Monday, March 10, 2008

Fiscal Restraint and Economic Stimulus

Is it such a novel idea that Minnesota's $1 billion projected budget deficit should be solved by spending less and stimulating our economy by confiscating fewer of Minnesota family's hard earned dollars in taxes?

Just a week after Democrats in the State Legislature voted to impose on the people of Minnesota the largest tax increase in Minnesota history, we now find ourselves with a $1 billion deficit. (oh, and not to stray too far away, after this massive Democrat gas tax increase gas prices are up 9 cents per gallon from just two weeks ago).

There will be calls (mark my words) to increase taxes further while we increase more and more taxes on the people of Minnesota in order to solve this budget shortfall.

This, obviously, would be a huge mistake. Why would the state of Minnesota stick it further to the taxpayers, and think that revenues will increase to cover ever increasing spending?

Governor Pawlenty has a different approach.

Governor Pawlenty is asking the state legislature to start thinking about Minnesota families. He is asking the Government to exercise spending restraint, and asking the legislature to pass legislation taking fewer dollars on purchases from Minnesota families through an actual, real cut in the state's sales tax.

Staring down a nearly $1 billion projected deficit, Gov. Tim Pawlenty said Friday that the state must scale back health care and higher ed spending, dip into reserves and, in a surprise move, cut the state sales tax.

Pawlenty rebuked the DFL-controlled Legislature for overriding his veto of gasoline and metro sales tax increases, and said lowering the state sales tax by one-eighth of 1 percent would partly neutralize those increases.

The cut, he said, could also serve as "a modest stimulus" to the economy.

"The Minnesota economy is under great strain," Pawlenty said, noting that the housing collapse, credit crisis, skyrocketing oil prices, a grinding war and global economic changes have all taken their toll and may do so for years.

"It's important to recognize that the country and Minnesota face great challenges," he said.

Pawlenty's recommendations for the rest of the current two-year budget period would reduce the growth in state spending by $341 million. (Excerpted from article. Click here to read the entire article).

It is too easy for the Government, when faced with a shortfall in the Government's budget, to simply take more and more from families while it keeps spending and spending.

After all, it isn't their money. It doesn't come out of their pocket. Until we get to a 100% tax burden, there is a huge pot of money just sitting there for these legislators to fill Government spending gaps.


In the real world, it doesn't work that way, and there are unintended consequences to burdensome taxation and wasteful Government spending.

Like deficits. (yeah, the type like we are facing now).

Until Governor Pawlenty has a more family friendly legislature, he is going to take his case for fiscal restraint and economic stimulus right to the citizens of Minnesota.

In fact, his campaign committee is advertising right now to make sure the people know what is happening to their family budget every day in St. Paul.

Click here to listen to Governor Pawlenty making the case to Minnesota citizens.

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