New Hampshire Needs To Go Into Rehab

by
Steve MacDonald

There are those who believe that a congressman or Senator has an obligation to get ours back—and then some.  That is, work hard to bring home the taxpayer bacon.  But the pork from DC comes with strings attached and recent research demonstrates that it may actually be worse to rely on federal money and contracts than to let private market forces drive local commerce. 

The focus of the paper by three Harvard Business School professors was on the affect of committee chairman and the requisite increase in pork they bring home—as much as a 40% increase by their calculations.  Using a wide ranging amount of data–different states, decades, and so on they discovered remarkable consistencies regardless of where or when the ‘pork’ was administered.

“We find that fiscal spending shocks appear to significantly dampen corporate sector investment activity. Specifically, we find statistically and economically significant evidence that firms respond to government spending shocks by: i) reducing investments in new capital, ii) reducing investments in R&D, and iii) paying out more to shareholders in the face of this reduced investment opportunity set. Further, we find that when the spending shocks reverse (through a relinquishing of chairmanship), most all of these behaviors reverse. Finally, we also find some evidence that firms scale back their employment, and experience a decline in sales growth.  Our findings demonstrate that new considerations may limit the stimulative capabilities of government spending.” 

So earmarks have a negative impact on corporate behavior just as entitlements do for individuals.  This makes perfect sense.  There is less incentive to act as a responsible steward if there is some guarantee of resources from a government entity.  This should easily apply to any amount of entitlement under almost any set of circumstances, if the recipient does not continue to accept a personal or professional obligation to secure other work for an unknown future. 

States, like people (and corporations as well), only work best when they secure first their own best interests through their own responsibility and labor.  And now we have a study that suggests the negative impacts of what should—to any responsible hard working American seem obvious—no one respects free money the way they do that which is earned through perseverance and hard work.  Free money makes you lazy.  Or  to quote George Will, no one washes a rental car.

And it seems like state governments learn to rely to much on federal handouts as well. New Hampshire democrats just "balanced" the state budget with more debt and millions in federal money that’s not even there.   So now they’ll have to get someone to put it back or their budget will not be "in balance,"  like some crack whore begging for another hit.

Nice image that.  Take it with you to the polls this November.

The state government under democrat rule has changed its behavior, and placed us in hock to the feds.  Excpet in these circumstances, you the tax payer will be the ones who have to pay when the spending shock is reversed.  The study shows that you can come back from the brink.

I think New Hampshire needs to go into rehab.  We need to wean ourselves off failed democrat leadership, get rid of the cash-crack whores writing the state budget,drop the spend first and look for revenue later mentality, re-build a foundation of self reliance and a commercial atmosphere that attracts business and commerce from across New England,  and tell the money pimps in DC, we’re in charge of our own destiny again–if you want some of this, it’ll be on our terms.

 

Short Review

Harvard Study (pdf)

 

Cross posted at NH Insider

Author

  • Steve MacDonald

    Steve is a long-time New Hampshire resident, blogger, and a member of the Board of directors of The 603 Alliance. He is the owner of Grok Media LLC and the Managing Editor of GraniteGrok.com, a former board member of the Republican Liberty Caucus of New Hampshire, and a past contributor to the Franklin Center for Public Policy.

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