Saturday, December 31, 2011
How to Judge a Tax Plan
Source: William McBride, "How to Judge a Tax Plan," Tax Foundation, December 15, 2011.
Tax reform has become the central issue in the presidential primaries and will likely remain an important issue in the general election. While the plans and proposals will vary considerably in their scope and intent, it is important that they all be judged against a standard set of guideposts or principles that define a sound tax system, says William McBride of the Tax Foundation.
The fairness and neutrality of a tax system.
The complexity of a system and how costly it is to comply with it.
How the system affects U.S. competitiveness and economic growth.
How it affects the stability or volatility of tax revenues
In regards to fairness and neutrality along with the complexity of the tax code, the removal of "tax expenditures," also called "loopholes," should be made a priority. These distortions manipulate the market and create enormous cost to comply with the tax code. Loopholes amount to over $1 trillion per year, or equal to about 7 percent of gross domestic product.
These loopholes are split between individual income taxpayers and businesses, with 90 percent allotted to the prior and 10 percent to the latter.
The complexity of the tax code, caused in no small part by the proliferation of loopholes, creates an aggregate cost of tax compliance of approximately $400 billion each year. This "deadweight" cost for compliance with the current individual income tax, amounting to roughly 11 to 15 percent of total income tax revenues, is equivalent to a burden of $110 to $150 billion on taxpayers and the economy.
The overall competiveness and economic growth of the country, especially in how the nation attracts multinational businesses, is also an important area of tax code analysis.
All four of these factors must be kept in mind as presidential candidates within the next year, and in future elections, share their goals for reforming America's tax system.
The last three years have shown 'taking from the productive and giving to the unproductive' does not work and we have spent borrowed trillions in these last years to prove the point. Why would anyone, that possess any common sense, think that more spending of resources that we don't have will actually be effective to solve financial problems?
The only people that believe this are insane. Doing the same thing over and over again but look for different out comes is the definition of insanity.
Medicare and Social Security to Total 50 Percent of Budget by 2030
Source: Veronique de Rugy, "Spending Surge for Seniors: Medicare and Social Security Total 50 Percent of Budget by 2030," Mercatus Center, December 19, 2011.
The annual share of the U.S. budget spent on programs benefiting senior citizens (i.e., those aged 65 and over) has increased rapidly in the past few decades. More importantly (and alarmingly) is that these same programs under current law are expected to continue to increase rapidly in decades to come. Data on Social Security and Medicare spending from the Congressional Budget Office is used to show the historical trends and projected share of the budget between 1970 and 2084, says Veronique de Rugy of the Mercatus Center.
In 1970, spending on Social Security and Medicare was one-fifth of the budget. This portion has since grown to nearly 37 percent of the budget in 2010; this amounts to 8.4 percent of the country's gross domestic product.
The portion of the federal budget that is allotted to these two mandatory programs has begun to dwarf even the most traditional forms of government spending -- in 2010, they amounted to more than double defense spending.
Furthermore, this data underestimates the realities of federal spending for the old. According to the Centers for Medicare and Medicaid Services in 2004, a substantial portion of Medicaid spending went to those older than age 65. Thus, this amount must be added to the costs of Social Security and Medicare in order to establish a more accurate figure for the total budgetary burden of entitlement programs for the wealthy.
In 2004, 28 percent of Medicaid spending went to those older than 65. If this figure held constant through 2010, then the original estimate of 37 percent for the elderly population's share of the federal budget rises to roughly 40 percent.
This moves forward the timetable for the growth of these programs in the projected future, with these three areas of spending constituting more than half of the federal budget sometime in the next decade.
The growing number of beneficiaries due to the aging of the baby-boom generation will cause scheduled spending to surge. If current Social Security and Medicare policies continue without change, large deficits will undoubtedly emerge in the next decade and will grow even larger in subsequent decades. Undoubtedly, these trends are unsustainable, and current law cannot be allowed to stand if these entitlement programs are to remain solvent without bankrupting the federal government.
Friday, December 30, 2011
I am so proud to be an American, a country that has given me everything I need.
Generosity in Canada and the United States: The 2011 Generosity Index
Source: Charles Lammam, "Generosity in Canada and the United States: The 2011 Generosity Index," Fraser Institute, December 15, 2011.
In comparing charitable giving among and between Canadian and American jurisdictions, researchers at the Fraser Institute, a free market think tank in Canada, found that trends over the past decade continue to hold strong. Among the trends, all Canadian provinces and territories have continued to be drastically outstripped by American states in charitable giving by a large margin. In both of the standard measures of giving (percentage of tax filers who report having given) and the total share of aggregate income that was donated, Americans out-give Canadians.
More than 26 percent of American tax filers donated to charity in 2009 (the most recent year for which data is available), compared to 23 percent of Canadians.
On a countrywide basis, Americans gave 1.32 percent of their aggregate personal income to charity, more than double the 0.64 percent that Canadians donated. Had Canadians matched the generosity of their American neighbors by donating the same percentage of total income, Canadian charities would have received an extra $8.3 billion in private donations in 2009.
These national differences are large enough that broad comparisons can be made regarding the giving behavior of Americans and Canadians; specifically, Americans are on the whole more generous than their northern neighbors. However, this should now shroud the substantial variability between jurisdictions within each country.
Among Canadian provinces, Manitoba had both the highest percentage of tax filers donating to registered charity (26.0 percent) and the highest percentage of total income donated (0.89 percent); meanwhile, Quebec again ranked lowest in both measures.
Similarly in the United States, Utah was by far the most generous jurisdiction with 33.4 percent of tax filers donating 3.09 percent of the total income earned in the state. The figures for Utah far exceed even the second-place state, Maryland, in which only 1.67 percent of total income was donated.
Allowing this to continue gives new meaning to the term 'brain dead' or just plain weak and corrupt.
Public Workers Pay to Add Work Time, Costing State Pensions
Source: Thomas Frank, "Public Workers Pay to Add Work Time, Costing State Pensions," USA Today, December 28, 2011.
Government workers in 21 states are using an obscure perk to retire early or to boost their annual pensions by thousands of dollars, which can cost taxpayers millions more in payments to retirement funds, a USA Today analysis shows.
The practice, called buying "air time," lets state, municipal and school employees pay to add up to five years to their work history so they are eligible to retire and collect a lifetime pension.
Workers already eligible for retirement can buy extra years to boost a pension by up to 25 percent. It's called "air time" because workers buy credit for non-existent work, in contrast to policies that let workers buy credit for military service or government jobs in a different state.
Dan Pellissier, a former adviser to California's previous governor, Republican Arnold Schwarzenegger, paid $75,000 in 2004 for five years of work credit. When he turns 55 in 2015, he will get a California pension of $61,536 a year -- nearly $13,000 more than if he hadn't bought air time. That's $320,000 extra by the time he is 80.
Legislatures have allowed air-time purchases as both a perk to workers and an inducement for early retirement. Some states try to make air time cost-neutral to their retirement funds by charging an up-front sum equal to a worker's projected extra lifetime pension payments.
But nine states set the price in ways that could cost taxpayers money.
Michigan, Indiana, Montana and Nevada let workers buy air time years before they retire and pay a sum based on their salary at the time. If a worker's salary is higher at retirement, his pension will be based on the higher salary and the state may not have charged enough to break even, says David Driscoll of pension adviser Buck Consultants.
Wednesday, December 28, 2011
The EPA, like other out of control agencies in this administration, Interior is another one, conjures up the idea that it's their personal duty to force the population to conform to their socialist environmental agenda, the people and congress be dammed.
These out of control agencies are almost reason enough to make sure they change hands this coming November.
The EPA's Fracking Scare
Source: "The EPA's Fracking Scare," Wall Street Journal, December 20, 2011.
The shale gas boom has been a rare bright spot in the U.S. economy, so much of the country let out a shudder a few weeks ago when the Environmental Protection Agency (EPA) issued a "draft" report that the drilling process of hydraulic fracturing may have contaminated ground water in Pavillion, Wyoming.
The good news is that the study is neither definitive nor applicable to the rest of the country, says the Wall Street Journal.
This is the first major study to have detected linkage between fracking and ground-water pollution, and the EPA draft hasn't been peer reviewed by independent scientific analysts. Critics are already picking apart the study, which Wyoming Governor Matt Mead called "scientifically questionable."
The EPA says it launched the study in response to complaints "regarding objectionable taste and odor problems in well water." What it doesn't say is that the U.S. Geological Survey has detected organic chemicals in the well water in Pavillion for at least 50 years -- long before fracking was employed. There are other problems with the study that either the EPA failed to disclose or the press has given little attention to:
The EPA study concedes that "detections in drinking water wells are generally below [i.e., in compliance with] established health and safety standards."
The pollution detected by the EPA and alleged to be linked to fracking was found in deep-water "monitoring wells" -- not the shallower drinking wells.
To the extent that drilling chemicals have been detected in monitoring wells, the EPA admits this may result from "legacy pits," which are old wells that were drilled many years before fracking was employed.
The fracking in Pavillion takes place in unusually shallow wells of fewer than 1,000 to 1,500 feet deep. Most fracking today occurs 10,000 feet deep or more, far below drinking water wells, which are normally less than 500 feet.
One has to believe the Obama administration and congressional Democrats have a different agenda in mind when they adopted Obamacare without any debate from Conservatives or the general public. It sure seems the idea was to get the bill past as fast as you can and prepare to defend the nightmare that surly will ensue.
History has proven this right on all levels of despair.
Source: Peter Suderman, "Medicare Whac-A-Mole," Reason Magazine, January 2012.
Medicare as we know it is the nation's biggest fiscal disaster. For years members of Congress and the executive branch have been trying, and failing, to find ways to restrain the growth of government health spending on seniors. As the single largest driver of long-term federal debt, the program is projected to increase in costs rapidly over the next few decades, with the twin drivers of a gradually aging population and rising health care costs that outstrip inflation and economic growth, says Peter Suderman, an associate editor at Reason Magazine.
Medicare is a $500 billion program on track to become a $1 trillion program before hitting estimated insolvency in 2024.
President Obama has made modest inroads, having signed a debt deal with Republicans over the summer that allowed for a 2 percent cut to Medicare spending. He also endorsed a $248 billion Medicare cut as part of his own debt reduction proposal in September.
Despite recognition of the great problems that Medicare faces for its fiscal future, the recent legislative schemes do not address the problem. Rather, by relying on a technical system of price controls and complicated payout formulas, Congress is continuing to play the same game that it has for years in which it drives down direct costs in one area only to see them spring up elsewhere.
In attempting to address the problems of Medicare and medical expenses on the whole, members of Congress should look to the history of the program. Upon the program's initiation, actual costs routinely outstripped projections because coordinators failed to account for a dynamic system in which consumers respond to market changes.
The House Ways and Means Committee, when charged with assessing the costs of the program, projected that total costs for the first year would run no more than $1.3 billion when total spending in the first year actually was $4.6 billion.
The committee did not improve its accuracy over time, projecting that hospital spending would amount to just $3.1 billion in 1970 when it was actually $7.1 billion.
John Goodman, president of the National Center for Policy Analysis, explains that these chronic projection mistakes are because analysts failed to account for increased demand as 19 million people were given free access to unlimited health care.
Today, Congress makes the same mistakes in different ways, failing to account for a dynamic market that undermines direct controls and ignores price-controlling efforts.
Tuesday, December 27, 2011
Bottom line, just survive until the atmosphere of outside control clears.
Do More Regulations Equal Less Safety?
Source: "Do More Regulations Equal Less Safety?" Mercatus Center, December 2011.
American business must comply with a lot of rules. One of the chief rationales for many regulations is safety, and, as Congress expands regulators' mandates, regulators concentrate on writing highly detailed and specific rules to cover perceived gaps in the law. For the sake of protecting the health and safety of workers and consumers, the federal government accepts the significant drag regulatory compliance puts on the U.S. economy and the burden it places on all businesses.
Psychology, economics and organizational science, however, suggest that too many regulations may make society less safe, says the Mercatus Center.
Increased regulation often leads to reduced compliance, whereby businesses feel that they cannot possibly keep up with the number of rules and therefore give up all efforts entirely.
Heavy regulation also stifles safety innovation -- businesses spend so much energy and time attempting to abide by commanded rules that they do not create their own, firm-specific regulations that may be more needed.
Regulation also causes uncertainty as corporations are more hesitant to invest due to a lack of knowledge regarding the future regulatory landscape.
This first point of reduced compliance makes clear sense: businesses become so clouded with the number of rules by which they must comply that they often fail to adequately obey the most important ones. Minor rules that attempt to address small problems consume a disproportionate amount of time and often cause compliance failure in other areas. Furthermore, a plethora of minor regulations of minimal impact often cast a negative light on all regulations, even those of particular importance.
That regulation will reduce firm-specific safety standards is also a significant problem. Nationwide or even industry-wide regulations usually fail to take into account corporation idiosyncrasies. Thus, even if all regulations are obeyed, there remains significant room for improvement in safety. However, an exhaustive regulatory atmosphere often dampens efforts to create a more comprehensive system of rules.
Businesses hesitate to invest and make drastic changes in their production or line of work when they are uncertain about extraneous factors such as regulation. Managers often cite regulations as one of the greatest factors in their decisions not to hire, and this hesitation causes economic paralysis.
Still states will go ahead and give it a try knowing full well the problems associated with organized gambling will come as well.
Cash-Strapped States Bet On Gambling
Source: Ron Dicker, "Cash-Strapped States Bet On Gambling," Huffington Post, December 14, 2011.
Faced with mounting budget deficits, more states are expanding gambling options and loosening restrictions in a grab for revenue. Critics warn that the winnings are not worth the potential social and financial ills. Nevertheless, many states continue to enact legislation that will increase brick-and-mortar establishments within their borders.
While the federal government attempts to overcome its deficit woes, it bears mention that states face a combined $95 billion deficit for 2012. In this context, it makes fiscal sense that state lawmakers advocate the expansion of gambling options, as casinos and lotteries make up at least 2 percent of revenue in states that have them.
Recognizing the impending budget shortfalls, in 2009 and 2010 alone, 37 states pushed for increased gambling outlets. State lawmakers in Massachusetts, who recently approved the construction of three casinos after 20 years of the debate on the topic, could not help but emphasize the potential fiscal benefits. Estimates suggest that the casinos will collect $1.5 billion to $2 billion a year. That corporate income will translate into $300 to $400 million in tax revenue to chip away at the state's projected $1.8 billion 2012 deficit.
The fiscal benefits explain largely why so many states have made recent efforts to bring gambling options to their citizens. Additionally, it cannot be ignored that if a state chooses not to allow gambling within its borders it will watch potential tax revenue leak into other states that do.
Monday, December 26, 2011
If you continue to reduce the number looking for work and use this number to calculate the unemployment rate, the numbers will continue to improve while the economy gets worse.
This is pure politics at the expense of the working class, the class the Democrats claim they represent.
Why Unemployment Is Worse Than You Think
Source: Ike Brannon and Matt Thoman, "Why Unemployment Is Worse Than You Think," The American, December 13, 2011.
The current unemployment rate of 8.6 percent hides the extent of the economic crisis. The widely quoted rate misses not only the underemployed and discouraged workers, but also major demographic factors. The large demographic shift that has taken place over the last few decades -- driven by the maturing of the baby boom generation -- now places considerable downward pressure on the unemployment rate, which makes the current malaise look a bit better than it really is, say Ike Brannon, director of economic studies, and Matt Thoman, coordinator of economic studies, at the American Action Forum.
The unemployment rate, firstly, fails to account for the older generation of workers in the United States (predominantly baby boomers), who have an increased tendency to accept early retirement or buyout packages when faced with possible layoffs.
It also fails to incorporate the large swathes of potential young workers who choose not to enter the labor force due to poor prospects and elect instead to stay in school.
When these two factors are integrated into a more comprehensive measure of unemployment such as the Demographically-Adjusted Unemployment Rate (DOUR), it is found that real unemployment is probably closer to 10 percent than 8.6.
Given this information, America's prospects in emerging quickly and coolly from the recent recession and back to "natural" unemployment levels seem somewhat bleaker. The nation may be on the cusp of having to accept a higher natural rate of unemployment, as it does not appear that the current rate of employment is moving rapidly towards its pre-recession levels.
It bears mention that this demographic effect that seems to suppress the unemployment rate by approximately 1 percent will wear off with the gradual retirement of the job-secure baby boomers. At that time, more attention will have to be paid to transitioning younger workers into the job market and maintaining an adequate level of unemployment.
There might be some good Democrats out there but why take a chance on making a wrong decision?
Top 12 Reasons To Vote Democratic
When your "friends" cannot explain why they voted for Democrats, give them this list. They can pick their reasons from this "TOP 12" List...
1. I voted Democrat because I believe oil companies' profits of 4% on a gallon of gas are obscene, but the government taxing the same gallon of gas at 15% isn't.
2. I voted Democrat because I believe the government will do a better job of spending the money I earn than I would.
3. I voted Democrat because Freedom of Speech is fine as long as nobody is offended by it.
4. I voted Democrat because I'm way too irresponsible to own a gun, and I know my local police are all I need to protect me from murderers and thieves.
5. I voted Democrat because I believe people who can't tell us if it will rain on Friday can tell us the polar ice caps will melt away in ten years if I don't start driving a Prius.
6. I voted Democrat because I'm not concerned about millions of babies being aborted so long as we keep all death row inmates alive.
7. I voted Democrat because I think illegal aliens have a right to free health care, education, and Social Security benefits.
8. I voted Democrat because I believe business should not be allowed to make profits for themselves. They need to break even and give the rest away to the government for redistribution as the Democrats see fit.
9. I voted Democrat because I believe liberal judges need to rewrite the Constitution every few months to suit some fringe kooks who would never get their agendas past the voters.
10. I voted Democrat because I think it's better to pay billions to people who hate us for their oil, but not drill our own because it might upset some endangered beetle or Gopher.
11. I voted Democrat because while we live in the greatest, most wonderful country in the world, I was promised "HOPE AND CHANGE".
12. I voted Democrat because my head is so firmly planted up my ***, it's unlikely I'll ever have another point of view.
Here's another way to look at the Debt Ceiling: Let's say, You come home from work and find there has been a sewer backup in your neighborhood.... and your home has sewage all the way up to your ceilings. What do you think you should do ...... Raise the ceilings, or pump out the sewage ?
Your choice is coming November 2012!
Friday, December 23, 2011
Liberal progressive Democrats believe that what ever they can do to destroy law and order in this state, they will do it. This is why they believe "the ends justifies the means" or "by any means necessary" to accomplish their goals to "fundamentally change America".
These are from Charlie Skyes of Milwaukee radio - these rules are absolute and effective as Conservatives seem to not have the ability to defend themselves against these attacks. The question now then is, why?
For your Holiday (Pre-Recall Madness) reading... a re-posting of my "rules" from earlier this year. (With apologies again to Saul Alinsky.)
Never acknowledge conservative victories as legitimate.
Never concede defeat in legislative votes. There is always a cloud.
Rely on Dane County judges whenever possible.
Elections only matter if liberals win.
Shut down schools, bring legislative process to a halt, tie up the courts, extort businesses, try to overturn elections … and then say “this is what democracy looks like.”
Private businesses, families, personal lives are all fair game. Get the Mainstream media to say that “both sides’ are equally guilty.
Create appearance of scandal and misconduct wherever and whenever possible.
Chant “shame, shame, shame,” a lot.
Break laws, ignore rules, commit fraud, flee the state, change standards at will – but hold conservatives to a standard of absolute compliance. (For example, using the open meetings law to tie up the union bill.)
If we can’t defeat conservatives at the ballot box, we can discredit them and demoralize them. If we get inside their heads, we win.
Encourage conspiracy theories. Use the phrase “Koch Brothers,” as often as possible.
Create chaos whenever possible.
Demand investigations, even if there is nothing to investigate. It adds to appearance of chaos and misconduct. Media will always bite.
Bully, intimidate, and threaten, unleash union thugs… but repeatedly accuse Scott Walker and the GOP of being bullies.
Hold many rallies.
Remember: there is no voter fraud, except when the charge works for our benefit.
Invoke ‘civility,’ when it is in our interest (to get conservatives to shut up), but otherwise feel free to use the vilest language possible.
It doesn’t matter if an accusation against a conservative is true or false; the only question is: can we use it to win (or discredit and demoralize conservatives).
Don't respond to talk radio or other conservative media: discredit them. Remember they are never to be considered a legitimate alternative viewpoint: they are liars." (Politifact will be helpful.)
Rely on the conservative base to hold their own to a higher standard than we do. We don’t care about the private lives of Bill Clinton, Jesse Jackson, or Chris Abele, but they will turn on their own in cases where we would just look the other way. (The MSM accepts and embraces the double standard so use it.)
Accuse conservatives of hypocrisy a lot. Obviously we are immune to the charge, since we don’t have any standards… except getting our way.
Use every controversy to stoke leftist anger and paranoia and raise money.
Never, ever stop
God bless America!
Thursday, December 22, 2011
Americans love a winner and that's not the Dallas Cowboys these days. The team from deep in the Republic of Texas has been replaced as the nation's most popular team.
Aaron Rodgers' Super Bowl-winning Green Bay Packers were picked by 22 percent of voters as their favorite team in the NFL, according to Public Policy Polling's newest national survey. The Cowboys finished second, with 11 percent of the vote, followed by the Bears, Giants and Steelers.
NFL Films famously gave the Cowboys the title of "America's Team" in a 1978 highlight film. The program opened up with this intro: "They appear on television so often that their faces are as familiar to the public as presidents and movie stars. They are the Dallas Cowboys, America's Team."
A generation later, Dallas was actually picked as America's least favorite NFL team. The Cowboys got 22 percent of the negative vote, beating out the Chicago Bears' 8 percent and Green Bay's 7 percent for the title.
This was a bi-partisan pigskin vote: Republicans (60 percent), Democrats (44 percent) and independents (44 percent) all picked the Packers over the Cowboys.
Russia's Entry into the World Trade Organization Is in America's Interest
Source: Daniel Griswold and Douglas Petersen, "Trading with the Bear: Why Russia's Entry into the WTO Is in America's Interest," Cato Institute, December 6, 2011.
Russia is poised to join the World Trade Organization (WTO), solidifying its transition from a closed communist economy to a full participant in the global marketplace. The only question is whether the United States will embrace Russia as a fellow WTO member or forfeit the benefits for the sake of an outdated policy rooted in the Cold War. The 1974 Jackson-Vanik Amendment requires Congress to annually pass a special exemption for Russia extending it conditional access to the U.S. market. If the law is not revoked, American exports will not benefit from the market-opening policies that Russia will adopt upon its accession, say Daniel Griswold and Douglas Petersen of the Cato Institute.
Through the first three quarters of 2011, Russia ranked 31st among nations as a market for U.S. goods exports and 16th as a source of U.S. goods imports.
In two-way trade (exports plus imports), Russia ranks as America's 23rd largest trading partner.
Russia is by far the largest economy in the world to have not been granted membership into the WTO, with Iran as the only other economy among the largest 50 in the same position.
Not only is Russia one of America's top trading partners, but also this relationship has been severely underdeveloped by previously existing trade barriers. If these barriers to commerce are removed, trade will probably expand even further, granting substantial benefits on each economy.
From 2000 to 2010, U.S. goods exports to Russia increased by 187 percent and U.S. imports from Russia increased by 235 percent.
During the same period, total U.S. exports and imports to and from the entire world grew only 63 percent and 57 percent, respectively.
By some estimates, U.S. exports to Russia could double in the five years following its accession to the WTO.
These facts and estimates suggest that the removal of trade barriers could greatly spur commerce with Russia and act as a significant boon to President Obama's National Export Initiative goal to double exports from 2009 to 2014. There remain substantial obstacles to expanded trade with Russia; however, if these obstacles can be overcome, the benefits to America's trade balance could be substantial.
Tuesday, December 20, 2011
What this new proposal entails is a complete take over of all aspects of our lives by an unelected agency head. The head of the Environmental Protection Agency will be more powerful than the President of the United States. This one person will control all industries and related institutions which means anything that will effect the environment in any way. This will include all financial and social institutions as well as they are connected to industry in one way or another.
Take a minute and think about this. How does one person assume so much power with no over-sight?
The EPA doesn't need anything or anybody to tell them they can't do something that they believe is in our best interest. And not only in this country, but the entire world through new regulations at the United Nations!! Not only will we all become subservient to any whim at the EPA, we will become subjects to a tyrant with unlimited power.
EPA Ponders Expanded Regulatory Power In Name of 'Sustainable Development'
By George Russell
Published December 19, 2011 FoxNews.com
The U.S. Environmental Protection Agency wants to change how it analyzes problems and makes decisions, in a way that will give it vastly expanded power to regulate businesses, communities and ecosystems in the name of “sustainable development,” the centerpiece of a global United Nations conference slated for Rio de Janeiro next June.
The major focus of the EPA thinking is a weighty study the agency commissioned last year from the National Academies of Science. Published in August, the study, entitled “Sustainability and the U.S. EPA,” cost nearly $700,000 and involved a team of a dozen outside experts and about half as many National Academies staff.
Its aim: how to integrate sustainability “as one of the key drivers within the regulatory responsibilities of EPA.” The panel who wrote the study declares part of its job to be “providing guidance to EPA on how it might implement its existing statutory authority to contribute more fully to a more sustainable-development trajectory for the United States.” Or, in other words, how to use existing laws to new ends.
According to the Academies, the sustainability study “both incorporates and goes beyond an approach based on assessing and managing the risks posed by pollutants that has largely shaped environmental policy since the 1980s.”
It is already known in EPA circles as the “Green Book,” and is frequently compared by insiders to the “Red Book,” a study on using risk management techniques to guide evaluation of carcinogenic chemicals that the agency touts as the basis of its overall approach to environmental issues for the past 30 years.
At the time that the “Green Book” study was commissioned, in August, 2010, EPA Administrator Lisa Jackson termed it “the next phase of environmental protection,” and asserted that it will be “fundamental to the future of the EPA.”
Jackson compared the new approach, it would articulate to “the difference between treating disease and pursuing wellness.” It was, she said, “a new opportunity to show how environmentally protective and sustainable we can be,” and would affect “every aspect” of EPA’s work.
According to the study itself, the adoption of the new “sustainability framework” will make the EPA more “anticipatory” in its approach to environmental issues, broaden its focus to include both social and economic as well as environmental “pillars,” and “strengthen EPA as an organization and a leader in the nation’s progress toward a sustainable future.”
Whatever EPA does with its suggestions, the study emphasizes, will be “discretionary.” But the study urges EPA to “create a new culture among all EPA employees,” and hire an array of new experts in order to bring the sustainability focus to every corner of the agency and its operations. Changes will move faster “as EPA’s intentions and goals in sustainability become clear to employees,” the study says.
The National Academies and the EPA held a meeting last week in Washington to begin public discussion of the study.
Even as it begins to go public, EPA, which has come under renewed fire for its recent rulings on new auto emissions standards and limits on coal-fueled power plant emissions, is being determinedly low-key about the study. Initially questioned about the document by Fox News weeks ago, an EPA spokesman eventually declared that “we are currently reviewing the recommendations and have not yet made any decisions on implementation.” During the deliberations, he said, “the agency will seek a wide range of perspectives on the recommendations from the business community, non-governmental organizations, the scientific community, and others.” The spokesman also said that EPA had “no current plans” for the so-called “Rio + 20” environmental summit next summer “that pertains to the Green Book’s recommendations.”
The U.N. summit meeting, however, is mentioned in the Green Book itself as an instance where “sustainability is gaining increasing recognition as a useful framework for addressing otherwise intractable problems. The framework can be applied at any scale of governance, in nearly any situation, and anywhere in the world.”
When it comes to applying the framework via EPA, the study says it is likely to happen only “over time.” The Red Book risk assessment approach now in use, it notes, “was not immediately adopted within EPA or elsewhere. It required several years for its general acceptance at EPA and its diffusion to state and local agencies.”
What is “sustainability” in the first place? That is a question the study ducks, noting that it is only advising EPA on how to bring it within the agency’s canon.
The experts take their definition from an Obama Administration executive order of October, 2009, entitled Federal Leadership in Environmental, Energy and Economic Performance. It defines sustainability in sweeping fashion as the ability “to create and maintain conditions, under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations.”
The study specifically notes that “although addressing economic issues is not a core part of EPA’s mission, it is explicitly part of the definition of sustainability.” The experience of the European Union is deemed “particularly relevant” to achieving the sustainability goal.
That European strategy involves a virtually all-encompassing regulatory vision. The study notes that its priorities include “climate change and clean energy; sustainable transport; sustainable consumption and production; conservation and management of natural resources; public health; social inclusion, demography, and migration; and global poverty and sustainable development challenges.”
In an American context, the study says sustainable development “raises questions that are not fully or directly addressed in U.S. law or policy.” Among them: “how to define and control unsustainable patterns of production and consumption and how to encourage the development of sustainable communities, biodiversity protection, clean energy, environmentally sustainable economic development, and climate change controls.”
The study notes that sustainable development is “broader than the sum of U.S. environmental and conservation laws.”
It adds that “a great deal more needs to be done to achieve sustainability in the United States.”
The experts say they found the legal authority for EPA to foster sustainable development without further congressional approval in the wording of the National Environmental Policy Act of 1969, or NEPA. The study says the law, the cornerstone of U.S. environmental policy, declared that the “continuing policy of the Federal Government” is to “create and maintain conditions, under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations.”
(In fact, the study quotes selectively from that portion of NEPA. What that section of the Act says in full is that “it is the continuing policy of the Federal Government, in cooperation with State and local governments, and other concerned public and private organizations, to use all practicable means and measures, including financial and technical assistance, in a manner calculated to foster and promote the general welfare, to create and maintain conditions under which man and nature can exist in productive harmony, and fulfill the social, economic, and other requirements of present and future generations of Americans.)
What ends that tacit authority should be used for are far less clear, because the study asserts that they need to be made up and codified as EPA goes along.
“EPA needs to formally develop and specify its vision for sustainability,” the study says. “Vision, in the sense discussed here, is a future state that EPA is trying to reach or is trying to help the country or the world to reach.”
The study offers up new tools for EPA to do the job. As opposed to environmental impact assessment, the study encourages the use of “sustainability impact assessment” in the evaluation of the hundreds and thousands of projects that come under EPA scrutiny to see whether they are moving in the proper direction
“Environmental impact assessment tends to focus primarily on the projected environmental effects of a particular action and alternatives to that action,” the study says. Sustainability impact assessment examines “the probable effects of a particular project or proposal on the social, environmental, and economic pillars of sustainability”—a greatly expanded approach.
One outcome: “The culture change being proposed here will require EPA to conduct an expanding number of assessments.” As a result, “The agency can become more anticipatory, making greater use of new science and of forecasting.”
The catch, the study recognizes, is that under the new approach the EPA becomes more involved than ever in predicting the future. “Forecasting is unavoidable when dealing with sustainability, but our ability to do forecasting is limited,” the document says.
One forecast it is safe to make: the study shows whatever else the new sustainability mission does for EPA, it aims to be a much, much more important—and powerful-- federal agency than it is, even now.
George Russell is executive editor of Fox News and can be found on Twitter@GeorgeRussell
Read more: http://www.foxnews.com/politics/2011/12/19/epa-ponders-expanded-regulatory-power-in-name-sustainable-development/print#ixzz1h0Ltapa0
Monday, December 19, 2011
On numerous occasions, after pointed statements from concerned legislators that Fannie and Freddie were out of control, mostly Republicans, they stated, on the floor of congress, these two agencies were solvent and no further control was needed even after their presiding officers where charged with fraud, fired and fined millions. Jim Johnson and Franklin Rains.
Nothing to see here was the attitude of the Democrats. They still insisted nothing was wrong.
Investor Speculation and the Housing Bubble
Source: Andrew Haughwout et al., "'Flip This House': Investor Speculation and the Housing Bubble," New York Federal Reserve, December 5, 2011.
The recent financial crisis -- the worst in 80 years -- had its origins in the enormous increase and subsequent collapse in housing prices during the 2000s. The New York Federal Reserve has taken advantage of unique data to suggest that real estate "investors" -- borrowers who use financial leverage in the form of mortgage credit to purchase multiple residential properties -- played a very important role in the housing downturn by defaulting in large numbers.
Investor shares of home purchases roughly doubled between 2000 and 2006.
At the peak of the boom in 2006, over a third of all U.S. home purchase lending was made to people who already owned at least one house.
In 2007-2009, investors were responsible for more than a quarter of seriously delinquent mortgage balances nationwide.
The effects of investors on the housing bubble are even more pronounced in those states that faced the harshest effects of the bubble. Arizona, California, Florida and Nevada had the most severe housing downturns, and they also had some of the highest activity of home investors.
While investors were responsible for one third of all home purchases nationwide in 2006, this number is approximately 45 percent in these four states. Furthermore, investors with three or more properties constituted 20 percent, which is triple their share from 2000.
In the years following the bubble burst, investors were responsible for more than a third of delinquent balances in Arizona, California, Florida and Nevada.
The impact of investors on the housing market can be understood by taking a closer look at their basic strategy. By "flipping" a house, an investor attempts to buy it and sell it as quickly as possible while maximizing profit. Because they have little intention of holding onto or living in the house in the long term, they often accepted high interest rates on mortgages in order to minimize down payments.
However, when the housing market dried up and investors were no longer able to clear houses, they were left with unforeseen interest payments that were too high to be kept up with. This caused a disproportionate number of investors to become delinquent and for their flipping to contribute strongly to the housing crisis.
Saturday, December 17, 2011
What will be needed is a strong Conservative leaders in the White House, along with majorities in the congress, to move the control away from the federal government and place the responsibility for excellence on the local school boards and the teachers.
Wisconsin is one of the leaders in this effort and it's working by producing individual leadership among the teachers and school boards. Unions have attacked the Govenors budget for it's striking of the collective bargaining from the teachers for pensions and health care, but the result is nearly no teachers were laid off and local communities have saved millions in the process.
The reality is if this new governor hadn't gotten this new budget passed, more the 5000 teachers and public employees would have been laid off. The 3.6 billion deficit demanded changes to the system and the best way to do this was ending the collective bargaining of the public sector unions. Collective bargaining is still in force for wages.
The union said they didn't care about laid off teachers, what they wanted was the collective bargaining left in tact. Without this in place, the unions have no way to force the collection of dues. Now it's voluntary and the teachers and public employees like it that way as their pay checks went up by more than $800. Go figure!
Maybe we can change the system from 'me' to 'them'. Only time and hard work will tell.
The Excellence Gap
Source: Sol Stern, "The Excellence Gap," City Journal, Autumn 2011.
Virtually all education reformers recognize that America's ability to remain an economic superpower depends to a significant degree on the number and quality of engineers, scientists and mathematicians graduating from our colleges and universities. Professionals working in these "STEM" areas produce greater scientific innovation, which has generated as much as half of all U.S. economic growth over the past half-century, on some accounts.
But the number of graduates in these fields has declined steadily for the past several decades as students gradually move away from those areas of study that are most beneficial to the economy on the whole, says Sol Stern, a senior fellow with the Manhattan Institute.
A report by the Information Technology and Innovation Foundation found that bachelor's degrees in engineering peaked in 1985 and are now 23 percent below that level.
According to the National Center for Education Statistics, only 6 percent of U.S. undergraduates currently major in engineering, compared with 12 percent in Europe and Israel and closer to 20 percent in Japan and South Korea.
The World Economic Forum now ranks the United States fifth among industrialized countries in global competitiveness, down from first place in 2008. The fact that students are moving away from these fields has damaged the United States' competitiveness in the international scope. Yet this trend is only one of the dangers that currently plague the American education system.
In tandem with this growing profession shift among students has been the pervasive effects of No Child Left Behind (NCLB). Some 10 years down the road, it is easy to see the good intentions of the law, which was one of the most significant education reforms in modern history. Yet its negative effects are now much easier to identify and quantify than they were at the outset.
Among them is the negative effect on top-performing students. By focusing on closing achievement gaps and lifting up the worst-off students, the law encourages educators to ignore talented learners. Additionally, because NCLB ties federal funding to a given school's performance within state-created metrics, state lawmakers are encouraged to lower standards. This artificially boosts scores and warrants greater shares of federal dollars.
Moving forward, Congress should reconsider some of the most damaging aspects of NCLB and should include policies that encourage the development of talented students who will drive innovation. Additionally, lawmakers should encourage further creation of math and science academies that will encourage greater entrance into STEM fields.
To find the perfect example one needs look no further than California, the poster child for corruption, ineptness and out right ignorance of reality. New York is right up there as well and Michigan may as well be standing next to these two.
But what is the common thread that binds these states to failure? They have been governed by progressive Democrats for decades. If proof is what you want, okay, let's take a look a Louisiana and how that was a sink hole dispare being trashed by Democrats for the past 60 years.
Now the people elected a Conservative to clean up the mess and the results are stunning. It works every time. Will it work for the entire country? Of course. Could it possibly to be worse then what we have now, not possible.
States Expand Lucrative Pensions to More Jobs
Source: Frank Thomas, "States Expand Lucrative Pensions to More Jobs," USA Today, December 10, 2011.
As states tighten budgets and prepare to address massive deficits, special retirement benefits are constantly being extended to additional groups of workers. While the exclusive packages were once reserved for police officers, firefighters and other public workers in dangerous areas, tens of thousands of state workers such as park rangers, dispatchers, coroners, even highway laborers, museum guards and lifeguards are being incorporated into the programs. These packages contain privileges and benefits that far exceed traditional compensation, says USA Today.
The minimum age of retirement is usually substantially lower for those with special retirement plans. The compensation package that retirees receive is a larger percentage of the beneficiary's working income and fewer years of service are necessary to qualify.
The additional cost per worker that is allowed to qualify for a special package is approximately $1 million over the course of the worker's retirement. The budgetary impacts of this growing tendency can be seen in California. The number of workers eligible for enhanced or early retirement jumped to 77,394 from 59,685 in 2000.
Simultaneously, the number of workers in regular retirement plans fell to 170,942 from 175,495, state records show. State records also show that enhanced early retirement plans cost taxpayers $1.5 billion this year, up from $385 million in 2000.
Many former and current lawmakers discuss this situation and recognize the inability to sustain current trends. As more workers are given special retirement packages, the burden of public worker pensions increases and states find themselves in an ever-growing pile of debt. Many have also recognized the snowball effect of the highly distinguishable plans: as one group requests special privileges, it becomes increasingly difficult to withhold those benefits from another group.
While each state is free to supply or deny special benefits to classes of workers, the growing tendency suggests that more and more workers will be found to have "dangerous" positions that warrant exceptional retirement.
Friday, December 16, 2011
With the release in 2009 and now this new batch of emails it is clear, there was no doubt even before 2009 that this was a scam, climate change can not be 'proved' one way or the other, yet hundreds of millions of tax dollars are still being spent to support a lie.
Green energy advocates use this false information to support their agenda that fossil fuel must be taken down or all is lost for the human race. The truth be dammed.
In reality, the worlds climate is way bigger than man's meager attempts to reduce it to just computer models. Of course this never stopped Al Gore and his ilk from their grab for more money and power.
Climategate 2.0 and Scientific Integrity
Source: H. Sterling Burnett, "What's Going on Behind the Curtain? Climategate 2.0 and Scientific Integrity," National Association of Scholars, December 14, 2011.
Climategate, both 1 and 2, are textbook cases of gross lapses in professional ethics and scientific malfeasance. To understand why, one must first understand what science is and how it is supposed to operate, says H. Sterling Burnett, a senior fellow at the National Center for Policy Analysis.
Science is the noble pursuit of knowledge through observation, testing and experimentation.
Scientists attempt to explain, describe and/or predict the implications of phenomena through the use of the scientific method, which consists of gaining knowledge or explanatory power through a process.
Progress is made in science by proposing a hypothesis and developing a theory to explain or understand certain phenomena, and then testing the hypothesis against reality. A particular hypothesis is considered superior to others when, through testing, it is shown to have more explanatory power than competing theories or hypotheses.
Every theory or hypothesis must be disconfirmable in principle, which means that, if the theory predicts that "A" will occur under certain conditions, but instead, "B" and sometimes "C" result, then the theory has problems. The more a hypothesis' predictions prove inconsistent with or are diametrically opposed to the results that occur during testing, the less likely the hypothesis is to be correct.
Which brings us to Climategate.
Climategate parts one and two are a series of leaked e-mails from arguably the most prominent researchers promoting the idea that humans are causing catastrophic global warming. The first group of e-mails released in 2009 showed scientists, among other things, attempting to suppress or alter inconvenient data, destroying raw data so that others would be unable to analyze it and trying to suppress dissent by undermining the peer review process.
Climategate 2 is a second release of e-mails with little new information, but more hiding of data.
To be clear, these e-mails do not disprove that humans are causing potentially catastrophic global warming, but what clearly emerges is that the scientists claiming that "the science is settled" and that there is "consensus" among scientists, can't be trusted, nor can their research be pointed to as solid proof of anthropogenic global warming, says Burnett.
Thursday, December 15, 2011
In Wisconsin, as other states, they are called Charter Schools and their success is another nail the coffin of the unions. With every school that opens and is successful, not all are successful, the unions push harder for the election of government officials that will support their agenda of total control of public education and millons of tax dollars.
The fact that the teacher's union in Wisconsin didn't even apply for rectification this year wasn't lost on anyone that's paying attention. Freedom of choice works.
For-Profit Higher Education
Source: Ben Wildavsky, "Crossing to the Dark Side?" American Enterprise Institute, December 13, 2011.
In the past year, for-profit higher education providers have been thrust into the spotlight. Largely missing from the debate, however, has been a more detailed look at how traditional and for-profit institutions differ in important areas like administration, instructor experience, mission and governance, data collection and use, and student recruitment and retention.
Ben Wildavsky, a senior fellow in research and policy at the Kauffman Foundation, tries to get beyond sensationalized headlines and examine these questions from the point of view of individuals who have moved from the traditional to the for-profit sector -- or kept a foot in both.
Trial, Error and Measurement: Entrepreneurial for-profits can move much faster to create new programs, adjust staffing levels and change curricula, according to Geri Malandra, a former University of Texas administrator and now provost of Kaplan University.
Rethinking the Faculty's Role: As a result of for-profit institutions' reliance on trial and error, a heavily standardized curriculum, and responsiveness to consumer demand, their faculty tends to look quite different from those at many traditional not-for-profit institutions.
First and foremost, they are instructors rather than researchers. For-profits also evaluate prospective hires on their teaching skills and give new instructors explicit pedagogical training.
Practical Instruction and Student Support: Interviewees noted that for-profits often hire working professionals or retired college instructors to teach courses with a relentlessly practical emphasis. Since for-profits also enroll a higher proportion of nontraditional and at-risk students, they must provide more intensive student support services and flexible course options.
Quality Concerns and Governance: Those interviewed were generally quick to acknowledge some serious problems in the for-profit sector while underscoring that nontraditional students often face comparable difficulties and frequently experience poor outcomes in conventional institutions.
For-profits will certainly need to work hard to prove their worth, but the observations and experiences of those interviewed suggest that traditional colleges and universities will be badly mistaken if they assume that the travails of for-profits today mean that useful lessons cannot be drawn from their successes to date -- and those likely to occur in the future.
But the story line of crushing cost increases to heat and cool our homes and industry is brought to you straight from the White House but conveniently and purposefully leaves out the progressive 'green energy' agenda.
Remember Obama's very words before the election in 2008, " under my administration and how I will capture green house gases, electrical rates will necessarily skyrocket. No matter what companies build to generated power, whether it's coal or gas, under my administration it will cost a lot more and these companies will pass this cost on to the consumer."
If you never watched Fox News or listen to Conservative radio, you would never have heard him say this, and the main stream media depends on the general public remaining ignorant to his real intentions which are, in his words again, " I want to fundamentally change America".
Is the general public really that ignorant to vote for this guy again? If they do, then it will be shame on him for trying to destroying our country the first time he was elected, but shame on you if you allow him to complete the job.
Household Electricity Bills Skyrocket
Source: Dennis Cauchon, "Household Electricity Bills Skyrocket," USA Today, December 13, 2011.
Electric bills have skyrocketed in the last five years, a sharp reversal from a quarter-century when Americans enjoyed stable power bills even as they used more electricity, says USA Today.
Households paid a record $1,419 on average for electricity in 2010, the fifth consecutive yearly increase above the inflation rate.
The jump has added about $300 a year to what households pay for electricity. That's the largest sustained increase since a run-up in electricity prices during the 1970s.
Electricity is consuming a greater share of Americans' after-tax income than at any time since 1996 -- about $1.50 of every $100 in income. Greater electricity use at home and higher prices per kilowatt hour are both driving the higher costs, in roughly equal measure:
Residential demand for power dropped briefly in 2009 but rebounded strongly last year to a record high. Air conditioners and household appliances use less power than ever.
But consumers have bigger houses, more air conditioning and more electronics than before, outpacing gains in efficiency and conservation.
Prices are climbing, too, hitting a record 11.8 cents per residential kilowatt hour so far this year, reports the Energy Information Administration. The increase reflects higher fuel prices and the expense of replacing old power plants, including heavily polluting -- but cheap to operate -- coal plants that don't meet federal clean air requirements.
Electricity cost varies widely depending on where you live. Cheapest: Northwest communities near hydropower dams -- as low as 2 cents per kilowatt hour. Most expensive major utility: Consolidated Edison, supplier of New York City -- 26 cents per kilowatt hour.
A potential bright spot: Electric bills appear roughly the same so far this year as last when adjusted for inflation, based on preliminary reports. However, the future of energy prices and the upcoming closure of more polluting coal plants make the long-term outlook cloudy for consumers.
Wednesday, December 14, 2011
It's just not Ohio or Indiana that is after these businesses in Illinois but Wisconsin is after them as well. They have a sign at the boarder that says businesses are welcome to relocate to lower taxes.
Governor Walker has turned the state around as he said he would. The budget is balanced and jobs are coming back. For all his efforts, the unions and progressive liberals are try to recall him.
Liberal Democrats hate success.
Businesses Threaten to Leave Illinois
Source: "Illinoyed," The Economist, December 3, 2011.
In January, in an attempt to grapple with its budget problems, Illinois raised corporate taxes from 7.3 percent to 9.5 percent and personal income tax from 3 percent to 5 percent. Although the tax hikes are theoretically temporary, both the rises and the continued failure of politicians to get to grips with the budget crisis are starting to worry businesses, says The Economist.
Over 17 percent of the state's operating budget, or about $5.8 billion this year, goes on meeting public-pension obligations -- a burden that will worsen as longevity increases. Many companies, fearing that they, and their employees, will ultimately have to pick up the tab, are demanding tax breaks to stay in the state.
In May Motorola Mobility was offered $100 million in financial incentives to retain its corporate headquarters in Illinois, in the hope of retaining 3,000 jobs. Last year Navistar, a truck and engine firm, also managed to extract incentives worth $65 million from the state.
Now Sears, a chain of department stores and one of the state's largest employers, is playing the relocation card. Two Chicago-based financial exchanges -- CME Group and CBOE Holdings -- say they will go as well.
The state's general assembly has responded by preparing legislation that offers these companies a deal. Although a final bill has yet to be agreed, legislative approval looks very likely. Although each new individual arrangement may seem justifiable to the politicians, together they further undermine the state's financial position.
Laurence Msall, president of the Civic Federation, an independent watchdog, says the current state budget contains more than $2 billion of promises for which there is no money. In addition, the state has carried over $5 billion in unpaid bills from previous years. The vultures are circling.
Ohio has offered Sears $400 million to move to the Buckeye State. Indiana has a personal taxation rate of 3.4 percent, and has promised to reduce corporate tax to 6.5 percent over the next four years.
Katelyn Hancock, a spokesperson for the Indiana Economic Development Corporation, points out that the way to compete is not through incentives but via lower taxes, a predictable regulatory climate and fiscal stability.
Most everyone knows that college and university tuition is out of the realm of common sense. Yet people flock to these schools to get their sheep skins which they believe will assure them of success in their future endeavors. These students believe it's a slam dunk for success no matter what their degree field is.
The Problem : People will pay anything for a free ride. Colleges and universities know this and jack up tuition fees to take a huge piece of the educational pie. How does the saying go, ' there's a sucker born every minute and two to take him'. But that's not all, in the end you find the education you got is marginal at best, or completely worthless. Welcome to higher education.
WOW! Reality is a harsh teacher as this economy has proven to most resent graduates. A degree in Women's Studies, English literature or Economics doesn't exactly assure one of fame and fortune. And after all their efforts to get through school, and in debt up to their necks for years to come, the graduates find there are no jobs for them and won't be for the foreseeable future.
U.S. Universities Feast on Federal Student Aid
Source: Virginia Postrel, "U.S. Universities Feast on Federal Student Aid," Bloomberg, December 8, 2011.
Any serious higher education policy reform has to start by considering a heretical idea: Federal subsidies intended to make college more affordable may have encouraged rapidly rising tuitions, says Virginia Postrel, the author of "The Future and Its Enemies" and "The Substance of Style."
It's a phenomenon familiar to economists: If you offer people a subsidy to pursue some activity requiring an input that's in more-or-less fixed supply, the price of that input goes up. A 1998 article in the American Economic Review explored an example: federal research and development subsidies.
The supply of scientists and engineers is fairly fixed, at least in the short run. So instead of spurring new activity, much of the money tends to go to increase the salaries of people already doing such work.
From 1968 to 1994, a 10 percent increase in research and development spending led to about a 3 percent increase in incomes in the subsidized fields.
In the short-term, the number of slots at traditional colleges and universities is relatively fixed. A boost in student aid that increases demand is therefore likely to be reflected in prices rather than expanded enrollments. Over time, enrollments should rise, as they have in fact done. But many private schools in particular keep the size of their student bodies fairly stable to maintain their prestige or institutional character.
On the whole, it seems that if the government hands their customers the equivalent of a discount coupon, the institutions can capture at least some of that amount by raising their prices -- especially when demand for their product is increasing independent of aid, because a college degree promises to pay off in higher wages.
This doesn't mean that colleges capture all the aid in higher tuition charges. But it does set up problems for two groups of students in particular: those who don't qualify for aid and who therefore have to pay the full, aid-inflated list price, and those who load up on loans to fill the gaps not covered by grants or tax credits only to discover that the financial value they expected from their education doesn't materialize upon graduation.
Tuesday, December 13, 2011
This is prevalent in the private sector as well in that managers make decisions about situations they know nothing about just because they are managers and because they believe they are being paid to make decisions.
Hard to believe? Maybe, but it happens all the time. Little wonder things don't get screwed up more then they do.
A Foundational Problem with Regulations
Source: "'Ready, Fire, Aim!' A Foundational Problem with Regulations," Mercatus Center, December 2011.
The regulatory authority Congress grants to government agencies is an immensely powerful tool for altering behavior in the marketplace. But while intended to solve problems that otherwise would not be addressed, the regulatory process often yields excessively broad and burdensome rules that fail to achieve the desired public objective.
Regulations are imposed prematurely, without any realistic examination of whether alternative approaches would be more effective or efficient at solving the problems, says the Mercatus Center.
All too often, the method of operations for a regulatory agency resembles the following:
Decide what it wants to do.
Write up a proposed regulation.
Perform analysis to justify the regulation.
The greatest problem with the status quo is that the economic analysis is conducted as an afterthought when it should instead be an integral part of the decision-making process.
Instead, the process should be expanded and reformed to match the following:
Define the problem.
Identify the desired outcome.
Consider all alternatives, including actions that can be taken by other governments and non-government actors.
Review the efficacy of the regulation after the fact.
Decades of yielding presidential orders have failed to align regulatory agencies with this proven method of decision-making; this fact alone should compel Congress to act. Statutory legislation will be required to force agencies to conform to the correct principles.
In light of the new email dump from the 'climate change" head quarters in England, some 5000 new emails with another 225,000 to come at a later date, this finding by the IPCC is just proving the definition of insanity, 'committing over and over again to the same agenda, but believing they can get different results each time'.
Truly, the climate change, global warming proponents, are insane. Do these people really believe they can fool all the people all the time?
It is extremely difficult for the average person to comprehend how these people can continue to advocate climate change in the face of so much evidence that is now available to the general public that these people lied. And yet they continue down the same path!
Intergovernmental Panel on Climate Change Reports Are Misleading
Source: Indur M. Goklany and Julian Morris, "How the IPCC Reports Mislead the Public, Exaggerate the Negative Impacts of Climate Change and Ignore the Benefits of Economic Growth," Reason Foundation, December 7, 2011.
By the year 2100, developing countries will be richer than the United States is today, according to the Intergovernmental Panel on Climate Change's (IPCC) worst-case temperature change scenario. Moreover, the faster developing countries grow and the more emissions they produce, the wealthier they will be -- even taking into account all the damage that is expected from climate changes caused by those emissions.These surprising findings about developing countries and global warming are based on the very studies that the Intergovernmental Panel on Climate Change's own reports rely upon. But you wouldn't know it based on the IPCC's dire warnings, say Indur M. Goklany, who has represented the United States at Intergovernmental Panel on Climate Change negotiations in the past, and Julian Morris, vice president of research at the Reason Foundation.
In a new study, Goklany and Morris detail how studies on the impacts of climate change disregard the economic and technological advances that poor countries are expected to make -- even under the IPCC's worst-case global warming scenario.
"Using the IPCC's own highest emission scenario, we show that by 2100 the gross domestic product per capita of today's 'developing' countries will be double that of the United States in 2006, even taking into account any losses resulting from climate change," Goklany says.
"Thus developing countries will have significantly more resources and better technology to cope with climate change than even the United States does today."
The study outlines three approaches to tackling climate change: cutting emissions of greenhouse gases; focused adaptation; and economic growth. "The best strategy by far to combat climate change is economic growth," says Morris.
The Private-Sector Pension Predicament
Source: Charles Blahous, "The Private-Sector Pension Predicament," Hoover Institution, December 1, 2011.
Recently there has been substantial attention paid to underfunding in state and local government pension plans, a longstanding problem made more urgent by recent troubles in the larger economy. There has of yet been comparatively less attention given to a similar (though smaller) set of mounting financial risks associated with private-sector worker pensions covered by the Pension Benefit Guaranty Corporation (PBGC).
Yet here, too, public policy corrections are required to address underfunding and avoid another taxpayer-financed bailout, says Charles Blahous, a research fellow at the Hoover Institution.
PBGC's latest annual report shows a net deficit of over $23 billion.
The PBGC estimates its exposure to reasonably possible plan terminations at approximately $170 billion.
The funding gap in the PBGC's finances is not due entirely to the recent economic downturn, as its deficits have amounted to more than $10 billion in each year since 2003. PBGC's multiemployer program is also presenting increased risks: in 2010, "reasonably possible" exposure in multiemployer plans suddenly rose from roughly $300 million to approximately $20 billion.
These pension plans have continued to be chronically underfunded for years, and the result is a significant budget gap that persists and grows as years pass. This pattern has been allowed to go on for so long because a number of factors have prevented the implementation of corrective measures.
Because asset values have traditionally been blended with previous years' levels, the loss of assets has not been realized until a substantial amount of time has passed. Pension funding liabilities have been regularly underestimated as accountants fail to account properly for the number of beneficiaries and the amounts that they will withdraw. Volatility in interest and yield rates complicate accounting efforts to convert dollar amounts into present value.
Loopholes in the recent 2006 Pension Protection Act allowed and encouraged underfunding by permitting certain contributions to be double-counted.
The PBGC's gross underfunding and potential for insolvency requires greater independence from government regulation such that the organization can resolve its own shortfalls. It is imperative that such a policy of autonomy be paired with requirements for greater transparency, as the potential sources of moral hazard in this regard cannot be ignored.
Monday, December 12, 2011
Another question that must follow these first two, how did the progressive become so illiterate, ignorant of history? In reality, it isn't about what's true or workable, it's about the agenda, the ideology. All other considerations must bow.
Tax Rates, Inequality and the 1 Percent
Source: Alan Reynolds, "Tax Rates, Inequality and the 1 Percent," Wall Street Journal, December 6, 2011.
A recent report from the Congressional Budget Office (CBO) says, "The share of income received by the top 1 percent grew from about 8 percent in 1979 to over 17 percent in 2007." This news caused quite a stir, feeding the left's obsession with inequality, says Alan Reynolds, a senior fellow with the Cato Institute.
But here's a question: Why did the report stop at 2007?
The CBO didn't say, although its report briefly acknowledged -- in a footnote -- that "high income taxpayers had especially large declines in adjusted gross income between 2007 and 2009."
Once these two years are brought into the picture, the share of after-tax income of the top 1 percent by Reynolds' estimate fell to 11.3 percent in 2009 from the 17.3 percent that the CBO reported for 2007. The incomes that top earners report to the IRS have long been tightly linked to the ups and downs of capital gains.
Changes in the tax law in 1986, for example, evoked a remarkable response -- with capital gains accounting for an extraordinary 47.7 percent of top earners' reported income as investors rushed to cash in gains before the capital gains tax rose to 28 percent.
When the top capital gains tax fell to 20 percent in 1997 and remained there until 2002, realized capital gains rose to 25.4 percent of the top earners' income, and it explained much of the surge of their income share to 15.5 percent in 2000.
Similarly, because the CBO estimates top incomes from individual tax returns, it looked like a big spurt in top income in 1988 when thousands of businesses switched to reporting income on individual rather than corporate returns as the top individual tax rate dropped to 28 percent from 50 percent.
In short, what the Congressional Budget Office presents as increased inequality from 2003 to 2007 was actually evidence that the top 1 percent of earners report more taxable income when tax rates are reduced on dividends, capital gains and businesses filing under the individual tax code.
Sunday, December 11, 2011
The only way to find out is to elect a Conservative. The alternative is unacceptable. Catastrophic.
The Truth about Obama’s Budget Deficits, in Pictures
Mike Brownfield and Emily Goff
July 28, 2011 at 7:54 am
Through the fog of the debt limit negotiations, President Obama has attempted to shift the blame for America’s deficit crisis to politicians at large, claiming that “neither party is blameless for the decisions that led to this problem.” Though the culture of overspending is endemic in Washington, don’t let the President fool you—some are a lot more guilty than others.
The fact is that Obama’s budget would set America on a dangerous fiscal course that leads to massive deficits well into the future—hitting $1.2 trillion in 2012 and, after dipping slightly, rising back to $1.2 trillion again by 2021.
The chart above illustrates what the country’s fiscal future looks like. As analyzed by the Congressional Budget Office, even after the massive tax hikes included in Obama’s budget, federal deficits total $9.5 trillion. In other words, under his budget, the President would more than double the national debt in just 10 years. Simply put, Obama’s budget (which didn’t even win the support of his own party in the United States Senate) would push America over a fiscal cliff.
The President’s media apologists are attempting to carry water for Obama and shift the blame for the budget mess squarely at the feet of President George W. Bush. Specifically, they argue that the wars in Afghanistan and Iraq, the tax cuts of 2001 and 2003, and the recession are all to blame for today’s deficits. It’s an argument we heard before from Obama since the days of his campaign, and it’s an argument that is as flawed today as it was then. One simple number explains it well: the budget deficit figure in 2007, the last Bush year prior to the recession. The tax cuts were in full effect, both wars were raging, and the recession had not yet struck, yet the budget deficit in 2007 was $160 billion, or about a tenth of Obama’s deficit this year.
Then there’s the President’s stimulus spending binge, which made matters worse. The policy was rooted in the false premise—recited by The New York Times—that government spending can propel the economy out of a recession. Well, it hasn’t. The economy is stuck in slow, and the hundreds of billions of stimulus dollars have only added to today’s debt and deficits.
So much for the past.
Looking forward, America’s fiscal woes aren’t due to wars, recessions, or tax cuts. As Brian Riedl explained, the root of America’s fiscal woes is entitlement spending: Entitlements and other obligations are driving the deficits. Specifically, Social Security, Medicare, Medicaid and net interest costs are projected to rise by 5.4% of GDP between 2008 and 2020. The Bush tax cuts are a convenient scapegoat for past and future budget woes. But it is the dramatic upward arc of federal spending that is the root of the problem.
To be fair, President Obama did inherit these programs. So, has he proposed remedial action? No, he’s acted to make the entitlement excesses worse by pushing through his Obamacare health care reform, which created a whole new entitlement.
Without a doubt, deficits during the Bush Administration were too high, especially in the early years. More could and should have been done to restrain spending. But, without a doubt, the Bush deficits were puny compared to what Obama and his congressional allies have inflicted.
For Obama’s apologists to seek cover in the Bush deficits is shameless. To use these diversions to now take attention away from the real problem to which Obama has added is outrageous.
I graduated with an MBA but who wanted that when most employers were looking for skilled workers in just about any field. This was some years ago but still holds today as this article can attest.
I wound up in manufacturing but the money was marginal. Then again, maybe I was paid what I was worth. I had no experience. I had no workable skills.
Wanted: Blue-Collar Workers
Source: Joel Kotkin, "Wanted: Blue-Collar Workers," City Journal, Autumn 2011.
There is a shortage of skilled workers capable of running increasingly sophisticated, globally competitive factories, says Joel Kotkin, a distinguished presidential fellow at Chapman University in Orange County, California.
Driving the skilled-labor shortage is a remarkable resurgence in American manufacturing.
Since 2009, the number of job openings in manufacturing has been rising, with average annual earnings of $73,000, well above the average earnings in education, health services and many other fields, according to Bureau of Labor Statistics data.
Production has been on the upswing for over 20 months, thanks to productivity improvements, the growth of export markets (especially China and Brazil), and the lower dollar, which makes American goods cheaper for foreign customers.
Also, as wages have risen in developing countries, notably China, the production of goods for export to the United States has become less profitable, creating an opening for American firms.
The industrial resurgence comes with a price: a soaring demand for skilled workers. Even as overall manufacturing employment has dropped, employment in high-skill manufacturing professions has soared 37 percent since the early 1980s, according to a New York Federal Reserve study. These jobs can pay handsomely -- an experienced machinist at the Ariel Corporation in Mount Vernon, Ohio, earns over $75,000.
The shortage of industrial skills points to a wide gap between the American education system and the demands of the world economy. For decades, Americans have been told that the future lies in high-end services, such as law, and "creative" professions, such as software-writing and systems design. This has led many pundits to think that the only real way to improve opportunities for the country's middle class is to increase its access to higher education.
The oversupply of college-educated workers is striking, however, when you contrast it with the growing shortage of skilled manufacturing workers. A 2005 study by Deloitte Consulting found that 80 percent of manufacturers expected a shortage of skilled production workers, more than twice the percentage that expected a lack of scientists and engineers and five times the percentage that expected a lack of managerial and administration workers.
Here is another reason why the unemployment rate is still going up. Corporation and even small businesses are pushing the workers they have to do more resulting in higher productivity and more profit. Why hire new people when you can do more with the work force that you have now?
It makes sense when the stock market doesn't tank given the amount of unemployed workers and yet companies are still moving forward. This does not bode well for our country for the future. Sometime, in the near future, unemployment will run out.
What do we do with those that will never be employed again because they are untrainable, those that just don't want to work anymore as it is easier to live on welfare and technology that came on the scene to replace workers that priced themselves out of the market?
Fine-Tuning the Perfect Employee
Source: Lauren Weber, "Fine-Tuning the Perfect Employee," Wall Street Journal, December 5, 2011.
Faced with a dearth of skilled labor, more companies are taking employee education into their own hands. Unemployment figures are high, but finding workers with the right skills for the job -- especially for highly specialized roles such as power plant technicians or laboratory chemists -- remains a big challenge, says the Wall Street Journal.
In a survey from Lloyd's, the British insurance concern, U.S. executives considered lack of skilled workers one of the greatest risks their companies faced in 2012, second only to loss of customers. So rather than wait for the perfect candidates to walk through the door, companies have decided to school their in-house staff or train new hires who may lack the exact skills they are looking for.
Companies have long devoted resources to training and development, either internally or through partnerships with universities and community colleges. But many companies cut back on programs or cancelled them altogether to save money during the downturn. That appears to be changing:
According to the American Society for Training and Development, U.S. employers spent 36 percent more on learning and development in 2010 than in 2009.
Direct expenditures for learning, as a percentage of payroll, rose to 2.7 percent in 2010 from 2.3 percent in 2006.
Aegis Sciences Corp., which conducts drug-screening services and other forensic testing, says it puts about 5 percent of its revenues into training.
There are about 50 positions for scientists and lab technicians, among others, open at any given time, according to Cheryl Hild, Aegis's director of quality. The company says it can't find enough experienced workers to fill those jobs, so it taps recent chemistry graduates who have university lab training but little or no experience at a professional lab, where quality control and consistency are critical. Aegis then trains employees in skills such as how to extract certain materials from blood or urine samples and analyze them for the presence of various drugs.