Free Markets, Free People

Freedom and Liberty

“Green” UK – A Cautionary Tale

A bit of ego, a little dab of moral vanity, a smidge of hubris all driven by an agenda and you have the perfect definition of the political class worldwide.  Of course I understate the smidges, bits and dabs by quite a bit. But that class has a problem.  Other than boring economic stuff they are apparently lacking a great moral cause.   So, it appears, they’ve decided to make one up with predicable results.

Dominic Lawson brings us up to date with the goings on in the UK beginning with helping us understand where the “green” movement has gotten them:

I was irresistibly reminded of this by Ed Miliband, the energy secretary, in his launch of plans to cut carbon emissions by switching to “renewables” for more than 30% of our energy use. This, he claimed, would “rise to the moral challenge of climate change”.

Miliband is of the generation of politicians struggling to find a great moral cause. Earlier in the Labour administration Tony Blair thought he had found it with wars of choice far from home, but that has, to put it mildly, lost its lustre. Now it is the “war against climate change”, given additional moral potency by the notion that the greatest concentration of sufferers from global rising temperatures would be among the world’s poorest.

Given the mostly positive press the fulminations of one Al Gore has received, what pol worth his salt could resist the call to save the world. “Go Green” young man and don’t dally because the earth has a fever!

And so Britain has tried to lead the effort. With high flying rhetoric and an aim to save Africa (really? Yup, so says Lawson), British politicans have bravely decided to throttle back their emissions and, apparently, kill their steel industry. Of course other than see the last vestiges of that industry leave forever, Lawson wonders, in the big scheme of things, if it’s worth it:

The UK is responsible for less than 2% of global carbon emissions – a figure set to fall sharply, regardless of what we do, as a result of the startlingly rapid industrial-isation of countries such as China and India: each year the increase in Chinese CO2 emissions alone is greater than those produced by the entire British economy. On the fashionable assumption that climate change is entirely driven by CO2 emissions, the effect on global temperatures of Britain closing every fossil fuel power station would be much smaller than the statistical margin of error: in effect, zero.

You see, Lawson, like many, has figured out the unfashionable truth – unless the big 3rd world emitters play ball, whatever dinky emitters like the UK do won’t amount to any net change. Whether or not you believe in AGW or not, running your economy on the shoals for no net gain seems something only a politican would do. And you’re right.

But those great moral crusades are beckoning and the political flesh is weak. Who wants to show up and serve their time in the spotlight with nothing but mundane governing to do. Politicians are driven to make a difference:

Gordon Brown claims: “Britain is leading the world in the battle against climate change.” Such remarks are regarded as absurd in the chancelleries of Europe: if you do take as a measure of such commitment the proportion of domestic energy already supplied by renewables, the UK occupies 25th place in the European Union league table, above only Malta and Luxembourg.

Never the less, “leading” certainly has had an effect, at least domestically. With a yawning energy gap promising huge problems in he very near future, the UK is leading by committing itself to 7,000 offshore wind generators.

Two problems with that. One they should have learned from Germany:

Indeed, Paul Golby, who runs the British operations of E.ON, Europe’s biggest wind-power producer, has told the government that a 90% fossil fuel or nuclear back-up will be needed for any of the National Grid’s future wind-power capacity. As Martin Fuchs, his German boss, pointed out: “The wind, sadly, does not blow where large quantities of power are required . . . on September 12 last year wind power contributed 38% of our grid power requirements at all times, but on September 30 the figure went down to 0.2%.”

Yes that’s right – wind is so unreliable that it must be backed up with more conventional methods of power generation up to the 90% mark. And:

The powerful wind-turbine lobby in Germany constantly harps on about the number of jobs “created” by its subsidised investment, quite ignoring the number of jobs destroyed by high-cost energy, or indeed the greater number of jobs that could be created if the same amounts were invested in more profitable activities. This is why the Bremen Energy Institute argues that “wind energy macro-economically has a negative employment impact”.

Peachy. Germany isn’t the only one that has learned “green” means fewer jobs, not more. Spain has also learned that lesson. A study of what has happened in Spain since it took essentially the same path as the UK in 2000 yielded these results:

* For every green job financed by Spanish taxpayers, 2.2 real jobs were lost as an opportunity cost;
* 9 out of 10 green jobs created by Spain over the past 10 years are no longer in existence today;
* Since 2000, Spain has spent €571,138 ($753,778) to create each “green job,” including subsidies of more than €1 million ($1,319,783) per wind industry job;
* Those programs resulted in the destruction of nearly 113,000 jobs elsewhere in the economy and;
* Each “green” megawatt installed destroyed 5.39 jobs in non-energy sectors of the Spanish economy.”

And what about all that wonderful green energy promised by the UK wind machines? Well, unfortunately it’s very expensive:

Miliband claimed last week that the result of his proposals would be an increase in costs to energy users of about 17%. However, the business and enterprise department admitted last year that Britain’s existing “climate policies” – even before Miliband’s latest Big New Idea – would add an extra 55% to energy bills. It’s obvious where this will lead: to the exit from Britain (and, indeed, Europe) of much of what remains of energy-intensive manufacturing industry – the euphemistic jargon term is “carbon leakage”.

Sure enough, that’s precisely what is happening:

Jeremy Nicholson, the director of the Energy Intensive Users Group, which represents such industries as steel and aluminium, is exasperated beyond measure: “A future administration will have to say in public what ministers and their officials already admit in private, that the renewables target is neither practical nor affordable. Outsourcing our emissions is not a solution to a global problem. Politicians need to understand that unilateral action will come at a terrible cost in terms of UK manufacturing jobs, investment and export revenue, for no discernible environmental gain – is that really what they want?”

Apparently so, since that is precisely the road the US and UK, without either China, India or the rest of the 3rd world, is headed.

What about the “exasperated” steel and aluminum industuries in Britain?

Well their demise has already begun:

Thousands of British steelworkers and their families are holding a protest march Saturday in a town in northeast England where the looming closure of a Corus steel plant threatens to throw families into poverty.

[…]

Closure is expected to result in the loss of 2,000 jobs at the plant, and another 1,000 elsewhere.

But others say the status of the plant, known as Teesside Cast Products, as one of the main regional employers means its closure will result in a loss of local high street spending that could balloon into nearly 10,000 job losses.

Aluminum too:

On the day Nicholson said this to me, last Thursday, Anglesey Aluminium, the biggest consumer of electricity in Wales, announced that it would cease production, precisely because it could see no prospect of signing up to a long-term supply of electricity at a rate at which it could make a profit. And on the day of Miliband’s announcement, a group of Labour MPs presented a “Save Our Steel” petition, saying: “We need to make sure we act before the light goes out.”

It may well be that the English steel mills will become unable to compete globally, even at current domestic energy prices; but deliberately to make them uncompetitive is industrial vandalism – and even madness when the consequence of Miliband’s Martin Luther King moment may be the lights going out not just for producers but for all of us in our homes. This is worse than a futile gesture: it is immoral.

Indeed. But the moral vanity and hubris involved in the belief one is “saving the world” apparently trumps any concern for the lives of others and the reality such policy brings in its execution.

The immoral part, as it pertains to the US, is we know this from watching what has happened in Europe and elsewhere. Yet apparently, if the administration has its way, we’re going to see the same immorality visited on us here shortly.

~McQ

Dems to Seniors: Drop Dead

And you can take that title literally, too.  Because that is where we are headed with the health care bill before Congress. As Erick Erickson points out:

I think, given that the member of Congress who drafted H.R. 3200 read and take seriously people like Klien, Yglesias, and Singer, we should be very troubled by Section 1233 of H.R. 3200. The section, titled “Advanced Care Planning Consultation” requires senior citizens to meet at least every 5 years with a doctor or nurse practitioner to discuss dying with dignity.

The section requires that they talk to their doctor, not a lawyer, about living wills, durable healthcare powers of attorney, hospice, etc. Given the progressive intelligentsia already being on the record in favor of euthanizing the elderly, it is no small leap to see where the Democrats are headed with this.

Legally forcing senior citizens to have “death with dignity schedules every few years is just another way to say the government wants to make sure seniors know it is time to commit suicide to save the system money.

If you can’t see this, then you’re just being intentionally obtuse.    Forget all the kind rhetoric about “dignity”.  Let’s call it what it is: Geriatric Euthanasia.  And let’s be very clear about why we want the old people to die:  We’ve sucked all the economic productivity we’re going to get out of them, and it’s more convenient to kill them than it is to assume the financial burden of their care.   You can pretty it up with all the flowery language you want, but at the end of the day, it comes down to, “You cost too much to keep alive. Just die.”

Frankly, it’d be far more honest just to have a “caretaker” just show up at the appropriate age, and double-tap the senior at the nape of the neck.  At least that would have the virtue of honesty, and would spare everyone the hypocritical stench of pretending to care about the “dignity” of the elderly when the real concern is to try to ensure they don’t become a drain on the public purse.

So forget any notion you have about producing wealth your whole life to save up for your golden years.  The new paradigm is to produce all the wealth you can, and when you’re done, you need to die so that those of us who remain can spend it instead.

And why should this come as a surprise?  This is the direction we’ve been going for a long time.  And it is, in fact, the logical end of the idea that health care is a “right”.  Because once the community as a whole has a “right” to the labor, property, or wealth of any individual member, then there are no rights at all.  There are only privileges that are extended at the wish of the community, and that can be withdrawn at will.

There is no liberty under any scheme of communal “rights”.  The highest value of community rights isn’t freedom, it’s democracy.  Whatever the “community” chooses is, by definition legitimate, as long as it’s democratically chosen.  No medical care for old people?  That’s fine, as long as the community decrees it.  The trouble is that democracy is value-neutral.  It is amoral.  if democracy is the highest expression of legitimacy, then it’s perfectly alright for black people to be slaves, as long as the majority thinks it’s OK.  Black people would vote against it, of course, but if they ended up in the minority, well, that’s the way the cookie crumbles.  Sorry, black people.  You lose.  By the way, your name is now “Toby”.

Thanks for participating in the democratic process, Toby.  Now get to work.

We see the same thing in the Honduran situation.  Mel Zelaya was elected president.  Therefore he’s legitimate, so it’s a very, very bad thing to depose him, even if he acts unconstitutionally.  Because we’ve fetishized democracy, the Obama Administration and the OAS, assume that deposing him is a way of illegitimately thwarting the people’s will, rather than preserving a legitimate constitutional order.

That kind of thinking forgets that democracy is not a value.  It is a process that is only legitimate insofar as it is animated by constitutional order that values human liberty.  Without that, it is merely a form of tyranny, different only in process, rather than kind, as compared to the tryanny of a single individual.

For the most part, we’ve abandoned the idea of individual liberty as the primary American value among the political class.  So, we see nothing wrong with counseling senior to “die with dignity”.  It’s better for everyone, really, except, perhaps in the proximate case of the individual senior.

We’re now seeing the fruits of collectivism starting to bloom fully in this country.  The country I was born in is gone.  But I’m glad I got to see it before it died.

Nicaragua: And The Pattern Repeats

I have to wonder what our State Department and President, who seem completely enamored with process over actual democratic institutions, will have to say about this:

Nicaragua’s President Daniel Ortega announced Sunday, on the 30th anniversary of the leftist Sandinista revolution he led, that he would seek a referendum to change the constitution to allow him to seek reelection.

Following in the footsteps of elected regional allies, Ortega told thousands of supporters here that he would seek a referendum to let “the people say if they want to reward or punish” their leaders with reelection.

His close leftist allies who have had rules changed enabling them to remain in power include presidents Hugo Chavez in Venezuela, Evo Morales in Bolivia and Rafael Correa in Ecuador.

In the last month President Manuel Zelaya in neighboring Honduras was ousted in a coup by his own military after seeking similar action.

My guess is they’ll applaud this even while it has essentially established “democratic” dictatorships in Venezuela, Bolivia and Ecuador. And my guess is the “certified election results” are complete for Nicaragua, just as they were for Hodura’s Zelaya, even as I write this. They only need to be produced at the proper time to “validate” the referendum.

Call it the Venezuelan model.

And our puddin’ heads in Washington will again applaud this step toward totalitarianism as a wonderful exercise in democracy we should all support.

Meanwhile those meanies in Honduras who take their Constitution too seriously? Not so much.

~McQ

State Governors Not Happy With Democratic Health Care Plan

At least not the Medicaid portion. The reason, of course, is states are on the hook to pay about 43% of Medicaid costs. Under the pending legislation, and depending on which plan you look at (House or Senate), Medicaid would expand 11% to 20%.

As you might imagine, that would impose a huge new mandate on the states already struggling with huge budget deficits and revenue shortfalls.

State governors, in Biloxi MS for the National Governors Association meeting, expressed bi-partisan disapproval of the plans.

“I think the governors would all agree that what we don’t want from the federal government is unfunded mandates,” said Gov. Jim Douglas of Vermont, a Republican, the group’s incoming chairman. “We can’t have the Congress impose requirements that we are forced to absorb beyond our capacity to do so.”

The House plan would pay for all of the costs of new enrollments and expand Medicaid the least (11%). The Senate version, however, would expand it the most (up to 20%) and would only pay full costs for 5 years. And the Senate’s answer to the states about how to fund the mandate?

Go into debt, of course:

One of the proposals being considered by the Finance Committee would encourage states to issue bonds to cover the costs of expanding Medicaid. Governors in both parties revolted, trumpeting their opposition in a conference call last week with Senator Max Baucus, the Montana Democrat who leads the committee.

The point is that not all costs are being surfaced when the total cost of this bill at the federal level is all that is cited. The House bill, for instance, would cost an estimated $438 billion over 10 years. I want to emphasize the word “estimated” and remind readers that there has never been an estimated cost I’m aware of that has come in on or under the projection.

Of course the Senate version, with expanded coverage, would cost more and shift the cost to states in 5 years. So you’ll not only be paying for this monstrosity at a federal level, but you can count on being tapped at a state level as well.

~McQ

Death Of A Hero: SSG Darrell “Shifty” Powers

You know, the word “hero” gets tossed around a lot these days. That’s not to say there aren’t heroes in our midst, there certainly are, but sometimes it’s just a good idea to sit back for a second and reflect on the word and its real meaning.

If you’re a fan of the HBO series “Band of Brothers”, then you know what real heroes look like. The paratroopers of Easy Company, 2nd Battalion, 506th Parachute Infantry Regiment of the 101st Airborne Division were soldiers we got to know during that series through the depiction of their heroic actions throughout the unit’s fight through Europe.

They became real people on the screen. That’s because we got to know the real people the actors were portraying in a series of interviews with the survivors of the unit which were cut in at intervals throughout the film.

Well, with little notice or fanfare, one of Easy Company’s heroes made his final jump on June 17th of this year. SSG Darrell “Shifty” Powers has joined the 101st immortals, passing away last month as a result of cancer. Unfortunately, but not surprisingly, his death barely got a notice.

SSG Darell "Shifty" Powers, E Co, 2/506th PIR, 101st Abn Div WWII

SSG Darell "Shifty" Powers, E Co, 2/506th PIR, 101st Abn Div WWII

Today, members of the milblog community are holding a virtual memorial for Shifty Powers, a man who helps define the word hero. Here’s a portion of an email that has gone viral which does a much better job than I can in giving you an idea of who Shifty Powers was:

Shifty volunteered for the airborne in WWII and served with Easy Company of the 506th Parachute Infantry Regiment, part of the 101st Airborne Infantry.

If you’ve seen Band of Brothers on HBO or the History Channel, you know Shifty. His character appears in all 10 episodes, and Shifty himself is interviewed in several of them.

I met Shifty in the Philadelphia airport several years ago. I didn’t know who he was at the time. I just saw an elderly gentleman having trouble reading his ticket. I offered to help, assured him that he was at the right gate, and noticed the “Screaming Eagle”, the symbol of the 101st Airborne, on his hat.

Making conversation, I asked him if he’d been in the 101st Airborne or if his son was serving. He said quietly that he had been in the 101st.

I thanked him for his service, then asked him when he served, and how many jumps he made. Quietly and humbly, he said “Well, I guess I signed up in 1941 or so, and was in until sometime in 1945 . . . ” at which point my heart skipped.

At that point, again, very humbly, he said “I made the 5 training jumps at Toccoa, and then jumped into Normandy . . . . do you know where Normandy is?”

At this point my heart stopped. I told him yes, I know exactly where Normandy was, and I know what D-Day was.

At that point he said “I also made a second jump into Holland, into Arnhem.”

I was standing with a genuine war hero . . . . and then I realized that it was June, just after the anniversary of D-Day. I asked Shifty if he was on his way back from France, and he said “Yes. And it’s real sad because these days so few of the guys are left, and those that are, lots of them can’t make the trip.”

My heart was in my throat and I didn’t know what to say. I helped Shifty get onto the plane and then realized he was back in Coach, while I was in First Class. I sent the flight attendant back to get him and said that I wanted to switch seats.

When Shifty came forward, I got up out of the seat and told him I wanted him to have it, that I’d take his in coach. He said “No, son, you enjoy that seat. Just knowing that there are still some who remember what we did and still care is enough to make an old man very happy.” His eyes were filling up as he said it. And mine are brimming up now as I write this.

Today is a day to remember what he did and reflect on that. Of course his understated “I made the 5 training jumps at Toccoa, and then jumped into Normandy” doesn’t even begin to describe what jumping into Normandy entailed:

“I could hear bullets and shrapnel hitting the plane. As I jumped out the door, I could see that the left motor was on fire.” – Darrell Shifty Powers talking about jumping over Normandy, France, on D-Day.

Real heroes really don’t talk about it much, and they usually don’t include themselves when they do.

There are some real heroes that live among us and they deserve more than just a passing notice when they die. Shifty Powers was one of those heroes.

May he rest in peace and in the acclaim for his deeds he so richly deserves.

From this day to the ending of the world,
But we in it shall be remembered-
We few, we happy few, we band of brothers;
For he to-day that sheds his blood with me
Shall be my brother

~McQ

Damned Libertarians! (Updated)

That’s the basic message of a post by Melissa Clouthier blasting those who voted for Bob Barr.

Here, let me quote her:

Don’t blame me!” Bellowed one of my redneck relatives,” I voted for Ross Perot!” Did ya now? And that vote wasn’t a “screw you” vote, that felt inwardly satisfying while it also served Bill Clinton the presidency on a nice, silver platter (the one taking a prominent position on a shelf in his sprawling residence out on Long Island)? Oh no! It was a vote of conscience. It was a morally superior vote. Sniff.

Have conservatives, libertarians, and other factions on the Right learned nothing from history?

So now, people are coming out of the woodwork saying, “Don’t blame me! I voted for Bob Barr!” I ask you, Is that something to be proud of?

You know, when you start something like this, it is usually best to have the facts at hand so you don’t say something silly like:

President Obama is a disaster for America and I hold those who voted for Bob Barr every bit as accountable as if the so-called principled person voted for Barack Obama himself. It was a vote that aided and abetted an enemy of freedom. How can a freedom-loving person be proud of this?

Bob Barr pulled all of 511,324 votes. Statistically that’s 0% of the electorate. Had every Bob Barr voter voted for John McCain, he’d have ended up with 58,854,995 votes instead of 58,343,671 to Obama’s 66,882,230.

Apparently Clouthier believes that libertarians are a wholly owned subsidiary of the GOP and due a righteous lecture for their lack of support.

It may be time for a little reality check for the good doctor.

A) Obviously if every vote Barr got had gone to McCain, it wouldn’t have increased McCain’s final count by even a percentage point. So the attempt to blame your abysmally poor GOP candidate’s abysmally poor showing on Barr voters is technically a non-starter.

B) The reason the GOP sucked so badly in the last election has absolutely nothing to do with Bob Barr and/or libertarians.  It had to do with how poorly your party governed.  Like most libertarians I haven’t voted for a Republican since Reagan. And frankly what happened to the size of government under Reagan is one reason why. Bush compounded the problem (Medicare Part D? “No Child Left Behind”?) and the eternally squishy McCain promised more of the same.

C) The only reason libertarians even somewhat identify with your party is because it sometimes pretends to be concerned about less spending and smaller government. Unfortunately, as I imply above, the GOP mostly just talks the talk and rarely walks the walk.

D) The GOP picked John McCain, not libertarians. John McCain was the worst of all worlds and your party gave him the nod. He was a candidate who had once been considered as a VP pick for John Kerry for heaven sake! He proved he was an enemy of the 1st Amendment with his campaign finance bill. His definition of “compromise” was to give the Democrats what they want.

E) Libertarians don’t owe the GOP a damned thing. You want libertarian support?  Then quit whining and lecturing and earn it! Put up candidates that actually do what you claim to want to do in terms of spending and the size of government. Yeah, that’s right – cut spending drastically and reduce the size of government radically and then you can start asking why libertarians aren’t supporting the GOP. Then you’ll have grounds to do so. But until then – we owe you nothing.

Barack Obama sits in the White House not because of Bob Barr or the libertarian vote. He sits there because the GOP has completely and totally failed to live up to its claimed philosophy and its word for decades. John McCain’s nomination told libertarians all they needed to know about the lack of seriousness within the GOP to remedy that situation.

If the GOP wants libertarian votes, then it had better mend its ways. We don’t do “tents” and we don’t do “plantations” and we don’t belong to the GOP. You want us, you’d better do what it takes to get us – and you’re not even close right now.

UPDATE:  Melissa Clouthier graciously acknowledges my criticism and for the most part understands the reason for it. She does, however, ask a couple of questions that deserve an answer and make a couple off remarks that deserve comment.

A Barr vote did nothing except register discontent.

Really? So those who voted for Barr couldn’t conceivably have been voting “for” something, only “registering discontent”?

With that bit of disrespect as a preface, here are the questions:

What about the next election? You know, when there are more impure Republicans? Do the libertarians plan to vote for an independent or vote for a Democrat?

Well now that it is hopefully clear that libertarians will actually vote for something and not just “register discontent”, the answer should be obvious. So here’s a question for the GOP – who do you plan to run that will cause us to vote for you? The ball is in your court, not ours.

All I’m saying is that McCain WOULD be better than Obama and I don’t want to see the Right fracture into delusion that nets us socialists in charge. That is worse. Much worse. It is worse right now.

In the case of McCain, “would be better” is really a non-starter of an argument for him among libertarians. In defeat, of course, he’s suddenly sounding Republican again, but McCain is a Snowe/Collins “Republican” from way back. Frankly I think you’ll find most libertarians believe that Obama and McCain are equally awful, just in different areas.

But the Libertarians don’t help anything by flopping around at the edges and indulging in third party fantasies. Libertarians needs to put their formidable energy into the Republican party at the bottom and take the party back to constitutional greatness.

Fixing the GOP is your job, not ours – you need to quit trying to outsource it. Libertarians have no desire to be a part of the GOP per se because there is enough not to like to keep us away. But libertarians will support a GOP that commits itself to the principles of less spending, smaller government and less government intrusion. But only when the GOP actually does something about them – find and run a candidate who actually believes in those principles and elect Republicans to Congress who will help he or she act on those principles.

Until then libertarians aren’t going to support the GOP. You can call it “flopping around the edges” or whatever you wish, but that won’t change the fact that until the GOP actually does the hard work of recreating itself in alignment with its stated principles it can’t expect support from libertarians just because the GOP thinks the Democrat’s candidate is worse than theirs.

~McQ

CBO Says Federal Budget On Unsustainable Path (Is Anyone Surprised?)

I‘m not sure how often everyone has to be told, but here’s the warning again, just as Democrats attempt to pile another trillion plus dollars in federal health care spending (and debt). From the CBO Director’s blog:

Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy.

I’m not sure how it can be said any more clearly and more succinctly.

The choices, as laid out in the paragraph above are fairly simple – cut federal spending dramatically or raise taxes (revenues) dramatically to meet the spending or your going to do “substantial harm to the economy”. Of course we also know that raising taxes dramatically would have the same effect. That leaves one option and, as is clear with the health care reform proposals, that’s nowhere near the table, is it?

Yet that’s the formula:

Keeping deficits and debt from reaching these levels would require increasing revenues significantly as a share of GDP, decreasing projected spending sharply, or some combination of the two.

CBO offers the following graph to illustrate the point of letting the status quo remain in place. Note that the second line coming off the actual/projected line – that’s the “extended baseline scenario” where absolutely nothing is changed and the budget, as projected, is executed. Disregard the first line for the moment.

slide2

What is important is to understand this:

The current recession and policy responses have little effect on long-term projections of noninterest spending and revenues. But CBO estimates that in fiscal years 2009 and 2010, the federal government will record its largest budget deficits as a share of GDP since shortly after World War II. As a result of those deficits, federal debt held by the public will soar from 41 percent of GDP at the end of fiscal year 2008 to 60 percent at the end of fiscal year 2010. This higher debt results in permanently higher spending to pay interest on that debt. Federal interest payments already amount to more than 1 percent of GDP; unless current law changes, that share would rise to 2.5 percent by 2020.

Now you’ve heard that, in various forms for years. But what does that mean to you personally – how does one put that in terms that mean anything to a taxpayer?

Well Jim Glass at scrivner.net has done that for us:

The national debt incurs interest that is paid with taxes. The interest rate on US debt is projected be about 6% annually in the long run, according to the Social Security Administration’s actuaries and other such governmental budget projectors. Six percent of one trillion dollars is $60 billion.

There are 80 million payers of income tax in the US. (If that seems low for a population of 300 million remember that 47% of all “tax units”, 70 million potential taxpayers, pay no income tax or receive refundable tax credits from the government.)

Now $60 billion divided by 80 million taxpayers equals $750 per taxpayer — so each trillion dollars of the national debt costs the average taxpayer $750 per year, every year that the debt is carried, forever.

So for every trillion in debt the federal government puts us, we owe $750 per tax payer in interest alone.

Jim extends his example to what the chart above depicts:

As of the end of last year the government’s outstanding explicit and implicit debt was $64 trillion. Add another year’s interest on that, plus this year’s $1.8 trillion deficit, and we will be well over $66 trillion at the end of this year. Which creates an explicit and implict annual interest liability to just carry the debt of more than $49,000 per taxpayer.

Yet we have Joe Biden claiming we have to spend money to avoid bankruptcy – and there are people out there who believe him.  As Jim points out:

As of today most of that is implicit (for unfunded Medicare liabilities, etc.) but every year from now on (as more seniors retire and start collecting Medicare, etc) more of the debt will shift from being implicit to explicit, requiring cash tax collections to pay for it.

And the same entity which has put the country in this shape running a health care system, now wants the rest of it with the stated goal of cutting costs.

If you’re gullible enough, given the facts above, to fall for that, I have to question your critical thinking abilities. In fact, you might want to consider the chart above again and pay attention to the top line coming off the actual/projected line – that’s likely what our debt will look like if you hand over health care to the federal government.

It is very close to fish or cut bait time for the people of the US – we have got to realize, very quickly, that in fact,  we are on the verge of bankruptcy and what that buffoon Biden says is just abject, unthinking nonsense.

Either cut government spending – drastically – or go under. Those are your choices.

~McQ

Ed Morrissey Hits A Home Run

If I could see my old buddy Ed Morrissey today I’d give him a hug. A man-hug of course, but still, what he wrote today deserves that.

Ed managed, in a well-written and timely bit of sarcasm, to lay bare the rotten claim that health care is a “right”. And he does it brilliantly by using everyone’s favorite foil – lawyers – and illustrating absurdity with absurdity.

Heh … it’s OK Michael, you’ll enjoy it too.

Go. Read.

~McQ

What’s Our Future? Bigger Government And Higher Taxes

At least that’s what Robert Samuelson sees for us. I can’t really dispute his numbers either:

For the past half-century, federal spending has averaged about 20 percent of GDP, federal taxes about 18 percent of GDP and the budget deficit 2 percent of GDP. The CBO’s projection for 2020 — which assumes the economy has returned to “full employment” — puts spending at 26 percent of GDP, taxes at a bit less than 19 percent of GDP and a deficit above 7 percent of GDP. Future spending and deficit figures continue to grow.

What this means is that balancing the budget in 2020 would require a tax increase of almost 50 percent from the last half-century’s average. Remember, that average was 18 percent of GDP. To get from there to 26 percent of GDP (spending in 2020) would require an additional 8 percentage points. In today’s dollars, that would be about $1.1 trillion, a 44 percent annual tax increase. Even these figures may be optimistic, because CBO’s projections for defense and “nondefense discretionary” spending may be unrealistically low. This last category covers much of what government does: environmental regulation, aid to education, highway construction, law enforcement, homeland security.

Now, this should come as no surprise, really, to anyone with a passing knowledge of accounting. When you increase spending without increasing revenue, you end up with a deficit. And what we’ve seen the government doing for decades is exactly that.  Now it’s in the midst of piling up massive deficits and planning huge increases in government.

And it’s not all the politicians fault. After all the average American keeps returning the same fiscally irresponsible people to the same place where they can continue doing what they’ve been doing for decades – spending us into bankruptcy.

Because, as Samuelson notes, Americans like the benefits even if they don’t like the taxes. So the formula has been a little different for each party but the result has been precisely the same:

Republicans want to cut taxes without cutting spending. Democrats want to increase spending without increasing taxes, except on the rich. The differences between the parties are shades of gray. Hardly anyone asks the hard questions of who doesn’t need benefits, which programs are expendable and what taxes might cover remaining deficits.

In fact, much harder questions are routinely ignored, such as “why is government getting into _________ at all?” To me that is the key question that is never asked. Name your program and tell me when anyone asks why government is involving themselves in such things?

It all comes back to the fundamental question which, over the centuries, has seen the answer change radically – “What is the basic function of legitimate government?”

Few are going to be able to argue successfully that the answer in 1781 was the same as it is today, are they? And you don’t really have to be an economist to understand what this direction we seem to be intent upon taking means for our future.  It should also be clear by now that those who’ve have gotten us into this mess have little incentive to change their ways and certainly no stomach for the sort of work it would entail:

There is little appetite for any of this, and so we face the consequences of much bigger government. Certainly higher taxes for future Americans. Probably a less robust economy. The CBO notes that elevated deficits would penalize saving, investment and income, while unprecedented tax burdens could “slow the growth of the economy, making the [government’s] spending burden harder to bear.” To such warnings, Americans’ collective response is: Go away.

Enjoy.

You can go back to sleep now.

~McQ

The OAS’s Double Standard

Surprisingly, one member of the Washington Post – Jackson Diehl – has noticed the double standard the OAS has applied when it comes to Honduras vs. Venezuela.

Venezuelan Antonio Ledezma is no gadfly or dissident; as the mayor of Caracas, he received almost as many votes in last November’s election (700,000) as Manuel Zelaya (915,000) did when he won the presidency of Honduras in 2005. Yet while the Organization of American States has been united in demanding Zelaya’s return to his post, and in suspending Honduras for violating the Inter-American Democratic Charter, it has studiously ignored the case of Ledezma — who, since his election, has been illegally driven from his office by a mob, stripped of most of his powers and budget, and subjected to criminal investigation by the regime of Hugo Chávez.

The reaction of the OAS? “None of our business”.

While championing Zelaya — whose attempt to illegally rewrite the constitution united Honduras’s Congress and Supreme Court against him — Insulza refused to interest himself in the case of Ledezma and other elected Venezuelan mayors and state governors who have been subjected to power-stripping and criminal prosecution by Chávez. The OAS “cannot be involved in issues of internal order of member states,” said a statement Insulza issued after a June meeting in Washington with Ledezma — a declaration he quickly contradicted once the pro-Chávez Zelaya was deposed.

The “Insulza” Diehl is referring too is OAS Secretary General José Miguel Insulza who has been absolutely uninterested in what has happened to the democratically elected mayor of Caracus or, for that matter, state governors and other mayors who’ve essentially enjoyed the same fate as Ledezma in Venezuela.

The reason? Simple – Insulza is counting on, in fact banking on, the support of Hugo Chavez for a second term as OAS GS. Insulza, who Diehl characterizes as a “Chilean socialist” knows he’s dead in the water without it. So he’s not at all inclined to rock the boat when it comes to Chavez’s illegal and unconstitutional moves in Venezuela.

Ledezma has courageously been pushing Insulza to acknowledge the problems in Venezuela:

Ledezma’s hunger strike eventually shamed Insulza into making a phone call in which he promised to meet with the Venezuelan mayors and governors in Washington, and to investigate their charges that Chávez had violated the democracy charter. But Insulza later repeated that “it is very difficult to determine how a country should organize itself internally.”

This is the face of the “new” OAS, which recently admitted the totalitarian dictatorship of Cuba into fold. It is now an organization which is driven by a socialist agenda that uses the veneer of ‘democracy’ as a way of legitimizing advancing its agenda throughout Latin America and as a weapon to thwart real democracy should it attempt to stop that agenda from successfully subverting a country.

But it obviously has no desire to really support democracy or investigate illegal and unconstitutional moves by despots in good ideological standing with the OAS leadership. That is reserved for those countries which haven’t yet converted to the socialist “Bolivar revolution” championed by Hugo Chavez – the defacto leader of the OAS. And, as Diehl points out, the OAS has been quite happy with the new administrations policies:

Such willful disregard of political repression was the prevailing policy among OAS members before the Honduran coup — including the Obama administration. Though Chávez launched his latest and most virulent campaign against elected opposition leaders and independent media shortly after Obama’s inauguration, the administration for months refused to publicly respond; instead, it agreed on a new exchange on ambassadors with Venezuela and repeatedly announced its hope to “work with” the caudillo.

My goodness, it sounds like Iran, doesn’t it?

Diehl holds out hope that the administration is figuring it out citing a recent Hillary Clinton interview with Globavision as proof. One interview, however, doesn’t prove that the administration has figured out it is being played like a fiddle or that it will take another look at how it has reacted to Honduras or the agenda of the OAS.

Diehl cites testimony before Congress the day after the interview and wonders what it means:

In testimony to Congress the next day, the State Department’s incoming assistant secretary for the Western Hemisphere, Arturo Valenzuela, said that following the Honduras crisis, “it should be clear that the collective response of the hemisphere in support of democracy should not be limited to taking action simply when elected leaders are removed from office by force.” Does that mean the United States now will also push Insulza and the OAS to judge what is happening in Venezuela — and in Nicaragua, Ecuador and other states where freedom of the press and free elections have been under sustained attack? The administration’s high-profile effort to defend a hostile Honduran president has provided an opportunity to take the offensive against the hemisphere’s most dangerous anti-democratic actors.

Given what I’ve seen so far from this administration and its foreign policy, I’d have to guess the answer is a flat “no”.

~McQ