Stimulus Package Forces States to Raise Taxes

Stimulus Package Forces States to Raise Taxes

January 03, 2010
Originally published in Opposing Views

The federal government’s $800 billion stimulus package, which failed
to cut unemployment, is now forcing states and local governments to
raise taxes. The Wall Street Journal describes how “stimulus dollars
came with strings attached that are now causing enormous budget
headaches . . . At the behest of the public employee unions, Congress
imposed ‘maintenance of effort’ spending requirements on states. These
federal laws prohibit state legislatures from cutting spending on 15
programs,” such as ”welfare, if the state took even a dollar of
stimulus cash,” even if a state’s tax revenue has since fallen due to
the recession. “So when states should be reducing” their spending ”to
match. . . lower revenue collections, federal stimulus rules mean many
states will have little choice but to raise taxes.”

Obama
claimed the stimulus package was needed to prevent the economy from
suffering from “irreversible decline,” but the Congressional Budget
Office admitted that the stimulus package actually would shrink the
economy “in the long run.” Unemployment has skyrocketed past European
levels, as big-spending countries have fared worse than thrifty ones.

The
Washington Examiner says that “75,000 jobs” Obama has claimed credit
for are “clearly imaginary” or “highly doubtful.” That includes
thousands of jobs the administration claims credit for creating in
nonexistent Congressional districts. As the Examiner notes:

If
his stimulus program was approved, Obama promised, unemployment would
not go above 8 percent this year. The reality is that it passed 10.3
percent in October. So now the stimulus books are being cooked to
mollify an anxious public worried that real-world jobs continue to
disappear and angry that Obama has thrown almost $1 trillion down the
stimulus rathole.

The stimulus package actually destroyed
thousands of real world jobs by triggering trade wars with Canada and
Mexico that killed jobs in America’s export sector (the stimulus
package barred a measley 97 Mexican truckers from U.S. roads, a minor NAFTA
violation that led to massive Mexican retaliation against U.S. exports
of 40 farm products and kitchen goods worth $2.4 billion). It also is
wiping out jobs by inflicting costly mandates on state governments
(such as repealing welfare reform, and imposing costly “prevailing
wage” regulations and expensive racial set-asides).

The
stimulus package has since spawned countless examples of government
waste and corruption. Recently, Obama fired an inspector general,
Gerald Walpin, who uncovered millions of dollars of waste and fraud in
the AmeriCorps program, including by a prominent Obama supporter,
endangering the Obama supporter’s ability to administer federal
stimulus spending in Sacramento. Obama’s alleged justification for
firing the inspector general turned out to be false.