by Scot Mussi | Sep 12, 2011 | News and Updates, Uncategorized
Once in a while, seemingly when I need it most, I can’t remember the list of President Obama’s “big ticket” policy enactments. Thankfully, Michael Boskin listed them in a column in the Wall Street Journal on September 8, 2011:
- $825 billion stimulus package
- Public-Private Investment Partnership to buy toxic assets from the banks
- “Cash for Clunkers”
- Home-buyers credit
- Auto bailouts
- Five versions of foreclosure relief
- Numerous lifelines to Fannie Mae and Freddie Mac
- Frank-Dodd
- Healthcare reform (Obamacare)
- Energy subsidies
Boskin points out that the stimulus bill cost $280,000 per job – by the administration’s estimates of jobs “created or saved,” and much more using more realistic estimates.
Results:
- Fraction of the population working is the lowest since 1983 (58.1%)
- Long-term unemployment is by far the highest since the Great Depression (45.9%)
- Job growth during the first two years of recovery after a severe recession is the slowest in postwar history (.5%)
- Home-ownership rate is the lowest since 1965 and foreclosures are at a post-Depression high (59.7%)
- Share of Americans paying income taxes is the lowest in the modern era (49%)
by Scot Mussi | Aug 23, 2011 | News and Updates, Uncategorized
The Arizona Republic ran a front page article highlighting the surge in lottery ticket sales. According to the article, in FY2011, the state sold $584 million worth of tickets – the most ever.
In this downtrodden economy, one might surmise that the spike in sales is due to the spike in financial desperation. It’s unfortunate, since lotteries are among the highest-taxed activities in the country. It’s also a hidden tax. It’s also a regressive tax, since it hits lower income people disproportionally harder. If the poor want to gamble, that’s fine with me, but the state shouldn’t be sponsoring, advertising, enticing, and acting as the culprit in the activity.
The tax on a lottery ticket is about 24%. Where is that advertised?
But even worse than hiding the tax is the aggressiveness of state government to get people to play (and pay). The advertising budget for the state lottery is $15 million.
Lottery Executive Director Jeff Hatch-Miller:
“Even though there was a recession and times were tough, that meant for us that the state needed that money even more.” (The heck with the people who might have needed it.)
“When times are tough, people need a good rate of return if they’re going to play the game. It’s better (for the state) that they play the game – even though (the state) gets a slightly smaller percentage – than they don’t play it at all.”
From the Republic article:
But state officials say the Arizona government needs the revenue it gets from Lottery sales even more in an era of budget cuts. They point to the changes made to make the games more enticing to players, such as improving odds of winning, selling new kinds of games and improving displays. (My emphasis.)
The changes were especially important in the face of a weak economy that has consumers cutting their spending. (My emphasis.)
“We knew we would have to act to counteract the recession, especially in Arizona,” Executive Director Jeff Hatch-Miller said. “We knew we had to really get out there and start listening more clearly to the players.”
So Hatch-Miller used the power of the state to “counteract” a declining interest in gambling during a recession. Is this really the role of state government?
by Scot Mussi | Aug 12, 2011 | News and Updates, Uncategorized
Let’s hope this isn’t an indication of where things are headed in the next legislative session, or even moderately reflects Gov. Brewer’s position.
As reported in the Arizona Capitol Times:
Arizona Commerce Authority CEO Don Cardon (no relation to Wil) offered freshman Congressman Ben Quayle some gems of advice this week. As reported by my colleague, Caitlin Coakley, Quayle held a roundtable with business owners who expressed deep dissatisfaction with partisan rancor.
Cardon advised that politicians need to drop some of their hard line approaches against all things government. One example offered by Cardon, who is Gov. Jan Brewer’s go-to man when it comes to job creation, would be the objection by many to having the government “picking winners and losers” when it comes to determining which businesses and industries should or shouldn’t get tax breaks or other nifty incentives.
That said, it’s hard to believe that Cardon, who is leading the state agency that was given a $25 million “deal-closing” fund, wishes the ACA could buy a reprieve from the state Constitution’s gift clause — or at least get the Goldwater Institute to look the other way. Cardon also encouraged Quayle to double-down and adopt sure-fire stances certain to make a fiscal-conservative voter base cringe.
“The market already picks winners and losers,” Cardon told the congressman, adding that government is well suited to decide which industries could use government investment to help spring back to life. “That’s where you say, maybe I cast a vote that will end my political career in two to three years,” he said.
by Scot Mussi | Jul 22, 2011 | News and Updates, Uncategorized
Bill Gates’ straight talk on solar subsidies was refreshing and spot on. Courtesy of the Wall Street Journal and from an interview in Wired magazine.
[Chris] Anderson: When you look at the big picture [for the future of energy], where should we be focusing besides nuclear? On massive solar plants in the desert? On middle-size stuff for office roofs? Or is there a reinvention that could be done right in the home?
Gates: If you’re going for cuteness, the stuff in the home is the place to go. It’s really kind of cool to have solar panels on your roof. But if you’re really interested in the energy problem, it’s those big things in the desert. . . .
I think people deeply underestimate what a huge problem this day-night issue is if you’re trying to design an energy system involving solar technology that’s more than just a hobby. You know, the sun shines during the day, and people turn their air conditioners on during the day, so you can catch some of that peaking load, particularly if you get enough subsidies. It’s cute, you know, it’s nice. But the economics are so, so far from making sense. And yet that’s where subsidies are going now. We’re putting 90 percent of the subsidies in deployment—this is true in Europe and the United States—not in R&D. And so unfortunately you get technologies that, no matter how much of them you buy, there’s no path to being economical. You need fundamental breakthroughs, which come more out of basic research. . . .
Anderson: So suffice to say we will find no solar cells on the roof of the Gates residence?
Gates: Oh, we like to be cute like everyone. For rich people, this is OK. Rich people can do whatever they want.
by Scot Mussi | Jul 7, 2011 | News and Updates, Uncategorized
Narrowly targeted tax incentives like those for ethanol producers are really just spending items, the expenses of which could just as easily appear on the spending side of the federal budget ledger. This is why the elimination of these credits should not require an offsetting tax cut somewhere else as some Republicans appear to demand. After all, conservatives who support cutting federal spending haven’t demanded that each dollar cut be used to reduce taxes. No one has articulated why we should treat spending on ethanol, solar, or any other tax incentive differently just because that spending happens in the tax code rather than in an appropriations bill.
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