State Economic Turnarounds: Jonathan Williams on iSpy Radio

ALEC Executive Vice President of Policy and Chief Economist, Jonathan Williams, was featured on iSpy Radio to discuss recent actions across the states promoting economic growth despite challenges in the national economy.

Economic Turnarounds

Williams noted that states like Indiana and North Carolina have seen significant economic improvements. West Virginia, Kentucky, and Ohio are also making notable progress.

Some blue states are also making strides. Connecticut and Hawaii have implemented tax cuts to boost their economies.

At the state level, we’ve seen so many great turnaround stories of states that were middle of the pack and are now in the top 10 of rankings, like Indiana and North Carolina. Over the years, we’ve talked a lot about states like West Virginia, Kentucky and Ohio that have really gone from the bottom tier states in our Rich States, Poor States economic index to now being in the middle of the pack. These states are doing so many good things and really improving for the first time in decades in some of these states.

GDP and Economic Outlook

The national economic outlook remains concerning. GDP growth for the first quarter was a mere 1.3%, revised downward from 1.6%. Business investment slowed due to high interest rates, and predictions for the second quarter suggest modest growth at best. Real wages have declined during the Biden administration due to inflation, despite nominal wage increases.

Federal Reserve Chairman Jerome Powell recently indicated that inflation may not need to reach the 2% target before considering rate cuts, prompting a brief market rally. However, the overall sentiment remains pessimistic, with inflation stubbornly high and economic growth sluggish.

Potential Consequences of Tax Policy Changes

Williams noted that the potential expiration of the Trump tax cuts if Joe Biden wins the next election is another looming economic concern. President Biden’s re-election campaign includes calls for higher taxes, such as letting the Tax Cuts and Jobs Act of 2017 expire at the end of 2025. This move, along with potential increases in business income taxes, would make the U.S. less competitive. The Trump tax cuts previously brought trillions of dollars back into the U.S. economy, boosting jobs and growth. Reversing these cuts could result in U.S. companies relocating to countries with more favorable tax laws, as seen in the past.

The Trump tax cuts going away makes it a whole lot worse, because as trillions of dollars of tax increases over time of problems and disincentives for businesses to stay open, expand, keep those people hired and pay good wages. The expiration takes all those incentives away and actually makes it much more expensive to do that. The most egregious thing of this whole discussion is that who is this going to impact? This is going to impact all taxpayers across the country, all individuals, all small businesses who pay individual side tax on the income tax.

The Future of Bidenomics

If Biden or another Democrat wins the next election, there is a risk that they may double down on current economic policies, interpreting their win as a mandate for more of the same. This could lead to even higher inflation, lower GDP growth, and more businesses and individuals struggling financially. The potential for continued policy failure is concerning, and a shift in economic strategy may be necessary to avoid further economic distress.

Conclusion

The economic challenges facing the nation are undeniable. As the media begins to reflect the reality of the situation more accurately, it may influence public perception and policy decisions. While some states are finding ways to thrive, the broader national picture remains troubled.Williams underscores the importance of state-level innovation and adaptation in navigating these economic challenges.

Listen to the full interview: State Economic Turnarounds: Jonathan Williams on iSpy Radio