Bailing out the states

[FreeJoe]

I'm confused. A lot of people are asking for the federal government to bail out the state governments. Doesn't the money all come from the same place? Aren't the state and federal taxpayers the same people?

[sharesunited]

1. The federal government can create money. The states cannot do this.

[FreeJoe]

2. They can tax...

...which is pretty much the same thing as printing money. Printing money is just a tax on people that have dollars.

[Statistical]

3. It is insanity IMHO.

The federal govt ability for us to borrow virtually unlimited amounts of money has landed us $12,000,000,000,000 in debt.

The only thing that has kept state govts from doing the same thing is an inability. Amount states can borrow is limited thus they must balance budgets (or at least come close to balancing budgets).

Allowing states to unload spending on federal govt which is very good at spending money we don't have is likely the best route for Obama to increase national debt to $20T by the time he leaves office.