By REP. KEVIN MCCABE
Final Friday, Rep. Ky Holland stood up on the Home flooring to sound the alarm in regards to the so-called “civic financial system.” He warned that slicing federal jobs — like President Trump has promised — will cripple communities, tank the free market, and ship us all into financial free fall.
Let’s take a look at {that a} bit. Alaskans don’t fall for scare ways with out proof, and historical past tells us {that a} leaner authorities doesn’t kill the financial system; actually, it strengthens it.
First, let’s begin with a definition. What’s a “civic financial system”? It’s not some new DC buzzword, it’s not an financial time period, and it’s not one which economists or students use.
Typically talking, it’s simply individuals getting issues executed collectively — whether or not it’s a Kenai Peninsula co-op promoting native beef or Huge Lake neighbors pitching in to construct a ship ramp. It’s common people, not bureaucrats, enhancing their communities with out authorities handholding.
The free market? That’s the larger animal within the dialogue. It’s not, as Holland instructed, subservient to a civic financial system. The free market is provide, demand, competitors, and the liberty to show onerous work into success. The civic financial system is definitely an ancillary a part of that, not the factor conserving it alive.
The large concern of many individuals proper now could be that slicing federal jobs — perhaps as many as 200,000 if Trump sticks to his previous plans – will intestine native tasks and ship the free market right into a tailspin. The Democrats, liberals, and big-government independents declare federal employees and grants are the glue holding communities collectively.
Sorry, people, historical past proves that’s nonsense. Let’s take a look at the cuts of a well-known Democrat president within the Nineties.
Beneath President Invoice Clinton, the federal government slashed over 377,000 federal civilian jobs — some estimates put it as excessive as 426,000. That’s 17-20% of the federal workforce. Most of these cuts got here by buyouts, early retirements, or voluntary exits. The truth is, solely about 20,000 federal workers have been compelled out.
Did the financial system crash? Hardly. The personal sector truly boomed, including 22.7 million jobs. Unemployment hit a 30-year low, GDP grew 35%, and we had 4 straight years of finances surpluses—the one ones since 1969. The nationwide debt? It shrank from 47.8% of GDP in 1993 to 31.4% by 2001. As a substitute of collapsing, the free market thrived. America thrived!
Quick ahead to right this moment. The federal workforce continues to be sitting at 2.1 million civilians—a tiny fraction of the 155 million employees in America. A 10% minimize (about 200,000 jobs) barely strikes the needle in a $27 trillion financial system. To place it in perspective, 20 million jobs have been misplaced in a single month in 2020, and the financial system nonetheless bounced again. I do know it hurts a few of our family and friends, and I perceive the angst in a authorities city like Juneau or perhaps a authorities state like Alaska, but when an actual disaster like that didn’t destroy the free market, some federal job cuts gained’t both.
And the civic financial system isn’t depending on federal paychecks. In 2023, US nonprofits pulled in $2.6 trillion, and solely a 3rd of that got here from authorities funding—largely on the state and native stage, not DC. The remaining got here from personal donations, native companies, and good old style onerous work. Co-ops and neighborhood tasks don’t want a bureaucrat in Virginia to outlive; they run on members, markets, and native initiative.
Clinton’s job cuts got here alongside tax hikes on the rich and spending reductions in protection and welfare. The outcome? The financial system grew, revenues climbed, and companies thrived. The civic financial system didn’t collapse—individuals tailored, identical to they at all times do and America boomed.
I’ve heard some argue, “However what about federal grants? Received’t slicing them kill native tasks?” Not going. After 2008, when the feds tightened spending, personal crowdfunding exploded. By 2012, crowdfunding had hit $1.6 billion—funding the whole lot from neighborhood facilities to small companies. Much less authorities doesn’t imply individuals surrender; it means they step up. That’s freedom, not failure.
And let’s not overlook that a smaller federal authorities truly strengthens the civic financial system. Fewer rules imply it’s simpler to begin a co-op, pool native funds, and launch new companies. Much less interference from Washington means communities lean on one another, not bureaucrats. That’s the Alaskan approach. Much less authorities equals extra liberty. Why do progressives have such a tough time with that idea?
Rep. Holland and others can wring their palms and fear all they need; publishing lists of jobs misplaced, and workplaces affected, however the details are clear – the civic financial system isn’t held collectively by federal jobs, and the free market isn’t fragile. Trump’s reductions in pressure may shuffle some desks in Washington, and even in Alaska, however they gained’t sink Important Road or Wall Road. If something, they’ll open up extra alternative for innovation, native management, and private-sector development. Clinton’s cuts trimmed authorities waste, fueled financial growth, and even lowered the nationwide debt. There’s no purpose to imagine historical past gained’t repeat itself.
Change could make individuals nervous — I get that. However this nation wasn’t constructed on authorities paychecks. It was constructed on self-reliance, onerous work, and the drive to make issues occur with out Washington’s permission. That’s the Alaskan approach, and it’s the American approach too.
Rep. Kevin McCabe serves within the Alaska Legislature for Huge Lake, District 30.
