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Sunday, May 24, 2020  Spokane, Washington  Est. May 19, 1883
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Opinion >  Guest Opinion

Teddy Benson: State needs to spend more to help struggling businesses

By Teddy Benson Co-Owner, The Grain Shed

Washington is facing two highly contagious threats.

The first is the COVID-19 pandemic.

The second is a comparably infectious outbreak of anti-government, economically backward ideology that puts public health and our economy at risk.

While a vocal but exceptionally small minority has disregarded health experts by calling for an immediate reopening, some business groups, politicians and editorial boards have prescribed across-the-board budget cuts as a response to this unprecedented economic crisis.

It’s hard to decide which group is more dangerous, but both fundamentally misunderstand this economic crisis, how the economy actually works, and how we recover. Make no mistake: Prematurely reopening Washington and radically cutting state spending will inevitably make our economy – and our health – worse.

As a small business owner, I’m tired of being used as a cudgel for bad economic ideas that hurt my customers, my community and my business.

This idea of cutting government spending during a recession is called austerity and it isn’t new. It’s the exact same way that Washington – and many other states – responded during the Great Recession. You can find plenty of data about how poorly this worked out. It took years for our economy to recover. Important services like mental health care still haven’t been rebuilt, and thousands of families are still worse off than they were before 2008.

Why doesn’t austerity work? If a patient is suffocating, a doctor wouldn’t deprive him of oxygen. Spending is the oxygen that circulates through a local economy, powering business and creating quality jobs. Cutting out of a crisis hurts already-struggling families, keeping even more customers from participating in the economy, inevitably prolonging the recession.

We need the opposite approach now. The state needs to increase, not cut, its investments in our communities.

Boost social services so people can make ends meet. Fund new direct assistance programs for business owners and workers. Make investments in Washington’s infrastructure to create jobs. As we’ve seen in states like Idaho, Florida and Georgia, simply allowing businesses to flip their signs from “closed” to “open” won’t save Washington’s economy. Increasing investments – so when everyone emerges from sheltering at home they can actually spend money in their neighborhoods – will.

Austerity peddlers use phrases like “we need to tighten our belts” and “time to trim the fat,” because they make instinctual sense to people like you and me. After all, when times are tough in our own lives, we cut back on our spending.

But state budgets aren’t household budgets. This isn’t about a family spending less on fancy coffee and bathroom remodels. It’s about cutting higher education, health care, and vital social services like food and cash assistance for the thousands of families that have been blindsided by this pandemic.

It’s pretty simple: When people have enough money to be customers, they create demand and drive growth in my business. Everything politicians and pundits told you over the last 40 years about business owners like me being “job creators” who need low wages, few regulations and nonexistent taxes to unfetter our ability to be the “engines of the economy” isn’t true.

The truth is we were never the job creators – you are.

And before you ask how we pay for this, the answer is simple: Washington has the most upside-down tax code in the nation. Our richest households and corporations pay up to six times less of their incomes in taxes than families like yours or mine. To support workers, families and small business owners who need assistance in this pandemic, we can balance Washington’s tax code by raising taxes on a small handful of the wealthiest households who can most afford it and who have been largely untouched by this economic crisis.

We can’t starve our way out of this catastrophe by knocking out even more supports for those who need it most. But we can grow our way out of it together.

And by the way, the next time you hear someone advocating for reopening Washington and making draconian cuts while shouting “the economy” as a rallying cry, consider this – sick and dead customers are pretty bad for business.

Teddy Benson is a co-owner of The Grain Shed, a brewery, bakery and eatery in the Perry District. He is also a member of the Spokane Metro Independent Business Alliance, a chamber of local business owners focused on supporting a prosperous, equitable and local economy.

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