President Obama tells us in the Overview to his Fiscal Year 2014 Budget just released last week that his budget proposes, “more than $2 in spending cuts for every $1 of new revenue from closing tax loopholes and reducing tax benefits for the wealthiest.”
But President Obama’s budget does not propose any spending cuts at all on net, not even reductions from expected increases in spending. Instead, his budget proposes to add $160 billion in increased spending just next year to the projected growth in spending, even increasing spending for the current 2013 fiscal year by another $61 billion as well. Over the next 10 years, President Obama’s budget proposes to add nearly $1 trillion to the projected growth in spending, proposing to increase annual spending by 2023 by $2.1 trillion as compared to 2012.
President Obama’s budget even proposes to cancel the sequester cuts, because he can’t bear to cut even 1% of federal spending from the growth in spending. His budget proposes to spend $46.5 trillion overall over the next 10 years, even more than the Senate Democrat budget, the highest government spending in world history.
Indeed, President Obama’s talk of “spending cuts’ in his budget Overview is followed by pages of proposals for increased spending. That reflects Obama’s basic thinking that what drives economic recovery and growth is increased government spending. But Obama’s economic record is a thorough rebuttal to that thinking. Not one of those increased spending proposals in his 2014 budget would contribute to increased economic growth and prosperity on net.
Still More Tax Increases
Besides these runaway spending increases, Obama’s budget also proposes $1.1 trillion in additional tax increases, on top of the $1 trillion in tax increases already going into effect this year under Obamacare, and the $600 billion in tax increases on the nation’s job creators, investors, and successful small businesses from the expiration of the Bush tax cuts for them in January.
Those new proposed tax increases include a doubling of the federal tax on cigarettes, in direct violation of the President’s campaign pledge not to increase taxes on singles making less than $200,000, and couples making less than $250,000, “in any form.” It includes the so-called “Buffett Rule” doubling the top capital gains tax rate from when Obama entered office. That would impose on America the fourth highest capital gains tax rate in the world, to go with effectively the world’s highest marginal corporate income tax rate.
Throughout his first term, and in this budget, President Obama has repeatedly claimed his policies have involved pro-growth tax cuts as well. But all of his supposed tax cut proposals (with the exception of limited, increased, investment write-offs for small businesses) have involved tax credits rather than reductions in tax rates (which he has repeatedly increased). But it is reductions in marginal tax rates that provide incentives for increased productive activity and growth, because it is the marginal tax rate, or the rate on the last dollar earned, that determines how much of the increased income resulting from increased productive activity the taxpayer is allowed to keep.
Tax credits do nothing to improve incentives for increased production. They increase government control over the public by providing an effective government payment for some activity the government wants to direct the recipients to do. But after the credit payment, taxpayers face the same economic incentives and tax rates as before. Tax credits are consequently true tax expenditures, the equivalent of additional government spending rather than a tax cut.
Despite all the tax increases, President Obama’s budget proposal would never balance the budget, by Obama’s own admission. His own budget admits that after 10 years, the deficit would still be $439 billion, still about the highest in history before President Obama. Congressman Paul Ryan’s House Republican budget, in sharp contrast, would balance the federal budget within 10 years, with no tax increases, as scored by CBO.
President Obama’s budget claims to reduce federal deficits by $1.8 trillion over the next 10 years. But that only results from calculating the effect on deficits from an “adjusted baseline” used by the Obama budget, and not the CBO baseline. That adjusted baseline assumes that the war in Afghanistan would never end without Obama’s proposed budget, and that we would otherwise be spending as much by 2023 fighting that war as during the recent War on Terror. That adjusted baseline also does not include the sequester cuts under current law that the Obama budget would reverse, so the $1 trillion in increased spending resulting from reversing the sequester cuts as in Obama’s budget is not counted in the effect of Obama’s budget on the deficits.
If the impact on deficits under Obama’s budget is calculated from the projected deficits under current law or policies, then the net reduction in deficits proposed by President Obama’s budget is only a comparatively negligible $119 billion over 10 years. That compares to deficit reductions of $5.7 trillion under Ryan’s budget as scored by CBO, almost 50 times as much.
President Obama’s own budget confesses to $5.3 trillion in additional deficits over the next 10 years, almost 5 times the deficits in Ryan’s proposed budget, which zeroes out the deficit entirely after 10 years. Obama’s budget proposes to increase federal debt held by the public by $8.2 trillion over the next 10 years, 6 times what would result under Ryan’s budget. Obama’s budget proposes to increase Gross Federal Debt to $25.3 trillion after 10 years, which would require increasing the national debt limit to that amount. That Gross Debt would cross 100% of GDP, equal to our entire economy, in 2020.
Moreover, these results assume federal revenues more than double over the next 10 years. That does not account for the likely result that Obama’s tax increases would not increase federal revenues as projected. For example, in the last 45 years, every time the capital gains tax rate has been increased, capital gains revenues have declined rather than increased. But Obama’s budget assumes that doubling the capital gains tax rate from when Obama entered office would nearly double capital gains revenues.
In addition, Obama’s budget assumes a suddenly booming economy to result from these policies, with real GDP growth in 2016, the end of his second term, at 3.6%, more than four times the average of his first term. That is highly unlikely, given that all of his policies are decidedly anti-growth, such as rocketing tax rates, explosive government spending, exploding regulatory burdens, costs, and restrictions, and cheerleading political cover for the Fed’s unanchored, ultimately destabilizing monetary policies.
At the same time, Obama’s budget inconsistently assumes sustained negligible interest rates (1.2% in 2016). That is further incompatibly assumed with sustained minimal inflation (2.2% in 2016), leaving real interest rates woefully negative at -1%. Given the Fed’s current policies, a rapidly growing economy would likely mean surging inflation and soaring interest rates. Both would raise spending, deficits and debt sharply as well, as federal interest expense is already projected in Obama’s budget, with the lowest interest rates in history, to be $763 billion (more than three quarter trillion) in 2023 alone.
Obama’s budget consequently assumes that there will not be another recession within the next 10 years, though some predict that Obama’s anti-growth policies will cause another recession as early as this year. That would cause revenues to collapse, spending to soar further, and deficits and debt to further explode. The second great vulnerability of the Obama, and Senate Democrat, budgets is the potential for soaring interest rates, as market rates spike out of the Fed’s control, after the longest period of near zero rates in U.S. history. With national debt approaching $20 trillion or more, sharply increasing interest rates would be extremely costly.
With these assumptions, the deficit and debt projections in Obama’s budget cannot be taken seriously, and most likely will turn out to be grossly underestimated.
Entitlement Reform Charade
President Obama has his propagandist flacks out there touting his supposed entitlement reforms in this budget as a grand gesture of compromise with Republicans. But there is no real entitlement reform of any significance in Obama’s budget at all.
Obama has gone back to proposing to cut promised benefits for seniors again, by arbitrarily changing the cost of living adjustment formula to reduce Social Security benefits by $130 billion over the next decade from what they would be otherwise. The argument that the new formula more accurately measures inflation is fallacious. The most accurate inflation formula depends on what you are trying to calculate. If you are trying to calculate how what consumers must pay for a fixed basket of goods and services changes over time, arguably even the currently used inflation index understates inflation.
Ten years ago, when President Bush was giving at least rhetorical support to the idea of personal accounts for Social Security, I argued against those who were still arguing for cuts in Social Security benefits by noting that no such cuts would ever be allowed by liberals without tax increases as well. President Obama is now proving me right about that all along.
Obama’s proposed change to the Social Security inflation index would produce tiny, negligible reductions in runaway Social Security spending increases, especially as compared to personal accounts. Over a generation, depending on how big the personal account option was and how many workers exercised it, such accounts would shift Social Security benefits entirely off of the federal budget, to private savings, investment and insurance instead, resulting in higher rather than lower benefits for those seniors who individually did choose the accounts. That would ultimately mean the biggest reduction in government spending in world history, equal to about 10 percentage points of GDP, if the option was ultimately expanded to all Social Security and Medicare payroll taxes, given ultimate projections of currently payroll tax financed benefits.
Obama’s proposal, by sharp contrast, would only reduce Social Security spending increases by one-fourth of one percent. Even with Obama’s “reform,” his own budget projects Social Security spending to soar over the next decade by 85%, from $768 billion last year to $1.427 trillion in 2023.
But Obama’s change in the Social Security inflation index would also apply to the index adjusting income tax brackets for inflation. That would mean still another tax increase of $100 billion over the next 10 years, which would also apply to the middle class and working people as well, again in direction violation of Obama’s campaign promise not to raise taxes on such taxpayers “in any form.”
The only real entitlement reform solving all the problems of Social Security is to shift to a fully funded system based on real savings and investment, with zero unfunded liabilities. That is what personal accounts do.
Obama’s other big, supposed compromise, entitlement “reform” is to again cut Medicare payments to doctors and hospitals serving seniors by another $250 billion over the next 10 years, in addition to the Obamacare cut of three quarters of a trillion in such Medicare cuts, making a nice round trillion in such Medicare cuts altogether. While Democrats talk such a good game of Republicans wanting to slash and burn Medicare, it is Obama and the Democrats who have already done it. And now they are celebrating doing it again.
Imagine what would happen to our national defense if the government refused to pay the builders of the Navy’s ships, the manufacturers of the Air Force’s planes, and the makers of the Army’s tanks. That is what is going to happen to health care for seniors under Medicare, given Obama’s so-called “reforms.”
Real Medicare entitlement reform would involve expanding the more modern and successful Medicare Parts C and D to the old-fashioned Medicare Parts A and B, which is all that House Budget Committee Chairman Paul Ryan has proposed. Seniors would get better benefits than under Obamacare’s Medicare with those real reforms, at major savings to taxpayers due to market competition and incentives, as we have already experienced under Medicare Parts C and D. Those reforms would “end Medicare as we know it” only to the extent that C and D are not part of the alphabet.
The last successful, cost-saving, entitlement reform was the bipartisan 1996 welfare reforms of the old, New Deal, AFDC program. Under the incentives of those reforms, two thirds of those dependent on the program left the rolls, with their incomes documented to increase by 25% as a result. Yet, taxpayers saved 50% of the costs of the program after 10 years, compared to where it would be otherwise under prior trends.
Real entitlement reform would involve expanding those President Clinton compromising reforms to the rest of the nearly 200, federal, means tested welfare programs, projected to cost $10 trillion over the next 10 years. CBO has scored such reform applied to just one program, Medicaid, as saving nearly $1 trillion over 10 years, while possibly vastly expanding access to health care for the poor, to their great benefit. But there is exactly zero compromising leadership from President Obama on such reform.
Real entitlement reform would involve providing health care for all unlike Obamacare (still scored by CBO as leaving 30 million uninsured after 10 years – a gross underestimate) with the reforms proposed by John Goodman and myself in , “Health Care for All Without the Affordable Care Act [Obamacare],” NCPA Issue Brief No. 116 (October 17, 2012). Those reforms would assure universal health care with no individual mandate and no employer mandate, at a savings to taxpayers of at least $2 trillion over the next 10 years alone. But there is exactly zero compromising leadership from President Obama on such reform.
What’s It All About
Federal law requires President Obama to propose a budget for the next fiscal year by February 4 of each year, before the House and the Senate adopt their own budget resolutions. But President Obama released his budget for next year just last week, after the House and the Senate had already adopted their budget resolutions. So what is the point of the President issuing a budget proposal now?
The point is to simply posture for all those low information, Twitter voters in the 2014 elections, who will hear only from all the Democrat Party propagandists at the New York Times, the Washington Post, and MSNBC and brethren. They will hear only about President Obama’s “spending cuts,” his grand, compromising, entitlement reforms, and how he is fighting for the middle class, with declining median incomes throughout his Administration, for the poor, with record, soaring poverty, and for “equality,” even as inequality has actually risen throughout his Administration. Is this generation of Americans in the process of proving America’s more than 200 year experiment with democracy a failure?
[First Published at Forbes]
At the start of this year makers of medical devices became subject to a federal excise tax on their products. It’s an especially bad way to fund Obamacare, says the Tax Foundation’s Kyle Pomerleau, because it could reduce innovation, raise costs of medical care, and cause conflict within the medical industry over who should ultimately bear the burden of the tax.at this link.]
The Barack Obama Administration has since it’s inception been very active in over-regulating the Web – for instance, Network Neutrality and Socialist-esque wireless price caps, to name but two huge power grabs.
Net Neutrality is in legal jeopardy – there are lawsuits pending to overturn it. So President Obama’s Federal Communications Commission (FCC) has kept open the possibility of – again, without any authority to do so – over-regulating the Web further still:
President Obama will move the Internet from Title I to Title II. Title II is how the FCC over-regulates landline telephone lines – you know, that bastion of innovation lo these last seventy-plus years. Title II opens up the Pandora’s Box of uber-regulation of the Internet.
But wait – there’s more. By so doing, the federal government is also looking to open yet another vein.
Under Title II, President Obama can also begin to tax the Internet – just as the Feds tax landlines.
Of course they are already uber-taxing your Internet use – on your wireless phones:
Checked your cell phone bill lately? (The Universal Service Fund tax) is 17.4% – an $8 billion total take in 2010 – and hurtling ever upward.
And now they are looking to let the states pile on.
Legislation giving states the power to compel retailers outside their borders to collect online sales taxes, a touchy subject for Internet merchants, is likely to move forward in the Senate next week.
I wonder why this would be “a touchy subject for Internet merchants?”
Current law dictates that a state can only require a business to collect its sales tax if it is physically present within its boundaries….
S.743 (the Marketplace Fairness Act [MFA]) would countenance an enormous expansion in state tax collection authority by wiping away the “physical presence standard,” a baseline protection that shields taxpayers from harassment by out of state collectors….
Dismantling this protection for remote retail sales would create a very slippery slope for states to attempt collection of business or even income taxes from out of state entities.
Why would anyone object to being taxed by forty-nine states with which they have no relationship? Taxation without representation on stilts, perhaps?
And of course it doesn’t at all complicate compliance matters.
(The MFA will) forc(e) online retailers to calculate and remit to more than 9,600 distinct taxing jurisdictions.
Nothing like in these interminably tough times making things for businesses infinitely more difficult and expensive.
No problem – they can begin figuring out compliance to the Marketplace Fairness Act right after they finish doing so with ObamaCare. And Dodd-Frank. And the President’s all-encompassing, on-all-fronts regulatory overrun. And….
After they pay all those new taxes, and plow through those thousands-of-pages-of-new-law and hundreds-of-thousands-of-pages-of-new-regulation, I’m sure they’ll have plenty of money, time, and energy left to, you know, actually concentrate on their businesses.
Though that last part really isn’t at all important important to the Big Government Coalition. For them, ‘tis far better that you be paid up on their taxes and in compliance with their red tape.
No matter how much red ink ensues.
P.S.: You can contact Congress and let them know how incredibly foolish – i.e. D.C.-like – they’re being with this new Internet tax here.
[First Published at Red State]
My new policy brief urges the Federal Communications Commission to get on with the business of allocating the necessary spectrum to meet the burgeoning demand for wireless services.
The paper was finished before Chairman Julius Genachowski announced his resignation last month. At the risk of sounding harsh, that might be addition by subtraction. One of the big disappointments of Genachowski’s tenure was the lack of significant movement to get spectrum freed up and auctioned. In fairness, there were the interests a number of powerful constituencies to be balanced: the wireless companies, the broadcasters, and the federal government itself, which is sitting on chunks of prime spectrum and refuses to budge.
But that’s the job Congress specifically delegated to the FCC. We’d be closer to a resolution–and the public would have been better served–had the FCC put its energies into crafting a viable plan for spectrum trading and re-assignment instead of hand-wringing over how to handicap bidders with neutrality conditions and giving regulatory favors to developers of unproven technologies such as Super WiFi. Instead of managing the spectrum process, the FCC got sidetracked trying to to pick winners and losers.
A new chairman brings an opportunity for a new direction. Spectrum relief should go to the top of the agenda. And as I say in the policy brief, just do it.
[First published at Tech Liberation Front]
EPA puts out press releases like this one at least weekly. If you examine activities, you notice most activity is spent on advocacy. Much of this advocacy is peddling the notion that carbon dioxide is a pollutant that must be curtailed.
Carbon dioxide is an airbourne fertilizer essential for survival of life on this planet. Oxygen supports combustion and was responsible for the explosion in Texas last week that killed at least 14. Why doesn’t EPA declare oxygen a pollutant because numerous examples exist where oxygen’s support of combustion killed millions.
The federal budget will be in debt $1.1 trillion for Fiscal Year 2014. This is the same level of debt the preceding 4 years–for a five-year total exceeding $5 trillion. Can the United States really afford this frivolous waste of tax dollars expended by the EPA.
Has anyone heard of EPA threatening to pull back on their activities due to the budget sequestration? In Atlanta, Georgia, home of the world’s busiest airport, air traffic controlers are going to be furloughed starting this May due to sequestration. This is reported to cause flight delays at the world’s busiest airport.
I was honored that several Arkansas legislators invited me to testify earlier this month on a bill that would impose renewable power mandates in Arkansas. Renewable power mandates impose punishing costs on the economy and the environment. The Arkansas bill’s feed-in tariffs requiring renewable power production from small-scale facilities were particularly costly and troubling.
The good news for Arkansans is the renewable power mandates died in the Joint Energy Committee. Before the committee met, legislative analysts predicted a very close vote on the bill. After I presented my testimony documenting the high costs of renewable power, no Committee member seconded a motion to vote on the bill, so it failed without a vote.
Watch it below:
Two scientist-activists at the University of Wisconsin-Madison published an article in Science last week calling for more “Climate Change Conversations,” as the article was titled. Speaking on behalf of people skeptical of an asserted global warming crisis, I accept the invitation.
Bassam Shakhashiri, a professor at the ultra-liberal University of Wisconsin-Madison and Distinguished Chair of the “progressive” group the Wisconsin Idea, along with his University of Wisconsin-Madison colleague Jerry Bell, write, “Communicating the science of climate change provides one example where the scientific community must do more. Climate change affects everyone, so everyone should understand why the climate is changing and what it means for them, their children, and generations to follow.”
Let us begin this important conversation now.
In their article, Shakhashiri and Bell claim “the average temperature of the Earth is increasing.” Well, not during the past decade the temperature hasn’t. NASA and NOAA satellite data show the Earth’s temperature has not risen at all for more than a decade. This has occurred even though global carbon dioxide emissions rose by a third during the past 10 years. If carbon dioxide is truly the primary driver of global temperature change, why has there been no warming during the past decade?
Global warming activists will often reply that we should look at the past century rather than the past decade when assessing global temperatures. Fair enough. At least half of the global warming of the 20th century occurred prior to the post-World War II economic boom. Global carbon dioxide emissions were minimal during the pre-World War II era. Again, this argues against carbon dioxide emissions being the primary driver of global temperature, and argues against economically ruinous “progressive” programs to restrict carbon dioxide emissions.
More importantly, we should look at the past several thousand years, rather than merely the past century, when assessing the context of current temperatures. The Earth’s current temperature, when assessed in proper context, is relatively cool right now. Today’s temperatures are cooler than those that prevailed during most of the past 10,000 years, when human civilization first developed and thrived. Temperatures during the past century only seem warm when compared with the Little Ice Age, which brought about the coldest temperatures of the past 10,000 years and ended just over a century ago.
Shakhashir and Bell claim “ice is melting.” If global temperatures finally warm from the extreme cold of the Little Ice Age, we can certainly expect some of the unusually prevalent ice to melt. But is ice melting at an alarming rate? Not according to NASA and NOAA satellite data. In fact, NASA and NOAA satellite instruments show polar sea ice has remained relatively steady since the satellite instruments were launched in 1979, and polar sea ice is currently more extensive than the long-term average.
Shakhashir and Bell claim “oceans are acidifying.” The oceans are alkaline, not acidic. The oceans have a pH of 8.1, which is far above the neutral pH of 7.0. To the extent ocean alkalinity may have declined from 8.2 to 8.1 during the past century, the oceans are becoming less alkaline, not more acidic.
More importantly, marine life – like terrestrial plant life – is benefiting from higher carbon levels. Several peer-reviewed studies document plankton, sea stars, crustaceans and other marine life thrive and grow more rapidly in ocean water with higher carbon content and less alkalinity.
Shakhashir and Bell claim “extreme weather events are more frequent.” If Shakhashir and Bell define “extreme weather events” as a remarkable decline in drought, a remarkable increase in soil moisture, a remarkable decline in strong tornadoes and a remarkable decline in hurricane strikes, they are correct. However, if they define “extreme weather events” the way most other people in the world define the term, they are irrefutably wrong. As temperatures continue to recover from the depths of the Little Ice Age, droughts are less frequent and severe, global soil moisture is improving, strong tornadoes are in long-term decline, and hurricane strikes are becoming less frequent.
Shakhashiri and Bell assert we should have more climate change conversations. I agree, especially considering the scientific evidence debunks global warming alarmism. Messieurs Shakhashiri and Bell, you name the time, place and venue, and I will be happy to oblige you in considering this climate change conversation.
[First Published at Forbes]
The biggest fallacy regarding Social Security is that it would be easier politically to cut Social Security benefits rather than to fundamentally reform the way the program works, so as to empower workers with the freedom to choose personal savings, investment, and insurance accounts.
Through such personal accounts, all families at all income levels would receive higher rather than lower benefits, much more than Social Security even promises, let alone what it can pay. That is because a lifetime of savings and investment would always pay more in benefits than a lifetime of no savings and investment, which is Social Security.
Social Security is entirely a tax and redistribution system, with no savings and investment at all. Even if the Social Security trust fund involved any real investment, the surpluses going into the fund in the past never amounted to more than about 10% of payroll tax revenues each year. The great majority of Social Security taxes were always immediately paid out to finance current benefits. Moreover, the Social Security surpluses are over now. The trust fund is entering a phase of long-term liquidation, with Social Security deficits each year drawing on the trust fund.
But real investment involves funding of productive activities and resources. The Social Security trust fund is and was always 100% federal debt immediately used to finance increased government spending. That is why it is officially accounted for in federal bookkeeping as part of the gross federal debt, subject to the national debt limit. Even the interest paid on that debt is financed 100% out of redistribution taken from the productive, not increased production, as in real investment.
Consequently, Social Security payroll taxes do not earn for working people the investment returns and ultimate benefits that are produced by real savings and investment. That is why personal accounts would pay seniors so much more than Social Security.
Moreover, with personal accounts, instead of the government imposing one retirement age on everyone, each worker can choose his or her own retirement age, with market incentives to delay retirement as long as possible. That is because to the extent workers delay retirement, their accounts accumulate to higher and higher amounts, which would pay higher and higher ultimate benefits.
So those engaged in manual labor can retire in their early 60s if they want, maybe with extra contributions to their accounts over the years from their employers to provide more for that. But millions engaged in intellectual work would choose to continue to work well into their 70s, and prefer that, a result that could never be imposed politically.
The only ultimate solution for Social Security is to scrap its no savings, no investment, tax and redistribution system for a fully funded system based on real savings and investment, with zero unfunded liabilities. That is what personal accounts do. That would require financing the increased savings and investment over a generation. It wouldn’t involve transition “costs,” or paying twice for retirement, which has confused even some conservative economists, who should have known better.
When you save $1,000 in an investment account, you don’t say that it cost me $1,000. That is because you still have it, in your account. Similarly, saving and investing over a generation in personal accounts does not involve transition “costs.” It involves replacing the payroll tax, the largest tax working people pay, with a personal family wealth engine that can grow to half a million, even a million or more, over a lifetime of working, saving, and investing.
Moreover, those savings and investment immediately go to work in the economy today, creating jobs, and increasing wages and incomes for working people. Some transition “cost.” Instead, personal accounts would result in the greatest reduction in government spending in world history, as the benefits financed by taxes and government spending today would be replaced by higher benefits financed by savings, investment, and insurance in the private sector.
Such personal accounts do not involve pie in the sky theorizing. They are a proven reform that has already worked in the real world. From the South American nation of Chile starting more than 30 years ago, to Great Britain starting under Thatcher, to local government workers in and around Galveston, Texas, who opted out of Social Security more than 30 years ago as well, and elsewhere, personal accounts are a proven success for working people. That same success is shown as well by the savings and investment accounts for federal workers under the federal Thrift Savings retirement plan.
In 2004 and 2005, Congressman Paul Ryan (R-WI), now chairman of the House Budget Committee, introduced model legislation providing for such personal accounts. That model was incorporated in the Ryan Roadmap, which provided full financing for the personal accounts through other necessary entitlement reforms. All of it was scored by the Chief Actuary of Social Security and CBO, validating every one of of the above arguments.
Obama’s Benefit Cuts and Tax Increases Instead
Almost a decade ago, when President Bush was giving at least rhetorical support to the idea of personal accounts for Social Security, I argued against those who were still arguing for cuts in Social Security benefits by noting that liberals would never allow such cuts without corresponding tax increases as well. Even many conservatives who should have known better, and recognized the obvious, openly doubted that claim.
But Obama is proving me right about that again. What Obama has proposed — and what his own hired propagandists (Jay Carney) and media sycophants (New York Times, Washington Post) tout as entitlement reform — involves changing the Social Security indexing formula that accounts for inflation. This would provide tiny, negligible, Social Security spending reductions from the increases in spending, especially as compared to personal accounts. As Charles Krauthammer reported last week, it would only reduce the dramatic increase in Social Security spending by one quarter of one percent. Even under Obama’s proposal, his own budget projects Social Security spending to soar over the next decade by 85% compared to last year, from $768 billion to $1.43 trillion.
But here is the kicker. Obama’s proposal would also increase taxes by another $100 billion, on top of the $1 trillion in Obamacare tax increases over the next decade, and the $600 billion in tax increases focused on the nation’s job creators, investors, and successful small businesses (“the rich”). That is because the same indexing change applies to the indexing of the tax brackets for inflation. That will mean a tax increase on the middle class and working people as well. That $100 billion in tax increases over the next decade compares to $130 billion spending savings, out of the roaring increase in such spending.
The proposed change is not even a more accurate assessment of inflation, also contrary to the propaganda. It changes the inflation measurement from calculating the change in prices of a fixed basket of goods and services over time, to a measurement of the price changes in a changing basket of goods and services, reflecting the declining standard of living of the American people (for example, substituting the lower price of hamburger for the price of steak as the American people increasingly no longer buy steak they can no longer afford).
Still More Medicare Cuts
The second great entitlement “reform” is further reducing Medicare payments to doctors and hospitals for health care provided to seniors, by $250 billion over the next 10 years. Obamacare already slashes such medical fee payments by three quarters of a trillion over the next 10 years. The Obama budget would make that a rough trillion in such Medicare cuts over 10 years. While Democrats have so aggressively accused Republicans of proposing draconian Medicare cuts, it is Obama and the Democrats who have actually done it. And now they are celebrating doing it again.
That would intractably leave Medicare paying less for health care for seniors than Medicaid pays for health care for the poor, which is demonstrably woefully inadequate. Seniors would consequently be unable to obtain timely, quality, health care. Medicare’s own Chief Actuary projects that one out of seven hospitals will leave Medicare over the next seven years as a result of the cuts already enacted by Obama and the Democrats. NCPA President John Goodman adds on his health policy blog, “[B]eyond that things just get worse and worse. Access to care will become a huge issue as waiting times [for seniors] to see doctors and enter hospitals grow…. From a financial point of view, seniors will be less attractive to doctors than welfare mothers.”
Such entitlement “reform” would work as well as trying to reduce defense spending by refusing to pay the builders of the Navy’s ships, the manufacturers of the Air Forces planes, and the makers of the Army’s tanks.
Real Medicare entitlement reform would involve not refusing to pay the doctors and hospitals providing medical care to seniors, but expanding the proven successful, more modern, Medicare Parts C and D to Medicare Parts A and B. That is all that Paul Ryan’s much maligned Medicare reforms would do. As with personal accounts, seniors would be far better off with such Medicare reforms.
Medicare Part C is Medicare Advantage, which provides “premium support” seniors can use to choose private insurers to provide their Medicare coverage. More than one-fourth of seniors have already chosen these private plans because they believe these plans provide better benefits than Medicare. Medicare Part D is the Medicare drug program, which provides “premium support” seniors use to choose among private insurers to provide their Medicare drug benefits. Original projected costs for Medicare Part D have been reduced by 40% because of the market competition among these private insurers.
Simple common sense would compel expanding what has been proven to work (Medicare Parts C and D) to what has been proven not to work (Medicare Parts A and B). But President Obama always chooses the exact opposite of common sense, while invoking common sense, to mislead the gullible. (See, e.g., Obamanomics, which involves doing the exact opposite on the economy of everything Reagan did, with the exact opposite results).
Such reform would be further enhanced for seniors by expanding personal accounts to the Medicare payroll tax as well. In retirement, those accumulated funds over the years would finance further benefits to be used to choose among competing private insurers for Medicare coverage. All these reforms would provide enormous gains for seniors as compared to Obamacare, because private insurers have to pay enough to doctors and hospitals to enable their customers to get timely and effective health care when they need it, providing an escape hatch from the Obamacare Medicare cuts.
More Real Entitlement Reform Still more real entitlement reform would involve replacing Obamacare with a comprehensive health care safety net that would assure essential health care for all at just a fraction of the cost of Obamacare, with no individual mandate and no employer mandate. That contrasts with Obamacare, which CBO projects would still leave 30 million uninsured after 10 full years of implementation. Indeed, it will leave far more uninsured than that, as tens of millions will lose their employer provided health insurance once Obamacare is implemented next year. (So much for “If you like your health plan, you can keep it.”).
Indeed, that can be accomplished while reducing federal spending over the next 10 years by close to $2 trillion, at least, as explained in full detail in John Goodman and Peter Ferrara, “Health Care for All Without the Affordable Care Act [Obamacare],” NCPA Issue Brief No. 116 (October 17, 2012).
More real entitlement reform would further involve expanding the last successful, cost-saving entitlement reform, the 1996 welfare reforms of the New Deal, AFDC program in 1996, to every means tested federal welfare program. Those 1996 reforms led to two-thirds leaving the AFDC rolls for work, increasing the incomes of the poor formerly dependent on the program by 25%, while reducing costs to taxpayers by 50% from where they would be otherwise.
Close to 200 federal means-tested welfare programs remain, projected to cost more than $10 trillion over the next 10 years. Sending all of those programs back to the states with block grants, as under the 1996 AFDC reforms, could effectively eliminate poverty in America entirely. Yet, the savings to taxpayers would run into the trillions over the years, based on the results of the 1996 reforms, another reform proven to work in the real world.
That would include Medicaid, which would be sent entirely back to the states with the feds providing the federal share of spending only through fixed, finite block grants, again as in 1996. The states could then each provide the poor with premium support they could use to purchase private health coverage of their choice. That would benefit the poor enormously, again because private insurers have to pay doctors and hospitals enough to ensure that their customers can get timely and effective health care when needed.
Such real entitlement reform would require real leadership out of Washington, which is why it is nowhere in sight. President Obama’s lauded entitlement reforms are just meant to provide talking points for the 2014 elections regarding supposed statesman-like compromise, when it is actually just more posturing sham not worthy of the name of entitlement reform.
[First Published at the American Spectator]
Listen to Heartland’s James M. Taylor interview John Droz, a North Carolina-based wind power expert central to the effort to remove the state’s renewable power mandates. Droz is the author of “Wind Power Facts” and a Senior Fellow at American Tradition Institute.[Subscribe to the Heartland Daily Podcast free at this link.]
In the race to the financial bottom the State of Illinois vies nicely with several other states, including (depending on the precise year involved) California, New York, and Ohio, with a projected 2012 deficit exceeding 43.8 Billion. (The actual deficit, incorporating more realistic assumed internal investment returns, may be closer to $100 billion.) Like that of its close competitors, much of the Illinois deficit stems from unfunded liability for defined benefit pensions promised to people who used to, but no longer, work for the State.
In terms of political corruption, too, the list may vary from year to year but Illinois is a solid competitor. Four of the past eight Illinois governors have gone to federal prison, including one (Republican George Ryan) recently released to probation following the death of his elderly wife and one (Democrat Rod Blagojevich) behind bars in Colorado (barring an unlikely end-of-term pardon from President Barack Obama) for years to come.
The list of Chicago aldermen and Illinois Congressmen who have been criminally convicted or imprisoned is too lengthy to detail here, but includes former House Ways and Means Committee Chairman Dan Rostenkowski, the recently resigned Jesse Jackson, Jr., recently convicted Chicago Alderman William Beavers (a self-described “hog with big nuts”), and even popular former Congressman and Chicago Mayor Harold Washington himself, who once spent thirty days in jail for not filing his income tax returns.
In terms of sheer political incoherence, however, Illinois may stand unchallenged at the bottom; indeed, that sometimes seems to be its intent. As Seventh Circuit Judge Richard Posner pointed out in the Illinois gun control case of Moore v. Madigan, “Remarkably, Illinois is the only state that maintains a flat ban on carrying ready-to-use guns outside the home [emphasis in original], … . If the Illinois approach were demonstrably superior, one would expect at least one or two other states to have emulated it.”
Further proof, if any were needed, of Illinois’ unchallenged position in incoherence comes from two closely (if unintentionally) related bills out of the State capitol of Springfield.
One bill, introduced by House Majority Leader Barbara Flynn Currie (D-Chicago) and passed by the Illinois House of Representatives on Tuesday, April 16, would automatically charge 17-year-old defendants as juveniles for crimes considered “lesser” felonies and would send the convicted defendants to juvenile correctional centers rather than to prison. Under the second bill, which State Representative Carol Sente (D-Vernon Hills) proposed last week as an amendment to House Bill 226, Illinois would nonetheless lower the voting age in primary elections to – you guessed it – 17 for those who will turn 18 in time for the general election.
In justifying the first bill, Majority Leader Currie, a fixture in the legislature since the late 1970’s, was quoted in the Chicago Tribune as saying that “I think it’s time for us to treat young people as young people because, as we know, they really are young, and their minds are not fully formed and their judgment is not always as mature as we would like it to be.”
Yet the idea behind the second bill, which passed the House Executive Committee unanimously on Monday, April 15, 2013, is exactly the opposite. According to Rep. Sente, as quoted in the April 16, 2013, Chicago Daily Law Bulletin, “if you’re ready to vote at 18 in the general election, that as a 17-year-old during the primary, where we select the primary candidates in the general, that age group could also vote.” What makes this proposed change in voting law even more shocking than it may first appear is that Illinois, as a practical matter, is a one-party state: As Oak Park-based election lawyer Richard K. Means put it in the same Law Bulletin article, “Because of gerrymandering and because of the way our districts are clearly safe districts for one party … the real contest is in the primary election.”
So there you have it – seventeen-year olds not old enough or mature enough to know right from wrong (see “Other People’s Children,” April 16, 2103) are nonetheless responsible enough to vote.
Perhaps that’s what President Obama meant in his 2013 State of the Union address when he talked about “improving the voting experience.”
Or perhaps that helps explain why Illinois is at the bottom of the heap in both political corruption and financial disarray and is likely destined to stay there.
It’s like they say – you can’t make this stuff up.
Our Founding Fathers wisely provided for a free and independent press as an additional check on government power. But the New York Times, the Washington Post, NBC, CBS and ABC decided they had a better idea. They concluded that it is more important to behave voluntarily like the old Soviet press did under government compulsion, when the socialist party is in power.
Of course, we do still have the freedom in America for now for the alternative media — talk radio, Fox News, the Wall Street Journal editorial page, conservative websites, blogs and a few other media outlets – to air criticism of the reigning socialist regime. But 50% of the country is ensconced in urban enclaves where listening to or reading views that are not friendly to socialist rule is considered socially unacceptable behavior. So, no alternative views, or checks on the reigning regime, ever break through there. That explains why our once grand, world-leading democracy has now been rendered dysfunctional.
An independent judiciary is also supposed to be a check and balance on the abuse of government power. But as his second term drags on, President Obama will have appointed more and more, and eventually a majority of, all federal judges.
Moreover, these won’t just be any judges but liberal judges chosen with a liberal judicial philosophy that their job is not to follow the law, but to do what they think is right, regardless of the law. What is “right” is going to be Obama’s liberal/left agenda.
Holding the line even right now are only five rapidly aging old men on the Supreme Court. Replacing even one of them with a liberal appointee will mean the end of the Reagan majority on the Court. Everything in our society will then change. Gun rights and the Second Amendment, gone in a heartbeat. Property rights and the rule of law, forget about it. Religious freedom? Only for the socialist religion.
These will be replaced by a constitutional right to welfare, and to your money. By gay marriage. And by a right to free contraceptives for everyone, so America can party on right through its decline, just like in Europe.
The Second Mid-Term Hex HeHexz
The second mid-term election of a two term incumbent President, as in 2014, has historically been a disaster for the party of the incumbent President. It was so even for Franklin Roosevelt in 1938. It was so for the war hero Dwight Eisenhower in 1958. Counting Kennedy/Johnson as one Administration, it was true for them as well in 1966. And it was so even for Ronald Reagan, even in the midst of an historic recovery, when the Republicans lost control of the Senate, and even more ground in the Democrat majority House, in 1986.
As University of Virginia political scientist Larry Sabato and Kyle Kondik write in the March 19 Wall Street Journal,
“Since the start of the modern two-party system in the mid-19th century, the party of an incumbent president has never captured control of the House from the other party in a mid-term election. While many presidents have held the House for their party, in 35 of 38 midterms since the Civil War the incumbent’s party has lost ground.”
And that is in any mid-term, not just in the more onerous second mid-terms.
But President Obama has decided to defy that history. He has decided not to try to govern with the Republican House majority, but to devote the next 18 months to political posturing and framing the issues so negatively against the Republicans that America would rally to give Obama total control of the government in November 2014, with a restored Democrat majority in the House as well, leaving no check on Obama’s power at all.
That is because President Obama’s goal is the radical transformation of America from the world’s leading capitalist state, the freest, most prosperous, and mightiest in history, into just another socialist third world country. But he knows he can’t do that with the Republican House majority elected in 2010 precisely to stop his socialist agenda. For that radical, socialist transformation, reflecting what the Democratic Party and their party controlled media lapdogs are really all about, he needs total control of Congress. For that he needs, effectively, a socialist, one-party state, which is actually what he is after in defying history, and seeking a restored Democrat House majority.
Organizing for Action
This is what Obama’s new 501(c)(4) organization, Organizing for Action, is all about. He has transformed his campaign into that organization, giving it the advanced social media technology, contact lists, and grassroots infrastructure of the campaign. Jason Stverak, President of the Franklin Center for Government and Public Integrity, writes in the March 15 Washington Times, “Organizing for Action is flooding the airwaves with advertisements praising the Obama Administration’s policies, and viewers at home are being inundated with just as many talking points and political attacks as they were during the 2012 campaign.”
Through that organization, Obama has begun an unprecedented fundraising crusade to raise $50 million to be spent in Republican districts to discredit Congressional Republican incumbents. But as a 501(c)(4) social activist organization, Organizing for Action is not subject to campaign financing limits. For half a million in contributions, donors get private meetings with Obama where they can lobby for their personal agendas, crony capitalist favoritism, and other special interest pleading.
This is going to be the ugliest smear campaign in American political history, similar to what we saw in 2012, where the President’s campaign made up Romney’s positions and then campaigned against their own strawmen. Such as the charges that Romney was proposing middle class tax increases, or that he wanted to ban contraceptives. When the real Romney showed up during the first debate to say that those were not his positions, Obama partisans responded that he must be lying.
It is up to conservative activists to respond to this with truth squads to counter and reveal the propaganda. This is not going to be primarily about Republicans, but about preserving the credibility of the conservative philosophy, which is actually what is going to be under attack. Witness the current liberal/left Democrat campaign for gun control and gay marriage. We need to preserve, protect and defend the Reagan economic record, for example. We need to explain the root government causes of the financial crisis, and advocate reforms so it will never happen again. In addition to tax reform, spending control, and entitlement reforms, that would involve monetary reform, so America can once again enjoy a dollar as good as gold.
We also need to promote and defend the national defense doctrine of peace through strength. And we need to more than redouble a positive vision of religious freedom and pro-family values.
The High Stakes Gamble
In defying the long term political trends, President Obama is engaged in a high stakes political gamble, putting his own political credibility on the line. If Obama breaks the historical pattern, and the Democrats take the House, then Obama will be the new Hugo Chavez, in effective authoritarian control of America.
But if the historical patterns hold, and instead of the Democrats taking back the House, the Republicans take back the Senate, then President Obama will be a politically discredited lame duck, facing an entirely Republican controlled Congress. His socialist transformation of America will be over and exposed.
Prospects are actually quite good for the Republicans to take over Senate control. Besides the historical trends, Sabato and Kondik further explain,
“Democrats are defending seats in seven states that Mitt Romney won in last year’s Presidential race: Alaska, Arkansas, Louisiana, Montana, North Carolina, South Dakota, and West Virginia. Mr. Obama won an average of just 40.5% of the vote in these states. In addition, the retirements of longtime Sens. Tom Harkin (D. Iowa) and Carl Levin (D., Mich.) make those previously safe seats much more competitive. Factor in some freshman Democratic Senators elected from swing states in Obama’s 2008 wave (the last time this batch of seats was contested), and Republicans could run competitive challenges in 10 or more Democrat-held seats. Incompetent GOP nominees could change the picture, but almost all of the seats that Republicans are defending are in solid-red states.”
The Bible says, “By their fruits ye shall know them.” Adding to GOP prospects for next year are Obama chickens coming home to roost. Obamacare will be creating chaos in health care next year, with tens of millions losing their employer provided health insurance. Health insurance premiums will be soaring, to double or more for many, particularly young adults. The negative market reaction to those increases will be causing health insurers to collapse and go out of business, resulting in still more government takeover of health care.
Millions will lose their jobs as employers seek to downsize and break up to avoid the economically fatal costs of Obamacare. Millions of others will be reduced to part time workers for the same reason. That will mean further declining real wages and incomes for working people and the middle class, with poverty soaring still higher.
If the Obama economy falls back into recession in the second term, as Obama deserves, it will be the Democratic Party that will be on the verge of extinction. Unemployment would explode into double digits, and deficits would soar to over $2 trillion.
And then there will be a new front regarding chaos in foreign policy. Iran is likely to break out as a nuclear power before the mid-terms, which may mean nuclear war in the Middle East. At best, it would mean nuclear proliferation efforts spreading to Saudi Arabia, Turkey, Egypt and other Middle Eastern nations. North Korea’s nuclear breakout would extend that to Japan, South Korea, and maybe Australia (especially as the American nuclear umbrella fades under Obama policies). The formerly progressive citadels of San Francisco, Portland, and Seattle will have new reasons to begin to question Obama’s foolish national defense policies.
In my opinion, Obama is primarily motivated by ideology and power, and not by the trappings of office. I predict that if we aggressively advance the conservative philosophy over the next two years, do our job in the midterms (electing not just Republicans, but true Tea Party Republicans), and make the historical patterns stick, Obama won’t want to be a time server for the last two years, battling Republicans with no ability to advance his socialist agenda.
I predict in that case, Obama will resign, ending the Marxist assault on America as a failure. He will let Biden run for reelection as an incumbent, with Hillary on the ticket. Then it will be time for the rest of us to clean house, everywhere Marxists have already infiltrated American society and culture, from the Democrat Party controlled media, to Hollywood, to “academic” cloisters of taxpayer financed Marxism.
If this generation of Americans cannot rise to defend traditional American freedom and prosperity, we will lose both. And deserve to.
[First Published at American Thinker]
In a nation that officially – officially, mind you, at the highest levels of government – can no longer distinguish between an act of terror and an act of workplace violence (the Fort Hood shootings) or a spontaneous celebration and a terrorist plot on the eleventh anniversary of the September 11 attacks (Benghazi), it is important to distinguish between the words “terrorism” and “tragedy” in the context of the Boston Marathon Massacre.
A hurricane, a plague, a tornado, or a famine is a tragedy – even if, like the Dust Bowl of the 1930’s, it is ultimately the predictable result of human conduct. An earthquake that takes human lives is a tragedy, as likewise a tsunami that does the same.
A pressure cooker stuffed with explosives, nails, and ball bearings set to explode as thousands of lightly clad runners finishing a twenty-six mile road race in front of friends and family is an act of terrorism. This is especially true of such an attack that takes place on Patriot’s Day in Boston, a home of the American revolution, on the day that U. S. federal and state personal income tax returns are due.
In contrast to the Benghazi and Ft. Hood attacks, this time the administration relatively quickly acknowledged the attack for what it is. Although the word “terror” first came from a White House spokesperson, the President himself was soon on board.
Presumably no one outside the administration – and plausibly no one within it – yet knows who may be behind the attack. This may lead cynics to suspect that early intelligence does not suggest that the attack came from al Qaeda, Iranian, or Taliban-trained Islamic extremists, or official sources might be either blaming a YouTube video or exclaiming in defiance “at this point, what difference can it possibly make?”
At this point the fairest answer, which the media should acknowledge, is that we simply don’t know.
But whether the miscreants behind this mayhem are members of al Qaeda or Sinn Fein, Hamas or Hezbollah, the Weathermen or the Aryan Nation, the administration has, to its credit, already labeled this a terrorist act and not just a “tragedy.”
The attack remains, of course, a tragedy for the runners, the race, and the City of Boston, and most especially for those who were wounded or killed and their family and friends.
But the first step, as they say, in solving a problem is to call it by its right name.
Last week, Bob Goodlatte (R-Va.) and other lawmakers introduced legislation in the House of Representatives calling for major changes in the Renewable Fuel Standard (RFS). The RFS is the reason why most US automobile fuel contains ten percent ethanol. The bill would eliminate the current mandate to blend 15 billion gallons of corn ethanol into fuel by 2022 and ban ethanol fuel content over ten percent. But are ethanol mandates good public policy?
For decades, ethanol vehicle fuel was touted first as a solution to reduce oil imports and second as a solution for global warming. The Energy Tax Act of 1978 established the US “gasohol” industry, providing a subsidy of 40 cents per gallon for ethanol blended with gasoline. President George W. Bush promoted biofuels to reduce dependence on foreign oil, stating, “I set a goal to replace oil from around the world. The best way and the fastest way to do so is to expand the use of ethanol.” Last year the Environmental Protection Agency promoted E15, a fifteen percent ethanol blend for cars and trucks, announcing, “Increased use of renewable fuels in the United States can reduce dependence upon foreign sources of crude oil and foster development of domestic energy sources, while at the same time providing important reductions in greenhouse gas emissions that contribute to climate change.” But it appears that these two reasons for promoting ethanol vehicle fuel have disappeared.
First, US dependence on oil imports is greatly reduced. Net imports of crude oil peaked in 2005, providing 60 percent of US consumption. In 2012, just six years later, oil imports dropped to 40 percent of consumption and continue to fall. Imports from the Organization of Petroleum Exporting Countries declined from half of US imports in 1993 to 40 percent of imports 2012. Canada is now the largest single-nation supplier of crude to the US, rising from 14 percent in 1993 to 28 percent today. Construction of the Keystone pipeline would switch additional imports from OPEC to Canada.
At the same time, US oil production is ramping due to the hydrofracturing revolution. Oil production from shale fields in North Dakota and Texas led to a boost in US oil production by 30 percent since 2006. Industry experts predict almost all US petroleum will come from domestic and Canadian sources by 2030. There’s no longer a need to force ethanol use to reduce oil imports.
Second, recent studies show that the use of ethanol and biodiesel does not reduce greenhouse gas emissions. For many years, proponents of decarbonization assumed that the burning of biofuels would be “carbon neutral.” The carbon neutral concept assumes that as plants grow they absorb carbon dioxide equal to the amount released when burned. If true, the substitution of ethanol for gasoline would reduce emissions.
But a 2011 opinion from the Science Committee of the European Environment Agency pointed out what it called a “serious accounting error.” The carbon neutral concept does not consider vegetation that would naturally grow on land used for biofuel production. Since biofuels are less efficient than gasoline or diesel fuel, they actually emit more CO2 per mile driven than hydrocarbon fuels, when proper accounting is used for carbon sequestered in natural vegetation. Further, a 2011 study for the National Academy of Sciences found that, “…production of ethanol as fuel to displace gasoline is likely to increase such air pollutants as particulate matter, ozone, and sulfur oxides.”
Ethanol fuel is no bargain. For example, when gasoline is priced at $3.40 per gallon, the 85 percent ethanol blend (E85) is priced at about $3.00 per gallon. But since the energy content of ethanol is only 66 percent that of gasoline, a tank of E85 gets only about 71 percent of the mileage of a tank of pure gasoline. E85 fuel should be priced at $2.41 per gallon for the driver to break even. According to the US Department of Agriculture, ethanol fuel remains about 25 percent more expensive than gasoline.
World biofuel production has increased by a factor of seven over the last ten years. Corn and soybean prices have doubled over the same period. (US Dept. of Energy, Food and Policy Research Institute, 2011)
Mandates for ethanol vehicle fuel are also boosting food prices. Forty percent of the US corn crop is diverted to produce about ten percent of US vehicle fuel. Global corn and soybean prices have doubled over the last ten years in concert with the growth in ethanol and biodiesel production. Anyone who drives a car or eats food is paying higher prices due to ethanol mandates.
But isn’t ethanol fuel sustainable? Not in terms of water consumption. Studies by the Argonne National Laboratory and the Netherlands University of Twente found that ethanol production consumes twice to dozens of times more water than gasoline produced from petroleum, even from Canadian oil sands.
Gallons of water consumed per gallon of fuel produced for gasoline, ethanol, and biodiesel from various sources, including irrigation and fuel production, but not including precipitation. Variations in water consumption for three US regions and global averages for ethanol and biodiesel are primarily due to amount of irrigation used and agricultural yield. (Argonne National Laboratory, 2009; University of Twente, 2009)
Suppose we return to using corn for food and gasoline to power our vehicles?
[Originally published in The Washington Times]
The Tax Foundation’s annual Tax Freedom Day report is out, and it shows federal tax increases that took effect this year will move the date back five days from last year. But that’s an average, as some states won’t see tax freedom until well into May, while others already have tax freedom.at this link.]
This past weekend, I spoke at three events in Ohio on Common Core–new national education standards 45 states have adopted. We had speaking panels in Cincinnati and Cleveland and a 3-on-3 debate in Columbus. Every event was packed. According to registration numbers and crowd counts, some 1,000 people attended altogether.
In Cleveland (you can vaguely see me speaking in this picture), audience members stayed for an hour after the two-hour forum was scheduled to end, and even when we walked off the stage, exhausted from jabbering all day and traveling all weekend, people were still waiting to ask questions. On Monday, I had two dozen emails from people who had attended, asking follow-up questions and for more information.
I brought two giant boxes of Heartland brochures, books, and flyers on school reform and education research, as well as a big stack of School Reform News‘s latest issue. Only a small pile of books remains.
The people were ravenous for information. As I spoke and listened, I could feel the agitation in the audience. Some of that came right out in the open when people lined up by the dozens to ask questions everywhere we went, many of them facing off against Common Core proponents. Here’s the audience in Columbus.
All of these forums were organized a few short weeks before they occurred, with minimal advertising–mostly through email forwards. Several groups are asking me to come back and speak in their hometowns. One lady drove five hours to attend the Columbus event.
Common Core represents a threat to American-style representative government and our freedoms to control our own children and local affairs, as I wrote in National Review Online shortly before the debates. Because it was written in closed-door meetings funded by progressive foundations and companies that stand to gain billions from the education mandates, the public is only now finding out about it. So far, 13 states have reconsidered their adoption of Common Core. Based on what I saw in Ohio, looks like they’re soon number 14. Who’s next?
I am pleased to pass along to Somewhat Reasonable readers news of the launch of a new blog, Executive Branch Review. Hosted by the Federalist Society for Law and Public Policy, Executive Branch Review seeks to prompt a national debate about (a) whether Federal executive branch activity has increased in recent years and (b) if so, with what consequences.
Because the Federalist Society does not take positions – it seeks simply to stimulate discussion and debate among politically aware and concerned citizens – the blog posts themselves will be relatively neutral in tone, merely citing federal activities that some may see as overreach and teeing them up for discussion and debate. The discussion itself will take place in the comments section of the blog, and that’s where Somewhat Reasonable readers come in.
Because I believe that public policy issues are too important to leave to just professional politicians, I ask my readers to do two things:
- Please go to the blog now (http://www.executivebranchproject.com/), bookmark the page, check back regularly, and offer comments on blog posts as you see fit. Feel free to be as brief or as extended as you wish, but please respect the rules of the forum: don’t be overly strident in nature; avoid abusive, vulgar, offensive, threatening, or harassing language, personal attacks of any kind, and offensive terms that target specific individuals or groups. Please also don’t try to post any electioneering or lobbying communications within the meaning of applicable federal or state law, as this is not a political website – it’s about public policy.
- Please forward the link ( http://www.executivebranchproject.com/) to anyone you know – left, right, or center – who wants to understand more about how our American government actually works in practice today and who wants to contribute to discussing the appropriate use of executive branch power.
Thank you in advance for your help. As I said, I believe that issues such the ones this blog will highlight are too important to leave to professional politicians, so please be professional, please be reasoned, and please say something as time permits and the spirit moves you. If the American experiment in self-government is going to work much longer, it needs intelligent and thoughtful participation from people like you and the people you know.
Maybe it’s a measure of progressives’ refusal to look back, to always move “forward.” Otherwise, they should be celebrating right now. In fact, President Obama and fellow modern progressives/liberals should be ecstatic all this year, rejoicing over the centenary of something so fundamental to their ideology, to their core goals of government, to their sense of economic and social justice—to what Obama once called “redistributive change.”
And what is this celebratory thing to the progressive mind?
It is the progressive income tax. This year it turns 100. Its permanent establishment was set forth in two historic moments: 1) an amendment to the Constitution (the 16th Amendment), ratified February 3, 1913; and 2) its signing into law by the progressive’s progressive, President Woodrow Wilson, October 3, 1913. It was a major political victory for Wilson and fellow progressives then and still today. By my math, that ought to mean a long, sustained party by today’s progressives, a period of extended thanksgiving.
President Obama once charged that “tax cuts for the wealthy” are the Republicans’ “Holy Grail.” Tax cuts form “their central economic doctrine.” Well, the federal income tax is the Democrats’ Holy Grail. For progressives/liberals, it forms their central economic doctrine.
As merely one illustration among many I could give, former DNC head Howard Dean and MSNBC host Lawrence O’Donnell were recently inveighing against Republican tax cuts. Dean extolled “what an increase in the top tax rate actually does.” He insisted: “that’s what governments do—is redistribute. The argument is not whether they should redistribute or not, the question is how much we should redistribute…. The purpose of government is to make sure that capitalism works for everybody …. It’s government’s job to redistribute.”
What Dean said is, in a few lines, a cornerstone of the modern progressive manifesto. For Dean and President Obama and allies, a federal income tax based on graduated or progressive rates embodies and enables government’s primary “job” and “purpose.” They embrace a progressive tax for the chief intention of wealth redistribution, which, in turn, allows for income leveling, income “equality,” and for government to do the myriad things that progressives ever-increasingly want government to do.
And so, in 1913, progressives struck gold. The notion of taxing income wasn’t entirely new. Such taxes existed before, albeit temporarily, at very small levels, and for national emergencies like war. The idea of a permanent tax for permanent income redistribution broke new ground. The only debate was the exact percentage of the tax. In no time, progressives learned they could never get enough.
In 1913, when the progressive income tax began (and the first 1040 form, with instructions, was only four pages long), the top rate was a mere 7 percent, applied only to the fabulously wealthy (incomes above $500,000). By the time Woodrow Wilson left office in 1921, the great progressive had hiked the upper rate to 73 percent. World War I (for America, 1917-18) had given Wilson a short-term justification, but so did Wilson’s passion for a robust “administrative state.”
Disagreeing with Wilson were the Republication administrations of Warren Harding and Calvin Coolidge, his immediate successors. Along with their Treasury secretary, Andrew Mellon, they reduced the upper rate, eventually bringing it down to 25 percent by 1925. In response, the total revenue to the federal Treasury increased significantly, from $700 million to $1 billion, and the budget was repeatedly in surplus.
Unfortunately, the rate began increasing under Herbert Hoover, who jacked the top rate to 63 percent. It soon skyrocketed to 94 percent under another legendary progressive, FDR, who, amazingly, once considered a top rate of 99.5 percent on income above $100,000 (yes, you read that right).
Appalled by this was an actor named Ronald Reagan, himself a progressive Democrat—though not much longer. Reagan often noted that Karl Marx, in his “Communist Manifesto” (1848), demanded a permanent “heavy progressive or graduated income tax.” Indeed, it’s point 2 in Marx’s 10-point program, second only to his call for “abolition of property.”
The upper tax rate wasn’t reduced substantially until 1965, when it came down to 70 percent. Alas, President Ronald Reagan took it down to 28 percent. And despite claims to the contrary, federal revenues under Reagan increased (as they did in the 1920s), rising from $600 billion to nearly $1 trillion. (The Reagan deficits were caused by excessive spending and decreased revenue from the 1981-3 recession.)
The upper rate increased again (to 31 percent) under George H.W. Bush and under Bill Clinton (39.6 percent). George W. Bush cut it to 35 percent. Barack Obama has returned it to the Clinton level of 39.6 percent.
Here in 2013, 100 years henceforth, the wealthiest Americans—the top 10 percent of which already pay over 70 percent of federal tax revenue—will be paying more in taxes this year than any time in the last 30 years. For progressives, this is justice. But it is also bittersweet: As progressives know deep inside, it still isn’t enough. For them, it’s never enough.
To that end, my enduring question for progressives is one they typically avoid answering, especially those holding elected office: In your perfect world, where, exactly, would you position the top rate? I routinely hear numbers in the 50-70 percent-plus range.
Democrats like President Obama complain about Republican “intransigence” in raising tax rates but, truth be told—and as any liberal really knows—if it wasn’t for Republican resistance, progressives would rarely, if ever, cut taxes. America would remain on a one-way upward trajectory in tax rates, just like under Woodrow Wilson and FDR, and just as it has been in its unrestrained spending for nearly 50 years. Like their refusal to cut spending (other than on defense), progressives are dragged kicking and screaming into tax cuts. They need high income taxes for the government planning and redistributing they want to do; for Obama’s sense of redistributive justice.
This year, the progressive income tax turns 100. For progressives, getting it implemented was a huge triumph. Their success in making it a permanent part of the American landscape is a more stunning achievement still.
Dr. Paul Kengor is professor of political science at Grove City College, executive director of The Center for Vision & Values, and author of the book, “The Communist: Frank Marshall Davis, The Untold Story of Barack Obama’s Mentor.” His other books include “The Crusader: Ronald Reagan and the Fall of Communism” and “Dupes: How America’s Adversaries Have Manipulated Progressives for a Century.”
Recent public filings by the DOJ and the FCC spotlight their reticence for wireless competition policy and market-driven spectrum auctions. They also show a strong predilection for preemptive and interventionist wireless regulation.
Specifically, the DOJ just sent an analysis to the FCC. It urges the FCC to establish spectrum auction regulations that would effectively deny new scarce radio spectrum to wireless market leaders, Verizon and AT&T, and effectively steer it to the “smaller nationwide networks,” Sprint and T-Mobile.
Just a few weeks ago in its annual wireless competition report to Congress, the FCC could not bring itself to declare that effective wireless competition exists.
Never mind the FCC’s own analysis shows the U.S. market is the most competitive it has ever been. Never mind it’s more competitive than most any other nation. And never mind, by most every competitive measure — pricing, speed, investment, deployment, availability, innovation and consumer satisfaction, competition is vibrant.
This tortured FCC decision to deny the obvious is a not-so-subtle signal that the FCC is bent on implementing some form of preemptive spectrum cap regulations that the FCC could not justify if it found the wireless market competitive.
What’s wrong with this FCC/DOJ approach?
First, such regulations will turn a competitive-market-based auction, driven by market supply and demand, into a less-competitive, rigged “auction” where everyone knows ahead of time to which companies the government wants to steer the new available spectrum.
A free and fair auction is just like free and fair trade – the outcome is based on competition, supply, demand, and price, not government pre-selections and regulation.
Second, the DOJ is speculating that two larger players will buy spectrum that they don’t really need in order to keep it from two smaller competitors.
If the DOJ is urging an auction policy grounded on DOJ speculation, why don’t they also consider the more obvious potential anti-competitive effects of preemptively and artificially limiting auction competition from four to two bidders?
Wouldn’t their two chosen bidders have a greater incentive to collude to foreclose the opportunity for the U.S. taxpayer to reap the benefit of being paid the highest market value for the spectrum?
Third, such regulations could shortchange the American taxpayer billions of dollars in foregone auction revenues, and not reduce the Federal budget deficit and debt as much as a free and fair auction would.
That’s because specifically excluding the two bidders — with the most subscriber demand for spectrum capacity and the most financial wherewithal to bid — will substantially reduce the winning prices for spectrum.
Fourth, the FCC has an abysmal track record of picking market winners and losers.
For example, the FCC’s heavy-handed implementation of the 1996 Telecom Act overtly picked the CLECs as market winners and the Bells as market losers. The FCC imposed one-sided uneconomic price regulations and terms, which predictably fueled a CLEC market bubble and subsequent market crash. All of the FCC’s chosen-winner-CLECs went bankrupt.
Another example, the FCC tried to steer the last 700 MHz public safety auction so tightly that no one bid. The ignominious result is that twelve years after 9-11, the FCC still has not been able to implement the 9-11 recommendation to create an interoperable public safety wireless network.
Fifth, the DOJ’s central market analysis and assumption here are incorrect. In a zealous attempt to lend support for FCC regulatory intervention, the DOJ (on page 12) contrived a flawed market analysis conclusion that Verizon and AT&T are “the dominant firms” in wireless.
The DOJ unnecessarily has created a credibility problem for itself here.
Legally, the word “dominant” is singular not plural. Dominant means first and foremost, not the top two. Verizon and AT&T logically can’t both be “dominant” at the same time; either one is dominant, or none is dominant.
Under the DOJ’s own guidelines, a firm is “dominant” with 50+% share — meaning every other competitor by definition is non-dominant. Neither Verizon nor AT&T have anywhere near 50+% share of the relevant market.
Language matters. If the DOJ meant to just imply the existence of market power, they should stick to that legal term, not employ the pejorative term “dominant,” for two wireless providers, when they know they can’t prove that factually based on their antitrust expertise.
This assertion of two “dominant” wireless providers imagines incorrectly that Verizon and AT&T somehow don’t compete against each other when they obviously do.
Lastly and most importantly, if the DOJ and FCC truly believe that the supply of spectrum is so important to wireless competition, why have they done so little publicly to rectify the federal government’s hoarding, waste and mismanagement of spectrum?
This huge and artificial governmental constriction of overall spectrum supply is the overriding reason for scarcity of commercial spectrum — not Verizon or AT&T speculated potential actions.
The federal government claims that it can’t spare any more of its spectrum for auction when it controls ~85% of the nation’s radio spectrum suitable for wireless broadband, but only uses 1% of the nation’s energy; provides 8% of the nation’s employment; produces 12% of the nation’s GDP; and gets by with 30% of the nation’s land?
The facts expose an enormous public-private imbalance between the Government’s unjustifiable and wasteful hoard of spectrum supply and the private sector’s huge unmet demand for more spectrum supply over time.
Tellingly, the private sector has a wireless spectrum utilization rate as much as ~80 times greater than the Government’s.
This spectrum hoarding and waste is only able to continue because spectrum is the only federal asset that has no modern management system, no inventory or utilization measurement, and no budget or accountability system.
It is the single biggest “good government” management scandal facing the federal government today.
In sum, there is no long-term, private-sector, spectrum-competition problem requiring FCC preemptive regulation. However, there is a deeply dysfunctional federal spectrum management pipeline problem in dire need of attention that the FCC, DOJ and the rest of the Government appear to be ignoring.
The longer the FCC and DOJ keep their head in the sand about the obvious state of federal spectrum mismanagement, the more clear it becomes that they are less interested in promoting wireless competition, and more interested in promoting regulation of the wireless industry.
[First Published at The Daily Caller]
Progressive Keynesian Myths Debunked: The Coming Redistribution of Political and Economic Power Among the States
Ongoing effective economic experiments among the 50 states are sharpening, and definitive results will pour out in the real world, editorial and opinion fallacies to the contrary notwithstanding. That sharpening is the result of the increasing political segregation among the states, with 25 now in complete control of Republicans in the Governor’s office and in majorities in the state legislatures, and 15 in the same complete control by the Democrats.
That sharpening is further exacerbated by the overconfidence of so-called “progressives” in reaction to the election of 2012, which they are certain heralds the greening of America – the abandonment by rising American majorities of the foundations of traditional American prosperity and success, in favor of European concepts of social justice and neo-Marxism. That overconfidence is leading the Democrat controlled states to embrace more radical left nostrums.
Hence we see accelerating tax rate increases in California, New York and Illinois, combined with overregulation driving out dramatic, emerging, real world opportunities in resource development and other market prospects.
The likely outcome of these economic experiments is carefully presented in the recent publication by the American Legislative Exchange Council (ALEC) of Tax Myths Debunked, authored by economists Eric Fruits and Randall Pozdena. That publication wields both meticulous logic and authoritative empirical support to definitively grind to dust economic myths advocated by “progressives” with religious fervor.
One such myth is the hopelessly outdated Keynesian notion that increased government spending stimulates the economy during recession. As the authors note, “The Obama Administration and its liberal allies in Congress forgot the dismal performance of Keynesian-type deficit spending as a stimulus of growth in the 1960s and 1970s and embarked on an aggressive deficit spending policy anyway.”
That was the nearly $1 trillion dollar so-called “stimulus” that Obama and the Democrats waived through Congress as the first major act of the Obama Administration in February, 2009. Keynesian policies failed so thoroughly in the 1970s, leading to both double digit inflation and double digit unemployment, that it is puzzling as to why Obama returned to them, as if he is ignorant not only of what happened then, but of everything that happened after then, from 1980 on. Ronald Reagan explicitly scraped Keynesian nostrums, embracing instead the new, modern supply side economics, which focuses on incentives for increased production to restore economic growth and prosperity, rather than increased demand. Inflation was quickly subdued, shocking the Washington Establishment, and the economy took off on a generation long, 25 year, economic boom from 1982 to 2007, which Art Laffer and Steve Moore called “the greatest period of wealth creation in the history of the planet,” in their 2008 book, The End of Prosperity.
That is why I have called Obama’s economic policies Rip Van Winkle economics, because Obama seems to have slept through that 25 year economic boom, and to be totally unaware of everything that happened then, in his own country.
The myth of Keynesian economics is based on a failure to take into account basic double entry bookkeeping. If the government spends more, where does the money for that increased spending come from? Either from increased borrowing, or increased taxes, which both take an equal amount of resources and spending out of the private economy as they finance in increased government spending. So not only can there not be a net increase in aggregate, or total, demand from these policies, the spending is in truth a net drag on growth, as the private economy spends money more productively and efficiently than the government. That is why this Keynesian nostrum never worked in the 1930s, as the recession of 1929 extended into the decade long Great Depression, and it hasn’t worked anywhere else since.
But most fundamentally, economic growth is not driven by increasing demand, which is insatiable, but by increased production or output (supply), which is driven by incentives for productive activity. In other words, just as an individual cannot spend himself rich, neither can a nation. Prosperity is determined by production, just as an individual increases his or her income by becoming more productive.
Demand can never be inadequate in a market economy. If the demand for any product or service is not strong enough, the price of the good or service will fall, until demand equals supply. The people can never spend more than they produce, and so increase “aggregate demand.” And they will never spend less than they produce, leaving demand inadequate, for they will either consume or save every dime that they earn or produce. The consumption goes into consumer spending, and the savings goes into capital spending (which is actually what makes us richer and more prosperous over the long run, as discussed further below).
Fruits and Pozdena recount the consequently all too predictable, dismal results, from Obama’s Rip Van Winkle, 2009 “stimulus,”
“The president’s economists predicted that by the fourth quarter of 2010 the stimulus would have led to employment of 137.5 million. Instead, actual employment was 7.3 million lower than the administration’s projections, and unemployment rates reached 10 percent. They projected that 2012 unemployment would be only 5.75 percent. Instead, unemployment is hovering around 8 percent, with much of that ‘improvement’ coming from individuals leaving the labor force unable to find employment.”
The only reason that Keynesian economics has survived for so long in western thinking is not because it works, or even makes any sense, but because it justifies what liberal politicians already want to do – spend with reckless abandon, run bigger and bigger deficits so they don’t have to explicitly pay for it with higher taxes today, and run up the national debt, which will be someone else’s problem later. The truth is, as Fruits and Pozdena explain, “A large and long-standing body of literature finds that increased or higher government spending tends to reduce economic growth rather than increase it.”
They cite Baumol, W. J. (1967), “Macroeconomics of unbalanced growth: The anatomy of urban crisis.” American Economic Review, 57(3): 415–426 as showing 45 years ago that shifting resources from high productivity growth sectors to low productivity growth sectors, such as government services, will cause the growth rate of overall productivity to decline. They cite Barro, R. J. (1991), “Economic growth in a cross section of countries.” Quarterly Journal of Economics, 106(2): 407–443 as showing that government consumption has no effect in increasing private productivity, or in other words in restoring economic growth. Instead, Barro found that increased government consumption lowers saving and growth through the distorting effects of taxation or government expenditure programs.
A review of data from the G-7 countries by E. Hseih and K. Lai (1994) found no evidence that increased government spending increases the rate of growth of per capita GDP. Barro, R. J. (1996), “Determinants of Economic Growth: A Cross-Country Empirical Study.” Working Paper No. 5698, National Bureau of Economic Research found that most government spending does not increase productivity, and that increased government spending relative to the economy reduces investment and growth.
Harvard Professor Alesina, A., along with Perotti, R. in “Fiscal Expansions and Adjustments in OECD Countries.” Economic Policy, n.21, 207-247 (1995) found based on a cross-country analysis of OECD studies that reducing the share of public spending in the economy would increase economic growth by increasing investment. Alesina A., Ardagna, S., Perotti, R., and Schiantarelli, F. (2002), “Fiscal Policy, Profits, and Investment,” American Economic Review, Vol. 92, no. 3, June 2002, 571-589 argue that government spending cuts are the most stimulative policy for economic growth in a recession.
The bottom line is that Keynesian economics has long been refuted by experience, empirical evidence, and logic, and the failed doctrine now needs to be put to bed, in American colleges and universities, and throughout the councils of government. Moreover, Obama should have known better, given that Keynesian economics has failed so badly every time it has been tried, from the 1930s to the 1970s, and all around the world since then. He had a responsibility to the American people to know better.
Another “progressive” myth debunked by Fruits and Pozdena is that raising tax rates will not harm the economy. Often cited is that tax rates were very high in the 1950s, yet the economy still grew. Perhaps if we bombed to smithereens all our economic competitors, as had recently been done in the 1950s, high tax rates would not be as harmful. But Kennedy did not think those high 1950s tax rates were harmless. He campaigned in 1960 against what he saw as the weak Eisenhower economy, and advocated an across the board 30% cut in tax rates. After that was mostly enacted after his death, the economy boomed, and revenues actually soared.
More recently, Fruits and Pozdena note that ironically, Professor Christina Romer, Obama’s own [former] head of his Council of Economic Advisors, has provided (along with her husband David Romer), some of the strongest evidence that higher tax rates depress economic growth, with their work concluding that each 1% increase in taxation lowers real GDP by 2 to 3 percent. That works primarily through the effect of tax rates on incentives. Lower rates increase the incentives for productive activity, such as savings, investment, business start ups, business expansion, job creation, entrepreneurship and work, resulting in more of each, which adds up to increased economic growth. Higher rates do the opposite.
Fruits and Pozdena explain that this works “because low marginal tax rates, in effect, raise the after-tax returns to labor and capital,” which “increase[s] the supply of labor, entrepreneurship and capital,” which directly increases production and economic growth. Most important for growth and prosperity directly for working people and labor is capital investment. That produces the tools for workers to be more productive (e.g., digging with computerized, mechanized steam shovels as compared to hand shovels as compared to bare hands). Increased worker productivity provides the increased earnings to pay workers higher wages. The increased investment also means the increased demand for labor that bids wages up to reflect the increased productivity. That reveals the fundamental truth about capitalism that labor and capital are complements, not antagonists, which so-called “progressives” fail to understand. Capital increases the productivity of labor, and labor increases the productivity of capital, which increases the production, and hence growth, of the entire economy.
This is why higher tax rates on investment (which in populist parlance is naturally held by “the rich,” who have the funds to make such investments) are so particularly harmful. This is further confirmed by the work of Romer and Romer, which found a strong negative effect of higher tax rates because “investment falls sharply in response to tax increases. It is very likely that this strong retreat of investment is part of the reason the declines in output are so large and persistent.”
That does not mean that “the rich,” or capital investors, should not pay their “fair share” of taxes. But as explained in this column already ad nauseum, “the rich” already pay far more than their fair share under current tax law, which leaves President Obama’s repeated calls ad nauseum for further tax increases on “the rich” to pay their fair share explicable only on Marxist grounds (“the rich” being unjustifiable per se, regardless of effects on economic growth, and ultimately working people and the poor).
Copious data and research from the increasingly divergent policies at the state level further explode the myth that higher tax rates are not harmful to the economy. As Fruits and Pozdena explain, “The evidence that lowering marginal tax rates grows the economy is voluminous and, because individual states vary so much in the level and type of taxes levied against the backdrop of federal policy, it is relatively easy to demonstrate a causal relationship between lower marginal tax rates and greater employment overall and migration to those states with preferable, low income tax rates.” Besides Tax Myths Debunked, that data and research are thoroughly provided in the annual volumes of Rich States, Poor States also published by ALEC.
The response from “progressives” too often just involves Alinsky style ad hominem attacks, which seems to reflect inadequate public schooling, failing to teach Aristotelian logic, which instructs that ad hominem arguments are logical fallacies.
This data and research are already increasingly affecting tax policy among the states. Nine states prosper perfectly well with no state income tax at all, including Texas, Florida and Tennessee. That policy is starting to spread across the South, from Louisiana to Virginia, and up the Plains states. In contrast, the “progressive” states, from California to Illinois to New York, along with Oregon, Hawaii, and some others, persist in raising state tax rates to record levels.
Political activist organizations posing as media institutions can effectively shield the populations of the “progressive” states from knowledge of the above discussed data, research and analysis. But they can’t shield them from the real world effects of “progressive” tax and economic policies. These redistributionist policies are only redistributing economic and political power among the states, as the American population is migrating from the increasingly stagnant “progressive” states to the increasingly booming growth oriented states.
Political power follows that migration, as the states with growing populations receive more Congressional representatives and electoral votes from the economically stagnant, “progressive” states. Arizona now has as many electoral votes, and Congressional representatives, as Massachusetts, with South Carolina not far behind. Florida now matches formerly dominant New York as well. Georgia now has as many as Michigan. Texas as many as Illinois and Ohio combined. For the first time since the 1849 Gold Rush, California received no additional electoral votes in the 2010 Census.
On our current course, these trends will only accelerate. As the saying goes, “the South will rise again.”
It’s often Crony Socialism – President Obama giving governmental benefit and/or our money to his donors and friends. Or it’s his having no idea what works and what doesn’t. Or both. Regardless, his Administration – any Administration – is perpetually pathetic when it tries to decide what should happen in the private sector.
So of course President Obama’s at it again.
On Friday the Obama Justice Department strongly suggested the Federal Communications Commission (FCC) make sure everyone get their “fair share” of wireless spectrum in the upcoming spectrum auction.
“The Department concludes that rules that ensure the smaller nationwide networks, which currently lack substantial low-frequency spectrum, have an opportunity to acquire such spectrum could improve the competitive dynamic among nationwide carriers and benefit consumers.”
I know what you’re thinking – it’s an auction. Everyone that wants spectrum attends the auction – thus everyone has “an opportunity to acquire…spectrum.” But you’re thinking like a rational human being – not like an Obama Leftist bureaucrat.
“The Department believes it is important that the Commission devise policies that address the allocation of low-frequency spectrum in particular so that acquisitions of such spectrum do not hamper the ability of carriers in markets where that spectrum is important.”
The Obama Justice Department wants the Obama FCC to rig the spectrum auction. So that it’s not actually an auction – it’s a quota set-aside program. Affirmative Action for wireless companies.
Where people who don’t make the highest bids – win the bids anyway. Or where the FCC forbids some willing participants from participating.
It’s not picking winners and losers – it’s picking losers at the expense of winners.
Because the Justice Department’s demands only became public late Friday, there have thus far been very few reactions. But the Media Marxists that have weighed in – are thrilled with this inter-governmental ideological interloping.
“All of these recommendations are in line with what Public Knowledge and many others have been advocating for years, and it is gratifying to see the DoJ take such a strong stand in favor of competition and against the wireless status quo. We urge the FCC to take the DoJ’s recommendations very seriously and to make reforming its spectrum aggregation policies its top wireless priority.”
The “wireless status quo” which these folks are “against” – is the amazing, hurtling-ever-forward smart phone Xanadu we are all currently enjoying. Let us look at but one facet of this alleged horrendous-ness.
Less than six years ago, an “app” was what you submitted to a college admissions office. Then came the iPhone (which begat a whole host of other devices with app-lications). In November 2008, there were 10,000 iPhone apps. In January 2011, there were 306,000. This January, there were 775,000.
This unbelievable, exponential progress – is the “status quo” the Left opposes. And – in the interest of “fairness” – wants the government to proactively diminish.
How about we let an auction be an auction – and not yet another government-mandated redistribution program?
[First Published at Red State]