Why Governor Walker Should Love the Recall Election

The recall election is an economic stimulus that doesn't raise the deficit.

Anyone who knows about economics will also understand this dismal science has no correct view, only compelling arguments. With that said, I support the recall and so should Governor Walker. Oh, don’t start the hate mail yet, please continue to read.

When trying to fix the economy, the government can use policies that involve taxes or spending. The Federal Reserve has a couple more tools, but since each state does not have its own Fed, we have to focus on what tools the local governments have. Governor Walker has made it his goal to cut government spending, and, it seems he has. Congratulations.

However, during a recessionary period, cutting spending is the wrong thing to do, at least according to John Maynard Keynes, the father of modern-day economics. Keynes would say the government should be spending to help the economy. A classical approach would say as interest rates and prices fall, businesses are encouraged to invest more and the ship will right itself. Unfortunately, businesses have not yet started to reinvest fully in the economy, which leaves the needed monetary boost to come from the government. I’ll touch on fiscal responsibility in another post.

With that said, why should Governor Walker love the recall? First, this is pumping millions of dollars into Wisconsin’s economy. Now couple that with the economic principle of the multiplier effect, the amount of spending reported is actually closer to three times that amount. I have heard the governor’s war chest is around $24 million and the total spending is expected to be in the hundreds of millions. No fiscal policy could so easily pump up to a half a billion dollars into the Wisconsin economy without increasing the deficit. Spend it all governor, spend it all.

But why isn’t the Wisconsin economy recovering faster? There is what we call in economics a lag period. That says, what we do today will not be felt until some time later. When will this be? Approximately right before the potential recall election and the Governor will look like an economic genius.

Whether or not you support the recall, hopefully we can all agree, we all support the financial stimulus it is providing our economy.

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M. Chavannes February 01, 2012 at 11:23 PM
Mr. Troy, I agree, the recall will cost the taxpayers some money, but when we compare the hundreds of millions other groups will be spending in the state, the cost of the recall will not dampen overall economic impact. Oh, those people who think the spending will be limited to unions, I will bet my paycheck that just as many outside special interest groups will be joining the republicans in their campaign efforts.
I am right February 02, 2012 at 12:00 AM
Keith pay your damn loan to the Village of Shorewood and stop being a dead beat.
Craig February 02, 2012 at 12:18 AM
What you really meant to say was, "The BRB and Walker cost me money from my wages, so I am more than happy to share the pain with everyone else." In reality: You are happy to give up the benefit to the taxpayor as payback for messing with your union.
M. Chavannes February 02, 2012 at 12:31 AM
Sorry Craig, I'm not really sure where you are coming from. I am pretty sure I said what I meant to say. This has nothing to do with unions it only has to do with the positive economic impact of spending in an economy during a recession.
Craig February 02, 2012 at 01:19 AM
Sorry Mr. C,, maybe I was a little hard on you. Actually you are one of the teachers that should benefit from act 10. Let me try this again a little differently: If you were on unemployment or took a serious wage reduction, would it be wise to spend money you don't have? This cost to the State for a do over election is just as foolish. We may not agree if it is possible to spend our way out of a depression/recession. But we both should agree that burning money is not helping anything regardless of the economic climate.


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