Generation Next: Federally Subsidized Pepsi

NEW YORK, New York -- You can't beat the real thing, New Yorkers. Unless, of course, the real thing is using federal stimulus money to subsidize soda purchases.

NY Governor David Paterson announced today that rather than raise taxes on soda and junk food to help close a gaping budget gap, stimulus money would be used to patch up the state's fiscal irresponsibilities, the New York Times reported.

With an estimated $14 billion in deficits, the state had planned to raise taxes on sugar water and junk food to raise over $1 billion. This plan, put forward by the state's health commission and Paterson, would have the additional effect of discouraging unhealthy eating -- one of the main causes of the obesity epidemic currently swelling waistbands across the state and country ... and increasingly making itself felt in obesity-related hospital bills and Medicare/Medicaid costs.

Despite cries that the tax was unfair to overweight individuals (who apparently need soda more than everybody else), I thought it was a pretty sensible idea. While the Legionnaire very fairly compared the NY State Legislature to King George III in its creation of absurdo levies, I think the idea is pretty palatable. Given the huge government deficits, taxes will inevitably be raised (even on Obama's middle class). The fairest, most efficient way to do this would be sales and consumption taxes, rather than piling ever more income taxes on people who grow more and more likely to seek out Swissmen named Bernard with deep vaults the more you tax them. And if you can achieve fairly reasonable policy objectives, like public health, in doing so, all the better.

Enter Sheldon Silver -- New York State Assembly Speaker, Dr. No, the High Priest of the Backroom Deal, and a likely Carnival of Corruption -- a man whose uniquely turbid power in Albany has quashed thousands of rational, good ideas in the past.

Paterson announced the kiboshing of the soda tax at a joint press conference with Silver, and my feline instincts tell me old Shelly was behind it.

The result is that $1.3 billion of tax increases composed of the soda tax as well as a tax on clothes over $100 will be eliminated. The Times reports that the remaining "flexible stimulus funds" will be $4 billion. So 25% of the discretionary stimulus funding (of $25 billion total in state stimulus aid) will go toward effectively subsidizing soda and Gucci blouses.

So much for completing the 2nd Avenue Subway, the various cash-strapped transit hubs, a rail link to LaGuardia, or building Moynihan Station. It's all about doing the Dew. Unless, of course, you're doing the Kate Spade.

It somehow smacks of 9/11 -- instead of being asked to join in shared sacrifice and buckle down to rein in deficits blowing open like saloon doors, we get to ... suck back a Mr. Pip. Sheldon Silver, let me just say: I like the Sprite in you.