02.22.09
Economic Recovery: Facts for D.C. to factor in
When Congress and the President are working on the budget, they have a perfect case study for the “no new taxes” approach right here in Minnesota: we elected a rising star of the Republican party to be our Governor in 2002 on that pledge, Timothy J. “Tim” Pawlenty. 
Now in his second term, Governor Pawlenty won the office promising to balance the state budget at a time when Minnesotans were tired of the way politics had played out in the state capitol while Jesse”The Body” Ventura as Governor, and according to Wikipedia, Pawlenty attacked a deficit of roughly “$4.3 billion without raising taxes, primarily by reducing the rate of funding increases for state services, including funding for transportation, social services, and welfare.“
“New fees aren’t taxes”
If not for the fact that the tourism industry in the state took a big hit in 2005 due to a government shutdown and closure of highway rest areas, state parks and so on, we might have been ok with the winking at that pledge and calling some things new “fees” instead of taxes (heck, it was only $300 million or so,)
and major increases in tuition at the state colleges and universities, or cuts in areas such as school spending — until we realized there was no longer a band playing at the high school events. And in places where they value music, such as Fergus Falls, the communities and booster clubs can find local funding to keep band directors such as Scott Kummrow employed, right?
We needed the revenue, clearly, and the Governor didn’t raise taxes – although local jurisdictions had to fill the gaps as the money from the state dried up, but that’s another story. By the way, adding toll lanes to busy commuter routes isn’t a new tax, either. I have some question about how to label the bond bill the governor signed last year, but he vetoed some line items so maybe we can say he somewhat limited tax increases in the future?
But lets not quibble about fees and bonding, let’s talk about the Minnesota economy and budget – that’s the point. Sure, we might have put thousands of Minnesotans to work if the bond bill had included funding for light rail connections between Minneapolis and St. Paul, and that probably would have stimulated business and tourism in those areas, but it would have made the bonding bill even larger and somebody would have had to pay and the delay only adds maybe $40 million to the cost – later, when he’s no longer the Governor. And now our budget deficit in probably only $7-$8 billion.
No New Taxes
In Minnesota trying to generalize that taxes were problematic by definition glossed over that the government runs on money: funding for nursing homes, teachers, and education was slashed, for example, and the costs passed on to local communities to “balance the budget.” The state budget deficit is now conservatively projected at double what it was when Pawlenty took office, while sales tax revenues fall and companies slash payrolls driving people onto unemployment rolls (placing their health care coverage at risk and further reducing consumer spending.) At least 
Pawlenty isn’t posturing for the pundits as Louisiana Governor Piyush “Bobby” Jindal and a few others are by suggesting we won’t take “stimulus” money from the federal government – He’s saying Minnesota government needs cash.
We borrow to buy homes, cars, and even smaller items that fit on our credit cards. We continually pay interest to some of the same companies that needed bailing out on Wall Street, while one group of people benefits: the rich. They don’t worry about the price of cheese, cars, or college.
History doesn’t support trickle-down theory.
For the common good it’s time we admit that when you cut taxes for the rich they mostly they stash more money into their nest egg(s) so they can retire early, live comfortably, eat cake, and travel the world. Meanwhile the rest of us watch our food budget, some see the investment in their homes plummet, and if we have put money aside we watch what remains of it shrinking in our privatized retirement accounts.
Digg this story!
02.08.09
600,000 additional jobs lost in January.
The U.S. economy continues to reverberate from the policies (or perhaps lack of policies) that the Bush-Cheney administration championed since taking office 8 years ago, and by most accounts we’ve now lost over 3.5 million jobs during the recession that they bestowed upon the tax-payers and future tax-payers. The layoffs are building momentum, the unemployment rate is soaring, yet certain members of the U.S. Senate and House of Representatives continue to support the trickle-down theories that brought us to this economic precipice. But it’s not their fault.
I don’t mean the state of the economy – that’s the fault of everybody who ever championed, or simply ignored, deregulation of the banking and financial industries. No, it’s not their fault that they’re engaged in partisan theatrics at a time when the country has demonstrated a broad mandate for new approaches, because Nancy Pelosi tricked them. The Speaker of the House got the minority to close ranks, to vote as a bloc to block the first version of the new Stimulus bill even though they had been altogether supportive of Bush’s unfettered spending as the previous administration was winding down, and now the Republican Senators are largely following suit.
Some strategists might suggest that at such a juncture the wise thing would be to give the newly elected President what he asks for, hoping that by the time the mid-term election rolls around they’d have something to point their fingers at if it fails while saying, “we did what he asked.” But these savvy politicos couldn’t pass up the opportunity to close ranks when Pelosi ran a bill through quickly for a vote, and now they’re posturing desperately while the tax payers and voters watch more closely than the D.C. insiders are accustomed to – they’re being downright obstructionist, and that leaves the Democrats in a stronger position.
All the voters are seeing offered as alternatives by the Republicans is “cut taxes.” Cutting taxes sounds pretty good to the people at the top end of the earning scales, but when you’re worried about losing your job and keeping food on the table your concern is not for the Capital Gains tax which is already considerably lower than the Income Tax, your concern is over staunching the flow of jobs before unemployment spirals to the levels of the Great Depression. President Obama’s right to insist on timely action, the same sort of need the prior administration finally woke up to in the waning lame-duck days of their power.
Theatrics are alive and well in the Senate.
What are the Republicans opposed to? Not so much, it turns out: something under 1% of the spending, yet rather than come with proposals for the voters to contemplate their doing what worked in the past, made-for-Fox drama and histrionics, name calling. While the President is visibly reaching out to find common ground, some of the most influential Republicans in the capitol are hoping for sound-bites of their outrage and opposition “you have to start from scratch” – they failed to realize that Nancy Pelosi invited them back into their old, discredited “we-they” postures for the national audience, and failed to understand the urgency and pain of their constituents as the layoffs and foreclosures continue.
I might counsel the Speaker to be less successful, but I know there’s no taking the politics out of the process. I just hope the damage she’s done to the opposition doesn’t delay the repair the President’s crafting for the people.
The reality is the situation is urgent; we can’t allow the economy of the nation to falter and stall, we can’t afford it. The decisions have to be made and plans launched by people who can’t remotely follow the calculus that economists such as Paul Krugman or Mark Anson employ. Americans want to get back to work – and we want our elected leaders to do their work swiftly so we can stop laying off teachers and assembly line workers and losing their productive participation in our economy.
Maybe if we enforced layoffs in Congress in proportion to the rest of the country, or the budget, they’d get off their rhetoric and get the bill passed.
