Every now and then, a word really wears out its welcome among the political class. A perfectly common, descriptive word will be minding its own business, having a quiet drink at the corner saloon, when a gang of politicians suddenly breaks a whiskey bottle over its head, and cleans off the bar with its face. The battered and confused word finds itself dumped in the mud outside the saloon, with nothing left in its future but a slow and painful walk out of town.
One such word is “bailout.” People really don’t like that word any more. It conjures images of billions in tax money flowing into favored banks and corporations, or vanishing into thin air. These images are entirely accurate, so “bailouts” found themselves staggering out of Washington, nursing a broken jaw.
The new word is “aid.” Aid sounds urgent and nourishing. Aid is what first responders deliver to the victims of a tragedy. It will be a while before “aid” has to worry about the shadow of political ruffians falling across its shot glass at the corner saloon.
Thus, we have the President proposing “jobless aid” to the states, which have racked up $42 billion in debt paying unemployment insurance to those who have not yet Won The Future. The basic idea behind the plan is to hold off state tax increases to pay for unemployment for a couple of years, with the taxable income level for unemployment insurance set to increase from $7000 to $15,000 in 2014.
Nationalizing unemployment debt through federal bailouts is a way of shutting down regional anger and political energy. For example, the two highest unemployment rates in the country can be found in Michigan and Nevada. We’ve already poured a gigantic amount of federal money into Michigan’s auto industry (didn’t we just see an expensive Super Bowl commercial about how well Detroit was doing these days?) and Nevada has massive illegal alien issues which exacerbate its unemployment picture. Making the locals pay off their own unemployment debt would produce a level of focused unrest that could upset a lot of apple carts in the next elections, especially since individuals and businesses might well decide to relocate out of the affected states, making their economies even worse. Better to ship a few billion more deficit dollars out of Washington, and keep the whole country vaguely upset with Congress.
Unemployment insurance is just the tip of a very big iceberg. When we criticize the performance of “the government,” we’re usually thinking of Washington, but many of the states have accumulated completely unsustainable levels of debt. The governments of those states generally assume Washington will rescue them from insolvency… and if that assumption proves correct, then our total “national debt” is much worse than the debt ceiling we currently fret about. Instead of enjoying responsible, representative government, Americans will find themselves bled dry by the governments of other states, where they will never be given a vote.
“Bailout” was the right word all along. The coming chain reaction of state bailouts reminds me of a classic scene from the Christopher Reeve Superman picture, where Superman catches Lois Lane as she plummets to her death, and she shrieks “You’ve got me? Who’s got you?” In a politicized economy where nobody knows what anything really costs, or just how broke any portion of the government really is, we totter on the edge of the horrifying discovery that nobody’s got Superman.
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