
Lawmakers, more than ever, have at their disposalย plenty of comprehensible studies andย metrics to guide them in voting on or drafting legislation. Think tanks serve as a much-neededย link between researchers and politicians.
One of the most widely used economic reports in the United States for policymakers isย Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Indexย by the American Legislative Exchange Council. Already in its 11th edition, the document examines both each state’s economic policies and its performance. The consistent conclusion will come as no surprise to readers of this blog: less government expenditure in transfer programs and lower tax rates increaseย economic growth.
The index combines two rankings. On the one hand, the Economic Performance Ranking looks at the states’ gross domestic product,ย absolute domestic migration, andย non-farm payroll employment. On the other, the Economic Outlook Ranking examines 15 key policyย issues ranging fromย taxes to labor regulations.
Rich States,ย Poor States also offers a useful online tool to compare statesย and tweakย policies to achieve a better score. If one tries with lower tax rates and constraints, the stateโs placement on the ranking improves.
This report shows what makesย Utah soย economically successful and a repeat number-one position holder in the final indexโevident by its cumulative GDP growth of 48.3ย percent from 2006 to 2016. Utah has the second-lowest unemployment rate in the United States, andย WalletHub ranked it as the nation’s 11th-safest state. Moreover, citizens of Provo and Salt Lake Cityย stand out as among the wealthiest and most educatedย in the entire nation.
โThe facts remain clear that pro-growth policies are working and there is a clear trend in favor of market-oriented reforms,โ the report’s authors argue.ย Twenty-one states that have implemented such policiesย have experienced significant hikes during theย ranking’s decade of existence, while 29 statesย that keep enforcing burdensome regulations have fallen.ย
The worst record goes toย South Carolina, which has dropped 13 positions, and no other state has improved as much asย Ohio, which has climbed 26 positions.
Rich States, Poor Statesย continues to provideย solid evidence thatย getting the government out of the economy is the best way to promote growth. As Utah’s Senate President Wayne Niederhauser puts it: โThere is no question that states like Utah are reaping the benefits of sound fiscal policy. It is clear that limited regulation, low taxes, low debt, and balanced budgets create the best environment for business, investment, and jobs.”
Lawmakers only have themselves to blame if they don’t heed the advice.
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