This is a principle I know to my core: The federal government does not create wealth, it redistributes it, and in the end, it is hardworking taxpayers who will pay for any additional federal spending and debt.
Earlier this year, Democrats in the U.S. House of Representatives passed a $1.9 trillion spending bill that included money for Planned Parenthood, environmental justice, and a San Francisco subway system. It also included a massive (and unnecessary) bailout for state governments.
I know some states are struggling to make ends meet, but data suggests their financial difficulties have little to do with the COVID economy and more to do with mismanaged budgets. In fact, the Department of Commerce’s Bureau of Economic Analysis recently released evidence showing state and local revenue sources actually increased in 2020, not decreased. Moreover, economic forecasts expect this trend to continue, with the Congressional Budget Office expecting a 4.6 percent increase in the GDP this year.
The reality is that many states have not made the adjustments necessary to reign in historically out-of-control spending. Additional federal aid to these states would amount to nothing more than a bailout for those who have poorly managed their finances for years, if not decades, before the pandemic. Mississippi is not in this category.
We have been careful stewards of our taxpayer dollars, and we have made fiscal responsibility a priority. Even with the challenges of COVID-19, we maintained our strong credit ratings because, as Treasurer, I could make the honest argument to creditors that Mississippi has robust budgetary controls and a responsibly managed rainy-day fund. In other words, we have systems in place to ensure Mississippi pays its bills on time.
There are clearly areas where government can and should help individuals and employers struggling with COVID-related challenges. But a massive state bailout is unnecessary and would move our nation further down a dangerous fiscal path.
If we are going to spend taxpayer dollars, let’s dedicate those funds to causes that will create good-paying jobs, alleviate the pains of COVID-related shutdowns, and accelerate vaccine distribution and development. We just can’t use this crisis as a way to force Mississippians to foot the bill for other states that have chronically mismanaged their constituents’ money.
In the words of Governor Tate Reeves: “If my state can save for emergencies like COVID, so can others.”
Submitted by Mississippi State Treasurer David McRae.