Landess: Stimulus Spending Will Hurt SC Economy, Cost Jobs
By Ashley Landess
Legislative leaders are creating hysteria over federal stimulus funds, threatening to fire teachers and police officers and let criminals go free if Governor Sanford doesn’t cave and let them spend millions of one-time dollars on recurring programs. The S.C. media have also thrown objectivity out the window and fed the flames of panic. They have highlighted the misleading projections of politically motivated legislators and special interest groups, and demonized anyone who expresses concern about spending billions of borrowed government dollars.
Common sense tells citizens there is a downside to spending temporary money on permanent programs such as classrooms, prisons and law enforcement. They are right about that – there will be consequences, and legislators are irresponsible not to consider them before passing the largest budget in state history.
Before they fund recurring programs with non-recurring money and flood the economy with government spending, lawmakers should explain how they will pay for programs in two years without the stimulus money, and why they would rather rely on government to improve the economy instead of protecting growth in the private sector.
Legislative leaders claim they’ve cut state spending to the core, but still need more money to fund classrooms and law enforcement. If that were true – and it isn’t – then legislators will face a tougher choice in two years: fire state workers anyway, or pass a multi-billion dollar tax increase. Absent spending cuts today, we will have higher unemployment or higher taxes in two years, and very likely both.
Spending federal dollars will not grow the economy. Rather, economists predict stimulus spending will make things worse. In a report for the S.C. Policy Council, national economists show that increased government spending will crowd out the private sector, leaving businesses with higher costs and less capital. Most jobs created with one-time government money are temporary, and come at the expense of more stable, permanent jobs in the private sector.
Our state has an unusually high percentage of government spending relative to private sector output, and more than a third of our government is already controlled from Washington. Legislators are about to make that worse, and the impact in South Carolina will be severe. Economists project that we will lose between 24,800 and 34,850 additional jobs in both private and public sectors. They offer compelling proof to back up their conclusions, but legislative leaders have refused to consider it.
Governor Sanford and several lawmakers, particularly in the Senate, are worried about potential job losses and tax increases in two years. Responsible policy makers want to solve the budget problem this year, before it gets worse. Unfortunately, the majority of legislators are basing budget decisions on politics, not economics. That is a dangerous approach.
Lawmakers need to set aside their political agenda, put the needs of the people they represent first and do what they already should have done – eliminate all programs we do not need and cannot afford.
Legislators haven’t cut all the fat from the budget. For example, they are still funding the “economic development” plan devised by four legislative leaders and three college presidents. That plan has poured hundreds of millions of dollars into venture capital funds, empty buildings and start-up money for “knowledge-based” companies. They are also spending millions on tourism marketing, paying the salaries of lobbyists and consultants and funding the Clemson Spring Dairy Exhibition – all while threatening to close down prisons and release criminals.
Lawmakers need to chop all economic development spending – it is not the role of government at all, much less at the expense of classrooms and law enforcement. The plan to run the economy from Columbia has robbed small businesses of capital to expand and hire South Carolinians. As a result, our state has the second-highest unemployment rate in the nation.
Government spending has not produced prosperity, and legislative leaders have proved that over the last several years. Taxpayers can no longer afford to fund companies chosen by politicians and bureaucrats when their own jobs are at risk.
Furthermore, there are $7.1 billion in “other funds” paying for programs that have not been examined in more than a decade. That pot of money is a virtual black hole of spending with almost no accountability or transparency.
Most “other funds” programs are practically on autopilot, and few lawmakers can explain what they are. Legislators cannot say they have cut unnecessary spending when they continue to ignore $7.1 billion worth of programs. They should at least look at the programs in that category before threatening to fire teachers.
Legislative leaders have played politics to deflect attention from their own irresponsibility. The legislature in this state controls where the money goes and how it is spent – lawmakers are responsible for the poor economic conditions in South Carolina. But instead of moving forward and passing a sound budget, they are wasting time attacking the governor. They are also risking huge tax increases and tens of thousands of jobs. The public cannot afford for them to ignore their duty. South Carolinians have to make hard choices at home, and the General Assembly should do the same in Columbia.
Ashley Landess is the president of the South Carolina Policy Council, a non-profit, non-partisan research organization in Columbia. For more information about the Policy Council, please log on to www.scpolicycouncil.com.
Comments
By dept of research & reference on April 17th, 2009 at 11:31 am
Amen. Anualizations, race-to-the-bottom spending with federal infusions and pr-based budgeting need to end now. Worst of all is how the failures are then used to justify more bad decision making (eg TRAC) and posturing. Good job scpc!
By T4 on April 17th, 2009 at 12:34 pm
So, do something, Miss Policy Council, or here’s an idea: Just state the obvious.
Maybe Sanford can fix all of this, since his “Billy Badass” attitude has discouraged others from working with him, as well as led to a stangant flailing economy.
By Pat Hendrix on April 17th, 2009 at 2:28 pm
Economists project?
Really? You mean an economist, right?
Republicans sure make it up as they go along.
Here let me try:
Some economists say that 100 percent of fitsnews stats are complete bullshit.
By StupidShouldHurtMore (SSHM) on April 17th, 2009 at 3:43 pm
“Common sense tells citizens there is a downside to spending temporary money on permanent programs such as classrooms, prisons and law enforcement.”
Common sense also says that properly applying said stimulus funding to one-time projects or projects that don’t require revisiting for extended periods of time can promote growth.
If you take your stimulus funds and direct them towards core infrastructure (roads, bridges, water, sewer, etc) you put yourself in a much better position in the long run?
How so? Most of those core infrastructure projects are designed not to be touched for another 10-20 years after initial implementation. If I install updated sewer service, I reduce my total cost of ownership (TCO) because upkeep costs drop. Its NEW! What is there to maintain?
Strong infrastructure is a key to securing businesses; growth and prosperity.
You can’t market a cow pasture with a dirt road and a septic system as a home to large industry. Government has a degree of responsibility in providing for some of these items. Government does not have to till the land and cut down the trees. Government should provide “ease of access” to growth by providing sewer, roads, and if necessary, bridges and rail access.
Bottom Line: Stimulus spending only hurts if you divert the focus away from core infrastructure.
Nice try Landess … scare tactics indeed …
- SSHM
PS: When are you going to get around to fixing the name on the front of the building to the South Carolina Libertarian Policy Council?
PPS: Would you kindly throw Mr. Bryant out of the building and tell him his office is not 1323 Pendleton St. (and to get to work)?
By Fashizzle on April 17th, 2009 at 4:44 pm
Yo Stupid (good name btw)…you say libertarian like it’s a bad thing. Come on, brother. Jefferson, Madison, Franklin — you know, basically the founding fathers responsible for our freedom — would be labeled libertarian today. So would most of those 3,000 “right-wing radical fringe people” (I’ll spare you the trouble of namecalling later) who attended the Statehouse tea party this week. Just move to Europe already and leave the rest of us alone.
By StupidShouldHurtMore (SSHM) on April 17th, 2009 at 7:05 pm
@Fashizzle …
Understand your Founding Fathers, please!
Franklin – Not a libertarian. You are talking about one of the biggest Federalists of them all (Electoral College, opposed to bicameral legislatures, hello!). Ah, as to the charge of “well, he was a co-signer of the Bill of Rights, a prominent anti-federalist document and idea, Franklin also signed three other key documents: The Declaration of Independence, the Treaty of Paris, the Treaty of Alliance, and the US Constitution. Trivia: He was the only Founding Father to sign all four documents.
Madison – Authored Federalist No. 10, which points out how to guard against “factions” or groups of individuals with opinions and thoughts contrary to the whole of the community. I would most certainly have to classify the SC Libertarian Policy Council as a “faction” with an agenda contrary to the whole of the community.
Jefferson – The only Anti-Federalist you listed that actually meets the criteria of a modern-day Libertarian. One out of three isn’t bad I suppose.
I *believe* that you are attempting to draw a parallel between anti-federalists and modern-day Libertarians and libertarianism (based on the folks you listed). Aside from missing the boat, I’d say that SC Public Education is working well in getting the message out about our Founding Fathers (a little ribbing, you know).
- SSHM
PS – I would hardly call John Adams a libertarian (Big L, little L or otherwise).
PPS – The libertarian philosophy of “screw you, I got mine” is the single worst approach you can have. There is nothing worse than watching Atlas shrug and laughing as it happens.
By angel on April 17th, 2009 at 7:43 pm
time to hit the job boards -
http://www.linkedin.com (professional networking)
http://www.indeed.com (agregated listings)
http://www.realmatch.com (matches you to jobs)
good luck to all.
By BIN News Editorial Staff on April 18th, 2009 at 7:24 pm
Ashley’s “Policy Scam” Council. What m@r@ns waste time reading her p@@p? It’s never any different. Same texture. Same smell. Same bias sources. That’s why it’s called the Policy Scam Council. “Non-Partisan” your @rse.
By Bombthrower on April 18th, 2009 at 7:25 pm
The Policy Council is full of libertarians. They live to give out false information and piss legislators off – even though the majority of legislatorws just ignore them. there is a small “out-there” fringe group that supports the council. You know the type that works at the policy council, especially that dork Brian, they are the ones you flicked boogers at from the back of the class in high school.
By CML on April 19th, 2009 at 7:51 pm
The Policy Council is just about the last bastion of conservatism in this state.
Keep up the good work, Ashley.
By BIN News Editorial Staff on April 19th, 2009 at 10:14 pm
Bombthrower,
We surveyed the BIN News Staff. Several admit to spit balls in High School, but none admit they ever “flicked boogers.” willie, have you ever flick one?
Ashley is a paid stooge like sic(k) willie and his “bud” at Voice for Voucher Scams. They’re nothing but hollow shells. They’re scams.
Sometimes they’re mildly entertaining and a little bit amusing.
But, they’re still nothing but political scams.
BIN News Editorial Staff
Flair and Balanced
By StupidShouldHurtMore (SSHM) on April 20th, 2009 at 8:56 am
@CML,
Last bastion of “conservatives?” All that organization is a bastion of is LIARs (Libertarians Imitating Actual Republicans). Go find your own party and stop glomming onto the GOP.
- SSHM
By Part D on April 20th, 2009 at 2:33 pm
Most ordinary conservatives who aren’t on a political payroll love the Policy Council precisely because they shun the GOP status quo. Who would want to “glom onto” a party that spent like drunken sailors and essentially ignored fiscal conservatives for a decade? The Republican Party is in flames precisely because it abandoned the fiscal conservatives, AKA “libertarian” wing.
By Marvin on April 21st, 2009 at 1:34 am
SSHM and Bombthrower (welcome back, WMD, a.k.a. an overpaid House or senate staffer who couldn’t find a job anywhere else because you don’t actually know how to do anything else. Dude, I hope you are still one of the young ones and have an excuse, and not one of the pathetic few past 40 who is still working for Harrell or McConnell, Leatherman or Cooper): the GOP supports lower taxes, less government, school choice, lower regulation and — wait for it — free market capitalism. You guys do not.
Interesting that you think the Policy Council is fringe. They also support lower taxes, less government, education reform and the free market. Libertarian support those things, too. You know who doesn’t? Socialists and American Democrats. Also, you and your bosses. It is that simple. Seriously, pretend you are smart enough for a minute, or go find someone who can explain it to you, and look at what you guys have done in the legislature. You’ve grown government, invested tax dollars in venture capital funds, picked winners/losers in the economy, given incentives to “special companies,” most of whom have lobbyists in the statehouse and return the favors you ask of them (tax credit contribution to SC Launch, for example?). Oh, and raising taxes to expand social programs. Wow! So, guys? Who does that sound like? That pretty much sounds like the liberal democrats. And socialists who do not support capitalism, but rather support re-distribution of wealth.
So, bombthrower. What do you support? Same with you, SSHM. What do you support that is a GOP platfrom agenda that is not supported by the Policy Council or Mark Sanford or even libertarians, but is supported by your clients like Bobby Harrell and Hugh Leatherman?
BIN, no one gives a crap what you support. You haven’t even read the platforms, so just go hang out in your tree house with Cooter Brown and Phil Branton. You aren’t part of the real GOP, so your opinions on our party don’t matter.
But you others I suspect think you are Republicans (maybe not — if so, just own being a democrat and that will make sense). If you are GOP, tell us what your heroes in the leadership have done to strengthen our core values.
By StupidShouldHurtMore (SSHM) on April 21st, 2009 at 9:27 am
@Marvin,
The last time the GOP had an effective governor here in SC was in the early 1990s.
Carroll A. Campbell, anyone?
Speaking of the late and great governor, he believed in venture capital. Thank GOD he did. Without his vision and the efforts of government investing into the private sector (in this case, economic development), we might not have BMW.
In fact, allow me to quote from the following:
Attracting Foreign Direct Investment: German Luxury Cars in the U.S.
by Michael R. Czinkota
“South Carolina Governor Carroll Campbell put up a strong recruiting effort, visiting BMW in Germany and making offers that were hard to refuse. In order to obtain the $640 million plant and the expected 6,000 new state jobs, a bit of southern finesse was used. For instance, the site most desired by BMW had 134 separate landowners. In order to ease land acquisition problems, Governor Campbell secured a $25 million appropriation from the state legislature to buy the property. He personally telephoned reluctant sellers and within 14 weeks, the state and local governments had spent $36.6 million to buy every single property—including a home that one family had just finished building two weeks before they were approached. To sweeten the deal for BMW, new roads and site improvement were included, and the runway at the local airport was extended to accommodate BMW’s cargo planes. The state also offered a $41 million property tax break to BMW. Furthermore, the local airport’s free trade zone status was extended to include the 900-acre plant site, meaning BMW would not have to pay duties on parts imported from Germany or elsewhere until cars actually left the plant for sale in the United States.”
You see Marvin, once upon a time, venture captial and venture capitalism was a key component of “progressive republicans.” Now, the LIARs (Libertarians Imitating Actual Republicans) that run about as members of the GOP treat those of us (Real Republicans that believe in venture capitalism) who believe in venture capital as lepers.
You can’t argue the economic impact of BMW nor can you say the actions of the late governor were not sound. Don’t believe me? Here, look at an authority on this:
http://mooreschool.sc.edu/export/sites/default/moore/research/presentstudy/bmw/bmwmay.pdf
Yeah – I’m a Republican. A Republican in the vein of the late Campbell. An advocate and follower of what David Wilkins called “the master architect” of the SC GOPs quick rise to power. I abhor what you Marvin and other LIARs have done to the GOP. At the same time, I abhor the actions of some of my fellow GOP-ers who spend money like “drunken sailors.”
The solution isn’t wild spending like a liberal democrat. The solution isn’t to cut everything to the bone like a libertarian. There is a happy medium – and we saw that in SC under Campbell’s leadership.
If three out of four fellow Sandlappers liked Campbell, he must have been onto something.
- SSHM
By Marvin on April 21st, 2009 at 10:34 pm
SSHM — how much do you think it has cost SC taxpayers to foot the bill for BMW, and how many other businesses either went under or never got started because they were not given a level playing field? How many people have been laid off by the couple of big companies that we essentially paid to come to SC? See, when you invest tax dollars in one industry, you risk that the industry will experience a hardship. Problem is that we are the ones who paid for it.
Targeted incentives are not a smart long-term strategy to create a competitive environment for businesses, and while I mean no personal disrespect to Gov. Campbell’s memory, that approach is a mistake. In the long run, you cannot pay a couple of companies to locate and expect others to do the same when they can’t get the same deal. And as you know, we can’t afford to pay everyone to come to SC, right? As for venture capital, that is all well and good, SSHM, but as you know it is a risky investment strategy and elected officials have no right to engage in it with our money. You know very well who pays the cost when the whole thing tanks — look what happened in DC.
You have to offer a good environment for all businesses to succeed. Lower taxes, less regulation, etc. for every business, big and small. The smaller businesses in this state get screwed by this incentive deal, and they hire most of the workers. There is nothing crazy or even really libertarian about believing that private businesses should assume all the risk and costs of their own companies, and then reap the rewards. That is capitalism, SSHM.
What I hear you saying is that lowering the tax burden for all businesses and allowing competition and innovation to drive the economy is a “fringe” approach, but that giving some cash to a couple of big companies at the expense of smaller, home-grown businesses and working class South Carolinians is the “real” Republican strategy. Sorry, but that is just not my cup of Republican tea, and if it is what the Party has decided to become, then you can have it. You can make libertarian a dirty word if you want and decide that’s what anyone who disagrees with you is. I’ll be a libertarian, SSHM, and you can be a socialist and those will just be the labels we apply.
By angelina on April 22nd, 2009 at 10:33 am
SSHM, I’ll be brief (since you and Marvin both struggle with space limitation issues). Venture capital funds are fine for you and your money. Sure, that’s capitalism. Private money, personal risk, individual reward. All good. But the government investing our money in risky projects that are chosen by the government, which takes on the risk on behalf of us without our knowledge, passes along the cost of failure to taxpayers, and the benefits of any success to a few people hand-picked by politicians? Not so much capitalism, dude. In fact, it is the same crap they’re doing in DC. Didn’t go so well for all of us.
By concerned on April 22nd, 2009 at 11:37 am
Do any of you care that we will be paying the same amount of federal taxes regardless if we accept the benefits of the stimulus money? Wouldn’t it be nice if our elected officials could focus on real matters such as fixing 388 so that all of our core requirements are no longer tied to sales tax?
How does Texas operate with their legislature in session every other year? We are in session every year and all we do is screw ourselves more and more!
By marvin on April 22nd, 2009 at 11:33 pm
Concerned, the point is not whether we’ll be paying the same federal taxes, but rather that we will end up paying MORE in state taxes. Spending that money will ultimately hurt our economy. That’s the point, and everyone better take a break from defending themselves and their bosses for spending us into this in the first place and start thinking about what will happen down the road. 388 is part of the problem, and so is the rest of the tax code. But adding more temporary money will absolutely make it worse. Guaranteed to.