January 2, 2026 • 33 mins
In this episode of Main Street Matters, Elaine Parker and Jonathan Williams discuss the latest Rich States, Poor States report, highlighting the economic successes of states like Utah and the challenges faced by states at the bottom of the rankings. They delve into the importance of fiscal responsibility, the need for pension reform, and the impact of government spending on state economies. The conversation emphasizes the necessity for states to compete for businesses and jobs while addressing the criticisms of their rankings and the broader implications of federal spending policies.
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Speaker 1 (00:07):
America is home to thirty three million small businesses, the
beating heart of communities across the country, and prove that
the American dream is still alive.
Speaker 2 (00:20):
This is a show about those dreamers and doers and
the communities they serve.
Speaker 1 (00:26):
Their real life stories, their striddles and successes, their grit,
determination and passion, and the people who fight to keep
their American dream alive. I'm alfreda Ortiz, i'm e Lane Parker,
and it's time for another episode of main Street Matters,
America's Small Business Megaphone.
Speaker 2 (00:44):
Hi everyone, and welcome to another episode of main Street Matters,
America's Small Business Megaphone. I'm e Lane Parker, the president
of the Job Creater's Network Foundation, and today we're joined
by Jonathan Williams. Jonathan is the president and chief Economists
at ALEC, which stands for the American Legislative Exchange Council,
and you can follow him on x at Tax Economists. Jonathan,
(01:08):
Welcome back to Main Street Matters.
Speaker 3 (01:11):
Well, thank you Elaine for having me back on the show.
It's always good to be with you and talking about
some of the big policy issues of the day.
Speaker 4 (01:17):
Yeah, there's really no shortage of things to talk about
is there.
Speaker 3 (01:21):
No, it's been in DC or in the States. I mean,
the States go at warp speed every single year, which
we all know, and that's why we love leading on
some of the state issues at ALEC and working with
you all at Job Creators Network. But the federal government,
we thought we knew what Operation warp Speed was, and
then the second Trump administration here has proven us wrong
(01:42):
that we didn't know how fast SAMs could move. And
whether it's Doge or so many of the efforts that
the Trump administration is leading right now, is just so
many things happening here in Washington as well. So it's
nice to see Washington finally meet the pace of what's
gone on in the States for decades.
Speaker 2 (01:57):
Yes, moving at the speed of business finally, right.
Speaker 5 (02:00):
That's right, almost, Yes.
Speaker 2 (02:04):
Well, I want to start out talking to you about
your new report that just came out. This is your
eighteenth year of Rich States, Poor States ranking.
Speaker 1 (02:14):
Tell us about that.
Speaker 2 (02:15):
You just released it on text Day, which is very
fitting of course.
Speaker 3 (02:19):
Yes, it was out in Salt Lake City where we
released the eighteenth edition of Rich States, Poor States with
Governor Cox and Senate President Stuart Adams and.
Speaker 5 (02:29):
Speaker Schultz and Utah. The reason we were there. You're
number one for eighteen years in a row.
Speaker 3 (02:36):
We get to host a release and it's an incredible
opportunity to be out there with those legislative leaders and
share the alec ideas that have helped make Utah the
fastest growing state in America, not just by our metrics,
but when you look at all the other metrics state
GDP or income growth by state or even population growth,
(02:58):
Utah has number one and all those categories over the
last decade. And so we think there's a lot of
connection there when you get it right on free market,
pro business, common sense. Really, at the end of the day,
public policy like Utah has, the results are coming right
after right. I mean, we see that and that's been
to the great benefit of Utah's across the board. And
(03:18):
so we are so happy to be out there with
those legislative leaders to really showcase the Utah success story
and hope that not just the rest of the states
but Washington, d C. Can learn a little bit from
what's been going right so many years now in Utah.
Speaker 1 (03:33):
Well, that's great.
Speaker 2 (03:34):
Tell us you know, sort of top line, what are
the things that are going so well in Utah that
makes it continue to sort of win that top spot
and maybe what are some of.
Speaker 4 (03:44):
The second and third place winners are?
Speaker 5 (03:49):
Who are they and what are what are the some
of their top attributes.
Speaker 3 (03:54):
Yeah, we could probably spend the entire show talking about
Utah and its successes. And it's just an incredible top
to bottom success story. I think in so many ways,
and from a top tier kind of top line perspective
of it, I think it's because of commitment for so
many years from legislative leaders like the ones I talked
about a minute ago that are continually looking to improve
(04:17):
to say, we know we have this competitive fifty laboratories
of democracy. We're in direct competition with not just our
neighboring states, but states all across the country for businesses
and jobs and for Americans voting with their feet. One
of our key findings in rich states port states from
state to state, there's great movement of people in capital
from state to state, and Utah has been a big winner.
(04:38):
And the legislative leaders realize that and they're doubling down
on their successes and not being complacent. I think that's
from a like I said, from a macro perspective. That's
one of the keys to the Utah success. Before you
get into all the nitty gritty of the various policies
and successes that they've seen there, one example to just
prove that point drive at home is our team look
(04:59):
back to the the first edition of Bridge States Poor
States coming out in two thousand and seven, and Utah
was number one and they had just enacted the flat tax,
one of the great things that they've done. And now
we've seen a good number of states, but seven states
now would become flat tax states in that period of time,
but Utah was the very first in recent memory. And
(05:20):
if Utah it would have just rested on its laurels
in two thousand and seven and said, hey, we're the
number one state in America. We have a very good makeup.
We don't need to do anything else. We looked at
the numbers and we found that Utah today would be
ranked twenty third in economic outlook in rich States Poor states,
not by doing anything bad, but just by falling behind,
by standing still. It's the key message that we find
(05:41):
time and time again that states don't make continuous progress
fall behind as all the other states passed them by
so I think that is one of the key takeaways
from my mind from Utah.
Speaker 5 (05:52):
And then the other.
Speaker 3 (05:53):
You know, when you look at the policy makeup, Utah
has been forward looking in so many ways.
Speaker 5 (05:58):
One was pinch and reform.
Speaker 3 (06:00):
You know, we've talked laying a lot over the years
about Illinois and New Jersey and all these states that
have just gotten billions of dollars of these unfunded pension
liabilities for the public pension plans for workers in state
and local government. That's a major future tax increase waiting
to happen for businesses and for individuals in those states.
Speaker 5 (06:20):
Utah thought about this.
Speaker 3 (06:21):
They saw the problems from the Great Financial Crisis, and
they looked ahead around the curve and say, what does
the private sector do here? And well, it turns out
as you know, well, I'm sure most of the Job
Creators Network members long ago, because they follow actual accounting standards,
have transitioned new hires over time into flexible four to
one K style retirement plans that you know, you haven't match.
(06:45):
But at the end of the day, the workers are
allowed to be flexible where they'd like to take their
retirement nest egg from job to job, and in the
cases of states that avoids building up these massive unfunded liabilities.
So Utah did that over a decade ago at saved
them countless billions of dollars of unfunded liabilities of other
states have seen. But then they look at things like
(07:07):
Utah's addressed property taxes. You know, we go around the states,
and I've probably been in about thirty five states in
the last year, and as I asked state legislators, what
are you hearing from your constituents? Is their number one challenge?
In almost everywhere where I've been, the number one challenge
we hear is property tax burdens and lane And that
is true not just for residential but certainly for commercial
(07:27):
and for business owners as well. Small businesses across the
board are really getting hit by the assessment driven property
tax problem in cities and counties across the country. In Utah,
this goes back almost forty years ago with what they
call their Truth and Taxation Model on property taxes that
we've adopted as ALEC model policy that really puts some
transparency and accountability and holds the feet to the fire
(07:51):
really of local elected officials. And if you spend too much,
then you're going to at least have to take the
recorded votes and say we're going to tax more of
your property. We're in so many other case is it
becomes a quagmire where really nobody understands where property tax
burdens are coming from. And Utah has gotten ahead of
that curve. And the know the final thing I'll mention, could,
like I said, go on and on about Utah is
(08:11):
when we're talking about right now this whole relationship between
Washington and the states and the needed I think reset
of all these federal funds that President Biden sent out
to the states, they were slashing around in state budgets.
It's one of the reasons state had states had a
lot of money sitting in those budgets because with these
federal funds, we all know that there's no such thing
(08:32):
as a free launch, as the great Milton Friedman always
reminded us, and those funds came with a lot of
federal requirements and strings attached to them. And one of
the things that Utah did a number of years ago
now is really come up with a great system of
cataloging what is it the state of Utah gets from
the federal government and what are the costs associated with
those federal funds that come into the state, and they
(08:53):
don't stop there. They say, if the federal government decides
to reduce its aid to Utah, what's our contentment SCY
planned to put in place, Whether it's a five percent
or ten percent or twenty percent reduction, Let's say in
a hypothetical scenario, they actually have a contingency plan to say,
here's what we would do with those government programs, whether
we would pick them up at the state level, or
(09:14):
we'd ask maybe churches and synagogues and civic society organizations
to pick up some of those functions, or whatever the
case may be. The bond rating agencies have looked at
this is one of the reasons why Utah has consistently
kept a triple A bond rating, is they actually have
a plan in place if and when the federal government
reduces aid to the states. And looking at the National
(09:36):
Debt Clock website, if you ever want to feel pessimistic
about your day, lane go to that website and you
see you we're well above thirty six trillion dollars now
of national debt. It's not really a question of if,
it's when the federal government reduces aid to the states,
and states like Utah because of this forethought, are not
just one step ahead, but a whole lot of steps
ahead the other states.
Speaker 2 (09:58):
So you mentioned a couple things that make me obviously
want to do some compare and contrasts because of the
state I live in, which is Florida. How many state
governments have you seen move to away from the state
pensions to the four oh one k's.
Speaker 5 (10:15):
Well, it's been slow but steady progress.
Speaker 3 (10:18):
My home state of Michigan, under then Governor John Angler
in the nineties, was one of the first states to
really transition new hires into that four to one K
style retirement system, and that saved Michigan untold billions of
dollars now in unfunded liabilities. Then you had other states
like Utah that moved in that direction. We saw Oklahoma
(10:38):
also move in that direction, most recently Arizona and North Dakota.
But it's one that is a heavy political lift. Oftentimes
it gets misrepresented in the media as to what these
reforms are looking to do, and it gets painted as
being something that it's not, because at the end of
the day, it's actually pro worker to do that because
when you analyze where let's say gen Z folks coming
(11:02):
into the workforce or millennials before them, they don't work
one job.
Speaker 5 (11:07):
I know, won't shock anybody watching this.
Speaker 3 (11:09):
They aren't going to work one job like their parents
or their grandparents' generation for forty years. They're going to
have probably ten jobs in the first ten or twenty
years of their careers. And looking at some of the averages,
and so when you look at the way that states
set up these pension systems, they don't even the young
workers don't even invest into the pension system unless they've
worked for that state government for let's say five or
(11:31):
eight or maybe even ten years, and so it does
them no good to be in this very expensive and
very burdensome to find benefit system. It actually is very
beneficial to the young workers, but oftentimes it doesn't get
portrayed that way by the liberal medias.
Speaker 5 (11:46):
I'm sure won't shock you.
Speaker 3 (11:48):
And so it has been a little bit of a
slow but steady progress in the States, but it's something
that states absolutely need to look at because it's been
obviously a shaky number of weeks here in the stock market,
just our plans that have been going up and down.
Where do you think state's invest their money. When it
comes to state pension systems, it's been a rocky road
for state investments as well. And who's at the end
(12:10):
of the day on the hook at the state level.
Look around the room, it's taxpayers that are going to
be on the hook if those state investments don't perform
like their benchmarks suggests.
Speaker 5 (12:19):
And so that's a huge area.
Speaker 3 (12:20):
It's one that is not gotten nearly enough attention, but
it needs to.
Speaker 2 (12:25):
And just broadly speaking, what are some of the other
key highlights you saw from some maybe the top five
states in general, So.
Speaker 3 (12:33):
Looking at the top five in rich states poor stage.
Coming in right after Utah was Tennessee. There's a lot
to like about what Tennessee has done. I know JCN
and ALEC. We partnered a ton on our education freedom
alliance with the huge school choice victory signing to law
by Governor Lee and by legislatives leading the way on that.
Speaker 5 (12:53):
That was a huge win.
Speaker 3 (12:54):
But beyond that, tax cuts and debt reduction in Tennessee
catapulted them ten full spots this year from number twelve
to number two for economic outlook. So that's say great
story and a victory in itself, and then you have
a kind of a steady state in terms of Indiana
that's been in the top five for a number of years,
(13:14):
clocking in at number three, North Carolina and North Dakota
at four and five. There's a really interesting story here
about North Carolina in that you go back to the
first edition of Rich State's Poor States, or in the
early years before Tom Tillis was Speaker of the House. Now,
of course you has Senator Tom Tillis. You know, you
had a situation where North Carolina was middle of the pack.
(13:36):
I think they bottomed out at number twenty six in
our ranking back pre tax reform, and then you had
Speaker Tillis who served on the ALEC Board of Directors,
and some great legislators come in Governor Patriccrory and they
remade the state's tax code. And it was a long
progress that's continuing to be made right now in North Carolina.
And they've not only kept up with other states, they
(13:58):
have really stampeded into the top ten and now unto
the top five in the index. And one of the
things that people don't realize, even very observant folks that
follow policy issues, but in current law, the income tax
in North Carolina has been getting phased down. It became
a flat tax as part of this tax reform that
we've been talking about.
Speaker 5 (14:18):
But the corporate income tax.
Speaker 3 (14:20):
Another huge attribute and one of the things we measure
in rich states poor states for how competitive state is.
Speaker 5 (14:26):
The corporate income tax in.
Speaker 3 (14:27):
North Carolina in the next several years, by the end
of this decade will actually continue to phase down and
be zero, So they will be the first state in
recent memory that has eliminated its corporate income tax altogether
without replacing it with another business tax. So it's a
state that's seen some huge benefits from the personal rate
reductions and eliminating the death tax and so many great
(14:49):
things that they've done. But in current law, just in
a few years, they will completely eliminate that business income
tax and talk about a way to put a billboard
up on your state line say we are open for business.
Speaker 5 (15:01):
That is what it is.
Speaker 3 (15:02):
It's not going to need to be these economic development
incentive packages that states all across the country of course
do and try to chase companies that way. It's going
to be the free market way to bring companies into
North Carolina. As we've seen over years, I expect that
to accelerate after this reform was fully phased in.
Speaker 2 (15:20):
Who was in the like say, bottom five, And I'm
curious if you get pushed back from those states when
you issue these reports.
Speaker 5 (15:28):
Well, yeah, we do, and it depends on who you ask.
Speaker 3 (15:31):
Sometimes, right there will be those that say, well, we've
been saying this for years, and I'm glad another organization
comes in and says that we've ranked dead last. So
I was in Albany and New York just a couple
of weeks ago doing a press conference there with our
ALEC delegation, and they have been beleaguered, right and said,
you know, we've been jumping up and down trying to
tell people how bad our business environment is, how high
(15:54):
the tax burden is in New York. And of course
many of our members are in the minority. They're in
New York, have been for a number of years, and
have a left wing tretector right now in Albany. That
really the question is, you know, not if they're going
to raise taxes, generally, it's about which taxes are going
to raise and New York, in California and Illinois and
the states that continue to be in the bottom of
(16:16):
our ranking, kind of follow that warning from Ronald Reagan
that he always said, you know, the liberal view of
the economy can be summed up as this, if it moves,
tax it, if it keeps moving, regulated, if it stops moving,
subsidize it. And that's what we see generally in the
states with the highest tax rates. Is then the way
they go about competing is by going and actually doing
special favorites to you know, special privilege to one industry
(16:40):
over another or one company over another. And that be
maybe one way in a short term to attract companies
or industries, but it's not going to be a long
term way or path to success. And so New York
is fifty out of fifty and they've been that way
for sixteen out of the eighteen editions of Bridge states,
poor states, and just beyond them as Bernie Sanders Vermont
(17:01):
in number forty nine. And that won't be a surprise,
I'm sure to anybody that has followed policy in the Northeast.
And then you have New Jersey, California, and Illinois. Once again,
no surprise is there states that have continued to raise
taxes even during the pandemic. New Jersey was a state
that came out under Governor Murphy and said, you know,
we're going to raise taxes. We have a budget shortfall,
(17:24):
And of course that precipitated even more individuals voting with
their feet, more businesses moving out of New Jersey.
Speaker 2 (17:30):
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(18:55):
small business.
Speaker 4 (18:56):
So when they call and say I disagree with this,
what do you do?
Speaker 2 (19:00):
Just pull off the data and say, we'll take a look.
Here's how we measured you. I mean, is that the
kind of conversation that you have when they're pushing back.
Speaker 3 (19:08):
Yeah, And it's pretty common sense, right, I mean, the
things we look at. We chose the fifteen variables that
we look at in rich states poor states, things like
taxes and regulation, labor policies, levels of state debt, state spending.
So Art Laffer and Steve Moore, my co authors of
the report, Our Laffers studied this for fifty plus years
(19:29):
and really narrowed down well, you could measure, you know,
literally a thousand different things that make some states rich
and some states poor. But focusing on these fifteen for
a few reasons is in doctor Laffer's research. These are
fifteen of the most important variables for determining why some
states grow and some states don't.
Speaker 5 (19:47):
But there are also.
Speaker 3 (19:47):
Things that state legislators directly control, whether it's in Albany
or in Lancing, or Richmond or Nashville. And that's an
important element because there's lots of different ways that states
get ranked these days, and some have very little or
nothing to do with what state legislators control. And so
getting back to the data point that you say, what
do you do about the critics out there, is you know,
(20:07):
we come into a state not because we have a
horse in the race, but because we have a consistent
way of measuring states based on proven policies that matter
and actually drive growth. Based on we know as we
talk to business owners, these are some of the important
things they look at as they're looking at multiple state
opportunities to either grow or move their business. We know
(20:28):
based on many of the academic studies that these are
determinants of where individuals and businesses will relocate or in
upsize or operations in some state versus others. And then
of course you come back to the common sense element
of it. When you raise taxes in location A and
lower them in location B, you're going to have people
leaving location A and going to location B. Because people
(20:51):
don't work for the privilege of paying taxes. They work
for after tax income. And when states realize that, you know,
whether it's let's say in California, where their top income
tax rate is over thirteen percent. Next door you have Nevada,
where they're one of the nine states without a personal
income tax. We shouldn't be surprised when California, year after
year after year is losing population to Nevada and other
(21:14):
lower tax states.
Speaker 5 (21:15):
It's common sense. It's not rocket surgery. As my co
author Art Labor likes to say exactly.
Speaker 4 (21:21):
I don't understand why liberals never understand that.
Speaker 2 (21:23):
They just think they can just keep raising taxes, you know,
every time they want to spend more money, instead of
looking at where they can cut and maybe you know,
re deploy resources differently. It's just they don't want to
cut anything. I mean, look what's happening with DOGE at
the federal level. I mean, dog isn't even really cutting anything.
(21:44):
They're recommending they're uncovering waste brought and abuse, and they're
making recommendations, and you would think that the sky is falling.
I mean, they don't want to there's nothing that isn't
sacred in their spending library on things that they're doing,
even when it gets tremendous media on the ridiculousness of
(22:06):
some of these programs.
Speaker 4 (22:08):
It's crazy.
Speaker 2 (22:09):
And in the one hand, you'll see, you know, an
article about a company that has to you know, a
major corporation that's making some layoffs because you know, they've
got some cutbacks or you know, the economy isn't working
as well for them, or whatever the reason is. And
you know, dose is saying, hey, we've got you know,
this entire building that no one comes to work at,
(22:29):
so clearly we.
Speaker 4 (22:30):
Don't need them.
Speaker 1 (22:31):
And they say, oh, well, we.
Speaker 2 (22:33):
Have to cut back too, because the government's not taking
in enough money. I mean, the economics of life applied
to the federal government and taxpayer dollars as much as
they do to you know, a private company in the
private sector, and so those employees experience the same kind
of uncertainty, that kind of uncertainty all the time. But
(22:53):
it's as if we are you know, it's it's unheard
of that we would actually look at trying to find
it efficiencies within the government and the liberals are just
I mean literally you would think that the sky is
falling on them.
Speaker 5 (23:08):
Yeah.
Speaker 3 (23:08):
You make such a great point there in that, you know,
we have this system of really Washington d C. Operating
in the land to make believe right, they have this
federal reserve, they have the unlimited ability to you know, print,
I guess they don't even print anymore. In a lot
of cases, they just can quantitatively ease their way out
and just increase the money supply. And of course that's
(23:29):
one of the things that we're still suffering, the hangover
effects from the Biden era of this massive run up
in government spending and debt and the money supply run
up whereas driven inflation. And you know, that's the that's
the life that DC spenders can live. And that's a
bipartisan problem. And it has been for a very long time.
And I will say, like on the you know, on
(23:51):
the Doge effort, such a key effort to just to
begin to uncover some of this. It's been layered on
top of layer and top of layer for not just years,
but decades, where people don't even look at the layers anymore.
They just are talking about the marginal change of whether
we're growing spending by one percent or ten percent or
five percent, and it's always just an argument over degree
(24:12):
of how much government should grow, versus asking the fundamental question,
which is what President Trump and Elon Musk and maybe
the members of this administration and Congress are now asking,
which is you, should it be done in the first place,
and if so, who should do it? Should it be
the federal government, should it be, of state, should it
be people? Should be charitable organizations and civic organizations. Just
(24:33):
around the discussion right now, in every single state, so
forty nine of the fifty states of Land, I'm sure
you know this, say they have balanced budget requirements in
the state constitution or in state law. In many states,
that is the one thing they're required to do in
a given state legislative session is pass a balanced budget. Washington,
DC doesn't even go through the charade of passing a budget,
(24:54):
let alone a balance budget. Having for many, many years,
I mean, you have to go back to the time
of Newt Gingrich, Speaker of the House, with the Republican
Revolution in the nineteen nineties, when you had consistent balanced budgets,
and so I mean, I think you know, when Americans
get cynical about Washington about this run up and federal
debt and inflation.
Speaker 5 (25:12):
And all the things that we face. You know, this
is one of the reasons why.
Speaker 3 (25:16):
And so the fact that President Trump is bringing this
common sense approach to budgeting and at least having the
discussions whether you know, many of these ended up being
organizational kind of moves, are long term or their recommendations,
and obviously Congress has to come in and make many
of these decisions themselves. This is a needed conversation to
have nationally because if you look at the run up
(25:37):
in the national debt, like we talked about the pessimism
by looking at the national debt clock there a second ago,
think about the history of this for a second. May
may you maybe know this as you're watching, maybe you
maybe don't when you look at we're looking forward to
here just in a little over a year celebrating America's
two hundred and fiftieth birthday from the declaration of independence
(25:58):
in seventeen seventy six, an incredible ability for us now
to look back and.
Speaker 5 (26:04):
Do a little bit of just soul searching as a country.
Speaker 3 (26:06):
If you go back to the founding of America to
nineteen eighty when Ronald Reagan became president. That took the
entire period of time of over two hundred years for
America to rack up its first one trillion dollars a
lane of national debt seventeen seventy six to nineteen eighty.
(26:26):
Roughly in that period that took the entire time for
one trillion nineteen eighty to the president. Another thirty five
trillion have been added to the national debt trillions just
in the last several years, right, I mean, so we're
talking about this trajectory that's unsustainable.
Speaker 5 (26:41):
So I think as people think through it from.
Speaker 3 (26:43):
A historic context of what this means for the future
of America, for our kids, for our grandkids, even for
national security. Now at this point where we have so
much of our national income from our taxpayers now going
just to pay the interest on the debt over a
trillion dollars a year, which more than we're spending on
our Department of Defense and military readiness across the board
(27:04):
now is being eaded.
Speaker 5 (27:06):
Up by interest costs. Think about that for a second.
This is a huge problem.
Speaker 3 (27:10):
And I think Americans, whether they agree or disagree maybe
with some of the policy areas that are being considered
for reduction. Just the fact that we're having this honest
dialogue and conversation again as a country, I think everyone
can be very thankful that we have leaders that are
willing to take on this massive challenge.
Speaker 2 (27:27):
Well, you mentioned, you know how we're at a point
where we just argue over degrees of or percentages of
increasing government spending because it goes up every year. It's
just a matter of one side is arguing for you know,
two or three percent, and one sides are aguing for
only one percent. But as soon as the conversation turns
to well let's go back to pre COVID spending because
(27:47):
COVID isn't here, we don't need those programs again, you
would think that, you know, we had taken someone's left
leg off. I mean, it's incredible that we can't go
back to at least pre COVID D levels when.
Speaker 1 (28:01):
We don't have a pandemic.
Speaker 2 (28:03):
We literally are still spending at COVID levels and we
don't have we don't have a pandemic. So what are
we spending the money on? What are we printing it for?
Why is this happening? And the American people, I don't
think that they understand those kinds of spending issues. And
so when Doge comes in and there's such pushback, you know,
(28:28):
and they're talking about we're going to cut Social Security
and they're in the computers and they're getting our data and.
Speaker 1 (28:34):
All this stuff.
Speaker 4 (28:35):
That's not what they're there for.
Speaker 2 (28:36):
I mean, it's ridiculous that we can't even look at
how to cut spending. I mean, we've seen her Democrat
presidents over the time, Clinton, Obama, all of them talk
about cutting spending and getting what a rid of waste
brought an abuse? Why is that and why is that
a partisan issue now?
Speaker 5 (28:54):
And surely, I mean it's a great point. It shouldn't be.
Speaker 3 (28:57):
There's no reason this needs to be a partisan issue.
It should be a common sense issue of we've racked
up the credit cards far too long. And what would
any responsible parent tell their kids if they're overspending, is they,
you know, say, hey, you know, maybe it's time to
take a break of the credit card. We're going to
cut that up and we're going to teach some basic
budgeting one oh one. And this is a great way
where Washington can learn a thing or two from how
(29:19):
the states go about doing that. Every single year not
not the fact that states get it perfect every year.
Obviously some states overspend even in that kind of an environment,
but by and large, I mean the state leaders, the
ALEC men and women across the country that we work
with every single day. You know, they go into that
and they sharpen the pencils and every single year they say,
where can we find those savings? Because at the end
(29:42):
of the day, states do can need to compete with
each other we were talking about with the rich states
poor States report, they realize they need to continue to
use those savings to buy down tax rates and continue
in this race for where jobs are created across the
United States. That adds I think an element and that's
why I think in our americaneri the founders were so
(30:02):
prescient to think about this, to say states are going
to be these laboratories of democracy, They're going to be
essentially a free trade zone across these states.
Speaker 5 (30:11):
They're going to need to compete. That keeps them honest, right,
And the federal government doesn't have that.
Speaker 3 (30:15):
And when you have that combined with the Federal Reserve
and the income tax and so many other things that
the federal government has at its disposal, it's really not
a fair playing field for taxpayers. And that's why you
having these discussions, whether it's Doge or people like Rand
Paul who have been talking about ideas for government spending
(30:36):
reduction for many, many years. It used to be the
Penny plan that he proposed. Now because of the new
way that national debt and spending is ramped up and
it gets up to six pennies.
Speaker 5 (30:45):
But the idea is, all you need to do is
shave six pennies.
Speaker 3 (30:48):
Off of every dollar spending, we'd have the national we'd
have the deficit under control right away, and we begin
to chip down in a national debt or to your point, Lane,
you just go back to pre pandemic spending levels and
all of a sudden, that raises a massive chunk of
our problem when it comes to the deficit and debt
issues here in Washington. But part of the reason I
(31:09):
think we see so much pushback obviously there's some emotional
impact of friends or family that are affected by some
of these positions being changed in Washington. So that's a
human consideration, clearly, But I think some of this is
the liberal media right. They do not want anyone looking
under the hood at what's going on. With the massive
(31:30):
amounts of government spending here in Washington, and they want
to make a very painful example of Elon Musk and
others that are trying to do the right thing and
look for government waste and fraud and abuse, or even
unauthorized congressional programs that have expired their even authorization to exist.
If it was that important, maybe Congress should just authorize
the programs.
Speaker 5 (31:50):
It's just kind of a.
Speaker 3 (31:51):
Thought that it comes to us from some common sense,
I think at the state level. But I do think
that's what's going on here is any of the folks
that are defenders of the big government status quot in
Washington are looking to make an example of those coming
after the ways, frauden abuse.
Speaker 2 (32:07):
Absolutely well, where can people go to find your new
report Rich States for States?
Speaker 3 (32:14):
Well, you can go to ALEC dot org, but you
can also go to Rich States Poor States dot org
and Ridge States Poor States dot Org.
Speaker 5 (32:21):
Is a great clearinghouse of not just this year's.
Speaker 3 (32:24):
Report, but all eighteen additions are loaded in and it's
a great way to explore where your state is today
and how it has raked every single year going back
to two thousand and seven and the other thing that's
a great tool in that website on rich statesportstates dot org.
The lane is we allow policymakers and anyone who visits
the website to adjust their state's policies. And you can
(32:46):
click on a button and say, I want to be
my state of right to work state, or I want
to eliminate my state income tax. What would that do
to my rich state's poor state's economic outlook score. So
it's a great way for those that are following the
developments in their state capitals, are in touch if they're policymakers,
or if they're a policymaker and sitting in a committee
hearing or on the chamber of their legislative body and saying, hey,
(33:07):
there's a proposal that's going to do with all these
great things or maybe bad proposals, and you can generate
that to say that's going to move us in the
wrong direction or in the right direction in the ranking.
So it's a great way to use this in a
real time sets to actually see what policies would do
to impact your ranking.
Speaker 2 (33:23):
Jonathan, thanks so much for taking the time to join
us on main Street Matters, America's small business megaphone. Main
Street Matters is part of the Salem Podcast Network and
new episode's debut every Wednesday and Friday. You can subscribe
to the show at salempodcastnetwork dot com or wherever you
get your podcasts from and we'll be back soon with
another episode.
Speaker 4 (33:41):
Bye for now.
America is home to thirty three million small businesses, the
beating heart of communities across the country, and prove that
the American dream is still alive.
Speaker 2 (00:20):
This is a show about those dreamers and doers and
the communities they serve.
Speaker 1 (00:26):
Their real life stories, their striddles and successes, their grit,
determination and passion, and the people who fight to keep
their American dream alive. I'm alfreda Ortiz, i'm e Lane Parker,
and it's time for another episode of main Street Matters,
America's Small Business Megaphone.
Speaker 2 (00:44):
Hi everyone, and welcome to another episode of main Street Matters,
America's Small Business Megaphone. I'm e Lane Parker, the president
of the Job Creater's Network Foundation, and today we're joined
by Jonathan Williams. Jonathan is the president and chief Economists
at ALEC, which stands for the American Legislative Exchange Council,
and you can follow him on x at Tax Economists. Jonathan,
(01:08):
Welcome back to Main Street Matters.
Speaker 3 (01:11):
Well, thank you Elaine for having me back on the show.
It's always good to be with you and talking about
some of the big policy issues of the day.
Speaker 4 (01:17):
Yeah, there's really no shortage of things to talk about
is there.
Speaker 3 (01:21):
No, it's been in DC or in the States. I mean,
the States go at warp speed every single year, which
we all know, and that's why we love leading on
some of the state issues at ALEC and working with
you all at Job Creators Network. But the federal government,
we thought we knew what Operation warp Speed was, and
then the second Trump administration here has proven us wrong
(01:42):
that we didn't know how fast SAMs could move. And
whether it's Doge or so many of the efforts that
the Trump administration is leading right now, is just so
many things happening here in Washington as well. So it's
nice to see Washington finally meet the pace of what's
gone on in the States for decades.
Speaker 2 (01:57):
Yes, moving at the speed of business finally, right.
Speaker 5 (02:00):
That's right, almost, Yes.
Speaker 2 (02:04):
Well, I want to start out talking to you about
your new report that just came out. This is your
eighteenth year of Rich States, Poor States ranking.
Speaker 1 (02:14):
Tell us about that.
Speaker 2 (02:15):
You just released it on text Day, which is very
fitting of course.
Speaker 3 (02:19):
Yes, it was out in Salt Lake City where we
released the eighteenth edition of Rich States, Poor States with
Governor Cox and Senate President Stuart Adams and.
Speaker 5 (02:29):
Speaker Schultz and Utah. The reason we were there. You're
number one for eighteen years in a row.
Speaker 3 (02:36):
We get to host a release and it's an incredible
opportunity to be out there with those legislative leaders and
share the alec ideas that have helped make Utah the
fastest growing state in America, not just by our metrics,
but when you look at all the other metrics state
GDP or income growth by state or even population growth,
(02:58):
Utah has number one and all those categories over the
last decade. And so we think there's a lot of
connection there when you get it right on free market,
pro business, common sense. Really, at the end of the day,
public policy like Utah has, the results are coming right
after right. I mean, we see that and that's been
to the great benefit of Utah's across the board. And
(03:18):
so we are so happy to be out there with
those legislative leaders to really showcase the Utah success story
and hope that not just the rest of the states
but Washington, d C. Can learn a little bit from
what's been going right so many years now in Utah.
Speaker 1 (03:33):
Well, that's great.
Speaker 2 (03:34):
Tell us you know, sort of top line, what are
the things that are going so well in Utah that
makes it continue to sort of win that top spot
and maybe what are some of.
Speaker 4 (03:44):
The second and third place winners are?
Speaker 5 (03:49):
Who are they and what are what are the some
of their top attributes.
Speaker 3 (03:54):
Yeah, we could probably spend the entire show talking about
Utah and its successes. And it's just an incredible top
to bottom success story. I think in so many ways,
and from a top tier kind of top line perspective
of it, I think it's because of commitment for so
many years from legislative leaders like the ones I talked
about a minute ago that are continually looking to improve
(04:17):
to say, we know we have this competitive fifty laboratories
of democracy. We're in direct competition with not just our
neighboring states, but states all across the country for businesses
and jobs and for Americans voting with their feet. One
of our key findings in rich states port states from
state to state, there's great movement of people in capital
from state to state, and Utah has been a big winner.
(04:38):
And the legislative leaders realize that and they're doubling down
on their successes and not being complacent. I think that's
from a like I said, from a macro perspective. That's
one of the keys to the Utah success. Before you
get into all the nitty gritty of the various policies
and successes that they've seen there, one example to just
prove that point drive at home is our team look
(04:59):
back to the the first edition of Bridge States Poor
States coming out in two thousand and seven, and Utah
was number one and they had just enacted the flat tax,
one of the great things that they've done. And now
we've seen a good number of states, but seven states
now would become flat tax states in that period of time,
but Utah was the very first in recent memory. And
(05:20):
if Utah it would have just rested on its laurels
in two thousand and seven and said, hey, we're the
number one state in America. We have a very good makeup.
We don't need to do anything else. We looked at
the numbers and we found that Utah today would be
ranked twenty third in economic outlook in rich States Poor states,
not by doing anything bad, but just by falling behind,
by standing still. It's the key message that we find
(05:41):
time and time again that states don't make continuous progress
fall behind as all the other states passed them by
so I think that is one of the key takeaways
from my mind from Utah.
Speaker 5 (05:52):
And then the other.
Speaker 3 (05:53):
You know, when you look at the policy makeup, Utah
has been forward looking in so many ways.
Speaker 5 (05:58):
One was pinch and reform.
Speaker 3 (06:00):
You know, we've talked laying a lot over the years
about Illinois and New Jersey and all these states that
have just gotten billions of dollars of these unfunded pension
liabilities for the public pension plans for workers in state
and local government. That's a major future tax increase waiting
to happen for businesses and for individuals in those states.
Speaker 5 (06:20):
Utah thought about this.
Speaker 3 (06:21):
They saw the problems from the Great Financial Crisis, and
they looked ahead around the curve and say, what does
the private sector do here? And well, it turns out
as you know, well, I'm sure most of the Job
Creators Network members long ago, because they follow actual accounting standards,
have transitioned new hires over time into flexible four to
one K style retirement plans that you know, you haven't match.
(06:45):
But at the end of the day, the workers are
allowed to be flexible where they'd like to take their
retirement nest egg from job to job, and in the
cases of states that avoids building up these massive unfunded liabilities.
So Utah did that over a decade ago at saved
them countless billions of dollars of unfunded liabilities of other
states have seen. But then they look at things like
(07:07):
Utah's addressed property taxes. You know, we go around the states,
and I've probably been in about thirty five states in
the last year, and as I asked state legislators, what
are you hearing from your constituents? Is their number one challenge?
In almost everywhere where I've been, the number one challenge
we hear is property tax burdens and lane And that
is true not just for residential but certainly for commercial
(07:27):
and for business owners as well. Small businesses across the
board are really getting hit by the assessment driven property
tax problem in cities and counties across the country. In Utah,
this goes back almost forty years ago with what they
call their Truth and Taxation Model on property taxes that
we've adopted as ALEC model policy that really puts some
transparency and accountability and holds the feet to the fire
(07:51):
really of local elected officials. And if you spend too much,
then you're going to at least have to take the
recorded votes and say we're going to tax more of
your property. We're in so many other case is it
becomes a quagmire where really nobody understands where property tax
burdens are coming from. And Utah has gotten ahead of
that curve. And the know the final thing I'll mention, could,
like I said, go on and on about Utah is
(08:11):
when we're talking about right now this whole relationship between
Washington and the states and the needed I think reset
of all these federal funds that President Biden sent out
to the states, they were slashing around in state budgets.
It's one of the reasons state had states had a
lot of money sitting in those budgets because with these
federal funds, we all know that there's no such thing
(08:32):
as a free launch, as the great Milton Friedman always
reminded us, and those funds came with a lot of
federal requirements and strings attached to them. And one of
the things that Utah did a number of years ago
now is really come up with a great system of
cataloging what is it the state of Utah gets from
the federal government and what are the costs associated with
those federal funds that come into the state, and they
(08:53):
don't stop there. They say, if the federal government decides
to reduce its aid to Utah, what's our contentment SCY
planned to put in place, Whether it's a five percent
or ten percent or twenty percent reduction, Let's say in
a hypothetical scenario, they actually have a contingency plan to say,
here's what we would do with those government programs, whether
we would pick them up at the state level, or
(09:14):
we'd ask maybe churches and synagogues and civic society organizations
to pick up some of those functions, or whatever the
case may be. The bond rating agencies have looked at
this is one of the reasons why Utah has consistently
kept a triple A bond rating, is they actually have
a plan in place if and when the federal government
reduces aid to the states. And looking at the National
(09:36):
Debt Clock website, if you ever want to feel pessimistic
about your day, lane go to that website and you
see you we're well above thirty six trillion dollars now
of national debt. It's not really a question of if,
it's when the federal government reduces aid to the states,
and states like Utah because of this forethought, are not
just one step ahead, but a whole lot of steps
ahead the other states.
Speaker 2 (09:58):
So you mentioned a couple things that make me obviously
want to do some compare and contrasts because of the
state I live in, which is Florida. How many state
governments have you seen move to away from the state
pensions to the four oh one k's.
Speaker 5 (10:15):
Well, it's been slow but steady progress.
Speaker 3 (10:18):
My home state of Michigan, under then Governor John Angler
in the nineties, was one of the first states to
really transition new hires into that four to one K
style retirement system, and that saved Michigan untold billions of
dollars now in unfunded liabilities. Then you had other states
like Utah that moved in that direction. We saw Oklahoma
(10:38):
also move in that direction, most recently Arizona and North Dakota.
But it's one that is a heavy political lift. Oftentimes
it gets misrepresented in the media as to what these
reforms are looking to do, and it gets painted as
being something that it's not, because at the end of
the day, it's actually pro worker to do that because
when you analyze where let's say gen Z folks coming
(11:02):
into the workforce or millennials before them, they don't work
one job.
Speaker 5 (11:07):
I know, won't shock anybody watching this.
Speaker 3 (11:09):
They aren't going to work one job like their parents
or their grandparents' generation for forty years. They're going to
have probably ten jobs in the first ten or twenty
years of their careers. And looking at some of the averages,
and so when you look at the way that states
set up these pension systems, they don't even the young
workers don't even invest into the pension system unless they've
worked for that state government for let's say five or
(11:31):
eight or maybe even ten years, and so it does
them no good to be in this very expensive and
very burdensome to find benefit system. It actually is very
beneficial to the young workers, but oftentimes it doesn't get
portrayed that way by the liberal medias.
Speaker 5 (11:46):
I'm sure won't shock you.
Speaker 3 (11:48):
And so it has been a little bit of a
slow but steady progress in the States, but it's something
that states absolutely need to look at because it's been
obviously a shaky number of weeks here in the stock market,
just our plans that have been going up and down.
Where do you think state's invest their money. When it
comes to state pension systems, it's been a rocky road
for state investments as well. And who's at the end
(12:10):
of the day on the hook at the state level.
Look around the room, it's taxpayers that are going to
be on the hook if those state investments don't perform
like their benchmarks suggests.
Speaker 5 (12:19):
And so that's a huge area.
Speaker 3 (12:20):
It's one that is not gotten nearly enough attention, but
it needs to.
Speaker 2 (12:25):
And just broadly speaking, what are some of the other
key highlights you saw from some maybe the top five
states in general, So.
Speaker 3 (12:33):
Looking at the top five in rich states poor stage.
Coming in right after Utah was Tennessee. There's a lot
to like about what Tennessee has done. I know JCN
and ALEC. We partnered a ton on our education freedom
alliance with the huge school choice victory signing to law
by Governor Lee and by legislatives leading the way on that.
Speaker 5 (12:53):
That was a huge win.
Speaker 3 (12:54):
But beyond that, tax cuts and debt reduction in Tennessee
catapulted them ten full spots this year from number twelve
to number two for economic outlook. So that's say great
story and a victory in itself, and then you have
a kind of a steady state in terms of Indiana
that's been in the top five for a number of years,
(13:14):
clocking in at number three, North Carolina and North Dakota
at four and five. There's a really interesting story here
about North Carolina in that you go back to the
first edition of Rich State's Poor States, or in the
early years before Tom Tillis was Speaker of the House. Now,
of course you has Senator Tom Tillis. You know, you
had a situation where North Carolina was middle of the pack.
(13:36):
I think they bottomed out at number twenty six in
our ranking back pre tax reform, and then you had
Speaker Tillis who served on the ALEC Board of Directors,
and some great legislators come in Governor Patriccrory and they
remade the state's tax code. And it was a long
progress that's continuing to be made right now in North Carolina.
And they've not only kept up with other states, they
(13:58):
have really stampeded into the top ten and now unto
the top five in the index. And one of the
things that people don't realize, even very observant folks that
follow policy issues, but in current law, the income tax
in North Carolina has been getting phased down. It became
a flat tax as part of this tax reform that
we've been talking about.
Speaker 5 (14:18):
But the corporate income tax.
Speaker 3 (14:20):
Another huge attribute and one of the things we measure
in rich states poor states for how competitive state is.
Speaker 5 (14:26):
The corporate income tax in.
Speaker 3 (14:27):
North Carolina in the next several years, by the end
of this decade will actually continue to phase down and
be zero, So they will be the first state in
recent memory that has eliminated its corporate income tax altogether
without replacing it with another business tax. So it's a
state that's seen some huge benefits from the personal rate
reductions and eliminating the death tax and so many great
(14:49):
things that they've done. But in current law, just in
a few years, they will completely eliminate that business income
tax and talk about a way to put a billboard
up on your state line say we are open for business.
Speaker 5 (15:01):
That is what it is.
Speaker 3 (15:02):
It's not going to need to be these economic development
incentive packages that states all across the country of course
do and try to chase companies that way. It's going
to be the free market way to bring companies into
North Carolina. As we've seen over years, I expect that
to accelerate after this reform was fully phased in.
Speaker 2 (15:20):
Who was in the like say, bottom five, And I'm
curious if you get pushed back from those states when
you issue these reports.
Speaker 5 (15:28):
Well, yeah, we do, and it depends on who you ask.
Speaker 3 (15:31):
Sometimes, right there will be those that say, well, we've
been saying this for years, and I'm glad another organization
comes in and says that we've ranked dead last. So
I was in Albany and New York just a couple
of weeks ago doing a press conference there with our
ALEC delegation, and they have been beleaguered, right and said,
you know, we've been jumping up and down trying to
tell people how bad our business environment is, how high
(15:54):
the tax burden is in New York. And of course
many of our members are in the minority. They're in
New York, have been for a number of years, and
have a left wing tretector right now in Albany. That
really the question is, you know, not if they're going
to raise taxes, generally, it's about which taxes are going
to raise and New York, in California and Illinois and
the states that continue to be in the bottom of
(16:16):
our ranking, kind of follow that warning from Ronald Reagan
that he always said, you know, the liberal view of
the economy can be summed up as this, if it moves,
tax it, if it keeps moving, regulated, if it stops moving,
subsidize it. And that's what we see generally in the
states with the highest tax rates. Is then the way
they go about competing is by going and actually doing
special favorites to you know, special privilege to one industry
(16:40):
over another or one company over another. And that be
maybe one way in a short term to attract companies
or industries, but it's not going to be a long
term way or path to success. And so New York
is fifty out of fifty and they've been that way
for sixteen out of the eighteen editions of Bridge states,
poor states, and just beyond them as Bernie Sanders Vermont
(17:01):
in number forty nine. And that won't be a surprise,
I'm sure to anybody that has followed policy in the Northeast.
And then you have New Jersey, California, and Illinois. Once again,
no surprise is there states that have continued to raise
taxes even during the pandemic. New Jersey was a state
that came out under Governor Murphy and said, you know,
we're going to raise taxes. We have a budget shortfall,
(17:24):
And of course that precipitated even more individuals voting with
their feet, more businesses moving out of New Jersey.
Speaker 2 (17:30):
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(18:55):
small business.
Speaker 4 (18:56):
So when they call and say I disagree with this,
what do you do?
Speaker 2 (19:00):
Just pull off the data and say, we'll take a look.
Here's how we measured you. I mean, is that the
kind of conversation that you have when they're pushing back.
Speaker 3 (19:08):
Yeah, And it's pretty common sense, right, I mean, the
things we look at. We chose the fifteen variables that
we look at in rich states poor states, things like
taxes and regulation, labor policies, levels of state debt, state spending.
So Art Laffer and Steve Moore, my co authors of
the report, Our Laffers studied this for fifty plus years
(19:29):
and really narrowed down well, you could measure, you know,
literally a thousand different things that make some states rich
and some states poor. But focusing on these fifteen for
a few reasons is in doctor Laffer's research. These are
fifteen of the most important variables for determining why some
states grow and some states don't.
Speaker 5 (19:47):
But there are also.
Speaker 3 (19:47):
Things that state legislators directly control, whether it's in Albany
or in Lancing, or Richmond or Nashville. And that's an
important element because there's lots of different ways that states
get ranked these days, and some have very little or
nothing to do with what state legislators control. And so
getting back to the data point that you say, what
do you do about the critics out there, is you know,
(20:07):
we come into a state not because we have a
horse in the race, but because we have a consistent
way of measuring states based on proven policies that matter
and actually drive growth. Based on we know as we
talk to business owners, these are some of the important
things they look at as they're looking at multiple state
opportunities to either grow or move their business. We know
(20:28):
based on many of the academic studies that these are
determinants of where individuals and businesses will relocate or in
upsize or operations in some state versus others. And then
of course you come back to the common sense element
of it. When you raise taxes in location A and
lower them in location B, you're going to have people
leaving location A and going to location B. Because people
(20:51):
don't work for the privilege of paying taxes. They work
for after tax income. And when states realize that, you know,
whether it's let's say in California, where their top income
tax rate is over thirteen percent. Next door you have Nevada,
where they're one of the nine states without a personal
income tax. We shouldn't be surprised when California, year after
year after year is losing population to Nevada and other
(21:14):
lower tax states.
Speaker 5 (21:15):
It's common sense. It's not rocket surgery. As my co
author Art Labor likes to say exactly.
Speaker 4 (21:21):
I don't understand why liberals never understand that.
Speaker 2 (21:23):
They just think they can just keep raising taxes, you know,
every time they want to spend more money, instead of
looking at where they can cut and maybe you know,
re deploy resources differently. It's just they don't want to
cut anything. I mean, look what's happening with DOGE at
the federal level. I mean, dog isn't even really cutting anything.
(21:44):
They're recommending they're uncovering waste brought and abuse, and they're
making recommendations, and you would think that the sky is falling.
I mean, they don't want to there's nothing that isn't
sacred in their spending library on things that they're doing,
even when it gets tremendous media on the ridiculousness of
(22:06):
some of these programs.
Speaker 4 (22:08):
It's crazy.
Speaker 2 (22:09):
And in the one hand, you'll see, you know, an
article about a company that has to you know, a
major corporation that's making some layoffs because you know, they've
got some cutbacks or you know, the economy isn't working
as well for them, or whatever the reason is. And
you know, dose is saying, hey, we've got you know,
this entire building that no one comes to work at,
(22:29):
so clearly we.
Speaker 4 (22:30):
Don't need them.
Speaker 1 (22:31):
And they say, oh, well, we.
Speaker 2 (22:33):
Have to cut back too, because the government's not taking
in enough money. I mean, the economics of life applied
to the federal government and taxpayer dollars as much as
they do to you know, a private company in the
private sector, and so those employees experience the same kind
of uncertainty, that kind of uncertainty all the time. But
(22:53):
it's as if we are you know, it's it's unheard
of that we would actually look at trying to find
it efficiencies within the government and the liberals are just
I mean literally you would think that the sky is
falling on them.
Speaker 5 (23:08):
Yeah.
Speaker 3 (23:08):
You make such a great point there in that, you know,
we have this system of really Washington d C. Operating
in the land to make believe right, they have this
federal reserve, they have the unlimited ability to you know, print,
I guess they don't even print anymore. In a lot
of cases, they just can quantitatively ease their way out
and just increase the money supply. And of course that's
(23:29):
one of the things that we're still suffering, the hangover
effects from the Biden era of this massive run up
in government spending and debt and the money supply run
up whereas driven inflation. And you know, that's the that's
the life that DC spenders can live. And that's a
bipartisan problem. And it has been for a very long time.
And I will say, like on the you know, on
(23:51):
the Doge effort, such a key effort to just to
begin to uncover some of this. It's been layered on
top of layer and top of layer for not just years,
but decades, where people don't even look at the layers anymore.
They just are talking about the marginal change of whether
we're growing spending by one percent or ten percent or
five percent, and it's always just an argument over degree
(24:12):
of how much government should grow, versus asking the fundamental question,
which is what President Trump and Elon Musk and maybe
the members of this administration and Congress are now asking,
which is you, should it be done in the first place,
and if so, who should do it? Should it be
the federal government, should it be, of state, should it
be people? Should be charitable organizations and civic organizations. Just
(24:33):
around the discussion right now, in every single state, so
forty nine of the fifty states of Land, I'm sure
you know this, say they have balanced budget requirements in
the state constitution or in state law. In many states,
that is the one thing they're required to do in
a given state legislative session is pass a balanced budget. Washington,
DC doesn't even go through the charade of passing a budget,
(24:54):
let alone a balance budget. Having for many, many years,
I mean, you have to go back to the time
of Newt Gingrich, Speaker of the House, with the Republican
Revolution in the nineteen nineties, when you had consistent balanced budgets,
and so I mean, I think you know, when Americans
get cynical about Washington about this run up and federal
debt and inflation.
Speaker 5 (25:12):
And all the things that we face. You know, this
is one of the reasons why.
Speaker 3 (25:16):
And so the fact that President Trump is bringing this
common sense approach to budgeting and at least having the
discussions whether you know, many of these ended up being
organizational kind of moves, are long term or their recommendations,
and obviously Congress has to come in and make many
of these decisions themselves. This is a needed conversation to
have nationally because if you look at the run up
(25:37):
in the national debt, like we talked about the pessimism
by looking at the national debt clock there a second ago,
think about the history of this for a second. May
may you maybe know this as you're watching, maybe you
maybe don't when you look at we're looking forward to
here just in a little over a year celebrating America's
two hundred and fiftieth birthday from the declaration of independence
(25:58):
in seventeen seventy six, an incredible ability for us now
to look back and.
Speaker 5 (26:04):
Do a little bit of just soul searching as a country.
Speaker 3 (26:06):
If you go back to the founding of America to
nineteen eighty when Ronald Reagan became president. That took the
entire period of time of over two hundred years for
America to rack up its first one trillion dollars a
lane of national debt seventeen seventy six to nineteen eighty.
(26:26):
Roughly in that period that took the entire time for
one trillion nineteen eighty to the president. Another thirty five
trillion have been added to the national debt trillions just
in the last several years, right, I mean, so we're
talking about this trajectory that's unsustainable.
Speaker 5 (26:41):
So I think as people think through it from.
Speaker 3 (26:43):
A historic context of what this means for the future
of America, for our kids, for our grandkids, even for
national security. Now at this point where we have so
much of our national income from our taxpayers now going
just to pay the interest on the debt over a
trillion dollars a year, which more than we're spending on
our Department of Defense and military readiness across the board
(27:04):
now is being eaded.
Speaker 5 (27:06):
Up by interest costs. Think about that for a second.
This is a huge problem.
Speaker 3 (27:10):
And I think Americans, whether they agree or disagree maybe
with some of the policy areas that are being considered
for reduction. Just the fact that we're having this honest
dialogue and conversation again as a country, I think everyone
can be very thankful that we have leaders that are
willing to take on this massive challenge.
Speaker 2 (27:27):
Well, you mentioned, you know how we're at a point
where we just argue over degrees of or percentages of
increasing government spending because it goes up every year. It's
just a matter of one side is arguing for you know,
two or three percent, and one sides are aguing for
only one percent. But as soon as the conversation turns
to well let's go back to pre COVID spending because
(27:47):
COVID isn't here, we don't need those programs again, you
would think that, you know, we had taken someone's left
leg off. I mean, it's incredible that we can't go
back to at least pre COVID D levels when.
Speaker 1 (28:01):
We don't have a pandemic.
Speaker 2 (28:03):
We literally are still spending at COVID levels and we
don't have we don't have a pandemic. So what are
we spending the money on? What are we printing it for?
Why is this happening? And the American people, I don't
think that they understand those kinds of spending issues. And
so when Doge comes in and there's such pushback, you know,
(28:28):
and they're talking about we're going to cut Social Security
and they're in the computers and they're getting our data and.
Speaker 1 (28:34):
All this stuff.
Speaker 4 (28:35):
That's not what they're there for.
Speaker 2 (28:36):
I mean, it's ridiculous that we can't even look at
how to cut spending. I mean, we've seen her Democrat
presidents over the time, Clinton, Obama, all of them talk
about cutting spending and getting what a rid of waste
brought an abuse? Why is that and why is that
a partisan issue now?
Speaker 5 (28:54):
And surely, I mean it's a great point. It shouldn't be.
Speaker 3 (28:57):
There's no reason this needs to be a partisan issue.
It should be a common sense issue of we've racked
up the credit cards far too long. And what would
any responsible parent tell their kids if they're overspending, is they,
you know, say, hey, you know, maybe it's time to
take a break of the credit card. We're going to
cut that up and we're going to teach some basic
budgeting one oh one. And this is a great way
where Washington can learn a thing or two from how
(29:19):
the states go about doing that. Every single year not
not the fact that states get it perfect every year.
Obviously some states overspend even in that kind of an environment,
but by and large, I mean the state leaders, the
ALEC men and women across the country that we work
with every single day. You know, they go into that
and they sharpen the pencils and every single year they say,
where can we find those savings? Because at the end
(29:42):
of the day, states do can need to compete with
each other we were talking about with the rich states
poor States report, they realize they need to continue to
use those savings to buy down tax rates and continue
in this race for where jobs are created across the
United States. That adds I think an element and that's
why I think in our americaneri the founders were so
(30:02):
prescient to think about this, to say states are going
to be these laboratories of democracy, They're going to be
essentially a free trade zone across these states.
Speaker 5 (30:11):
They're going to need to compete. That keeps them honest, right,
And the federal government doesn't have that.
Speaker 3 (30:15):
And when you have that combined with the Federal Reserve
and the income tax and so many other things that
the federal government has at its disposal, it's really not
a fair playing field for taxpayers. And that's why you
having these discussions, whether it's Doge or people like Rand
Paul who have been talking about ideas for government spending
(30:36):
reduction for many, many years. It used to be the
Penny plan that he proposed. Now because of the new
way that national debt and spending is ramped up and
it gets up to six pennies.
Speaker 5 (30:45):
But the idea is, all you need to do is
shave six pennies.
Speaker 3 (30:48):
Off of every dollar spending, we'd have the national we'd
have the deficit under control right away, and we begin
to chip down in a national debt or to your point, Lane,
you just go back to pre pandemic spending levels and
all of a sudden, that raises a massive chunk of
our problem when it comes to the deficit and debt
issues here in Washington. But part of the reason I
(31:09):
think we see so much pushback obviously there's some emotional
impact of friends or family that are affected by some
of these positions being changed in Washington. So that's a
human consideration, clearly, But I think some of this is
the liberal media right. They do not want anyone looking
under the hood at what's going on. With the massive
(31:30):
amounts of government spending here in Washington, and they want
to make a very painful example of Elon Musk and
others that are trying to do the right thing and
look for government waste and fraud and abuse, or even
unauthorized congressional programs that have expired their even authorization to exist.
If it was that important, maybe Congress should just authorize
the programs.
Speaker 5 (31:50):
It's just kind of a.
Speaker 3 (31:51):
Thought that it comes to us from some common sense,
I think at the state level. But I do think
that's what's going on here is any of the folks
that are defenders of the big government status quot in
Washington are looking to make an example of those coming
after the ways, frauden abuse.
Speaker 2 (32:07):
Absolutely well, where can people go to find your new
report Rich States for States?
Speaker 3 (32:14):
Well, you can go to ALEC dot org, but you
can also go to Rich States Poor States dot org
and Ridge States Poor States dot Org.
Speaker 5 (32:21):
Is a great clearinghouse of not just this year's.
Speaker 3 (32:24):
Report, but all eighteen additions are loaded in and it's
a great way to explore where your state is today
and how it has raked every single year going back
to two thousand and seven and the other thing that's
a great tool in that website on rich statesportstates dot org.
The lane is we allow policymakers and anyone who visits
the website to adjust their state's policies. And you can
(32:46):
click on a button and say, I want to be
my state of right to work state, or I want
to eliminate my state income tax. What would that do
to my rich state's poor state's economic outlook score. So
it's a great way for those that are following the
developments in their state capitals, are in touch if they're policymakers,
or if they're a policymaker and sitting in a committee
hearing or on the chamber of their legislative body and saying, hey,
(33:07):
there's a proposal that's going to do with all these
great things or maybe bad proposals, and you can generate
that to say that's going to move us in the
wrong direction or in the right direction in the ranking.
So it's a great way to use this in a
real time sets to actually see what policies would do
to impact your ranking.
Speaker 2 (33:23):
Jonathan, thanks so much for taking the time to join
us on main Street Matters, America's small business megaphone. Main
Street Matters is part of the Salem Podcast Network and
new episode's debut every Wednesday and Friday. You can subscribe
to the show at salempodcastnetwork dot com or wherever you
get your podcasts from and we'll be back soon with
another episode.
Speaker 4 (33:41):
Bye for now.
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