N.C. Employment Woes Highlight Problems With Federal Stimulus

JLF analyst says tax hikes in proposed state budget would add to jobless woes

RALEIGH (Carolina Journal Online) — North Carolina's latest unemployment numbers help expose problems associated with the federal government's stimulus plan, according to a John Locke Foundation analyst with a Ph.D. in economics. Proposed state tax hikes of nearly $1 billion a year would make existing problems worse.

The N.C. Employment Security Commission's latest report lists the state's unemployment rate at 11 percent for June, down one-tenth of a percentage point from May's record-breaking rate of 11.1 percent. North Carolina ranks No. 8 in the country in unemployment. The May unemployment numbers featured the highest recorded rate since the state started keeping seasonally adjusted data, according to the ESC.

"The state's continuing struggles with unprecedented unemployment offer more proof that the federal government has done nothing to stimulate the economy," said economist Dr. Roy Cordato, JLF Vice President for Research and Resident Scholar. "In fact, increased government spending cannot stimulate the economy. Increased government spending is a drag on the economy."