Colorado Dems flunk basic econ

As Obama pledges to use taxpayer money to hand out cash and prizes in the name of jump-starting the economy, Colorado Democrats seem to be taking notes. But perhaps they should start taking a basic college economics course. Their chosen model just won't work. A quick read through the daily papers and opening day remarks by the state's leading Democrat lawmakers revealed their plans to increase government regulation and taxation, two actions all but guaranteed to worsen the state’s economic prospects.

Here’s just a quick sample of their plans. Democrats want to mandate new business regulations. Rep. Mark Ferrandino, a Denver Democrat, is introducing legislation to force banks to give loan defaulters a “temporary timeout” to renegotiate their loans. Rep. Andy Kerr of Lakewood hopes to force businesses to grant a week of unpaid leave so parents can go to school events.

The trouble with these nice sounding ideas is that they will increase government intrusion into private businesses and increase costs that are in turn be passed on to consumers.

Democrats also want to increase the size of government. Only the state’s projected $604 million budget shortfall restrains their ambitions. According to the Rocky Mountain News, a $13 billion price tag for start-up costs is the only thing stopping some Democrats from moving forward with a socialized medicine scheme.

Even so, Rep. Mary Hodge of Adams County thinks a smaller version is doable. Never mind that government takeover of healthcare is a prescription for long lines, escalating costs, deficit spending, and loss of personal freedom.

To improve education, Rep. Karen Middleton of Aurora suggests that we should increase government bureaucracy by creating an "Office of Dropout Prevention and Student Reengagement." State Rep. Debbie Benefield of Arvada wants the government to guarantee every student has access to a high-quality teacher. I’m guessing parental choice isn’t what she has in mind rather the creation of yet another government teacher training program or teacher salary initiative. On the welfare front, legislation is poised to create an “Economic Opportunity Task Force” (at least it’s not a blue ribbon panel) to develop a “strategic, integrated and comprehensive plan to help lift families out of poverty.”

Bear in mind that every dollar spent on state bureaucracy is one not spent by entrepreneurs to create jobs, charitable organizations to provide real help, or individuals to invest in their own future.

Democrats think they can create jobs, stimulate growth, and generate prosperity through the creation of more government programs, hand-outs, and regulations. Unfortunately, they missed the lessons of the 20th Century, subtle as they were, like the Great Depression, 70's stagflation, and the collapse of centrally planned economies.

“There are severe limits to the good that the government can do for the economy, but there are almost no limits to the harm it can do,” observed Nobel laureate economist Milton Friedman. The direction sought by the majority party this legislative session points to darker days ahead.

Krista Kafer is a Denver-based education consultant, frequent cohost on Backbone Radio, and regular columnist for Face the, from which this is reprinted by permission.