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Fueling Your Economic Development: The Power of New Money and Trade

Fueling Your Economic Development: The Power of New Money and Trade. Presentation to. SWAMC Annual Meeting 2014. Marcus Hartley and Jonathan King. March 6 th , 2014 . Introduction. Our goal is for you to understand: The power of “new money” How new money and trade are related

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Fueling Your Economic Development: The Power of New Money and Trade

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  1. Fueling Your Economic Development: The Power of New Money and Trade Presentation to SWAMC Annual Meeting 2014 Marcus Hartley and Jonathan King March 6th, 2014

  2. Introduction • Our goal is for you to understand: • The power of “new money” • How new money and trade are related • Why new money and trade are so important in Alaska and to economic development in general

  3. Slide Title (Keep It Simple!)

  4. hoopla • Things • More things • Sub things

  5. What Do They All Have in Common?

  6. “New” Money versus “Old” Money New Money(Fills up the Tank) Old Money(Gets Burned in the Engine) Recycles through the economy Transfers from person to person Eventually leaks out of the economy Unless the economy is fully self-contained Alaskan economies are not fully contained • Brings new wealth to the community • Only comes from outside the community • It can be saved, invested, and grown. • Or, it can be spent. When you start spending the money in your economy it gets “burned” in the local economy.

  7. How Does Money Move in the Economy

  8. New Money: It Powers Alaska… Source: ISER, 2008

  9. Without Oil We Are Half the Size Source: ISER, 2008

  10. Every boom we’ve had: New Money! 1980 – 1985: State Oil Revenue BoomPopulation up 30% 1973 – 1977: Pipeline Construction BoomPopulation up 25% 1940 – 1960: Military BoomPopulation Triples 1940 72,000 1973 336,000 1980 420,000 1960 222,000 1985 540,000 1977 418,000 Source: ISER, 2006

  11. Where does Fairbanks Get Its New Money? Source: Northern Economics, 2010

  12. Where does Fairbanks Get Its New Money? Source: Northern Economics, 2010

  13. Fairbanks’ New Money Creates Jobs Source: Northern Economics, 2010

  14. Fairbanks’ New Money Creates Jobs Source: Northern Economics, 2010

  15. New Money in Rural Alaska Source: ISER, 2005

  16. New Money in Rural Alaska Source: ISER, 2005

  17. Why is New Money So Important in Alaska? Because our economies are terrible at holding in money!

  18. The Big Boys get it…. Source: ANCSA Annual Report, 2010

  19. CDQ Groups: They Understand It Also • CDQ groups use new money revenues to: • Own a larger share of the fisheries • Create economic development and employment opportunities in their communities in and outside of fishing • Even at a loss…. Source: CVRF, 2010

  20. The Economy of Southwest Alaska

  21. The Economy of Southwest Alaska

  22. The Economy of Southwest Alaska

  23. The Economy of Southwest Alaska • Where does your new money come from?

  24. The Economy of Southwest Alaska • Where does your new money come from? • Fish Harvesting

  25. The Economy of Southwest Alaska • Where does your new money come from? • Fish Harvesting • Fish Processing

  26. The Economy of Southwest Alaska • Where does your new money come from? • Fish Harvesting • Fish Processing • Waterborne Transport

  27. The Economy of Southwest Alaska • Where does your new money come from? • Fish Harvesting • Fish Processing • Waterborne Transport • State Government

  28. The Economy of Southwest Alaska • Where does your new money come from? • Fish Harvesting • Fish Processing • Waterborne Transport • State Government • Federal Government

  29. The Economy of Southwest Alaska • Where does your new money come from? • Fish Harvesting • Fish Processing • Waterborne Transport • State Government • Federal Government • Tourism

  30. The Economy of Southwest Alaska • Where does your new money come from? • Fish Harvesting • Fish Processing • Waterborne Transport • State Government • Federal Government • Tourism • Air Transport and Aviation

  31. Why is Government Money New Money

  32. Why is Government Money New Money • Isn’t government spending a drag on our economy?

  33. Why is Government Money New Money • Isn’t government spending a drag on our economy? • Shouldn’t we be trying to cut government spending?

  34. Why is Government Money New Money • We pay our taxes

  35. Why is Government Money New Money • We pay our taxes • Federal Income Taxes

  36. Why is Government Money New Money • We pay our taxes • Federal Income Taxes • Fish Taxes

  37. Why is Government Money New Money • We pay our taxes • Federal Income Taxes • Fish Taxes • Local Property Taxes

  38. Why is Government Money New Money • We pay our taxes • Federal Income Taxes • Fish Taxes • Local Property Taxes • Local Sales Taxes

  39. Why is Government Money New Money • We pay our taxes • Federal Income Taxes • Fish Taxes • Local Property Taxes • Local Sales Taxes • The Federal Gov’t spends much more in AK than we pay in income taxes

  40. Why is Government Money New Money • We pay our taxes • Federal Income Taxes • Fish Taxes • Local Property Taxes • Local Sales Taxes • The Federal Gov’t spends much more in AK than we pay in income taxes • Over 90% of State Government Funding comes from oil taxes & royalties

  41. Why is Government Money New Money • We pay our taxes • Federal Income Taxes • Fish Taxes • Local Property Taxes • Local Sales Taxes • The Federal Gov’t spends much more in AK than we pay in income taxes • Over 90% of State Government Funding comes from oil taxes & royalties • Most of local gov’t and education funding comes from the State

  42. So, What Should We Do?

  43. So, What Should We Do? • Bring New Money In?

  44. So, What Should We Do? • Bring New Money In? • Stick our finger in the Dam and plug the leaks?

  45. So, What Should We Do? • Bring New Money In? • Develop Infrastructure • Stick our finger in the Dam and plug the leaks?

  46. So, What Should We Do? • Bring New Money In? • Develop Infrastructure • Increase our exports • Stick our finger in the Dam and plug the leaks?

  47. So, What Should We Do? • Bring New Money In? • Develop Infrastructure • Increase our exports • Increase our ownership • Stick our finger in the Dam and plug the leaks?

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