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Michigan’s bets have been costly, with the state making substantial payouts of targeted incentives: We ranked fourth in subsidies nationwide, by one measure (See Graphic 2, below). The table below was based on 2012 estimates made by The New York Times and then adjusted by Mackinac Center scholars. It accounts for subsidies as a percentage of each state’s gross state product. State GSP is a measure of the value for industrial output, and the GSP calculation helps put subsidies in perspective, especially if we wish to compare states to each other.
Despite Michigan’s high payouts in 2012 — and payments after that — its inflation-adjusted GSP ranked just 32nd among the states from 2012 to 2020. Contrast that with Idaho, which gave out the fewest subsidies of any state, as a percentage of GSP. Its GSP growth was third among the states over this period.
Maybe there’s something unusual about Idaho that drives its growth. Or maybe it is yet another example that states need not hand out free lunches to targeted corporations to grow their economies.
