September 24, 2016

A Thought about Freedom

“If a nation values anything more than freedom, it will lose its freedom; and the irony of it is that, if it is comfort or money it values more, it will lose that too.”

~ William Somerset Maugham, 1941

Source; Walter E. Williams' collection of quotations.

September 23, 2016

A Thought about the Economy

"The Federal Reserve's holding pattern on interest rates should signal one thing to investors: start brushing up on astrophysics if you want to understand why the world's economy might be approaching a cosmic conclusion.

"Like a massive star exploding into a supernova, debt is rising at a blistering pace. There is currently more than $230 trillion in global debt—that's three times the amount of debt the world held during the credit crisis.

"Central bank intervention has fueled this explosion in debt, including historic levels of quantitative easing, zero interest rate policies and the adoption of negative rates. In the U.S. alone, there's more than $63 trillion in combined public and private debt. In stark contrast, there are only $3.8 trillion total dollars in circulation, and each of these dollars has been lent and borrowed more than 16 times. The amount of leverage continues to climb.

"At the end of every supernova comes a black hole. Black holes have such a strong gravitational effect that nothing can escape their pull. And fundamental laws of physics are distorted at the center of a black hole, also known as the gravitational singularity. We're seeing a similar phenomenon in the investment world: the crushing weight of all this global debt is distorting some fundamental economic principles.

< . . . . >

"What happens at the center of this economic black hole is anybody's guess, but there are some signs to look out for. For example, the Federal Reserve has historically lowered interest rates between 400 and 500 bps during a recession. If they do this in response to the next economic slowdown, that would plunge us deep into negative territory and further contort the natural rules that govern the market. One way to protect a portfolio when you don't know what rule will be distorted next is to maximize the diversification in your portfolio. Because when even your normal safe haven isn't safe, all you can do is diversify your risk."

~ Stephen Scott, managing director at Longboard Asset Management

Source: his 9/23/16 commentary, "The Economy is Edging Closer to a 'Black Hole," posted at CNBC.com.

September 22, 2016

Just 25 Regulations Cost Americans Almost $350 Billion

For the record, we've growled repeatedly about the drag that regulations have on economic development. For example, here on May 2, 2016, here on  May 10, 2016, and here on May 24, 2016.

Consequently, a story posted by the Washington Free Beacon's Elizabeth Harrington this morning caught our attention. She started her story this way:

"Regulations issued under the Obama administration could cost taxpayers roughly $350 billion, according to a new report released by Sen. John McCain (R., Ariz.).

"McCain highlighted 25 major final and pending regulatory actions, including the president’s health care law and numerous new rules from the Environmental Protection Agency, and noted how they affect the state he represents.

“Over the last eight years under the Obama administration, and especially since the president’s 2014 State of the Union address when he committed to using his ‘pen and phone’ to circumvent Congress, the American people have been hit with a barrage of federal regulations that are saddling Arizona’s economy, hurting small businesses, strangling middle class families, and robbing taxpayers—to the tune of $348.7 billion,” McCain said."

She also writes:

"The report is the latest in McCain’s series on wasteful government spending. The new report focuses exclusively on regulation, including Obamacare, which has left 14 of 15 Arizona counties with only one health care provider.

"McCain listed 107 regulations created by Obamacare that have incurred $48.5 billion in costs.

"The report features numerous regulations from the EPA, including the Waters of the United States rule that would place more than 60 percent of all surface water in the country under the control of the federal government. The rule, which went into effect last year, will cost $462.9 Million.

"The agency’s Clean Power Plan to regulate power plants, which the report says could lead to double-digit increases to utility bills, will cost $8.4 billion. The EPA’s ozone standard could cost up to $25 billion.

"The Dodd-Frank financial reform legislation resulted in over 22,000 pages of new regulations. Its 127 new regulations are costing taxpayers $36.2 billion."

The 78-page report, "Arizona Regulatory Wrap-up" is available here. Other reports in Senator McCain's "America's Most Wasted" series can be found here.

Tired of the ever-growing regulatory state? Growls readers are encouraged to write their members of Congress. Tell them you are not just overtaxed, but also over-regulated, Contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can 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.

September 21, 2016

A Thought about Freedom, Liberty and Limited Government

"I hope we once again have reminded people that man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics: as government expands, liberty contracts.”

~ Ronald Reagan

Source: Jeffrey Dorfman's 7/4/14 column with 20 quotes on freedom and liberty, posted at Forbes.com.

September 20, 2016

A Blue State, an Income Tax, and Fiscal Discipline

At the Daily Signal last Friday, Fred Lucas described about what happened after Connecticut "introduced an income tax to balance its budget."

According to Lucas:

"In 1991, Connecticut Gov. Lowell Weicker decried the state’s “orgies of spending,” and said his income tax proposal—which would include fiscal discipline—would balance the books.

"Connecticut recently marked the 25th anniversary of the income tax, which has resulted in little to no spending restraint. State spending grew 71 percent faster than inflation from 1991 to 2014 and most of that went toward debt services payments and state employee benefits—which combined grew 174 percent over the rate of inflation, according to a report by the Yankee Institute for Public Policy, a Connecticut think tank. The tax has raised $126 billion in revenue for the state.

"Weicker, a one time Republican senator who won the 1990s governor’s race as an independent, was praised by the left and won the Profiles in Courage Award in 1992 from the John F. Kennedy Presidential Library and Museum.

"However, even Weicker publicly said the state didn’t remain in strong shape, but he blamed the state Legislature and his successors, former Gov. John G. Rowland and current Gov. Dan Malloy, for lack of fiscal discipline.

“After I became governor and we enacted the income tax, the state was in the black,” Weicker told WTNH of New Haven last month. “All of those who cursed me, including … the representatives, John Rowland, everybody went ahead and spent all the money … When Dan Malloy became governor, they kept on spending and then they were right back in the red, which is where we were back in 1990.”

He also points out:

"Connecticut’s income tax rate isn’t as high as some nearby states, such as Maine, New Jersey, New York, and Vermont, which have income tax rates of between 7 percent and 8.5 percent.

"Some of the higher taxes in nearby states is all Connecticut has going for it, said Curtis Dubay, research fellow for taxes and economic policy with The Heritage Foundation.

"The income tax has led to a big expansion [of] state government, it wasn’t used to pay for existing spending,” Dubay told The Daily Signal. “The bottom line is that it was the wrong decision for the state that is bleeding talent and companies. It’s leading Connecticut into a Detroit-style death spiral.”

"The Hartford Courant said, “Overall, Connecticut had the second-highest income tax per capita, at $2,161 from every man, woman and child, just $25 less per capita than New York.” The state’s largest newspaper editorialized, “the state is utterly dependent on the tax … In 1991-92, the state budget was $7.6 billion. This year, it’s $19.76 billion.”

Here are the six key points in the executive summary of the Yankee Institute -- Connecticut's free-market think tank -- report, "Where has all the Money Gone? The 25th Anniversary of Connecticut's Income Tax," which is the basis for Lucas' reporting:

  • Since 1991, the state has taken in $126 billion through the income tax.
  • The top income tax rate has risen steadily since 1991 – from 4.5 percent to 6.99 percent today.
  • State government spending grew 71 percent faster than inflation between 1991 and 2014.
  • In the first three years after the passage of the income tax, the fastest growing area of spending was welfare, which saw a 30 percent increase over those three years. During those same years, the number of people living in poverty in Connecticut grew from 6.8 percent to 10.8 percent, which is where it stands today.
  • From 1991 to today, spending on debt service payments and public employee benefits grew faster than any other category of spending. This category, called “non-functional,” grew 174 percent over the rate of inflation. The next fastest growing category, corrections, grew by 103 percent.
  • The constitutional spending cap, approved by 80 percent of voters in 1992, and passed in conjunction with the income tax, was never fully implemented by state lawmakers; as a result, according to an opinion issued last year by the state’s attorney general, it is not currently in force.

Information worth remembering the next time politicians make promises while raising taxes.

September 19, 2016

American Plutocracy, Courtesy of the U.S. State Department

"A plutocracy is a political form in which the real controlling force is wealth."

 ~ William Graham Sumners, Essay, 1913, at Libertarianism.org

The Daily Caller's Eathan Barton reported last Thursday that John Kerry's State Departmentn funneled millions to his daughter's nonprofit" organization. He writes:

"More than $9 million of Department of State money has been funneled through the Peace Corps to a nonprofit foundation started and run by Secretary of State John Kerry’s daughter, documents obtained by The Daily Caller News Foundation show.

"The Department of State funded a Peace Corps program created by Dr. Vanessa Kerry and officials from both agencies, records show. The Peace Corps then awarded the money without competition to a nonprofit Kerry created for the program.

"Initially, the Peace Corps awarded Kerry’s group — now called Seed Global Health — with a three-year contract worth $2 million of State Department money on Sept. 10, 2012, documents show. Her father was then the chairman of the Senate Committee on Foreign Relations, which oversees both the Department of State and the Peace Corps.

"Seed secured a four-year extension in September 2015, again without competition. This time, the Peace Corps gave the nonprofit $6.4 million provided by the Department of State while John Kerry was secretary of state.

"Seed also received almost $1 million from a modification to the first award, as well as from Department of State funds the group secured outside the Peace Corps.

"The Peace Corps program — called the Global Health Service Partnership (GHSP) — sends volunteer physicians and nurses to medical and nursing schools in Malawi, Tanzania, Uganda and Liberia, according to Seed’s website. More than 40 clinical educators worked at 13 sites in the 2014-2015 program.

"Kerry and government officials colluded to launch the program and ensure that Seed would get the contract."

Read the entire article for many more details about this mini-plutocracy.

What oversight is your member of Congress providing over operations of the U.S. Department of State? Growls readers are encouraged to write their members of Congress. Tell them you object to the conflicts of interest described in Barton's article. Contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can 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.

September 18, 2016

Tourism, Business Travellers, and Arlington County

The Arlington Sun Gazette reports today that "Arlington saw a 2.9-percent increase in spending from domestic tourists and business travelers in 2015, according to new state figures, retaining its position atop Virginia’s 133 cities and counties."

The online story goes on to report:

"Tourism and business-travel spending in Arlington totaled $3.06 billion in 2015, according to figures compiled by the U.S. Travel Association on behalf of the Virginia Tourism Corp. That’s up from $2.97 billion a year before and is a single-year record for any Virginia locality.

"Although representing only about 5 percent of the commonwealth’s transportation, Arlington garnered more than 13 percent of domestic travel spending statewide during the year. Across the commonwealth, domestic travel spending stood at $22.94 billion, up 2.4 percent.

"Rounding out the top five jurisdictions were Fairfax County ($2.93 billion), Loudoun County ($1.64 billion), Virginia Beach ($1.4 billion) and Henrico County ($852 billion).

The weekly newspaper also wrote:

"According to state figures, domestic travel helped support 25,600 jobs in Arlington and 223,100 across the commonwealth. Travel to and through Arlington brought in $115 million in tax receipts to the state treasury and $85.8 million to the local government."

The Convention & Visitors Service is a part of Arlington Economic Development (AED). The FY 2017 adopted budget for AED show the service has the following functions:

  • Destination Marketing & Promotion
  • Meetings and Conventions Sales
  • Visitor and Convention Services
  • Small Business and Arts Promotion
  • Tourism Infrastructure
  • Hospitality Community Engagement

The C&V Services' budget for FY 2015 were $860,602 (actual), for FY 2016 were $752,659 (revised). and for FY 2017$626,148 (adopted). Spending for the service was affected by the unavailability of the Transient Occupancy Tax). However, the adopted FY 2017 budget shows"

"On May 14, 2016, the County Board adopted an ordinance to amend Chapter 40 (Transient Occupancy Tax) of the Code of Arlington County to add an additional 0.25% transient occupancy tax levy for the purpose of promoting tourism and business travel in Arlington County. The County Board appropriated $1.25 million in revenue and expense to the FY 2017 Travel and Tourism Promotion Fund along with 2.0 limited term FTE’s for the purpose of promoting tourism and business travel in Arlington County."

Growls readers wishing to learn more about travel and tourism in can write to members of the Arlington County Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

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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