Advertisement

Archive for Saturday, April 6, 2013

Opinion: Economic schemes likely to hurt Kansas

April 6, 2013

Advertisement

Kansas has no mountains, great lakes, forests, deserts, sea coast, tropical climate or large cities to attract people. Kansas agriculture and energy sectors are far too efficient to support a large workforce. Manufacturing continues to decline in the U.S. and Kansas. We get some synergistic growth from Kansas City, Mo., but it is limited by fragmentation of the metro area. Consequently, for over a century, Kansas population has grown slower than the rest of nation.

Despite those disadvantages, our real standard of living has been well above average. How did we do it?

We did it with stable, effective, traditional, conservative economic development programs — we invested in people and infrastructure. We delivered those investments through a reasonably honest, efficient and frugal government. And we had a balanced tax structure to pay for it.

Until the frontier closed, the leading Kansas development program was federally supported homesteading. Ever since then, it’s been Kansas education funding. For close to a century, highway funding was second or third. More recently health care funding was second. Nowadays, scoring federal revenues and grants is a leading government enterprise. We’ve tried to mitigate poverty — important because poverty drags down the productivity of the next generation. We’ve supported family farms. Also, we do have a few development tax gimmicks of limited scope and uncertain effectiveness.

And that has always worked for us. We’ve even been able to weather some terrible droughts, dust bowls and depressions.

But now come Gov. Brownback and his movement-conservative supporters in the Legislature to surprise us with revolutionary economic development schemes they never campaigned on to fix what wasn’t broken.

First, they’re abolishing the income tax. Then to pay for it they’re making massive cuts in education, highways, health care and any other pot of money they can grab on to. According to their “Laffer curve” ideology, sooner or later, a spurt of growth is supposed to follow.

Next, adding direct injury to reckless experiment, Brownback keeps turning away federal dollars and jobs. He abolished the Arts Commission — goodbye $1.3 million a year in grants and perhaps 50 jobs. He rejected a $35 million health grant — goodbye 200 to 300 job-years.

Movement conservatives are also opposing federally funded Medicaid expansion, which would mean goodbye to an estimated $500 million a year and 4,000 jobs. That would be the biggest single Kansas economic development program — ever. Let’s pray Brownback doesn’t kill Medicaid expansion.

Not satisfied with defunding education, movement conservatives want to punish teachers by silencing their representatives, removing negotiation rights, politicizing curriculum, replacing public schools with private schools and imposing yet more outside testing

As to poor people, Brownback proposed abolishing the earned income tax credit and the food tax credit. He is also dismantling government service agencies by renting their functions out to profit-making companies — companies that, perhaps coincidentally, make large campaign contributions. Early reports speak of heavily degraded service delivery.

Leaving no economic niche undisturbed, movement conservatives want to abolish regulations that support family farms and ensure phone service in rural areas.

These radical and destructive plans are contrary to common sense. And they’re contrary to experience: Every high-income state makes large public investments in education and other services. And they’re dead opposite to mainstream economic theory.

Also they’re contrary to Kansas public opinion. For example, polls have consistently shown that Kansans oppose cuts in education and will even support tax increases if necessary to maintain education.

In addition, the education cuts are contrary to the Kansas Constitution, in the opinion of Kansas courts. Cuts in support for poor people could also face constitutional challenge. When it looked like he couldn’t amend the Constitution, Brownback’s response was a direct attack on the separation of powers. He wants to remove Supreme Court oversight of education, and he wants to pack the courts.

Sadly, we can’t do much to reverse the damage this year. If Kansans want to stop the economic hemorrhaging, we’ll need to send a message at the 2014 ballot box.

— David Burress is a retired KU economist and current president of the Kansas Progress Institute.

Comments

lucky_guy 1 year ago

IKU57 what are you complaining about 12% in 6 years if you do the math...oh, what you right wingers don't do math, that is less that 2% inflation per year. Pretty good when you recall that Regan had 15% inflation till Volker killed it with high interest rates. Oh and gas prices have been coming down 11 cents in the last week. It isn't 1980. Get over it.

0

Richard Heckler 1 year ago

The Lawrence real estate industry is about long term inflation. I guess Ben missed the "boom town real estate disaster" that began in about 2001 and burned up the economy by 2007 world wide.

Lawrence politicians also live in perpetual denial.

0

IKU57 1 year ago

States cannot do enough to stay up with Gentle Ben's scheme... America is dying. Enjoy the ride.

The Shocking Truth About Inflation

Ben Bernanke declared, in no uncertain terms, that there’s no need to worry about inflation.

Recently, he testified before Congress and defended his outlandish money-printing policies by claiming:

"My inflation record is the best of any Federal Reserve chairman in the post-war period."

Is he right? Is inflation really at historic lows of 2-3%?

If you have gone to the grocery store … filled up your gas tank … or gone out to dinner recently, it’s crystal clear.

Inflation is soaring!

The Fed can make this outlandish claim — that inflation is at 3% — by ‘manipulating’ the numbers. It’s something they first began doing back in the 1980s.

As John Williams’ website, shadowstats.com, reveals, if inflation were measured by Reagan-era standards … it would be close to 10%.

And last Saturday, a Barron’s article confirmed that you’d need $1.12 to buy $1.00 worth of goods in 2007. That’s 12% inflation in just 6 years.

1

John McCoy 1 year ago

Come to Texas. Our governor is just like yours. Only taller. And even more short sighted. And more venal. Just a destructive clown.

2

Kookamooka 1 year ago

I gotta get out of this state. I hate being treated like a guinea pig.

5

KU_cynic 1 year ago

Kansas Progress Institute? El presidente?

It has almost no web presence save some references to Burress's home address.and a Twiiter account with a history of 86 tweets -- and none since November of last year.

Aren't we all presidents of our own personal one-person think-tanks?

Just write what you think without the posing and puffing.

0

Commenting has been disabled for this item.