Last week, in something delicately called an “early guidance,” economic forecaster Arun Raha told legislators they’d have about $2.3 billion less to spend over the next 30 months. The announcement means the state now faces an $8 billion budget shortfall.
On cue, entering from stage left, come 28 liberal economists telling the governor and legislative leaders that they better consider raising taxes. Fair enough. Liberal economists, like other special interests, have a right to their opinion. But there is something a little pretentious about this:
Drawing upon economic theory, we believe reducing government spending will have a more deleterious effect on Washington State’s economy than would increasing revenue. Although both cuts in government spending and tax increases have the potential to slow economic growth, cutting government spending would likely have the most immediate impact by directly reducing consumption. Tax increases are less problematic…
The appeal to “economic theory” is unlikely to persuade families and business struggling to get by in an economic collapse precipitated, in part, by serious missteps taken by the credentialed ubersmug, the degreed greedy with economic training.
Economists disagree, often and vigorously. If they didn’t cable news would have more dead air time, perhaps a good thing. Of the 28 folks who signed the letter, 24 work in tax-supported institutions: county government, community colleges, and four-year universities. Does it surprise anyone that they agree that raising taxes would be a good thing?