Links, links, links

Well, I don't have time to make a full post today, so here are a few links that you may find interesting:

Economics:

• Check out this link to some research on child care spending multipliers in PA.  (Hat tip to my Uncle Tom for the link!)  Note that the multiplier is one of the highest compared to the ones from my last post about stimulus spending, which implies that public spending in early education is an effective way to stimulate the economy
• Here's a link to an economics paper by Art Rolnick and Rob Grunewald at the Minneapolis FED showing the extraordinary long-run returns of investing in early education
• Check out Paul Krugman's (my favorite NY Times columnist) take on the Wisconsin situation.  I don't really know where I stand on this issue, but I think Krugman makes some good points.

Bikes:

• Haven't had anything about bikes on here lately, so here's another NY Times article about the (relatively) new bike lanes in NYC.  This is from their room for debate series, with different folks arguing the issue.  Note that Caroline Samponoro is the only one in the debate who backs up her article with statistics....
• Some cool stuff here about winter bikers in Minneapolis.  I had to bike all through winter last year at Jimmy John's, and I've been biking to work this winter, too because I am too impatient to wait for the bus......

Coming soon:

In the coming weeks, my girlfriend Anna and I will be having a rap battle.  I will win.

More on this as it develops....

Mark Dayton's Minnesota budget: Taxes

Several days ago, Minnesota Governor Mark Dayton, (who did NOT take six months to be sworn in, - I'm looking at you, Al Franken!)  released his proposed budget for the state of Minnesota.  Here's a summary of his budget:

• Through increased income tax and property taxes, the richest 5% of Minnesotans will pay an additional $4 billion
• Education: Increased funding for K-12 education by $37 million, mostly to fund more full-day Kindergartens
• Early Education: Funds a quality rating system for early child educators
• Health Care: Eliminate eligibility for MinnesotaCare for people making over $20,000 and raise the surcharge on health care providers
• State Agencies: Reduces state workforce by 6%
• This is not a part of the budget, but Dayton is also proposing $1 billion for new public works and construction spending.

Keep in mind that Minnesota currently is $6 billion in debt, and Republicans currently control both houses of the Minnesota legislature.  Since it's getting late, tonight I'm only going to talk taxes.  I'll try to make some more posts in the coming days about the other parts of the budget.  So here goes:

I have to give credit to Dayton for having the guts to raise taxes, which is never a politically popular move.  Despite what republican politicians say, lowering taxes is among the least effective ways to stimulate the economy.  For proof, check out this table from the nonpartisan Congressional Budget Office!

As you can see, tax cuts to lower/middle income people come in with a multiplier of .6 to 1.5, tax cuts to high-income people have a multiplier of .2 to .6, while on the high end "Purchases of Goods and Services by the Federal Government" has a multiplier of 1 to 2.5.

So what do all these multipliers mean?  Basically, if you want to stimulate the economy in the short run (which god knows we need right now...), a tax cut is among the least effective ways to do it, while increasing government spending is the best!  In addition, it's hard to argue that the richest 5% of Minnesotans will be seriously hurt by a tax increase.  Cry me a river, and buy one less yacht.......