The novel and untested approach has been introduced by Democratic lawmakers in at least four states.
Democratic legislators mostly in blue states are attempting to fight back against Donald Trump’s efforts to withhold funding from their states with bills that aim to give the federal government a taste of its own medicine.
The novel and untested approach — so far introduced in Connecticut, Maryland, New York and Wisconsin — would essentially allow states to withhold federal payments if lawmakers determine the federal government is delinquent in funding owed to them. Democrats in Washington state said they are in the process of drafting a similar measure.
These bills still have a long way to go before becoming law, and legal experts said they would face obstacles. But they mark the latest efforts by Democrats at the state level to counter what they say is a massive overreach by the Trump administration to cease providing federal funding for an array of programs that have helped states pay for health care, food assistance and environmental protections.
I have no idea if this would even do anything.
The federal government prints money. If the states don’t pay the federal government it doesn’t actually mean the government will run out of money.
What will happen is the money supply will balloon, because federal payments are one of the ways the government controls the money supply. If those payments don’t go back to the feds, the delayed payments will stay in circulation.
That might create inflation? Will it do anything else? Again, no idea.
Actually, no. What would happen is that the federal government would just intervene, contact the banks, and seize the funds.
But even in a situation where there’s a fight over the money, that’s not what would happen.
The Federal government is going to draw up and execute its budget as if they had the funds anyway. If any of the earmarked money is spent, it would just be added to the national debt until the federal government actually collects the state funds, through force if necessary. Then the seized funds would be applied accordingly.
In the meantime, the seized funds would just be frozen by court order in state bank accounts until the whole case is settled. And by “Settled”, I mean that the SC would just rule that the states have to pay and order the banks to release the funds to the federal government.
This is what would happen regardless of who is President, regardless of who’s on the SC bench. States don’t have to like policies enacted by the federal government. There are deep red states like Florida and Tennessee that also give more federal funds than they receive, and they would not be allowed to withhold federal funding just because they don’t like Democrat policies, either.
The courts aren’t going to allow that, nor should they. Both red and blue states have multiple states that pay out more in federal funds than they receive. Allowing states to do this would only lead to a situation where blue states refuse to pay out whenever there’s a Republican president and red states refusing to pay out when a Democrat is in charge.
That’s what I was getting at when I pointed out the fact that the feds print their own money. The federal government would be fine.
I was just running the thought experiment of “would this even do anything” under the assumption that it was successful. And it’s a fantasy on its face, even in the best case scenario it accomplishes nothing.
And the best case isn’t what would happen, because ultimately you’re right and this won’t be allowed. There are a lot of mechanisms the federal government has to compell the states to pay their dues.
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