 Originally published on Texans for Fiscal Responsibility. Texas continues to outperform most of the nation in job creation and output, but signs of cooling are appearing beneath the surface. The latest data from the Texas Workforce Commission, Bureau of Labor Statistics, and Bureau of Economic Analysis show that while Texas’ economy remains strong, inflation and excessive spending threaten its momentum. Employment and Unemployment Texas added 17,600 jobs in August 2025, marking continued but slower growth after several months of cooling. The state’s unemployment rate increased to 4.1%, remaining below the national average of 4.3%. Over the past year, Texas employers have added 195,600 jobs, bringing total nonfarm employment to 14.35 million—a 1.4% annual growth rate, compared with just 0.9% nationwide. The labor force grew by 169,500 people to 15.86 million during the same period, reflecting ongoing population inflows as families and businesses continue to relocate to the Lone Star State. Texas continues to outperform other large states, with nonfarm job growth stronger than California’s at 0.4%, New York’s at 1.3%, and Florida’s at 1.0%. Private-sector job creation in Texas is slowing, with a 1.3% increase, while government employment has seen a 1.7% increase—a concerning trend for a state built on entrepreneurship and free markets.  GDP and Output According to the latest BEA report, Texas’ real GDP grew 6.8% at an annualized rate in the second quarter of 2025, above the national average of 3.8%. The state continues to outperform peers thanks to strength in construction, professional services, and energy, offsetting slower performance in manufacturing and trade.  Among other large and nearby states, Florida (3.3%), Oklahoma (3.6%), and Louisiana (4.0%) trail just behind, underscoring that Texas remains a leader but cannot take that position for granted.
What Texas Gets Right Texas’ strengths are well known:
These fundamentals have made Texas an economic powerhouse—but they must be defended. Where Texas Falls Short Texas also has weaknesses that can’t be ignored:
These trends represent a creeping expansion of government—precisely the opposite of what drives lasting prosperity. The Path Forward
Conclusion Texas remains one of America’s economic engines, but growth is slowing and inflation is eroding families’ paychecks. The solution isn’t more government—it’s fiscal restraint, lower property taxes, and a renewed commitment to letting people prosper. Texas has every advantage in the world. To keep it, lawmakers must remember what made this state thrive in the first place: limited government, competitive markets, and freedom for workers, entrepreneurs, and families.
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 Originally posted at Pelican Institute. The latest economic data for Louisiana paint a troubling picture of slow job growth, lagging income gains, and continued out-migration. While the state saw a modest population increase in 2024 after years of decline, thousands of residents still left for better opportunities elsewhere. Louisiana continues to struggle with weak economic performance compared to neighboring states, reinforcing the urgent need for pro-growth reforms that create jobs, attract investment, and make the state a more competitive place to live and work. Job Growth Lags Behind Neighboring States Louisiana’s nonfarm employment grew by 9,400 in the fourth quarter of 2024, bringing total employment to 1.97 million. This represents an average of 3,133 new jobs per month, which is positive but still well below the pace of growth in the region. Compared to the previous year, Louisiana had the slowest job growth rate in the third quarter of 2024 among neighboring states, increasing by just 0.9%. For comparison, states likeAlabama (1.9%),Arkansas (1.8%),Mississippi (1.3%), andTexas (2.0%) all outpaced Louisiana in job creation. Florida added 218,700 jobs (1.5%) over the same period, while Texas saw 293,100 new jobs (2.0%). Louisiana’s sluggish job growth means fewer opportunities for residents and less economic dynamism. Economic Growth Among the Weakest in the Nation Louisiana’s real GDP grew by 2.3% in the third quarter of 2024, bringing the total economic output to $257.2 billion. Unfortunately, this ranked 38th among U.S. states and was the worst growth rate in the region. By contrast, states likeAlabama (6.0%),Arkansas (6.9%), andTexas (4.2%) experienced much stronger economic growth. The national economy also grew faster, meaning Louisiana is falling behind in its ability to expand businesses, attract capital, and create high-paying jobs. Personal Income Growth Remains Weak Personal income growth is key to economic prosperity, yet Louisiana ranks near the bottom nationally. In the third quarter of 2024, personal income in the state grew by just 2.3%, placing Louisiana 40th in the country and well below the U.S. average of 3.2%. Once again, Louisiana trailed neighboring states, withAlabama (5.0%),Arkansas (5.4%),Mississippi (4.8%), andTexas (4.0%) all experiencing higher income growth. Slower income growth means Louisiana residents have less spending power and fewer financial opportunities than workers in faster-growing states. Out-Migration Continues to Drain People and Wealth Louisiana’s population grew slightly in 2024, adding 9,669 residents to 4.6 million. However, this increase masks a troubling trend: thousands of Louisianans continue to leave for better opportunities elsewhere. The state experienced a net loss of 29,692 residents (-0.38%) due to domestic out-migration, ranking 7th worst in the nation. This trend of out-migration has serious long-term consequences, reducing the state’s workforce and eroding the tax base. Even more concerning is the financial toll of this exodus. In 2022, Louisiana lost $882 million in adjusted gross income due to residents moving to states withlower taxes and better job opportunities. Over the last few years (2019–2022), this income loss has totaled $2.3 billion, making Louisiana one of the biggest losers of wealth in the country. The Case for Pro-Growth Reform The latest data show that Louisiana is falling behind. Without major reforms, the state will continue to struggle with stagnant job growth, low incomes, and ongoing outmigration. Policymakers must take decisive action to reverse these negative trends and make Louisiana more competitive and business-friendly. Here’s what pro-growth reforms should include: Tax relief: Reduce the tax burden on individuals and businesses to attract new investment and retain workers. Regulatory reform: Cut excessive red tape that stifles job creation and entrepreneurship. Workforce development: Improve education and job training programs to equip residents with in-demand skills. Economic freedom: Reduce government spending and bureaucracy to create a more dynamic, opportunity-driven economy. By removing barriers to growth, Louisiana can boost job creation, raise incomes, and retain its population rather than losing residents to more prosperous states. The time for action is now—Louisiana cannot afford to keep falling behind. Read our Winter 2025 Quarterly Economic Report here.  Originally posted at Texans for Fiscal Responsibility.
Texas continues to lead as an economic powerhouse in the United States, but challenges persist. With the 2025 legislative session around the corner, it’s imperative that lawmakers address rising government spending, high property taxes, and regulatory barriers to ensure sustainable growth. The following analysis highlights where Texas stands today and what must be done to keep the Lone Star State competitive. The State of the Texas Economy Texas stands as a national leader in economic performance, with its real gross domestic product (GDP) growing by 4.2% in Q3 2024, ranking 9th nationally. This robust growth outpaced the national average of 3.1% and underscores the state’s resilience and business-friendly policies. However, with Florida growing at 3.3% (21st) and California at 3.1% (23rd), Texas leads but can’t sit on its laurels. Personal income growth in Texas remains strong, increasing by 4.0% in Q3 2024. This outpaces Florida’s 3.3% and California’s 3.1%, further highlighting the state’s economic strength. In the labor market, Texas added 274,300 jobs year-over-year through November 2024, achieving an annual job growth rate of 2.0%, which outpaced the national rate of 1.4%. The civilian labor force reached a record 15.5 million, with a participation rate of 64.7%, the highest in a decade. Despite these gains, the state’s unemployment rate rose slightly to 4.2%, ranking 33rd nationally, behind Florida’s 3.4% (19th) but ahead of California’s 5.4% (49th). Challenges Facing Texas in 2025 Despite its strengths, Texas faces critical challenges that could hinder its long-term prosperity. The state’s budget increased by a record 32% last session. This unsustainable trajectory risks undermining the fiscal stability that has attracted businesses and residents to Texas. Without immediate reform, this spending growth could necessitate higher taxes or reduce the state’s competitiveness. Property taxes in Texas are among the highest in the nation, driven largely by the school district maintenance and operations (M&O) tax, which directly impacts homeowners and businesses. This tax discourages homeownership and investment, underscoring the need for substantial reform to provide relief and support economic growth. Texas also lags in regulatory efficiency. Overly burdensome occupational licensing requirements and delays in permitting processes stifle entrepreneurship and innovation. In contrast, Florida’s streamlined regulatory framework has created a more dynamic business environment. The state’s business franchise tax, or margins tax, continues to act as a barrier to small business growth and investment. Eliminating this tax would provide immediate economic benefits and enhance Texas’ reputation as a pro-business state. Recommendations for the 2025 Legislative Session To sustain its economic leadership position, Texas must enact bold reforms during the upcoming legislative session. Chief among these is spending less with a maximum of a zero-growth budget, which freezes spending. In addition to spending restraint, Texas must address its property tax burden by using surplus revenues above less spending to phase out the school district M&O tax. This reform would relieve homeowners and businesses of one of the state’s largest economic barriers and encourage further investment. But this should be combined with paths to eliminating all property taxes in Texas so Texans can finally own their home. Abolishing the franchise tax should also be a priority. Eliminating this tax would attract more businesses and entrepreneurs, fueling job creation and long-term growth. Streamlining regulatory processes is another essential step. Simplifying occupational licensing requirements and recognizing out-of-state licenses will lower costs for workers and businesses alike. Improving permitting efficiency will encourage faster investments in key industries. Finally, lawmakers must expand education freedom by implementing universal education savings accounts (ESAs). This policy would empower parents, improve educational outcomes, and reduce inefficiencies in the school funding system. Conclusion With a strong economy and a growing workforce, the state has the tools to lead the nation. However, bold action is needed to address runaway spending, high taxes, and regulatory burdens. By adopting a zero-growth budget, eliminating burdensome taxes, and expanding economic freedoms, Texas can secure its position as the top destination for businesses and families alike. The 2025 legislative session offers an opportunity for transformative reforms. The path forward is clear: spend less, tax less, regulate less, and let people prosper. With the right policies, Texas can continue to shine as a beacon of opportunity and growth for generations to come.  Similar version originally published at Texans for Fiscal Responsibility.
As Texas faces rising property taxes and record-high government spending, it’s time to reassess the path toward long-term prosperity. Recent data illustrates Texas’ strengths and challenges. In August 2024, Texas maintained a 4.1% unemployment rate, while the state’s GDP grew by 3.5% in Q2 2024, outpacing national averages. However, the last legislative session resulted in unprecedented government spending increases, threatening Texas’ fiscal stability. The solution is clear: spending cuts, lower taxes, and imposing the strongest possible spending limits on state and local governments. This can be done by ending excessive spending of at least $30 billion, which is a 15% cut in state funds. Corporate Welfare: A Drain on Taxpayers of $10 billion New constitutionally-dedicated funds like the $5 billion to Texas Energy Loan Fund, $1 billion to Texas Water Fund, and $1.5 billion to Texas Broadband Infrastructure Fund create even more opportunities for contractors and financial firms to benefit at the taxpayer’s expense. Expanding these programs is already being discussed, adding to concerns about unchecked government spending. Not spending these funds and instead redirecting them toward broad-based tax relief would benefit all Texans, not just a select few private entities. Other corporate welfare programs like the Texas Enterprise Fund (TEF) and Chapter 403, the newly revamped property tax abatement program that replaced the expired Chapter 313, continue to burden taxpayers. Overfunding the Government School System by $17 billion Annually Texas is overfunding its monopoly government school system, spending billions of dollars annually on a system that lacks competition and efficiency. A transition to universal Education Savings Accounts (ESAs) would inject competition into the education sector, allowing parents to choose the best educational options for their children. Moving to universal ESAs could save the state an estimated $17 billion per year by allowing the state to spend $12,000 per 6.3 million school-age kids instead of $16,792 per 5.5 million enrolled at government schools. These savings could be used to eliminate school property taxes, providing meaningful relief for homeowners and fostering a more dynamic, competitive education system. Medicaid Reform: Lowering Costs with HSAs for Savings of At Least $3 billion Annually Healthcare spending, especially through Medicaid, is another area where Texas can find significant savings. Shifting Medicaid recipients to work requirements and Health Savings Accounts (HSAs) would encourage more cost-effective healthcare decisions, saving the state at least $3 billion annually. These savings could then be applied toward property tax relief, allowing Texans to benefit from lower overall taxes while promoting personal responsibility in healthcare. Achieving Property Tax Elimination Through Fiscal Discipline By combining savings from eliminating corporate welfare, passing school choice, and reforming Medicaid, Texas could save at least $30 billion per year. These funds could eliminate most, if not all, school district M&O property taxes, providing substantial relief for homeowners. It is also critical to enact the strongest possible constitutional spending limit, tying state and local government spending growth to a maximum of population growth plus inflation. But with record spending increases in the most recent legislative session, including the creation of the Texas Water Fund and Texas Broadband Fund, it’s crucial to cut government spending, pass Frozen Texas Budgets, and provide fiscal responsibility. Securing Texas’ Economic Future Texas is at a crossroads. While the state’s economy remains relatively strong, with low unemployment and impressive GDP growth, the rapid rise in government spending, corporate welfare, and property taxes pose significant risks to its long-term success. Texas can secure a prosperous future by embracing a strategy of lower taxes, spending restraint, and market-driven reforms. Eliminating corporate welfare, expanding school choice, and adopting Medicaid reform will unleash the opportunity to eliminate school district M&O property taxes, allowing Texans to keep more of their income and ensuring that the state remains a beacon of economic freedom.  Originally published at Texans for Fiscal Responsibility.
Big Government Is Holding America Back America’s federal debt has now skyrocketed past $35 trillion—an increase of $2.3 trillion in just the last fiscal year. Inflation persists, with core prices rising 3.3% over the past year. Meanwhile, government jobs are growing faster than private sector employment, which is draining the economy. The warning signs are everywhere: big government stifles growth, and the solution is less intervention, not more. Debt, Deficit, and Sluggish Growth: The Hidden Costs of Overspending The U.S. is on an unsustainable fiscal path. A $2.3 trillion deficit and a debt-to-GDP ratio of about 125% are squeezing private investment essential for real, long-term economic growth. Instead, Keynesian-style interventions aimed at boosting demand through government spending have ballooned the national debt and undermined productivity. Historically, government spending programs have delivered questionable short-term benefits but have left long-term economic consequences. The more the government grows, the more it crowds out the private sector’s ability to innovate and create high-quality jobs. This economic distortion is only deepening as Washington pours more money into inefficient programs while ignoring the importance of fiscal responsibility. Inflation: The Persistent Threat to Household Budgets September’s Consumer Price Index (CPI) showed a 2.4% overall increase, with core inflation excluding food and energy at 3.3%. While inflation has cooled from its 2022 peak, these numbers are still too high. American households feel the squeeze as the cost of essentials like shelter and services continues to rise, undermining real wage growth. Average weekly earnings adjusted for inflation have been down 3.4% since Biden-Harris took office in January 2021. It is no wonder that nearly 60% of Americans believe we are in a recession. The Federal Reserve’s monetary excess continues to cause inflation. Between 2020 and 2021, the money supply expanded by over 40%, sparking inflation. The federal government’s continued spending spree makes it difficult for the Fed to drain its bloated $7 trillion balance sheet, so inflation will be around much longer than otherwise. This is because the Fed chooses to not let interest rates rise to fund the increased national debt, so it prints more money and disrupts economic activity, contributing to the fragile economy we have today. Labor Market Distortion: Government Outpacing the Private Sector On the surface, the U.S. labor market appears strong. The economy added 254,000 jobs in September, with private-sector employment increasing by 223,000. However, government jobs grew by 31,000, continuing a troubling trend that has persisted since April 2023. Government employment has been rising faster than private-sector jobs, shifting the labor market toward less productive sectors. This growth of government payrolls is not just unsustainable—it’s a drag on economic dynamism. Private sector jobs are the engine of innovation and prosperity, but when the government grows at the expense of the private sector, it hampers job quality and wage growth. Real average hourly earnings remain below pre-pandemic levels, leaving workers with less purchasing power despite more jobs. Expanding government employment also means higher costs for taxpayers and more resources diverted from productive economic activity. Texas: A Model of Free-Market Success Texas exemplifies how free-market policies can lead to robust economic growth. The state’s low taxes, minimal regulation, and pro-business environment have consistently helped it outperform national job creation and economic growth averages. However, even Texas is not immune to the negative impacts of federal policy and its big-government, Keynesian creep. The crowding-out effect of federal debt growth and regulatory burdens imposed by Washington are raising costs for businesses and consumers alike. To maintain its competitive edge, Texas must continue pushing for property tax elimination and spending limits at the state and local levels with a maximum of population growth plus inflation, but with excessive spending in recent years, there’s more evidence to at least freeze these budgets if not cut them by 10% or more. Phasing out school district M&O property taxes by state surpluses is essential for sustainable fiscal management and long-term growth. By keeping the government in check, Texas can remain a national leader in economic freedom. Free-Market Capitalism: The Path Forward The solution to America’s economic woes is clear: embrace free-market capitalism and reduce the size of government. Policymakers should focus on:
Milton Friedman once said, “The only way that has ever been discovered to have a lot of people cooperate voluntarily is through the free market.” This wisdom remains true today. America’s best chance for renewed prosperity is shifting from big-government Keynesianism toward free-market capitalism with strict fiscal and monetary rules and massive deregulation. Originally published at Texans for Fiscal Responsibility.
Texas at the Crossroads: Sustaining Leadership Amid New Challenges Texas has long been at the forefront of job creation in the U.S., consistently outpacing other states, particularly since the COVID lockdowns. However, recent data from the Bureau of Labor Statistics (BLS) signal that even Texas, a state known for its economic resilience, is not immune to broader economic challenges. In June and July 2024, Texas experienced back-to-back job losses, with a decrease of 9,100 jobs in June before Hurricane Beryl and another 14,500 in July in the month it hit, raising the unemployment rate to 4.1%. These figures reflect a critical moment for Texas, where reaffirming its commitment to pro-growth policies is essential. Texas vs. Other Major States: A Comparative Analysis Despite these setbacks, red-state Texas remains a powerhouse but faces stiff competition from other states, particularly the other large red-state Florida, where 21,800 jobs were added in July, demonstrating the strength of its pro-growth policies. While the blue states of California and New York often struggle with robust job creation under high taxes and burdensome regulations, they gained 21,100 and 41,400 jobs, respectively, in July. Florida boasts a year-over-year job growth rate of 2.4% compared with Texas’ 1.9% and blue states of California’s 1.6% and New York’s 2.0%. Texas and Florida have led the nation in job creation since the COVID lockdowns, a testament to the power of low taxes, limited government, and a business-friendly environment. However, Texas’ recent job losses, particularly in the private sector, indicate that it cannot afford to be complacent. The state must double down on the principles that made it successful and push forward with bold reforms to maintain its edge. The Path Forward: Policy Recommendations Cut Government Spending: The Texas Legislature’s recent 32% increase in appropriations of state funds, the largest in the state’s history, is unsustainable. Texas must prioritize cutting government spending in the next session, targeting wasteful programs and agencies. Implementing universal school choice through education savings accounts could replace the existing school finance formulas, reducing the burden on taxpayers while empowering parents and improving educational outcomes. Revamp the Tax System: The growing dissatisfaction with property taxes in Texas signals the need for a significant overhaul. Transitioning to a more efficient tax system by capping government spending and using surpluses to phase out property taxes by state and local governments over the next decade is a bold but necessary step. This shift would relieve taxpayers and bolster economic growth by removing one of the most significant barriers to investment and homeownership. Reinforce Limited Government: Texas must recommit to the principles of limited government. Reducing regulatory burdens and tightening state and local government spending are crucial. Strengthening constitutional and statutory spending limits, aligned with the taxpayers’ ability to pay, will ensure fiscal responsibility and long-term economic stability. Maintaining Leadership in a Competitive Landscape Texas has been a beacon of economic freedom, fostering an environment where businesses and individuals can thrive. However, the state must innovate and adapt to remain at the forefront of job creation and economic growth. By strengthening its pro-growth policies, cutting unnecessary government spending, and revamping its tax system, Texas can maintain and enhance its position as an economic powerhouse. As other states accelerate their economic reforms, Texas must lead by example. The comparison with states like Florida underscores the importance of aggressive, pro-growth strategies. While states like California and New York continue to falter under progressive policies, Texas has the opportunity—and the responsibility—to champion policies that ensure prosperity and freedom for its citizens. The path is clear: Texas must reject progressive fiscal policies and instead embrace reforms that promote growth, safeguard economic freedom, and provide a bulwark against the economic challenges of our times.  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. 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. |
Vance Ginn, Ph.D.
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