Tuesday, 24 February 2009

Republican Governors Split on Stimulus

Written by  Patrick Krey

Bobby Jindal Obama’s economic stimulus package is causing quite the stir among America’s governors, particularly the Republican ones. The New York Times reports: "Republican governors split sharply over the weekend over how to respond to the economic crisis, a debate whose outcome will go a long way toward shaping how the national party redefines itself in the wake of its election defeats of recent years."

It looks like the Republican governors are dividing along the lines of moderates and conservatives. The epitome of moderate Republicans, California Governor Arnold Schwarzenegger, who was one of the biggest advocates for the stimulus actually poked a little fun at his fellow Republicans: "Everyone has their own way of thinking. I just hope they give me their funding."

Governor Mark Sanford of South Carolina didn’t find much to laugh about with the situation. Sanford is part of a small coalition of mainly Southern governors who were opposed to its passage and are now what he considers “the last ones standing” in setting a conservative fiscal policy for America. “What we're doing should have been done by Congress and the U.S. Senate.... This is a gut check vote, a gut check deliberation ... for the future of our civilization,” Sanford told the Republican Governor’s Association.

Many of the complaints from Republicans centered on the fact that accepting federal funding will have long-lasting effects on state laws even after the funds run out. Louisiana Governor Bobby Jindal has stated that he will reject $33 million of the stimulus because it would expand unemployment insurance that the state would have to pay for by raising taxes after the funds run out. Texas Governor Rick Perry voiced similar concerns, worrying about strings attached to the stimulus that are “a mile long.”

President Obama didn’t take too kindly to the complaints about his economic recovery program, complaints he criticized as mere posturing for the next presidential race: “If we agree on 90 percent of this stuff, and we're spending all our time on television arguing about 1, 2, 3 percent of the spending in this thing … that starts sounding more like politics.... There's going to be ample time for campaigns down the road.”

President Obama is correct that some of the complaints about the bill are trivial when considering its enormous scope. In addition, all of these criticisms overlook the stimulus bill’s biggest liability: it is not in any way, shape, or form authorized by the U.S. Constitution. U.S. governors check their constitutional conscience at the door because states have been accepting unconstitutional U.S. funds for a very long time. Those funds have helped to reduce once strongly sovereign states, an important check on the central government's power, into mere administrative units of the federal apparatus.

Although serious criticism of the stimulus was rare, Governor Sanford, of all the plan's opponents, did point out the very real danger facing this nation because of Obama’s aggressive government spending. In an interview with Politico, Sanford warned about the possibility of an inflationary depression: "If we go too far in just spending too much money and borrowing money, we could put ourselves in the exact position Argentina found itself in the 1920s when they had, you know, cratering of their currency. If you look at the Weimar Republic, you know, between World War I and World War II, you had a cratering of their currency, so much that you had to carry a wheelbarrow load of currency to get so much as a loaf of bread. And horrible things happened in the wake of that experience."