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March 2009
President Barack Obama and the U.S. Congress have gone on a spending and debt spree that the country cannot afford. As a result, a spontaneous grassroots movement is emerging from every corner of the nation with a message for Congress and the president: Stop spending us into an inevitable spiral of debt and higher taxes … now!
To that end, groups of Americans will be meeting in towns and cities across the nation on April 15 for “Tax Day Tea Parties” (think Boston Tea Party, not biscuits and fine English china). These “Ten Tax Facts” are our effort to make sure the American people are well- informed as they gather together to express their concern about the direction Washington is headed.
#1 .Under the Obama budget, the Congressional Budget Office (CBO) projects that the national debt will double over the next five years; and it will triple over the next 10 years to $17.3 trillion.
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So this Mexican trucker drives up to the Texas border. He stops short, gets out and unloads his truck. An American driver sees the Mexican driver, picks up the unloaded stuff, puts it on his own truck, then drives off…
The punch line? Sorry, but if you’re expecting a joke you’re out of luck, just like the Mexican truckers who’ve been going through this charade since the ‘90s.
In fact, the joke’s on us. The U.S. Department of Transportation estimates this unloading-loading silliness costs $400 million annually—which is passed on to U.S. consumers.
The North American Free Trade Agreement (NAFTA), intended to promote trade between the U.S., Canada and Mexico, was signed in 1992. The treaty said borders were open for trade. But the politically powerful Teamsters said, never mind the treaty, Mexican trucks aren’t safe and we can’t let them in.
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“Merger mania is gripping the global pharmaceutical industry” scream the headlines. Pfizer is buying Wyeth, Roche is buying Genentech, Merck is buying Schering-Plough, Gilead is buying CV Therapeutics, and GlaxoSmithKline is rumored to be considering purchasing Allergan.
The best way to understand all these pharmaceutical mega-mergers is to recognize an industry battening down the hatches against the coming tsunami of harmful government policies that are aligning against the innovative pharmaceutical industry.
The first is the Obama administration’s push for health care “reform.” The pharmaceutical industry has long been the scapegoat for high health care costs, despite the fact that drugs are responsible for only about 10 percent of all health care costs, and its growth rate is down to 4.9 percent, the lowest since 1963. Read More...
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Are You Living a Healthy Lifestyle? Dr. Merrill Matthews of the Institute for Policy Innovation says that some politicians think you will—if you have insurance...
Senators Edward Kennedy and Max Baucus published an article in The Wall Street Journal recently stating that once everyone has insurance, health care costs will go down. That’s because people will get the preventive care and timely treatments they need.
But 85 percent of the population already has health coverage, and yet a recent survey of large employers by Watson Wyatt found that: - Two-thirds of their insured employees have poor health habits; and
- Forty-two percent under utilize preventive care.
In other words, people with good health coverage often engage in unhealthy or risky behavior, or avoid getting the preventive care they need.
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 Preventive Care |
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In a brand new op/ed in American Spectator, IPI director of entitlement and budget policy Peter Ferrara writes:
"Suppose to vote in state and national elections you weren't allowed a secret ballot behind a curtain. Suppose to vote you had to go downtown and vote in the baseball stadium, where your choices would be flashed on the scoreboard, before a howling mob. Your boss, and your co-workers, and your neighbors would all know who you voted for.
That is how the unions and liberal Democrats want to change the law in regard to employees choosing whether they want a union.
For decades now, employees have been able to vote in secret ballot certification elections to determine whether they really wanted a union in their work place. In about half of these elections, for many years now, the workers have said no to the union... Read More...
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Just wondering if this is what Obama voters were voting for?
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So now the Democrat-controlled Congress is pumping money out of Washington in an effort to stem a catastrophe—and lots of bad press. And it turns out this Congress isn’t any better at it than the Republicans were.
When Hurricane Katrina hit New Orleans in 2005, the city’s levees broke and disaster flooded in. President George W. Bush was initially slow to respond.
But once the public outcry rose to a crescendo, the government began churning out so much money so quickly that the normal processes for ensuring the money was spent properly were ignored.
That led to numerous negative news stories about exorbitant spending and shady operators reaping huge profits, making the Bush administration look not only uncaring, but incompetent.
Well, now money is beginning to pour out of Washington to rescue us from the economic downturn.
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Are you excited about handing over your personal information to a clerk who you don’t know and may not even like?
You don’t have to now—but you will if you buy a prepaid cell phone after the state passes state Senator John Carona’s (R-Dallas) legislation.
The Texas Senate will have a hearing to consider Mr. Carona’s bill (SB 1635), which requires purchasers of prepaid cell phones to provide the vendor with a valid drivers license with a photo ID, complete address and date of birth.
The senator sees his bill as a crime deterrent. Since some criminals use prepaid cell phones as a way to avoid detection, the legislation would force them to register. And we are sympathetic with the bill’s intent.
The problem is we aren’t sure the legislation would actually prevent any crimes, and we are dead certain it creates all kinds of privacy and liability concerns.
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The Florida Legislature, Governor and insurance commissioner should all pay attention to what’s happening in Massachusetts. Geico, which in the past refused to write automobile insurance policies in Massachusetts, the one state whose regulatory policies it considered too unfriendly, is coming to the Bay State to compete.
Geico's decision to come to Massachusetts - the only state where it does not already do business - is seen as an endorsement of the competitive auto insurance system introduced a year ago by the Patrick administration and spearheaded by Insurance Commissioner Nonnie S. Burnes...
Instead of driving insurance companies out of the state the way Florida did with State Farm, Massachusetts has learned the lesson of market-based competition. Read More...
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In a blog post on the Huffington Post, we have an admission that net neutrality and limits on media ownership are really about the political Left trying to lock in a political advantage.
I would think articles like this would be very damaging to those who are trying to argue for net netrality for reasons related to "the nature of networks" or "the nature of the Internet." No, it turns out this is really what it's about.
I'll be surprised if this blog entry isn't pulled down, so I'm going to quote it in its entirety.
Dick Cheney, Karl Rove, Ari Fleischer and other right-wing mouthpieces are trying to frame future debates while they reinvent the George W. Bush years. Their eerie falsehoods, half-truths, revisions, and lies are given added weight because they sit atop a bed of chatter and static, Read More...
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Bank of America just canceled contracts to hire a batch of foreign-born business students, because Congress said its bailout recipients (the “TARP” money) should hire American first. More jobs for Americans? Probably not: B of A can easily outsource the work abroad.
Sen. Chuck Grassley (R-IA) says we don’t need foreign workers… “there are plenty of qualified Americans.” Even if there are, they might not be in the right place at the right time.
And many Americans also want to work abroad and aren’t helped by limiting the flow of workers into the U.S.
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Interesting article in the Wall Street Journal today about the latest dispute within the CopyLeft community on fair use.
It's not big surprise that the CopyLefties would be arguing that it's perfectly fine for an artist to find a licensed photo on the Internet and use it without paying or even acknowledging the owner of the photo. That's pretty much standard for the CopyLeft. They feel free to take what they want, because, you see, that's really what creativity is. Creativity isn't the hours of work and the years of experience that go into creating the original creative work. Creativity is taking someone's creation and splashing a little yellow paint on it. THAT's creativity. You call it a mash-up, and you're on the cutting edge of creativity, and you are so much more creative than the person who did the original work that they aren't even worth mentioning, unless they have agreed to abandon all their rights and use the borrower's licensing system, Creative Commons. Read More...
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Why Is the Stock Market Going Down? The Institute for Policy Innovation says the market knows something the president doesn’t...
There are reasons why the stock market’s been tanking this year. It’s pricing in President Obama’s policies. For example, he wants to:
- Raise the income tax rate on higher-income workers from 35 to 39.6 percent;
- Lower their ability to write off charitable contributions;
- And raise the capital gains tax from 15 to 20 percent. That’s the tax people pay on investments like the stock market.
Higher-income people will have less to invest in the market, and will get to keep less when they do.
Those lower returns mean demand for stocks will fall—and so does their price.
While not everyone invests in the stock market, we all have an interest in it doing well. Read More...
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In a brand new op/ed discussing the climate change debate, IPI director of entitlement and budget policy Peter Ferrara says global warming is not really a debate about science, but a battle over money and power.
Peter writes:
The chief source of hysteria over possible man-made global warming has been the United Nations and its Intergovernmental Panel on Climate Change (IPCC). The panel's own climate models project that if man's emissions of carbon dioxide (CO2) and other greenhouse gases were causing global warming, there would be a particular pattern of temperature distribution in the atmosphere, which scientists call "the fingerprint." Temperatures in the troposphere portion of the atmosphere above the tropics would increase with altitude, producing a "hotspot" near the top of the troposphere, about 6 miles above the earth's surface. Read More...
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The New York Times reports that the Obama administration is open to the idea of taxing some employee health insurance benefits.
The Times continues by noting that such a tax might create some political difficulties for the president, since he ran campaign commercials criticizing his Republican opponent John McCain for proposing exactly the same thing.
Of course, there was one teeny, weenie little difference: McCain also proposed a $5,000 per-family refundable tax credit intended to offset the increase in taxable income. The Obama administration apparently would use the increased tax revenue to pay for its health care reform goal of providing universal coverage.
The current tax break for employer-provided coverage is unlimited; every penny the employer spends on coverage is excluded from an employee’s income.
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In a brand new op/ed appearing in TCS Daily online, IPI senior fellow George Pieler and International Affairs Forum editor-in-chief Jens F. Laurson write:
Change is here, and people are responding. Bank of America just responded to the decision by Congress to limit hiring of foreign skilled workers under the H-1B program, and did so by canceling contracts to hire a batch of foreign-born business students. Does it mean jobs for Americans? Probably not: Bank of America can either cancel the positions, or outsource the work abroad.
Senator Chuck Grassley, who co-sponsored the H-1B clampdown, says "There is no need for companies to hire foreign guest workers -- when there are plenty of qualified Americans." Read More...
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Some nice ideas are nice only as long as they stay ideas. For instance, Plano Independent School District’s recently disclosed notion of a wireless Internet network for low-income families and students.
Sure, it sounds nice: a community wireless network linking low-income students and their families to the school district’s resources, using an already-existing wireless network.
All Plano needs now is some great stories to tell about where the idea has actually worked. And lots of extra cash—that’s something else that would be nice.
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Officials at the NTIA (the Commerce Department’s National Telecommunications & Information Administration), the FCC and the USDA, (yes, the Department of Agriculture) held a meeting earlier this week to begin to decide how to spend the $7.2 billion in “economic stimulus” funds for the rollout of broadband to un-served and underserved areas as mandated by the recently passed, so-called “stimulus bill.”
These expenditures are rife with controversy and potential to harm rather than enhance broadband deployment, but in at least one area the answer should be pretty clear—reject any plans to expand the costly and failed initiatives of municipal broadband networks.
The NTIA should not support the advancement of taxpayer-funded networks. With all of the bailouts and extensive list of pork projects taxpayers are already shouldering, the last thing they should have to pay for is failed municipal broadband projects.
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In a brand new op/ed published today in the Detroit News, IPI resident scholar and health care expert Dr. Merrill Matthews discusses the merits of Medicare PartD over federal comparative effectiveness research.
Matthews writes:
President Barack Obama's economic stimulus package not only will take America one step closer to a European-style health care system, but a key provision could hamper access to health care.
The key provision is $1.1 billion going to the federal Agency for Healthcare Research and Quality for so-called comparative effectiveness research or CER. Ostensibly, comparative effectiveness research is an effort to compare two or more prescription drugs or medical devices, or even medical procedures, to find out which ones are most effective with the fewest problems or side effects.
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“If we want to create jobs and rebuild our economy, then we must address the crushing cost of health care this year, in this administration,” President Barack Obama recently claimed. “By a wide margin, the biggest threat to our nation’s balance sheet is the skyrocketing cost of health care.”
The president’s claim—echoed by his Office of Management and Budget Director Peter Orszag—is ridiculous.
Yes, we do spend more on health care than any other country, about 16 percent of our GDP. But we also spend more on cars than any other country, and the administration is trying to get us to buy even more of them—especially “green” cars.
The president says if we don’t buy more cars people will lose their jobs, and companies—especially the automakers—may close.
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Here’s the answer to the earmark controversy still raging in Washington, D. C.: good old-fashioned sunshine.
“Earmarks” are those pesky little tags on federal spending. Texas Rep. Ron Paul likes to say that earmarks aren’t new spending. He’s right. When Congress passes a budget, it often includes money for states.
The question is who decides how to divvy up the spoils: members of Congress or state-level elected officials and bureaucrats. Members of Congress say it’s better to let them make those decisions.
Dallas Congresswoman Eddie Bernice Johnson claims, “I’ve never asked for anything that didn’t benefit my district.” Well, ma’am, how do we know? Should we take such affirmations on faith? Don’t believe so: not with Congress and the White House playing around with trillions of our dollars.
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In testimony March 8 before the United States Senate Banking Committee, New York Insurance commissioner Eric Dinallo said he isn’t opposed to federal regulation of insurance; its giving insurance companies the option to choose federal regulation over state regulation that he opposes:
I can have a serious conversation about a federal regulator. My view is it shouldn’t be an optional federal regulator…you shouldn't be able to choose the regulator. I'm not steadfastly against any federal involvement in insurance regulation. I feel very uncomfortable about optionality (sic).
A careful examination of Dinallo’s argument reveals that his opposition to allowing insurance companies the same option banks have to choose which level of government regulates them is really all about protecting states’ current regulatory monopoly over insurance regulation, not about achieving the optimal regulatory arrangement. Read More...
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In a brand new op/ed published today in the Orlando Sentinel, IPI resident scholar Dr. Merrill Matthews discusses a new bill sponsored by Democrats to overhaul Medicare PartD. “Known as the Medicare Prescription Drug Savings and Choice Act of 2009, the bill would allow the federal government to "negotiate" its own prices with drug companies. The bill would also set up at least one Medicare-operated alternative to the existing private PartD plans. Although the bill's advocates are surely well-intentioned, passage of the measure would mean fewer choices, fewer drugs and probably higher prices for America's seniors.
As currently structured, the PartD program is administered by private-health-insurance companies. The government pays a significant portion of the costs, but otherwise, the plans operate just like conventional insurance plans. Read More...
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In Sunday’s Washington Post, columnist Michael Shear cites IPI’s Peter Ferrara on President Obama’s buzz word, “responsibility.” Peter Ferrara, a columnist for the American Spectator and director of budget and entitlement policy at the Institute for Policy Innovation, said that Obama is "trying to distract us from his ideology. When he's going to do something ideological, he uses the word 'responsible' to make it look like it's not." It riles conservatives, Ferrara said, to hear Obama talk about "fiscal responsibility" even as he advocates massive spending that they see as anything but responsible. Ferrara summarizes Obama's message as "I'm not extreme, I'm responsible." After all, Ferrara asks, "What's more mainstream than being responsible?" Read More...
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In this weekend’s San Angelo Standard Times, IPI senior research fellow Bill Murchison discusses the re-regulation of Texas electric utilities.
A study by a coalition of Texas municipalities - the Cities Aggregation Power Project, whose members include San Angelo, Odessa and Abilene - says the state needs "meaningful reform" of its electric deregulation policies to compensate for what it calls generally higher electricity prices since deregulation began 10 years ago. The power industry responds that the Texas Electric Choice Act of 1999 is achieving what it was meant to achieve - the replacement of regulation with "fierce competition" that not only enhances investment in new power sources but maintains downward pressure on prices. Read More...
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Should We Fear Another Great Depression? Dr. Merrill Matthews of the Institute for Policy Innovation says the real threat comes from government policies...
Economic times are tough, but are things as bad as the Great Depression of the 1930s?
President Obama used the fear of another Great Depression to rally support for his economic stimulus package.
But economist Bradley Schiller, writing in the Wall Street Journal, disagrees.
- While unemployment is at 7.6 percent now, it peaked at 25 percent in 1932.
- The economy may decline about 2 percent this year, but from 1930 to ‘32 it declined between 8 and13 percent each year.
- Finally, auto production declined 25 percent last year, but 90 percent in 1932.
It was government policies that turned the 1929 recession into a decade-long depression. The real fear is that government policies will do it again. Read More...
Great Depression |
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So Tuesday night I'm watching a bit of Kudlow, and Larry is talking with a screen full of people about some of Treasury Secretary Tim Geithner's recent moves and statements. (this is the video)
Kudlow says something like this to Don Luskin (who is a fellow supply-sider but with whom I've had a minor run-in in the past): "I don't understand how this guy [Geithner] thinks. He's a bright guy. He's not stupid, right?"
To which Don Luskin replies "I don't think we can rule out that he's [Geithner] stupid."
Funny line, but tragic if true.
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My friends Helen Disney and Meir Pugatch of the Stockholm Network have a good piece in today's European Voice on the importance of not letting the piracy lobby determine copyright policy.
The economic consequences of sites such as the Pirate Bay, which attempt to find loopholes in the existing intellectual-property system, will be dire – and even more so in a downturn. The knowledge economy is based on a trade-off in which the investments and time put into the creation of new content allow their owners to sell it for a price, not least in order to recover their own costs. But when this side of the equation is not respected then the entire rationale of the system is lost.
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The election of Barack Obama has sometimes been characterized as a return of John F. Kennedy’s “Camelot.” Both Obama and JFK were young, attractive, articulate senators, with accomplished wives with young children.
Both Kennedy and Obama came to office amidst economic concerns. But when Kennedy became President, higher-income people paid significantly higher rates on their taxes than middle-income workers. Sound familiar? That’s exactly what President Obama wants.
But not President Kennedy. He thought tax rates on high-income earners were too high and stifled investment. And Kennedy’s push for lower tax rates resulted in a burst of economic growth and economic recovery.
Kennedy began a trend moving tax rates in the right direction—down. President Obama is taking tax rates the other direction.
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Nope, no such thing as a free lunch. No such thing as free federal money, either—as Texas and other states are learning.
Under the just-passed $787 billion stimulus law, Texas is due nearly $17 billion—$555 million of it for increased benefits to the unemployed. Hold on, though. It appears that to get the latter sum, the state has to change some eligibility requirements in current law, making benefits available to thousands of temporary and part-time workers. Permanently. Forever.
Of course, when the stimulus money runs out in about two years, the Legislature could, technically, say to these newly covered workers: That’s it; see you around.
We all have a big picture of that happening, don’t we?
No wonder Gov. Rick Perry and several other governors—from Mississippi, Georgia, Louisiana, Idaho, South Carolina and Alaska—grumbled last week that they might steer clear of some of the stimulus money. Read More...
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IPI senior research fellow writes today in the Waco Tribune Herald:
“A study by a coalition of Texas municipalities — the Cities Aggregation Power Project, whose members include Robinson and Lorena — says the state needs ‘meaningful reform’ of its electric deregulation policies to compensate for what it calls generally higher electricity prices since deregulation began 10 years ago.
The power industry responds that the Texas Electric Choice Act of 1999 is achieving what it was meant to achieve — the replacement of regulation with “fierce competition” that not only enhances investment in new power sources but maintains downward pressure on prices.
Who’s right?”
To read the full op/ed, please visit the Waco Tribune Herald online. Read More...
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In Sunday’s edition of The Washington Times, IPI senior fellow George Pieler writes:
“President Barack Obama says now that he has inflated the federal budget deficit beyond the level of human comprehension, he's ready to start cutting it, and he won't let anyone (Republican governors, especially) stand in his way.
But the president has no hope of making a dent on his massive deficits unless, somehow, the U.S. economy gets back on a reasonable growth path.
Reasonable people can disagree about whether the Obama-Pelosi-Reid stimulus package will help revive the economy or, as the Congressional Budget Office warns, drag down long-term growth enough to wipe out any short-term benefit.
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Author: TaxBytes || Location: Lewisville, Texas, USA