“Maine Struggling to Revive Ailing Economy”
Recently, the Federal Reserve Bank of Boston released a study (pdf) examining the economies of New England. Today, the New York Times ran a story about Maine’s plight titled “Maine Struggling to Revive Ailing Economy” (registration required). MHPC also recently sent out a press release on this report.
The Bank’s study dryly concludes: “In many areas of the economy, Maine concluded 2005 no better than it began the year; in some areas, the situation worsened. Maine’s recovery seems to have stalled, and, accordingly, the state’s average coincident economic activity index barely budged between 2004 and 2005–and actually fell slightly over the course of the year–as the other New England states saw gains. In fact, Maine was the only state in the country to see a decline over this period, except for Louisiana.”
But while Louisiana’s decline was due to “forces of nature,” Maine’s decline can be attributed to the “forces of man.” Much of Maine’s economic woes can be blamed on a multitude of poor public policy decisions made at the state and local levels of government that substitutes government spending for real economic development.
Maine needs a principled and disciplined free-market approach to reduce its level of taxation, reform its byzantine tax code and reform its health care system–and to do so with a sense of urgency. Every day that passes Mainers fall further behind their fellow Americans in terms of economic progress. Since 1998, Maine has lagged the national average annual growth in Gross State Product by nearly a full percent point–3.1 vs. 2.2 percent, respectively.
Questions/Comments: Email J. Scott Moody