Federalism

So it's been a couple months since my last post. Sorry. Women have that effect of causing the mind to stray from what is most important in life.

I have been watching the HBO television series John Adams and thinking about this financial crisis (and living in California) has made me think about the role of the federal government vs. state government. There was an article in the WSJ a few months ago written by two governors about how our country has become all about the federal government with the state government having less responsibility. For example, all talk about bailout comes from the federal government, even bailouts for states. We have become a federalist government in this time of crisis.

I wonder if that is the best strategy. I remember this discussion coming up in “John Adams” where Adams is talking about the federal government taking over the debt of the states to develop federal credit. This caused them to be called “federalists” – in essence they believed in a very strong central government (as opposed to “republicans”). Also, California’s budget impasse has just caused their credit rating by S&P to drop to the lowest of any state and there is talk of the federal government loaning California some money (preferably at a low interest rate).

A part of me wants California’s budget problem to stay with California. I think there’s a lesson to be learned in fiscal responsibility for California to deal with this themselves, although that lesson is diminished because of the severity of the crisis. Also, I guess I see this as their responsibility so the default is they should figure it out themselves (it seems weird that New Yorkers should bailout Californians). Lastly, I have some emotional aversion to the federal government being so powerful, the “big brother” ready to bailout the states or help when needed. I simply like the idea of more independent states when it comes to fiscal responsibility.

Now, this is not to say that the government shouldn’t give the states financial assistance; I’m simply wondering the extent of that assistance. I have no idea how California is going to get out of its budget crisis. I suspect tax increases and spending decreases are required, although it’s so interesting how there is so little compromise on either end, especially the Republicans. The ASSembly needs only 2-3 Republican votes to get the budget passed but the Republicans took a “no new taxes” pledge. One rep from ~Pasadena area rescinded and he’s taking massive heat for it. Ordinarily I would prefer almost all the changes to come from spending decreases, but in the California political climate and the urgency of the need I feel both are required. You can call me a lib if you want.