There's some bad news for Obama voters who think their guy swept the table in November and is now entitled to have things his way for the next four years. There were other elections held in states across the nation and most of them didn't go so well for the Big Government tax-and-spend crowd.
Voters have installed Republicans for governor and both legislative houses in 25 states while Democrats maintain similar control in 13 states. Many seemed poised to seize the agenda on tax reform, regulatory cutbacks, unions, pensions and health care since Washington is stuck in place.
States have reasons to be more fiscally sound than the federal government. Almost all of them must produce balanced budgets, at least nominally. They're unable to create more money, so they can't inflate their way past excessive spending. Moreover, productive citizens can and do leave states with high tax burdens and lagging economies.
You can see the difference between federal and state governments in the current debate over health care. The Feds behave as if cost is no object as they move to massively expand Medicaid and bribe the states to join in. In fact, they've offered to cover 85 percent of the cost if the states will agree to provide full insurance coverage for people under 133 percent of the federal poverty level.
Arizona, like many states, is apprehensive about taking the plunge especially since the feds may be unable to keep up their commitment forever. They tried to negotiate a lower eligibility level for which they could still receive the full federal match but were firmly rejected. Arizona may join other states in turning down the match, not because they don't care about their poor, but because there are better ways to make health care available at less expense.
For the Obama administration, government employee unions are a critical political support group to be pampered at all costs. The Feds have wasted hundreds of billions on "stimulus" spending that ended up going to unions. They maintained the Davis – Bacon Act that inflates the cost of infrastructure projects and they have supported unions in their efforts to eliminate secret ballots in union elections.
It works differently in the states. Many states have come to realize that they can no longer afford the inflated compensation and benefits that unions were able to win when economic conditions were better. Outsized government pension benefits alone are seriously threatening the solvency of many state and local governments.
Out of economic necessity, Wisconsin and now Michigan have moved to pass labor law reforms, in spite of spirited union opposition. Several other states are moving to curtail the dominance of unions, motivated in part by new confirmation that states with a strong union presence actually experience weaker growth of good jobs.
Several states are looking seriously at the broad-based tax reform that has eluded Washington, such as lowering tax rates while broadening the base or eliminating some taxes altogether. According to the American Legislative Exchange Council, the 10 states with the most business friendly tax climates saw 61 percent growth in state GDP over the past decade compared to 42 percent for other states. They gained 6.1 percent in private sector jobs versus a decline of 2.8 percent in the rest of the nation and saw significant in-migration of citizens from high tax states.
North Carolina was one of several states to elect a governor and legislature eager to cut taxes, institute pro-growth regulatory reforms and make their state more attractive to employers and investors.
Of course not all states are on board and here's where it gets interesting. California is the poster child of states where lawmaking is openly directed by unions, where taxing, spending and over-regulating have led to a decline in every index of economic health. Debt is piling up and public institutions are in steep decline. Yet voters actually responded by passing yet another $7 billion tax hike this November and giving Democrats a veto proof majority in the Legislature so that they can raise taxes at will.
The Californias and North Carolinas of the world have chosen dramatically different paths and we'll get to see which one turns out best. I can't wait. Meanwhile, states are leading the way while Washington dithers.
Accuracy posted at 7:38 am on Sat, Dec 29, 2012.
With the edge of the ‘Obama fiscal cliff” mess in sight, congressional leaders are ready (again) to kick the can down the road.
“Cliff-hanger” Democrats are adamant about President Obama’s higher taxes, and not extending a payroll tax cut.
wdgnas posted at 7:42 am on Sat, Dec 29, 2012.
hey tom, one of your examples ,north carolina, is a right to work for less state. you also forgot to mention all of manufacturing jobs that got shipped overseas. early stage alzheimers i surmise...
Dee_Voss posted at 8:32 am on Sat, Dec 29, 2012.
A little disclosure would be good to help readers understand your point of view - such as you have been a member of the right wing organization, the American Legislative Exchange Council (ALEC) for almost 30 years and are/were the public sector chair for ALEC.
Might want to give your readers an alternative to the ALEC report you are quoting - a different report which notes that states that follow the ALEC economic policies are worse off economically - Report name: “Selling Snake Oil to the States,” a study published by Good Jobs First and the Iowa Policy Project.
For those that do not know about ALEC - I suggest you go to this website www.alecexposed.org They have links to two very detailed reports on that webpage of the destruction ALEC has caused in AZ.
chatmandu002 posted at 11:29 am on Sat, Dec 29, 2012.
Tom,
You must have hit a correct note with your comment. All the "anti-capitalists" are attacking you instead of your message. They are starting to realize that the liberal/progressive/socialists states are going to fail and that the free market enterprise states will improve unless the whole liberal/progressive/socialists federal government collapses. Then we will all be in deep doo-doo.
Dale Whiting posted at 7:59 pm on Sat, Dec 29, 2012.
Tom, "tax and spend", you say.
Who ran on lowering taxes and trickle down economics in the 80's yet raised them numerous times? Who said "No new taxes" yet was obliged to raise new taxes? Why are you so certain that you know what you are talking about? Pork is spending that benefits a region or a particular cause and is added to legislation in exchange for pork for another region or cause. If we do not raise taxes, the most wealthy will make higher campaign contributions in states who have voted for one party over the other. So what's the difference? Aint' that pork, too? It all helps get Washington politicians re-elected in both parties. So like bacon. Others like chops. I like pork that is stewed in sour krout the Pennsylvania Dutch way. It's all the same sort of pig.
Abstract01 posted at 12:18 am on Mon, Dec 31, 2012.
Dale,
isn't pork mostly fat?
Don't you agree that Congress needs to trim the budget , instead of finding excuses to increase spending?
Pat Mytush posted at 9:09 am on Mon, Dec 31, 2012.
Tom is a pawn of the Koch brothers. Kochaine is a bad addiction Tom...bad for all of us.
VofReason posted at 1:51 pm on Wed, Jan 2, 2013.
Oh good. So all the detractors to the meat of the message here will explain how you spend more than a trillion dollars more per year then you could ever take in and end up with a winning formula? Take the scenario down to your own level, if you spend a thousand dollars more than you take in monthly, are you ever going to get out of debt or be successful?