Government bailout is not economic stimulus

How many people would take a gift of a $1,000 and go out and buy a $60,000 sports car if they could not afford the monthly payments? Yet that is exactly what many state and local leaders seem to be asking us to do with the federal "stimulus" package.

Federal money nearly always comes with strings attached. In fact, most federal transportation grants require a 20-percent (or greater) local match. "Free money" sounds nice, but what happens when state and local governments cannot afford the match?  

If Milwaukee County receives $50 million for infrastructure under this formula, taxpayers in the county would have to come up with an extra $10 million. Does anyone think we have an extra $10 million in this budget climate?

It is even worse if these federal funds are used for operating expenses as that will create even larger holes in future budgets. Bailing out failed governments is not the same as stimulating the economy.

A real economic stimulus would put money in the hands of consumers – and not the government. Tax cuts work.

Tax cuts worked for Ronald Reagan in the 1980s and they are what John F. Kennedy called for in the 1960s. In each case, our nation climbed out of a recession by putting more money back into the hands of the taxpayers.

The choice is simple: do we bail out failed governments with budget deficits or do we stimulate the economy and put more people to work with real tax cuts at the federal, state and local levels? I choose to put people back to work!


Scott Walker is the Milwaukee County Executive. He is responding to Thursday’s Milwaukee Biz Blog by County Board Chairman Lee Holloway.