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Sunday, October 23, 2011

Better Red Than Dead: By The Numbers

By Susan Duclos

I so stole the headline from the first paragraph in a Forbes piece I read written by Merrill Matthews titled "The Red State in Your Future," where he delves into data that shows how Red states on the whole are doing far better than Blue states economically.

One reason for that shift is that red states are taking fiscal responsibility while many blue states aren’t—and it shows. The American Legislative Exchange Council (ALEC), a bipartisan association of conservative state legislators, recently released its fourth edition of “Rich States, Poor States,” by the well-known Reagan economist Arthur B. Laffer, the Wall Street Journal’s Steve Moore, and Jonathan Williams of ALEC.

The study looks at factors that affect state prosperity and economic outlook, such as tax burdens and population change. What’s clear is that red or red-leaning states dominate the top positions while blue states have the dubious distinction of dragging in last. In the economic outlook section, for example, the top 20 states are bright red or lean red, while eight out of the bottom 10 are very blue: New York, Vermont, California, Hawaii, New Jersey, Illinois, Oregon and Rhode Island.

Most of the “poor states” states, as ALEC calls them, have the highest personal income tax rates and the largest unfunded state pension liabilities. But instead of taking the red-state approach by lowering taxes and/or cutting spending, the blue states tend to want to raise taxes even higher, just like their White House mentor.

Red states are not only doing better economically than Blue states but the policies enacted in Red states are also providing conditions which make them superior, by the numbers, to Blue states in relation to job growth.

This is a point I made back in late May with a two part piece I wrote called "Red States Add More Jobs Than Blue States." The breakdown over the last decade showed that Red states had a totaled 451,600 private-sector job increase from April 2001 to April 2011, Blue states had a totaled 2,041,300 private-sector job decrease from April 2001 to April 2011 and Purple states (swing) had a totaled 597,900 private-sector job decrease from April 2001 to April 2011.

Part one is here and part 2 is here.

From part one:

Apply state-by-state politics to the national argument that has been raging over the the federal deficit, government spending, spending cuts and job creation, where both sides of the political spectrum have their own opinion, for lack of a better word, on what needs to be done to address each issue, especially job creation.

It comes down to what set of ideas work and while everyone has their own opinion, if we go by the actual numbers, only one set of ideas seems to consistently provide the desired results in regards to private sector job creation.

Matthews@Forbes quotes a The Daily Beast article, highlighting figures which show the five biggest losers in terms of ‘residents lost to other states’ were California (Blue), New York (Blue), Illinois (Blue), Michigan (Blue), and New Jersey (Blue) and those that gained the in the "relocation sweepstakes, as he calls it, were Florida (Purple), Texas (Red) , North Carolina (Red), Arizona (Red), and Georgia (Red).

Democrats believe that the government must borrow more funds to "spend" more money to stimulate the economy and that taxes should be raised on the people who are already taxed more than any other income group to provide revenue.

Republicans believe that we need to cut government spending to live within our means, ease regulations on businesses so they can grow and provide a permanent tax level so small businesses will have stability and security so they will expand and hire.

States taking up the mantle of fiscal responsibility instead of "tax and spend" are showing impressive results.

Political parties, Republican and Democrat, and their supporters, can argue until the cows come home, on what policies work to create jobs and kick start the stalled economy, but numbers don't lie.