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March 31, 2009

The Cost of President Obama’s Proposed Budget

The Heritage Foundation has produced some extremely valuable research regarding the President’s proposed FY 2010 budget. They have a “rapid response” page where you can access all their resources concerning the president’s FY 2010 budget. One especially valuable analysis is Brian Riedl’s “backgrounder” that discusses spending, taxes, and how the national debt would double. Some highlights from Riedl’s analysis:

  • Increase spending by $1 trillion over the next decade
  • Include an additional $250 billion placeholder for another financial bailout
  • Likely lead to a 12 percent increase in discretion­ary spending
  • Permanently expand the federal government by nearly 3 percent of gross domestic product (GDP) over pre-recession levels
  • Raise taxes on all Americans by $1.4 trillion over the next decade
  • Raise taxes for 3.2 million taxpayers by an average of $300,000 over the next decade
  • Call for a pay-as-you-go (PAYGO) law despite offering a budget that would violate it by $3.4 trillion
  • Assume a rosy economic scenario that few econo­mists anticipate
  • Leave permanent deficits averaging $600 billion even after the economy recovers
  • Double the publicly held national debt to over $15 trillion ($12.5 trillion after inflation)

For a better understanding, read the entire document. The two graphs below from the backgrounder show just what American taxpayers can look forward to. By the way, that increase from $21,104 to $32,463 is an inflation-adjusted 53.8% increase in federal spending per household, which American taxpayers will be paying. Remember, as we've pointed out before, based upon data from the Tax Foundation for tax year 2004, 32% of Americans (42.5 million Americans) "filed a tax return but had no tax liability after taking advantage of their credits and deductions."

March 30, 2009

Mark Levin’s Liberty & Tyranny Book Signing


Two great book signings. First, March 21 on Long Island, and a second one this past Saturday, March 28 at the Barnes & Noble at Tysons Corner, for Mark’s book, Liberty and Tyranny: A Conservative Manifesto. I’ve completed the first three chapters. More blogging about the Northern Virginia signing at The Astute Bloggers with link to Common Cents. More info and pictures, including those below, at the Mark Levin Show.


March 29, 2009

Going Athenian . . . The Age of Mindless Mob Rule

The weekend brings two very good columns. First, the inimitable Mark Steyn explains why we need capitalism today more than ever. He begins his National Review online column:

“Writing in the Chicago Tribune last week, President Obama fell back on one of his favorite rhetorical tics: “But I also know,” he wrote, “that we need not choose between a chaotic and unforgiving capitalism and an oppressive government-run economy. That is a false choice that will not serve our people or any people.”

"Really? For the moment, it’s a “false choice” mainly in the sense that he’s not offering it: “a chaotic and unforgiving capitalism” is not on the menu, which leaves “an oppressive government-run economy” as pretty much the only game in town. How oppressive is yet to be determined: To be sure, the official position remains that only “the richest five percent” will have taxes increased. But you’ll be surprised at the percentage of Americans who wind up in the richest five percent. This year federal government spending will rise to 28.5 per cent of GDP, the highest level ever, with the exception of the peak of the Second World War. The 44th president is proposing to add more to the national debt than the first 43 presidents combined, doubling it in the next six years, and tripling it within the decade. But to talk about it in percentages of this and trillions of that misses the point. It’s not about bookkeeping, it’s about government annexation of the economy, and thus of life: government supervision, government regulation, government control. No matter how small your small business is — plumbing, hairdressing, maple sugaring — the state will be burdening you with more permits, more paperwork, more bureaucracy.

"And don’t plan on moving. Ahead of this week’s G20 summit in London, Timothy Geithner, America’s beloved Toxic Asset, called for “global regulation.” “Our hope,” said Toxic Tim, “is that we can work with Europe on a global framework, a global infrastructure which has appropriate global oversight . . . ”

“Global oversight:” Hmm. There’s a phrase to savor.”

Then in today’s Washington Times, the classicist and historian Victor Davis Hanson writes “the last three months, we've been reduced to something like the ancient Athenian mob - with opportunistic politicians sometimes inciting, sometimes catering to an already angry public.” A bit later, he writes:

“The historian Thucydides offers even more frightening accounts of bloodthirsty voters after they were aroused by demagogues ("leaders or drivers of the people"). One day, in bloodthirsty rage, voters demanded the death of the rebellious men of the subject island city of Mytilene; yet on the very next, in sudden remorse, they rescinded that blanket death sentence.

"Lately, we've allowed our government to forget its calmer republican roots. We've gone Athenian whole hog.”

If you wondered just what the statists are up to, the headline of an article posted at Politico this afternoon reads, “GM CEO resigns at Obama’s behest.” (HT to Drudge Report). But leave it to Mark Steyn to put it succinctly:

“Barack Obama, even when he’s not yukking it up on 60 Minutes, barely disguises his indifference to economic matters. He is not an economist, a political philosopher, a geopolitical strategist. He is the president as social engineer, the Community-Organizer-in-Chief.” (emphasis in the original)

If you’re not fans of Mark Steyn or Victor Davis Hanson, read these two articles and you may quickly become  fans.

March 28, 2009

Quote of the Day

"Politicians are the same all over.  They promise to build a bridge even where they is no river."

    -- Nikita Khrushchev

HT QuoteGarden

March 27, 2009

Quote of the Day

"Arbitrary power is most easily established on the ruins of liberty abused to licentiousness."

    -- George Washington, Circular to the States, 9 May 1753

HT Patriot Post

March 26, 2009

Analyzing the Arlington County Budget, Part 7

Because the Arlington County Board advertised a real estate tax rate that would increase taxes, Virginia law required this evening’s tax rate hearing. ACTA’s president, Tim Wise, testified about the increased taxes, which the Board plans to plunder from Arlington taxpayers. One thing he pointed out, which we growled about in February was that if the Board does approve the 3.0 cents increase, which they advertised, that would represent an effective tax increase of 2.9% or over 20% higher than the municipal cost index published by American City & County magazine.

Wise also pointed out two “inconvenient” facts to the Board. First, he pointed out that numbers compiled by the Tax Foundation show that in 2007 Virginians paid an a median real estate tax rate of 0.66% on the median home value. If that rate was applied to the so-called average value of a single-family residence in Arlington County, the property owner of that average property would pay annual real estate taxes of $3,433 rather than  $4,514. In other words, the average Arlington homeowner would have paid $$1,081 more than the average Virginian, which is 31% more than the average Virginian.

A second inconvenient fact provided by the Tax Foundation is a ranking of property taxes by by county. The rankings show that Arlington County ranked 37th among the 3,000 or so counties in the United States.

One piece of good news in that ranking is that Loudoun County ranked 33rd and Fairfax County ranked 34th. A second piece of good news is that the tax as a percent of income  is lower in Arlington County (3.6% and ranked 276th) compared to Loudoun County (3.9% and ranked 216th) or Fairfax County (3.7% and ranked 260th).

So when you hear County Board members blah, blah, blahing about Arlington County having the lowest tax rate in the region, tell them the difference is only $63 compared to Loudoun County ($1.21 a week) and $23 compared to Fairfax County (0.44 cents a week). As Wise told the County Board, they can talk all they want about how caring and compassionate they are, the numbers tell a far different story of just how greedy they are.

March 25, 2009

Analyzing the Arlington County Budget, Part 6

Critics of aspects of the Arlington County Manager’s proposed FY 2010 budget “descended on the County Board’s March 24 budget hearing, telling board members the proposal was at best shortsighted and at worst a cynical effort to lay the groundwork for closing the facilities,” according to a report filed by Scott McCaffrey at the online Arlington Sun-Gazette. Those aspects include three branch libraries and the Gulf Branch Nature Center for which McCaffrey added:

“The proposed library and nature center cuts have become the year’s lightning rods for local residents, even though they represent but a miniscule fraction of the overall budget. Carlee has proposed cutting service at the three branch libraries from six days per week to three, while not making similar cutbacks at other branch libraries or Central Library, and has proposed eliminating staffing at Gulf Branch and moving its programs to nearby Potomac Overlook Regional Park.”

McCaffrey also reported that “representatives of the county’s public-safety personnel complained that most of the cost of health care was being shifted from the government to workers.” Residents should be concerned, but for another reason, which is staffing levels of public safety personnel. As we growled on March 22, one County Board member requested tables about the history of selected staff, including public safety personnel.

We don’t profess to have the knowledge of either the police chief or fire chief regarding the proper staffing of their departments. However, we note that from 2001 to 2010, staffing of the fire department increased on the basis of full-time equivalent personnel per 1,000 residents while it decreased far more in the police department on the same basis.

  • Arlington County Fire Department. In 2001, there were 1.44 FTEs per 1,000 residents, and grows to 1.54 FTEs in the Manager's proposed FY 2010 budget. This is a 6.9% increase over 10 years.
  • Arlington County Police Department. In 2001, there were 2.48 FTEs per 1,000 residents, but decreases to 2.24 FTEs in the County Manager’s proposed FY 2010 budget. This is a 9.7% reduction in staffing.

While libraries and nature centers are fine county amenities, it seems police and fire services deserve a greater priority for all Arlington taxpayers than branch libraries and nature centers. Before agreeing on a final budget next month, the Arlington County Board should determine whether police department staffing was appropriate in 2001, or whether the proposed FY 2010 staffing is more appropriate.

March 24, 2009

Analyzing the Arlington County Budget, Part 5

To paraphrase the late U.S. Senator Everett Dirksen, a program here and a program there, and soon you’re talking about real money. No better example in the proposed FY 2010 “Arlington County budget is the Department of Human Services (DHS), which manages the county’s health and welfare programs. However, that means looking through many pages; even DHS's 10-year history of “budget changes” takes up 15 printed pages.

One particular page (requires Adobe) in the budget gives meaning to the Dirksen paraphrase, however. It is the “multi-departmental programs" page. They are referred to as multi-departmental programs because several departments may provide housing programs, for example. The page lists housing programs (20), senior adult programs (7), youth programs (11), and transportation (3).

  • Housing programs. Three departments provide the 20 programs as well as ones classified as “non-departmental” programs. Proposed spending in FY 2010 is expected to be $34.9 million with $20.9 million provided by Arlington taxpayers.
  • Senior adult programs. Two departments provide the seven listed programs with total spending of $8.9 million. Of that, $6.2 million would be provided by Arlington taxpayers. An eighth senior program -- senior transportation with $155,501 of spending-- is listed under transportation.
  • Youth programs. Three departments provide the eleven programs. Proposed spending is $27.3 million with $13.7 million of “net tax support” provided by Arlington taxpayers.
  • Transportation programs. The three programs are provided by two Arlington departments and METRO with proposed spending of $$30.6 million, including $28.0 million provided by Arlington taxpayers. One of the three is the transit program where taxpayers subsidize $7.3 million of the $9.9 proposed spending for FY 2010.

And if you want to see how government grows over time, browse the 10-year histories of any department.

March 23, 2009

Mob Rule East of the Potomac

Investor’s Business Daily (IBD) introduces their lead editorial today about the AIG bonuses (background: Washington Post, Wall Street Journal, IBD 3/19, and IBD 3/20) saying:

“Of all the alarming things going on in Washington these days nothing is as shocking, or disheartening, as the collapse in respect for the rule of law and the Constitution. Just look at the flap over AIG's bonuses.”

IBD then explains:

“Like most Americans, we found ourselves angry and perplexed that a company that took $173 billion in bailout aid because it had failed to run its affairs competently would hand out $165 million in "bonuses" to its top employees.

“Yet, as with many things, the tale is a bit more complex than the sound bite. For one, Congress authorized the bonuses to be paid — at the direct instigation of Sen. Chris Dodd, D-Conn., who took $103,100 from AIG during the 2008 political cycle.

“And while letting AIG pay some employees retention bonuses might seem wrong or even immoral to some, it wasn't illegal.

“Yet Congress, which created the problem in the first place, acted with consummate cowardice by trying to "claw back" the money through a punitive, 90% retroactive tax, one specially levied on those who work at AIG. It wants to do the same thing with recipients of TARP money, too.

“Why the big change? Public anger. Welcome to mob rule.”

After more explanation, IBD concludes with:

“This bill is bad and unconstitutional. It was passed — let's face it — because Congress fears the people's wrath. The bill doesn't stand up to legal scrutiny. But then, neither does this Congress.” (emphasis added)

The editorial is worth reading in its entirety.

March 22, 2009

Analyzing the Arlington County Budget, Part 4

Yesterday, we congratulated the county’s finance employees for improving the transparency of county budget information. One of the improvements involves providing access to the questions, and responses, raised by County Board members (reference the DM&F webpage for the FY 2010 budget)

One of those questions requested tables showing a history of full-time equivalent (FTE)/employment information for the county and schools. A little crunching of the numbers shows the County Manager has improved efficiency by 2.7% over the past 10 years. Why?

  • In the FY 2001 budget, there were 3,552.3 FTEs (all funds) to serve 189,013 residents, or 18.79 employees for every 1,000 residents.
  • In the Manager’s proposed FY 2010 budget, the county would serve a projected 209,300 residents with 3,828 FYEs, or 18.29 employees per 1,000 residents.

On the other hand, the School Board and the Superintendent would see a 5.0% drop in the efficiency Here are the numbers:

  • In the schools FY 2001 adopted budget, there were 3,330 FTEs responsible for education of 18,882 students, or 176.36 FTE for every 1,000 students.
  • In the Superintendent’s proposed FY 2010 budget, the schools would educate a projected 20,084 students with 3,718 FTE, or 185.12 FTEs for every 1,000 students.

The schools are mandated to educate every student, but the School Board is accountable for the efficiency of the schools. Consider if the the School Board had been able to at least maintain the level of efficiency as they did in 2001? There would be 176 fewer employees, and at a cost of $60,000 per employee, the schools budget would be $10,5 million leaner. And, that would mean the average county homeowner would see the real estate tax rate almost 2.0 cents lower. Should we hold our breath expecting the School Board to be held accountable?

March 21, 2009

Analyzing the Arlington County Budget, Part 3

First, kudos to the county’s management and finance employees for increasing the transparence and accountability of county budget information. They have significantly enriched budget data available at the DM&F FY 2010 webpage.

I say that to lead into a discussion of some of that data. First, staff is now posting follow-up responses to questions from County Board members. One question concerned the percentage increase in the county’s contribution to health insurance and retirement in FY 2010. For uniformed employees, the county percentage (defined benefit) has gone from 19.4% to 35.1%. For general employees, the percentage increase (defined benefit) has gone from 9.8% to 13.8%. Might that explain why the Manager included no step increases or COLAs in his proposed budget for FY 2010?

Another question requested tables showing a history of funding and full-time equivalent (FTE) information for the county, schools, police, fire, sheriff, and emergency management.We learn, for example, the general fund budget for FY 2001 was $537.8 million, and is $929.5 million in the Manager’s proposed FY 2010 budget. Using the U.S. Department of Labor’s “CPI Inflation Calculator,” if the general fund budget had  just grown at the rate of inflation, the general fund would have increased to $662.7 million in the FY 2010 budget.

The difference between between the Manager’s proposed FY 2010 general fund budget of $929.5 million, and what the budget would have been, i.e. $662.7 million, or almost $400 million less. Put bluntly, if the County Board had been able to control spending to the level of inflation, they would not have needed to plunder almost $400 million from Arlington taxpayers. Even if the numbers are adjusted for the growth in population, the amount plundered from Arlington taxpayers would still be tremendous.

Another reason for Arlington taxpayers to growl at the County Board, we think. And you can do so in person at the budget and tax hearings next week, or use the link to the County Board in the right-hand column, and tell the County Board what you think about their taxing policies.

March 20, 2009

Going For The Last Drop?

When I became a “Board watcher” years ago, I was told the Arlington County Board does its best work after completing their published agenda. They do this by considering so-called “additional items.” The Board’s March 14 meeting was no different. The report to the Board, prepared by the County Manager is dated (get set to be surprised) March 14, 2009. In his “Board report” the Manager recommended the Board:

“Authorize advertising for a March 26, 2009, public hearing on proposed amendments to Chapter 14.2 (Motor Vehicles & Traffic) of the Arlington County Code, Section 14.2-73, as shown in Attachment I, allowing for a $9 increase to the motor vehicle license fee from $24 to $33 per year.” (emphasis added)

The Manager provides this summary of the issue:

“The Code of Virginia § 46.2-752 caps the fee that the County can charge for motor vehicle license fees at the same level for State motor vehicle licenses imposed by the Commonwealth, or $33 per year. By raising this fee from its current $24 per year to the statutory limit, the County will generate $1.2 million in revenue, of which $140,000 is included in the County Manager’s FY 2010 Proposed Budget. This fee increase would bring Arlington’s motor vehicle license fees in line with what is currently charged by the City of Alexandria and with what has recently been proposed by the Fairfax County Board of Supervisors.”

It seems, however, the County Attorney may be looking to lose another court case. Although the Manager’s memo cites Virginia Code § 46.2-752, as well as § 46.2-694, no mention is made of Virginia Code § 46.2-753, which is entitled, “Additional license fees in certain localities, and includes the following sentence in the first paragraph:

“The total local license fee shall be no more than twenty-five dollars on any vehicle and this license fee shall not be imposed on any motor vehicle exempted under § 46.2-739.”

On Monday, the Arlington Sun Gazette reported, “Just when critics thought the County Board had found all the ways it could to raise taxes and fees, temptation strikes again.” That was followed in the printed edition by an editorial in the “Highs & Lows” where they wrote:

“To County Board members, for sneaking in the possibility of a bigger increase in the cost for county vehicle decals than they should . . . Apparently these board members don’t know the meaning of “regressive,” because any increase in the decal fee hits rich and poor equally. That’s not as socially noble as Arlington officials like to project themselves as being, now is it?”

Remember the County Board's tax hearing on Thursday, March 26, 2009. You can also e-mail your message to the Board; see the contact information in the right-hand column. 

March 19, 2009

The Taxing Burden Of Global Warming

Last week, the Wall Street Journal reported that: “Cap and trade is the tax that dare not speak its name, and Democrats are hoping in particular that no one notices who would pay for their climate ambitions. With President Obama depending on vast new carbon revenues in his budget and Congress promising a bill by May, perhaps Americans would like to know the deeply unequal ways that climate costs would be distributed across regions and income groups.” They then wrote:

“Politicians love cap and trade because they can claim to be taxing "polluters," not workers. Hardly. Once the government creates a scarce new commodity -- in this case the right to emit carbon -- and then mandates that businesses buy it, the costs would inevitably be passed on to all consumers in the form of higher prices. Stating the obvious, Peter Orszag -- now Mr. Obama's budget director -- told Congress last year that "Those price increases are essential to the success of a cap-and-trade program."

“Hit hardest would be the "95% of working families" Mr. Obama keeps mentioning, usually omitting that his no-new-taxes pledge comes with the caveat "unless you use energy." Putting a price on carbon is regressive by definition because poor and middle-income households spend more of their paychecks on things like gas to drive to work, groceries or home heating.

“The Congressional Budget Office -- Mr. Orszag's former roost -- estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That's about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all five of them).

It gets worse, though. The Journal points out, “the greatest inequities are geographic and would be imposed on the parts of the U.S. that rely most on manufacturing or fossil fuels -- particularly coal, which generates most power in the Midwest, Southern and Plains states.”  See the following chart that accompanied the article:

In a news release today, the Tax Foundation, reported American households would see an annual tax burden of $144.8 billion under a cap-and-trade system. Foundation scholar Andrew Chamberlain “explains that this burden would be disproportionately borne by low-income households, those under age 25 and over 75 years, those in southern states, and single parents with dependent children. The bottom 20 percent of income earners has an annual cap-and-trade burden that is equal to 6.2% of their household cash income.” The compete sttudy can be accessed from the news release.

As the Wall Street Journal concluded:

“Cap and trade, in other words, is a scheme to redistribute income and wealth -- but in a very curious way. It takes from the working class and gives to the affluent; takes from Miami, Ohio, and gives to Miami, Florida; and takes from an industrial America that is already struggling and gives to rich Silicon Valley and Wall Street "green tech" investors who know how to leverage the political class.” (emphasis added)

Also last week, Investor's Business Daily reported that the political elite in Washington and their eco-statist sycophants are in "hot pursuit of CO2," pointing out:

"Washington is about to crack down on carbon dioxide emissions. It had better hurry because it won't have much time before the backlash strikes. The public is losing its faith in the global warming religion."

March 18, 2009

Thought For The Day

 "There is only one way to kill capitalism -- by taxes, taxes, and more taxes."

   -- Karl Marx

March 17, 2009

Rep. Jim Moran & The Favor Factory

NewsBusters reported Sunday a “noteworthy congressman” appears in the Seattle Times’ “Favor Factory,” a “database of lawmakers, earmarks, and campaign giving.” The congressman is Arlington’s representative in Congress, Rep. Jim Moran (D-VA). NewsBusters goes on to report:

Moran’s Favors Factory page for 2008 lists 29 earmarks totaling $40.6 million, and over $890,000 in capaign contributions from earmark recipients. (emphasis added)

“Recall that Nancy Pelosi promised, "Fiscal Restraint If Democrats Win" in a July 2006 Wall street Journal interview about the congressional elections that would be taking place four months later (link is to cato.org, which excerpted the now unavailable WSJ report) . . . ”

NewsBusters also cited Moran’s “virtually unreported ‘buoyant’ outburst” about earmarks that appeared in the Arlington Sun-Gazette about a year ago.

Here is the page listing both Moran’s earmarks and campaign contributions. Since most look to be going to defense contractors, it makes you wonder why DoD didn’t include them in the budget submitted to Congress. No earmarks, no campaign contributions? Nah, it doesn't work like that, or does it?

Sen. Jim Webb (D) also has a prominent place in the Favor Factory with 23 earmarks totaling $627.8 million although one is for $588 million for the Electric Boat Corporation to “accelerate” procurement of a second submarine, which he shares with retired Sen. John Warner (R).

March 16, 2009

Management and Union Thinking Alike?

In the vernacular of the Arlington Sun-Gazette, we give a “thumbs up” to their “thumbs down” to the Superintendent of the Arlington Public Schools. In their “thumbs down” opinion piece in last Thursday’s weekly paper, the newspaper wrote:

“To any of you out there still naive enough to believe that every last penny of the bazillions we have spent on public education, both here in the local area and across the nation, is essential, because “it’s all about the children.”

“Arlington Superintendent Robert Smith’s proposed fiscal 2010 budget isn’t about extra spending to expand the valuable foreign-language programs in elementary schools. It isn’t about spending more to expand vital pre-kindergarten education programs. He doesn’t have new funds for either of those programs included.

“And yet . . . he does have funding for pay hikes (“step raises”) for a hearty chunk of the school system personnel included in his budget proposal.

“No cost-of-living adjustments - even a school superintendent wouldn’t be so brazen as to put those in this troubled year - but raises nonetheless. All at a time when so many in the private sector see their jobs at risk, when tax bills aren’t stopping their ever-upward climb, at a time when Arlington’s county government workforce is seeing raises nixed, at a time when most school systems across the region are going without pay increases, Arlington’s superintendent wants to boost the pay of his workers. Lucky them.

“Perhaps it’s a going-away present, not to the superintendent (who is departing in June), but from the superintendent.

“It’s not “all about the children.” It’s probably never been “all about the children.” It’s “all about the bureaucracy” - proven once again by the budget proposal submitted by Superintendent Smith. To quote the bumper sticker: “If you aren’t outraged, you aren’t paying attention.”

Is the Superintendent too close to the teachers union? That thought came to mind when we read the Education Intelligence Agency’s March 16 e-newsletter, the EIA Communique. An item concerned the following "do" in the Maine Education Association’s “Dos, Don’ts of Bargaining in Tough Times:

"Insist that all other steps to reduce costs be implemented, including reduction-in-force if it is unavoidable, before reductions in employees' compensation are considered."

According to the EIA Communique, the “dos and don’ts” “aren't appreciably different from bargaining in good times, or bargaining in OK times, or bargaining in the End Times.” Thanks, Mike Antonucci for publishing the EIA Communique.

March 15, 2009

Paying Off Mount Spendmore

The peerless Mark Steyn asks in his weekend column (posted at National Review Online and at the Orange County Register) tongue-in-cheek, “imagine how bad all this economic-type stuff would be if our kids and grandkids hadn’t offered to pick up the tab.” Then, more seriously, he asks:

“Are you sure you young folks will be able to pay off this massive Mount Spendmore of multi-trillion-dollar debts we’ve piled up on you?”

According to Steyn, today’s young are “the ultimate credit market:

“Because, as politicians like to say, it’s about “the future of all our children.” And the future of all our children is that they’ll be paying off the past of all their grandparents. At 12 percent of GDP, this year’s deficit is the highest since the Second World War, and prioritizes not economic vitality but massive expansion of government. But hey, it’s not our problem. As Lord Keynes observed, “In the long run we’re all dead.” Well, most of us will be. But not you youngsters, not for a while. So we’ve figured it out: You’re the ultimate credit market, and the rest of us are all pre-approved!”

So what is Mount Spendmore? Steyn explains it this way:

”This is the biggest generational transfer of wealth in the history of the world. If you’re an 18-year old middle-class hopeychanger, look at the way your parents and grandparents live: It’s not going to be like that for you. You’re going to have a smaller house, and a smaller car — if not a basement flat and a bus ticket. You didn’t get us into this catastrophe. But you’re going to be stuck with the tab, just like the Germans got stuck with paying reparations for the catastrophe of the First World War. True, the Germans were actually in the war, whereas in the current crisis you guys were just goofing around at school, dozing through Diversity Studies and hoping to ace Anger Management class. But tough. That’s the way it goes.

Steyn ends the column suggesting young people form an “association of Americans who’ll never be able to retire,” explaining it this way:

“General Motors has 96,000 employees but provides health benefits to over a million people. They can never sell enough cars to make that math add up. In fact, selling cars doesn’t help, as they lose money on each model. GM is a welfare project masquerading as economic activity. And, after the Obama transformation, America will be, too. The young need to recognize that this is their fight. They need to stop chanting along with the hopeychangey dirges and do something more effective, like form the anti-AARP: the association of Americans who’ll never be able to retire.”

A peerless column from the peerless Mark Steyn. Read the entire column; you just may become a regular reader.

March 14, 2009

Arlington Country Board Kowtows to Enviro-Statists

Earlier today, the Arlington County Board approved greater incentives (see the "Board Report for item #24 on the agenda) for “building green,” meaning the the county will offer “greater bonus density for higher levels of environmental sustainability.” According to the county’s press release:

“The changes reflect how green building policies such as Arlington’s have helped transform the green building market in the past five years. The County relies on the Leadership in Energy and Environmental Design (LEED) rating system, developed by the U.S. Green Building Council, to evaluate proposed site plan projects and encourage the construction of energy efficient and environmentally sustainable buildings.”

Just what is this “sustainability?” According to a column by Morgan Poliquin, posted at the Ludwig von Mises Institute, “Nomenclature and in particular, catchy phrases and slogans, are integral to the institution and leadership of political action and violence as well as simplifying or condensing the rational for such action into neat and all encompassing phraseology.”

One such “catchy phrase” is “sustainable development,” which Poliquin says was coined in 1987 by the  former Prime Minister of Norway, “who, at the bequest of the then Secretary General of the United Nations, established and chaired the World Commission on Environment and Development. Her Committee produced a report entitled Our Common Future in which the definition first appeared.” According to Poliquin:

“Legislating sustainability is another attempt to replace the collective decisions of many in the market place with the coercive will of the few. In a free market, with increasing scarcity of a given resource, its price tends to rise, encouraging economizing on behalf of those who consume the resource.

“Why then all the fuss about making industries such as mining sustainable? Perhaps the people behind the legislation — the intellectuals, the legislators, and the large business firms that already dominate their industries — form an alliance that serves their own self-interests. The revered intellectuals sit on endless committees defining meaningless terms like sustainable development and are paid handsomely for doing so.

“They are also lauded, much like actors, by their own organizations, which continually self-produce awards. Mingling with media, wealthy patrons, government officials, and business leaders, they frequent the most exclusive locations on the planet to discuss the implementation of their leadership. The self-interest of the legislators and government is readily apparent as their incomes are derived from the taxes that society is required to pay, purportedly for their management of the new laws and regulation that will ensure sustainable development.”

Poliquin concludes by writing:

“Nobody can decide what is "sustainable" for another person. Every action requires a weighing up of costs and benefits. To implement any one person's idea of sustainability on everyone else will result in loss. The idea that people are not able to make these decisions on their own, and require leadership and coercive laws to determine what is best for them, is essentially to implement slavery.

“Communists told us to follow them because humanity was at stake. Today we are told that the planet itself is at stake. It sounds like a new way of saying the same old thing. To sacrifice the needs of individuals for the sake of the many will result in great benefits to the very few, at the cost of the many.” (emphasis added)

We growled about Arlington county’s overuse of sustainable and sustainability on February 9, 2009. Today’s County Board decision is further evidence they are part and parcel of the enviro-statists.

March 13, 2009

Arlington Country Board = Big Spenders!

At least bigger spenders than the Fairfax County Board. Well, that’s certainly true when you crunch the numbers in their respective, proposed FY 2010 budgets. And not just bigger either, but very much bigger. Here are the relevant numbers:

  • Fairfax County: the general fund of the proposed FY 2010 budget is $3.313 billion, and their estimated population is 1,055,580.
  • Arlington County: the general fund of the proposed FY 2010 budget is $929.5 million, and the estimated population is 211,400.

Crunching the numbers results in $3,137 general fund spending per capita while Arlington’s is $4,396, or $1,259 more spending per capita by Arlington County’s local government. A bit more crunching shows that Arlington’s general fund spending is 40.1% higher than Fairfax County’s general fund spending.

I’d say the Arlington County Board needs to direct the County Manager to go back and do a lot more just a little pruning of the FY 2010 budget.

March 12, 2009

Is This Where America Is Headed?

Mark Levin talked about a Wall Street Journal column by Daniel Henninger during his show this evening. Henninger urges his readers to “(m)emorize Figure 9 (page 11 of President Obama’s Fiscal Year 2010 budget), and you will never be confused” about where  President Obama’s wants to take the country.

The chart’s attribution is to “Piketty & Saez.” Henninger explains why it is “the Rosetta Stone to the presidential mind of Barack Obama." He writes:

“Either you know instantly what "Piketty and Saez" means, or you don't. If you do, you spent the past two years working to get Barack Obama into the White House. If you don't, their posse has a six-week head start on you.

“Thomas Piketty and Emmanuel Saez, French economists, are rock stars of the intellectual left. Their specialty is "earnings inequality" and "wealth concentration."

“Messrs. Piketty and Saez have produced the most politically potent squiggle along an axis since Arthur Laffer drew his famous curve on a napkin in the mid-1970s. Laffer's was an economic argument for lowering tax rates for everyone. Piketty-Saez is a moral argument for raising taxes on the rich.

“As described in Mr. Obama's budget, these two economists have shown that by the end of 2004, the top 1% of taxpayers "took home" more than 22% of total national income. This trend, Fig. 9 notes, began during the Reagan presidency, skyrocketed through the Clinton years, dipped after George Bush beat Al Gore, then marched upward. Widening its own definition of money-grubbers, the budget says the top 10% of households "held" 70% of total wealth.

“Alan Reynolds of the Cato Institute criticized the Piketty-Saez study on these pages in October 2007. Whatever its merits, their "Top 1%" chart has become a totemic obsession in progressive policy circles.”

According to Wikipedia, the Rosetta Stone “contributed greatly to the deciphering of the principles of hieroglyph writing.” Additionally, if the word “dispossess” is not a part of your daily vocabulary, you may want to add it; according to Dictionary.com, the first meaning is: “to put (a person) out of possession, esp. of real property; oust.” We’ve growled several times about “income inequality” (most recently here and here), and urge reading Mr. Henninger's entire column. The concluding paragraph, however, reads:

”The White House says its goal is simple "fairness." That may be, as they understand fairness. But Figure 9 makes it clear that for the top earners, there will be blood. This presidency is going to be an act of retribution. In the words of the third book from Mr. Obama, "it is our duty to change it."

March 11, 2009

Implications For The Arlington Country Budget?

Scott McCaffrey of the Arlington Sun-Gazette posted an online story today discussing a sharp drop in Arlington home sales. He writes:

“Home sales in the second month of the year totaled 90 across the county, down from 137 a year before, according to figures released by Metropolitan Regional Information Systems Inc., the area’s multiple-listing service.

“Average sales also were down, although not as precipitously as in some other Northern Virginia localities. The average sales price in February was $457,955, off 9.9 percent from the $508,232 recorded 12 months before.”

The average sales price drops differed depending on the kinds of homes. The news article also provided information on sales by ZIP code, e.g., in 22207, there were 12 sales, “down from 16. The average sales price of $603,200 was down 17.9 percent. Homes spent an average of 46 days on the market” while in 22204, there 22 sales, “down from 33. The average sales price of $282,597 was down 34.7 percent. Homes spent an average of 121 days on the market.”

When the county assessor releases the 2010 assessment data a year from now, they will based on sales from July 1, 2008 through June 30, 2009. Although housing prices aren’t nearly as precipitous as they are in other Northern Virginia jurisdictions, the lower prices would put further pressure on the Arlington County Board to reduce the size of county government. Those who believe in limited government would say that’s a good thing, however, it would mean another year watching Board members wring their hands.

March 10, 2009

Thought For The Day

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."

    -- Ayn Rand

HT Neal Boortz

March 09, 2009

Contrary To Rhetoric

Readers of ACTA’s newsletter, The ACTA Watchdog, will know that we like to feature quotes by the noted economist Thomas Sowell, whose “prolific scholarship (melds) history, economic and political science,” according to Wikipedia. Investor’s Business Daily posted Sowell’s latest column at their website in which he discusses the folly of the federal government bailing out homeowners in trouble, including those with mortgage loans up to $720,000. He begins by saying:

“Now that the federal government has decided to bail out homeowners in trouble, with mortgage loans up to $729,000, that raises some questions that ought to be asked but are seldom being asked.

“Since the average American never took out a mortgage loan as big as seven hundred grand — for the very good reason that he could not afford it — why should he be forced as a taxpayer to subsidize someone else who apparently couldn't afford it either but who got in over his head anyway?

“Why should taxpayers who live in apartments, perhaps because they did not feel that they could afford to buy a house, be forced to subsidize other people who could not afford to buy a house but who went ahead and bought one anyway?”

Here are a few more pearls:

  • “What is new is the current notion of indulging people who refused to save for a rainy day or to live within their means. In politics, it is called "compassion" — which comes in both the standard liberal version and "compassionate conservatism."
  • “The one person toward whom there is no compassion is the taxpayer.”
  • “The political meaning of "affordable housing" is housing that is made more affordable by politicians intervening to create government subsidies, rent control or other gimmicks for which politicians can take credit.”
  • “Affordable housing produced by market forces provides no benefit to politicians and has no attraction for them.”
  • “Study after study, not only here but in other countries, shows that the most affordable housing is where there has been the least government interference with the market — contrary to rhetoric.”

So well said, Mr. Sowell. And thank you, IBD, for publishing Mr. Sowell’s columns.

March 08, 2009

Analyzing the Arlington County Budget, Part 2

Last month, the Arlington County Manager proposed a FY 2010 budget totaling $1.17 billion on an “all funds” basis with the “general fund” making up the largest portion of that $1.17 billion, or $929.5 million. The county uses “fund accounting,” a system of accounting that emphasizes how money is spent rather than how it is earned, according to InvestorWords.

A major part of the difference between the two numbers is attributed to such “funds” as the utilities fund, Section 8 housing, and transportation investment.The “general fund” accounts for the major portion of county expenditures, which the Manager proposes to be $929.5 million for FY 2010. Below are two graphs showing where the money comes from how it is spent.

March 07, 2009

Can We At Least Agree On Who Pays Taxes?

A week ago, the Wall Street Journal wrote that “President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it.” The newspaper added that during his State of the Union earlier last week, “he left the impression that we need merely end ‘tax breaks for the wealthiest 2% of Americans,’ promising “that households earning less than $250,000 won't see their taxes increased by ‘one single dime.’" The Journal’s editorial concluded by saying (emphasis added):

“The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can't possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well. (emphasis added)

“On that point, by the way, it's unclear why Mr. Obama thinks his climate-change scheme won't hit all Americans with higher taxes. Selling the right to emit greenhouse gases amounts to a steep new tax on most types of energy and, therefore, on all Americans who use energy. There's a reason that Charlie Rangel's Ways and Means panel, which writes tax law, is holding hearings this week on cap-and-trade regulation. (emphasis added)

“Mr. Obama is very good at portraying his agenda as nothing more than center-left pragmatism. But pragmatists don't ignore the data. And the reality is that the only way to pay for Mr. Obama's ambitions is to reach ever deeper into the pockets of the American middle class.” (emphasis added)

The Tax Foundation provides additional detail, derived from official IRS data, on “who pays the nation’s taxes” in two tables at their Tax Policy Blog. The two tables include such data as the effective tax rates and average tax payments for each income level from $1 - $5,000 to $10,000 or more. The Tax Foundation writes:

“In 2006, there were roughly 4 million taxpayers with incomes above $200,000—the target group for Obama's higher taxes. These taxpayers account for 39 percent of total AGI among actual taxpayers but pay 53 percent of all income taxes. The vast majority of these upper-income taxpayers—91 percent—earn between $200,000 and $1 million. These taxpayers account for half of the AGI and roughly half of the taxes paid by the "rich."

“There were about 353,000 taxpayers with incomes above $1 million. They had a total AGI of $1 trillion and accounted for $273 billion in income taxes in 2006, 27 percent of all income taxes. Just 15,911 taxpayers had incomes above $10 million. They paid $91 billion in income taxes, 9 percent of all income taxes. Their average tax payment was $5.7 million.”

It would be nice if both sides in Congress, not to mention the President, could agree to some basic facts so they could hold an intelligent discussion on federal spending and taxation rather than blabbering on about “ taxing the rich” and using the same 2% of taxpayers to pay for every last item of the welfare state.

March 06, 2009

Renewable Energy . . . Blah, Blah, Blah

Robert Bryce writes in yesterday’s Wall Street Journal, “We can double the output of solar and wind, and double it again. We'll still depend on hydrocarbons.” Bryce then goes on to explain:

“During his address to Congress last week, President Barack Obama declared, "We will double this nation's supply of renewable energy in the next three years."

“While that statement -- along with his pledge to impose a "cap on carbon pollution" -- drew applause, let's slow down for a moment and get realistic about this country's energy future. Consider two factors that are too-often overlooked: George W. Bush's record on renewables, and the problem of scale.

“By promising to double our supply of renewables, Mr. Obama is only trying to keep pace with his predecessor. Yes, that's right: From 2005 to 2007, the former Texas oil man oversaw a near-doubling of the electrical output from solar and wind power. And between 2007 and 2008, output from those sources grew by another 30%.

“Mr. Bush's record aside, the key problem facing Mr. Obama, and anyone else advocating a rapid transition away from the hydrocarbons that have dominated the world's energy mix since the dawn of the Industrial Age, is the same issue that dogs every alternative energy idea: scale.

“Let's start by deciphering exactly what Mr. Obama includes in his definition of "renewable" energy. If he's including hydropower, which now provides about 2.4% of America's total primary energy needs, then the president clearly has no concept of what he is promising. Hydro now provides more than 16 times as much energy as wind and solar power combined. Yet more dams are being dismantled than built. Since 1999, more than 200 dams in the U.S. have been removed.”

After walking readers through the numbers from the U.S. Energy Information Administration, Bryce concludes with:

“But the problem of scale means that these hydrocarbons just won't go away. Sure, Mr. Obama can double the output from solar and wind. And then double it again. And again. And again. But getting from 76,000 barrels of oil equivalent per day to something close to the 47.4 million barrels of oil equivalent per day needed to keep the U.S. economy running is going to take a long, long time. It would be refreshing if the president or perhaps a few of the Democrats on Capitol Hill would admit that fact.” (emphasis added)

So the next time a member of the Arlington County Board starts talking about renewable energy and the Board’s FreshAIRE initiative, ask them how much plunder they’re taking from Arlington taxpayers for their “blah, blah, blah.”

March 05, 2009

You Mean Individuals Pay The Corporate Income Tax?

On Monday, the Tax Foundation began running both a TV ad and a radio ad in the Washington, DC market area “to educate Americans about the burden that American families bear from the corporate income tax.”  According to the Tax Foundation press release:

"Most people think that corporate income taxes are paid by wealthy, anonymous companies," said Scott Hodge, President of the Tax Foundation. "But as economists have been teaching for years, people bear the burden of corporate taxes, not companies."

“Research from the Congressional Budget Office shows that in a global economy where capital is highly mobile but workers can't easily move abroad, workers end up bearing the brunt of corporate taxes. In 2007, Economist William Randolph found that 70 percent of corporate tax burdens fall on employees through lower wages and productivity, while the remaining 30 percent fall on company shareholders. A recent Tax Foundation study shows the federal corporate income tax alone collected $370 billion in 2007. That's an average household burden of $3,190 per year - more than the average household spends on restaurant food, gasoline or home electricity in a year. (emphasis added)

"Typically, the argument for cutting the U.S. corporate tax rate centers on improving the ability of American companies to compete globally," said Hodge. "While true, those arguments overlook the fact that individual households bear the corporate tax burden, and their pocketbooks will benefit most from reform."

View the TV add here, the radio ad is at You Tube as well.

March 04, 2009

Honesty in Political Discourse

Many have commented on President Obama’s first State of the Union speech last Tuesday, February 24, 2009. One that seemed particularly good was Victor Davis Hanson’s posted on National Review Online.

The last four paragraphs seem especially observant since they can be generalized to what passes for political discourse today, especially on television. While the entire column makes worthwhile reading, these four seem rather descriptive:

“All government officials talk of spending wisely, but they never tell us the true extent of their financial malfeasance. Imagine if last week, in his address to Congress, President Obama had said something like the following: “We must cut spending, since the borrowed money must come from somewhere. Either we print more paper dollars, and eventually ruin the value of our currency in the manner now common in Zimbabwe or Argentina; or we continue to borrow from the Chinese, Japanese, and Europeans, and therefore mortgage both our honor and our autonomy; or, in the manner of War Bonds during the Second World War, we will have to ask you all to forgo stocks, 401(k)s, and real-estate investments, and instead each month, as part of your patriotic duty, buy U.S. government savings bonds that garner almost no interest, to subsidize our nation’s lavish borrowing and spending.”

“Only that way could we have an honest national debate on whether the proposed high-speed rail between Vegas and LA is worth making Americans soon pay $10 for a Big Mac; or whether federally subsidized community organizing justifies more begging for help from the Communist government in Beijing; or whether we would all like to accept 0.05 interest on our government bonds to finance the mortgage bailout of those in arrears on their home debt.

“In short, for each word devoted to spending, we need one word of honest exegesis about “paying for it.”

“For the last 20 years, all our presidents have talked much about health care, education, and spending, while saying little. Either they were not honest enough to tell us the truth — or they were convinced that, like children, we simply couldn’t handle it if they did.”

Honest political discussion? Now that would be change we should hope for!

March 03, 2009

Patrick Henry on Liberty

"Guard with jealous attention the public liberty. Suspect every one who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are inevitably ruined."

    -- Patrick Henry, speech in the Virginia Ratifying Convention, 5 June 1778

HT Founder's Quote Daily at The Patriot Post

March 02, 2009

From War on Terror to War on Prosperity?

On Friday, February 27, 2009, Larry Kudlow, host of CNBC’s The Kudlow Report wrote at his blog, Kudlow’s Money Politics, that President Obama had declared “war on investors, entrepreneurs, businesses and more.” He then goes on to explain:

“Let me be very clear on the economics of President Obama’s State of the Union speech and his budget. He is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds. That is the meaning of his anti-growth tax-hike proposals, which make absolutely no sense at all -- either for this recession or from the standpoint of expanding our economy’s long-run potential to grow.

“Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is a function of Obama’s left-wing social vision, and a repudiation of his economic-recovery statements. Ditto for his sweeping government-planning-and-spending program, which will wind up raising federal outlays as a share of GDP to at least 30 percent, if not more, over the next 10 years.

“This is nearly double the government-spending low-point reached during the late 1990s by the Gingrich Congress and the Clinton administration. While not quite as high as spending levels in Western Europe, we regrettably will be gaining on this statist-planning approach.

“Study after study over the past several decades has shown how countries that spend more produce less, while nations that tax less produce more. Obama is doing it wrong on both counts.

“And as far as middle-class tax cuts are concerned, Obama’s cap-and-trade program will be a huge across-the-board tax increase on blue-collar workers, including unionized workers. Industrial production is plunging, but new carbon taxes will prevent production from ever recovering. While the country wants more fuel and power, cap-and-trade will deliver less.

“The tax hikes will generate lower growth and fewer revenues. Yes, the economy will recover. But Obama’s rosy scenario of 4 percent recovery growth in the out years of his budget is not likely to occur. The combination of easy money from the Fed and below-potential economic growth is a prescription for stagflation. That’s one of the messages of the falling stock market.”

Well said, Mr. Kudlow. No wonder a letter writer to the editor of the Pocono Record blames President Obama for the current stock market and fiscal woes. For a record of the Dow Jones Industrial Average see this CNBC chart.

March 01, 2009

General Assembly Passes Budget On Time

Gary Emerling of the Washington Times reports Virginia’s General Assembly approved a $77 billion biennium budget, which enabled it to adjourn on-time. He writes:

“Disputes about Virginia's biennial spending plan took the state's 12 budget conferees until roughly midnight Friday to resolve, threatening to push the winter legislative session past Saturday's scheduled adjournment.

“But with the sixth overtime session in the past eight years looming, members of the Republican-controlled House voted 90-8 in the evening to pass a spending proposal containing key compromises between the General Assembly's two divergent chambers.”

In a companion piece in the Washington Times, the AP’s Bob Lewis wrote:

“Slightly more than $1.5 billion in federal cash was used to offset a $3.7 billion shortfall and restore many state health care, educational and public safety cuts Gov. Timothy M. Kaine proposed in December.

“Without the stimulus money, Kaine said, state workers faced "massive furloughs and layoffs."

"If anybody wonders whether the stimulus packaged mattered, whether the recovery package mattered, 7,100 people are going to have jobs with state government," said Kaine, who is also Democratic national chairman.”

Speaking of “stimulus” money, the Richmond Times-Dispatch reports:

“A total of $365 million in stimulus money will go to K-12 education to substitute for declining basic-aid payments to education. The budget puts off until next year a decision on one of the more contentious proposals favored by Kaine and the House: limits on non-instructional staff at public schools.

“The largest chunk of Obama-initiated assistance -- $962 million -- will be used to plug a hole in Medicaid, which provides health care for the aged and poor.”

And on the importance of that federal money, the Times-Dispatch reported that Del. Ken Plum (D-Fairfax), chairman of the House Democratic Caucus said "The stimulus package is our salvation.” Sounds like political talk for “that sure saved us from having to make tough budget decisions.”

More on the budget (House Bill 1600), and the voting on the various amendments, is available at the General Assembly website. Here is the Virginian-Pilot’s take on the budget bill. Finally, the Washington Post reports, “Lawmakers agreed to put $160 million in reserve for future economic problems” and also “limited the number of support staffers at public schools next year, saving $340 million, and altered the timetable for large retailers to send sales taxes to the state, recouping $100 million."