The toll of Covid-19 on the Ohio economy is starting to become clear as unemployment will likely reach 22% this week. Even after our economy reopens we must be prepared for some painful months ahead, including double digit unemployment – at least until the latter part of this year.
As our government fights to help its citizens, corporations and industries regain their footing during these hard economic times, doing so through rescue legislation will have long-term fiscal impacts. That said, is Mitch McConnell right when he said today to “Let the States go Bankrupt?”
In an interview with Hugh Hewitt, McConnell expressed concern with adding more to the National debt and that perhaps state and local governments should “use the bankruptcy route” rather than receive federal aid. Inferring that somehow needing assistance is a blue state vs. red state issue.
McConnell went on to state, “My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now … that’s not something I’m going to be in favor of.” Now, Mitch is a smart guy, but most states are not allowed to declare bankruptcy under current law, and it would take an act of Congress to change the bankruptcy code to allow them to do that – do you think the public would stomach that while the Feds are bailing out corporations? Does he think Americans are stupid and don’t realize it’s their local police, fire, EMT’s, teachers, etc that are on the front lines of this pandemic? Not likely.
And he just wouldn’t stop – later in the day, on a Fox News phone interview, Mitch went on to say that he would seek to limit any money for states and localities for Covid-19 related issues. He added “We’re not interested in rescuing them from bad decisions they’ve made in the past, we’re not going to let them take advantage of this pandemic to solve a lot of problems that they created themselves.” Ugh – he just should have stopped talking.
Now, you know I’m a Republican but one that is not afraid to call out an elected official of my own party when they are clearly wrong. And in this case, it looks like I will be in good company as the likes of Senator Portman, Representative King and other Republicans cringed at the insensitivity of Mitch’s words.
And, since I’m a numbers guy, I couldn’t help but dig into the data and see just how well Mitch’s home state of Kentucky compares to the other states we know he is referring to in his heartless comments (NY, CA, etc). So – I’ve come up with this handy chart that proves his state, the 5th poorest in the country, is actually taking the Feds to the cleaners! They take a heck of a lot more than they contribute. In fact, they rate 2nd in this list as they receive a net gain per capita of $10,039. How does Ohio compare? We too take more from the Feds than we contribute – but nothing like Kentucky. Ohio gets a net gain per capita of $2,949, 3 times less than Kentucky. (And look where NY, CA, Michigan comparest to KY).
It’s election season and Americans know Mitch lead the charge to bailout the banks and auto industry in 2009, he lead the charge for huge tax cuts in 2019, and he just recently lead the charge to pass the spending for the Cares Act; bringing the deficit to an estimated $3.8 trillion for this fiscal year – four times larger than it was just a couple of months ago. One economist put in these terms, “for every dollar Washington collects in taxes and other revenues, it will be spending $2.”
And now he says let’s the state’s go bankrupt? That’s in invitation to insurrection.