Through a combination of government and private aid, a moral, civil society provides a social safety net to help those in need. The debate is over how generous the net should be and who should qualify for aid. Here in North Carolina, officials have made difficult but appropriate choices to address the more than $2 billion the state owed to the federal government for borrowed unemployment benefits. The money had been borrowed with no plan on how to pay it back.
As the Governing magazine headline states:
Why Can’t Oregon Get People Off of Welfare?
The story:
Yet in two ways, Oregon is unique: It saw the largest increase in TANF cases of any state in the country from 2007 to 2013 and its TANF recipients reported the lowest participation rate for work-related activities of any state in the country.
Last year one in 40 Oregonians were on TANF. The state has one of the highest TANF coverage rates in the country, the direct result of a policy decision to expand access by adding state funding while cutting related support services. The number of single-parent families covered by TANF almost doubled from 2007 to 2013, while the number of two-parent families increased fivefold. Although DHS expects the number of families on TANF to steadily decline in future years, its forecast for 2017 still estimates that more families will be on TANF than at the start of the recession in 2007.
When you build dependency on government, you an expect dependency to become the norm.
The correct course is to spur economic growth in the state, which provides opportunities for people who need jobs to support themselves and their families. We know exactly which policies lead to growth, as John Hood has explained.
During the Great Recession and its aftermath, few issues in North Carolina politics have been as contentious as fiscal policy. According to a literature survey of recent studies examining the relationship between public policy and economic performance at the state and local level, it is clear that the policy preferences of fiscal conservatives have strong empirical support. Most studies find that lower levels of taxes and spending, less-intrusive regulation, and lower energy prices correlate with stronger economic performance. Most studies also find that the quantity and quality of infrastructure and the level of educational attainment are linked to economic performance. However, that doesn’t necessarily mean that raising taxes to fund more spending on infrastructure and education will prove to be a good investment, since the relationship between government spending and outcomes is not particularly strong.
For state and local officials, this suggests a strategy for promoting economic growth in both the short term and the long term that includes:
• Keeping overall tax and regulatory burdens as low as possible.
• Spending more tax dollars on public safety and the courts.
• Increasing the productivity of current taxpayer spending on infrastructure and education programs.
These implications of academic research on economic growth closely track with recent public policies adopted in North Carolina. Judging from the available empirical evidence, North Carolina’s new policy mix is likely to result in stronger economic growth in the coming years.
