Category Archives: political economy

Now’s the Chance

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President Barack Obama has admitted what Senator Max Baucus said a month ago: that his Obamacare is a train wreck coming down the tracks.  Obama has delayed until 2015—i.e., until after the midterm elections—the implementation of the employer mandate.  With this mandate, large employers would have been required to provide health “insurance” for all of their full-time-equivalent employees or face a fine of $2,000 per employee.  (Note that the existence of that fine puts a floor under the per-employee cost of insurance of some $2,000 per covered employee.)

No one was ready for employer mandate part of the train wreck.  Not the employers, although they have been variously cutting back on employees, employee hours, and/or hiring in order to hold their numbers to a bearable cost.  Not the IRS, which quite apart from the criminal aspects of its operation is wholly unprepared—employees or software—to manage its tracking and enforcement task.  Not HHS, which hasn’t even been able to write draft rules good enough for comment, much less for publication.

This represents a golden opportunity for the Republican Party.  They were handed a gift by the Supreme Court in the summer of 2012 when that body upheld the constitutionality of Obamacare.  Had it been struck, the Republicans would have been caught flat-footed with no viable alternative, and the Democrats would have had a field day beating them about the head and shoulders for being whiners without a solution.

Now’s the chance for the Republicans to recover from that unpreparedness.  In addition to voting to repeal Obamacare one more time, the House has from now through late summer 2014 to pass an actual alternative to Obamacare.  Such an alternative might be three bills: one to take down barriers and allow health insurance to be sold interstate, with no mandates for minimum coverage.  Let the doctors, patients, and market decide what policies (and there will be a lot of them) should be available, and a policy available for sale in New York ought to be saleable in California, also; only the market should make that determination, not any Know Better Government.  Moreover, these policies should be saleable for risk-based premiums, not community premiums.  One group of Americans should not be forced to subsidize another.

Another bill could be a sort of Truth in Advertising bill.  The House should pass a standard, plain English language policy format that mandates that each item to be covered or excluded is to be described in these terms, so that a potential insuree (and his doctor if desired) can compare policies from different insurers and be able to understand the tradeoffs he’s getting when he selects one policy over another.  All without having to talk to an insurance agent for the explanation (or even to view the policy at all), unless the insuree wants to.  This bill might also give the health insurance industry two years (say) to come up with their own standard language, or the House-passed format will go into effect.

A third bill could involve the health provision industry.  This one might center on the publication of performance statistics by hospitals and doctors: admission lengths vs readmission rates vs regional averages, surgery types vs success rates vs regional averages, treatment types vs re-treatment rates vs regional averages, and the like.

Senate Republicans should take up the matter, too, and either work to force a Senate (roll call) vote on their version or work to force a Senate (roll call) vote on the House version when it comes up.  Of course either version will fail in the Senate, and we can anticipate Obama veto threats, too.  But the Republicans will have the Democrats, in the runup to the 2014 midterms, on the record, ideally by name on the failed votes, as opposing serious, material health care reform.  Those Democrats can be called to account for their demonstrated preference for a train wreck that their constituencies—we Americans—have broadly and volubly disliked since before Obamacare was enacted.  We’ll also know who the RINOs were that contributed to blocking these reform bills; they can be dealt with in the primaries.

Social Engineering with the Tax Code

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Senators Max Baucus (D, MT) and Orrin Hatch (R, UT), Senate Finance Committee Chairman and Ranking Republican, respectively, had a thought, as described in a recent Wall Street Journal op-ed.  In a letter to their fellow Committee members, they suggested,

To make sure that we clear out all the unproductive provisions we plan to operate from an assumption that all special provisions are out unless there is clear evidence that they: (1) help grow the economy, (2) make the tax code fairer, or (3) effectively promote other important policy objectives.

In other words, they want to zero out all deductions, loopholes, subsidies, credits, carve-outs, and so on in the Federal tax code and start over, including only those that are explicitly defended and defended successfully.

Right idea; flawed execution.  Items 2) and 3) are mutually exclusive.  “Important policy objectives” can only come at the expense of this or that group.

Moreover, “policy objectives” through taxing is inherently ineffective and immoral.  If Congress can’t achieve the policy objective through legislation, it’s because the legislators and their bosses, the sovereign people, don’t want that objective, and so that objective is illegitimate.

Further, the circumscription created on this or that group by taxing for that or this objective limits arbitrarily the victimized groups, and it thereby immorally eliminates those groups’ equality of opportunity—which is supposed to be equal to the opportunities of other groups (vis., the opportunities of the tax-favored groups)—and their ability to exercise such opportunities as are left to them according to their own imperatives, not those dictated by government.

We’ll see how far even this idea gets, though, first in the Progressive-controlled Senate Finance Committee, and then in the Progressive-controlled Senate.

On the other hand, what’s happening along these lines in the Republican- (as opposed to Conservative-) controlled House?  Not much, mostly this year-old chit-chat.  Even on the matter of social engineering through the tax code, the Ways and Means letter and attachment merely identify the existence of damage done by social engineering, but they do not offer anything concrete to do about that damage or about the measures themselves.  At least the two Senators had that much.

A Bit More on “Climate”

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Recall that Candidate Barack Obama said in 2008 that if

someone wants to build a coal-powered plant, they can.  It’s just that it will bankrupt them because they are going to be charged a huge sum for all that greenhouse gas that’s being emitted.

In President Obama’s speech last week, he announced the next phase of his assault on our economycontributions to climate dysfunction, and in it he’s going after existing coal-fired power plants.  Indeed, Obama’s attack on coal—on cheap energy for the American economy—and on coal-related jobs is now explicit: his climate advisor, Daniel Schrag (formally, Schrag is a member of the President’s Council of Advisors on Science and Technology), also said last week that

a war on coal is exactly what’s needed.

Some of the broader economic damage to be done through Obama’s new policy phase has been estimated by The Heritage Foundation.

First, some highlights from the Heritage Foundation‘s report:

In March 2012, the EPA proposed a rule that would prohibit new power plants from emitting more than 1,000 pounds of carbon dioxide per megawatt of electricity generated.  Without the addition of carbon capture and sequestration…the regulation would effectively ban the construction of new coal-fired plants.*

The President’s recent announcement also threatens existing plants and would adversely affect the more than 1,100 coal-fired generators at nearly 600 plant locations that generate 40 percent of America’s affordable, reliable energy.**

Last year, the EPA finalized new mercury and air toxics standards that will force utilities to use maximum achievable control technology standards to reduce mercury emissions and other hazardous air pollutants.  By the agency’s own admission, the rule will cost $10 billion by 2015 but have only $6 million in purported benefits from mercury reductions.

[Never mind that i]n the absence of these new regulations, US air quality [already] has improved significantly over the past several decades.  Emission of toxic pollutants [already] has dropped as much as 96% since 1980.

Now, some of the economic losses that will occur by 2030 according to the Heritage Foundation:

  • Employment falls by more than 500,000 jobs;
  • Manufacturing loses over 280,000 jobs;
  • A family of four’s annual income drops more than $1,000 per year, and its total income drops by $16,500 over the period of analysis;
  • Aggregate Gross Domestic Product (GDP) decreases by $1.47 trillion;
  • Electricity prices rise by 20%;
  • Coal-mining jobs drop 43%; and
  • Natural gas prices rise 42%.

In sum, Obama’s war on coal will cut GDP by $1.47 trillion by 2030.  All for no impact at all on our climate, since atmospheric CO2 (the biggest target of this war) is well-established as a trailing indicator confirming warming that’s already occurring and increasing health of the planet.

 

*It’s important to note that carbon capture has never been successfully demonstrated in a production-sized mechanism and that no one—including Obama’s administration—has been able to figure out what to do with the “15–20 super tankers’ worth of liquid carbon dioxide that…carbon capture would create” annually.

**This also ignores the impact on an already marginally stable American electric power grid that cannot handle such a catastrophic drop in power production while demand continues to rise—or would with an actual economic recovery.

 

h/t Power Line

Democrats in the Way, Again

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Interest rates on student loans are set to double on Monday after lawmakers failed to find a bipartisan solution to keep the federally subsidized borrowing costs down.
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[T]he current, 3.4% interest rate on Stafford loans—the most popular funding for college students—set to expire on July 1….
…
The higher rates would add about $3,000 to the total interest on a $23,000 student loan repaid over 10 years.

In fact, the rates will double to nearly 7%.  However, those $3k are mostly partisan hype: they work out to an extra $12.50 per month on the loan payment for graduates with jobs.  Oh, wait….

On the other hand,

In May, House Republicans passed a bill that would index rates on new loans to the rate on 10-year Treasurys (currently about 2.6%), plus 2.5 per centage points, with an 8.5% cap.  But with little Democratic support in the Senate, that bill is dead in the water.

Thus, the Senate Progressives are perfectly willing to burn students and their loans because these self-important Democrats couldn’t get their way.

Then there’s this minor set of details, courtesy of Glenn Harlan Reynolds, law professor at the University of Tennessee, in that same Wall Street Journal op-ed:

According to an extensive 2012 analysis by the Associated Press of college graduates 25 and younger, 50% are either unemployed or in jobs that don’t require a college degree.  Then there are the large numbers who don’t graduate at all.  According to the National Student Clearinghouse Research Center, more than 40% of full-time students at four-year institutions fail to graduate within six years.  The National Center for Education Statistics reports that almost 75% of community-college students fail to graduate within three years.  Those students don’t have degrees, but they often still have debt.

And

Now here’s where the real immorality kicks in.  The skyrocketing cost of a college education is a classic unintended consequence of government intervention.  Colleges have responded to the availability of easy federal money by doing what subsidized industries generally do: Raising prices to capture the subsidy.  Sold as a tool to help students cope with rising college costs, student loans have instead been a major contributor to the problem.

In the end, the way to work the student debt problem is to reduce the need for the borrowing: get school costs down to saner levels.  Reynolds suggested a way:

Remove the incentives for universities to accept government-subsidized student-loan money regardless of a student’s prospects of graduation or gainful employment.

To which I add the following:

  • the schools shouldn’t receive the subsidized loan monies—i.e., the schools would have to be reimbursed after the fact—until the borrowing student has actually graduated and begun working
  • subsidized loan monies—taxpayer funds—should not be available at all except to students in majors that have serious prospects of bettering our nation’s strength and prosperity (stated differently, making better off the taxpayers on the hook for those monies).  STEM majors would qualify; Gender, Women’s, and Sexual Studies majors or majors in General Literary Studies need not apply.

Naturally, Progressives will have a herd of cattle over such criteria; money grows on the trees of the rich, after all.  Too bad.

Obamacare Hub and Privacy

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Courtesy of Senator Max Baucus (D, MT)—President Barack Obama isn’t the only politician appreciating the joys of greater flexibility after a last election—we get the following concerning Obamacare’s ability to pry into the private affairs of American citizens.

Baucus had asked HHS to provide “a complete list of agencies that will interact with the Federal Data Services Hub,” the agency of Obamacare that is responsible for determining eligibility, exemptions, grant sizes, and so on related to the delivery of Obamacare…services.

The Hub will, it turns out, draw from the Social Security Administration, the IRS, the Department of Homeland Security, the Veterans Administration, Office of Personnel Management, the Department of Defense, and the Peace Corps and it will suck data from the states’ Medicaid databases.

That’s a broad reach of information feed to support determining who’s buying insurance and who needs to be finedtaxed or subsidized.

Here’s a subset of the personal, private information being collected by the Federal government on every individual American:

Social Security numbers, income, family size, citizenship and immigration status, incarceration status, and enrollment status in other health plans….

Of course, the Feds aren’t going to actually store those data, or so they claim.  They’ll only “securely transmit” those data.

Sure.  Never mind that the Feds’ regulatory notice filed last winter was for

a new “system of records” that will store names, birth dates, Social Security numbers, taxpayer status, gender, ethnicity, email addresses, telephone numbers on the millions of people expected to apply for coverage at the ObamaCare exchanges, as well as “tax return information from the IRS, income information from the Social Security Administration, and financial information from other third-party sources.”

They will also store data from businesses buying coverage through an exchange, including a “list of qualified employees and their tax ID numbers,” and keep it all on file for 10 years.

All of those data listed above, plus a potful more, will be collected by the Hub.  And retained, apparently under the fiction that 10 years is just temporary storage solely for “secure transmission.”

And all of that temporarily stored information can be bruited about at will without so much as a fare-thee-well to the information’s owners—us private citizens.  The following can have our data without notice:

agency contractors, consultants, or grantees…need[ing] to have access to the records…as well as law enforcement officials….

Of course, it’s the Feds’ definition of “need,” not ours; it’s against the Feds’ evident lack of interest in safeguarding this information of ours that they’re collecting:

  • A [GAO] report found that weaknesses in IRS security systems “continue to jeopardize the confidentiality, integrity, and availability of the financial and sensitive taxpayer information.”
  • A separate Inspector General audit found that the IRS inadvertently disclosed information on thousands of taxpayers between 2009 and 2010.
  • In 2011, the Social Security Administration accidentally released names, birth dates and Social Security numbers of tens of thousands of Americans.

Where’s the NSA when we need it?  Oh, wait….