Publisher’s Note: As readers of these pages may recall Alaskans for Sustainable Budgets also maintains a separate blog providing news & commentary on Alaska fiscal and economic policy on national website Medium. The following piece appeared first on that website. ______________________________
Yesterday in response to a question during the Fairbanks presentation of the Alaska Senate Majority’s Fiscal Plan Senator Click Bishop said that he had started talking to colleagues about developing an “economic stimulus plan” of various capital projects. The question and response begins at about 54:00 of the following video. Fortunately, I was sitting out of the frame, so my resulting facepalm is not recorded for posterity.
In many ways, Sen. Bishop’s response tells you all you ever need to know about why the Alaska economy is in the shape it is, and why it will become worse if either the current Alaska Senate Majority or Alaska House Majority Coalition fiscal plans are enacted.
Alaska already has what many economists view as an outstanding and long term “economic stimulus plan.” It’s the Alaska Permanent Fund Dividend (PFD). According to a March 2016 analysis by the University of Alaska-Anchorage Institute of Social and Economic Research (ISER), each $1 distributed as a PFD in Alaska produces about $1.40 in income in the overall Alaska economy. As “stimulus” packages go that’s an extremely good bang for the buck.
As significantly, according to the March 2016 and subsequent ISER studies the PFD also materially reduces state poverty levels and helps reduce income disparity, both also very important economic objectives.
But that program is troublesome to some because it puts the dollars — and economic decisions — in the hands of individual Alaskans, rather than government. So, rather than do whatever it takes to maintain the program during an increasingly serious economic recession, the majority caucuses in both bodies are currently proposing to curtail it severely and move roughly half of the dollars — and resulting control over how those dollars are spent — over to government, substituting instead things like Senator Bishop’s “economic stimulus plan” to help drive the economy. Continue reading