Paul Ryan: No federal bailouts coming for Illinois and California

Paul Ryan, right, with Joel Pollak

The Illinois Review tells us that Congress--which of course includes a Republican-majority House of Representatives--won't be bailing out the spending addicts in Illinois and California.  Rep. Paul Ryan (R-WI), the chairman of the House Budget Committee, tells it like it is:

"Should taxpayers in frugal states be bailing out taxpayers in profligate states?" Ryan asked during a forum near the Capitol. "Should taxpayers in Indiana, who have paid their bills on time, who have done their job fiscally, be bailing out Californians, who haven't? No, that's a moral hazard we are not interested in creating."

From Bloomberg lets the boom down:

"We expect state and local governments to wrestle with their fiscal problems on their own without help from the federal government," said Natalie Cohen, a New York-based senior analyst for the bank, in a report. She said 35 states haven’t reported midyear deficits, while Illinois’s $13 billion gap is 47 percent of its budget. In California, she said, the current-year imbalance amounts to 6.6 percent of the spending plan.

Moody’s Investors Service said yesterday in a report that this year won’t bring any defaults on state debt it rated. There were no defaults last year involving state and local securities it rated, the New York-based company said.

Illinois and California created their messes--they should clean them up. Start with cutting spending. Banning public-sector unions will provide residual financial benefits too.

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