Zero hour approaches

by Hal Lindsey

We've been counting down to the year that Iran will finally become a nuclear power ever since Iranian dissidents exposed the Iranian nuclear program in 2002. European intelligence estimated it would take Iran until 2012 to achieve this. Israeli intelligence figured late 2007.

Last year's National Intelligence Estimate completely undercut the Bush administration's Iran foreign policy when it estimated Iran was still "many years" from being able to build a bomb.

The NIE predicted: "… with moderate confidence that the earliest possible date Iran would be technically capable of producing enough HEU [highly enriched uranium] for a weapon is late 2009, but that is very unlikely."

Unlikely though it may have been, the International Atomic Energy Agency found that Iran had enriched enough uranium to make its first atomic bomb on Nov. 21, 2008. By now, as it brings new centrifuges online, Tehran may well have enough for a second.

The head of Russia's state nuclear corporation, Sergei Kiriyenko, was quoted from the Kremlin on Wednesday confirming the launch of the Bushehr reactor later this year. Iran's nuclear ambitions are no longer even remotely unclear.

Yet, knowing this, Moscow fully intends to supply Iran with all the nuclear material it needs. ....

Must See Video for Any One Supporting Keynesian Bailout

from The Jawa Report

If you haven't seen the PBS series Commanding Heights about the rise and fall of Keynesian economics and how it was discredited by Hayek's vision of free people and free markets it's really a must see. I watched Part 1 again today, and I left feeling inspired and depressed.

Inspired by the triumph of the market, depressed that so many are willing to forgo it. Prescient, I think, given that so many today are clamoring for the government to do something.

The courage to do nothing is what we need from our politicians today. Unfortunately, democracies are such that people expect politicians to do something, even if the solution to the imagined problem just makes it worse.

I've embedded the entire video below. It's long, but worth watching. Especially analogous to today's crisis are two segments. First, the discussion by George Schulz and Milton Friedman on Nixon's abandonment of the market during the economic crisis of the early 1970s. Something, the people clamored, must be done! And so it was, and the crisis was deepened.

The second set of segments deal with Margaret Thatcher and Ronald Reagan's handling of economic crisis in the US and UK. Thousands of economists, schooled by the Keynsians, begged Thatcher to stop her spending cuts during a recession, only a few dozen urged her on. They warned that if she did, than the deep recession would become a depression. Sound familiar?

And it came to pass, as Thatcher says, thousands of economists were wrong.

Reagan's response is also enlightening given that Reagan, too, was begged not to cut domestic spending due to the fact that people would lose jobs. It is in this context that Reagan says, "If not now, when? If not us, who?" And so it was that the recession did go on for three years, but it ended, and from the ashes of the regulatory state came nearly three decades of nearly unfettered growth.

Videos below.

PART 1

PART 2

PART 3

The Overlooked War Along the Mexican Border

In northern Mexico a largely overlooked but nonetheless brutal war is raging between the narco-cartels and government authorities—and its violence threatens to spread to the United States. In his weekly chat with Federal News Radio, Homeland Security Today Editor David Silverberg discusses the implications for the US and homeland security. must read

Click here to listen to the audio.

Veteran Terrorist Hunters Say US Vulnerable to Attack

by Anthony L. Kimery

'The intelligence from my perspective is pretty clear in so far as what Al Qaeda’s intentions are' must read When former Vice President Dick Cheney earlier this week said there’s a “high probability” that terrorists will attempt a catastrophic nuclear or biological attack and implied that Obama administration policies have weakened the Intelligence Community to the extent that it might now be impossible to detect such an attack, it made a lot of observers wince on the left and right. Veteran US counterterror officials HSToday.us spoke to said while intelligence capabilities under the Obama administration aren’t currently likely to be as deficient or as policy-unwise as Cheney implied, there certainly are crisis-level vulnerabilities on the home-front that Al Qaeda or other terrorist organizations bent on seriously doing damage to the United States could strike at which could deliver a devastating blow during the next 12 to 24 months while the government attempts to rescue the nation from its weakened economy. The US’s seriously destabilized economy—which is at least as bad as it’s been in 30 years—has opened a fissure in the nation’s vulnerability to a catastrophic terrorist attack that potentially could in fact economically cripple the nation, the counterterrorists believe. Given that Al Qaeda and affiliated terrorist groups desire to strike at America’s economic stability, a catastrophic attack or attacks across the nation anytime soon would certainly contribute in a big way to the nation’s existing downward spiral, the officials said. “And Al Qaeda has to be looking at this as an opportunity … looking at every which way they can possibly pull off a spectacular attack,” one of the officials said. Continuing, the official said, “imagine 9/11s in every major city. We’re still facing a very real threat—it has not diminished, and I’m quite sure President Obama and his senior national security advisors understand this since they’ve been privileged to see the actual intelligence that lays it all out; at least I hope they do. If they don’t, then someone needs to get them up to speed. But I’m sure they do.” The counterterror experts pointed to the recent undeniable exposure of the gross deficiencies in the federal government being able to swiftly detect and immediately halt distribution of food borne pathogens as an “example of one of the many vulnerabilities” in homeland security through which terrorists could launch a biological attack. Speaking at a recent Washington Institute Special Policy Forum, Ken Wainstein, former assistant to President Bush for homeland security and counterterrorism, stressed that the gravest terrorism threat from “terrorist organizations [is their acquiring] weapons of mass destruction and [using] them against us, our homeland, or our allies.” “Biological weapons are the most likely” terrorist WMD threat right now,” agreed Charles "Sam" Faddis, a 20-year veteran CIA officer who was a National Counterterrorism Center department chief overseeing “worldwide operations against the terrorist WMD target” when he retired from the clandestine services last May. Faddis earlier told HSToday.us that, yes, terrorists are probably more likely to try to use biological weapons in the near future, noting that such an attack would “be devastating and it would totally cause catastrophic casualties.” “And there are other vulnerabilities” that could be exploited to carry out a catastrophic attack, one of the counterterror officials said. Rejecting notions by some former IC counterterrorists that Al Qaeda for whatever reason is unwilling to try to attack the US directly again, the officials HSToday.us talked to said they do not necessarily “buy into that line of thinking.” “The intelligence from my perspective is pretty clear in so far as what Al Qaeda’s intentions are—make no mistake about that,” one said, pointing to Cheney’s remarks in his interview this week about planned attacks that were stopped but the details about which remain classified. Cheney said he’s confident that the classified files on these thwarted attacks will some day be made public and will prove that significant planned attacks were halted. “The fact is there have been attacks in the works we’ve learned about that we’ve managed to stop,” the official told HSToday.us, adding, “and Al Qaeda and its affiliates continue to work on plans to attack us.” While the counterterrorists split with Cheney on the efficacy of so-called “enhanced interrogations,” they agreed with him on the use of wide-ranging communications intercepts when there’s “clear-cut” intelligence that specific communications are related to terrorism. But the bottomline of what the officials said is that the crisis America finds itself in is and of itself a serious vulnerability that makes a concerted effort to pull off a catastrophic attack so attractive to terrorists. “Which means we still need to devote resources—sooner than later—to start plugging all the holes in security we know about,” one of the officials said.

HOW FAR LEFT PLANS TO CHANGE AMERICA BY USING ILLEGAL IMMIGRANTS

(Compiler's note: A must read item)

By Bill O'Reilly

This is a Paul Revere alert.

The New York Times actually did me a favor by implying that I am a racist and a white supremacist guy. The far-left paper attacked me because I understand their true agenda — and it has nothing to do with helping the poor. It has everything to do with amassing power and changing the political structure in America by using illegal immigrants.

As we reported Monday night, The Times wants blanket amnesty for illegal aliens already in this country, and the paper wants their extended families to join them in the USA as well. That would swell the voting rolls by tens of millions, the vast majority of new voters joining the Democratic Party because that's where the entitlements are.

On May 4, 2007, The Times editorialized:

"Closing the door to families (of migrants) would be unjust and unworkable, and a mockery of the values that conservatives profess. It would only encourage illegality by forcing people to choose between their loved ones and the law."

It is very touching that The Times cares so much about illegality when it has supported sanctuary city policies and lax immigration enforcement, isn't it? This whole caring for the downtrodden deal is a ruse, a scam, a con. What The New York Times wants for the country is what has happened in California.

Forty years ago the Golden State was fertile ground for Republicans and conservatives. Richard Nixon, Ronald Reagan and Pete Wilson all prospered out there. In fact, in 1968 Nixon beat Humphrey 48 to 45 in California. Last November, Obama beat McCain 61 to 37, a huge landslide.

In 1970, nine percent of California's population was foreign born. Now it is an astounding 28 percent, and most of the new voters are Democrats.

So the Dems now control power in California. It is a virtual one-party state — its 55 electoral votes a lock for the Democrats.

New York is almost a one-party state, that's 31 electoral votes. Illinois, controlled by Democrats, another 21 electoral votes.

Get the picture?

If blanket amnesty is passed, the Democratic ranks in places like Colorado, Arizona, Nevada and Florida will explode, putting our two-party system in jeopardy. That's exactly what The Times envisions.

And guess who is also a big blanket amnesty guy? Hey, there, George Soros. The far-left billionaire has donated big money to open border groups.

And then there's the ACLU, actively working against many laws that constrain illegal immigration, and opposing strict border enforcement.

So let's add this up. The Times, Soros, the ACLU. Quite a lineup.

If these people succeed in getting blanket amnesty passed for illegals and their families living abroad, the political system in America will change forever.

That's why The Times has branded me a racist — because I have unmasked them. They can't deny it, so they trot out the smear machine. A very troubling situation.

And that's "The Memo."

The Fierce Urgency of Pork

By Charles Krauthammer

"A failure to act, and act now, will turn crisis into a catastrophe." -- President Obama, Feb. 4.

Catastrophe, mind you. So much for the president who in his inaugural address two weeks earlier declared "we have chosen hope over fear." Until, that is, you need fear to pass a bill.

And so much for the promise to banish the money changers and influence peddlers from the temple. An ostentatious executive order banning lobbyists was immediately followed by the nomination of at least a dozen current or former lobbyists to high position. Followed by a Treasury secretary who allegedly couldn't understand the payroll tax provisions in his 1040. Followed by Tom Daschle, who had to fall on his sword according to the new Washington rule that no Cabinet can have more than one tax delinquent.

The Daschle affair was more serious because his offense involved more than taxes. As Michael Kinsley once observed, in Washington the real scandal isn't what's illegal, but what's legal. Not paying taxes is one thing. But what made this case intolerable was the perfectly legal dealings that amassed Daschle $5.2 million in just two years.

He'd been getting $1 million per year from a law firm. But he's not a lawyer, nor a registered lobbyist. You don't get paid this kind of money to instruct partners on the Senate markup process. You get it for picking up the phone and peddling influence.

At least Tim Geithner, the tax-challenged Treasury secretary, had been working for years as a humble international civil servant earning non-stratospheric wages. Daschle, who had made another cool million a year (plus chauffeur and Caddy) for unspecified services to a pal's private equity firm, represented everything Obama said he'd come to Washington to upend.

And yet more damaging to Obama's image than all the hypocrisies in the appointment process is his signature bill: the stimulus package. He inexplicably delegated the writing to Nancy Pelosi and the barons of the House. The product, which inevitably carries Obama's name, was not just bad, not just flawed, but a legislative abomination.

It's not just pages and pages of special-interest tax breaks, giveaways and protections, one of which would set off a ruinous Smoot-Hawley trade war. It's not just the waste, such as the $88.6 million for new construction for Milwaukee Public Schools, which, reports the Milwaukee Journal Sentinel, have shrinking enrollment, 15 vacant schools and, quite logically, no plans for new construction.

It's the essential fraud of rushing through a bill in which the normal rules (committee hearings, finding revenue to pay for the programs) are suspended on the grounds that a national emergency requires an immediate job-creating stimulus -- and then throwing into it hundreds of billions that have nothing to do with stimulus, that Congress's own budget office says won't be spent until 2011 and beyond, and that are little more than the back-scratching, special-interest, lobby-driven parochialism that Obama came to Washington to abolish. He said.

Not just to abolish but to create something new -- a new politics where the moneyed pork-barreling and corrupt logrolling of the past would give way to a bottom-up, grass-roots participatory democracy. That is what made Obama so dazzling and new. Turns out the "fierce urgency of now" includes $150 million for livestock (and honeybee and farm-raised fish) insurance.

The Age of Obama begins with perhaps the greatest frenzy of old-politics influence peddling ever seen in Washington. By the time the stimulus bill reached the Senate, reports the Wall Street Journal, pharmaceutical and high-tech companies were lobbying furiously for a new plan to repatriate overseas profits that would yield major tax savings. California wine growers and Florida citrus producers were fighting to change a single phrase in one provision. Substituting "planted" for "ready to market" would mean a windfall garnered from a new "bonus depreciation" incentive.

After Obama's miraculous 2008 presidential campaign, it was clear that at some point the magical mystery tour would have to end. The nation would rub its eyes and begin to emerge from its reverie. The hallucinatory Obama would give way to the mere mortal. The great ethical transformations promised would be seen as a fairy tale that all presidents tell -- and that this president told better than anyone.

I thought the awakening would take six months. It took two and a half weeks.

50 De-Stimulating Facts

(Compiler's note: If you're an American voter - you simply must read this article.)

By Stephen Spruiell & Kevin Williamson

Senate Democrats acknowledged Wednesday that they do not have the votes to pass the stimulus bill in its current form. This is unexpected good news. The House passed the stimulus package with zero Republican votes (and even a few Democratic defections), but few expected Senate Republicans (of whom there are only 41) to present a unified front. A few moderate Democrats have reportedly joined them.

The idea that the government can spend the economy out of a recession is highly questionable, and even with Senate moderates pushing for changes, the current package is unlikely to see much improvement. Nevertheless, this presents an opportunity to remove some of the most egregious spending, to shrink some programs, and to add guidelines where the initial bill called for a blank check. Here are 50 of the most outrageous items in the stimulus package:


VARIOUS LEFT-WINGERY
The easiest targets in the stimulus bill are the ones that were clearly thrown in as a sop to one liberal cause or another, even though the proposed spending would have little to no stimulative effect. The National Endowment for the Arts, for example, is in line for $50 million, increasing its total budget by a third. The unemployed can fill their days attending abstract-film festivals and sitar concerts. bailout

Then there are the usual welfare-expansion programs that sound nice but repeatedly fail cost-benefit analyses. The bill provides $380 million to set up a rainy-day fund for a nutrition program that serves low-income women and children, and $300 million for grants to combat violence against women. Laudable goals, perhaps, but where’s the economic stimulus? And the bill would double the amount spent on federal child-care subsidies. Brian Riedl, a budget expert with the Heritage Foundation, quips, “Maybe it’s to help future Obama cabinet secretaries, so that they don’t have to pay taxes on their nannies.”

Perhaps spending $6 billion on university building projects will put some unemployed construction workers to work, but how does a $15 billion expansion of the Pell Grant program meet the standard of “temporary, timely, and targeted”? Another provision would allocate an extra $1.2 billion to a “youth” summer-jobs program—and increase the age-eligibility limit from 21 to 24. Federal job-training programs—despite a long track record of failure—come in for $4 billion total in additional funding through the stimulus.

Of course, it wouldn’t be a liberal wish list if it didn’t include something for ACORN, and sure enough, there is $5.2 billion for community-development block grants and “neighborhood stabilization activities,” which ACORN is eligible to apply for. Finally, the bill allocates $650 million for activities related to the switch from analog to digital TV, including $90 million to educate “vulnerable populations” that they need to go out and get their converter boxes or lose their TV signals. Obviously, this is stimulative stuff: Any economist will tell you that you can’t get higher productivity and economic growth without access to reruns of Family Feud.

Summary:
$50 million for the National Endowment for the Arts
$380 million in the Senate bill for the Women, Infants and Children program
$300 million for grants to combat violence against women
$2 billion for federal child-care block grants
$6 billion for university building projects
$15 billion for boosting Pell Grant college scholarships
$4 billion for job-training programs, including $1.2 billion for “youths” up to the age of 24
$1 billion for community-development block grants
$4.2 billion for “neighborhood stabilization activities”
$650 million for digital-TV coupons; $90 million to educate “vulnerable populations”

POORLY DESIGNED TAX RELIEF
The stimulus package’s tax provisions are poorly designed and should be replaced with something closer to what the Republican Study Committee in the House has proposed. Obama would extend some of the business tax credits included in the stimulus bill Congress passed about a year ago, and this is good as far as it goes. The RSC plan, however, also calls for a cut in the corporate-tax rate that could be expected to boost wages, lower prices, and increase profits, stimulating economic activity across the board.

The RSC plan also calls for a 5 percent across-the-board income-tax cut, which would increase productivity by providing additional incentives to save, work, and invest. An across-the-board payroll-tax cut might make even more sense, especially for low- to middle-income workers who don’t make enough to pay income taxes. Obama’s “Making Work Pay” tax credit is aimed at helping these workers, but it uses a rebate check instead of a rate cut. Rebate checks are not effective stimulus, as we discovered last spring: They might boost consumption, a little, but that’s all they do.

Finally, the RSC proposal provides direct tax relief to strapped families by expanding the child tax credit, reducing taxes on parents’ investment in the next generation of taxpayers. Obama’s expansion of the child tax credit is not nearly as ambitious. Overall, his plan adds up to a lot of forgone revenue without much stimulus to show for it. Senators should push for the tax relief to be better designed.

Summary:
$15 billion for business-loss carry-backs
$145 billion for “Making Work Pay” tax credits
$83 billion for the earned income credit


STIMULUS FOR THE GOVERNMENT
Even as their budgets were growing robustly during the Bush administration, many federal agencies couldn’t find the money to keep up with repairs—at least that’s the conclusion one is forced to draw from looking at the stimulus bill. Apparently the entire capital is a shambles. Congress has already removed $200 million to fix up the National Mall after word of that provision leaked out and attracted scorn. But one fixture of the mall—the Smithsonian—dodged the ax: It’s slated to receive $150 million for renovations.

The stimulus package is packed with approximately $7 billion worth of federal building projects, including $34 million to fix up the Commerce Department, $500 million for improvements to National Institutes of Health facilities, and $44 million for repairs at the Department of Agriculture. The Agriculture Department would also get $350 million for new computers—the better to calculate all the new farm subsidies in the bill (see “Pure pork” below).

One theme in this bill is superfluous spending items coated with green sugar to make them more palatable. Both NASA and NOAA come in for appropriations that properly belong in the regular budget, but this spending apparently qualifies for the stimulus bill because part of the money from each allocation is reserved for climate-change research. For instance, the bill grants NASA $450 million, but it states that the agency must spend at least $200 million on “climate-research missions,” which raises the question: Is there global warming in space?

The bottom line is that there is a way to fund government agencies, and that is the federal budget, not an “emergency” stimulus package. As Riedl puts it, “Amount allocated to the Census Bureau? $1 billion. Jobs created? None.”

Summary:
$150 million for the Smithsonian
$34 million to renovate the Department of Commerce headquarters
$500 million for improvement projects for National Institutes of Health facilities
$44 million for repairs to Department of Agriculture headquarters
$350 million for Agriculture Department computers
$88 million to help move the Public Health Service into a new building
$448 million for constructing a new Homeland Security Department headquarters
$600 million to convert the federal auto fleet to hybrids
$450 million for NASA (carve-out for “climate-research missions”)
$600 million for NOAA (carve-out for “climate modeling”)
$1 billion for the Census Bureau


INCOME TRANSFERS
A big chunk of the stimulus package is designed not to create wealth but to spread it around. It contains $89 billion in Medicaid extensions and $36 billion in expanded unemployment benefits—and this is in addition to the state-budget bailout (see “Rewarding state irresponsibility” below).

The Medicaid extension is structured as a temporary increase in the federal match, but make no mistake: Like many spending increases in the stimulus package, this one has a good chance of becoming permanent. As for extending unemployment benefits through the downturn, it might be a good idea for other reasons, but it wouldn’t stimulate economic growth: It would provide an incentive for job-seekers to delay reentry into the workforce.

Summary:
$89 billion for Medicaid
$30 billion for COBRA insurance extension
$36 billion for expanded unemployment benefits
$20 billion for food stamps


PURE PORK
The problem with trying to spend $1 trillion quickly is that you end up wasting a lot of it. Take, for instance, the proposed $4.5 billion addition to the U.S. Army Corps of Engineers budget. Not only does this effectively double the Corps’ budget overnight, but it adds to the Corps’ $3.2 billion unobligated balance—money that has been appropriated, but that the Corps has not yet figured out how to spend. Keep in mind, this is an agency that is often criticized for wasting taxpayers’ money. “They cannot spend that money wisely,” says Steve Ellis of Taxpayers for Common Sense. “I don’t even think they can spend that much money unwisely.”

Speaking of spending money unwisely, the stimulus bill adds another $850 million for Amtrak, the railroad that can’t turn a profit. There’s also $1.7 billion for “critical deferred maintenance needs” in the National Park System, and $55 million for the preservation of historic landmarks. Also, the U.S. Coast Guard needs $87 million for a polar icebreaking ship—maybe global warming isn’t working fast enough.

It should come as no surprise that rural communities—those parts of the nation that were hardest hit by rampant real-estate speculation and the collapse of the investment-banking industry—are in dire need of an additional $7.6 billion for “advancement programs.” Congress passed a $300 billion farm bill last year, but apparently that wasn’t enough. This bill provides additional subsidies for farmers, including $150 million for producers of livestock, honeybees, and farm-raised fish.

Summary:
$4.5 billion for U.S. Army Corps of Engineers
$850 million for Amtrak
$87 million for a polar icebreaking ship
$1.7 billion for the National Park System
$55 million for Historic Preservation Fund
$7.6 billion for “rural community advancement programs”
$150 million for agricultural-commodity purchases
$150 million for “producers of livestock, honeybees, and farm-raised fish”


RENEWABLE WASTE
Open up the section of the stimulus devoted to renewable energy and what you find is anti-stimulus: billions of dollars allocated to money-losing technologies that have not proven cost-efficient despite decades of government support. “Green energy” is not a new idea, Riedl points out. The government has poured billions into loan-guarantees and subsidies and has even mandated the use of ethanol in gasoline, to no avail. “It is the triumph of hope over experience,” he says, “to think that the next $20 billion will magically transform the economy.”

Many of the renewable-energy projects in the stimulus bill are duplicative. It sets aside $3.5 billion for energy efficiency and conservation block grants, and $3.4 billion for the State Energy Program. What’s the difference? Well, energy efficiency and conservation block grants “assist eligible entities in implementing energy efficiency and conservation strategies,” while the State Energy Program “provides funding to states to design and carry out their own energy efficiency and renewable energy programs.”

While some programs would spend lavishly on technologies that are proven failures, others would spend too little to make a difference. The stimulus would spend $4.5 billion to modernize the nation’s electricity grid. But as Robert Samuelson has pointed out, “An industry study in 2004—surely outdated—put the price tag of modernizing the grid at $165 billion.” Most important, the stimulus bill is not the place to make these changes. There is a regular authorization process for energy spending; Obama is just trying to take a shortcut around it.

Summary:
$2 billion for renewable-energy research ($400 million for global-warming research)
$2 billion for a “clean coal” power plant in Illinois
$6.2 billion for the Weatherization Assistance Program
$3.5 billion for energy-efficiency and conservation block grants
$3.4 billion for the State Energy Program
$200 million for state and local electric-transport projects
$300 million for energy-efficient-appliance rebate programs
$400 million for hybrid cars for state and local governments
$1 billion for the manufacturing of advanced batteries
$1.5 billion for green-technology loan guarantees
$8 billion for innovative-technology loan-guarantee program
$2.4 billion for carbon-capture demonstration projects
$4.5 billion for electricity grid


REWARDING STATE IRRESPONSIBILITY
One of the ugliest aspects of the stimulus package is a bailout for spendthrift state legislatures. Remember the old fable about the ant and the grasshopper? In Aesop’s version, the happy-go-lucky grasshopper realizes the error of his ways when winter comes and he goes hungry while the industrious ant lives on his stores. In Obama’s version, the federal government levies a tax on the ant and redistributes his wealth to the party-hearty grasshopper, who just happens to belong to a government-employees’ union. This happens through something called the “State Fiscal Stabilization Fund,” by which taxpayers in the states that have exercised financial discipline are raided to subsidize Democratic-leaning Electoral College powerhouses—e.g., California—that have spent their way into big trouble.

The state-bailout fund has a built-in provision to channel the money to the Democrats’ most reliable group of campaign donors: the teachers’ unions. The current bill requires that a fixed percentage of the bailout money go toward ensuring that school budgets are not reduced below 2006 levels. Given that the fastest-growing segment of public-school expense is administrators’ salaries—not teachers’ pay, not direct spending on classroom learning—this is a requirement that has almost nothing to do with ensuring high-quality education and everything to do with ensuring that the school bureaucracy continues to be a cash cow for Democrats.

Setting aside this obvious sop to Democratic constituencies, the State Fiscal Stabilization Fund is problematic in that it creates a moral hazard by punishing the thrifty to subsidize the extravagant. California, which has suffered the fiscal one-two punch of a liberal, populist Republican governor and a spendthrift Democratic legislature, is in the worst shape, but even this fiduciary felon would have only to scale back spending to Gray Davis–era levels to eliminate its looming deficit. (The Davis years are not remembered as being especially austere.) Pennsylvania is looking to offload much of its bloated corrections-system budget onto Uncle Sam in order to shunt funds to Gov. Ed Rendell’s allies at the county-government level, who will use that largesse to put off making hard budgetary calls and necessary reforms. Alaska is looking for a billion bucks, including $630 million for transportation projects—not a great sign for the state that brought us the “Bridge to Nowhere” fiasco.

Other features leap out: Of the $4 billion set aside for the Community Oriented Policing Services—COPS—program, half is allocated for communities of fewer than 150,000 people. That’s $2 billion to fight nonexistent crime waves in places like Frog Suck, Wyo., and Hoople, N.D.

The great French economist Frédéric Bastiat called politics “the great fiction through which everybody endeavors to live at the expense of everybody else.” But who pays for the state bailout? Savers will pay to bail out spenders, and future generations will pay to bail out the undisciplined present.

In sum, this is an $80 billion boondoggle that is going to reward the irresponsible and help state governments evade a needed reordering of their financial priorities. And the money has to come from somewhere: At best, we’re just shifting money around from jurisdiction to jurisdiction, robbing a relatively prudent Cheyenne to pay an incontinent Albany. If we want more ants and fewer grasshoppers, let the prodigal governors get a little hungry.

Summary:
$79 billion for State Fiscal Stabilization Fund