US & Canada

Wyoming's cowboys teach fiscal restraint

The Wyoming state capitol
Image caption Wyoming's state government does not tax personal or corporate income

It looks as though 2010 is going to be a big year for small government.

Greece, Portugal, Ireland and Spain are learning painful lessons about living within their means, Britain's coalition government is planning serious and lasting cuts, and the Obama administration, having expanded the deficit in the hope of stimulating the economy, is now talking about somehow, someday, bringing it back down again.

In the wake of the global financial crisis, the bailing out of banks and the pricking of property bubbles in places like the US and the UK, a new mood of minimalism is setting in.

Sometimes governments embrace austerity out of an ideological conviction that cutting state spending creates room for the private sector to grow. Sometimes it is because they simply run out of tax revenues or scope for affordable borrowing.

Either way, the result is the same. Governments that spend less end up doing less.

And there are plenty of places in the US where that is seen as no bad thing.

Take Wyoming, where the belief that less is more, when it comes to government, is not confined to the right wing of the Republican Party.

The state collects its revenues mainly from its mineral industries - oil, coal and uranium - and runs without taxing either personal or corporate income.

True, it is only able to make that choice because of its natural resources - but of course it could choose to levy personal taxes as well and offer Swedish levels of lavish social protections.

Cowboy heritage

It chooses not to though. Wyoming, like quite a few other states out in the West, is thrifty and prudent and retains an old-fashioned belief in "sound" money.

Image caption Dennis Steele and his wife run a ranch outside Cheyenne, Wyoming

Dennis Steele, a college maths professor who spends his summer running a cowboy dinner show at his ranch just outside the city of Cheyenne, is convinced that the state's legendary fiscal caution has roots in its cowboy heritage.

You can see the connection.

In the old West, there was as much law and order as you could personally guarantee with your own guns and, of course, there was no federal government to nag you about the need to wear a crash helmet when you were out riding the range.

"Plenty of people out here reckon the government should just deal with defence and leave everything else to us," Mr Steele says.

"People here help each other out - we know what we need better than government back east could ever know."

Cowboys, of course, are Republicans. When I ask Dennis how many of the Magnificent Seven would have voted Democrat, he doesn't hesitate for a second.

"None of 'em," he assures me. "Not one."

Something of that fierce sense of independence has indeed filtered down over the years to the state's modern politicians.

'No free lunches'

One pragmatic Wyoming Democrat I spoke to said she did believe in the power of government to do good but was reluctant to characterise herself as "a progressive" in the wider American context. For "Progressive" read "Tax and Spend Liberal", of course.

And Tony Ross, a senior member of the state's Republican Party, had just returned from a family holiday in Greece and was incredulous over the profligacy he found there.

"It proves there are no free lunches," he told me. "Public sector workers in the end can't get 14 monthly pay checks in a 12-month year."

The odd thing is that while you can still find people arguing passionately for sound public finance at state level, when it comes to the federal finances, the voices of restraint are going unheard with dangerous consequences.

There are a variety of reasons.

Modern Republicans have convinced themselves that if you keep cutting taxes, the economy will grow to the point where the deficit won't matter.

Modern Democrats remain convinced of the ability of public spending to do good, especially during a recession.

Image caption Wyoming has one of the smallest populations of all the US states

The result is that one party won't raise revenues to tackle the debt and the other side won't cut spending. Something of a problem when they are the only two parties.

Add to that a two-yearly election cycle which effectively creates a mood of perpetual campaigning and you have a formula for failing to address difficult economic issues.

Wyoming is one of the least populous American states, with a population of about 500,000, but perhaps it has something to teach the mighty federal government after all.

If the lesson isn't learned, then this is one story - unlike the cowboy tales of the Old West - that won't have a happy ending.

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