Economist: Federal Spending in Alaska Doubled Within Decade

Alaska is targeted for federal spending cuts as the government seeks to get spending under control, according to economist Neal Fried.

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By Lauren Maxwell
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Story Created: Jul 27, 2011 at 9:44 AM AKDT

Story Updated: Jul 27, 2011 at 9:44 AM AKDT

Alaskans are following the debate in Washington D.C., and what could happen if the government defaults on its loans. The deadline for that is Aug. 2 and there is increasing frustration that not enough is being done.

But Alaskans have good reason to be concerned even if the short-term crisis is averted.

State labor economist Neal Fried says the federal government needs to get spending under control and since Alaska gets more federal dollars than any other state, Alaska is a big target.

“The federal government represents about a third of all economic activity in the state,” says Fried.

“It directly employs more than 40,000 people and when you look at per-capita spending we are in the top.”

Fried says federal dollars pay for the military and health care as well as capital projects in every corner of the state. He also says that in the last ten years federal spending in Alaska has doubled.

Fried says he’s not certain how much money the state will lose but that at the very least the federal sector will not be growing in Alaska any time soon.

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