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September 30, 2016

Massachusetts Governor is September's Porker of the Month

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 named Massachusetts Governor Charlie Baker (R) its September Porker of the Month for signing into law a destructive and foolish tax on citizens who use ride-sharing apps in order to bailout the stalled taxi industry, according to this press release.

Here's how CAGW justified its selection of Gov. Baker as September's Porker of the Month:

"On August 5, 2016, Gov. Baker signed into law a “first of its kind” tax on ride-sharing services like Uber and Lyft.  The five-cent tax will be added onto each ride and is required by law to be hidden from invoices so as to minimize political backlash.  The money raised from the new tax will be used to help the taxi industry develop “new technologies and advanced service.”

"Gov. Baker’s attempt to prop up the politically powerful taxi cartel by taxing its competition is the worst kind of government cronyism.  The state should not be picking winners and losers, or worse, aiding one industry at the expense of another.

"The alarming nature of this scheme is best exemplified by Mark Sternman, the spokesman for the MassDevelopment agency, which will be in charge of the funds.  He admitted that plans for how to spend the influx of cash “still need to be drawn up.”  The fact that a tax is set to be levied with an amorphous and unwritten goal sets a dangerous precedent for Massachusetts taxpayers, as well as other jurisdictions that may be considering similar action.  As CAGW has detailed for decades, when taxpayer dollars are funneled through a system with minimal oversight and nebulous objectives, that money will always be squandered.

"For setting up a wasteful scheme that picks winners and losers by taxing innovative businesses in order to bailout a failed cartel, CAGW names Gov. Charlie Baker its September Porker of the Month."

Kudos to Citizens Against Government Waste (CAGW) for their continuing work on behalf of America's taxpayers.

September 29, 2016

Virginia Slides 4 Places in State Business Tax Climate Index

The Tax Foundation released the 2017 State Business Tax Climate Index yesterday -- the 13th annual edition. The index "gives taxpayers, the media, and policymakers a barometer to judge state tax systems against the rest of the country, while providing a roadmap to reform their tax codes to a simpler, more neutral, more transparent system." The report's authors are Jared Walczak, Scott Drenkard, and Joseph Henchman.

To provide context for the index, here's a portion of the introduction:

"Taxation is inevitable, but the specifics of a state’s tax structure matter greatly. The measure of total taxes paid is relevant, but other elements of a state tax system can also enhance or harm the competitiveness of a state’s business environment. The State Business Tax Climate Index distills many complex considerations to an easy-to-understand ranking.

"The modern market is characterized by mobile capital and labor, with all types of businesses, small and large, tending to locate where they have the greatest competitive advantage. The evidence shows that states with the best tax systems will be the most competitive at attracting new businesses and most effective at generating economic and employment growth. It is true that taxes are but one factor in business decision making. Other concerns also matter—such as access to raw materials or infrastructure or a skilled labor pool—but a simple, sensible tax system can positively impact business operations with regard to these resources. Furthermore, unlike changes to a state’s health care, transportation, or education systems, which can take decades to implement, changes to the tax code can quickly improve a state’s business climate.

"It is important to remember that even in our global economy, states’ stiffest competition often comes from other states. The Department of Labor reports that most mass job relocations are from one U.S. state to another rather than to a foreign location.[1] Certainly, job creation is rapid overseas, as previously underdeveloped nations enter the world economy without facing the third highest corporate tax rate in the world, as U.S. businesses do.[2] State lawmakers are right to be concerned about how their states rank in the global competition for jobs and capital, but they need to be more concerned with companies moving from Detroit, Michigan, to Dayton, Ohio, than from Detroit to New Delhi. This means that state lawmakers must be aware of how their states’ business climates match up against their immediate neighbors and to other regional competitor states.

"Anecdotes about the impact of state tax systems on business investment are plentiful. In Illinois early last decade, hundreds of millions of dollars of capital investments were delayed when then-Governor Rod Blagojevich proposed a hefty gross receipts tax.[3] Only when the legislature resoundingly defeated the bill did the investment resume. In 2005, California-based Intel decided to build a multibillion dollar chip-making facility in Arizona due to its favorable corporate income tax system.[4] In 2010, Northrup Grumman chose to move its headquarters to Virginia over Maryland, citing the better business tax climate.[5] In 2015, General Electric and Aetna threatened to decamp from Connecticut if the governor signed a budget that would increase corporate tax burdens, and General Electric actually did so.[6] Anecdotes such as these reinforce what we know from economic theory: taxes matter to businesses, and those places with the most competitive tax systems will reap the benefits of business-friendly tax climates. (emphasis added)

"Tax competition is an unpleasant reality for state revenue and budget officials, but it is an effective restraint on state and local taxes. When a state imposes higher taxes than a neighboring state, businesses will cross the border to some extent. Therefore, states with more competitive tax systems score well in the Index, because they are best suited to generate economic growth.

"State lawmakers are mindful of their states’ business tax climates, but they are sometimes tempted to lure business with lucrative tax incentives and subsidies instead of broad-based tax reform. This can be a dangerous proposition, as the example of Dell Computers and North Carolina illustrates . . . ."

From Table 1, we learn Virginia's overall rank as well as the component ranks, which were:

  • Overall Rank -- 33
  • Corporate Tax Rank -- 6
  • Individual Income Tax Rank -- 40
  • Sales Tax Rank -- 11
  • Unemployment Insurance Tax Rank -- 39
  • Property Tax Rank --  28

Then in the Executive Summary's Table 2, we learn that Virginia's State Business Tax Index ranking has been sliding since 2014 when it ranked #25 to its 2017 ranking of #33.

  • 2014 -- 25
  • 2015 -- 27
  • 2016 -- 29
  • 2017 -- 33

Virginia's slide of 4 places was exceeded on the 2017 index only by Delaware (-5), Louisiana (-5), and the District of Columbia (-7).

The 6 top ranked states were: Wyoming, South Dakota, Alaska, Florida, Nevada, and Montana. The 6 lowest ranked states were Ohio (45), Minnesota (46), Vermont (47), California (48), New York (49), and New Jersey (50).

The report's 8-page Executive Summary is here. The compete 83-page report is here.

The Tax Foundation included the following map to provide an easy comparison of the  2017 State Business Tax Climate Index:

On August 25, 2016, we growled that Virginia had improved its fiscal ranking on the Mercatus Institute's fiscal ranking of the states, moving from #21 to #19. However, as the Tax Foundation noted, a state's "stiffest competition often comes from other states." With North Carolina's overall ranking improving from #41 in 2014 to its 2017 ranking of #11, it may be time for Virginia to make a major move to improve its business tax climate ranking.

Growls readers are urged to tell their members of the Virginia General Assembly that the Governor and the General Assembly need to assure Virginia's taxpayers that Virginia's policymakers are doing everything possible to improve Virginia's business climate. The following legislators represent Arlington County in the Virginia General Assembly: Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Mark Levine). Contact information for members of the General Assembly can be found here  -- use one of the "quick links" to locate the senator and delegate who represent you.

And tell them ACTA sent you.

Kudos to the nonpartisan Tax Foundation for its efforts to provide principled and insightful research and analysis.

September 28, 2016

Cost To Avoid Last 8 Yrs of National Debt? 44% Tax Increase

Although it may seem to some that we growl only about the national debt, that's not true. However, we do growl about it a lot, e.g., on February 1, 2016, we growled when the national debt hit the $19 trillion mark. Then, on March 16, 2016, we growled when the national debt debt hit a World War II high as a percentage of GDP.

Most recently, we growled on September 1, 2016 when the debt hit $19.5 trillion. Then, yesterday, we growled that the U.S. government is poorly equipped to handle the next recession.

We probably should wait a few more days before growling about the national debt, however, a column today by Terry Jeffrey, editor-in-chief of CNS News (HT Mark Levin Show) caught our attention when he wrote:

"President Barack Obama has presided over a federal government that has already taxed more than $20 trillion away from the American people. But to cover the federal spending he has presided over without increasing the federal debt, he would have needed to increase federal tax revenues by about 44 percent." (emphasis added)

He explains the numbers-crunching this way:

"Since he was inaugurated in January 2009, Obama has completed 91 full months in office, running from February 2009 through August 2016. As this writer has reported at CNSNews.com, the Monthly Treasury Statements show that during those 91 months, the federal government collected approximately $20,197,437,000,000 in total revenues.

"But the Treasury's "Debt to the Penny" database shows that during those same 91 months, the total federal debt increased by $8,878,290,996,028.69. $20,197,437,000,000 in total taxes was not nearly enough to cover the spending the federal government did in the first 91 months of the Obama era.

"To avoid any increase in the federal debt over those 91 months, the federal government would have needed to haul in approximately $29,075,727,996,029 in total taxes. In other words, the government would have needed to impose a tax bill on the American people over those 91 months that was approximately 44 percent higher than the tax bill it did impose.

"What the government did instead was tax away $20,197,437,000,000 and then borrow $8,878,290,996,028 — placing an essentially permanent burden on future American taxpayers who must cover the cost of maintaining that $8,878,290,996,028 in new debt.

"Obama apologists will argue that the debt increased so dramatically during the Obama years because he took office while the Great Recession was still in progress (it started in December 2007 and ended in June 2009), that the massive "stimulus" law he signed in 2009 was needed to get the economy going, and that annual deficits have since declined.

"So are we now going to balance the budget and start paying down the debt — or at least stop it from growing even more? Not under current law, according to the Congressional Budget Office. In an August update to its budget and economic outlook, the CBO estimated that if "current laws generally remained unchanged," the federal government would tax away $41.658 trillion over the 10 fiscal years from 2017 through 2026 while spending $50.229 trillion.

"That would result in a cumulative 10-year deficit of $8.571 trillion. In the last three years of the coming decade, the CBO estimated, the annual deficits would be $1 trillion, $1.128 trillion and $1.243 trillion. In 2017, the CBO estimated, the federal government will tax away 17.9 percent of gross domestic product and spend 21 percent. By 2026, it will tax away 18.5 percent of GDP and spend 23.1 percent."

Jeffrey also writes, "To eliminate the $8.571 trillion deficit that the CBO estimates the federal government will incur over the next decade while spending $50.229 trillion, the federal government would need to increase taxes by almost 21 percent above the $41.658 trillion CBO now estimates it will collect," adding:

"This fiscal year ends Friday. The current law funding the federal government expires that day.

"And that means Obama and the Republican Congress will be making another deal — to spend your money and borrow from your children." (emphasis added)

If you have a few minutes, write your member of Congress. Tell them your position on the national debt. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 27, 2016

U.S. Poorly Equipped to Handle Next Recession

In a paper posted earlier this month, the Committee for a Responsible Federal Budget (CRFB) asks whether the federal government has sufficient 'fiscal space,' which is "the flexibility of a government in its spending choices, and, more generally, to the financial well-being of a government," according to Wikipedia.

More specifically, CRFB says, "the United States is more poorly equipped to handle the next recession than it was to handle the most recent one. This reality is even more troubling because the Federal Reserve has less monetary space due to already-low interest rates and a very large Federal Reserve balance sheet."

Here is what amounts to the paper's executive summary:

"The national debt increased dramatically during and after the Great Recession, rising from 35 percent of Gross Domestic Product (GDP) in 2007 to 66 percent by 2011. Though that recession was uncharacteristically large, debt has also risen in every other recession since 1970 by an average of 5 percent of GDP.

"In past recessions, the country has had reasonably low debt levels, allowing us to withstand automatic increases in debt as unemployment rose and incomes fell, while also having flexibility to adopt fiscal stimulus measures to boost the economy.

"Since 1970, there has been a recession every 5 1/2 years on average. Though it is impossible to predict the timing of the next recession, the fact that one has not occurred in the last 7 years suggests one is likely on the horizon. Unless there is a dramatic reduction in debt, we will enter the next recession with the highest debt level in nearly 70 years (and higher than any time prior to World War II).

"This has led to legitimate concerns about the available “fiscal space” in the United States, or the federal government’s financial capacity to respond to emergencies. While there is not a single definition of fiscal space and it is impossible to know the precise amount, the United States clearly has less fiscal space today than it did a decade ago and is projected to have less in the years to come.

"As a result, the United States is more poorly equipped to handle the next recession than it was to handle the most recent one. This reality is even more troubling because the Federal Reserve has less monetary space due to already-low interest rates and a very large Federal Reserve balance sheet.

Our simulations show that in ten years, a recession could lift debt levels to within 8 to 17 percentage points of GDP of the country’s all-time record high debt levels set after World War II, leaving less capacity for fiscal stimulus than was available during the Great Recession.

"In order to create the necessary fiscal space, policymakers should enact an agenda that slows the growth of federal debt while accelerating economic growth."

Note especially the spreadsheet (Figure 1) on the first page showing debt before and after recessions as a percentage of GDP. In the recession of 1973-1975, debt increased only 2%. After the recession of 1980, debt increased 3%. Debt increased 9% after the recessions of 1981-1982 and 1990-1991, and debt increased 2% after the recession of 2001. However, debt increased 31% after the so-called Great Recession of 2007-2009, increasing from a pre-recession level of 35% to a post-recession level of 66%.

CRFB concludes, saying:

"Having sufficient fiscal space is important to give the federal government flexibility to respond to emergencies and other needs. It is difficult to know how much fiscal space the United States currently has, but the recent run-up in debt has put the federal government in mostly uncharted territory. For that reason, it has become at least a little more likely that the federal government’s fiscal capacity will not be sufficient when substantial new borrowing is needed.

"Lawmakers should work to reduce the current projected high level of debt (as a percent of GDP), rather than letting it rise unsustainably, in part to help provide enough fiscal space to respond to new needs and emergencies. Even reducing the future debt relative to the economy may create more fiscal space today by re-assuring markets and policymakers about the long-term sustainability of the country’s fiscal situation.

"High and rising levels of debt can tie the hands of policymakers, making it more difficult for the government to respond to important national needs, particularly during an economic downturn. President John F. Kennedy once said, “the time to repair a roof is when the sun is shining.” The time to fix the debt and to ensure we have the fiscal space to respond to emergencies is now."

The 5-page paper includes several embedded links.

If you have a few minutes, take a look at the CFRB paper cited above. Then write your member of Congress. Tell them your position on the national debt. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 26, 2016

A Thought about Tax Legislation

"The wise and correct course to follow in taxation and all other economic legislation is not to destroy those who have already secured success but to create conditions under which every one will have a better chance to be more successful."

~ Calvin Coolidge

Source:  page 154, "As Certain as Death: Quotations about Taxes," 2010, compiled by Jeffrey Yablon, TaxAnalysts.com.

For more information about the 30th U.S. President of the United States (1923-1929), visit the Miller Center at the University of Virginia.

September 25, 2016

Where, oh Where is the Science Underlying Climate Change?

At the Daily Caller News Foundation on Thursday, Michael Bastasch reports on a new study that shows "the 'fingerprint' of global warming doesn't exist in the real world."

He begins the article, writing:

"One of the main lines of evidence used by the Obama administration to justify its global warming regulations doesn’t exist in the real world, according to a new report by climate researchers.

"Researchers analyzed temperature observations from satellites, weather balloons, weather stations and buoys and found the so-called “tropical hotspot” relied upon by the EPA to declare carbon dioxide a pollutant “simply does not exist in the real world.”

"They found that once El Ninos are taken into account, “there is no ‘record setting’ warming to be concerned about.”

“These analysis results would appear to leave very, very little doubt but that EPA’s claim of a Tropical Hot Spot (THS), caused by rising atmospheric CO2 levels, simply does not exist in the real world,” reads the report by economist James Wallace, climatologist John Christy and meteorologist Joseph D’Aleo.

“Also critically important, even on an all-other-things-equal basis, this analysis failed to find that the steadily rising atmospheric CO2 concentrations have had a statistically significant impact on any of the 13 critically important temperature time series analyzed,” they wrote.

"When EPA released its CO2 endangerment finding in 2009, it used three lines of evidence to bolster its argument that greenhouse gases threatened human health through global warming.
The crux of EPA’s argument rested on the existence of a “tropical hotspot” where global warming would be most apparent. That is, there should be enhanced warming in the tropical troposphere — the “fingerprint” of global warming.

"EPA’s endangerment finding is the legal basis for agency global warming regulations, including the Clean Power Plan (CPP) now being fought over in federal court. CPP aims to cut power plant carbon dioxide emissions 32 percent by 2030 and could cost $41 billion a year, according to independent estimates.

"D’Aleo and his colleagues looked at the data and controlled for El Ninos and La Ninas. What they found was that once natural oceanic warming and cooling events are accounted for, there’s no warming trend."

Read the remainder of his article for additional details and links to his source material.

One of those links takes you to the August 2016 68-page report by James Wallace, economist, John Christy, climatologist, and Joseph D'Aleo, meteorologist. Here is the report's abstract:

"These analysis results would appear to leave very, very little doubt but that EPA’s claim of a Tropical Hot Spot (THS), caused by rising atmospheric CO2 levels, simply does not exist in the real world. Also critically important, even on an all-other-things- equal basis, this analysis failed to find that the steadily rising Atmospheric CO2 Concentrations have had a statistically significant impact on any of the 13 critically important temperature time series analyzed.

"Thus, the analysis results invalidate each of the Three Lines of Evidence in its CO2 Endangerment Finding. Once EPA’s THS assumption is invalidated, it is obvious why the climate models they claim can be relied upon, are also invalid. And, these results clearly demonstrate--13 times in fact--that once just the ENSO impacts on temperature data are accounted for, there is no “record setting” warming to be concerned about. In fact, there is no ENSO-Adjusted Warming at all. These natural ENSO impacts involve both changes in solar activity and the 1977 Pacific Shift.

"Moreover, on an all-other-things-equal basis, there is no statistically valid proof that past increases in Atmospheric CO2 Concentrations have caused the officially reported rising, even claimed record setting temperatures. To validate their claim will require mathematically credible, publically available, simultaneous equation parameter estimation work.

"The temperature data measurements that were analyzed were taken by many different entities using balloons, satellites, buoys and various land based techniques. Needless to say, if regardless of data source, the results are the same, the analysis findings should be considered highly credible."

The Manhattan Contrarian also reported on the Wallace, Christy and D'Aleo study last Monday, September 19, 2016 in a post entitled, "The "Science" Underlying Climate Alarmism Turns Up Missing." In addition, on Thursday, he posted an item about "Climate Alarmism Airheads."

Finally, in the Science and Environmental Policy Project's (SEPP) latest newsletter, The Week That Was, president Ken Haapala writes about the EPA's so-called endangerment finding and the hot spot, CO2, and importance to U.S. policy.  His write-up is especially help because it provides a history of EPA's endangerment finding.

It's not likely any of this research will change the minds of climate change's true believers. Interestingly, though, there is a website, Skeptical Science, that is set-up as "a non-profit science education organisation." Their goal is to refute the 193 global warming & climate change myths" held by global warming skeptics. At the moment, they currently rank the tropical hot spot as myth #59, and their position is they "see a clear 'short-term hot spot' - there's various evidence for a 'long-term hot spot.'" According to Skeptical Science, "The IPCC confirms that computer modeling predicts the existence of a tropical, mid-troposphere 'hot spot' about 10km above the Earth’s surface."

I bring your attention to the Skeptical Science website chiefly because its expertise is cited in an environmental e-newsletter sponsored by Representative Don Beyer (D-Virginia), who represents portions of Northern Virginia, including Arlington County, Alexandria, Falls Church, and portions of Fairfax County. The September 22, 2016 issue of "Just the Facts" tries to dispel "several of the most common myths related to climate change," and references the Skeptical Science website because it "provides science-based responses of customizable complexity to 193 different arguments often offered by climate 'skeptics.'"

Amazing! The federal government has spent billion of dollars of American taxpayers money for global warming research, and the staff of a member of Congress is using half-baked arguments from an Australian website endorsed by Naomi Oreskes and Michael 'Hockey Stick' Mann. Incredible!

If you have a few minutes, look over the sources cited above, and write your member of Congress. Tell them your position on anthropogenic global warming, and whether you think the government should be raising the cost of electricity and other forms of energy that you use in pursuit of solutions to global warming. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 24, 2016

A Thought about Freedom

“If a nation values anything more than freedom, it will lose its freedom; and the irony of it is that, if it is comfort or money it values more, it will lose that too.”

~ William Somerset Maugham, 1941

Source; Walter E. Williams' collection of quotations.

September 23, 2016

A Thought about the Economy

"The Federal Reserve's holding pattern on interest rates should signal one thing to investors: start brushing up on astrophysics if you want to understand why the world's economy might be approaching a cosmic conclusion.

"Like a massive star exploding into a supernova, debt is rising at a blistering pace. There is currently more than $230 trillion in global debt—that's three times the amount of debt the world held during the credit crisis.

"Central bank intervention has fueled this explosion in debt, including historic levels of quantitative easing, zero interest rate policies and the adoption of negative rates. In the U.S. alone, there's more than $63 trillion in combined public and private debt. In stark contrast, there are only $3.8 trillion total dollars in circulation, and each of these dollars has been lent and borrowed more than 16 times. The amount of leverage continues to climb.

"At the end of every supernova comes a black hole. Black holes have such a strong gravitational effect that nothing can escape their pull. And fundamental laws of physics are distorted at the center of a black hole, also known as the gravitational singularity. We're seeing a similar phenomenon in the investment world: the crushing weight of all this global debt is distorting some fundamental economic principles.

< . . . . >

"What happens at the center of this economic black hole is anybody's guess, but there are some signs to look out for. For example, the Federal Reserve has historically lowered interest rates between 400 and 500 bps during a recession. If they do this in response to the next economic slowdown, that would plunge us deep into negative territory and further contort the natural rules that govern the market. One way to protect a portfolio when you don't know what rule will be distorted next is to maximize the diversification in your portfolio. Because when even your normal safe haven isn't safe, all you can do is diversify your risk."

~ Stephen Scott, managing director at Longboard Asset Management

Source: his 9/23/16 commentary, "The Economy is Edging Closer to a 'Black Hole," posted at CNBC.com.

September 22, 2016

Just 25 Regulations Cost Americans Almost $350 Billion

For the record, we've growled repeatedly about the drag that regulations have on economic development. For example, here on May 2, 2016, here on  May 10, 2016, and here on May 24, 2016.

Consequently, a story posted by the Washington Free Beacon's Elizabeth Harrington this morning caught our attention. She started her story this way:

"Regulations issued under the Obama administration could cost taxpayers roughly $350 billion, according to a new report released by Sen. John McCain (R., Ariz.).

"McCain highlighted 25 major final and pending regulatory actions, including the president’s health care law and numerous new rules from the Environmental Protection Agency, and noted how they affect the state he represents.

“Over the last eight years under the Obama administration, and especially since the president’s 2014 State of the Union address when he committed to using his ‘pen and phone’ to circumvent Congress, the American people have been hit with a barrage of federal regulations that are saddling Arizona’s economy, hurting small businesses, strangling middle class families, and robbing taxpayers—to the tune of $348.7 billion,” McCain said."

She also writes:

"The report is the latest in McCain’s series on wasteful government spending. The new report focuses exclusively on regulation, including Obamacare, which has left 14 of 15 Arizona counties with only one health care provider.

"McCain listed 107 regulations created by Obamacare that have incurred $48.5 billion in costs.

"The report features numerous regulations from the EPA, including the Waters of the United States rule that would place more than 60 percent of all surface water in the country under the control of the federal government. The rule, which went into effect last year, will cost $462.9 Million.

"The agency’s Clean Power Plan to regulate power plants, which the report says could lead to double-digit increases to utility bills, will cost $8.4 billion. The EPA’s ozone standard could cost up to $25 billion.

"The Dodd-Frank financial reform legislation resulted in over 22,000 pages of new regulations. Its 127 new regulations are costing taxpayers $36.2 billion."

The 78-page report, "Arizona Regulatory Wrap-up" is available here. Other reports in Senator McCain's "America's Most Wasted" series can be found here.

Tired of the ever-growing regulatory state? Growls readers are encouraged to write their members of Congress. Tell them you are not just overtaxed, but also over-regulated, Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 21, 2016

A Thought about Freedom, Liberty and Limited Government

"I hope we once again have reminded people that man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics: as government expands, liberty contracts.”

~ Ronald Reagan

Source: Jeffrey Dorfman's 7/4/14 column with 20 quotes on freedom and liberty, posted at Forbes.com.

September 20, 2016

A Blue State, an Income Tax, and Fiscal Discipline

At the Daily Signal last Friday, Fred Lucas described about what happened after Connecticut "introduced an income tax to balance its budget."

According to Lucas:

"In 1991, Connecticut Gov. Lowell Weicker decried the state’s “orgies of spending,” and said his income tax proposal—which would include fiscal discipline—would balance the books.

"Connecticut recently marked the 25th anniversary of the income tax, which has resulted in little to no spending restraint. State spending grew 71 percent faster than inflation from 1991 to 2014 and most of that went toward debt services payments and state employee benefits—which combined grew 174 percent over the rate of inflation, according to a report by the Yankee Institute for Public Policy, a Connecticut think tank. The tax has raised $126 billion in revenue for the state.

"Weicker, a one time Republican senator who won the 1990s governor’s race as an independent, was praised by the left and won the Profiles in Courage Award in 1992 from the John F. Kennedy Presidential Library and Museum.

"However, even Weicker publicly said the state didn’t remain in strong shape, but he blamed the state Legislature and his successors, former Gov. John G. Rowland and current Gov. Dan Malloy, for lack of fiscal discipline.

“After I became governor and we enacted the income tax, the state was in the black,” Weicker told WTNH of New Haven last month. “All of those who cursed me, including … the representatives, John Rowland, everybody went ahead and spent all the money … When Dan Malloy became governor, they kept on spending and then they were right back in the red, which is where we were back in 1990.”

He also points out:

"Connecticut’s income tax rate isn’t as high as some nearby states, such as Maine, New Jersey, New York, and Vermont, which have income tax rates of between 7 percent and 8.5 percent.

"Some of the higher taxes in nearby states is all Connecticut has going for it, said Curtis Dubay, research fellow for taxes and economic policy with The Heritage Foundation.

"The income tax has led to a big expansion [of] state government, it wasn’t used to pay for existing spending,” Dubay told The Daily Signal. “The bottom line is that it was the wrong decision for the state that is bleeding talent and companies. It’s leading Connecticut into a Detroit-style death spiral.”

"The Hartford Courant said, “Overall, Connecticut had the second-highest income tax per capita, at $2,161 from every man, woman and child, just $25 less per capita than New York.” The state’s largest newspaper editorialized, “the state is utterly dependent on the tax … In 1991-92, the state budget was $7.6 billion. This year, it’s $19.76 billion.”

Here are the six key points in the executive summary of the Yankee Institute -- Connecticut's free-market think tank -- report, "Where has all the Money Gone? The 25th Anniversary of Connecticut's Income Tax," which is the basis for Lucas' reporting:

  • Since 1991, the state has taken in $126 billion through the income tax.
  • The top income tax rate has risen steadily since 1991 – from 4.5 percent to 6.99 percent today.
  • State government spending grew 71 percent faster than inflation between 1991 and 2014.
  • In the first three years after the passage of the income tax, the fastest growing area of spending was welfare, which saw a 30 percent increase over those three years. During those same years, the number of people living in poverty in Connecticut grew from 6.8 percent to 10.8 percent, which is where it stands today.
  • From 1991 to today, spending on debt service payments and public employee benefits grew faster than any other category of spending. This category, called “non-functional,” grew 174 percent over the rate of inflation. The next fastest growing category, corrections, grew by 103 percent.
  • The constitutional spending cap, approved by 80 percent of voters in 1992, and passed in conjunction with the income tax, was never fully implemented by state lawmakers; as a result, according to an opinion issued last year by the state’s attorney general, it is not currently in force.

Information worth remembering the next time politicians make promises while raising taxes.

September 19, 2016

American Plutocracy, Courtesy of the U.S. State Department

"A plutocracy is a political form in which the real controlling force is wealth."

 ~ William Graham Sumners, Essay, 1913, at Libertarianism.org

The Daily Caller's Eathan Barton reported last Thursday that John Kerry's State Departmentn funneled millions to his daughter's nonprofit" organization. He writes:

"More than $9 million of Department of State money has been funneled through the Peace Corps to a nonprofit foundation started and run by Secretary of State John Kerry’s daughter, documents obtained by The Daily Caller News Foundation show.

"The Department of State funded a Peace Corps program created by Dr. Vanessa Kerry and officials from both agencies, records show. The Peace Corps then awarded the money without competition to a nonprofit Kerry created for the program.

"Initially, the Peace Corps awarded Kerry’s group — now called Seed Global Health — with a three-year contract worth $2 million of State Department money on Sept. 10, 2012, documents show. Her father was then the chairman of the Senate Committee on Foreign Relations, which oversees both the Department of State and the Peace Corps.

"Seed secured a four-year extension in September 2015, again without competition. This time, the Peace Corps gave the nonprofit $6.4 million provided by the Department of State while John Kerry was secretary of state.

"Seed also received almost $1 million from a modification to the first award, as well as from Department of State funds the group secured outside the Peace Corps.

"The Peace Corps program — called the Global Health Service Partnership (GHSP) — sends volunteer physicians and nurses to medical and nursing schools in Malawi, Tanzania, Uganda and Liberia, according to Seed’s website. More than 40 clinical educators worked at 13 sites in the 2014-2015 program.

"Kerry and government officials colluded to launch the program and ensure that Seed would get the contract."

Read the entire article for many more details about this mini-plutocracy.

What oversight is your member of Congress providing over operations of the U.S. Department of State? Growls readers are encouraged to write their members of Congress. Tell them you object to the conflicts of interest described in Barton's article. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 18, 2016

Tourism, Business Travellers, and Arlington County

The Arlington Sun Gazette reports today that "Arlington saw a 2.9-percent increase in spending from domestic tourists and business travelers in 2015, according to new state figures, retaining its position atop Virginia’s 133 cities and counties."

The online story goes on to report:

"Tourism and business-travel spending in Arlington totaled $3.06 billion in 2015, according to figures compiled by the U.S. Travel Association on behalf of the Virginia Tourism Corp. That’s up from $2.97 billion a year before and is a single-year record for any Virginia locality.

"Although representing only about 5 percent of the commonwealth’s transportation, Arlington garnered more than 13 percent of domestic travel spending statewide during the year. Across the commonwealth, domestic travel spending stood at $22.94 billion, up 2.4 percent.

"Rounding out the top five jurisdictions were Fairfax County ($2.93 billion), Loudoun County ($1.64 billion), Virginia Beach ($1.4 billion) and Henrico County ($852 billion).

The weekly newspaper also wrote:

"According to state figures, domestic travel helped support 25,600 jobs in Arlington and 223,100 across the commonwealth. Travel to and through Arlington brought in $115 million in tax receipts to the state treasury and $85.8 million to the local government."

The Convention & Visitors Service is a part of Arlington Economic Development (AED). The FY 2017 adopted budget for AED show the service has the following functions:

  • Destination Marketing & Promotion
  • Meetings and Conventions Sales
  • Visitor and Convention Services
  • Small Business and Arts Promotion
  • Tourism Infrastructure
  • Hospitality Community Engagement

The C&V Services' budget for FY 2015 were $860,602 (actual), for FY 2016 were $752,659 (revised). and for FY 2017$626,148 (adopted). Spending for the service was affected by the unavailability of the Transient Occupancy Tax). However, the adopted FY 2017 budget shows"

"On May 14, 2016, the County Board adopted an ordinance to amend Chapter 40 (Transient Occupancy Tax) of the Code of Arlington County to add an additional 0.25% transient occupancy tax levy for the purpose of promoting tourism and business travel in Arlington County. The County Board appropriated $1.25 million in revenue and expense to the FY 2017 Travel and Tourism Promotion Fund along with 2.0 limited term FTE’s for the purpose of promoting tourism and business travel in Arlington County."

Growls readers wishing to learn more about travel and tourism in can 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.

September 17, 2016

On the 229th Anniversary of the Constitution

"Our Constitution should keep the government from interfering with the citizens’ rights, the self-evident freedoms of religion, press, petition, speech, assembly, and more. But today, we live in an America where state officials can send police to terrorize the families of those who oppose them politically. They can threaten florists and bakers with personal and professional ruin when they will not be bullied into expressing a message that contradicts their faith.

"But there’s good news. Citizens still have the power to take the federal government in hand and push it back within its constitutional bounds. The Founders knew that the closer power lies to the people, the safer liberty is. They carefully gave the states power to restrain the federal government. Article V of the Constitution reads: “the legislatures of two thirds of the several states, shall call a convention for proposing amendments.” The proposed amendments would then be subject to the approval of three fourths of the states.

"If there ever was a time to use this state-held power, the time is now."

~  Tom Coburn and Mark Meckler

Source: their September 16, 2016 op-ed, "On its anniversary, the Constitution faces trouble," at WashingtonTimes.com.


For more information about an Article V convention, technically a Convention of States, see our August 14, 2013 Growls in which we feature Mark R. Levin's book, "The Liberty Amendments."

And visit the Convention of States website. Be sure to bookmark it!

Today is the 229th anniversary of the signing of the Constitution. Click here, or used the Resources pull-down menu at The Patriot Post for additional resources, e.g., historical documents.

Also, consider expanding your knowledge of Western Civilization by taking one of Hillsdale College's online courses. And, Google has this 7-lesson Constitution Study Guide.

Other resources for the U.S. Constitution include:

September 16, 2016

Blame Political Paralysis for the Economy's Problems

The Daily Caller's Phillip Stucky wrote in his lede yesterday, "Strongly partisan government is to blame for a sluggish U.S. economy, concludes a study from The Harvard Business School." (emphasis added) He goes on, writing:

“The U.S. political system was once the envy of many nations. Over the last two decades, however, it has become our greatest liability. Americans no longer trust their political leaders, and political polarization has increased dramatically. Americans are increasingly frustrated with the U.S. political system,” The Harvard Business School asserts in a study entitled, “Problems Unsolved and a Nation Divided,” published Thursday."

According to Stucky:

"The study asserts that the key to understanding how to fix the nation’s economy is to maintain competitiveness:

U.S. competitiveness has been eroding since well before the Great Recession. America’s economic challenges are structural, not cyclical. The weak recovery reflects the erosion of competitiveness, as well as the inability to take the steps necessary to address growing U.S. weaknesses.

"In other words, the U.S. government hasn’t ensured that the American economy is competitive with the rest of the world. The majority of the study’s recommendations focus on maintaining a strong tax policy. The agenda should be simplicity and efficiency, it concludes." (emphasis added)

He also comments on specific taxes, and says that not everyone who was surveyed agreed with the authors.

Fortune magazine's Alan Murray also reported on the Harvard Business School study in a story headlined, "Harvard Gives the U.S. an 'F''."  According to Murray:

"A new report from the Harvard Business School this morning says the United States is “failing the test” of economic competitiveness.

"The report is part of a project launched in 2011 by Michael Porter and his colleagues to understand the disappointing performance of the U.S. economy in recent years and identify steps to restore growth. Looking at the last five years, it finds unusually slow economic growth, declining productivity growth, slow employment growth, declining labor force participation, stagnant or declining real incomes, and a slowdown in small business formation.

"That’s not to say that the U.S. doesn’t still enjoy some outsized advantages in the global economy. The Harvard study cited strengths in higher education, entrepreneurship, innovation, management and capital markets as key areas where the U.S. still leads. But, it said, “these strengths are being offset by weaknesses,” including the corporate tax code, the K-12 education system, transportation infrastructure, health care, and a broken political system.

“Many of the weaknesses, are in areas driven by federal policy,” the report concludes. “The federal government has made no meaningful progress on the critical policy steps to restore U.S. competitiveness in the last decade or more.”

According to Murray, the Harvard report "offers an eight point plan," e.g., simplifying and streamlining federal regulation or reforming the federal budget and entitlements. More importantly, though, he says, "the number one task is to fix a broken U.S. political system, which has stymied progress on the eight points," and includes this explanation from the report:

“To us, the confused national discussion about our economy and future prosperity in this election year is our worst nightmare. There is almost a complete disconnect between the national discourse and the reality of what is causing our problems and what to do about them. This misunderstanding of facts and reality is dangerous, and the resulting divisions make an already challenging agenda for America even more daunting.”

To read the 70-page Harvard Business School report, Problems Unsolved, "A Nation Divided (September 2016)," click here. Importantly, the report makes the following point about the political system:

"A large majority of HBS alumni believe the political system is obstructing U.S. economic growth and competitiveness. Many alumni who self-identified as Democrat or Republican blame the other party, but a sizable proportion also hold their own party responsible."

And at The Fiscal Times today, contributing editor Ciro Scott writes:

"A new Harvard Business School study on American competitiveness says that the single biggest threat to the economy is politics. It also says that more than at any time in recent history, the U.S. desperately needs a national economic strategy.

"Among those surveyed – including almost 5,000 b-school alumni, MBA students and over 1,000 members of the general public -- the study found that 65 percent of business leaders and 50 percent of the public believe the political system is obstructing economic competitiveness and growth. “Over the last two decades,” the study says, “politics has increasingly become a liability. Today, we believe that our political system is now the major obstacle to progress on the economy, especially at the federal level.”

"The number of laws passed by Congress is at historic lows, trust in Washington is waning, Republicans and Democrats hold more extreme views of each other, and the 2016 presidential candidates have appealed to voters’ worst fears, the study says."

The Fiscal Times story includes the following chart:

Over the last several years, we've growled about many of the items in the eight-point program. Such things as taxes, federal budget, regulation, and energy. Those and other conservative solutions such as free trade will bring Americans greater freedom and prosperity.

Growls readers are encouraged to write their members of Congress. Tell them about the Harvard Business School's eight-point plan that provides a "national economic strategy" to solving many if not most of the U.S. economy's problems. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 15, 2016

A Thought about Republican ('small r') Virtues

"Today, America is split between a party of Carthage that supports identity politics and sees the spoils of politics as prizes to be distributed to favored groups and individuals, and a party of the republic, that, like republican Rome, stands for the equality of all citizens before the law."

~ Rupert Darwall

Source: his 9/14/16 National Review Online essay, "Is America Becoming the New Carthage?" Growls readers are likely to find the essay thought-provoking.

September 14, 2016

Government Fails to Verify ObamaCare Eligibility

In a post for the blog of Americans for Tax Reform, Natalie De Vincenzi reports, "The federal government is failing to verify enrollment and eligibility information for individuals enrolled on Obamacare exchanges or on Obamacare’s Medicaid expansion, according to two reports by the Government Accountability Office (GAO). Individuals who did not meet the eligibility requirements were still being approved, resulting in billions of dollars in payments by the government to fraudulent individuals."

De Vincenzi went on to report:

"GAO performed undercover testing and created fictitious accounts for 2015 and 2016 to check if applicants were being properly verified. GAO tested enrollment verification on both the federal and state exchanges. In both cases, GAO found insufficient verification of its fictitious applicants and determined that the marketplaces still remain vulnerable to fraud.

"With its passage, Obamacare created two new government programs: exchanges for private insurance and the expansion of Medicaid. In order for enrollees to be eligible for subsidies or Obamacare’s Medicaid expansion, applicants must meet basic eligibility requirements. To be eligible, an applicant must provide their Social Security number, proof of citizenship, household income, and family size. This information is then verified by an electronic verification system or approved by HHS."

In a 58-page report, the General Accountability Office (GAO) reported on their results of undercover enrollment testing for the federal marketplace and a selected state marketplace for the 2016 coverage year (GAO-16-784; published September 12, 2016). In a second report, GAO testified before the House Subcommittee on Health and Oversight and Investigations (GAO-16-882T; September 14, 2016) on the results of their undercover testing.

De Vincenzi then observes, "These latest findings should not be surprising. Watchdog groups have raised concerns that the federal government is not properly verifying enrollment eligibility for Obamacare on numerous occasions. Since the start of 2015, government watchdog groups have released warnings at least ten other times. One of those reports was a 62-page report (GAO-16-29; February 23, 2016), GAO recommended the Centers for Medicare and Medicaid Services (CMS) "should act to strengthen enrollment controls and manage fraud risk."

In addition, she identified the nine other identified the other watchdog reports, including links and a brief comment on each.

The GAO reports, as well as those by those by The Inspector General for Tax Administration (TIGTA), the Health and Human Services (HHS) Inspector General, and Minnesota's Office of Legislative Auditor document just how poorly ObamaCare's information technology was designed. So not only are billions of taxpayers dollars being wasted for ineligible ObamaCare recipients, but billions were wasted for shoddy information technology services.

Growls readers are encouraged to write their members of Congress. Tell them taxpayers deserve better, not to mention better representation. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 13, 2016

Fed. Govt. Collects $2.91 Trillion; Deficit Still $621 Billion

The Washington Free Beacon's Ali Meyer reported today, "The federal government collected $2,910,151,000,000 in taxes in the first 11 months of fiscal year 2016 and still ran a deficit of $620,771,000,000 during this time, according to the latest monthly Treasury Department statement."

She also reported:

"The $2.91 trillion that the federal government collected this year was only slightly lower than the $2.93 trillion the government collected last year in the first 11 months of fiscal year 2015, after adjusting for inflation. The 2016 fiscal year begins on Oct. 1, 2015, and runs through Sept. 30, 2016.

"Almost half of the $2.91 trillion that the government collected came from individual income taxes. The government collected $1,386,447,000,000 in individual income taxes in the first 11 months of fiscal year 2016.

"The Treasury Department has been tracking these data on its website since 1998. In that fiscal year, the federal government collected $2.27 trillion in inflation-adjusted revenue in the first 11 months of that fiscal year. This means that since 1998, tax revenues have increased 28 percent.

"Although the federal government brought in approximately $2.91 trillion in revenue in the first 11 months of fiscal 2016, according to the Treasury, it also spent approximately $3.51 trillion, leaving a deficit of approximately $620 billion."

The latest Monthly Treasury Statement of Receipts and Outlays of the United States Government for FY 2016 through August 31, 2016 is available here. It is 36-pages. Cumulative outlays by function for the first 11 months of FY 2016 were:

  • Defense -- $535 billion
  • Social Security -- $839 billion
  • Medicare -- $525 billion
  • Interest on the Debt -- $258 billion
  • Other -- $1,373 billion

You can find all monthly states going back to FY 1998 here.

If you think federal spending is out of control, some members of Congress are proposing a solution. A March 16, 2016 editorial by Investor's Business Daily (IBD) observed:

"House Republicans have a budget plan that would balance the budget in 10 years entirely through spending cuts. But it’s not likely to go anywhere because of the $30 billion in extra spending this year.

"Budget Committee Chairman Tom Price deserves praise for producing a plan that would restore fiscal sanity to the federal government. Instead of ever-increasing deficits and a huge increase in national debt, the plan would put the government on a steady glide-path to a balanced but by 2026.

"And it focuses on the right problem, which is out-of-control federal spending. Even with tax revenues projected to climb to historic highs, spending is slated to climb far more rapidly, as the nearby chart graphically indicates. This plan cuts projected spending $6.5 trillion over the next decade.

"The House plan also provides a striking contrast to President Obama’s budget, which projects that deficits will start climbing steadily after 2018 -- both in dollar terms and as a share of GDP.  It relies almost entirely on tax hikes for the relatively meager deficit cuts it does propose.

"While Obama’s budget kicks every problem budgetary can down the road, the House budget tackles them all head on.

"On the entitlement side, the House budget plan leaves Social Security largely untouched, but once again proposes reforming Medicare along the lines that Rep. Paul Ryan has advocated for years. It would give seniors a fixed amount that they can put toward a private plan of their choice.

"It once again proposes switching Medicaid from a matching grant to states -- which encourages overspending -- to fixed payments. States would have far more flexibility in designing health programs for their poor, and any money they save is there’s to keep.

"Overall, the plan would reduce entitlement spending by $2.9 trillion, saves another $2 trillion by repealing ObamaCare, and cuts discretionary spending by $690 billion. By 2026, it figures that annual interest payments on debt will be $210 billion lower than under current law."

If you don't think the federal budget is out of control, take a look at the following chart that accompanied the IBD editorial:

There is nothing magical about the Republicans proposed budget solution. Unfortunately, your humble scribe is not aware of another proposal that would bring the federal budget into balance in 10 years, 20 years, or ever. In the end, the IBD calls it a "fiscally conservative budget plan."

We encourage Growls readers to write their members of Congress to learn what their representatives in Congress are doing to bring sanity to the federal government's budget. Take a few minutes to write your members of Congress. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 12, 2016

Taxpayer-Financed Loans to Failed Businesses. How Much?

At the Daily Signal last Friday, Rachel Greszler, senior policy analyst in the Heritage Foundation's Center for Data Analysis, writes, "The Astonishing Amount of Taxpayer-Financed Loans That Have Gone to Failed Businesses."

According to Greszler:

"Small businesses are America’s backbone. They employ more than half of America’s workforce, and for every large business (more than 500 employees), there are 1,500 small ones.

"Most small business owners—those who risked their own money to start their business—would be shocked to hear that the government’s Small Business Administration has written off $17.5 billion dollars of taxpayer-financed loans and loan guarantees to 160,000 failed businesses since 2000. (emphasis added)

"Starting a small business is costly. There are mountains of rules and regulations that take time and money to comply with, as well as significant physical costs for a building, equipment, and employees. Often those costs can’t be recouped if a business fails.

"That’s why many small business entrepreneurs seek loans. Without them, many small businesses would never get a chance to open their doors.

"Banks don’t give loans to just any entrepreneur that walks in the door, however. They require a credible business plan, demonstrating how the business will be able to prosper and pay back its loan, and often times, lenders require borrowers have significant financial assets outside the loan.

"Some would-be small businesses don’t have credible plans or financial assets and they can’t get loans from the private sector, at least not at interest rates that they can afford. But they may qualify for an affordable loan or loan guarantee from the Small Business Administration.

"The Small Business Administration is tasked with helping small businesses that can’t, for whatever reason, get financing from the private sector. But if the private sector won’t lend to a business, there’s usually a good reason. The lender must think the risk of failure outweighs the potential profit from the loan."

But here's the key point, as she points out:

"With the government’s Small Business Administration loans, there effectively is no risk to the agency because the cost of a failed loan doesn’t come out of its operating budget, but is instead passed on to taxpayers. (emphasis added)

"If a private bank had to write off $17.5 billion worth of bad loans, it would almost certainly go out of business, but not the Small Business Administration. It can just ask Congress for more money when it incurs big loan losses." (emphasis added)

Just under an average of  $110,000 for the 160,000 loans to failed business. Sheesh!

The 6-page report by OpentheBooks.com is available here, and includes a searchable database.

The highest defaulting categories included:

  • Full-Service Restaurants -- $1.30 billion
  • Hotels and Motels -- $1.23 billion
  • Limited-Service Restaurants -- $0.82 billion
  • Gasoline Stations with Convenience Stores -- $0.56 billion

Of the almost $18 billiion in defaulted SBA $2.2 billion of the bad debt came from franchises, including:

  • Choice Hotels -- $95.3 million
  • Holiday Inn -- $88.4 million
  • Comfort Inn -- $83,8 million
  • Days Inn -- $81.9 million
  • Quiznos -- $58.1 million
  • Ramada Inn -- $49.5 million
  • Cold Stone Creamery -- $49.0 million

California ($2.79 million in gross charge-offs), Florida ($1.57 billion), and Texas ($1,50 billion) were the top three defaulting states. Virginia ranked #19, with $305 million in gross charge-offs.

Rachel Greszler summarizes the situation, writing:

"While there’s nothing wrong with upscale businesses or well-known franchises, it’s hard to believe these businesses couldn’t obtain loans from the private sector, without taxpayer subsidies.

"The government should not be in the business of picking winners and losers, using taxpayer dollars to finance businesses deemed least likely to succeed by the private sector.

"The government should instead encourage small business formation and growth by reducing regulations and costs across the board, creating an equal—and easier—playing field for all businesses."

Here's the link, again, to Greszler's Daily Signal article.

Not happy about this abuse of your taxpayer dollars? Then take a few minutes and tell your members of Congress what you think about it. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 11, 2016

Political Appointee Lives Well at Taxpayer's Expense

At the Hot Air blog today, Jazz Shaw introduces us to the Commerce Department appointee who "had a great time on the taxpayer dime," and begins the story this way:

"You may want to look into getting yourself one of those government jobs after all. It turns out that life can be pretty sweet, even in the supposed era of federal responsibility, reduced government waste and elimination of fraud. The Inspector General for the Commerce Department released a report this week introducing us to someone who figured that out pretty quickly when he landed a position there in 2014 . . . ."

Shaw links to a Government Executive story posted last Friday by Charles Clark who wrote:

"When a former investment banker joined the Commerce Department, among his earliest agenda items were renovations of his “beat up and run down” office and an upgrade to VIP travel accommodations, according to an inspector general’s report released on Thursday. (emphasis added; link available in original)

"By pressuring his staff and by submitting poorly detailed documentation that eluded Commerce leaders, the official spent thousands of extra dollars on office improvements and stays in first-class hotels before being reimbursed a rate higher than the normal per diem, investigators found.

"Identified only as “a political appointee” in the report, he was named in The Washington Post as Stefan Selig, undersecretary for international trade, who left Commerce quietly in June after two years. )emphasis added)

“Within weeks of being confirmed to his new position, Political Appointee visited his office suite in the Department’s Washington, D.C., headquarters for the first time” and commented that “it looked awful,”  the report said. The appointee noted chipping and peeling paint, stained carpet, a non-functioning toilet with urine in it, non-matching furniture and some exposed wiring. “Indeed, Political Appointee said, conditions in the suite were such that a member of his family ‘almost started to cry’ upon viewing the space.”

"Renovations were ordered that included a $10,000 carpet; $1,800 to have three doors stripped down and refinished; and $3,100 for reconfiguring light switches and “reinstalling a 50-inch television, apparently so that the television would sit at a more comfortable viewing angle,” said the IG, who was alerted by an anonymous tipster in 2015. They would appear to exceed the $5,000 limit on unapproved renovations set by Congress."

Read Clark's entire article for additional details.

The 45-page U.S. Commerce Department Inspector General Report (Final Report 15-0444; September 2016) into the "travel and other improprieties" is available here.

Not happy about the abuse of your taxpayer dollars, then take a minute or two and tell your members of Congress what you think about it. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 09, 2016

Average Paychecks in Arlington County Declines in 1Q

According to an online story in yesterday's Arlington Sun Gazette, "The average paycheck for those employed in Arlington County declined from the first quarter of 2015 to the first quarter of 2016, according to new federal data, but remains among the 10 highest in the nation."

The Sun Gazette went on to explain:

"Those employed in Arlington – no matter where they live – saw an average weekly paycheck of $1,734 for the January-to-March time frame, according to figures reported Sept. 7 by the federal Bureau of Labor Statistics.

"That’s a decline of 0.2 percent from a year before, but the Arlington performance was better than the nation as a whole, which saw average weekly pay drop 0.5 percent to $1,043 during the same period.

"Among the nation’s 344 largest counties, Arlington ranked 187th from the top in wage growth. Nationally, 164 of the nation’s largest counties saw year-over-year increases, with Clayton, Ga., up the highest at 15.5 percent, followed by King County, Wash. (5.1 percent) and San Mateo County, Calif. (4.8 percent).

"Nationally, Arlington ranked ninth in average weekly wage, with the highest reported in New York County (Manhattan), N.Y., at $2,783, and Santa Clara, Calif., at $2,210.

"The District of Columbia ranked just above Arlington in eighth place at $1,766, and was the only other locality in the region to reach the top 10."

So, while Arlington County paychecks dropped, the good news is that Arlington County paychecks remain in the top 10% of more than 3,100 counties.

Moreover, if the Arlington County Board wants to jack-up the real estate tax rate come next spring, I doubt the Board will stop to remind themselves about this news report.

September 07, 2016

A Thought About Misleading With Statistics

In his most recent column at Investor's Business Daily, Thomas Sowell reminds us, "Even if the statistics themselves are absolutely accurate, the words that describe what they are measuring can be grossly misleading."

Here is a portion of Sowell's explanation:

"Household income statistics are an obvious example. When we hear about how much more income the top 20% of households make, compared to the bottom 20% of households, one key fact is usually left out. There are millions more people in the top 20% of households than in the bottom 20% of households.

"The number of households is the same but the number of people in those households is very different. In 2002, there were 40 million people in the bottom 20% of households and 69 million people in the top 20%.

"A little over half of the households in the bottom 20% have nobody working. You don't usually get a lot of income for doing nothing. In 2010, there were more people working full-time in the top 5% of households than in the bottom 20%.

"Household income statistics can be very misleading in other ways. The number of people per household is different among different racial or ethnic groups, as well as from one income level to another, and it is different from one time period to another.

"The number of people per American household has declined over the years. When you compare household incomes from a year when there were 6 people per household with a later year when there were 4 people per household, you are comparing apples and oranges."

So, here's the bottom-line, according to Sowell, who raises several important questions to keep us from comparing apples and oranges:

"So household income statistics can show an economic decline, even when per capita income has risen.

"Why do so many people in the media, in academia and in politics use household income statistics, when the number of people per household can vary so much, while individual income statistics always mean the average income of one person?

"Although individual income statistics can give a truer picture, not everyone makes truth their highest priority. Alarming news that household incomes have failed to rise, or have actually fallen, is more exciting news for the media, or for alarmists in academia or in politics.

"Such alarming news can attract a larger audience for the media, and can justify an expansion of government programs dear to the heart of academics on the left, or to politicians who just want more power to hand out goodies and collect more votes from the beneficiaries."

The link to the entire column is here. Sowell closes, mentioning, "Such statistical distortions are discussed more fully in my book 'Wealth, Poverty and Politics.'" It is just one of several books he's written about economics. For information about them, and others. click here for his website.

HT Mark Perry and his inimitable blog, Carpe Diem, where he provides some additional data.

September 06, 2016

A Thought About Power

"Wherever the real power in a Government lies, there is the danger of oppression."

~ James Madison. letter to Thomas Jefferson,1788

Source: Founders Quote Database, at PatriotPost.com.

September 05, 2016

A Thought About 'Social Justice'

“The idea of social justice is that the state should treat different people unequally in order to make them equal.”

~ Friedrich August von Hayek

Source: AZQuotes.com.

September 04, 2016

What? More Government Workers Than Manufacturing Workers

According to CNS News on Friday, September 2, points out that "government workers now outnumber manufacturing workers by 9,932,000."

According to the story by Terry Jeffrey, editor in chief:

"Government employees in the United States outnumber manufacturing employees by 9,932,000, according to data released today by the Bureau of Labor Statistics.

"Federal, state and local government employed 22,213,000 people in August, while the manufacturing sector employed 12,281,000.

"The BLS has published seasonally-adjusted month-by-month employment data for both government and manufacturing going back to 1939. For half a century—from January 1939 through July 1989—manufacturing employment always exceeded government employment in the United States, according to these numbers.

"Then, in August 1989, the seasonally-adjusted employment numbers for government exceeded the employment numbers for manufacturing for the first time. That month, manufacturing employed 17,964,000 and government employed 17,989,000.

"Manufacturing employment in the United States had peaked a decade before that in June 1979 at 19,553,000.

"From August 2015 to August 2016 seasonally-adjusted manufacturing employment declined by 37,000--dropping from 12,318,000 last August to 12,281,000 this August.

"The 22,213,000 government employees in August, according to the BLS, included 2,790,000 federal employees, 5,120,000 state government employees, and 14,303,000 local government employees."

At the moment, there are 541 reader comments, including one by "Doc3" who says, "We are on the path to being Greece. We cannot afford the government that has grown like a malignant tumor. We need to lay off half of the government and shut entire departments like HUD and the Department of Education."

Take a look at the following chart, which Jeffrey includes in his story, for the trends, and then show it to your favorite federal politician should he or she have the courage to hold a town hall meeting:


At the Hot Air blog on Saturday, Jazz Shaw looked at the numbers in Jeffrey's CNS News article, and observed:

"So basically we reached a tipping point way back in 1989. Before that, manufacturing jobs outnumbered government workers stretching back as far as you’d care to look. For the first ten years after that initial reversal the gap only opened slowly, but not because we were losing jobs. The economy was booming for the next decade. Sadly, government was growing even faster. And then after 9/11 things really went to hell in a handbasket. Now the government behemoth is an employment giant compared to manufacturing.

"Why should we care? Because with very few exceptions in aerospace and a few other niche endeavors, the government doesn’t actually produce anything. It’s a necessary function in a democratic republic and you need people to keep it running, but it’s not really contributing anything to the general productivity of the nation. In fact, too much of government’s role is to actually retard productivity in the private sector courtesy of our endless chain of regulatory agencies.

"But now government employment has left actual productive jobs in the dust. And the way things are going I wouldn’t expect that to change any time soon."

Not happy about the reduced number of manufacturing jobs, but the growth in the number of government employees? Satisfied that one or the other of the two major political party candidates -- or even one of the third-party candidates -- has the answer to increasing the number of manufacturing jobs and reducing the number of government employees? Be sure your vote for president counts! Then take a few minutes and tell your members of Congress what you think about the trend in manufacturing and government jobs. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 03, 2016

Trade Balances Before and After NAFTA

With all the talk about international trade in the 2016 presidential campaign by candidates in both major political parties, a story at CNS News on Wednesday, August 31, caught our attention.

First, though, a bit of background. NAFTA -- the North American Free Trade Agreement -- is defined this way at Investopedia:

"A regulation implemented January 1, 1994 in Mexico, Canada and the United States to eliminate most tariffs on trade between these nations. The three countries phased out numerous tariffs, (with a particular focus on those related to agriculture, textiles and automobiles), between the agreement’s implementation and January 1, 2008. NAFTA’s purpose is to encourage economic activity between the United States, Mexico and Canada."

Investopedia goes on to exaplain:

"About one-fourth of U.S. imports, (especially crude oil, machinery, gold, vehicles, fresh produce, livestock and processed foods), comes from Canada and Mexico, which are the United States’ second- and third-largest suppliers of imported goods. In addition, about one-third of U.S. exports, particularly machinery, vehicle parts, mineral fuel and oil, and plastics are destined for Canada and Mexico.

"The Clinton administration, which signed the law that was developed under the George H. W. Bush administration, believed NAFTA would create 200,000 American jobs within two years and 1 million within five years because exports played a major role in U.S. economic growth. They anticipated a dramatic increase in U.S. imports to Mexico under the lower tariffs. Critics, however, were concerned that NAFTA would move U.S. jobs to Mexico. While the United States, Canada and Mexico have all experienced economic growth, higher wages and increased trade with each other since NAFTA’s implementation, experts disagree on how much NAFTA contributed to these gains, if at all.

"NAFTA was supplemented by the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC). These side agreements were intended to prevent businesses from relocating to take advantage of lower wages, more lenient laws about worker health and safety, and less strict environmental laws.

"NAFTA did not eliminate regulatory requirements on companies wishing to trade internationally, such as rule of origin regulations and paperwork requirements that determine whether a good can be traded under NAFTA. The free trade agreement also contains administrative, civil and criminal penalties for businesses that violate any of the three countries’ laws or customs procedures."

Click-on the Investopedia link to watch a video, slightly over 1 minute, about NAFTA.

Encyclopedia Britannica adds that NAFTA was a "controversial trade pack, which "was inspired by the success of the European Economic Community (1957–93) in eliminating tariffs in order to stimulate trade among its members. Proponents argued that establishing a free-trade area in North America would bring prosperity through increased trade and production, resulting in the creation of millions of well-paying jobs in all participating countries.

For additional background information about NAFTA and other United States trade agreements, visit the Office of the United States Trade Representative.

Let's start with the numbers. According to Terry Jeffrey, CNS News' editor-in-chief:

"In 1993, the last year before the North American Free Trade Agreement went into effect, the United States ran a $1,663,300,000 merchandise trade surplus with Mexico, according to the trade data published by the U.S. Census Bureau.

"In 2015, the last full year on record, the U.S. ran a merchandise trade deficit with Mexico of $60,662,800,000.

"In 1994, the first year NAFTA was in effect, the U.S. ran a merchandise trade surplus with Mexico of $1,349,800,000—down from the $1,663,300,000 surplus of 1993.

"1994 is now the last year the United States ran a merchandise trade surplus with Mexico.

"In 1995, the second year under NAFTA, the U.S. ran a merchandise trade deficit of $15,808,300,000 with Mexico.

"So far, the largest merchandise trade deficit the United States has run with Mexico was in 2007 when it hit $74,795,800,000. (The last recession started in December of that year and ended in June 2009).

"In the first half of this year (January through June), the U.S. has run a trade deficit with Mexico of $31,571,300,000.

"While the U.S. trade in goods with Mexico has expanded greatly since NAFTA took effect, U.S. imports from Mexico have grown faster than U.S. exports to that country.

"In 1993, the year the U.S. ran a $1,663,300,000 merchandise trade surplus with Mexico, the U.S. imported $39,917,500,000 from there, and exported $41,580,800,000.

"In 2015, when the U.S. ran a merchandise trade deficit of $60,662,800,000 with Mexico, the U.S. imported $296,407,900,000 and exported $235,745,100,000."

The chart below shows that while "U.S. trade with Mexico has expanded, imports have grown faster than exports."


Mr. Terry also reports the trade deficit with Canada.

Finally, he reports NAFTA's legislative history:

"The North American Free Trade Agreement created a free-trade zone between the United States, Canada and Mexico. It was signed by President George H.W. Bush in December 1992—after he had been defeated in the November 1992 presidential election by Bill Clinton. The House and Senate approved the agreement in 1993 under a fast-track procedure that required majority votes in both houses—rather than the two-thirds majority needed in the Senate to ratify a treaty.

"The legislation approving NAFTA passed the House on a 234-200 vote and it passed the Senate on a 61 to 38 vote. President Bill Clinton signed it in December 1993."

An early version of the story reported that the 234-200 vote in the House included 43 Republicans and 156 Democrats voting against it. The 61-38 Senate vote had 10 Republicans and 28 Democrats voting against it.

The Council on Foreign Relations provides a "backgrounder" -- updated July 26, 2016 -- about "NAFTA's economic impact."

For a brief discussion of international trade, visit this Wikipedia entry, and CNBC reported yesterday, "The U.S. trade deficit fell more than expected in July as exports rose to their highest level in 10 months, offering further evidence that economic growth picked up early in the third quarter."

Not happy with NAFTA? Think nations of the world are taking advantage of the United States in foreign trade? Then take a few minutes and tell your members of Congress that United States trade policies need to ensure free trade as well as fair trade. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

September 02, 2016

'Free Stuff' Earns Sen. Chuck Schumer Porker of Month

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 recently "named Senator Chuck Schumer (D-N.Y.) its August Porker of the Month for his leading role in the effort to create supposedly “debt free” college for all students, which would exacerbate rather than resolve the student loan crisis."

Here is how CAGW justifies the award to Sen. Schumer:

"As coeds across the nation return to school, the debate over their increasing loan debt has intensified.  According to the Federal Reserve Bank of New York, student loan debt hit an all-time high of $1.26 trillion in Q2 2016, which is a $69 billion increase from the previous year.  Upon graduating with a bachelor’s degree, the average student owes more than $37,000, more than double the amount they owed in the early 1990s.  More than 43 million Americans are liable for these loans.

"The cause of this dramatic increase in student loan debt is simple:  Increased federal government subsidies.  Over the past decade, there has been a 69 percent increase in students borrowing from federal loan programs.  The federal government now provides about 71 percent of all student aid.  The consequential increase in student access to credit enables colleges and universities to continue to hike prices, which necessitates more loan borrowing.  Tuition costs have increased 153 percent over the last three decades for private colleges and 231 percent for public universities, faster than prices for both food and healthcare.

"Senator Schumer completely fails to comprehend the root cause of the student loan bubble.  He proposed S. 2677, the In the Red Act, earlier this year that would ensure “debt free college for every student in the country.”  Putting aside the steep price tag on his supposedly “free” plan, Senator Schumer offered a puzzling assessment of the student loan bubble on February 12, 2016:  “A Ford and a college education used to be the same price, but these days an education at NYU costs $60,000 a year, compared to $20,000 for a Ford today.”

"Senator Schumer’s silly comparison between the open and highly competitive auto market and the closed and heavily subsidized higher education sector lays bare his flawed knowledge of how government intervention hurts students.  His plan would continue the vicious cycle of increased subsidies and higher loans that have already saddled America’s next generation with mountainous debt."

To summarize, CAGW writes, "For his utter lack of understanding of the student loan bubble and his efforts to inflate it, CAGW names Sen. Chuck Schumer its August Porker of the Month."

Take a few minutes to write your members of Congress to tell them about the need for a sustainable federal budget. Contact information is available at the Library of Congress' Congress.gov. 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 written response. And tell them ACTA sent you.

Kudus to Citizens Against Government Waste (CAGW) for their continuing efforts to bring about sanity in the federal government.

September 01, 2016

Mark Your Calendar: National Debt Hits $19.5 Trillion

Peter Kasperowicz of the Washington Examiner wrote in his lede paragraph today, "The national debt hit $19.5 trillion for the first time ever this week, a little more than seven months after it hit the $19 trillion mark."

He then went on, writing:

"The debt clocked in at $19.51 trillion at the end of Wednesday, the Treasury Department reported Thursday afternoon. Precise debt figures on any given day are released on the following business day.

"The national debt hit $19 trillion for the first time ever on Jan. 29.

"When President Obama took office in early 2009, the total debt was $10.63 trillion, which means it has almost doubled under his watch.

"The Congressional Budget Office reported in August that the debt-to-GDP ratio will match levels not seen since 1950 by the end of the current fiscal year.

"The debt is the sum total of annual budget deficits, plus interest, and those annual deficits are soon expected to rise again in the coming years.

"President Obama has boasted of cutting the annual budget deficits by more than two-thirds over the last few years. But it was under his administration that those deficits soared north of $1 trillion, and only in the last few years did they return to the highest deficit levels ever seen under his predecessor, President George W. Bush.

"While he was a senator, Obama criticized Bush for presiding over those same deficit levels, and said they represented a failure of leadership on the part of Bush."

Here is a chart provided in the Washington Examiner story of the last few days' debt numbers:


When we growled on Sunday, we wrote, "The IBD editorial concludes by observing, 'But if Trump and Hillary have their way, the country will face another, far worse problem: runaway entitlements and growth-choking national debt.'" A financial meltdown is not a matter of if, but when.

Last week, Dan Mitchell pointed out in his weekly op-ed for CNS News, "It’s not a big day for normal people, but today is exciting for fiscal policy wonks because the Congressional Budget Office has released its new 10-year forecast of how much revenue Uncle Sam will collect based on current law and how much the burden of government spending will expand if policy is left on auto-pilot." He then went on to note that it's still possible to balance the federal budget with modest spending control.

Tired of Congress failing to bring the federal budget under control? If so, then take a couple of minutes and write one of your Congressional representative to tell them your thoughts about deficits, debt, and a balanced federal budget. Contact information is available at the Library of Congress' Congress.gov website. 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 written response. And tell them ACTA sent you.