The Washington Policy Center, a right-leaning think tank, published a report today with a terrifying title: “Economic model shows Superintendent Dorn’s proposed tax increases would cost 18,500 jobs“. This is “truthy”, AN economic model did show this. Of course, THIS economic model ALWAYS shows job losses from proposed public policy proposals.
Economic model shows Superintendent Dorn’s proposed tax increases would cost 18,500 jobs |Washington Policy Center Economic model shows Superintendent Dorn’s proposed tax increases would cost 18,500 jobs | Washington Policy Center.
The model in question, the STAMP model, is often used by people who want to make a point. The Policy Center, and this author in particular often have their thumb on the scale when they describe the impact of actually funding our K12 system. For an alternate viewpoint on a similar discussion in Arizona, the link below discusses a comparison of three different economic models, models based on the same basic set of data about the economy.
They are looking at a remarkably similar issue – the impacts of a $1 billion increase in the sales tax in Arizona, an increase I believe they did in the end. The other two economic models showed the exact opposite – an increase in jobs in Arizona. The conclusion from the University of Arizona analysis is:
Both the model structure and the parameter assumptions suggest that the STAMP model was both designed and specified in a way that biases the results toward the findings of very low impacts of government expenditures and very high impacts of tax increases.
UA Estimates of Tax/Expenditure Impacts Compared to those of the Goldwater Institute (prepared by Beacon Hill) and REMI. | Economic and Business Research Center, Eller College of Management, University of Arizona http://ebr.eller.arizona.edu/research/articles/2010/compare_ua_remi_stamp_simulations.asp
You can say almost anything you want about economics and get a study to “prove” it. This article from the Policy Center is unlikely to say anything interesting because of its use of the STAMP model. It’s yet another example of the Policy Center not providing data and analysis in a way that can actually be used by policymakers. By not providing a balanced view of the variety of economic models out there it makes the analysis almost painful to read, and not trustworthy.