Regardless of the political spin this is a bailout. If this action is allowed to move forward this will be just the beginning – bailouts for states are next?
“Rep. Paul Ryan (R-WI) wants Congress to pass a law that would cause Puerto Rico bondholders who own $73 billion in notes from the territory’s government to be treated the same way the federal government treated Chrysler bondholders back in 2008 and 2009.” click here
“In other words, the first spending blueprint passed with Republicans — led by Ryan — in complete control of Congress actually increased the deficit more than Democrat spending plans.” click here
States are fully dependent upon federal funds for most of their programs and especially programs for drinking water and pollution control. The Clean Water State Revolving Loan Fund has been around since 1987. The Drinking Water State Revolving Loan Fund has been around since 1996. Yes, lots of money has been granted to states to provide loans to some municipalities for drinking water and/or wastewater treatment. When a states gets their grant every year they usually blow their horn to maintain an image of doing good for the citizens (e.g. Nevada). But the amount of money provided is very small compared to the overall need.
In the long run have these programs help or hurt the cause? In reality, such programs are simply not sustainable yet they continue to be funded for political expediency. But perhaps it is time to reexamine these and other federal programs related to drinking water and pollution control. A burgeoning federal and state bureaucracy does not keep drinking water clean nor do they prevent pollution.
We have more technological tools available now that when these regulatory programs began. Continuing unsustainable programs such as these are quickly becoming counterproductive.
“Federal Reserve Chairman Janet Yellen, referencing the Congressional Budget Office’s long-term budget projections, told the Joint Economic Committee of Congress today that under current policies the federal government’s deficits “will rise to unsustainable levels.” ” click here
At least she acknowledges the problem.
“The United States Bureau of Labor Statistics (BLS) announced on March 12th that the total cost of employing a state or local government worker is 45% more than an equivalent worker in the private sector.” click here
According to the Congressional Budget Office (CBO), a large federal debt could lead to a fiscal crisis where investors no longer want to buy the securities the U.S. Treasury sells to finance the debt. Those folks are right on it, focused like a laser….
Click here for CBO report.