When you hear talk of the state "stimulus" package via $744 million in debt spending coming from now ex-Governor Easley, it sounds like a perfect plan with no down side.
face of the troubled national economy,” Gov. Mike Easley said in a statement. …
"Anything that creates jobs right now is a good idea," Easley said. "If you
don't have a job, you don't care whether you're building a prison, a university
building or a polar bear exhibit."
Easley said the projects could produce nearly 26,000 new jobs. Also, each $1
spent on the projects would pump $2.28 into the state economy, he said.
New jobs? Pumping money into the economy? Who could be against that?
If it's such a great idea, why not $7 billion in debt spending? That would create nearly 250,000 jobs by Easley's math. Why be so stingy?
But take away the political spin, allow economic realities to enter the discussion, and suddenly the "stimulus" plan doesn't sound so great. Try this alternative narrative:
"Taxpayers of North Carolina will be forced to finance $744 million worth of government projects over the next few years, essentially guaranteeing future tax increases as the debt will be paid back with interest. Further, said government projects will require millions more in tax support to staff and maintain into the unforeseeable future, sucking even more resources from the productive sector.
Meanwhile, tons of steel, concrete, labor and other scarce resources will be diverted away from private, wealth-generating projects created to satisfy consumer demand. These resources will be shifted to non-productive government projects chosen for their political considerations. Economic growth will be slower in the short term as a result."