The editorial “A better way to support states during downturns” in Monday’s Times-Dispatch does not fix the underlying problems, fiscal irresponsibility and playing politics. States that are fiscally responsible should have rainy day funds like Virginia does. With rainy day funds plus some program adjustments and in most cases no layoffs, a well-run state can survive a downturn by reducing its budget and, in more serious downturns, using its rainy day funds.
Such a federal fund as described in the editorial would involve state contributions, some of which could be used by other states, although the proposals does say “aid could be linked to states’ own prior contributions to the federal rainy day fund.” Any federal funds would be borrowed because the federal government runs on huge deficits and has been doing so in increasingly large amounts. Such a program undermines the balanced budget and debt capacity limits, which requires states to be more fiscally prudent than the federal government. Instead, isn’t the problem a fiscally irresponsible U.S. Congress and the federal government, especially in the latest $1.9 trillion COVID-19 relief bill? Indeed, the economic figures and the fact that all the money from the last COVID-19 relief has not been spent show the problem is not in the need of a federal rainy day fund for states in downturns, but for Congress to fiscally be responsible not playing politics with the taxpayers’ money. The cure is a fiscally responsible Congress and a return to former President John F. Kennedy’s “Ask not what your country [the government] can do for you — Ask what you can do for your country.”