Why South Carolina Doesn't Want 'Stimulus' [Mark Sanford]

America's states are laboratories of democracy. They are both affected by, and relevant to, the larger national debate. What we've found in our own corner of the country is that carrying a substantial debt load limits our options when it comes to running government.

A recent report by the American Legislative Exchange Council ranked us 47th worst in the nation for annual debt service as a percentage of tax revenue. Our state dedicates nearly 11% of its annual tax revenue to paying debt. On top of that, South Carolina has another $20 billion in unfunded, long-term political promises for pensions and other liabilities. The state budget has already been cut four times in recent months as the national economic downturn has impacted South Carolina and driven down tax revenue.

President Barack Obama recently signed a "stimulus" bill that will spend about $2 billion through "programmatic means" in South Carolina. In other words, the federal government will put this money directly into existing funding formulas and programs such as Medicaid. But there is an additional $700 million that I as governor have influence over, and it is the disposition of this money that has drawn the national spotlight to South Carolina.

But many people do not realize that the stimulus money runs out in 24 months -- at which point South Carolina will be forced to find a new source of funding to sustain the new level of spending, or to make sharp cuts. Sure, I could kick the can down the road; in two years, I'll be safely out of office. But it would be irresponsible.

This is the key point. Why are so many blind to this? Perhaps because of the 'I want what I want and I want it now!' short term obsession.

“But many people do not realize that the stimulus money runs out in 24 months ...”

And that’s how they’re getting away with it. Think of the movie “Wild in the Streets.” Well, that’s what we have with all the new ACORN voters. They were recruited to vote Mr Obama in and knowing his supporters — since he orghanized them — he knew they were ignorant of 1)history 2)economics 3)politics and most of all 4) he knew they didn’t follow any political discussions — on any channel (they watched Leno last night because he was on). They are American Idol fans. They neither know nor understand what’s going on. The O tells them “GOOD” they cheer. The O tells them “BAD” they riot.
And there you are: Rome 476.

I left this on the WSJ blog:

The first two sentences of Governor Sanford's piece are critical to the future of the United States. Unless we're just content with witnessing the effective dropping of the last letter "s" from States, those that embrace federalism have got to become more vocal about its merits.
Though politically impossible in the current environment and with the shape of the electorate at large, a push toward decentralizing the taxing authority of the federal government would optimize political cooperation and be more responsive to the voters. The tenth amendment might come to have relevance once again. And a push toward being vocal about the merits of federalism could look like this:
- The federal government would create a budget and then turn around and ask for money from each of the states based on factors such as state population, state landmass size, and state median income per household.
- The states, in turn, would develop their tax legislation to pay their federal share as well as raise revenue for their own public goods.
If we could all be tolerant enough to try this and let the laboratories -- or a market for political policies -- run their experiments, optimization would occur. It would have to. And we would see what the demands for public goods (and their true costs) really are; the free movements of productive people would validate/invalidate those experiments.

If they post it great. If not, there's always some receptive people here to pitch the idea to.

This shouldn't be going by unnoticed:

Last week I reached out to the president, asking for a federal waiver from restrictions on stimulus money. I got a most unusual response. Before I even received an acknowledgment of the request from the White House, I got word that the Democratic National Committee was launching campaign-style TV attack-ads against me for making it.

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