The United States was founded on the principle that there should be ‘no taxation without representation’. Adherence to that principle helped keep the government small for much of America’s history.

Throughout the nineteenth and much of the twentieth century, those that the States sent to Congress proved reluctant to approve federal largesse. Unfortunately, the federal government discovered a way of overcoming this constraint; rather than raising taxes directly, they figured out that they can simply borrow the money they wanted instead.

Instead of trying to persuade lawmakers to increase taxes in order to be able to spend more, the federal government issues bonds – basically an IOU – in exchange for cash. While Congress has to approve tax increases, it is the Federal Reserve (created in 1913 and not mentioned in the Constitution) that issues bonds with far less democratic oversight.

By borrowing, rather than raising taxes, those in Washington DC have been able to find money for their various boondoggles, without risking the wrath of voters by raising taxes.

To be sure, the federal government has been issuing bonds since the days of Alexander Hamilton, if not before. But it is the sheer amount of recent borrowing that is without precedent.

The total US federal government debt today stands at more than $31 trillion (not billion, trillion). That is the total amount of debt that the US government has managed to accumulate over the past 235 years. But here’s the shocking thing; over half of that total amount of debt has been accumulated since 2008, the year that Barack Obama was first elected.

A tenth of all the US government debt accumulated since the founding of the Republic has been borrowed in the two years since Joe Biden was inaugurated. The American Rescue Plan and inappropriately named Inflation Reduction Acts have indeed been eye-wateringly expensive.

When the government accepts cash from bondholders, the bondholder gets in return a slice of future tax revenue – the interest payment. This might not be such an issue when interest rates are low. But, of course, interest rates have started to rise – and so too has the amount of money that US taxpayers must pay to service the debt that the federal government and Federal Reserve ran up in their name.

The Congressional Budget Office forecasts that annual net interest payments on the national debt would total $399 billion in 2022, but then triple over the next ten years to $1.2 trillion. The American government is already spending more money servicing its debts than it does on transportation, housing or education.

Progressives might insist that we spend tax dollars for wealth redistribution. The effect of their reckless accumulation of debt since 2008 will be to redistribute vast amounts of wealth

from US taxpayers to bondholders. Not quite the wealth distribution they intended, perhaps.

To try to prevent Washington from spending money in a manner that would shame a drunken sailor, there has long been a so-called ‘debt ceiling’. This is a limit on the amount that can be borrowed.

The trouble is that the ceiling keeps on being raised. Indeed, by some measures it has been increased 78 times since 1960, rendering it rather irrelevant.

The current ceiling is set at $31.4 Trillion, and the day is fast approaching when the ceiling will either need to be raised again or spending cut.

Fortunately, thanks to the intransigence of a handful of Republicans, the 118th Congress is committed to having a vote to decide if the ceiling should be raised, or spending curtailed.

After two decades of reckless spending, which risks bankrupting the United States and diminishing our status as a superpower, will those we elect insist that the federal government lives within its means? Or will we see more of the same?

This is going to be a key moment for Congress and America.

Douglas Carswell is President & CEO of the Mississippi Center for Public Policy. He was previously a Member of the British Parliament.

The free market is defined as unrestricted competition between private businesses. 

A large majority of Mississippians would claim to be free-market driven, supporting new companies or enterprises coming into the state. More business boosts the economy, right? In a free-market society, we should be jumping at the idea of new companies bringing in additional jobs, innovation and dollars. One would think. 

A new bill has emerged in the Mississippi Legislature that would turn away one of the fastest-growing markets in America. House Bill 401 revises certain provisions of the Mississippi Motor Vehicle Commission Law in regard to how manufacturers sell their vehicles. 

Currently, a car manufacturer is permitted to obtain a dealership license and sell the vehicles right where they’re made. This bill would change that. 

HB 401 prohibits manufacturers from personally engaging in business or being licensed as motor vehicle dealers within the state. This is a direct target to electric vehicle manufacturers because EV companies almost always sell their vehicles through their manufacturers, not needing dealerships to do the transactions. 

While these other auto manufacturers do use dealerships to sell their cars, the majority of acquired revenue generated from these dealerships comes from maintenance services. EV companies don’t need these services because electric cars don’t require oil changes or transmission upkeep, therefore not needing the same kind of dealerships that other auto manufacturers demand. 

The dealerships act as a middleman, essentially costing the consumer more money in the end. The EV model of doing business cuts out that middleman by selling directly to the buyer, saving that buyer time and money. 

If this passes, an actual law would dictate who could create jobs and investments in our state. Instead of bringing this booming industry into Mississippi, EV companies will choose to build their manufacturing sites elsewhere, such as Louisiana or Tennessee. We’re pushing jobs and investments across state lines. Mississippians who want to buy a Tesla or Lucid car will still buy one, but instead of the money being spent in Mississippi, it will be going to neighboring states who don’t have these ridiculous constraints. 

Other industries aren’t subjected to such regulations. For example, we have an Apple Store in Mississippi which is allowed to sell iPhones, MacBooks and other products directly from the store. If Apple had to adhere to the same rules that this proposed bill would enforce, then only places such as Best Buy or C Spire could sell these products rather than the prime manufacturer- Apple. 

The point of living in a free-market society is allowing the customer to choose how he or she wants to buy their vehicle. If they want to go through a third-party franchise, that’s fine. If they would rather buy straight from a manufacturer, that’s also fine. That should be one’s own prerogative. 

The government should never be involved in how a business operates. Choices and individual liberty are what drives the free market, not government oversight. 

HB 401 will considerably hurt the free market and Mississippians. Businesses will go elsewhere, along with their jobs and commerce. We don’t want to be kicking ourselves down the line for enacting bad policy. 

This is more than just electric vehicles and car manufacturers. What kind of Mississippi do we want to live in? One where the government tells us how to live and operate, imposed by vested interests? Or one where we make our own financial choices so that investments can be made to deliver the greatest prosperity and opportunity to the people of the Magnolia State. 

Rural hospitals in Mississippi are in crisis, we are told. Unless they receive more money, many may close, apparently.

There’s an easy answer, according to those that want to expand Medicaid. Rural hospitals, they claim, are losing money because of the costs of caring for all those without health insurance. If only we would expand Medicaid, they suggest, rural hospitals would be secure.

This idea is nonsense, but unfortunately many in the state legislature now believe it.

Rural hospitals do indeed face a financial squeeze. This is not due to a lack of Medicaid but because Medicaid does not pay. Medicaid reimburses hospitals significantly less than the actual cost of providing treatment.

Every time a rural hospital treats someone on Medicaid, the hospital likely loses money. How would expanding such a loss-making system improve the financial position of rural hospitals? It wouldn’t.

Many Mississippi hospitals are in financial difficulty not because there is too little Medicaid, but because there is too much of it. Drawing more people and health care providers into this loss-making system solves nothing – and might make matters worse.

Those that run rural hospitals have to walk a financial tightrope. On one side, they need to take patients on Medicaid, but they do so in the knowledge that they will seldom be reimbursed enough to make any money from it. To balance the likely loss, they then need to find and charge enough from insured patients to recoup what they lose on the Medicaid side.

Expanding the number of Medicaid patients would mean that they need to recoup more from insured patients, through higher premiums and charges. It is not impossible that if rural hospitals started to do this, they would discover that there simply aren’t enough insured patients to cross-subsidize the cost of treating those on Medicaid.

For many in the state legislature, Medicaid expansion has become an answer looking for a solution. Cash-strapped hospitals? More Medicaid! Poor postnatal care? More Medicaid! Unequal health outcomes? More Medicaid!

Never mind that it might actually be Medicaid that accounts for many of the shortcomings in the current system. Anyone opposed to more Medicaid is treated as if they want worse health care.

The demand to expand Medicaid has drowned out the case for making the kinds of changes our health system in Mississippi actually needs.

Did you know, for example, that the Mississippi Code explicitly prohibits any freestanding Emergency Room in rural areas, except in very limited circumstances? Having freestanding ER facilities in rural areas might make good sense. But insisting that there can only be an ER facility if there is a fully-fledged hospital attached necessarily limits ER provision in rural areas.

Across Mississippi, anyone looking to expand healthcare provision needs to get a permit – known in the businesses as a Certificate of Need. They are notoriously difficult to get, meaning that the shape and scope of healthcare provision in much of the state have been frozen in time.

Healthcare provision has not been allowed to evolve and grow as the needs of local communities change. It is hardly surprising that after four decades of this protectionist red tape, the healthcare facilities in many parts of our state no longer match the actual demands of those that live there.

“Okay, Carswell” some in the legislature will say. “These arguments are all very interesting, but what do I say to someone in my district that only earns $40,000 a year and can’t get the healthcare that their family needs? We have to have practical solutions that will help them today”.

I agree. Change is needed to ensure that primary health care is available at a price that someone on a relatively low income can afford – and other states show precisely how this might be done, without expanding Medicaid.

Next month, Dr. Lee Gross, a brilliant physician from Florida is coming to Mississippi to explain how he provides affordable health care to ordinary families. Instead of asking for insurance or Medicaid, Dr. Gross provides families with care using an affordable subscription model. It is low-cost, reliable and wildly popular.

I hope that lots of lawmakers will come to listen to Dr. Gross explain how we can actually improve health care for low-income Mississippians.

What’s the difference between a tax cut and a tax rebate?  This question may feature prominently during the current legislative session in Jackson.

A tax cut means lowering the amount of tax taken from you by the government.  A tax rebate, on the other hand, means the government giving back some of what it has already taken from you.

A cut in taxes is recurring.  Unless and until our lawmakers vote otherwise, the amount you pay goes down.  With a tax rebate you get a one-off grant – given in an election year.

Mississippi currently has record cash reserves and a large state budget surplus.  Being an election year, you won’t be surprised to hear that all our state leaders support the idea of letting taxpayers have more of their own money. 

The question that divides them is should this be done as a one-off rebate or as a more permanent reduction in the cost of government?

I am not against a tax rebate.  Letting taxpayers keep more of their own money is always a good idea.  I just happen to think that the rebate needs to be recurring; in other words, a tax cut.

Why would anyone be skeptical about a one-off grant given by politicians in an election year?  You only need to ask the question to answer it. 

In 2022, Mississippi’s leaders introduced the largest tax cut in our recent history, reducing the personal income tax rate from about 7 percent to 4 percent.  This was a bold move and at a stroke, they made our state more competitive. 

For the past thirty years, much of the southern United States has flourished.  Tennessee, Texas, Georgia and Florida have prospered.  Even Alabama is doing pretty well.   Why? 

The fastest-growing southern states have low taxes and light regulations.  Far from having one-off tax rebates, Tennessee, Texas and Florida don’t have any income tax at all.

But what about our own state?  Mississippi has not grown nearly as fast.  If we want to be part of the southern success story, we need to cut our taxes to the low level that they are in some of the neighboring states.

In the 2023 legislative session, our lawmakers have the chance to put our state on the road to greater prosperity by giving us meaningful tax cuts, not just a one-off rebate.

Not a single conservative leader in Tennessee, Texas or Florida would run for office proposing the rate of personal income tax that we have in our state today, offset with a mere tax rebate.  It is time for our leaders to be just as bold.

“But will we be able to afford it?” I hear you ask.  Good conservatives should always make sure that the math adds up.

That is why the Mississippi Center for Public Policy published a Responsible Budget for our state at the start of this session.  Working with a former White House economist, Vance Ginn, we show how our lawmakers can keep spending under control and use the large surplus that we have to make tax cuts – not a mere rebate – that we can afford.

The 2023 Legislative Session has begun! It's been a little over a week since the state legislature gaveled in, and hundreds of bills have already been dropped in both chambers. 

As I oversee MCPP's legislative affairs, I will be giving weekly updates to keep you all informed on governmental news, policies we want to highlight - both good and bad - and the status of our agenda throughout the session. 

NEWS

Candidates began qualifying to run for the 2023 elections beginning last week. Candidates have until the end of the month to qualify, but many incumbents have already done so. 

Gov. Tate Reeves and Lt. Gov Delbert Hosemann will be seeking their respective positions for a second term. House Speaker Philip Gunn will not be running for reelection, but Speaker Pro Tem Jason White plans to run again, stating if elected as the new Speaker in 2024, he would gladly accept the role. 

POLICIES

While most bills that have been dropped have not yet been discussed in committee, here are a few that have been introduced so far that we would like to highlight. 

THE GOOD
- HB 31 from Rep. Timmy Ladner provides penalties for knowingly making false accusations of a person committing a crime. This could help prevent misguided harm that could negatively impact reputations of the accused. 
- HB 38 introduced by Rep. Henry Zuber requires new proposed agency rules to be approved by the state auditor. This would allow for more transparency in agency spending. 
- HB 370 from Rep. Shanda Yates allows for a municipal recall. If members of a municipality feel a mayor or local elected official is not performing to the best of their abilities, they can call for the removal of a said official with a petition of signatures. 

THE BAD
- HB 54 by Orlando Paden and both HB 80 and HB 99 by Oscar Denton infringe on our second amendment rights. These bills restrain certain Mississippians from purchasing firearms, an act that goes against our Constitution.
- HB 74 from Charles Young requires that all Mississippians ages 12 or older must carry photo identification with them at all times, and those found without an ID will be fined. While one must have a driver's license to operate a motor vehicle, simply existing does not constitute for means of providing identification. 

THE INTERESTING
- HB 45 from Gene Newman requires trash pickup if someone is found littering as a means of punishment. Along with easily paying a fine, offenders would have to learn from their mistakes by actually reversing their crime.
- HB 133 by Bryant Clark gives two or more municipalities the authority to create a joint police force amongst one another. While logistically I am not sure if this would be very successful, the concept is intriguing.

OUR AGENDA

We are currently working with various lawmakers to see our plans put into action. A full list of MCPP's goals for the legislative session can be found here. 

So far a few bills have already been introduced that support our agenda, with more to come: 
- HB 370 which constitutes a municipal recall, as mentioned above, is a topic MCPP has been a consistent advocate for. 
- HB 9 from Rep. Lee Yancey authorizes pharmacists to test and treat particular minor health conditions. MCPP believes in changing the state's healthcare system for the better, and we support giving pharmacists more jurisdiction. 
- HB 10, also from Rep. Yancey, removes regulations and Certificate of Need requirements for certain medical facilities. While we support the overall removal of CON laws in the state, this is a great first step in repealing an outdated federal mandate that negatively impacts the quality of healthcare. 

With a new year, comes new ideas, and MCPP is excited to promote conservative ideas over the next few months. We hope you'll follow us on this journey as we work toward creating positive change for our dear Mississippi.  

Conservatives in the Mississippi legislature will spend plenty of time considering cultural issues in the 2023 legislative session.  Let’s hope they don’t forget to address the economy, too.

When the Mississippi Center for Public Policy published a Conservative Platform for our state just before the start of the current session, we called for a Woman’s Bill of Rights to counter some of the more extreme ‘woke’ ideology that has started to infect sports.  We also suggested a Parents’ Bill of Rights and proposed a new law to tackle ‘woke’ corporatism.

It’s great to see that these ideas are being taken up and a strong swell of support for them among our lawmakers.  But conservatives also need ideas to improve the economy.  

Here are some things that conservatives in the legislature should look to do this session.

• Cut taxes:  Mississippi has a massive budget surplus plus the largest cash reserves in our history.  At the same time, we have a higher tax burden than many neighbouring states.  Using some of that cash surplus to reduce taxes would allow us to grow like some of the neighbours.

• Remove restrictive rules that increase health costs:  Mississippi has some of the worst health outcomes in the country.  One of the reasons is that Mississippi has some seriously restrictive rules that prevent new healthcare providers expanding.  These so called certificate of need, or CON laws, need to go. 

• Abolish boards:  Downtown Jackson is full of state boards, agencies and commissions.  Far from living in a free market state, the permission of these officials is often needed for all kinds of economic activity.  Many of them should simply be scrapped.  It was wonderful to read a report written by the legislature calling for the abolition of the barber board.  Why stop with that?  Free Mississippi’s economy and shut down more boards.

• Deficit reporting:  How state agencies report their finances might seem deathly dull, but it matters.  For far too long those that run agencies have been able to ask for last minute funds from the legislature.  A bill is needed to set out deficit reporting requirements so that state funds can be properly managed.

• Allow more home-based businesses:  Of course, HOA rules should be respected.  But unless your HOA prohibits it, why not make it easier to run a business from your home if you don’t disturb the neighborhood?

What a farce! Having won a narrow majority in the US House of Representatives back in November, last week the Republicans could not even agree on who should be Speaker.

For the first time in living memory, a Speaker was not elected on the first ballot as a handful of Republican Representatives refused to support Kevin McCarthy. Eventually, after 15 votes – and plenty of concessions to the Republican refuseniks – McCarthy scrapped together just enough votes to get the job.

Such shenanigans, some will scoff, are yet more evidence of America’s political dysfunction. A Trumpian faction, others insist, are so intent on waging war against the political establishment that they are making America ungovernable.

Hang on a second. That narrative is nonsense. What happened last week shows not dysfunction, but the first stirrings of a long overdue renewal within one of Washington’s most moribund institutions.

Lazy journalists might find it easy to portray the Republican refuseniks as Trumpian, but Trump does not explain why they withheld their support from Kevin McCarthy.

The 45th President supported McCarthy for Speaker unequivocally, as did many of his more strident supporters in the House. Indeed, Marjorie Taylor Greene was reported to have him on the end of her cell phone, as she tried to encourage the last few holdouts to fall into line.

What eventually brought the Republican rebels into line was neither Trump nor Greene, but a series of concessions that they wrung from McCarthy.

Sick and tired of watching Congress rubber stamp decisions, they sought a series of changes to the House procedures that would enable them, as the elected representatives of the people, to have a greater say.

Thanks to the concessions they won, in the 118th Congress, there will be a vote on a balanced budget amendment. Efforts to raise the nation’s debt ceiling must be paired with spending cuts. Appropriations bills will have to be moved individually.

Having served in the British House of Commons for 12 years, a legislature in which individual members have not had the ability to amend budget bills in over a generation, I cannot tell you how vital I believe it is for an effective legislature to have the power of the purse. If Congress were to give up the power to control federal spending, the socialization of America will become both inevitable and irreversible.

Anyone that believes in limited government should cheer the way in which the Republican holdouts secured a set of concessions that will mean Congress can now cap the ability of the administrative state to make discretionary spending decisions. The House will once again have the power to reduce the salary of government officials.

Alarmed at the way that the previous Speaker, Nancy Pelosi, re-wrote the House rule book to give her greater power, Republican refuseniks also insisted on restoring the power to members to trigger a motion of no confidence in the Speaker at any time. The key word here is ‘restore’. The Republican party’s awkward squad in the House successfully sought to give back to members of the House powers that are rightfully theirs.

Back in 2009 in Britain, I tabled a motion of confidence in the Speaker of the House of Commons. This led to the removal of the then Speaker for the first time in over 300 years. The biggest challenge I had in ousting a Speaker who was clearly not up to the job was not garnering support from within the legislature. It was figuring out a procedure to move the motion. It is vital that members of the US House of Representatives retain a clear process for removing a redundant Speaker.

Last, but not least, the rebels won a concession which means that they will have at least 72 hours to review bills before they come to the floor. Stop and ask yourself why this has not been happening in the first place?

Those elected to the House of Representatives are sent to Washington DC to make laws. How are they able to do that if they do not even have time to study and consider the bills they are expected to vote on?

As for the idea that what happened in Washington last week was unprecedented, there have been 14 previous occasions when there were multiple votes to choose a Speaker. Back in the mid-19th century, the 34th Congress took 133 ballots before deciding.

The House might have had to take a couple of extra days to choose a Speaker, but it will be time well spent if it means that our elected lawmakers rediscover how to do their jobs.

Over the past half-century or so, the law in America has ceased to be a set of clearly defined statutes given effect by those that we elect. ‘The law’ has instead come to mean a set of rules generated by various branches of the administrative state to whom Congress has delegated too much decision-making. The power to allocate public money has been given to those that are not directly answerable to the public.

Last week saw a concerted effort to restore to the House of Representatives the role and responsibilities Congress should never have conceded. That is not evidence that American democracy is dysfunctional. It might just show us how American democracy can be renewed.

Douglas Carswell is the President & CEO of the Mississippi Center for Public Policy. He was previously a Member of the British Parliament.

Mississippi recently made some significant tax cuts. Thanks to the 2022 Mississippi Tax Freedom Act, over a million Mississippi workers will be better off as the state income tax rate is reduced from around 7 percent to a flat 4 percent.

In the coming legislative session, Mississippi lawmakers have to set a budget for 2024. Some will call for further tax cuts. Others will insist that we cannot afford tax cuts.

What should conservative lawmakers do? To help authentic conservatives in our state, the Mississippi Center for Public Policy has published a responsible budget for our state.

The key to setting a responsible budget, as every householder knows, is to get control of what we spend. We believe that Mississippi’s government spending (general fund appropriations) for 2024 should not exceed $6.75 billion.

To increase spending over and above that amount would mean raising spending per person in our state faster than inflation. That would be un-conservative.

When setting a budget, conservatives that are serious about limiting the size of government ought to follow a simple fiscal rule; any increase in government spending should not exceed the rate of population growth plus inflation.

Before drafting our budget, we took a look at Mississippi government spending over the past decade or so. Unfortunately over the past decade state government spending (the general fund appropriations) has tended to grow rather rapidly. Between 2014 and 2019, state government spending grew faster than population change plus inflation, meaning that the relative size of the state government in Mississippi increased.

The good news, however, is that since 2020 the expansion of the state government in Mississippi has slowed. Spending growth over the past three years has not exceeded changes in population plus inflation.

Genuinely conservative lawmakers should aim to keep things that way in 2024, and not exceed $6.75 billion in spending.

If lawmakers set a responsible budget that keeps control of spending, we estimate that there will be a budget surplus of around 800 million in 2024 – a portion of which could be used to reduce the tax burden yet further.

During the last legislative session, a number of lawmakers argued that we could not afford to cut taxes. If we were not careful, they claimed, we could end up like Kansas.

Kansas did indeed once cut taxes, before having to raise them again when the money ran out. But the money only ran out in Kansas because they failed to get control of spending first.

Here in Mississippi, provided we limit the general fund appropriation to $6.75 billion, there will be not just a surplus, but a sustainable surplus that can be used to cut taxes.

We believe that Mississippi’s budget surplus is both cyclical and structural. That is to say the surplus will not simply disappear as and when the economy slows. Provided Mississippi lawmakers keep spending under control there will be money left over to reduce taxes.

Over the past few decades, the southern United States has flourished. Tennessee, Texas, Georgia and Florida have enjoyed rapid growth. Dallas and Nashville have become go-to places for ambitious young people right across America.

Why are these southern states doing so well? Because they tend to be run by people who appreciate the importance of low taxes and light regulation.

While those that run New York, Chicago and California have raised taxes and red tape, driving businesses away, the south has gone in a very different direction.

Mississippi could be part of this southern success story too – provided we continue to cut taxes. A responsible budget for 2024 that carefully controls spending would be another big step in the right direction.

Douglas Carswell is the President & CEO of the Mississippi Center for Public Policy. The Responsible Budget for Mississippi can be read HERE. 

Mississippi’s government spending (general fund appropriations) for the fiscal year 2024 should be no higher than $6.75 billion, according to a new budget report published today.

Any spending increased over and above $6.75 billion would expand the size of government in our state and reduce the scope of future tax cuts.

The Responsible Budget for Mississippi, authored by former White House economist, Vance Ginn Ph.D., applies a simple fiscal rule to determine how much spending should increase:
      a) The level of spending (general fund appropriations) in 2023, plus
      b) The rate of population growth and inflation.

“Conservatives serious about limiting the growth of government in Mississippi should not raise spending faster than inflation and population growth,” said Douglas Carswell, President & CEO. “To do so would be to expand the size of government and to limit the freedom for further tax cuts”.

When preparing the Responsible Budget, Ginn looked at how Mississippi government spending had grown over the past decade. He found that between 2014 and 2019, state government spending grew faster than population change plus inflation, meaning that the relative size of the state government in Mississippi increased. More encouragingly, however, since 2020 the expansion of the state government in Mississippi has slowed relative to inflation and population changes.

With projected general fund revenue collections of $7.5 billion for the FY 2024, a Responsible Mississippi Budget would result in an estimated surplus of $0.8 billion.

"Our Responsible Budget suggests that much of Mississippi’s budget surplus is structural, rather than cyclical. That means that provided we keep control of spending, the surplus will not simply disappear as and when the economy slows," Carswell said. "That means that there is room for tax cuts if we keep spending under control."

With a potential $0.8 billion surplus, Mississippi can afford to further reduce the state’s personal income tax rate as much as possible (e.g., from 4 percent as expected over time from recent tax cuts to 3 percent). The state could also reduce corporate income taxes.

A link to the Responsible Budget can be found here.