Good post. What is a Republican policy response to the state and local funding that addresses the moral hazard problem you identify? What could they ask for in the bill that incentivizes fiscal responsibility (or at least disincentivizes fiscal irresponsibility)?
I haven't seen many people discussing this question. One path would be to set conditions on aid, such as a requirement that any state/locality that accepts federal aid funds needs to pay down X% of its unfunded obligations over the next Y years. Another path would be to adjust Congress's procedural rules to make it more difficult for to pass emergency state/local aid in the future. Each of these broad options has upsides and downsides, and I'm a little surprised that I haven't seen more proposals on this topic from right-wing think tanks.
Good post. What is a Republican policy response to the state and local funding that addresses the moral hazard problem you identify? What could they ask for in the bill that incentivizes fiscal responsibility (or at least disincentivizes fiscal irresponsibility)?
I haven't seen many people discussing this question. One path would be to set conditions on aid, such as a requirement that any state/locality that accepts federal aid funds needs to pay down X% of its unfunded obligations over the next Y years. Another path would be to adjust Congress's procedural rules to make it more difficult for to pass emergency state/local aid in the future. Each of these broad options has upsides and downsides, and I'm a little surprised that I haven't seen more proposals on this topic from right-wing think tanks.