Before Black Friday, November 21 Is “Economic Growth Tuesday”

Thanksgiving is on November 23 this year, and the following day is Black Friday.
 

But with the celebration of the harvest upon us, some big news that will be delivered on November 21 might get lost in the shuffle.

That’s when the U.S. Bureau of Economic Analysis will release its latest statistics on state economic growth, and the numbers are especially important for Nebraska.

Those statistics will be a follow up to the first quarter of the year, when Nebraska fell behind every other state in terms of Gross Domestic Product (GDP) growth, shrinking 4 percent.

Nebraska wasn’t alone in this rut. Most of our heavily agricultural neighbors are also seeing a significant pullback in growth due to falling agricultural commodity prices and their impact on farm incomes.

Map of US

If Nebraska shows it’s moving in the direction of positive economic growth on November 21, then the previous quarter’s downturn may be regarded as a speedbump instead of a roadblock. That would be something for everyone to be thankful for.

But if negative state GDP returned in the 2nd quarter of the year, that would technically mean Nebraska is in the midst of a regional recession, just as most of the country’s economy is entering high gear.

If Nebraska is currently in a recession, policymakers in Lincoln would do well to take notice when it comes to discussions of taxes, spending, and regulation.

There isn’t a consensus among elected officials in Lincoln about the extent to which government policies impact economic growth. But it should be clear to everyone that when economic growth is down, so is new revenue for government.

The state can’t spend money it doesn’t have, particularly from taxpayers who can’t afford to pay higher tax rates. But if the news on November 21 isn’t promising, then lawmakers need to start asking which state policies they could be changing in the coming session to remove economic disadvantages Nebraskans face compared to residents of other states that are gaining more economic growth.
 

There isn’t going to be any single economic event that will rescue Nebraska if we are actually in a recession. Economic growth is a messy-looking process that doesn’t happen from the top down. The price of corn isn’t going to double any time soon, and Nebraska won’t be saved by Toyota-Mazda or Amazon.

Instead, budget-conscious senators need to focus on making Nebraska the best place for hardworking people in any profession to set up shop and make a good living.

Posted by: Adam Weinberg

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