Defense contracting reportedly brought $146.1 million to Western Massachusetts business and educational institutions in 2009.
Michael GoodmanSPRINGFIELD – Fueled by business investment in computers and high-tech equipment, the Massachusetts economy is growing faster than the nation’s as a whole, according to a report released Friday by MassBenchmarks.
MassBenchmarks, a publication of the UMass Donahue Institute in Hadley, says the state’s economy grew at an annualized rate of 4.3 percent in the second quarter of this year. That’s compared with a national rate of 1.3 percent also announced Friday by the U.S. Bureau of Economic Research, part of the Commerce Department.
“Massachusetts is doing well in comparison,” said Martin A. Romitti director of economic and policy research for the UMass Donahue Institute “It’s relative because we are speaking about a bad national economy.” But Massachusetts’ growth is not reaching the western part of the state and is threatened by fallout from the protracted argument over raising the nation’s debt ceiling.
“The circular firing squad going on in Washington right is certainly a threat,” said Michael D. Goodman, a MassBenchmarks editor and chairman of the Department of Public Policy at the University of Massachusetts at Dartmouth.
Even a the possibility of a default on federal debt drive up interest rates making harder for not only the federal government to finance its borrowing, but harder for everyone else, too.
“Think of all those people with an adjustable-rate mortgage or a credit card tied to the prime interest rate,” Goodman said. “Pretty much everybody is carrying some debt.”
Also, the federal government could stop paying some bills, Goodman said. That might be Social Security or payments for goods and services like the high-tech equipment and services that drive Massachusetts economy.
“Think of all the hospitals. Think of all the universities that do research,” he said.
Defense contracting brought $146.1 million to 237 Western Massachusetts business and educational institutions in 2009, according to a report by Associated Industries and the University of Massachusetts that came out last December.
Romitti said rising interest rates could slow an already ailing housing market.
He also likes to remind people that the worst word to use around any economy is “uncertain”. The debt limit debate sows uncertainty.
“Sometimes people can live better with lousy than they can with uncertain,” he said.
