 Originally published at the Pelican Institute. “Affordability” has become one of the most talked-about issues in politics—and for good reason. Families feel squeezed. Groceries cost more. Housing is harder to find. Insurance and interest rates take a bigger bite out of every paycheck. But affordability isn’t a slogan or a buzzword. It’s a basic economic outcome: can people buy what they need with what they earn? When incomes grow faster than prices, life gets easier. When prices grow faster than incomes, life gets harder. Over the past few years, prices have clearly won. But the story doesn’t end there—especially in Louisiana. How We Got Here The affordability problem didn’t appear out of thin air. It was largely the result of government-imposed lockdowns in 2020, followed by trillions of dollars in deficit spending and unprecedented money creation by the Federal Reserve. Those policies drove the highest inflation Americans have seen since the 1970s, visible in both CPI and PCE inflation. Inflation has cooled since its peak, which is good news. But prices never came back down. Instead, families are living with permanently higher costs for food, energy, housing, insurance, and borrowing. Meanwhile, real average weekly earnings—what paychecks are worth after inflation—have struggled to keep up, according to earnings data on the Fed FRED website, which show they just now returned to their level in January 2021.  That gap between income and prices is what people mean when they say life feels less affordable.
Why Louisiana Feels It—and Why Things Are Improving Louisiana didn’t cause national inflation, but state policy determines how well people can adapt to it. For years, Louisiana made that harder than it needed to be. Complex taxes, heavy regulation, slow permitting, and legal uncertainty all raised the cost of living and discouraged investment. The good news is that policy has started to move in a better direction over the past year. Efforts to simplify taxes, reduce red tape, improve the business climate, and focus on economic growth have begun to pay off. More private investment is coming in. Job growth has improved in key sectors. The direction is finally right. That progress matters. It shows that affordability is not fixed—and that better policy choices make a real difference. But progress doesn’t mean the job is done. Why Affordability Still Lags Even with improvements, affordability remains strained because supply hasn’t kept pace with higher prices. Housing is still too hard to build in many places. Energy and infrastructure projects face long delays. Insurance costs remain elevated. When supply can’t respond, prices stay high. Political “solutions” often make this worse. Subsidies may temporarily help some households, but they usually increase demand without increasing supply, pushing prices higher. Price controls create shortages. Targeted tax credits shift costs rather than reducing them. You can’t make things affordable by ignoring how they’re produced. The Path Forward for Louisiana The path to real affordability is not flashy, but it works. It’s the path the Pelican Institute has long emphasized: get government out of the way so people can respond to prices, invest, and compete. That means continuing to lower and simplify taxes, removing barriers to housing and infrastructure development, reducing legal and regulatory uncertainty, and expanding opportunities for work and investment. These reforms don’t promise overnight relief—but they compound over time, steadily lowering costs and raising incomes. The Big Picture Affordability isn’t something the government can declare or subsidize into existence. It emerges when people are free to build, work, invest, and innovate—and when policy stops standing in their way. Louisiana has made meaningful progress over the last year. That’s worth recognizing. But the affordability challenge didn’t develop overnight, and it won’t be solved overnight either. The encouraging part is this: we know what works. And if Louisiana keeps moving in the right direction, families will feel the difference where it matters most—at the kitchen table.
0 Comments
 Originally published at The Pelican Institute.
Federal spending is out of control. Washington is racking up debt faster than at any time outside a world war or national emergency, and the consequences aren’t theoretical. They’re hitting state and local governments hard, especially in Louisiana. The national debt just blew past $38 trillion. This year’s deficit alone will be about $2 trillion, fueled not by declining revenues (they’re up!) but by a refusal to curb spending. And that spending spree is already showing up in Louisiana’s economy. Louisiana’s Labor Market Shows a Slowing Recovery The latest job numbers from the Bureau of Labor Statistics reveal that Louisiana added just 19,100 nonfarm jobs over the past year, a 1.0% increase as of August 2025 (latest BLS data available). That might sound encouraging in isolation, but zoom out, and it becomes a red flag. Many neighboring states are growing faster. In a region where competitive tax structures and stronger labor markets are drawing people and capital, Louisiana risks getting left behind. A 1.0% job growth rate won’t be enough to reverse declining population trends, expand the tax base, or lift incomes. And here’s where it all ties back to Washington: Federal fiscal recklessness is magnifying Louisiana’s economic vulnerability. Runaway Federal Spending = Higher Costs, Lower Growth As the federal government borrows trillions of dollars to cover unsustainable spending, interest rates rise. That makes it more expensive for states and local governments to borrow for infrastructure, schools, and basic services. It drives up costs on mortgages, car loans, and business financing, squeezing Louisiana families and small businesses already facing affordability challenges. And federal uncertainty breeds local instability. When D.C. starts trimming transfers, grants, or matching funds to rein in deficits, states like Louisiana, which rely heavily on federal support, will feel the crunch first. Whether it’s Medicaid, disaster aid, or education funding, when federal budgets tighten, fragile state budgets get stretched. It’s a perfect storm: Washington overspends, interest rates climb, uncertainty spreads—and Louisiana’s already-sluggish growth stalls further. The Fire Is Spreading. Baton Rouge Can’t Just Watch. The implications for Louisiana’s state and local policymakers are clear: don’t wait for D.C. to collapse before acting.
Congress Must Hear from Louisiana’s Leaders Louisiana’s congressional delegation has an obligation to act before the fiscal cliff hits. The next budget deal, continuing resolution, or debt ceiling negotiation must include real spending cuts and growth limits—not just political posturing. That means rejecting gimmicks and demanding structural reform. Because the longer Congress delays, the greater the risk that Louisiana becomes collateral damage. Bottom Line: This Is a Warning The federal budget isn’t just some distant fight in Washington—it’s a ticking time bomb for states like Louisiana. The combination of slow job growth, rising costs, and economic uncertainty makes Louisiana especially exposed to the consequences of fiscal failure. The job numbers prove it: Louisiana isn’t growing fast enough to absorb the shock. Without immediate policy action—both at the state and federal level—the future looks bleak. The fire is burning. It’s time to break the glass and pull the brake before Louisiana gets scorched.  Originally published on Substack. The Tax Foundation’s recently released 2026 State Tax Competitiveness Index ranks Louisiana 31st in the nation, a middling position that reflects the state’s economic climate. While Louisiana has taken modest steps to simplify its tax code, government spending continues to grow faster than the economy—and that’s what keeps the state stuck in neutral. Across the country, the story is becoming clear. States that maintain a limited and predictable government are the ones that attract new residents, jobs, and businesses. Those that allow spending to balloon are watching people and investment leave.  The Real Problem: Spending, Not Just Taxes Louisiana’s tax structure looks competitive in some areas, but high and complex spending patterns undermine those gains. The state ranks 10th in corporate taxes and 15th in individual income taxes after its 2024 reforms. However, it ranks 50th—dead last—in sales-tax simplicity due to its fragmented local collection system. Property taxes are moderate at 22nd, but they continue to climb as local budgets expand. The real obstacle is not insufficient revenue; it’s a lack of fiscal restraint. When state spending grows faster than population growth plus inflation, taxpayers lose purchasing power, and the private economy—the engine of prosperity—shrinks. Every dollar the government spends must first be taken from someone who earned it. The longer this pattern persists, the more challenging it becomes for families and businesses to plan, invest, and thrive. Learning from Our Neighbor: What Mississippi Is Doing Right Louisiana’s neighbor, Mississippi, is taking a disciplined and forward-looking approach. Under the Build Up Mississippi Act, enacted in 2022, the state is phasing out its individual income tax through a series of scheduled rate reductions. The top rate will fall to 3 percent by 2030—a goal Louisiana has already achieved—but then further cuts will occur automatically if revenues and reserves meet defined benchmarks. Louisiana has no such automatic trigger or plan to achieve further reductions. In fact, earlier this year, state senators balked at a proposal to lower the rate to 2.75%. Analyses from the Mississippi Policy Center and ALEC indicate that Mississippi’s forward-looking plan fosters certainty for employers and workers who can anticipate the direction of policy.  That clarity matters. Expectations shape behavior. When people know tax burdens will decline, they invest more, relocate more confidently, and hire more aggressively. It’s not simply about the current rate; it’s about the direction of policy. Mississippi is communicating that its government intends to grow less so that its people can grow more.
What Louisiana Should Do Next If Louisiana wants to rise in competitiveness and attract long-term investment, it needs two straightforward reforms:
The Bigger Lesson Economic freedom is not just an accounting exercise—it’s a moral principle. Prosperity occurs when individuals, not bureaucracies, determine how to allocate their earnings. States that respect that truth, such as Mississippi, Texas, Florida, and Tennessee, are outperforming those that treat government as the primary driver of opportunity. Louisiana can join that group, but only if it confronts its spending habits and sends a credible signal that tax burdens will continue to fall. Fiscal restraint and predictable policy are the cornerstones of growth. The path to prosperity is simple: spend less, tax less, and trust people to make their own choices. That’s how Louisiana—and every state—can let people prosper.  Originally published at The Pelican Institute. For the first time, Louisiana has cracked the Top 10 States for Doing Business, coming in at #9 in Area Development’s 2025 rankings. Long dismissed as an economic underperformer, Louisiana now stands shoulder to shoulder with heavyweights like Georgia, Texas, and North Carolina. This leap signals progress, as site consultants and corporate decision-makers increasingly see Louisiana as a competitive place to invest. But reputation isn’t prosperity. To understand what this ranking really means, it’s worth comparing the criteria that drove it with the hard numbers on jobs and GDP growth. Why States Rank High The Area Development ranking is based on corporate site consultants’ assessments, weighing multiple factors:
Louisiana has improved in many of these areas. Faster permitting, competitive industrial energy rates, and major investments in port and liquified natural gas (LNG) export infrastructure have boosted its standing. But how do these perceptions compare to actual economic performance? The Numbers: Jobs and GDP Here’s how the top states for doing business are performing, using Bureau of Labor Statistics (BLS) job data and Bureau of Economic Analysis (BEA) GDP data through the second quarter of (Q2) 2025.  Sources:BLS,BEA,Area Development
Louisiana’s Position The data show Louisiana’s story is one of progress but not yet a breakout. Over the past year, the state added about 20,000 jobs, a 1% increase, modest compared to South Carolina’s blazing 3.1% or Texas’s nearly 200,000 job surge. On the other hand, Louisiana’s 4.0% real GDP growth in Q2 2025 was right at the national average and stronger than several of its peers in the top ten. A major driver of Louisiana’s ranking is its energy sector. Natural gas, refining, and petrochemicals make up about a quarter of the state’s economy. That scale gives Louisiana some of the lowest industrial electricity rates in the country, roughly 16% below the national average. For energy-intensive industries like manufacturing, petrochemicals, or even data centers, that cost edge is a powerful magnet. The Energy Advantage—and the Risk Louisiana’s infrastructure, from pipelines and refineries to LNG export terminals and deepwater ports, gives it a durable energy advantage. But it’s not a guarantee. As more firms expand or relocate, demand for power will rise, pushing costs up. Add in the growth of LNG exports, the arrival of data centers, and potential federal restrictions on fossil fuels, and the margin could narrow. The very strength that makes Louisiana attractive today could become a pressure point tomorrow if not met with energy abundance. Cautious Optimism Louisiana’s top-ten debut is a milestone worth celebrating. It signals growing confidence in the state’s ability to compete. But turning perception into prosperity requires more than rankings. The state must:
Louisiana has momentum, and its energy advantage is real. With the right reforms like those highlighted in the Pelican Institute’s Louisiana Comeback agenda, it can sustain that edge and translate a business-friendly reputation into durable growth. Without them, it risks being celebrated for potential while continuing to lag behind states like Texas, South Carolina, and North Carolina that are already converting reputation into results. For now, the message is clear: Louisiana is rising, but the work isn’t finished. |
Vance Ginn, Ph.D.
|
RSS Feed
Proudly powered by Weebly