The excruciatingly-"progressive" mountain burg of Basalt, Colorado, recently gave small-scale Obamanomics a try, by launching a local economic stimulus program that, just like its federal counterpart, robs Peter to pay Paul. And it's worked no better than the federal stimulus plan, according to The Aspen Times -- meaning not very well. Yet local officials, just like their Treasury Department doppelgangers, claim the effort wasn't in vain, using the "it-might-have-been-worse" line of "reasoning."
The town's sales tax revenues are down 12.7 percent over last year, with all major sectors of the local economy taking hits. Grocery store sales were down 10.25 percent; sales at restaurants and bars fell by 29.4 percent; general retail was off 41.3 percent. This despite the town's stab at small-scale economic stimulus.
Reports the Times:
"Town officials had already expressed disappointment after June that Basalt's own stimulus program didn't spur more business. The town funded a program that offered $30 gift certificates to shoppers for each cumulative $300 they spent at participating shops and restaurants.
By one measure, the program was a success. The town awarded 2,500 gift certificates and spent $75,000 to honor them. Despite that success, sales tax revenues fell 17 percent in June. [Town finance director] Tippetts said she believes the program was worthwhile even if it didn't keep sales on par with last year. Without the program, this summer might have been even tougher on shops and restaurants, she said."
Local politicos fall into the same trap federal politicos do, by measuring the "success" of a government initiative not by whether it had the intended benefit, but by how many people took advantage of it. Give away gift certificates, paid for with other peoples' money, and you'll find willing recipients. No shock there. If that's your measure of success, pat yourselves on the back.
But all you're doing is moving money from one set of pockets to another, and tinkering at the edges of an economy, as the lackluster results in Basalt and elsewhere show. Obamanomics, on the small and large scale, is a shell game, which creates the illusion of economic growth. But only through increased productivity and risk-taking and value-creation can you actually "stimulate" -- meaning "grow" -- an economy. Otherwise, you're just handing out gift certificates, paid for with other peoples' money.