A mere two days after Bailout Nation Lives was posted, the President urged Congress to bail out states to avoid massive layoffs. The President
…urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid “massive layoffs of teachers, police and firefighters” and to support the still fragile economic recovery. In a letter to congressional leaders, Obama defended last year’s huge economic stimulus package, saying it helped break the economy’s free fall, but argued that more spending is urgent and unavoidable. “We must take these emergency measures,” he wrote in an appeal aimed primarily at members of his own party. See Obama Pleads for $50b in State, Local Aid.
The price tag for this proposal will be $50b.
The Problem
- We continue to foster profligate spending
- We spare states the need to make the hard choices of picking which employees need to be laid off (it does not necessarily require states to lay off police or teachers); raise taxes or cut spending in other areas.
- Knowing that this proposal is unpopular, we get another weekend announcement to deflect criticism. Where is the vaunted transparency the Administration trumpeted? See Shredding the Social Fabric where we discussed the pre-Christmas Eve unlimited bailout of Fannie Mae and Freddie Mac.
- Given all the Administrative propaganda on the robust recovery, why must we take “emergency measures” to support the “still fragile recovery?”
- Are ANY groups not entitled to a bailout?
Where is Your Money Going?
The savvy view is that Obama is just buying the votes of public sector union members in key states. See Obama Once Again Wants to Buy Union Votes with your Tax Dollars. Our money is going to pay very rich public sector salaries, pension and health benefits.
Juxtapose the problem of underfunding state pension plans with rich salaries and benefits in the public sector. Michael Shedlock points out that seven state pension funds will be out of money in 2020 and twenty state pension funds out of money in 2025. See Seven State Pension Funds Out of Money by 2020.
At the same time we learn that 100 top administrators have earned pension benefits that actuaries value from $7m to $26m. See Make this Story Go Viral – You Thought California State Pensions were Out of Control? Wait Until You See this List from Illinois. The Illinois state teachers’ pension fund is 61% underfunded and is employing risky strategies using derivatives to try to achieve full funding.
Why shouldn’t we get “back to even” with risky investment strategies that smack of “doubling down” in Vegas? Obama has our backs and is sure to bail us out when we inevitably fail.
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Related posts:
- Bailout Nation Lives
- Bank Bailout v. Rule of Law
- Update on Deflation
- Where Are We Now?
- We Can Handle the Truth
Tags: bailouts, Illinois Pensions, Michael Shedlock, Obama
