Beware of a Federal Bailout of States

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A year after the first COVID-19 shutdown, President Biden signed the American Rescue Plan Act – the $1.9 trillion coronavirus legislation that truly has little to do with coronavirus at all.

The third of its kind since 2020, the bill was proposed with the intention to provide COVID relief and bailout states with federal funds. But in this case, the third time isn’t the charm as once again, federal decision makers have turned to quick fixes that create long-term issues rather than long-term solutions.

Our recent history teaches us a federal bailout of the states threatens to further harm taxpayers, federalism and ultimately the states themselves. This third state bailout, with less than 10% going to COVID relief and only 1% going to vaccine distribution, proves that this will be the case again.

Since the first discussion on federal bailout of the states began in 2020, hundreds of state lawmakers addressed the policy problems with a federal bailout. State leaders were concerned with the federal “solution” prescribed to help them, because a state bailout wrongly rewards those who have made poor financial decisions at the expense of prosperity states.

In 2020, state and local governments already received hundreds of billions in CARES Act funding. In many states, much of the funds remain unspent. My home state of California has a $25 billion surplus, and will now receive $42.63 billion more. Giving more only incentivizes more fiscally irresponsible decision making and will unjustifiably punish the financially responsible states.

We’ve seen the consequences of federal bailout before. In 2009, state legislators voiced concerns over the strings attached to federal dollars during debate on the American Recovery and Reinvestment Act (ARRA), acknowledging the costly consequence of accepting a bailout. Federal aid will unfortunately always come with strings attached and will more than likely only lead to increase in spending and higher state taxes.

Today, though, our national debt lingers at almost three times what it was in 2009. The stakes are too high to continue a cycle that promises quick fixes from the federal government. Quick fixes turn into long-term issues, and if we continue to dig the hole so deep we may never escape. We should instead rely on fact and experience, and learn from our history.

The only real way to make productive, responsible decisions for our states is for our states to practice fiscal discipline. It is one of the more difficult roads to take, but to bring true relief to our communities, we should look to policy solutions in the prosperity states that lead the way in fiscal responsibility. Prosperity doesn’t come from luck, but from the difficult and necessary work to balance state budgets and keep spending in check.

Organizations like the American Legislative Exchange Council release annual publications, like Rich States, Poor States, ranking the states’ performances in policy variables that have proven to build financially resilient prosperity states. Many of the states at the top of this ranking, such as Utah and Wyoming, find themselves in the best position coming out the other side of the pandemic. Practicing fiscal responsibility in state policy solutions is proven to build state competitiveness in both times of prosperity and turmoil.

Nearly a year ago, over 200 state lawmakers and nearly 1,500 state leaders and activists signed a letter to raise policy concerns with a bailout – and Congress noticed.

The fight is not over, and voices are still needed to commit to fiscal responsibility in the states. Encourage your state lawmakers to choose solutions that build true prosperity in your state.

Copyright 2021 Lisa B. Nelson, distributed exclusively by Cagle Cartoons newspaper syndicate.

Nelson is the chief executive office of the American Legislative Exchange Council, an organization bringing state legislators and stakeholders together to develop public policy beneficial to the free market and individual liberty.

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A Free Market Should Be Free to All, All of the Time

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In January, the world changed following closely behind the disruption of financial markets at the hand of individual investors.

The invisible hand of free market economics, originally introduced by Adam Smith, was abruptly replaced by a very visible hand – Robinhood. Instead of empowering individual investors to make fee-free stock trades, the company put its thumb on the scales, denied their users the right to buy and sell stock, and in doing so upended hundreds of years of free-market doctrine.

In the days that followed, thousands of retail investors recognized gains beyond their wildest dreams. Far different from 2008, though, because this came about by a group of “Redditors” – participants in the forum hosting website Reddit. They bet against wall street and won, and America watched the free market at work. It was short lived, however, as market makers quickly shut it down. And the market that was previously considered accessible to all became anything but.

Hedge Funds essentially bet that GameStop would fail – they purchased the right to sell shares they did not own, at a fixed price. But then, retail investors purchasing the stock caused a surge in the price, negating any value the Hedge Funds may have realized and forced them to purchase the stocks they previously didn’t own, but bet on. The rich intended to stay rich by betting on destruction.

The “little guy” via Robinhood LLC, a financial services group, fought back. And when they did, Robinhood – marketing itself as the everyman champion of stock market access – changed the rules. They upended the free market and restricted purchases, allegedly forced sales of stock and limited access to features. This action prompted massive backlash and bipartisan agreement that the free market was shackled by the people who have supported it for decades.

Many perceive Robinhood’s actions as an antithesis to their namesake – 33 lawsuits filed at present, all suggest they essentially robbed from the poor, to protect and give to the rich.

As one might guess, these actions against retail investors shook trust in the market to its core. People believed they had a free market, but the market makers proved them wrong. A free and accessible market is simply the best mechanism to foster innovation, growth and stability in an economy. What happened last week, a concerted and organized effort against thousands of retail investors, shows the importance of a free market for all. A free market that is open, accessible and accountable to its participants all the time.

No matter your ideology, beliefs or affiliations, we can all agree a free market is where we are able to economically express ourselves. The capitals of the 50 states is where we protect and foster access to the free market. It works best by virtue of unfettered access and participation, to allow commerce to cultivate and recognize value. If one thing became clear this past election cycle, it is the importance of voting – and nothing votes stronger than the dollar allowed to participate in a free market.

State’s which allow and protect this sort of participation experience gains beyond those more regulated. If nothing else, the concerted effort to prohibit market participation shows the importance of ensuring it remains open and accessible. Coupled with the fact those who won big in the nine states without capital gains tax will enjoy even greater ability to reinvest in an open and free market, and the case becomes clear: ensure everyone can access the market, and experience the benefits that follow when you prioritize the best interest of your people. Your state will be better off for it.

If last week didn’t upset you, it should have.

That’s why now is the best time to push for free market principles and legislation, to ensure that what happened this week – a concerted effort to exclude – doesn’t happen again. For a market to be free, it must be accessible for all, all the time. It is up to the legislators of our states to ensure that occurs, and by adopting sound model policies, they can ensure their constituents are never denied the opportunity to participate again.

Let’s follow the lead of WallStreetBets. Let’s ride this momentum “to the moon.”

Copyright 2021 Lisa B. Nelson, distributed exclusively by Cagle Cartoons newspaper syndicate.

Nelson is the chief executive office of the American Legislative Exchange Council, an organization bringing state legislators and stakeholders together to develop public policy beneficial to the free market and individual liberty.

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Liberty in 2021: It’s Common Sense

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On January 10, 1776, impassioned Americans – from the streets of the Colonies to private meetings in taverns – were moved by an anonymous pamphlet calling for independence and liberty from Great Britain. Today it is recognized as one of the most important rallying cries leading up to the Revolutionary War, and we know it as Thomas Paine’s Common Sense.

Eleven years after its publication, in 1787, the cries for liberty were answered when the Founding Fathers wrote and America ratified the U.S. Constitution, a living document to outline and protect our freedoms and liberties. And now in 2021, 245 years after the first distribution of Thomas Paine’s Common Sense, newly elected officials across the states dive into the first sessions of the year, prepared to prioritize the values our country was first founded on.

Americans in 1776 were sure that local control and decision making would be the foundation of a successful society. It’s still true today. In 2020, voters everywhere rediscovered the important work of our state and local leaders, and asserted at the voting booths that they prefer principled leadership that is close to home.

And many of the recently elected state leaders have already begun to set their policy priorities for 2021 – to advance the principles of individual liberty and free enterprise, which have proven to create an environment for strong and resilient state economies, workforces, schools and health care systems.

How do we know this? Because 2020 put every state to the test. Those that prioritized liberty and fiscal restraint survived the impacts of the global health crisis with the least amounts of consequence.

For decades, organizations like the American Legislative Exchange Council (ALEC) have worked in tandem with principled state leaders on educational resources and model policy. No state looks or operates the same. Providing opportunities for state legislators to discover policies that worked – or didn’t work – in a state makes room for the tried-and-true policy solutions that best fit its people. Simply put, it invests in federalism, which is exactly what our Founding Fathers did all those years ago.

2020 inspired innovation across the states in the private sector, whether it was PPE manufacturing, vaccine development or keeping our workforce and schools connected during bouts of virtual working and learning. In our state legislatures, it inspired innovative solutions to issues like broadband and telehealth access in rural communities and keeping business safely open.

And from what we’ve seen so far, 2021 policy priorities will only build on this momentum. Last month, hundreds of state legislators virtually convened to map out the road to building states stronger in the year to come. Discussions ranged from COVID-19 vaccine deployment, balanced state budgets and returning students to a safe and effective classroom.

The takeaway? There is a mandate in the states, and our local leaders are ready to serve.

When we empower local control and say “no thanks” to big, distant government, we encourage the innovation and decision making of our state legislators, industry leaders and partners. American voters chose federalism in 2021, and I know that state legislatures are prepared to answer similar calls for liberty that were heard in our Colonies more than two centuries ago.

On January 10, 1776, Thomas Paine made a public declaration of the threat a distant and overruling power brings when it does not have the ability to address the needs of its communities. These threats to liberty look different today, sometimes even within our own government. They may always exist – especially in times of crisis. But it is exactly why Americans across the states voted for federalism, local control and state leadership in 2020.

It’s exactly why American vigor, strength and hope await us in 2021.

Copyright 2020 Lisa B. Nelson, distributed exclusively by Cagle Cartoons newspaper syndicate.

Nelson is the chief executive office of the American Legislative Exchange Council, an organization bringing state legislators and stakeholders together to develop public policy beneficial to the free market and individual liberty.

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The Best States for Business

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The states experienced a major upheaval of the economic success that preceded the pandemic this year, but, like clockwork, we have overcome one step at a time.

We didn’t get a free pass to fall behind, and neither did our state leaders. It is important now to hold our elected officials and ourselves accountable for the sake of the years to come.

Businesses did not take a free pass either. They are open, and they are eager to succeed. To hold states accountable to improve pro-business environments means more jobs and a smoother recovery for the nearly 14 million Americans currently unemployed. And this month Area Development released its state ranking of top states for doing business in 2020. Publications, rankings and analyses are more important than ever before because they tell us, the voters, how our state or state leaders are stacking up, and who we should be taking cues from.

At the top of the list is Georgia – its seventh consecutive win – followed by Tennessee, South Carolina, Texas and North Carolina, respectively. In fact, every state in the ranking’s top ten is in the South aside from the 7th, Indiana. But separate from a clear geographical majority, the 13 variables used to rank the state’s pro-business environments included corporate tax structure, the state’s regulatory environment and state government cooperation and responsiveness.

Similarly, organizations like the American Legislative Exchange Council release comprehensive reports annually to check in with how the states are doing in specific policy areas. Last month the 13th Edition of Rich States, Poor States released, which ranks the economic competitiveness of states using 15 equally weighted policy variables. Right-to-work, top marginal corporate income tax rate and state minimum wage are among them, and Area Development’s top 5 states are ranked in the upper half of these Rich States, Poor States variables.

While Area Development makes a ranking to help states create a pro-business environment – which would no doubt help states identify steps to build business strong in the recovery unfolding before us – it’s also important to stay attuned to what priorities best serve the taxpayers in our states.

Stronger business means more jobs, and more jobs mean more opportunity for Americans. Good economic policy is obviously a win for the residents of every state, and trends have shown people will flee the poor states to find success in those better-prepared states. We saw it this year with New York, and we will likely see it again.

Luckily, we also know the policy solutions that make up good economic policy thanks to the many publications, rankings and analysis that tell us how our states did. Even before the pandemic, when our economy was thriving, neglecting to make policy changes in the right direction was enough to fall behind. This is even more true today as we grapple with the fiscal shock of the global crisis.

That is why it is so important we stay informed, and we check in on our elected officials’ and our state leaders’ performances to make sure we’re making the right decisions as voters, taxpayers and community leaders. We should keep up with our state’s ranking in business, in economic competitiveness and how our governors are performing. These variables have proven to work, they are based on individual liberty and free enterprise and they lay the roadmap to success.

We have the tools, it’s time to use them.

Copyright 2020 Lisa B. Nelson, distributed exclusively by Cagle Cartoons newspaper syndicate.

Nelson is the chief executive office of the American Legislative Exchange Council, an organization bringing state legislators and stakeholders together to develop public policy beneficial to the free market and individual liberty.

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Formula for Economic Recovery Exists, and It’s Not a Federal Bailout

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Congress is debating another $1 trillion stimulus package in response to the COVID-19 pandemic. The first stimulus package granted hundreds of billions of dollars in an attempt to relieve family, business and government funding shortfalls as a result of mandated school and business closures. If states accept more federal bailouts, it will only harm their economies in the long run. Instead, state leaders and lawmakers should focus on the sound policies proven to build state economies stronger and more resilient.

There was overwhelming support for the first stimulus package in March, but voters are now aware of the strings attached that will accompany more state bailouts. A recent Rasmussen survey showed that eighty-four percent of likely voters are concerned the HEALS Act includes costly items that have nothing to do with the coronavirus. Americans should trust their instincts.

The economic boom in recent years gave states the opportunity to build up rainy-day funds – but not all states planned for the rainy season brought on by COVID-19. Some remained highly dependent on their revenues and still accumulated massive debt.

Now, another stimulus package threatens to reward those states that practiced poor fiscal restraint in pre-pandemic times, but at the expense of states that practiced sound fiscal management.

Federal bailouts make big promises of quick fixes for Americans, but history has shown us these big promises continue a cycle of debt and spending, bankrupting the future.

And lawmakers across the states are speaking up. Last week, over 200 state legislators signed a letter opposing a federal bailout of the states instead urging state leaders to practice fiscal discipline and put in place sound policy to ensure a strong recovery.

Americans deserve stability following months of uncertainty, and the best thing state leaders can do is prioritize the tried and true policy that has consistently proven to build economic growth in states. For over a decade the ALEC-Laffer report “Rich States, Poor States” has ranked states for their potential economic growth by looking at 15 specific state policies.

The proven policies highlighted in the annual report are always important for a state’s economic success, but in an economic downturn with clear budget shortfalls on the horizon, low-tax, low-regulation policies are even more important to the future of the states. Recently, the Center on Budget and Policy Priorities recently released a report that found for 2020-2022, state government revenues will fall by over $555 billion.

The principles that value free market, fiscally responsible policy will help states respond to the high price of COVID-19 and prepare for future problems. And if states neglect their rainy-day funds, they will surely fail.

History repeats itself, and what history teaches us about federal bailouts is that they are harmful to our states. This is a crucial time for decision-making that will define our future. It’s not a time to put hope in big promises, but to put confidence in the reliable policies we know give states a competitive edge. Failure to make proactive changes is enough for a state to get left behind.

Proactivity is exactly the mindset we need moving forward. We need everyone – taxpayers, their elected officials and their state governments – to work together to make the right moves, put in place the right policies and rebuild society stronger than before.

Copyright 2020 Lisa B. Nelson, distributed exclusively by Cagle Cartoons newspaper syndicate.

Nelson is the chief executive office of the American Legislative Exchange Council, an organization bringing state legislators and stakeholders together to develop public policy beneficial to the free market and individual liberty.

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2020: The Year of Free Market Women

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Only 15 miles from ALEC headquarters in Arlington, Virginia lies a relic of a bygone era: the Lorton Workhouse and Reformatory. Originally built in 1910 by the very prisoners it would house, shortly after its opening it became the home of the Silent Sentinels – women who stood in front of the White House six days a week, silently protesting; demanding the right to vote.

Surely one of the earliest suffragists, Susan B. Anthony said it best: “No self-respecting woman should wish or work for the success of a party that ignores her sex.” A banner emblazoned with this quote was displayed at the 1920 Republican National Convention in Chicago by suffragist leaders Mrs. James Rector, Mary Dubrow and Alice Paul.

In Women’s History Month, 100 years after women were granted the franchise, we’ve come a long way. But, we’ve a long way to go.

The right to vote is important for the equality of all citizens. Representation at the ballot box was an important step. But, 100 years later, representation in elected office remains the next milestone.

During the 2018 midterm elections, the public was promised a change in the legislature; it was going to be the “year of the women.” Droves of voters submitted their ballot in support of the record-breaking number of female candidates, and Americans across the states celebrated when 102 women were elected in the House and 14 women were elected in the Senate.

The country patted itself on the back – but not all Americans felt the celebratory spirit. In the midst of an election where the “women’s movement” was heavily associated with victimization and the issues used to enable this attitude, one voice was left unheard: the voice of the market-minded, conservative woman.

As the women of the Democratic Party gained 18 House seats, bringing the number to 80, Republican women watched their representation fall from 22 to 13 seats in the House. In the state legislatures only 29 percent of seats are held by women. Of those seats, Republican women hold less than half.

It’s clear: 2018 was not the year of all women. But the future for market-minded, female representation is not bleak. According to the Center for American Women in Politics, 170 Republican women and 348 Democratic women have filed or are considered strong potential candidates for the House – nearly tripling the number of Republican women that ran in the 2018 cycle. These free market women are not running on the mindset of victimization, and they are ready to step up to the plate and break records.

And what of our responsibility – the conservative women ready to see principled representation for the unique voice we offer? It is time for free market women to support free market women. It’s time to take back our perspective on the women’s movement and reestablish that it does not belong to a party. All issues are nonpartisan, and all issues are women’s issues.

Think of the suffragettes that risked it all a century before. Think of the women of today in the Middle East who still need permission to vote from their husbands or fathers. Think of the women in countries like Uganda and Kenya who face violent protests at the polls and put themselves at risk to merely exercise their rights. They do not see themselves as victims – they continue to fight against the oppression because they know their voice is valuable.

How lucky we are in the United States to be able to put our voice into action at the voting booths. But it’s not luck; it was the work of the thousands of women and allies that fought tirelessly against the current for years. While long overdue, the 19th Amendment gave us that right, and now it is time to use it intentionally. We – the previously underrepresented women of free-market principles – must exercise our right and elect the women we know to be natural leaders and protectors of community and liberty.

Support the leaders that will show compassion and empathy, compromise, honesty, ethical decision-making and, most importantly, the leaders who will stand strong on what they believe in. Cast your vote to the women that value free enterprise and individual liberty, and who want to see a thriving economy for our children and our children’s children.

2018 can have “year of the women.” 2020 will be the year of the “market-minded” women.

Copyright 2019 Lisa B. Nelson, distributed exclusively by Cagle Cartoons newspaper syndicate.

Nelson is the chief executive office of the American Legislative Exchange Council, an organization bringing state legislators and stakeholders together to develop public policy beneficial to the free market and individual liberty.

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ALEC is Helping America and Its Legislators

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The beginning of the year brought with it a new decade, one we all hope will be filled with opportunity and success for us all. Contrary to what some of the folks currently out on the hustings say, government cannot guarantee those outcomes, but it can do a lot to make sure the table is set properly so that we, the American people, can achieve them.

Defining decisions will be made in the coming months – not just in Washington, but in state capitals from coast to coast. In many places, state legislators are already hard at work developing and enacting policies that will guide the future of our country. They will put things in motion that will hopefully lift the living standards and opportunities available to our children and our children’s children. That’s what they do. It’s why many of them sought an elective office in the first place.

This imperative was clearly visible at our most recent national meeting and the various learning engagements we’ve conducted throughout the country over the last year. Reflecting on what’s been accomplished in just the last year – criminal justice reform, changes to tax policy that benefits families and workers and has helped spark an amazing period of job creation, and education reforms that continue to emphasize quality, excellence, and the interests of parents and children over the priorities of a bureaucratic model created in the 19th century – demonstrate that what American Legislative Exchange Council, (ALEC) members are doing in the states is working.

Tracing back where these policy successes began, one need look no further than the ALEC model policy on each of these issues as they were used as an impetus towards positive change and reform. The US/Mexico/Canada Free Trade agreement that replaced NAFTA, the pension overhaul and recent data privacy legislation only scratch the surface of things that began as state efforts led by the free-market movement.

Another critical success, the FIRST STEP Act, which began in the states, continues to gather momentum in the fight to ensure criminal justice reform continues and that those who commit minor and victimless crimes receive appropriate, fair punishment rather than some draconian sentence out of a French novel. The next phase of this battle is sure to be exciting because of the lives that may be improved as a result.

At the ALEC Annual Meeting and States & Nation Policy Summit, thousands of state legislators, local government leaders, and stakeholders gathered to share valuable information and insight as to how to solve today’s policy challenges. ALEC held 30 Academies and issue briefings last year, which provide state legislators continuing education and a leg up in the world of policy making. ALEC taught legislators about wind farms, natural gas facilities, nuclear power plants, and much more.

We’re proud of our record as we are proud of our new program for experiential learning, now offered at every ALEC event to promote continuing legislator education. At the Annual Meeting, dozens of ALEC legislators toured the Community First Tiny Home Village in Austin, Texas, and learned how to fight homelessness in their states. And every legislator walked away learning how homelessness can be addressed without a bloated and ineffective government program.

Our shared commitment to individual liberty and free enterprise will always take this country forward to prosperity. Those who offer a vision of the future based on collectivism and even greater government control of our lives, our communities and our families are made uneasy by our success. They slapped a target on our back that we wear with pride as a testament to our continuing success.

It’s been difficult, but we will continue to forge ahead. Economic liberty, equal justice under law, job creation, education reform and the other issues on which we focus demand it. Brighter days are ahead for America because of the committed state legislators who stand up for these policies and the values inherent in them against who would just as soon shut down the debate because they know they can’t win the argument.

Our role as a convener of idea summits and as a source of energy in the policymaking arena provides both hope and a reason to make 2020 an even more innovative, solutions-based and successful year.

Copyright 2020 Lisa B. Nelson, distributed exclusively by Cagle Cartoons newspaper syndicate.

Nelson is the chief executive office of the American Legislative Exchange Council, an organization bringing state legislators and stakeholders together to develop public policy beneficial to the free market and individual liberty.

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