Q&A: Beth Giesting on Hawaiʻi’s economy and Gov. Ige’s proposed 20 percent cut to public employee salaries

Beth Giesting is the Director of the Hawaiʻi Budget & Policy Center. In a recent blog post, Giesting spoke out against Governor Ige’s proposal to cut state employee salaries by 20 percent due to the state revenue shortfalls stemming from COVID-19. 

Emily Boerger: You recently wrote a blog post about Governor Ige’s proposal to cut state employee salaries by 20 percent. From an economic standpoint, can you walk me through why you think this is the wrong path forward?

Beth Giesting: It is a pretty well-accepted principle that government has to spend money to restore the economy when the private sector is paralyzed. Recovery from the Great Recession happened because governments put money in the hands of people and businesses to stimulate spending. The International Monetary Fund found that imposing cuts in government spending on Greece after the recession made the situation worse: spending less retarded recovery and economic growth.