The recession that began in 2008 is said to be over, but the overconfidence that preceded it is still missing. That’s because the economy is different now, and 9 percent of Americans remain unemployed.
For the nation, the goal remains to restore fiscal discipline. The people elected last fall, Republican and Democrat alike, had little to say about the biggest issue facing the nation. And yet, the public debt continues to spiral out of control.
History tells us that there are eight ways to bring public debt under control. They are: raise taxes; cut government spending; more economic growth; lower interest rates; more inflation; winning a war of acquisition; receiving foreign aid; or defaulting on the debt.
The only one of those alternatives that will result in re-establishing relatively sustained prosperity is economic growth.
That’s why spending time and money that the government does not have on health care reform did nothing to help bring about the recovery.
That’s also why sprinkling government grants across the economy for anything other than improving infrastructure and helping to seed new private businesses will provide only a temporary easing of the recessionary pressures.
The citizenry needs to encourage all levels of government to do everything possible to bring about economic growth — and, just as important, to stop doing everything that impedes the economy’s prospects.
America needs to recognize that we have an aging population, but we cannot use that as an excuse. We need to encourage an entrepreneurial mindset, an admiration instead of criticism of those risk-takers who strive for wealth, because it is those people who will provide jobs for everyone else — including the bureaucrats who manage and implement government programs.
Rationally, one cannot be pro-government and anti-business. It isn’t a zero-sum game. Instead, the economic share going to government needs to be limited to a percentage of national output that gives the United States a competitive advantage over every other nation. Allow the private economy to grow, and government can then grow, too. Take too much seed money from the private sector to fund government, and both will flounder.
Thus, Americans need to support bringing down debt use for current government as much as possible.
The same lessons apply at the state level. Minnesota businesses are in competition with those in not only every other state but every nation.
We need to fund public education adequately, but not so much that, for example, it leaves retired educators comfortably well off, but hardly anyone else. The focus in St. Paul needs to be on funneling precious tax dollars into the classroom, providing dedicated, active teachers with the resources they need.
Beyond that, the Legislature’s primary goals this year should be to, first, lower the hurdles that prevent Minnesota businesses from competing globally, and second, balancing the state budget.
In Little Falls, the City Council has taken some flak for raising taxes 7 percent. The problem is that the city has excessive debt — much of it incurred for projects that did not directly expand the tax base. If the city can lower the amount of debt it needs to service, it can then cut taxes or have more to spend on vital services like police, fire, streets and sewers.
As much as some would like to see other public projects completed, first we need to rein in government spending to put the nation, state and local communities back on the path to sustained prosperity.