One Step Closer to Boomergeddon

The U.S. Senate approved another bail-out Wednesday, this one for state governments. In a 61-38, mostly party-line vote, Virginia Senators Jim Webb and Mark Warner agreed to provide $26 billion in aid to the states, nominally to save the jobs of some 145,000 teachers and prop up state Medicaid programs. Approval by the House of Representatives and signature by President Obama seems to be a foregone conclusion.

Thus do 50 state governments join the long list of beggars, special pleaders, con artists and others addicted to Uncle Sam’s Keynesian cocaine. The passage of the $787 billion porkulus bill last year gave states a brief reprieve. Now Congress hands out another vial of crack. Next year, the states will be back for more.

As Senate Minority Leader Mitch McConnell, R-Kentucky, said: “For the first time in our history, the federal government is the single largest source of revenue for the states. When does it end?”

End? Why should it end? That’s the way it works in Washington, D.C. — keep everyone on the dole. Keep everyone on bended knee, as dependents and supplicants. That’s the way incumbents hold onto power.

Here’s my question: Why should Virginia’s senators participate in a bailout which is driven by the bankrupt politics of other states? We made tough choices here in the Old Dominion. We kept our fiscal house in relative order. Admittedly, Virginia is far from perfect, as demonstrated by the $650 million under-funding of the Virginia Retirement System this year. But the commonwealth has been far less improvident than, say, California, Illinois and New York. This vote does a huge disservice to Virginia taxpayers.

It also does a disservice to the nation. Add that $26 billion to the $34 billion that Congress appropriated to extend unemployment benefits, and that’s $60 billion not contemplated in the proposed FY 2011 budget — a budget that Congress hasn’t gotten around to passing yet. But, hey, who needs a budget? Just put the $60 billion on the nation’s tab. Borrow the money from the Chinese, Japanese, the petro-states and the hot European flight-to-safety money seeking refuge from the Greek bail-out.

One more question: What happens when Boomergeddon comes? What happens when the federal government defaults on its debt and literally can borrow no more? What happens when Congress can spend no more money than the country brings in from taxes — requiring a cut of some 30 to 40 percent of total spending? Who will bail out state governments then? Who will pay for extended unemployment benefits then?

Senators Warner and Webb say they believe in fiscal responsibility. Yet they still vote for every budget-busting bill that comes their way. I mock their empty words.

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34 responses to “One Step Closer to Boomergeddon”

  1. Larry G Avatar

    This is all being driven by the weak economy which is generating less revenues at both the Federal and State level and by those economist who believe that if we do not keep as many employed as we can – that we will slide back into a liquidity trap – into a decade-long stagflation or perhaps even a depression.

    I can see a reasoned debate on the part of those who agree or disagree as to what the govt should be doing or not but for one side to portray the other side as blatantly irresponsible is just plain wrong and, in my view, dishonest.

    My understanding is that Va would lose on order of about 30,000 teaching and deputies jobs if we did not have help from the Feds money-printing credit card that is, sure enough, making the deficit worse.

    I'd say, be careful what you wish for.

    Your kids may well be attending a school that goes to 40 or 50 kids per classroom.. no sports, or AP classes, or other extracurricular.

    If you put 5-10% of your local deputies and teachers our of work – what will happen to local tax revenues?

    how many more mortgages will default and further erode local revenues?

    For myself, I think we are on the hairy edge here – flirting with a depression and while I fully understand that we are building one hell of a future deficit that will have to be dealt with – right now the patient is on life support and talking about a 1000 calories diet … well.. those are the medical advisors that we usher out of the room and send down the hall to contemplate navels and other esoteric issues to keep them busy with while the guys with their head screwed on straight get back to the patient threatening to experience a come-to-God moment.

    So… a question.. do we know how many teacher/deputy jobs would be lost without affirmative votes from Warner and Webb?

    So to those who eschew the Warner/Webb votes I ask:

    " should we go ahead ad lose 30,000 jobs"?

    no quibbling.. give an answer.. yes or no..

    maybe it will take a depression to convince the skeptics… maybe that is the only thing that might cause them to re-think their positions.

  2. James A. Bacon Avatar
    James A. Bacon

    Our choices: Double-dip recession now or all-out depression later. Sooner or later, we will pay the piper.

  3. Larry G Avatar

    I guess the issue is can you take some of the downside during an uptick such that you have a strong economy but the taxation is high to pay back the debt incurred during a recession…

    or is the only way to take the damage is at the low point of the economy ….????

    That's in essence the two competing visions.

    One says that there is a tipping point below which the damage is much more severe than if you defer the damage until the economy is stronger and able to withstand it better.

    Sometimes I almost think folks are hoping for the worst case scenario – rather than an approach to trying to manage the damage…

    much like you would with a guy with a serious heart problem… do you do the deed and let whatever happens – happen – or do you try to get the patient healthy enough so he can better withstand the rigors of the operation?

    Some folks obviously see the, "let's wait until the patient is stronger" as just waiting until the patient is even weaker while others think that kind of "therapy" will kill him..

    Again – I can see both sides of the debate – but I would not call the "let's wait and see if we can make the patient better" as an "irresponsible" strategy.

  4. Accurate Avatar

    Okay Larry, you asked for it and I'm not ashamed to answer you. First, the job cuts could (and in my opinion should) come from the schools. As we discussed in an earlier post, the schools are doing a lousy job of educating kids. There are lots of examples that show that more money does not equate with a better education. You said, be careful because the classroom might have 40 to 50 kids in a classroom – bring it on. There are so many wastes in today's schools that, IMHO, you won't see much difference in what is being turned out of the schools today. Plus, you miss another component – let's cut the school administrations. Let's cut the huge bureaucracy that exists in the majority of school districts. Allow local control (school by school) of hiring, supplies, etc.

    Gee, no AP, so soar to the top of your class as the class exists. No sports, a pity, but was/is it really the job of a SCHOOL to have sport teams? PE, yes, kids need to have excercise and they need to learn what organized sports/excercise teaches, but to drop in the extra money for football uniforms, baseball uniforms, upkeep of proper facilities – no, we can, we use to raise good adults without them.

    There are some very viable alternatives to the traditional school as well; which would save the state a bundle. There is the online school (and no, I don't work there and I have no connection to them) which would work for many kids and parents. I know, it takes away the public daycare facility called a public school, but with lots of parents out of work they will be home to watch and help the kids.

    As for deputies – hands off. There are a ton of other places that states and cities can cut before we need to take police off the road; ditto fire-fighters. One caveat, government workers should not be allowed to belong to unions.

    Isn't it a bit funny (it is to me) that when cuts are brought up, teachers and police (and sometimes fire-fighters) are the first positions that government officials always bring up? Let's start with an unconditional, across the board hiring freeze. Then let's start going through the various agencies and cut positions and even entire departments.

    Now it's not going to help when Obamacare hits us all with new taxes. Nor will it help when our taxes go up (everyone's taxes will go up, including those at the low end where they get a 50% increase from 10% to 15%) when Obama allows the Bush tax cuts expire; but hey, that's what y'all voted for.

    You asked what will happen when the local tax revenues drop – guess the government will have to concentrate on the core issues (like they should have been doing all along) instead of crap like diversity. Maybe the governments will find ways to entice and encourage businesses, rather than regulate them out of this country.

    You asked, I've answered.

  5. Larry G Avatar

    Accurate you did answer and I congratulate you for an honest, straight-shot answer – which is increasingly rare these days and in my view, what is lacking if we are going to truly confront the issues.

    I'm pretty much with you on the schools but would devote more resources to the younger grades where either you get the kid on the right track or you fail…

    and I'd keep the things that parents want – provided they're willing to pay for them and it not be a taxpayer burden.

    On the deputies – I'd like to see more, better metrics on staffing verses crime/public safety.

    I do not believe that more staffing necessarily results in better schools nor better law enforcement either.

    The reason in Virginia that it is always about the schools and the deputies is that the State funds roughly half the local school and law enforcement costs.

    I say "the state" with a tinge of sarcasm because the state gets that money from the localities to start with and then in a legislatively sleight of hand "gives" it back as a magnanimous gesture.

    to the point that when the State Revenues drop and they have to cut what they send back to the localities that the citizens accuse the state of not sending enough money and assume that the state is engaging in some sort of a conspiracy to steal funds from the localities to spend on fruitless things (like transportation).

    I agree with your conclusion also – and believe it or not to a certain extent with Jim Bacon in that – at the end of the day – the decision of how many teachers to have and how many deputies to have is – not a Federal issue and not a State issue but, in fact, a local issue where the folks who pay taxes and elected representatives should decide those things.

    Until the Feds passed the latest stimulus – the localities were each facing the issue of whether or not to lose 200-300 teachers and deputies …or to increase taxes to pay for them.

    But the stimulus once gain, rescued them from making that decision… big daddy came through with an increase in their allowance, after all.

  6. Accurate Avatar

    Yup, the Feds just gave the states back some more of our money … uh, wait, the Feds don't have it, they aren't getting enough in revenues to pay for everything under the sun; so they just added to the deficit. By tossing a bone to the states, they didn't solve the problem that we are facing, they just kicked that can a bit further down the road.

    Mission creep seems to be the normal-scope-of-operations for all governments be they local or federal. I've seen it time and time again, revenues get fat and every Tom, Dick and Susie come out of the woodwork with another 'great idea'. I mean, we've got the funds for it, so why can't we do this (put your favorite bleeding heart cause here) for the people. Rather than say "NO" and either bank the excess funds or return them to the taxpayer (there must be some kind of law that stops that process); the lawmakers always say 'Yes'. Then, of course, as times get lean, they scratch, they cry, they scream about how they are going to have to 'cut' these valuable programs. And again, ever notice how the services that directly hit the largest number of people the hardest are the ones that they seem to tag? Oh, we're low on funds, we'll cut back teachers and police, not the arts commission and the diversity commission. We're going to have to lay off fire-fighters, because we have to spend $40 million to upgraded office space and indoor parking for Kansas law makers.

    Yeah, the absolute waste, the out of control government; complete with an insatiable hunger for money. All the big promises of how everything was going to be done without raising taxes yet supply everything for everybody.

    You know, it's said of socialism that sooner or later you run out of someone else's money. In the case of government (the federal government specifically), they just keep printing money and sending it off. I can't wait till November. I'm not silly enough to think that it will make a huge difference, but if we can bring Obama down out of the clouds … it will be at least a small relief.

  7. Larry G Avatar

    Many, many folks SAY that we cannot go on like this and that we must cut the "fat" but I wonder how many think that "fat" won't affect them but others …it's going hurt all o us… any fool ought to see.

    But look, who was it that told us that deficits don't matter?

    That we could give tax cuts at the same time we were going to fight two wars?

    People say that Clinton did do so hot either but hells bells.. wouldn't it have been nice to get something like that from Bush where we could all carp that even though it was "technically" a surplus.. that in reality it was not.

    No such luck with Bush.

    He and his administration – and our Republican friends (you know, the same ones who say they should be put back in charge)….. all of them said "no sweat"… we can run these deficits because we got a tax cut and that tax cut is going to "grow the economy" (remember than phrase?) … yes.. "grow the economy" to generate the revenues that would wipe out the deficit.. eh?

    But I heard nary a peep from folks back then worrying and fretting about handing our kids "crushing debt".

    so we talk about Obama being "up in the clouds" .. which may be true..

    but all I'm saying is that we did not get here last night…. or even 18 months ago.

    we got here after a decade of either failed or incompetent leadership or both.

    unless one actually wants to subscribe to the theory that Bush had no choice.. that his destiny was already decided by events he could not control ( which was the beginning of "it's not my fault" logic that we now castigate this Prez for.

    At any rate – the solution to the deficit is pretty simple – we have to cut spending and yes..virtually all the economist say we have to raise taxes ….just as soon as this recession is over with.

    In the mean time.. we got all these teachers and deputies getting rid to bail on their mortgages and drive local govt revenues ever lower… which will cause more deputies and teachers to get laid off.. so on .. and so forth.

  8. Gooze Views Avatar
    Gooze Views


    Writing such as this is way over the top and not needed:

    "Thus do 50 state governments join the long list of beggars, special pleaders, con artists and others addicted to Uncle Sam's Keynesian cocaine."

    We're talking about a necessary and temporary stop gap measure to keep our educators while the economy gets on a footing.

    You really should knock this off. It hurts your credibility.
    Peter Galuszka

  9. James A. Bacon Avatar
    James A. Bacon

    Peter, I guess it all comes down to how you and I think government works. I happen to think that Washington is full of beggars, special pleaders, con artists and worse who make a living by persuading Congress to take other peoples' money and give it to them. Would you suggest otherwise?

    As for referring to deficit spending as "Keynesian cocaine," what else would you call it but an addiction? The U.S. economy now needs its fix of $1 trillion-a-year deficits to keep the economy going, just as the drug addict needs his fix. Take away the stimulus, and the economy goes into withdrawal. Keep on providing the stimulus, and the economy needs a stronger fix to have the same effect. I think it's the perfect analogy.

    You think such statements hurt my credibility. I think you're in denial.

  10. Gooze Views Avatar
    Gooze Views

    Cocaine is not physically addictive, so the analogy is wrong.
    And while the cesspool up the Potomac is handing out federal drugs, how about cutting defense spending for Virginia? It has kept our unemployment rate low. I mean, do we need TWO jet engines for the F-35.
    I love to see you conservatives squirm when you bring up the "d" word.

    Peter Galuszka

  11. James A. Bacon Avatar
    James A. Bacon

    Bringing the federal budget back into balance undoubtedly will hurt Virginia more than other states, especially if slashing defense spending is part of the program (as I advocate in "Boomergeddon").


    When Boomergeddon comes, and the whole thing falls apart, Virginia (along with Maryland and D.C.) will suffer worse than anyone else… but the level of suffering will be worse than if we started exercising some discipline now.

  12. Larry G Avatar

    The Republicans have a pretty good narrative going right now.

    The stimulus is "not paid for" and is increasing the deficit but if taxes (now the lowest since the 1950's) are raised back to the Clinton levels – it will hurt the economic recovery.

    Of course giving tax cuts at the same time we were fighting two wars would _not_ increase the deficit because the tax cuts would generate more than enough increased revenues to pay for the wars.

    Anyone with an ounce of respect would instantly denounce such shenanigans as corrupt as those who were saying at the same time that 'deficits don't matter'.

    The same crowd of carping blather butts now tell us that the only way to fiscal nirvana is to stop the stimulus and "take it like a man".

    If pomposity had value these guys would be golden.

  13. Loudoun Insider Avatar
    Loudoun Insider

    As pointed out in an excellent op-ed in today's WaPo, John Lehman makes an airtight case that a second jet engine (read as "competition") would result in big savings over the long run. Everyone knows government contracting is massively wasteful. Real reform would go a long way towards getting our federal budget back into shape.

  14. Loudoun Insider Avatar
    Loudoun Insider

    And we do need to pay the piper, and both parties are to blame. We really need a viable third party.

  15. "We really need a viable third party."

    You mean not the Tea Party or the Greens?

  16. "…but the level of suffering will be worse than if we started exercising some discipline now."

    Cool, I think I'll start cuting off my leg an inch at a time right away.

  17. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    "The same crowd of carping blather butts now tell us that the only way to fiscal nirvana is to stop the stimulus and "take it like a man"."

    Hmm, fiscal nirvana for who? Republicans, or Barney Frank and his Wall Street buddies? A choice between dry or KY? Either way the citizen gets reamed by the gangbang crowd in DC, while voyeuristic state and local officials circle their chairs for Act II in this seedy cinema we used to call America.

    We've gone from a nation of E Pluribus Unum, to a rust belt country of lobbyists, grifters, and governmental perverts whose hands now roam beyond our pockets in an intrusive display of self gratification, where any stimulus is for their pleasure and not ours. Ex Uno, Plures, the new nation's motto, is shouted aloud as each citizen is lined up to bend over the stained seats of power.

  18. "John Lehman makes an airtight case that a second jet engine (read as "competition") would result in big savings over the long run."


    Big savings at what discount rate? Assuming you sell how many engines?

    A jet engine is like a city: it has huge infrastructure requirements and you have to assume that they will be amortized over many generatons of new engines.

    Considering our deficits what do you suppose the replacement rate for military aircraft will be, or needs to be? When we are in default, who will attack us to take over our debt?

    You are on to something on competition, though. More houses would result in big savings over the long run, right?

  19. Larry G Avatar

    if we can spend money on jet engines why not solar panels?

  20. Larry G Avatar

    " You mean not the Tea Party or the Greens? "


    Ron Paul for President
    Dick Armey /Newt for VP

    repeal and replace

    Social Security


    "do you own damn planning for your retirement and medical care and stop leeching off of other taxpayers."

    why Ron Paul?

    because he'll tell the Defense Department to make do with one jet engine and stop their voyeuristic love affairs with nation building your favorite failed Neanderthal nation the harbors WMD and Al Queida and other "threats" to the American Way of Life.

  21. Gooze Views Avatar
    Gooze Views

    Loudoun Insider,
    An "airtight" case on the second F-35 engine. I read Lehman's piece and I don't see it that way. I'd say he wants to spread the wealth around.

    Peter Galuszka

  22. if we can spend money on jet engines why not solar panels?


    Solar panels have a lower ROI.

    We can spend money on solar panels, but it is a question fo what you get back for what you spend.

  23. Larry G Avatar

    " it is a question fo what you get back for what you spend."

    we get money back from jet engines?

  24. we get money back from jet engines?

    Sure. Jet enginse and solar panels both convert energy from one form to another.

    Jet engines convert a lot more enrgy a lot faster and at a much lower cost per unit of energy.

  25. Larry G Avatar

    " Jet engines convert a lot more enrgy a lot faster and at a much lower cost per unit of energy. "

    jet engines USE ENERGY guy in case you have not noticed and solar panels GENERATE energy.

    so what does a Jet Engine PRODUCE that is a return on investment?

    A solar panel will pay for itself in 10-15 years.

    How many years does it take for a DOD jet engine like the one being discussed here – to pay for itself.

  26. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    How many years does it take for a DOD jet engine like the one being discussed here – to pay for itself.

    Depends on whether it is used as a military jet engine, or a generating source for electricity. For many years, power compainies used a version of the F14 engine in their plants. Basically they removed the afterburner and attached a big generator on the power take off components.

  27. Larry G Avatar

    " Basically they removed the afterburner and attached a big generator on the power take off components. "

    uh huh… they're still USING energy, not GENERATING it.

    your natural gas peaker plants use gas turbines also but they use energy to produce power as opposed to the unit generating power on it's own.

    and the power they produce is about 7 times more costly as conventional coal burners.

  28. Accurate Avatar

    It's nonsense like this that just drives me nuts – I mean it defies all logic and reasoning.

    "With the district in a financial crisis and hundreds of its members facing layoffs, the Milwaukee teachers union is taking a peculiar stand: fighting to get their taxpayer-funded Viagra back."

    Good Lord!!!! With unemployment continuing to be high. With government funds continuing to dwindle and these folks are fighting for this???? Is it the union, which I think it is – or is it the employees, from the article it's the union.

    "The filing last month comes as the union, the Milwaukee Teachers' Education Association, is also protesting hundreds of layoff notices issued to teachers for the coming school year. Citing a "financial crisis" caused by exploding benefit costs and revenue shortfalls, the district's outgoing superintendent proposed laying off 682 employees in April."

    "At least one lawmaker questioned why the union is fighting for Viagra while teachers are losing their jobs. A consultant for the school board has estimated that reinstating the drug benefit would cost $786,000 per year — the cost to keep perhaps a dozen first-year teachers employed."

    So if these teachers can't tell the union to stuff it, then they need to disband the union or find a way of working without joining. If either of those aren't possible, then go ahead, fire teachers. There is stupid and then there are actions like this.

  29. Anonymous Avatar

    The worst thing that could happen to public education in Fairfax County would be for the Schools to receive more Obama bucks. A number of people have been pushing FCPS finally to cut its bloated staff and protect classroom teachers. The administration and school board have been drug along and are making some progress towards real reform. But if Obama bucks come down like rain, progress will happen. What a shame! What a shame!


  30. Larry G Avatar

    All this talk about tax, tax, tax and entitlements and spending money we don't have – the public schools systems are not only a scam to taxpayers but the parents love the "free" services.

    There was time when the purpose of public schools was to produce an educated workforce.

    To the Feds and the State credit – they still fund on this basis.

    The FEDS worry about getting kids help at the K-2 level when it makes a difference regardless of parental influences.

    and the State only funds the SOQ-related expenses that are directly related to the SOLs.

    The rest of it – take for instance Fairfax – is local taxation to provide everything from 10 different foreign languages I through IV… photo journalism, AP, team sports (which exclude kids who lack innate talent – rather than teaching them how to be competitive with what they have).

    Local taxpayers should pay for the basic academics.

    The rest should be user-fees with economically disadvantaged cut a break in exchange for work or similar.

    We are teaching the kids to expect the govt to give them whatever they'd like to have.

    And the parents go right along with it – after all – how many parents do you know that pay property taxes equivalent to what it cost to educate one kid?

    It's a bargain right?

    Online education is a reality.

    We can have 100-200 kids taking Rosetta Stone German – and report once a month for testing.

    One teacher to administer this rather than a dozen or more.

    Ditto for many of the courses that while education-related are not core academic.

    If you want your kid to take AP or similar – pay for it.

    The taxpayers job is to get your kid the basics.

    It's your job to get the rest of the job done.

    and it won't hurt any of these kids one bit – to realize that these things cost money – and they ought to be learning – to work for the things they want rather than expect them.

    Now.. I don't know what Groveton is going to do with reconciling this view with "liberalism" but I'd love to see him try to explain it.

  31. Gooze Views Avatar
    Gooze Views

    Does Viagra really work? I have no idea.


  32. "and hundreds of its members facing layoffs, the Milwaukee teachers union is taking a peculiar stand: fighting to get their taxpayer-funded Viagra back."


    Makes sense to me. If you haven't got a job, what are you going to do while lying around the house?

  33. " Jet engines convert a lot more enrgy a lot faster and at a much lower cost per unit of energy. "

    jet engines USE ENERGY guy in case you have not noticed and solar panels GENERATE energy.


    I wondered if you wour pick up on that.

    Both jet enginew and solar panels are energy converters. they take one form of existing energy and convert it to another.

    Solar panels take currently avaialable solar energy and convert it for immediate use or into another form of energy that can be stored, like batteries or air pressure or hydro-puming.

    Jet engines use solar energy that has been collected by billions of tiny photo-cells in theprocess know as photosynthesis and stored as combustible chemicals.

    Both depend on the same basic processes,only the time sclae is a lot different.

    Once you recognize them as energy convertors, and take in the costs of the entire system in each case, then you can no longer hide behind economic fantasies such as "solar panels generate energy".

    They do not. The collect and convert enegy produced by burning hydrogen in the Sun. Fortunately, the sun has lots of hydrogen and burns it very efficiently at ultra high temperatures and pressures that are difficult to uplicate here on earth.

  34. Larry G Avatar

    you're right but one of them is converting energy from a virtually inexhaustible sources that does not need an intermediate "refining" process and it does not pollute whereas the other comes from a finite resource.

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