From Dan White at Moody’s Analytics:

Indiana and Illinois, which have similar geographies and industrial makeups, have approached the recent recession’s fiscal problems with diametrically opposed strategies. Indiana has relied on spending cuts, while Illinois has implemented some of the largest tax increases in recent memory. In the two years following the onset of the Great Recession, Indiana’s GSP growth has improved relative to the rest of the country at nearly twice the rate of Illinois’s.

I hope to write a short paper on this soon. White’s analysis jibes with this chart from Veronique De Rugy at the Mercatus Center.

Illinois has a negative net worth of almost $40 billion, by far the worst in the country. My back-of-the-napkin estimates say that Illinois’s recent tax hike would have increased state government revenues by 1.2 percent of state GDP. Spending has not been meaningfully reduced; in fact common sense accounting suggests that it has increased. If displayed graphically, Illinois’s 2011 fiscal adjustment would be a mirror image of the right-most graph above. Lawmakers in Illinois literally mimicked the strategy that has sent most debt-ridden countries further into debt.

(Hat tip: Nick Shultz)