Tuesday, October 28, 2014

Tricklin' down

"Trickle-down economics" and the "trickle-down theory" are terms in United States politics to refer to the idea that tax breaks or other economic benefits provided to businesses and upper income levels will benefit poorer members of society by improving the economy as a whole.

So says Wikipedia.
A report by Ernst & Young projected that the GreenLight Pinellas transportation projects would create more than 67,000 jobs over 30 years, with 48,500 jobs in the construction industry. According to the same report, about $4.2 billion would be pumped into the county’s economy and will offer a return of $2.50 for every dollar spent.
So says  the St. Petersburg Area Chamber of Commerce.
The new proposed transit network is expected to generate positive economic activity, returning approximately $4.00 for every $1.00 invested in public transportation.
So says Greenlight Pinellas.

Hillsborough County PLG Value Proposition

Every $1 billion invested in public transportation capital and operations creates and supports an average of 36,000 jobs.

These 36,000 jobs result in roughly $3.6 billion in business sales and generate nearly $500 million in federal, state, and local tax revenues.

76 percent of public funding for transit is spent creating and supporting hundreds of thousands of private sector jobs.
For every $1 invested in public transportation, $4 is generated in economic returns.
Every $10 million in capital investment in public transportation can return up to $30 million in business sales alone.  
So says Hillsborough County Transportation and Policy Leadership Group.

That's a lot of trickling coming down.

Most of the jobs numbers cited above are very misleading.  "20,000 jobs will be created" was a common statement during the Florida HSR debates.  That was false.  It was 20,000 job-years, as in one job for one year, not total long term jobs, with a peak short term employment of 8,000 jobs during heavy construction.  The long term jobs for HSR operations and business was about 1,000, or a fraction of the overall jobs cited. That same flawed logic is applied in the cases above as well.

Meanwhile, recall Hillary, who recently said
“Don’t let anybody tell you . . . that, you know, it’s corporations and businesses that create jobs. You know that old theory, trickle-down economics. That has been tried. That has failed. It has failed rather spectacularly.”
Don't forget about President Obama's nearly $1T 2009 stimulus spending bill. Four years later we still had greater than 8% unemployment, and historically below average GDP growth averaging 2.4%.  We're still paying for that debt, and will be forever.

I'll defer defending trickle down theory and exposing these "value propositions" for another day.

But either you believe in it, or you don't.

Or you believe trickle down only when its convenient to believe in trickle down.

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