Daily Archives: 16 December 2014

Why Would Anyone Want To Do Business with the Illinois Government?

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A bit less polemic (but only a bit); however, the Illinois government is being openly dishonest in its business dealings.

The Land of Lincoln has accrued a $111 billion unfunded liability for government workers’ pensions—up 75% from five years ago. There is an additional $56 billion of unfunded debt to cover health benefits for the state’s retirees. Illinois today is already spending more of its general fund on pensions than on K-12 education. One in four tax dollars pays for its retired workers’ benefits. Last year the state had to defer paying $7 billion owed to contractors. All this after Democrats in 2011 raised income taxes and corporate taxes by 67% and 30%, respectively.

How can any business expect to get paid by a government so far into debt with so little means of raising the money to pay it? How can the Illinois government incur additional (contractual) obligations with private (or other) businesses, knowing as it must know, that it has no hope of meeting its current obligations under its current tax and spend régime?

The only legitimate way, the only moral way, to unilaterally alter a contract is through bankruptcy. Like Stockton, CA, and Detroit, MI, and others have had the integrity to do. But states can’t do bankruptcy. Illinois (in the present case) can only cut spending (except now, for their debt); counterintuitively (to Democrats, anyway), reduce tax rates; and otherwise get out of the way of Illinois citizens and those citizens’ private sector economy.

“Green” Energy, Competition, and Consumers

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Technologies that can’t compete in the market place aren’t ready for market, nor are they ready for our consumption. Subsidizing these not-ready techs is one way of plusing them up. Another way is to penalize their competition for being too successful.

The New York Times tells this tale, albeit carefully buried in the nether regions of Katharine Seelye’s article. Overarching all of this is this:

New England [Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont] already pays the highest electricity rates of any region in the 48 contiguous states because it has no fossil fuels of its own and has to import all of its oil, gas, and coal.

That’s not strictly true; the Marcellus Shale holds more natural gas than you can shake a…drill…at, and a significant fraction of that lies under western New York. New York, though, is throwing every road block they can think of in the way of extracting the natural gas, which would give the Northeast a nearby, if not local, source of natural gas.

There are two items of interest that backdrop this. One is the spiking energy prices in the Northeast. For instance,

[f]or October, [a small business owner] had paid $376. For November, with virtually no change in his volume of work and without having turned up the thermostat in his two-room shop, his bill came to $788, a staggering increase of 110%.

The other is the lack of infrastructure: there are all of five pipeline systems in the region, with seven new systems proposed.

The six states’ governors had agreed to a regional solution to this, involving building those additional pipelines.

However.

Just last August,

the Massachusetts Legislature rejected the plan, saying in part that cheap energy would flood the market and thwart attempts to advance wind and solar projects. That halted the whole effort.

That halted the whole effort.

But, it’s OK. Progressives and “environmentalists” have your back. And they have sharpened their knives.

 

h/t Power Line