Nostalgia for 2005

Stop the presses! Federalism works. Lower taxes increase prosperity -- as does reduced regulation.

In an article in American Magazine called The Path to Prosperity, (Do they have to pay Larry Kudlow to say that?) Amela Karabegovic and Alan W. Dowd summarize a report to which each contributed.

Common sense tells us that low taxes, limited government, and flexible labor markets will help to spur economic growth. The Fraser Institute’s 2008 Economic Freedom of North America (EFNA) report offers a striking, yet unsurprising, picture of the benefits that flow from such policies.

In 2005, the most recent year for which data are available, Colorado, Georgia, Delaware, North Carolina, New Hampshire, Tennessee, and Texas—states with consistently strong records of promoting economic freedom—had an average per capita GDP that was more than $4,300 above the U.S. average. Their total growth from 1981 to 2005 was nearly 20 percentage points higher than the U.S. average.

The report attempts to rank the 50 states and 10 provinces in freedom and economic activity as Fraser Institute’s Economic Freedom of the World index has done for countries.

What struck me as a resident of a highly ranked state was fear that the most recent data came from 2005. Colorado elected a Democratic Senate and reelected a Democratic house in 2004. Democrat Bill Ritter was elected governor in 2006 to replace Republican Bill Owens. Owens was dedicated to freedom and low taxes.

The new regime will not be so friendly to the taxpayer or employer. No doubt the state will fall in the growth rankings as well.

Colorado Posted by jk at August 7, 2008 1:16 PM