Recently the Bluegrass Institute partnered with the Mercatus Center at George Mason University to host its Citizen Education Seminar at the Crowne Plaza Hotel in Lexington. The event included both Bluegrass Institute and Mercatus scholars discussing the most pertinent barriers standing in the way of Kentucky’s economic competitiveness.
Speakers at the event included the Mercatus Center’s distinguished visiting scholar Maurice P. McTigue and senior research fellow Matthew Mitchell, Ph.D., along with John Garen, Ph.D., the Gatton Professor of Economics at the University of Kentucky and chairman of the Bluegrass Institute Board of Scholars.
During the following weeks, we will bring you exclusive video footage of what each speaker had to say about Kentucky’s efforts toward economic competitiveness with its neighboring states, as well as special extra footage of the Q&A session that followed.
Today, we offer Garen’s presentation in which he compares Kentucky’s recent economic performance to that of its neighboring states.
As Garen notes, becoming more competitive with our neighboring states is vitally important for economic recovery in both rural and urban areas of the commonwealth. He shows how Kentucky currently lag behind surrounding states in nearly every important key economic index:
- Kentucky’s labor-force participation is a full two points lower than that of either Indiana or Tennessee.
- Kentuckians’ average income is nearly $2,000 less than Indiana’s, and nearly $3,000 less than Tennessee’s.
- The commonwealth’s productivity is currently $4,000 less per citizen than either Indiana or Tennessee.
But dollars and cents figures aren’t the only areas in which Kentucky is lacking. Compared to the rest of the nation, our health and dependency stats are also abysmal:
- Kentucky continues to have the highest rates of lung cancer and total cancer among the states.
- The commonwealth ranks No. 48 among the states for coronary health.
- The Bluegrass State receives more than 100 percent of its General Fund spending in federal aid, making it one of the most government-dependent states in the nation.
In almost any relevant category one can think of – levels of education, health, GDP per capita or even transfer payments – Kentucky outranks only West Virginia.
According to Garen, there are two roads Kentucky can take in our efforts to become economically competitive with our neighbors: the road toward increased economic productivity or the path toward increased economic dependency. The former would increase Kentuckians’ labor-force participation, income and productivity. The latter would increase the size of government, amount of taxpayer funds redistributed and our reliance upon the welfare state.
What’s worse is that the feds actually make the situation worse by luring Kentucky by offering goods and services to Kentuckians for far less than what they could purchase them for otherwise. Meanwhile, our elected officials rush to accept the seemingly free lunch.
The only problem is that the feds are doing the same thing for every other state in the union, and where do they find the resources to pay for those handouts? They find a large chunk of it in our pocketbooks right here at home.