Jimmy Stewart On The PFD: Don’t You See What’s Happening? Walker Isn’t Selling, Walker’s Buying!

Contributed by David Eastman

There’s a memorable scene in the classic Christmas movie, It’s A Wonderful Life, that aptly sums up what is taking place in Juneau this year. In the scene, Jimmy Stewart passionately explains to his neighbors how the local tycoon’s offer to take over the town’s insolvent bank in exchange for their rights as stockholders really isn’t as generous as it sounds.

Alaskans today face an orchestrated campaign designed to convince them that their future is inexorably tied to the continued government take-over of our economy and that they should abandon their investment in any other future. It’s a powerful message. No doubt some reading this have already been convinced.

The message is not geared for those who work for the state. No, state employees and contractors don’t need to be convinced. Their future really is tied up in the growth of state government. It’s all the rest of us that this campaign is directed at.

Under this campaign, threatening Alaskan veterans and seniors with fake eviction notices is A-Okay if it results in Mat-Su residents telling their legislators to pass an income tax. In fact, the greater the hysteria, the greater the effect. As with any bailout, the overarching goal boils down to one basic thing: to push consequences off of state government and onto somebody (everybody) else. 

State government is what must come first. It is the truly essential part of our state: “The people may come and go, but we must take care of the government.” 

Do you see what is happening? Special interests rallied together to put a governor into office. That governor has now put them and the state agencies they partner with to the front of the line. Voila! Time for a government bailout! Note: Even though we have over $15 billion in reserves, we call this a fiscal crisis.

Of course, it’s not a fiscal crisis (which is why we have to resort to “fiscal terrorism” of Alaska’s seniors to try to generate support for more taxes). In actuality, it’s a government crisis. But who among us is moved to action by hearing that state government has been spending more than our economy can sustain and needs to cut back? What’s new?

Yep, that about sums up what is taking place in the capitol this year. The governor demanded more money from Alaskans last year (and more money to government), and he has now terrorized various groups of people (including seniors, vets and those who drive on KGB) into going along with it. The Senate just passed a statewide tax that will take $5,000 from every family of four this year, and that’s just the PFD cut.

By convincing the legislature to redirect the dividend and the earnings of the Permanent Fund from Alaska’s private sector to state government, he has “solved the crisis” and is every bit the hero of the state public sector. And while the private sector now experiences the recession even more painfully than it otherwise would have, significant portions of state government get to celebrate that the crisis of downsizing has been averted yet again. 

You ask me how this arrangement can continue? Well of course it can’t, because there is only so much permanent fund money to go around and the appetite of government is limitless. Alaskans allowed their representatives in the State House to approve spending more than $4 billion of the permanent fund earnings this year. Think about that. The straw has hardly been placed in the fund, and the vote was to suck out more than $4 billion in the very first swallow!

Talk about unsustainable!

Alaskans need to lay the smack down and fight for a future in which we still have a permanent fund when my kids graduate high school.

Yes, as a resident of Alaska, you are a shareholder (whether you like it or not). If that makes you feel uncomfortably responsible, that’s probably a good thing. You and I each own shares in the future of Alaska, and in the permanent fund that has permitted Alaska’s economy to continue to be as “normal” as it is today. 

Without that permanent fund, you would see a smaller state economy today, less support for local government and an even smaller private sector. You would also see the state with a lower credit rating, higher taxes, less investment in Alaska on account of the higher taxes and an Alaskan economy that looked a bit more like Puerto Rico’s. (Note: That’s not a good thing).

You’re invested in this great state simply by living here, and a governor I know would love to take your shares in exchange for a short-term government subsidy. The existence of a fiscal crisis is the justification for those invested in state government to do what they’ve always wanted to do - crack the code on how to get Alaskans to redirect the permanent fund earnings to government and away from the private sector. 

Amazingly, they’ve already convinced enough legislators to do this, in a time when Alaskans are having to lose their health insurance because they can no longer afford it. Oh, and they now tax you for that too! And while some Alaskans are trying to find the money to pay the tax for not having healthcare insurance, the state House of Representatives just voted to pass another $650 million in new broad-based taxes on all Alaskans. Government crisis solved!

Government isn’t shrinking in Alaska today. It’s just increasing its market share over the private sector.