Say Anything Blog

The 2007 North Dakota Department of Commerce annual report has just been published, and it has some pretty interesting numbers.  Specifically the $78,359,669 in tax dollars spent on economic development.

According to the report, that spending has resulted in 12,350 new jobs and 1,254 new businesses.  Assuming those numbers are correct (and as I’ve recently pointed out there are some serious questions to ask about “jobs created” numbers being used by the Hoeven administration) this works out to about $61,933 per business created, or $6,344 per job created.

The big question we, as citizens, need to ask ourselves is this: Are these economic development programs worth the money we’re investing in them?

For me, the numbers above prove just how terribly inefficient the government is when it comes to “creating” jobs.  We’ve spent in the ballpark of $80 million to create a number of jobs and business that aren’t going to pay anywhere near that in taxes back to the state.  To me, that represents a net loss for the taxpayers of North Dakota despite the new jobs.

A better approach for economic development would have been to give this $80 million or so back to the taxpayers for them to spend.  Not only would that have helped create new business and jobs ($80 million in an economy as small as North Dakota’s is a significant amount) but it would also have allowed taxpayers to get something concrete for their money.

When the government spends my money on economic development I don’t get anything back for it directly.  But if I spend my money at the businesses I like, not only do I support those businesses but I also get some goods or a service back in exchange.  Which may not create as many jobs or new businesses, but is a more sustainable sort of economic development in that a) it lets taxpayers give their money to the sort of businesses they’re actually going to patronize and b) is free of the massive amount of bureaucracy it takes to administer government economic development.