And neither do some Senators.
Senator Kirsten Gillibrand (D, NY) says it's total BS that the Progressive-Democrat-proposed $1 trillion in Federal Wuhan Virus stimulus monies aimed at State and local governments would benefit public sector unions. Whether public sector unions should or should not benefit is a separate matter.
I'm being generous, though, in suggesting that such an intelligent woman actually misunderstands.
Adding a trillion dollars, or any amount of money, to a budget means—work with me, now—that budget has those added dollars to spend. Earmark the trillion for specific purposes, or bar it from being used for public unions. Do that by sending the money as cash and tracking serial numbers. That still lets the recipient government move a different [trillion] of dollars from a different part of its budget to benefit its public unions. That's the fungibility of money. It can be moved around.
Then the Senator said this in all seriousness:
We need to fund government so that we can continue to grow the economy….
Here are the Constitutionally authorized reasons for funding the government:
to pay the Debts and provide for the common Defence and general Welfare of the United States
Nothing in there about "growing the economy," not even under that general Welfare part. What is the general Welfare of the United States is explicitly defined by the clauses of the rest of Article I, Section 8.
Indeed, as has been demonstrated over the course of our history and across a broad range of nations, the way to grow the economy is to have a free market, capitalist economy with minimal government involvement.
In fine, the State and local governments don't need the stimulus money; they need to step back, (in many cases) end the lockdowns, and let the private economy function.
Eric Hines
8 comments:
Nothing in there about "growing the economy," not even under that general Welfare part. What is the general Welfare of the United States is explicitly defined by the clauses of the rest of Article I, Section 8.
You and I know that, but I think at this point even the current SCOTUS won't agree with the plain language definition provided in the Constitution. "Interstate Commmerce" has been ruled to include "individuals who choose not to engage in commerce between the States in a particular market (i.e. healthcare)", and a tax is only a tax for purposes of "Constitutionality" and in no other way a tax. I promise you, no one on the left side of the aisle (and few on the right even) don't believe the Congress can pass laws on just about anything they so choose at this point.
I don't entirely agree with you, Mike. CJ Roberts is the wild card here. Trump's nominations have pulled the courts, including the Supreme Court, back toward textualism, if not originalism, and that makes his upcoming nomination and confirmation critical. With five textualists/originalists on the Court, Roberts' interest in preserving...legacy...will become less important. And Thomas and Gorsuch have indicated it's time to undo/correct some prior, fairly hoary precedents.
Indeed, Roberts' behavior reminds me of Great Britain's erstwhile behavior vis-a-vis Europe in days gone by: a power broker, siding with one, then another, continental power to prevent serious hegemony.
In Roberts' case, it's his "balls and strikes:" he gave a call to the liberal wing, now it's the conservatives' turn, then back to the liberals,....
Eric Hines
We have had government giveaways and an unfree market since the beginning. It's worse now, but there was no previous golden age of the free market. Reading the history of funding for the railroads might make you homicidal.
Our market is and always has been overregulated. But the principle remains--the freer the market the greater the prosperity--as does the goal.
Eric Hines
Reading the history of funding for the railroads might make you homicidal.
This is a trope that really needs to die an ugly death as it has been debunked numerous times by economists and historians.
https://ap.gilderlehrman.org/essays/financing-transcontinental-railroad
"The leaders of both companies lobbied incessantly for government aid. Their efforts led to the Pacific Railroad Acts of 1862 and 1864, which provided several forms of assistance. Each railroad received its right-of-way along with a land grant of ten alternating sections on both sides of every mile of track (about 12,800 acres per mile); the government retained the sections in between. In addition, the companies received government bonds totaling $16,000 a mile for each twenty-mile section of track completed on the plains. For the plateau between the Rocky and Sierra Nevada Mountains the amount per mile went up to $32,000 per mile and for the mountain regions, $48,000. Each company could also issue its own first mortgage bonds for the same amount as the government bonds, relegating the latter to a second mortgage.
These provisions sound more generous than they were. The land grant ultimately proved valuable to both railroads but played only a minor role in financing their construction. The land was difficult to sell, in large part because it had first to be surveyed, and the overwhelmed government land office issued patents (titles) to parcels at a glacial pace. In the end the land grant helped underwrite Union Pacific construction mostly as collateral for yet another class of securities known as land-grant bonds. The government bonds have often been described as a subsidy or handout to the builders of both railroads, but they were in fact a loan that ultimately had to be repaid. Each company was, of course, responsible for paying interest on its own bonds."
"The government bonds received for construction—the so-called subsidy—remained a bone of contention for another quarter century. Ultimately both railroads paid off their government debt in full. From the first, the government also received another payment in the form of reduced rates on its troops and freight carried by the roads. No one doubts that the transcontinental railroad cost far more to build than was necessary, nor that considerable skimming off the contracts and the work took place. However, in the context of the era the completion of the railroad remains a remarkable achievement, one that for better or worse changed the destiny and character of the West."
https://www.coxrail.com/land-grants.asp
"For the land grant system to work as planned, the government hoped railroads would sell their lands to help pay for the construction costs of laying rail lines. The problem was that very few people wanted to buy any land until after rail lines were constructed. Moreover, there were severe problems with Native Americans, obviously upset at having their lands stolen. In truth, vast areas of land grants were located in barren and "worthless" parts of western states where it was nearly impossible to grow or ranch anything.
When it was realized that land grants alone would never accomplish the building of transcontinental rail lines, the government decided to loan 30-year Federal bonds to railroad companies. The whole idea was that government bonds would be easier to sell than land. With an economic kickstart, companies would lay track across the continent, develop undeveloped areas and thereby sell land in the bargain. In the process, land grant laws intended that companies would ultimately repay the government loans with interest.
As originally designed, the Federal government loaned $16,000 per mile of track across flat land. In hilly terrain, the loans jumped to $32,000 per mile and then to $48,000 per mile for mountain construction. Government bonds were doled out in 40-mile units.
The government also required that railroad companies could not build curves sharper than 10 degrees, nor grades steeper than 116 feet per mile (a little over 2%.) Additionally, rail lines had to be built with American steel which created a serious hardship for the Central Pacific. Finally, the whole intercontinental line between Omaha and Sacramento had to be completed within fourteen years. If not completed in that time, all land, all track, all tunneling, and all labor would be forfeited!
Oh, yes. One other thing. The government initially gave the companies the rights to use the surface of the land, not the minerals underneath."
"Another little-understood problem was that the government required companies to use their railroad and lands as collateral for the government bond loans. In effect, the Federal government held the first mortgage on every inch of the transcontinental railroad. Contemporaneous writers suggest that the government's own first mortgage made it impossible for transcontinental railroads to sell their own corporate bonds like railroads elsewhere had done for almost 30 years."
"We need to be careful in talking about the "value" of the land grants. Over time, parts of most of the land grants became immensely valuable. As western Nebraska was settled, and as the Sierras were developed, both the UP and the CP benefited enormously from selling their land grants. And the Union Pacific benefited dramatically from the huge coal reserves it acquired in Wyoming. Until dieselization in the mid-1950s, the UP mined large tonnages of coal for use in its own steam engines.
That is not to say that the Northern Pacific, the Southern Pacific, and the Santa Fe did not also benefit from their own immense land grants. While some of those companies may disagree, I suggest that land grant's greatest rewards appeared with the energy boom of the 1980s. Nonetheless, if you adjust those energy profits back in time a hundred years or so, the real value of the land grants was often subdued except in very special locations."
Reading the history of funding for the railroads might make you homicidal.
This is a trope that really needs to die an ugly death....
The trope itself has been debunked, but the concept has considerable credence. One of the founders of the modern Progressive movement, Theodore Roosevelt, centered his politics on nationalizing the railroads (at the time, roughly a sixth of our economy (a prescient fraction)). Once a Government enterprise, the railroads would have gotten all kinds of taxpayer funding.
Eric Hines
Whether or not it's constitutionally appropriate to use tax revenues to try to "grow" the economy, it's a fool's errand. That's not what makes the economy grow. Law and order and protecting property rights is just about the most government can do in that area. Otherwise the less money the public sector gloms onto the better.
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