A model for the 21st century.

• Author: Engler, John

As we approach the millennium, the other 49 states can learn much from Michigan's experience in cutting both taxes and welfare.

"It's the economy, stupid." The slogan is as fresh today as it was during the 1992 presidential campaign that cost Republicans the White House. Despite White House press releases to the contrary, the performance of the American economy in the 1990s continues to be of concern. For example, the U.S. Commerce Department reported that the nation's gross domestic product (GDP) expanded by a mere 2.3% in the first quarter of 1996. Stephen Moore of the Cato Institute observes that, if the GDP sputters ahead at this pace through the year 2000--which is what most economists are forecasting--the 1990s will go down as this century's second poorest decade for economic and income growth. Only the Depression-era 1930s were worse.

Moreover, the American middle class is feeling the pinch. According to the Bureau of Labor Statistics, real average weekly wages are 5.5% lower than during the Reagan Administration, so many families are in debt. Spouses are entering the workforce to help make ends meet, raising total family income by about one-third. Yet, these same families must pay almost 28% of their income to the Federal government. In effect, mothers are having to work just to pay off Washington.

It is useful to put the burden on American families in historical perspective. Washington has not always been so greedy. In 1954, the last year Republicans were in control of the White House and both houses of Congress, Federal taxes amounted to less than the tithe to one's local church--eight percent of total family income. Quite often, both parents did not have to work unless they chose to do so, and that's the point--families were free to choose.

Given the tough going for many middle-class families, what can be done? At the very least, we should take note of the ideas that do work. As National Center for Neighborhood Enterprise founder Bob Woodson says, "We must study success." There is no better place to do so than in the states, those laboratories of democracy where ideas can be tested.

Perhaps no state in the 1990s has had more success in solving its economic woes than Michigan. The "old" Michigan of the 1970s and 1980s could have been the poster child of the Rust Belt. Unemployment was above the national average for 192 consecutive months (1978-93). By contrast, it has been at or below the national average since then. Now, Michigan...