Wednesday, October 31, 2012

College Education Produces Huge Debt & No Jobs

The good news is maybe people are waking up to the fact that they might do better with a technical degree and much less debt, rather then a worthless degree and huge crushing debt as a reward for 5 years of college.

Five Reasons College Enrollments Might Be Dropping
Source: Richard Vedder, "Five Reasons College Enrollments Might Be Dropping," Bloomberg, October 22, 2012.

October 30, 2012
While official national data will not be published for a while, state by state college enrollments appear to be down. Hardest hit are for-profit universities, hurt by stricter federal regulations. There are five possible reasons for the drop in enrollments, says economist Richard Vedder.

Possible reasons for the drop in enrollments:

•The population of 18 year olds is in decline.
•A stronger economy leads to more in the workforce and less in schools.
•Federal financial assistance is not what it used to be.
•College tuition fees are too high.
•Lower rate of return on a college investment.

The population of 18 year olds is not declining enough to be a real factor. While it is true that a stronger economy leads to more in the workforce and less in schools, the annual job growth has not increased enough to have an effect on enrollment. Federal financial aid now limits Pell Grant recipients from nine years to six years and the number of recipients is down 100,000. This can have an effect on the number of enrollments. In addition, college tuition fees are up an average of 3.9 percent for private schools and 5 percent for public schools.

However, a lower rate of return on a college investment is a prime reason for the drop in college enrollments. An estimate says that 53 percent of recent college graduates are either unemployed or have low-paying or low-skilled jobs. On top of that, the number of graduates is growing faster than the number of high paying jobs. Only two-fifths of adult Americans have associate degrees or higher and even less have the traditional jobs in the technical, professional or managerial fields. Eventually, close to half adult Americans will have college degrees and many will be working less than degree-worthy jobs.

Energy Production Is the Answer to Real Success

Limiting oil and gas exploration and extraction is based on ideology; America is headed in the wrong direction and has been since the beginning.

This is the agenda of the progressive socialist liberals lead by Mr Obama. His statements since 2008 have shown this quite clearly. The problem was no one wanted to listen to the voices that saw this all coming.

Americans, even to this day, can barely believe that Mr Obama is happy to be part of America's decline. He is willingly presiding over and orchestrating the destruction of 236 years of success. How is this possible? Who is Mr Obama and where did he come from?

But we do have a chance to turn this nightmare around before it all come crashing down on heads. This November 6th will be a turning point for our country. We all need to be part of those that 'stand and deliever'.

The Real Stimulus: Low-Cost Natural Gas
Source: Daniel Yergin, "The Real Stimulus: Low-Cost Natural Gas," Wall Street Journal, October 22, 2012.

October 30, 2012
The United States is experiencing a revolution in oil and gas. Half a decade ago, it was assumed that the United States would become a large importer of liquefied natural gas; now the domestic natural gas market is oversupplied, thanks to the ability to produce shale gas through hydraulic fracturing and horizontal drilling technologies, says Daniel Yergin, vice chairman of IHS, a global market information and analytics company.

•Shale gas is now 10 percent of the overall U.S. energy supply.
•As many as 1.7 million new jobs have been created.
•In addition, the energy revolution is expected to add $62 billion to federal and state revenues this year.
•This growth in shale gas will save the United States from spending $100 billion on imported liquefied natural gas (LNG).

Manufacturing is also experiencing a surge because of the increased oil and gas production. Chemical companies that have been leaving the United States for years are now returning to invest in new factories because of inexpensive and stable supplies of natural gas.

While the uptick in oil and natural gas production has clear economic impacts, less is known about the geopolitical implications. For example, because of the increase in oil production, the United States has been able to supplant Iranian oil exports, which are necessary in maintaining credible sanctions.

With respect to international trading, there are debates about the United States becoming a major exporter of LNG. Opponents of LNG exports argue that domestic prices of natural gas would increase; but American LNG exports would be limited by competition from other producers around the world. More importantly, the United States could trade with allies, like Japan, which the United States has already pressured to limit its oil imports from Iran.

One source of concern has been the environmental impacts associated with the increased oil and gas production and methods for extraction. However, the secretary of energy created a committee that identified the three major concerns -- wastewater, air pollution, and impact on community -- and came up with solutions to solve the problems.

College Bound Students Should Look Elsewhere

Bottom line here is many students that arrive a college do so because everyone else that they know is there. Also, these days it's not the thing to do to go to a technical college to get a skill in a field that matches your desires and genetic abilities, it so important to be able to say I have a college degree.

Instead, to many, most, kids wind up in college where they eventually get a degree that will do them no good and in debt for decades. Where is the guidance in high school? Why do so many counselors believe a person can't succeed without a college degree? This is crazy.

Many Students Lack Basic Academic Skills to Succeed in College
Source: Judith Scott-Clayton et al., "Improving the Targeting of Treatment Evidence from College Remediation," National Bureau of Economic Research, October 2012.

October 30, 2012
More and more students are graduating high school and entering college unprepared. The reason is that many high school students lack basic academic skills to succeed in college course. In response to this, many two-year and four-year colleges have begun screening students to see if they need remedial courses, say researchers with the National Bureau of Economic Research.

•Half of all undergraduates will take one or more remedial courses.
•Remedial coursework is one of the largest interventions to help underprepared college students, costing $7 billion annually.
•The vast majority of institutions use brief, standardized tests before registration to determine who needs remediation.

Because the screening can be arbitrary, many students can be placed into remedial classes without actually needing them. This has many adverse consequences for the student and the educational institution. First, the school has to pay for the indirect costs of having the student stay longer. Second, the student has to stay in school for a longer period of time because remedial courses don't count for credit.

But remedial courses do have their place in a higher education system. For instance, studies have shown that an underprepared student that dives straight into college coursework not only fares worse, but also depresses the achievement of better-prepared students. Furthermore, some evidence has shown that underperforming students in remedial courses do better in their college coursework.

The system would be better served if accuracy in deciding whether students are put in remedial courses is better. The researchers find:

•One in four test-takers in math and one in three test-takers in English are misassigned under current testing procedures.
•Furthermore, using high school transcripts instead of or in addition to test scores reduces the prevalence of errors in course assignments.
•This would allow institutions to remediate substantially fewer students without lowering success rates for students in college-level courses.

'Fical Cliff' Used To Change America "Fundamentally"

What a great way to kill of America's position in the world, stall its military advancement and allow the rest of the world dictated what happens in this country. Without America as an anchor, the rest of the world will be at each others throats.

With the last 4 years results now on full display in the Middle East, little wonder people are afraid of what another 4 years of 'hope and change' will bring.

"Fiscal Cliff" Already Hampering U.S. Economy
Source: Lori Montgomery, "'Fiscal Cliff' Already Hampering U.S. Economy, Report Says," Washington Post, October 25, 2012.

October 29, 2012
The "fiscal cliff" is still two months off, but the scheduled blast of tax hikes and spending cuts is already reverberating through the U.S. economy, hampering growth and, according to a new study, wiping out nearly 1 million jobs this year alone, says the Washington Post.

The fiscal cliff refers to a set of policies that take effect this January in an effort to reduce the deficit.

•It includes about $100 billion in automatic cuts to the military and federal agencies.
•In addition, there is to be about $400 billion in tax hikes.
•This is likely to destroy 6 million jobs through 2014, raising the unemployment rate to 12 percent.

According to the nonpartisan Congressional Budget Office (CBO), these policies are likely to push the economy back into a recession, albeit only briefly. Some analysts argue that the economy is in such fragile condition that another recession would raise unemployment to double digits.

Particularly hard hit is the defense industry, which employs millions of Americans. The Pentagon is set to lose nearly $55 billion, which affects defense contractors all over the country. Some companies have already anticipated the cuts by freezing salaries, renegotiating health benefits and firing employees.

Democrats have blocked action on the fiscal cliff unless the Bush tax cuts are allowed to expire for people that make more than $250,000 a year. Republicans, on the other hand, want to keep current tax rates so that Congress can make needed reforms.

Monday, October 29, 2012

Education's Capital Investment in Buildings, Shared?

Again, the free market at work will solve most problems if it is allowed to do what it was designed to do, open education to competition. To believe school districts want to help charter schools succeed is fantasy at best, and at worst, the school districts what them to fail.

For the most part, unions control all aspects of education, and to have charter school succeed means the union power will be less. Therefore unions will do anything and everything to stop charter schools from being a force in education.

That district won't sell vacant buildings to charter schools, as this article points out, give them away to successful charter schools, is just more union influence.

Whose School Buildings Are They, Anyway?
Source: Nelson Smith, "Whose School Buildings Are They, Anyway?" Education Next, Vol.12, No. 4, Fall 2012.

October 25, 2012
At one time, school districts had a monopoly on public education programs and infrastructure. Today, that monopoly is being challenged by the rise of charter schools. Charter schools represent the market at work, as these institutions provide better quality education and competition to school districts, says Nelson Smith, a consultant on education policy and public charter schooling.

•Charter schools have become large schools with extensive networks in the public education system.
•The number of students in charter schools has grown, comprising 4.2 percent of public school students nationwide.
•And in six major school districts at least 30 percent of public school students are enrolled in charter schools.

However, public schools are still the only game in town when it comes to financing, developing and deploying public school buildings. Only 17 states provide some sort of direct aid for charter school facilities, whereas states give capital support to traditional school districts.

Moreover, charter schools are denied access to existing school buildings that are no longer being used by the school district. This is for a couple of reasons:

•First, laws governing school facilities were established before charter schools existed, and therefore made school districts the sole proprietors.
•Second, there is a general unwillingness from officials to help charter schools out when they can find other buyers.

Slowly, school districts are beginning to become more cooperative with charter schools. In New York, for example, three-quarters of charter schools are located in district facilities.

As popularity of charter schools grow, city and state officials should take actions to ensure that students have access to facilities. Municipal leaders should be given authority to dispose of surplus schools to charter schools first, either for sale or at lease for no cost. And if there is no surplus, a third-party building should be commissioned to determine whether there is excess space.

There are a few management models to manage public school facilities portfolios.

•First, create a real-estate trust that assumes ownership of a community's public school buildings, and has the authority to sell surplus buildings and build additional buildings.
•Second, retrofit the Construction Authority to finance, build and oversee public schools.
•Third, expand charter-based models to allow municipalities to contract with nonprofits to take over and manage the entire school facilities process.

Family First - A portrait

What a great way to start the week - a family portrait. Mom, her two boys and the uncle.

Sunday, October 28, 2012

Gov. House Cleaning Saving Billions : Dump Bad Programs

That this would even be on some one's bucket list of things to do is amazing - I believe that when government get a program to bleed the taxpayers it never goes away, NEVER!

Imagine this at the EPA or HHS. What a hoot - The only time this might happen is if a true Conservative was told to clean house. hmmmm  Can Romney do this?  I hope we have the chance to find out.

Government Streamlining Commissions
Source: Carmine Scavo and Emily Washington, "Government Streamlining Commissions: A Methodology for Measuring Effectiveness," Mercatus Center, October 15, 2012.

Streamlining commissions are a businesslike approach to government and act as a search for efficiency in government operations. The commissions are a source for identifying savings and policy improvements while providing improved services at decreased costs.

Commissions can help to make a more business-friendly climate with less taxes and regulation. Streamlining commissions may recommend that certain services would be more effective or efficient in the private sector or not useful at all and recommended to be terminated.

Two commissions in Louisiana and Virginia succeeded in finding cost savings and get more business friendly policies. Also, studies have shown that all countries and states would experience greater prosperity with smaller governments, say Carmine Scavo and Emily Washington of the Mercatus Center.

Goals of the streamlining commissions include determining which state programs and agencies could be eliminated or consolidated, and determining if a program is a core government function. All spending outside of this area could decrease economic growth by crowding out private sector activity.

The core attributes of a streamlining commission include:

•Has clear and defined objectives regarding its final product.
•Clear and well thought out schedule planning for at least a year of work with opportunity for interim advice.
•Sufficient funding to hire an independent staff.
•Most of the members of the commission should be independent of the government, especially the head of the commission.

Health Care Burdens (States) Managed by Sharing Costs

Given what's happening in Greece with the public employees and others, it doesn't a great leap of intellectual imagination to see this happening in America with the public sector unions and other precipitants of free stuff.

It was all to obvious to the entire country what happened in Wisconsin with the unions attacking the state capital by the thousands, recking havoc on police and legislators for more then two months over Gov. Scott Walker's Act 10 legislation to reduce the budget deficit, 3 billion, and save thousands of jobs in the public sector, which worked beautifully.

The fact that the jobs saved were union jobs meant little to the organizers of the riots, it was about power lost to take money from the employees to fund progressive socialists politicians and, of course, feed the union leaders fat bank accounts. After all, it's really all about the power to control others. Always!

States Rein in Health Insurance Expenses
Source: Dennis Cauchon, "States Rein in Health Insurance Expenses," USA Today, October 23, 2012.

October 26, 2012
Financially strapped state and local governments are saving billions of dollars on health insurance by cutting back on free coverage for employees and raising worker contributions, says USA Today.

•The advantage government sector employees have had in health benefits over private sector employees has declined from $1,523 in 2007 to $891 in 2012.
•Similarly, the share of full-time government employees paying nothing for their coverage declined from 39 percent in 2007 to 30 percent in 2012.
•Yet that number is still higher than the 17 percent of private sector workers that pay nothing for their coverage.
•Moreover, paycheck withdrawals for health insurance are the same for public and private employees at about $425 a month for the family health coverage.

Government employees still benefit from more generous benefits such as lower copayments and deductibles and more choices.

The reductions in benefits for public sector employees stems from the efforts of Republican governors to reduce the costs of employee benefits. State officials have sparred with public employee unions in places like New Jersey, Ohio, Wisconsin and other states.

Public sector employees are taking the fight to courts and legislatures to protect their benefits. They argue that they have already made sacrifices such as taking wage freezes in order to protect health benefits.

Saturday, October 27, 2012

Corporate Income Overseas Coming Home : Romney's Plan Works

Romney's new proposal to get corporate money back into this country is a good one. The problem with Mr Obama's is, if he is reelected, he is not tell the truth about what he will do or won't do after being reelected. His past history tell us all we have to know about his truth telling.

The Merits of a Territorial Tax System
Source: Diana Furchtgott-Roth and Yevgeniy Feyman, "The Merits Of A Territorial Tax System," Manhattan Institute, October 2012.

October 26, 2012
The United States' corporate tax rate is one of the highest in the world at 35 percent. The average corporate tax rate of many industrialized countries sits at 23 percent. As a result, many corporations are incentivized to shift operations overseas as it becomes costlier to do business in the United States, say Diana Furchtgott-Roth, a senior fellow, and Yevgeniy Feyman, a research assistant, with the Manhattan Institute.

The current system that the United States operates under is known as the worldwide tax system. Essentially, this means that any income made overseas is subject to U.S. taxes. Critics have correctly pointed out that this system discourages companies from repatriating any income to the United States. For example, American companies have about $1.7 trillion in earnings that haven't been brought into the United States for fear of being taxed.

In contrast to this is what is known as the territorial tax system. This system is used by an overwhelming majority of Organization for Economic Cooperation and Development (OECD) countries. With it, companies are not subject to domestic taxes on any income that is earned abroad. Rather, companies are only responsible for paying taxes at the rate in whichever country the income is earned.

This system has proven itself to meet the demands of globalized businesses. In an effort to become more competitive, both presidential candidates offer proposals to change the current tax system to make it friendlier to businesses.

•Romney and Obama want to bring down the corporate tax rate to 25 percent and 28 percent, respectively.
•Obama has proposed reducing the deductibility of ordinary interest; ending tax preferences for oil and gas; ending deductions for moving overseas; and imposing a minimum tax on foreign income held abroad.
•However, his plan would drive more companies offshore to evade the minimum tax on foreign income and the increase in tax for oil and gas.
•Romney, on the other hand, proposes a pivot to the territorial tax system with a minimum repatriation tax and ending some tax preferences.

Critics of the territorial system argue that many jobs would be created overseas rather than in the United States. However, studies on the territorial system have not looked at the combined effect of a territorial system and a lower tax rate that would attract more companies and jobs to the United States.

Friday, October 26, 2012

Health Care Will Break Industrial Progress?

So much rest on this election for leadership of our country. The decision is, or should be, who will be the best suited to bring the country back from economic disaster. A Republican with vast experience in business or a community organizer that has used his skills for the last 4 years to drive our country into economic ruin?

The election in less the two weeks will be a sign of just what policies the general population believes our leadership should use to solve our problems. More debt, more control, more dependency, or less spending, sound fiscal programs to bring down the debt and create jobs for everyone willing to work.

You Choose.

Health Care Costs Top U.S. Executives' Concerns
Source: Nick Zieminski, "Health Care Costs Top U.S. Executives' Concerns: Adecco Survey," Reuters, October 22, 2012.

October 26, 2012
Adecco, the world's largest staffing company, recently released a survey on top executives and their hiring concern with the new health care legislation. The poll included 501 CEOs, business owners and senior executives, says Reuters.

•About one-third are holding back hiring because of health care reforms and 55 percent say that health care benefits are their biggest current business challenge.
•Only 35 percent said that health care was their biggest worry back in 2007, before the recession.
•ObamaCare is expected to raise insurance costs for employers because of a wider coverage of people, including people with pre-existing medical conditions.

U.S. hiring could pick up after the election, regardless of who wins, because employers will have one less area of uncertainty to keep them on the sidelines.

California's Progressive Socialism Strangles Success

What the rest of country can get from the actions of California politics is what ever they do to solve their problems, the rest of the country has to do just the opposite.

With Jerry Brown pushing Prop 30, increased sales tax and a new tax on upper incomes, and the opposition with Prop 32 that advocates firing bad teachers, and Brown advocating the train that will saddle the state with 68 billion in new debt along with the 173 billion they are already on the hook for, the residents must know that their future is doomed and the future of their children is also doomed.

The fact that 225,000 are leaving the state every year doesn't seem to have any effect on the politicians. Oh wait there's more crazyness, Mr Obama is slated to win California by 20 points. Little wonder then why the rest of the country understands how California's progressive socialism is not the way to solve problems.

California Gasoline Consumers Hurt by Few Suppliers, Outages
Source: Ken Bensinger, "California Gasoline Consumers Hurt by Few Suppliers, Outages," Los Angeles Times, October 22, 2012.

October 26, 2012
Conventional economic wisdom dictates that lack of competition can handicap the local market it functions in. California is riddled with these market fractures. This is particularly evident in the state's energy economy. Since 1980s, the number of refiners operating in California has decreased by half; as a result, gasoline prices are prone to price spikes, which can impair the local economy, says the Los Angeles Times.

When it comes to the gasoline market, the Golden State is largely protected from external competitions -- paralleling the oligopolies present in the oil producing economies of the Middle East.

•The state's strict clean-air rules mandate a specially formulated blend used nowhere else in the country.
•Producers in places such as Louisiana or Texas could make it, but there are no pipelines to get it to the West Coast quickly and cheaply.
•As a result, virtually all 14.6 billion gallons of gasoline sold in California last year were made by nine companies that own the state's refineries.
•Three of them control 54 percent of the market.

The lack of competition is manifested at the retail sector.

•Around 85 percent of gas stations offer brands such as Chevron, Arco, Valero or Mobil.
•Additionally, the pump prices are directly or indirectly controlled by refiners.

In contrast, in other states, such as Texas, independent, non-branded fueling posts make up around 50 percent of the market, thus more competition, which buffers against price volatility that harms local economies.

Given that gas is an integral input for numerous economic activities, by extension, it means that the higher prices will translate to a higher cost of doing business in California.

Further complicating the picture, the current push on limiting greenhouse gas emission and promoting alternative fuel opportunities may coerce nearly eight of California's refineries to shut down in the coming years. This thrusts California's energy supply edifice into a more fragile state, characterizing the energy marketplace with monopolistic features.

In the short run, it makes the market vulnerable to price hikes, and in the long run, this can have major detrimental ramifications.

National Debt Vs Household Debt : Simple Math

Read this and then believe the truth makes so much sense and so easy to understand.

This rather cleverly cuts thru all the political doublespeak we get. It puts it into a much better perspective.

Lesson # 1:

U.S. Tax revenue: $2,170,000,000,000
Fed budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cuts: $ 38,500,000,000

Let's now remove 8 zeros and pretend it's a household budget:

Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Total budget cuts so far: $3.85

Got It ?

OK now Lesson # 2:

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?

A. Raise the ceilings.
B. Pump out the crap?

Your choice is coming Nov. 2012


Thursday, October 25, 2012

Affordable Care Act : Progressives Managed Benefits/Costs

What has happened in real time is the Obama administration managed the results of studies and lied about costs and benefits of the Affordable Care Act to get it passed.

Remember Nancy Pelosi saying 'we have to pass this to find out what's in it", well we now know how they manged and lied to get the results they wanted. Yet knowing full well that the costs of this outrageous program would cost more than any program in our history, and cause the system that it was designed to help, but ultimately will cause it fail, was of no consequence. It was full speed ahead.

The agenda and ideology was all that mattered. How did this happen? How did we allow this to happen? On November 6th we will have one chance to change the direction of this nightmare that the progressives have brought upon us. Make sure when you vote you understand how important your vote is to saving our country as it was founder 236 years ago.

It really is that important.

The Affordable Care Act's Rulemaking Process
Source: Diane Calmus, "The Affordable Care Act's Rulemaking Process: What the Research Shows," Heritage Foundation, October 15, 2012.

October 25, 2012
The Affordable Care Act (ACA) seeks to reform the nation's entire health care system through new rules and regulations, some of which have yet to be implemented. According to a series of research papers by Jerry Ellig of the Mercatus Center at George Mason University and Christopher Conover of Duke University, the ACA's regulations were rushed and are inadequate in achieving their goals, says Diane Calmus, a research assistant with the Heritage Foundation.

According to the authors, agency analyses were incomplete and insufficient to inform decision making. This led to an underestimation of the costs and overestimation of the perceived benefits. These were done using interim final rulemaking which is an expedited process to create rules without the normal notice and comment period. The result is that the cost-benefit analysis and reviews of alternative methods were forgone in order to pass quick regulations.

•The requirements on children with pre-existing conditions, for example, overstated the reduction in bankruptcy risk by as much as a factor of eight.
•Similarly, the research estimated early retirement reinsurance costs between $9.2 billion and $10 billion over four years compared to the agency's estimates of $39.8 million.
•Furthermore, they estimated that keeping coverage for dependents up to age 26 would cost between $0.9 billion and $1 billion, whereas the agency estimates the cost at $10.4 million.

Furthermore, regulators failed to consider the moral hazards of the new rules, which are a result of people changing their habits because they don't have to worry about the outcomes. For instance, people may smoke or drink more knowing that insurance will pay for any medical treatment. Furthermore, people can use the services for relatively minor issues because it is available.

Congressional politics often plays a large part in the quality and thoroughness of regulations. For example, Congress may impose tight deadlines to ensure that a new law or requirement is implemented before newly elected members have a chance at obstruction. In the case of the ACA, there was strong public disapproval, which resulted in a rush to get the bill passed and deadlines tightened to make sure that the new law was not changed.

The president has an even larger influence on regulatory action. Agency analyses are often discouraged and reviews by the Office of Information and Regulatory Affairs are limited to just approving the regulation. Since the ACA was a top priority for Obama, agencies crafted their analysis to support the decisions of the White House.

States Move to Manage Medicaid

If there is any benefit from the Affordable Care Act it's that the states are working over time to find ways to get around the crushing costs of its effect on revenue and quality care. With a Romney/Ryan health care plan in place of ACA, states will have even more options to make health care more affordable and actually increase the quality.

Benefits and Challenges of Medicaid Managed Care
Source: Robert Book, "Benefits and Challenges of Medicaid Managed Care," Forbes, October 18, 2012.

October 25, 2012
The rising cost of Medicaid has created a crisis for the program that places many beneficiaries at risk. To address the problems of insufficient access to health care and lack of coordination, states began to contract with private insurers with what is now known as Medicaid Managed Care Organizations (MCO), says Robert Book in Forbes.

•Individual beneficiaries select the MCO plan of their choice, which may provide additional benefits beyond what Medicaid requires.
•These MCOs provide some services that can't be provided by the fee-for-service framework, such as disease management and innovations in care coordination.
•By 2010, these MCOs provided coverage for 53 percent of all Medicaid beneficiaries in 35 states.
•One study found that in 24 states, Medicaid managed care resulted in a reduction in per-beneficiary spending.

States regulate these MCOs in order to ensure they are actuarially sound. Actuarial soundness refers to the concept that monthly rates paid for a health plan are sufficient enough to cover its population to ensure that it doesn't go bankrupt. In the case of Medicaid managed care, the Centers for Medicare and Medicaid Services are charged with approving how much states pay to MCOs. However, it is difficult to assess how much money is actually needed, which could result in inadequate funding.

Setting actuarially sound rates is of utmost importance to beneficiaries. Insufficient rates would force MCOs to reduce payments to providers which would make it difficult to enroll further providers. Moreover, MCOs may cut back on services or go bankrupt altogether.

To set correct rates, states have several options at their disposal. In order to prevent MCOs from only attracting healthy enrollees, some risk adjustment needs to take place in which the state pays higher rates for enrollees that have higher costs. One way this is accomplished is through establishing risk cohorts for patients with similar health needs. These cohorts would put similar people in one category and create different rates for each cohort. Another method would be to do risk adjustment at the individual patient level.

Economic Outlook Dim : Progressives Accept Dim

More proof of the progressive socialist agenda to slow growth of the country and punish the very core of American exceptionalism by coming down hard on the productive members with higher taxes and uncontrolled inflation.

Obama said he wanted to "fundamentally change America" and this how he is doing it. An over reaching and suffocating pile of rules and regulations, out of control spending on worthless industries and proposals now that will make things even worse, not better.

Will we fall for this line from the progressives again as so many did in 2008? Or will we say enough is enough, we want our country back. Think about what this country is all about on November 6th and what you believe will change things for the better.

Obama's Death by Jobs
Source: Henry I. Miller, "Obama's Death by Jobs," Hoover Institute, October 10, 2012.

October 25, 2012
The economic picture given to us by key administration and congressional personnel and leaders is so different from reality that it looks as if it were from a parallel universe.

Indeed, America has not turned the corner as Vice President Joe Biden said at the Democratic convention. From unemployment, taxes, regulations and the mishandling of affairs by the administration, the economic situation is not looking good.

Our economic outlook looks poor due to the administration's shortcomings, which include lack of transparency, wasteful spending, overbearing regulation and growing distrust of the public sector, says Henry I. Miller, the Robert Wesson Fellow in Scientific Philosophy and Public Policy at the Hoover Institution.

•Only 114,000 jobs were created in September.
•Seventeen million Americans were unemployed.
•The hourly wage of college-educated Americans ages 23 to 29 dropped 4.9 percent from 2007 to 2011.
•Gross domestic product is expected to grow at 1.6 percent instead of 2.5 percent a year.

In addition, the administration's increase in taxes is causing taxpayers to spend less and thus is reducing the demand for goods and services. A claim of greater transparency is hard to believe when the government's spring 2012 "Unified Agenda of Federal Regulatory and Deregulatory Actions" has not been published. More financial, environmental and consumer-product regulations are planned that will cost consumers tens of billions of dollars.

Moreover, the White House is meddling in the affairs of the U.S. Food and Drug Administration, such as the case with genetically engineered Atlantic salmon, and into state politics with California's Proposition 37 that requires the labeling of certain foods as "genetically engineered." Such interference by the Obama administration will increase costs to consumers and slow the economic recovery.

Energy Policy Renewed : Change American History

This article is spot on and is the base line for America to, again, become the 'shining city on the hill' as Ronald Reagan foretold years ago. But right now we are headed toward a pit of economic disaster that is so deep that it will take decades of hard work and common sense to climb out of, but even then our country will never be the same. Our children will inherit a country much different then what have enjoyed and they will find it wanting.

The problem, of course, is the current leadership has no intention of changing course. Economic slow down is the rule of the day, and as a result, forced dependency. This is the agenda of the progressive socialists now in power.

Can we recover from this increasing slide into the abis, sure, but it will take a complete change of leadership. November 6th is our chance to save the country from the ash heap of history. Think about this before you make your mark on history.

An Energy Policy for Long-Term Economic Growth
Source: H. Sterling Burnett, "An Energy Policy for Long-Term Economic Growth," Jewish Policy Center, Fall 2012.

October 25, 2012
Finding reliable sources of energy is imperative to maintain the current American lifestyle while growing the economy, says H. Sterling Burnett, a senior fellow with the National Center for Policy Analysis.

U.S. oil consumption is expected to increase by a third over the next 20 years and electricity demand will increase by more than 45 percent. Such observations call for bold initiatives to be taken if the United States wishes to avoid energy shortage and high prices.

The blueprint for an energy renaissance to take effect requires several steps.

•First is basically for "government do no (further) harm." This means disassembling the framework set in place by the Environment Protection Agency (EPA). Two such rules highlighted, are the Utility MACT (maximum achievable control technology) Rule and the Cross-State Air Pollution Rule. The Utility MACT rule requires retrofitting 753 electricity-generating outlets. However, the standards are so rigid that even the most recently permitted plants, which are equipped with the best technologies, cannot meet the level. Credit Suisse estimates that this rule could cost $100 billion by 2017.

•The second step is to give up on the current romance with green jobs. Research from King Juan Carlos University shows that for every green job the government creates, 2.2 jobs are lost.

•The third step is the end of inefficient ethanol subsidies that are supported by current programs like the Renewable Fuel Standard. One report by the U.S. Agriculture Department determined that every dollar spent subsiding ethanol costs consumers more than $4.

•The fourth is to end the moratorium on oil and gas production. The government must allow the extraction of oil and gas from public lands and offshore. Given that fossil fuel reserves are one the largest U.S. resource, it should be appropriately utilized.

•The final key is investing in the necessary delivery infrastructure. Now is not the time to shy away from investing in large-scale delivery systems like the Keystone XL pipeline that could transport large quantities of fuel needed to feed a growing economy.

Ultimately, buffering against distortions from government interference in the market is a crucial necessity for an energy renaissance. A truly visionary plan for America would unleash the power of the markets and competition in all areas of energy production and delivery, allowing the Bill Gates and Steve Jobs of the energy arena to innovate America's way to a brighter future.

Moses Explains History of Lost Leadership

Just a little travel log through history to explain how we got were we are today. This may stretch it a little but right now a little humor helps with the stress of facing the reality of eternal darkness if the wrong person get into the presidency.

On November 6th, vote to have someone keep the lights on and get the machine running again. We have worked hard to protect the 'promised' land our forefathers fought for. Make sure we don't waste it next month.

Over five thousand years ago, Moses said to the children of Israel , "Pick up your shovels, mount your asses and camels, and I will lead you to the Promised Land."

Nearly 75 years ago, (when Welfare was introduced) Roosevelt said, "Lay down your shovels, sit on your asses, and light up a Camel, this is the Promised Land."

Today, Congress has stolen your shovel, taxed your asses, raised the price of Camels and mortgaged the Promised Land! I was so depressed last night thinking about Health Care Plans, the economy, the wars, lost jobs, savings, Social Security, retirement funds, etc .... I called a Suicide Hotline.

I had to press 1 for English.
I was connected to a call center in Pakistan ..I told them I was suicidal. They got excited and asked if I could drive a truck......

Folks, we're screwed

Wednesday, October 24, 2012

Counterfeit Drugs Infect the Market : Consumers Beware

Like most other counterfeiter operations that infect our society, the consumer has to be part of the solution. If you are prescribe a certain medicine or durg and it cost to much, even with a co-pay, an alternative brand begins to look good, a generic will cost less but we as consumers, have to take charge of our lives by looking closely at who makes it and what history does it have.

Ask questions of your pharmacists or doctor if they have heard of a certain generic drug that replaces the original. Be proactive. If you are willing to wait for others to decide what is safe and what isn't, and may take years or never, then you have to suffer the consequences. 

The Deadly World of Falsified and Substandard Medicine
Source: Roger Bate, "The Deadly World of Falsified and Substandard Medicine," American Enterprise Institute, October 16, 2012.

October 24, 2012
More deaths are caused by dangerous therapeutic medicines than narcotics. Lazy manufacturers and counterfeiters pump the market full of medicine that can kill people, says Roger Bate, a resident scholar at the American Enterprise Institute.

•Before Syria's civil war, Damascus was home to counterfeit drug operations worth tens of millions of dollars.
•Since then, many of those counterfeiters have moved to Iraq or Iran to continue making around 80 brands of fake drugs.
•Nearly 100,000 deaths per year can be attributed to bad medicines.
•Furthermore, 10 percent of all essential drugs fail basic quality tests.

Attributing the cause of death to a fake drug proves to be a difficult task. Take for instance Plavix, a widely used heart medication. If someone were to take counterfeit Plavix and die, the death would be attributed to the ill health of the patient, not the medicine.

Producers of substandard medicine have also become an increasing problem for established drugmakers. Nothing about these operations is illegal; these companies pay taxes and create jobs. Emerging drug markets in India and China are at the forefront of many drug categories, notably anti-infectives.

These companies benefit from being able to cut corners and deal with lax regulations. In many cases, regulators don't have the resources to conduct thorough inspections of production plants or products on the market. Furthermore, these companies offer better prices, which drives competitors out of the market.

Governments can't work alone in trying to stop entire networks working globally to inject counterfeits and substandard medicines into the market. Instead, international treaties need to be established or international laws strengthened to help crackdown on these cases. But more importantly, regulators and customers need to demand better quality products.

Michigan Green Energy Group Drinking the Koolaid

There doesn't seem to be any end to the insanity that has gripped the green energy advocates. In the face of overwhelming evidence and statics's showing wind and solar energy resources have not and can not meet even the smallest requirements for industrial and or residential needs.

This proposal doesn't take into effect the increased demand of industry alone over the next decade, let alone expansion of new housing in the state. If proposition 3 believes that Michigan will not get new employers to come into the state, and that there by no new demand for energy, then this might work, especially since with realistic projections on jobs having to go away as employers seek better energy rates for their companies in other states, there will be no need to have more energy development in the next decade.

I'm sure who actually sits down and thinks this stuff up given the history of wind and solar that is available to everyone. It's like these people live in a different universe totally unconnected to reality here on planet earth.

Michigan Groups Aim for Green Energy Mandate in State Constitution
Source: Michael Bastasch, "Michigan Groups Aim for Green Energy Mandate in State Constitution," Daily Caller, October 16, 2012.

October 24, 2012
Michigan is pushing toward using more renewable energy and the latest proposition has many groups lining two sides of an argument. Proposition 3 would limit utility rate increases to consumers to 1 percent per year, and allow for annual extensions of the 2025 deadline in order to prevent rate increases of more than 1 percent. It also requires the state legislature to pass additional laws that encourage the use of Michigan-made equipment and in-state workers, says Michael Bastasch of the Daily Caller.

The Michigan Environmental Council is leading the effort to pass the proposition. It is part of Michigan Energy, Michigan Jobs -- a coalition that includes the Sierra Club, the American Wind Energy Association, the NAACP, the Natural Resources Defense Council, United Auto Workers and Michigan Democratic Senator Debbie Stabenow.

The Michigan Environmental Council states:

•Initially the residential utility rates will be close to 50 cents a month more and by 2030; residential utility rates will save over 80 cents a month.
•The proposition will create 74,495 jobs and requires an investment of $10.3 billion in renewable energy.
•Most of the increased energy generation is from wind power.

The coalition Clean Affordable Renewable Energy opposes the proposition and its members include the Michigan Chamber of Commerce, International Brotherhood of Electrical Workers local unions, Latin Americans for Social and Economic Development, DTE Energy and the American Coalition for Clean Coal Electricity.

The Clean Affordable Renewable Energy coalition states:

•Proposition 3 will put a $12 billion burden on both residential and commercial customers.
•Almost as many jobs will be lost in the energy industry as gained from the new proposition.

The Energy Information Administration says that in 2010, wind power was 0.3 percent and renewables 3.7 percent of Michigan's energy generation. The Mackinac Center for Public policy says that by 2025 the proposition would cost the state of Michigan 10,540 jobs, cost the state $2.55 billion and increase average annual household electric costs by $180.

Affordable Care Act (ObamaCare) Forcing Doctors Out

Further notice to the general public that things are changing in the health care industry and not for the better. ObamaCare will change how the public is treated and who will get treatment and who will not.

To say the Affordable Care Act, ObamaCare, will be able to service an additional 30 million people without changing the entire system is not living in the real world. On top of this, the entire system is run by an institution that is completely out of control, the federal government. Look how well they have run Social Security, Medicaid and Medicare, all are broke and riff with fraud.

Doctors Working Less as Flood of New Patients Looms
Source: Bruce Japsen, "Docs Working Less as Flood ff New Patients Looms," Forbes, October 8, 2012.

October 24, 2012
It is no longer news that the new health care law creates sweeping changes to the nation's health care system. However, discussion of the implications of the new health care law has been theoretical, with no one knowing exactly what to expect, until now. In anticipation of the effects of the new health care law, physicians are starting to alter their work habits, says Bruce Japsen of Forbes.

•Doctors are working 6 percent fewer hours and treating 17 percent fewer patients than they were four years ago.
•At this pace, 44,000 physicians could be lost over the next four years.
•However, these physicians are going to be crucial to treat the 30 million new patients over the next few years as a result of the new health care law.
•Only one-third of physicians surveyed said they'd be independent by next year.
•The same survey found that more than half of current doctors plan to change their practices by either cutting hours, cutting back on the number of patients they treat, or seeking employment elsewhere.

This trend is problematic considering that there will be a short supply of doctors to cover an almost endless demand. Most of the burden will be placed on primary care doctors like internists and family physicians.

Many doctors are choosing to sell their practices to larger health care networks or hospitals so they don't have to deal with the new requirements of the health care overhaul. These include things like upgrading their practice or spending more money on installing electronic medical records.

In addition, doctors are demanded by the law to create a team approach to medical care so as to increase the quality of care for patients while making doctors more accountable. This incentivizes insurance companies to bundle payments to doctor practices for keeping patients out of hospitals. However, this approach has contributed to the increase in doctors opting out of their practice in favor of working in a hospital or starting a concierge practice.

Industry Investing in Clinics for Employees

What a great idea - on site clinics and maybe even industry owned hospitals that would cut the federal government out of the picture, and at the same time, save money while giving quality care.

Unfortunately, many doctors would migrate to these institutions leaving the general practice that would have to serve the ObamaCare (ACA) business of millions of new people coming into the system to doctors willing to be paid less and suffocated by mountains of paper work. How do you think that will work out for improving our health care?

This November 6th, make sure everyone gets equal health care by electing a leader that will make sure ObamaCare does not destroy health care for everyone.

Large Employers Look to On-Site Health Clinics to Reduce Costs and Absenteeism
Source: "Large Employers Look to On-Site Health Clinics to Reduce Costs and Absenteeism," Washington Post, October 21, 2012.

October 24, 2012
On-site health care clinics are becoming a popular avenue for employers to reduce health care costs and boost employee productivity. These facilities are being established by firms across all sectors to offer everything from urgent and primary care to biometric screenings to chronic disease management, says the Washington Post.

•Currently, 8 percent of employers across the country have such clinics.
•But among big companies, about 46 percent have on-site clinics.
•At one company, Discovery Communications, about 85 percent of the workforce visits the on-site clinic.
•As a result, Discovery Communications estimates that it will save $2.2 million.

Big businesses can afford to have an on-site clinic because the large number of employees means that there will be enough patients to justify the costs. Some even offer a surprising number of services. Discovery Communications, for example, provides services that range from Pap smears to weight management programs to infertility counseling.

The increase in millions of insured Americans under the Affordable Care Act may expand interest in employer-sponsored clinics. Insuring millions of people is likely to strain the health care system and lead to increased waiting times for patients to see doctors. Employers would be willing to alleviate that pressure to get quicker care for their workers so that they can be healthy sooner.

Tuesday, October 23, 2012

Romney's Tax Plan Will Work : Middle Class Benefits

Romney's plan looks to the future where everyone is treated with the same idea of a tax  that reflects their income. Romney hasn't told every he wants to do as he would be attacked on every issue, mostly with managed facts to change outcomes.

The problem is most people are not paying attention except to head lines in the main stream media that makes no bones about being completely part of the Obama reelection campaign

The Impact of Romney's Proposed $17,000 Deduction Cap
Source: Stephen Entin, "The Impact of Romney's Proposed $17,000 Deduction Cap," Tax Foundation, October 11, 2012.

October 23, 2012
Mitt Romney's tax plan would add substantially to the gross domestic product (GDP) over time, raise after-tax incomes across the board, and cost the U.S. Treasury far less than what traditional "static" estimates have reported, says Stephen J. Entin, a senior fellow at the Tax Foundation.

However, the biggest issue in discussing Romney's tax plan is how the static revenue costs are going to be paid for.

•Altogether, the tax plan would increase private sector GDP by 7.8 percent.
•The overall cost, excluding economic improvements and revenue inflow, would be $338 billion (measured at a 2008 baseline level of GDP and income).
•Including the growth of incomes and tax revenue, the tax plan would cost around $137 billion in 2008 dollars.
•About 60 percent of the costs would be covered by the added income growth.
•In addition, the proposed reduction in the corporate income tax rate and lower taxes on capital gains, dividends and estates would contribute to job growth and federal revenues.
•The rest of the revenue shortfall can be eliminated by closing tax loopholes on high-income taxpayers or making cuts in corporate welfare and ineffective federal programs.

Recently, however, Romney has announced that he plans to impose a $17,000 cap on itemized deductions to fund his tax plan.

•Under this plan, private sector gains would decrease by 0.4 percent.
•The cap on deductions would reduce the costs of the tax plan from $338 billion to $206 billion.
•However, this would take back over half the tax cut for people between the $150,000 to $500,000 income ranges.
•Furthermore, it would take back 60 percent to 80 percent of tax cuts for those making over $500,000.
•In contrast, just 5 to 14 percent of the tax cut will be taken back for those with incomes between $20,000 and $50,000.

As a result, the after-tax income of tax filers will be disproportionately reduced. For example, the income for people making over $500,000 will be reduced by a third after taxes. However, those earning below $50,000 would only have their after-tax income lowered by 8 percent.

While Romney's deduction cap does succeed in paying for his tax plan without raising taxes on the middle class, it does so by reducing overall growth and lowering the tax cut for upper income payers. It is still unclear what deductions will be capped and whether Congress will agree to the major reductions in some of the deductions.

Green Energy Fails Every Time : Battery Company Bankrupt

Who knew?  I know, what we need now is 4 more years of this insanity of spending billions of dollars on government selected industries and the money that comes back as campaign funds, It's called money laundering with taxpayer dollars. See this as how unions and industries, under the influence of government control operate.

The wind and solar industries have recycled millions to Mr Obama's administration even though they have nearly all gone bankrupt. Does Mr Obama understand how this works? Believe he designed this operation to work exactly as it now operates. Failure is designed in.

November 6th is a chance to stop the taxpayer dollars from being wasted, stolen by operatives, bundlers, that are part and parcel of the Obama administration. 

Maker of Batteries Files for Bankruptcy

Source: Bill Vlasic and Matthew L. Wald, "Maker of Batteries Files for Bankruptcy," New York Times, October 16, 2012.

October 23, 2012
The troubled battery maker A123 Systems filed for bankruptcy, dealing a blow to the Obama administration's program to jumpstart a domestic battery industry and spur development of electric vehicles, says the New York Times.

•A123 received money under the stimulus program for electric car development.
•In addition, it was awarded a grant from the Department of Energy for $249 million.
•However, it had only received $132 million of that before its bankruptcy.

Before its bankruptcy, A123 struck a deal to sell a majority stake to Chinese auto parts manufacturer Wangxiang. However, the deal was never completed and the company failed to make a debt payment on the $75 million it had borrowed from the Chinese company.

A123 opened two factories in Michigan and supplied batteries to the likes of General Motors and a start-up firm, Fisker automotive. However, the company had to recall defective batteries in Fisker cars. In response to insufficient revenue, the company agreed to sell up to 80 percent of the company to the Wangxiang Group.

This move invited many criticisms against the company. For instance, Chinese companies got access to American technology that American taxpayers funded. Now, the Energy Department is countering that the employees and customers would be absorbed by another competitor in the electric battery market: Johnson Controls.

•Johnson Controls is poised to be the dominant American battery manufacturer and has agreed to provide $72.5 million in financing for A123's reorganization in bankruptcy.
•Most importantly, Johnson Controls will have access to the important assets left behind by A123 such as electric-grid technology.

This is sure to provide the Romney campaign fodder as it criticizes Obama's energy policy as being misguided. As energy continues to be a large issue in the presidential campaign, it is difficult for the Obama administration to explain this failure considering the similar fate other energy companies like Solyndra.

Natural Resources Waiting for Release : Vote Energy

America has the most fossil reserves of any country in the world and yet our president has decided we have to stop any use of these resources. Why? I believe he wants slow the growth of this country and bring us into line with other socialist democracies of Europe, by the way that are failing completely. Greece?

He believes this country is bad and must be brought down, punished for being the most powerful country in the world and have responsibilities to bring freedom to oppressed peoples. Progressives believe individual freedom is in opposition to socialism and must be changed.

Mr Obama believes individual freedom is bad as he wants to control populations with all encompassing government, as they, the people, are not able to make decisions as well he can and those that are his friends.

Mr Obama is a progressive socialist that believes his agenda will save us all from our selves. Individual freedom is the enemy as this negates big government. This is totally unacceptable.

This November, we have the chance to bring individual freedom back and save our country from perpetual dependency; a living standard with no future.  You chose.

Gas Prices Doubled, Obama Locks up National Reserve
Source: "Gas Prices Doubled, Obama Locks up National Reserve," Investor's Business Daily, October 16, 2012.

October 23, 2012
The president openly talks about how open our reserves are to oil production and how much the production on those lands is going up. However, the land is increasingly locked up and the land that is available is unproductive or undesirable. The president and his administration work very hard to satisfy environmentalists by creating road blocks for oil companies in places such as Alaska. At the same time, the president is opening up other reserve lands for alternative energy projects such as commercial-scale solar, says Investor's Business Daily.

The facts:
•The price of gasoline was $1.84 a gallon when President Obama took office and has now more than doubled.
•The vast oil reserves of North America are larger than OPEC's reserves.
•In August, the administration closed off 23.5 million acres of the most productive areas of the National Petroleum Reserve in Alaska.
•Alaska's entire congressional delegation is strongly against the administration's decision to block off the 23.5 million acres.
•So far, only one oil company has said that it will go after the strategic reserve in Alaska, which holds 2.7 billion barrels of oil and 114.36 cubic feet of natural gas.

Monday, October 22, 2012

Generic Drugs Saves $ Billions $

This is good news. Anything that saves money in health care, and that works, must be used. It's not easy switching one's thinking from past habits of believing the best is always the newest and the most expensive.

And the most expensive has to be better, a Lincoln is better then a Ford, right?

Encouraging the Use of Generic Medication Could Save Medicare Billions

Source: John F. Hoadley et al., "In Medicare Part D Plans, Low or Zero Copays and Other Features to Encourage the Use of Generic Statins Work, Could Save Billions," Health Affairs, vol. 81 no.10, October 2012.

October 22, 2012
Many private health plans that administer Medicare drug benefits are taking advantage of tools to encourage beneficiaries to use generic drugs as a means of lowering total drug spending, say researchers in the journal Health Affairs.

•Eighty percent of prescriptions dispensed last year were generics, compared to 63 percent in 2006.
•The use of generic drugs in Medicare Part D saved $33 billion in 2007.
•Fourteen states required pharmacies to dispense the generic version of a drug whenever it is available.

There are many benefits derived from encouraging the use of generic drugs aside from the cost savings.

•For example, the use of generic drugs encourages consumers to fully adhere to their medication.
•While greater adherence may increase overall drug costs, it leads to long run medical savings because of the reduction in hospitalizations and emergency room use.

Many insurers and state governments are pursuing strategies to encourage people to not only switch to a generic version of a drug, but also from patented drugs to generic alternatives in the same drug class. However, studies have shown that despite the large difference in copays, the discouragement of brand-name drugs does not translate to an increase in generic use.

As a result, one health plan strategy relies on requiring the use of low-cost medication before one buys the brand-name drugs. This is done by requiring prior authorization for the use of the brand-name drug by the consumer.

In a study that assessed what influenced Medicare beneficiaries to choose a generic drug to treat high cholesterol, it was low copayment that attracted consumers to the generic drugs. Other tools that had some effect include higher copays for brand-name drugs and "step therapy," which is a health plan that require enrollees to try a low-cost medication before it will cover the costlier alternative.

Overall, for every 10 percent increase in the use of generic drugs, there is an estimated $1 billion in annual savings for Medicare.

EPA Driving Down Industrial Progress : The Progressive Agenda

Great article - the problem with the EPA is they believe it's their duty to strangle industry to the point where they just bearly survive thereby protecting the environment. But by doing so, they strangle the economy as well forcing unemployment up and living standards down.

Also, given that most of the inhabitants of the EPA are progressive socialists installed by the Obama administration with instructions to slow the growth of Americas industrial power,   believing free markets and individual freedom must be restrained, and the best way to do this is through suffocating over regulation.

The Environmental Protection Agency's Moving Goalposts
Source: Merrill Matthews, "The EPA Is Moving the Goalposts, Even After the Game Has Started," Forbes, October 18, 2012.

October 22, 2012
Metaphorically speaking, football fans would be outraged if every time a team is about to kick a field goal the official reacted by moving the goal post further out. Similarly, the Environmental Protection Agency (EPA) frequently moves the goalposts further away for companies and industries trying to abide by countless federal regulations, says Merrill Matthews, a resident scholar with the Institute for Policy Innovation.

One of President Obama's top agenda items was to pass cap-and-trade legislation intended to limit the amount of greenhouse gas emissions. Given that legislation of this sort will not be approved anytime soon, the EPA responded by engaging its own emission-limiting agenda without the approval of Congress.

•According Time magazine, the EPA's new goalpost-moving tactics are the "most far-reaching environmental regulatory scheme in American history."
•Although the EPA states that it is taking carefully measured steps, numerous industries are already shouldering damages and have sued the EPA.

Texas has also sued the EPA, asserting that the EPA does not have the power to carry out the measures stipulated under the Clean Air Act.

•Texas created its "Flexible Permitting Program" in the 1990s.
•It uses combined emissions -- referred to as an "umbrella" -- rather than specific emissions, to meet Clean Air Act rules.
•The EPA generally ignored the state's request for approval and moved the goal post forward; as a result, over 100 industries were affected.
•The Fifth U.S. Circuit Court of Appeals "concluded that the EPA exceeded its authority in rejecting the Texas program and that its grounds for doing so were insufficient, capricious and arbitrary."
•In short, you don't get to move the goalpost just because you want to.

The EPA can import and integrate some of the lessons from the way medical research is conducted.

•To test a new drug, researchers start with a small sample of patients and subsequently increase the sample experiment size at each stage. The purpose is to limit any potential harm.
•If the EPA adopts this approach, it would begin with a small number of wastewater treatment plants -- just as the industry is proposing -- see if there is any reason to be concerned, and if so, mover to a larger trial.

Carbon Tax Still Lives : Climate Change Insanity

Carbon emission (CO2) is not the problem, but 'man-made climate change' environmentalists that drives this insanity is the problem. With all of the information that is available to everyone, why is this nonsense still a moving force?

Worse, why does an trusted news institution, like Investor's Daily, still believe this is a legitimate topic? Climate change nutjobs that believe CO2, green house gas, is the driving force that it is killing the planet; this is a lie, but yet so many people still buy into it as though it's gospel.

Tell a lie enough and soon it's taken as the truth.

Carbon Tax Would Kill Major Industries, Hurt U.S. Consumers
Source: Mark J. Perry, "Carbon Tax Would Kill Major Industries, Hurt U.S. Consumers," Investor's Business Daily, October 16, 2012.

October 22, 2012
A carbon tax will hurt the United States' economic recovery and any short-term growth. It will hurt the energy industry the most and energy industry companies will move to other countries, taking their dollars and jobs with them.

Most developing nations will not have a carbon tax because they do not want to hurt their living standards. Developing nations are the leading producers of carbon emissions and they will not work on reducing them while their household incomes are relatively much lower than that of developed nations, says Mark J. Perry, a professor of economics at the Flint campus of the University of Michigan and a scholar at the American Enterprise Institute.

There will be less of a need for a carbon emission tax if there are fewer carbon emissions. The abundance of natural gas is providing a much cleaner source of energy than coal. The abundance of natural gas and advanced drilling technologies helps with the production levels in the United States and could be used to help other countries. Use of natural gas is on the rise, while the use of coal is quickly declining. This decreases the amount of carbon emissions in the United States.

The case against a carbon emission tax:

•The amount of electricity from carbon emission rich coal is down 10 percent in four years and expected to fall another 10 percent in eight years.
•Eighty-five percent of the projected increase in global emissions of carbon dioxide will come from developing countries.
•The United States has cut its carbon emissions by 9 percent since 2007.

Progressive Cronyism : Recipe for Failure

It seems that when ever there is a progressive socialist in the White House the trust factor goes down, but when a Republican takes power, the trust goes up : i.e. when George W Bush was in power, trust is high, and now with Mr Obama, there is no trust.

Little wonder then why the economy and foreign affairs are in disarray, a complete disaster. Need more proof, check out how many cities that are run by progressive Democrats that are not catastrophic failures, or for that matter, states governed by progressive Democrats?

Progressive socialism is a recipe for failure. Always has been and always will be. Think about this on November 6th.

Government Cronyism and the Erosion of the Public's Trust
Source: John Garen, "Government Cronyism and the Erosion of the Public's Trust," Mercatus Center, October 11, 2012.

October 22, 2012
Public trust in the government has eroded in recent decades due to the perceived preference the government gives to favored groups. Government cronyism often happens in the form of preferential tax treatment, preferential regulation, influence on policy, and subsidies, says John Garen, the Gatton Endowed Professor of Economics at the University of Kentucky.

Since the 1960s, popular opinion and trust in the government has been on a downward trend.

•Trust in government peaked in 1966 at 76.6 percent.
•By 1976 it had fallen to 35.6 percent.
•In the early 2000s, trust in the government had risen to 48.3 percent.
•But in 2010, it was at its low of 21.5 percent.

There are many causes for the mistrust of government. According to some research, the level of public mistrust correlates with the number of government regulations and overall size of government. For instance, between 1966 and 1976, there was a sharp increase in federal regulations -- around the same time that public mistrust increased.

Public trust is important to the government for a variety of reasons. Studies by social scientists have shown that people are more willing to reciprocate cooperation if there is trust. Public cooperation entails cooperation and involvement with government functions and civic duties that rely on a willing populace. The more engaged people are with their government, the more efficient the government is in responding to the demands of its citizens.

Moreover, government cronyism has deleterious effects on the nation as a whole. Indeed, it encourages the shifting of resources to a select group with which the government is earning favor. However, this stifles any serious solution to economic problems the rest of the country faces. In the long run, investments in human capital will focus more on developing lobbying skills rather than economically productive skills.

Taken together, a government that encourages the reallocation of resources away from economically productive efforts into political activity creates a negative spiral that is difficult to break. As economic growth slows and mistrust in the government increase, people are less likely to cooperate with the government or become productive members in society.

Sunday, October 21, 2012

Tax Increases To Crush Middle Class & Poor : January 1, 2013

It's not surprising that this nightmare has caught the Congress napping and the president on the back nine. Why would most of the members believe that a committee would be able to come to some logical conclusions to save the country?

This after all isn't about the country, it's about ideology, an agenda that believes there is nothing more important to get and keep power. The first two years of the Obama administration he had a super majority in both houses of congress and stone walled the Republicans completely. They did not participate in any decision making what so ever, nothing.

Little wonder then why the sequester went through last year. The Republicans believed that even the Democrats would see this as a total failure and reject it. They were wrong. Taxmageddon is just what the progressive socialists want. Crush the middle class and the poor assuring total dependence on a over reaching government for all their needs, including a sustaining vote.

Budget sequester and taxmageddon.
At the end of the year, without any Congressional or Presidential action needed, taxes will dramatically increase when the Bush tax cuts expire and federal spending will be cut automatically when the across-the-board budget sequester goes into effect.

If you recall, the automatic budget sequester was meant to be a poison pill to incentivize Congress to enact meaningful budget reform. In exchange for raising the debt limit, Congress agreed to cut federal spending dollar for dollar. The budget sequester cuts social spending and defense spending so severely, nobody thought Congress would want to swallow it. But after the failure of the so-called Super Committee, it appears Congress may be forced to swallow the poison pill after all or else renege on their promise to cut spending.

Senate Democrats published a report outlining the impact of the budget sequester, while 15 CEOs wrote a letter similarly warning Congress about the "grave" consequences. At this point, the Obama Administration seems to be playing a game of chicken, threatening to veto any legislation to solve the problem unless it raises taxes on the wealthy. Meanwhile, the federal government is on track to hit the current debt limit sometime in January.

Saturday, October 20, 2012

Medical Tourism : Competitive Forces Working

How cool is this - the free market doing a the job of providing quality health care that the federal government can not do and they do it better and cheaper then ObamaCare that will destroy, not only health care it's self, but the entire economy.

Under the free market system of competitive forces, and personal responsibility, employees are the winners, but under ObamaCare, everybody loses, employees and companies alike from an overreaching system of unelected bureaucrats picking winners and losers. Who Knew!?

Want to stop this nightmare that is coming to your household? Vote in new leadership next month.

Wal-Mart Turns to Medical Tourism to Lower Employee Health Costs
Source: "Wal-Mart Turning to Medical Tourism to Lower Employee Health Costs," BusinessWeek, October 12, 2012.

October 19, 2012
Medical tourism is becoming a popular avenue for employers to lower employee health costs. Wal-Mart, the nation's largest employer, will offer insured employees no-cost heart and spine surgeries at Scott & White Memorial in Temple, Texas, and seven other hospitals around the country, says BusinessWeek.

•To reduce health costs, many companies have narrowed the number of physicians and hospitals covered by their insurance policy.
•Wal-Mart, for example, has urged employees to use Mayo Clinic's three hospitals for organ transplants.
•Furthermore, Wal-Mart encourages people to use one of their preferred hospitals by offering to cover out-of-town expenses.

This new policy will save thousands of dollars for employees that are plagued with high deductibles and out-of-pocket requirements. Employees can save as much as $5,000 or more.

Other companies have jumped to capitalize on the reduced costs that medical tourism has to offer. Energy Future Holdings, for example, hired consultants ACAP Health to help its employees find local doctors and hospitals that are low cost and high quality.

The costs of medical tourism are relatively low, considering that cost of a care episode is bundled. This means that everyone in the system pays a lump-sum rather than getting billed separately for tests, procedures, etc.

The benefit to this design is that employers become choosy about which health providers they do business with. Health care providers will increase the quality of patient outcomes while simultaneously reduce the cost of procedures as a way of attracting more companies.

Campaign Spending Huge : What About the Children?

What a hoot - remember that famous tid-bit from the 'first black president' Bill Clinton, when he scolded the opposition on many occasions for some spending he didn't like, it went something like this, 'just think what you could do to help needy children with all this money'.

I wonder why the progressives Democrats are so willing to spend all this money in light of Bill's much used intellectual analysis of money well spent?

Presidential Campaign. (National Center for Policy Analysis)

The Federal City is virtually empty these days with politicians opting instead to stay home and campaign for the November 6 election. Among those of us left in Washington, the topic of conversation has been the presidential campaign in general and the recent debates in particular. The second debate in the series (some argued it was President Obama's first debate) was held this week at Hofstra University. Pain was inflicted on both sides, but the debate doesn't seem to have moved the needle much in either direction.

Combined spending so far on television advertising for the campaigns has totaled more than $881 million. With Virginia being one of the so-called battleground states, and in the same media market as Washington, I think NCPA's Washington Office has seen every political commercial this season.

Analysts predict the total advertising spending will top $1 billion by election day.

Welfare Spending Increases Recipients : More Money More Need

There have been several post on this catastrophe of spending, but not until now have the pundits been stepping up their game on both sides of the issue as the end of the year will bring tax increases that will strangle the economy and increase the risks of attack on our country.

Nearly a trillion dollars has been spend on the poor and, wonders of wonders, the poor are still here and their numbers are growing. Worse, with the reelection of Mr Obama, the amount of money spent on poverty programs, like food stamps, the number of dependent people will reach more the 50% of the entire population with no end in sight of new programs to speed  the increases.

How will all these programs be funded, easy, by reducing spending on defense, over 700 billion taken from the defense budget starting next year. Is this a problem for the country one might ask, not really if your objective is only making sure your job as 'overseer' is assured.

Worse yet, once the hand outs are embedded, stopping them will be nearly impossible. WOW - the perfect storm for the progressive socialists, a constantly increasing voter base. Hello Greece!!!

National Center for Policy Analysis

In a new report issued by the Congressional Research Service and published by the Senate Budget Committee, federal spending on aid for low-income people increased by nearly a third between 2008 and 2011, making the combined spending total of 83 separate federal welfare programs the biggest ticket of the federal budget.

Friday, October 19, 2012

QE3 Will Not Solve Our Problems : New Leadership Will

If you ask people how QE3 will effect their lives, they will have no idea, most won't even know you are taking about. The same is true of the proponents to some degree, it's more about fixing the 'looks' of the economy just before an election, rather then doing something that will have long term effect but look bad now.

The general thought in the financial community is QE3 will do more harm then good by pushing off decisions that need to be made now to be made at some later date. The problem, of course, who will have the political power and the will to do the right thing later?

Our best chance to turn the country around is new leadership now. What we don't need right now is more of the same bad policy of the past four years that brought on the financial nightmare we currently in. Hard decisions need to be made with considerations for our future, not considerations to benefit a central government or a progressive socialist party agenda.

This November, think about what is important in your life and how your vote will make a difference. Think about how your vote will effect you and your families future.

How to Think About QE3
Source: Arnold Kling, "How to Think About QE3," The American, October 9, 2012.

October 19, 2012
In attempts to get the economy on track, the aftermath of the current recession has witnessed numerous intertwining interventions between the public and private spheres of society. The series of quantitative easing by the Federal Reserve are an illustration of this scenario. The Fed will implement the third installation of quantitative easing to stimulate the economy. However, economists are divided on the consequences of further measures, says Arnold Kling, a member of the Financial Markets Working Group at the Mercatus Center.

Quantitative easing is a relatively new experiment the Fed is embarking on; thus, Kling's examination draws from the intervention in central banks in the markets for foreign currency.

Foreign currency intervention can take three forms: Unsterilized intervention, sterilized intervention and sterilized intervention with a credibility kicker. The current attempt looks like sterilized intervention, which many deem ineffective.

•Unsterilized intervention means that the Fed will purchase foreign securities to increase the supply of money. This increase entails that more money is chasing the same goods, thereby deteriorating the value of local currency.
•Sterilized intervention is the attempt to decrease the value of the currency without having to change the money supply or price levels. The Fed can do this by selling some of its portfolio of U.S. Treasury securities, which will offset the purchase of foreign bonds. However, many economists have little confidence in this sterilization measure.

•Sterilized intervention with a credibility kicker. The distinction here is that the Fed will publically signal a serious commitment on its determination to see the dollar value decline.

It is important to note that the environment where these interventions are unfolding is domestic, whereas the interpretations up to this point have been made from foreign case studies. By extension, it follows then that there are several outcomes to the QE3 within domestic market. Overall there are three possible scenarios:

•If QE3 operates like sterilized intervention, there will be short-term reductions in the cost of specific long-term borrowing, but will soon dissipate. In the end, the economy will proceed along the same path as it would have without QE3. The probability for this is 20 percent.

•If QE3 operates like unsterilized intervention or like sterilized intervention with a credibility kicker, and the Phillipsians are correct (those who believe that additional inflation would help to reduce unemployment), then QE3 will put the United States on a slightly higher inflationary path with significantly lower unemployment. The probability for this is 30 percent.

•If QE3 operates like unsterilized intervention or like sterilized intervention with a credibility kicker, but the Phillipsians are incorrect, then QE3 will produce a significantly higher inflation with little effect on unemployment. The probability for this is 50 percent.

Education Needs More Imagination, Not More Teachers

With the agenda of the unions to cement their power by having judges that believe it is more important to support a progressive socialist agenda rather then the law, a Wisconsin judge found collective bargaining and voter ID Unconstitutional, it doesn't come as a surprise then that the call would come out to hire more teachers and renegotiate new contracts.

After all, teachers are the very back bone of the NEA and a major source of campaign funds for the progressive socialist Democrat party.

The time has come to change the thinking of our government from spending more money that we don't have, to finding better ways to spend the money we have that will best serve the community and teachers.

The Imaginary Teacher Shortage
Source: Jay P. Greene, "The Imaginary Teacher Shortage," Wall Street Journal, October 8, 2012.

October 19, 2012

The challenges facing America's schools have become a major focus of the public dialogue. Over the past few decades, many have been lamenting the decaying quality of education in America. Case in point, in the past 40 years, and a million teachers later, student performances have remained stagnant. And despite this stagnancy, a large portion of policymakers continue to propose "more teachers" as the answer, says Jay P. Greene, a professor of education reform at the University of Arkansas and a fellow at the George W. Bush Institute.

Given limited resources, states should consider shrinking their teacher labor force and explore new alternatives. There is extensive data that support this push to rein in the teacher-splurge.

•According to the U.S. Department of Education's Digest of Education Statistics, in 1970, public schools employed 2.06 million teachers, or one for every 22.3 students. In 2012, there are 3.27 million teachers, one for every 15.2 students.
•Despite the increase in the number of teacher, math and reading scores for 17 year olds have remained stagnant since 1970, according to the U.S. Department of Education's National Assessment of Educational Progress.
•To put it bluntly, unless the next teacher-hiring craze delivers an improved academic reality compared to before, there is little reason for further investment.
•Although more individualized attention is an important ingredient for a child's academic development, the dilemma to watch out for is that "expanding the number of hires means dipping deeper into the potential teacher labor pool. That means additional teachers are likely to be weaker than current ones."

•A flip-model alternative is to have a more meritocratic structure, where the system has better-paid but fewer teachers. This also relaxes the enormous burden of pension and health benefits, which have increased greater than salaries per teachers.

The education system must import more innovative means to improve the system.

Welfare Spending At 1 trillion 2011 : Wasted / Lost

Wait a minute - spending 1 trillion dollars on welfare and the poor are still just as poor and the number has gone up drastictly. But wait, there's more, after 6 trillion dollars of government spending in the last 4 years without moving the unemployment number. The number when Obama came into office was 7.8%.

The quesion now is why would we allow Mr Obama another 4 years to spend another 6 trillion with the possibility of not doing any more good then the last 4 years. Do we want to take that risk or look for new leadership?

Welfare Spending Shattering All-Time Highs
Source: Robert Rector, "Morning Bell: Welfare Spending Shattering All-Time Highs," Heritage Foundation, October 18, 2012. "Spending for Federal Benefits and Services for People with Low Income, FY2008-FY2011: An Update of Table B-1 from CRS Report R41625, Modified to Remove Programs for Veterans," Congressional Research Service, October 16, 2012.

October 19, 2012
Given the recent history following the financial crisis, the United States is confronted with the harsh realities of making more parsimonious decisions to rein in spending while maintaining its fundamental responsibilities to its citizens. Welfare is a central topic in this dialogue, says Robert Rector of the Heritage Foundation.

A new investigation by the nonpartisan Congressional Research Service (CRS) exposes the pressing reality of the "growing welfare state." Welfare expenditure is fast approaching the $1 trillion mark.

•Around 100 million people, one-third of the nation's population, are receiving aid from at least one of 80-plus means-tested aid program each month. That is around $9,000 per recipient.
•If converted to cash, means-tested welfare spending is more than five times the amount needed to eliminate all poverty in the United States.

Conventional wisdom seems to dictate that this is a reasonable, temporary response to the recession. However, President Obama pursues a permanent increase of the welfare state.

•According to the president's budget plans for fiscal year 2013, means-tested welfare will continue to grow swiftly for the next decade, projecting costs of $12.7 trillion.
•Welfare spending has long passed the amount spent on defense: Since 1993, the ratio of welfare to defense expenditure averages $1.33 to $1. By 2022, this will be $2.33 of welfare to every $1 spent on defense.

One issue contributing to the sudden explosion in the number of welfare recipients is the dismantling of the screening system. Initially four of the programs had work requirements, but now the administration has suspended the work requirement for two of them. The recipient pool doubled. According to the report:

•At the federal level, $746 billion in means-tested spending exceeded spending on Medicare ($480 billion), Social Security ($725 billion) or the defense budget ($540 billion).
•At the state level, in 2011, state contributions to federal welfare programs came to $201 billion, and independent state programs contributed around $9 billion.
•Overall, means-tested welfare spending from federal and state sources reached from all sources reached $956 billion.

An important step is to return the welfare spending to prerecession levels. Along the same lines, it is important to reintegrate the work requirement measures in order to undo the signal that "able-bodied recipient rarely are required to work or prepare for work to receive aid."

Thursday, October 18, 2012

Green Energy Failed Firms Get Tax Breaks? Really?

In the face of a total break down of the green energy agenda where the federal government is picking winners and losers, well, all losers, except for the Obama's campaign that is taking in millions from bundlers embedded in these firms.

It's called money laundering. Tax dollars to green energy firms that have failed now are returned to the Obama as campaign contributions. Who knew? Democrats have done this for years especially through unions.

The Solyndra Tax Break
Source: "The Solyndra Memorial Tax Break," Wall Street Journal, October 15, 2012.

October 18, 2012
In a recent twist, Solyndra's investors could be rewarded for their failure, thanks to a tax benefit the Obama administration handed out in a bid to evade political accountability, says the Wall Street Journal.

•The Internal Revenue Service exposed this double Solyndra debacle last week in the U.S. bankruptcy court for the district of Delaware, which is unwinding the defunct solar panel maker.
•The IRS formally objected to Solyndra's Chapter 11 reorganization plan, claiming its "principal purpose is tax avoidance."

Having sold off its manufacturing plant, fired nearly 1,000 workers and proven the non-viability of its business model, Solyndra's only real assets are what the IRS calls "tax attributes." These are between $875 million and $975 million in net operating losses that can reduce future taxable income, which the IRS values as high as $350 million. Before it went toes up, Solyndra also accumulated $12 million in solar tax credits that can reduce tax liabilities dollar for dollar.

Tax-loss carry-forwards are routine but worthless if a company can't turn profits to pay taxes on. So Solyndra's owners are asking the court to liquidate the rest of the business and contribute a net $6.7 million to pay off creditors for pennies on the dollar. A holding corporation will then emerge from Chapter 11 that won't make products or employ workers, but it will get the Solyndra tax offsets. The dummy company is owned by Argonaut Ventures I LLC, Solyndra's largest shareholder and the primary investment arm of the George Kaiser Family Foundation. Mr. Kaiser is a Tulsa oil billionaire who bundled campaign checks for Mr. Obama in 2008.

Under the bankruptcy plan, taxpayers will recoup $27 million at most on Mr. Obama's $535 million "investment." The IRS and Energy Department are now asking the courts to reject the deal, because bankruptcy is designed to give a business a second chance, not goose a tax return.