Is the Taylor Swift effect real? Be skeptical of economic welfare claims

No one gets hurt when the media spreads false reviews of Taylor Swift concerts. But people will suffer the most as economic multipliers are used to justify wasteful taxpayer subsidies.


What do Taylor Swift, county fairs, and taxpayer handouts to Hollywood all have in common?

All of them boost the economy, magically multiplying every dollar spent. This is a general statement about the smallest local festivals and the biggest public events and government spending programs. However, that is rarely true. The public is being deceived by the witchcraft science of „economic multipliers”.

This trick takes many forms. Some are benign, like standard claims Taylor Swift’s current world tour is bringing an economic boom Everywhere she goes – apparently $1,300 or more is spent locally on every $100 spent on tickets. This is a simplistic statement that ignores how people could have spent their money on a thousand other wants and needs.

Economic multiplier claims are often flawed

Rosi numbers are essentially cost-benefit analysis that only look at benefits, which is an obviously flawed approach. Similar issues are common when people talk about the benefits of etc Youth Football Tournaments, golf invitationals and state and county fairs. They are all important and beautiful things, no doubt, but not the economic titans they usually are.

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Fortunately, no one was actually hurt when the news media reported false studies of Taylor Swift concerts and tractor pulls at the state fair. But people will surely suffer as „economic multipliers” are used to justify wasteful taxpayer subsidies – an almost daily occurrence.

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Special interests specialize in producing studies that show they can do great things if only taxpayers fund them. For example, Hollywood executives desperately want taxpayers to pay for movie production, so they say they will. $8.40 return to economy For every dollar they receive from taxpayers. States have spent the least $25 billion in film subsidies, but money finances different things, not creates new things. Unlike Taylor Swift concerts, this one is at taxpayer expense.

Numerous self-serving interest groups are involved in the economic multiplier game. That’s what the American Public Transportation Association says Every taxpayer spent on transportation gets $5 For economy. Transit advocates in Cleveland boast even more gains, saying they generate a dollar in rapid transit. $114 in economic activities.

The Great Lakes Coalition wants Congress to spend More money on the Great LakesAnd supporters say it delivers $3.35 in economic activity for every dollar It gets.

And green energy advocates say a $1.42 income in economic activity for their subsidy.

Yet when taxpayers fund green energy projects, they’re taking money that would otherwise be spent elsewhere and giving it to a politically powerful lobby — something that’s already earned. Hundreds of billions of taxpayer dollarswith More on the way.

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Taxpayers should be skeptical about the value of subsidies

It is clear why these false claims are so common. Taxpayer funding seems like the easy choice, as if only fools could resist such clear economic benefits. But reporters need to ask tough questions about the motivation behind them.

Interest groups like to make themselves look like the best recipients of precious taxpayer resources. Elected officials are happy to have analyzes that ignore the costs but tout the benefits.

Economic multipliers are usually used to amplify manuals that are never approved.

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Americans need to see this. They should demand better from economists and researchers, listen to messages that tout a program’s far-reaching economic benefits, and look twice at politicians who claim transferable benefits if taxpayers subsidize some discretionary program.

It’s one thing to say that Taylor Swift is an economic force of nature. It’s another thing entirely to throw billions of dollars in public money at anyone and everyone who claims their idea is the best thing since sliced ​​bread.

Jared Schorup is vice president of marketing and communications and James Homan He is the Director of Fiscal Policy at Mackinac Center for Public Policy.

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