It’s been a bad year for my car, an Oldsmobile Delta 88 I named the H.M.S. Ronald after my father and the man who was serving his first term as President when my car was manufactured. Its gas mileage is down, its maintenance problems are up, and it’s had three flat tires in the past three months. Whenever the Ronald breaks down I wonder if my car, which has a higher number on its odometer than the number on my University student ID, has completed its final voyage.
This sentiment was especially strong one day last week when I found myself changing yet another tire as a blizzard threatened to bury me alive. Maybe it’s time to buy another car, I thought. After all, we are living in bountiful times. Consumer confidence is up, deficits are down, and interest rates are forecast to be flat for months ahead. Minnesota winters are brutal, and the Ronald is showing rust from the salty roads, but why worry? Minnesota’s economy is stronger than ever. And there I was, lyin’ on the pavement, thinkin’ ’bout the government, wondering if it’s time to abandon austerity — just like the folks at the Capitol.
It’s difficult for me to comprehend the biggest economic story at the end of the century, the elimination of budget deficits. After all, the last time the federal budget was balanced was in 1969, years before I was born. In nearly every state and national political campaign or budget battle I’ve witnessed in my lifetime, the notion that any increase of government expenses or decrease of government revenues might compromise people’s futures loomed over every idea and proposal.
Spending plans were attacked as irresponsible indulgences that robbed children like me of their futures. Tax cuts were berated as attempts to eliminate my chance to have the same standard of living as my parents. Politicians ignored the deficit (Ronald Reagan), lied about it (George Bush) or complained about the pains of reducing it (Arne Carlson). And the “future of America” — people like me who never knew of any other budgetary condition — shrugged our shoulders, gave up on government and drove used Oldsmobiles.
But now, seemingly overnight, everything’s changed. President Clinton recently announced that the federal budget will begin running surpluses in 1999. In Minnesota, the state legislature began its annual session on Tuesday with a $1.3 billion budget surplus, which follows last year’s $2.3 billion amount. The combination of a strong economy and a consequent rise in tax revenues is creating a spectacle that, to my deficit-accustomed eyes, is downright weird: new social programs proposed by fiscal conservative Carlson; tax cuts actively favored by Democrats; and bipartisan support for significant increases in funding for higher education.
The times they are a-changin’. It’s time to buy a new car — or is it?
For the first time in more than a generation, political road rules are guided by the politics of plenty. Instead of telling cautionary tales of living beyond our means, politicians can articulate bold visions of future financial benefits, shifting budgetary debates from fights for pieces of an ever-shrinking fiscal pie to debates over what can be done to fill people’s plates.
Carlson’s proposed state bonding bill is the latest, and in some ways the most remarkable, example of this new condition. At more than $1 billion, the package shatters old standards for state spending on capital improvements and construction projects. Items in the proposal range from the long-overdue (a quarter-of-a-billion dollars for University infrastructure projects) to the gratuitous ($65 million for a St. Paul hockey arena, the pet project of Carlson’s adopted favorite son, Norm Coleman), to the bizarre ($14 million to tow a World War II cruiser, the U.S.S. Des Moines, from the east coast to Duluth, presumably to defend against amphibious invasion by Packer fans once the Vikes start beating them again).
Legislators are taking the amount in stride; in fact, chances are good that the final bill passed will be even more expensive than the current amount. And my views of what government can and can’t do, conditioned by years of belt-tightening rhetoric, are undergoing vertigo. Is it possible for government to give everyone what they want? To a large extent, under the politics of plenty, the answer seems to be yes –and therein lies the danger.
The temptation to gorge on good times, if focused on current conditions and not on prudent planning, can mean plenty of missed opportunities. Take, for example, the prospects for an increase in the gasoline tax in the upcoming legislative session. While a tax increase would be useful in encouraging environmentally-friendly fuel efficiency and raise needed revenue for road improvement, such an increase is impossible to sell when people believe that sacrifice is unnecessary. In terms of short-term gain, lower gas prices are a good thing (I am sorry to report that the H.M.S. Ronald only gets 10 miles to the gallon), but by passing up an opportunity for sound environmental planning now, we’ll pay a higher price later.
While potential new tax revenues are pushed away as unnecessarily painful, other revenues that helped create the current fiscal good surplus could be eliminated. Last year the Legislature earmarked 60 percent of this year’s budget surplus to property tax relief, and Republicans are toying with permanently lowering the state income tax. Although I would directly benefit from both moves, I’ve managed to live just fine with the current rates, and I wonder if padding my wallet this year is in the state’s best long-term interests.
With a surplus this size, amazing things could be done to improve the state’s education system, its job-training programs and its environmental quality. For a fraction of the roughly $700 million of this year’s tax relief, student tuition could be reduced instead of increased, and much more could be done for greater Minnesota than creating a nautical tourist attraction in Duluth.
To the credit of lawmakers much long-term investment is taking place — hence the record bonding bill. In the politics of plenty, everyone gets at least some of what they want. But when once-in-a-generation opportunities like today’s surplus arise, it’s important to ask what really is for the best. It’s important for state officials, as they leave their legacy on the state’s future, to emphasize long-term investment more than short-term reward. The governor has already taken some steps toward this by asking to set aside $200 million of the surplus to guard against an economic downturn. Active investment in growth and education would help ensure that economic downturn would never come.
I think I’m going to keep my Oldsmobile. As one of my car’s namesakes (not Reagan) told me once as I cursed the Ronald, “Every day you’re not making an unnecessary payment is a day you can pay for something else.” Perhaps I’ll spend my money on another class. Perhaps when the Ronald finally stops running I’ll tow it up to Duluth, where it can help the Des Moines ward off the green-and-gold hordes. Maybe I’m being too cautious — I’m just a kid, and I’ve never seen budget surpluses before; what do I know?
I do know that I’d like to see the politics of plenty continue for years to come. I hope our politicians agree.
Alan Bjerga’s column appears every Wednesday. He can be contacted at [email protected].