Illinnoyed?

I thought this Washington Times article about the stark economic differences between two neighboring states, Indiana and Illinois, was fascinating. States are an interesting microcosm of the country as a whole, and comparing the economic results of different policy approaches taken by different states should be instructive for our federal politicians as they try to figure out how to get our country out of its current economic mess. Months ago, I posted a link to an online Forbes article discussing how draconian environmental regulations had damaged the economy of California and driven businesses out of the state in large numbers. Like California, Obama's home state is dominated by left-wing Democrats, and those Illinois Democratic politicians are doing their very best to follow in California's footsteps.

About a year ago, Illinois's Democratic legislature, with support from its Democratic governor, forced through huge tax increases -- 67% increases for individuals, 30% increases for businesses -- on a party line vote (in a lame-duck session, no less). Since then, the state has lost 89,000 jobs. Over the past year it has competed with neighboring Indiana for new investment and jobs 45 times, and lost 42 of those contests to Indiana. The state has also had to turn around and offer tax incentives to large corporations based in the state to keep them from moving out, which has understandably enraged the public. And ironically, the revenue gained from those massive tax increases, supposedly needed to pay down the state's debt to avoid fiscal insolvency, has simply been used to pay bloated public employee pensions and as an excuse to continue to increase spending. Of course, out-of-control spending is the reason why both the federal government and many state governments are tetering on the brink of insolvency, but Democrats (and some Republicans as well) have no interest in reining in spending. They want to raise taxes instead, which hurts businesses, kills job growth, and drives away investment, which in turn makes the budget crisis even worse, which results in added debt. It's a vicious cycle that has left Illinois's economy in shambles and threatens our entire country as well.

By contrast, Indiana is headed by a fiscally responsible Republican governor (Mitch Daniels) and a conservative legislature that has succeeded in balancing its budget, reducing spending, and keeping taxes low. This is why the state has been so effective at stealing new business and investment from Illinois that it has started an ad campaign called "Illinnoyed?" that explicitly targets Illinois businesses.

Next November, our country has to decide whether to re-elect Barack Obama, another Democratic politician obsessed with raising taxes on the rich and on the evil corporations but completely uninterested in taking any meaningful steps to reduce federal spending and reform entitlements. I hope that, unlike Illinois, we make the right choice.