The Struggling States Need $40B for Healthcare and $136B for Infrastructure Projects

The Nation’s Governors met with President-elect Barack Obama today to try to get some of the proposed $500B plus stimulus package that he will sign when he is President. The problem is how do we hold these States, and their CEO’s, accountable for misaligned management of public funds? Why are they not looked at under the same light as the Wall Street CEOs? Neither group has been found to engaged in criminal activity. However both groups are partly to blame for not avoiding a financial meltdown. New Governors can get a pass but those that have been in office for more than 3 years should accept some reasonability for not preparing their states properly to whether a downturn in spending.

 

What will America get in exchange for the $176 billion these States are asking for? No preferred shares in the States themselves? No ownership of assets such as land or lottery income? Nothing. At best it will be a “loan” with 30 years to repay at 2-3% interest. This will not a sound investment if the State governments will not be held to similar covenants imposed on private companies receiving U.S. Treasury cash.

 

And where will the money go? To companies that already have contracts with the States?  Or will new relationships and bids need to be developed to accept U.S. Treasury cash. Is preserving existing jobs the same as creating new ones? No, but it’s a start. I say require the contract winners to hire 1 employee per $300k value on the contract. This is a two-pronged way to stimulate the economy.

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