November 30, 2008
Nov 30 16:37 Kelliher Talking Deficits...Can Tax Increases Be Far Behind?
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Kelliher Talking Deficits...Can Tax Increases Be Far Behind?
I was reading this article in the Bemidji Pioneer when I got stopped dead in my tracks. Here's what stopped me:
"The main thing is we can look at the budget as just solving the math problem, making it back to zero and equaling it out," she said. "But the real challenge is going to be investing in the sorts of areas that we need to make Minnesota stronger in the next 10 years."TRANSLATION: This budget deficit is restricting our ability to
When the budget deficit is released this Thursday, it'll likely show a deficit north of $4 billion. In that setting, one would think that austerity would be the order of the day. Ms. Kelliher has just said that they want to increase spending.
Don't buy into the notion that she's just talking about ensuring adequate funding of education. That isn't what she's talking about here. She's talking about adding new programs into the mix. That means increasing taxes.
This deficit would've been considerably bigger if the House GOP hadn't sustained Gov. Pawlenty's vetoes in 2007. Had the DFL gotten their way, spending for that budget period would've increased by 17 percent instead of the 9 percent that got signed into law. That's because the DFL didn't want to hear the word prioritize.
Steve Gottwalt has been a constant advocate for prioritizing spending. That mindset will be especially important this year because we'll need to spend money wisely.
Creating a business-friendly climate is the biggest thing that'll make Minnesota stronger over the next decade. Raising taxes will make things infinitely worse. Think Jennifer Granholm's Michigan. Cutting taxes will give businesses an incentive to not leave the state. Not only that but it'll give them the incentive they need to actually invest in their businesses.
There's an LTE in this morning's St. Cloud Times dealing with the issue of clean energy. This alarming statement is the most appalling part of the LTE:
In rebuilding our economy Congress and President-elect Barack Obama should use the opportunity to shift from a pollution-based economy to a 100 percent clean energy economy.Eliminating fossil fuels shouldn't be our goal but let's play devil's advocate and say that's our goal. Shouldn't natural gas, which is an extremely clean form of energy, be part of the solution? Theoretically, companies would have to work on the technology while others would manufacture that type of vehicle.
Companies won't flock to Minnesota to do either of those things because Minnesota's business climate is terrible. Companies aren't expanding as it is. Why would they want to move here?
Another thing that's imperative is that we eliminate plans to 'reform' health care by passing more mandates or giving state government more control of it. Giving people the incentive to invest in HSAs, wellness programs and their own custom-designed insurance plans will have a sibstantially greater impact on improving people's health than anything that the DFL-dominated legislature will offer.
This next part is telling about how screwed up the DFL's priorities are:
The real challenge in a budget deficit, Kelliher said, "is to make sure you're actually paying attention to the things that are going to make you stronger over time. I actually have a little hope that maybe we can all get together and determine what some of those long-term goals are."Why isn't creating a business-friendly climate important to the DFL? What good are well-educated children if there aren't Minnesota jobs waiting for them? This is typical DFL thinking. They think that a public works-based economic system is a great thing. The problem with that theory is that that's the system that's gotten us in trouble every couple of years.
One area of investment would be in early childhood education, she said, "getting all 5-year-olds ready for kindergarten. That would be a good goal agree to all together and start to drive some decision-making toward that."
Relying on a public works-oriented model is what's created the feast-then-famine swings in budget deficits/surpluses. Based on what's happened the last 3 budget cycles, it appears that the DFL isn't interested in an entrepreneur-based economic model. As long as we aren't cutting taxes, companies don't have an incentive to create the next Microsoft here in Minnesota.
Frankly, I'm amazed that more businesses haven't moved across the border into South Dakota. If we don't stop increasing taxes on small businesses, the exodus from Minnesota will devastate Minnesota's economy. Again, I'll just point to Michigan, which was "in a one state recession" for most of the Bush administration.
Just ask yourself if that's the type of state you want to live in. If it isn't, then you need to start pushing back against the DFL's disastrous economic policies.
Posted Sunday, November 30, 2008 4:37 PM
Comment 1 by J. Ewing at 30-Nov-08 06:32 PM
The problem with that "pollution free" thingie is that they're talking about CO2 as a pollutant. Natural Gas releases CO2 just like gasoline, just like ethanol, and just like coal.
Comment 2 by eric z at 01-Dec-08 11:14 AM
Pollution free is indeed a loaded term.
How do you build wind turbines?
Polymers, fiberglass reinforcement, metals, copper generator components, aluminum power lines, perhaps permanent magnet generators in smaller units.
It is capital investment, but it is energy intensive, with mining and smelting needed for metals, and polymers are petrochemicals, and so you consume petroleum in building wind turbines.
What's the pollution record of silicon wafer works - better over time, but still consuming energy and producing byproduct problems.
What, besides silicon wafer solar panels has worked? I have seen reports of dye-based titanium dioxide nanoparticle technology, but it's not deployed anywhere that I am aware of, so solar to electric "clean energy" does have its problems at the asset production end, not over the utilization lifetime.
Plus, wind and solar siting in a near optimal manner requires investiment in the transmission grid, not just new technology to allow more and more loading of the installed grid. At some point reliability is lowered the more you load the grid beyond its designed carrying overcapacity.
New devices, especially power semiconductor technology, has permitted getting more bang for the invested grid buck. But the sane future is to build more infrastructure and that costs.
Question - are we better building energy intensive aluminum wires strung on steel poles, or more energy intensive concrete and rebar roadways and bridges?
Both parties have to sanely prioritize. With Oberstar in Congress handing out trnasportation pork, who's watching the power grid needs? Oberstar seems myopic that way, it's his fifedom, etc.
That gets to the national stage. On the state stage, is the least common denominator the aim? The argument that plants move to Texas because Texas whores more, is not necessarily saying Minnesota needs to out-Texas Texas that way. In a bidding war of that kind nobody but the capitalist-financiers benefit. The environment suffers, etc., and isn't that the complaint about China and India? They have more lax standards so the runaway plant movement is there. They get the PhD degrees from our best universities, go home, and take high tech jobs offshore because they work cheaper, etc.
Enslaving the world to the labor standards of the Mariana Islands or the East Asian guest workers in Dubai for the good of the shieks and other wealthy interests is great for them, not so neat for those enslaved.
I suggest balance and prioritizing are equally important - spread the wealth, or at least the income more fairly, and still grow.
It is disconcerting, however, you watch Viking's games, then look at all the crap that seems to sell. Video games, vehicles, beer, overloaded phones, big screen TV, junk that is no real value added to anyone's core life and values.
But it is business, retail version.
And don't buy Zigy any new venue, it's his team, his cash flow, don't socialize his costs when there's better use of public cash.
Pohlad got his, and it was wrong, don't multiply that stupidity.
Comment 3 by eric z at 01-Dec-08 11:35 AM
Gary, one question. You talk of spending etc., on the state level, where partisan stances are traditional, but what of Met. Council and the local level? Ostensibly local government races are not partisan, but hinged on local issues. Realistically with Met Council homogenizing developer friendly growth quotas upon all seven counties, and their population growth number invented and above sensible projections and beliefs, they are dictating metro wide things that the lucky folks in Wright and Sherburne Counties get to duck, and to really have local control.
So, how do you see that and Met Council, part of a solution or part of a problem?
And is there a partisan answer.
My impression is that under Peter Bell things are a bit better, but only marginally so vs. Ted Mondale under Ventura. Both are bureaucratic dictatorial efforts, pandering to the developers with Bell having the market go splat on his watch being the major difference I see. Any thoughts?
And Dept. of Employment and Economic Development, DEED, it's no different with Pawlenty appointing the head than earlier. It's the same lazy bunch, with a toy dial-to-file four question biweekly reporting excuse for real oversight as the legislature intended. Why has Pawlenty allowed that? I hate to say it, but I see more posturing than performance from the man. Your guy, defend him.
That agency, DEED, is progressive in the Economic Development and forecasting areas, doing commute shed mapping, and then the UI idiots don't use their own expert people down the hall as witnesses in any of their hearings.
And telephonic hearings? How do you assess credibility of the person over a phone? It is simply a lazy-man's way of simulating a real hearing. And then, ULJ bias in that agency is an entire further story.
Comment 4 by Gary Gross at 01-Dec-08 05:04 PM
Eric, The Met Council shouldn't exist. They're dictating to city councils what they can & can't do.
Most Met Council members aren't accountable to anyone except themselves. They're an affront to the constitutional principle of accountability & sovereignty.
Peter Bell might well be better at running the Met Council but that's just a distraction because the MC shouldn't exist.
