In this newsletter, I share my thoughts on the recent events in DC, the upcoming legislative session in Texas, the increased harm to families from government lockdowns, and the need for competition.

You can read this newsletter and register to receive it weekly at no charge here: ​vanceginn.substack.com/

The Texas economy continues recovering since the steep downturn due to the COVID-19 pandemic and business shutdowns by state and local governments in spring 2020.  Tailwinds could be strong in 2021 if the government removes restrictions and follows responsible fiscal policy so people are free to live and earn money. 

Read my full newsletter with charts and subscribe here. 

Hello Friend!
As 2020 nears an end, I’d like to start this newsletter a bit different to share some personal things about me that you might not know. We will then get into the many things that have happened since the newsletter last week.
Here are the highlights of my life’s journey so far:

• born on Nov.12, 1981 at Clear Lake Hospital in Texas and raised in the South Houston area;

• battled severe asthma and allergies with multiple hospital visits for asthma and three rounds of allergy shot treatments over time;
• watched my dad have seizures and learned from his optimism and intellect throughout his battle with epilepsy;
• grew up in a single-mother, relatively lower-income household for most of my life after my parents divorced twice before I was 10;

• learned strength and love from my mom who struggled while raising my sister and me and gained wisdom from my grandparents;

• completed K-2 grades at a private school, 3-6 grades at public schools, and 7-12 grades at home school (graduated at 17 yrs old);

• experienced life as a "rockstar" in the band Sindrome, which was a top rock band in Houston, and was a tumultuous period as a young adult (17-20 yrs old);

• flipped at least 6 times as a front passenger in a 2002 Acura RSX after wrecking into the back of an SUV while racing at around 120 mph and then life-flighted to a hospital in Houston with a potential head injury but was released that night (20 yrs old);

• turned closer to God and prayed for His guidance which directed me toward my calling of helping others through His lessons and the tools of economics;

• enjoyed my time at Texas Tech University and learned much in courses, gained many great friends, and led several organizations;

• the unexpected loss of my father from SUDEP when I was 29 yrs old;

• graduated in 2013 with a Ph.D. in economics from TTU after neither parent graduated college (31 yrs old);

• worked as a lecturer at institutions of higher education, as a chief economist at the White House, and now chief economist at TPPF, which is a top think tank in the nation; and

• now at 39 yrs old, I’m blessed to have God’s grace, be married to an inspiring woman, have two amazing boys, have had an experience in Virginia but glad to be back in Texas, and continue living my dreams.

• There’s no way that I could have planned this. The ups and downs. The uncertainty, faith, fear, and love. These events and many more make me the man I am today.

• As 2020 comes to a close, I thank God for these blessings and the courage to overcome many obstacles along the way, including many of them this year.

• I started praying about and choosing a word to act as a guide each year since 2018. My word for 2018 was “prosper,” 2019 was “flourish”, and 2020 is “thrive,” which was perfect.

• My word for 2021 is “serve” because I know that there will be many challenges that come along but as long as I’m serving God and others then the rest will work for my good. What’s your word? (Leave in comments or email me)

• Thank you for your friendship. I hope my testimony can help some know that anyone can reach their goals with God’s favor and one’s endurance. Here’s to a spectacular 2021!

OPEN TEXAS AND AMERICASummary:

• As of December 29, there are 12 Trauma Service Areas (TSA) on the Governor’s list for elevated restrictions that include 56% of Texans. The 7-day moving average of new COVID-19 cases looks to have plateaued and are 20% above their summer highs while fatalities are 40% below then.
• Available total hospital capacity statewide is near the average of 26% since June.
• Austin area has the lowest rate of COVID-19 hospitalizations as a share of total hospital capacity or staffed inpatient beds while keeping a normal rate of available capacity of 26% since June.
• These data put into question the increased restrictions across the state, mainly on what appears to be flawed forecasting models. Here’s an example.

 

• The 7-day average of new confirmed cases in Texas looks to have plateaued since Dec. 7 at about 12K on Dec. 29, with the highest new daily of 26,990 on Dec. 29—likely from more people congregating over Christmas. The 7-day average of new fatalities in Texas on Dec. 16 (latest data available) was 160—possibly already peaked although more recorded death certificates will be reported.
• 7-day averages of cases remain well above the highs over the summer (12K v 10K) while fatalities remain well below their highs then (250 vs. 150), meaning the case-fatality rate has so far been substantially lower now than during the highs over the summer.
• There remains a relatively high rate of available hospital capacity (I’ve updated this to total hospital capacity from my previous reports to match the Governor’s metric and increased capacity opportunities not represented by staffed inpatient beds) across most of the state’s TSAs with every TSA having at least 16% available—30% available statewide.
• Testing remains on average around 100K per day and the positivity rate remains elevated (17% for new molecular tests and 11% for new antigen tests) but well below the high rates during the summer (25% for new molecular tests and 20% for new antigen tests) though with substantially fewer tests (about 40K during July).
• While debatable, improvements could be from better therapeutics, younger and healthier population infected, better utilization of hospital resources, and Governor Abbott’s more targeted, timely, and temporary policy approach of examining hospitalizations per TSA and sending resources where needed most.

Texas Governor Abbott Metric Overview:

• Per GA’s metric of COVID-19 hospitalizations as a share of total hospital capacity for seven consecutive days, TSAs below 15% can have most businesses expand to 75% capacity, keep state mask mandate, and bars (and others) open to 50% capacity with the approval of the county’s judge.

• 12 of 22 TSAs are reported on the list of further restrictions: A (Amarillo), B (Lubbock), D (Abilene), E (Dallas/Ft. Worth), G (Longview/Tyler), H (Lufkin), I (El Paso), M (Waco), N (Bryan/College Station), P (San Antonio), R (Galveston), and TSA T (Laredo).
• 56% of Texans are at 50% capacity + other restrictions while 44% of Texans are at 75% capacity + other restrictions.
• This CV19-to-capacity metric has been rising recently statewide since mid-Oct. to 17.4%, which is near July’s 17.0% average.

Hospital Overview Statewide:

• COVID-19 hospitalizations up 14.3% (to 11,775 hospitalizations) from 7 days ago and up 24.3% from 14 days ago, the level is above July’s 9,713 average
• Available beds as a share of total hospital capacity up to 30.5%, well above the averages of 23.7% in July and of 26% since June
• Hospital capacity up 2.4% (to 67,495 beds) from 7 days ago and up 4.8% from 14 days ago, the level is well above July’s 56,871 average

TEXAS ECONOMIC AND FISCAL SITUATION
Texas’ Legislative Session Starts Jan. 12: More to come on this soon! I’m looking forward to TPPF’s Policy Orientation on Jan. 13-15 that will be live-streamed, so I’ll be sure to add info about it later.

Read the entire newsletter here: ​https://vanceginn.substack.com/p/fiscal-insanity-dc-disappoints-again

​Hello Friend!
​
I hope you had a blessed Christmas. My family did as we celebrated Jesus’ birth and his eventual death on the cross for our sins. That salvation came at a great cost, yet another example of how nothing is free. We’re now relaxing after a great day playing outside with our boys and hanging out with friends. Those moments are priceless.

What’s not priceless is the latest $908 billion COVID aid bill along with the omnibus that’s combined to be over $2 trillion and appropriately called the “coronabus” given how much pork is in this package. I’ve been calling it “CARES 3.0” because there was the original bill and another bill that added funding to the programs created in the original bill, so this is really the third bill that’s funding many of the same things.

And that’s part of the problem, as it comes with a huge cost and President Trump is correct to hint at vetoing it. However, the President’s reasoning seems to be to increase the amount in checks to individuals from $600 to $2,000, which would push incomes well above where they were before the pandemic and provide income to many individuals who weren’t influenced much if at all from the shutdown. This is likely the case for you and me, as we are able to work from home or have savings to live on for a while to deal with this situation. I get the point of advocating for more in a check to individuals as it appeals to struggling Americans and balances some of the atrocities in this monstrosity of a bill, but that doesn’t make it good policy.

This notes the importance of work flexibility along with saving for a rainy day but also notes the huge cost to those who aren’t in this boat. Unfortunately, too many have and will continue to fall through the cracks of our economic lifeline that should ultimately be improved by moving toward more capitalism and away from socialism. While civil society should be first to help those in need, governments will play a role though hopefully a more limited one as it assists those who can’t be helped otherwise (last resort). This would help improve our bloated, ineffective safety net system that often just expands bureaucracy and helps too many of those the programs were not intended.

Thanks again for reading! I’m truly grateful for you continuing to read this newsletter. As 2020 comes to a close, we have much to accomplish to find opportunities to let people prosper.

If you haven’t signed up for my newsletter yet, please register here at no charge. And follow me on Twitter: @vanceginn.
Have a Happy New Year if I don’t write another newsletter before then, which I may given how things go in D.C. Until then, many blessings to you and yours.
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper

​Are your kids getting the education they need—either in person, or remotely? It might depend on where you live; it should instead be up to you.

Schools shut down last spring. Some reopened in the fall, some did not. Others, like those in New York City, are closing again. Some schools are trying to mix in-person and virtual instruction.

This confusion should be alleviated as much as possible by allowing parents to decide which schooling is best for their kids.

Based on the evidence, it seems that schools can safely keep in-person instruction as they aren’t super-spreaders, and that many students benefit from this kind of instruction. A recent national poll found that more than 50% of parents are comfortable with returning to school. The same poll found that half of parents with a choice selected remote education for their children.

Ultimately, decisions about schooling should happen closest to students, starting with their parents. The COVID-19 shutdowns have shown us the need for school choice—letting parents decide what schooling works best for their children.

Families with means already have more choices, of course. Some have chosen to put their kids in private schools or home school. But other families can’t afford this and must try to make their public school work—while also trying to make ends meet.

For example, virtual instruction usually requires an adult’s care to ensure that a child is able to access instruction and learn. This puts extra pressure on working families—they might have to miss work or pay someone else for childcare.

We know that normal school breaks can lead to widened educational disparities. Continued school shutdowns could also lead to widening racial wealth disparities in America. A McKinsey study reported that the educational level of the average Black or Hispanic student is two years behind the average white student, based on many factors—including place of residence and wealth disparity.

That study also indicates that if in-person instruction doesn’t occur until January 2021 and students receive remote instruction at reduced learning rates (or even no instruction at all), “white students would earn $1,348 a year less (1.6% reduction) over a 40-year working life, [but] the figure is $2,186 a year (3.3% reduction) for Black students and $1,809 (3.0% reduction) for Hispanic ones.”

Continuity in students’ educational experiences are also at the forefront of parents’ concerns.

A recent survey of 600 full-time, public school teachers across the nation showed that 67% of teachers agreed that completion rates of assignments were worse during distance learning than in-person instruction.

The concern is especially high with low-income earners. The Texas Education Agency, for instance, reported a 55.6% drop this spring in progress for online math coursework for low-income families.

Still, for many families, the threat from COVID-19 is more concerning than the potential drawbacks of remote instruction, particularly for students or family members who are immunocompromised. And there are at least some families who have thrived in a remote education setting.

In the end, parents know their situations and concerns best. The choice should be theirs. In-person schooling, remote learning, or some other model should be their call.

The burden shouldn’t lie on parents to be flexible (and accepting of whatever school officials tell them they’ll receive); it’s the school districts that must be flexible—and accountable.

Child development doesn’t stop for COVID-19, or any other disruption. We owe American families the flexibility they need to keep their kids on track. And that should start with more choices for parents rather than top-down mandates by governments.

https://www.texaspolicy.com/schooling-options-are-essential-during-covid/

Read the full newsletter with figures and subscribe here. 

​Hello Friend!
Can you believe that Christmas and New Year’s are right around the corner? It’s hard for me to believe.
We put up our Christmas tree early this year to get into the spirit of celebrating Jesus’ birth and the salvation and grace provided to us through a huge price (Nothing is Free), and this spirit has helped drown some of the negativity going on in the media regarding COVID, the election, and more. I have a lot of what I consider uplifting points to share with you below.
It’s important to remember that we live in the most prosperous, most remarkable, and most opportunistic country in the history of man. Sure, there’s much we need to do to improve it because too many have fallen through the cracks, but we have much to be positive about even as the media and many politicians tell us otherwise.
So, get your optimistic cap on and maybe grab your favorite drink so you can imagine me telling you the following story. Enjoy!

Have a blessed weekend and a Merry Christmas and Happy New Year in case I don’t see you or write another newsletter before then. I’m truly thankful for you and for your interest in reading this newsletter. My only request is that you share this newsletter with at least one of your friends and ask them to register. That would be a great gift!
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper

In March 2020, during the early part of the COVID-19 pandemic, the U.S. Congress passed the Families First Coronavirus Response Act and then the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The “maintenance of effort” (MOE) provisions authorized in the Families First Act and then enhanced by the CARES Act were to provide a 6.2 percentage point increase in the normal share of Medicaid payments provided to states through the Federal Medical Assistance Percentage (FMAP).

These provisions require that those eligible for Medicaid must be kept on the program up to 90 days after the declaration of a public health emergency for COVID-19 ends whether they age out of an eligibility group, have an increase in income, or other reasons noted by the Kaiser Family Foundation (more info at Medicaid.gov). The Health and Human Services declaration, which is set to expire on January 20, 2021, should not be renewed by the secretary as this enhanced MOE could represent an increased cost to taxpayers to fund more people on Medicaid along with an increased dependence on the program for people not meant to be on it.

https://www.texaspolicy.com/ending-medicaids-enhanced-maintenance-of-effort-provisions/

Many Americans are recovering after the economic collapse that began in March due to the COVID-19 pandemic and shutdowns by state and local governments.

While the strength of that recovery has weakened, a sound policy approach will help support a safe, expedited, and less debt-riddled rebound so Americans have more opportunities to prosper.

https://www.texaspolicy.com/the-ginn-economic-brief/

​Today, the Texas Public Policy Foundation released five papers that together form a responsible strategy for the state’s immediate and long-term economic growth.

“These five approaches make for good economic policy anytime,” said TPPF Chief Economist Vance Ginn, Ph.D. “But they are especially important as the state recovers from government-imposed shutdowns. Together, these strategies will help return Texas to the prosperity we saw before COVID-19 and help get us there fast.”

The Five-Step Strategy is:

1. Pass a Conservative Texas Budget
2. Reduce Government Spending
3. Reduce Regulatory Burdens
4. Reject Increased Taxes
5. Use the Rainy Day Fund Responsibly

“During the shutdown, the state suspended some rules and regulations, proving they weren’t essential for health and safety in the first place,” said Rod Bordelon, TPPF’s Policy Director for the Remember the Taxpayer Campaign. “Instead of waiting for the crisis to end to re-evaluate these regulations, we should repeal them now and review others in an ongoing basis so that Texans aren’t held back by unnecessary restrictions.”

The Responsible Recovery Agenda also stresses that budget writers should avoid seeking additional state revenue through increased fees and taxes.

“Raising taxes is a costly endeavor — even more so in a recession because it distorts behavior at a time when the economy is weak, delaying recovery and leading to even greater economic stress,” said Benjamin Priday, Ph.D., Economist at TPPF. “Legislators should close budget gaps first by strategically employing the Rainy Day Fund and by trying to find ways to reduce spending.

The Responsible Recovery Agenda is a comprehensive approach to addressing the budget challenges Texas faces in the wake of COVID-19 shutdowns while also preserving the success of the Texas Model, which has strengthened the state’s economy.

​For a historical look at the budget and other ways to improve the budget process, the Foundation also released The Real Texas Budget report.

​Texas’s Economic Stabilization Fund (or “rainy day fund”) is a valuable tool for covering unexpected shortfalls in tax receipts, like those during the COVID-19 pandemic, but it should be used sparingly, and budget reductions should be prioritized instead.

Key points:

• Texas ranks high in economic growth and must maintain a balanced budget, but the current economic situation could strain Texas taxpayers’ ability to pay for the state budget.
• Texas must exercise fiscal restraint and find responsible budget reductions before it taps into the state’s rainy day fund.
• Texas state leaders have appropriately begun the process of finding savings in the budget, but additional savings are likely needed and should be realized before using taxpayer money in the rainy day fund.

https://www.texaspolicy.com/texass-rainy-day-fund-how-to-use-it-responsibly/

The COVID-19-induced recession in Texas has strained the ability of many Texans to pay taxes to fund the state’s budget. The Legislature should consider prioritizing budget reductions to cover any potential budget shortfall.

Key points:

• Texas usually ranks high in economic prosperity and must maintain a balanced budget, but the COVID-19-induced recession has put pressure on taxpayers to fund the tax receipts needed to cover the state’s budget.
• Texas must prioritize fiscal restraint by finding responsible budget reductions to deal with any potential budget shortfall.
• Statewide elected officials have appropriately begun the process of prioritizing budget cuts by directing some state agencies to identify 5% reductions in their existing 2020-2021 budgets, but additional cuts may be necessary.
• As with past shortfalls, the Legislature should work with state agencies and adopt zero-based budgeting to prioritize program spending and identify responsible spending cuts while maintaining necessary services.

https://www.texaspolicy.com/prioritizing-texas-budget-reductions-amid-deficits-due-to-the-covid-19-induced-recession/

The Real Texas Budget provides an overview of government spending from 2004-05 to 2018-19. It demonstrates the need for reforms to restrain the growth of government spending and increase budget transparency.

​Key points:

• Over the last 16 years, Texas state spending has increased faster than the pace of population growth plus inflation, at the excessive cost of $33.1 billion to taxpayers, or almost $2,300 for a family of four annually, on average
• The Real Texas Budget demonstrates the need for government spending restraint and an improved budget process.
• Legislators should pass a Conservative Texas Budget in 2021, holding any growth in initial appropriations of all funds to less than population growth plus inflation of 5% to $246.8 billion, excluding explicitly related COVID-19 funds.

https://www.texaspolicy.com/2020-real-texas-budget-the-state-of-texass-spending/

Read full newsletter with figures and subscribe here. 

​Hello Friend!
I hope you had a blessed Thanksgiving however you chose to celebrate it. I had a nice time with my family from Houston at our place in Round Rock and then a nice time with my in-laws in Port Aransas, which is on the beach near Corpus Christi, Texas. The picture below is of my youngest son playing in the water.
It’s been an interesting time that’s normally spent with family. But many have decided not to do so, which is a decision that should be left to individuals instead of politicians trying to tell people how to act.
One thing that I’ve been concerned about is missing time with my family and friends and never seeing them again—for many reasons. The COVID-19 situation is serious and one that should be taken seriously, as noted in my previous newsletter, but it is also a situation where I have taken time to grow closer to God, family, and friends when so much else seems to be uncertain. This has given me calm during this storm as I know that these relationships are what matter over time while the novel coronavirus is just a blip in the long run scheme of things.
Of course, the repercussions of authoritarian forms of government interventions may last much longer, which is something that we must continue to push back on when necessary.
To be frank, I think we should open Texas and all states, as the shutdowns were a mistake, and instead do what should have been done in the beginning and have the government play an informational role to provide guidance on best practices while targeting resources to vulnerable populations and areas as I outlined in a recent commentary at the Austin American-Statesman. I say this with a great deal of humility as there are many factors that go into making these decisions and I understand that I could be wrong. But I also believe strongly in the power of liberty and allowing individuals, families, and entrepreneurs in an inclusive institutional framework (like the Texas Model) to find the best path to dealing with these sorts of crises rather than the government.
Thanks again for reading! I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper.
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper

We at the Texas Public Policy Foundation are saddened to learn of the passing of economist Walter E. Williams.

“Walter Williams’s journey from the projects of Philadelphia to a professorship in economics at George Mason University—and becoming one of the most recognized and respected conservative voices of our time—was remarkable,” said TPPF Executive Director Kevin Roberts. “His great gift was communicating complex economic principles in everyday language. Always a cheerful combatant—yet one who would ‘Suffer No Fools,’ as the title of a documentary about him pointed out—Walter was an effective advocate for freedom.”

“There are few people who so eloquently explained how people can prosper—given scarce resources and limited government involvement—than the free market economist Walter Williams,” said TPPF Chief Economist Vance Ginn. “It was a pleasure to read and learn from his many academic publications, commentaries, and books over the years. While it’s a day to mourn his loss, let’s also celebrate his many gifts to us and continue to build on them, so that every person has the best chance to thrive in life—like he did.”

https://www.texaspolicy.com/press/tppf-statement-on-the-passing-of-esteemed-economist-walter-williams

​COVID-19 continues to take a toll in the U.S., with more than 13 million cases and over 260,000 deaths. The rise in cases has led to interventions by state governments.

Given that the health threat is real, we should learn from what has worked —and what has not. That means we must work hard on a vaccine, protect the vulnerable, and let most people live their lives.

Michigan, New Mexico, Oregon and Washington have closed most businesses. New Mexico has issued a shelter-in-place order. Other states have started mandating masks. Some Texans are pushing for more interventions even as we’ve had a statewide mask mandate since July 2.

While these interventions are well-intended, blanket and indefinite policies simply aren’t warranted. Such policies have already cost millions of jobs.

During the lockdown that started in March, many Texans’ livelihoods suffered a devastating blow. The state’s economy contracted by a record 29% on an annual basis in the second quarter of 2020. This contributed to at least 8,900 shuttered businesses, losses of 1.3 million jobs in the private sector, and an unemployment rate that skyrocketed to 13.5% through April.

In a survey taken at the end of May, 16% of Texans said they were facing financial ruin, and 22% said it would take them a year or more to recover. These figures likely have worsened since then.

After reopening some businesses in May and then reversing course over the summer, Gov. Abbott changed the method for assessing how and when to expand capacity at certain business venues.

The new system—considering COVID-19 hospitalizations as a share of hospital capacity in each of 22 trauma service areas — allowed a more targeted, timely, and temporary approach. And it reflected the intent of the initial lockdown response to “flatten the curve” so hospitals wouldn’t be overwhelmed.

If a trauma service area has a rate for seven straight days in which less than 15 percent of total hospital capacity has been COVID-19 patients, then most businesses there can expand from 50% to 75% capacity. Currently, 94% of Texans are in areas that can be at 75% capacity—contributing to more economic activity.

But state totals of COVID-19 cases and hospitalizations have been at or near their highest since the pandemic started.

This has initiated calls by the Statesman’s Editorial Board for people to act responsibly, for a new path in Texas’ response that has been “marked by high hopes and half measures,” and for a “serious national strategy.”

But Gov. Abbott rightfully said lockdowns are off the table: “Our focal point is going be working to heal those who have COVID, get them out of hospitals quickly, make sure they get back to their normal lives,” he said.

With several vaccines getting closer to being available and with Pfizer announcing a pilot program to deliver the vaccine quickly in Texas, there is no reason for a lockdown.

Let’s acknowledge we can’t get to zero cases and deaths without eliminating liberty and livelihoods, and let’s better allocate our efforts in a targeted, temporary, and timely way until the vaccine is readily available and population immunity occurs.

https://www.texaspolicy.com/governments-cure-shouldnt-be-worse-than-covid-19/

Read the full newsletter with charts and subscribe here. 

​Hello Friends!
Thank you for reading my Let People Prosper newsletter! Please keep sharing it with others who may be interested in our productive discussions. Many thanks in advance! I hope you have a fantastic week of finding things to be thankful for as we approach Thanksgiving. May you be blessed with good health, prosperity, and wisdom every day.
Keynote Speech: I enjoyed the opportunity to give the keynote speech at the Free Market Institute at Angelo State University on Tuesday, November 17. This presentation was part of the Free Market Institute at Texas Tech University's Public Speaker Series, where I explain the economics of how institutions, tradeoffs, and policy matters when dealing with this situation. You can watch and view my slides at the link in my tweet below. I included a number of slides in my presentation that walked through where we were before COVID-19 hit, where we have been since it hit, where we are now, and where we should head.If you have any information to share along these lines, please send my way. Also, please unsubscribe at any time. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper.
Have a blessed week of thanksgiving. And try to educate yourself on things to tame your fear, and focus instead on your spirit of power, love, and self-discipline.
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper

​Shutdowns and stay-at-home orders across Texas due to COVID-19 have spiked unemployment,  slowed tax receipts, and forced the permanent closure of 8,900 Texas businesses since March. This, from one of the most dynamic and fast-growing economies in the world.

A return to previous success is possible, and necessary, by safely reopening Texas and promptly strengthening its institutions.

The Texas Model of relatively limited government, along with the pro-growth policies of the Trump administration, provided an institutional framework that helped create an attractive economic environment to let people prosper.

In 2019, Texas led the nation with GDP growth of 4.4% and with the most jobs added of nearly 350,000 (and the fourth-fastest growth rate of 2.7%). Also, Texas had the lowest supplemental poverty measure rate of 13.7%, (the SPM accounts for cost of housing differences across the nation and other key metrics), compared with other large states of New York (14.4%), Florida (15.4%), and California (17.2%)—the highest in the nation.

In addition, the Texas model was strengthened by a voter-approved constitutional ban on a personal income tax last year, property tax relief through reform and reductions, and a track record over the last three sessions of passing conservative budgets.

But these benefits couldn’t withstand the economic destruction of fear.

Fear led the public to decrease their interactions early on during the COVID-19 pandemic, before state and local governments created a whiplash of openings and closures with questionable results.

At the state level, Texas Gov. Greg Abbott issued a disaster proclamation on March 13, near the start of the pandemic, and then a stay-at-home order on March 31.

Some restrictions were lifted on April 17 and more were eased a couple of weeks later before another the rise in COVID-19 cases and positive tests—both have been questionable measures to consider when making policy— over the summer raised concern, resulting in a statewide mask mandate and further restrictions.

This sort of uncertainty makes it practically impossible for entrepreneurs to run a business or for job-seekers to find steady employment.

The recently released GDP by state figures for the second quarter of 2020 accounted for this destruction. Dealing with a U.S. economy contracting by an annualized rate of 5% in the first quarter and 31.4% in the second, Texas’s GDP shrank by a record-breaking 29% in the second quarter. But this put it in the second quintile of best-performing states, if contracting at a record annual pace can be considered “best,” with less loss than Florida (-30.1%), California (-31.5%), and New York (-36.3%).

While the third quarter growth improved dramatically across the U.S., the same is true in Texas as some restrictions were eased.

And on Sept. 17, Texas changed the metric used to evaluate the situation to COVID-19 hospitalizations as a share of all hospitalized patients, which aligns with the initial reasoning for government overreach to avoid overwhelming hospital capacity. This allowed some trauma service areas (TSA) with that metric below 15% for seven consecutive days to open most businesses to 75% capacity.

Then, on  Oct. 7, a new Executive Order was issued that changed the metric to COVID-19 hospitalizations as a share of total hospital capacity, an improvement that better accounts for the flexibility that hospital managers have with beds. This order also expanded most businesses capacity to 75% in TSAs with less than 15% of this metric and allowed bars to open to 50% capacity—assuming a county’s judge approves it, which hasn’t been the case in most large urban counties.

The new metric  results in only three (Amarillo, Lubbock, and El Paso) of 22 TSAs with a hospitalization rate above 15%, as of Nov. 9, meaning that 94% of Texans can have access to 75% of certain business capacity.

As COVID cases rise once more during flu season, calls for a second round of harsh restrictions are sure to happen. What these demands fail to understand is that the re-opening measures in place are not due to a blind indifference to human suffering, but rather a different, better path to evaluate tradeoffs.

In addition, the catastrophic drop in GDP across the state was due in no small part to the swinging pendulum of shutdown to rollback to shut down again, with unemployment rising to a historically high 8.3%. Another statewide shutdown would deal another staggering blow to an economy recovering from the fallout of the pandemic.

The Texas Model was responsible for the economic boom before the pandemic, and what comparative success we’ve had during the COVID-19 crisis was due to efforts to roll back restrictions in line with that model.

If the state is to fully recover, the next steps to do so must be made clear soon as without it the uncertainty and fear will contribute to more job losses and the demise of the once successful Texas Model.

https://www.texaspolicy.com/covid-19-must-not-break-the-successful-texas-model/

Read the full newsletter with figures and subscribe here. 

Hello Friends!
Thank you for reading my Let People Prosper newsletter! Please keep sharing it with others who may be interested in our productive discussions. We’ve got a lot to accomplish together, so I need your help in growing my subscribers. Many thanks in advance!
Humble Yourself: This is an important reminder given the rise again in many politicians’ desire to do something like lockdowns to deal with rising COVID-19 cases but nothing or something much more targeted is best. We can learn a lot from economists Friedrich Hayek and John Maynard Keynes, but more importantly from the Bible.
If you have any information to share along these lines, please send my way. Also, please unsubscribe at any time. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper.
Have a blessed rest of your weekend. And remember to humble yourself this week.
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper



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​With the Texas economy reeling in the wake of the COVID-19 pandemic and the resulting statewide shutdowns, economic recovery will be the top issue for the upcoming legislative session. Key to any attempt at recovery will be determining how much the state should spend.

The prosperity of many Texans at stake and the Texas Legislature ought to consider fiscal savings to cover any shortfall in the current budget period and pass a responsible budget in the upcoming session that starts in January.

The Texas economy has taken a beating from the COVID-19 pandemic and associated lockdowns by state and local governments. Many Texans are struggling. And a recent national poll found  65% of voters say it will take more than a year for the U.S. economy to recover.

As Texas continues to recover, the necessity of keeping the government’s hands out of the taxpayer’s pockets is as important as ever. As the economy recovers, the natural inclination is to spend as much as necessary to support Texans reeling from the effects of COVID-19.

However, the old adage that there is no such thing as government funds, only taxpayer funds, should be at the front of legislators’ minds as they attempt to address the fallout from the pandemic.

With that spirit in mind, we at TPPF recently released our latest 2022-23 Conservative Texas Budget (CTB) that sets a maximum threshold on appropriations at $246.8 billion.

This amount is the result of increasing the 2020-21 appropriations by 5% growth rate, which was calculated using the state’s population growth plus consumer price inflation to capture taxpayers’ ability to pay for their government. These appropriations exclude extraordinary funds that shouldn’t go into the baseline budget because they’re one-time costs, such as funds to Hurricane Harvey recovery and property tax relief last session and those explicitly to COVID-19 efforts.

The CTB has been a success in the sense that it has helped give state officials a maximum benchmark with which to hold appropriations to within taxpayers’ ability to pay for it. By limiting growth in the budget, legislators have helped strengthen the Texas Model of low taxes and more freedom by cutting the business margins tax and property taxes by billions of dollars since the 2015 session when TPPF created the CTB.

Specifically, the average growth of the two-year state appropriations fell from 12% during the five budgets from 2004 to 2015 to an average of just 5.5% during the last three budgets. And after appropriations grew well above population growth plus inflation of 7.3% in the earlier period, the more recent growth was below this key metric of 6.3%.

This fiscal responsibility in the last three budget cycles must be continued because the excess in the earlier period has compounded to put more pressure on taxpayers’ budgets.

For example, if the state had adhered to this metric every budget period since the 2004-05 budget, appropriations would be $37.3 billion less, saving families of four, on average, about $2,500 per year—savings which would have been invaluable with the lockdowns’ lost wages and jobs.

Texas Comptroller  Glenn Hegar recently reported that state sales taxes were down a whopping 6.1% in September over the prior year. This has contributed to a projected $4.6 billion deficit by the end of fiscal year 2021. Any attempt to raise appropriations above population growth plus inflation or raise taxes fails to take into consideration this deficit because it will detrimental to the recovery. The responsible action now is to cut spending as much as possible to make up the shortfall.

And to help put Texans on the best path to a full recovery from this unprecedented situation is to consider cutting wasteful and unnecessary appropriations at the very least not appropriate more than the Conservative Texas Budget in the upcoming session. Doing so will improve the proven successful Texas Model so more people have the chance to fully recover much faster than anticipated.

After the year we’ve had, we need a clear conservative fiscal approach in the upcoming session.

https://www.texaspolicy.com/nows-the-time-plan-for-a-conservative-texas-budget/

​Americans want to return to work after months of joblessness due to the COVID-19 pandemic-related business closures. But too many Texans can’t—because of the industry they work in.

There was some hope that this might change after Gov. Greg Abbott’s executive order that took effect on Oct. 14 expanded the state’s reopening plan by adding bars to the list of certain businesses allowed to partially open. But one of the stipulations in the order to open bars to 50% capacity is already proving hardest to overcome: gaining the approval from the county judge.

Despite low COVID-19 hospitalization rates in most of the 22 trauma service areas across the state, many bars do not have the judge’s approval they need to open.

This limitation—among others—hits many Texans while they’re down. For example, Texas’s 8.3% unemployment rate in September is historically high and substantially higher than the near record-low rate of 3.5% in February before the COVID-19 pandemic.

Under the latest order, fewer restrictions are placed on those areas that are below the 15% threshold metric of COVID-19 hospitalizations as a share of total hospital capacity for at least seven consecutive days. These areas can have most businesses expand to 75% capacity and allow bars to open to 50% capacity with the approval of the county’s judge. But if an area’s metric is above this 15% threshold for seven straight days, then certain businesses are rolled back to 50% capacity and bars must close.

Fortunately, this order allows a more targeted policy approach to focus public and government assistance on populations that need it most. The chosen metric also helps bring a more objective measure that’s less susceptible to manipulation—intentional or otherwise—while supporting the government’s initial argument for preventing COVID-19 from overwhelming hospitals.

While this is an appropriate and safe step towards opening Texas, uncertainty remains for employers and workers who are left in the dark without a timeline for when the state will be fully open. In other words, when will Texans have their freedoms back so that they can live out their dreams responsibly?

This sort of certainty is what will help give people a sense of calm in this storm and support a more vibrant economy that will lead us back to a robust situation like we had in February. Adding to the current uncertainty, local officials are making bad decisions by refusing to rely on the evidence.

Specifically, many of the major county judges insist that the threat levels are still too high for any further reopening efforts. But the data indicate otherwise. In fact, as of Oct. 27, most areas where 94% of Texans reside are maintaining a hospitalization rate below 15% with only the three trauma service areas that include El Paso, Amarillo, and Lubbock on the restricted list.

The evidence did not stop the counties of Dallas, Harris, and Travis from firmly putting their feet down when it comes to reopening bars. Judges in Dallas and Harris counties quickly announced their rejection of opting into the order despite their preceding seven-day COVID-19 hospitalization rate at that time holding steady around 8% and 4%, respectively.

Dallas and Houston are not alone. The Travis County judge, which houses the state’s capitol in Austin, announced its intention to keep bars closed until further notice. Its preceding seven-day average was even lower than Dallas and Houston, running below 3%. In fact, the Austin area’s rate has been below the Governor’s 15% threshold since July 22.

With numbers this low and personal responsibility in place, why shouldn’t bars and similar businesses be allowed to open?

Failing to rely on the data when making life-altering decisions demonstrates that these decisions are not based solely on the health, safety, and livelihoods of Texans. If they were, Texas would be further along to fully opening, and Texans could live their lives more freely.

The evidence supports further reopening and local officials would do right by Texans to allow it. One thing is clear: Texans want to get back to normal.

https://www.texaspolicy.com/ending-prohibition-in-texas/

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​Hello Friends!
Thank you for reading my Let People Prosper newsletter. Please keep sharing it with others who may be interested in our fun discussions. Here’s my personal website, which has my academic work, and my employer TPPF’s website. If you like this information and would like daily updates from scholars on more issues, sign-up for TPPF’s The Cannon newsletter.
Before we get going, I’d like to share with you two things that I was thrilled to be a part of this week.

• First, I was honored to be presented with the “Defender of the American Dream” award this week by Americans for Prosperity—Texas and The Libre Initiative for my work on reforming and cutting (hence the sharp knife!) property taxes in Texas. There’s a lot more work to do, as my vision is that Texas would eliminate its disastrous property tax system thereby creating an even more inclusive institutional framework to support increased prosperity for Texans.

• Second, I had the pleasure of meeting with the former Texas Tech University Chancellor Kent Hance. We had a great discussion about Texas Tech and public policy in the Lone Star State. He is a legend here and I’m thankful to know him and meet with him pretty regularly.

Sure, we need to take personal responsibility, but the worry that is driven by fear over the novel coronavirus is keeping too many in a freeze response that prevents them from living their full potential even with precautions in place. Instead, pray for our country, our leaders, our people, and people around the world so that we can love our enemies and have no fear as hope arises around us.
If you have any information that I should see, please send my way. Contact me at any time. Also, please unsubscribe if you’d rather not receive this personal connection. I hope this newsletter is marginally beneficial to you and will help us to find opportunities to let people prosper.
Blessings to you and yours,
Vance
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper

Read the full newsletter with charts and subscribe here. 

Hello Friends!
Thank you for reading this latest edition of my Let People Prosper newsletter. Given this is the third entry of the new newsletter, I’d like to again welcome many new subscribers. Thank you!
Please keep sharing this with your friends and family who may be interested in our fun but hopefully educational chats. And you can share with them more info about me on my personal website or where I work at the Texas Public Policy Foundation. Also, if you like this information and would like daily updates from TPPF scholars on more issues, sign-up for TPPF’s The Cannon newsletter.
Are you ready? That reminds me of one of the songs from my favorite band growing up, Korn. Did I mention that I’m a drummer who played for a hard rock band for a few years in Houston? I probably haven’t yet. When you have time, check out my YouTube video where I tell my story of failures and how I got into economics to help people prosper that has supported much success over time.

​I hope that this information provides insights that reveal how nothing is free. Most of you have heard me say this often as there are always tradeoffs in a world of scarcity, whether those costs are explicit or implicit, such as opportunity costs.
If you have any information that I should see, please send my way. Contact me at any time. Also, let me know if you’d like me to take you off this list. I hope this newsletter is marginally beneficial to you and will hopefully help us to find opportunities to let people prosper.
Have a blessed week.
Vance Ginn, Ph.D. | www.vanceginn.com | #LetPeopleProsper

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