Thursday, January 07, 2010
Congress should say no to California bailout
California Governor Arnold Schwarzenegger is asking for a "bailout" of California, which faces a deficit of $20 billion, despite raising taxes in 2009. The federal government should say 'no.' Providing bailouts to failed states, or failed companies, creates a moral hazard, which makes future mismanagement even more likely in the future since there will be an assumption that there will be future bailouts. California has increased its rate of government spending far higher than inflation and population growth over the last decade, mainly to enrich the perennially enraged lunatic government employee unions. California's government needs to go on a diet. Now.