Home > Fiscal Policy, General Assembly, State Government > Uncle Sam Will Save Us!

Uncle Sam Will Save Us!

Word came yesterday that the state’s budget shortfall is even deeper than originally thought. However, according to Governor Kaine, we shouldn’t fear. From the WaPo:

Gov. Timothy M. Kaine said Monday that Virginia’s budget shortfall has grown more than 25 percent since December, bringing the gap between revenue and spending to more than $3.7 billion over two years as the economy worsens.

But Kaine (D) told legislative leaders in a closed meeting that the federal stimulus bill, expected to be signed into law Tuesday, will offset the additional $800 million shortfall for the two-year, $77 billion spending plan that runs through June 2010.

However, although this may seem like manna from heaven, this “fix” isn’t exactly without costs. From Tertium Quids:

According to this chart, our impoverished Uncle up North will be cutting the state a nice, guaranteed-not-to-bounce check for various and sundry items, including $1.2 billion for “budget balancing.”

That’s sweet. I’m sure our grandchildren will thank us one day for mortgaging their future to the world’s debt merchants so we can square our books today. 

If we’re lucky, that is. They may decide to show their gratitude by send us all to the crooked old folks home. Or they might develop a taste for Soylent Green.

You didn’t think this money was coming out of thin air, did you? Norm doesn’t even touch upon the rather serious implication of states relying upon federal dollars in order to correct their own fiscal mistakes. How are we to expect that our federalist system will maintain its careful balance when the the federal government is bailing out the states every time mismanagement occurs? Why even have states? 

But these questions are for another time. From the time being, the Senate has adopted a wait and see approach to see just how big of winners we are in the Generational Debt Lotto. t to pass their budget today. Worry not. The fireworks are just beginning.

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  1. November 19, 2009 at 7:35 pm

    Change is the constant, the signal for rebirth, the egg of the phoenix.

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