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Pure Michiganís Bid For More Tax Money
Michigan Capitol Confidential ^ | 3/29/2012 | James Hohman

Posted on 03/29/2012 6:41:21 PM PDT by MichCapCon

A new study on Michigan’s 2011 Pure Michigan advertising campaign repeats the common ploy of using "multiplier" analyses to defend some line items in the state budget. This technique is often used to justify government spending on everything from public transportation to film subsidies.

Multiplier analyses take some economic activity and estimate its net economic impacts. For example, it looks at something like a customer buying a pair of shoes, and estimates what effect the retailer's use of the proceeds from the sale has as that money flows through the economy. Though they often use overblown and sometimes erroneous assumptions, the real problem with such analyses is they rarely ask where the spending comes from in the first place (where did the shoe buyer get the money to buy the new pair, for example).

There are economic consequences to all actions — you can’t drop a dollar bill on a sidewalk without affecting commerce. In this case, the money taken from Michigan taxpayers to pay for tourism ads has an impact that's not considered by the economic models used to justify the ads.

These models are better used to compare spending items, all others being equal (which they never are). For instance, the multipliers from this item can be compared to those of arts subsidies, whose proponents argue that they have a 51-times multiplier.

Government Initiative

Multiplier: "job creation"

RASCO corporate subsidy

2.34x

Transit Spending

0.6x

Transportation spending

0.9x

Government Initiative

Multiplier (in dollars): "increased economic activity"

Arts Grants

51x

Early Childhood Education

16x

Earned Income Tax Credit

1.67x

Film Subsidies

6x

Tourism Advertising

40x

Transit Spending

4x

While multiplier analyses potentially could be used to weigh the economic consequences of different government spending programs, they appear most in the public arena to justify taking taxpayer resources.


TOPICS: Business/Economy; Government
KEYWORDS: subsidy; travel

1 posted on 03/29/2012 6:41:39 PM PDT by MichCapCon
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To: Springman; Sioux-san; 70th Division; JPG; PGalt; DuncanWaring

Give us a website and we’ll promote Michigan on our own.

If anyone wants on the Michigan Cap Con pinglist let me know.


2 posted on 03/29/2012 6:44:53 PM PDT by cripplecreek (What does it profit a man if he gains the whole world but loses his soul?)
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To: MichCapCon
the real problem with such analyses is they rarely ask where the spending comes from in the first place

and how those sources might have used the money in a way that most likely would have benefited the economy more than the government.

3 posted on 03/29/2012 6:52:49 PM PDT by MulberryDraw (Toilet paper, the poor man's gold. It will hold its value better than the dollar.)
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To: MulberryDraw

There are plenty of us who would happily promote Michigan for free if we had a website to do it with. There would be administrative costs but it would be a fraction of what this pure Michigan crap costs.

The pure Michigan website is simply crap and they don’t seem to understand what brings visitors to Michigan. People primarily come to Michigan for the state and national forests, hunting and fishing Out door type stuff. Its also important to note who your visitors are and we get a lot of asians in the forests.

http://www.michigan.org/


4 posted on 03/29/2012 7:16:43 PM PDT by cripplecreek (What does it profit a man if he gains the whole world but loses his soul?)
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To: cripplecreek

Wow, I thought everyone went to Michigan to visit Detroit! Hope they can turn the state around ... it’s been in bad hands, very bad hands, for a very long time.


5 posted on 03/29/2012 7:49:56 PM PDT by RetiredTexasVet (There's a pill for just about everything ... except stupid!)
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