Committee for a Responsible Federal Budget

Weekend Editorial Roundup

Apr 26, 2010

Here are the highlights from this weekend’s editorials on fiscal and budget policy:

The Wall Street Journal criticized plans by Democrats to introduce new health cost control measures in response to a report that said the recently passed health care legislation would increase premiums.  They predicted Democrats resorting to "political rationing" in an attempt to stem the outrage over the increased costs.  They argued that price controls would further distort and batter the insurance market, making controlling costs much more painful and inefficient than necessary.

The Washington Post discussed the different views on future bailouts in regards to financial reform.  They argued that the Dodd bill's position, to create a prepaid fund to liquidate failed or threatening firms, would give "market players unhealthy confidence in an eventual bailout."  The Post instead proposed that the cost of bailouts or liquidation be assessed on firms after they occur, so as to not implicitly encourage the prospect of future bailouts.

The Denver Post panned GM's misleading claims that they have paid off their debt to the US government in full. GM's claim refers to about $6 billion it paid back to the government last week.  The Post noted that both the US and Canadian governments still had stake in the company (the US holds 61% ownership of the company) and also noted that since GM's financing arm, GMAC, was bailed out by the US government, GM was in fact paying back the government with government money.

The New York Times called on the EU and IMF to create a bailout package for Greece in order to allow it room to maneuver to get its deficits under control.  They said that considering the economic conditions of Greece, it was nearly impossible for them to get their deficits down to reasonable levels.  In addition, they said there should be a "pre-emptive bailout package" for other heavily-indebted European countries like Portugal and Ireland to ensure that investors stay confident in these countries' bonds.