Will Bidenomics resurrect the United States from the doldrums of a coronavirus-induced downturn? Or will freedom and some semblance of normalcy return the economic powerhouse to its pre-pandemic glory days? It turns out that the panacea to better gross domestic product numbers and job creation is reopening the economy, diminishing social distancing guidelines, and treating citizens like adults. As the country attempts to get back to business, the United States might need to rely on the red states for growth.
Red States Leading the US Recovery
The Bureau of Economic Analysis published a new report that used fourth-quarter GDP figures and the February 2021 unemployment rate to determine how the country is performing during the recovery.
Researchers discovered that the top states leading America’s economic growth were red: South Dakota, Texas, and Utah. Five of the remaining seven states were also controlled by Republicans: Tennessee, Iowa, Nebraska, Alaska, and Missouri. Connecticut and Delaware were the only Democratic strongholds on the top ten list.
South Dakota and Utah maintained the lowest jobless rates, with 2.9% and 3%, respectively. Hawaii (9.2%) and California (9%) possessed the country’s highest unemployment numbers.
Overall, real GDP advanced in all 50 states and the District of Columbia – both annually and quarter-over-quarter. Here is a list of the top ten states in the October-December period in terms of real GDP:
- South Dakota: 9.9%
- Texas: 7.5%
- Utah: 7.1%
- Connecticut: 7%
- Tennessee: 6.7%
- Iowa: 6.3%
- Nebraska: 6.3%
- Alaska: 5.8%
- Delaware: 5.8%
- Missouri: 5.6%
The report concluded:
“The increases in fourth-quarter GDP by state reflect both the continued economic recovery from the sharp declines earlier in the year and the ongoing impact of the COVID-19 pandemic, including new restrictions and closures that took effect in some areas of the United States.
“The annual 2020 estimates of GDP by state reflect the rapid shifts in activity, as business and schools switched to remote work, consumers and businesses canceled, restricted, or redirected their spending, governments issued and lifted ‘stay-at-home’ orders and government pandemic assistance payments were distributed to households and businesses. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP by state estimates because the impacts are generally embedded in source data and cannot be separately identified.”
So, what are some of the key differences between, let’s say, the Beehive State and the Ocean State?
The Republic’s Grand Experiment
One of the greatest characteristics of America is that all 50 states can experiment with various public policy mechanisms, from the social to the economic. The United States is not a monolith with a one-size-fits-all directive. Texas can cut taxes, while California can raise confiscation rates. New York can offer COVID-19 passports, while Florida can prohibit their existence. South Dakota can stay open during a pandemic, while New Jersey can shut everything down. Federalism is beneficial for the field of economics since the data collectors can assess what works and what does not.
According to Liberty Nation‘s regularly updated “Coronavirus by the Numbers,” there is a chasm between how blue and red states function.
In Missouri, entertainment venues and outdoor recreation activities are permitted. However, in Minnesota, only two households can gather. Nebraska has restaurants open, but New Mexico has kept them at limited capacity. Texas has ostensibly perturbed the White House for lifting mask mandates and broader restrictions. The Lone Star State has returned to normal, and the data are proving how beneficial it has been to the economy. Texas Governor Greg Abbott (R) has noticed, recently tweeting:
“The Texas economy expanded at a rapid pace of 7.5% in the last quarter of 2020. That means more jobs & more prosperity for Texans. Only one state – and no large state – had better economic growth than Texas. The Texas economy is on fire.”
Sunshine in a Dark Winter
So much for that doom-and-gloom dark winter, eh, President Joe Biden?
The COVID-19 doomers are constantly warning everyone to wait two weeks to see the graveyard after any state or municipality lifts public health restrictions or welcomes an event. Be it the Super Bowl in Tampa or college football celebrations in Alabama – the armchair epidemiologists have routinely cited the fortnight proclamation anytime people have a good time living their lives. Of course, the charts show that the new infections barely register following these so-called superspreader events. Contrary to what basement dwellers think, the economy cannot remain shut down until coronavirus cases have reached zero. People need to go back to work, commerce needs to be executed, and the government needs to confiscate wealth to pay for all the astronomical spending over the last year. Will there be new COVID-19 cases? Yes, but, as economics teaches us, trade-offs are one of the best currencies in the market.
Read more from Andrew Moran.
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