RALEIGH – Strip away all the Keynesian fairy tales about magical multiplier effects spinning economic straw into gold, and you will find that the case for raising taxes to balance North Carolina’s budget next year rests on two foundations: special-interest pleading and left-wing ideology.

The plaintive special interests aren’t too hard to spot. “We’re at war,” says the North Carolina Association of Educators matter-of-factly. Further budget savings will “put the public at risk,” says a radio ad sponsored by the State Employees Association of NC. Add in hospitals and other Medicaid providers, contractors, state-funded nonprofits, and other big recipients of state dollars, and you start to recognize the size of the state’s powerful lobby for largesse.

But the arguments of public-employee unions and state vendors are too obviously self-serving to suffice. Most North Carolina taxpayers, experiencing the worst economic downturn in decades, are in no mood to hear themselves blamed for the state’s yawning budget deficit. After all, an argument for higher taxes is inevitably an argument that taxpayers are keeping too much of their own money.

Few taxpayers feel that way. Ask them.

To North Carolina leftists in and out of government, however, this would prove only that taxpayers are suffering from a form of false consciousness. North Carolinians perceive that they are overtaxed and that today’s government costs more than they can afford, but that’s just because they don’t know any better. The Left intends to educate them – first through public argument, echoed by most political commentators, and later through the proposal of a no-new-taxes state budget from the N.C. House that, its architects believe, will so mortify or terrify taxpayers that they will suddenly realize their error of their ways and whip out their wallets.

That this is all an ideological exercise divorced from fiscal and economic reality is not to say that it doesn’t have some rhetorical value. The gambit has worked in other states, after all, where some legislatures have already enacted billions of dollars in higher income, sales, property, or excise taxes.

But here in North Carolina, there is still time for facts to dispel the fantasy.

First, raising taxes to cover government deficits is a way to foist off the consequences of the government’s fiscal recklessness onto private households and businesses. By definition, recessions mean lost jobs and incomes in the private sector, from which government revenue is derived. When told that without a tax increase state and local governments will have to eliminate programs, reduce compensation, and lay off some public employees, private businesses and families might well respond with a resigned “welcome to our world.”

Not every business is downsizing dramatically, but many are – and most are cutting back to some degree. Likewise, while most North Carolina families aren’t facing home foreclosure or long spells of joblessness, some are – and most are cutting back on their household expenses.

Consider the latest data from the U.S. Bureau of Labor Statistics. Over the past 12 months, private industry in North Carolina has shed hundreds of thousands of jobs, with some sectors laying off more than 5 percent of their workforces, including information and technology (6 percent), business and professional services (8 percent), manufacturing (13 percent), and construction (18 percent). During the same period, government employment grew. Similarly, during the last quarter of 2008, average earnings in North Carolina’s private sector fell while average earnings in North Carolina’s public sector rose.

In short, it would be neither fair nor efficient to raise taxes, further burdening the state’s private sector, in order to prevent the public sector from having to adjust to same hard economic realities.

Second, it is simply false to assert that North Carolina is a low-tax state that can “afford” to raise its “level of public investment.” North Carolinians already pay higher taxes as a share of personal income than the national average. The real problem is that North Carolinians do not receive a good return on the money government confiscates and “invests” on their behalf.

Indeed, if North Carolina’s bloated budget were really akin to an investment portfolio, then the proper response of taxpayers would not be to throw good money after bad but instead to fire their fund managers.

Perhaps the layoffs, in other words, ought to begin at the top.

Hood is president of the John Locke Foundation