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Why is stimulus by one type of government better than the other?

Perhaps someone should ask that question at the next Republican Presidential debate, which they seem to have every week or so.

Gov. Rick Perry’s record of creating jobs with taxpayer money is coming under greater scrutiny because of his presidential campaign.

Perry is trying to deflect criticism of inflated job numbers and cronyism from the right and the left, from The Wall Street Journal to The New Republic and, of course, from his presidential rivals.

This is hardly news in Texas, where the Legislature this year ordered greater oversight of Perry’s management of economic development funds in the wake of a critical audit and outside evaluations of his jobs record. But past criticisms are amplified by presidential politics, particularly when some conservative voters are questioning the wisdom of spending taxpayer dollars to choose winners and losers in the business and technology arena.

Perry’s use of tax dollars for job creation is even being compared with the Obama administration’s $535 million loan guarantee to the failed solar company Solyndra.

During this week’s GOP presidential debate, Perry said it was OK for him to do it, but not President Barack Obama.

“I don’t think the federal government should be involved in that type of investment, period,” he said. “If the states want to do that, that’s fine for states to do that.”

I get that this is a “federalism” issue for Perry, insofar as he actually understands these things, and I get that Republicans hate the federal government – well, they hate it when they’re not in charge of it, anyway. What I want to know is whether there’s any actual economic argument here on Perry’s part. Is there any reason beyond his own political self-interest here to claim that only state governments, and not the federal government, should use public money to spur job creation? If the claim is that one has a better track record of results than the other, which may be implicit here, is there any empirical evidence to back that up? I suspect the answer is No, and I daresay that in the godforsaken event that Rick Perry gets elected President he’ll find ways to steer money to his cronies in the name of job creation. I just would like to see him get pushed on that, for the entertainment value if nothing else.

Another way to put this is to say that Perry isn’t arguing he can do a better job creating jobs than President Obama, he’s saying he shouldn’t be allowed to try it at all as President because it’s best left to the states. Again, I’m sure the first time he proposed a business tax cut of some kind and claimed it would help create jobs, it will be because he’ll also claim that’s totally different from any other method of using taxpayer money to create jobs. Or something, I have no idea what twisted rationale he’d come up with. Not that it really matters, because as this story shows he’ll just make up numbers to support his claims anyway. Read the rest for the details on that.

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