New Mexico, despite its natural beauty and rich cultural heritage, faces significant economic challenges. The state is experiencing an oil and gas boom, producing two million barrels of oil daily, which constitutes more than 15 percent of U.S. production. However, this has not translated into widespread prosperity for its residents.
According to Matthew Mitchell and Paul J. Gessing in a recent National Review article, New Mexico's lack of economic freedom is a major factor contributing to its economic struggles. They highlight that the state ranks 47th in employment growth and 36th in real GDP growth over the last decade. Additionally, it has the third-highest poverty rate and leads the nation in children receiving federal food assistance.
Mitchell and Gessing attribute these issues to high spending, steep taxes, and burdensome regulations that place New Mexico at 47th out of 50 states in terms of economic freedom. They argue that these factors hinder personal economic choices and overall prosperity.
Their report with the Rio Grande Foundation and Fraser Institute suggests that economically freer regions attract people, entrepreneurship, and growth while experiencing lower levels of poverty and homelessness. "Economically free places attract people," they write.
Despite having budget surpluses exceeding $3 billion annually and a substantial fund for future government spending, New Mexico's economy has grown by only 12 percent over five years compared to a 27 percent increase in budget size.
Mitchell and Gessing propose that New Mexicans question their leaders' policies when voting. They point out the state's high top marginal income tax rate compared to neighbors and stringent labor regulations as areas needing reform.
The authors emphasize the importance of increasing economic freedom for prosperity: "The evidence suggests that if allowed to make more of their own economic choices, New Mexicans would build a flourishing economy every bit as enchanting as everything else the state has to offer."
Matthew Mitchell is affiliated with the Fraser Institute's Center for Human Freedom in Canada while residing in northern New Mexico. Paul Gessing serves as President of the Rio Grande Foundation based in Albuquerque.
