Buckeye Institute: Accepting "stimulus" funds will hurt Ohio
COLUMBUS -- Just weeks after the federal government approved the largest emergency spending bill in U.S. history, local and state governments are struggling with decisions about which projects to fund. Making public officials think twice are some of the nation's top economists saying it will actually damage the economy -- hitting Ohio especially hard with major job losses.
The Buckeye Institute for Public Policy Solutions released today "The Economic Impact of Federal Spending on State Economic Performance: An Ohio Perspective." This study illustrates the damaging effects higher federal spending has on the nation's economy and estimates that an additional 91,000 jobs could be lost in Ohio as a result of the federal "stimulus" bill.
Much of the federal "stimulus" spending is not for one-time projects but for new or expanded government programs, such as unemployment insurance. Once this federal money runs out, state and local governments will be forced to pay for these programs, according to the study. Read the research here.
"As this study clearly shows, federal spending isn't 'free' for Ohio," said Buckeye Institute President David Hansen. "In fact, this spending has a very high cost in terms of both taxes and reduced economic activity. While Governor Strickland has been a very visible cheerleader for this federal stimulus package, his efforts will cost Ohio jobs and further worsen our economy's woes."
According to the study, Ohio's economy will be up to 3.09% smaller over the next 10 years than it would have if the state would have rejected all funds. This is because the "stimulus" funds ultimately lead to a permanent increase in the government spending burden. Approximately 82,000 jobs will not be created due to the additional government spending burden being maintained. Find more data on how Ohio stacks up with other states here.
The study was created in cooperation with Donna Arduin of Arduin, Laffer, & Moore Econometrics in Washington, DC.
Watch the Buckeye Institute YouTube channel for videos of the event.
