Federal $$ no path to prosperity

We’re number 1! That’s the finding of a new WalletHub report on the most federally-dependent states. New Mexico is the single most federally-dependent state in the nation.

Specifically, New Mexico gets more federal contracts and more grants than does any other state in the union as seen below. Our friends on the left love to tell us how great Medicaid (the fastest-growing and most generous grant program) is an “economic stimulus.” But, the reality is that being reliant on the federal government is hardly a path to prosperity for US states.

The dependence bred by those federal programs is not helpful, but we at the Rio Grande Foundation would argue that the greatest single harm of relying on the feds for so much money comes in the form of policies (like the Gross Receipts Tax) which remain in place as a means of bringing in federal dollars while killing other businesses.

What’s it mean? The Legislature and other policymakers spend a lot of time and energy pursuing federal dollars. That’s unwise. Instead of worrying about how much money is coming to New Mexico from Washington, they should worry about the impact on businesses and economic growth.


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One Reply to “Federal $$ no path to prosperity”

  1. Statehood probably seemed like a good idea for New Mexico 106 years ago but has not worked particularly well. State government has failed at its core functions of education, public safety and rule of law.

    Because New Mexico is effectively a ward of the federal government, the best model for governance may be tribal status rather than statehood. We already are moving in that direction: Prosecutors are turning to federal courts to adjudicate violent crimes and our Congressional representatives are increasing federal control over more and more land. Significant numbers of New Mexicans believe Spain and the United States were wrong to take land away from the Indians in the first place.

    So it makes sense to take the incremental step of dissolving the state government and petitioning the federal government for tribal status. That will formalize New Mexico’s preferred role as a federally subsidized nature preserve and art colony.

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