Tag: bailout

Congress Can’t Afford to Bail Out High-Spending States

 

Gov. Andrew Cuomo (NY-D) speaks to union group. (Lev Radin / Shutterstock.com)

Congressional Democrats are doubling down on their demand that, in response to the coronavirus pandemic, the federal government must bail out free-spending states. There are several terrible ideas out there just now (destroying minority-owned businesses in the service of racial equality comes to mind), but this is one of the worst.

The crisis in problem states is fueled mainly by unfunded pension liabilities. Public employee unions and the politicians they elect have for decades promised lavish pensions to union members, far exceeding those paid to wealth-creating private-sector employees. But adequate funding was never provided and the over-optimistic financial market returns didn’t materialize. The result is a growing total of $4.9 trillion in contractually enforceable liabilities to state retirees. There is no way the states can make these payments.

It’s the first-ever al fresco edition of the Three Martini Lunch!  Join Jim and Greg as they welcome encouraging news on the search for the coronavirus and that experts believe the economy might start improving in June. They also roll their eyes as California Gov. Gavin Newsom says the federal government must bail out his state or else first responders will be the first ones laid off.  And they fire back at a Washington Post opinion writer who claims Americans would do much better against the coronavirus if we weren’t so skeptical of government and protective of our liberties.