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Ease back into free enterprise

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Various interest groups battle furiously over the correct interpretation of the U.S. Constitution, but one thing we know for certain: The founding fathers made no plans for government acting as a business broker, savior or booster.

But we citizens sure are involved in supporting businesses now. Like so many government programs, the concept started out small and sensible. Why not give a little money up front to get lots of money back in property taxes and jobs? Unfortunately, the real trouble with American government is not a lack of sincerity but the inability to say, “OK, that’s enough.”

Now we have an epic battle going – city vs. city, state vs. state – and nobody can lay down their weapons without getting whacked.

However, groups and individuals are starting to question the path we’re on. The National Federation of Independent Business’ 2005 Iowa State Member Ballot found that more than 62 percent of the respondents oppose restoring the Grow Iowa Values Fund. We small businesses aren’t getting Values Fund money, they say, and the big guys who do get it have the power to put us out of work.

The people who want to build a racetrack in Newton automatically looked for some help from government and asked if they could keep the sales tax revenues the track would generate. But the governor said he’s not so sure about that.

Then, last week at the Commercial Real Estate Trends & Issues Forum, Principal Real Estate Investors President Randall Mundt uttered a bit of heresy. In a room full of people who assure one another that downtown Des Moines housing projects aren’t feasible without tax credits from the government, Mundt said, hey, if you can’t make it happen without credits, maybe you shouldn’t be doing it at all.

Tax credits sound nice and neutral, but they take money out of the game. Issuing credits is just another version of pulling in tax money and redistributing it to your favorites.

When Mundt tells us that he sees other cities developing downtown housing the old-fashioned way, following the laws of supply and demand, it makes you wonder whether here in Iowa – supposedly a self-reliant kind of place – we have fallen into a bad habit.

We’ve used a great deal of the public’s money to ignite some good projects. But it just might be time to pull back and see if free enterprise can shoulder the load again.