Everyone agrees that “tax and spend” is appropriate, provided the spending is necessary. There are also those who think that, in an emergency, it’s reasonable to “spend and borrow”, if the money is paid back within a reasonable time. Of course, the most popular position is “spend and borrow – even if not an emergency, and even if there’s no prospect of ever actually paying it off”. That’s why politicians who vote this way are so easily reelected.
This year, an even more irresponsible philosophy is rearing its election-year head. Our representatives in St. Paul want to “spend, give money back, and borrow”. Minnesota has outstanding bonds totaling over $5 billion. Now we’re going to build a stadium, restore the Capitol, and proceed with many other projects – all to be paid with borrowed money. Maybe we ought to pay our bills first before giving money back.
We’ve been here before. In 1998, we thought the good times would never end, so we demanded our “Jesse checks”. Once the boom was over, the state had to raise taxes and cut services at the very time people were struggling to pay their bills. We could have been prepared to face the recession with a significant rainy day fund and no outstanding bond debt. That didn’t happen.
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Let’s not repeat that mistake. We should limit additional spending and use the surplus to pay off the stuff we already bought. Let’s get to a point where the state only spends money that it actually has – no bonding, just true tax and spend. Someday, if there’s an extra $400 million sitting around and we want to build another stadium, so be it. But my guess is that our representatives will be a lot more cautious about spending money if it has to be in the bank before it’s spent rather than down the road when the next generation of politicians is in office. Then when the next recession comes, and it will, maybe we’ll be able to cut taxes instead of raise them. Wouldn’t that make a lot more sense?
