Spring Break
A Return to Federalism
Patrick Ryan
Issue date: 4/29/09 Section: Opinion
With the ensuing economic crisis in the United States, new distinct divisions are presenting themselves, both between parties and inside them. Obviously, the stimulus packages show the distinctions between both political parties. All House Republicans voted against President Obama's first bailout package, worth $787 billion, while around 20 Democrats voted against it.
However, the nation is also witnessing a division inside the parties themselves, especially within the Republican Party. Specifically, it is occurring between Republican governors. Bobby Jindal, governor of Louisiana, and Mark Sanford, governor of South Carolina, both argued against bail out money for the states, but eventually accepted a small percentage of the money after the initial stimulus package passed.
The other side of the Party, however, that of Arnold Schwartezenneger, governor of California, wholeheartedly supports bailout money for the states, as it means the balancing of budgets wherever there has been reckless spending during the economic boom from 2002 to 2007. Obviously, the majority sides with Schwartezenegger for political reasons. However, each state is different, which is why the states are the so-called "laboratories for democracy."
Because of federal spending, state spending has increased dramatically as well. In the era of stimulus packages and borrowing, this trend will merely continue. With economic expansion comes an expansion of the state, and with a recession comes spending cuts. The United States has followed this pattern lately, with a huge expansion in state revenue collection and spending from 2002 to 2007, and large deficits in 2008 and 2009.
From 2002 to 2007, combined state general-fund revenue grew twice as fast as inflation, resulting in an excess $600 billion. During these five years, overall spending rose 50% faster than inflation, resulting in a combined funding shortfall of $350 billion for 2009. In other words, during an economic boom in which the unemployment rate fell to 4% and gross domestic product increased consistently, state governments spent more and more irresponsibly.
However, the nation is also witnessing a division inside the parties themselves, especially within the Republican Party. Specifically, it is occurring between Republican governors. Bobby Jindal, governor of Louisiana, and Mark Sanford, governor of South Carolina, both argued against bail out money for the states, but eventually accepted a small percentage of the money after the initial stimulus package passed.
The other side of the Party, however, that of Arnold Schwartezenneger, governor of California, wholeheartedly supports bailout money for the states, as it means the balancing of budgets wherever there has been reckless spending during the economic boom from 2002 to 2007. Obviously, the majority sides with Schwartezenegger for political reasons. However, each state is different, which is why the states are the so-called "laboratories for democracy."
Because of federal spending, state spending has increased dramatically as well. In the era of stimulus packages and borrowing, this trend will merely continue. With economic expansion comes an expansion of the state, and with a recession comes spending cuts. The United States has followed this pattern lately, with a huge expansion in state revenue collection and spending from 2002 to 2007, and large deficits in 2008 and 2009.
From 2002 to 2007, combined state general-fund revenue grew twice as fast as inflation, resulting in an excess $600 billion. During these five years, overall spending rose 50% faster than inflation, resulting in a combined funding shortfall of $350 billion for 2009. In other words, during an economic boom in which the unemployment rate fell to 4% and gross domestic product increased consistently, state governments spent more and more irresponsibly.
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