Observations on life

The real difference between Republicans and Democrats

As state tax rev­enue climbs na­tion­wide, Minnesota finds it­self with a $1.9 bil­lion sur­plus—and a grow­ing po­lit­i­cal fight about what to do with it.

Re­pub­li­cans are push­ing for tax cuts and us­ing surplus funds to fix roads and bridges, while blocking calls for an in­crease in the state gaso­line tax.

De­moc­rats talk about ex­pand­ing early-childhood ed­u­ca­tion programs and in­creas­ing spend­ing on rural broad-band ser­vice, while discussing some tar­geted tax cuts.

Budget Surplus Prompts Tussles in Minnesota, Wall Street Journal 12-7-15

Here is a concise illustration  of the difference between left and right and also the tendency for the naive left to get us into fiscal trouble.

IMG_2864A budget surplus is a fleeting thing with no guarantee of being available in the future. It’s similar to a one-time grant from the federal government. When you have such a surplus the prudent thing to do is save some for a rainy day which Minnesota has done and then when you do spend, spend it in non-recurring needs certainly not on establishing new ongoing commitments that create new and likely permanent liabilities. That is how you get into fiscal trouble.

In the case of the above example, Republicans want to fix roads and presumably in the process generate work and some jobs.

While the Democrats ideas have may be desirable, they appear to do little in the way of economic stimulation and at the same time create ongoing programs with no permanent funding. It’s like using a bonus to put a down payment on a car that requires five-years of monthly payments that you could not afford before or after receiving the bonus.

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4 replies »

  1. Seems to me it was George Dumya Bush who plunged us into the deep recession in 2008 and the “naĂŻve left” is digging us out of it – is your memory that short? Seems to me that Europe tried to extricate themselves from that recession with austerity and that didn’t work out so well. Republicans here wanted to take the same stupid approach, but “the naĂŻve left” stopped their idiocy. Reich Wing trickle down economics has never worked, but that doesn’t stop Republicans from wanting to try it again. The definition of insanity is doing the same thing over and over and expecting different results. Looking at the clown car of Teapublikkkan presidential hopefuls, insanity is exactly what they would give us. Luckily, Donald Trump will save us all from suffering through another Teapublikkkan administration.

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    • Stick to the point there Wilson. Would you initiate new ongoing programs with a one year budget surplus? Would you do that with your own finances if you received a one-time windfall? And by the way, the root cause of the recession was the Democratic policies pushing home ownership and sub-prime lending … and people who went to a mortgage broker and let broker or lender tell them what THEY could afford.

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  2. Since budget surpluses are temporary things that come and go with the good economy, fixing bridges is EXACTLY the right thing to do with temporary surpluses. We all know the bureaucrats skimp on maintanance in the bad years, so make up for it in the good years, before the bridges become unsafe.

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  3. How many studies have to be done that show early childhood education does not provide any lasting benefits. It is just an expensive babysitting program. Rural broadband should be funded by the companies that service the state. Perhaps a small fee added to every broadband bill would be a better way to fund expansion.

    We need to make smart choices with any surplus, a million here a million there and before you know it you are out of money and will have to raise taxes and that could wreck the economy.
    The federal government borrows 41 cents of every dollar it spends, we cannot continue on this yellow brick road journey.
    The politicians have no brains or are not using them correctly. I hope they save the money for a rainy day, that I am sure is right around the corner.

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