Monday, February 2, 2004

Hold on to Your Wallet!

The era of big government is just beginning...

The newly-installed Grand Rapids mayor George Heartwell gave his second state of the city speech last week at the Rotary Club downtown. His message? More government is needed to improve the regional economy.

He essentially outlined three initiatives that included more funding for downtown, a bigger regional mass-transit system, and more centralized land-use planning.

First, the mayor wants to continue the improvement of the GR downtown district. Sure, downtown's been doing well over the last decade, but the best way to continue that improvement is to keep taxes low. The continuation of renaissance zones seems to be the most effective tool to increase investment. In fact, renaissance zones should be expanded to all of downtown - or even all of the city... then we'd see some enormous growth rates in Grand Rapids. However, the mayor prefers to use taxpayer dollars to subsidize new business growth - as the governor proposed at her state of the state address. No one seems to realize that this $500 million in proposed venture capital has to come from somewhere... and when was the last time bureaucrats were successful in conjuring up the best investment avenues for money?

Second, and perhaps most laughably, even the new mayor is stumping for light rail service. Nevermind the fact that light rail in most urban and suburban areas is a colossal waste of money, except for in the most densely-populated cities - we need to go for it! (See Myths of Light Rail Transit) And where is the money for this going to come from? That's right! Not the people riding the system, but you and I, the faithful taxpayers of the Interurban Transit Partnership (ITP) service area. The current system subsidizes each rider with taxpayer dollars to the tune of $6 per rider - only 13% of revenue is generated by bus fairs.

Finally, the mayor wants further expansion of the Grand Valley Metro Council, the regional super-government wannabe organization. Wyoming has smartly refused to join, and kudos to them for that decision. The mayor wants to strengthen the GVMC's land-use powers. In other words, they want to be able to tell you where you can and can't live. As the mayor talks out of one side of his mouth about regional planning, which drives up the cost of housing for everyone, he also talks about affordable housing. One government-caused problem (a housing shortage, which drives up prices), needs to be solved by more government! A perfect circle. Who said politicians don't do everything they can to make themselves important?

I thought we had learned our collective lesson that increased government spending and revenue is a gigantic drag on the economy - but apparently not. Is it any wonder that Michigan, a high-tax state, has an unemployment rate way above the national average? Maybe it's time to study a little economics and let the market correct our past public policy mistakes.

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