Sequester? I’ll Take Two, or Three, or …

February 20, 2013

If the automatic budget cuts set in motion back in 2011 – known as the “sequester” – go into effect soon, as will be the case without Congressional action, people will die. At least that is if the level of rhetoric to which President Obama has now lowered himself to bears any actual resemblance to reality. (Let us leave out for now that politics seldom ever really bears any resemblance to reality to begin with.)

Speaking in front of cameras Tuesday – and flanked by uniformed first responders otherwise known to political cynics as ‘prop people’ often used for emotional, rather than rationale, appeals – Obama warned of the following (abbreviated to prevent potential reader nausea):

“Emergency responders … their ability to help communities respond to and recover from disasters will be degraded… FBI agents will be furloughed. Federal prosecutors will have to close cases and let criminals go… Hundreds of thousands of Americans will lose access to primary care and preventive care like flu vaccinations and cancer screenings.”

Who, according to Obama, will be to blame for these supposedly outrageous “meat-clever”-type cuts? The usual suspects: “Congress.” Or what he really means: Those evil, rich-loving Republicans who only cater to ‘special interests.’  Never mind the minor detail that the sequester was actually the Obama administration’s idea. In fact, Obama was at one point adamant against backtracking on it. In November of 2011, he warned, “I will veto any effort to get rid of those automatic spending cuts – domestic and defense spending.” He added, “There will be no easy off-ramps on this one.”

obama_1st-responders-sequester

But don’t sweat the details, right? Political rhetoric is much more preferred in situations like this. And none is more preferred than the rhetoric that claims this sequester actually represents ‘cuts’ – and the “meat-cleaver” kind at that! Unfortunately, in ‘Washington-speak,’ most references to ‘cuts’ are really just slow-downs in the rate of projected growth. Assuming the sequester takes place, the federal budget will actually still grow by $2.4 trillion over the next 10 years. Translation: We’re still going to spend more, just not as much as we had originally planned. Similar to as if an employee were to get a slightly smaller raise instead of larger raise, only employers usually actually have that money to spare for the slightly smaller raise.

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Sweet Protectionism

November 23, 2012

For American sugar producers, like many other industries, protectionism is apparently a sweet deal. Not the same for American consumers, as this video from Learn Liberty explains …

H/T to Crony Chronicles.


Real Charity

August 25, 2012

It’s a common narrative in many elections, and this year is no exception. Democrats care about the poor; Republicans do not. Progressives are concerned about those who have less; conservatives only care about the rich. It’s been stated so many times, many have come to believe it.

Then come periodic studies on actual charitable giving – you know, the kind where people actually give their own money instead of relying on the government. Turns out the oppositie may be true.

The latest is a recent report from The Chronicle of Philanthropy showing that those in many “red states” give more as a percentage of their income than in many “blue states.” For example, the eight highest states in their ranking (those that gave the most as a share of income) went for John McCain in the 2008 presidential election. The seven lowest ranking states went for President Obama. See this chart for the details.

This is nothing new. Back in 2004, I wrote a column noting a similar study with similar results. Back then, all of the top 25 states that gave the most in relation to their average incomes all went to George W. Bush in the 2004 presidential election, and 19 of the bottom 25 went for John Kerry.

Despite the rhetoric from progressives about “giving back” and the need for spreading the wealth around, it appears they don’t practice it as often in their private lives. That includes some in the current administration.

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Bad Investment

August 16, 2012

Turns out Social Security may not only be an unwise investment for new and future retirees, it may not be an investment at all. A recent Associated Press report noted that today’s new retirees are part of the first generation that has paid more into the Social Security system than they will actually receive after retirement.

One such example from a 2011 Urban Institute study was given in the AP article:

“A married couple retiring last year after both spouses earned average lifetime wages paid about $598,000 in Social Security taxes during their careers. They can expect to collect about $556,000 in benefits, if the man lives to 82 and the woman lives to 85 …”

Though Medicare has come back into the spotlight with the media attention toward Mitt Romney’s new VP pick and his now infamous proposal of remaking the single-payer healthcare system into a “premium support” system (something Romney also supports), reform of the other big entitlement elephant in the room, Social Security, has rarely been discussed since the failed attempts by the last presidential administration to partially “privatize” it.

Perhaps Social Security reform deserves new attention. After all, the program’s own trustees state in their latest annual report that after 2033, “tax income would be sufficient to pay only about three-quarters of scheduled benefits…”  At that point, one could just as well literally hide their money under their mattress and guarantee a more secure retirement. Assuming they remember where they hid it, they at least would not lose any of their money. Not to even mention the problem of inflation.

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Getting Permission to Work

May 19, 2012

The Institute for Justice has this fairly thorough video demonstrating the preponderance of dubious occupational license requirements in many jurisdictions:

Back in 2006, I looked at the prevalence of occupational licensing in Hillsborough County, Florida – starting with the example of requiring auctioneers to be licensed. I thought it kind of funny that a person who wanted to be an auctioneer requires a government license, while a 16-year-old who wanted to operate a large roller coaster, like at the theme park where I used to work, did not. (Subsequently, that theme park quit hiring anyone under 18 years of age – not connected to my original column I’m sure.)

At the time, Hillsborough County issued two different auctioneer licenses: one for selling your own property and one for selling someone else’s. (I contemplated interviewing an actual auctioneer, but I realized that he or she might be difficult to understand.)

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Facts Behind Tax ‘Fairness’

May 1, 2012

To all who decry the “1 percent” and the perceived unfairness of a tax system supposedly tilted in favor of the wealthy, ponder the following table from the National Taxpayers Union that breaks out who pays federal income taxes:

Tax Year 2009

Percentiles  Ranked by AGI

AGI  Threshold on Percentiles

Percentage  of Federal Personal Income Tax Paid

Top  1%

$343,927

36.73

Top  5%

$154,643

58.66

Top  10%

$112,124

70.47

Top  25%

$66,193

87.30

Top  50%

$32,396

97.75

Bottom  50%

<$32,396

2.25

Note: AGI is Adjusted Gross Income   Source: Internal Revenue Service

Some Perspective on the Debt

February 17, 2012

A parody that might bring the enormity of the national debt a little closer to home:


More Than a Day Off

September 5, 2011

Perhaps some perspective.


Downgrade

August 5, 2011

It’s official. Ratings agency Standard & Poor’s has downgraded their long-term credit rating for the U.S., noting in their report the following reasons:

… we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Hard to argue with.  Even the party dubbed as deficit hawks, Republicans, have voiced skittishness over the possibility of defense spending cuts should the plan potentially emanating from the so-called “super” committee not pass.

The sad reality is that very few politicians are willing to make the cuts that are necessary to correct our ever-increasing path toward staggering debt (not that we aren’t already there). And if they’re not willing to make those cuts, the only other option is to “increase revenues,” which is code for raising taxes – something that is even less politically palatable. Yet even raising taxes on the “rich” isn’t enough to put the government in the black.

It’s easy to point the finger at our politicians. But they are just doing what they think will get them reelected, which means in most cases avoiding making tough decisions that might offend their constituents. Truth be told, it’s the electorate that is to blame for our mounting debt and near refusal to seriously deal with it (note: part of the S&P reasoning was that the amounts agreed on in the recent debt-ceiling deal are not anywhere near enough to tackle our long-term debt problems). As long as we the voters are unwilling to give up our particular piece(s) of the pie the government spending-machine cooks up, we will continue to face mounting debt and further credit worries.

“But what about cutting waste, fraud and abuse?” you might ask. One man’s “waste” is another man’s “investment.” One man’s “fraud” is another man’s “tax credit.” And one man’s “abuse” is another man’s “grant” or “entitlement” or whatever other euphemism he may choose at any given moment to justify his looting of other people’s money.

We are all part of the problem. The sooner we realize that the better.


Planned Parenthood and Grown-up Budgeting

April 9, 2011

Much debate took place around government funding to Planned Parenthood leading up to the prevented government “shutdown.” Many pro-lifers argued funding was going directly to fund abortions. Pro-choicers argued the federal money was separated from the money going to abortions. And budget hawks and libertarians argued government shouldn’t be subsidizing any of their services, regardless of the abortion issue.

Here are a few facts on the issue straight from Planned Parenthood itself:

  • Percent of Planned Parenthood revenue from government funding (FY 2008/2009) = 33% [source]
  • Abortion as percentage of all Planned Parenthood services (FY 2008/2009) = 3% [source]
  • Number of abortions performed by Planned Parenthood every hour (2009) = 38 [source]

In short, some of the figures thrown around have been exaggerated while others not raised should be a little disturbing. However, two points should be raised.

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