Thought for the Day
"We have a system that increasingly taxes work and subsidizes non-work."
~ Milton Friedman
HT As Certain As Dealth -- Quotations About Taxes," TaxAnalysts
"We have a system that increasingly taxes work and subsidizes non-work."
~ Milton Friedman
HT As Certain As Dealth -- Quotations About Taxes," TaxAnalysts
USA Today reported today that a record number of Americans are now in government anti-poverty programs, writing:
“Government anti-poverty programs that have grown to meet the needs of recession victims now serve a record one in six Americans and are continuing to expand.
“More than 50 million Americans are on Medicaid, the federal-state program aimed principally at the poor, a survey of state data by USA TODAY shows. That's up at least 17% since the recession began in December 2007.”
In addition, the number of Americans receiving food stamps and unemployment reached record numbers while people on welfare increased 18%. The cost for these programs has also increased. According to USA Today:
“As caseloads for all the programs have soared, so have costs. The federal price tag for Medicaid has jumped 36% in two years, to $273 billion. Jobless benefits have soared from $43 billion to $160 billion. The food stamps program has risen 80%, to $70 billion. Welfare is up 24%, to $22 billion. Taken together, they cost more than Medicare.”
The newspaper points out that “(c)onservatives fear expanded safety-net programs won’t contract after the economy recovers.” That is why our political solons need to focus on jobs, jobs, and jobs. The following chart is from USA Today:
'Nothing is more calculated to make a demagogue popular than a constantly reiterated demand for heavy taxes on the rich. Capital levies and high income taxes on the larger incomes are extraordinarily popular with the masses, who do not have to pay them."
~ Ludwig von Mises
HT "As Certain As Death -- Quotations About Taxes (2010), TaxAnalysts
A new report from the Tax Foundation (Fiscal Fact No. 242, August 27, 2010) shows they pretty much plunder everyone although different states plunder some more than others. The Tax Foundation, however, says it nicer:
“Newly released Census data show how different the 50 states' fiscal systems are. Their reliance on various sources of tax revenue differs widely because they have different endowed resources and policy priorities. These differences are reflected in state-local tax collections no matter how large or small a fraction of the residents' income state and local governments have decided to take in taxes.
“States heavily endowed with valuable natural resources, such as Alaska and Wyoming, will usually exploit those tax revenue sources, which they can do without much fear of driving the activity out of state, given that those natural resources are largely immobile. States with more tourism like Nevada and Florida rely more heavily on sales taxes so that they can forgo taxing income. A calculated decision by a state to concentrate taxation in a few sources is a plus for the state's taxpayers, significantly lowering the administrative burden for government and taxpayers and making the state tax climate conducive to economic growth. Of course, that means relying more heavily on the remaining tax sources for revenue.”
The sources for the study’s numbers are Tax Foundation calculations and recently released data from the Census Bureau. Some examples of these differences include: (emphases added)
In addition, Virginia relies for 2.4% of its tax revenues from the corporate income tax while Maryland relies on the corporate income tax for 2.7% of its tax revenues.
Why are the people starving? Because the rulers eat up the money in taxes."
~ Lao Tzu
HT "As Certain as Death:Quotations about Taxes," Tax Analysts
One of my favorite blogs that I usually visit daily is Cafe Hayek published by George Mason University economists Don Boudreaux and Russ Roberts. One of the features are the letters to the editors written by Mr. Boudreaux, who is also a columnist for the Pittsburgh Tribune-Review.
In his Tribune-Review column yesterday, Mr. Boudreaux writes about his letter-writing. For example, he’s been writing letters to the newspaper editors for seven years, and about seven percent of his letters get published. One of the reasons he gives for writing to newspaper editors is that it’s “an excellent exercise in sharpening (his) writing skills.” In that regard, he writes:
“Good writing is not a natural talent. Like becoming proficient at playing the piano or shooting hoops, becoming a good writer requires plenty of practice. My daily letters to the editor are a great way to practice my writing.
“In fact, writing letters to the editor is an especially good way to polish writing and communicating skills. The ideal length of a letter to the editor is 150 words. That's not a lot! (By way of comparison, the length of this column is about 750 words.) Fitting a complete and effective idea into a mere 150 words requires the writer to pay attention to every word — to waste not a single one, making sure each word conveys as much meaning as possible.”
Don points out one reason for writing letters is that it’s cathartic. So the next time you read something in the local fishwrap, get out your pen or pencil and writing pad, or get your computer warmed-up. Boudreaux concludes his column by writing:
“Doing so not only will help you become a better thinker and writer, it will enable those who read your letters to become part of an important public conversation about matters vital to the public interest.”
Citizens Against Government Waste (CAGW) calls its Porker of the Month designation “a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.” CAGW has named its August Porker of the Month, and he is Rep. Hal Rogers (R-Ky.). Rogers received the dubious award “for sponsoring legislation that could give federal funding to his daughter’s nonprofit organization, which promotes overseas wildlife protection for cheetahs.”
CAGW’s justification includes the following:
CAGW’s Porker of the Month can also be viewed on video which is co-produced with reason.tv, the video website of Reason Magazine. You can also view the video on You Tube.
“According to a July 26, 2010 article in the Lexington Herald-Leader, “U.S. Rep. Hal Rogers, R-Somerset, is sponsoring a bill to give $5 million a year to conservation groups that work overseas on behalf of endangered ‘great cats and rare canids,’ such as cheetahs, lions and Ethiopian wolves. One group interested in applying, should Rogers’ bill become law, is the Namibia-based Cheetah Conservation Fund. Its grants administrator, Allison Rogers, is the congressman’s daughter.”
“Americans are being forced to tighten their belts while the economy is limping along, but that doesn’t deter porkers in Congress, like Rep. Rogers, who think nothing of using the hard-earned tax dollars of the U.S. Treasury to subsidize family members,” said CAGW President Tom Schatz. “Members of Congress should go out of their way to ensure that their actions in Congress never appear to be nepotistic. Rep. Rogers and members like him continue to behave as though the U.S. Treasury is their own personal piggy bank.”
“Rep. Rogers has claimed there is no conflict of interest. Unfortunately, the bill that Rep. Rogers’ is sponsoring is narrow enough in scope that his support seems more than coincidental.”
You can call Rep. Hal Rogers on Capitol Hill at (202) 225-4601.
Today’s Washington Examiner reports that “Virginia spends nearly ($1,000,000) on unused cell phones for state employees” The reporter, Markham Heid, writes:
“The state of Virginia spent almost $1 million on unused wireless phones for its employees during a recent six-month period, according to a study from the state's auditor of public accounts.
“The state paid AT&T, Verizon and other wireless providers roughly $962,000 from July to December 2009 for more than 4,500 phones that clocked zero minutes of use per month, according to the auditor's report.
“The unused phones comprised nearly 40 percent of all the employee cell phones managed by the state's information technologies agency and accounted for roughly 30 percent of the state's six-month, taxpayer-funded $3.1 million wireless phone bill.
“Virginia also spent about $75,000 per month in overage charges -- penalties for exceeding the phone's allowance of minutes -- on BlackBerrys and other cell phones during the same period, according to the auditor's report.”
The report by the Commonwealth’s Auditor of Public Accounts released the report, titled “Commonwealth Cell Phone Study,” was released last month (requires Adobe). He notes the following, which is from the report’s executive summary:
“The Commonwealth of Virginia spends over $6 million on over 11,000 wireless telecommunication devices annually. However, the Commonwealth does not have up to date and comprehensive statewide policies, procedures, and guidance over the management and usage of these telecommunication devices. With improved management and oversight, the Commonwealth has the potential to save hundreds of thousands of dollars in wireless expenses.
“The Commonwealth lacks tools to analyze telecommunication usage and costs effectively. We found several areas where phone use and associated charges did not appear consistent with efficient business use and where improved practices could result in cost savings. These areas are below.
- Phones with no usage for the entire month
- Phones that went over their allotted plan minutes or have excessive roaming charges
- Phones with high cost plans "
Hey, bureaucrats, it’s our taxes you’re spending. You wouldn’t spend it like that if it was your own money. Sheesh!
According to Americans for Tax Reform, “Cost of Government Day (COGD) is the date of the calendar year on which the average American worker has earned enough gross income to pay off his or her share of the spending and regulatory burden imposed by government at the federal, state and local levels.” For 2010, COGD occurred on August 19. ATR writes:
“On average, working people must toil 231 days out of the year just to meet all costs imposed by government. In other words, the cost of government consumes 63.41 percent of national income.”
For Virginians, however, COGD occurs on Wednesday, August 25. This year, Virginia ranks 40th in the nation, an improvement from 2009 when the Commonwealth ranked 44th. Among the states, Connecticut taxpayers will be working for government until September 17th, the same as last year. (emphasis added)
The four components of COGD, nationally, include working 104 days to pay for federal spending; 52 days to pay for state and local spending; 48 days to pay for federal regulation; and 26 days to pay for state and local regulation. ATR writes that COGD trends include:
“Cost of Government Day (COGD) falls 8 days later in 2010 than last year’s revised date of August 11. In 2010, the average American will have to work an additional 51 days out of the year to pay off his or her share of the cost of government compared to 2000, when COGD was June 29.
“In fact, between 1977 and 2008, COGD has never fallen later than July 20. 2010 marks only the second year that this has happened—2009 being the first. The difference between 2008 and 2009—from July 16 to August 11—was a full 26 days, spurred primarily by the Emergency Economic Stabilization Act (EESA) that created the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act of 2009 (ARRA), passed under the guise of economic “stimulus.”
“The so-called “stimulus” continues in full swing in 2010. In addition, 2010 saw the expansion of government in the form of the Patient Protection and Affordable Care Act, which is expected to cost one trillion dollars. This year’s date has continued to climb upward, setting a new record at August 19. This late date is driven by continued government spending on all levels and a further increase in the regulatory burden which, taken in combination with a struggling economy, have made the cost of government equal to 63.41 percent of national income.”
Sure is something to remember while you’re voting on November 2. If you need something to remember that, here’s a graph provided by Americans for Tax Reform:
“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber barons’ cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.”
~ C.S. Lewis
HT OnPower.org and Donald MacQueen
In her August 12 Washington Examiner column, Amity Shlaes writes that the White House argues that “you can have low taxes, or you can have an economic recovery, but you can’t have both.” She also writes that “Democrats argue in particular that extending President George W. Bush’s rate cuts on people in the top tax brackets will damage the budget to such an extent that our economy will suffer.” She says, however, the argument is hypocritical.
Shlaes, a senior fellow in economic history at the Council for Foreign Relations, Bloomberg News columnist, and author of The Forgotten Man: A New History of the Great Depression, notes that the tax cuts Treasury secretary Tim Geithner “would like to see expire cost taxpayers by his own estimate $700 billion over 10 years.” But she points out:
“Plenty of other items in the federal budget cost $700 billion over 10 years, or a much shorter period. Yet you don’t hear the administration positing apocalyptically that those outlays will darken the future.”
About the role of the lawmakers, Ms. Shlaes writes:
“Democrats are willfully overlooking a general record that shows that tax cuts can increase revenue. The last two times the U.S. trimmed the capital gains rate, in the late 1990s and under Bush in the early 2000s, the lower rate generated extra activity and the Treasury Department saw more cash flow in than predicted.
“Unfortunately, Republicans liked their tax cuts too much. They failed to use their political capital to control spending and push through entitlement reform.
After walking the reader through the role of former Federal Reserve chairman Alan Greenspan and the “Social Security fixes recommended by the commission he chaired, Ms. Shlaes closes her column by writing:
“In other words, the Greenspan fix was a poison pill of its own. It didn’t prevent huge cash deficits in the long run. To use Greenspan’s own phrase, the commission itself and the politicians who implemented its short-term fixes borrowed from the future. Those are the deficits that are in the news in 2010, the first year Social Security will pay out more than Americans paid into it.
“Had the Greenspan commission come up with a long-term reform, and had other reformers come up with better formats for our other entitlements, Greenspan wouldn’t need to talk about “borrowed money” as a rationale for preventing tax cuts today.
“The nation’s real ailment comes from having swallowed those entitlement poison pills, not annual budgeting or even financial crises. Yet lawmakers and commentators are not talking about fundamental entitlement reform. Democrats are scolding tax cutters in the hope of diminishing Republican chances in the next election. What a shame. Taxes aren’t the economy’s big problem.” (emphasis added)
To repeat the title of a John Stossel column from last October, “It’s the spending, stupid.”
"It is the soldier, not the reporter, Who has given us freedom of the press.
"It is the soldier, not the poet, Who has given us freedom of speech.
"It is the soldier, not the campus organizer, Who has given us the freedom to demonstrate.
"It is the soldier, who salutes the flag, Who serves beneath the flag,
And whose coffin is draped by the flag, Who allows the protester to burn the flag."
~ Charles M. Province
HT Patriot Post
Scott McCaffrey of the Arlington Sun Gazette has a great follow-up today to a story we growled about October 8, 2008 after the Sun Gazette first reported that Arlington County spent almost $3,000 to purchase six “adult tricycles” or “trikes.”
McCaffrey reports the six trikes were “taken out 25 times” after first being introduced. As he reports, however:
"Perhaps it’s because the novelty has worn off, but apparently the love affair between Arlington County government employees and the government’s fleet of trikes seems to have hit a plateau.
“Government officials report that the six three-wheeled, pedal-powered people movers have been checked out a collective total of 14 times so far this year. That compares to 42 checkouts during the same period in 2009, and 47 checkouts during the three-month period in 2008 after the trikes were introduced.”
Yet the Arlington County Board somehow determined it was necessary to raise real estate taxes when they adopted the FY 2011 budget. Sheesh!
BTW, check out the great picture of retired County Manager Ron Carlee riding one of those $500 trikes that accompanies the story. Was that one of the 25 times a trike was used in October 2008? Just asking.
David Sherfinski of the Washington Examiner reports that “Virginia's budget surplus is projected to end up at about $400 million for the past fiscal year -- nearly twice as much as previously estimated.”
Official figures will not be available until Gov. McDonnell (R) speaks before the so-called money committees of the Virginia General Assembly on Thursday morning. However, sources spoke “on condition of anonymity.” According to Sherfinski, the budget surplus will total almost $404 million, about double the $220 million projected a month ago. However, that’s the good news since Sherfinski also writes:
“Despite the rosy projections, though, the state will defer $620 million in payments to the Virginia Retirement System, the state's $50 billion employee retirement fund, in fiscal 2011 and 2012 -- to be paid back over 10 years with 7.5 percent interest. The state deferred nearly $140 million in VRS payments in the fourth quarter of 2010.
“Virginia also will reap $540 million from the approximately $28 billion in state aid signed into law by President Obama last week. About $290 million will go toward Medicaid funding, and about $250 million will go toward public education.
“The governor's office has estimated that the federal health care overhaul, passed in March, will cost the state $1.5 billion through 2022.”
Although the reports of a budget surplus sound like good news, it seems its more than negated by the bad news. And as Norm Leahy notes at Tertium Quids yesterday, don’t expect any of the money to be refunded to Virginia taxpayers.
Thomas Sowell has an essay posted today at Investor’s Business Daily about the U.S. Constitution being a “big barrier to (the) liberal agenda.” Playwright David Mamet called Sowell “our greatest contemporary philosopher” in a March 2008 essay for the Village Voice, and this essay by Thomas Sowell leaves no doubt.
Sowell explains that the Constitution “was the blueprint for America, and the success of America made that blueprint something that other nations sought to follow.” He goes on to write that it was the Progressive Movement that started in the late 19th century “who began saying that the Constitution needed to be subordinated to whatever they chose to call "the needs of the times." Sowell explains:
“Nor were they content to say that the Constitution needed more Amendments, for that would have meant that the much disdained masses would have something to say about whether, or what kind, of Amendments were needed.
“The agenda then, as now, has been for our betters to decide among themselves which Constitutional safeguards against arbitrary government power should be disregarded, in the name of meeting "the needs of the times" — as they choose to define those needs.
“The first open attack on the Constitution by a President of the United States was made by our only president with a Ph.D., Woodrow Wilson.
“Virtually all the arguments as to why judges should not take the Constitution as meaning what its words plainly say, but "interpret" it to mean whatever it ought to mean, in order to meet "the needs of the times," were made by Woodrow Wilson.”
Then, Sowell writes the following about the elites who are part of what Angelo Codevilla calls America’s”Ruling Class” in this great American Spectator essay:
“How can our betters impose their superior wisdom and virtue on us, when the Constitution gets in the way at every turn, with all its provisions to safeguard a system based on a self-governing people?
“To get their way, the elites must erode or dismantle the Constitution, bit by bit, in one way or another. What that means is that they must dismantle America.”
Thank you, Mr. Sowell, for your fine “must read” essay.
Back in March 2010, Sen. Robert Casey (D-Pennsylvania) introduced S.3157, the Create Jobs and Save Benefits Act of 2010. According to the Library of Congress’s THOMAS system, the bill wasn’t going anywhere, having added only Sen. Al Franken (D-Minnesota) besides the original Senate co-sponsors of Roland Burris (D-Illinois), Sherrod Brown (D-Ohio), and Debbie Stabenow (D-Michigan).
However, the bill got a boost last week, writes Vincent Vernucccio of the Competitive Enterprise Institute, when Sen. Dick Durbin (D-Illinois), Senate Minority Whip, signed on as a co-sponsor.
According to the CRS summary, the bill would among other things “permit multiemployer pension plans to merge or form alliances with other plans.” However, in an opinion piece posted at the Washington Examiner this afternoon, Vernuccio writes:
“The bill would create a special fund in the Pension Benefit Guarantee Corporation (PBGC.) PBGC uses private premiums paid by pensions to insure retirees are paid if a plan sponsor becomes insolvent. If passed, the bill would use tax payer dollars to shore up some underfunded union pension plans. The use of public funds to insure private pension plans is a first for PBGC which has not used public moneys in the past.
“Last October the Washington Times was the first to identify bailout language in similar legislation, introduced in the House sponsored by Rep. Earl Pomeroy (D-ND).”
Vernuccio writes that “(a)nti-spending watch dog groups have been sounding the alarm” about the proposed legislation, adding that “50 free market and anti-tax organizations co-signed a letter” this Spring asking Congress to opposed the bills. He adds that with the second ranking Democrat in the Senate as a co-sponsor, the bill is likely to gain traction, and when Congress returns from its summer recess, “a new bailout battle is likely on Capitol Hill.” (emphasis added)
Sounds like the bill's title could easily be shortened to the Save Union Benefits Act since no where in the bill's CRS summary is there any mention of job creation.
A month ago, two LA Times reporters focused the nation’s attention on Bell, California on the map when they reported:
“Bell, one of the poorest cities in Los Angeles County, pays its top officials some of the highest salaries in the nation, including nearly $800,000 annually for its city manager, according to documents reviewed by The Times.
“In addition to the $787,637 salary of Chief Administrative Officer Robert Rizzo, Bell pays Police Chief Randy Adams $457,000 a year, about 50% more than Los Angeles Police Chief Charlie Beck or Los Angeles County Sheriff Lee Baca and more than double New York City's police commissioner. Assistant City Manager Angela Spaccia makes $376,288 annually, more than most city managers.”
The LA Times even reported that Rizzo was “unapologetic about his salary” while the mayor defended the salaries.
A month later, thanks to Nicole Gelinas, a fellow at the Manhattan Institute, we learn there is much more to the story of Bell, California than that it was a poor city with a population of 38,000, “88 percent of whom speak a language besides English at home.” She explains in a City Journal story:
“The Bell story is not just about unengaged residents, though, but about supposedly sophisticated investors whose indifference to a deeper problem—untenable debt levels—is even less excusable.”
Gelinas writes that taxes for Bell property owners will continue to rise “for one reason: debt,” adding:
“The city’s debt burden clocks in at nearly three times its annual revenues; debt in New York City, by contrast, is less than one and a half times revenues. Bell’s debt burden is more than 16 percent of city residents’ modest personal income, whereas debt in New York makes up 15 percent of residents’ much higher personal income. Bell’s residents approved this debt, much of it through a 2003 voter referendum that, among other things, allows the city to raise property taxes, if necessary, under a debt-service exemption to California’s constitutional property-tax limit. But sophisticated underwriters, guarantors, and bondholders were the city’s willing enablers then and since.” (emphasis added)
She closes the essay with the following summary:
“Where does Bell go from here? Taxes will continue to climb; one assessment tax for the pension debt has already risen by nearly 50 percent in the past four years. Will residents be able to pay it? Even as officials were paying themselves handsomely, they slashed public services, as public money was already finite. Will voters be willing to pay—or will they perceive underwriters and investors as the cynical enablers of corrupt politicians?
“How many Bells are out there, posing a silent risk to the financial system and to economic recovery? The costs far exceed $787,637.”
The story of Bell should be enough to cause every Arlington taxpayer to want to read and understand the county’s financial documents. Read Gelinas’ article to fortify yourself with questions to ask Arlington County Board candidates in the November elections. And oh, by the way, the phone number for Arlington County's department of management and financial is (703) 228-3415.
The cost of the United Nations for American taxpayers receives little reporting by the so-called mainstream media. We first growled about these costs on July 6, 2007. However, thanks to Brett Schaefer, a fellow at the Heritage Foundation, taxpayers are provided a window on the lates costs in a Heritage Foundation WebMemo published yesterday (August 13; No. 2981).
He first provides a brief history of the 2006 efforts of Sen. Tom Coburn (R-Oklahoma) to get an authoritative figure on the cost of U.S. support of the U.N. According to the WebMemo, “(i)n its 2006 report, OMB calculated that U.S. contributions to the entire U.N. system actually totaled $4.115 billion in 2004 and $5.327 billion in 2005.” In FY 2009, the U.S. contributed over $6 billion to the U.N. or U.N. organizations. Schaefer writes:
“The U.S. has been the largest financial supporter of the U.N. since the organization’s founding in 1945. The U.S. is currently assessed 22 percent of the U.N. regular budget and more than 27 percent of the U.N. peacekeeping budget. In dollar terms, the Administration’s budget for FY 2011 requested $516.3 million for the U.N. regular budget and more than $2.182 billion for the peacekeeping budget.
“However, the U.S. also provides assessed financial contributions to other U.N. organizations and voluntary contributions to many more U.N. organizations. According to OMB, total U.S. contributions to the U.N. system were more than $6.347 billion in FY 2009. This is more than $1 billion more than total contributions as compiled by OMB for FY 2005, and it is indicative of the rising budgetary trends in the U.N. and the consequential demand on U.S. financial support.”
Schaefer closes the paper writing:
“It is stunning to realize that until a few years ago, the U.S. Congress had only a general idea of how much the U.S. was providing to the United Nations on an annual basis. Congress is right to demand accurate information on exactly how much the U.S. is providing to the U.N. system each year. This is particularly relevant considering the vulnerability of U.S. taxpayer dollars to waste, mismanagement, and corruption in the U.N. system and the lack of transparency and oversight in the U.N. generally.
“Making sure U.S. contributions are used appropriately starts with knowing how much the U.S. is providing to the U.N. and where that funding originates. The legislative requirement for the Administration to report to Congress on U.S. contributions to the U.N. is scheduled to expire in 2011. Congress should take action to make this reporting requirement permanent.”
Another informative paper from the Heritage Foundation.
One of President Reagan famous quotations about government programs was:
“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.”
We were reminded of that insight after reading yet another news story about the so-called Universal Service Fund (USF), this time in the July 20, 2010 Washington Post. According to Wikipedia, the USF “was created by the United States Federal Communications Commission (FCC) in 1997 to meet Congressional universal service goals as mandated by the Telecommunications Act of 1996.”
Cecilia Kang of the Washington Post reports that reforms are being “urged in federal funding for phone lines," writing:
“Americans are turning away from home phone lines and toward mobile, but a federal program continues to pour $8 billion a year into phone service for rural homes and businesses. Last year in Chelan, Wash., for instance, the fund paid an average of $17,763 each for 17 residents to get phone lines. (emphasis added)
“But as the nation looks to wireless and fiber broadband networks as its on-ramp to e-mail, tweets and Skype calls, lawmakers and regulators have called for sweeping changes to the Universal Service Fund.
“Created in 1997 to connect the nation by phone, the subsidy program has come under criticism as a symbol of inefficient federal telecommunications policy.
“In some areas, the subsidies go to multiple companies providing the same services.
“Critics suggest that satellite service would be cheaper than stringing phone lines across mountains and plains and then maintaining those services indefinitely through federal subsidies, which come from monthly fees charged to long-distance and wireless customers.”
Better yet, Congress should quit taxing us through the Universal Service Fund. If you’re wondering just how much you’re paying, check your phone bill the next time it arrives. You may be shocked at just how much of your income Congress is redistributing.
"The true test is, whether the object be of a local character, and local use; or, whether it be of general benefit to the states. If it be purely local, congress cannot constitutionally appropriate money for the object. But, if the benefit be general, it matters not, whether in point of locality it be in one state, or several; whether it be of large, or of small extent."
~ Joseph Story, Commentaries on the Constitution, 1833
“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”
~ George Washington
"This member of the Government was at first considered as the most harmless and helpless of all its organs. But it has proved that the power of declaring what the law is . . . by sapping and mining slyly and without alarm the foundations of the Constitution, can do what open force would not dare to attempt."
~ Thomas Jefferson, Letter to Edward Livingston, 1825
“No law can give power to private persons; every law transfers power from private persons to government.”
~ Karl R. Popper
Yesterday, we growled after learning from the Arlington Sun Gazette that Arlington County's total government debt will increase to over $1.12 billion after its most recent sale of new bonds. The Sun Gazette also pointed out that if voters approve $161 million of new bond referenda on November 2, county debt would soon bump-up against its self-imposed limit of keeping debt service under 10% of government expenditures each year.
The Sun Gazette also reported the county would soon be spending more than $100 million a year on debt service. According to Arlington County's FY 2011 adopted budget, the "real estate tax payment" on the "average single family home" at $4,821 for CY 2010, that means the real estate tax revenue from almost 21,000 single family homes will soon be going towards servicing Arlington County's debt.
Which brings us to the wisdom of Thomas Sowell, who said in one of his 2002 "random thoughts" columns published by Townhall.com:
"What are bond issues on the ballot except taxes on future taxpayers who cannot yet vote? It is taxation without representation."
No wonder the Tea Party Movement has gained so much respect. And it's certainly something to consider before the November 2 Arlington County bond referenda.
Some years ago, a long-time resident of Arlington coined the term Arlogance, often using the term to refer to those oh-so-typical vanity projects that Arlington’s grandees like to involve themselves into. For example, the Columbia Pike trolley project, the aquatic-athletic center north of Crystal City, the most expensive high schools in Virginia, high risk lawsuits, etc.
Two online stories at the Arlington Sun Gazette today points out the price of Arlogance can be steep. One article notes the cost of the legal bills for the county’s I-395 HOT-Lanes lawsuit against the state and federal governments now exceeds $1 million. Scott McCaffrey of the Arlington Sun Gazette explains:
“With bills of $109,320 for work done in April and $156,473 for work done in May, the D.C. law firm Schnader Harrison Segal & Lewis LLP has been paid a total of $1.01 million, according to figures released to the Sun Gazette by county officials.
“The fees are on top of bills of $37,068 for work done in January, $41,645 in February and $119,338 in March, along with bills submitted for work in 2009. The bill for work done in June is not yet available.”
In another article that is now online, McCaffrey writes that after its most recent sale of new bonds, “Arlington’s total government indebtedness” is now “$1.12 billion, or about $5,345 for every county resident.” McCaffrey adds:
“How much debt is too much debt? County officials acknowledge that they are running up against self-imposed guidelines to keep the cost of servicing general-obligation debt under 10 percent of government expenditures each year.
“If voters approve a raft of new bond referendums totaling $161 million on Nov. 2, the county’s debt level will edge up even closer to that limit, and the county government soon will be spending more than $100 million a year on debt service.”
Gee whiz, would Arlington's political elite file those lawsuits or build those vanity projects if they were spending their own money? Arlington's hardworking taxpayers surely already know the answer.
According to the report, “Summertime Blues: 100 Stimulus Projects That Give Taxpayers the Blues,” from Sen. Tom Coburn, M.D. (R-Oklahoma) and Sen. John McCain (R-Arizona):
“When Congress passed the $862 billion American Recovery and Reinvestment Act in 2009, otherwise known as the stimulus bill, it passed with assurances that it would stem the loss of American jobs and keep the economy from floundering. As most can see, it hasn’t.
“Eighteen months since the law’s passage, millions of jobs are still gone and the economy is as uncertain as ever. The only thing getting a boost is our national debt – the stimulus has helped push it 23 percent higher, to $13.2 trillion, a new record.”
[ . . . . ]
“There is no question job creation should be a national priority, but torrential, misdirected government spending is not the way to do it. Generating record-breaking national debt is not an investment in our children’s and grandchildren’s future and will not lead to any long-term recovery.”
I’ts difficult to decide which of the 100 projects that Coburn and McCain pulled together that cause one's blood pressure reading to go up more. The $1.9 million handed out to the California Academy of Sciences might be one such project, though. As the two senators write:
"Ants Talk. Taxpayers Listen (San Francisco, CA)
"The California Academy of Sciences is receiving nearly $2 million to send researchers to the Southwest Indian Ocean Islands and east Africa, to capture, photograph, and analyze thousands of exotic ants. The photographs of the ants – over 3,000 species’ worth, according to the grant proposal – will be posted on AntWeb, a website devoted to organizing and displaying pictures and information on the world’s thousands of ant species.
“The project’s goals are, to the lay person, both laudable and arcane: In addition to “foster[ing]…a large pool of ant taxonomists,” it also strives to document “the vast majority of ant species known from [Africa].” “[Ants] give us back the most data on the environment than any other group. Their life cycle is shorter, they change very quickly,” says the project’s Principal Investigator in a promotional article on the Academy’s website. “Everyone has run into ants . . . now we need to listen to them.”
In commenting on the report, Tom Schatz, president of Citizens Against Government Wase:
““President Obama talks incessantly about wasteful government spending and reining in the budget deficit, yet his policies do the opposite and end up spending more taxpayer money than any previous President. In fact, President Obama and Congress have increased discretionary spending by 84 percent . . . ."
Fox News reported yesterday that a General Accountability Office (GAO) report found that hundreds of federal workers may have pocketed Social Security payments improperly. More specifically, Fox News reported:
“The Government Accountability Office issued a report that showed at least 1,500 federal employees may have wrongly received benefits. The group's investigation, which focused on two Social Security programs for people who have limited incomes due to disabilities, found several specific cases in which beneficiaries were earning well above the income cap while still receiving benefits. In one case, a Transportation Security Administration screener was overpaid $108,000, according to the report.
"Our case studies ... confirmed some examples in which individuals received SSA disability payments that they were not entitled to receive," the GAO said in a letter to Sens. Tom Carper, D-Del.; John McCain, R-Ariz.; and Tom Coburn, R-Okla. Some of the payments were attributed to fraud, others to "administrative error," according to the report. The GAO found that the Social Security Administration does not use its own automated system to flag workers who may be earning too much income to qualify for benefits.
"SSA's internal controls did not prevent improper and fraudulent payments," the GAO said.
GAO issued two reports yesterday. One report is addressed (requires Adobe) to Sen. Tom Carper (D-Delaware) and Sen. John McCain (R-Arizona). A second report involved GAO testimony (requires Adobe) before the Senate’s Permanent Subcommittee on Investigations. In the report to Senators Carper and McCain, the GAO reported they had:
“obtained data from 12 selected states and found that 62,000 individuals received or had renewed commercial driver’s licenses after SSA determined that the individuals met the federal requirements for full disability benefits. Under DOT regulations, these individuals’ eligibility must be medically certified every 2 years. Lastly, GAO found about 7,900 individuals with registered transportation businesses who were receiving SSA disability benefits.
In the report's Appendix III, GAO also reported the total net amount owed to SSA for DI and SSI overpayments has increased from $7.6 billion in 2004 to $10.7 billion in 2008 that resulted in part from “SSA’s failure to promptly prevent improper disability payments for the DI and SSI programs.”
But hey, we’re just the taxpayers and not the tax takers.
Yesterday, the Washington Examiner’s Kytja Weir reported that an analysis (included) of the minutes of WMATA board meetings showed that half of WMATA’s 14 board members missed between 20% and 64% of all full board meetings over the period January 2009 through July 1, 2010. In addition, eight of 14 missed between 18% and 66% of both full and subcommittee meetings.
Ms. Weir had a second article yesterday in which she quoted D.C. alternate member Michael Brown explaining why he missed 52 meetings (66%). He explained his poor attendance by saying:
“My attendance hasn't been great but my engagement has always been there," Brown said. "Engagement can't just be measured by attendance."
There was a small measure of good news in Ms. Weir’s report, however. She wrote that four of the members missed none or only one meeting during the 18 month period. Congratulations are due Arlington County Board member Chris Zimmerman for missing only one subcommiittee meeting over 18 months.
While Mr. Zimmerman’s sparkling attendance record would normally be a plus, what it means in this case is that governance of WMATA was left to Mr. Zimmerman and a few others while the rest were AWOL. Thus, the board’s concern for safety and their love affair with discretionary spending for things like NextBus, etc. was left to the four members who showed up for Board work. As the Examiner wrote in an editorial today:
“Board members are supposed to be public advocates on serious matters of safety, fiduciary responsibility and overall policy, but this lackadaisical attendance record is just another example of how lightly board members view their responsibilities. It also goes far toward helping to explain the board's failure to ensure that Metro managers implemented past recommendations by the National Transportation Safety Board. Most important, it sheds light on why Metro managers got away for years with their indefensible lack of emphasis on making absolutely certain that maintenance and safety programs came first -- even if doing so led to confrontations with the transit union.”
As one reader pointed out online, if the board members with poor attendance records were on the boards of private companies, they'd likely be asked to submit their resignations. But what the heck, when you're working for the government . . . .
And congratulations also to the Washington Examiner for their long series of coverage on the problems of WMATA.
"In public-policy debates the word most commonly invoked as the ace in the hole is need. However, need needs careful handling.
"Need has the political advantage, but the logical disadvantage, of lacking a clear meaning. That allows it to be systematically abused to distort understanding and to reach desired conclusions that justify picking people's pockets to pay for what someone else wants. (emphasis added)
"The concept has no universal meaning beyond I want, but I do not want to pay for it. I learned this from my children, who wielded the word almost exclusively to extract benefits for themselves at parental expense. However, once we move beyond childhood's focus on getting what is wanted by verbally manipulating parents, there is less reason to invoke need. In a world of voluntary market arrangements, one seldom uses the word (except when explaining why one did or plan to do something). If you really needed something, rather than saying it you would simply buy it or earn the resources to do so. Need would result in not mere complaining but rather in actions that benefit others as well. (emphasis added)
"When public policy is discussed, though, need is resurrected as a weasel word by whoever wishes to avoid paying for what he wants — a return to the paternalism of childhood — and it should therefore raise a warning whenever it is used.
"In that context need assumes away the consequences of unavoidable scarcity. Scarcity exists for each us, individually as well as for society, making tradeoffs imperative. And some of those tradeoffs involve choices among various needs. Therefore, calling something a need diverts attention from the actual choices faced."
~ Gary Galles
An article posted earlier today at the online Arlington Sun Gazette by Scott McCaffrey says that “housing-to-income” ratios are returning to their normal patterns. According to McCaffrey:
“The median price of home sales now stands at about 2.6 times the median household income, according to figures reported by a mid-year housing report issued by Metropolitan Regional Information Systems Inc., the area’s multiple-listing service, in conjunction with Delta Associates.
“From the early 1990s until about 2002, the median sales price of a home in the Washington metropolitan area ranged from 2.1 times to 2.6 times the median income.
“But starting in 2002, as the housing market took off but income lagged behind, the ratio rose, and rose, and rose. It peaked at just over 4.5-to-1 in 2005 - just as the market was beginning to cool but before the overall economy started to nosedive.
“During the 2001-05 period, sales prices of homes in the local area grew at a rate of 9.5 percent a year (even more in most Northern Virginia localities), while household income was growing at an average of 2.5 percent.
“The decline in sales prices following the 2005 bust sent the ratio downward, and by 2008 it had leveled off at 2.75-to-1. During the first quarter of 2010, the ratio declined even more, to about 2.6-to-1.”
Not surprisingly, the news report says the lower ratios have “helped spur improvements in the local real estate market."McCaffrey provides additional statistics on the Northern Virginia real estate market.
The entire mid-year MRIS report is here (requires Adobe). For a clear picture of this decade's housing bubble, take a look at the chart on page 10. It graphs the ratio of the median home price to median household income in the Washington metro area for the period 1992 through the first quarter 2010.
In case you wondered about the inclusion of the Arlington County Board in the title, affordable housing is one of the catchwords of the Arlington County Board. According to a county affordable housing issue brief (requires Adobe), the second of two affordable housing goals is:
"To secure 400 net new committed affordable housing units per year – units guaranteed to stay affordable for at least 30 years -- through partnerships with non-profit and for-profit home builders." (emphasis in the original)
The longest-serving member of the current Arlington County Board is Christopher E. Zimmerman, who was first elected in a special election in 1996. The other four were elected in 1997 or sooner.
So what has the trend of county spending been since 1996? Let’s take a look at the numbers from the Comprehensive Annual Financial Reports (CAFR):
Some rather amazing numbers, but for the life of me, I have great difficulty in imagining where that $1,180 in extra government that I am paying for has gone. I mean, I had difficulty in 1996 in identifying the $3,526 in government that I was paying for let alone the extra $1,180 of government that has been added since 1996. Can you?
UPDATE (8/2/10): In the fourth bullet, I substituted a compound annual growth rate (now 2.25%) for a straight arithmetic rate (was 2.57%).