Beware the Multiplier Effect

THEORIES ARE DEBATABLE. REALITY? NOT SO MUCH. When a public official wants to sell a big spending increase, he’ll almost inevitably justify it by claiming that it won’t just create the benefit for which it’s intended; it will also have a “ripple effect” that will accelerate economic growth even more. This is the case not […]

Stimulus Dollars Not Going to Teachers and Law Enforcement

Last session, legislative leaders argued South Carolina needed every dollar of the state’s $2.8 billion federal stimulus package to save jobs for teachers and law enforcement personnel. Faced with such dire needs, Gov. Mark Sanford’s suggestion to use $694 million in stimulus funds to pay down the state’s $8.2 billion debt sent legislators into a […]

Stimulus Task Force Says Agencies Moving Forward Despite Contradictions

By: Geoff Pallay and Kevin Dietrich Despite a lack of direction from federal officials, state agencies in South Carolina claim to be on track for complying with stimulus funding guidelines, the S.C. Stimulus Oversight, Accountability and Coordination Task Force reported Thursday. “Frankly, it’s just shocking to me the continual conflicting guidance that’s coming from the […]

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The Economic Impact of Federal Spending on State Economic Performance: A South Carolina Perspective

Federal government spending comes with costs; it should not be accepted as the free-lunch it is frequently considered to be. Every dollar the government spends must first be removed from the pocket of the private sector through higher taxes today, or higher borrowing today implying higher taxes tomorrow. Either way, government spending crowds-out private sector spending, diminishing the private economy’s rate of growth.

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