Letter: State Taxpayers Pay Federal Too

Letter: State Taxpayers Pay Federal Too

— To the Editor:

Anyone seeking clues on why the federal government is heading for a fifth straight year of trillion-dollar deficits need look no further than District 44 Del. Scott Surovell's op-ed, "Partisan Games on Healthcare Hurt Mt. Vernon-Lee Community." [Mount Gazette Gazette, July 19-25, 2012]

Mr. Surovell urges lawmakers to move forward to create a state-sponsored health-insurance exchange as provided in the so-called Affordable Care Act. I leave the merits of that idea for others to parse. What is troubling is one of his main arguments. "The cost to Virginia taxpayers is minor," he says, for "the federal government is picking up 92 percent of the cost over the next 10 years."

Perhaps Mr. Surovell has no federal tax liability. My household does, and it is far larger than that due to the Commonwealth of Virginia.

The widespread presumption that "federal money" is free, pouring out of a golden faucet in the sky and requiring nothing from state and local recipients, is not only delusional, but dangerous. It encourages voters to allow more and more functions to shift to a level of government over which they have little influence, and saddles them with the costs of supporting a higher overall level of spending than they would tolerate if the money had to be raised through state and local taxes.

Meanwhile, the federal government is borrowing about 40 cents of every dollar it spends. At the moment, the interest costs for this credit binge are low. But if inflation fears pick up, foreign economies recover, and foreign bond buyers stop perceiving U.S. Treasury debt as a useful assets, then debt-service costs will soar and we shall see just how "minimal" the costs of federal largesse really are.

Clark T. Irwin