Today I am adding a new piece to the Southern Couples Guide blog called Friday’s Financial News, where I pick a news article that I think is important for our readers to know about. It will always pertain to finances, but not necessarily personal finance. Also, if any of our readers see an article that they think would be a good Friday Financial News article, feel free to send it to us in the “contact us” section of the website!
Today’s topic is “States: We’ll take stimulus – our way” from CNN Money.com
Find the article at: http://money.cnn.com/2009/03/20/news/economy/stimulus_waivers/index.htm
Brief summary: Some states are requesting that the government allow them to use their portion of the stimulus money for things other than what the government allocated it, and some are refusing to take portions of the stimulus money.
Okay, so first things first…I have to go on record that I love the idea that some states are refusing to take all the stimulus package money. That is what they SHOULD be doing. Just because the federal government says you can have some money for a particular part of your states budget does not mean that you should take it. These states are conerned that if they take money for certain projects now they will not be able to maintain them after the federal money runs out. They are correct, and for some reason, nobody seems to be talking about this. This is how the country got into some of its financial problems in the first place…borrowing to cover shortfalls, and when you can’t borrow anymore, then what? Think about the problems that will crop up for the states that do start these projects. For example, they start a program for fine arts, and they get 100 people a job on this fine arts stimulus money, which runs out in 2 years…what then? The state more than likely will not have the money to continue to fund the program, so those people are out of work again…and if this happens in 30-40 states, pretty much all at once, well, then we have another unemployment crisis! Better for those people to find a job in the private sector, and the state government not to owe the government for the program. You see, it’s a band-aid…it doesn’t actually solve the problem. These states need to remember that once the federal money dries up, they have to go back to their regualar budget, which could be quite a shock if they don’t plan ahead!
Nevada is rejecting the money the government is sending them for unemployment, because of the provisions in the bill regarding how to qualify for that money. The state government has to change the regulations on unemployment to include part time employees. That means part time employees will be eligible for unemployment benefits, but Nevada (along with other states) don’t believe the businesses that operate within their borders will be able to pay the additional costs associated with covering the ex part time employees. Well, Nevada and those states are correct. Once that money runs out, those rules and regulations will still be in place, and companies will go belly up trying to cover unemployment benefits for part time employees! That’s just what we need…people need work, and companies will have to close their doors because they can’t pay the unemployment insurance!
So, it’s my opinion that a lot of states are going to take all of this money and spend it according to the rules in place by the federal government. Overall, I’d say this is a bad idea. I applaud those states who remember that they retain their sovreighty (yes, they did) and can choose what taxpayer help they do and don’t want from the government. I worry that after a couple of years when this money has run out, that we as a nation will plunge deeper into a recession. So, check out the article and tell us what you think. I look forwar to hearing your comments!
Tags: Economic Stimulus Package, State Government, State Sovereignty
