New Mexico’s revenue estimators just announced the good times are here again! With almost $1.4 billion in “new” money for the upcoming fiscal year, progressive politicians Roundhouse are already drafting their shopping lists of things they want to buy for our state. In fact, the New Mexico House Speaker was so excited about this “new” money, he tweeted out that this was “proof that Democrat policies are working.”
Setting aside all of the predictable political chest-pounding, key questions New Mexicans should be asking is where is this money coming from and is it real?
Typically, when this much new revenue is coming into the state treasury, it usually means our economy is absolutely humming along with low unemployment, low inflation, and a general sense of optimism towards the future.
Yet, contrary to the claims of the House Speaker, every current economic indicator shows our economy is struggling. For example, New Mexico’s unemployment rate is the second highest in the nation even as there are “help wanted” signs everywhere. Rather than encouraging people to go back to work, Democratic policies have resulted in many people discovering they can make more money on unemployment than holding a job. Or, consider the fact that because of the shutdown imposed by the Governor, 40% of our state’s small businesses closed last year. Our state is also being forced to transition away from fossil fuels, a source which provides billions of dollars each year to state coffers and tens of thousands of jobs for New Mexicans, in favor of renewable energy which provides zero dollars to the state treasury and very few permanent jobs.
How do we have $1.4 billion in new revenue when these harsh economic realities are staring straight at us? The answer is simple. When we were all staying home during the pandemic, the federal government sent more than $20 billion directly and indirectly into our pockets. In turn, New Mexicans went out and spent every penny. People bought big screen TVs, new cars and pick-up trucks, and remodeled kitchens, while state government collected more and more in taxes. Oil and gas production also grew despite continuing efforts by progressive Democrats to rid New Mexico of our most lucrative and successful industry, one that provides tens of thousands of jobs.
Our current economy is living proof that excessive government spending can temporarily prop up consumer spending. However, the reality is such government-driven stimulus devalues the dollar and the free money is short-lived. This is why inflation is increasing faster than at any time over the last three decades as government has created a situation where too many dollars are chasing too few products. This federal largesse during the pandemic has also resulted in our national debt soaring to nearly $30 trillion. This revenue boom we are witnessing is not only short-term, but history has taught us that after every boom there usually is a major correction which causes revenues to decline.
Simply put, we are living in a Disneyland economy. The smoke and mirrors our progressive leaders are using is only creating the illusion of prosperity, but an economy based on hand-outs from the federal government is not sustainable nor is it good for the future of our state. Instead of listening to politicians giving false praise to a doomed economic plan, we need to embrace an economic future based on fiscal responsibility, low taxes, a vibrant private sector, and an educational system that produces well-trained workers for the high-paying jobs of tomorrow. Economic growth and prosperity will never be achieved through more government spending and handouts.
Randy Pettigrew, R-Hobbs, represents N.M. House District 61.