October 23, 2014

A Thought on an Optimum Tax Rate

Note: there will likely be little if any growling until the middle of next week.

                              - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

"Back in 1971, a Scottish economist by the name of James A. Mirrlees wrote a groundbreaking paper, in which he attempted to answer the question of what an optimum income-tax regime would look like if one desired to reduce inequalities while at the same time not discouraging work and economic growth. Up to the time of Mr. Mirrlees‘ work, no one had been able to figure out the optimum trade-off between equality and. Mr. Mirrlees was awarded the Nobel Prize in economics in 1996 for his work, and was knighted in 1998.

"Mr. Mirrlees had been an adviser to the British Labor Party, which supported the high tax rates in effect at that time. He did a careful analysis of the variation of people’s skills and the effect tax rates had on their incentives to earn. Much to his surprise, he found the optimum tax rate on high earners was about 20 percent, not the 83 percent in effect at that time. He also determined that 20 percent should be the optimum rate for everyone, thus giving rise to the idea of the flat tax (which now has been adopted by several-dozen countries). In his 1971 paper, Mr. Mirrlees concluded, “I must confess that I had expected the rigorous analysis of income taxation in the utilitarian manner to provide an argument for high tax rates. It has not done so.” *emphasis added)

< snip>

"In the United States, there has been almost no relation between maximum individual tax rates and tax revenues as a percentage of gross domestic product (GDP). For example, individual-tax revenues have averaged about 7.9 percent of GDP for the past half-century, whether the maximum rate was 28 percent (after Ronald Reagan’s reform in the late 1980s), 70 percent (during the Jimmy Carter era in 1978), or 39.6 percent (when Bill Clinton was president in 1995, and also in 2013 under President Obama). All of this only goes to show that higher maximum individual income-tax rates (despite the conventional wisdom and the endless faulty estimates from the government tax-revenue forecasters) are no more likely to produce greater revenue as a share of GDP than lower rates. High rates do, however, have the clear disadvantage of causing more tax evasion, lower job creation and slower economic growth."

~ Richard W. Rahn, Senior Fellow, Cato Institute, and Chairman, Global Economic Growth

SOURCE: His October 21, 2014 column, entitled "The optimum income taxation," posted at the Washington Times.

October 22, 2014

A One-Way Pro-Streetcar Narrative from County Staff?

The Arlington Sun Gazette's Scott McCaffrey reported this morning that "anti-streetcar Arlington (County) board members irked at county PR efforts." According to McCaffrey:

"The anti-streetcar faction on the County Board represents 40 percent of board membership, but is getting zero-percent assistance from county-government staff in getting its message out to the public.

"And that, apparently, is the way it’s going to stay for now.

"Anti-streetcar board member John Vihstadt complained at the Oct. 21 meeting that county staff continue to put out a “one-way, pro-streetcar narrative” that allows no dissenting voices to be heard. He criticized a series of “false premises” and “red-herring arguments” in the materials the government disseminates.

"Vihstadt, who was elected in an April special election but faces a rematch with Democrat Alan Howze on Nov. 4, professed himself “a little disappointed [but] not completely surprised” that he and anti-streetcar colleague Libby Garvey do not get a chance to make their case through government channels. He noted that while pro-streetcar forces hold a 3-2 board majority, the last two board members elected ran on anti-streetcar platforms."

McCaffrey then explained the electoral implications for the streetcar opponents:

"Opponents of the streetcar will have their chance to wrest control of the County Board in November 2015, when the seats of pro-streetcar Democrats Walter Tejada and Mary Hynes are up for grabs. A Vihstadt victory this November would mean his side would only need to win one of those seats; a Howze victory would mean anti-streetcar advocates would need to win both seats in 2015.

"If they pull it off, streetcar opponents would be able to kill the project on Jan. 1, 2016 – before construction will have begun – but pro-streetcar forces could take back the majority, and resurrect the project, by knocking off Garvey in the 2016 general election."

In a lengthy story today, Patricia Sullivan of the Washington Post reported that "Arlington County Board race again focuses on streetcar divide." The opening of her story says:

"Arlington Democrats want desperately to believe that last spring’s special election was a fluke.

"In a county that routinely and overwhelmingly elects Democrats, their party’s nominee for an open County Board seat lost by 16 percentage points to John Vihstadt, a Republican-turned-independent who capitalized on voter opposition to a proposed streetcar line and frustration at perceived overspending.

"Now the Democratic nominee, Alan Howze, is facing off against Vihstadt for a full four-year term.

"Howze is campaigning more energetically than he did last spring, hopeful that a bitter Senate race in Virginia will spur higher turnout on Nov. 4 — including a wave of Arlington Democrats who back both him and the Columbia Pike and Crystal City streetcar project."

Sullivan also noted:

"There are signs that some Arlington voters are growing weary of the streetcar debate.

"The election “has basically become a referendum on the streetcar,” said Jim Green, who works in advertising. “I’d like a decision one way or another. We are talking this thing to death.”

Readers of Growls are urged to make their views on the Columbia Pike streetcar by: 1) voting on Tuesday, November 4, 2014; and 2) e-mailing the Arlington County Board by clicking-on the following hotlinks. Or just call them:

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

And tell them ACTA sent you!

October 21, 2014

Has LBJ's War on Poverty been Won? Is it Winnable?

No one will be surprised to learn that we've often growled about poverty and welfare (use the search facility in the right-hand column). After all, the nation spends an enormous amount of our taxes for welfare and to fight poverty. On June 20, 2014 we specifically growled about the "war on poverty' which President Lyndon Johnson declared in his January 8, 1964 State of the Union speech.

Yesterday, as the 'War on Poverty' turns 50, the Cato Institute published a detailed, 26-page Policy Analysis (Number 761, October 20, 2014). Senior fellow Michael Tanner and research assistant Charles Hughes ask whether the country is winning the war, yet.

Here is the study's executive summary:

"The War on Poverty is 50 years old. Over that time, federal and state governments have spent more than $19 trillion fighting poverty. But what have we really accomplished?

"Although far from conclusive, the evidence suggests that we have successfully reduced many of the deprivations of material poverty, especially in the early years of the War on Poverty. However, these efforts were more successful among socioeconomically stable groups such as the elderly than low-income groups facing other social problems. Moreover, other factors like the passage of the Civil Rights Act, the expansion of economic opportunities to African Americans and women, increased private charity, and general economic growth may all have played a role in whatever poverty reduction occurred.

"However, even if the War on Poverty achieved some initial success, the programs it spawned have long since reached a point of diminishing returns. In recent years we have spent more and more money on more and more programs, while realizing few, if any, additional gains. More important, the War on Poverty has failed to make those living in poverty independent or increase economic mobility among the poor and children. We may have made the lives of the poor less uncomfortable, but we have failed to truly lift people out of poverty.

"The failures of the War on Poverty should serve as an object lesson for policymakers today. Good intentions are not enough. We should not continue to throw money at failed programs in the name of compassion."

The fact is that America has spent $19 trillion on LBJ's so-called war on poverty, which is more than the national debt of almost $18 trillion, is itself astounding. More so if you consider that $19 trillion is equivalent to giving about $63,000 to every man, woman and child in America. Let's spend a few more minutes looking at how this welfare spending has grown over the years, according to Tanner and Hughes:

"The cost of the War on Poverty has in- creased dramatically from its rather narrow beginnings. In constant 2014 dollars, federal spending on welfare and anti-poverty programs has risen from $107 billion to $688 billion, a 640 percent increase, while total government welfare spending—including state and local funds—has risen from $160 billion to $981 bil- lion, a 613 percent increase (see Figure 1).

"Of course, this amount is not adjusted for growth in the population. Therefore, a better measure might be to look at welfare spending on a per capita basis, specifically per poor person (as defined by the Federal Poverty Level, discussed below). Measured this way, federal spending has risen by almost 320 percent, from $4,643 to $14,848, while total spending rose by 302 percent, from $6,972 to $21,113 (see Figure 2).

"Altogether, the United States has spent more than $19 trillion fighting poverty (in con- stant 2014 dollars). Last year alone, the federal government spent almost $700 billion, while state and local governments added nearly $300 billion more, for a total of roughly $1 trillion. That is equivalent to more than $21,000 for ev- ery person below the poverty level in America, or $63,339 for a family of three.7 While it is true that a significant portion of the actual money in these “anti-poverty” programs goes to families above the poverty line, the fact remains that we spend enough money on the welfare system to conceivably lift everyone who currently lives in poverty above the poverty threshold, which stood at $18,769 for a single mother with two children in 2013."

You're urged to spend a few minutes poring over the facts and charts that are interspersed throughout Cato's newest policy analysis, which provide a wealth of information, including many helpful charts.

Readers of Growls who are concerned about the growth of so-called entitlement spending, and how it drives the national debt, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers 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 Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

October 20, 2014

Working for the Gummint. A Great Life for Some?

The Washington Examiner's Susan Ferrechio reported today, "Government has paid millions for workers to stay home." Her reporting is based on this U.S. General Accountability Office (GAO) report published on Friday, October 17.

In the report's highlights, GAO explained their reasons for doing the audit:

"Federal agencies have the discretion to grant paid administrative leave for a variety of reasons, such as weather closures and blood donations. While paid administrative leave costs taxpayers, it has not been reviewed or reported on extensively.

"GAO was asked to examine the use of paid administrative leave. This report (1) describes paid administrative leave policies at selected federal agencies; (2) reviews practices in recording and reporting paid administrative leave and describes the number of federal employees granted such leave, and the amount and associated salary costs of such leave; and (3) describes categories for which large amounts of paid administrative leave have been charged by individual employees at selected federal agencies.

"To determine the total amount of paid administrative leave, GAO analyzed fiscal year 2011 through 2013 payroll data from OPM's Enterprise Human Resources Integration system. To review agency policies and reasons for using large amounts of administrative leave, GAO selected five agencies based in part on the percentage of employees with higher-than-average amounts of such leave."

Here is how Ms. Ferrechio begins her report:

"The federal government has shelled out more than $700 million in paid leave to more than 57,000 employees who were home from work for time periods stretching from one month to three years, a Government Accountability Office report has found.

"In a 62-page report published Monday, the GAO analyzed why so many federal employees were home and getting paid for such long periods of time and they discovered a variety of reasons.

"In many cases, employees were home awaiting the outcome of investigations into alleged misconduct and criminal actions. Some racked up paid leave for “physical fitness activities,” and others were away from work seeking professional development. Employees also took paid leave for “recuperation” from overseas work.

"Hundreds of federal employees remained at home, collecting a paycheck, for years.

"The report found that during a three-year period beginning in 2011, 263 employees remained on paid leave for one to three years at a cost of $31 million.

"In some cases, about five percent of the time, the federal government couldn’t come up with a reason why some employees were home on paid leave.

"Overall, paid leave for federal government workers, excluding holidays, cost billions of dollars from 2011 to 2013, the GAO report found, but comprised less than one percent of all federal government salaries paid during that time period.

"The vast majority of the 1.2 million federal employees analyzed in the report — about 97 percent — took fewer than 20 paid leave days, excluding holidays. More than 940,000 employees took two to five paid leave days outside of holiday breaks, the report found."

According to Ms. Ferrechio, the report was requested by Sen. Charles Grassley (R-Iowa); she wrote:

"Sen Chuck Grassley, R-Iowa, said he asked for the GAO probe after his own investigators uncovered unusual instances of paid leave. In one case, Grassley said, Inspector General of the National Archives and Records Administration, Paul Brachfeld, was put on paid leave "against his will for nearly two years" before retiring."

As Ms. Ferrechio pointed out, 97% of employees were granted fewer than 20 days of paid administrative leave. The following chart from the GAO report shows the number of employees who charged paid administrative leave, government-wide, for fiscal years 2011-2013:

Readers of Growls who are concerned that paid administrative leave is being abused are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers 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 Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

UPDATE (10/21/14): HT to Guy Benson at Townhall.com for reminding us "about the state of our 'not-a-cent-to-spare' federal government," and pointing us to coverage by the Washington Post's Lisa Rein's coverage of this latest abuse of America's taxpayers. She provides this additional background:

"The extensive use of administrative leave continues despite government personnel rules that limit paid leave for employees facing discipline to “rare circumstances” in which the employee is considered a threat. The long-standing rules were written in an effort to curb waste and deal quickly with workers accused of misconduct.

"And the comptroller general, the top federal official responsible for auditing government finances and practices, has repeatedly ruled that federal workers should not be sidelined for long periods for any reason."

October 19, 2014

Deficits, Debt and Ticking Time Bombs

A week ago, the New York Times' published an economics op-ed by Justin Wolfers, senior fellow for the Peterson Institute for International Economics who claimed "the federal budget deficit is back to normal," and threw the following sop to those who are just as concerned with the level of the national debt, writing:

"For those who are concerned about government debt, smaller deficits are surely a good thing. And indeed, because deficits are expected to remain relatively small, total public debt as a share of the economy’s total output is projected to be roughly stable over the next decade. It is only over subsequent decades that the debt is projected to rise, although any economic forecast made decades in advance comes with a sufficiently wide margin of error that there’s also a good chance that it also may fall."

On Wednesday, the Missourian published an editorial, which looked at the national debt, noting the nation "has owed money since the Revolutionary War. They also suggest it is doubtful the country will ever get out of debt although there are occasional efforts to reduce the debt every "now and then." Here's a portion of the Missourian editorial:

"In case anybody is interested, as of Monday, the national debt was $17,868,497,104,334.61. It’s higher when you are reading this since it continues to increase by an average of $2.43 billion every day since Sept. 30, 2012. Yes, that’s $2.43 billion!

"Each citizen’s share is $55,978.73. That’s based on a population of 319,201,559.

"Is anybody concerned? There is a group called the Concord Coalition, a grassroots movement to eliminate the deficit and bring entitlements down to a level that’s fair to all generations. Talk about a challenge!

"The U.S. Department of the Treasury provides daily, monthly and annual figures on the debt — to the penny.

"At the end of FY 2015, the total government debt in the United States, including federal, state and local, is expected to be $21.897 trillion; the total state debt is expected to be $1.228 trillion; and local total debt is expected to be $1.956 trillion."

Unfortunately, as the Committee for a Responsible Federal Budget (CFRFB) wrote in a paper published this week, "the recent fall in deficits is not a sign of fiscal sustainability." Following is the paper's executive summary:

"The FY2014 budget deficit totaled $483 billion, according to today’s statement from the Treasury Department. Although this is nearly 30 percent below the FY2013 deficit and 66 percent below its 2009 peak, the country remains on an unsustainable fiscal path.

"In this paper, we show:

  • Annual deficits have fallen substantially over the past five years, largely due to rapid increases in revenue (mostly from the economic recovery),  the reversal of one-time spending during the financial crisis, small decreases in defense spending, and slow growth in other areas.
  • Simply citing the 66 percent fall in deficits over the past five years without context is misleading, since it follows an almost 800 percent increase that brought deficits to record-high levels.
  • Even as deficits have fallen, debt has continued to rise, more than doubling as a percent of GDP since 2007 to record levels not seen other than during a brief period around World War II.
  • Both deficits and debt are projected to rise over the next decade and beyond, with trillion-dollar deficits returning by 2025 and debt exceeding the size of the economy before 2040, and as soon as 2030.

"Unfortunately, the recent fall in deficits is not a sign of fiscal sustainability."

The following chart show how the deficit increased from 2007 to 2011, and how they are expected to increase again beginning in 2015:

Take another look at the fourth bullet above, and especially note the expectation that trillion-dollar deficits are expected to return by 2025 and that debt will exceed the size of the economy before 2040.

The CFRFB concludes the paper with this warning:

"The fact that deficits have fallen from their trillion-plus dollar levels is an encouraging sign that the economy continues to recover. Unfortunately, Washington’s myopic focus on short-term deficits has likely slowed the recovery by cutting deficits somewhat too fast in the short term while leaving substantial imbalances in place over the long term.

"While the deficit has indeed dropped significantly, this drop followed a massive increase, was largely expected, and does not suggest the country is on a sustainable fiscal path. Currently, debt levels are at historic highs and projected to grow unsustainably over the long run.

"In only a decade, deficits are projected to again exceed $1 trillion, and within 15 to 25 years debt is projected to exceed the entire size of the economy.

"Policymakers must work together on serious tax and entitlement reforms to put debt on a clear downward path relative to the economy, not declare false victories and sweep the debt issue under the rug."

In an op-ed, posted October 8, 2014 at Investor's Business Daily, Jed Graham warns that "while the fiscal storm that struck six years ago has subsided, the apparent calm is deceptive."

Terry Jeffrey in a commentary piece for CNS News, dated October 15, 2014, frames the numbers in a more personal manner, asking, "Which will be greater: the burden of student debt on Americans who went off this fall to their first year of college, or the amount of federal debt per full-time private-sector worker when these students earn their degrees and start looking for jobs?" His answer:

"There is no doubt: It will be the amount of federal debt per full-time private-sector worker.

"As of last Friday, the total debt of the federal government was $17,858,480,029,490.28, according to the U.S. Treasury. That equaled $200,258.81 for each of the 89,177,000 full-time private-sector workers that, according to the Census Bureau, were in the United States in 2013.

"(There were a total of 105,862,000 full-time workers in the United States in 2013, according to the Census Bureau. However, 16,685,000 of these full-time workers worked for government, getting paid with tax dollars or from government borrowing. That left only 89,177,000 who were self-employed or worked for private-sector employers.)

"Federal debt per full-time private-sector worker has escalated rapidly. At the end of 2007, the total federal debt was $9,229,172,659,218.31, which equaled $101,158.25 for each of the 91,235,000 full-time private-sector workers in the United States that year. In 2000, the total federal debt was $5,662,216,013,697.37, which equaled $66,553.23 for each of the 85,078,000 full-time private-sector workers that year.

"Since 2000, federal debt per full-time private-sector worker has more than tripled."

Readers of Growls who are concerned about the country's national debate in particular, or fiscal policy in general, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers 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 Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

October 18, 2014

Will there be a 'Second ObamaCare Election'?

In a  "must read" article to be published in the October 27, 2014 issue of the Weekly Standard, Jeffrey H. Anderson makes the case that the November 4, 2014 election will be a "second ObamaCare election."

Following are the first several paragraphs of the article by Anderson, a senior fellow in health care studies at the Pacific Research Institute:

"A Gallup survey earlier this month showing that Americans oppose Obamacare by a margin of 53 to 41 percent was  the 150th poll listed by Real Clear Politics during President Obama’s second term to find Obamacare unpopular. The number that found it to be popular was zero.

"The mainstream media, meanwhile, seemingly operating in an alternative universe, think that Obamacare is here to stay. Politico writes, “Deep down, Republicans who know health care know the truth: Obamacare isn’t about to be repealed. .  .  . [T]hink of the last time a major social program was repealed after three enrollment seasons, with millions of people getting benefits. That’s right—it hasn’t happened.”

"But to conclude that the track record of major social programs indicates that Obamacare cannot be repealed requires historical cluelessness. Social Security passed the House with 92 percent of the vote (365 in favor, 30 opposed). Medicare and Medicaid (which were voted on together) passed the House with 73 percent of the vote (307 in favor, 116 opposed). Obamacare passed the House with 50.8 percent of the vote (219 in favor, 212 opposed). Moreover, support for Social Security, Medicare, and Medicaid was bipartisan. House Republicans backed Social Security by 81 to 15. House Republicans backed Medicare and Medicaid by 70 to 68. House Republicans opposed Obamacare by 178 to 0.

"There’s a big difference between major social programs that passed the House with majority support from both parties and majority support from the citizenry and a major social program passed by the House over the unanimous opposition of one of the two parties and the clear opposition of a majority of the citizenry—opposition that (at least in the case of the citizenry) remains every bit as strong an Olympiad later."

And below is Anderson's conclusion. I've left out a wealth of information-rich material that explains why Anderson believes the election on November 4, 2014 will give American voters a second opportunity to tell America's political class just what they want done with the Patient Protection and Affordable Care Act, aka ObamaCare.

"Obama and his Democratic allies said Obamacare would be good for the economy. But the 62 months since Obama launched the Obamacare debate in earnest (with his speech to the American Medical Association in June 2009) have been the 62 worst months in the past 30 years in terms of the percentage of eligible Americans who are working. That’s according to the Bureau of Labor Statistics’ own numbers for the employment-population ratio.

And that’s without even mentioning Obamacare’s unprecedented individual mandate—long its most unpopular provision—which compels private American citizens, for the first time in U.S. history, to buy a product or service of the federal government’s choosing. It’s without mentioning the Independent Payment Advisory Board, Obamacare’s unelected, quasi-legislative, largely unaccountable, and blatantly unconstitutional Medicare rationing arm. And it’s without mentioning Obamacare’s $700 billion raid on Medicare, its war on religious charities, or the dangerous presidential lawlessness it has spawned.

"What the American people have wanted for more than four years is to repeal Obamacare and replace it with a conservative alternative. That’s what they’ll tell Washington once again this November 4."

You can read the entire Weekly Standard article here.

Readers of Growls who are concerned about ObamaCare, or, if you prefer, the Patient Protection and Affordable Care Act are urged to vote on November 4, 2014 (the deadline to register to vote ended October 14, 2014). In addition, readers are urged to contact their member of Congress. Contact information is available at Thomas (use left-hand column). Readers 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 Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

October 17, 2014

And How Much Will ObamaCare Cost? More Than Expected!

Earlier this month, the Washington Post's Anna Gorman and Julie Appleby reported the states are getting set for the second enrollment period, set to start in mid-November.

With the national debt now expected to reach $18 trillion according to CNS News, it's worth asking what the Affordable Care Act (aka ObamaCare) is expected to cost.

In a timely article, posted today at Reason magazine, Jason Keisling and Nick Gillespie try to answer that question. The provide a series of efforts at estimating the cost. Their bottom line is that it will cost more than expected. According to Keiesling and Gillespie:

"As the nation prepares for the second enrollment period under The Affordable Care Act in November, there is officially no way of figuring out what Obamacare is going to do to federal deficits compared to the estimates used to push the program through Congress.

"Back in 2009, it was really important to President Obama that people understand he would not "sign a plan that adds one dime to our deficits—either now or in the future. Period." He sold the plan as costing about $938 billion in its first decade of operation (2010 through 2019) but saving about $143 billion overall because of the various taxes and other revenue it raised. A 2012 Congressional Budget Office (CBO) report figured that Obamacare would shave $109 billion off the deficit between 2013 and 2022.

"This past June, however, the CBO said it will no longer try to estimate the law's effects on the deficit. There have been too many delays, postponements, modifications, you name it, to the original bill. "Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the Affordable Care Act is not possible," the CBO concluded.

"So what's going on? The deficit for fiscal year 2014, which ended on September 30, came in at "just" $483 billion and 2.8 percent of GDP, the lowest figures in years. President Obama was quick to say it was because of his signature health-care reform plan. "Healthcare has long been the single biggest driver of America’s future deficits," reports The Hill. "Healthcare is now the single biggest factor driving those deficits down."

"At the same time, the CBO (and everyone else) expects deficits to start growing again in fiscal 2016, so it's a bit premature to break out the bubbly just yet. Senate Republicans have just released a report based on CBO data claiming that Obamacare will end up adding $300 billion to federal deficits between 2015 and 2024."

About that Senate Republicans report, they write (see also separate Reason article):

"The Republican report is ultimately a political document, so its methods and conclusions deserve to be taken with more than a few grains of salt. But if past experience with massive government-run health care programs is any indicator, the odds are high that Obamacare will end up costing way more than it was supposed to.

"Indeed, all signs suggest that overall health-care spending, including the government's already-large share, will keep growing over the next decade."

Keisling and Gillespie point out the the NY Times has reported "that by 2023, all spending on health care will equal 19.3 percent of GDP, which is 'two percentage points more than last year.'" So, according to the two Reason reporters, "whether it's through taxes, increased premiums, or out-of-pocket costs, we'll be paying more for health care in the coming years."

They conclude, saying, "Government-run health-care programs have a track record of costing more than advertised." In addition, they provide three examples of how the cost of three health care programs ballooned from their initial estimates:

  • RomneyCare in Massachusetts. "Initial cost estimates came in at $472 million while actual costs were closer to $628 million for an error ratio of 1.2:1."
  • Medicare. "In 1967, Congress estimated that the nation's single-payer system for the elderly, Medicare, would cost $12 billion in 1990. The actual price tag was $110 billion, for an error ratio on 9.17:1."
  • Medicaid. "1987, Congress figured DSH payments would be less than $1 billion in 1991. Instead, they totaled $17 billion, creating an error ratio of 17:1."

Readers of Growls who are concerned about the ill effects (pun intended) of the passage and implementation of the so-called Affordable Care Act, i.e, ObamaCare, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers 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 Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

UPDATE (10/18/14): We growled on June 11, 2014 in response to the CBO giving up on projecting the long-term cost of Obamacare.

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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