July 25, 2023

It’s Simple: Democrats are focused on Spending. Republicans are focused on Growth.

California is on the cusp of a “borrowing bonanza,” according to a recent article by Politico. 
Gavin Newsom and Democratic lawmakers in the state are wanting to borrow billions of dollars on the backs of over-taxed Californians to fund a massive expansion of Newsom’s liberal agenda. Worst yet: legislative leaders are asking an economically anxious electorate to make this spending spree a reality. 
The Details: Current proposals made by these California Democrats total well over $100 billion all to fund Green New Deal initiatives and other left-wing programs. 
Just like President Biden and his allies in Congress, this is yet another classic example of the never-ending cycle of Democrats overspending by asking taxpayers to shoulder their debt. 
While Democrats focus nationwide on reckless spending, Republican governors and state legislatures are laser focused on economic growth. New data from the Bureau of Economic Analysis (BEA) shows that the Republican approach is paying off. 
According to BEA, earnings for workers and businesses in red states this year have increased significantly more than in blue states. 
Exhibit A: Workers’ Paychecks in High-Tax Blue States are Lagging Behind the Nationwide Average

  • Per BEA, earnings in blue states are lagging the nationwide average of 5.4% in the first quarter of 2022 and 2023, including in places like New York (2.6%), California (2.9%), Connecticut (3.4%), Rhode Island (3.6%), Maryland (4%), New Jersey (4.3%), Oregon (4.5%), and Illinois (4.6%).
  • These blue states “boast high taxes and a high cost of living, which along with Covid-19 related lockdowns spurred increased out-migration during the pandemic,” according to the Wall Street Journal

Exhibit B: Red States are Seeing Faster Wage Growth and More Job Creation

  • On the other hand, earnings have surged faster than the national average in red states throughout this same period, including in places like North Dakota (9.7%), Nebraska (8.6%), South Carolina (8%), Alaska (7.9%), and Texas (7.7%).
  • GOP-led states creating more jobs and attracting higher paying industries such as technology or finance, along with faster growing wages. 

As the Wall Street Journal points out, “states that have a higher earnings growth also tend to have faster growing populations. Americans are relocating to red states where their paychecks can go further, and their wages can grow faster.” 
The bottom line: While Democrats continue to ask taxpayers to shoulder more debt, higher tax, and higher levels of government spending for less growth, Republicans across the country are moving our economy forward from the failed economic policies of the Biden administration with policies that are leading to more jobs and bigger paychecks.

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