December 18, 2009

Obama's Vote-Buying Dilemma

By Monty Pelerin
Does President Obama want to make new friends or alienate old ones? That is the interesting political problem shaping up for him and other Democrats. This problem will manifest in the coming collision between states and Obama's reelection strategy. Federal bailout money helped many states with their shortfalls. A Government Accounting Office (GAO) report indicated that much of the stimulus was used to fill state budget gaps. As a result, underlying fiscal problems were not solved, but merely papered over. Downsizing is anathema to all politicians, but necessary to resolve these issues. The stimulus allowed state layoffs to be avoided, but only temporarily. States presented "balanced" budgets at the start of this fiscal year. Continued economic deterioration created shortfalls in these budgets after a few months: Thirty-six states face budget shortfalls totaling $28 billion in the fiscal year that began just five months ago, according to a new 50-state report....(Read Full Article)