Donatelli: States Experimenting with Creating New Jobs

If we are to believe government experts and liberal academics, Americans must accept high unemployment and slow economic growth “for the foreseeable future.” Fortunately, many states are experimenting with economic policies and strategies designed to create jobs and raise economic activity by strengthening the private sector and targeting investment and resources to make labor markets function more smoothly.What are some of these policy initiatives that conservative governors across the country are supporting?

First, and most obvious, states must restore fiscal discipline to their budgeting and tax policies. Numbers don’t lie. States with high rates of taxation and large public sectors (New York, New Jersey, California) tend to have lower growth rates than the national average.

States that are addressing high taxation rates and bloated public sectors seem poised for a brighter future. Govs. Mitch Daniels of Indiana, Tim Pawlenty of Minnesota and Haley Barbour of Mississippi have been particularly focused on creating business-friendly environments that stress holding the line on state taxes and spending, reducing state regulatory burdens on firms and scaling back “junk lawsuits” by enacting tort reform.