Hatch: “Utah is Going to Get By Fine” Without Stimulus Money


Senator Orrin Hatch (R-UT) talked with Wolf Blitzer earlier today:

BLITZER: Should Utah accept the $1.5 billion or $2 billion or whatever is included in this stimulus package earmarked for Utah?

HATCH: Well, I kind of agree with the southern governors who are willing to say, he, we’d just as soon not have this money. But I don’t blame any state for accepting the money at this time. Utah is going to get by fine whether we get that money or not.

I was up at the state legislature. And they’re cutting programs to make us live within our budget constraints. That’s something the federal government doesn’t do. That’s something the Obama administration isn’t doing. it’s something that Bush could have done much better on.

Hatch is right, of course, that the federal government doesn’t cut spending amidst a recession. The federal government doesn’t do that because doing so would be contractionary and pro-cyclical, reducing aggregate demand at a time when it needs to be increased. State governments don’t have the option of deficit spending, so they have to cut back. But cutting back will deepen the recession. Which is why there’s this federal aid to state governments in the stimulus. Ideally there probably should have been more such aid. But Hatch seems to think there should have been less.

But even with the stimulus money coming down the pike, Utah is being forced to cut back on services in ways that will have real harms. For example, they’re eliminating 90 beds at the Utah State Hospital, where the state’s most severely mentally ill are housed. The right likes to talk about waste and bureaucrats, but I’m not sure I understand how letting dozens of severely mentally ill people wander around the state is going to lay the foundations for long-term growth. They’re looking at importing more nuclear waste. They’re reducing staff at state universities, because everyone knows that higher education is a waste of time and it’s “fine” to not invest in human capital. And those cuts aren’t going to be nearly enough to plug the hole in Utah’s budget. They’ll have to do more.

Meanwhile, as McClatchy points out, the increased joblessness associated with the recession will probably mean higher levels of crime across the country at the very time the budget shortfalls Hatch is downplaying are forcing cutbacks to police forces all around the nation.