|
|
|
McPhersonSentinel - McPherson, KS
  • Reaganomics: Will it work in Kansas?

  • In 1964, I was listening to a speech given by the then Governor of California, Ronald Reagan. It was one of the most inspiring speeches I have ever heard. Governor Reagan was nominating Senator Barry Goldwater for President.
    • email print
  • In 1964, I was listening to a speech given by the then Governor of California, Ronald Reagan. It was one of the most inspiring speeches I have ever heard. Governor Reagan was nominating Senator Barry Goldwater for President.
    I was enthralled with the charisma and motivating influence of Ronald Reagan. It was then no surprise to me that Reagan would win the 1980 Presidential race.
    Upon entering the White House in 1981, President Reagan initiated his signature economic plan. His plan was based on the principles of supply-side economics. To summarize in a brief way, supply-side economics embraced the idea of huge tax cuts to stimulate the economy, breaks for business by deregulating corporations, and cutting back government social programs.
    After President Reagan’s first term, the results were somewhat mixed. It is true that the economy began to flourish. Defense spending was dramatically increased, thereby bringing prosperity to those companies competing for government contracts. Social programs funded by the federal government took a hit. The national debt, which was one trillion dollars to start with, increased to three trillion dollars.
    The economic architect of this plan was a young Harvard graduate, Arthur Laffer. Mr. Laffer is the same economist hired by the state of Kansas to give his economic expertise to our state.
    What will be the outcome of supply- side economics to the state of Kansas?
    First of all, state governments, unlike our federal one, must operate on a balanced budget. Cuts will have to be made. Programs will suffer, at least in the short-run. State services will face challenges not known in recent times.
    When will the results of such an experiment be known? According to the economic experts, there will be a time-lag of varying degrees from implementation to final results. Some predict it may be 4-5 years before the final tabulation is known. It is unknown as to how many new businesses will come to Kansas as a result of cutting the income tax. Voters must weigh the risks of such an economic plan pushed forward by the Governor and his Republican counterparts in the legislature.
    Is there any precedence on the state level for such an economic approach? Looking to the south at the state of Texas, we also find mixed results. The Texas economy is booming to some degree. Social services in the state of Texas, such as education, have dropped into the bottom five of the fifty states.
    What do the voters of Kansas want? What are they willing to risk? No one knows for sure when the tax cuts in Kansas will “kick” in. Kansas has been a leader in many areas of social services, including roads and education. We are in the top three states in the number of roads among the fifty states. Kansas is anywhere from 35-40 in the resources we have for education and the amount we give for education. However, in the area of achievement, Kansas consistently ranks in the top 10 states, no matter what criterion is used. Again, the voters of Kansas will have to decide how to judge this economic experiment.
    Page 2 of 2 - It would seem to me that the two government services mentioned would be of vital interest to new businesses coming to Kansas. Roads and transportation are of critical importance to many businesses. Transporting goods and services becomes an important aspect of many businesses. Good schools are important to workers employed by these businesses. Families want a top notch school system to send their children to. Furthermore, schools become a training ground for potential employees for those businesses. Top businesses usually go hand-in- hand with first class schools.
    A friend claimed, if schools are so vital, why aren’t schools improving? Why are test scores going down? The vast majority of teachers are working extremely hard to help children learn. American education accepts all levels of students.
    We try to educate everybody regardless of a variety of abilities. Therefore, scores will often vary with other countries’ scores. Their scores are often based on students who are tracked according to manual labor pursuits as opposed to higher academic education.
    This article is not intended to be one on the merits of American education. Suffice to say that the voters of Kansas are facing big issues in the upcoming elections. Needless to say, there are legitimate questions on both sides of the economic divide.
    Kansas is a wonderful state. It has a national reputation for many things. It is never too early to gain all the facts you can. Will the risk of eliminating the state income tax be worth the long term benefits for the Kansas economy? What will be the long term effects for essential services provided for by state government? Hopefully, the wisdom of Kansas voters will decide what is best for Kansas.
      • calendar