Mercury Rising 鳯女

Politics, life, and other things that matter

Cue The Ghost Of John Maynard Keynes Murmuring “I Told You So.”

Posted by Phoenix Woman on February 4, 2007

The StarTribune’s editorial staff, freed from the constraints of the wingnut-welfare-providing Anders Gyllenhaal (he who forced the blitheringly stupid GOP zampolit Katherine Kersten upon us), has now cut loose with a flurry of punches on just how devastatingly bad the Republican tax cuts of the past decade have been for the state’s economy, jobs and infrastructure.

There’s this from Dave Hage:

 Between 1997 and 2001, the Legislature passed five major tax cuts — not just temporary rebates but permanent rate reductions that reduced the state’s revenue stream by $1 billion annually and left state government, measured against the Minnesota economy, 10 percent smaller than it was in the mid-1990s.

It wasn’t long before local experts began to question the results. By 2004 Minnesota’s economy had actually slowed down relative to the 1990s, and by 2005 the state’s council of economic advisers noted that, for the first time in years, Minnesota’s economy was underperforming the nation’s.

Now an outside study has put Minnesota in a national context and confirmed those doubts about the low-tax experiment. Two analysts at the Center on Budget and Policy Priorities in Washington identified 16 states that passed major tax cuts during the late 1990s, then studied their economic performance in the 2001-2006 recovery.

The results? On key measures such as job creation and unemployment, virtually all of the 16 lagged behind the 34 states that didn’t pass major tax cuts. Minnesota, though its economy picked up steam in 2006, still posted weaker job creation and income growth than the U.S. average over the five-year span.

“There’s just no evidence that moving to lower tax levels boosts your economic performance,” says Nicholas Johnson, one of the study’s authors.

As the 2007 Legislature gets down to business, lawmakers should pay attention to these results. The DFL majority arrived in St. Paul with an ambitious agenda to improve the state’s schools, roads and health care system, then quickly discovered it doesn’t have the money to carry it out. Remember, the projected $2.2 billion budget surplus is largely one-time money; even Gov. Tim Pawlenty’s budget shows that spending in major categories will go down again after 2009.

Yet if legislators mention the dread phrase “tax increase,” they’re sure to be accused of wrecking the state economy.

They shouldn’t be buffaloed by that accusation, and they shouldn’t let the state’s needs be held hostage to what is now a discredited theory.

Then there’s this from John Foley:

If Minnesota were run like a competitive business, we would insist on a clear vision, achievable objectives and measurable results. One of the most common practices in business is for CEOs to come into a company and immediately start cutting costs. They know this is the fastest way to increase shareholder value and make themselves look effective — but it rarely lasts. Cost-cutting is not a sustainable business strategy. That’s one reason the average tenure for a CEO today is three to five years.

The governor and Legislature should also be held accountable for delivering a sustainable vision for Minnesota. Consistent investment in good times and bad is the hallmark of strong, competitive companies.

How did the whole argument get boiled down to no new taxes? While I don’t like paying taxes, I understand that we have an obligation to support our way of life. What makes Minnesota competitive is that we have consistently invested in increasing our standard of living and quality of life.

Then there’s this from the editorial staff of the Strib, on how the incoming Democratic state legislature has been hamstrung by the Grover-Norquist-inspired tax cuts of the Republicans. (One thing I wish they’d have done: Mention the role Tim Pawlenty played, back when he was in the state legislature, of getting these tax cuts rammed through in the first place.)

And then we have this (though it won’t be in the dead-tree edition of the StarTribune until tomorrow):

The Every Child Matters Education Fund, a Washington-based child advocacy group, recently released a report tying politics to the health and well-being of children. In states where voters lean toward electing Republicans, children are “at significantly more risk” than in Democratic-leaning states, the report said.

Using federal health statistics, the organization’s director, Michael Petit, ranked all 50 states using indicators such as infant mortality, health insurance, poverty and child abuse. Compared to their peers in the top 10, mostly blue states, a child in a state in the bottom 10 is more than twice as likely to be living in poverty and without health insurance and seven times more likely to die from abuse and neglect.

Mothers in those bottom states are twice as likely to receive inadequate prenatal care, placing children at higher risk.

A major report finding is that blue states tend to tax at higher rates, then spend more on children’s programs. As a result, those states have generally better outcomes for kids, including lower incarceration rates, lower births to teen mothers and fewer infants born underweight.

Good for the Strib. Now let’s see them stand up to the screeching howler monkeys of the right wing, who are probably already bombarding their e-mail servers even as we speak.

2 Responses to “Cue The Ghost Of John Maynard Keynes Murmuring “I Told You So.””

  1. MEC said

    Can we borrow the Strib’s editorial staff here in Michigan for a couple of months? The Thugs in our lege need a good slapping around.

  2. Sure!

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