States next in line at the bailout trough
Looks like the states are next in line for a bailout, right behind the automakers, banks, brokers, insurers, money market mutual funds, and Cousin Sue from Milbrook, N.D. (I made that last one up). From the New York Times ...
"President-elect Barack Obama turned from national security to domestic concerns on Tuesday, telling the country’s governors that his administration would not delay in pushing an economic recovery plan that would bring relief to the states, 41 of which are forecasting budget shortfalls this year or next.
"Speaking at a conference of the National Governors Association in Philadelphia, Mr. Obama said his background in the Illinois state senate made him particularly sympathetic to the needs of state and local governments. And he declared himself open to good ideas that work, whether they come from Democrats or Republicans.
“We are not going to be hampered by ideology in trying to get this country back on track,” he told the governors, many of whom he met for the first time at the conference. “We want to figure out what works.” Vice President-elect Joseph Biden Jr. also attended the meeting.
"Aides to Mr. Obama have suggested that a recovery plan, which the president-elect hopes to be able to sign not long after taking office on Jan. 20, might carry a price tag of as much as $700 billion."
I'm not trying to make light of the problems facing states like California, which is facing a whopping deficit of $28 billion over the next year and a half. I'm just noting how this "bail out everyone" stuff is getting a bit nuts. The Fed is openly practicing a "print money and then drop it out of helicopters" monetary policy. The Treasury is borrowing like mad and buying every asset besides Little Billy's baseball card collection. And it seems like Washington is refusing to say "No" to anyone. Meanwhile, the total cost of all these bailouts -- and the debt we're going to stick our children and our children's children with to pay for them -- is climbing trillions of dollars at a time.