• $45,200 to the Forest County Snowmobile Club for “snow grooming equipment”
• $142,500 for “technical assistance related to planting trees and shrubs”
• $45,000 for “the development of boat launches and access”

For the full “see how great I am” news release, click here.

More rankings of Pennsylvania’s economic climate can be found here.

NTU’s Andrew Moylan also has a roundup of bailout-related links - beginning with a clip comparing the bailout to a Family Guy joke that isn’t funny, except that it goes on too long - including a new site, BailoutSleuth which has been tracking where the $700 billion is going and all those sorts of minor details.

One recent applicant for the bailout money is Americans for Tax Reform head Grover Norquist - who applied for the full $700 billion.  He wants to use to to cut the corporate income tax from 35% to 15%; cut the top individual income tax rate from 35% to 15%; eliminate the death, capital gains, and dividend taxes; and allow companies to fully-expense capital assets purchased the first year.  If that last one doesn’t seem nearly as sexy as the others recall - it takes that many tax cuts to equal $700 billion. No chance he gets the money of course, it makes too much sense.

1) They make the absurd claim that “state spending cuts will result in a dollar-for-dollar reduction in state economic activity” and that any new government spending “will provide an infusion of funds into the Pennsylvania economy”. It’s as though spending by government creates new money, rather than takes money out of the private sector through taxes and borrowing. If the PBPC’s economic logical is correct, then government spending should be increased to infinity, with no repercussions, because it will create unlimited economic growth.

Of course, I’m being sarcastic, because government has no money except that which it first taxes from it citizens. Additional government spending no more adds to the economy than splashing water across a swimming pool increases the level of water in the pool. The PBPC should take advice from far right wing icons like John F. Kennedy who, when facing a recession said, “Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income” and Barack Obama, who noted that increasing taxes was the wrong thing to do if the economy continues to struggle.

2) Their use of data on the growth of taxes and spending is deceptive – government spending has increased faster than income.

• PBPC looks only at state General Funding spending. General Fund spending as a percentage of personal income has increase, but this represents less than half of total state spending. The state operating budget has increased much more quickly, relative to personal income.
• Add to that local government spending, which represents about the same level of spending as the state budget – and has likewise increased substantially faster than personal income – and families are paying substantially more for government.

Each 1% of personal income represents $5 billion, or about $400 per capita ($1,600 per family of four). Had state and local spending remained at a constant level of personal income since 1991-92, the average family of four would save around $3,900 in the cost of government.

3) Their view of government spending - that government deserves a set, or even increasing, percentage of your income - implies there should be no limit to the size, scope, or function of government.

• The PBPC view of government – that it should grow with (or faster than) personal income - is socialistic. The Christian concept of tithing implies that everyone should give a portion of their income (10%) to the Church. For socialists and groups like the PBPC, government is the new church—government deserves a percentage of everyone’s income, regardless of what it is to be spent on. Naturally, the view that government should grow with income flows from a mindset that government should redistribute wealth.
• The founding fathers believed that government should be limited to its proper and define role - namely, to secure the rights of citizens. National defense, protection of life and liberty, and “promoting the general welfare” are among the proper functions of government. Even if one thinks that the core functions of government include public education and a “safety net” of public welfare, spending on these functions and services of government should grow not with income, but with inflation and population.

In inflation-adjusted terms, Pennsylvania state and local government spending has grown from just over $7,000 per person, to almost $10,000 per person ($28,000 to $40,000 per family of four), a 40% increase.

Calendars are among the many items we identified as wasteful spending, including a whole category of “incumbent protection plans”, like WAMs, Public Service Announcements, legislative newsletters, studios for lawmakers TV shows, and the like. 

While voters will get a chance to vote on new water and sewer bonds, they don’t get a say in whether their money should be used for this corporate welfare scheme. Hmmm… I wonder why Pennsylvania has a budget deficit to begin with.

This shortfall far exceeds previous years in which a tax increase occurred, and is already well above the $350 million in savings Governor Rendell believes he will achieve - through only the first four months of the fiscal year.

Heritage points to recent testimony of experts that additional spending won’t jumpstart the economy, links to research by Ronald Utt showing little economic benefit from additional transportation spending, and notes that even some of Obama’s advisers have pointed that out. 

As noted in Nathan Benefield’s commentary on the Nanny State Mentality,

(T)he pork-barrel spending and corporate welfare that is pervasive in both Harrisburg and Washington exudes the nanny-state mentality. Elected officials often celebrate taxpayer handouts to politically selected companies as “economic development,” claiming they will create jobs. But how many jobs are destroyed with the taxes necessary to pay for these handouts? Taxing all businesses and individuals to give taxpayer-funded gifts to a select few is like splashing water across a pool—it won’t make the pool any larger.

In what may be the most surprising Congressional testimony since Frankie Pentangeli renounced his accusations against the Corleone family, Sanford told the Ways and Means Committee:

There seems to be no consequence, and indeed a reward, for unsustainable spending growth by states. In effect, sending $150 billion more to states would produce another layer of moral hazard – already laid bare at the corporate, individual and federal levels in recent years. Corporations like CountryWide overleveraged their resources on risky loans as American banks increased their stake in subprime mortgages from only 5 percent in 1994 to roughly 20 percent in 2005. At the individual level, some people bit off more mortgage than they could chew, with Americans’ house price-to-income ratio jumping from 4-to-1 (where it had hovered for 30 years) to 8-to-1 in 2006, and over 40 percent of first-time homebuyers in 2005 not making any down payment at all. Nationally, the federal government stepped in and offered a solution that presented more risks than the problem it addressed: namely, not allowing certain companies, and even certain citizens, to fail. Yet capitalism was and is predicated on this idea of risk, and the chance for success and failure.

Bloomberg News columnist and author of The Forgotten Man Amity Schlaes points out that the taxpayer is the forgotten man in this equation – and you and I and all our constituents are put on the hook for more and more liabilities, many of which will certainly be passed onto our kids and their kids after them. On both a rhetorical and practical level, I’d ask you what happens when the federal government, indeed our nation, needs a bailout? Who bails out those who’ve bailed out everyone else?

Third and finally, I believe there are far better paths, albeit some less traveled by, to take than going and borrowing more money from the Chinese – whom we owe over an estimated $1.3 trillion plus already – to spend even more taxpayer dollars in a desperate attempt to catalyze a souring economy.

First among these preferable paths would be giving states relief from unfunded mandates – which have cost the fifty states $131 billion over the last four years, and my home state specifically around $500 million. These mandates include Real ID with its long-term $10 billion price tag for states, increasing the minimum wage costing states $200 million this year, No Child Left Behind’s $12.3 billion burden this year, regulations related to prescription drug plans that will cost states $95 million in 2010, bio-terrorism upgrades costing $167 million this year, and reductions in Federal Food Stamp funding costing states $200-300 million annually.

Regular readers will recall that Mark Sanford’s fiscal responsibility has worked better for South Carolina than the borrow and spend model of Governor Rendell for Pennsylvania.

NC-17 rating or not, subsidizing Hollywood filmmakers is not a proper role for government. Film tax credits don’t result in any economic gains, but only distort the tax code – resulting in higher taxes on most Pennsylvania families and business, while awarding special carve-outs to politically connected companies.