Michigan’s Economy: Where Do We Stand, Where Are We’re Going?

1. West Michigan Policy Forum Michigan’s Economy: Where Do We Stand, Where Are We’re Going? Robert Genetski President, ClassicalPrinciples.com

2. Outline 1. Where we’ve been 2. Where we’re going a. US elections b. State policies: Booms and Busts c. Impact of Michigan’s policies

3. Outline 1. Where we’ve been

7. Michigan’s economy—secular decline in past decade By 2008 Michigan’s performance—worst in the US In 2009 US recession—depression in Michigan Since 2009—Michigan economy stable relative to US

8. Outline 1. Where we’ve been 2. Where we’re going a. US elections

10. Classical Economic Principles Policies that promote individual freedom: • Low tax rates & limiting public spending to efficiently producing essential public services • Free markets • Protection of individual property rights • Stable value for currency

11. Economic Problems Don’t Just Happen Problems Result from Bad Policies • Rapid increases in federal spending • Massive increases in regulatory burdens • Policy mistake by US Treasury Secretary

12. Reversing Economic Malaise • Major cuts in federal spending • Reducing tax burdens • Reducing regulatory burdens • Protecting property rights • Maintaining a stable currency

13. Election 2012 • President Obama in 2014: • plans $400 billion more spending • imposes $400 billion more compliance costs • $235 billion more taxes • Governor Romney: • Repeal $400 billion compliance costs • $400 billion less federal spending • Cut individual tax rates by 20%

14. Outline 1. Where we’ve been 2. Where we’re going a. US elections b. State policies: Booms and Busts

15. Characteristics of High Performance States • Policies geared toward individual freedom also promote a state’s economy • State Policies that maximize individual freedom: • Low or no tax on income • Prudent spending for only essential services • Freedom to join or not join a union(Right to Work)

23. Characteristics of Poorly Performing States • Policies place restrictions on individual freedom: • Higher tax rates • Wasteful government spending • Onerous regulations • Forced unionism (no Right to Work law) • Large union penetration • Overburdening debt

27. How Michigan Compares to Other States Tax burden Public employees compensation Debt

29. Compensation per worker: 2010 US average Private Nonfarm: $42,900 State & Local employees: $58,500 36% Michigan Private Nonfarm: $40,400 State & Local employees: $59,500 47%

30. Compensation per worker: 2010Adjusted for cost of Living Michigan Private Nonfarm: $42,300 State & Local employees: $62,300 47% Texas Private Nonfarm: $44,900 State & Local employees: $56,600 26%

31. Worse State for Accumulating Debt Burdens on Future Taxpayers • (2010 financial reports) • 1. Connecticut $49,000 per taxpayer • 2. New Jersey $35,800 • 3. Hawaii $32,700 • 4. Illinois $31,600 • 5. Kentucky $23,500 • 6. Massachusetts $23,200 • 7. California $21,400 • 8. Michigan $20,800 • 9. West Virginia $20,500 • 10. Rhode Island $18,800 • Source: Institute for Truth in Accounting; Financial State of the States

32. Outline 1. Where we’ve been 2. Where we’re going a. US elections b. State policies: Booms and Busts c. Impact of Michigan’s policies

33. Destructive Ballot Measures • “Protect Our Jobs” • “Home Health Care” • “Renewable Energy”

34. Making Michigan a High Performing State Provide more freedom to Michigan workers and businesses: • Limit state spending to essential services • Cut tax burdens to below US average • Give workers freedom to decide whether or not to join a union