Dec 04 2009
But We Don’t Really Have to Pay it Back, Right?
North Carolina’s high unemployment rate has stuck the state with $1.4 billion in debt – money that officials don’t know how they’ll pay back.
It gets worse. The debt is still rising.
The problem is that with about one-half million people out of work, the state has more unemployment claims than it can pay. So it has been borrowing from the federal government since February, sometimes as much as $20 million a day.
So the state owes money it can’t pay to a federal government that ALSO owes money it can’t pay? Boy, this just gets better and better.
Meanwhile, here’s newly-elected Senate Majority Leader Martin Nesbitt, who is undoubtedly a Nobel Laureate in Economics:
Sen. Martin Nesbitt, the new majority leader, gave a recent speech in Asheville in which he credited the 2009 federal bailout as the only way to protect jobs and personal income in North Carolina. The alternative to the bailout, he said, would have been an economic meltdown.
Let me see if I have this straight. America has entered a Great Recession because households and businesses, in response to perverse subsidy and tax incentives, took on excessive debt to invest in real estate and other speculative ventures lacking any connection to underlying economic reality. So, in response to this costly borrowing binge, our public officials truly think the right policy is to borrow still more to finance the daily operations of bloated bureaucracies and expansive entitlements?
This isn’t a rational theory of political economy. It’s a trip to Cloud Cuckoo Land.
No, it’s just another day in the N.C. General Assembly.
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