Your Recovery Dollars at Work

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About three months ago, a curious sign appeared at one end of my street. It reads, “Putting America to Work. Project Funded by the American Recovery and Reinvestment Act.” It depicts a hard-hat-wearing stick figure digging into a pile of dirt — as if this jaunty cartoon of a “shovel-ready” project would soothe my anger at the wealth confiscation that funds such ridiculous endeavors.

Not much goes on in my small, East Coast rural enclave. The acquisition of “city” sewage by the nearest two towns was a big deal around here. So the government sign was the talk of our street. There was no explanation of why the sign appeared, no explanation of what project was in the offing. This was strange.

Then, roughly two weeks after the sign was erected, road crews appeared on both ends of our street and started tearing up the asphalt. The re-paving project was completed two weeks later.

Some neighbors speculated that the project was inflicted on us to predispose us to vote Democratic in the upcoming local election. But elections here are the smallest of small potatoes. It wasn't logical that federal funds would be spent to influence local voting. One neighbor speculated that the road was being prepared for a utility development set to occur in the next few years; but another road is slated to be built specifically for that purpose, at the opposite end of the nearest big town. None of us could come up with a reasonable answer. I suppose I could have attended a township meeting to divine the reasons behind this project, but I don’t have the time to waste and it’s highly unlikely that the simple folk, and by that I mean simpletons, who make up the township committee would have a credible answer.

As I said, this is a rural area. Roads need only be passable  — pickup trucks and tractors do just fine. Given that my street is only one section of a decently long through road, this paving project does not qualify as a “road to nowhere”; but it is very strange that the project was limited to one section of the road. Even stranger, there was nothing wrong with this part of the road in the first place. Nary a pothole! There is no meaningful difference between the street in its pre-recovery- dollars condition and the street in its post-recovery-dollars state. The road is now black. It used to be to gray.

In short, the project was a colossal waste of money. The dollars devoted to it should not have been printed, let alone spent. The workers involved in it did not achieve sustainable employment; they simply received unemployment subsidies by another name. No one was “put to work” in the sense that the designers of the Recovery Act intended the populace to believe.

Increased employment results from increased demand for goods and services. Allowing taxpayers to keep the majority of our dollars is the best option for “Recovery and Reinvestment” in all areas. Greater disposable income spurs demand as well as mitigating the risk of investment in small ventures. A person can spend his or her own dollars on any number of goods or endeavors that would contribute to sustained economic activity. More dollars in the hands of the citizenry will “put more people to work” than dollars in the hands of government ever will.

The first step to an actual recovery is limiting government spending. How do we achieve this?

We can apply my friend’s sound advice on dealing with young children: give them only very limited options. For example, instead of asking, “Where would you like to go for your birthday dinner?” ask, “For your birthday dinner, would you like to go to Friendly’s or McDonald’s?” Young children are ill-equipped to handle unlimited discretion. Governments are too.

With the country in its present mood, severely limiting government’s spending discretion is an attractive and realizable goal. We already have the set of tools necessary to do this. It’s called the Constitution.




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The Simple Life

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Remember calculators? How simple. Even my three score and ten year-old brain could use a calculator without the benefit of a 12-year-old associate offering advice on the sidelines. Naturally, this was B.C. (Before Computers). Then the computer came along and with much difficulty — much cursing — much advice from mocking 12-year-olds who found an activity they loved, besides obnoxiousness and noisemaking — my stressed brain learned to operate the device. So I thought.

Then “they,” the strange pointy-headed people who lived in the woods and emerged to design software, somehow discovered that even I could use 30% of the functions on the computer. No good. They changed it.

Why, oh why, are they obsessed with change? No sooner do I learn X than they change it to Y.

Highly intelligent but aged minds hate change. “Leave it alone,” says the home page of my 15-year-old Mac, to those people who live in the woods.

It all reminds me of the mania to modify a product just to make it different — to stimulate sales, not efficiency. “Hey look, I’ve got the new whatchamacallit - newest model, makes popcorn, too. Bet your iPad or Raspberry can't make popcorn.”

Thank goodness, for the moment, we still live in a capitalist society. Companies like profits, and change is often the engine of profit. That’s OK, just give me a choice. If I don’t need to track the

number of passengers with green shirts flying out of Kennedy, don’t build it into the “M” key on my keyboard. And don’t ring bells and flash green naked women on my screen so I remember to upgrade to this bizarre requirement.

Because of those technical wood nymphs, change becomes religious. It doesn’t always bring improvement, but it does always bring complication. There ought to be two streams of development. The first would be like your car. You bought a 2010 Ford; it remains a 2010 Ford. The accelerator never moves from its floorboard position. The instrument panel still indicates miles per hour, not feet per second. My kind of device. The second would be a test of your mental flexibility. Here, everything changes. The accelerator is now the brake. This is for users who like puzzles and are intrigued by how the device operates, not by what it does.

But in the computer world, even if you stick with the same computer, it’s always bugging you to update this or that. And it has clever little tricks. While you’re playing tennis, it swaps out your operating system so you have to call that smart aleck 12-year-old just to send an email. This is a world that worships change — for better or worse.

My pet remembrance of the “fix it even if it ain’t broke” philosophy is the battery-powered watch. Yep, I’m convinced that’s when it all started — a pivotal date in the history of uselessness. Now, I’m not a watchmaker, but batteries cost money and add an item to your “to do” list. And I swear they’re dying sooner and sooner. How long will it be before it’s a daily ritual? And few stores will change a battery.

How hard was it in the old days to give that little stem a few twists? Free twists, I might add. Think about it.

Gotta go now — my computer is groaning, which means that if I don’t install the popcorn app, it’ll erase my files of all stories that contain the word “popcorn."




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Good News, for a Change

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Little noticed in all the year-end political hysteria has been the good news about fossil-fuel energy production in the US and Canada. Unfortunately, the good news could have been better, if only we had better leaders.

The Globe and Mail (Dec. 8) reports that in 2010 the U.S. will end up having produced 140,000 barrels of oil a day more than it did in 2009. That’s incredible, when you consider Obama’s jihad against deepwater drilling. October, a banner month, saw 5.5 million barrels a day produced from American wells. Indeed, the US Energy Information Agency (the EIA) reports that our proven reserves of petroleum are now 22.3 billion barrels, up by 9% last year, in part because of the newly explored Green River shale oil field straddling Colorado and Utah.

America has even more bracing news about natural gas. The US now leads Russia in natural gas production. Again, this is in great measure because of expanding reliance on our extensive shale fields. We have the four largest natural gas fields in the world, and the EIA now puts our proven natural gas reserves at 284 trillion cubic feet, up 11% last year alone, and now at the highest level since 1971.

No doubt this is why China’s state-owned energy company CNOOC has cut a deal with Chesapeake Energy, according to which CHOOC will cover three-fourths of development costs and pay Chesapeake an up-front $1.08 billion for a one-third interest in its Texas natural gas project, a project that will produce the natural gas equivalent of half a million barrels of oil a day.

Our ally to the north, Canada, has also been doing well in fossil fuel energy production. Canadian oil sands production has increased dramatically; it now delivers more oil to North America than does Saudi Arabia. And while the Canadians may not love us, they don’t hate our guts. Young Canadian men don’t strap bombs around themselves and blow Americans apart. This is clearly preferable to the example of other countries.

Also exciting is the prospect of exploiting methane hydrates — essentially frozen water containing gas, found in stupefying abundance beneath ocean floors and the northern permafrost. This is something that the US and Canada can exploit when the time comes. How much of that stuff is there? The US Geological Survey estimates that even with a miserable 1% recovery rate, America could cover all of its present natural gas needs for the next century. And the UN Environmental Program hails methane hydrates as “the most abundant form of organic carbon on Earth.” Canada has been the leader in field-testing this form of gas extraction, and plans to exploit it commercially within a decade or so.

So we are doing fine in terms of resources. What is hurting us is our environmentalist-controlled leadership. We have at the federal level an administration that is hostile to fossil fuels in general and petroleum in particular, and has done its best to push us toward grotesquely costly and inefficient alternatives, such as solar and wind power.

Even at the state level, success in domestic fossil fuel production often happens in spite of, rather than because of, government help. Consider a Wall Street Journal piece (Dec. 16) about New York Governor David Paterson’s decision to issue an executive order imposing a virtual ban on drilling for natural gas within the state.

We don’t normally think of New York as a place like Texas, a petroleum-rich state. But the huge Marcellus shale formation, all 65 million acres of it, stretches from Ohio and West Virginia to Pennsylvania and upstate New York; it’s a repository of vast amounts of natural gas.

Natural gas can be readily extracted from this shale by hydraulic fracturing (“fracking”) — injecting a mixture of water and sand, together with miniscule amounts of various chemicals. Fracking, used now for over 60 years, is used in about a third of our oil and natural gas extraction. Even the EPA has published studies concluding that it’s safe.

But New York environmentalists — among the most devout in the nation — naturally oppose fracking, and the legislature there recently banned it. Paterson vetoed the bill, but put a moratorium on horizontal fracking until the New York Department of Environmental Conservation issues new regulations. This will take at least six months, and will likely manage to keep the ban in effect.

Pennsylvania — hardly a bastion of redneck petroleum lovers — saw $4.5 billion in investment in the massive shale field, creating about 44,000 jobs and $400 million in state and local taxes last year alone. Between July 2009 and June 2010, the 632 Pennsylvanian Marcellus wells produced 180 billion cubic feet of gas, doubling the state’s production.

The American Petroleum Institute reckoned that if New York allowed its shale gas to be tapped, it would provide $15 billion in economic output and $2 billion in state taxes. But New York apparently couldn’t care less about great-paying blue-collar jobs that add to the nation’s energy supplies and lessen our dependence on foreign tyrannies bent on our annihilation.




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The Case Against the Corporate Tax

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As the new Congress gets set to liberate America from the stranglehold of the freshly defeated Red Congress, hopes for change are arising. One is the hope for a lowering of the US corporate tax rate.

This rate is a hefty 35%, second highest among the developed economies of the world. It seems obvious, just considering basic psychology, that lowering the corporate tax will be economically beneficial. It is a truism of behaviorist psychology that if you punish (negatively reinforce) a behavior you get less of it, and if you reward (positively reinforce) a behavior you get more of it. Corporate taxes punish business activity, resulting in less business — great if you are a leftist, but lousy if you are anyone else.

The Heritage Foundation has released the results of a study by economists Karen Campbell and John Ligon that spells out the case for lowering corporate taxes, called The Economic Impact of a 25 Percent Corporate Income Tax Rate. Campbell and Ligon ran a simulation of the economic impact of lowering the corporate tax from 35% to 25%. The results are eye-opening.

Their simulation (which covers the period 2011 to 2020) estimates that under the lower taxes, GDP would grow by an extra $132 billion annually, creating over 530,000 new private-sector jobs per year. The average family of four would see its after-tax yearly income go up by nearly $2,500. Gross private investment would rise by over $57 billion annually, and foreign assets in the US would rise by 4% annually. American capital stock would grow by $240 billion more a year, and real after-tax corporate profits would increase by an average of $124 billion a year over the current projected levels.

Notwithstanding all this, it is questionable whether Obama will ever allow a drop in corporate tax rates. He is instinctively anti-business, and although the economic case is compelling, he is the most economically ignorant president in recent history.




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What's in a Brand?

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People often complain that the tea partiers confuse socialism, fascism, and communism.  These people argue that the three have distinct definitions and different ideologies.

Well, Chevrolet, Buick, and Cadillac are not the same car. They are, however, different nameplates on similar products, with many parts manufactured by the same people.  They'll all take you to the same place, though some will do it faster.




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The Mother of All Unintended Consequences

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A number of unanticipated consequences of Obamacare have appeared, even before the major provisions take effect.

Thousands of elderly people have lost their Medicare Advantage plans, insurance companies have been forced to jack up their rates to cover the myriad of new mandates, many insurance companies have eliminated child-only policies, and over a hundred companies and unions — many of them supporters of the Obama administration — have been given waivers from the disastrous bill by the selfsame administration that inflicted it upon the nation.

But the mother of all unintended consequences of Obamacare may be coming down the pike in 2014. That is the year when the healthcare plan dumps 16 million people (and even more, if illegal aliens aren’t excluded) on Medicaid. Medicaid is the program that already covers at least 62 million poorer Americans.

Medicaid is partly funded by the federal government, but almost half the costs are paid by the states. It is a heavy burden on them even in the best of times, and some of them now border on insolvency.

Rick Perry of Texas was the first governor to talk about withdrawing from Medicaid and substituting a less expensive alternative devised by Texans, following the tastes of Texans. But now similar ideas are being discussed by officials in Nevada, South Carolina, Washington, and Wyoming.

Will this group of free thinkers regarding Medicaid swell as we get closer to 2014, the Year of the Great Dump? In the immortal words of Sarah Palin, “You betcha!”




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Wait ’Til Next Year

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John Maynard Keynes is the Chicago Cubs of economics. In both cases, repeated failure has been rewarded with undying fanatical devotion.

Meanwhile, I am weary of watching our "brilliant” president blame his predecessor for the economic woes the nation still suffers. True genius confronts adversity. Thomas Edison never once blamed the darkness.




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Stimulate This

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As stories pile up about how the money from Obama’s massive stimulus bill was spent, it is becoming clear why the money stimulated few jobs. Two recent stories illustrate this.

First is the report from Randolph, Massachusetts, on how that city spent $4.6 million in scarce taxpayer dollars from the stimulus funds.

The lucky district took its windfall cash and repaired — a horse bridge! Yes, the horseshit project connected two parts of the 238-acre “Blue Hills Reservation,” making it easier for horseback riders and pedestrians to wander freely therein.

An owner of a local equestrian center was of course delighted at this pork project: “I was psyched. I thought, Whoo-hoo, new bridge!” Her defense — standard for anyone who has never read Bastiat — was, “How many other misappropriations have been given through the state for financial funding?” In other words, it benefits me, and the state has approved other senseless projects, so what’s the big deal?

A local bureaucrat, one Wendy Fox, spokesperson for the Massachusetts Department of Conservation and Recreation, said that the bridge was popular and often used, though she couldn’t give any numbers. The horses on the farm on one side of the bridge total 30, and those on the other side total 20  — which averages about $92,000 per horse to build the bridge.

Then there is the happy news that nearly 90,000 people who got “stimulus payments” were either prisoners or . . . corpses. The thinking must have been that the cash would go beyond stimulation and into the realm of resurrection.

Yes, 72,000 stimulus checks (each for $250 of loot stolen from taxpayers) went to deceased people, in anticipation of one last blast. Seventeen thousand more payments were sent to prison inmates. And only about half the money has been returned.

Your tax dollars at work.




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Congress' Last Good Deed

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Inspired by a zeal for liberty, and by some very large political contributions, Congress has finally voted to stop the military’s harassment of gays. It would be churlish not to congratulate our legislators for doing this. Therefore, congratulations, legislators.

While burning this incense, I would like to recall some other good thing that the 111th Congress has done. I don’t mean a good thing with a lot of bad things attached, such as temporarily maintaining lower tax rates for people who are actually paying taxes, while increasing the amount of tax money diverted to people who aren’t. And I don’t mean failing, from sheer incompetence, to do a bad thing, such as passing out billions of dollars in gifts to congressmen’s friends, hidden in an “omnibus spending bill.”

I just mean something good.

Something that lets people live their own lives.

Something that lets people plan their own futures.

Something that lets people spend at least one day of their existence not worrying about what the government may do to them.

I’d like to think of something good like that, something that this Congress has done.

Well. I’m trying.

Still trying.

Can you think of anything?




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Bush's Revenge

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I have always felt somewhat better about George Bush than many libertarians apparently do. Two recent events have reinforced my feelings.

The first is the very recent ruling against Obamacare in the U.S. District Court. When pressed for things I think Dubya did right, I have had two quick replies: “Sam Alito” and “John Roberts.” He should be proud of his two appointees to the Supreme Court; they have been superb. Without them, it is doubtful we would have an explicitly recognized individual right to keep and bear arms. But I now have a third quick reply: “Henry Hudson.”

U.S. District Court Judge Hudson was the one who ruled that Obamacare’s key provision, requiring all people not covered by health insurance to purchase it (called the “Minimum Essential Coverage Provision”), exceeds the commerce clause of the Constitution. He was placed on the court in 2002 by Bush.

As Hudson put it, “The unchecked expansion of congressional power to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers. At its core, this dispute is not simply about regulating the business of insurance — or crafting a scheme of universal health insurance coverage — it’s about an individual’s right to choose to participate.”

If Obamacare is ruled unconstitutional, it will be largely because the judges Bush put on the Supreme Court uphold the ruling of one of the judges he put on the district court.

This just seems obvious. It is one thing to regulate interstate commerce, it is quite another to mandate it universally, i.e., to require individuals to engage in commerce (here, buying insurance) if they don’t want to. The argument given by proponents of the bill, that people who don’t buy health insurance wind up requiring the public’s support when they get sick and have to go to the emergency room, is very feeble. Hospitals can and often do bill people without insurance directly. And if Congress had been worried about those who can’t afford health insurance, it could have passed a voucher scheme for healthcare. In that way, anyone who wanted to participate could accept the voucher and go buy at least minimal health insurance, and anyone who didn’t could just refuse the voucher.

Moreover, if you take the pro-Obamacare argument seriously, there is no end to what it would sanction the feds to force us to buy. If I refuse to purchase a car, I will have to use public transportation, so doesn’t that mean that the government can make me buy an American car? No doubt Obama, who nationalized GM and Chrysler to pay back his financial supporters in the UAW, would love that idea. But it is sheer moonshine.

It now seems likelier than not that this issue will make it to the Supreme Court. And it is quite possible that the Court will side with Judge Hudson on the mandate issue. Considering that the wise solons who passed Obamacare forgot to include a severability clause, it is even possible that the Supreme Court could declare the whole bill unconstitutional. If that happens, it will be largely because the judges Bush put on the Supreme Court uphold the ruling of one of the judges he put on the district court.

The second area in which Dubya’s ghost haunts Obama is tax policy. During the present lame-duck session of Congress, Obama reached a surprising last-minute compromise with the Republicans — a compromise that renews Bush’s tax rates for two years. Obama had spent more than two years bashing Bush’s tax cuts “for the obscenely wealthy” and blaming the cuts for our lingering economic difficulties, but he was finally forced to compromise.

He did so very ungracefully, claiming that the Evil Republicans were holding middle class tax cuts hostage, and that while he normally wouldn’t negotiate with terrorists, he had to save the hostage. This was as ludicrous as it was infantile. What was held hostage was the rest of Obama’s presidency, which would have been annihilated had the rates gone up, tumbling the economy back into recession. Obama had to pitch his leftist supporters and his congressional myrmidons on the merits of tax cuts as a way to stimulate the economy, after denying that claim all through his presidency.

But perhaps the most farcical turn came when Obama had to call in Bill Clinton to lead a news conference justifying the compromise to outraged congressional Democrats. Farce devolved into pure camp as the ex-prez, who had jacked up the tax rates to begin with, endorsed the compromise that would preserve the lower rates his successor managed to enact. Dubya must have laughed at that one.




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