Ryan Streeter
Middle America is where the action is. Today, as we take in the new Census figures, we see that the churning middle of America is marked by population growth in areas that have favored Republicans.
Changes reflected in the Census numbers are very much a policy story, not just a story reflecting the random wishes and preferences of millions of Americans. People move to places because of the cost of living or the favorability to business, and away from places that make life more expensive and business more difficult - and it's the policies in each place that make the place attractive or unattractive in these ways. Why else would people be leaving beautiful California in droves? It's not because California's wine suddenly got worse or its coastal vistas less appealing.
I have made this point at The American's Enterprise blog in the past by comparing California to Texas (a comparison that has become something of a sport for writers and policy wonks in the past year or so). The two largest states in America offer a compelling portrait of how policy choices, over time, can affect what we call demography. Rich people with few children and socially liberal outlooks on life are comfortable in San Francisco. Middle income couples who want to start a family and launch a new enterprise leave San Francisco and head for Texas. What we call demography follows from the policy environment in each place.
The beauty of the United States, and the envy of European countries trying in vain to replicate this dynamic on a continent with multiple languages and cultures, is that states can compete for population and business quite easily because of the lack of linguistic barriers and because of a common culture (yes, we Americans do have a culture). States will therefore be locked in a competition that is as old as the United States itself.
But the federal government can play a role to make this competition even more lively, and if I were running for President in 2012 as a Republican, I would propose a few things to do just that. More competition among states will ultimately favor states that implement pro-business and pro-family policies - which ultimately favor Republicans.
Propose legislation that prohibits Congress from bailing out states. There is a lot of noise in the news about the rugged fiscal condition of a number of states. But this is only the beginning. If you think the debate about bailing out banks was rough, wait until we start talking about bailing out California - and don't be surprised when Congress decides to do just that. In fact, I would argue that governors and state legislators are expecting just that. And what an insult that would be to reformers such as Mitch Daniels of Indiana or Chris Christie of New Jersey, who have staked their reputations on the ability to bring their states' fiscal houses in order.
Following from the first point, propose that the federal government withholds its subsidy to states for federally-backed bonds if a state can't service borrowing costs due to profligate spending. The bulk of states' financial predicaments results not from debt but from out-of-control spending. It's nearly criminal for them - and their bondholders - to expect the federal government to help them service their debt when they can't control their own spending. If states know that federal subsidies end if they can't control their finances, investors in turn will adjust their behavior.
Propose a new authority for the President to spend less than Congress authorizes. This one may be complicated, but some states' governors have this authority, and it helps to control costs by conditioning funding on certain behavior. If the President were able to write down discretionary spending levels to states that were misusing the funds or using them to fill spending gaps resulting from their own profligacy, states would adjust their behavior.
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