Buy Hoosier, Raise Taxes

by on February 24, 2004 at 8:07 am in Economics | Permalink

In Indiana, Governor Joe Kernan canceled a $15.2 million dollar contract with a subsidiary of a Bombay headquartered company. The next lowest bid was $8.2 million dollars higher. Even if we accept (incorrectly!) the notion that trade restrictions create jobs the governor’s action will at best create some 50 jobs at an additional cost to Indiana taxpayers of $162,000 per job. Consider, both Indiana taxpayers and workers would be better off if the state government hired the Indians and gave 50 randomly chosen workers $100,000 to spend at their leisure.

See Stuart Anderson’s review of state legislation against outsourcing for more examples of Mercantilism in action.

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