Opinion

Giving Financially Mismanaged States a Bailout Is Morally Reprehensible

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Posted: Apr 29, 2020 12:01 AM
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Giving Financially Mismanaged States a Bailout Is Morally Reprehensible

Source: AP Photo/Charles Krupa, File

“Never let a crisis go to waste.” Those now infamous words ring as true, maybe truer, today than ever before and the current crisis is no exception. In the wake of the coronavirus pandemic, Americans are witnessing a new epidemic emerge—an epidemic of middle-class theft. Politicians in states that have been fiscally irresponsible for decades, amassing massive levels of debt and unfunded liabilities are coming hat in hand to the federal government—to you, the middle-class taxpayer—in an attempt to exploit our current health crisis to solve their financial mismanagement.  

Such exploitation rightfully begs the question: why should the taxpayers of fiscally responsible states be forced by the federal government to bail out the states who failed, in many cases for decades on end, to wisely and responsibly manage their finances?

President Trump posed this very question on Twitter earlier this week and last week Senator McConnell dared to suggest that states consider filing bankruptcy instead of looking for bailouts. The response?  Exactly what you would expect from the governors of multiple states who have longstanding track records of fiscally irresponsibility—anger, outrage, and name-calling.

Governor Cuomo of New York called the notion “dumb and vicious.” New Jersey Governor Phil Murphy blasted the idea of states taking responsibility for their own past financial mismanagement as “completely and utterly irresponsible.” Governors Whitmer and Pritzker, of Michigan and Illinois respectively, similarly attacked the concept as foolhardy.  While these Democrat responses are less than encouraging, they are also not unexpected.   

The genesis of this current debate stemmed from a letter by an Illinois State Senator to that state’s Democratic congressional delegation requesting a federal bailout for Illinois, not for the purpose of buying ventilators and test kits, but to help sinking public employees’ pension fund.  Make no mistake—Illinois’ pension fund has been sinking for decades and Democrats’ policies in the state have continued to compound and exacerbate the problem long before the coronavirus became common nomenclature. 

In fact, the systemic mismanagement of state finances by many, arguably most states, dates to well prior to the current health crisis and is not limited to merely pension fund obligations.   Let’s take a look at the financial stewardship of the four states referenced above:

Illinois: Current debt $165 billion

New York: Current debt $349 billion

New Jersey: Current debt $95 billion

Michigan: Current debt $73 billion

Each of these states, along with many others, was running budget deficits prior to the coronavirus. So, again, we are forced to ask the question: why should the taxpayers of fiscally responsible states be forced to clean up the mess and foot the bill for the fiscally irresponsible ones?  

The citizens of states like New York, New Jersey, Michigan, and Illinois have repeatedly voted for politicians who fail at even elementary money management.  Any American with common sense, and certainly anyone who has run a business, can immediately tell you that when you spend more than you take in, you have a deficit.  This isn’t politics or rocket science, it is simple arithmetic. 

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For these states’ politicians to now expect that they can exploit the current pandemic to make up for their failures isn’t just wrong, it’s morally reprehensible—it’s theft.  The people of Tennessee, Kansas, Florida, Arizona, or any other state for that matter, didn’t cause New York’s financial woes, nor did they elect those who did.  The only ones responsible for an individual state’s fiscal shortcomings are the people who live within that state.

As Washington gets ready to look at yet another round of coronavirus relief and with the U.S. national debt rapidly approaching $30 trillion, Congress must reject any notion that the citizens of another state should be forced to bailout the irresponsibility of another.  Failure to do so will result in yet another unfair financial burden being redistributed to today’s middle class and tomorrow’s children and grandchildren.

Jeff Webb is an internationally renowned entrepreneur, founder of Varsity Brands—a global sports empire, President of the International Cheer Union, and a business, politics and culture commentator featured in outlets such as Newsweek, The Washington Times, Forbes, ESPN, and more.