South Carolina governor Mark Sanford writes in the WSJ that the federal government should not bail out state and local governments pinched by the current economic crisis. Whatever one's view of the financial bailout measures enacted thus far, Sanford argues, allocating additional funds to state and local governments rewards behavior, such as unconstrained spending increases, and will do little to improve economic conditions. He also notes that a bailout would reward fiscally irresponsible states (e.g. California, which nearly doubled state spending in ten years) at the expense of those states that exercised greater fiscal restraint. A better way to ease the pressure on state budgets, Sanford suggests, is to reduce federally imposed unfunded mandates, such as those associated with the REAL ID act. I am all for reducing excessive federal mandates, but I doubt it would do all that much to help those states in the most dire fiscal straits.
Don't Bail Me Out Bro: