This University of Guam Economics Professor, herself a supporter of the military buildup in Guam, says that the claims of the economic benefit of the build up are exaggerated. Apparently the Draft Environmental Impact Statement used the formula from Hawai’i to calculate the multiplier effect of the military spending. But according to the professor, the numbers don’t add up.
This raises a question whether the multiplier used to calculate the military’s benefit to Hawai’i is accurate. Whether one chooses to use 1.89, 1.82 or 1.5, it all seems pretty arbitrary. But the dollar figures change dramatically. It seems to be economic sleight of hand.
Furthermore, these so-called multipliers are flawed because they don’t take into account the true costs, such as costs to the environment, culture, social conditions, quality of life.
Who gets paid, and who pays the price in a military economy? Pick your multiplier. The answer is always the same. The indigenous people get screwed.
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UOG Economics Professor Says Benefits Of Buildup Overstated in DEIS
Guam – A University of Guam professor of economics is saying that the Draft Environmental Impact Statement for the Guam military buildup is inaccurately estimating the economic boost that the buildup will bring Guam. According to Dr. Claret Ruane the DEIS estimates are overstating the buildup’s economic impacts.
University of Guam professor of economics Dr. Claret Ruane says that the DEIS is borrowing a formula from Hawaii to calculate the economic benefits of the Guam Military Buildup.
According to Dr. Ruane it all boils down to what’s called the multiplier effect. Basically it’s a formula used by economists to determine how much money will circulate through an economy. Dr. Ruane says the DEIS does this by multiplying every dollar brought into Guam from the buildup and multiplying it by 1.89. 1.89 is the same figure that Hawaii uses to determine the multiplier effect.
Dr. Ruane feels that the Guam multiplier is much less. She thinks Guam should be using a multiplier of 1.5 but just for arguments sake she based her first analysis on a multiplier of 1.82. The DEIS estimates the total number of dollars circulating in the economy because of the buildup as over a billion dollars. Dr. Ruane used a multiplier of 1.82 and came up with $567 million. Using a 1.5 multiplier gave her a figure of $467 million. Dr. Ruane’s biggest problem is that there simply isn’t any real data to determine what formula Guam should be using. Thus she’d rather err on the side of caution. She says “I’d like to be more positive about it but the numbers are just not giving me a straight answer.”
It’s important to know how much money will be infused into Guam’s economy so that the government can calculate how much revenues they can count on. Dr. Ruane says that if the total economic benefit ends up being half of what is estimated then revenues collected by GovGuam will also be half of what is estimated.
Dr. Ruane is not against the buildup but she says this should be an opportunity to look to the future of the island and look at what other options Guam has to further develop it’s economy. She says it is a good call for the community and “…military buildup or not we should find ways to move this island forw
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