Pres. Obama recently outlined his new jobs bill, part of which calls for about $130 billion going to state governments to cover costs, pay for projects, and work on their unemployment. As you might expect, the plan is meeting resistance, mostly along party lines.
While the money would be helpful to states for covering their costs over the next couple of years, it would not make any long-term changes directly. Instead, it would provide states with the breathing room they need to reorganize and get things together for themselves. While I believe that money would be better spent stimulating the pockets of the American People, I am more willing to see it go to the states than to business, as what happened to the stimulus from 3 years ago.
The money is supposed to go to things like infrastructure, education, and safety services like fire departments and police. While this sounds admirable and intelligent, it is precisely this that some GOP-ers are concerned about. For them, these count as strings attached to their money. They'd rather get that money with the freedom to spend it as they see fit.
Normally, I'm all for freedom when it comes to how states manage their money. States that waste money soon experience economic and social calamity. Look at California. It's in a state's best interest to act in their citizen's best interest because if they don't they won't have many citizens left. It's much easier to leave a state than a country.
In this case, though, giving money to states to spend how they want is not a good idea. Every state has had to cut government pay and positions. Every state has had to limit the size and scope of their government in an attempt to feed the economy. If we inject billions of dollars for a one-time boost, that money will go nowhere that is useful to the people. It has to be directed, just like block grants for education. It's not unheard of, it's not unethical or scandalous. It's good business.
States should use the money to pay for the things that they can't afford easily now. Upgrade schools and roads, get the economy going by giving the people a tax break or bonus check, or give out subsidies to small businesses to get them started and to keep them going. Get your economy rolling again. That's what the money is for.