If you care about your money — you need to hear this.
Former White House chief economist Vance Ginn joins Pags to talk pandemic spending, fiscal insanity, and why tariffs might not be the answer. Is a return to the gold standard possible? What’s really in Fort Knox? And how do we actually get our financial house in order? No spin — just straight talk and sharp analysis.
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There’s been a lot of conflict making headlines lately—from the clash between Elon Musk and President Trump over the “Big, Beautiful Bill” (BBB) to riots in Los Angeles sparked by immigration raids. These events all point to the true national emergency: overspending in Washington. Congress has a critical opportunity to take action. As a strong advocate for sustainable budgeting, we must cut current spending, not just slow the growth as in “DC speak,” but actually reduce spending to at least 2019 levels before COVID nonsense, and cap annual spending growth to a maximum rate based on population growth plus inflation. Instead, lawmakers discuss raising the federal debt ceiling by up to $5 trillion with the BBB.
In this week’s episode, I explain why now is the time to restore fiscal discipline. Americans are already feeling the strain of rising costs due to inflation. Our leaders have the power to address this crisis by tackling Washington’s out-of-control spending. You can catch the full episode on YouTube, Apple Podcast, or Spotify. Visit: VanceGinn.com Subscribe: VanceGinn.Substack.com Originally posted at Kansas Policy Institute.
Kansas’s recent fiscal trajectory offers a cautionary tale for federal policymakers. While tax relief is essential for economic growth, pairing it with unchecked spending can lead to fiscal instability. The state’s experience underscores the importance of coupling tax reforms with disciplined budgeting—a lesson Washington should heed as it considers the so-called “One Big, Beautiful Bill” (OBBB). Kansas: The Perils of Overspending Over the past decade, Kansas has seen both the promise and the peril of bold tax reform. In the early 2010s, the state attempted a major tax overhaul under then-Governor Sam Brownback, slashing income tax rates in hopes of spurring growth. However, the tax cuts were not paired with corresponding reductions in spending. Instead, state budgets continued to expand, and the resulting deficits sparked political backlash and fiscal instability. Fast-forward to 2025, and Kansas again finds itself in a precarious fiscal position. The Legislature recently passed another tax relief package aimed at flattening income tax rates and reducing the property tax burden—moves that are pro-growth in theory. However, these reforms come alongside a surge in state spending. Our research at KPI shows that, for 2025 alone, the state budget is $8.7 billion larger than if spending had followed a responsible limit based on population growth plus inflation since 2005. Spending per resident has soared to unsustainable levels, outpacing economic growth and increasing the burden on Kansas taxpayers. Kansas’s state government spending per resident was $5,428, placing it 23rd highest among the states. State and local tax collections per capita stood at $6,326 in 2022, ranking Kansas 24th nationally, well above no-income-tax states like Florida and Texas. This high tax burden helps explain why Kansas has seen a net outmigration of nearly 198,000 residents since 2000. Forecasts show Kansas facing a $741 million deficit within four years. Assuming these projections are accurate, it is not because of the tax cuts but because of unsustainable spending growth. A decade after the first tax reform attempt, Kansas still grapples with the consequences of failing to control government expansion. The lesson is clear: even the best tax reforms can falter without fiscal discipline. The Responsible Kansas Budget: A Blueprint for Reform To address these challenges, Kansas needs to adopt KPI’s Responsible Kansas Budget (RKB). This simple yet powerful framework starts by demanding real cuts to inflated spending now—not just limiting future growth. Only then can state and local spending growth be effectively capped to population growth plus inflation, a measure of what taxpayers can sustainably afford. By taking this two-step approach—cutting first, capping second—Kansas can reduce the government’s burden, avoid deficits, and create room for meaningful tax relief. This framework is a prerequisite for long-term stability. The RKB also demands a shift toward performance-based budgeting. That means funding decisions should be based on outcomes, not historical inertia. Dedicated funds and earmarked programs currently dominate the Kansas budget, limiting lawmakers’ flexibility and reducing transparency. These automatic appropriations are a recipe for bloat and inefficiency. A responsible budget should reflect real priorities, not legacy carveouts or special interests. And it should reject the fallacy of burden-shifting—replacing one tax with another—without actually reducing the total tax load on Kansans. With a responsible budget and sound tax policy, Kansas could join the growing number of states advancing toward flatter and simpler tax systems. Over a dozen states have already adopted or are moving toward flat income taxes, and several—including Florida, Tennessee, and Texas—have eliminated income taxes entirely in favor of consumption-based models that encourage savings, investment, and growth. Washington’s “One Big, Beautiful Bill”: Echoes of Kansas At the federal level, the “One Big, Beautiful Bill” (OBBB) mirrors Kansas’s approach in its ambition and flaws. The bill includes several encouraging provisions: Extending the expiring 2017 Tax Cuts and Jobs Act (TCJA) provisions,
Medicaid Reforms: Necessary but Potentially Disruptive Among the most important components of OBBB are the long-overdue reforms to Medicaid. These changes aim to rein in ballooning entitlement costs and require work among capable adults. For Kansas, however, this could initially create budgetary pressure if federal matching funds are reduced or enrollment drops more quickly than anticipated. However, short-term stress should not deter long-term reform. Kansas must begin to wean itself off the federal budget, in Medicaid and elsewhere, especially in programs where dependency has grown far beyond the original intent. Taxpayers in Kansas are being overtaxed to support an unsustainable federal system. Rather than fearing change, Kansas should seize the opportunity to modernize its Medicaid program, cut costs, and move toward a more state-driven and fiscally responsible healthcare model. Tax Carveouts vs. Tax Reform Whether in Topeka or D.C., the distinction between tax carveouts and true tax reform is critical. Carveouts are a form of cronyism: they reward lobbyists and special interests, not families and small businesses. They complicate the tax code, reduce transparency, and make it harder to achieve long-term economic growth. By contrast, real tax reform broadens the base and lowers the rate for all taxpayers. It removes distortions, encourages work and productivity, and treats taxpayers equitably. The federal government should follow the lead of states like Kansas (when done right), Arizona, and Iowa by simplifying the tax code and moving toward a broad-based consumption model, not patchwork exemptions. Simply shifting the burden from income to consumption taxes isn’t enough—real reform must actually reduce the total burden on taxpayers. Why Spending Discipline Matters No tax policy can succeed in the long run without spending control. When spending outpaces economic growth, the gap must be filled with higher taxes, borrowing, or inflation—all of which harm the private economy. We’ve seen this nationally, as federal spending exploded during COVID-19 and remained high even after the emergency passed. And let’s not ignore federal borrowing. With debt levels now nearing $37 trillion, future generations will bear the burden of today’s excesses. Every trillion in new debt erodes trust, crowds out private investment, and raises the specter of inflation. In Kansas, the failure to reduce spending has led to budget shortfalls even in times of economic growth. That’s because the state government has locked itself into long-term obligations and special funds that leave little room for discretion. Every dollar funneled into a dedicated account is one less that can be used for tax relief or urgent needs. In Washington, the same problem plays out in the form of entitlement autopilot and defense contractor guarantees. Unless both levels of government prioritize spending restraint, tax relief will be short-lived and economic growth will stall. As states and the federal government consider long-term reform, one of the most promising directions is a shift from taxing income to taxing consumption. Income taxes penalize productivity, savings, and investment—the very engines of economic growth. Consumption taxes, by contrast, are less distortionary and more transparent. A flat consumption tax, such as a final sales tax, aligns incentives and simplifies compliance. Texas and Florida have demonstrated the viability of no-income-tax models, relying instead on consumption-based revenue systems. Kansas should explore similar reforms by reducing reliance on income taxes and eliminating carve-outs that clutter the code. At the federal level, replacing income and payroll taxes with a broad-based consumption tax could boost growth, improve compliance, and reduce the tax gap. But that can only happen if spending is first brought under control to avoid just shifting the burden. A Time for Courageous Leadership The opportunity is clear: Kansas and Washington can implement sustainable, pro-growth tax reform. But doing so requires real courage. It means cutting unnecessary programs, resisting special interests, and saying no to budget gimmicks. It means adopting a responsible budget cap—like the RKB—and sticking to it. In Kansas, that starts with ending the use of dedicated funds to circumvent scrutiny. It means evaluating programs on performance and eliminating those that fail to deliver value. It means using surpluses for tax relief or debt reduction, not new spending obligations. It means getting Kelly Era spending surges under control. In Washington, it means pairing tax relief with real entitlement reform. It means capping spending growth and ending the practice of raising the debt ceiling without structural change. Conclusion: The Path to Prosperity Tax relief is not enough. Without spending discipline, it leads to deficits, debt, and future tax hikes. Kansas has seen this firsthand and must not repeat the mistakes of a decade ago. Washington is at risk of making the same errors now. The path to prosperity lies in cutting inflated spending now, capping future growth, enacting broad-based tax reform, and shrinking the government’s footprint. Only then can we ensure a truly free and prosperous future. Washington would be wise to follow. Today marks the conclusion of the 89th Regular Session of the Texas Legislature, and what a session it's been. Once renowned for its commitment to pro-freedom and pro-growth policies, Texas now grapples with decisions that challenge its conservative principles. This session has strayed from the fiscal conservatism Texans expect, from expanding corporate handouts to unprecedented spending. The people of Texas deserve better. It's time to return to the pro-growth policies that have enabled the state to thrive and lead the nation. On the federal front, the passage of the “One Big, Beautiful Bill” in the House reveals a similar mix of commendable and concerning developments. How can we reconcile the benefits of tax cuts with the drawbacks of increased government spending?
In this episode, I delve into these significant legislative moves and assess their impact on the nation's economic health. Let's examine both the positive and negative aspects to gain a clear understanding of where things stand. You can catch the full episode on YouTube, Apple Podcast, or Spotify. Visit: VanceGinn.com Subscribe: VanceGinn.Substack.com (0:00) - Texas Legislature's 89th Session: A Mixed Bag (6:22) - The Good, Bad, and Ugly of Texas Legislative Outcomes (12:04) - Market Health Update: Overspending and Economic Consequences (17:56) - Housing Market Challenges and Solutions Originally published at Substack. Get the tables for these at the Substack link.
Taxpayers should be alarmed as the Texas Legislature prepares to vote on the final 2026–27 budget. What started as competing proposals from the Senate and House has ended in a bloated conference committee budget that dramatically expands state government beyond what key measures like population growth and inflation would justify. Despite claims of fiscal conservatism, this final product mirrors the spending habits of progressive states like California more than it does the limited government model that made Texas an economic powerhouse. Here's a breakdown of how we got here, why it matters, and why this budget deserves a firm rejection. Comparing the Budgets: Senate, House, and Conference Using a consistent apples-to-apples comparison of appropriations to appropriations, the growth from the 2022–23 budget to the 2026–27 budget is staggering. Since then, the maximum growth rate of population growth plus inflation has been 20%. Yet each version of the new budget far exceeds that: Senate Budget:
Each budget proposal got bigger, not smaller, throughout the process. Instead of aligning spending with population and inflation growth, lawmakers escalated the budget with every iteration—an unsustainable trend. Major Spending Increases by Budget Area The 2026-27 budget reveals unsustainable growth across nearly every article of government. In state funds, Article II for Health and Human Services is up 30.4% over 2022–23, with an additional 5.4% increase from 2024–25. Article III, covering Education, soared by 42.4%, with public education up 43.2% and higher education up 40.2% since 2022–23. Even areas like Article V for Public Safety grew by nearly 60%. Looking at all funds, the trends are equally alarming. Article III rose by 40.2%, including a 38.5% increase in public education and a 45.3% increase in higher education. Health and Human Services (Article II) grew by $18.8 billion or 21.6%. Even Regulatory functions (Article VIII) increased by over 800% over the 2022–23 budget. This is not a conservative budget—it’s a big government expansion. The False Justification: Temporary Tax Relief Supporters of the budget may claim that the spike in appropriations is justified because of historic property tax relief. But even after backing out tax relief, the budget increases are well above any reasonable threshold. In short, the relief is temporary, but the spending is permanent. This sleight of hand will lead to even higher property tax burdens in future years if spending is not restrained. The Legislative Budget Board claims $51 billion in tax relief, which is a misleading total. It includes maintaining past tax cuts and contingent new ones, but does not include any structural restraint to prevent property taxes from rising again. There are no local spending limits or end to loopholes to property tax levy limits, while reducing the rollback rate to the no-new-revenue rate, so property taxes will keep going up. This is not reform—it’s an expensive illusion. Bigger Than the Numbers: A Progressive Budget in Disguise This budget doesn’t reflect Texas values. It reflects progressive budget ideology:
In fact, since the first Republican trifecta in 2003, Texas looks to overspend by nearly $60 billion more in the 2026-27 budget than what would have occurred had budgets followed pop+inf. This is unacceptable and underscores how this budget weakens the Governor’s legacy of restraint. A Warning About November: Constitutional Amendments As if this weren’t enough, lawmakers have lined up a slate of new constitutional amendments for the November ballot—each proposing to dedicate billions more of taxpayer money for favored projects outside the already weak spending limit. Voters should reject these amendments. These dedicated funds are deliberately structured to bypass the state’s current spending restraints. This is a transparent effort to bake big-government growth into the Constitution. If successful, it will further erode the Legislature’s ability to prioritize, leading to budget chaos. The solution? Strengthen the constitutional spending limit to cover at least all state and local spending, ideally all funds, and tie them to a maximum growth rate of population plus inflation, with no loopholes and a three-fourths supermajority vote required to exceed it with surpluses returned through lower tax rates. Anything less invites more backdoor spending and fiscal irresponsibility. Why Lawmakers Should Reject the Budget Texas lawmakers have a choice: rubber-stamp a budget that entrenches government growth and betrays fiscal conservatives, or stand firm and demand better. This budget fails the test of stewardship. It overcommits future legislatures and taxpayers. It locks in massive baseline growth that will be difficult to reverse. And it sends a dangerous message: that the Texas model is no longer one of limited government, but of California-style excess wrapped in conservative rhetoric. Texans deserve better. Lawmakers should reject the conference budget. If not, Governor Abbott should veto it. |
Vance Ginn, Ph.D.
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