Key To Recovery: Attract New Businesses, Not More Federal Spending
Washington’s “fiscal cliff” has been the topic of much discussion. After more than a decade of out-of-control spending, politicians are finally coming to grips with the need to cut back.
The problem for us in the Land of Enchantment is that our economy has long relied on Washington as a source of income and investment. With the government running trillion dollar-plus annual deficits and having piled up an astonishing $16 trillion in debt, simple math, not ideology, makes cutbacks inevitable.
This could mean tough times ahead for New Mexico’s economy.
In fact, those tough times are already here. Already a poor state, New Mexico is one of only a handful of states to lose jobs over the past year and we lost those jobs at a rate (1.3%) exceeded only by coal-mining-reliant West Virginia.
According to data given at a recent presentation by the Federal Reserve in Albuquerque, New Mexico’s job losses have been driven by losses in federal spending within the state.
While the recently-completed congressional campaigns focused on keeping federal jobs in New Mexico, the better approach is for our state’s elected leaders to take the lead in making our state more business-friendly. This does not mean providing handouts to specific companies and industries, rather it means sensible taxes and regulations that attract entrepreneurs.
Opportunities abound for reform: New Mexico law allows “compulsory unionization.” This should be abolished with a “Right to Work” law. Corporate tax rates are uncompetitive within the region and our judicial climate is ranked poorly as well. Lastly, our education system is 49th in the nation in graduation rates and needs to be opened up for greater choice and competition.
New Mexico, like our nation, faces uncertain economic times ahead. We can at least partially secure our future prosperity by enacting sweeping and much-needed reforms.
Paul Gessing is the president of the Rio Grande Foundation.