WJR’s Frank Beckmann interviews David Littman, Mackinac Center’s senior economist, on DRIC
Frank Beckmann: Welcome to our show again, one of the official economists of the Frank Beckmann show, he hasn’t been on in a while, which is our fault and we are glad to have him back from The Mackinac Center, David Littman… I saw a report on, I think it was Channel 4 over the weekend; you were on there talking about the bridge project, the DRIC project, and you were the first one to raise the question “Do we even need a second bridge over the Detroit River?”
David Littman: Of course we don’t. We are at 50% of the operation levels and traffic, which is the key, from 12 years ago. The state has perpetually, just like the state of Michigan budget, continued to project these rosy figures and they have been wrong each time and that’s how we have landed with the kinds of debt and deficit crisis in Michigan and this is now being reflected of course at the National level. If we wanted a bridge, replace the one we got, and that’s what the Ambassador Bridge people have already put half a billion dollars of their own money into doing. And here’s the state, at a time of fiscal crisis, now in pertuity wanting to essentially indebt Michigan further 2 billion, or whatever the numbers are at this point, based on very fallacious numbers of traffic that they really won’t even show you.
FB: Does the ‘Build it and they will come’ philosophy work here?
DL: (laughs) Ya know I’d subscribe, Frank, to all of the rosy projections if I saw the business climate, not only in Michigan but in the U.S., turning around to favor a large ticket, durable good purchases like automobiles, it’s just the opposite. The Governor and legislature in Michigan are not mulling over an increase in pension taxes and they just don’t know how to stop the spending I guess which is really devastating to our future tax burdens and our population losses in Michigan.
FB: Is there anything wrong though with looking ahead and anticipating a return to more booming financial times in constructing a new bridge like that?
DL: No, there is nothing wrong with looking and planning for it but the problem is you don’t want to do it and burden people with a white elephant, which is what we’ve been doing time and time again. The imperatives, if we were mature people, responsible fiscally, is to repair the infrastructure that we have; roads, overpasses, and so forth, to make sure we’re up to snuff with regard to things that protect people’s property and lives. Instead, in Lansing and its people to buy boats, I don’t know what high profile projects for the press, I don’t know. They always want to be doing something new and spiffy but that isn’t what it’s all about. Fiscally that’s bankrupting. And it is a bankrupt philosophy.
FB: Well they say we’re not going to be impacted tax wise in Michigan, it’s gonna have no load on the taxpayer.
DL: Oh yeah sure, how many times have politicians been telling us it’s a free lunch, the money comes out of thin air, it comes from somebody else. It’s just not true. There is no way, a $2 billion bridge. And furthermore, if it is a bridge we need let the people in the private sector, who compete, and who have a great track record do it. Don’t get the government involved into something else they know nothing about and cannot do effectively, cost effectively for the taxpayer and the citizens. So, what they’re doing is falsifying where the revenue is coming from Frank. What happens is, Michigan would have to forfeit, under their ostriches all of the revenues from the tolls to Canada to pay back. Now if that’s free, ya know, it’s only a bridge.
FB: (laughs) Bridge to nowhere. Hey final question for ya before I let you go. National story, the Dow right now, down almost 200 points after standard emperor’s rating service lowered its long-term outlook for our debt from stable to negative. And this is after the International Monetary Fund recently voiced its concerns about the growing deficit. Washington doesn’t hear these experts talking does it?
DL: No, obviously tone deaf. The SMP downgraded essentially its view of the Obama Administration’s ability to come up with anything serious, responsible or mature. It’s a vote of no confidence on the government. It’s a vote that says they still don’t get it. America doesn’t have a revenue problem, it has a spending problem. Presidents Harding, Kennedy, Reagan, Bush they all reduced taxes, not increased taxes and revenue surged. Today, essentially our debt alone is equal to our GDP. This is an impossible situation to continue. What some of the legislators, the more mature ones, are advocating, is returning the dollars that the federal government pays for education, energy, health, environment, welfare, those spending functions, return those to the states so they can decide the local government levels as well and the people. That’s the way it’s ordained in the constitution. Drill for oil, get the shale oil, the gas, the nuclear, whatever we need so we can compete in the world. This is what Washington isn’t allowing us to do.
FB: David, thanks so much for the time, always good to talk with you and I promise it won’t be as long before the next visit.
DL: Great, thank you. Look forward to it Frank. Bye Bye.
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