“As the Recovery Act funds that saw through many states over the last two years are phasing out and it is undeniable that the Recovery Act helped every single state represented in this room manage your budgets, whether you admit it or not,” President Obama told a meeting of Governors this morning.
I think the “economic stimulus” spending dumped into the states helped the states…avoid making necessary and tough budget decisions for a period of time. But now the stimulus is running out and what we’re finding is that the stimulus really just exploded the national debt while inflating state budgets and exacerbating this nation’s overall fiscal problems.
In March of 2009 I wrote a letter to the Grand Forks Herald opposing North Dakota’s acceptance of federal stimulus dollars. At the time I argued that the stimulus money would only inflate our state budget, and that the politicians would request spending increases to keep that inflation in place once the stimulus money ran out.
Earlier this year Governor Darlymple announced his state budget and said in his budget address to a joint session of the legislature that some $69 million of his proposed spending increases were due to “the additional expense caused by the discontinuation of federal stimulus funding in the upcoming biennium.”
States around the country are facing this issue, trying to make ends meet after federal funds from the stimulus dried up, and none of them are running a budget surplus like North Dakota.
Obama’s stimulus spending made dire state budget issues worse while doing nothing to stimulate economic growth.