The infamous Citizens United v. FEC Supreme Court Decision stated that money constitutes free speech, and restrictions on soft money contributions were unconstitutional. This led to proliferation of super PACs and record-breaking campaign contributions in the 2012 election.
What effects did this mass campaign spending have on the economy?
The economic principle that correlates to campaign spending is opportunity cost: what one sacrifices to achieve something else. If Goldman Sachs has $1 million to spend, the company can either donate the money to a super PAC, or use it to create more jobs.
If they decide to use the money in campaign contributions, the economy will receive a slight upward bump due to the stimulus effect, but it would have the opportunity cost of new jobs that could have been created.
In this situation, the opportunity cost would outweigh the one-time contribution, because the job would give a family a salary that would continually increase the nation’s consumption spending. The true concern about campaign finance money is the other ways it could have been spent.
The U.S. has seen decreases in spending since the Financial Crisis of 2008, so it’s possible the money spent on campaigns would not been spent, meaning minimal opportunity cost; the campaign could have excited donors to give money that wouldn’t be spent otherwise. In my opinion, the opportunity cost behind campaign spending is more significant than the ideological arguments. It is paramount that these economic arguments are understood in partisan debate.
Hayley Hohman, freshman