Jobs are Priority (For Now), Not Spending and Debt Reduction

There is a lot of recent evidence among countries and regions that the best policy in a grave economic crisis and recession, the central issue is to create jobs as fast as you can, even if this means running a large deficit over the short-term.  More growth will cause tax revenues to increase over the medium-term.

The broad pattern is clear: the more that governments have worried about enabling future moral hazard by excessive bailouts and sought to stem the rise in public debt, the worse their countries’ economies have performed. The more that they have focused on policies to put people back to work in the short run, the better their economies have done.

via A Time to Spend by J. Bradford DeLong – Project Syndicate.

Florida State Government Not a Business

Mr. Scott pretends that he will run the State of Florida government like a private business.  Too bad the stockholders and consumers will have something to say about this, as follows:

…Scott’s health-care transition team has recommended merging the agencies that regulate doctors, oversee the $20 billion Medicaid program and provide services to the disabled and elderly to re-create a single health-care agency. To critics, that looks like the Department of Health and Rehabilitative Services that was broken up in the mid-1990s.

That proposal has already drawn opposition from the powerful Florida Medical Association.

Scott’s “regulatory reform” task force has proposed merging the state’s road-building agency with agencies that protect natural resources and regulate growth to create the “Department of Growth Leadership” that would focus on economic development.

Transition team members wrote that “the ‘system’ has lost touch with strategic purpose,” and that “the regulatory structure is about barriers rather than progress.”

But the notion of combining Florida’s environmental and urban sprawl watchdogs with its chief road-building agency is certain to spark fierce resistance from conservation, transportation and consumer groups.

“It doesn’t make a lot of sense,” said Eric Draper, with Audubon of Florida. “They have such distinctly different purposes, it’s difficult to see how they would work together. … I’ve got to think this would not be viewed favorably by the Legislature.”

Opposition is also likely to spring from unions over Scott’s charge to slash billions of dollars in state spending by reforming the nation’s third-largest prisons system and perhaps requiring state employees, teachers, police and firefighters to start paying into their pension funds.

via Florida Gov.-elect Rick Scott poised to take office — can the former CEO run the state like a business? – OrlandoSentinel.com.

We’ve Heard this Before? Good Luck, Governor

One may suppose that these efforts are mutually exclusive:  cut the budget, justify the money spent, cut taxes, help business expand, cut corporate and property taxes, pay for medicaid, pay pensions (already well funded by the state), all simultaneously.  Sound like an unattainable wish list if tax revenues fail to grow enough.

[Scott]…wants to place a freeze on new business regulations. He wants to phase out corporate income tax over the next seven years and  cut property taxes by nearly 20 percent. He also wants to expand Florida’s K-12 vouchers and charter schools.

Scott wants to solve Florida’s $3.5 billion  budget  deficit and will ask all  state agencies  to justify all the money they spend. He wants to save $1.4 billion  annually on Florida’s public employee pensions by requiring greater  worker contributions to the funds  and  by placing new workers into the 401(k) retirement plans. He wants  to cut Florida’s budget all the way back to its 2004 baseline.

via Florida government workers may have to contribute more to their pensions – Miami Labor Relations | Examiner.com.

Ethanol Subsidies are Good for Cutting

Except for being good for the pockets of farmers in Iowa, ethanol is bad for gas motors, consumers and taxpayers. Also, politicians who seek votes in the corn belt, including Mr. Obama, continue to support this  irrational subsidy for ethanol.

It is now conceivable that the myth of ethanol as the salvation for America’s energy problem is coming to an end. And maybe we always should have known it would wind up in italics, underlined, with the real facts of the damage ethanol can do to gas-powered motors laid out for all to see in a court of law.

via End the Ethanol Insanity: Ed Wallace – BusinessWeek.