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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Re: WSJ- States of Distress

Posted by WARREN MOSLER on January 26th, 2009


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(email exchange)

I’d just give a total of $300 billion to all the states on a per capita basis in which case fiscal responsibility isn’t applicable.

>   
>   Morris wrote:
>   
>   Why didn’t I think of this???
>   
>   Subject states to the same rules as corporations.
>   
>   Why isn’t there moral hazard to this upcoming bailout??? Why should fiscally
>   responsible states pay for this??? Is this any worse than John Thain???
>   


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One Response to “Re: WSJ- States of Distress”

  1. RichW Says:

    Couldn’t agree more.

    Why would we want the fed govt to micro-manage this money? Spending decisions are best made by entities closest to the consumers/beneficiaries of the spending (local govts). I’m sure states are fully aware of their spending needs.

    Smacks of ruling class elitism.

    As far as subjecting corps to rules regarding the use of TARP funds it’s unmanagable. You’d have to require the capital go into a special fund and it’s spending would have to be approved by some govt regulator. Why bother “giving” (use the term very loosely, of course it’s not given) the money to the corps at all in that case? Might as well just have the govt spend it in the first place.

    Reply

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