Double-down

Georgia Republicans are apparently digging on doubling-down on a failed economic approach ...

You can’t borrow your way to prosperity. If we want to stimulate the economy, let’s reduce spending, taxes, and unnecessary regulation.

Quite simply, there is little to any verifiable research or data to support such methods ever stimulating economic development. Sure, it sounds good and has morphed into rigid dogma for many conservatives today, particularly at the state level, but it doesn't hold up against mountains of contrary statistical evidence.

I've argued this before, but relying solely on tax cuts to generate economic development and revenue growth is a foolish strategy.

Again, Georgia has averaged eight percent a year of revenue growth for more than 20 years during non-recession years. In order to satisfy existing public spending commitments, you'd have to see an increase of 11 percent to 15 percent revenue growth, which assumes a massive increase in economic development.

Both assumptions are unprecedented as the largest revevenue growth in Georgia over the past 20 years was 10 percent. Given our current economic situation, drastically scaling back on investments (which actually hinders economic development) won't get it done.

And given the fact that we have a balanced budget in Georgia, any time we cut taxes, we have to reduce spending. When we reduce spending, we scale back our investments in education, infrastructure, quality of life, utilities, etc. and etc. That, ultimately, results in a worse climate for economic development than one with lower taxes.

Gov. Sonny Perdue's bond proposal is a valid one largely because it can enable the Georgia General Assembly to provide short-term, targeted relief while maintaining a modicum of investment in infrastructure and education.