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Report card is in on the Tax Cut Decade: Not good for most of us
The U.S. Census Bureau's report on "Income, Poverty and Health Insurance Coverage in the United States: 2010," is out and it's worth digging in to the spreadsheets showing year-by-year change over the last 25 years for each state.
More than 500,000 Minnesotans currently are without health care, even more (560,000) are living below the official poverty level (a ridiculously paltry $22,113 for a family of four) and median income in Minnesota ($52,554 in current dollars) has dropped to its lowest level since 1999. As usual, our rankings relative to the rest of the nation are a little better, but this should be small comfort.
It's important to remember that 1999 gave us some of the largest state income tax cuts in Minnesota's history, sold then as the surefire medicine for long-term economic growth. Many states followed suit with their own tax cuts, and two years later we were treated to some of the largest federal income tax and capital gains tax cuts in history, also billed as a tonic for long-term job and income growth. Instead, the next decade was marked by a dot-com bust and a bad recession, a rather weak recovery for all but high-income families, another recssion capped by a banking and housing collapse, the worst economic and private-sector failure since 1929, and severe budget shortfalls and ballooning debt at the state and federal level.
Of course, the last decade, increasingly known as the "Lost Decade'' for most Americans and Minnesotans, also was the decade of 9/11, an expensive and dubious "Global War on Terror", rapid technological progress and disruption, and accelerating economic globalization, and manufacturing job loss to cheap-labor competitors. All of these factors surely are related to economic dislocation and travail, and poor and middle-income folks usually don't cope as well with rapid change as the people who are on top, highly educated, and in position to take advantage of economic changes.
But let's not forget that it was anti-government conservatives who made the cause-and-effect case, and still do, that tax cuts are not only a good thing for the economy and general prosperity, but the best and main thing to do, period. As Ricky Ricardo would say, they have some "splainin' to do.''
Some of the best analysis and interpretation of the Census numbers can be found at the Center for Budget and Policy Priorities, which offers and interesting take on the growth of "deep poverty,'' and the Minnesota Budget Project, which noted that only Michigan had a bigger drop in median income than Minnesota since 1999.