Faced with a slow economy and a large deficit, Democrats in Washington are going to try to solve the problem by adding more than $1 trillion to the national debt. Many governors are faced with similar challenges, and some at least, are trying a different approach. One noteworthy example is Minnesota’s Tim Pawlenty:
In his State of the State Address to a joint body of the House and Senate in the House chamber, Pawlenty urged lawmakers wrestling with a $4.85 billion budget deficit in the upcoming biennium not to raise taxes for strapped workers.
Rather, calling the challenges facing the state “the worst we’ve seen in a long time,” Pawlenty said the state should cut the business tax rate in half, from 9.8 percent to 4.8 percent over a six-year period, and give businesses a series of tax credits and exemptions that would allow them to expand and create jobs…
In his budget proposal later this month, Pawlenty said he will rely on spending cuts to balance the state’s budget. But he promised to protect military members and their families and public safety programs, and he urged legislators dealing with the deficit to do the same.
Pawlenty is going to have a hard time pushing his agenda through the Legislature, which Democrats control with a solid majority. If DFLers do work with him however, it will be interesting to compare the national recovery with the one in Minnesota — to see which economy picks up steam first. I bet we’ll see that the economy grows more quickly when you cut taxes and limit the growth of government.