3 Lessons Policymakers Should Learn from the Detroit Bankruptcy As the nation watches Detroit tumble into bankruptcy, three important lessons weigh heavily on policymakers across the country, especially here in Minnesota. 1. High Taxes The most important lesson is understanding why Detroit failed. Governments receive most of their revenue from taxes. Taxes come from the local economy. A tipping point was finally reached when well-meaning liberal policies outweighed the taxpayer’s ability to pay and government leaders could not say “no” to the spending. Eventually, enough businesses and taxpayers left the core city, decimating their tax base until they could not pay for all of the things they wanted the government to fund. The question for Minnesota policymakers is “Where is our tipping point?” In the 2011 budget, Republican leaders forced Gov. Dayton to say “no” to some of the spending in order to balance the budget without raising taxes. We all know now how this turned out – low unemployment, more jobs, schools fully funded, higher consumer confidence and increased revenues to the state treasury. In the 2013 budget, nobody in state government said “no.” 2. One-Party Rule Detroit has been run by one party (Democrats) for 60 years. What about MN? In 2013, with complete control by Democrats, just about every well-meaning liberal policy was heard and funded. They even talked about meeting a “pent up demand” for funding. And of course taxes and fees were raised on every Minnesotan to pay for it all. So the $2.1 billion question is “When will Minnesota reach our tipping point.” When will businesses and taxpayers start making decisions that impact the ability of the state to pay for all of the feel-good, sound-good policies of Mark Dayton and the Democrat-controlled legislature? 3. Corruption Detroit was hit with an inordinate amount of corruption. Lawmakers abandoned average citizens by enacting policies in favor of interest groups that only help themselves get reelected. The tragedy of Detroit comes as a warning to other governments. It is “symbolic” of the damage a corrupt one-party rule and bad leadership can bring to any state. It is time all Minnesotans rally behind Republicans to restore a balanced Minnesota and avert the factors that threaten Detroit.
Posted on: Fri, 09 Aug 2013 02:02:47 +0000
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