NC Budget Hardball

My friend Bob Geary at Indie Week notes that Gov. Bev has come out swinging hard and effectively.

On the other hand, my friend Jim Morrill from the N&O says that Repubs smell victory. They are hoping to override Gov. Bev's veto on the budget.

My own view is closer to Mr. Geary's. (To be fair, Mr. Morrill makes no predictions himself, merely citing the Repub conventional wisdom). Bev is doing some fine work, politically. And the Repubs only seem to talk to people who agree with them. That kind of "my whole family and staff agree with me" polling may just reach up and bite 'em on the butt.

Gov. Bev is generally not a very inspiring stumper. But she actually cares about this issue, particularly education (whether she understands it is a different question). And the Repubs would make a big mistake to ignore her genuine speaking ability on issues she cares about. Yes, she will oversimplify and distort. Yes, she only has one effective emotional tone, and that's mad grandma-style indignation. But she will also make a lot of people mad at the Republicans. This is not over.

You can pay me now, AND you can pay me later

States borrowing off the books? It appears so.

Most states have to run a balanced budget, by state constitution or by statute. But these "emergency" loans from Uncle Barack never have to appear on the state budget. Here is the list of states and borrowings:

Alabama $ 283 million
Arkansas 330 million
California 6.9 billion
Colorado 253 million
Connecticut 498 million
Delaware 12 million
Florida 1.6 billion
Georgia 416 million
Idaho 202 million
Illinois 2.2 billion
Indiana 1.7 billion
Kansas 88 million
Kentucky 795 million
Maryland 133 million
Mass. 387 million
Michigan 3.9 billion
Minnesota 477 million
Missouri 722 million
Nevada 397 million
New Jersey 1.7 billion
New York 3.2 billion
N.C. 2.1 billion
Ohio 2.3 billion
Penn. 3.0 billion
R.I. 225 million
S.C. 886 million
S.D. 24 million
Tennessee 21 million
Texas 1.0 billion
Vermont 33 million
Virginia 346 million
Virgin Islands 13 million
Wisconsin 1.4 billion
Total $37.8 billion

For North Carolina, that's about $210 per person in borrowing. Not very much, perhaps. But that's an additional $400 per person who is actually working and paying federal income taxes. And this is DEBT, not new taxes. How in the world can anyone think that borrowing on the credit of the US, and giving the money to the states, is a good idea? You hear this a lot: "Our state taxpayers can't afford this, so we are going to seek Federal money." IT'S ALL THE SAME MONEY. If you take money from my federal taxes, and give it back to me as a state benefit, there is no net benefit, and nothing of value is created.

But if you BORROW on Federal credit, and give the money to the states, it appears to be free money. Politicians can claim credit for it, and it won't have to be repaid until later. This is exactly the strategy that has worked so well in Greece, for example.

To be fair, this new off-the-books state borrowing appears to be something else: In the long run, this debt will take money from some people, in some states, who are dumb enough still to have jobs. And give that money to other people, in other states, who have figured out that it's cheaper to get free money than to try to earn a living by having a job.

(nod to Doug C, and the Economic Policy Journal)

Amazing, But Not Surprising

This is a problem for every state in the U.S.

Can you explain to me again how excessive compensation in private employment requires people like this to regulate us?