Well, we were right. Headlines this morning declared America’s economy shrank for the second quarter in a row and yesterday’s news cycle confirmed the Fed was delivering another large interest rate hike.
Politicians, policy makers, and members of the media are scrambling to redefine the term “recession” for the American public but voters are not fooled by word games that are being played by politicians. Iowans are not only paying more for groceries and gas, but inflation is also eating away at their wages and savings, serving as a de facto tax hike.
Hopefully Iowa’s leaders do not get caught up debating whether the United States economy is in a recession (technical, real, or otherwise). Instead, attention should be paid to what the status of the economy might actually mean to those of us here in Iowa, and what impact it could have on the state’s budget.
Above is a table identifying the six most recent instances when the American economy was in a recession (1980, 1981-82, 1990-91, 2001, 2007-2009, 2020) and the corresponding changes in Iowa’s revenue.
Find out how this data and state leaders’ prudent fiscal policies can create a roadmap that will help our state weather future economic storms triggered by irresponsible federal policies.
The results are in from the most recent Iowans for Tax Relief Foundation Poll, conducted by Cygnal. Here are a few of the highlights:
ITR Foundation President Chris Ingstad said, “Results like these seem to indicate Iowans approve of the conservative policies enacted in our state, while wanting to push back against the liberal agendas being promoted by Washington, D.C. and the political left. We are encouraged that Iowans agree the best way to fight inflation is to keep more money in the hands of families and businesses, instead of cranking up taxes, spending, and corporate regulations.”
View full poll results to see where Iowans stack up on support for the right to bear arms, & how the abortion debate impacts the decisions of voters.
The record high inflation that is plaguing Americans is being fueled by out-of-control federal spending. The federal government has spent over $6 trillion on COVID-19 related pandemic stimulus measures and a portion of those dollars were not used as many states experienced large surpluses.
It is unfortunate that the American people have become numb to the national debt increasing without any major consequences. However, with the national debt over $30 trillion and rising, which translates to an estimated $97,500 per citizen, record inflation is beginning to change that.
If Congress does not rein in spending it will create dire economic and national security consequences. Thankfully, one U.S. Senator is proposing a budget plan that will begin the process of addressing out-of-control spending.
Learn how the plan works to rein in spending and bring stability back to our economy and country.
Last week’s episode of ITR Live included a discussion of the city of Des Moines’s decision to participate in a pilot program that aims to provide guaranteed income to low-income residents of central Iowa costing property taxpayers $500,000.
The same day the city of Des Moines’s decision was announced, the Wall Street Journal released a study, “The High Cost of Free Money”, by Harvard and the University of Exeter examining the impact of unconditional cash transfers to low-income Americans. Contrary to the thought that handouts would lead to better financial decisions and a reduction of stress, the study came to the exact opposite conclusion.
Expanding programs at the local level is becoming a trend in our larger cities across the country. The progressive left can’t get their preferred policy solutions done through either the state legislatures or Congress, so they just go and start picking them off at the local level. This is not only poor policy, but it simply is not a role of local government.
In March 2021, the United States was in the midst of the COVID-19 pandemic. In addition to previous large-scale stimulus measures, Congress passed the American Rescue Plan Act (ARPA) on a party-line vote. Now Iowa cities and counties are flush with federal dollars from ARPA, with local governments in our state collectively receiving $1.162 billion.
Iowans for Tax Relief Foundation submitted open records requests to a selection of eleven cities and eight counties across the state of Iowa to determine how they utilized their ARPA funds. According to the data they provided ITRF, these 19 local governments have approximately $465 million (86%) of their ARPA allocation unspent as of June 2022. At the time of its passage, ARPA was billed as necessary relief for local governments hit hard by the pandemic. However, whether local governments needed funds to recover from the pandemic a year after it started is a question that should have been taken more seriously. With so many ARPA dollars still sitting on the sidelines, it appears the need for those dollars may not have been as great as it was thought to be.
A second tranche of ARPA payments is still scheduled to be distributed in late-2022. Assistance paid out this long after the onset of the pandemic, when everyday life has, in so many ways, returned to normal, is arguably too late to do any good and will only further contribute to painfully high inflation.
Read the details of our survey and see how your local community spent their ARPA dollars.