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May 31, 2009

Hiding $1.2 Trillion in Taxes

An op-ed in Investor’s Business Daily (IBD) last week by Wayne Crews and Ryan Young of the Competitive Enterprise Institute (CEI) points out:

“Compliance costs from thousands of regulations — pouring out from over 60 departments, agencies and commissions — amounted to $1.17 trillion in 2008. The federal government spends an additional $49.1 billion just to administer and enforce its rules. This figure is on par with federal income tax revenue ($1.2 trillion) and Canada's entire 2006 GDP ($1.265 trillion).”

As Crews and Young point out:

“. . . today's deficits are tomorrow's tax increases. And more spending is usually followed by more regulation. The Bush spending explosion was accompanied by more than 30,000 new regulations.”

But wait, isn’t it Congress’ job to make the rules? Crews and Young write:

“Article I, Section 1 of the Constitution says, "All legislative powers herein granted shall be vested in a Congress." Much of that power has been given away to federal agencies. Congress passed 285 laws last year, compared with 3,830 final rules from agencies. The alphabet soup of agencies should answer to Congress for the regulatory burdens they impose.”

The two authors argue that the economy needs “a deregulatory stimulus,” and outline “three fronts in the battle to achieve it. The first is disclosure. While CEI publishes their annual Ten Thousand Commandments report, but Crews and Young say the federal budget or the Economic Report of the President “should include in-depth chapters exploring the regulatory state.” A second would be to install sunset provisions so that obsolete rules are eliminated. Finally, they argue that Congress “reassert its lawmaking authority.”

As Don Boudreaux at Cafe Hayek points out, “A tax by any other name . . . ,” and thanks for the HT.

May 30, 2009

A Second Opinion On Gargantuan Borrowings

Yesterday, we growled “that each American household now has liabilities of $668,661, which includes a federal debt of $546,668 and personal debt of $121,953,” according to calculations by USA Today and supplemented by observations by Investor’s Business Daily.

Victor Davis Hanson, a senior research fellow in the classics and military history at the Hoover Institution is leading a tour of the “vanquished civilizations of the Mediterranean”  through Rome, Crete and Athens. He posted some “reflections on an age now fading . . . at Pajamas Media earlier this week, including this:

“From time to time I meet individuals who feel that the United States as they have known it is changing before their eyes, and therefore they have sunk into a terrible depression. They cite a litany of horrors.

“Take the economy: the liberal attack on Bush as a reckless spender who increased the debt by $2 trillion is now replaced by ’stimulus’ groupies, who are silent about a staggering $9  trillion of Obama debt to come. Cannot the country, the media-anyone!-see that the amounts of borrowing are so gargantuan that we are talking about massive changes in the US economy and lifestyle? The size and inefficiency of the government will grow. We will have soon some sort of national sales taxes on top (of) state, local, and federal higher rates, the point being threefold: more recipients and distributors of entitlements mean larger liberal permanent constituents-an institutionalization of the welfare state. The debts are so large that it will require a redistribution of income through higher taxes. When a Paul Krugman writes seriously that California’s financial meltdown (9% sales, 10% income taxes) is due to too low taxation (as hundreds of thousands of overtaxed skilled professionals flee the state), then one can see how the power of ideology in the present age so easily trumps empiricism. Three, the debts will end American exceptionalism abroad, and severely curtail our options. In other words, we are seeing the much waited for multilateralism-but by financial default! What depresses is the fact that debt is now being used as a political tool-to reconstitute American culture and society, both at home and abroad.” (emphasis added)

It's difficult to be more observant that that. 

May 29, 2009

Beyond Ugly

USA Today reports that each American household now has liabilities of $668,661, which includes a federal debt of $546,668 and personal debt of $121,953. According to USA Today:

“Taxpayers are on the hook for an extra $55,000 a household to cover rising federal commitments made just in the past year for retirement benefits, the national debt and other government promises, a USA TODAY analysis shows.

“The 12% rise in red ink in 2008 stems from an explosion of federal borrowing during the recession, plus an aging population driving up the costs of Medicare and Social Security.

“That's the biggest leap in the long-term burden on taxpayers since a Medicare prescription drug benefit was added in 2003.”

Unable to remember using your credit card to buy all that? Investor’s Business Daily (IBD) says in an editorial, “Well, technically, you didn't. The government did it for you. And USA Today has done us all a favor by taking out a calculator and doing the basic math. It's beyond ugly.” The IBD editorial goes further:

“Looking long term is where it really gets scary. Recently, we learned the U.S. had $101 trillion in retirement and health care obligations over the next 75 years. The only problem is, at current tax rates we'll have only $53 trillion to pay for it all.

“That leaves a gaping hole of $48 trillion.

“It gets worse. The stimulus plans and bailouts pushed into the budget by President Obama and congressional Democrats will add $9 trillion to our national debt over the next 10 years alone.

IBD concludes by saying:

“Two weeks ago, Standard & Poor's warned Britain it could lose its AAA rating because its national debt will soon hit 100% of GDP. Well, guess what? We're heading down the same road. A story in the usually staid Financial Times of London last week said it all: "Exploding Debt Threatens America."

“More brutal was last week's assessment of Russia's Pravda, the former house organ for the Soviet communist regime: "The American descent into Marxism is happening with breath taking speed." Ouch.

“We'd like to disagree, but at least one of those newspapers is right. And unless we Americans stand up and tell our elected officials to stop this insane surge in spending and taxing, we'll pay for it for decades to come.” (emphasis added)

As President Obama told C-SPAN's Steve Scully last weekend:

"Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades."

May 28, 2009

James Madison On Government

"But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place, oblige it to control itself."

   -- James Madison, Federalist No. 51

HT Patriot Post and page 5 of Mark Levin's Liberty and Tyranny

May 27, 2009

Where’s That In The Constitution?

With a HT to Thomas Lifson, writing at the American Thinker, Terrence Jeffrey of the CNSNews.com reports:

“Transportation Secretary Ray LaHood told a group of reporters at the National Press Club on Thursday that he wants to “coerce people out of their cars.” (emphasis added)

“In Newsweek magazine last week, nationally syndicated columnist George Will published a piece critical of Lahood, entitled, “Ray LaHood, Transformed--Secretary of Behavior Modification.”

“He says he has joined a ‘transformational’ administration: ‘I think we can change people's behavior,’” Will reports that LaHood said over lunch.

“LaHood, a former Republican congressman from Peoria, Ill., has become a champion of using the Department of Transportation and federal transportation spending to get people to take trains, busses, and ride bikes instead of driving cars.

“At the National Press Club on Thursday he attempted to respond to George Will’s column and to explain his vision for using the power of government to change people’s transportation behavior and to change the nature of American residential communities.”

To fully understand what LaHood is talking about, turn to this Heritage Foundation Backgrounder by Ron Utt who wrote:

“President Barack Obama's early comments on his opposition to suburban sprawl and his intention to alter the way Americans live and travel took a step closer to reality when he created an interdepartmental initiative on housing and transportation costs. A March press release issued by the U.S. Department of Transportation (DOT) and the U.S. Department of Housing and Urban Development (HUD) announced a new interagency partnership to create "affordable, sustainable communities."

Utt then identifies the partnership’s goals, describes liberals’ anti-suburban bias, and how those goals would  be furthered. He also provides some rather stunning numbers:

“In 2006, the most recent period for which data are available, the federal subsidy for public transit amounted to $165.61 per 1,000 passenger miles, while automobiles earned the federal government a $0.93 "profit" per 1,000 passenger miles, in large part because federal fuel taxes paid by motorists are used to subsidize other projects, including transit.” (emphasis added)

In conclusion, Utt writes, in part:

“Despite the broad scope of this new DOT-HUD partnership, the press release announcing it was long on euphemisms and slogans and offered little or no substance as to what it intended to accom­plish beyond the enhancement of existing bureau­cracies and greater data manipulation. Nonetheless, the euphemisms it did embrace belong to those who want to force dramatic changes on how Amer­icans live their lives.

“While some may hope this effort is nothing more than the President's attempt to use the White House as a bully pulpit to encourage Americans to mimic the urbane lifestyle he experienced in an upscale Chicago neighborhood, the record of past such efforts by the federal government is more troubling.”

For more on what LaHood is up to, read George Will’s column from the May 25 issue of Newsweek, which was referenced in the above CNSNews.com article. Will’s concludes:

“Once upon a time, government was supposed to defend the shores, deliver the mail and let people get on with their lives. Today's far-seeing and fastidious government, not content with designing the cars Americans drive to their homes and the lightbulbs they use in their homes . . . And to think that Republican Ray LaHood, Secretary of Behavior Modification, is an enthusiast for this, well, cozy relationship between Washington and Peoria, and everywhere else, too.”

The American Thinker’s Thomas Lifson opines:

“I applaud the Secretary's honesty, as I deplore the elitist mentality that seeks to coerce Americans.”

Oh. By the way, there is even an Arlington County connection to all of this. At the county's website, the  Grand Poohbahs want you to fork over $5 to for a DVD of the 52-minute video of their “smart growth journal” featuring a:

“tale of political wheeling and dealing, visionary planning, missteps and challenges (that) is a glimpse into the recent history of Arlington, as told by many who were there.”

Save the $5, and if you must, watch the video online.

May 26, 2009

Global Warmers Named May 2009 Porkers

Citizens Against Government Waste (CAGW) has selected “House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) and House Energy and the Environment Subcommittee Chairman Ed Markey (D-Mass.) its May Porkers of the Month.” They are sponsor and co-sponsor, respectively, of H.R. 2454, the American Clean Energy and Security Act of 2009 (ACESA), the Waxman-Markey bill. CAGW explained their selection:

“As the negative economic realities of the bill have become clear, negotiations have degenerated into a circus as Reps. Waxman and Markey frantically jump through hoops, adding and altering provisions to placate special interests and buy the votes of appropriately skeptical members of Congress from states which stand to lose if the bill passes.

“The Waxman-Markey bill would purportedly do two things.  First, it would reduce greenhouse gases by having the government set annual carbon emissions limits which would steadily ratchet lower.  Second, the Environmental Protection Agency would distribute carbon permits to companies, and since some companies will be over the limits and some will be under, those whose emissions exceed the limits would have to buy more permits from the government or from other firms in this new government-created and managed “market.”

“Waxman-Markey is a job-killer, with estimates of job losses ranging from 1 to 2.5 million by 2030.  It imposes enormous cost burdens on companies and industries and will drain the nation’s gross domestic product by $9.6 trillion by 2035.  It will drive consumer utility bills up dramatically, a fact that President Obama himself admitted during the campaign when he stated that consumer energy bills “would necessarily skyrocket” and Director of the Office of Management and Budget Peter Orszag reiterated when he confirmed that “price increases would be essential to the success of a cap and trade program.”  Families will pay an average of $1,500 more in energy costs per year.  Waxman-Markey would create complicated new financial instruments similar to those that played an integral role in the collapse of the mortgage market.  Despite the authors’ claims that the bill would create jobs, the bill contains a provision that would grant any worker laid off as a result of the program a “climate change adjustment allowance,” three year’s worth of salary payments, health insurance premiums, up to $1,500 in a relocation allowance, as well as $1,500 for job search expenses.”

Even worse, however, is the admission by Rep. Waxman (see the C-SPAN 3 video available here) that he doesn’t “know everything that’s in this bill” and he also relied “very heavily on scientists” at the United Nations.

Wow, for a bill that could cause American familes to pay $1,500 or more in annual energy costs and result in the loss of as many as 2.5 million jobs, that is an amazing admission.

May 25, 2009

ACORNs, Election Fraud, And The Census

At it’s website, the Association of Community Organizations for Reform Now (ACORN) describes itself as:

“the nation’s largest grassroots community organization of low- and moderate-income people with over 400,000 member families organized into more than 1,200 neighborhood chapters in 110 cities across the country. Since 1970, ACORN has been building community organizations that are committed to social and economic justice, and won victories on thousands of issues of concern to our members, through direct action, negotiation, legislative advocacy and voter participation. ACORN helps those who have historically been locked out become powerful players in our democratic system.

Others don’t see ACORN in such glowing terms. An editorial in the weekend edition of the Washington Examiner writes:

“Under the guise of due process concerns, congressional Democrats have opened the way for organizations with criminal histories to gain greater access to taxpayer funds. Exhibit A here is the Association of Community Organizers for Reform Now (ACORN), now under investigation in at least 14 states for voter registration fraud.”

Even Politico’s Michael Falcone admitted earlier this month:

“Indeed, ACORN has continually run afoul of the law in recent years. Most recently, in Nevada, law enforcement officials charged the group with voter registration fraud on Monday, accusing ACORN of illegally setting quotas for its canvassers and paying employees bonuses for signing up more than 21 new voters per day.

“And in Pennsylvania on Thursday, authorities charged seven ACORN workers with falsifying voter registration forms – six of those employees face felony counts. ”

In a column earlier this month, the Wall Street Journal's John Fund wrote, “The stink (around ACORN) is bad enough that some congressional Democrats have taken notice,” including “Michigan Rep. John Convers, chairman of the House Judiciary Committee.” Fund goes on to say:

“A lot of money is at stake. In the stimulus bill passed by Congress, Acorn is eligible -- along with other activist groups -- to apply for $2 billion in funds to redevelop abandoned and foreclosed homes. Meanwhile, public records show that last spring the IRS filed three tax liens totaling almost $1 million against Acorn, most of which concerned employee withholding.”

In addition to the stimulus money, Phyllis Schlafly writes in an Investor’s Business Daily op-ed that ACORN could receive another $.5.5 billion from the federal government’s FY 2010 budget, which is “after receiving $53 million of taxpayers’ money over the last 15 years.” Schlafly adds:

“Acorn also has received generous grants from top recipients of federal bailout money. Bank of America (almost $3 million), Citigroup and JPMorgan Chase made big grants to Acorn Housing Corp., one of Acorn's many affiliated organizations.”

Schlafly adds, "It is particularly important to expose Acorn's political activities because of its new relationship with the Census Bureau, the agency tasked with compiling the 2010 census." 

In an extensive investigative report (requires Adobe) last fall, Matthew Vadum of the Capital Research Center sums up its report saying:

“ACORN has become America’s most prominent left-wing community group. Little-known until now, ACORN has played a major role in the subprime mortgage mess that has undermined Americans’ support for free market problem-solving and set off a worldwide chain of financial troubles. It is also implicated in vote fraud schemes from coast to coast. ACORN aims to give America change that socialists can believe in – by any means necessary. It is deliberately organized to avoid scrutiny. But with an FBI probe underway, millions of dollars in back taxes owing, and a racketeering lawsuit pending, it may finally have to answer for its many misdeeds.

If you prefer a video report, check here for Fox News’ Glenn Beck. Finally, a HT to Tertium Quids’ Norm Leahy where you can also listen to a podcast with the Wall Street Journal’s John Fund talking about voter fraud.

May 24, 2009

On This Memorial Day Weekend

For Memorial Day 2008, Mark Alexander began an essay at Patriot Post with quotes -- the first by Nathan Hale and the second by John Adams:

  • “I only regret that I have but one life to lose for my country."
  • "I am well aware of the toil and blood and treasure that it will cost to maintain this Declaration, and support and defend these States. Yet through all the gloom I can see the rays of ravishing light and glory. I can see that the end is worth more than all the means...."

Alexander continues:

“Fortunately, millions of American Patriots still reserve Memorial Day to honor the service and sacrifice of our fallen countrymen, who donned the uniforms of our Armed Forces with honor and under oath to defend of our Constitution and the cherished liberties it embodies. On 7 August 1782, General George Washington instituted the first formal military award of recognition for "any singularly meritorious action." It was a purple cloth heart, the predecessor of the now-familiar Purple Heart, which is awarded to any member of our Armed Services who is wounded or killed in combat or combat-related actions. For this reason, the decoration carries the profile of George Washington.

"But our nation's supreme military award was instituted in 1861. That award is the Medal of Honor (No, it is not the "congressional" Medal of Honor, and, no, it is not "won.")"

He then goes on to call attention to “four young men who served in Iraq and Afghanistan  (who) will not be at the malls, nor will they be at the family barbecue” this weekend. “They are Corporal Jason L. Dunham, USMC; Master-at-Arms Second Class Michael A. Monsoor, USN; Sergeant First Class Paul R. Smith, USA; and Lieutenant Michael P. Murphy, USN.”

Their Medal of Honor citations, which Alexander includes, should be a “must read” by every American Patriot.

HT to Mark Levin for the above picture of Marines raising the American flag at Iwo Jima.

May 23, 2009

“Another Mark Steyn Gem”

The American Thinker asks whether readers have ever wondered “where that $800 billion in stimulus money went? Do you ever think about the jobs created as a result of it?”

For an answer, AT points to Mark Steyn’s weekend column in the Orange County Register, saying “Steyn is is in rare form,” adding the column “is both hilarious and tragic.” The essence of the column is that: “Statism (is) the only thing being stimulated.” Or, as Steyn writes:

“We're spending trillions we don't have to create government programs to spend even more trillions we don't have.”

While visiting the neighboring state of Vermont, he saw an ad by a non-profit group of ‘community organizers’ who were “just like the president.” The “designated ‘anti-poverty agency’ was seeking job applicants who would be funded by the so-called American Recovery & Reinvestment Act, known to most taxpayers as the $787,000,000 (that's billions) Porkulus. He then explains what the jobs entail. He concludes by saying:

“The stimulus will do nothing for the economy, but it will dramatically advance the cause of statism (as Mark Levin rightly calls it). Last week's vote in California is a snapshot of where this leads: The gangster regime in Sacramento is an alliance between a corrupt and/or craven political class wholly owned by a public sector union-bureaucracy extortion racket. So what if the formerly Golden State goes belly-up? They'll pass the buck to Washington, and those of us in nonprofligate jurisdictions will get stuck with the tab. At some point, the dwindling band of citizens still foolish enough to earn a living by making things, selling things or providing services other than government-funded program coordination will have to vote against not just taxes but specific agencies and programs – hundreds and thousands of them.

“The bad news is that our children will not enjoy the American Dream. The good news is they'll be able to apply for an American Dream Readiness Assistance Coordination Grantwriter Program. May the Funds be with you!”

Thanks for “another gem,” Mark. Other growls featuring Mark Steyn include here, here, and here.

May 22, 2009

Politicians Are Supposed To Control Spending. Who Knew?

A poll released today by Rasmussen Reports(™) reports that “(f)or nearly four-out-of-five U.S. voters, the problem is not their unwillingness to pay taxes. It’s their elected representatives’ refusal to cut the size of government.” In addition,  Rasmussen reports:

“Seventy-seven percent (77%) of voters say the bigger problem in the United States is the unwillingness of politicians to control government spending. Just 14% say the problem is that voters are unwilling to pay enough in taxes, according to a new Rasmussen Reports national telephone survey.

“These findings parallel results in California just before voters there rejected several ballot initiatives aimed at raising taxes.”

Rasmussen also noted “the gap between Mainstream America and the Political Class on the question is wider than that between political parties.” On the issue of spending vs. tax cuts, Rasmussen writes:

Most voters believe that tax cuts are good for the economy.” (emphasis added)

Time for more tea parties! In an op-ed in today's Washington Post, Newt Gingrich wonders if last month's tea parties and the results of this week's voting in California "are a harbinger of things to come."

And today's Culpeper Star-Exponent reports there is a TEA party tomorrow. Here are the details from the news story by Nate Delesline:

"Saturday’s rally is set for 11 a.m. to 2 p.m. at Yowell Meadow Park. The event will feature music, patriotic readings and special appearances by historical characters Gen. Stonewall Jackson and Patrick Henry. The event will go on rain or shine.

"Last month, under rainy skies, hundreds gathered in the park on April 15 — tax day — to protest government spending. The Culpeper rally was one of thousands nationwide." 

HT Mark Levin Show (3rd hour, 5/22/09 show). 

May 21, 2009

Senator Cuccinelli Named "Legislator of the Year”

The limited government, free market group Tertium Quids yesterday named Ken Cuccinelli (R) as its inaugural “Legislator of the Year” in the Virginia Senate.

According to John Taylor, Tertium Quids president. “Virginia would not have passed a law to put the state budget online or a law to prevent Kelo-like eminent domain abuses without Senator Cuccinelli steadfastly pushing for them for several years in the Virginia Senate.”

Here’s Ken, with John Taylor, receiving the award.

 

HT Brian Gottstein, blogging at the Tertium Quids blog.

May 20, 2009

Raise My Taxes -- Lose My Vote!

It started on April 15 with the tea parties all across the nations. Listen to this speech by John Taylor of Tertium Quids at the Richmond Tea Party, or to Leslie Carbone who provided the opening remarks at the Reston Tea Party.

It continued yesterday in California as citizens voiced their outrage over the spendthrift ways of the “Governator” and the state legislature (as Joshua Culling reports at the National Taxpayers Union blog, Government Bytes and the Los Angeles Times reports today).

According to Tertium Quids:

“If you are fed up with the politicians at all levels of government and their abusive spending and overburdening taxation, if you are willing to fight for future generations instead of plundering them, and if you are made of the same steel as your ancestors who fought for freedom and limited government, then sign the pledge below that you will not vote for any politician who votes, or who promises to vote, to raise taxes."

A good place to begin is to Sign the Pledge, and get a Raise My Taxes - Lose My Vote bumper sticker from Tertium Quids. And be sure to check the box indicating you want to become a member of Virginia's largest and most successful coalition of small government, free market activists and organizations, the Tuesday  Morning  Group  coalition.

 

May 19, 2009

Call Members of Congress On Global Warming Legislation

We’ve growled on several occasions about global warming, or climate change if you prefer the latest word du jour, including January 20, 2009, January 16, 2009, November 17, 2008, August 18, 2008, July 15, 2008, and April 22, 2008.

Before discussing the so-called “cap-and-trade” legislation now on a fast-track in Congress, let me first address the scientific side of global warming. There are many sources for “warming skeptics,” but the SEPP (Science & Environmental Policy Project) website is one that I regularly frequent. It was founded by atmospheric physicist S. Fred Singer.

In the book, “Unstoppable Every 1,500 Years Global Warming,” Dr. Singer wrote with Dennis Avery, and updated and expanded in 2008, the authors write in the dedication:

“The public has remained virtually unaware that the 1,500-year cycle offers the only explanation for the modern warming that is supported by physical evidence.”

And in August 2008, Dr. Singer wrote: “Climate will continue to change -- as it always has -- both warming and cooling on different time scales and for different reasons, completely unrelated to any human action. I will also argue that, should it occur, a modest warming on the whole is beneficial.”

The Congress, under Rep. Henry Waxman (D-Calif) and Ed Markey (D-Mass), “have modified their cap-and-trade global warming bill, but that’s not good news. The new legislation will increase U.S. economic losses by $2 trillion,” according to an editorial in today's Investor's Business Dailyl, which goes on to say:

“As energy prices rise, income and employment will fall. Because families will spend larger portions of their incomes on energy — as much as $1,500 a year for a typical family of four — they will have less to spend on basic needs, less to invest, less to buy luxury items. (emphasis added)

“Economic activity won't be wiped out by the higher energy costs. But it will be severely jarred. The White House itself, through the Small Business Administration's Office of Advocacy, concedes that restricting carbon emissions "is likely to have serious economic consequences for regulated entities throughout the U.S. economy."

“It's conceivable that a cap-and-trade regime — or a carbon tax, which would likely generate similar GDP losses — could create permanent economic stagnation.

“Economies grow best when the tax burden is low. But economies are handicapped when the burden is high, and cap-and-trade (indirectly) and a carbon tax (directly) increase that burden. As Myron Ebell, the Competitive Enterprise Institute's director of energy and global warming policy, noted, this would be the "biggest tax increase in history.

"It's alarming that the economic problems that will be created by CO2 emission restrictions mean nothing to the global warming bill's sponsors and those who'll support it. They know carbon caps will carry heavy costs. Yet they traffic in the myth that such legislation will create "green" jobs and revive the economy."

Let’s bring the economic costs down to a family level. According to a study by the Heritage Foundation, published May 13, 2009, “The negative economic impacts accumulate, and the national debt is no exception. Waxman-Markey drives up the national debt 29 percent by 2035. This is 29 percent above what it would be without the legislation and represents an additional $33,400 per person, or more than $133,000 for a family of four. To reiterate, these burdens come after adjusting for inflation and are in addition to the $450,000 per family of federal debt that will accrue over this period even without cap and trade.” And here’s that statement in chart form (emphasis added):

 

Your representatives in Congress need to hear from you. You can send them e-mail by using the following “Web Forms” or phone them on Capital Hill at (202) 224-3121.

IBD and Heritage Foundation have other articles and studies on global warming, not to mention other warming skeptic websites that are available.

May 18, 2009

Don’t Like High State Taxes? Move!

An op-ed in today’s Wall Street Journal by Arthur Laffer and Stephen Moore says, “Americans know how to use the moving van to escape high taxes,” and that if you "tax the rich, you lose the rich." They write:

“Here's the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.

“And the evidence that we discovered in our new study for the American Legislative Exchange Council, "Rich States, Poor States," published in March, shows that Americans are more sensitive to high taxes than ever before. The tax differential between low-tax and high-tax states is widening, meaning that a relocation from high-tax California or Ohio, to no-income tax Texas or Tennessee, is all the more financially profitable both in terms of lower tax bills and more job opportunities.

“Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.”

Richard Vedder also authored a Policy Analysis for the Cato Institute in 1996 in which he pointed out that just “(a)s ancient Rome lived in splendor off the tribute raised in the provinces, so in modern America the political capitals are prospering economically at the expense of the rest of the nation.” He pointed out “(t)he income differential between Washington and the rest of the nation rose from 25.9 percent in 1980 to 32.1 percent in 1990.

ACTA analyzed IRS migration data for a story that appeared in ACTA’s July 28, 2003 issue of The ACTA Watchdog (requires Adobe), and concluded that taxes in Arlington County were a factor in out-migration from the county.

Jim Bacon, who founded the e-zine Bacon’s Rebellion, looked at the same data from a state-level perspective. He wrote on September 8, 2003 that “other factors are at work. People aren't just leaving Arlington County -- they're joining a migratory stream headed toward the urban periphery,” adding  “(p)eople move to new locations in order to better their lives. They seek a bundle of attributes, of which taxes most definitely are one.”

You can find the ALEC study, “Rich States, Poor States” here.

May 17, 2009

Conservatism, Liberty and Freedom

The April 2009 issue (requires Adobe) of Imprimis, a monthly publication of Hillsdale College, features the adaptation of a lecture delivered at the college by the inimitable Mark Steyn. Taken from his “Live Free or Die” lecture delivered March 9, the following remarks are the penultimate paragraph.

“Conservatives often talk about "small government," which, in a sense, is framing the issue in leftist terms: they're for big government. But small government gives you big freedoms—and big government leaves you with very little freedom. The bailout and the stimulus and the budget and the trillion-dollar deficits are not merely massive transfers from the most dynamic and productive sector to the least dynamic and productive. When governments annex a huge chunk of the economy, they also annex a huge chunk of individual liberty. You fundamentally change the relationship between the citizen and the state into something closer to that of junkie and pusher—and you make it very difficult ever to change back. Americans face a choice: They can rediscover the animating principles of the American idea—of limited government, a self-reliant citizenry, and the opportunities to exploit your talents to the fullest—or they can join most of the rest of the Western world in terminal decline. To rekindle the spark of liberty once it dies is very difficult. The inertia, the ennui, the fatalism is more pathetic than the demographic decline and fiscal profligacy of the social democratic state, because it's subtler and less tangible. But once in a while it swims into very sharp focus. Here is the writer Oscar van den Boogaard from an interview with the Belgian paper De Standaard. Mr. van den Boogaard, a Dutch gay "humanist" (which is pretty much the trifecta of Eurocool), was reflecting on the accelerating Islamification of the Continent and concluding that the jig was up for the Europe he loved. "I am not a warrior, but who is?" he shrugged. "I have never learned to fight for my freedom. I was only good at enjoying it." In the famous Kubler-Ross five stages of grief, Mr. van den Boogard is past denial, anger, bargaining and depression, and has arrived at a kind of acceptance.”

Browse the Imprimis archives for other outstanding reading. Consider subscribing. It’s free.

May 16, 2009

More Corporate Pigs At The Government Trough

Yesterday’s New York Times reported that “(s)ix major insurance companies have received preliminary approval to get billions of dollars in fresh capital as part of the government’s financial rescue program,” The six are:

  1. Hartford Financial Services Group
  2. Prudential Financial
  3. Lincoln National
  4. Allstate
  5. Ameriprise
  6. Principal Financial Group

The Times story went on to say:

“Under the program, each company is eligible to receive investments worth up to 3 percent of its total assets. Based on the Treasury formula, the amount of capital available to the other companies would be at least several billion dollars each.

“While the extension of additional capital to insurers had been widely expected, these are the first companies that have been identified to receive aid after the near-collapse of American International Group. According to the Treasury spokesman, Andrew Williams, these insurers qualified for capital infusions under the department’s Capital Purchase Program because each had restructured itself as a bank holding company and met the November deadline for the program.

“Hundreds of other financial institutions are still in the pipeline for review and will be approved on a rolling basis, the Treasury Department said.”

Thanks to the Foundation for Economic Freedom (FEE), who often pair current news stories with “classic” articles from their monthly journal, The Freeman. On Friday, they paired a “classic.” written by Charles Baird, from the November 1997 “issue, which discusses “corporate welfare.” It begins:

“There is widespread support for ending welfare, and for nudging, or pushing, welfare recipients into self-sufficiency through employment. Congress even voted to end Aid to Families with Dependent Children (AFDC), though President Clinton and the Republican Congress have since backpedaled.

“However, there has been no similar attempt to eliminate what might be called Aid to Owners of Dependent Enterprises (AODE). All three levels of government—federal, state, and local—are in the game. The federal government currently spends more than $65 billion a year on what both Representative John Kasich and Ralph Nader call “corporate welfare.” State and local governments spend billions more under the euphemism of “industrial development incentives.”

“For example, the federal government subsidizes commercial ads for companies like the Gallo Winery in foreign countries. The state of California recently sold a former hospital to Sun Microsystems Computer Co. for less than one-half of its fair market value. Both Oakland and San Francisco have given subsidies to privately owned professional football teams to construct and upgrade stadiums.”

Imagine what Baird would write about today’s “bailout nation.” First the banks and AIG, then the auto companies, and now insurance companies. When will it all stop? Thanks to William Warren for the following cartoon (used with permission).

May 15, 2009

Do Voters Hold School Boards Accountable?

Research in the Winter 2008 edition (click here for Adobe copy) of the Hoover Institute’s Education Next journal, found that “student learning (is) seldom a factor in school board elections.” The two researchers (Christopher Berry and William Howell) from the University of Chicago write:

“Not surprisingly, school board members agree that one of their most important goals is to help students learn. According to a 2002 national survey, student achievement ranks second only to financial concerns as school board members’ highest priority. We wondered, though, do voters hold school board members accountable for the academic performance of the schools they oversee? Do they support sitting board members when published student test scores rise? Do they vote against members when schools and students struggle under their watch?

“Existing accountability policies assume that they do: states shine light on school performance by providing the public with achievement data. Voters and parents are expected to make use of these data in choosing school districts or schools, and to hold administrators and school board members accountable for the schools’ performance at each election. The idea is that voters will replace incumbents with new members when performance is poor and support incumbents over challengers when performance is strong. Indeed, there are very few other ways in which district officials can be held accountable for school performance. Neither the federal No Child Left Behind Act (NCLB) nor the states impose direct sanctions on members of school boards that oversee large numbers of underperforming schools.”

The researchers chose to focus on South Carolina because it “centrally collects precinct-level election data for school board races. In all other states, obtaining precinct-level election results requires gathering and organizing election returns from hundreds of individual counties and election districts. In addition, they also found “the most important difference between South Carolina and most other states when it comes to local school politics is the role played by the state’s teachers unions, which are among the weakest in the country. In other states strong teachers unions may mobilize high turnout among members, their families, and friends, and punish and reward board members for their treatment of teachers rather than hold them accountable for student test scores.”

Berry and Howell conclude:

“The evidence from South Carolina shows that voters do at least sometimes evaluate school board members on the basis of student learning trends as measured by average school test scores. Changes in average school test scores from year to year can affect the number of votes incumbents receive, the probabilities that they run for reelection, and the likelihood that they face competition when they do.

‘But the absence of a relationship between average school test scores and incumbents’ electoral fortunes in the 2002 and 2004 school board elections raises important questions about the assumptions underlying accountability systems. School board elections give the public the leverage to improve their schools. If voters do not cast out incumbents when local school performance is poor, they forfeit that opportunity. As debate continues over components of NCLB, policymakers should consider whether it is realistic to assume voters will in fact use the polls to drive school improvement.”

The researchers are left to speculate on the difference between 2000 race and the 2002 and 2004 races, and put it this way:

“The 2000 elections were the first to follow the passage of the state’s accountability system. Journalists devoted ample space to issues that either directly or indirectly concerned student learning trends . . ..

“In the 2002 and 2004 elections, however, media coverage shifted to other issues, such as the closing of schools, the racial composition of schools and boards, disciplinary problems, and sports programs. In these years, only 30 and 34 percent of articles, respectively, touched on test scores. The decline in media attention leads us to suspect that concerns about student learning trends probably did not stand at the forefront of voters’ or candidates’ thinking in the 2002 and 2004 elections.”

Some interesting research indeed. Additional details on the methodology and findings are in the Education Next story.

May 14, 2009

National Taxpayers Conference

The 2009 conference is June 11-13, 2009 at the Hyatt Crystal City Hotel at Reagan National Airport.

For more information, visit this National Taxpayers Union webpage.

May 13, 2009

Threats To The Nation

Since 1965, the Gallup organization has been surveying respondents to the question:

“In your opinion, which of the following will be the biggest threat to the country in the future -- big business, big labor, or big government?”

The responses are presented in several charts, but the following one presents the longer-term trend:

Gallup also reports that responses vary by partisan affiliation. For example, in 2006, 55% of Democrats thought big government was the bigger threat while 60% of independents and 68% of Republicans thought big government a bigger threat. By March 2009, only 32% of Democrats consider big government the biggest threat while 59% of Independents and 80% of Republicans consider big government the biggest threat.

The survey was conducted March 27-29, 2009, but Gallup conducted an earlier one December 2008. According to Gallup, the implications are:

“A primary thrust of the American political tradition is a fear of centralized government with too much power. And the U.S. capitalist economic system has given businesses wide latitude to operate with minimal government interference. But those values were put to the test last year as the imminent collapse of several major U.S. corporations threatened to drive the country into an economic depression. The government responded by infusing some of these failing companies with cash and in some cases taking on significant ownership in the companies.

“Gallup has now conducted two post-crisis updates of this question (Dec. 4-7, 2008, and March 27-29, 2009) and has found similar results each time, both overall (In December, 53% said big government was the greater threat and 31% said big business was) and by party (there have been some minor changes since December as Republicans have become slightly more likely to identify big government and Democrats slightly more likely to identify big business as the greater threat).

“Thus, the change in administrations from Republican to Democratic and the government's additional actions to stabilize failing companies or address other economic problems since early December has not caused fear of big government to escalate any further beyond what was the case late last year.

“Given the timing of the December poll, it is not clear whether the initial shift came in response to the financial bailout from last fall or perhaps was a more basic partisan reaction to the election of a Democratic president in November. Whatever the cause, Republicans have grown somewhat more concerned about the threat of big government and Democrats have grown more concerned about the threat of big business, but Americans as a whole still rate big government as the greater threat.

Makes you wonder what the results of a similar survey would show of the U.S. Congress. It might be more interesting, however, to put the question to Tim Carney, author of The Big Ripoff: How Big Business and Big Government Steal Your Money (see this University Bookman interview with Tim Carney). Carney writes a regular opinion colum for the Washington Examiner, which you can find here.

May 12, 2009

Taxpayers See A Line In The Sand

OK, so I could have titled this “Your Tax Dollars At Work,” but that title would have been too easy. Washington Waste of the Day, maintained by staff of Sen. Tom Coburn (R-OK), included a story yesterday from the Miami Herald, which reported that Miami Beach will get $11 million for sand, or as government planners call it, for “beach replenishment.” Another “sand story” posted last week comes from the San Diego Weekly Reader, and focuses on the “sand efforts” of the city of Imperial Beach. The weekly newspaper points out:

“In fact, if Imperial Beach officials have their way, the local beach will be the recipient in coming years of roughly 2 million cubic yards of additional sand. That would be enough to fill the Rose Bowl — more than five times over. And this mountain of new sand would be dumped on just 1.3 miles of Imperial Beach’s shoreline.

“One concern is that some of the new sand would come from dredging the ocean bottom about one mile west of the mouth of the Tijuana River, whose pollution is notorious and responsible for frequent beach closings in Imperial Beach. Nonetheless, the sand has been determined to be clean and of appropriate consistency for placement on the city’s beach, according to Greg Wade, community development director for Imperial Beach.

“Most of the sand won’t come cheap. The Army Corps of Engineers’ plan to dredge sand off the coast, move it to the shore, and spread it along the beach would cost nearly $60 million over 50 years. A separate San Diego Association of Governments’ project would cost $22 million for sand replenishment along county beaches. A third project, also conducted by the Army Corps of Engineers, in which sand dredged from San Diego Harbor would be deposited off the shoreline of Imperial Beach, would be free to the city.”

A Google search found a third “sand story” in last Friday’s Bradenton Herald that points just how much sand American taxpayers will be buying:

“President Barack Obama’s proposed 2010 federal budget boosts spending on efforts to restore the imperiled Everglades, and includes money for shoring up beaches lost to the tides.

“The $45 million for beach renourishment nationwide marks the largest amount that a president has proposed in more than a decade, and beach advocates were gleeful. (emphasis added)

“‘Very little has ever shown up in a president’s budget request,’’ said Debbie Flack of the Florida Shore & Beach Preservation Association, which represents coastal cities and counties. ‘’We’re hoping this is recognition of the economic benefit of beaches.’”

If local or state government officials are able to justify using taxpayer money to buy sand and renourish beaches within their states, and show that it’s cost-beneficial to do so, fine! But where in the Constitution do Congress and the President find the authority to buy sand and spend money for “beach renourishment?”

May 11, 2009

Lurking Jackpots In Virginia’s Budget

The Arlington County Civic Federation passed its 2009 legislative package in November last year that included a plank requesting “the General Assembly to study the fairness and equitableness of the many formulas used in distributing general and non-general fund budget appropriations to assure they are fair and equitable.” The plank passed 36-3 with one abstention.

A news story in today’s Washington Examiner by Kytja Weir brought to mind the plank in the Civic Federation’s legislative package. The news story said that Northern Virginia “could hit road maintenance funding jackpot.” According to the Examiner:

"A proposed change to the way Virginia allocates its road maintenance dollars could more than double Northern Virginia’s share of money to fix potholes and worn roadways, according to a transportation advocacy group’s analysis.

“Later this month, the Commonwealth Transportation Board plans to consider shifting how it funds pavement maintenance on the state’s nearly 58,000 miles of roadways. The Northern Virginia Transportation Alliance estimates that the change could mean the region’s share of the Virginia Department of Transportation pie would increase from about $37 million a year to about $84 million.”

According to Weir’s article, “VDOT could not provide any figures Friday on how much money Northern Virginia roads got last year in pavement funds.”

Anyone willing to render a guess as to how many other “funding jackpots” lurk in Virginia’s budget because the formulas are unfair and inequitable to Northern Virginia’s taxpayers?

Full disclosure: I serve as the Federation's legislation committee chairman.

May 10, 2009

Federal Spending -- Arlington vs. Fairfax Counties

“The Consolidated Federal Funds Report (CFFR) is a presentation of data on federal government expenditures or obligations in state, county, and subcounty areas of the United States . . . consolidated and tabulated in a standard format by the U.S. Census Bureau, under the auspices of the U.S. Office of Management and Budget,” according to the Fiscal Year 2007 CFFR, issued September 2008. (requires Adobe)

Virginia receives more federal spending per capita than any other state, according to Figure 7, which categorizes spending by major agency. Virginia receives about $14,200 while Nevada receives the least, $6,000. Figure 7 excludes the District of Column, which received $73,900 per capita in total federal expenditures.

The latest population estimates from the Census Bureau shows Arlington County with 209,969 people and Fairfax County with 1,015,302 people. So let’s look at some of the selected data from the online CFFR query-system for FY 2007. Since Fairfax County contains about 5 times Arlington’s population, I’ll highlight some that do not bear that proportionate difference.

  • From the Summary: Total direct expenditures or obligations, Arlington County $11.3 billion and Fairfax County $19.2 billion. Salary and wages, Arlington $3.0 billion, Fairfax $1.4 billion. Grants, Arlington $887.8 million, Fairfax $799.4 million. Procurement contracts, Arlington $6.7 billion, Fairfax $13.7 billion. Another way to look at the total direct expenditures is between defense and non-defense expenditures: defense, Arlington $5.6 billion and Fairfax $11.4 billion; non-defense, Arlington $5.7 billion and Fairfax $7.8 billion.
  • The breakdown in federal retirement and disability payments shows an interesting breakdown between military and civilian retirees. For military retirees, Arlington received $90.9 million while Fairfax receives $640.8 million, but for civilian retirees, Arlington received $198.0 million and Fairfax received $944.6 million.
  • Salaries and wages. For DoD/active military: Arlington received $615.4 million and Fairfax received $139.4 million. DoD/civilian: Arlington received $1.3 billion and Fairfax received $492.4 million. And finally, all federal government civilian except DoD and USPS: Arlington received $981.5 million and Fairfax $520.1 million.

Some interesting differences in those details. With close to 100 pages in the CFFR, there are many more interesting comparisons that could be made.

May 09, 2009

Those Pesky "Remaining Challenges"

On Friday, the Washington Post reported that “President Obama's modest proposal to slice $17 billion from 121 government programs quickly ran into a buzz saw of opposition on Capitol Hill yesterday, as an array of Democratic lawmakers vowed to fight White House efforts to deprive their favorite initiatives of federal funds.” (emphasis added)

We don’t oppose shutting down ineffective government programs, but the president may want to begin a regular program of reading U.S. General Accountability Office (GAO) reports to find government programs with rampant waste, fraud, and abuse. For example, in testimony before a Congressional subcommittee (requires Adobe) last month, GAO reported they had found:

“Agencies reported improper payment estimates of $72 billion for fiscal year 2008**, which represented about 4 percent of the $1.8 trillion of reported outlays for the related programs. This represents a significant increase from the fiscal year 2007 estimate attributable to (1) a $12 billion increase in the Medicaid program’s estimate and (2) 10 newly reported programs with improper payment estimates totaling about $10 billion. (emphasis added)

  • “Progress made in estimating and reducing improper payments. The governmentwide improper payment estimates rose about $23 billion from fiscal year 2007 to 2008. This represents a positive step to improve transparency over the full magnitude of the federal government’s improper payments. Further, of the 35 agency programs reporting improper payment estimated error rates for each of the 5 fiscal years since implementation of IPIA—2004 through 2008—24 programs (or about 69 percent) reported reduced error rates when comparing fiscal year 2008 error rates to fiscal year 2004 error rates. Also, the number of programs with error rate reductions totaled 35 when comparing fiscal year 2008 error rates to fiscal year 2007 rates.
  • “Challenges remain in meeting the goals of IPIA governmentwide. The total improper payment estimate does not yet reflect the full scope of improper payments across executive branch agencies; noncompliance issues with IPIA continue; and agencies continue to face challenges in the design or implementation of internal controls critical to identifying and preventing improper payments. The fiscal year 2008 total improper payment estimate of $72 billion reported for fiscal year 2008 did not include any estimate for ten programs—including the Medicare Prescription Drug Benefit program—with fiscal year 2008 outlays totaling about $61 billion that were identified as susceptible to significant improper payments. Over half of the agencies’ OIGs identified management or performance challenges that could increase the risk of improper payments, including challenges related to effective internal controls.
  • “Medicare and Medicaid programs’ implementation of IPIA and its challenges. Medicare and Medicaid comprise 50 percent of reported governmentwide improper payments in fiscal year 2008. HHS reported improper payment amounts of $10.4 billion in Medicare Fee-for-Service and $6.8 billion in Medicare Advantage. HHS also reported in its agency financial report that it issued its first full-year Medicaid improper payment rate estimate of 10.5 percent, or $18.6 billion for the federal share of expenditures for fiscal year 2008. This Medicaid improper payment estimate represents the largest amount that any federal agency reported for a program in fiscal year 2008. While CMS has taken steps to enhance its program integrity efforts, further work remains to put in place the internal controls necessary to effectively identify and detect improper payments. For example, GAO’s work on Medicare's home health care administration and enrollment of durable medical equipment suppliers found weaknesses that exposed the program to significant improper payments. The magnitude of Medicaid improper payments indicates that CMS and the states face significant challenges in addressing the program's vulnerabilities in estimating national improper payment rates for diverse state-administered programs.

About those pesky challenges? GAO told subcommittee members:

“While federal agencies have shown progress, major challenges remain in meeting the goals of IPIA and ultimately provide reasonable assurance as to the integrity of payments. Specifically, while improved, the total improper payment estimate reported in fiscal year 2008 does not yet reflect the full scope of improper payments across executive branch agencies; noncompliance issues with IPIA implementation continue to exist; and agencies continue to face challenges in the design or implementation of internal controls to identify and prevent improper payments. Not all agencies have yet developed improper payment estimates for all of the programs and activities they identified as susceptible to significant improper payments. As shown in table 1, the fiscal year 2008 total improper payment estimate of $72 billion did not include any amounts for 10 risk-susceptible programs—including the Medicare Prescription Drug Benefit program—with fiscal year 2008 outlays totaling about $61 billion.”

**If you're wondering what "improper payments" are, it's bureaucratese for such things as overpayments or payments that should not have been made in the first place.

May 08, 2009

More Inconvenient Facts About Taxes

We’ve growled before (for example, see this growls) about the chasm between rhetoric and fact when it comes to taxes paid by the rich. Senior tax analyst Curtis Dubay begins a Heritage Foundation “web memo” this week by noting:

“Since the passage of the 2001 and 2003 tax cuts, critics have claimed incessantly that they disproportionately benefited the rich while burdening the poor. Now that the data is in, these claims have been shown to be unquestionably false.”

Using data from the Congressional Budget Office, Dubay points out:

“ . . . the tax cuts significantly increased the share of federal income taxes paid by the highest-earning 20 percent of households compared to their levels in 2000, President Clinton's final year in office.

“In 2006, the latest available year from CBO, the top 20 percent of income earners paid 86.3 percent of all federal income taxes, an all-time high. This is an increase of over 6 percent from 2000, when the top 20 percent paid 81.2 percent. During the same period, the bottom four quintiles all saw their share of the federal income tax burden fall sharply (emphasis added):

  • The bottom 20 percent of income earners' share of federal income taxes fell from -1.6 percent in 2000 to -2.8 percent in 2006;
  • The next 20 percent's share declined from 1.1 percent to -0.8 percent;
  • The middle quintile's share dropped from 5.7 percent to 4.4 percent; and
  • The fourth quintile's share decreased from 13.5 percent to 12.9 percent.”

A significant feature of the 2001 and 2003 tax cuts is that they removed millions of taxpayers from the federal income tax rolls. According to Dubay, this occurred because every tax rate was lowered. In addition, Congress created a new 10% tax bracket and expanded the refundable Child Tax Credit from $500 to $1,000.

According to Dubay, shifting the tax burden onto one segment is economically dangerous, as we suggested in yesterday’s growls in which we quoted Alexander Tytler. The numbers in chart form appear below:

There is also the matter that wealth is being redistributed as shown in the following chart:

 

May 07, 2009

Quote of the Day

"A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves a largess out of the public treasury."

    -- Alexander Tytler

HT Tax Analysts' "Quotations About Taxes," 2006 Edition

May 06, 2009

A Finger In Every Pie

Cato Institute senior fellow Richard Rahn asks readers of his “bailout nation” column in today’s Washington Times if they wanted to buy shares of stock in Chrysler, GM or AIG or other corportations. He then writes:

“Well, if you did, you could have purchased them through any stockbroker. But if you chose not to buy them, you are out of luck because the U.S. government is buying them for you, whether you want them or not.

“One could be picky and ask where the Constitution gives the president the right to serve as our personal stockbroker - ah, it doesn't - but constitutional niceties are not much of a concern within the Washington establishment.

“After frittering away 4 billion "bailout" taxpayer dollars to "save the company," Chrysler just announced it was going into bankruptcy. Not the normal Chapter 11 bankruptcy, but a "managed bankruptcy" that will require at least another 8 billion in taxpayer dollars, while, at the same time, turning 55 percent of the ownership of the company over to the United Auto Workers (whose contracts and work practices helped destroy Chrysler) and 35 percent of the equity to Fiat motors of Italy (a company that is contributing no cash - hmmm). U.S. and Canadian taxpayers are putting up a lot of cash but only get to share the remaining 10 percent ownership.”

After discussing additional details of Uncle Sam’s “buying spree, Rahn writes:

“Capitalism is a self-correcting economic system and only gets in sustained trouble as a result of faulty government policies, such as excessive or erratic monetary growth, which causes "bubbles"; inflation or deflation; and/or destructive tax, spending or regulatory policies.

“Politicians in Washington coercing citizens to buy into companies they wish not to, and politicians picking boards of directors and managers of companies are doing more than merely flirting with socialism and fascism.”

Will Wilkerson, a research fellow at Cato also has a column today in Marketplace (posted at Cato's website), writes about the role of politics in today’s bailout mania. He concludes by writing:

“ . . . When the government gets its finger in every pie, who gets what piece becomes a political decision. We may want to trust our leaders to be dispassionate stewards of the public interest, but politicians — and our over-empowered executive is a politician — will use whatever discretion is at hand to reward their constituencies. (emphasis added)

“Justice wears a blindfold for a reason. Injecting political partisans directly into economic decisions when well-functioning, time-tested rules are in place not only chills the confidence of investors, but moves us one step further from the already battered rule of law, and one step closer to the dangerous rule of men.”

Just another example of the federal government being way too big, and having too much power!

May 05, 2009

Your Tax Dollars At Work

Yesterday’s CNSNews.com reported what has to be one of the more outrageous examples of wasteful spending by the federal government. They report the National Institutes of Health (NIH) will spend $400,000 of taxpayers money for a study “to discover a link between drinking and having sex among homosexuals in Argentina.” According to the news organization:

“The study will send researchers to six bars in Buenos Aires to interview both patrons and proprietors in an effort to discover what it is about those bars that may encourage the risky behavior.

“The study began on Sept. 30, 2008, and runs through Aug. 31, 2010. It already has cost taxpayers $198,776. By the time the project ends, it will have cost $403,902, according to NIH.

“The grant, awarded to the New York State Psychiatric Institute, was provided by the National Institute on Alcohol Abuse and Alcoholism (NIAAA), the division of NIH that studies the effects of alcohol and alcoholism.

“The study’s primary focus is to determine the relationship among drinking, bars frequented by homosexuals, and risky sexual behavior to see if certain bars in Argentina might be good targets for HIV-prevention campaigns.”

If this wasteful spending outrages you, call Rep. Jim Moran (D); his phone number on Capitol Hill is (202) 225-4376.

May 04, 2009

A Time To Do Their Best Work?

As I growled in March, the Arlington County Board seems to do its best work after completing their published agenda -- through so-called “additional items.” In March, the Board advertised allowing for a $9 increase in the decal fee rather than a $1 increase. This time, they considered plans to move the Department of Human Services (DHS) from Clarendon to the Sequoia Plaza complex on Washington Boulevard, as reported by the Arlington Sun Gazette this morning.

Of special interest was the 3-2 vote to approve a deed of lease for Sequoia Plaza property at 2100 Washington Blvd, authorize the County Manager to execute the lease, and direct the Manager to use the “savings earned by the County” from the move to fund local transit (i.e., ART) service, according to the “Board report” provided to ACTA (the report is not available on the Board’s webpage as of 9:00 PM this evening).

According to the Board report, the county occupies 145,777 square feet at 3033 Wilson Blvd, but the amended lease expires August 31, 2010. The lease for Sequoia Plaza is for 144,740 square feet for 13 years. In addition, the “Board report” says, “The total rent and operational cost estimate for the full 13 year lease term is projected at $83.0 million.

In their editorial, the Sun Gazette gave a “thumbs down” to county staff, and included the following about  the new DHS space at Sequoia Plaza:

“Late in the evening, board members were asked to approve a lease to relocate the Department of Human Services from Clarendon to Washington Boulevard. The public and press weren’t even aware it had been placed on the agenda, but time was of the essence, staff intimated.

“Two board members - Chris Zimmerman and Walter Tejada - voted against the measure, but it passed, 3-2.

“The body language even of those who voted for it indicated just how uncomfortable the situation was, and how unmistakably grumpy board members had become. Obviously, the proposal had generated heat in executive session, and board members, tired from a long night of raising the public’s taxes (which usually makes them giddy), were in no mood to discuss the matter in front of the public and cameras. After only cursory discussion, it was OK’d.”

The Board report lists the primary benefits of the relocation, including: reduced costs; more efficient space plus a larger conference room; central location, allowing “shorter travel time for most DHS clients residing in South Arlington;” and, “(o)pportunities for leasing and/or purchasing additional building space.”

May 03, 2009

What Is Congress Waiting For?

The question arises upon reviewing the latest long-term fiscal outlook (requires Adobe) that was released last week by the U.S. General Accountability Office (GAO), the "audit arm" of the U.S. Congress.

GAO says they’ve been publishing “long-term fiscal simulations of what might happen to federal deficits and debt levels under varying policy assumptions” since 1992 “in response to a bipartisan request from Members of Congress who were concerned about the long-term effects of fiscal policy.” They conclude:

“While the factors driving the near-term outlook can be and have been quite volatile, the long-term fundamentals have not changed. Health care costs are still growing faster than the economy and the nation’s population continues to age. GAO’s long-term simulations show that absent policy actions aimed at reforming the key drivers of our structural deficits— health spending and Social Security—the federal government faces unsustainable growth in debt. The longer that action to deal with the federal government’s long-term fiscal outlook is delayed, the greater the risk that the eventual changes will be disruptive and destabilizing.” (emphasis added).

The report includes a number of slides, but the one on page 7 is worth looking at. The slide shows revenues and the composition of spending as a share of gross domestic product (GDP). In 2008, spending on interest, social security and medicare/medicaid was about 10% of GDP, leaving about 10% of GDP for all other federal spending. However, if Congress makes no changes to those entitlement programs, by 2040, spending on interest and those three programs will take up 20% of GDP, which virtually assures significant increases in income taxes in order to continue government services. The graphic below is from the GAO website:

What a legacy for this generation to leave to its children and grandchildren? Sheesh!

HT Government Bytes

May 02, 2009

A Really Big Inconvenient Truth

"Nobody in this country realizes that cap and trade is a tax and it’s a great big one."

-- Rep. John Dingell (D-Michigan)

He said that last week at a hearing of the House of Representatives’ Subcommittee on Energy and the Environment. You can hear him in his own words in a You Tube/C-SPAN video at Government Bytes, the blog of the National Taxpayers Union.

Earlier last month, Pete Sepp of the National Taxpayers Union penned this column that appeared in the Pittsburgh Tribune. Sepp wrote, in part:

“Even if Kyoto were to be imposed worldwide, the results would be underwhelming. As far back as 1998, an expert with the National Center for Atmospheric Research estimated that fully enacting the protocol would, by the year 2050, curtail global temperatures by less than 1 degree (Celsius). Yet, that same year Wharton Economic Forecasting Associates warned that Kyoto could have led to 2.4 million lost jobs in the United States.

“The fatal conceit of cap-and-traders is believing their plan will take place in a fiscal vacuum. In addition to punitive tax hikes on oil and gas production, President Obama's budget plan envisions a $646 billion revenue windfall from cap-and-trade, and more taxes for a "down payment" on national health care.

“Worse, America's entitlement programs are in peril. Next year Medicare's Hospital Insurance Trust Fund will begin devouring its assets and will go broke by 2019.

“Unless leaders get serious about reducing entitlement spending, the Congressional Budget Office predicts that over the next four decades income tax rates would have to rise 90 percent across the board to avoid further deficit financing of the federal budget. With unsustainable burdens like these on the horizon, cap-and-trade must be weighed among many policy concerns, not just by itself.”

May 01, 2009

The Purpose Of $787 Billion Stimulus Was What?

When Congress passed the $787 billion stimulus package this past winter, USA Today wrote on February 17 the bill could provide “relief for the unemployed.” In addition, the newspaper wrote:

“The non-partisan Congressional Budget Office says the bill could increase employment in a range of 800,000 to 2.3 million jobs by the fourth quarter of 2009 and 1.2 million to 3.6 million by the fourth quarter of 2010.”

So how are things working out? Stephen Dinan writes in a Washington Times story that “four of the top 10 recipients of per capita grant aid to date have the lowest unemployment rates in the country and nearly all are below the national average.” He adds:

“And some of the places receiving the most money per capita are U.S. territories whose residents don't pay federal income taxes: American Samoas $759 per resident is more than any other U.S. state or territory. The U.S. Virgin Islands is third on the list and Puerto Rico is fifth at $529, or 30 percent more than the $407 per capita received by Michigan, the state with the highest unemployment in the nation.

“Meanwhile, North Dakota, with the lowest unemployment rate in the country at 4.2 percent, compared with the nations 8.5 rate, and Wyoming, with the second-lowest unemployment, each have received $498 per resident in grant aid from the American Recovery and Reinvestment Act, according to an analysis by The Washington Times.

“The recovery act was signed into law two months ago and the numbers are an early snapshot of who is benefiting the most. The grant figures come from Recovery.gov, the government's official Web site set up to track recovery spending. The population figures are from 2008, and the unemployment data are from the Labor Department's April report, covering through March 2009.”

Vice President Biden’s spokeswoman questions the analysis, however, saying:

"This biased and flawed analysis excludes many of the funds that are targeted directly at areas of high unemployment. When one looks at the Recovery Act as a whole - and not selectively, as this analysis does - it reflects a comprehensive effort to help get our economy moving again, in all parts of the country."

Dinan adds that a spokesman for Virginia Gov. Tim Kaine (D) “said he is confident the funding will even out and said Virginia will eventually get $4.8 billion, not including extra unemployment benefits and tax cuts going to state residents."

HT to U.S. Sen. Tom Coburn (R) and his “Washington Waste” website.