Letter From Economists
Fred Thompson has a very interesting response to the letter in which he argues that now that the legislature has enacted a balanced budget, it is free to engage in deficit spending if the revenues don't materialize - which they won't if voters overturn the tax increases. Fred is much more informed than I of the intricacies of the state budgeting process, but I think most economists would agree that in a crisis, deficit spending is the preferred solution over tax increases. Here is Fred's full response:
I am skeptical that deficit spending on the scale required to fill the gap would happen if the tax increases fail to materialize so I am not ready to suggest voting against the tax increases, but it is a very interesting argument. What do you think?
Fred also asks about the opinion of other economists in the state, if they or any other economist would like to participate in this discussion, I offer this blog as a forum.