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  • Economic Freedom: Key to the 50 States’ Economic Recovery

    Economic freedom, enhanced by limited government, is critical to economic dynamism and job creation, as documented in the Index of Economic Freedom, an annual cross-country policy analysis by The Heritage Foundation. The individual economies of our 50 states are no exception to that. The strongly positive linkage between economic freedom and economic dynamism holds true for states as well as nations.

    High-stakes policy battles are going on in all 50 states about whether to move toward more limited government and greater economic freedom. According to a 2011 state-level study by the Federal Reserve Bank of St. Louis, “Economic Freedom and Employment Growth in the U.S. States,” states with greater economic freedom—defined as the protection of private property and private markets operating with minimal government interference—experienced higher rates of job growth. More specifically, the study notes that critical determinants of employment growth across all 50 states are “labor market freedom and a smaller state government.”

    As also shown in a study published in Public Choice, states with larger public sectors tend to have lower economic growth rates due to the negative impact of government spending on growth, which is “considerably larger at the margin.” A quick analysis of more recent years’ economic data of the 50 states also supports such findings. On average, states that spent a higher portion of their citizens’ income on various government programs over the last decade had lower economic growth rates.

    Not convinced? Need a real time example? Take a look at Texas. The Lone Star State has created more than 30 percent of all net U.S. jobs since mid-2009. As The Wall Street Journal points out:

    Texas stands out for its free market and business-friendly climate. Capital—both human and investment—is highly mobile, and it migrates all the time to the places where the opportunities are larger and the burdens are lower. Texas has no state income tax. Its regulatory conditions are contained and flexible. It is fiscally responsible and government is small. Its right-to-work law doesn’t impose unions on businesses or employees. It is open to global trade and competition: Houston, San Antonio and El Paso are entrepôts for commerce, especially in the wake of the North American Free Trade Agreement.

    There is an easy lesson here. The question, though, is whether President Obama is a willing student.

    Posted in Economics [slideshow_deploy]

    5 Responses to Economic Freedom: Key to the 50 States’ Economic Recovery

    1. Dan, Detroit says:

      If you want to take a break from the Weiner story, I think you'll enjoy a piece called Mitt Romney Comes to Michigan and Liberals Have a Hissy Fit http://mittromneycentral.com/2011/06/09/mitt-romn… You won't believe some of the stuff in that article.

    2. Pingback: Economic Freedom: Key to the 50 States' Economic Recovery » Small Business Life

    3. Andy, UK says:

      Economic freedom? What a joke! Poverty, relative or otherwise, is a yoke and is the lot of the vast majority of the world's population; viz the working class. What this means is that we are unfree; we cannot do as we please – we are compelled to work at jobs that are onerous and boring, to compromise on everything, to scrimp, to lower our sights and expectations in regard to everything life can offer. To talk of 'freedom' as freedom from state intervention is just so much right wing claptrap. What you lot actually have in mind is allowing private capitalist the unfettered leeway to exploit the working class. Interestingly, when the working class exercises its 'market prerogatve' by withdrawing its labour (becuse the the price for the commodity it has to offer isn't right (geddit?), then we get the squeals of moral indignation. Where is talk of economic freedom then?. You also seem oblivious to the concept of state capitalism, where the state acts qua a capitalist entity in its own right. Want to know more? Check out http://andycox1953.webs.com/. All your tired hackneyed commentary can offer up is the delusional, utopian belief that capitalism can be made to operate as if in some idyllic village setting where each and everyone is a 'Free Man' and engages with all as an equal. What bollocks!

    4. Pingback: Must Know Headlines — ExposeTheMedia.com

    5. Gary TX says:

      Wow, Andy sounds like you need to move. Come on down to Texas, thats the ideal village yuo think is nonexistant. Its were capitalism is working and the government doesn't pick the winners and losers it just gets out of the way and lets us go to work everday and raise our families. Limited government is about being the referee and making sure the playing field is level so all have the opportunity to succeed or pursue happiness. Pursuing happiness and success doesn't mean you get it everytime you try, just that you are free to try. Of course if you are just another whiner who is afraid to compete so you have to pay someone to collective bargain for you then it might not be for you. You see you can collective bargain for your job but you are also going to compete with those who aren't afraid to negotiate for themselves. Personally I think you need both to keep the other honest (through competition). Checks and balances I think that's in our Constitution somewhere….

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