April 25, 2015

A Thought on Economic Growth

"How bad is the Obama recovery? Compared with the average postwar recovery, the economy in the past six years has created 12.1 million fewer jobs and $6,175 less income on average for every man, woman and child in the country. Had this recovery been as strong as previous postwar recoveries, some 1.6 million more Americans would have been lifted out of poverty and middle-income families would have a stunning $11,629 more annual income. At the present rate of growth in per capita GDP, it will take another 31 years for this recovery to match the per capita income growth already achieved at this point in previous postwar recoveries.

< . . . >

"Despite the largest fiscal stimulus program in history and the most expansive monetary policy in more than 150 years, the U.S. economy is underperforming today because we have bad economic policies. America succeeded in the Reagan and post-Reagan era because of good economic policies. Economic policies have consequences.

"With better economic policies America was like the fabled farmer with the goose that laid golden eggs. He kept the pond clean and full, he erected a nice coop, threw out corn for the goose and every day the goose laid a golden egg. Mr. Obama has drained the pond, burned down the coop and let the dogs loose to chase the goose around the barnyard. Now that the goose has stopped laying golden eggs, the administration’s apologists—arguing that we are now in “secular stagnation”—add insult to injury by suggesting that something is wrong with the goose."

~ Phil Gramm, former U.S. senator from Texas (R) and currently a visiting scholar at the American Enterprise Institute

Source: His April 21, 2015 column, posted at the Wall Street Journal (behind WS's paywall)

April 24, 2015

A Thought About Freedom and Free People

"The irony is that free people usually create far more wealth than the coerced, which makes the lower echelons better off, a fact that reminds “equality” is usually about empowering progressive elites rather than materially helping the poor. Moreover, in a free society, there are all sorts of forces — religion, constantly improving and ever cheaper technology, family pressures, honor, shame, philanthropy — that redistribute wealth either naturally or through the consent of the giver, and far more effectively than creating a huge government equalocracy that seeks power to bully others and exempt itself.

~ Victor Davis Hanson

Source: from his January 14, 2014 column posted at National Review Online.

April 23, 2015

This is Income Inequality? Family Incomes Continue Falling.

In his column today at CNS News, Dan Mitchell writes that he doesn't "understand the left’s myopic fixation on income inequality. If they genuinely care about the less fortunate, they should be focused on policies that produce higher incomes . . . instead, they agitate for class warfare and redistribution, which leads me to believe that many of them hate the rich more than they love the poor."

Meanwhile, at Investor's Business Daily this evening, John Merline points out that not only did family income fall in March, but is "now 5% below pre-recession level." According to Merline:

". . . Real median family income fell in March, to $54,203, back to where it was in September 2009.

"Sentier Research — which uses Census data to compile monthly income statistics — found that family incomes plummeted more after the recession than during the recession itself, bottoming out in mid-2011.

"After that, family incomes started to make a painfully slow climb. But even now, nearly six years after the recession ended, they are still 5% below where they stood at the previous peak in early 2008, just as the recession was starting. At the current pace, it will take several more years for family incomes to reach that peak again.

"Another way to look at it. Under President George W. Bush, this income measure averaged $56,081 — despite his presiding over two recessions. That's 6% higher than the average under Obama and 3.5% above the latest March figure.

"If this constitutes a "breakthrough year" for this administration, that isn't saying much for how it measures success."

In concluding his column, Mitchell says "the goal should be to make the pie bigger," adding that his "main point (is) that the focus should be growth rather than inequality."

If members of Congress are not talking about economic growth, what are they talking about? We urge Growls readers to contact their members of Congress to ask what they are doing in support of economic growth. Contact information is available at Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376.

Ask for a written response. And, tell them ACTA sent you.

April 22, 2015

Arlington County Budget Includes 'Web' of State Money

When the Arlington County Board voted to adopt the $1.499 billion FY 2016 budget last night, total revenues included $72.3 million of state revenues. (agenda item 38.A. on the County Board's 4/21/15 agenda).

Although the $72.3 million in state revenues represents less than 5% of the FY 2016 Arlington County budget, a story in yesterday's Newport News Daily Press (be aware, there is a paywall), Travis Fain reminds us, "State money flows to localities through a complicated collection of funding streams." The story, by Travis Fain, certainly explains why state lawmakers are forever wrangling over the state budget.

Here's the beginning of Fain's report:

"Highway maintenance money comes from the state. So does pay for constitutional officers, such as commonwealth's attorneys and treasurers.

"The state pays part of the tab for E-911 services, which also get broken down into different streams. The state pays per diems for inmates in jails, though that doesn't always cover actual costs. It also picks up a percentage of new jail construction.

"It pays sheriff's deputies, and in this year's budget boosted starting salaries high enough that families of the lowest-paid deputies won't qualify for food-stamps anymore.

"There's 599 money for city police forces, named for the legislation that created this funding stream in 1979, as part of a package deal meant to slow down annexations.

"There's library aid, airport subsidies and transit money to buy new buses. Foster care and adoptive services funding comes through from the state, as does workforce training money.

"Lisa J. Cipriano, budget director for Newport News, figures that out of 260 or so revenue line items in her city's budget, probably 60 come from the state. And that doesn't include school funding.

"The same thing is happening in a different way to schools," Cipriano said."

Fain also writes, "Aside from the regular streams of funding, there are all sorts of small-time particulars to the state-and-local financial marriage. Hampton, for example, gets about $984,000 a year for Fort Monroe, the former Army post the state now owns and is redeveloping." The remainder of his interesting report is here.

The tangled web of state revenues suggest the need to reform the state budget process. But given the importance of state revenues to many of Virginia's town, cities, and counties, according to the Comparative Report of Virginia's local governments, prepared by the Virginia Auditor of Public Accounts, some of those local jurisdictions may be reluctant to reform the state budget process.

April 21, 2015

A Though About Tax Systems

"Tax systems can have multiple goals. For example, in addition to the common goal of raising revenue for the government, goals can also include redistributing income, stabilizing the economy, and achieving various other social and economic objectives through the use of preferences. Generally speaking, the greater the number of goals, the more complex is the tax system."

~ General Accounting Office

Source: page 68, "As Certain as Death: Quotations About Taxes," 2010, compiled by Jeffrey L. Yablon, TaxAnalysts.com.

April 20, 2015

VA Secretary is April's Porker of the Month

Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.

Citizens Against Government Waste (CAGW) named Veterans Affairs (VA) Secretary Robert McDonald its April Porker of the Month for his further bungling of a massively mismanaged agency, according to this press release from CAGW. Following is CAGW's justification for awarding this month's Porker of the Month:

"It is not easy to turn around a department in as much disarray as the VA.  However, that effort should start by adopting commonsense business practices that are used in every company.  Secretary McDonald appears to have run Proctor & Gamble (P&G) well enough that consumers can still brush their teeth with Crest rather than just Colgate and wash their dishes with Joy instead of just Palmolive.  But the secretary has so far done a poor job of managing the VA within the very limited confines of competency for a government agency, let alone a private-sector company.

"Secretary McDonald should be front and center with a response to every report of mismanagement at the VA.  He should present Congress, taxpayers, and most of all veterans, with a clear, concise, and comprehensive plan to cut the waste, fraud, and abuse and improve the efficiency and effectiveness of the VA.  Instead, he has not exactly elicited the kind of empathy on Capitol Hill that would help him acquire the necessary tools to fix the agency’s problems.

"During a February 11, 2015 House Veterans Affairs Committee hearing on the VA’s fiscal year 2016 budget request, Rep. Mike Coffman (R-Colo.) charged Sec. McDonald with “glossing over the extraordinary problems confronted by your department.”  The secretary lashed back indignantly bragging, “I ran a company, sir, what have you done?”  He shifted blame from the VA to Congress by telling Rep. Coffman, “You’ve been here longer than I have… If there’s a problem in Denver, you own it more than I do.”  One would imagine that a response such as that to the P&G board when Mr. McDonald was CEO could have led to a vote on whether he should be fired for insubordination.

"The “Denver” reference was to the medical complex in suburban Aurora, which has been a black eye for the VA for the past decade.  The cost was originally slated to be $328 million in 2005. It ballooned to $621 million by 2006, and was estimated in March 2015 to cost $1.73 billion. The project was dubbed the “biggest construction failure” in the history of the VA.  Despite his apparent abdication of responsibility for the project, it was on Sec. McDonald’s watch that the VA begged Congress to lift the $880 million spending cap imposed on the project.  One rationale for the need to throw more good money after bad was to avoid another construction shutdown (the first of which happened on his watch in December).  Indeed, Sec. McDonald forced one top official to take the fall for the VA’s continued financial negligence.

"Sec. McDonald should also not escape blame for the failure to fix problems at the infamous Phoenix VA hospital, where the denial of benefits to veterans due to a combination of negligence and a flawed claims system has continued unabated.  An October 2014 investigation found that a VA facility in Shreveport, Louisiana lacked “toothbrushes, toothpaste, pajamas, sheets and blankets” for veterans as the facility bought solar panels, new televisions, and new furniture.  There so much mismanagement that the VA Committee could hold a hearing every week; indeed, there is another one on April 22, “Philadelphia and Oakland: Systemic Failures and Mismanagement.”  The toxic culture at the VA has even fostered a chilling effect on employees who blow the whistle on this waste, fraud, and abuse.

"CAGW President Tom Schatz said, “After decades of mismanagement, abuse, and waste, Sec. McDonald should at least show a little contrition.  In his short time as secretary, he has failed to demonstrate sufficient willingness to reform the bureaucracy; instead, he has been arrogant.  It is time for the secretary to take charge and give veterans confidence that he will provide them with the services they need, without delay and without excuses.”

Kudos to Citizens Against Government Waste (CAGW) for their continuing efforts to fight waste, fraud, and abuse in the federal government.

April 19, 2015

A Thought About Freedom and the Statue of Liberty

"In 1982, when he was in his 85th year, (Frank) Capra was awarded the American Film Institute’s Life Achievement Award. In his acceptance speech, he touched on the things that had been most important in his life. He spoke of celebrating his sixth birthday in steerage on a 13-day voyage across the Atlantic. He recalled the lack of privacy and ventilation, and the terrible smell. But he also remembered the ship’s arrival in New York Harbor, when his father brought him on deck and showed him the Statue of Liberty: “Cicco look!” his illiterate peasant father had said. “Look at that! That’s the greatest light since the star of Bethlehem! That’s the light of freedom! Remember that. Freedom.” Capra remembered. In his speech to the Hollywood elite so many years later, he revealed his formula for moviemaking. He said: “The art of Frank Capra is very, very simple. It’s the love of people. Add two simple ideals to this love of people—the freedom of each individual and the equal importance of each individual—and you have the principle upon which I based all my films.”

~ John Marini, Professor of Political Science, University of Nevada

Source: From a speech at Hillsdale College, March 3, 2015, during a conference on the films of Frank Capra, posted at Imprimis, a publication of Hillsdale College.

April 2015
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Items in Growls are written by individual ACTA members and do not necessarily represent the views of the Arlington County Taxpayers Association, Inc. Please send comments about Growls to The Growl Meister