Blue States Slated to get more "Jobs Bill" money than Red

SiliconMagician · Sep 15, 2011

Remember when I had talked about a warning to Obama about not screwing up the "Jobs Bill" with partisan gladhanding? Well here is the first proof he's (*)(*)(*)(*)ing it up.

http://online.wsj.com/article/SB100...?mod=WSJ_article_comments#articleTabs=article

In a new study at Harvard's Program on Education Policy and Governance, we discovered why the Obama administration is so interested in helping out the states. States with a bluish hue—that is, states with legislatures that are heavily Democratic and have a highly unionized public-sector work force—must pay interest rates that are often an extra half a percentage point higher than states with a reddish coloring.

Specifically, a 20 percentage-point increment in either the Democratic share of the state legislature or a comparable increase in the share of the public work force that is unionized drives up interest rates by nearly a half a percentage point on a five-year security note. That amount is nontrivial. In Obama's home state of Illinois, it is costing governments over $700 million annually.

The impact of these political factors on interest rates is in addition to the impact of standard economic factors, such as a state's unemployment rate, its gross domestic product growth, and its debt-to-GDP ratio, all of which are themselves shaped in part by the state's political climate.
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But federal fiscal bailouts put our federal system at risk. In essence, the national government is acting as if states are too big to fail. In the next financial crisis, the federal government may decide that states need to be treated like General Motors or, at least, be given ever bigger handouts of the kind the Obama administration seems committed to making.

But if the federal government is going to tacitly assume responsibility for state debts, then those $3 trillion in sovereign state debt must be added to the $14 trillion national debt that has already caused grave concern, pushing the current U.S. debt into the danger zone. Even if pension liabilities are ignored, the combined federal-state-local debt runs in excess of 120% of GDP.

The costs go beyond dollars and cents. The more often the federal government bails out the states, the more Washington bureaucrats will insist on regulating state and local affairs. At some point the United States will see the end of state fiscal sovereignty and the demise our federal system of government.
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So, Obama has now decided that blue states have become "too big to fail"?

Even during the depression we didn't bailout failing States!

venik · Sep 15, 2011

I'll save you the trouble, and surprise, anything which votes or funds obama is too big to fail.

jmpet · Sep 15, 2011

SiliconMagician said: ↑

Remember when I had talked about a warning to Obama about not screwing up the "Jobs Bill" with partisan gladhanding? Well here is the first proof he's (*)(*)(*)(*)ing it up.
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I guess Obama should have listened to anonymous posters like you instead of his cabinet?

SiliconMagician · Sep 15, 2011

jmpet said: ↑

I guess Obama should have listened to anonymous posters like you instead of his cabinet?
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That has nothing to do with it. I showed from the beginning that I was willing to support Obama and his jobs bill as long as it didn't turn into another "Stimulus II" that went to his union and solyndra cronies.

I want a fair jobs bill, and what he submits his own Democrats don't even like.

This is already turning into a cluster(*)(*)(*)(*) and the Republicans have nothing to do with it. This is Obama's baby and we have every right to look in the crib and point out how ugly it is.

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Blue States Slated to get more "Jobs Bill" money than Red

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