​Join me for Episode 63 of "This Week's Economy" as we dive into key economic issues affecting us all! Here are the highlights:

📈 Inflation Impact: The Federal Reserve's interest rate hikes influence borrowing costs and the broader economy.
🏡 Housing Crisis: Exploring solutions to skyrocketing housing prices and making homeownership accessible again.
🤠 Texas Reforms: Recent election results, the push for universal school choice, budget cuts, and property tax elimination in Texas.

Thank you for listening! Please like, share, and subscribe. For more info, subscribe to my newsletter at vanceginn.substack.com and check out vanceginn.com.

Stay informed, stay free, and let's keep working together to let people prosper!

Originally published at TFR. ​

Texas at the Forefront: Leading the Charge but Facing New Challenges

Texas continues to blaze trails in the labor market, with recent data from the Texas Workforce Commission showing a robust addition of over 42,000 jobs and an unemployment rate of 4% in April. This included 41,000 jobs in the productive private sector and 1,100 in the government sector. Coupled with an impressive gain of 306,000 jobs (+2.2%)since last April, these figures underscore Texas’ economic vitality and its role as a leader in the national economy. 

However, as other states ramp up their economic policies, especially in red states, and the burdens of federal missteps weigh heavily on Americans, Texas must renew its commitment to pro-growth, limited government principles to maintain its leadership position.

In April, the Lone Star State’s labor force expanded and demonstrated resilience in several key sectors, contributing significantly to the state’s economic dynamism. Employment grew the most in percentage terms over the last year in other services (+6%) and professional and business services (+3.3%), but government (+3.3%) grew too much. This private sector growth is a testament to Texas’ business-friendly environment and its ability to attract and retain top-tier talent and enterprises. 

Despite these achievements, there is an emerging need for vigilance as other states begin to adopt reforms that could rival Texas’ appeal.

Nationally, the labor market shows varying degrees of recovery, with some states quickly catching up by implementing aggressive tax cuts and regulatory reforms to support economic growth. Red states like South Carolina (+3.4%), Florida (+2.5%), and Missouri (+2.5%) are thriving, with job growth rates that challenge Texas’ dominance.

Texas has long been a bastion of economic freedom, which has fostered an environment where businesses and individuals can thrive. However, the state now faces the dual challenge of maintaining its competitive edge while also addressing the economic pressures exerted by federal policies and economic management—or mismanagement—by the Biden administration, Congress, and the Federal Reserve. These challenges include inflationary pressures, federal spending levels, and monetary policies that have left many Texans feeling the pinch.

Policy adjustments are essential to address these challenges and keep Texas at the forefront of job creation. 

First, Texas must return to limited government. Reinforcing and expanding upon policies that have proven successful, such as reducing regulatory burdens and further limiting state and local government spending, should be a priority. 

As other states enhance their economic policies, Texas must not rest on its laurels but should strive for even bolder reforms to sustain its economic leadership. This includes strengthening the state’s constitutional and statutory spending limits consistent with the average taxpayer’s ability to pay for government spending. 

The best path would be to limit the entire budget or at least all state funds, excluding federal funds, with a maximum rate of population growth plus inflation and a two-thirds vote to exceed it. This limitation should also cover local governments, which has helped keep Colorado’s state and local spending in check, even in a blue state, with its Taxpayer’s Bill of Rights.

Additionally, the state’s approach to taxation needs a radical rethink. The overwhelming support for eliminating property taxes reflects a broader dissatisfaction with traditional tax structures that penalize success and deter investment. 

A bold approach would be to transition from property taxes to a more equitable tax system by limiting state and local government spending and using surpluses to lower property taxes until they are eliminated in about a decade. The state would use its surpluses to buy down the school district M&O property tax rates, and local governments would use their surpluses to reduce their property tax rates. 

This approach would support substantial economic growth and a path for people to finally own their home instead of renting from the government forever by being forced to pay these taxes whether the mortgage is paid off. 

Moreover, as Texas navigates these fiscal reforms, there should be key reforms and reductions where necessary to wasteful government programs and agencies. Given the excessive spending by the state legislature during the last session, with more than a 20% increase in appropriations–the largest in Texas history- there is a need to cut government spending in the next session rather than just limit the growth. 

This should include providing universal school choice with education savings accounts that should replace the state’s school finance formulas. Doing so would help to empower parents to do what’s best for their kids’ education while reducing the burden on taxpayers because this could dramatically reduce spending. 

While Texas continues to lead in job growth and reach record highs, the path forward requires adherence to tried-and-tested economic principles and a willingness to innovate and adapt to changing economic landscapes. Texas can maintain and strengthen its position as an economic powerhouse by fostering a more favorable business climate, eliminating corporate welfare, reducing unnecessary governmental interference, and revamping its tax system. 

​As other states accelerate their economic reforms, Texas must lead by example, championing policies that ensure prosperity and freedom. The call to action is clear: Texas must stop passing progressive fiscal policies and ensure its policies promote growth and provide a bulwark against the economic challenges of our times.

Originally published at Texans for Fiscal Responsibility.

Unlocking Prosperity: Steering America Back to Free-Market Fundamentals

​As the latest economic indicators from April 2024 unfold, it’s becoming alarmingly clear that America’s path to prosperity is at a critical juncture. A steadfast return to free-market capitalism with limited government is not just a choice but an urgent necessity. In the face of fluctuating, weakening economic conditions, a pivot towards policies that promote market-driven growth rather than big-government socialism is imperative. This shift is crucial to counteract the current trend of governmental overreach, which is stifling innovation, profitability, and efficiency.

April’s labor market update provided a mixed bag of results. 

While an increase of 175,000 in nonfarm payroll employment was reported, the government added 8,000 jobs, bringing the increase to 618,000 (+2.7%) over the last year. This underscores a continuing trend of government expansion faster than the productive private sector by 2.2 million or by just 1.6%. Furthermore, the household employment figures tell a concerning story of a stagnant labor force participation rate of 62.7%. This stagnation indicates that a large part of the potential workforce remains on the sidelines, artificially lowering the unemployment rate and obscuring deeper systemic issues.

The latest GDP data for Q1 2024 revealed a growth rate of just 1.6% on an annualized basis, indicating that the economic recovery is still on shaky ground. When government spending was excluded, real private sector growth was even more lackluster at 1.4%. There is a critical need for genuine market-driven growth rather than relying on fiscal or monetary ‘stimulus’ that fails to ignite real economic dynamism. It’s a clear call for a return to free-market capitalism.

Inflation continues to erode the economic landscape, with the Consumer Price Index rising by 3.5% year-over-year for April. This persistent inflation is coupled with a troubling decline in inflation-adjusted average weekly earnings, which have fallen by a large 4.4% since January 2021, when Biden took office. This decline in purchasing power strains American households, making the case for immediate inflation control measures more compelling than ever. 

The regulatory environment under the current administration has also become a significant burden. An estimated $1.6 trillion in new regulations have been added since President Biden took office, further hindering economic activity. This increase across various sectors, including banking and anti-trust enforcement by the Federal Trade Commission, Federal Deposit Insurance Corporation, Federal Reserve, and Consumer Financial Protection Bureau, has introduced considerable uncertainty and constrained economic vitality. 

The nation’s fiscal situation is also a growing concern, with the Monthly Treasury Statement for April 2024 showing significant budget deficits that continue to burden future generations. Coupled with the Federal Reserve’s latest meeting minutes, which reveal ongoing concerns about inflation and economic stability, and the size of the bloated Federal Reserve’s balance sheet, it’s clear that fiscal and monetary policies are distorting and destroying sustainable growth.

The U.S. must champion policies that reduce government intervention to navigate these turbulent waters. This involves cutting government spending, easing regulatory burdens, and reforming and simplifying taxes to foster economic growth and innovation. Adopting a fiscal rule such as Americans for Tax Reform’s Sustainable Budget Project and advocating for a monetary policy rule that curtails the Federal Reserve’s market interventions would help pave the way for a more stable and prosperous economic future.

The time is ripe for America to recommit to the principles that have historically underpinned its economic success: trust in market mechanisms, empowerment of individuals, and a significant reduction in government’s coercive roles. By advocating for a return to these fundamentals, we can ensure that the economy not only recovers but also thrives in a manner that benefits the broadest swath of society. As we look forward, let’s rally behind policies repeatedly proven to be the bedrock of prosperous, resilient economies.

Property taxes in Wyoming have increased dramatically, placing a substantial burden on taxpayers. This proposal outlines a bold, practical plan to eliminate property taxes through disciplined government spending and targeted surplus distribution to reduce school district property taxes.
​
Property Taxes are Growing Too Fast:

• Total property taxes increased by $1.7 billion from 2000 to 2023, a 316% increase. Property tax growth significantly outpaced both personal income growth (+206%) and the rate of population growth plus inflation (+91%) over the same period.
• The sharpest increases were recorded from 2021 to 2023, with a 71% rise in property taxes. In contrast, population growth plus inflation increased by +17%, and personal income grew by +9% during this period.
• The disproportionate increase has made property taxes unaffordable for many, influencing Wyoming's cost of living and business operations.

Process for Eliminating Property Taxes: The proposed process involves three critical steps aimed at systematically reducing and eventually eliminating property taxes while fully funding state government operations and school districts:

• Spend Less:
  • ​Implement a strong state spending limit, capping budget increases to a maximum rate of population growth plus inflation (PGI). This is the same discipline you use in your family’s budget; governments should follow the same rules, if not more conservatively, as your family because it is not their money.
  • Pass a new state law and propose a constitutional amendment to enforce this spending cap, with provisions for exceptions through a two-thirds legislative vote by each chamber.
• Tax Less:
  • Dedicate 90% of state budget surpluses from the spending cap to reduce school district property tax rates, representing the largest share (73%) of property taxes.
  • Retain 10% of surpluses to address revenue volatility and use reserve balances if necessary, with no rate reduction without surplus.
• Limit Government:
  • Encourage local governments to adopt similar fiscal constraints and require voter approval for property tax increases, promoting transparency and accountability while allowing them to reduce and eliminate their property taxes.

Expected Outcomes

• Direct Benefits: Property owners will see a gradual reduction in property taxes, moving towards complete elimination.
• Indirect Benefits: Renters and businesses will benefit from lower property-related costs, contributing to an improved standard of living and economic competitiveness.

Economic Gains

• From 2021 to 2023, inflation-adjusted personal income declined by 8%. Despite this loss in purchasing power, property taxes were up an average of 71%, proving that property taxes are a crushing, unsustainable burden.
• Implementing these reforms would position Wyoming as a national leader in fiscal responsibility and taxpayer fairness.
• Bold reforms are necessary to restrain government spending at the state and local levels and use the resulting surplus taxpayer money to reduce property taxes until they are zero. 
• These are similar reforms to what has been worked on in Texas, but Wyoming can be the national leader in helping people stop paying rent to the government forever through property taxes and instead begin to own their property

Conclusion
This proposal seeks to relieve Wyoming residents of the oppressive property tax burden. The discipline it imposes on state spending directly benefits all Wyoming taxpayers – surplus money flows back into their pockets, not into government accounts to be spent by politicians. Achieving this bold reform will allow Wyoming to flourish now and for future generations. 

Full research paper here. 

​Join my conversation with Ryan Bourne, chair of economics understanding at Cato Institute and editor of the book The War on Prices, on the latest Let People Prosper Show podcast.  Like, subscribe, and share the Let People Prosper Show, and visit vanceginn.substack.com and vanceginn.com for more insightful content.

Organized by R Street Institute. 

​With house prices surging recently, the average American homeowner now has around $300,000 of equity in their home. With the cost of living also soaring, many homeowners are considering taking out a home equity loan, or HELOC, to pay off their mortgage. But how exactly do such lines of credit work, and are they a good idea?

NTD’s Evelyn Li spoke with Vance Ginn, the former chief economist at the White House’s Office of Management and Budget and the president of Ginn Economic Consulting, to find out more.

Interview on NTD News on May 22, 2024: https://www.ntd.com/pros-and-cons-of-using-a-home-equity-line-of-credit-to-pay-off-your-mortgage-economic-consultant_994520.html

​Join me for this episode as I discuss the COVID lockdowns in Australia, the fight for liberation, and Topher Field's incarceration. Don't miss this inspiring conversation on human rights and the power of resilience. 💪

Like, subscribe, and share the Let People Prosper Show, and visit vanceginn.substack.com and vanceginn.com for more insightful content.

​Originally published at Marketplace.

Inflation numbers came in better than expected this week, and they’re the latest in several months of data showing that price growth has slowed down. Another way to look at inflation came out from the Congressional Budget Office this week, looking at the issue from the lens of purchasing power.

The CBO found that if you look at the same basket of goods from pre-pandemic to 2023, on average, Americans need less of their income to buy the same set of stuff. But if that just feels a bit off to you, I get it.

According to the Congressional Budget Office, purchasing power went up across all income groups because incomes grew faster than prices between 2019 and 2023.

“That kind of goes against the common perception of what’s going on is that people are losing purchasing power over the last few years,” said Vance Ginn who is president of Ginn Economic Consulting and was a White House chief economist during the Trump administration.

The CBO found, percentage-wise, folks in the highest income bracket spent less of their income on common expenses — down 6.3%, thank you stock market.

Folks in the lower income brackets weren’t so lucky. They saw only a two percent drop in how much they spent on basics, thanks to higher wages.

But for people in the middle, it was even less noticeable.

“And that’s why I think they’ve been, kind of, not being able to be as prosperous as some of the others during this period,” said Ginn.

Plus these numbers reflect averages, not people’s individual experiences. And that’s where narratives really come into play, especially in an election year.

“We did go through a period of about 18 months of very elevated inflation. But it’s also true that prices today are rising roughly in line with previous historical experience,” said Michael Linden, a Senior Policy Fellow at the Washington Center for Equitable Growth.

And in campaign ads and in stump speeches we’ll probably end up hearing versions of both inflation stories, amplified in whichever direction benefits the candidate talking.

“And I think that the American people are going to have to decide when they hear about inflation, which of those two things is more important to them,” said Linden.

And whose narrative about the economy you choose to believe.