Category Archives: morality

The Danger of Accepting Federal Money

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…made manifest.

Labor Secretary Thomas Perez…threatened to cashier federal grants for 83 local transit agencies because he claimed California’s pension reforms violate the Federal Transit Act, which requires the Labor Department to certify that “protective” arrangements are made for workers (i.e., the Teamsters) before the feds dole out dough.  Nearly $2 billion in federal funds are at stake this year alone.

And there’s this:

In July, HUD published…”Affirmatively Furthering Fair Housing” in the Federal Register…a sweeping set of land-use regulations…. The agency wants the power to dismantle local zoning so communities have what it considers the right mix of economic, racial and ethnic diversity.  A finding of discriminatory behavior, or allegations of discrimination, would no longer be necessary.  HUD will supply “nationally uniform data” of what it thinks 1,200 communities should look like.

Local governments will have to “take meaningful actions to further the goals identified.”  If they fail to comply, HUD can cut federal funding.

Of course, if the States weren’t addicted to Federal handouts, the Feds’ pushers wouldn’t be able to make such threats, much less have this control over a State’s internal affairs.

Obamacare and Taxes

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Casey Mulligan has looked into this in a paper he has at the National Bureau of Economic Research titled “Average Marginal Labor Income Tax Rates under the Affordable Care Act“.  The full paper can be had through the NBER for five bucks.

Mulligan summarizes his paper here, on his blog supply and demand (in that order).

My summary of Mulligan’s summary is his comparison of Obamacare’s impact on our marginal tax rates with the impact of a couple of other programs and his comment on the impact of Obamacare on our take home pay—the part of our paychecks we actually get to use for our own purposes.

Several SNAP (formerly food stamp program) expansions in combination were a quarter of the ACA’s magnitude.  In terms of its impact on average marginal tax rates, the ACA hike is almost double the effect of permanently increasing unemployment benefit payments to 99 weeks from a baseline of 26 weeks[.]

And

[Obamacare] has not been introduced into a tax-free economy, so its marginal tax rate hikes add to marginal tax rates already in effect.  I estimate that, by 2015, the average marginal after-tax share among household heads and spouses with near-median weekly earnings will have fallen to 0.50 from 0.60 in 2007, largely from the ACA but also from other expansions in safety net programs.  That is a massive 17 percent reduction in the reward to working—akin to erasing a decade of labor productivity growth without the wealth effect….

That is to say, in just two short years—immediately on implementation of Obamacare—our median income wage earner will see his take home pay drop 17%, from 60% of his paycheck (already too small a portion) to a miniscule 50% of his paycheck.  As Mulligan notes, that is an enormous penalty to pay for the opportunity to work for one’s living.

Keep in mind, also, that the median weekly income in the US as recently as 2012 was the princely sum of $775.  This works out to a skosh over $40,000 per year.  It’s hard enough to feed, cloth, and educate a family on three-fifths of that.  Think about trying to do it on only half.

Hypocrisy

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Here is a 2008 exchange between Candidate Barack Obama (D) and the Boston Globe concerning the US’ use of force against Iran’s nuclear facilities [emphasis added]:

Globe: In what circumstances, if any, would the president have constitutional authority to bomb Iran without seeking a use-of-force authorization from Congress? (Specifically, what about the strategic bombing of suspected nuclear sites—a situation that does not involve stopping an IMMINENT threat?)

Obama: The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.
…
As for the specific question about bombing suspected nuclear sites, I recently introduced SJ Res 23, which states in part that “any offensive military action taken by the United States against Iran must be explicitly authorized by Congress.”

In the Senate Foreign Relations Committee hearing earlier this week concerning US intervention in Syria, Senator Rand Paul (R, KY) offered this amendment to the draft authorization bill being debated:

It is the sense of the Senate that the President does not have the power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.

Paul’s amendment was voted down 14-4, with all 10 Democrats present voting against.

Apparently, the President does have that power, so long as he’s from the politically correct party.

Who’s Actually Repaying Federal Loans?

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Here’s one example.

Under the 2008 Farm Bill, the United States Department of Agriculture is required to buy sugars like refined beet sugar and sell it to ethanol producers if the sugar producers are, in the opinion of the USDA, likely to default on certain Federal loans (this requirement is unchanged by the current Farm Bill modifications wending their way through Congress).

You read that right: the Feds loan sugar producers money, then the Feds buy the producers’ output so the producers can repay the loans.  Federal money—which is to say, our money sent to the Feds as taxes—is loaned to sugar producers in support of an ethanol program that no one wants.  Then, when repaying those loans becomes inconvenient, or even impossible, more of our (tax) money is used to buy the borrowers’ output, providing them with the funds with which to pay up.  The borrowers, courtesy of…Uncle Sugar…use (our) purchase money to pay us back.  We’re screwed two times in one deal.

But wait—there’s more.  In one illustrative case,

[t]he USDA paid about $3.6 million for the sugar, which it purchased from Western Sugar Cooperative, a sugar-beet processor based in Denver, according to a notice posted on the agency’s website Friday.  Front Range Energy LLC, a Windsor, CO-based ethanol maker, paid $900,000 for the sugar, according to the USDA notice.

We’re screwed a third time.

And that’s the purpose:

By buying the sugar, the USDA aims to boost prices to a level where sugar processors will be able to repay $298 million in outstanding federal loans that come due at the end of August and September.

It really is just this barefaced.