The Minnesota shutdown highlights the poor quality of journalism in the U.S.
I haven’t seen any newspaper article that provides the following information:
- how much tax revenue does Minnesota raise compared to other states? (the governor wanted higher taxes)
- how does the $2.5-3 billion/year budget gap that caused the shutdown relate in size to the total state budget? (are we arguing about 1% , 10%, or 50%?)
These numbers aren’t that hard to get. http://www.taxfoundation.org/research/topic/37.html indicates, for example, that Minnesota rakes off 10.3 per cent of residents’ income, which is above the U.S. average. Tax rates are among the highest in the nation in many categories, e.g., 3rd highest for corporate income tax (consistent with their overall business environment being 43rd in the nation; neighbouring South Dakota is #1). http://www.mmb.state.mn.us/budget shows that the total revenue for the state is about $2.3 billion per month, so the budget gap is about 10 per cent of total spending.
The articles on the consequences of the shutdown are interesting because they show just how much paperwork and hassle the government creates, e.g., around the distribution and sale of alcohol. (see this Atlantic article).
Finally the proposed restart of Minnesota state government is interesting because they’re doing it with an Enron-style accounting scam. Instead of raising taxes or cutting spending, the politicians are going to fix this year’s numbers by delaying writing checks to school districts and pulling (tobacco lawsuit shake-down) revenue in from future years.
Minnesota, like Greece, provides evidence that democracy depends on economic growth. To ensure their own reelection, politicians ladle out so many promises to cronies and interest groups that if the economy doesn’t grow as forecast the choice becomes bankruptcy/default or such high taxes that businesses flee, taking the jobs with them, and the most capable workers emigrate.
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