Economic Boom by Economic Modelling


I’ll be taking a closer look at the REMI study of Governor Raimondo’s Rhode Works proposal, but two quick thoughts based on Patrick Anderson’s article in the Providence Journal. First:

As it turned out, the study estimated that raising the gas tax would create even more jobs — 6,656 jobs over 10 years — than tolling alone, and $22 million more in gross domestic product.

REMI finds that government spending boosts the economy. It’s assumptions virtually guarantee that outcome.  The question of tolls versus taxes, or trucks versus everybody,  is simply a political calculation.

Second, the Rhode Works proposal calls for borrowing $600 million. Is it really a surprise that an economic model would find a half-billion-dollar boost to the economy? If you cash in a balance transfer check from your credit card, that’s free money in you pocket… until it isn’t free.  At some point, it becomes a consideration that the state will be paying almost as much in borrowing costs.  That initial boost will wind up costing $1,154.9 million.

Rhode Islanders have every reason to overrule a one-month study for which they paid $50,000 and say that more government revenue is not the answer.

  • Monique Chartier

    Excellent points, Justin. The assumptions that went into the REMI study were carefully, narrowly chosen to give the governor the answer she wanted in support of her highly wasteful, destructive toll plan.

    And the economic boost that would come from her toll plan is exactly the same as would come from charging an enormous sum on a credit card. Of course, the governor will be long gone when Rhode Island has to start paying the correspondingly large bill – repayment that will NOT just come from truckers; far from it.

    The press statement from the governor’s office which accompanied the release of the toll “analysis” included this phrase:

    “The Governor has made it clear she does not want to place the burden on the people of Rhode Island”

    But the people of Rhode Island will end up carrying most of the burden, both short and long term, if her destructive toll plan is permitted to move forward (“faux-wood”, per John Loughlin’s helpful pronunciation guide).