Originally published at Kansas Policy Institute. 

For decades, Washington has made it easier for states to spend money without fully confronting the cost. That era may be coming to an end.

Kansas should see that as an opportunity.

A recent Washington Post editorial documents how dramatically the relationship between Washington and the states has changed. Federal transfers to states reached about $1.2 trillion in 2025, roughly 17 percent of federal spending. Federal money provided about 34 percent of state revenue nationwide in 2024, compared with 22 percent in 1989.

That arrangement allows Washington to collect or borrow money, route it through federal programs, and return it to states with requirements attached.

Kansas is less exposed than most. Federal funds supplied 24.9 percent of Kansas state revenue in fiscal 2024, compared with 34.2 percent nationwide.

But even Kansas has substantial reason to pay attention.

Washington is approaching $40 trillion in gross debt while continuing to run enormous annual deficits. That fiscal path cannot continue indefinitely. Federal aid to states, along with the rest of the federal budget, will face increasing pressure.

The wrong response in Topeka would be to assume that every dollar Washington removes must be replaced with another dollar from Kansas taxpayers.

Instead, ask why the money was being spent.

That is where Kansas has an underused advantage.

Kansas already has performance-based budgeting in state law. Agencies are supposed to provide goals, outcomes, and performance measures that help lawmakers judge whether programs are accomplishing what taxpayers are funding them to do.

Too often, though, those measures do not happen nor drive the budget conversation enough. They should.
Instead of beginning with last year’s appropriation and negotiating how much to add, lawmakers should start with results. What problem is a program solving? What evidence shows that it works? Is there a less expensive approach? Could businesses, nonprofits, families, or local communities handle the responsibility better?

Federal funding reductions would make those questions more important, not less.

Kansas also enters this discussion with spending already elevated. The 2027 Responsible Kansas Budget shows state-funded spending rising from $7.2 billion in fiscal 2005 to $22.3 billion in fiscal 2026. Spending has grown much faster over that period than the benchmark of population growth plus inflation.

So Kansas does not need another source of money to preserve every existing program. It needs better prioritization.

That means pairing serious performance reviews with a firm limit on overall spending growth. A strong Kansas spending limit would force policymakers to make tradeoffs instead of allowing higher revenues to continually ratchet spending upward.

Those savings have another purpose: tax relief.

When government requires fewer resources, Kansans can keep more of what they earn. Permanent reductions in broad-based income-tax rates would improve incentives for entrepreneurship, investment, work, and migration into Kansas. Over time, that can mean a larger private economy rather than a larger government economy.

This is the promise of federalism that gets overlooked.

Fifty states making more of their own decisions create more accountability, experimentation, and competition. Kansans can see more clearly what their government costs and compare its results with Colorado, Missouri, Nebraska, Oklahoma, and beyond.

Washington’s fiscal troubles will create challenges for states. But they could also help reverse decades of centralization.

Kansas should use the opportunity to measure results, eliminate what isn’t working, restrain spending, lower taxes, and return more decisions to the people closest to them.
​
That would be a healthier federalism and a stronger Kansas.

Originally published on Substack.

Diesel above $6 per gallon hurts. It hits truckers and farmers first, then works its way through freight, groceries, construction, manufacturing, and ultimately household budgets. So I understand the instinct to ask why American refiners are exporting diesel when prices are so high here.

But I’ve studied oil, gasoline, and diesel markets for nearly two decades, and there’s an important lesson in that research: prices reflect information about scarcity throughout the supply chain. Trying to suppress that signal doesn’t eliminate the scarcity.

That’s why President Trump’s consideration of a diesel export ban⁠ concerns me. The desire for lower prices is understandable. But the better response is to attack the causes of expensive energy rather than restrict where American refiners can sell it.

What’s In the Diesel Price?
​
The Energy Information Administration’s breakdown⁠ of what Americans pay at the pump is revealing. In May, when diesel averaged $5.60 per gallon, 42% of the price came from crude oil, 25% from refining, 23% from distribution and marketing, and 11% from taxes.

Those shares move with market conditions. Over the longer run, EIA estimates crude oil⁠ accounted for about half of the average retail diesel price from 2004 through 2025. Crude therefore remains fundamental to what truckers and families eventually pay.

But today’s diesel problem is also about refining. The latest EIA analysis⁠ points to unusually high diesel refining margins combined with elevated crude prices. Global distillate supplies have tightened as refinery disruptions and geopolitical events reduced available supply.

This is what scarcity looks like.

America Is Already Straining Refining

American refiners aren’t sitting around waiting for higher prices.

According to EIA’s September diesel-market analysis⁠, U.S. distillate production averaged about 5.1 million barrels per day from January through August, the highest since 2019. Refinery utilization reached roughly 97% in the week ending September 11.

Yet inventories remained about 13% below their five-year seasonal average.

Meanwhile, global diesel markets have tightened⁠ as geopolitical conflicts, refinery disruptions, and reduced exports from important producing regions have collided with already-low inventories.

That context matters because an export ban doesn’t create another gallon of diesel.

It could keep additional gallons in some U.S. markets temporarily. That’s the strongest argument for it. But the more important question is: What happens to production and investment afterward?

Don’t Punish the Supply Response

Refineries are multibillion-dollar investments expected to operate for decades. Investors care about future regulatory costs, input prices, transportation options, and access to customers.

Tell refiners that government may restrict where they sell whenever prices become politically uncomfortable, and policy risk rises. That can reduce expected returns on refinery expansions, upgrades, maintenance, pipelines, terminals, and storage.

My own research helps explain why focusing narrowly on the pump price can mislead policymakers. In a peer-reviewed Energy Economics⁠ research on retail and wholesale gasoline prices⁠, we found a strong long-run relationship between crude oil and wholesale and retail gasoline prices, with symmetric long-run adjustment.

Our later Energy Economics⁠ study of the retail gasoline supply chain⁠ similarly examined short- and long-run price responses and structural breaks. And my more recent research, “Structural Breaks and Long-Run Adjustment in the Diesel Fuel Market,”⁠ applies this work directly to diesel.

The broader lesson is simple: petroleum markets are interconnected, and prices adjust to underlying market fundamentals.

So let’s improve those fundamentals!

Make Supply the Strategy

Start with production. America should make it easier to explore, drill, produce, and transport oil. More crude supply matters because, as the EIA data above show, crude remains one of the largest components of diesel prices.

Then tackle refining. If refining represents roughly one-quarter of today’s diesel price, barriers to building, expanding, and modernizing refinery capacity deserve much more attention than restricting exports. Streamline permitting and provide predictable rules so businesses can confidently invest billions of dollars over decades.

Lower the cost of investment, too. Tariffs on steel, aluminum, machinery, and other productive inputs raise the cost of pipelines, refineries, drilling equipment, storage facilities, and other infrastructure. If we want cheaper energy, government shouldn’t make the capital needed to produce it more expensive.

Transportation matters, but it isn’t the central problem. The administration’s temporary Jones Act relief⁠ shows why flexibility matters when supplies are tight. Fuel needs to move efficiently between American regions, not encounter artificial transportation barriers.

And pursue peace. When wars damage refineries, disrupt shipping routes, or remove barrelsfrom world markets, Americans eventually feel those disruptions at the pump.

Let Abundance Work

America exported about 2.4 million barrels per day of major transportation fuels in 2025, according to EIA’s analysis of U.S. transportation-fuel trade⁠, with distillates accounting for more than half. Yet distillate exports actually declined from 2024 and remained below 2019 levels.

Exports aren’t the enemy. Scarcity is.

The durable answer is to make producing, refining, transporting, and investing in American energy easier and more profitable.

More production. More refining. More infrastructure. Freer trade. Less government.

Don’t respond to high diesel prices with another government restriction. Remove the barriers to abundance and let people prosper.

Originally published at Kansas Policy Institute. 

Kansas went from leading the nation in economic growth to growing at less than half the national rate in just two quarters. That should get every Kansas policymaker’s attention.

Kansas real GDP surged 6.5 percent at an annual rate in the third quarter of 2025, the fastest growth in the country and well above the 4.4 percent U.S. rate. By the first quarter of 2026, however, Kansas real GDP growth had slowed to just 1.0 percent, compared with 2.1 percent nationally.

There’s good news in the latest Kansas economy. But these swings are a reminder that one great quarter, especially one heavily influenced by agriculture, isn’t the same thing as sustained economic growth. And sustained growth is what Kansas needs to compete for workers, families, businesses, and investment.

Kansas did outperform some neighbors in the first quarter. Colorado grew 1.4 percent, while real GDP declined 0.9 percent in Nebraska and 0.1 percent in Iowa.

Income is where Kansas really stood out. Kansas personal income increased an impressive 7.7 percent annualized in the first quarter, more than twice the 3.4 percent national rate. Kansas matched Iowa’s 7.7 percent growth, though Nebraska did even better at 8.8 percent.

That’s good news for Kansans. But we want those income gains accompanied by stronger production, productivity, and job creation so they can continue. And jobs are where I’d be most concerned.

The latest BLS numbers show Kansas had about 1.47 million nonfarm jobs in July, up just 0.4 percent from a year earlier. Construction was a bright spot at 5.0 percent growth, but the overall job market isn’t expanding quickly.

The unemployment rate was a solid 3.8 percent. But Kansas’ labor force declined from roughly 1.58 million in February to 1.56 million in July. So, yes, celebrate low unemployment. But Kansas needs more people working, starting businesses, and moving here.

That becomes even clearer when we look beyond our immediate neighbors. Kansas has roughly 3 million people, putting it in the same general class as Iowa, Arkansas, Mississippi, Nevada, and Utah. Some of those states have done a much better job attracting people and capital.

Kansas ranks only 30th in economic outlook in the latest Rich States, Poor States rankings. That’s not terrible, but Kansas shouldn’t settle for the middle of the pack.

So what should policymakers do?

I wouldn’t respond with more subsidies, targeted tax breaks, or other flawed government attempts to pick the next winning industry. Those policies favor some businesses at everyone else’s expense.

I’d start with spending.

The Responsible Kansas Budget shows state-funded spending increased from $7.2 billion in FY2005 to $22.3 billion in FY2026. Had spending followed population growth plus inflation, it would have been about $12.6 billion. That benchmark matters because population growth plus inflation roughly reflects growth in the average taxpayer’s ability to fund government. Government shouldn’t consistently grow faster than the people paying for it.

Reduce and restrain spending, then use surpluses to permanently lower income-tax rates toward zero. Reduce property taxes, regulatory, occupational-licensing, and housing barriers. Expand education freedom so children can develop the skills needed for tomorrow’s economy.

Kansas doesn’t need government to create prosperity. It needs government to provide the conditions for Kansans to create it.

Kansas has the workers, businesses, agriculture, manufacturing, energy, and communities to compete with anyone. Give Kansans more freedom to work, invest, build, and innovate, and let people prosper.

​Happy Labor Day! Today we recognize and honor the contributions of American workers. But it’s also worth remembering why work itself matters. Work helps us provide for ourselves and our families. But it’s about more than a paycheck. Work provides dignity, purpose, opportunity, and the satisfaction of creating something valuable.

Public policy can either make that work more rewarding or make it harder for Americans to get ahead. In today’s episode of This Week’s Economy, we’ll look beyond the headline unemployment rate to examine what workers are really experiencing, how Washington’s $40 trillion debt and Federal Reserve policy affect prosperity, and why debates over data centers, social media, and even the “common good” ultimately come back to a fundamental question: Are we giving people more freedom to prosper or are we putting government in their way? 

Originally published on Substack. 

​Louisiana has spent too many years watching people, jobs, and investment leave for faster-growing states. That is why the latest numbers matter.

The new Summer 2026 Louisiana Economic Report⁠ finds that real GDP grew at a 2.9% annualized rate from the fourth quarter of 2025 to the first quarter of 2026, sixth-best among the states. Personal income grew at a 6.3% annualized rate.

That is real progress.
​
Better Policy, Better Incentives

Louisiana’s recent improvement did not happen in a policy vacuum.

Over the last two years, lawmakers moved the state in a more competitive direction. They flattened the personal income tax to a lower single rate, eliminated the corporate franchise tax, reduced occupational licensing barriers, expanded education freedom through the LA GATOR program, and advanced regulatory and legal reforms.

Those policies matter because incentives matter.

Lower and flatter income taxes increase the reward for work, entrepreneurship, and investment. Eliminating the franchise tax reduces the penalty on business capital. Occupational licensing reform makes it easier for people to enter professions and earn a living. Education freedom gives families more control while improving the long-run potential of Louisiana’s workforce.

The latest growth does not prove that every reform caused every new job. Energy markets, national growth, investment projects, and other forces matter too.

But policy changes incentives, and incentives change behavior.

Louisiana spent years making it too easy for workers, businesses, and capital to choose somewhere else. These reforms begin reversing that equation.

Momentum Is Not Victory

The gains are encouraging, but Louisiana still has work to do.

The state ranked 44th in net interstate migration from 2018 to 2023, losing more than 110,000 residents and roughly $3.6 billion in income over that period, according to the Pelican report⁠. Louisiana also remains below its 2020 population base. But things have been improving recently!

That is why the next reforms matter so much.

First, lawmakers should enact a meaningful government growth limit. Spending restraint is what makes future tax relief sustainable. If government keeps growing faster than taxpayers’ ability to fund it, today’s tax cuts eventually become tomorrow’s tax hikes.

Second, fully fund LA GATOR. Families should have real education options, not promises that exist only on paper.
Third, Louisiana must protect its recent investment wins from overregulation, lawsuit abuse, and lawfare. Capital is mobile. Businesses that announce projects today can change course tomorrow if costs and uncertainty rise.

As Pelican Institute CEO Daniel Erspamer recently noted in The Advocate⁠, the comeback is promising but incomplete.

Bottom Line

Louisiana’s economy is showing what can happen when policy starts moving toward lower taxes, fewer barriers, more choice, and stronger competition.

Growth accelerated. Personal income rose. Payroll employment increased. Construction and manufacturing strengthened.

That is a great start.

Now Louisiana must make it sustainable: restrain spending, keep cutting taxes, fully fund school choice, reduce regulation and lawsuit abuse, and keep the state open to investment.

The goal is not one good quarter. The goal is a Louisiana where people want to stay, work, invest, raise families, and build businesses for decades. State competition is real. Louisiana is finally competing again. Now it needs to keep going.
​

Originally published at the Pelican Institute. 

Why this report matters
Louisiana’s comeback is real. Finishing it is the harder part.

The numbers in our Summer 2026 Louisiana Economic Report all point the same direction — and they point there for a reason.

Louisiana’s economy grew faster than the nation and faster than every neighboring state last quarter. Personal income growth led the region. Employers added roughly 16,700 jobs over the year. And for the second year running, more people call Louisiana home.

None of that happened by accident. It follows a run of deliberate policy choices: education freedom through LA GATOR, tax reform that flattened the income tax brackets and ended the corporate franchise tax, One Door to Work, changes to occupational licensing, the REINS Act, and legal reforms aimed at the nation’s highest auto insurance rates.

But the same report shows the work that remains. Louisiana still ranks 44th in net interstate migration, having lost more than 110,000 residents and $3.6 billion in income between 2018 and 2023. The state remains about 39,700 residents below its 2020 base. Unemployment sits just above the national rate.

Writing in The Advocate, Pelican Institute CEO Daniel Erspamer argued that too many reforms stopped short of their promise: LA GATOR funding stalled despite tens of thousands of families qualifying, no permanent path to phasing out the income tax, no limit on government growth, and a legal climate that still deters investment.

Momentum is not permanence. The data below shows what reform has already delivered — and where Louisiana still has ground to make up.

You can't sustainably cut taxes while government keeps spending more.

Dr. Adam Michel joins me to explain why Washington's fiscal problem begins with spending, how tariffs can undermine tax cuts, and what Congress should do to build a simpler, flatter, more pro-growth fiscal system.

We also discuss debt, investment, reconciliation, welfare reform, and why lower taxes work best when paired with limited government and open markets.

Get show notes at vanceginn.substack.com.
​
#TaxCuts #FiscalPolicy #Economics #EconomicFreedom

The political left and right increasingly agree on one dangerous idea: Washington should direct more of the economy.
​
Industrial policy, tariffs, subsidies, and economic nationalism are being sold as ways to rebuild manufacturing, strengthen families, and make America more prosperous. But replacing market decisions with political direction does not create prosperity. It concentrates power, protects favored industries, and forces families and businesses to pay the bill.

That is the focus of my conversation with ⁠Dr. Paul Mueller⁠, Senior Research Fellow and Director of Defending Freedom and Combatting Collectivism at the American Institute for Economic Research. Paul studies entrepreneurship, economic growth, monetary economics, and political economy. He also hosts AIER’s ⁠The Economist Next Door⁠, which brings economic ideas to everyday Americans.

We discuss his AIER paper examining the New Right’s growing embrace of industrial policy, protectionism, and government-directed investment.

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​Economics is often reduced to numbers and policy debates. But its deeper question is simple: How can people peacefully cooperate to improve their lives?

That is the focus of my latest conversation with Abigail R. Hall, professor of economics at the University of Tampa, Senior Fellow with the Independent Institute, and Senior Affiliated Scholar with the Mercatus Center.

Abby joined me to discuss her new book with , Austrian Economics: An Introduction. The book explains how human action, subjective value, prices, entrepreneurship, and dispersed knowledge allow people to cooperate without central direction.



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