Gov. Bev Begging For A Bailout
Governor Beverly Perdue was in Washington over the past weekend, among other things, begging Barack Obama personally for a bailout. Specifically, she requested that the Feds defer interest payments that North Carolina is obligated to pay for loans from the federal government to cover unemployment benefits for NC residents. Under the American Recovery and Reinvestment Act, interest on these loans was suspended through December 2010. But now the piper must be paid.
No big deal, right?
Au contraire, it is a very big deal. Our governor officially requested a federal bailout because our state can’t pay interest on our loans. Or more accurately, we do not have the fiscal courage to take the steps necessary to put our state back on solid financial footing.
Delaying a loan repayment does not alone constitute being a deadbeat – many people or companies cannot pay back loans because they have major medical issues, career reversals or other problems out of their control. They are not deadbeats. However, because North Carolina has other viable alternatives (cutting state government employee wages and pensions, hiring efficiency experts to cut medical costs, cut wasteful and needless programs, etc.) but instead chooses the “easy way out,” we can be considered a deadbeat state.
A little background on unemployment loans from the Feds: in the 1930’s FDR introduced unemployment insurance to provide a temporary financial parachute to people who lost their jobs. Presently, each state controls its own trust fund, and may borrow from the Feds to get them over a financial hump. But as is the case with most government financial programs, it’s gotten out of control.
What constitutes out of control? California owes $7.5 billion, or $205 per state resident. New York owes $3.2 billion/$163 per resident; Michigan $3.8 billion and $383; NC $2.4 billion and $253. In total, 31 states now owe about $40 billion. That’s out of control.
And that’s not a typo; our great state owes $2.4 billion, with a big “B,” and more per capita than the fiscal disaster known as California.
If a bank held these loans and their borrower asked for an interest deferral, then the Feds/FDIC/Comptroller of the Currency would require that the loans be written down. When a company’s loans are written down, by law the bank has to declare a loss. Often the offending borrower declares bankruptcy soon thereafter.
Will North Carolina declare bankruptcy? Unlikely. But if Perdue ignores true fiscal austerity measures then it’s not out of the realm of possibility.
This is embarrassing. I am personally ashamed of my Governor. By recklessly seeking a federal bailout she has humiliated every financially responsible citizen of our state. Asking for bailouts and being a fiscal parasite is not the North Carolina that I love, nor is it the North Carolina that I want to teach my kids about – especially when there area numerous other viable and superior options for our state to pursue.
Like many of you, I take pride in North Carolina’s independence, responsibility, integrity and intellectual aggressiveness. I believe our forefathers shared those values for our country.
That said, the state that I have promoted and been loyal to since moving here in 1982 has a Chief Executive who does not share those values. Not only that, but she performs her deadbeat begging act on a national stage for all to see. That’s embarrassing. Particularly when two states in which I have many friends and business associates, Virginia and Texas, are doing no such thing.
I know damn good and well that Ronald Reagan would have never, ever done something so weak, so irresponsible, so timid.
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