A new report from a University of Iowa economist suggests the U.S. purchase of Alaska in 1867 hasn't been a worthwhile investment for taxpayers. "The economic benefits that have been received from Alaska over the years could have been obtained without purchasing the territory. In financial terms, Alaska has clearly been a negative net present value project for the United States," says David Barker, an adjunct professor of finance.
Barker acknowledges several positive benefits Alaska has brought the U.S., even former Gov. Sarah Palin's failed vice-presidential run. "It's a rich source of natural resources, especially oil; its vistas, open spaces and wildlife provide unmatched natural beauty; and, for many Republicans like Barker, there's Palin herself," the news release says.
Barker calculates Alaska cost the federal government $9.9 million in 1867 dollars, which translates to $16.5 billion in today's dollars after adjusting for inflation and other factors. He says any tax revenue from Alaska can best be described as "occasional spikes followed by long periods of net federal subsidy."
But what if Russia still owned Alaska? Many historians believe if the U.S. hadn't purchased it, Great Britain would have, and then made it part of Canada. Barker believes any strategic benefit from Alaska as a source of domestic oil would be maintained under Canadian ownership at a far lower cost to Americans. (Read more)
This economist's study is compelling on the surface, but he lacks a real understanding of Alaska to make his argument work. It is a disappointment because the thesis is an interesting one.
ReplyDeleteIt is pop scholarship.