Wednesday, March 10, 2010

Barker's Newsbites: Wednesday, March 10, 2010


A, B, C, D, E, F, G...

Like your ABC's, like it or not, this stuff matters.
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13 comments:

William R. Barker said...

http://www.chicagotribune.com/news/elections/ct-met-quinn-state-budget-0310-20100309,0,4279309.story

[Illinois] Gov. Pat Quinn on Tuesday unveiled a caustic budget plan that would borrow billions of dollars to stay afloat and push even more debt down the road...

(*SMIRK*)

[E]ven after about $2 billion in cuts, the state would still be $11 billion in the hole.

Overall, Quinn's budget proposal forecasts a $4.7 billion operating deficit for the budget year that begins July 1, on top of $6 billion of debt from the current budget. Quinn would borrow to cover the operating shortfall, which would need to be repaid later on top of the $6 billion in lingering debt.

* ISN'T SINGLE PARTY RULE GRAND...

March 10, 2010 at 11:31 AM
William R. Barker said...

http://finance.yahoo.com/taxes/article/109012/us-sales-tax-rates-hit-record-high

While President Obama's push to raise federal income taxes for the wealthy gets lots of attention, the continuing upward creep in the sales tax rates imposed by state and local governments has gotten less notice.

But Vertex Inc., which calculates sales tax for Internet sellers, reports that the average general sales tax rate nationwide reached 8.629% at the end of 2009, the highest since the Berwyn, Pa., company started tracking data in 1982.

During 2009 seven states and the District of Columbia raised sales tax rates, with one jurisdiction - North Carolina - actually doing it twice.

State level sales tax generally accounts for only about two-thirds of the total sales tax bill. The rest comes from levies assessed by counties, municipalities, Indian tribes and special-purpose taxing districts funding mass transit, urban renewal and even stadiums. Among lower level jurisdictions such as counties and towns, Vertex counted 649 new or increased sales tax rates during 2009 and just 192 reductions.

Some of the highest sales taxes in the nation are designed to grab dollars from tourists. The New Orleans International Airport has a special 10.75% rate, while Snowmass Village, the ski resort in Colorado, levies a 10.4% sales tax. (Many locales also impose special higher taxes on services purchased by tourists, such as rental cars and hotel rooms.)

March 10, 2010 at 11:32 AM
William R. Barker said...

http://radio.woai.com/cc-common/news/sections/newsarticle.html?feed=119078&article=6855247

The head of the Toyota National Dealer Council today blasted the federal government for using 'taxpayer dollars' to fund incentive campaigns to lure customers away from Toyota...

"As an American citizen, it is tough on my part to pay tax dollars to an entity that can turn around and use those tax dollars to get my fellow American citizens to not do business with me," Paul Atkinson, who owns Atkinson Toyota in Bryan Texas, and is President of the dealer council, tells 1200 WOAI news.

"The government owns 60% of General Motors, and these American tax dollars are funding business activity for one company, with the express goal of negatively impacting another company," Atkinson said today. Atkinson specifically cited GM dealer mailings which he says have been targeted at existing Toyota owners. He called it ‘a nationwide predatory advertising campaign that uses fear in an attempt to lure customers away from Toyota and Lexus dealers.’

"There are some mailing lists which have been given to dealers, and there have been some mailers, in fact, I've seen several of them," he said. "On the outside of the envelope it says 'important Toyota recall information enclosed.' But when you open up that envelope, it is nothing more than an advertisement trying to get you to come trade your Toyota in at a GM store." Atkinson calls those 'predatory incentives,' which he says should not be allowed to be employed by a company which is majority owned by US taxpayers against another company which employs hundreds of thousands of Americans.

Atkinson also suggested that the recent Congressional hearings and federal government concern over Toyota's accelerator problems may have been sparked less by a desire to protect the public, and more by a desire to protect the federal government's investment in GM. "There is a list of twenty manufacturers on these recall lists, and Toyota is number 17," he said. "If we're having hearings on number 17, what are they doing about numbers 1 through 16?"

* SOUNDS LIKE REASONABLE POINTS AND QUESTIONS TO ME!

March 10, 2010 at 11:32 AM
William R. Barker said...

http://www.nypost.com/p/news/opinion/opedcolumnists/final_reform_push_0pwRMzHMNshlHQZg8LWmcJ

President Obama's attempts to ram health-care "reform" through an increasingly reluctant Congress are starting to resemble a really eventful episode of "The Sopranos."

They've already bought votes with pork and special deals -- the "Louisiana purchase" ($300 million to bolster that state's Medicaid program, which swayed Sen. Mary Landrieu); the "Cornhusker kickback" ($100 million to Medicaid there, sweetening the pot for Sen. Ben Nelson), and Florida's "Gator Aid" (a Medicare deal potentially worth $5 billion, a hefty price for Sen. Bill Nelson's vote). Plus the millions for Connecticut hospitals, Montana asbestos abatement and so on.

[T]here has been an unprecedented willingness to ignore congressional rules - from the failure to appoint a "conference committee" to negotiate differences between the House and Senate bills, to their current plans to use the reconciliation process to bypass a Republican filibuster.

Those who support the president can expect favors. No sooner had Rep Jim Matheson (D-Utah) suggested that he might be willing to switch his vote and support the latest version of ObamaCare than his brother was nominated for a federal judgeship.

Alan Mollohan (D-W.Va.) is also on the undecided list. And, purely by coincidence no doubt, the Justice Department just announced that it is dropping an FBI investigation that has been swirling about the congressman. Gosh, if only Charlie Rangel were one of the undecideds.

Some of this is just traditional electioneering...some of it is much nastier. [Eric] Massa's story may have credibility issues, but other opponents of the bill are also starting to feel the heat. For instance, Rep. Bart Stupak (D-Mich.), whose opposition to abortion funding has become one of the bill's biggest hurdles, is now seeing attacks on his ethics.

Presidents have always twisted arms and made deals. And when two-thirds of voters are opposed to your plans, you may have no choice but to play hardball. But when Obama promised to change the way Washington does business, we didn't think he meant making it a "family" business.

March 10, 2010 at 11:32 AM
William R. Barker said...

http://online.wsj.com/article/SB10001424052748704187204575101461287544470.html

Hundreds of University of California students rallied against a 32% tuition hike last week.

(*ROLLING MY EYES*)

Let's hope their future employers get a better work product. With just a little research, the students could have discovered that compensation packages won from the state by unions were a big reason for the hike.

In 1999, the Democratic legislature ran a reckless gamble that makes Wall Street's bankers look cautious. At the top of a bull market, they assumed their investment returns would grow at a 8.25% rate in perpetuity—equivalent to assuming that the Dow would reach 25,000 by 2009—and enacted a huge pension boon for public-safety and industrial unions.

The bill refigured the compensation formula for pension benefits of all public-safety employees who retired on or after January 1, 2000. It let firefighters retire at age 50 and receive 3% of their final year's compensation times the number of years they worked. If a firefighter started working at the age of 20, he could retire at 50 and earn 90% of his final salary, in perpetuity. One San Ramon Valley fire chief's yearly pension amounted to $284,000—more than his $221,000 annual salary.

In 2002, the state legislature further extended benefits to many nonsafety classifications, such as milk and billboard inspectors. More than 15,000 public employees have retired with annual pensions greater than $100,000.

In the last decade, government worker pension costs (not including health care) have risen to $3 billion from $150 million, a 2,000% jump, while state revenues have increased by 24%.

Because the stock market didn't grow the way the legislature predicted in 1999, the only way to cover the skyrocketing costs of these defined-benefit pension plans has been to cut other programs (and increase taxes).

* AIN'T "DEMOCRACY" (UNTETHERED BY REALITY) GRAND?

This year alone $3 billion was diverted from other programs to fund pensions, including more than $800 million from the UC system. It is becoming clear that in the most strapped liberal states there's a pecking order: Unions get the lifeboats, and everyone else gets thrown over the side. Sorry, kids.

Get ready for more. The governor's office projects that over the next decade the annual taxpayer contributions to retiree pensions and health care will grow to $15 billion from $5.5 billion...

March 10, 2010 at 11:58 AM
William R. Barker said...

http://rsc.tomprice.house.gov/News/DocumentSingle.aspx?DocumentID=174610

Right now, Congress can make a singe change to current law that will save taxpayers $11.4 billion this year. According to recent Heritage Foundation research, in 2010 the Davis-Bacon Act will cost taxpayers $11.4 billion in expensive, artificially inflated wages that benefit a select group of workers.

The Davis-Bacon Act, a Depression-era wage subsidy law that is the last remnant of the old racist Jim Crow laws, was designed to block American blacks from construction jobs in the northeast. It requires that each public works contract over $2,000 contain a clause that mandates "prevailing" wages be paid. Contractors and subcontractors are forced to pay a "prevailing wage" set by the federal government. However, a recent government study showed that "prevailing wages," as determined by the federal government, were in error 100% of the time.

In fact, these wages rarely resemble local market conditions. In practice, Davis-Bacon wage scales are inflated union wages imposed on even the smallest of start-up companies.

Davis-Bacon wage rates are on average 22% higher than the standard wage rate in an area. Similar Heritage research revealed that, under Davis-Bacon law, the government pays four workers artificially inflated wages the same price it could pay five workers the local market rate.

This law disproportionately impacts small companies and rural businesses. Davis-Bacon law discourages small businesses from bidding on public projects because of the difficulty of meeting the complex and archaic reporting rules it requires. And, because it requires the payment of inflated union-scale wages, most small businesses are often priced out of competition - leaving large, unionized firms to divvy up the work to be done under taxpayer funded federal construction contracts.

Requirements in Davis-Bacon law that workers be paid inflated wages increase the cost of completing federal construction projects. President Obama's "stimulus" bill required the payment of Davis-Bacon wages for all of the construction projects it funded, thus inflating the cost of these projects to taxpayers by $13 billion.

Davis-Bacon laws also impact small towns across America. Some communities decide to forgo federal dollars because a Davis-Bacon project would inflate the cost of their project by 8-35%, often by an amount that is more than the federal dollars involved. Davis-Bacon law results in fewer projects being built and fewer jobs created. The result is only four miles of highway built rather than five or only four bridges constructed when we could build five with the same money.

Davis-Bacon wage laws will not allow me to operate one of my son's excavators for $20 per hour, even if he and I agree that $20/hr is a reasonable amount.

Young construction workers need an opportunity to develop their skills. A law requiring that every machine operator earns only the highest wage locks young workers out of the trades.

With 20 million Americans looking for work and a crumbling infrastructure... (*SHRUG*)

March 10, 2010 at 4:25 PM
William R. Barker said...

http://www.house.gov/htbin/blog_inc?BLOG,tx14_paul,blog,999,All,Item%20not%20found,ID=100308_3661,TEMPLATE=postingdetail.shtml

[By Congressman Dr. Ron Paul, MD; R-TX]

Last week Congress voted to encourage participation in the 2010 census. I voted “No” on this resolution for the simple, obvious reason that the census- like so many government programs- has grown far beyond what the framers of our Constitution intended.

The invasive nature of the current census raises serious questions about how and why government will use the collected information. It also demonstrates how the federal bureaucracy consistently encourages citizens to think of themselves in terms of groups, rather than as individual Americans. The not so subtle implication is that each group, whether ethnic, religious, social, or geographic, should speak up and demand its “fair share” of federal largesse.

* YEP. RIGHT ON TARGET.

Article I, section 2 of the Constitution calls for an enumeration of citizens every ten years, for the purpose of apportioning congressional seats among the various states. In other words, the census should be nothing more than a headcount. It was never intended to serve as a vehicle for gathering personal information on citizens.

* YEP. AGAIN... RIGHT ON TARGET.

[I]ndividuals are asked detailed questions concerning their name, address, race, home ownership, and whether they periodically spend time in prison or a nursing home - just to name a few examples. From a constitutional perspective, of course, the answer to each of these questions is: “None of your business.”

* DAMN STRAIGHT! GOD BLESS YOU, DR. PAUL!

If the federal government really wants to increase compliance with the census, it should abide by the Constitution and limit its inquiry to one simple question: "How many people live here?"

* SOUNDS REASONABLE TO ME...

March 10, 2010 at 4:25 PM
William R. Barker said...

http://www.realclearmarkets.com/articles/2010/03/10/whats_gross_about_our_gross_domestic_product_98378.html

The health of an economy is too-simply described by GDP growth.

If I sue you, and you countersue me, our collective legal fees increase GDP handily.

If government passes additional laws to increase the complexity of the tax code and the burden of regulatory compliance, and then hires additional staff to better enforce these more-complex laws and regulations, GDP rises handily.

If our employers hire additional people to address these new levels of complexity and regulation, GDP again rises handily.

* REGARDLESS OF THE FACT THAT WE'RE TALKING RISING COSTS, NOT RISING PROFITS.

The "Austrian School" and libertarians believe that the private sector is inherently responsive to the requirements of its clientele and is therefore the real growth engine for the economy, for employment and for the supply of goods and services. If so, then even a small negative multiplier on the private economy is a bad thing.

What if we (still too simplistically) assume that growth in the private sector is generally good, while growth in the government portion of GDP is a mixed blessing? After all, for most of us, when we want goods and services, we go to the private sector to buy them, apart from the occasional call to the police or fire department. When we test the linkage between public spending and growth in the private sector economy, we find a startlingly different picture. We find a negative Keynesian multiplier. We find "crowding out."

From 1952 through 2009, each 1% change in US government outlays as a percent of GDP was accompanied by a 1.8% shrinkage in the private sector (the non-Government GDP). If we ignore the extreme outlier year of 2009, the multiplier actually increases from 1.8 to 2.4. And, the statistical significance is off-the-charts. If we go back to the turbulent years of the Great Depression and the two World Wars, we find similar results. It would appear that the Keynesian multiplier, redefined to tie government outlays to the growth in the private sector economy, is about -2.

The linkage is very clear and very powerful, but causality is less clear. Does a tumbling in private economy GDP trigger government outlays, or do soaring outlays cripple the private economy? On one level, it doesn't matter: if the multiplier is worse than -1, the net damage is self-evident.

Much of the world is now pursuing a policy experiment that (1) has been tried repeatedly without success, (2) has highly significant - and discouraging - historical evidence, and (3) is now being tried on unprecedented global scale. The exit strategy is ambiguous or absent; we're borrowing with no clear means to repay our debts.

We face an added risk, from the sheer magnitude of our deficit and debt. Our deficit for 2009 was over 10% of GDP. Or was it? It soars to 18% of GDP, if we add in off-balance-sheet spending (legal for government, illegal for Enron), incremental debts for Fannie, Freddie and the other GSEs (backed by full faith and credit of the US Treasury, with no limit to the obligation, but somehow not considered part of our deficit or our debt), and new unfunded liabilities for Social Security and Medicare. Just to supply a frame of reference, this is twice Greece's deficit.

Our public debt is 40% of GDP according to the CIA 2009 World Factbook, down from 60% in 2007. Right? Well, they took the off-balance-sheet debt off the tally; apples-to-apples, we're at 85%, and rising fast. Add in the GSEs, plus state and local debt, and we're at 140% of GDP.

Greece is at 115% of GDP.

Add in the unfunded Social Security and Medicare obligations, and we're at 420% of GDP.

Who has greasier accounting? Sadly, the US.

March 10, 2010 at 7:52 PM
William R. Barker said...

http://www.thestreet.com/story/10698409/1/why-the-trade-deficit-matters-so-much.html

The trade deficit, along with the credit and housing bubbles, were the principal causes of the Great Recession.

The Commerce Department Thursday plans to report the January deficit in international trade in goods and services. Analysts expect it to increase to $41 billion from $40.2 billion in December. My forecast for January is $41.5 billion

At 3.1% of GDP, the trade deficit subtracts...from the demand for U.S.-made goods and services... Money spent on Chinese coffee makers and Middle East oil cannot be spent on U.S.-made goods and services, unless offset by exports.

Subsidized manufactures from China and petroleum account for nearly the entire deficit, and both will rise as consumer spending and oil prices rise through 2010.

From 2004 to 2008, the trade deficit exceeded 5% of GDP, and Americans borrowed from abroad to keep the economy going. To consume more than they produced, they posted as collateral overvalued homes financed on shaky mortgages. When mortgages and banks failed, home prices and retail sales tanked, the shortfall in demand for U.S. made goods and services drove up unemployment, further choked consumer and investment spending, and thrust the economy into...recession...

President Obama ignores the fundamental causes of trade deficit...the escalating trade deficit will push the economy down again and threaten a second recession - the feared "W"-shaped recovery.

So far, the Obama Administration has not challenged Beijing's most protectionist policies -- large government purchases of U.S. dollars that drive down the exchange rate for the yuan, subsidize Chinese exports, and artificially elevate Chinese savings and suppress U.S. savings. The China-U.S. savings imbalance is not entirely a natural phenomenon rooted in consumer behavior.

In 2010 the trade deficit is slicing $400 billion to $600 billion off GDP, and longer term, it reduces potential annual GDP growth to 3% from 4%.

Manufacturers are particularly hard hit by subsidized imports. Through recession and recovery, six million manufacturing jobs have been lost since 2000. The trade deficit is the single most important reason why the private sector has failed to add a single job since 1999.

March 10, 2010 at 7:52 PM
William R. Barker said...

http://www.bloomberg.com/apps/news?pid=20601039&sid=aBLsdok30x6M

The public is mad as hell at Washington: at the corruption, the underhanded deals, the earmarks, the sense of entitlement that comes with lifetime employment. If we don’t want to take it anymore, we can do something about it.

We the People of the United States need to make clear to our representatives in Congress, or their challengers, that our vote in November is contingent on what’s-his-name’s support for term limits. No support, no vote. Got it?

Senator Jim DeMint, Republican of South Carolina, introduced a “Term Limits for All” constitutional amendment in November. The amendment, co-sponsored by Senators Tom Coburn, Kay Bailey Hutchison and Sam Brownback, Republicans of Oklahoma, Texas and Kansas, respectively, would limit every House member to three terms and every Senator to two. Only with an end to the “era of permanent politicians” will real change come to Washington, DeMint said.

(*THUMBS UP*)

Term limits is equally popular with the public, among Democrats, Republicans and Independents alike. In an October 2008 national poll commissioned by USTL, 83 percent of Americans said they support term limits, the highest ever.

Guess who opposes term limits? Incumbent politicians, their staffs and lobbyists in search of legislative favors. There is no better guarantee of lifetime employment than incumbency. In the last 10 congressional elections, the re-election rate in the House was 94.6 percent, according to the Center for Responsive Politics, a nonpartisan, independent research group tracking money in U.S. politics. Incumbency doesn’t confer the same degree of security on Senators, with “only” 87.5 percent of sitting senators returned to office since 1990.

(*SMIRK*)

Our elected officials may go to Washington to do good, but they end up doing well, as the saying goes. They forget why they were elected -- to do the people’s business -- and focus on their own: fundraising and campaigning for re-election.

With public approval of Congress at an all-time low and support for term limits at an all-time high, it’s time to seize the day. What can you do? Sign the petition on the USTL Web site. Contact your senator or representative and tell him your vote is contingent on his support for term limits.

March 10, 2010 at 7:52 PM
William R. Barker said...

http://article.nationalreview.com/427337/artificial-stupidity/thomas-sowell

A woman with a petition went among the crowds attending a state fair, asking people to sign her petition demanding the banning of dihydroxymonoxide. She said it was in our lakes and streams, and now it was in our sweat and urine and tears.

She collected hundreds of signatures to ban dihydroxymonoxide — a fancy chemical name for water.

A couple of comedians were behind this ploy. But there is nothing funny about its implications. It is one of the grim and dangerous signs of our times.

(*SIGH*)

March 10, 2010 at 7:52 PM
William R. Barker said...

http://corner.nationalreview.com/post/?q=Mjc5ZTIxMjlkYTg1Y2VmNzA0ZjQwMmM5YTQyNDJjMTY=

Last Friday, the Congressional Budget Office (CBO) released its analysis of the president’s 2011 budget submission to Congress. This report hasn’t gotten nearly the attention it deserves.

When the administration released its budget in early February, the news seemed bad enough. According to CBO, the Obama budget plan would run up much larger budget deficits and pile up even more debt than the administration reported in February.

By its own reckoning, the Obama administration’s budget plan would result in massive deficits and borrowing if adopted in full. According to the administration’s estimates, the president’s budget plan would produce deficits totaling $10.1 trillion over the period 2010 to 2020, and by 2020 federal debt would reach $18.6 trillion.

Two years ago, CBO expected total federal spending to reach $4.3 trillion in 2018. Now, if the president’s budget plan were adopted, CBO projects spending would exceed $5 trillion in 2018.

Over the period 2010 to 2020, CBO expects the Obama budget would run a cumulative deficit of $11.3 trillion — $1.2 trillion more than the administration predicted. Over the next ten years, CBO says the Obama budget would increase federal spending by $2.3 trillion, including $800 billion in net interest costs on the additional borrowing that would be required.

By 2020, total federal debt would reach an astonishing $20.3 trillion — up from $5.8 trillion at the end of 2008.

In 2020, federal entitlement spending would reach $3.3 trillion, up from $2.1 trillion in 2009.

The federal government is drowning in unaffordable entitlement commitments. President Obama’s response is to spend, entitle, and borrow even more, while he can. And then, with an even bigger government locked into the “baseline,” he plans to pivot and use the prospect of a debt crisis he made much more probable to push for a massive tax increase.

March 10, 2010 at 7:53 PM
William R. Barker said...

http://www.humanevents.com/article.php?id=35948

Greece this past weekend saw the worst rioting since the debt crisis began. After Athens had announced new tax hikes and budget cuts to reduce a deficit of 13 percent of gross domestic product, mobs drove guards from Greece's Tomb of the Unknown Soldier and attacked police.

In our own country, students, teachers and administrators at UC-Berkeley held a "Strike and Day of Action to Defend Education" to demand more money from taxpayers - for themselves.

[R]iots in Greece and demonstrators in California do portend a time of troubles. For the budget cuts and tax hikes needed to keep the welfare states of Europe operating as populations age and fewer children are born will be staggering and endless. And, in the U.S., California is where we all are headed.

Nevada, Arizona and New Jersey are staring at budget gaps of 25%. New York and Illinois are not far behind. Michigan has an unemployment rate of 14%. Detroit is the quintessential sick city.

Republicans may get by this fall surfing an anti-government wave. But they will soon have to reveal where exactly they propose to cut.

Republicans should call for a one-year freeze on federal salaries and a two-year freeze on congressional salaries.

* ACTUALLY, REPUBLICANS SHOULD CALL FOR 10% REDUCTION IN FEDERAL SALARIES AND THEN A TWO-YEAR FREEZE WHILE ALSO CALLING FOR A 20% CUT IN CONGRESSIONAL SALARIES AND A FOUR-YEAR FREEZE. BUCHANAN WAS MUCH TOO MODEST IN HIS PROPOSAL!

Barack Obama, Nancy Pelosi and Harry Reid, in that $787 billion stimulus bill, shoveled billions of federal tax dollars into California to pay salaries, pensions and health benefits of Californians who have been paid more than private-sector workers all of their lives. Where is the fairness here?

Not another federal dime should go out to any state government whose employees receive more in pay and pensions than the average worker in that state or the other 49.

* DAMN STRAIGHT! AND BEYOND THIS, WE MUST WEEN THE STATES OFF THE FEDERAL TIT REGARDLESS OF THEIR STATE WORKER PAY AND BENEFITS POLICIES!

March 10, 2010 at 7:53 PM

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