Gathering Places
Gathering Places
The centerpiece of the economic recovery package before the Legislature's special session is a large increase in spending on construction. This package is insufficient and will ultimately be ineffective in helping to stimulate Hawaii's economy because it does not include a major tax cut. Hawaii can’t spend
its way out of crisisHawaii needs meaningful tax relief such as the elimination of the excise tax on food and a retail sales tax holiday.
>> Tax cuts are more effective than spending increases: Almost every player concerned about Hawaii's economy agrees that the Legislature must find a way to pump money into our economy. A spending increase, however, is a poor method of doing so. Funds that are appropriated does not mean that money would automatically be expended.
Instead, there is a time-consuming process between legislative approval of increased spending and that spending getting into the stream of commerce. Even if the government worked at lightning speed, it would take up to a year for the spending approvals to work their way into the economy.
Hawaii's working families cannot wait that long. Tax cuts would be a faster and more effective means of putting money into our economy. As soon as a tax cut takes effect, consumers will see cash in their wallets.
>> Increased government spending alone is insufficient: Spending increases alone would be insufficient. Trying to attack a recession by increasing spending without tax cuts is like trying to fight a boxing match with only one arm.
During the past several years, Japan has built almost every major bridge, highway or airport the country has ever needed. Japan's economy, however, has not recovered from its prolonged recession.
>> The Democrats' proposal would stimulate more big government: The Legislature's moves to cut the governor's spending proposal from $1 billion to $100 million will emasculate any stimulus. All Hawaii will get is an increase in government and more debt service.
Although I may differ with Governor Cayetano, he was thinking boldly with his $1 billion construction proposal. The Legislature is not thinking at all with its $100 million to $300 million spending increase.
If Hawaii is going to attempt to spend its way to prosperity, we should accept the governor's "glutton" spending and reject the legislative leadership's "diet" increases.
>> Spending increases do not help average Hawaii residents: Proposals to increase spending on construction would ultimately benefit the construction industry. The average resident of Hawaii would will see little benefit from the proposed spending plan. The construction industry deserves support and can help our economy, but cannot save Hawaii alone.
>> The increased spending is misdirected: Hawaii's tourist industry is bearing the brunt of the economic downturn. Hawaii's unemployment rate may reach a record 8 percent with working families on the front line of this recession. Rather than direct spending increases toward tourism or increasing benefits to society's needy, the spending plan directs almost all fund increases toward just one sector of the economy.
Any effective legislative package to stimulate Hawaii's economy must include significant, broad and meaningful tax relief. It is up to the voters to educate legislators to enact a stimulus package that includes real tax relief.
Charles K. Djou, a Republican, represents
the 47th District (Kaneohe, Kahaluu) in
the state House of Representatives.
