ELLIOT: What North Carolina can teach the nation about economic stimulus

Most North Carolinians know that the state’s economy is doing well, both compared to our neighboring states and compared to the recent past. Exactly how much conservative policies since the 2011 legislative takeover by Republicans have helped the economic turn-around is up for debate. But any objective look at the state of the state will show how wrong the left and the old-guard media were about predicting gargantuan budget shortfalls, painful job losses, and general calamity and collapse when legislators proposed conservative reforms.Instead, the state’s economy is humming along, by some measures posting the fastest economic growth in the nation. Another major milestone came recently, when July unemployment figures were released, showing North Carolina’s jobless rate at 4.7 percent ­—the lowest it’s been since 2007 and below the national average of 4.9 percent.Since the slow recovery began in 2010, North Carolina’s unemployment rate had generally tracked with the national average and about a point higher. Then in 2013, the gap began to narrow. Now the state’s rate is lower, dropping an entire percentage point since this time last year while the national rate has showed scant improvement. In terms of jobs, the state has added 114,518 since last July, roughly equivalent to the population of Wilmington.What do all these numbers mean? First, North Carolina’s economy is fairly well tethered to the nation’s, although there can and will be differences. Second, policy choices matter. It’s impossible to know the exact cause of the boost to North Carolina’s rate of rebound since 2013 — but certainly no one would say that the state has enacted liberal policies since then.In effect, North Carolina’s leaders have stimulated the state’s economy through broad conservative reforms. While there are many more vestigial shackles on the economy — such as the antiquated certificate of need laws for healthcare, a ridiculous state-run liquor system, and anti-competitive occupational licensure requirements — so much has been accomplished that it’s hard to know which reform has had the most impact on the economy.Is it decreased individual income taxes, decreased corporate taxes, overhauling the unemployment insurance program, chipping away at the regulatory state, or something else that has helped the state to stop lagging the nation and start leading it? The truth is that it is likely the combination of all these policies and more. And while crossing the line to best the nation’s unemployment rate is more of a psychological threshold than anything else, the rate drop continues the long trend of recovery, a trend that conservative policies accelerated.And remember, Tarheel Republicans have been able to juice the state’s recovery while simultaneously taking short-term budget hits that will pay off down the road — rebuilding the rainy-day fund, boosting teacher pay and classroom supply funds, paying back a $2.75 billion loan to the federal government for unemployment benefits, and others. All this while enacting budgets using legitimate math that have produced small budget surpluses instead of the large, painful deficits of the past.If only the federal government had taken this approach to stimulus. Instead, Pressident Obama pushed through more than $800 billion in total “stimulus” spending, with little to show for it. There were some sensible short-term measures that helped ease the recession and provide relief, such as temporary payroll tax cuts and temporary extension of the duration of unemployment benefits. But by and large the recovery act was an orgy of spending, much of it directed to wealthy Democratic donors.North Carolina’s “stimulus act,” on the other hand, was a return to principles that would make Calvin Coolidge smile — minding the fisc and trusting citizens to make the most productive choices with their own money. But in a democracy, results are as important as principles. So it is good news for North Carolina Republicans that voters have such clear indications that their plans have worked.