Out of Control Policy Blog

More states looking for federal money

There is already a long line of banks and investment firms queuing up for federal bailout money. The automakers just got in line and who knows, maybe we'll see a newspaper or two slip in the back relatively soon. The number of states asking for a bailout is growing too. Already with California looking for a potential $7 billion to keep it out of bankruptcy, New York and New Jersey have joined the chorus pleading for a bailout. NY Gov. Paterson hasn't asked for a specific amount yet, though NJ Gov. Corzine has suggested an additional $300 billion be allocated for struggling state budgets in general.

In the wake of this, nationally syndicated columnist Cal Thomas wonders today if states could set a fiscally responsible example for America's groveling economic giants: "What if governments were forced to live within their means? Isn't that what each of us has to do? If we get in financial trouble, we have to cut our spending, possibly curtail wants and focus on real needs."

Thankfully, there are still some wise leaders in America, as Reason's Director of Government Reform Len Gilroy noted in this post. Attempting to Counter Govs. Corzine and Paterson, South Carolina Republican Gov. Mark Sanford urged Congress to avoid placing further burden on an already struggling economy by adding billions more in debt, "Simply throwing money into the marketplace in the hope that something positive will happen ignores the fact that the government has already put over $2 trillion into the system this year."

At times Gov. Paterson has seemed to recognize that bailouts aren't the answer, and is beginning to pursue public-private partnerships to reduce spending. But while he has vetoed 171 spending bills since taking office, there still appears to be an inherent distrust that the free market can restore market stability and sustainability.

So with banks, industry, and states looking for redistributed cash, the question is, what's next? Reason.TV finds citizens asking "Where's my bailout?"

Anthony Randazzo is Director of Economic Research


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