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[Note: This material is copyright by the Des Moines Register, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Des Moines Register.]

But Iowa won't - can't, really - unilaterally disarm in the war between the states for what's called economic development.

Only the federal government has the power to impose a cease-fire. Congress should do so.

In the meantime, Iowa tries to stay in the giveaway game, each year adding to an ever-growing array of business incentives. As business writer Donnell Eller reported in the Sunday Register, there are so many state and local programs that it's impossible to do an accurate accounting of them. Worse, no one really knows whether the programs work.

The Department of Economic Development keeps track of the state-level programs and can ascribe a certain number of jobs created to each grant or loan, but in truth it can never be known whether those jobs would have been created anyway.

Ideally, businesses would locate their operations where it made the most economic sense. They would rely on private investors - not the taxpayers - to bankroll their expansions. That's how a market economy is supposed to work.

And tax money would be spent on schools, roads, libraries, parks and other improvements that benefit the general public. Overall tax rates could be lower, because there would be fewer credits and exemptions offered as business incentives.

Until the rules of the incentives game are changed, though, Iowa must keep playing. The recently re-enacted Grow Iowa Values Fund was a needed piece of legislation. To the governor's and Legislature's credit, the state has tried to target assistance to industries that are a good fit for Iowa and has attempted to exclude employers that offer only low-wage jobs.

The state also should provide for a thorough annual accounting of all state and local business incentives, along with revealing the now-confidential names of companies that claim special tax credits. Public disclosure is the least taxpayers are entitled to in exchange for their forced investments in private enterprise.

Nationally, the bidding war between the states is a zero-sum game. It adds nothing to the economy; it merely relocates operations. To the extent that market forces are distorted by state incentives, they might actually harm the economy. That's why the federal government should impose a moratorium on state incentives that affect interstate commerce.

Congress has shown no inclination to intervene, but Iowa Sen. Chuck Grassley, as chairman of the Senate Finance Committee, is in a position to at least open the discussion.

If Congress doesn't impose a cease-fire, the federal courts might. A federal appeals court last fall cited the interstate commerce clause of the Constitution in striking down a tax credit used by Ohio to induce DaimlerChrysler to expand its Jeep plant in Toledo. The ruling narrowly applied to one type of tax credit and might be overturned. But if the ruling stands and is expanded to other incentives, it could change the way the game is played.

Then states could compete for businesses on the quality of their schools, the greatness of their universities and their level of public amenities rather than the generosity of their giveaways. That would be good for the taxpayers and the free-market system.