Gov. Nathan Deal continues to say that Georgia cannot afford to take the federal government's generous offer to pay for the expansion of Medicaid to cover an additional 600,000 Georgians. The federal government would pay 100% for three years, gradually declining after that to 90%.
In addition, according to a Georgia State University study, it would also create 70,000 new jobs in the state. That -- in addition to providing health care and saving lives -- makes it seem like a very good deal.
Sadly, we just cannot afford it. In fact, we've also had to cut days from the school year because we can't pay the teachers and keep the schools open that long.
But we can cut taxes for businesses, In fact the governor has appointed a committee of 21 businessmen to advise him on how to do just that. You know the mantra: to stimulate job creation, cut taxes for business.
There is now some data from a natural experiment that bolsters the argument that it doesn't work that way, at least not in the kind of economic situation we have today. Thanks to the AJC's Jay Bookman for writing about this.
Four years ago, Georgia and Oregan had similar taxes and similar rates of unemployment: 11% for Oregon, 10.4% for Georgia. Then Oregon raised taxes and Georgia cut taxes. So what happened?
Oregon's unemployment dropped to 8.1% (from 11% = down by 2.9%); Georgia's dropped to 8.7% (from 10.4% = down by 1.7%).
Of course the different tax plans were not the only factor; but it does challenge the Republican mantra that cutting taxes is always the answer. Oregon had a more significant drop in unemployment than Georgia.
Ralph
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