A Warm Anchor Rising
Critique Welcome to Brian Hull
We’d like to welcome, of course, Brian Hull to the RI blogscene in his new role as proprietor of RIFuture. I, for one, am hopeful for a return to the collegiality of the Matt Jerzyk years and am determined not to be the cause should that prove unworkable.
That said, what better method of offering a cyber handshake and slap on the back could there be than highlighting our fundamental differences? And they must be fundamental, because this argument seems flatly erroneous to me:
There is a real big problem with the [state government] shutdown days, over and above the forced pay cut of 4.6% that the employees will have to absorb. We already have a weak economy, and to essentially take another $17.3 million out of it won’t make things any better. Consumer spending makes up the bulk of GDP, nationally and in the state. Add the multiplier effect and every dollar spent generates a dollar plus in economic activity. By stripping out $17.3 million from the local economy of Rhode Island, we’re going to depress the economy by much more than $17.3 million. This is not a good thing.
We’re in a recession, and while the recession might be getting better, there is no indication that employment will bounce back anytime soon. This will mean a suppressed economic situation in RI potentially for years to come. The unfortunate reality is that we need to raise revenues. And that means higher taxes.
We could certainly dip into the argument over whether state workers or taxpayers would use money in a more economically productive fashion. Even if we ignore the fact that it costs the government money to collect taxes, but nothing not to collect them, and even if we accept that new taxes would skew toward the higher end of the economic spectrum (which I assume would be Brian’s preference), I’d argue that the business owners and wealthy residents thus implicated would be apt to spend additional money in a way that maximizes the multiplier effect.
The more direct point, though, is that Brian’s appeal to the need to leave money in the economy ought to suggest a different form of government cut than to the labor force. Instead, he merely argues for redistribution.
He doesn’t even advocate for easing restrictions, regulations, and mandates on businesses and productive individuals as a way of increasing economic activity and, thus, government revenue. One gets the impression, from his post, that “taxpayer dollars” exist in some sort of pool outside of the economy that folks won’t “be happy about paying” to the government, but that they otherwise won’t use.