​In episode 77 of This Week's Economy, I break down the flawed economic promises of presidential candidates who ignore that nothing is truly free. From proposed AI regulations and fracking policies to tax plans and protectionism, I explore the impact these issues have on innovation, energy independence, and economic growth while highlighting why free-market solutions are key to prosperity. Get the show notes and more information at vanceginn.substack.com.

Government Spending Is The Problem

The late, great economist Milton Friedman said, "The real problem is government spending." This is true as spending comes before taxes or regulations. In fact, if people didn't form a government or politicians didn’t create new programs, then there would be no need for government spending and no need for taxes. And if there was no government spending nor taxes to fund spending then there would be no one to create or enforce regulations. 

​While this might sound like a utopian paradise, which I desire, there are essential limited roles for governments outlined in constitutions and laws. Of course, most governments are doing much more than providing limited roles that preserve life, liberty, and property. This is why I have long been working diligently for more than a decade to get a strong fiscal rule of a spending limit enacted by federal, state, and local governments promptly under my calling to "let people prosper," as effectively limiting government supports more liberty and therefore more opportunities to flourish.

Empirical research underscores the importance of spending restraint over tax hikes in promoting economic growth. Studies by economists Alberto Alesina and Silvia Ardagna, John Taylor, Casey Mulligan, and others have consistently shown that fiscal adjustments based on reducing government spending better foster economic growth than those based on raising taxes.

Fortunately, there have been multiple state think tanks that have championed this sound budgeting approach through what they've called either the Responsible, Conservative, or Sustainable State Budget. I recently worked with Americans for Tax Reform to publish the Sustainable Budget Project, which provides spending comparisons and other valuable information for every state. This groundbreaking approach was outlined recently in my co-authored op-ed with Grover Norquest of ATR in the Wall Street Journal. 

When Did This Budget Approach Begin?

I started this approach in 2013 with my former colleagues at the Texas Public Policy Foundation with work on the Conservative Texas Budget. The approach is a fiscal rule based on an appropriations limit that covers as much of the budget as possible, ideally the entire budget, with a maximum  amount based on the rate of population growth plus inflation and a supermajority (two-thirds) vote to exceed it. A version of this approach was started in Colorado in 1992 with their taxpayer's bill of rights (TABOR), which was championed by key folks like Dr. Barry Poulson and others.  (picture below is from a road sign in Texas)

Why Population Growth Plus Inflation?

​While there are many measures to use for a spending growth limit, the rate of population growth plus inflation  provides the best reasonable measure of the average taxpayer's ability to pay for government spending without excessively crowding out their productive activities. It is important to look at this from the taxpayer’s perspective rather than the appropriator’s view given taxpayers fund every dollar that appropriators redistribute from the private sector.

Population growth plus inflation is also a stable metric reducing uncertainty for taxpayers (and appropriators) and essentially freezes inflation-adjusted per capita government spending over time. ​The research in this space is clear that the best fiscal rule is a spending limit using the rate of population growth plus inflation, not gross state product, personal income, or other growth rates. In fact, population growth plus inflation typically grows slower than these other rates so that more money stays in the productive private sector where it belongs. To get technical for a moment, personal income growth and gross state product growth are essentially population growth plus inflation plus productivity growth. There's no reasonable consideration that government is more productive over time, so that term would be zero leaving population growth plus inflation. And if you consider the productivity growth in the private sector, then more money should be in that sector at the margin for the greatest rate of return, leaving just population growth plus inflation. Population growth plus inflation becomes the best measure to use no matter how you look at it.

Given the high inflation rate more recently, it is wise to use the average growth rate of population growth plus inflation over a number of years to smooth out the increased volatility (ATR's Sustainable Budget Project uses the average rate over the three years prior to a session year). And this rate of population growth plus inflation should be a ceiling and not a target as governments should be appropriating less than this limit. Ideally, governments should freeze or cut government spending at all levels of government to provide more room for tax relief, less regulation, and more money in taxpayers' pockets.

Overview of Conservative Texas Budget Approach

Figure 1 shows how the growth in Texas’ biennial budget was cut by one-fourth after the creation of the Conservative Texas Budget in 2014 that first influenced the 2015 Legislature when crafting the 2016-17 budget along with changes in the state’s governor (Gov. Greg Abbott), lieutenant governor (Lt. Gov. Dan Patrick), and some legislators. ​

​The 8.9% average growth rate of appropriations since then was below the 9.5% biennial average rate of population growth plus inflation since then, which this was drive substantially higher after the latest 2024-25 budget that is well above this key metric (before this biennial budget the growth rate was 5.2% compared with 9.4% in the rate of population growth plus inflation). 

This approach was mostly put into state law in Texas in 2021 with Senate Bill 1336, as the state already has a spending limit in the constitution. The bill improved the limit to cover all general revenue ("consolidated general revenue") or 55% of the total budget rather than just 45% previously, base the growth limit on the rate of population growth times inflation instead of personal income growth, and raise the vote from a simple majority to three-fifths of both chambers to exceed it instead of a simple majority.  There are improvements that should be made to this recent statutory spending limit change in Texas, such as adding it to the constitution and improving the growth rate to population growth plus inflation instead of population growth times inflation calculated by (1+pop)*(1+inf). 

But this limit is now one of the strongest in the nation as historically the gold standard for a spending limit of the Colorado's Taxpayer Bill of Rights (TABOR) has been watered down over the years by their courts and legislators, as it currently covers just 43% of the budget instead of the original 67%. 

My Work On The Federal Budget In The White House

​From June 2019 to May 2020, I took a hiatus from state policy work to serve Americans as the associate director for economic policy ("chief economist") at the White House's Office of Management and Budget. There I learned much about the federal budget, the appropriations process, and the economic assumptions which are used to provide the upcoming 10-year budget projections. In the President's FY 2021 budget, we found $4.6 trillion in fiscal savings and I was able to include the need for a fiscal rule which rarely happens (pic of President Trump's last budget).

Sustainable Budget Work With Other States and ATR

When I returned to the Texas Public Policy Foundation in May 2020, as I wanted to get back to a place with some sense of freedom during the COVID-19 pandemic and to be closer to family, I started an effort to work on this sound budgeting approach with other state think tanks. This contributed to me working with many fantastic people who are trying to restrain government spending in their states and the federal levels. Here are the latest data on the federal and state budgets as part of ATR's Sustainable Budget Project.

​From 2014 to 2023, the following happened:

Federal spending increased by 81.7%, nearly four times faster than the 23.1% increase in the rate of population growth plus inflation.

• Had the federal government limited the growth in spending to the rate of population growth plus inflation during that decade, the federal government would’ve spent $2.1 trillion less in 2023 than the $6.47 trillion. 

• If the federal government had done this over the entire decade, the national debt would have increased by $1.8 trillion instead of the actual $12.8 trillion.
• And if this had been done over the last two decades since 2003, the cumulative national debt would have increased by less than $700 billion instead of $20.2 trillion.
• This means that following a sustainable budget would help leave more money in Americans’ pockets so that they can flourish. 

Aggregate state spending, excluding funds received from the federal government, by the 50 state governments increased by 59.0% during that decade. 

• Had their spending grown by no more than the rate of population growth plus inflation from 2014 to 2023, state governments would’ve spent $1.44 trillion in 2023, which is $430 billion less than the $1.87 trillion that all state governments spent. 
• If the states had done this over the entire decade, cumulative spending would have been $1.4 trillion less than what was actually spent, resulting in more money in people’s pockets across the country.

Result: American taxpayers could have been spared more than $2.5 trillion in taxes and debt just in 2023 if federal and state governments had grown no faster than the rate of population growth plus inflation during the previous decade. And this would be even more if we considered the cumulative savings over the period.  

My hope is that if we can get enough state think tanks to promote this budgeting approach, get this approach put into constitutions and statutes, and use it to limit local government spending as well, there will be plenty of momentum to provide sustainable, substantial tax relief and eventually impose a fiscal rule of a spending limit on the federal budget. This is an uphill battle but I believe it is necessary to preserve liberty and provide more opportunities to let people prosper.

​Sustainable State Budget Revolution Across The Country

Below are the states and think tanks which I'm working with and this revolution is going, which you can find an overview of this budgeting approach in Louisiana and should be applied elsewhere. 

I update these periodically, successful versus not successful budgeting attempts being 25-9 so far.

1. Americans for Tax Reform released the Sustainable Budget Project with every state's spending compared with population growth plus inflation and valuable comparisons and data for each state.
2. Alaska: Alaska Policy Forum released its third Responsible Alaska Budget, with the first two unsuccessful but the most recent being successful as it helped define the narrative about sound budgeting.
3. Colorado: Independence Institute recently released the first Sustainable Colorado Budget.
4. Florida: James Madison Institute released its first successful Conservative Florida Budget.
5. Iowa: Iowans for Tax Relief Foundation released its fourth Conservative Iowa Budget; the first four have been mostly successful.
6. Kansas: Kansas Policy Institute released its third Responsible Kansas Budget; the first three weren't successful but improvements are being made to help rein in even more spending.
7. Louisiana: Pelican Institute recently released its second Responsible Louisiana Budget, which the first was unsuccessful. Here is a comparison of the RLB with ATR's Sustainable Budget project.
8. Michigan: Mackinac Center released its second Sustainable Michigan Budget, with the first not being successful but the second one being successful in reining in excessive spending in a tough political situation.
9. Mississippi: Mississippi Center for Public Policy recently released its first Responsible Mississippi Budget and was successful.
10. Montana: Frontier Institute released one Conservative Montana Budget and one report on Responsible Local budgets, which has resulted in two successful CMBs and improved local budgets.
11. South Carolina: SC Policy Council released its third South Carolina Sustainable Budget, with the first being successful and the second being unsuccessful. Oconee County Council in South Carolina used the SC Sustainable Budget approach and filed their own sustainable budget. 
12. Tennessee: Beacon Center released its third Conservative Tennessee Budget, with the first three being successful.
13. Texas: Texas Public Policy Foundation released its fifth Conservative Texas Budget, with the first four of five (2024-25 budget wasn't) being mostly successful, and the recent release of Responsible Local Budgets.
14. Federal: The Let Americans Prosper Project along with the Responsible American Budget to rein in federal government spending to support fiscal sanity in D.C., which is essential for the future of our country.

​
If you're interested in doing this in your state, please reach out to me.

For more details, check out these write-ups on this issue by Grover Norquist and I at WSJ, Dan Mitchell at International Liberty, and The Economist.

Originally published at KTRH News Houston.

State budget officials believe Texas would have to spend about $81.5 billion a year to end property taxes.

Reducing or even eliminating the state’s high property taxes has been something on the minds of Texas lawmakers for a handful of years now.

The Texas Senate Finance Committee were presented the costs from the Legislative Budget Board recently. Just over half ($42 billion) would go to cover the property taxes collected by cities, counties and special taxing districts from last year.

Economist Vance Ginn calls property taxes "fundamentally immoral."

"I believe that they should be eliminated at the end of the day but of course with any sort of policy change nothing is free," he said.

School property taxes make up a large portion of the figure too. Budget officials say that getting rid of all property taxes collected by school districts would cost the state $39.5 billion.

"That's really where the focus is is the state eliminating the school portion first," Ginn said, who believes would take about a decade if state spending is seriously limited.

Ginn also suggested using surplus money to buy down the school maintenance and property tax over time wouldn't be a bad idea either in eliminating nearly half of the state's property taxes.

"There are ways to do this in a fiscally conservative way that can allow for Texas to get rid of property taxes within about a decade, certainly about half the property taxes, but they could even do all the property taxes if local governments would also limit their spending," Ginn said.

According to Ginn, state lawmakers have put around $18 billion towards property tax relief with $12.7 billion in new relief approved during the last legislative session. However, there has not been much change overall in Texas property taxes.

"There's more that needs to be done to reign in government spending at the local levels and the state level," said Ginn. "Reducing property taxes for Texans would be a huge relief for them."

Interview on NTD News.

Vice President Kamala Harris has announced plans to raise both the corporate tax rate and the rates on capital gains taxes.
According to Vance Ginn, the founder and president of Ginn Economic Consulting and a former chief economist at the White House’s Office of Management and Budget, these provisions will slow the economy and stifle investment. NTD spoke to him to find out more.

​Joining the show today is Vance Ginn. Vance is the founder and president of Ginn Economic Consulting, where he leverages data-driven insights to shape economic policy discussions across the nation. 
 
Over the course of the show, Veronique and Vance discuss state and local government spending, federal spending, and the connection between the two.

Don't miss it!

Originally published at Washington Examiner.​

Government intervention in markets is back in vogue after Vice President Kamala Harris proposed price controls on groceries and food. But this isn’t the only price control the government is eyeing. The Federal Reserve is picking sides in a fight between banks and big-box retailers concerning who pays what when a customer makes a purchase using a debit card.

The proposed regulation, known as Regulation II, limits the amount that large banks can legally charge merchants to process a debit transaction. It was first enacted in 2011 as required under the Dodd-Frank Act. At the time, retail lobbyists tried to justify this price cap by arguing that lower debit card interchange rates would translate to savings for consumers at the register.

​Surprise, surprise: Those savings never transpired. Only about 2% of large retailers reduced consumer costs after the initial implementation of Regulation II, per research from the Federal Reserve Bank of Richmond. Instead of passing on savings, these large merchants often pocketed the difference, undermining the very premise of the regulation.

Letting large companies such as Walmart fight their own battles seems like a no-brainer in a free market economy. Companies come together, negotiate a contract, and, if they don’t like what they’re paying, find an alternative provider.

Yet, retail lobbyists have somehow convinced the Federal Reserve to tip the scale in their favor by further lowering the legal limit that large retail stores have to pay to process debit transactions. Meanwhile, banks and card networks such as Visa and Mastercard will be forced to cover the cost.

​This change could have serious consequences for consumers and small financial institutions, but it also sets a bad precedent for the government’s role in the marketplace. Should the Federal Reserve’s mission be to pick winners and losers when it comes to the activities between private companies? The answer is no.

The Federal Reserve isn’t oblivious to the politics here. It knew it would be controversial, therefore, it only applied Regulation II to institutions with over $10 billion in assets. That way, it wouldn’t also have to justify the changes to frustrated community banks and credit unions. Yet, the regulation had unintended consequences hitting even these exempt institutions. Between 2011 and 2021, debit card interchange revenue for exempt issuers fell by 13% for single-message network transactions, a clear sign that the ripple effects of price controls extend far beyond their intended targets.

Moreover, the proposed regulation’s stricter routing requirements could further strain smaller banks by limiting their flexibility in negotiating better terms with networks. This could reduce their ability to offer competitive pricing and services to consumers, stifling innovation and increasing operational costs. In 2014, a survey found that 73.3% of exempt banks reported that the policy hurt their earnings, indicating that even institutions not directly subjected to the cap suffer from these market distortions.

Given these harms, it’s unsurprising that groups representing community banks, credit unions, and minority depository institutions oppose the Federal Reserve’s proposed changes. By imposing these price caps, the Fed is not leveling the playing field but rather tilting it in favor of bigger firms, leaving financial institutions, especially smaller ones, at a disadvantage.

Government intervention in pricing inevitably leads to market distortions. Whether it’s rent control, wage control, or debit card fees, price fixing creates artificial shortages, misallocates resources, and stifles innovation. When the government dictates prices, it disrupts the natural balance of supply and demand, leading to unintended consequences that ripple through the economy.

The Fed’s willingness to cave to retail lobbyist demands ignores the lessons of the past decade. Instead of fostering competition or benefiting consumers, these price controls have distorted the market, harmed smaller institutions, and failed to deliver on their promise of consumer savings. It’s a textbook case of the government picking winners and losers, propping up large retailers while putting additional strain on institutions that are the backbone of many communities.

The reduced debit card transaction fee revenue for smaller, exempt banks directly affects their ability to offer competitive services and maintain profitability. As these institutions struggle, the services they provide, often vital to underbanked or rural communities, could diminish, leading to fewer options for consumers. This contradicts the goal of financial inclusivity and broad access to banking services.

The reality is that government price setting rarely benefits the average consumer. While lower costs are appealing, the savings seldom materialize where they’re needed most. Instead, the benefits accrue to large retailers while smaller banks, credit unions, minority depository institutions, and their customers bear the brunt of the costs.

As the Fed considers its next steps with Regulation II, it should be wary of further entrenching these market distortions. The path forward should focus on enhancing competition and innovation in the payments ecosystem, not embracing failed price controls and doing the bidding of corporate lobbyists. If the goal is to create a more equitable financial system that benefits all consumers, the Fed should reconsider its involvement and allow market forces, not government mandates, to determine prices.

​Read the full testimony with charts and data here: https://www.vanceginn.com/letpeopleprosper/testimony-before-the-texas-senate-committee-on-finance-presented-by-vance-ginn-phd-on-september-4-2024

Join me for Episode 112 of the Let People Prosper Show with Dr. Abby Hall as we discuss her fantastic book "How to Run Wars: A Confidential Playbook for the National Security Elite." She is an Associate Professor in Economics at the University of Tampa and received her PhD in Economics from George Mason University in Fairfax, Virginia. 

Subscribe, share, and rate the Let People Prosper Show, and visit vanceginn.com for more insights.

​Unlock the Secrets of Housing Market Regulations and Real Estate Growth!
​
Discover how housing market regulations are reshaping real estate growth and affordability in 2024. Join Mike Mills and economist Vance Ginn, Ph.D., as they dive deep into the key policies, economic strategies, and insider insights every real estate professional needs to know.

In this episode, you'll learn about the critical changes in housing market regulations and how they impact real estate growth and home affordability. Understand how fiscal policy, zoning laws, and commission structures are influencing market dynamics. Vance Ginn provides expert analysis on navigating these challenges to help Realtors and real estate professionals thrive in today's evolving landscape.

Key Takeaways:

Housing Market Regulations Explained: Learn how recent policy changes affect home prices, market competition, and Realtor strategies.

Impact of Economic Policies: Understand how inflation, interest rates, and government spending shape the real estate market and what it means for your business.

Navigating Property Tax Reforms: Discover actionable strategies to adapt to changes in property tax policies and maintain your competitive edge.

Leveraging Knowledge for Growth: Get expert tips on using economic insights to drive real estate growth and stay ahead of market shifts.

Don't miss out on these game-changing insights that could redefine your approach to real estate. Watch now to stay informed and ahead of the curve in 2024!

🔔 Like, Comment, and Subscribe for more in-depth discussions on real estate trends and strategies. Share your thoughts on the episode in the comments below and let us know which topic you'd like to see next!

Links and Social Media:

🌐 Podcast Website: https://www.thetexasrealestateandfina...
🏠 Mike Mills Mortgage Website: www.millsteammortgage.com
📊 Vance Ginn's Website: https://www.vanceginn.com/

​Originally published at Kansas Policy Institute. 

As the debate over tariffs continues to dominate political discussions, Kansas finds itself caught in the crossfire of these trade policies. Though touted as a way to protect American industries, tariffs often act as hidden taxes that ultimately burden consumers and largely restrain economic growth and prosperity in the state.

Kansas, known for its strong agricultural and manufacturing sectors, is particularly vulnerable to the economic impacts of tariffs. While tariffs may seem like a tool to give local products a competitive edge by making foreign goods more expensive, the reality is that these costs are passed down, increasing the prices of goods essential to Kansas families and industries. This isn’t just theoretical; it affects every Kansan, from the prices paid for everyday goods to the costs of doing business by the tariff rate over time.

Kansas’ Trade Dynamics
In 2023, Kansas exported over $14 billion worth of goods, making it the 32nd largest exporter among U.S. states. Especially given the overall size of the state, Kansas is punching above its weight. The state’s top exports included aircraft parts ($2.63 billion), fresh or chilled boneless beef cuts ($970 million), maize/corn ($537 million), frozen beef cuts ($422 million), and soybeans ($365 million). These figures highlight Kansas’ vital role in both aerospace and agriculture. On the import side, Kansas brought in $13.4 billion in goods, ranking as the 35th largest importer in the U.S. Significant imports included unspecified commodities ($1.54 billion), aircraft parts ($671 million), turbo-jet engines ($403 million), communication apparatus ($331 million), and electrical machinery ($302 million). This trade activity underscores the importance of imports in supporting Kansas’ diverse industries, particularly in aerospace and technology.

Despite Kansas’ robust trade performance, the state is not immune to the economic strain caused by tariffs. These trade barriers increase the cost of imported materials and components crucial to its industries. While trade deficits often draw negative attention, the focus should be on Kansas’ overall trade volume of $27.4 billion, which supports jobs and drives economic activity across industries and the state. Trade is not just about deficits or surpluses; it’s about the mutually beneficial exchanges that allow Kansans to thrive.

The Economic Impact of Tariffs
Tariffs, by design, impose a tax on imported goods, impacting both producers and consumers. This added cost reduces demand for foreign currencies while increasing demand for the U.S. dollar, especially when federal deficits push interest rates higher. A stronger dollar can mitigate some price increases caused by tariffs but also disrupt supply chains and raise production costs. As the dollar appreciates, Kansas’ exports become more expensive for international buyers, reducing demand for these goods abroad. This can lead to a decline in Kansas’ export volume, undermining efforts to balance trade deficits. Additionally, tariffs often trigger retaliatory measures from other countries, further complicating trade relationships. For Kansas, where global trade is integral to the economy, such disruptions can have serious consequences.

Although tariffs don’t directly cause inflation, as the Federal Reserve creates inflation by printing too much money, tariffs increase prices on certain goods by the amount of the tax hikes on them over time. These higher costs ripple through the supply chain, affecting a broad range of products. As noted by the Tax Foundation, tariffs can also lead to reduced economic output, lower wages, and job losses in affected industries, illustrating these policies’ broader negative effects on Kansas.

Strengthening Kansas’ Economic Future
Kansas must proactively enhance its competitiveness in response to federal trade policy uncertainties. Of course, the state cannot set interest rates or tariff policies. The state should focus on policies that promote growth through fiscal responsibility—reducing unnecessary government spending, lowering taxes, and aligning workforce training with the needs of key industries like agriculture and aerospace. A skilled workforce is essential for attracting businesses and supporting Kansas’ existing industries.

Additionally, reducing the regulatory burden on businesses can help Kansas offset some negative impacts of federal tariffs. Creating a more business-friendly environment encourages investment and job creation, ensuring long-term economic resilience. Expanding trade relationships and exploring new markets is another critical strategy. Diversifying export destinations reduces reliance on a few large markets, mitigating risks from global trade tensions. It’s nice that many state leaders attend the occasional international air show or economic confab, but these taxpayer-funded trips don’t help “sell” Kansas. However, sound economic policy will “sell” the state, making it easier for a business to expand in The Sunflower State than in The Palmetto State. 

Finally, Kansas leaders should advocate for federal trade policies that support free trade and minimize reliance on tariffs. Supporting global trade agreements will help secure Kansas’s prosperous future and contribute to a stronger national economy.

Conclusion
While tariffs aim to protect American industries, they function as a tax that burdens consumers and businesses. For Kansas, which is deeply tied to global trade, the negative impacts of tariffs are particularly significant. By focusing on fiscal responsibility, enhancing competitiveness, and addressing domestic challenges, Kansas can ensure its industries remain strong, its economy resilient, and its people prosperous in the global market.

​Originally posted here: https://www.politicsandparenting.com/p/the-economy.

​Today on the show I am joined by Vance Ginn, Ph.D. A leading economist and advocate for free-market principles and fiscal conservatism. He is the former associate director for economic policy at the White House’s Office of Management and Budget and chief economist at the Texas Public Policy Foundation.   He is the founder and president of Ginn Economic Consulting and host of the Let People Prosper Show podcast, providing high-impact economic consulting that dives deep into pressing issues with top influencers. He lives in Round Rock, Texas, with his family, championing policies that promote economic freedom and prosperity.

We discuss inflation, debt, minimum wage, currency, and tariffs. This is a great episode for average citizens trying to get a handle on this complex topic. Be sure to follow Vance on X and Substack, and check out his new article out in the Freemen-News Letter.

​Last session, despite a $32.7 billion surplus, new property tax relief was limited to just $12.7 billion. And the state budget increased by a record 32% in state funds from GAA appropriations to appropriations

Originally published at American Institute for Economic Research.

The Republican Party wages an internal battle while the US economy teeters on the edge of a potential recession, marked by a weakening labor market and volatile financial conditions. The debate within the party is not just over political leadership, but the very economic principles that will define the nation’s future. With inflation-adjusted wages down since January 2021 and savings rates at historic lows, a pro-growth economic agenda is urgently needed. 

Yet, some within the GOP or right-leaning groups are pushing for a dramatic shift away from the free-market capitalism that has historically driven American prosperity. The deviation threatens to undermine decades of economic success.
The “New Right,” represented by groups like American Compass, advocates for a return to big-government policies. Under the guise of a new form of conservatism, this faction argues for increased government intervention in the economy, protectionist measures, and the strengthening of monopoly labor unions.

Oren Cass, who leads American Compass, pushed this interventionist approach in his article “Free Trade’s Origin Myth” at Law & Liberty: 

As the American people, and American policymakers, rediscover the importance of promoting domestic industry and protecting the domestic market, economists have a vital role to play in analyzing how best to accomplish the nation’s goals.
Cass claims these policies will benefit workers and domestic industries, yet history and economics tell us otherwise. The New Deal, Great Society, and more recent Obama-Biden policies, all rooted in similar principles, have repeatedly demonstrated the failure of such approaches to deliver sustainable economic growth.

This misguided movement threatens the free-market policies that have been the hallmark of much of GOP economic policy. American Compass and its allies call adherents to these principles “free-market fundamentalists,” suggesting that the time has come for the GOP to abandon the policies that have lifted millions of Americans out of poverty and spurred innovation and economic growth.

Consider the economic successes of the Trump administration during its first term — a period characterized by substantial deregulation and tax cuts. 

The American Action Forum calculates the final rule costs at the same point of the last three administrations. The latest through August 23 in the fourth year of each term had final rule costs of $311.7 billion for Obama and $1.67 trillion for Biden, while Trump had a decline of $100.6 billion. The cost of doing business was lower under Trump than the other two. According to the Competitive Enterprise Institute, there is always room for more cuts: the high costs of regulations currently top $2.1 trillion per year. 

The Tax Cuts and Jobs Act helped boost the economy by lowering tax rates, contributing to more incentives to work and invest. The Trump tax cuts and deregulation empowered more economic growth, more job creation, and greater income distribution, by allowing the private sector to thrive. Before the destructive pandemic-related lockdowns, real median household income increased by $5,000, wages increased by nearly 5 percent, and the poverty and unemployment rates reached their lowest in 50 years. 

These gains, however, are now at risk as key provisions of the tax cuts are set to expire in 2025, and the fiscal crisis driven by government overspending threatens to reverse this progress.

The GOP must resist the allure of the “New Right” and reaffirm its commitment to pro-growth policies that prioritize economic freedom and limited government. This begins with reducing government spending, which is essential to making the Trump tax cuts permanent and preventing a tax hike that would stifle economic recovery. Simplifying the tax code by eliminating special provisions that pick winners and losers would further enhance economic efficiency and equity.

In addition to tax reform, the GOP must focus on streamlining welfare programs and enforcing work requirements. These policies would reduce dependency on government assistance, encourage labor force participation, and strengthen families by promoting self-sufficiency. The economic benefits of such reforms are clear: a more robust labor market, higher productivity, and greater economic mobility.

Embracing free trade is likewise crucial for maintaining America’s competitive edge in the global economy. Protectionist measures, as advocated by the “New Right,” may offer short-term relief to specific industries but ultimately harm consumers, reduce innovation, and weaken the broader economy. On the other hand, free trade fosters competition that drives technological advancement and delivers lower prices and more consumer choices.

The GOP should also prioritize fostering innovation, particularly in the technology sector. The US can lead the next economic revolution by reducing regulatory barriers and promoting a pro-innovation environment, driving productivity and economic growth for decades.

The alternative — a retreat into the big-government policies championed by the “New Right” — would be disastrous. Higher tariffs, increased taxes, and greater government and union control over the economy would exacerbate economic stagnation, fuel inflation, and increase poverty. They echo the failed strategies of progressive leaders like Woodrow Wilson, Franklin D. Roosevelt, and Lyndon B. Johnson — policies that expanded government power at the expense of economic freedom and prosperity for ordinary Americans.

The path forward for sound policy is to embrace a pro-growth approach championed by the American Institute for Economic Research, Club for Growth’s Freedom Forward Policy Handbook, Americans for Tax Reform’s Sustainable Budgeting, among others. Reducing government spending, taxes, regulations, and the money supply will unleash abundance.

By recommitting to pro-growth principles, the GOP can present a compelling alternative to the electorate and pave the way for a more prosperous future. Or, it can follow the “New Right” down the progressive road to serfdom.

​Check out episode 76 of This Week's Economy. I discuss whether the Fed will cut interest rates, the anti-growth message by Harris-Walz, problems with tariffs by Trump-Vance, support by RFK, Jr. of Trump, school choice in Texas, and a boom in cities in red states, and much more. Get the show notes at vanceginn.substack.com.

Originally published by Real Clear Health.

By Vance Ginn & Deane Waldman
August 27, 2024

Affordability of health care in the U.S. has been declining, reaching its lowest point since 2022, with no signs of improvement. This stark reality underscores the urgent need for a healthcare system that prioritizes timely access to affordable, high-quality care. To achieve this goal, the government needs to step aside and empower We the Patients.

In fact, Americans need exactly the opposite of what Candidate Harris intends to do if she gains the oval office. She plans to expand Washington’s role in Americans’ health (medical) care.

The U.S. spends an astonishing $4.8 trillion annually on healthcare. But here's the truly shocking part: more than half of that huge expense produces NO patient care! It does not pay for essential services like doctor visits, hospital stays, medications, mental health care, and home health care!

Two point four trillion “healthcare” dollars are wasted on administrative costs and regulatory compliance. This useless spending not only inflates costs but also diverts resources away from patients, contributing to delays in care and, tragically, to what is known as "death-by-queue," where Americans die while waiting for care they desperately need.

Many healthcare providers find themselves trapped in a system driven by perverse incentives. The third-party payment structure rewards dollar efficiency over medical effectiveness, and volume over value. This misalignment leads to unnecessary tests and procedures, over-treatment, and a general focus on quantity rather than quality of care.

We need a shift to value-based care, where the definition of value is determined by patients and providers—not by an externally imposed financial metric. When patients have control over what is considered valuable, providers are incentivized to focus on their patients rather than following federal rules. The result is better health outcomes at lower costs. This approach aligns patient well-being with financial rewards, promoting preventative care and chronic disease management, which can reduce hospitalizations and improve overall health.

However, a significant obstacle to achieving this vision is the heavy hand of government regulation. The regulatory environment in healthcare dramatically increases costs and restricts access to care by siphoning money away from patients to fund bureaucratic overhead. Streamlining and eliminating unnecessary regulations could foster a more competitive market, driving efficiency, effectiveness, and innovation.

Restoring financial control to patients is crucial. While price transparency is often touted as a solution, it won't lead to real savings unless patients—not third parties—control their health care spending. Currently, third-party payers make most of the medical decisions, stripping patients of their autonomy and resulting in frustration and poor outcomes. Eliminating restrictions on Health Savings Accounts (HSAs) and other consumer-directed health options can empower patients with financial control, incentivizing them to seek cost-effective care.

The employer-supported health insurance model is another area ripe for reform. This system, a relic from World War II when wage freezes forced companies to offer health insurance as a benefit, is outdated, limits patient choice, and increases costs. Today, the average cost of employer-provided health insurance is $18,328 per employee. This money would be better spent if given directly to employees, still tax-advantaged, and made available for deposit into an unlimited Family HSA. With these funds, Americans would have the financial freedom to shop for direct-pay care, creating competition among providers and driving prices down.

Technology also holds great promise for revolutionizing healthcare delivery. Telemedicine, for example, was a critical lifeline during the COVID-19 pandemic, providing access to care while reducing the strain on traditional healthcare facilities. It has also proven invaluable in reaching rural and underserved urban areas, where access to healthcare is often limited or non-existent. By fostering technological innovation, we can further increase the effectiveness and efficiency of healthcare delivery, lower costs, and expand access to those who need it most.

The U.S. healthcare system is plagued by a "cancer" of ever-expanding bureaucracy and a third-party payment system with misaligned incentives. To cure this, we must reduce government over-regulation and return financial as well as medical control to We the Patients. This shift will instantly align incentives, reduce wasteful government spending on bureaucracy, and deliver timely, affordable care to many more Americans.

The path forward is clear: give control back to the patients and doctors. Let them decide what care they need and how they want to pay for and provide it. For the medically vulnerable, state-created and -run, not federal one-size-fits-all, safety nets. By doing so, we can finally achieve the goal of delivering high-quality, affordable care to everyone.

Vance Ginn, Ph.D., is president of Ginn Economic Consulting, host of the Let People Prosper Show, and previously chief economist of the Trump White House's OMB. Follow him on X.com at @VanceGinn.

Deane Waldman, M.D., MBA is Professor Emeritus of Pediatrics, Pathology, and Decision Science; former Director of New Mexico Health Insurance Exchange; and author of 12 books, including multi-award winning, Curing the Cancer in U.S. Healthcare: StatesCare and Market-Based Medicine. ​

This research was originally published at Iowans for Tax Relief Foundation. 

Join me for Episode 111 of the Let People Prosper Show with Dr. Paul Tice, Adjunct Professor of Finance at the Leonard N. Stern School of Business at New York University, to hear his take on the costs of ESG actions and mandates on energy and our future from his book “The Race to Zero.”

Subscribe, share, and rate the Let People Prosper Show, and visit vanceginn.substack.com for more insights.

Parents rightfully demand transparency from their school districts, and too often schools hide how much they're spending and what they're spending taxpayer dollars on. Join Mandy Drogin as she sits down with Vance Ginn, dad of 3, founder of Ginn Economic Consulting, and formerly an economist in the Trump administration, as they break down school finance and dive into how much our schools are spending and what they're spending it on. ​

Originally published at American Institute for Economic Research.

​The school choice revolution shines a bright light on an otherwise dire situation caused by COVID and draconian government efforts, including shutting down schools with little to no sound reason. But it woke a sleeping giant in parents across the country: their kids were learning little at public schools and it was time for them to stand up. Since then, parents have spoken loudly and clearly, with more than 30 states now having a school choice program, including 12 states with a universal or near-universal education savings account (ESA) program.

But Texas is not yet on that list.

Texas is the largest red state and has more than six million school-age kids but has yet to follow the lead of other states with school choice, even when there is overwhelming support for it. Given the recent primary election victories for school choice proponents against incumbents, which rarely happens, there is an opportunity for a big win in the Lone Star State for students, parents, teachers, and taxpayers.

According to the NAEP test, only 24 percent of eighth graders are proficient in math and 23 percent in reading. Texas’s public education system is failing kids. The time for bold action is now: Texas must embrace universal education savings accounts (ESAs) to reclaim its position as a leader in educational excellence.

As states like Arizona, Florida, and ten other states with universal or near-universal ESAs demonstrate the transformative power of school choice, Texas’s delay in adopting ESAs is becoming increasingly urgent. Amid the heated debate over school choice legislation in Texas, the stark reality is that while these states are witnessing improved student outcomes and a more competitive educational landscape, Texas continues to lag despite pouring billions into public education. 

Despite a $20.3 billion increase in the latest two-year state budget for public education — a 33.3 percent boost — student performance in Texas has stagnated. Less than 20 percent of classroom expenditures reach teachers, with much of the budget consumed by bloated administrative costs. The average classroom receives about $340,000 annually, yet teachers, the backbone of our education system, see only a fraction of this amount in their paychecks. 

This inefficiency is a clear sign that the current system is broken.

Economist Milton Friedman’s vision of school choice as a means to dismantle the government’s monopoly on education is more relevant than ever. States that have implemented ESAs are seeing better student outcomes and improvements in public schools due to the competitive pressure of school choice. 

In contrast, Texas remains stuck in a system that fails to deliver its promises, leaving students underperforming, teachers underpaid, and taxpayers questioning where their money is going. As I recently highlighted in my testimony before the Texas House Committee, this stagnation is untenable.

The economic case for universal ESAs in Texas is equally compelling. 

By moving to an ESA model, Texas could reduce its per-student spending from $17,000 for 5.5 million students at public schools to $12,000 for all 6.3 million school-age kids, potentially saving taxpayers $18 billion annually. These substantial savings could then be returned to Texans through lower property taxes, providing much-needed relief as the cost of living rises. 

Moreover, a competitive education system would compel schools to pay quality teachers more, with estimates suggesting salary increases of up to $28,000 annually. The benefits of ESAs extend beyond education; they represent a broader commitment to economic freedom and efficient use of taxpayer dollars.

Recent primary election results show that public support for school choice is overwhelming. 

Yet, despite this mandate, Texas lawmakers have not acted. The path forward is for Texas to pass a universal ESA bill that gives every parent the freedom to choose the best educational environment for their children. This is about more than just improving education — it’s about empowering parents, raising teacher salaries, and ensuring that our taxpayer dollars are spent wisely.

Beyond education, the benefits of ESAs would reverberate throughout the Texas economy. 

A well-educated, adaptable workforce is essential for maintaining Texas’s competitive edge in attracting businesses and fostering innovation. By providing students with the education that best suits their needs, ESAs prepare them for success in a rapidly changing job market, support higher property values, and spur job creation.

Having grown up in a low-income, single-mother household in South Houston, attending private, public, and home schools, I understand firsthand the transformative power of educational choice. Texas has always been a leader, but the state is falling behind in education. 

​Texas must stop following and join the school choice journey across the country to ensure every child has access to a high-quality education tailored to their unique needs. The future of our children, teachers, and economy depends on it. It’s time for lawmakers in every state to act, so universal ESAs become not just a revolution but the norm, empowering Americans for generations to come.

Fox News contributor Gary Kaltbaum and former Trump Office of Management and Budget chief Vance Ginn on the latest economic developments coming from the Federal Reserve and White House.

More here.

​Don’t miss episode 75 of This Week's Economy. I discuss price controls and handouts to Americans being pushed by Harris and, in some ways, Trump, free-market energy policies in states, whether Google should be broken up, the economy being a top election issue, income tax elimination in Louisiana, and a state-level jobs report after Hurricane Beryl.

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​Economist Vance Ginn joined "The Joe Pags Show" to highlight the stark contrasts between a Trump-led economy and the current Biden/Harris administration's approach.

Ginn began by criticizing the Democrats' anti-growth agenda, pointing out the dangers of Kamala Harris’s push for price controls, which he argued would hurt businesses and raise costs for consumers. He explained that the Biden/Harris administration has been increasing the national debt at an alarming rate, and excessive spending remains the top issue facing America. Ginn expressed concern over Harris's plans to continue this trend, warning that it could further destabilize the economy.

On taxes, Ginn highlighted Harris’s proposal to raise corporate tax rates to 28%, which he said would lead to business closures, reduced hiring, and companies moving operations overseas. In contrast, Trump’s focus on deregulation and lower taxes helped the economy thrive before the pandemic. Ginn suggested that if Trump wins in 2024, his administration would likely prioritize deregulation and tax cuts to boost economic growth.

The conversation also covered global trade and supply chain issues, with Ginn advocating for a balanced approach that promotes U.S. production by reducing regulations. He concluded by comparing Trump’s and Harris's stances on economic issues like eliminating taxes on tips, emphasizing the broader economic philosophies at play.

To hear Vance Ginn’s full interview with Joe Pags, click the link below.
https://news.iheart.com/featured/the-joe-pags-show/content/2024-08-22-trump-vs-bidenharris-economy-explained-by-vance-ginn/

Originally published at Kansas Policy Institute.

​Like many states, Kansas has a complex economic situation in 2024. The latest Bureau of Labor Statistics (BLS) data provide a blurry picture of the state’s employment situation. While nonfarm employment numbers offer some signs of stability, a closer look at the household employment data reveals potential challenges that warrant careful attention.

Understanding Nonfarm and Household Employment Data

To fully grasp Kansas’s employment trends, it’s essential to differentiate between nonfarm and household employment data. 

Nonfarm employment, reported through the Current Employment Statistics (CES) program called the establishment report, tracks payroll jobs in nonfarm establishments, excluding agricultural workers, the self-employed, and private household employees. This measure is a key indicator of jobs in major industries. This BLS survey excludes agriculture and farm jobs because they are difficult to measure due to high volatility and lack of reporting. 

On the other hand, household employment data collected via the Current Population Survey (CPS), called the household survey, includes jobs for the self-employed and those in private households but not separated by industry. This latter data set captures shifts in labor force participation and underemployment, often offering a more comprehensive view of economic health.

Historical Employment Trends in Kansas

Kansas’s employment trends provide insights into the state’s economic trajectory. Since the 1990s, Kansas has experienced periods of moderate job growth punctuated by significant downturns, such as the early 2000s recession and the Great Recession of 2007-2009. 

For example, nonfarm employment grew from 1.08 million in 1990 to 1.12 million by the mid-1990s, reflecting the state’s overall economic growth. However, the early 2000s saw a dip in employment due to the dot-com bubble burst, with a more substantial decline during the Great Recession. Post-recession recovery was slow but steady, with household and nonfarm employment regaining much of their lost ground by 2015. 

By 2019, Kansas had reached new employment highs. However, the COVID-19 pandemic disrupted these gains, causing sharp declines in employment across the state. Although there has been a recovery since then, the 2024 employment trends show a divergence that mirrors broader national patterns.

Nonfarm vs. Household Employment: A Comparative Analysis

Since the COVID-19 lockdowns, U.S. employment trends have shown a divergence between household and nonfarm jobs. Initially, household employment rebounded more swiftly as individuals turned to self-employment and gig work to navigate the economic uncertainty. However, nonfarm employment took longer to recover as traditional businesses faced prolonged disruptions and slow rehiring processes. Over the last year, household employment has slowed and remained flat, while nonfarm jobs increased by 2.5 million nationwide. 

These trends were similar in Kansas, where household employment bounced back faster than nonfarm jobs in the immediate aftermath of the lockdowns. Since July 2019, household employment has increased by 3,100 jobs, while nonfarm employment has increased by 40,800. Like the national trend, household employment has lost 13,146 jobs over the last year, while nonfarm jobs are up by 21,100. 

Household employment has declined in 12 of the last 14 months, with a decline of 14,475 jobs to the lowest level of 1.460 million since January 2022, but nonfarm employment has increased in 10 of those 14 months, increasing by 21,400 jobs to 1.462 million.

In July 2024, Kansas lost 1,700 nonfarm jobs, a slight decline of 0.1%. However, over the past year, the state added 21,100 nonfarm jobs, marking a 1.5% increase, primarily driven by gains in the leisure, hospitality, and professional services sectors. In contrast, household employment declined by 1,200 in July, raising concerns about broader economic well-being. 

At the national level, the U.S. added only 114,000 jobs in July 2024, far below expectations and reflective of a broader slowdown in the labor market. This weak performance suggests that Kansas’s challenges are part of a larger national trend.

Unemployment Rates: Kansas and Neighboring States

As of July 2024, Kansas’s unemployment rate is 3.2%, ranking 17th nationally, with the U.S. rate at 4.3%. The state’s unemployment rate reflects a relatively stable labor market, but the losses in household employment that go into the unemployment rate calculations highlight the need for Kansas to remain vigilant in its economic policies to ensure continued competitiveness. 

The differences in unemployment rates are notable when comparing Kansas to its neighboring states. For instance, Nebraska boasts one of the lowest unemployment rates in the country at 2.6%, ranking 5th nationally, while Missouri’s unemployment rate is slightly higher at 3.8%, ranking 30th. Iowa is in a better position than Kansas with an unemployment rate of 2.8%, ranking 8th. 

These comparisons emphasize that while Kansas performs reasonably well, there is room for improvement, particularly in creating a more dynamic and resilient labor market.

Improving Economic Vitality and Competitiveness

Kansas must prioritize economic freedom and fiscal discipline to enhance its economic competitiveness. Reducing government spending, revamping the tax system, and promoting regulatory reform are essential. By adopting strict spending limits tied to inflation and population growth, Kansas can create a more predictable fiscal environment and attract businesses. Streamlining regulations will encourage entrepreneurial activity and job creation, especially for small businesses and startups.

Kansas’s current economic challenges are not new. The state has faced long-term economic stagnation, with private sector job growth lagging behind national trends since the 1980s. 

Addressing these issues requires a concerted effort to reduce government spending and improve the business climate. Embracing reforms that promote economic freedom and pro-growth policies is crucial for ensuring long-term prosperity for all Kansans.