The Shaky Case for State Bailouts...Newspapers are running story after story about how, in the absence of such bailouts, state and local legislators are forced to slash funding for services.
...Consider a recent New York Times article, "With Washington Deadlocked on Aid, States Face Dire Fiscal Crisis."
- The report tells us: "Alaska chopped resources for public broadcasting.
- New York City gutted a nascent composting program that could have kept tons of food waste out of landfills….
- In Maryland, the Baltimore Symphony Orchestra will lose a $1.6 million state subsidy."
These examples not only are not dire; they represent activities that the government has no business wasting taxpayer money on.
- Orchestras, for instance, overwhelmingly benefit the rich. If affluent Americans want to enjoy the pleasure of live classical music, they should pay for it themselves, fully and honestly.
- ...spending includes the lavish pensions paid to state employees. Why should I, as a resident of Virginia, pay for public employees' retirements in badly managed states such as Kentucky? As the Times explains, Kentucky has one of the most poorly funded public-sector pension systems in the country, and now it is further delaying its payments into the system.
- Meanwhile, "some, like California and New Jersey, had recently committed to raising their contributions to cover past underpayments—but now can't afford to do so."
...one dollar of government spending during the last recession returned much less than a dollar in growth, even under the best circumstances.
Worse, systematically bailing out state and local governments creates a serious moral hazard, reducing decision makers' incentives to plan better for the next downturn...Read all.
