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May 31, 2016

A Thought about Facts and the Left

"Facts are seldom allowed to contaminate the beautiful vision of the left. What matters to the true believers are the ringing slogans, endlessly repeated.

"When Senator (Bernie) Sanders cries, "The system is rigged!" no one asks, "Just what specifically does that mean?" or "What facts do you have to back that up?"

"In 2015, the 400 richest people in the world had net losses of $19 billion. If they had rigged the system, surely they could have rigged it better than that.

"But the very idea of subjecting their pet notions to the test of hard facts will probably not even occur to those who are cheering for socialism and for other bright ideas of the political left."

~ Thomas Sowell

Source: his 5/31/16 "Socialism for the Uninformed" column at National Review Online.

For more information about Thomas Sowell, visit his website.

May 30, 2016

A Thought on Memorial Day

"Our obligations to our country never cease but with our lives."

~ John Adams, Letter to Benjamin Rush, 1808

Source: Founding Fathers' Quote Database at The Patriot Post.

Today's Patriot's Post includes the following "In Honor of American Patriots."

"Memorial Day is reserved by American Patriots as a day to honor the service and sacrifice of fallen men and women who donned our Armed Forces uniforms with honor. We at The Patriot Post pay our humble respects to those that gave the ultimate sacrifice as members of the United States Armed Forces. We will remember you always.

"Accordingly, please read this tribute in honor of our fallen American Soldiers, Sailors, Airmen, Marines and Coast Guardsmen."

Link to the wonderful essay is in the original.

May 29, 2016

Clean Power Plan: A War on the Poor and Working Class?

In a research report from the Capital Research Center (CRC), Doug Domenech, director of the Fueling Freedom project at the Texas Public Policy Foundation (TPPF) says "Obama's plan for expensive electricity threatens its greatest harm to the most vulnerable. In short, the 8-page paper says:

"In 2010, a Democratic Congress refused to pass President Obama’s “green” agenda to implement a national cap-and-trade system. Now the Administration is trying to use the Environmental Protection Agency to force the states to put his scheme into effect. Often ignored in this debate is the harm the Obama plan will inflict on people who will lose their jobs and on those who can’t effort higher prices."

Here's Domenech's introduction to the paper:

"As a candidate, Barack Obama said that, “under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.”

"These higher costs would be passed on to consumers. As is clear from his statement, the President has long supported increases in the cost of energy as a way, he has said, to reduce demand and thus reduce carbon dioxide emissions.

"Politicians often represent themselves as fighting for the interests of middle- and low-income people, and other vulnerable groups like senior citizens on fixed incomes. Yet it is precisely those people who bear the brunt of policies that make electricity more expensive.

"Last year, the Environmental Protection Agency (EPA) pushed through a bureaucratic version of cap-and-trade: the misleadingly named Clean Power Plan, which was to be imposed on states through intimidation. If a state government refused to come up with its own plan along the lines of what the EPA demanded, the feds would impose their own restrictions on that state, measures that could do great harm to the state’s economy.

"It is no surprise that 27 states and over 120 other business organizations, electric utilities and coops, and even labor unions sued EPA to stop the rule and appealed to the U.S. Supreme Court to stay the rule until they could litigate the rule’s constitutionality. On February 9, the challengers won. The EPA appeared headed for defeat, most likely on the losing end of a 5-to-4 vote in the Supreme Court. Then the tragic death of Supreme Court Justice Antonin Scalia threw the matter into chaos—about which, more below."

And here's his conclusion:

“If somebody wants to build a coal-fired power plant, they can. It’s just that it will bankrupt them,” the future President said in January 2008. “Under my plan . . . electricity rates would necessarily skyrocket.” It is often said that a nation’s greatness is measured by how it treats its weakest members. The so-called Clean Power Plan—which would be better named the Costly Power Plan—represents a case in which the rich, powerful, and well-connected decide the fate of poorer families. The elites don’t really care what happens to people in those poorer families.

"The elite can afford higher energy costs. But people on fixed incomes, and lower- and middle-income families (including many African-Americans and Latinos/ Hispanics), and businesses that provide jobs to working class people—they need energy that’s affordable. For many of them, the choice is between the CPP... and keeping the lights on."

The paper prints out to eight-pages, and is available as a .pdf file, and contains the facts needed to better understand the so-called Clean Power Plan. Give a copy of the paper to a friend.

Domenech served the Commonwealth of Virginia as Secretary of Natural Resources and deputy chief of staff at the U.S. Department of the Interior.

So, take a few minutes to read the entire report, and then write your member of of Congress to tell them the harm the CPP will do to American's working men and women. Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Be sure to ask them for a written response. And tell them ACTA sent you!

May 28, 2016

GDP and the need for Tax Reform

The U.S. Department of Commerce's Bureau of Economic Analysis updated their 1st quarter estimate of the Gross Domestic Product (GDP) yesterday, writing:

"Real gross domestic product -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 0.8 percent in the first quarter of 2016, according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 1.4 percent."

We growled about the 0.5% increase in the GDP on May 1, 2016, noting that the economy started the year badly. In addition, we've growled about the nation's regulatory burden here, here and here. Not to mention growling about Uncle Sam, Esq.'s legal army of 25,060 on May 2, 2016 and the December 23, 2015 Growls about the retreat of economic  freedom.

Consequently, Raymond Keating's May 20, 2016 column, posted at Real Clear Markets, pointing out that tax reform and investment are key to small business success, was indeed welcome news. According to Keating, chief economist for the Small Business & Entrepreneurship Council (SBEC):

"Capitol Hill is waiting with anticipation for House Ways and Means Committee Chairman Kevin Brady (R-Texas) to release his tax reform blueprint sometime next month. With a bad economy further slowing, as noted in the latest release on GDP, the first serious step for tax reform will be most welcome.

"And given that this recovery has so badly under-performed due to a lack of sufficient private-sector investment, a commitment to comprehensive tax reform that enhances incentives for entrepreneurship and investment is vital.

"Consider a recent report from the American Council for Capital Formation (ACCF) that highlighted a disturbing falloff in capital formation, that is, in plant, equipment, technology and so on. When it comes to the United States' recent track record, we don't stack up well against our global competitors. According to ACCF, "Domestic capital formation not only declined over time, but compared unfavorably relative to our top ten trading partners. . . . the U.S. [is] lagging behind all countries except the U.K. in gross fixed capital formation as a percent of GDP for 2007-2014 period."

On Wednesday, May 25, Scott Hodge, president of the Tax Foundation, provided the Foundation's perspectives on the need for tax reform in testimony before the Ways & Means Subcommittee on Tax Policy. Here's the introduction from his testimony:

"There are many reasons to reform our tax code, but the cost of tax complexity to our nation’s economy should be near the top of that list.

"Over the last century, the federal tax code has expanded dramatically in size and scope. In 1955, the Internal Revenue Code stood at 409,000 words in length. Since then, it has grown to a total of 2.4 million words: almost six times as long as it was in 1955 and almost twice as long as in 1985.

"However, the tax statutes passed by Congress are only the tip of the iceberg when it comes to tax complexity. There are roughly 7.7 million words of tax regulations, promulgated by the IRS over the last century, which clarify how the U.S. tax statutes work in practice. On top of that, there are almost 60,000 pages of tax-related case law, which are indispensable for accountants and tax lawyers trying to figure out how much their clients actually owe.

"Tax complexity creates real costs for American households and businesses, starting with just the time it takes us to comply with the tax code. According to the latest estimates on Reginfo.gov, Americans spend over 8.9 billion hours complying with IRS tax filing requirements, equal to nearly 4.3 million full-time workers doing nothing but tax return paperwork. To put that in perspective, 4.3 million is greater than the populations of 24 U.S. states.

"Put in dollar terms, those 8.9 billion hours add up to more than $400 billion each year[1] in lost productivity, or greater than the gross state product of 36 states.

"Tax complexity, and the fear of making mistakes, motivates about 62 percent of all taxpayers to use tax return preparers, but the percentage climbs to about 73 percent for the poorest Americans claiming the EITC.

"But tax complexity creates other costs besides our lost time. Many of the most complex features of the tax code distort individual and business behavior in numerous ways that leads to long-run economic harm. And we can measure that economic harm using the Tax Foundation’s Taxes and Growth (TAG) Macroeconomic Tax Model.

"To illustrate the tax code’s harmful economic effects, I’ve selected a number of examples from the Tax Foundation’s forthcoming Options for Reforming America’s Tax Code. The Options book will contain nearly 100 specific policy changes to the individual and corporate tax code that have been scored with the TAG model. Each “Option” will include an estimate of the policy’s economic effects (such as on GDP, wages, and jobs), revenue effects (measured conventionally and dynamically), and the distributional effects (also measured conventionally and dynamically)."

Hodge's testimony is worth reading in its entirety. Although 10-pages long, it's well-worth spending the time to understand the basics of tax reform. Here's his conclusion:

"A few years ago, the National Taxpayer Advocate named tax complexity the number one issue facing American taxpayers. In addition to robbing us of 8.9 billion hours of our lives complying with its Byzantine rules, our complex tax system punishes success and hard work, thus, robbing the economy of its ability to create jobs and better living standards.

"Using the Tax Foundation’s Taxes and Growth (TAG) Macroeconomic Tax Model, we are able to measure and quantify the cost of complex tax provisions on GDP, investment, and jobs. We find that the complexity caused by measures designed to make the tax code more progressive shrink the economy and kill jobs. We find that the complexity caused by tax policies to help the poor can discourage work and shrink wages. We find that the extremely complex corporate income tax—from its high rate, badly designed cost recovery systems, and twin layers of taxation—leads to less investment, fewer jobs, and a smaller economy.

"Finally, by scoring a wide variety of tax reform plans with our TAG model, we learned that there are many valid ways of ridding the tax code of its worst parts and creating a tax system that boosts economic growth, creates jobs, and lifts living standards."

As Keating pointed out in his column for RealClearMarkets, the Ways & Means Committee will be releasing his blueprint for tax reform next month. Speaker Paul Ryan repeated that promise today while a guest on Larry Kudlow's radio program today (WMAL 105.9 FM).

As we noted in yesterday's Growls, jobs and the economy continue to rank at the top of the most recent Gallup poll, published May 18, 2016. To talk about jobs and the economy, the political class must talk about tax reform and reducing the regulatory burden, among other basics in order to get the economy moving. So, take a few moments to write your member of of Congress to find out their position(s) on tax reform. Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a reply. And tell them ACTA sent you.

May 27, 2016

Econ 101 for Politicians: How to Raise Wages

According to Pamela Villareal, senior fellow at the National Center for Policy Analysis (Brief Analysis 827, May 25, 2016):

"Since the Great Recession, the unemployment rate has steadily fallen from a high of 10 percent in October 2009 to the current rate of 4.9 percent. However, job gains and a low unemployment rate have not been matched by accelerated wage growth. Wages have only grown about 2 percent annually since 2012. This is quite lower than the average 3 percent annual growth that occurred before the recession. Some politicians claim companies are simply being greedy, but it is important to look at other factors — the cost of employment, in particular."

Ms. Villareal takes a closer look at the cost of employment, pointing out:

  • While wage growth may be staggering along, the cost of employment is increasing. The cost of employment includes mandated and voluntary benefits that are not explicitly in the employee’s hourly or salaried pay. These benefits include health insurance, worker’s compensation, unemployment insurance and contributions to pensions or retirement accounts.
  • In the first quarter of 2005, the average hourly wage across private industry and all occupations was $17.15.
  • Employer-provided health insurance, paid leave and legally required benefits increased the “implicit” wage an additional $5.40 per hour.
  • By first quarter 2015, the average hourly wage across private industry was $21.94.
  • Add in health insurance, paid leave and legally required benefits at $7.27 an hour and the employer’s cost was $29.21. When factoring in employee retirement plan contributions and supplemental pay (such as overtime), the hourly cost rose to $31.64 an hour.

She suggests several solutions "to bump up wages." For example:

  • Corporate Tax Reform
  • Wage and Benefit Flexibility
  • Flexible Health Plans
  • Less Regulator Burden
  • Support High-paying Jobs and Skill Enhancements

She concludes the two-page "tutorial for politicians," writing:

"While some policymakers may just shrug and insist that slow wage and GDP growth are the “new normal,” others seem to believe that simply bumping the minimum wage to $15 an hour or more will fix everything. But promoting high-paying jobs, easing the burden of labor costs and allowing workers to negotiate their benefits would go a long way in at least increasing individual take-home pay."

Jobs and the economy continue to rank at the top of the most recent Gallup poll, published May 18, 2016. Unfortunately, Washington's political establishment doesn't seem to be getting the message. So, take a few moments to write your member of of Congress, and cite the NCPA's brief analysis. Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a reply. And tell them ACTA sent you.

May 26, 2016

This Month's Porker is Puerto Rico's President

Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.

Citizens Against Government Waste (CAGW) has announced its selection of the May 2016 Porker of the Month, and he is Puerto Rico Governor Alejandro García Padilla (D-P.R.) "for recklessly pushing Puerto Rico into default."

CAGW justified its election of Puerto Rico's Governor Padilla this way (does not include links in the original):

"On May 2, 2016, the Commonwealth of Puerto Rico officially defaulted on a $370 million bond payment, the third such default since August 2015.  Gov. García Padilla’s tax-and-spend policies helped push the island’s debt to $72 billion, along with $46 billion in pension liabilities.

"After fiscally conservative Gov. Luis Fortuno was voted out of office, Gov. García Padilla began reversing his predecessor’s efforts to stabilize Puerto Rico’s fiscal situation.  He proposed a massive new $783 million spending package and raised sales taxes by 64 percent, from 7 percent to 11.5 percent, all while stating, “I can assure you that Puerto Rico will not default.  Puerto Rico will pay our debts.  It is a constitutional obligation.  But for me it is also a moral obligation.”

"On February 7, 2014, Moodys downgraded Puerto Rico’s bond rating to “junk” status.  As the decline continued, Gov. García Padilla refused to even provide fiscal audits for two consecutive years.  On June 28, 2015, Gov. García Padilla backed out of his previous assurances and glibly admitted, “The debt is not payable.  There is no other option.”

"He then set out to not only allow two defaults to occur in the months that followed, but on April 6, 2016, he signed into law a one-year moratorium on debt payments.  Gov. García Padilla defended the moratorium and the continued defaults as necessary to be able to maintain basic services, while conveniently neglecting to mention that the government would continue to provide “free” electric power to local communities, which has been used to build and power such “basic services” as a recreational ice rink.

"CAGW President Tom Schatz said, “Puerto Rico’s debt crisis was exacerbated by Gov. García Padilla’s reckless tax and spending agenda, and now the island is suffering the consequences.  Puerto Rico should make every effort to stabilize its fiscal situation by implementing pro-growth policies and reversing the destructive growth of the state bureaucracy.  To avert a taxpayer bailout of the island, Congress must act on the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which includes essential measures such as a financial control board that can put Puerto Rico’s fiscal house in order.”

In summary, CAGW said, "For hastening Puerto Rico’s descent into fiscal calamity and refusing to honor its debt obligations, CAGW names Gov. Alejandro García Padilla its May Porker of the Month."

Growls readers. Please take a few minutes to write to your member of Congress concerning the proposed bailout of Puerto Rico's debt. Additional information is available in the April 14, 2016 letter sent by the National Taxpayers Union to the House Committee on Natural Resources. The free enterprise/less government-oriented 60 Plus Association has a fact sheet on the possible bailout of Puerto Rico. CCAGW issued this press release last week with updated information. Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you.

For more information about Citizens Against Government Waste click here. CAGW is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

May 25, 2016

A Thought about a Lottery

"A lottery is a tax on people who are bad at math."

~ Anonymous

Source: page 38, "As Certain as Death: Quotations About Taxes," 2010, compiled by Jeffrey L. Yablon, TaxAnalysts.com.

May 24, 2016

Individuals and Businesses Drowning in Ever More Red Tape

The Heritage Foundation released their latest report on the regulatory state yesterday, entitled "Red Tape Rising 2016: Obama Regs Top $100 Billion Annually." The authors are senior research fellows James Gattuso and Diane Katz.

Writing in the Heritage Foundation's Daily Signal, the two researchers point out that 20,642 regulations were added during the Obama presidency." Here's the lede:

"The tide of red tape that threatens to drown U.S. consumers and businesses surged yet again in 2015, according to a Heritage Foundation study we released on Monday.

"More than $22 billion per year in new regulatory costs were imposed on Americans last year, pushing the total burden for the Obama years to exceed $100 billion annually."

According to Gattuso and Katz, "These are just a few of the 2,353 regulations of 2015—and there have been 20,642 since Obama took office in 2009."

Here's the summary from their 22-page report (Backgrounder #3127, May 23, 2016):

"The number and cost of federal regulations increased substantially in 2015, as regulators continued to tighten restrictions on American businesses and individuals. The addition of 43 new major rules last year increased annual regulatory costs by more than $22 billion, bringing the total annual costs of Obama Administration rules to an astonishing $100 billon-plus in just seven years.

"The effects of this rampant rulemaking are widespread. Among them: higher energy rates from the Environmental Protection Agency’s “Clean Power Plan”; increased food prices for both people and pets as a result of excessively prescriptive food production standards; restricted access to credit for consumers and small businesses under Dodd–Frank financial regulations; fewer health care choices and higher medical costs because of the Affordable Care Act; and reduced Internet investment and innovation under the network neutrality rules dictated by the Federal Communications Commission (FCC).

"The tide of regulation is expected to rise even higher in 2016—President Barack Obama’s final year in the White House. Historically, rulemaking increases as Presidents scramble to fulfill their regulatory agenda before leaving office. With 144 new rules already in the pipeline, Americans should be prepared for a regulatory surge before year’s end.

"In a post-Obama era, the need for reform of the regulatory system will be greater than ever before. Immediate reforms should include the requirement that legislation undergo an impact analysis before a floor vote in Congress, as well as a requirement that every major regulation obtain congressional approval before taking effect. Sunset deadlines should be required for all major rules, and independent agencies should be subject to the same White House regulatory review as executive branch agencies."

The following chart, showing the number and costs due to major regulations during both the Bush and Obama presidencies, is from the Gattuso and Katz paper:

The paper contains additional charts, which serve to make the report more understandable.

Growls readers. Please take a few minutes to look further at the Backgrounder. Is it any wonder the economy is mired in stagnation? Then write to a member of Congress to express your views about this excessive burden of the regulatory state. Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you.

May 23, 2016

A Thought about "Settled Science"

"Masking opinions in a white smock is a brilliant, albeit infuriating and shabby, rhetorical tactic. As the late Daniel Patrick Moynihan famously said, “Everyone is entitled to his own opinion, but not his own facts.” Science is the language of facts, and when people pretend to be speaking it, they’re not only claiming that their preferences are more than mere opinions, they’re also insinuating that anyone who disagrees is a fool or a zealot for objecting to “settled science.”

"Put aside the fact that there is no such thing as settled science. Scientists are constantly questioning their understanding of things; that is what science does. All the great scientists of history are justly famous for overturning the assumptions of their fields. The real problem is that in politics, invocations of science are very often marketing techniques masquerading as appeals to irrefutable authority. In an increasingly secular society, having science on your side is better than having God on your side – at least in an argument.

"I’m not saying that you can’t have science in your corner, or that lawmakers shouldn’t look to science when making policy. (Legislation that rejects the existence of gravity makes for very silly laws indeed.) But the real intent behind so many claims to “settled science” is to avoid having to make your case. It’s an undemocratic technique for delegitimizing opposing views and saying “shut up” to dissenters.

"For example, even if the existence of global warming is “settled,” the policies for how to best respond to it are not. But in the political debates about climate change, activists say that their climatological claims are irrefutable and so are their preferred remedies."

~ Jonah Goldberg

Source: his 5/20/16 National Review Online essay, "Who are the real deniers of science?" also posted at American Enterprise Institute.

HT Red Eye Radio.

May 22, 2016

Federal Government Waste: What does the Data Show?

It's not a pretty picture. According to an editorial posted Friday evening by Investor's Business Daily (IBD), "The federal government wasted more than $100 billion on overpayments last year. It knows this, even tracks it, but somehow can’t seem to stop it. Is there a better indication that government is too big?"

The federal government even has an official website -- PaymentAccuracy.gov -- that is replete with charts and data.

The term most often used with this government waste is improper payment.  Improper payments occur when either (from the frequently asked questions (FAQ) webpage):

  • federal funds go to the wrong recipient,
  • the recipient receives the incorrect amount of funds (either an underpayment or overpayment),
  • documentation is not available to support a payment, or
  • the recipient uses federal funds in an improper manner.

IBD writes in their editorial:

"Last year, the government made $126 billion in overpayments, nearly double the amount of made in President Bush’s last year.

"Improper payments in Medicare, for example, went from $10 billion in 2008 to $43 billion last year; and for Medicaid, the figured jumped from $19 billion to $29 billion.

"The Payment Accuracy site notes that the government also underpaid by $11 billion last year. Still, at $115 billion, the net overpayment just in 2015 is massive.

"It is, for example, equal to the combined budgets of the Departments of Justice, Energy, Interior, State and the EPA for 2015.

"It’s twice as much all the income taxes paid by everyone making less than $50,000.

"It’s roughly equal to the combined 2015 profits of Apple, Exxon Mobil, Wal-Mart, Google, Pfizer and Comcast."

Let me repeat those last paragraphs since they are truly mind-boggling (emphasis added):

"It’s twice as much all the income taxes paid by everyone making less than $50,000.

"It’s roughly equal to the combined 2015 profits of Apple, Exxon Mobil, Wal-Mart, Google, Pfizer and Comcast."

Another way to look at the total amount of improper payments, consider the Adjusted Gross Income (AGI) threshold in 2013 for the top 25% of taxpayers was $74,955 while the AGI threshold to be in the top 50% was $36,841, according to the National Taxpayers Union (NTU) analysis of who pays federal income taxes.

The editorial reminds us that some improper payments can be for the correct amount, but lack documentation. However, they point out:

" . . . But Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University who has studied these data, says the figures on waste are probably too low. She notes that Harvard University’s Malcolm Sparrow says that 20% of federal spending on health care programs could result from fraud.

“The government has become so big that no one is accountable, oversight is impossible, and no one seems to care at all,” she writes.

"And, indeed, if you bother to read audits from agency inspectors general or the Government Accountability Office, you’ll be treated to an endless stream of depressing examples of rampant mismanagement of taxpayer funds."

Take a few minutes to browse the data and charts at the PaymentAccuracy.gov website, and then write to a member of Congress to express your views about this form of federal government waste. Contact information is available at the Library of Congress' Thomas website (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you.

UPDATE (5/23/16): Title rewritten into a question.

May 21, 2016

A Thought about Over-Taxation

"Over-taxation cost England her colonies of North America."

~ Edmund Burke

Source: page 44, "As Certain as Death: Quotations About Taxes," 2010, compiled by Jeffrey L. Yablon, TaxAnalysts.com.

May 20, 2016

New CIP "Seeks No Additional Funds for Aquatics Center"

The Arlington Sun Gazette's Scott McCaffrey continues flushing out details of the County Manager's proposed FY 2017 -- 2026 Capital Improvement Plan (CIP) today. According to McCaffrey:

"Arlington County Manager Mark Schwartz fulfilled a pledge on the Long Bridge Park aquatics center, saying the project can be completed without going to voters for a third round of funding.

“We’re not requesting any additional resources” and should be able to move the project forward with funds already approved in referendums, Schwartz told County Board members on May 17, opting not to include a request for additional cash in his 10-year capital-improvement plan.

"Schwartz in April proposed a 73,000-square-foot aquatics complex – down from 116,000 square feet – that would cost $40 million to $44 million to build (not including design, project-management and contingency fees). He was following up on a March 2015 County Board directive, calling for staff to revisit the aquatics-center concept after it had been put on hold by then-County Manager Barbara Donnellan.

"In 2004, county voters approved bond funding for the entire Long Bridge Park complex in Crystal City, but higher-than-anticipated costs, and a more grandiose concept of what the facility should be, led government leaders to put more funding for the facility on a 2012 park bond.

"Voters approved the 2012 bond, but sent a warning shot over the bow: Its margin of victory – 63 percent – was about 20 percentage points lower than for several other bonds on the 2012 ballot, including those for schools and Metro.

"From there, things got worse for the effort to build the facility. Estimated costs both for construction and operation ballooned, and the aquatics center joined Artisphere, the Columbia Pike streetcar system and “million-dollar” bus stops as symbols of the Arlington government’s capital-spending overreach."

Scroll down to yesterday's Growls where we embedded links to make it easier to access such source documents as the county's press release; the CIP, and the Manager's PowerPoint presentation of the CIP to the Arlington County Board.

Growls readers are urged to write to members of the Arlington County Board to voice concerns about the proposed FY 2017 -- 2026 Capital Improvement Plan. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

May 19, 2016

Flushing Out Details of Metro Bond Referenda

Beginning Sunday, May 15, we started growling about the amount that Arlington County taxpayers subsidize Metro -- see our May 15 and May 16 Growls; yesterday, we growled about the FY 2017 -- 2026 Capital Improvement Plan (CIP), which the County Manager proposed Tuesday evening.

Today, Scott McCaffrey of the Arlington Sun Gazette reported the Arlington County Manager is seeking $30 million for Metro in this fall's bond referenda. According to McCaffrey:

"The Arlington County government’s subsidy to operate the Metro system will amount to about $130 for every county resident over the next two years, based on the county manager’s bond-referendum proposal detailed May 17.

"Mark Schwartz is seeking $30 million for Metro funding, up 31 percent, as part of a $59 million transportation referendum likely to go to voters on Nov. 8. The proposal also calls for $24 million for paving and road maintenance, up 27 percent from what was included in the 2014 transportation bond passed by voters.

"Rising costs for Metro come even as Arlington is looking to lighten its load by moving more transit service to the less-costly ART bus service. The $30 million spending proposal doesn’t count interest costs that will accrue during the life of the bonds."

The $30 million for Metro is almost half of the $59 million the Manager is proposing in the Metro and Transportation bond referenda. Over the next 10 years, though, the Manager proposes spending $1.3 billion, or just over 46% of the total 10-year, CIP, for transportation programs.

According to the press release explaining the CIP, the fall bond referenda for Metro and transportation would spend:

  • Metro – fulfilling our ongoing commitment – $30 million, a 31 percent increase from the 2014 referenda ($23 million).
  • Paving – maintaining our roads – $24 million a 27 percent increase over the last CIP

Additional information is available beginning at the Capital Improvement Plan webpage. From there, you can access the FY 2017 -- 2026 CIP; the Manager's PowerPoint presentation of the CIP to the County Board; and, the seven chapters of the FY 2017 -- 2026 CIP.

Growls readers are urged to write to members of the Arlington County Board to voice concerns about the proposed FY 2017 -- 2026 Capital Improvement Plan. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

May 18, 2016

Arlington County Manager Annouces $2.8 Billion Capital Plan

At the Arlington County Board's recessed meeting yesterday evening, the County Manager proposed a $2.8 billion, 10-year Capital Improvement Plan (CIP). See recessed agenda here.

One item in the CIP will be the design of a new fire station #8 -- on Lee Highway -- according to Scott McCaffrey of the Arlington Sun Gazette this morning. He writes the design funds would be "part of a package of projects totaling $177 million in a series of bond referendums," adding:

"The package first goes to the County Board, which is likely to vote on it in July. It then is forwarded to the Circuit Court, which has the final say on ballot placement.

"Voters are likely to go along with whatever is placed in front of them; in recent years, most Arlington bond referendums have passed with support of 75 to 80 percent of voters, and even controversial ballot measures (such as the 2012 parks bond that included more funds for a Long Bridge Park aquatics center) collected more than 60 percent of the vote.

"Under Schwartz’s proposal, construction funds for a new fire station would be included in a future referendum, likely in 2018. Total cost estimates range from about $14 million to $19 million, depending on whether the station is moved to Old Dominion Drive or razed and rebuilt on its current location on Lee Highway."

Read the remainder of McCaffrey's article here since he writes more about the fire station #8 task force.

The press release about the County Manager's $2.8 billion CIP includes five bullet points:

  • Fulfilling commitments to Lubber Run, Long Bridge Park projects
  • Planning for Columbia Pike premium transit
  • Maintaining existing infrastructure
  • Remaining within debt, financial policies
  • Continuing support for APS

As noted by Mr. McCaffrey above, the Manager is proposing a 2016 bond referenda totaling $177 million, divided as follows (see press for detailed breakdown):

  • Metro and Transportation – $59 million
  • Parks and Recreation – $19 million
  • Government Facilities – $70 million
  • Community Conservation – $17 million
  • Joint County Schools – $12 million

More details about the FY 2017 -- 2026 proposed Capital Improvement Plan (CIP) are in this 22-slide PPT presentation here. The Superintendent's proposed CIP is available at the Arlington Public Schools website here.

Arlington County citizens are encouraged to attend the County Board's budget work sessions. On May 24 -- a Joint County Board /School Board work session. Then on May 31, June 16, 28, and July 12 -- County Board work sessions on proposed CIP. On June 22 -- a public hearing beginning at 7:00 p.m in the County Board Room, 2100 Clarendon Blvd., 3rd floor. Finally, on July 19, the County Board will adopt the CIP and set the bond referenda language.

Growls readers are urged to write to members of the Arlington County Board to voice concerns about the proposed FY 2017 -- 2026 Capital Improvement Plan. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

May 17, 2016

A Thought about Ideas and Classical Liberalism

" . . . In the two centuries after 1800, the goods and services made and consumed by the average person in Sweden or Taiwan rose by a factor of 30 to 100—that is, a rise of 2,900 to 9,900 percent. The Great Enrichment of the past two centuries has dwarfed any of the previous and temporary enrichments. It was caused by massively better ideas in technology and institutions. And the betterments were released for the first time by a new liberty and dignity for commoners—expressed as the ideology of European liberalism. Not "liberalism" as it's come to be understood in the United States, as ever-increasing government, but its old and still European sense, what Adam Smith advocated in 1776: "allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice."

"Why did such ideas shift so dramatically in northwestern Europe, and for a while only there? Why did Leonardo da Vinci in 1519 conceal his engineering dreams in secret writing, yet in 1825 James Watt of steam-engine fame was to have a statue set up in Westminster Abbey? In 1400 or even in 1600, a canny observer would have bet on an Industrial Revolution and a Great Enrichment—if she could have imagined such freakish events—in technologically advanced China or the vigorous Ottoman Empire. Not in backward, quarrelsome Europe.

"The answer does not lie in some 1,000-year-old superiority, such as English common law, or in the deep genetic ancestry of Europeans. The liberalism that led to ordinary people being allowed to have a go, and then bettering their lives and ours with a wave of gadgets, lies rather in the black-swan luck of northwestern Europe's reaction to the turmoil of the Early Modern—the coincidence in northwestern Europe of successful reading, reformation, revolt, and revolution. The dice were rolled by Gutenberg, Luther, Willem van Oranje, and Oliver Cromwell. By a lucky chance for England their payoffs were deposited in that formerly not-so-consequential nation in a pile late in the late 17th century. A result of those four Rs was a fifth R, a crucial revaluation of the bourgeoisie, an egalitarian reappraisal of ordinary people."

~ Deirdre McCloskey

Source: her May 12, 2016 essay, "Bourgeois Equality," posted at Reason.com. The essay appears in the June 2016 issue of Reason magazine. She teaches economics, history, and English at the University of Illinois, and economics, philosophy, and art and cultural studies at Erasmus University, Rotterdam. Her latest book is "Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World."

May 16, 2016

Campaign Begins to Provide Metro 'Dedicated Funding Source'

Yesterday, we growled about the growing burden of Metro subsidies provided by Arlington County taxpayers -- that after a Washington Times story that Metro announced an $18 billion budget shortfall.

Now we learn, "A pair of regional organizations are jointly crafting a proposal for dedicated Metro funding to augment what the transit system receives from fares and cash-strapped area governments," according to Michael Neibauer in today's Washington Business Journal.

Here are some of the details:

"The Metropolitan Washington Council of Governments, representing 22 area jurisdictions, and the Greater Washington Board of Trade expect to have a proposal ready by September, said Roger Berliner, chairman of the MWCOG board and a Montgomery County councilman.

"The complexities of a regional funding mechanism are enormous, but officials hope Metro's safety crisis will create a sense of urgency and prompt elected officials in D.C., Maryland and Virginia to approve a funding source that has evaded the region for years.

"The big three jurisdictions, along with the localities served by the Washington Metropolitan Area Transit Authority, would be asked to share the burden, likely in some equitable way.

"The proposal's rollout would be followed by an intense campaign to earn support, not just from D.C. area residents, but, more importantly, from Virginia and Maryland state-level elected officials.

“I don’t think the region’s the issue,” Berliner said. “Richmond’s the issue. Annapolis is the issue. I am convinced that our region’s political leadership will strongly back a dedicated funding source. Our dilemma is that in two of the three jurisdictions there are larger dynamics at play here.”

"What might a regional funding package consist of? It’s too early to say, Berliner said, but the sales tax is “always at the top list of candidates,” because everybody pays it, including visitors to the region. A 2005 analysis of Metro funding options — sponsored by MWCOG, the Federal City Council and the Board of Trade — suggested a sales tax is the most viable source, but it wasn't the only option. The report considered property and payroll, gas and motor vehicle taxes, too."

Neibauer's reporting includes one more important especially information point:

"In Northern Virginia, the state hiked the sales only three years ago to 6 cents — same as Maryland, a quarter cent more than D.C. — to fund transportation and transit projects. Asked whether he could support additional tax dollars for Metrorail, Virginia Del. David Albo, R-Fairfax, responded in an email: “No way, no way, no way.” (emphasis added)

Yesterday, we growled that before Metro further picks  taxpayers' pockets, Metro needs to provide detailed information of how effectively Metro's management used past funding increases. As we growled yesterday:

" . . . From fiscal year 2001 to fiscal year 2015, which ended June 30, 2015, total expenditures increased by 5.1%. but the subsidies paid to WMATA (technically, "regional contributions transit") increased at an annual rate of 8.3%. During this same period, the annual rate of inflation was about 2.8%. Numbers based upon Table D-1, Statistical Section, of the county's Comprehensive Annual Financial Report (CAFR)."

Growls readers are urged to write to members of the Arlington County Board to voice concerns about the planned campaign by the Metropolitan Washington Council of Governments (MWCOG) and the Greater Washington Board of Trade to "augment" current Metro revenues. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

UPDATE (5/17/16): Washington Business Journal is conducting a poll, which asks,"What type of tax or fee would you prefer be used to repair and maintain the beleaguered Metro system?" Click here to take the poll. As of 11:45 PM, 18% favored a sales tax; 5% favored a property tax; 2% favored a payroll tax; 18% favored a developer impact fee; 17% favored a new car or gas tax; and 8% favored an other tax or fee. 32% opposed new taxes.

May 15, 2016

Before Giving Metro More $$$, Tell Us If Past $$$ Well-Spent

The Washington Times' Ryan McDermott reported this past Wednesday that "Metro faces $18 billion budget shortfall in next decade."

According to McDermott:

"Metro faces an $18 billion capital deficit over the next 10 years, news that shook regional lawmakers and prompted one to suggest privatizing the long-troubled transit agency.

"In addition, the Federal Transit Administration ordered Metro to make immediate repairs to prevent fires on the subway system’s tracks, just days after issuing a safety directive with a threat of defunding and closures. The directive capped a week in which Metro’s new general manager laid out his plan for major repairs a day after the subway had suffered its eighth serious smoke-and-fire incident in two weeks.

"At Wednesday’s meeting of the Metropolitan Washington Council of Governments (COG), Metro Board Chairman Jack Evans told lawmakers about the $18 billion deficit the transit agency anticipates in its capital budget over the next decade. He pleaded with them to pressure the federal government to step up its contribution to the rail system’s operating costs, adding that little else can be done to improve Metro’s financial situation.

“I can’t even take this thing and put it into bankruptcy because there’s no law that covers this,” he told the group.

"Mr. Evans, who was elected chairman of the Metro Board of Directors in January, also noted that maintenance costs will total $10 billion over the next 10 years.

“We have no way of paying for that. Nothing,” he said. “The finances are worse than the operations.”

Read the entire article for more details.

But the subsidies that Arlington County taxpayers have been paying to WMATA have been growing faster -- much faster -- than total county expenditures from the General Fund, the main revenue source for county and schools spending. From fiscal year 2001 to fiscal year 2015, which ended June 30, 2015, total expenditures increased by 5.1%. but the subsidies paid to WMATA (technically, "regional contributions transit") increased at an annual rate of 8.3%. During this same period, the annual rate of inflation was about 2.8%. Numbers based upon Table D-1, Statistical Section, of the county's Comprehensive Annual Financial Report (CAFR).

Put another way, if the subsidies to WMATA in fiscal year 2015 remained at the same share of total expenditures as 2001, the subsidies to WMATA in fiscal year 2015 would be $19.5 million rather than $29.9 million. That difference of $10.4 million means the real estate tax rate could be an additional 1.7 cents lower. On the so-called average Arlington County home, that would mean an annual saving of $102.

Growls readers wishing to comment on the county subsidies paid to WMATA, are urged to write to members of the Arlington County Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

May 14, 2016

Local Arlington County Gun Store Wins Zoning Appeal

ARLnow.com readers learned on Tuesday of this past week that "(a) group of Lyon Park and Ashton Heights residents is trying to challenge the legality of Nova Armory’s Certificate of Occupancy." The appeal would be heard the following evening, Wednesday, May 11, before Arlington County's Board of Zoning Appeals (BZA). The BZA public notice for the May 11, 2016 hearing is here.

Here's a portion of ARLnow.com's reporting, which provides context:

"Nova Armory, a firearms retailer, opened in March in Lyon Park amid local controversy. The store’s owner, Dennis Pratte, is now suing dozens of residents and lawmakers, accusing them of trying to interfere with his business. (link in the original; links to an April 25 report in ARLnow.com)

"Five local residents launched their own legal offensive when they filed an appeal to Arlington’s Board of Zoning Appeals (BZA), challenging the county’s decision to issue Nova Armory a Certificate of Occupancy, which is required for businesses with a physical location in Arlington.

"Arlington County has previously said that there is nothing it can do legally to prevent a gun store from opening, as long as it follows zoning rules and files all the proper paperwork."

In addition to the ARLnow story about the suit against "residents and legislators" linked to above, the Washington Post's Patricia Sullivan reported the story here. A copy of the lawsuit is available at Scribd here.

So, how did the BZA hearing go? The Daily Caller's Kerry Picket has some of the details here:

"Chalk up another victory up for NOVA Armory. The suburban Virginia firearms store beat back an appeal late Wednesday night that asked the Arlington County Zoning Board to revoke its small business occupancy permit.

"The five-member board voted unanimously to uphold issuing the occupancy certificate to NOVA Armory, though board members stressed that their decision was based on zoning rules rather than the Second Amendment.

"Local Second Amendment activists wearing “Guns Save Lives” stickers packed the Arlington hearing room and sat through three hours of residents’ requests for zoning permits relating to various property issues. In the final hour, numerous Arlington residents and representatives of local organizations spoke on behalf of NOVA Armory.

"Three women — Bernadette Brennan, Julia Young and Emily Hughes — appealed the permit and tried to get the occupancy certificate repealed, claiming that “the application for the certificate of Occupancy contains false and misleading information and therefore the permit was issued in error.”

Picket's entire article is worth reading since it is fact-rich.

The Virginia Citizens Defense League has two photos posted on  their photo album webpage. In one, the VCDL president addresses the BZA board. The other shows that virtually every hand -- at 10:20 PM -- is raised in support of NOVA Armory.

The War on Guns blog has an exclusive report -- by William T. -- on the BZA hearing here.

Just wondering: since Arlington County had already told residents "there is nothing it can do legally to prevent a gun store from opening, as long as it follows zoning rules and files all the proper paperwork," will the BZA appeal be raised during the trial before the City of Richmond's Circuit Court?

Growls readers wishing to comment on the Second Amendment or the rights of gun store owners are urged to write to members of the Arlington County Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

May 13, 2016

A Thought about the Task of Economics

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."

~ Friedrich Hayek, "The Fatal Conceit"

HT James Pethokoukis, American Enterprise Institute, posted earlier this week in honor of his 117th birthday. See the post for six other great quotes by Friedrich Hayek.

May 12, 2016

A Thought about Fiscal Discipline and the Federal Budget

"The fact that the House (of Representatives) budget is at a standstill over $30 billion reveals how unserious some within the Republican Party are about fiscal discipline and actually addressing our national debt crisis.

"The federal budget deficit will swell in relation to gross domestic product this year for the first time since 2009, ballooning to an estimated $534 billion in 2016, according to the nonpartisan Congressional Budget Office. If Congress continues on its current path of spending, the deficit will surpass $1 trillion by 2022 and every year thereafter. That’s $30 trillion in debt in a decade. Feel the Bern and you will be at $40 trillion. Yes, with a “T.”

"We have only to look to Puerto Rico to see where Washington’s addiction to spending can lead. Many have argued that Donald Trump may not be conservative on fiscal issues. That argument is hot air if Congress itself cannot walk the walk. There is nothing conservative about the Obama-Boehner budget deal that leadership is urging us to vote for.

"If we are serious about fiscal discipline and a brighter future for our country, as conservatives say they are, we must pass a budget that actually reins in federal spending."

~ Rep. Dave Brat (R-Virginia)

Source: his May 12, 2016, op-ed, "Missing a chance to walk the walk toward fiscal discipline," posted at the Washington Times. Brat represents Virginia's 7th district.

May 11, 2016

Bee Stings, Walking with Coffee, and Other Uses of Your Taxes

U.S. Senator Jeff Flake (R-Arizona) released an 'oversight report' yesterday "highlighting 20 hard-to-justify, taxpayer-funded studies that diverted more than $35 million that could have been better spent researching treatments for cancer, Alzheimer’s disease, and viral infections such as Zika and Ebola." The 85-page report is titled "Twenty Questions: Government Studies That Will Leave you Scratching Your Head," and is available here.

The report received above-the-fold, front page coverage by the Washington Times today. Here's a portion of Stephen Dinan's reporting:

"Taxpayers paid for one scientist to have a bee sting his penis and paid other researchers to figure out that cheerleaders look more attractive in a group than individually, according to a painful new survey of wasteful spending released Tuesday by Sen. Jeff Flake.

"At a time when the Obama administration is pleading for more money to fight the Zika virus, repair water pipes in Flint, Michigan, and combat the growing opioid epidemic, the ridiculous research projects suggest there’s plenty of room to save money already in the budget, Mr. Flake said.

"Unnecessary projects included the $50,000 for researchers who studied femininity and masculinity in members of Congress. The National Science Foundation paid the University of California, Los Angeles to conclude that Republican women are feminine and Democratic women are not.

In conclusion, Mr. Dinan wrote:

"Mr. Flake said he hoped highlighting the bizarre spending choices would push bureaucrats to be more watchful in the future.

"He also said it’s time to enlist the public. He introduced legislation to require the White House to develop a system to weed out duplicative research and to require agencies that fund research to post a summary, funding details and information about papers written for every unclassified study paid for by taxpayers’ money."

The report is Sen. Flake's fifth oversight report, and "continued retired U.S. Sen. Tom Coburn’s (R-Okla.) tradition of publishing an annual Wastebook when he released Wastebook: The Farce Awakens, an oversight report highlighting 100 examples of wasteful government spending that totaled over $100 billion." Links to the reports are available in this May 10, 2016 press release.

According to Fox News yesterday, "The most cringe-worthy item highlighted by the report was a study -- part of a $1 million National Science Foundation grant to Cornell University -- for which researcher Michael Smith had a bee sting him roughly 200 times on 25 parts of his body and rated how much it hurt." They also featured a "Wheel of Waste" in a 5-minute video that included Sen. Flake.

Growls readers are encouraged to write to their members of Congress to learn what their Member did to eliminate waste, fraud and abuse. You can find contact information at the Library of Congress' Thomas website (use left-hand column). Here are Arlington County's members of Congress:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Remember to ask for a written response, and tell them ACTA sent you.

May 10, 2016

Regulatory Costs Help Make 'Affordable Housing' Unaffordable

Last Thursday, we growled about the effect that government subsidies have in the healthcare and higher education fields, specifically raising the cost to consumers.

Yesterday, the Wall Street Journal's Chris Kirkham reported that "home builders say they are squeezed by rising compliance costs." Here's a portion of Kirkham's reporting (emphasis added below):

"The average cost for home builders to comply with regulations for new home construction has increased by nearly 30% over the last five years, according to new research from the National Association of Home Builders.

"Regulatory costs such as local impact fees, storm-water discharge permits and new construction codes, which have risen at roughly the same rate as the average price for new homes, make it increasingly difficult for builders to pursue affordable single-family construction projects, the group argues.

“It really makes it hard to satisfy the lower end of the market, which is a lot of first-time buyers,” said Paul Emrath, vice president for survey and housing policy research at the NAHB, who conducted the survey of about 400 builders across the country.

"The cost of regulation imposed during the land development and construction process on average represented $84,671 of the cost of the average new single-family home in March. That is up from $65,224 in 2011, the last time the home-building industry group conducted a similar survey on regulatory costs.

"The 2011 and 2016 surveys used a different panel of home-building executives, who were asked to calculate the costs of environmental mitigation, impact fees and other approvals as a percentage of construction or lot development costs. Both surveys showed that regulatory costs represented about the same percentage of the final price tag of a new home—24.3% this year versus 25% in 2011.

"Other recent surveys have also suggested that builders are contending with steeper costs than they have in the past. A study this week from housing research firm Zelman & Associates found that local infrastructure “impact fees” have increased by 45% on average since 2005 in 37 key home building markets across the country, to about $21,000 per home."

The Wall Street Journal included the following graphic in the report:


In September 2015, the Arlington County Board adopted -- with considerable fanfare -- a so-called Affordable Housing Master Plan (AHMP). The county even released a three-page press release. The County Manager also issued a "supplemental report" with a clarifying statement that the AHMP "does not commit the County to any immediate or future expenditures." Our September 21, 2015 Growls includes links to all the gory details. A search of the AHMP found two instances of "regulatory" (pages 18 20) and three of "compliance" (pages 2, 8 and 8). Unfortunately, there was no accompanying discussion that indicated the County Board, the County Manager, or county staff were even cognizant of the regulatory costs, or compliance costs. that are "built into" each new home. Nor does the table of contents suggest any effort would be made to reduce the cost of so-called affordable housing by reducing the regulatory costs.

In the September 21, 2015 Growls, we included the following paragraph from a news report by the Arlington Sun Gazette's Scott McCaffrey:

"The package had the support of most housing advocates, but some in the community voiced concern about the cost – Arlington already spends far more of its municipal budget on housing than neighboring jurisdictions – and over unforeseen and unanticipated side effects."

Growls readers who haven't expressed their concerns about affordable housing -- and now the regulatory costs imposed by our local government -- are urged to tell members of the Arlington County Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

May 09, 2016

Economic Growth and America's Future

Frequent Growls readers know that economic growth is a frequent topic discussed here. For example, recent  Growls touching on economic growth include May 1, 2016, April 25, 2016, March 14, 2016, and March 10, 2016. In the May 1 Growls, we highlighted the 0.5% growth in GDP in 2016's first quarter.

That said, an article by Robert Romano posted at Conservative Review caught our eye, and explained "why no economic growth will kill the" United States. According to Romano:

"Unsurprisingly, the lack of growth falls well below the already dreary Federal Reserve expectations for 2016, which is projected in December 2.4 percent for the year. Which still stinks. Even as the economy struggles to catch up, perhaps we’ll even meet that growth projection this year. Which is the problem.

"The U.S. economy has not grown above 4 percent since 2000, and not above 3 percent since 2005. While President Barack Obama goes around the world claiming he has been “Saving the world economy from a Great Depression” with his policies, in point of fact the last 10 years marks the worst performance of GDP since the 1930s. The rest of the world, particularly in emerging markets, have performed well above the U.S. in that timeframe.

"And at the current slow-to-no-growth rates, the U.S. economy is poised to underperform its way into financial oblivion.

"Without growth, the U.S. will be unable to meet its full faith and credit financial obligations both publicly and privately. Right now, the $19.2 trillion national debt stands at 105 percent of GDP.

"The U.S. has sustained such largesse with extremely low interest rates, but that will only work for so long. Nominally, the national debt grew 5.7 percent in the past 12 months. Compare that to 2015’s nominal economic growth — that is, before inflation adjustment — of 3.5 percent.

"If those numbers held true for the foreseeable future, by 2050, the national debt would be $140 trillion, while the economy would be just $60.9 trillion — a whopping debt to GDP ratio of 229 percent. That is unsustainable, even with low interest rates.

"And left unchecked, it may result in the greatest default in human history. Harvard economist Carmen Reinhart recently, remarkably called for debt restructuring — they dare not call it default but that is what restructuring is — writing for Project Syndicate, “[W]ith the largest economies, nearly eight years after the global financial crisis, burdened by high and rising levels of public and private debts, it is baffling that comprehensive restructuring does not figure prominently among the menu of policy options. Indeed, for the global economy, debt restructuring is the proverbial elephant in the room.”

"But if the economy grows faster than the debt, the debt to GDP ratio shrinks — and there is no financial crisis. No need to restructure or default, or at least far less of a need. Reinhart does not see growth on the horizon, so she points to restructuring.

"Without growth, the U.S. will be unable to maintain its global security posture, which the free world has depended on since the end of World War II to maintain freedom of the seas, operate the world’s nuclear defense deterrent and be able to respond to hotspots that threaten national and regional security.

Later, as Romano explains. "the real solution again is to get the U.S. economy growing again — robustly — so that public and private systems are not so strained." He then went on to explain some of the causes:

"Some of the causes of the economic slowdown are easier to deal with than others. The demographic slowdown of fewer babies poses a generational challenge, with a lower relative growth of demand. As for the accumulation of too much debt public and private, which serves as a net drag on growth, that run-up of credit occurs very much as a function of growth being too slow. That is, we tend to borrow to move consumption to the present.

"Other wounds are self-inflicted, such as $8.7 trillion of trade deficits since 2000 and the regulatory stranglehold particularly on energy production by the Environmental Protection Agency. Those could be undone or at least affected by a smart mix of policy that seeks to restore U.S. competitiveness globally.

"Regardless of the causes — and there are many — everyone should agree that growth is the solution. Because the danger of no growth is default on our massive bond bubble, a crippled U.S. defense posture and seniors who will simply die waiting for care.

He concludes by almost pleading, "But if we just start growing — and fast — it all goes away."

Growls readers are encouraged to write to their members of Congress to learn what the Member has done to increase economic growth. You can find contact information at the Library of Congress' Thomas website (use left-hand column). Here are Arlington County's members of Congress:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Remember to ask for a written response, and tell them ACTA sent you.

May 08, 2016

Explaining a $2 Million Give Away by Virginia's Governor

On Tuesday, May 3, the editors of the Richmond Times-Dispatch thanked a Roanoke Times' reporter for reporting how "Virginians now have a clearer idea how the state came to pay $2 million to Norfolk Southern for shifting jobs from one end of the commonwealth to the other," adding, "It’s not a pretty tale." The reporter, who provided "some good show-leather reporting" is Jeff Sturgeon.

Here's how the Times-Dispatch editorial explains what happened:

"We now know that just days after the company announced it would close its office in Roanoke and move hundreds of jobs to Atlanta, vice president James Hixon emailed Secretary of Commerce and Trade Maurice Jones to say he had been reviewing “the funds available in Georgia” and “would like to talk with you or someone from your office about possible incentives from Virginia.”

"We also know that officials with the Virginia Economic Development Partnership were none too keen about giving the railroad company money to move some of the jobs from Roanoke to Norfolk. Liz Povar, vice president at the VEDP, did not want to give the company any grant money unless it kept all of the Roanoke jobs in Virginia.

"The company and the McAuliffe administration dickered over how much grant money the commonwealth would shell out for how many jobs at which salary levels. At one point, Jones approved a $2.5 million package; in return, the railroad agreed to invest $2 million and keep 182 jobs in Virginia. Rob McClintock, vice president for research at VEDP, noted that “Virginia has never before awarded a . . . grant for an amount greater than the project’s private sector capital investment. If it’s being considered, it’s something that (Jones) should consciously pause and reflect on.”

"Not long afterward, Norfolk Southern gave $25,000 to Gov. Terry McAuliffe’s political action committee, Common Good VA. Hixon, the railroad’s vice president, already had donated $10,000 to McAuliffe’s election campaign. A couple of months later company president James Squires gave another $1,000 to the PAC.
More dickering. McClintock wrote that he would prefer to “stop the deal altogether.” Others at the VEDP agreed, but apparently they were overruled.

"Eventually the company and the administration hammered out a deal: Norfolk Southern would move 165 jobs to Norfolk, where the city would give it more than $2 million worth of municipal parking, and the state would give it just under $2 million as well. To make that happen under state legal restrictions, the VEDP treated the 165 jobs being moved as new jobs and counted income taxes from them as new revenue."

Here's Sturgeon's report in the Roanoke Times.

The Times-Dispatch editorial also noted that when Gov. McAuliffe (D) "was heading up GreenTech Automotive, the company hoped to get incentives from Virginia. But VEDP officials expressed 'grave doubts about the business model,' and concerns that 'the financing plan does not fit the rules for the EB-5 Program.'" They also said none of the above should be a surprise, writing, "In his autobiography “What a Party!” McAuliffe writes that “it’s a lot easier to raise money for a governor. They have all kinds of business to hand out.”

Growls readers wishing to comment about the giveaway of $2 million of their tax dollars are urged to write to Governor McAuliffe to voice complaints about the misuse of their tax dollars. Click-on the following link:

And tell him ACTA sent you.

Kudos to Jeff Sturgeon and to the Times-Dispatch for editorializing about another newspaper's reporting.

(UPDATE (5/9/16): I expanded the title to clarify the giveaway was done by Virginia's governor, as indicated in the referenced sources.

May 07, 2016

Taxpayers Due a 'Fair and Reasonable' Amount of Surplus

Arlington County taxpayers favorite weekly newspaper, the Arlington Sun Gazette, reported early last month the Arlington County Civic Federation would be debating at its May 3, 2016 meeting "whether to call on the county government to refund up to one-third of its annual surpluses to taxpayers." The newspaper explained it this way:

"The proposal, introduced at the organization’s April 5 meeting and backed by its revenues-and-expenditures committee, targets the $20 million to $40 million annually that the county government has as a surplus – funds left over at the end of the year and not allocated to any future expenditures.

"At the end of the county government’s 2015 fiscal year last June, there was an available closeout balance of just under $22 million. Had a third of that been taken for tax relief, it could have resulted in an approximately 1-cent reduction in the real estate tax rate – which would have put about $60 back in the pockets of a typical homeowner."

Unfortunately, as noted in his Editor's Notebook blog, Scott McCaffrey had double-duty this Tuesday so he was not able to report on the Civic Federation's debate of the resolution prepared by the Civic Federation's Revenues & Expenditures (R&E) Committee. Full disclosure: your humble blogger, ElGrowlerGrande, is a member of the R&E Committee.

The resolution is available at the Civic Federation's website here. Most importantly, the resolution points out that for the five fiscal years 2011 through 2015, surpluses totaled $145.1 millionn, ranging from $21.8 million to $31.8 million. The Arlington County Board sometimes places these excess funds into one or more reserve accounts, but often finds various "uses," and spends the excess funds for "one-time expenditures."

One civic association, especially, was opposed to the resolution, even bringing a two-page "statement of opposition" to the meeting that was signed by seven of their members or Federation delegates. Unfortunately, portions of the statement were irrelevant, e.g., saying, "there is no guarantee that budget surpluses will be as high as $29 million in the future." If that occurred, the Board could still consider using one-third for tax rate reduction. Further, the statement of opposition noted "the County is facing many pressing issues." If that's the case, then one would expect the Arlington County Board to direct the Manager to include those priorities in the direction it gives the Manager in preparing the following year's budget. However, the press release that announced the County had adopted the FY 2017 budget included the following comment:

"' . . . the Board was able to put together a budget that preserves our community’s values, gives schools more funding than they requested, and adds funding for public safety, economic development and other key services – with a slight decrease in the tax rate.'”

That sure sounds like the County Board took care of all "pressing issues."

So let's return to the "debate." First, the opposition focused on the two "therefore" paragraphs. Those efforts lost by votes of 18-8 and 24-13. There was one minor change, however. Instead of urging the Board to annually set aside a fair and reasonable amount, Federation delegates added the word consider, thus urging the County Board to annually consider setting aside for reduction of the real estate tax rate. That vote was 22-13.

The R&E committee also prepared a report that accompanied the resolution. Although it is not yet available at the Federation website, the summary is well-worth reading, and is included below:

"The annual closeout and allocation process involves substantial sums of money.  Most of the county's identified needs are funded through the annual operating budget and the CIP. However, should unexpected needs be identified, the Board may use available or 'surplus' funds to meet those needs.  And while we commend the County Manager for including a tax rate reduction in this year's budget, it has generally not been the practice to use available or surplus amounts to reduce the tax and fee burden on residents.  What has been lost in this process is the need to contain taxes and fees for homeowners and small businesses, which add to everyone's cost of living.  The resolution simply asks the County Board to consider allocating a 'fair and reasonable' share (at their discretion!) of any available surplus for this purpose.  It does not suggest how much nor that other specific needs be left out."

Incidentally, in adopting the FY 2017 budget, Arlington County Board members directed the County Manager to analyze the various financial reserves (Item #22), specifically telling the Manager to "provide, no later than October 1, 2016, an analysis of the County’s various reserves and funding levels, including criteria for utilization of certain reserves, which will inform a possible update of the County’s financial and debt management policies." If properly done, we expect the analysis will be completed in accordance with Government Finance Officers Association guidance on setting an appropriate level of unrestricted fund balance, and "establish a formal policy on the level of unrestricted fund balance that should be maintained in the general fund for GAAP and budgetary purposes."

Growls readers wishing to tell members of the Arlington County Board how surplus budget amounts should be used are urged to tell members of the Arlington County Board what you think about the services provided by the county government. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

UPDATE (5/11/16): Here's the link to the Arlington Sun Gazette story about the Federation's action last Tuesday on R&E resolution to provide Arlington County taxpayers a fair and reasonable share of available Fiscal Year Closeout funds.

May 06, 2016

A Thought about the Distribution of the Tax Burden

"Economic theory does not provide an answer as to how the tax burden should be distributed among people with unequal incomes. While few would argue that the tax system should be regressive, the degree to which it should be progressive involves subjective value judgments."
~ David L. Brumbaugh, Gregg A. Esenwein, and Jane G. Gravelle
Source:  page 139, "As Certain as Death: Quotations About Taxes," 2010, compiled by Jeffrey L. Yablon, TaxAnalysts.com.

May 05, 2016

A Thought about the Effect of Government Subsidies

"Between 1960 and today, overhead costs as a share of health spending doubled to 8%. But the explosion in overhead costs is shown dramatically in the chart (see at bottom), which measures the relative growth in physicians and health care administrators from 1970 to 2009.

"ObamaCare has only added fuel to this health care paperwork fire. In 2014, insurance overhead costs jumped 12.4%, and the cost of administering government programs jumped more than 10%.

"ObamaCare has only added fuel to this health care paperwork fire. In 2014, insurance overhead costs jumped 12.4%, and the cost of administering government programs jumped more than 10%.

"This phenomenon is not limited to health care.

"Over the past several decades, the federal government has sharply increased the amount of college aid it provides students. According to The College Board, federal aid today is 134% higher than it was in 2000.

"But, as Paul Campos noted in the New York Times, that money simply fueled tuition inflation. “The astonishing rise in college tuition correlates closely with a huge increase in public subsidies for higher education. If over the past three decades car prices had gone up as fast as tuition, the average new car would cost more than $80,000.”

~ John Merline

Source: his Capital Hill article, "Government Subsidies Fuel Overhead Costs in Health Care, Education, posted May 4, 2016, at Investor's Business Daily.

As noted in the first paragraph above, here is the chart:


The op-ed reminds readers to remember this editorial whenever, "someone tries to sell you on a plan to have the government make something 'free.'"

HT to Isaac Morehouse for posting the chart above in an April 30, 2016 post entitled,"Every Industry Gets Worse When Government Gets Involved."

May 04, 2016

It's No Longer "Ordinary Services @ Extraordinary Prices"

When the Arlington County Taxpayers Association (ACTA) produced an annual comic book years ago, we would splash, “Ordinary Services @ Extraordinary Prices” in one of the front page corners. Apparently, our methodology was faulty.

According to the headline of an online story in today's Arlington Sun Gazette, "Arlington scores high for getting good services for tax dollars." Here's their story:

"Arlington ranks second among Virginia jurisdictions in a new ranking of biggest “bang for the buck” when it comes to property taxes.

"The new ranking by SmartAsset looks at communities’ property-tax rates, educational quality and crime rates to come up with an “overall value index.”

"Arlington finished with a 99.51 rating, second only to Page County (99.78) among commonwealth localities. Arlington did considerably better on educational quality, but had a higher property-tax rate and more criminal activity than Page County.

"Rounding out the top five are Loudoun County (99.36), Hanover County (99.33) and Charlotte County (99.29).

"Among other Northern Virginia jurisdictions, Prince William County ranked ninth (98.76) and Fairfax County 10th (98.69)."

The Sun Gazette report says, "SmartAsset is a New York-based financial technology company," adding "the full ranking can be found at www.smartasset.com."

Perhaps the difference results from our higher standards than those of the technicrats who produced the ranking. ElGrowlerGrande will take another look at the Virginia Auditor of Public Accounts' "comparative report" to see whether those comparisons with other Northern Virgina jurisdictions are appropriate.

Growls readers are urged to tell members of the Arlington County Board what you think about the services provided by the county government. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

May 03, 2016

A Thought about the Foundation of a Free Government

"`Tis substantially true, that virtue or morality is a necessary spring of popular government. The rule indeed extends with more or less force to every species of free Government.”

~ George Washington, Farewell Address, 1796

Source: Founders' Quote Database, The Patriot Post.

May 02, 2016

Uncle Sam, Esq. A Legal Army of 25,060, and Growing?

Take a guess. How many lawyers do you think are employed by the federal government?

According to Adam Andrzejewski, founder and CEO of OpentheBooks.com -- reportedly "the world's largest private repository of public spending -- "the number of federal lawyers now exceed the individual public payrolls of twelve states or the top seven largest private law firms in the USA – combined," he writes in an article last Thursday in Forbes magazine.

He provides the following highlights from the report:

  • 25,060 lawyers on the rank and file federal agency payroll with a job classification of ‘general attorney’ cost taxpayers $3.3 billion last year and $26.2 billion since 2007, plus $130 million in bonuses.
  • The average federal lawyer ‘earned’ $132,817.06 plus bonuses in FY2014.
  • The number of federal lawyers exceeds the total public payroll headcount of twelve states including Alaska (25,050); Delaware (23,249); Idaho (20,270); Maine (18,602); Maryland (16,877); Nevada (24,524); New Hampshire (14,694); North Dakota (15,742); Rhode Island (17,073); South Dakota (12,774); Vermont (13,289); and Wyoming (8,500).
  • If the feds were a private-sector law firm, they would exceed the TOP 7 Largest Private Law Firms – combined (24,411): Baker & McKenzie (4,363); Yingke (4,153); DLA Piper (3,702); Dacheng (3,700); Norton Rose Fulbright (3,461); CMS Legal Service (2,522); and Jones Day (2,510).
  • More than half of the lawyers are located inside the Washington, D.C. beltway.

Andrzejewski says that in a sense, "the lawyers have more firepower" than a Pentagon combat division, adding that  "Mario Puzo cautioned in The Godfather, 'A lawyer with his briefcase can steal more than a hundred men with guns.'"

His explanation of the importance of this issue:

"Many times, those lawyers are out to protect the government’s interests, not the public interest.

"Consider the example of North Carolina convenience store owner, Lyndon McLellan.  McLellan was accused of making cash bank deposits less than $10,000 to avoid reporting requirements. The feds dropped the case but kept McLellan’s life savings of $107,000 for two more years. Prosecutors even had the gall to warn him not to go to the media.

"A couple years ago, Chicago teamed up with the feds to rid itself of the numerous little-entrepreneurial electro-platers on the South and Near West sides. After the regulations, the enforcers moved in and today, there are very few left. In just one case, federal lawyers spent $1 million to shutdown a family owned electro-plater – settling for under $50,000. The business never recovered."

The entire 5-page report from OpenTheBooks.com is available here (.pdf). Instapundit comments on the report here. The Daily Caller reports on the report here.

In addition, to the bullying of defendants who are innocent into settlements because of the cost of litigation. there are also  the voluntary civil settlements with criminal defendants with diverting part of the profits to advocacy interests, not to mention the declinations of some of the worst corruption under the excuse of limited prosecutorial resources.

Take a few minutes to write to a member of Congress. Contact information is available at the Library of Congress' Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you.

Kudos to OpenTheBooks.com for their work in making public spending more transparent. Retired U.S. Senator Tom Coburn (R-Oklahoma) provided the following testimonial:

"Open the Books is doing the work I envisioned when the Coburn-Obama bill became law.  Their innovative app and other tools are putting sunlight through a magnifying glass."

May 01, 2016

Economy Starts Year Badly; Grows Only 0.5% in 1st Quarter

The Wall Street Journal's Jeffrey Sparshott starts his front-page, above-the-fold report on Friday (behind WSJ paywall) this way:

"A sharp pullback in business investment and weak global demand dragged down an already-lackluster U.S. economy in the opening months of 2016, the latest setback in a bumpy expansion entering its seventh year.

"Consumers and the housing market kept the U.S. from sliding backward, though only barely. Gross domestic product, the broadest measure of economic output, advanced at a 0.5% seasonally adjusted annual rate in the first quarter, the Commerce Department said Thursday. That marked the economy’s worst performance in two years."

Sparshott added that corporate executives and economists blamed "turmoil across global financial markets" early in the year. He also wrote the first quarters of 2014 and 2015 were followed by a rebound. In addition, he noted the Fed "hasn't budged on interest rates since December (2015) when it raised its benchmark for the first time in nearly a decade," adding the Fed had backed-off raising the rate a full percent in 2016.

On page A2, the Journal included a very informative chart showing GDP changes in various sectors of the economy. For example, while overall GDP increased only 0.5% in the first quarter, business investment decreased 5.9% for the quarter; consumer spending on goods increased 0.1%; exports decreased 2.6%; consumer spending on services increased 2.7%; and, residential spending increased 14.8%. Federal government spending decreased 1.6% while state and local government spending increased 2.9.%.

The GDP numbers are prepared by the U.S. Commerce Department's Bureau of Economic Analysis (BEA), which you can find here.

In a front-page story in Friday's Washington Times, Dave Boyer's lede was, "The White House labored Thursday to explain a first-quarter economic report showing the weakest growth in two years, even as President Obama was trumpeting his mastery of the economy in a New York Times Magazine interview." He went on to write:

"Private economists said the first quarter number was uninspiring, although the economy remains on track for at least modest growth this year.

“The economy essentially stalled in the first quarter, but that doesn’t mean it is faltering,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told the Reuters news service. “Some of the restraints to growth are dissipating. Growth is likely to accelerate going forward.”

"But Nariman Behravesh, chief economist at IHS Global Insight, said the GDP number pointed up a major factor in the role the economy will play in November’s presidential race.

“Why is it that voters are feeling so blue when we have an economy that is close to full employment?” he said. “Part of the problem is a divide between people with college degrees who are doing fairly well and people with high school degrees who are not doing so well.”

Boyer included the following discussion to debate President Obama's economic record:

"The first-quarter number presented a political and PR problem for the White House, coming just as President Obama appeared to be trying to burnish his own legacy overseeing the economy since the global financial crisis of 2008.

"The president told a group of college journalists Thursday that his record on the economy is among his proudest achievements.

“I’m proud about the work we did to save the economy,” Mr. Obama said. “Right after we came in, we were in a free fall and could have experienced a worldwide depression.”

"He expressed a similar view while discussing his legacy last week with British youth, boasting, “Saving the world economy from a great depression, that was pretty good.”

"The president also urged the budding journalists to write “good stories” about the government, using his administration as an example.

"It is very hard to get good stories placed,” Mr. Obama said. “People will assign you stories about what’s not working. It’s very hard for you to write a story about, ‘Wow, this thing really works good.’”

"In an interview with The Times’ magazine, Mr. Obama said he believes the U.S. economy is in better shape than Americans appreciate.

“I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform,” the president said. “By that measure, we probably managed this better than any large economy on Earth in modern history.”

"In the magazine interview Mr. Obama expressed frustration by the suggestion from Republicans that the economy is faltering under his administration.

“I mean, the truth of the matter is that if we had been able to more effectively communicate all the steps we had taken to the swing voter, then we might have maintained a majority in the House or the Senate,” he said.

"The president also believes his administration could have helped more people if he had sold his policies more effectively.

“The fact of the matter is that our failure in 2012, 2013, 2014 to initiate a massive infrastructure project — it was the perfect time to do it: low interest rates, construction industry is still on its heels, massive need — the fact that we failed to do that, for example, cost us time,” Mr. Obama said. “It meant that there were folks who we could have helped and put back to work and entire communities that could have prospered that ended up taking a lot longer to recover.”

"The missed opportunities, he said, 'keep me up at night sometimes.'"

Boyer also wrote, "There are some hopeful signs for the economy: The dollar’s rally appears largely over, oil prices are firming up, and the bulk of the inventory liquidation is out of the way. In addition, the jobs market remains fairly robust."

At the Washington Post's Wonkblog on Thursday, Chico Harlan reiterated the point made above by the WSJ that residential investment was the bright spot in the 1st quarter GDP report. According to Harlan:

"If there was a bright spot, i(t) came in the housing sector, where real residential fixed investment — a measurement for building and remodeling — rose 14.8 percent during the quarter. In a post on the White House web site, Jason Furman, chairman of President Obama’s Council of Economic Advisers, said that the demand for homes was being driven by job growth and relatively low mortgage rates. Household formation was still relatively low compared with historical trends, he said, and had further room to grow."

On Friday, the Wall Street Journal (behind WSJ paywall) tucked the following barb into an editorial:

"President Obama didn’t comment on the first quarter, but the New York Times rolled out an interview with him Thursday, part of a larger apologia for his economic record, in which he offered this beauty: “I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform. By that measure, we probably managed this better than any large economy on Earth in modern history.”

"Mr. Obama has already compared himself favorably to every President except Lyndon Johnson, FDR and Lincoln, so why fake humility in his home stretch?

"The reality is that the first quarter is further evidence of what has been the weakest economic expansion in the postwar era. The 0.5% growth is subject to revision but it follows 1.4% in the fourth quarter. Growth over the last six months has averaged about 1%, and under 2% over the last 12 months. The usual definition of recession is two consecutive quarters of negative growth, which we barely ducked."

Investor's Business Daily (IBD) posted two editorials on Thursday for their Friday paper edition. One editorial focused on the President's boasts "about his economic record." According to IBD:

"The only real problem with the economy, as far as Obama is concerned, is that he hasn’t been selling his successful policies aggressively enough.

“We were moving so fast early on that we couldn’t take victory laps. We couldn’t explain everything we were doing. I mean, one day we’re saving the banks; the next day we’re saving the auto industry; the next day we’re trying to see whether we can have some impact on the housing market,” he told the Times’ Andrew Ross Sorkin.

"Never mind that Obama didn’t “save” either industries. Obama’s only contribution to GM and Chrysler’s bankruptcy process was to protect union interests at taxpayer’s expense. Dodd-Frank didn’t save banks; in fact it’s killed multitudes of community banks. His stimulus was a massively expensive bust.

"The rest of Obama’s boasts aren’t on any firmer ground.

"Obama talks about 14.4 million new jobs since 2010, without noting that working age population grew by 15.8 million over those same months.

"He touts the 5% unemployment rate, but fails to mention that it would be more like 10% if millions of Americans hadn’t given up looking for work altogether."

The second IBD editorial focused more on economic growth. In it, IBD starts by asking:

"So why aren’t businesses investing? First, is rotten policy decisions. We’ve raised investment tax rates under Obama — capital gains, dividends and income taxes on profits — so the after tax returns on business investment are lower. Investment taxes are up by as much as 60% since the end of the George W. Bush years (from 15% to 23.8%). As Arthur Laffer has taught us over and over: tax something, and you get less of it.

"Regulations, like Dodd-Frank are suffocating businesses, as are the rules and mandates under ObamaCare. Energy capital spending has collapsed, mostly due to the free fall in oil and gas prices. It doesn’t help that Obama has declared war on fossil fuels, through EPA strictures and anti-America international accords like the Paris climate change agreement. Hillary has practically boasted to her green billionaire friends that he won’t rest until America’s oil and coal industries are dead. Republicans should tell voters they care more about good jobs here in America than the purely theoretical rise of the oceans.

"The latest dismal economic numbers should put an end to Obama’s insulting cheerleading on a limp economy. More than 80% of voters in primary exit polling say that the economy and jobs are their main concerns, and that is a reflection of a real economy that can’t seem to get its mojo back. After a decade of flat wages, voters are financially stressed out.

"Yet, though the economy stinks, the GOP talks about anything but the economy. The GOP needs to present a growth agenda."

Elsewhere on the Internet, the Washington Examiner's Joe Lawler reported on the 1st quarter GDP, saying the economy began 2016 by suffering the "worst quarter of growth in two years." At the Washington Free Beacon, Ali Meyer also wrote about the BEA's "advance estimate" of the GDP, noting the "second estimate" for the first quarter of 2016 will be released on May 27.

And while you're thinking about the economy and jobs, take a few minutes to write to a member of Congress. Contact information is available at the Library of Congress' Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you.