So here is what we’re reduced to, after Senate Finance Chairman Hugh Leatherman raised the alarm that the Clyburn amendment notwithstanding, the Legislature might not be able to bypass him to get the stimulus funds: Asking Mark Sanford to reconsider.
Which, I’ve got to say, is not much of a plan.
The senator said, in the story in The State this morning, that he plans to ask the governor to reconsider his quixotic stand against common sense. And at a Senate Finance subcommittee hearing that I attended this morning (to hear the three research university presidents make their budget pitches — more about that later) several other senators urged the presidents, and their trustees, and students, and the small army of alumni attending Carolina Day at the State House, to make their concerns known to “the man downstairs,” as Sen. Darrell Jackson referred to him, even though he was speaking in the Gressette Building rather than the State House proper (and maybe he was talking about some “man downstairs” in the basement of Gressette, but I doubt it).
And what do you think the chances are that the governor will be moved by any of this? Essentially, zero. You have to understand that real-world consequences mean nothing to this governor, whose only reality is his ideological constructs. Especially when the consequences are felt by people other than Mark Sanford.
Maybe you can think of an argument that will cause him to see how nuts it is to refuse money that South Carolinians will have to foot the bill for later anyway. But I’m fresh out.
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Give the man a break, Brad. He’s only getting 3M for his house. If he’s going to suck it up then the rest of us should as well.
On a more serious note, isn’t this typical? Many rich people completely lose sight of the challenges faced by most Americans. The disparity in wealth distribution today is greater than any time since the 20s. The stock market soared during much of W’s administration but median income for the middle class was stagnant over the same time period. In other words, the rich were getting richer.
South Carolinians have no one to blame but themselves. They voted him BACK into office. He was rewarded for his idiotology.
Randy, you’re half right. Wages were stagnant during the Bush reign of error but the stock market, as measured by the DOW, sank 30% over the course of his 8 years in office. Even the rich didn’t benefit all that much. The wealth destroyed by our disasterous previous leader affected everyone. But the very richest were at least able to fall back on what was left. The poor and middle class are now paying a very steep price for his incompetence. And our governor is made from the same mold. Can’t we somehow break that mold? It’s been used too much already.
> Maybe you can think of an argument that will cause him to see how nuts >it is to refuse money that South Carolinians will have to foot the bill for >later anyway. But I’m fresh out.
He’s not refusing the money. He’s refusing the money that comes with strings attached for future expenditures.
How much debt would you be willing to take on at this time in your life? If someone offered to loan you $100,000 today, would you spend it all in order to help the economy? Or would you pay down some debts and put the rest aside to cover immediate needs? Would you take the money if you were forced to purchase a $200,000 house with it and expected to come up with the other 100K in a couple years without being able to sell the house?
There’s nothing nuts about fiscal sanity. Nuts is taking magic money created out of thin air and not worrying about how you will ever pay it back.
Randy – I hate to burst your bubble but Sanford would win a third term easily if he were allowed to run again. But he can’t — unlike the legislators who actually bear the greatest responsibility for the state of the state and who can stay in power for life.
Is there anyone besides Sanford who ever is held accountable?
You’re right Doug. He would win again. Because we’re idiots.
Same idiots vote for all the rest of the politicians.
If we can term limit the Governor, we should be able to term limit the legislators also. They wield the power but can deflect the blame onto the governor by crying about how he doesn’t make small talk with them and kiss their feet.
The SC economy is the Harrell-Leatherman economy.
Just as the public school system is the Jim Rex Public School System.
He runs it, he owns it.
How about a speedy impeachment?
Doug, with respect to the comment “He’s refusing the money that comes with strings attached for future expenditures,” I think it is more accurate to say “He’s giving the money with strings attached to some other state.” Saying he’s refusing it seems somehow sort of noble, like he’s resisting temptation. Instead he’s just giving away something we’re paying for anyway. It won’t make me feel better to drive over the “South Carolina Commemorative Bridge” somewhere in Indiana sometime. I don’t think it’ll help out our state too much either.
It isn’t actually an option of us choosing more debt (I’m sure you know this)- the “more debt” has already been chosen by DC. I don’t think Sanford thinks of himself as refusing to take on debt either. He appears to regard this as a simple contest between the ideas tax breaks = growth vs tax expenditures = growth. He has always maintained, in a depressingly black and white sort of way, that breaks are the only solution. It’s disappointing, I would have hoped someone in government this long could be a little more mature and nuanced.
Oh stop, Doug. You know Jim Rex has virtually no ability to change education in this state. He runs a Department whose every activity is mandated by the Legislature. He can’t cut a penny without running afoul of the General Assembly. He could cut salaries, maybe, and then we’d have really unqualified people doing what the General Assembly makes them do. And it wouldn’t contribute more than a couple of pennies to local district money.
That’s fine, KP.
Just wait til Jim Rex runs for governor in 2010. Then we’ll be hearing about all the things he did to improve the education system. Wanna bet?
John,
So if we’re going to sink the economy, we may as well all enjoy the ride to the bottom?
I’m just amused that people find Sanford heartless for refusing to borrow our way to prosperity. How does it work differently for the government than any other entity? You gotta pay the piper sometime.
I hope he does. And if he does, you’ll be hearing a lot less defending of the status quo and a lot more discussion about what needs to be done to change the system.
I agree with KP about Rex. At this very moment, the legislature has a bill requiring schools to inform students about dating violence. – Not that I don’t want to teens to be informed and wise, but public schools are expected to do everything and it is legislated bit by bit by the legislature. The legislature tells the schools what a myriad of different funds can be used for – no flexibility there. They’ve legislated sugar in the schools; it just goes on and on.
But the other thing about the Legislature and Sanford, they seem to be doing everything except facing the real problems that we have. It just a bunch of grown up boys playing a big game but the consequences of the game affect real people and real lives.
KP – so Rex is powerless to say anything or do anything to change the public schools that he is in charge of now yet will magically turn into a champion of change when he’s running for governor?
What’s he waiting for?
I just am trying to understand what qualifications he would have to be governor if he doesn’t do anything in four years to improve the schools he’s in charge of?
Which is he: a figurehead or a puppet?
Doug, I know you watch public education, so I know you know better than what you’re saying here. You can’t change direction without shifting money, and in South Carolina, all money flows through the Legislature, with every t crossed and every i dotted as to how it can be spent.
Rex is naturally not powerless to say things, or even to propose things. He just doesn’t have the power to do what he wants unless the General Assembly agrees with it.
He proposed changes in state testing. The General Assembly did some of what he wanted, and some of what the EOC wanted, and most of what legislators wanted.
He proposed a school choice bill, which might have really changed the shape of things, but the General Assembly defeated it.
He’s proposed revenue changes, which the General Assembly is pondering, and which it will take them years to resolve if they ever do.
He’s proposed funding changes, ditto.
But then, they’re very busy mandating that teens be informed about dating violence, with the money for that to come from….well, somewhere.
Jim Rex is not your problem.
And ialong the lines of what he could contribute as Governor, I would say he has this: a clear idea of what needs to be accomplished, a bent toward pragmatism instead of ideology, and the ability to work with the Legislature (since we are a legislative state) to get it done. Every one of which puts him in stark contrast to what we have now.
And he’d have a lot more clout dealing with the General Assembly as Governor than he does as the lone Democrat in statewide office in a state with a Republican Governor and a Republican Legislature.
Doug,
That’s the misconception – Sanford doesn’t have the power to borrow a dime or refuse to borrow a dime. It’s already done and the debt is nationalized. All Sanford can do is make sure we pay for money we don’t get. I don’t anticipate “enjoying” spending it, but since we’re paying for it anyway I would rather it stir the pot here than somewhere else.
Doug, by putting all this control in Rex’s hands, you undermine your previous arguments about the R2 School Board. Given your argument, this board is absolved of culpability. Also, MOST of the funding for R2 is in the hands of the county council.
The truth is this issue extends far beyond any office or individual. Rex call pull some strings from downtown but Hefner, Anderson, Montgomery, Rich, and the teachers all play a huge role in learning.
Responsibility also falls on the shoulders of parents who succumb to simplistic arguments like drop out rates are soley the responsibility of schools and like supporting school choice that will provide $4k for a poor family to send a student to a $10k/year school.
As I’ve written before, the ONLY politician who’s addressed education as a societal issue is Campbell junior. If a poor rural town has 20% unemployment and only 60% of the adults having a high school diploma, Rex, school choice, Rich and his SCouRGe cronies will have little change to affect real change.
little CHANCE to affect real change.
Doug, a family’s budget is very different from the federal budget. A family has a steady stream of bills that must be paid on a regular basis. It is prudent for them to have some set aside for emergencies. The Feds on the other hand incur expenses in a very sporadic manner. We have a situation that requires spending money, not saving it. By withholding money from the economy we only exacerbate the current problem. At some future time when the current emergency is behind us we can focus our efforts on paying down the debt and preventing inflation. That’s the Keynsian way and it works.
Granted, the government does a poor job of running surpluses during times of plenty. Clinton did some of that but not nearly enough. All the recent Republican administrations, along with congress, have failed utterly in that regard thus making our current situation much more difficult. But at the end of the day our only option right now is to run deficits by spending money. That’s not what a family should do, but it’s the right medicine for our current economic situation.
No politicians slobbering over our children’s money has yet demonstrated any real NEED for this federal money.
The state revenues are the same as they were in 2005, which was 20% more than 2001. The state was awash in surplus money then, way over its original spending plan. So why can’t it cut back and live on that, just like the private sector taxpayers are having to do?
We should not take any more money than we really need.
Right now, revenues will be as much as they were in 2005, which was a time of excessive expansion of the state government, so it is hard to argue that the state needs any more money. They just need to reallocate it to pay for increased spending on unemployment benefits.
We should not take any money we need to repay with future taxes.
We should not take any money which requires us to match it with state funds, because that means more taxes.
We should not take any money for projects which are not absolutely vital, which we already had as a budget priority.
We should not take any funds which create new programs or expand any social welfare programs, or build new roads and bridges which future taxes must maintain.
bud hits the nail on the head in my opinion. Running these kinds of deficits during a recession is not a bad thing as long as we pay it back immediately when the economy turns around by running surpluses.
But, we all know that the Democrats and Republicans are NOT going to do this because it requires reducing federal benefits and spending or raising taxes. This is very unpopular and our spineless congressmen and women won’t do it.
And it’s worse than that. A lot of the recession spending not only goes unpaid, but turns into permanent spending which further complicates things.
Throw another bundle of straw on the camel’s back and let the children figure it out. That’s the Republicratic Party way.
Anyone who thinks there’s a long-term hope for democracy and prosperity in America when we have spineless, self-interested elected leaders and an ignorant, uneducated population is fooling himself or herself.
Exactly, Birch.
This is the equivalent of maxing out your credit cards when you lose your job instead of cutting expenses and working harder to improve your skills so that you are more marketable. Eventually the credit will run out.
How about we accept the bailout money with this condition: every adult citizen gets a bill for his/her share of the amount with payment due in 2019? If you don’t pay off the bill, your taxes are raised or your Social Security check is cut until it’s paid off.
We’re all in this together, right? Or are some of us paying for the recovery of others?
Doug, I would gladly support your stimulus payback plan.
Yes, bill every household for their share of stimulus debt, not just the 16% of people who actually pay income taxes.
Doug, that’s a non sequitur about cutting expenses. If a family bread winner loses his or her job and they have NO income or savings, you can’t simply cut expenses that are essential. For example, if Lee loses his job as a economistengineerfirecaptainsalesmanmarksmanhallmonitor and there’s no money at all, he’s not going to cut mortgage, utilities all together, food, and his membership to the Rush Limbaugh fan club.
MILLIONS of people are recently unemployed. We have AMERICANS moving into tent cities. You honestly think the answer is to cut their spending?
Uh, Randy, we’re not cutting spending. We’re increasing it by amounts never before seen in our country’s history.
There is plenty of money available within the current tax revenues to take care of Americans in need. Unfortunately, we are spending it on other programs that politicians feel are more important. It’s easy to just create money out of thin air rather than shift money from non-essential, politically connected programs. Every dollar spent on outside foreign aid, defense spending, programs that support illegal immigrants, department of education, IRS, etc. could be spent on Americans in need. It’s not. So instead Obama cranks up the Treasury xerox machine and starts cranking out devalued dollar after devalued dollar. There is no way that can be sustained.
If you lost your job, wouldn’t you shift money from non-essential items to
essential items first? Or would you just keep spending on the same stuff and borrow enough to cover your expenses?
Repeat after me: the stimulus money doesn’t really exist. It’s money transported in a DeLorean from the future.
Doug, with regard to the stimulus package, the money exists and the budgets are allocated. We’ve already signed the paperwork to take out the second mortgage. We’re already obligated to pay it. The 49 other states we cosigned with can and will spend our checking account dry if we won’t spend it to the best possible benefit we can get. I do not appreciate Sanford’s posturing that “refusing” the money is really possible. We’ve already signed off on it and are committed to pay for it no matter what. So we should use it to the best benefit we can.
If he wants to articulate it as an issue of constitutionality and local control, fine, get on with it and get to court. Right now he’s just showboating and it’s a waste of time.
John, you are attempting to rationalize irresponsible spending by saying,
“Everyone else is doing it”,
“If we don’t steal that money from the taxpayers, someone else will.”
If we have to take this phony federal money, then the other state spending and taxes should be reduced by the same amount.
Doug, the point about spending was in reference to your non sequitur about people cutting their spending in lieu of maxing credit cards. If people have NO MONEY then there is no shifting of money. Your suggestion to simply cutting spending is moot.
The US government has to increase spending because so many people either don’t have money or aren’t spending it. It’s supply and demand. Businesses have merchandise but there’s no demand because there’s no spending.
BTW Doug, still waiting for the proposal you support. What does the government do if we don’t spend!?!?!?
Randy,
What part don’t you get? The government doesn’t “have to” increase spending. They could take money being spent right now on non-priority programs and put it toward economic recovery programs. The money is there. But making tough choices is not the way politics works. The easiest solution is to print more money and hope for a Hail Mary miracle a few years from now.
The proposal I support is:
No bailouts for any industry
No deficit spending
Cutting wasteful government spending especially in
Cutting taxes for working people
Simplifying the tax system by implementing a flat tax, no deduction, no exemption system.
Phasing out Social Security and putting all that money back into the hands of the people who earned it
It would be better to have one or two tough years of economic readjustment than a ten year Depression. Obama is leading us down that path.
When your kids get old enough, tell them the reason they are paying most of their income to the government is because you spent it in 2009 rather than ask your political leaders to cut wasteful spending.
The alternative to the Democrat’s printing fiat currency to finance huge deficits, and spending most of it after 2010 on projects of little economic value, or on huge new social welfare programs like socialized medicine, is cut taxes right now and let the private sector spend and invest THEIR MONEY right now.
* A suspension of all federal income taxes would create a budget deficit only one half as large as the current one already planned by the Democrats.
* Abolish the capital gains taxes altogether, to encourage investment.
* Stop the double taxation of stock dividends.
* Abolish the taxes on interest to encourage savings.
* Replace the income tax with a flat federal sales tax of no more than 10%, which is more than enough to meet all the 2006 spending.
* Allow businesses to write off capital investments on their taxes the same way they choose to depreciate or expense it for their accounting.
* Start phasing out Social Security, and replacing it with private savings accounts.
* Start phasing out Medicare, and end the special tax breaks for corporate employee benefits, in order to build a system of private, individual healthcare insurance.
* Abolish all government pensions. Pay off everyone with a cash settlement and let them take care of themselves, instead of riding the backs of private sector taxpayers.
Doug, instead of sharing all that, why not simply say “I believe in conservative platitudes”?
Tax cuts will NOT work. Conservative economists dismiss cuts as a response to a recession/depression. The GOP tried it in the early 30s and made the crisis worse. In comes the “Stalinist” FDR and BAM, the GDP skyrockets in the mid and late 30s. Unemployment drops by 40%.
In 2001 and 2003 W gave the wealthy TAX CUTS. 4 years later we have a grizzly bear market. To stem the tide he offers a big fat tax rebate in 2008 which did nothing.
What part of supply and demand is confusing? This is economics at it’s most basic. If there is not demand, there are no sales. No sales means businesses lay off employees or close. Food stamps are considered the most stimulus or products because it goes to the people who will spend it the fastest. Tax cuts often go to pay off bills (that’s not new spending) or to into savings – no demand there.
It’s simple, in the early 30s the GOP cut spending and cut taxes plan FAILED. FDR SPENT money and there was success. WWII, MASSIVE MASSIVE government spending, pulled us out for good.
Supply and demand.
Randy,
The stimulus package has nothing to do with supply and demand. Sure, there will be a temporary gain in the amount of money some people have in their pockets. But where does that money come from? It doesn’t come from the production of goods and services. It comes from the Treasury simply printing more money. So what effect do you think that has on existing dollars? It makes them worth less. And then guess what happens? Prices rise to cover the drop in value of the dollar.
You conveniently keep ignoring the fact that every deficit dollar spent must be paid back someday.
If the Obama plan was right, then why don’t we all just start scanning $100 bills, printing them out, and buying stuff? Because then $100 wouldn’t be worth $100 any more. If you can create money out of thin air, it devalues existing money. Is that really a difficult concept to grasp???
And as an example of why Obama’s plan will not work just look at the stimulus checks that were distributed last year. They did nothing to stave off the collapse of the economy. Wasn’t that the same “supply-demand” scenario you are promoting? Obama’s plan is the same thing on steroids. And we know what happens when you abuse steroids for too long.
Conservative economists dismiss cuts as a response to a recession/depression. The GOP tried it in the early 30s and made the crisis worse.
Damn those Republicans for cutting taxes during The Great Depression!
Oh, wait.
Tax cuts worked for President Bush in 2001 to quickly end the recession left by President Clinton.
The economy improved enough to generate money to play for the entire war in Afghanistan and Iraq, and balance the budget all 8 years, if there had not been such large increases in spending on social welfare programs.
The economy was very good right up until the summer of 2008, with much lower unemployment than under Clinton, and much more increases in net wealth of Americans.
The economy came apart when Democrats attacked IndyMac Bank and Lehmann Brothers as cover for the collapse of their affirmative action mortgage programs at FNMA and FMAC. The war was won in Iraq and no longer a campaign issue, so they created an economic issue that quickly got away from them.
Those were TAX REBATES, similar to TAX CUTS Doug. You prove my point! YOUR tax cut/rebate idea doesn’t do any good because people use that money to pay bills or put into savings.
If the government spends the money, people get jobs! These jobs can last for months or even years. When people have a job, they buy lunch, groceries, clothes, etc. That creates demand and those businesses then move product.
Yes, the money must be paid back one day. Using our previous analogy of a household budget, if I love my job and have no money I will run up my credit card to buy groceries. Your idea is to not buy groceries because you have to pay it back. Great idea, let’s not buy food for a few weeks because we don’t have any money.
At extreme times like this, running up a debt is not as bad as complete economic collapse. Using your plan, the government cuts spending. That stifles demand and MORE businesses close. More millions of people lose jobs. That’s what the GOP did in the early 30s. Respect history, Doug, it does repeat itself. With that in mind, FDR jacked up spending money the government did not have and GDP skyrocketed and unemployment droped by 40%. Then the government spent massive amounts of money it did not have for WWII and we completely recovered from the Great Depression.
Supply and demand Doug.
Putting money into savings or paying off debt makes more money available for the banks to lend to other people. When you pay off or save $1.00, the bank can lend $13.00.
Tax cuts work. Tax increases kill economic growth, especially as high as taxes are now.
Reagan fixed the Carter economic mess by reducing and simplifying taxes.
Under Reagan and GHW Bush, the net worth of Americans increased from $10 Trillion to over $50 Trillion.
Clinton’s tax increases were followed by economic stagnation.
His reduction of capital gains taxes to 14% ( more than half ), created an investment boom in new businesses. His tax increases on the middle class left Bush with a recession.
Likewise, FDR killed off both moderate recoveries in the 1930s with tax increases on individuals and businesses.
Randy,
What does your history book tell you regarding how long the Depression lasted during FDR’s administration? When should we expect to see things turn around? Have we hit the bottom yet? Since this economic strategy is all under the control of Obama and the Democratic Congress, they better show progress in about three years or it will be a one term presidency.
In my opinion, the way out of the recession is to put as much money in the hands of people who are motivated by profit incentive to create jobs and create wealth. The government does not have that reputation or purpose. The dollars that flow through the government are less efficient than those that flow through the private sector.
Good lord, we pumped BILLIONS into the banks and big business. If they’re not motivated, as you say, who is? Let’s review again. In 2001 and 2003 we gave the wealthy a MASSIVE tax cut. 4 years later we have a profound economic crisis. We give a huge tax rebate in 2008 and that did nothing (our rebate went to paying existing medical bills, no stimulus there and we weren’t alone). We have MASSIVE bailouts, infusing money into the biggest of big business and still no action. The private sector has not come through.
How long the depression lasted? Are you suggesting that the New Deal caused a delay in recovery? Given that your suggestion of tax cuts and cutting spending accelerated the Great Depression under Hoover, 8 years of the New Deal taking us from 25% unemployment to 15% and energizing the GDP was completely effective. Then we went into massive debt to fund the war and voila, recovery.
Randy, you do know that a huge portion of the Democrats’ stimulus (37%) was tax cuts, right?
So are you angry at the Dems for bending this country over to the tune of $288 billion or are you ready to admit that tax cuts are a means of stimulus too?
Either way is fine with me, but if indeed you do choose the former, can you please consider stopping voting Republicratic?
One less vote for those assholes would make the country a better place.
Birch, I am keenly aware of the tax cuts that were included. Obama reached out to republicans immediately with an offer to cut taxes, not as stimulus but as an effort to compromise. This was the bipartisanship the GOP speciously decried were absent from the president. They lied and still would not vote for the stimulus because they were posturing. The only stimulus the GOP understands, apparently, is Brittany Spears.
Many CONSERVATIVE economists scoff at tax cuts as stimulus. I cited one who cited the tax rebates from 2008 that did nothing to stimulate the economy.
Obama lied about tax cuts.
His carbon tax will be a national sales tax of 20% to 40% on all utility bills.
He wants a $2.00 per gallon tax on vehicle fuels, which will be another sales tax on working people.
More and more people are realizing that Obama is dangerous.
Ok Randy, let’s assume that you are correct. Will you at least stop supporting a party that has shown its willingness to throw $288 billion down the drain — $288 billion which could have gone towards stimulus when we badly need it — for purely political reasons when they did not need the votes? How can we trust people who show such recklessness?
If what you say is true, then the Democrats responsible can go to hell. Of course, I don’t believe that the Democrats believe tax cuts during a recession have NO stimulus effect.
And if memory serves, even that one conservative economist didn’t say that tax cuts did “nothing” to stimulate the economy. He said only 15% of the rebates went towards consumer spending. Again, I am not arguing for the effectiveness of tax cuts over government spending during a recession. I only argue that tax cuts do have some stimulus effect.
“nothing” was more a figure of speech, so we’ll go with 15% – barely significant considering that 85% is remaining!
Down the drain? Reckless? The point was to compromise to get something passed. They needed 2 of those 3 republican senators. Without compromise, the stimulus might still be under debate today. The votes were not need in the House.
one conservative economist? Hardly! If the conservative economists were collectively against stimulus, we’d be hearing about this non stop (and the GOP would likely have more than 18 pages for a budget). The one I cited, Feldstein, is a bellwether for the right. If he agrees that ONLY 15% of tax cuts or rebates are stimulating and hence are unworthy, then you can bet that’s the prevailing view.
Democrats oppose tax cuts for individuals because they claim that allowing taxpayers to keep more of their own money will result in paying off personal debt and increasing savings.
Paying off debt and saving money actually will stimulate the economy, and a lot more than direct spending by government.
When debt is reduced at the bank, or savings deposited, the bank can loan a multiple of the amounts, to someone else. RIght now, that multiple is about 13 to 1.