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Wednesday, December 10, 2008
A change of heart on borrowing our way to prosperity
The Atlanta Journal-Constitution
Last week, when questioned about his Philadelphia meeting with Barack Obama, Gov. Sonny Perdue raised doubts about the president-elect’s plans for economic recovery.
“We expressed our concern that we cannot borrow our way back into prosperity,” Perdue said.
But that Keynesian virus is pretty powerful, and the governor announced yesterday that he had come down with a significant infection:
Gov. Sonny Perdue told state lawmakers Tuesday that he will propose an “aggressive” package of borrowing to build schools, libraries, roads and other facilities to help stimulate Georgia’s struggling economy.
“I am going to be aggressive with our bond package to use the good credit and the good name and the good balance sheet of Georgia to do our own stimulus package in Georgia,” Perdue said….
Chris Schrimpf, a spokesman for the governor, said there is no contradiction between what Perdue said last week, and what he said this week.
The jolt of a stimulus is one thing. Long-term prosperity is another, Schrimpf said. Specific projects are good. Habitual debt is bad, the spokesman said.
Regardless, key Republican state lawmakers seemed happy to see the governor succumb to the bug, and one even hoped it would get more serious.
“I think that’s great. I think that’s the way to go. You want to stimulate the economy,” House Rules Chairman Earl Ehrhart (R-Powder Springs) told my AJC colleague Aaron Gould Sheinin.
“I say let’s double whatever he’s thinking. The interest rates are at rock bottom. We can save the state millions over the life of these bonds. The state is going to get an absolute windfall by stimulating the economy. We’ll gain by a factor of 10 or 20 on every dollar we spend.”
At a Capitol press conference for the anti-tax group, Americans for Prosperity, Senate Majority Leader Chip Rogers (R-Woodstock) touted a new push for a constitutional amendment to tie growth of the state budget to population increases and inflation.
Said Rogers:
“Over the last few years, interest rates have been extremely low, so if you’re going to borrow, this is not a bad time to borrow. I would have to look at this in the context of our entire picture of state debt.
But the governor’s idea of rebuilding our infrastructure, particularly as a way to support economic development is a good idea.”
Jared Thomas, director of AFP in Georgia, said there was indeed a difference between good debt and bad debt. “I do not think there’s anyone in this state who would argue that we do not have transportation infrastructure needs,” Thomas said.
Phil Kerpen, the AFP’s national policy director, provided the only fly in the ointment. He, too, said going into debt for worthwhile projects is acceptable. But John Maynard Keynes had it wrong, Kerpen said — spending for the sake of stimulating the economy doesn’t work.
In other business, the AFP said it would be working the Legislature in January on behalf of Rogers’ constitutional amendment, and in favor of zero-based budgeting.
Roger said we can expect legislation to corral what he said was a state Department of Community Health attempt to add fees to health insurance policies issued by HMOs — which the majority leader said was a form of executive-branch taxation.
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Ford dealer in Savannah goes after ‘rice-ready’ imports
The Atlanta Journal-Constitution
A frustrated Ford dealer, angered over the way lawmakers in Congress are approaching the bailout of Detroit, has put out two radio ads in the Savannah area, condemning politicians as useless and dismissing Japanese cars as “rice-ready…not road-ready.”
Listen to the two ads here and here.
Here are the details from the Associated Press:
O.C. Welch, who owns a dealership near Savannah in Hardeeville, S.C., began airing the minute-long ad on a dozen stations in the area over the weekend. The ad sounds more like a talk-radio tirade than a sales pitch.
“All you people that buy all your Toyotas and send that money to Japan, you know, when you don’t have a job to make your Toyota car payment, don’t come crying to me,” Welch says in the ad. “All those cars are rice ready. They’re not road ready.”
Floyd Mori, executive director of the Japanese American Citizens League, said Welch’s remarks evoke anti-Asian sentiments often aimed at Japanese and Chinese immigrants to the U.S. from the 1930s through World War II. He also noted many Japanese automakers’ cars are manufactured in America.
“It’s a blatant, ignorant, racist remark from somebody who should know better,” Mori said.
Welch said he’s mostly mad at politicians, blasting them in his ad as only being good for “slinging mud and spending our tax dollars.” He said the government should offer tax incentives for consumers to buy new cars rather than spend money bailing out Ford, General Motors and Chrysler.
