A Politician Finally Talking Sense About Bailouts and Stimulus Funds

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Milwaukee County Executive Scott Walker had an opinion piece on the bailout madness in today’s Wall Street Journal. His legacy is holding the line of property taxes for Milwaukee County property owners. (i.e. He felt that we were already paying too much when he won the office several years ago, and has seen to it that we did not have any increases.)

I agree with his entire opinion piece, but here are some of the best parts (b0ld added by me):

Gov. Doyle — like other politicians — had lined up at the federal trough begging for billions in “free money” to cover budget deficits and to fuel new spending. He and others simply couldn’t understand and were outraged that I didn’t join them, and that I didn’t relent even after the president signed the stimulus bill into law.

My explanation is simple. First, this money isn’t free. Second, under Gov. Doyle our state has borrowed vast sums of money and avoided making tough budget decisions while expanding government programs. In three biannual budgets since he took office in 2003, new state bonding exceeded new tax revenue collections by $2.1 billion. During good times, the governor had been borrowing money to underwrite expansions of health care, education and environmental programs. If he is bailed out now, the federal stimulus funds will only enable the governor and others to go on spending and even taking on new obligations that will lead to larger deficits down the road. Third, if we grow government rather than private-sector jobs, we will not help the economy. Strong leadership, honest budgeting and tax cuts would do a lot more.

Wisconsin is afflicted with fiscal woes. In every budget he has signed, Gov. Doyle postponed difficult decisions using accounting gimmicks and excessive bonding to pay for ongoing operational costs. The most egregious example is the damage done to the transportation fund over the past six years, which uses state gas taxes and vehicle registration fees to fund road projects. The governor has raided the segregated fund for a total of $1.2 billion to cover ongoing operational costs for government programs. He’s partially replaced the raided funds with $865.5 million in bonds.

Wisconsin now faces an unprecedented $5.75 billion budget deficit, fourth-largest in the nation. Many municipalities also face deficits. My county, however, finished fiscal year 2007 with a $7.9 million surplus and will break even for fiscal year 2008 when the books are closed next month. Why? Because we made tough budget decisions demanded by the taxpayers.

State and local officials who failed to do so are looking to the federal government for a bailout. But what happens when the stimulus money is gone? Is the federal government committed to funding the projects it will now underwrite forever? I’m not willing to bet on it.

The stimulus is a classic bait-and-switch. Once the highways are built and social-service case loads have increased, Wisconsin will be left with the bill to maintain the new roads and services. This will force Wisconsin to raise new taxes. Gov. Doyle and legislative Democrats are already discussing higher taxes on hospitals, retailers, employers and even Internet downloads to feed their spending addiction.

The stimulus is also a bait-and-switch on employment. While the stimulus package might create a few construction jobs, the federal money will run out and those workers will lose their jobs. Even worse, most of the money is actually spent on new government programs and on bailing out failed state and local governments.

Too many politicians confuse more government spending with economic recovery. I believe that’s the wrong approach, and I will not submit a wish list for new government spending. Excessive spending will only lead to higher taxes, and that will drive jobs away when we need them the most.

We need to use these challenging times as an opportunity to streamline government and reduce the tax burden on working families. In 2002, during my first campaign for county executive, I promised to spend taxpayer money as if it were my own. If government — at all levels — were to do just that, we could reduce taxes and stimulate the economy. That would put people back to work again. And that is something on my wish list.

4 thoughts on “A Politician Finally Talking Sense About Bailouts and Stimulus Funds

  1. Barbara

    Tracy,

    My husband has been saying just this exact thing. Glad to see there is a government official who actually has a brain in his head for the business/money side of things. Did we have a bailout during the great depression… NO So why do it now. The country recovered just fine back then and it would have fixed itself now if greedy politians did not step in and say we need help and we need to help the people who were stupid in the first place.

  2. Tracy Coenen

    Yes, Barbara, I believe this “fix” is only going to prolong the pain much longer. Sad.

  3. David

    Don’t expect nobama and his fellows understand all this. Our country is totally screwed by these liberals.

  4. Bob

    Actually, Barbara, it took World War II to get out of the Great Depression. The lesson contained with the Great Depression is that the New Deal, massive government enacted by FDR, did little to nothing to stimulate the economy. If anything, the country slip deeper into the depression as a result of half-brained ideas perpetrated by government dopes.

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