While politicians may be forgiven for stretching facts when it comes to making their points, they shouldn’t totally ignore economic reality.
That’s what seemed to happen on July 6, the last day of the Oregon 2015 legislative session, when a huge $1 billion dollar-plus bonding measure was up for debate.
Because such bills usually have something to offer in every legislator’s district, most can be expected to vote for such a bill, as they did in this case.
But Representative Greg Smith (R) went over the top in his statements on the House floor in support of the bill. He began by saying, “The value of infrastructure development, I guess, is in the eye of the beholder. I’m of the opinion that public sector investment leads to private sector investment.”
Of course, this is far from certain, especially when public sector investments are often prone to overspending and underperforming, or so ill-advised that they may actually hamper private sector investment rather than enhance it. We might give Representative Smith the benefit of the doubt here.
But, then he said this: “…and but for Measure 5, we would be driving on platinum streets. That is fact!”
With all due respect, that is not a fact! Far from it. Measure 5 was a citizen’s initiative passed by Oregon voters in 1990 aimed at limiting the amount of property tax that could be extracted from homeowners and businesses.
One early analysis showed that from 1991 to 2000, property owners saved an impressive $5.05 billion thanks to Measure 5. A later analysis found that over its first 16 years, Measure 5 reduced local revenue by some $41 billion. Impressive, but not nearly enough to afford platinum streets anywhere in the state.
You see, while asphalt costs in the range of $50 to $150 per ton, platinum costs closer to $970 per ounce, which translates to about $31 million per ton. Even assuming you wouldn’t need as much platinum because it’s so much harder than asphalt, it’s difficult to imagine that paving our streets with precious metals would ever be either affordable or sensible on any level.
Representative Smith was trying to make a point that had it not been for Measure 5, Oregonians would have more money to make better public investments. But by taking his argument so over the top, he simply brought into question whether at least some of our elected officials understand that resources are limited but human wants and desires are not. Economics is the science of how to best allocate those scarce resources. Politics is a poor substitute.