(Albuquerque) Expensive studies are in the works and much discussion is taking place on the best ways to develop New Mexico’s economy. This is great news to advocates of the free market. For too long, economic development in New Mexico meant waiting for the federal government or the Labs to bring more jobs and money to the area.
Of course, some politicians and economic development “experts” are hoping to promote their own visions of targeted economic incentives, tax giveaways, training programs, and other methods of bringing jobs to New Mexico. At best, these methods are unproven in terms of generating net, long-term growth. Rather, the new plant or business may be “seen,” but the businesses and investments that would have happened absent those taxes is the unseen and untold story.
In an effort to steer the debate towards proven, pro-free-market policies, the Rio Grande Foundation has released its own study, “A Roadmap for a More Economically-Competitive New Mexico” that bases its findings on “tried and true” principles of taxation, spending, and regulation as a path forward for New Mexico’s economy. The study is available at the Foundation’s website.
Said Gessing, “Politicians and economic development ‘experts’ love targeted incentives because they give them power and a political constituency and financial support. But, true economic development comes from unleashing the inherent productivity of a given population, not from top-down decisions and resource-shifting.”
Gessing noted that “Reforms like ‘Right to Work’ laws have been shown to increase economic growth rates by 11.5% where they have been enacted. Elimination of state taxes on personal income have also proven effective with no-income tax states having created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts between 1998 and 2007.”
“Other reforms,” Gessing noted, “including reduced regulatory burdens, better, more cost-effective educational systems, and reducing the size of New Mexico’s government work force, are designed to increase the effectiveness of government spending and/or re-direct resources from government to the private sector. These initiatives and ones like them have a high likelihood of driving economic growth and creating jobs.”
Gessing concluded that, “While the reforms contained in this paper WILL spur economic growth, they are also politically-challenging. New Mexicans and their political leaders must choose between political expediency and proven success.”