« June 2010 | Main | August 2010 »

July 31, 2010

Nasty Fiscal Arithmetic

Niall Ferguson, professor of history at Harvard had a great column in Thursday’s Australian, raising the following question:

“Yet what if history is not cyclical and slow-moving but arhythmic, at times almost stationary, but also capable of accelerating suddenly, like a sports car? What if collapse does not arrive over a number of centuries but comes suddenly, like a thief in the night?”

He goes on to say that “(g)reat powers and empires are complex systems,” and adds:

“Empires exhibit many of the characteristics of other complex adaptive systems, including the tendency to move from stability to instability quite suddenly. But this fact is rarely recognised because of our addiction to cyclical theories of history. The Bourbon monarchy in France passed from triumph to terror with astonishing rapidity. The sun set on the British Empire almost as suddenly. The Suez crisis in 1956 proved that Britain could not act in defiance of the US in the Middle East, setting the seal on the end of empire.”

He follows that by noting “imperial falls are associated with fiscal crises”, and asks what the implications are for the United States. He writes:

“Think of Spain in the 17th century: already by 1543 nearly two-thirds of ordinary revenue was going on interest on the juros, the loans by which the Habsburg monarchy financed itself.

“Or think of France in the 18th century: between 1751 and 1788, the eve of Revolution, interest and amortisation payments rose from just over a quarter of tax revenue to 62 per cent.

“Finally, consider Britain in the 20th century. Its real problems came after 1945, when a substantial proportion of its now immense debt burden was in foreign hands. Of the pound stg. 21 billion national debt at the end of the war, about pound stg. 3.4bn was owed to foreign creditors, equivalent to about a third of gross domestic product.”

Ferguson goes on to cite the grim fiscal statistics that many Americans are all too familiar with, e.g., an estimated FY 2010 deficit of $1.47 trillion, etc. Numbers that don’t bode well for the United States; he asks whether “the nasty fiscal arithmetic of imperial decline drives yet another great power over the edge of chaos.” (emphases added)

HT Mark Levin Radio Talk Show

July 30, 2010

The Trifecta and The Future of Your Medical Care?

Yesterday, we growled that after almost 20 years, key federal agencies had not yet fully implemented the Native American Graves Protection and Repatriation Act (NAGPRA) that became law in 1990. Another day, another example of the federal government’s inability to effectively manage its basic mission. According to a blog entry by Marian Wang at ProPublica on Wednesday:

“In a memo released on Tuesday, a Senate subcommittee disclosed that it has “obtained information suggesting that 4,900 to 6,600 graves may be unmarked, improperly marked, or mislabeled” on the maps at the historic Arlington National Cemetery. These problems, according to the memo, are “far more extensive than previously acknowledged.”

“The Subcommittee on Contracting Oversight gave kudos to Salon.com for a series of articles about the cemetery’s mismanagement, and to whistleblowers whose concerns went largely ignored for years.”

Today’s Washington Post reported on a Senate subcommittee hearing yesterday, writing:

“The 2 1/2 -hour hearing, a lively Washington ritual, was full of indignant senators demanding answers from defensive bureaucrats, and it ratcheted up pressure to comprehend the cemetery's problems and correct them. But the subcommittee's chairman, Sen. Claire McCaskill (D-Mo.), conceded that in the end perhaps no one, beyond the two cemetery officials who were allowed to retire this month, will be held responsible for what she called a "long scenario of catastrophic incompetence."

"No one took full ownership, and if you don't have full ownership, then you can't take full blame," McCaskill said. "Because there wasn't one person's head who was going to roll, nobody's heads will. It's the old finger-pointing."

The Post quoted an obviously "testy" Senator Claire McCaskill (D-Missouri), subcommittee chairman as saying:

"We've got waste . . . We've got abuse. We've got fraud. The whole trifecta." (emphasis added)

If you can’t manage a single cemetery, what are the chances the federal government is capable of managing 16% of the entire United States economy? Makes you wonder just what members of Congress were thinking in voting for the so-called ObamaCare.

The Kansas City Star, Fox News, the Australian, and the Chicago Tribune have additional reporting. As the Chicago Tribune wrote in its opinion piece, there is probably "no more honorable place in this nation than Arlington National Cemetery," adding that "(t)o hear of the unfolding scandal there, it just kicks you in the gut."

July 29, 2010

The Future of National Health Care?

The Government Accountability Office released an audit report yesterday (requires Adobe) concerning the Native American Graves Protection and Repatriation Act (NAGPRA) in which GAO said that “after almost 20 years, key federal agencies still have not fully complied with the act.”

GAO explained that they “examined NAGPRA implementation in detail for eight key federal agencies with significant historical collections: Interior’s Bureau of Indian Affairs (BIA), Bureau of Land Management (BLM), Bureau of Reclamation (BOR), U.S. Fish and Wildlife Service (FWS) and NPS; Agriculture’s U.S. Forest Service; the U.S. Army Corps of Engineers (Corps); and the Tennessee Valley Authority (TVA).

NAGPRA was enacted November 16, 1990, Included in what GAO found during their audit, they wrote:

“Through fiscal year 2009, 55 percent of the human remains and 68 percent of the associated funerary objects that have been published in notices of inventory completion had been repatriated, according to agency data and GAO’s survey results. Agencies are required to permanently document their repatriations, but they are not required to compile and report that information to anyone. Only three agencies—the Corps, the Forest Service, and NPS— centrally track their repatriations. These three agencies, however, along with the other federal agencies that have published notices, generally do not report any of their data on repatriations to National NAGPRA or to Congress . . . .”

Don’t you just look forward to medical care in the future? Now really, don't you? Sheesh!

July 28, 2010

Re: Your First Amendment Right to Free Speech

 The Constitution's First Amendment says:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” (emphasis added)

Back in January 2010, the Supreme Court voted 5-4 to “reject corporate spending limit” in Citizens United v. Federal Election Commission, according to the New York Times on January 21, which wrote:

“Overruling two important precedents about the First Amendment rights of corporations, a bitterly divided Supreme Court on Thursday ruled that the government may not ban political spending by corporations in candidate elections.

“The 5-to-4 decision was a vindication, the majority said, of the First Amendment’s most basic free speech principle — that the government has no business regulating political speech. The dissenters said that allowing corporate money to flood the political marketplace would corrupt democracy.

In response, Sen. Charles Schumer (D-N.Y.) and Rep. Chris Van Hollen (D-Maryland) introduced the DISCLOSE (Democracy Is Strengthened by Casting Light On Spending in Elections) Act. ("all information" of the Senate version of the bill is here although the House version contained a few differences). John Samples, director of the Cato Institute’s Center for Representative Government analyzes the legislation in Policy Analysis No. 664. Here’s the executive summary of the Policy Analysis:

“The United States Supreme Court decided in Citizens United v. Federal Election Commission that Congress may not prohibit spending on political speech by corporations. President Obama and several members of Congress have sharply criticized Citizens United, and Sen. Charles Schumer and Rep. Chris Van Hollen have proposed the DISCLOSE Act in response to the ruling. DISCLOSE mandates disclosure of corporate sources of independent spending on speech, putatively in the interest of shareholders and voters. However, it is unlikely that either shareholders or voters would be made better off by this legislation. Shareholders could demand and receive such disclosure without government mandates, given the efficiency of capital markets. The benefits of such disclosure for voters are likely less than assumed, while the costs are paid in chilled speech and in less rational public deliberation. DISCLOSE also prohibits speech by government contractors, TARP recipients, and companies managed by foreign nationals. The case for prohibiting speech by each of these groups seems flawed. In general, DISCLOSE exploits loopholes in Citizens United limits on government control of speech to contravene the spirit of that decision and the letter of the First Amendment.”

Liberal columnist Eleanor Clift wrote in yesterday’s Newsweek:

There wasn’t any real suspense about how the Senate would vote today on a bill known as the Disclose Act, which would require a corporate or union sponsor of a campaign ad to physically appear in it so the public knows where the backing is coming from. Without a single Republican stepping forward to support the legislation and not all Democrats certain to vote for it, the expectation was that the Senate would fall short of the 60 votes needed to break a Republican filibuster, and indeed they did, with the final tally 57 votes.”

[ . . . ]

“The Disclose Act passed the House last month 219 to 206, with just two Republicans voting for it (Rep. Anh Cao of Louisiana, a Vietnamese immigrant who on occasion votes with the Democrats; and Rep. Michael Castle of Delaware, who is running for the Senate, and presumably wants to cast a wider net than a straight-down-the-line Republican). Maryland Democrat Chris Van Hollen led the fight in the House and in order to secure the necessary votes made some awkward compromises, notably an exemption that allows large special-interest groups an exemption from the sunshine provision if they meet certain criteria. Those criteria—more than a million members, in existence for at least a decade, and with funding of less than 15 percent from corporations—turned out to be conveniently tailored for the National Rifle Association.”

Both of Virginia’s senators, Jim Webb and Mark Warner, voted in favor of cloture, according to the Roll Call vote 220. In their reporting on the vote, The Hill newspaper wrote, “The three Republican centrists considered most likely to support the bill, Sens. Olympia Snowe (Maine), Susan Collins (Maine) and Scott Brown (Mass.), all voted against it.” In addition, Hot Air reports that Sen. Diane Feinstein (D-Calif) would have voted against the bill if it had passed the cloture procedure.

In their reporting today, the Washington Post wrote that “the legislation attracted opposition from a strange-bedfellows group including the U.S. Chamber of Commerce, the American Civil Liberties Union and the AFL-CIO, which said it "reluctantly" opposed the legislation after Schumer removed an exemption benefiting unions. An exemption for the National Rifle Association irritated many Democrats and liberal groups but had no apparent impact on Tuesday's vote.

Finally, Speaker Nancy Pelosi released a statement saying that Senate Republicans were “obstructing progress” by protecting “the special interests.” However, at the Heritage Foundation’s blog, The Foundry, Hans von Spakkovsky reminds us “there are no permanent victories in politics . . . Protectors of free speech rights obviously must remain vigilant as the Senate session continuesD.

Didn't our two Virginia Senators pledge to uphold the Constitution, but can't read, or are they so arrogant as to think they can ignore the Constitution? Just asking!

July 27, 2010

Congress Finds Another Way to Spend Our Taxes

One item easily caught my eye when the National Taxpayers Union Foundation’s fourth Taxpayer’s Tab newsletter dropped into my inbox today. The most expensive bill of the week would create the electric vehicle deployment act at an annual cost of $624 million annually. The sponsor is Sen. Byron Dorgan (D-N.D.) and the two co-sponsors are Senators Lamar Alexander (R-Tenn.) and Jeff Merkley (D-Oregon). Rep. Ed Markey (D-Mass.) is the sponsor in the House.

According to the newest Taxpayer’s Tab:

“The Electric Vehicle Deployment Act's sponsor intends "to encourage U.S. production and adoption of electric vehicles in response to some of the country's most pressing problems, from dependence on foreign oil to climate concerns." The bill calls for a national deployment plan, including tax credits for new electric vehicles, loans for electric-centric infrastructure improvements, and require the federal vehicle fleet to be converted to electric vehicles. Also established by the bill is a 500-mile Battery Fund, which encourages research in secondary uses of vehicle batteries, creating a secondary market for batteries, and recycling options.”

Sheesh! The ruling elite never stop finding ways to spending our taxes.

July 26, 2010

Thought for the Day

"[W]hen all government, domestic and foreign, in little as in great things, shall be drawn to Washington as the center of all power, it will render powerless the checks provided of one government on another."

   ~ Thomas Jefferson, letter to Charles Hammond, 1821

HT PatriotPost

July 25, 2010

The ‘Wreckage’ from the 2008 Financial Crisis

Thanks to Don Boudreaux, GMU economics professor and publisher of the great economics blog, Cafe Hayek, for pointing to “this remarkably powerful essay” by Nicole Gelinas in the Summer 2010 issue of the Manhattan Institute’s City Journal. She writes:

“Over the past year, hundreds of authors have published books on the crisis. What becomes clear—often despite the authors’ own intentions—after reading ten of the most significant of these works is that the mainstream narrative is wrong. Over the two decades leading up to 2008, financial markets were anything but free. The nuts-and-bolts government infrastructure that free markets require to thrive—healthy fear of failure, respect for the rule of law, and fair rules for everyone—was crumbling. The crisis books make clear, too, that Washington’s extraordinary rescues of Wall Street have eroded much of what’s left of free-market infrastructure in finance. Worse, Congress’s efforts to reform the industry will do yet more damage. The next time the financial world implodes, it will hurt the economy even more severely.”

Perhaps best summing up the essay is the following paragraph:

“What Washington has created, then, is best summed up in Johnson and Kwak’s title. The “13 bankers” are the CEOs of the surviving big banks, whom President Obama summoned to the White House just weeks after his inauguration. Obama had convened the bankers to show the public that he was firmly in command of the institutions that the government had rescued. But what markets perceived was protection. “It was clear that the thirteen bankers needed the government,” Johnson and Kwak write. “But why did the government need the bankers?” In pumping trillions of dollars in cash and guarantees into the financial system without demanding change, Johnson and Kwak say, we risk creating a “uniquely American oligarchy”—one that will harm America’s growth, just as similar oligarchies have harmed other nations’ growth throughout history.”

The essay is well worth reading for a better understanding of the 2008 financial crisis that started us down the road to today’s economic morass. You may walk away wondering just what problem Congress was trying to solve with the recent passage of the Dodd-Frank financial reform bill.

July 24, 2010

John Kerry. Supply Side Economist or Tax Skipper?

According to James Gwartney in the Concise Encyclopedia of Economics, 'supply side economics' "is “also used to describe how changes in marginal tax rates influence economic activity. Supply-side economists believe that high marginal tax rates strongly discourage income, output, and the efficiency of resource use. In recent years, this latter use of the term has become the more common of the two and is thus the focus of this article.”

Yesterday, the Boston Herald reported that Sen. John Kerry (D-Massachusetts) “has repeatedly voted to raise taxes while in Congress.” The newspaper went on to report that Kerry:

“ . . . dodged a whopping six-figure state tax bill on his new multimillion-dollar yacht by mooring her in Newport, R.I.

“Isabel - Kerry’s luxe, 76-foot New Zealand-built Friendship sloop with an Edwardian-style, glossy varnished teak interior, two VIP main cabins and a pilothouse fitted with a wet bar and cold wine storage - was designed by Rhode Island boat designer Ted Fontaine.

“But instead of berthing the vessel in Nantucket, where the senator summers with the missus, Teresa Heinz, Isabel’s hailing port is listed as “Newport” on her stern.

“Could the reason be that the Ocean State repealed its Boat Sales and Use Tax back in 1993, making the tiny state to the south a haven - like the Cayman Islands, Bermuda and Nassau - for tax-skirting luxury yacht owners?

“Cash-strapped Massachusetts still collects a 6.25 percent sales tax and an annual excise tax on yachts. Sources say Isabel sold for something in the neighborhood of $7 million, meaning Kerry saved approximately $437,500 in sales tax and an annual excise tax of about $70,000.

“The senior senator’s chief of staff David Wade denied the old salt was berthing his boat out of state to avoid ponying up to the commonwealth.”

Is Senator Kerry a hypocrite or tax dodger for acting to avoid high marginal tax rates, or has he now become a “supply sider” and will now be voting for lower federal tax rates? As Fox News likes to say, “We report, you decide.”

There is an alternative, and probably more serious. view in all of this, however. Gregg Collins at Examiner.com writes:

“The more important issue is that time and time again, legislation passed with certain intentions creates incentives for people to act in ways they wouldn’t behave (pseudo-intellectuals like to call this “unintended consequences). Fewer people would not open offshore accounts in Switzerland and other European countries if the American tax code was less draconian. Fewer employers would be less willing to hire new workers if the business climate was more stable and adaptable to changing economic circumstances. Kerry would have been less likely to berth the yacht in a neighboring state with lower or no taxes on that particular action if the same tax regulations applied to Massachusetts.

“In essence, Kerry may be yet another tax dodger, and he may be duplicitous for supporting excessive tax regulations in Congress while seeking out loopholes for himself.” Another view, as NECN reported a Republican spokesperson saying in closing the story, it proves Massachusetts taxes are too high.

“But in this particular instance, don’t blame him.

“Blame the Massachusetts legislature.”

An additional view, as NECN reported in the video accompanying the LA Time story, a Republican spokesperson says in closing the story, it proves Massachusetts taxes are too high. By the way, the Los Angeles Times has a great picture of the $7 million yacht named Isabel.

July 23, 2010

Federal Deficit to Exceed $1,470,000,000,000

Since it’s always difficult to remember just how many zeros are in a trillion dollars, I wrote it that way rather than writing $1.47 trillion. According to Associated Press:

“New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.”

But there’s good news. According to Bloomberg/BusinessWeek:

“ . . . this year’s federal deficit will be a record $1.47 trillion, about $84 billion less than forecast in February because of lower spending for unemployment and some government programs.

“The administration predicted in its mid-session review that the deficit for the 2011 spending year, which begins Oct. 1, will be $1.42 trillion, $150 billion more than estimated at the beginning of this year, mostly because of lagging tax receipts.”

In reporting on the new forecast from the White House, the Washington Post also reports:

“But at a time of heightened public anxiety about government borrowing, the forecast of three consecutive years awash in such high levels of red ink is certain to provide fresh ammunition to Republicans campaigning to regain control of Congress in the fall midterm elections.

“Democrats quickly sought to remind voters that the budget gap is due primarily to the effects of the recession, which depressed tax revenue and forced policymakers to throw hundreds of billions of dollars into economic rescue programs.”

The Wall Street Journal adds unemployment information in their reporting on the story, writing:

“The unemployment rate, which stands at 9.5%, isn't expected to fall below 6% until 2015, according to the review. "The increase in unemployment was unusually steep in this cycle, exceeding what might have been expected based on the decline in real GDP," the review notes.

“The unemployment rate in 2010 is estimated to average 9.7%, compared with the federal government's earlier projection of 10%.”

Are you registered to vote on November 2, 2010? According to Arlington County’s Office of Voter Registration's website, “The deadline to register to vote or update your registration address to be eligible to vote on Nov. 2, 2010 is Tuesday, October 12, 2010.” (emphasis in the original) The phone number is (703) 228-3456.

July 22, 2010

Another Month, Another Congressional Porker

Citizens Against Government Waste (CAGW’s newest Porker of the Month is Rep. Marcy Kaptur (D-Ohio), She was awarded this dubious honor for “gaming the House Democrats’ prohibition on awarding earmarks to for-profit companies and wasting taxpayers’ money.”

On March 10, 2010, House Democrats said earmarks directed to for-profit entities would  not be approved, but that apparently didn’t stop this member of Congress, as CAGW points out:

“A New York Times article published on July 4, 2010 reported that Rep. Kaptur was attempting to skirt the House Democrats’ ban on for-profit earmarks by securing earmarks for a new nonprofit that was very closely related to a for-profit company.  According to the article, Rep Kaptur requested $10.4 million in pork-barrel earmark funding for the Great Lakes Research Center, a nonprofit organization that specializes in the same kind of work, and operates out of the same location as a for-profit company, Imaging Systems Technology.  Rep. Kaptur helped Imaging Systems Technology secure $8.4 million in pork-barrel earmark funding in the past.  The Times article also reported that Rep. Kaptur received tens of thousands of dollars in campaign contributions from Imaging Systems Technology’s executives.”

You can see the Porker of the Month award on video, which is co-produced with reason.tv. If you wish to express your concern about Rep. Kaptur’s “gaming the House Democrats prohibition on awarding earmarks,” her phone number on Capitol Hill is (202) 225-4146.

July 21, 2010

Thought for the Day

“Economic thinkers have recognized for generations that every person has two ways to become wealthier. One is to produce more, the other is to capture more of what others produce. … Washington looks increasingly like a public-works jobs program for lawyers and lobbyists, a profit center for professionals who are in business for themselves.”

   ~ Jonathan Rauch, "Government's End, 1994

HT The Foundry

July 20, 2010

Weekly Newsletter From National Taxpayers Union Foundation

In 1991, the National Taxpayers Union Foundation (NTUF) started computing the costs and savings of bills sponsored or co-sponsored by members of Congress. Their goal was to provide taxpayers with objective information about what Congress wants to do with our tax dollars. You can review the information at the BillTally Project webpage.

Building on that effort, NTUF has launched a weekly newsletter called The Taxpayer’s Tab that highlights BillTally research, and you can take advantage of the research. Each weekly newsletter will feature that week’s “most” and “least” expensive bills plus the bill with the most “co-sponsors.” In addition, they’ll identify a few “wildcards,” which they hope you might find of interest.

For example, the “most expensive bill" from last week’s July 13 issue includes the below information. Also, newsletters contain “links” so you can obtain background information, e.g., to detailed information about the bill:

“The bill: H.R. 5035, National Shipbuilding Budget Policy Act

“Annualized cost: $7.219 billion (first-year cost)

Congressman Robert Wittman's (VA-1) sponsored H.R. 5035 authorizing new spending for both the US Navy and US Merchant Marine fleets. The Navy would receive $20 billion to meet its force requirements -- about 292 vessels in the near-term of 2011-2020. $60 million would go toward replacing and expanding Merchant Marine fleet ships. The Journal of Commerce points out the bill is warranted because "the Obama administration's fiscal 2011 budget does not provide any new funds for Title XI construction. It only provides money for administration of existing loans."

“As Co-Chair of the Congressional Shipbuilding Caucus, Wittman stated "unless new ship construction budgets are increased and sustained above the current projected levels, the fleet will continue to shrink and ships will continue to be acquired inefficiently. We're already well behind in funding for maintenances and acquisition and, we can't afford inefficiencies in these times of tighter budgets."

“The act would increase federal spending on ship building by $7.219 billion from its current $13 billion budget levels.”

You can sign-up for the Taxpayer’s Tab newsletter here.

July 19, 2010

“Government Programs . . . Never Disappear”

President Reagan was so correct when he said, “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.” The latest example of that truism is described in today’s Washington Examiner editorial. While arguing for the need to get the cancerous $13 trillion national debt under control, the Examiner editorial says:

“House Democrats provided an example of this irresponsibility last week during debate on reauthorizing the National Flood Insurance program in the Federal Emergency Management Agency. The Democrats defeated a Republican motion to recommit the reauthorization bill with instructions to kill a proposed new federal spending program that duplicates an existing program. The new $250 million national flood insurance public outreach duplicates FEMA's Cooperative Technical Partners Program. The motion to recommit was defeated 229-191.

“During the debate on the GOP motion to recommit, Rep. Jeb Hensarling, R-Texas, cited Bowles' description of the growing debt as a cancer and noted that "even if this wasn't duplicative of an already existing system, even if we truly needed it, the question is, can we afford it? Is it really worth borrowing 43 cents on the dollar mainly from the Chinese and sending the bill to our children and grandchildren? At a time when our nation is facing a debt crisis, the motion to recommit says, no, it doesn't meet that test. I mean, Mr. Speaker, we know already that the deficit has increased almost tenfold in just two years. I mean, we're looking at the largest deficits in American history. Our nation is literally drowning in debt."

The editorial concludes saying:

“It doesn't take a rocket scientist to figure out that a key step toward the cure for the federal debt-and-deficit cancer is for the government to stop spending money it has to borrow from foreign creditors to create new domestic programs to do the same thing as old programs.”

Any wonder the Tea Party movement has gained such a toehold?

July 18, 2010

So Much for ‘Lowest Tax Rate' in Northern Virginia

You’ve heard us growl when the Arlington County Board resorts to talking about Arlington having the “lowest tax rate” when they hear complaints about the high taxes in Arlington County. And it’s true, county taxpayers do enjoy the the lowest real estate tax rate among Northern Virginia jurisdictions. But at the same time, real estate tax payments to Arlington County are are based on the highest average assessed value for the "average single-family home."

The adopted FY 2011 budget that began on July 1 (available at the DM&F website), and which the Board approved three months ago, contains a page that compares Northern Virginia jurisdictions’ real estate tax bills for the average single-family home. While Arlington County does indeed have the lowest real estate tax rate, it also raised taxes so that Arlington taxpayers will see the second highest change in tax payments. According to the comparison, the six Northern Virginia jurisdictions showed the following percent changes in tax payments:

  • Prince William County        7.0%
  • Arlington County                 5.9%
  • City of Fairfax                      2.6%
  • Alexandria                           1.8%
  • Loudoun County                 1.4%
  • Fairfax County                  <0.6%>

If you consider just the change in the amount of the tax payment, of the six, Arlington County had the highest change ($270) followed by Prince William County ($215), City of Fairfax ($101), and Fairfax County (a reduction of $29).

Did your income or your family's income go up 5.9%? Well, the income from the real estate tax available to the Arlington County Board went up 5.9%. Sheesh!

July 17, 2010

Does the Political Class Care What You Think?

If you’ve wondered whether politicians really care what you think, there is now survey data showing that 68% of those recently surveyed and reported July 15 by Rasmussen Reports (TM) “believe the nation’s Political Class doesn’t “care what most Americans think.’ Only 15% believe the Political Class is interested in the views of those they are supposed to serve. Another 17% are not sure.”

According to Rasmussen Reports (TM), “Skepticism about the Political Class interest in voters is found across just about all demographic and partisan groups. However, self-identified liberals are evenly divided on the question.  Eighty-eight percent (88%) of conservatives and 64% of moderates reject the notion that the Political Class cares.” They also add that:

“The perception that the Political Class doesn’t care what voters think helps explain much of the frustration displayed by those voters in recent years.”

In a separate report of responses, dated July 16, 2010, from what appears to be the same survey, Rasmussen Reports (TM) also found:

“Over the past couple of years, most Americans have opposed many initiatives of the Political Class including the bailouts of the financial and auto industries. Additionally, most voters still favor repeal of the national health care plan and overwhelmingly disagree with the Justice Department's decision to challenge Arizona's new immigration law in court.

“Fifty-five percent (55%) don’t even think most members of Congress pay all the taxes they owe.

“Voters are evenly divided over the notion that a group of people randomly selected from the phone book could do a better job than the current Congress.

“One reason for skepticism about the Political Class is that  70% believe Big Government and Big Business are on the same team  working together against the rest of us.

No wonder the pollsters found that “just 23% of voters nationwide believe the federal government today has the consent of the governed.”

July 16, 2010

The Costs and Consequences of ObamaCare

In one press conference about the recently passed health care bill, the Patient Protection and Affordable Care Act, Speaker Nancy Pelosi explained why the bill needed to be passed this way: “But we have to pass the bill so you can find out what is in it, away from the fog of the controversy.”

Now, 100 days after the bill was passed, Americans can learn the costs and consequences of that legislation thanks to Michael Tanner, a senior fellow at the Cato Institute. Mr. Tanner has written the ‘white paper’ Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law (requires Adobe). Following is the executive summary from the white paper:

“For better or worse, President Obama's health care reform bill is now law. The Patient Protection and Affordable Care Act represents the most significant transformation of the American health care system since Medicare and Medicaid. It will fundamentally change nearly every aspect of health care, from insurance to the final delivery of care.

“The length and complexity of the legislation, combined with a debate that often generated more heat than light, has led to massive confusion about the law's likely impact. But, it is now possible to analyze what is and is not in it, what it likely will and will not do. In particular, we now know that:
  • While the new law will increase the number of Americans with insurance coverage, it falls significantly short of universal coverage. By 2019, roughly 21 million Americans will still be uninsured.
  • The legislation will cost far more than advertised, more than $2.7 trillion over 10 years of full implementation, and will add $352 billion to the national debt over that period.
  • Most American workers and businesses will see little or no change in their skyrocketing insurance costs, while millions of others, including younger and healthier workers and those who buy insurance on their own through the non-group market will actually see their premiums go up faster as a result of this legislation.
  • The new law will increase taxes by more than $669 billion between now and 2019, and the burdens it places on business will significantly reduce economic growth and employment.
  • While the law contains few direct provisions for rationing care, it nonetheless sets the stage for government rationing and interference with how doctors practice medicine.
  • Millions of Americans who are happy with their current health insurance will not be able to keep it.

“In short, the more we learn about what is in this new law, the more it looks like bad news for American taxpayers, businesses, health-care providers, and patients.”

Printed copies can be obtained from the Cato Bookstore for $10. Take some time to read Michael Tanner's entire white paper.

July 15, 2010

Time for a Taxpayer Bill of Rights in Virginia

In 2005, Colorado voters approved Referendum C, an “initiative that suspended a tax limit set by the Taxpayer’s Bill of Rights (TABOR) for five years to fund health care, public education and transportation projects." Ref C's 'timeout' ended June 30th, according to a report in yesterday’s Denver Daily News. The newspaper report adds that fiscal conservatives claim that taxpayers missed out on $3.6 billion in tax rebates while “(s)upporters say had it not been for Ref C, the situation would be even worse.”

The National Taxpayers Union issued this press release on Tuesday applauding the return of TABOR in Colorado. NTU said, in part:

“John Stephenson, NTU's State Government Affairs Manager, says "The return of all TABOR provisions is a momentous event for Colorado taxpayers. Under Referendum C's 'TABOR timeout,' Coloradans missed out on $5 billion in tax rebates and state spending grew unchecked. But now Coloradans can look forward to tax relief in years ahead and take comfort in knowing that the ultimate authority to keep government budgets under control lies with them."

“According to Stephenson, by guaranteeing refunds of excessive taxes, restricting spending to sensible growth rates, and giving Coloradans the ability to vote on tax increases, TABOR has since its enactment been instrumental in growing Colorado's economy and protecting it from the worst effects of recessions. TABOR helped to facilitate reductions in both the state's income and sales tax rates, and by 2001 returned $3.2 billion in refunds to taxpayers. But over the years, special interests have tried to repeal or weaken TABOR. In 2005, the tax-and-spenders enacted Referendum C, which suspended TABOR's limits on government expenditures until July 1, 2010.”

In 2005, the Virginia Institute for Public Policy released a study (requires Adobe) written by Steven Slivinski and Michael New in which they argued for a Virginia Taxpayers Bill of Rights. A summary of their conclusion says:

“The time is ripe for consideration of a spending cap in Virginia. Modeled after the very successful Taxpayer’s Bill of Rights amendment in Colorado, a Virginia tax and expenditure limitation could control spending by holding it to the rate of population growth plus inflation. If such a limit had been in place since 1992, the Commonwealth of Virginia would have been able to avoid the deficit crunch. Indeed, the spending cap would have required the legislature to grapple with the need to reprioritize spending in the state budget and to cut unnecessary and wasteful programs.

“If the tax and expenditure limit had also required tax refunds of all surplus dollars, taxpayers in Virginia would have been a cumulative $11.7 billion richer between 1992 and 2002. Even if a portion of those refunds went into a “rainy day fund,” taxpayers would still have benefited from refunds that were much larger than the annual car tax cut taxpayers actually received.”

Time for the Virginia General Assembly to take-up a TABOR? It’s past due!

July 14, 2010

Stock Dividends Go Mostly to Seniors

The Tax Foundation reported today on their Tax Policy Blog that “seniors earn (the) lion’s share of dividend income according to new IRS data.” Tax Foundation president Scott Hodge blogged:

“The IRS recently released some interesting new tax return data by age group for 2008. Today we'll focus on taxpayers with dividend income because the data sheds light on how seniors will be impacted if the current 15 percent tax rate on dividend income is allowed to expire at the end of 2010 and dividends revert to being taxed at the personal income tax rate, which could go as high as 39.6 percent.

“Of the roughly 142 million tax returns filed in 2008, 26.4 million returns reported nearly $159 billion in dividend income qualifying for the lower 15 percent rate. While 19 percent of all returns reported dividend income, 42 percent of taxpayers over 65 reported dividend income. The age group with the next highest share of dividend earners is those aged 55 to 65.

“Overall, taxpayers over age 55 account for 71 percent of all dividend income earned. The lion's share of dividend income - 48 percent - is earned by those over 65, and dividend income accounts for 6 percent of all the income earned by these taxpayers.”

Visit the Tax Foundation’s Tax Policy blog tomorrow for “capitol gains income by age group.”

July 13, 2010

In Case Health Care Reform is not Repealed

“"If you are going to sin, sin against God, not the bureaucracy. God will forgive you but the bureaucracy won’'t.”"

    ~ Admiral Hyman Rickover

HT OnPower.org

July 12, 2010

A Matter of Attitude

Lee Harris has a very interesting essay, “The Tea Party vs. the Intellectual,” in the June-July 2010 issue of the Hoover Institution’s Policy Review. He writes that the Tea Party is a movement of attitude rather than one of ideas. He puts it like this:

“It is all about attitude, like the attitude expressed by the popular poster seen at all Tea Party rallies. Over the head of a hissing rattlesnake threatening to strike is inscribed the defiant slogan so popular among our revolutionary ancestors: “Don’t tread on me!””

Harris asks how do you debate an attitude, writing:

“It is little wonder that so many sober intellectuals find it difficult to take the Tea Party seriously, except to see it as a threat to the future of American politics. But anti-Tea Party intellectuals who are liberal have a luxury that their conservative brethren don’t have. Liberals can attack and deride the Tea Party without fear of alienating their traditional allies among ordinary voters. Indeed, their mockery of the Tea Party makes good sense to them politically. It is throwing red meat to their base. But conservative intellectuals are in a wholly different position.

“As the Tea Party gains in momentum, conservative intellectuals are faced with a dilemma: to join the party or denounce it. If they join, they risk losing their status as respectable public intellectuals. If they denounce the party, they risk losing influence over the traditional Republican base.”

Harris makes another important point when he writes, “The nature of American politics has been revolutionize by the Tea Party’s ability to politicize people who were once apolitical.”

It’s a great flag, isn’t it?

HT Norm Leahy at Tertium Quids.

July 11, 2010

Green, Red and a $535 Million Government Loan

A January 10, 2010 article in Barron’s is surprised that you may not have heard of Solyndra, Inc. Barron’s writes that the company:

“. . . was supposed to be the cornerstone of (President) Obama's vaunted green-energy future, but now is a king-size political embarrassment. Solyndra, recipient of a $535 million Department of Energy loan guarantee, last month cancelled a $300 million initial public offering because auditor PricewaterhouseCoooper said its operating losses and negative cash flow raise doubts about its ability to continue as a going concern. Ouch!” (emphasis added)

The New York Times on Wednesday, July 7, asks whether Solyndra’s financial problems caught the White House “napping,” writing:

“A Bay Area solar manufacturer's abrupt retreat last month from an initial public stock offering has analysts questioning President Obama's use of the company as a showcase for federal investments in renewable energy.

“Solyndra Inc. enjoyed a national spotlight when Obama visited the company's Fremont headquarters in May to herald it as an example of the federal stimulus at work. The president saluted the solar-panel maker, which received a $535 million federal loan guarantee, as the kind of business that will help the U.S. economy turn the corner.

“But the reality is Solyndra has been hemorrhaging cash and decided last month to pull back from an initial public offering (IPO) in favor of raising another $175 million from private investors. That brings its total investment from venture capitalists to $1.1 billion, said Shyam Mehta, a senior analyst at GTM Research.”

George Avalos of the Oakland Tribune, and posted at Mercury News, went further late last month, writing on June 22:

"The withdrawal of Solyndra Inc.'s initial public offering might be due to the Fremont company's pool of red ink and shaky financial markets — but the IPO cancellation nevertheless darkens the outlook for solar energy, some analysts said Monday.

“The maker of solar cylinders — whose fortunes sparkled with high-profile visits to its Fremont operations from President Barack Obama and Gov. Arnold Schwarzenegger — was tarnished at the end of last week by its decision to scuttle a first-time sale of its stock to the public.”

If a company can raise $1.1 billion from venture capitalists and one of its biggest stakeholders is an Oklahoma oil billionaire, why is the federal government providing the company a $535 million loan? No wonder the nation’s fiscal condition is in the perilous shape it's in.

July 10, 2010

Thought for the Day

"If, from the more wretched parts of the old world, we look at those which are in an advanced stage of improvement, we still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping the spoil of the multitude. Invention is continually exercised, to furnish new pretenses for revenues and taxation. It watches prosperity as its prey and permits none to escape without tribute."

    ~ Thomas Paine, Rights of Man, 1791

HT PatriotPost.us

July 09, 2010

Arlington County Debt Service Set to Surpass $100 Million

A story posted today at the online Arlington Sun Gazette says the county’s debt service will soon pass $100 million annually if voters approve the four local bond referenda totaling over $160 million. The County Board is expected to vote tomorrow to place the bond referenda on the November 2010 ballot. The Manager’s request to the Board is item #45 on the Board’s July 10, 2010 “consent” agenda.

The story was written by Scott McCaffrey who explains:

“Voters will be asked to decide on a $34.1 million referendum to fund transportation and Metro; a $5.8 million item for local parks and recreation; an $18.1 million initiative for community infrastructure, including Neighborhood Conservation projects; and $102.9 million for schools, largely for construction of a new Wakefield High School.

“If approved by voters in November - a near-certainty, given past behavior - the new bonding authority will push Arlington’s total government debt to a point where the annual interest payments servicing the debt by fiscal 2013 will climb above $100 million for the first time.

“In fiscal 2011, which started July 1, estimated debt-service costs for the county government and school system combined are estimated to be $92.1 million. That figure is projected to rise to $104.2 million - or about $500 for every resident of Arlington - in two years.”

As an indication of the growth in the amount of debt that the Board has burdened Arlington taxpayers, compare that projected amount of $104.2 million in FY 2013 to the following, which were taken from prior year county audited financial statements, the CAFRs, available at the county’s DM&F website:

  • 1992 - $21.9 million
  • 2000 -  44.0 million
  • 2009 -  83.6 million

ACTA president Tim Wise told the Sun Gazette that reaching the $100 million mark should be nothing less than a wake-up of just how prodigal the Board has really been.

July 08, 2010

Thought for the Day

"There is a make-believe quality to modern American politics: People -- and this applies across the political spectrum -- say things that are stupid, misleading or unattainable and think (or pretend) that these very same things are desirable, candid and realistic. A disconnect between the language of politics and the nation's actual problems is growing. The politics of the budget offer a splendid example."

    ~ Robert J. Samuelson

HT Column, Washington Post

July 07, 2010

Thought for the Day

"Rampant redistribution of wealth by government is now the norm. So is this: It inflames government's natural rapaciousness and subverts the rule of law."

   ~ George Will

HT "Racing Post the Constitution" Column at Townhall.com

July 06, 2010

Waste and Fraud Goes Wild in Federal Assistance Program

Matt Cover of CNSNews.com, reports the “federal government helped pay (the) home air-conditioning bills for federal employees, prisoners and more than 11,000 dead people.”  According to Cover:

“According to the Government Accountability Office (GAO), the federal government helped pay the home air conditioning bills for more than 11,000 dead people, 1,100 federal employees, and 725 convicts in fiscal year 2009.

“The payments were made by a $5 billion program known as the Low-Income Home Energy Assistance Program (LIHEAP). LIHEAP is designed to provide federal assistance, administered by the states, to help people pay the energy bills to heat their homes in the winter and cool them in the summer. The funds are disbursed by the Department of Health and Human Services and are distributed based on a formula that takes into account a state’s weather and the size of its low-income population.

“The GAO examined the LIHEAP programs in seven states: Virginia, Maryland, Ohio, New York, Illinois, Michigan, and New Jersey.  The agency found evidence of fraud in each state.”

The alternative news source reports the problems GAO found fall into three categories:

  1. First, GAO found “the pervasive payment of LIHEAP benefits to dead people, some of whom, records show, had been dead for quite a long time.”
  2. Second, “the payment of benefits to federal employees who make too much money to qualify for the program. The GAO found that 1,100 federal employees were receiving heating and A/C subsidies despite being able to afford to pay their own bills.”
  3. Third, GAO found “the program repeatedly paid the air conditioning and heating bill of convicts who were in jail at the time the payments were made.”

You can read the entire GAO report, “LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM: Greater Fraud Prevention Controls Are Needed” (GAO-10-621) (requires Adobe) by accessing the report at the GAO website.

When, oh when, are a few of the bureaucrats that run these wasteful programs going to get fired? Better yet, it seems some of the 535 grandees on Capitol Hill need to be fired come November 2, 2010.

UPDATE (7/9/10): Jeannie DeAngelis commented at the American Thinker today that the bureaucrats who administered the LIHEAP benefits are likely to be not much different than the HHS bureaucrats who will be overseeing health care reform. She ends saying:

Inevitably, government management of health care will be responsible for many tragic missteps, so many in fact that LIHEAP wasting $40 million dollars will be viewed as an enviable and efficient record . . . America can rest in the knowledge that after we die at least we get a check.

UPDATE (7/9/10): Tad DeHaven teases out a few more facts from the GAO report at the Cato Institute's Downsizing the Federal Government website. For example:

"The GAO identified several recipients living in million-plus dollar houses in Maryland and Illinois. But because these two states don’t consider the household’s assets in determining this “low-income” program’s eligibility, it’s technically not fraud! One LIHEAP recipient lived in a $2 million home and owned a late 2000s Mercedes."

July 05, 2010

Latest Flatus of Arlogance

Remember the problems the Arlington County Board faced this past winter when the County Manager presented the Board with a proposed FY 2011 budget that included an estimated $65 million budget gap. While the gap was reduced somewhat, the Board still raised real estate taxes 9.5% to $0.958 per $100 of valuation, and it resulted in the elimination of many FTE’s. See our Growls here and here.

Consequently, it was surprising to see the report in yesterday’s online Arlington Sun Gazette by Scott McCaffrey that the Board was set to approve almost $250,000 in arts grants. In his report, McCaffrey wrote:

“County Board members on July 10 are expected to approve nearly $250,000 in funding for arts organizations in fiscal 2011, as recommended by the Arlington Commission for the Arts.

“The 22 grant submissions being recommended for funding include 19 from arts organizations and three from artists. A total of 47 applications, totaling $1.04 million, was received.”

The Manager’s recommendation for approval of the arts grants is item #36 on the Board’s so-called “consent” agenda at their July 10, 2010 meeting.

It's not that we are opposed to the arts, it's just the arts should not be receiving taxpayer subsidies at a time when they are being plundered by other levels of government.

July 04, 2010

Happy 234th Birth of Independence Day

As we celebrate the 234th anniversary of the birth of the United States of America, let’s take a few minutes to read the Declaration of Independence, Extracted below is a portion of the Declaration, linked to the Founding documents at the Patriot Post:

“July 4, 1776

“In Congress, July 4, 1776

The unanimous Declaration of the thirteen united States of America,

“When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

[. . . . . ]

“He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.

[. . . . . .]

“For imposing Taxes on us without our Consent . . .”

July 03, 2010

Thought for the Day

"We've gone astray from first principles.  We've lost sight of the rule that individual freedom and ingenuity are at the very core of everything that we've accomplished. Government's first duty is to protect the people, not run their lives."

   ~ Ronald Reagan

July 02, 2010

Six Months Until Largest Tax Hikes in History

Ryan Ellis of Americans for Tax Reforms advised taxpayers yesterday that families and small business are set to get hit with three great waves of tax hikes on January 1, 2011. Sources include a staff report from the Joint Committee on Taxation. The three waves are:

  1. Wave 1: expiration of 2001 and 2003 tax relief. This includes personal income tax rates, including the 10% bracket to an expanded 15% one and the 35% bracket rising to 39.6%. There will be higher taxes on marriage and family; return of the estate tax (aka “death tax”); and higher tax rates on savers and investors.
  2. Wave 2. Ellis says there are over 20 new or higher taxes in ObamaCare with several going into effect on January 1, 2011. These include the “medicine cabinet tax,” the “special needs kids tax,” and an increase in the Health Savings Account Withdrawal Tax.”
  3. Wave 3. These include changes in the alternative minimum tax (AMT) and employer tax hikes. Ellis reports the AMT will ensnare over 28 million families, up from four million last year. In addition, taxes will be raised on all types of businesses.

Taxation with representation. Worse than taxation without  representation. Much worse!

HT Rush Limbaugh

July 01, 2010

Thought for the Day

“There is no art which one government sooner learns of another than that of draining money from the pockets of the people.”

   ~ Adam Smith

HT OnPower.org