11 Temmuz 2012 Çarşamba
10 Temmuz 2012 Salı
8 Temmuz 2012 Pazar
The Malaise of 2012 | Part IV
* Inordinate Stimulus, Undue Debt and Global Warming Foolishness Caused the Recession
* By: Larry Walker, Jr. *
“With few exceptions no educated person in the history of Western Civilization from the 3rd Century B.C. onward believed that the earth was flat... No one before the 1830’s believed that medieval people thought that the earth was flat.” ~ Jeffrey
In an article entitled, “Algae for Waste Water Treatment and BioFuel Production: A Double Winner,” Dr. John Kyndt and Dr. Aecio D’Silva discuss the process known as phycoremediation, which is short for treating waste water with micro algae, for the purpose of producing low cost algae biofuels and other biomass products.
Biofuel is a type of fuel whose energy is derived from biological carbon fixation. The advantage of algae is that it will supposedly consume more CO2 than is released in the process. Unfortunately, and unbeknownst to many, this has not been the case with previous generations of biomass. So how did scientists arrive at the recent pronouncement that algae-biomass is the answer to our future fueling needs?
In 2008, two groups of US researchers independently concluded that most biofuels commonly thought of as solutions for reducing greenhouse gases, turned out instead to increase greenhouse gas emissions. Clearing grassland or forests to plant them released more carbon dioxide than could be saved in the process. The analyses proved that large amounts of trapped carbon are released into the atmosphere when vegetation burns or decays as land is cleared. This up-front 'carbon debt' could take centuries to break even with emissions gradually avoided by substituting biofuels in place of fossil fuels. Many studies subsequently arrived at the same conclusion.
For example, sugarcane ethanol grown on the converted Brazilian savannah would need to replace petrol emissions for 17 years just to repay the carbon released when the savannah was converted. Other examples, such as soybean biodiesel from cleared Amazonian rainforest, took centuries to break even. The studies concluded that, only biofuels made from waste products, or grown on abandoned lands would do less harm than good. Thus the algae boom was born. The same line of reasoning eventually lead to the latest craze: treating waste water with algae for biofuel production. A double winner loser!
Ironically, fossil fuels have their origin in ancient carbon fixation, a similar process to that realized through detoxifying sewer water with algae. However, green scientists don’t recognize fossil fuel as a biofuel because it contains carbon that has been out of the carbon cycle for a very long time (which might actually be a good thing). Thus, we have green fuel, manufactured through synthetic carbon fixation, versus black gold, created through naturally aged carbon fixation.
Here’s how the algae fad works. Instead of waiting on Mother Nature to naturally form fossil fuels, mankind is now capable of producing the same effect in a fraction of the time. We have arrived. The idea is that as you flush your toilet, instead of the waste flowing to costly, energy consuming, waste water treatment facilities; it will instead be treated with algae before returning to your tap. In turn, the algae will be converted into biodiesel, green diesel, bio-jet and chemicals. The residual biomass, which is high in proteins and carbohydrates, will be used in aquaculture, animal feed, and food ingredients. Did I say food ingredients? Yes. And that makes algae a triple loser!
In fact, one particular algae biofuel manufacturer, Solazyme, boasts of its ability to create renewable oil – for fuel, and for food. Among its primary inputs are waste streams. When I recently learned that one of my favorite frozen food companies, which I won’t name here, was using the residual biomass from Solazyme in its food-line, I immediately discontinued its use. The thought of diesel fuel, and food coming from the same sewage fed algae-brew was more than I could take, as I alluded to in, Ends of the Green Agenda - Costs of Algae Biofuel.
The U.S. Navy has announced the objective of operating at least 50% of its fleet on clean, renewable fuel by 2020. According to Marine Corps Times, in 2009 the Navy paid $424.00 per gallon for 20,055 gallons of biodiesel made from algae, which set a world record at the time for the cost of fuel. Solazyme was the recipient of this lucrative contract. In the midst of the worst recession since the Great Depression, the U.S. Navy presumed that paying $424.00 per gallon for algae biodiesel (while petroleum based diesel was selling for an average of $2.50 per gallon) was somehow not a foolish waste of taxpayer’s money.
How has the company fared since the stimulus well ran dry? Solazyme (symbol: SZYM) opened on the NASDAQ Exchange at $20.71 in May of 2011, peaked at $27.03 in July of 2011, then tanked to $8.29 by October of 2011. Although it recently closed at $15.05 on March 21, 2012, its total revenue for the fiscal year ended December 31, 2011 was $39.0 million compared with $38.0 million in the prior year. The fiscal year 2011 GAAP net loss attributable to its common stockholders was $(54.0) million, compared with $(16.4) million in the prior year.
Since Solazyme had $39 million in revenue but wound up losing $54 million, in 2011, it appears to be a huge boondoggle. It’s quite a feat for a company to lose more than 100% of its total revenues. Were it not for the government’s inordinate stimulus coupled with undue debt, this foolish endeavor, along with a myriad of others, wouldn’t exist.
Yes, it's true, global warming foolishness is a major cause of the looming recession. Instead of focusing on root causes of the previous recession, the Obama Administration has gone awhoring after science fiction myths and bowed itself to strange gods. And because of this we must all pay a price.
Economist Raymond Richman of Ideal Taxes sums it up:
The growth of state-subsidized bio-fuels, windmills and solar panels, hybrid vehicles, electric cars, and lithium battery manufacturers has highly negative effects on employment and regressive effects on the distribution of income.
We estimate that about $100 billion in grants and tax credits have been extended by the federal and state governments to the proprietors of those establishments, making many of them rich and eager to take advantage of the free capital and guaranteed loans.
Tax rebates and tax credits do not appear in our federal budget.
American economists are at a loss to explain the continuing high level of unemployment in the face of the $800 billion Recovery Act expenditures, the $1.5 and $1.8 trillion budget deficits in 2010 and 2011, and “green” energy subsidies, federal and state.
Moreover, none of the “global warming” could compete with fossil fuels without huge government subsidies. The states and federal government provided about 60 percent of the capital of the green enterprises and got nothing in return. The government made sure that wind and solar plants got a high enough price for the electricity they produced by requiring electric utilities to buy their electricity output regardless of price. The subsidies are so costly that
had to end the wind and solar subsidies to avoid bankruptcy and we shall have to as well. Spain
Recently, while attempting to defend his global warming panic policies, Barack Obama made the following humorous remark, “If some of these folks were around when
Am I supposed to trust a man who is roaming around the countryside proclaiming that the world will turn into a giant incinerator within a couple of years, unless we start making our food and fuel out of our own feces?
I simply refuse to believe that the World will turn into a ball of fire through our continued, prudent use of natural, God-given, carbon based fossil fuels. However, I do believe that the
The U.S. is sitting on a 200-year supply of oil. If the idea is to break free from our dependence on foreign oil, I’m game, and we can start doing that right now, with our God-given natural resources. But if the idea is some foolish Doomsday notion, based on panic and fear, then Obama should be removed from the White House, and returned to the nearest urban street corner, cardboard sign and all. Global warming foolishness is the third and final element contributing to the Malaise of 2012.
Continued from: The Malaise of 2012 | Part I | Part II | Part III
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Other references:
http://en.wikipedia.org/wiki/Biofuel#cite_note-Science2-51
Unilever’s new Durban plant a model of sustainable savoury dry food production - Well alrighty then!
11 Great Things to Do With Sewage
Algae Meal Performs as Dairy Cattle Feed
Obama's Secretarial Tax Fallacy
By: Larry Walker, Jr.
There's no way Obama's secretary paid a higher effective tax rate than the Obamas. You don't believe it? Are income taxes such a mystery that we can't find out? Well, let's run the numbers and see.
According to Jake Tapper of ABC News, Mr. Obama released his 2011 federal income tax today, with he and his wife reporting an adjusted gross income of $789,674. The Obamas paid $162,074 in total tax – an effective federal income tax rate of 20.5%.
The White House also reported that President Obama’s secretary, Anita Decker Breckenridge, makes $95,000 a year. White House spokeswoman Amy Brundage told ABC News that Breckenridge “pays a slightly higher rate this year on her substantially lower income, which is exactly why we need to reform our tax code and ask the wealthiest to pay their fair share.”
The only problem with this story is that Amy Brundage doesn't know how to compute a tax return, or an effective tax rate. If Ms. Breckenridge were single, made wages of $95,000, and had no other dependents or deductions, her standard deduction would have been $5,800 and her personal exemption $3,700. So taking Ms. Breckenridge's income of $95,000, and subtracting her deductions of $9,500 results in taxable income of $85,500 and an income tax of $17,564 (click the tax return image below to enlarge). Thus, her effective tax rate is 18.4% (17,564 / 95,000). The last time I checked 18.4% was less than, not greater than 20.5%.
Is the Obama Administration so delusional that it believes the American public doesn't understand basic math? Get a clue! In my opinion we're all paying way too much for the incompetence of this government. The mainstream media should be ashamed for not verifying the numbers. And Obama's definitely on the wrong track, one which will fortunately lead to the end of his short and sorry career. That suits me fine.
Note: If Ms. Breckenridge is married her tax rate will be lower, if she has dependents her total tax will be reduced, if she owns a home, gives to charity, or pays a substantial amount in State taxes she could itemize deductions on Schedule A, any combination of which would make her effective tax rate substantially lower than 18.4%. What I have calculated above is the maximum effective tax rate possible for a person with $95,000 of gross income.
Economic Dependence vs. Independence, Part 1
Two Schools of Thought
* By: Larry Walker, Jr. *
“Again, it will be like a man going on a journey, who called his servants and entrusted his property to them. To one he gave five talents of money, to another two talents, and to another one talent, each according to his ability. Then he went on his journey. The man who had received the five talents went at once and put his money to work and gained five more. So also, the one with the two talents gained two more. But the man who had received the one talent went off, dug a hole in the ground and hid his master’s money.” ~Matthew 25:14-18
One interpretation of the Parable of the Talents is that the master is an employer who hired three workers and paid them different amounts according to their ability. The first two workers were productive, doubling their employer’s investment. The third didn’t like the employers pay structure, and chose not to work, giving up a potential paycheck. In the age we live in today, the era of big government, government is the new master. An oversized government takes the eight talents from the employer in taxes, before it can employ anyone, redistributes one talent to each of the unemployed, and then squanders the rest on worthless thingamajigs. In the following year, bloated government returns, and demands of the employer another eight talents to do it all over again. Eventually the employer moves toSchool #1 – Lower Income Tax Rates
In the first school of thought, the words of former President’s John ‘Calvin’ Coolidge, Jr., John F. Kennedy, Ronald W. Reagan, and George W. Bush forever live, reminding us that high income taxes are the single largest barrier to job creation and economic growth. And if we don’t lack job creation and economic growth today, then what do we lack – higher taxes and more social welfare benefits? Perhaps we should listen more to reasoned voices from
“There is a limit to the taxing power of a State beyond which increased rates produce decreased revenue. If that be exceeded intangible securities and other personal property become driven out of its jurisdiction, industry cannot meet its less burdened competitors, and no capital will be found for enlarging old or starting new enterprises. Such a condition means first stagnation, then decay and dissolution. There is before us a danger that our resources may be taxed out of existence and our prosperity destroyed.” ~ Calvin Coolidge, January 8, 1920. Address to the General Court beginning the 2nd year as Governor of Massachusetts.
"The largest single barrier to full employment of our manpower and resources and to a higher rate of economic growth is the unrealistically heavy drag of federal income taxes on private purchasing power, initiative and incentive." ~ John F. Kennedy, Jan. 24, 1963. Special message to Congress on tax reduction and reform.
“We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much” ~ Ronald Reagan - 40th
President (1981-1989) US “He said, tax the rich. You've heard that before haven't you? You know what that means. The rich dodge and you pay.” ~ George W. Bush - 2004
Across the board income tax cuts always deliver results, as they allow productive members of society, from all races and social classes, from the least to the most productive, to earn and keep more of their own money. As this phenomenon occurs, those affected are incentivized to produce, consume, save and invest more. The resultant growth spills over into the broader economy allowing nonparticipants to reenter the workforce, or enter for the first time. This concept was good enough for Coolidge, JFK, Reagan and G.W. Bush, whose across the board tax cuts delivered for each an era of relative growth and prosperity for millions of Americans. So what’s the excuse today? For answers, we return to the Parable of the Talents:
“Then the man who had received the one talent came. ‘Master,’ he said, ‘I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed. So I was afraid and went out and hid your talent in the ground. See, here is what belongs to you.’ His master replied, ‘You wicked, lazy servant! So you knew that I harvest where I have not sown and gather where I have not scattered seed? Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest. Take the talent from him and give it to the one who has the ten talents. For everyone who has will be given more, and he will have an abundance. Whoever does not have, even what he has will be taken from him. And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.’” ~ Matthew 25:24-30
The radical left believes that if the servant who was given one talent had instead been given two or five, he might have been as productive as the others. Although some would think this a possibility, it wasn’t likely, for in the parable, each was given an amount according to his ability. The worthless servant simply proved himself to be lazy and wicked. But instead of casting him out into the darkness, the radical left, which has become a bastion of the lazy and wicked itself, believes it is the responsibility of the productive to provide sustenance for those unwilling to work.
The moral of this story is that when the free market is given liberty to place money into the hands of the fruitful, it benefits all who are willing to participate. So politicians who constantly clamor for higher taxes on more productive persons, including corporations, have it backwards. The lesson teaches us that when resource allocators are allowed to direct their own capital at will, jobs are created and the economy grows. It also teaches us that when wicked and lazy people are given an opportunity to succeed, they instead run and hide.
Taxes are too high!
The point is not that we are a nation of wicked and lazy people, but rather that income taxes are still, after all the lessons learned throughout American history, way too high. Yet the government demands more. Today, the minimum income tax rate in the United States is 10%. But add to that 13.3% in mandatory Social Security and Medicare taxes, and lowest rate is really 23.3% (25.3% in normal years) for most Americans. Even the poorest working person in
These days, the American middle class muddles along after handing around 30.0% of its income over to the government, while those who are more productive are forced to give up as much as 45.0%. Yet the government demands more. If you take a moment to contrast the minimum income tax rate of 1.5% in the mid-1920’s with today’s minimum rates of 13.3% to 23.3%, you will understand the real disparity. Looking back through American history, it is clear that we suffer not so much from income disparity, as from an income tax disparity. In other words, we are much poorer than our ancestors.
In the mid-1920’s, our great grandparents worried about paying income tax rates ranging from 1.5% to 25.0%, while today we are forced to contend with taxes ranging from 13.3% to 45.0%. We worry about how much the government will confiscate beyond a virtually guaranteed minimum rate of 13.3% of the first $106,800 in earnings, which is 886.7% higher than our ancestors lowest tier. As things stand today, the government isn’t giving us anything; instead it is taking our talents and burying them under a pile of debt. So by lowering income tax rates across the board, the government won’t be giving anything to anyone, but rather proportionally reducing the amount it already takes from everyone.
The Exxon Mobil Fallacy
For example, many on the radical left routinely spout off, that since Exxon Mobil Corp made $42 billion in profits last year, more should be taken away from it and given to the government. While it’s true that Exxon Mobil earned net after-tax profits of $42.2 billion in 2011, the company actually made a profit of $146.7 billion before taxes. That is to say, once you deduct out $33.5 billion in sales based taxes, $40 billion in other taxes and duties, and $31 billion in income taxes, it was left with $42.2 billion (see income statement below).
In effect, Exxon Mobil paid 71.2% of its pretax profits, or $104.5 billion, in sales based taxes, other taxes and duties, and income taxes, before it was able to take home 28.8%, or $42.2 billion. If 71.2% isn’t enough for left-wing radicals, then how much is enough? Is profit a dirty word? Exxon Mobil is a producer, and the more leeway granted to the productive, the more wealth is created. If the government takes even more capital away from producers like Exxon, who would radical left-wingers propose it be given to? Is there another entity around that can turn higher profits than Exxon Mobil? Left-wingers have it all backwards.
The radical left surmises that we should take more away from Exxon and give it to the government, so that the government may in turn give a small penance to nonworking, nonproducing members of society, and squander the rest. They propose to take away more of Exxon Mobil’s resources and incentives because the company and its industry return large profits. But the morally correct thing to do is to take more away from the nonproductive, like our debtor-government in
Continued … Economic Dependence vs.
Photo Credit:
References and Related:
Exxon Mobil SEC Filings
Obama's 1950s Tax Fallacy
Saving Our Way to Prosperity
Obama’s Failed Jobs Subsidy | 99 Weeks
Private Equity vs. Government Redistribution
Tax Virtue: The Golden Mean
Economic Dependence vs. Independence, Part 2
* Continued from Part 1 *
School #2 – Higher Income Tax Rates
Within the second school of thought, Barack H. Obama speaks as though something most of us believe in no longer exists, or is at threat of extinction. According to Obama, ‘the idea that if you work hard, you can do well enough to raise a family, own a home, and put a little away for retirement’ is at risk, and that ‘this is the defining issue of our time’. But what he doesn’t understand is that like God, natural rights and divinely inspired ideals never change. The basic ideal Obama is referring to is called freedom. So is our freedom suddenly at risk of extinction? If it were, could it possibly be restored by raising taxes on the most productive members of our society?
“What’s at stake is the very survival of the basic American promise that if you work hard, you can do well enough to raise a family, own a home, and put a little away for retirement. The defining issue of our time is how to keep that promise alive. No challenge is more urgent; no debate is more important. We can either settle for a country where a shrinking number of people do really well, while more Americans barely get by. Or we can build a nation where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules. At stake right now are not Democratic or Republican values, but American values – and for the sake of our future, we have to reclaim them.” ~ Barack Obama, January 24, 2012. Blueprint for an
Built to Last. America
Newsflash: We are still free. The American Dream has been in existence ever since our Founding Fathers penned the Declaration of Independence. There’s a reason it wasn’t named the ‘Declaration of Dependence’, for that is what we were delivered from. The Declaration of Independence in itself is the only blueprint
Big government is like the servant who was given one talent, except instead of burying and returning it to his master; he spent it, then borrowed another in his master’s name, and spent that as well, returning to his master a bill for two additional talents. Under the second school of thought, we’re taught to take from those who are productive, to throw it away, and then borrow more in their name, eventually turning them from free men into indentured servants. So although no man can take our freedom from us, we can voluntarily give it away. How is an economy supposed to grow when resources are taken away from its most productive members, and squandered?
For this lazy and wicked government, one dollar is too many and a thousand is never enough, so why is it deserving of anything at all? We entrusted the federal government with a $2,600,000,000,000 surplus of Social Security savings, yet where is it today? It’s now part of the $16,000,000,000,000 national debt, the portion of which the government claims to have borrowed from itself. And who will the government get the money from to pay back what it has borrowed from itself? The government will return to those same productive members of the private sector and demand even more. How dare you! It’s time to identify those who are responsible and throw those worthless servants outside, into the darkness!
Conclusion
Under the morally correct theory, tax cuts lead to a smaller government and more private sector freedom, allowing productive men and women of all races and backgrounds to create wealth, by leveraging their own resources. But under the morally bankrupt theory, wealth is never created with resources handed out through redistributive schemes, as redistribution merely keeps its recipients poor and dependent, while robbing society’s most productive members of their capital.
Put another way, every man and woman is endowed by their Creator with certain talents, but not everyone achieves equal results – some produce thirty fold, some sixty, and some one hundred fold. This has been true since the beginning of creation. But then there are those rare birds, who not only squander the talents entrusted to them, but incur huge deficits along the way, some thirty, some sixty and some one hundred fold. Because these wicked and lazy servants seek to drag as many as they can latch onto down with them, they must be cast out.
The radical left thought it could rewrite American history, within a couple of years, by conning us into believing that we had lost something which, in reality, has always been in our possession. But radical left-wingers are severely misguided. Our freedom will not be taken away without a fight.
“In the last times there will be scoffers who will follow their own ungodly desires. These are the men who divide you, who follow mere natural instincts and do not have the Spirit.” ~ Jude 1:18-19
“He who has ears, let him hear.” ~ Matthew 13:9
Photo Credit:
References and Related:
Economic Dependence vs. Independence, Part 1
Exxon Mobil SEC Filings
Obama's 1950s Tax Fallacy
Saving Our Way to Prosperity
Obama’s Failed Jobs Subsidy | 99 Weeks
Private Equity vs. Government Redistribution
Tax Virtue: The Golden Mean
U.S. Jobs Deficit Grows by 47,000 in June
Going Around in Circles
~ “If you're lost in the woods and you feel like you're walking in circles, you probably are.” ~ Discovery News
- By: Larry Walker, Jr. -
According to the Economic Policy Institute (EPI), the
He added, “We can't be satisfied because our goal was never to just keep on working to get back to where we were back in 2007.” So according to Obama, his goal was never to just keep working to get back to where we were in 2007, a day when we had 4,805,000 jobs more than we have currently. “I want to get back to a time when middle-class families and those working to get into the middle class have some basic security,” he said. We are left to wonder what time that was – the 1920’s, 50’s, 60’s, 80’s, 90’s, or the 2000’s. But based on the latest jobs report, that time could have been any year prior to Obama’s term.
Returning to December of 2007, the month the last known recession began, and applying the Economic Policy Institute’s (EPI) estimate — that we need to create a minimum of 127,000 jobs each and every month to keep up with population growth — we discover that the jobs deficit, since then, has grown to 11,790,000. The deficit stood at 5,165,000 jobs when Obama was inaugurated, and has since grown by an additional 6,625,000. So does that sound like, “a step in the right direction?”
As you can see graphically in the chart above, the jobs deficit has little changed since left-wing Economist Paul Krugman’s December of 2009 assessment. According to Krugman, to be meaningful, the economy needed to add 300,000 jobs a month, from the end of Obama’s 11th month in office, through December of 2014. But since then, as shown in the corresponding table, the jobs deficit hasn’t decreased at all.
Last month, according to the Bureau of Labor Statistics, the
New Jobs Benchmark
When we tweak Krugman’s December 2009 benchmark with the latest figures, we discover that to be meaningful, the number of jobs needed to return to more or less full employment by December of 2014, or within 2 ½ years is now 520,000 jobs a month, as follows:
In order to keep up with population growth, we would need to create 127,000 jobs times 30 months, or 3,810,000. Add in the need to make up for lost ground and we’re at around 15,600,000 (3,810,000 + 11,790,000) over the next 30 months — or 520,000 jobs a month.
However, if we just simply write-off Barack Obama’s last 3 ½ years as a foolish, but costly experiment, and extend the target date out another 5 years, or through June of 2017, then we come up with 323,500 jobs a month, as follows:
In order to keep up with population growth, we would need to create 127,000 jobs times 60 months, or 7,620,000. Add in the need to make up for lost ground and we’re at around 19,410,000 (7,620,000 + 11,790,000) over the next 60 months — or 323,500 jobs a month.
In other words, we aren’t moving in the right direction, we’re going in circles. Since the economy now needs to create 520,000 each and every month to be on a track towards full employment within 2 ½ years, or 323,500 jobs each and every month to be on track towards full employment within 5 years, Obama’s record of 80,000 jobs in June has only pushed us farther away from the mark. In fact, as I alluded to above, instead of heading towards full-employment, we are currently on track towards increasing the jobs deficit by another 3,120,000 jobs over the next 5 years.
The Bottom Line: As each month passes in which fewer than 127,000 jobs are created, the goal of full employment is pushed farther away. When Barack Obama was sworn into office, the
Photo Credit: Mr. Barlow’s Blog - Are you going round in circles?
Data: Worksheet on Google Docs
Related: The Real Jobs Deficit | Moving in the wrong direction.
7 Temmuz 2012 Cumartesi
Bush's agenda faces opposition from election-wary Republicans
Bush has outlined an aggressive agenda -- including restructuring Social Security, cutting a record budget deficit and easing immigration policies -- that he hopes will secure his legacy for posterity. His party's lawmakers have a simpler goal: winning re-election and maintaining or enlarging their House and Senate majorities in 2006.
``Bush sees himself as a consequential president in history who accomplished big things,'' says Bill McInturff, a Republican pollster. ``Most members of Congress can be very happy just strolling along saying, 'Here is all the money I delivered to my district.'''
Congressional Republicans are pushing for legislation to allow drug imports from Canada, a measure opposed by Bush and drug makers such as Pfizer Inc. and Merck & Co. Bush also faces resistance on his plan to ease immigration laws, which food- service companies such as Outback Steakhouse Inc. and Wendy's International Inc. support. And Wall Street analysts and economists hoping for measures to restrain the budget deficit are concerned that lawmakers facing re-election won't be inclined to cut spending.
``There are some great challenges,'' White House spokesman Trent Duffy says. ``This president is a big-game hunter. The process is just beginning.''
The Republicans, who gained expanded majorities in both chambers of Congress in the November elections, gave Bush some early successes this year with measures that curbed class-action lawsuits, rewrote bankruptcy laws and paved the way for oil drilling in Alaska's Arctic National Wildlife Refuge.
Easy Wins
These ``were easy wins that were left over from the last Congress,'' says Ethan Siegal, president of the Washington Exchange, which tracks policy for institutional investors. ``Everything else Bush has on the table is very difficult, and the discipline in his party is breaking apart.''
The first stirrings of dissent were heard when lawmakers took up Bush's 2006 budget, which calls for trimming federal benefits and other domestic programs while extending portions of his first-term tax cuts.
Last month, Senator Gordon Smith, an Oregon Republican, led six other Republicans in blocking Bush's plan to cut $14 billion from the Medicaid health program over five years. And when a Senate committee approved Bush's $284 billion highway bill, Senator James Inhofe of Oklahoma assured his fellow Republicans that the funding may be increased later.
Drug Imports
Republicans are also at odds with Bush's position on allowing Americans to import cheaper drugs from Canada. Senator Charles Grassley of Iowa, the powerful chairman of the Finance Committee, is pushing for legislation that would allow the imports, which Bush and drug makers oppose.
Representative Jo Ann Emerson, a Missouri Republican, says she is confident the bill allowing imports can clear the House. Lawmakers' ``constituents are saying, find any means possible to bring down the cost of drugs,'' she says.
Drug makers such as New York-based Pfizer, Whitehouse Station, New Jersey-based Merck and Madison, New Jersey-based Wyeth say the measure won't adequately address these concerns. ``We don't believe that re-importation is a solution to the problems of access and affordability of medications,'' Wyeth spokeswoman Natalie De Vane says. ``And it does pose a safety risk.''
Bush's call for a guest-worker visa program aimed at allowing migrants to fill low-skilled jobs may be the toughest to pass, because so many Republicans are opposed to it, says Bruce Josten, the head lobbyist at the U.S. Chamber of Commerce in Washington.
Opening Floodgates
Representative John Hostettler, an Indiana Republican who heads the House Judiciary Subcommittee on Immigration, said he wouldn't allow any bill easing immigration to be brought before his panel for a vote. ``It is my concern and others' concerns that if you legalize those who have illegally obtained residency here, you will open the floodgates,'' he said in an interview March 31.
The National Restaurant Association, which represents companies such as Tampa, Florida-based Outback Steakhouse and Dublin, Ohio-based Wendy's International, backs Bush's plan. The food-service industry is the largest U.S. employer of undocumented workers -- about 1.4 million of the nation's 8 million immigrants.
Second-Term Blues
These kinds of defections are common in a president's second term, particularly when his party is in power in Congress, says Stephen Wayne, a government professor at Georgetown University in Washington. In four of five second-term mid-term elections since World War II, the party that controlled the White House has lost seats in both chambers, says Jennifer Duffy, an analyst at the Cook Political Report, which tracks political races.
Most lawmakers are aware of this phenomenon, called the ``sixth-year itch,'' Duffy says, and Republicans will cast their votes on Bush's agenda items with this precedent in mind. ``It's a self-preservation issue,'' she says.
There are 15 Republican-held Senate seats on the ballot next year. In the House, where all members are up for re-election, 24 Republicans won their 2004 elections with 55 percent of the vote or less.
This dynamic is already evident in the voting behavior of Senator Rick Santorum of Pennsylvania, the No. 3 Senate Republican leader, who is expected to face a tough re-election contest in 2006 from Democrat Robert Casey Jr., the state treasurer.
Good for Pennsylvania
Santorum has parted ways with the president at least twice in the last month. He proposed a $1.10-an-hour increase to the $5.15-an-hour minimum wage, and voted in favor of an amendment to a 2006 budget plan that rejected Bush's call to cut nearly $2 billion from the Community Development Block Grant program and other economic development programs that are popular in his state.
``You're going to see him deviate on things that make sense for Pennsylvania,'' Duffy says.
Perhaps most significant for Bush's legacy, his plan to establish private Social Security accounts has failed to generate a critical mass of support. The proposal has proved unpopular in the polls, and Republican lawmakers including Representative Jim Nussle of Iowa and Representative John Mica of Florida have not made commitments to support it.
Wall Street Worries
Some Republicans share Wall Street's concern over the effect of the proposal on the budget deficit, which reached a record $412 billion last year. Any plan to create the accounts would add $1 trillion to $2 trillion to the deficit over the next 10 years, according to the Congressional Budget Office.
``The longer we continue to allow the public debt to rise, the more painful the ultimate cuts will be,'' says Lou Crandall, chief economist at Wrightson ICAP LLP, a research firm in Jersey City, New Jersey, that analyzes the effects of federal economic policies.
For many Republicans, though, concern about the deficit is mitigated by the desire to avoid the political pain that spending cuts or moderating Bush's tax cuts would entail.
During last month's Senate debate on Bush's request to extend his $1.85 trillion in tax cuts, only five Republican senators joined the chamber's 44 Democrats and one independent to demand that further reductions be offset by tax increases or spending cuts. While the Senate rejected, 50-50, an amendment to the fiscal blueprint requiring offsets, some Republicans plan to fight again this summer when party leaders advance the legislation.
Deficit cracking GOP's solidarity
This one is from within.
When Congress returns next month from its Thanksgiving recess, Republican leaders who have never failed to marshal their forces on big party-line votes face the prospect of defeat on tax cuts and spending restraint -- the core issues that have united the party since President Ronald Reagan and gave them their House majority in 1994.
They have lost some tax and spending votes already, and postponed others because of the specter of losing. After a five-year spending spree on everything from the Iraq war to Medicare, deficits are now jeopardizing the tax cuts that were the centerpiece of President Bush's first term.
A move to preserve tax cuts on capital gains and dividends -- the gemstone of the Bush tax cuts for conservatives -- is in trouble in both the House and the Senate. For the first time since George W. Bush took office, House Democrats are united against tax cuts, and Republican moderates are bucking their party leadership.
GOP leaders are pushing a measure to control entitlement spending by shaving Medicaid and food stamps for the poor. But the combination of investor tax cuts and reductions in poverty programs has already led to a series of embarrassing defeats in committee and on the House floor. Republicans are headed for a pre-Christmas showdown that could turn into a political disaster.
Hurricane topples plans
Hurricane Katrina last summer was a tipping point. The storm forced Republicans to ditch the estate tax repeal because it was deemed unseemly to end a wealth tax after poor people had lost their homes. Sensing a public relations disaster, Republican leaders also postponed extending the investor tax cuts until the end of the year.
Congress quickly passed $62 billion in emergency disaster relief. But Bush's promise to "do whatever it takes" to rebuild the Gulf Coast set off a rebellion among conservatives, who demanded spending cuts to pay the bill.
"I think they blinked after Hurricane Katrina," said Brad Woodhouse, a liberal activist who helped defeat Bush's Social Security overhaul and has turned his fire on the Republican budget, heading a liberal alliance called the Emergency Campaign for American Priorities.
"It was such an acknowledgment of how inappropriate these spending cuts to finance tax cuts are," Woodhouse said. "It was like blood dripping in the water for us."
The budget outlook -- and the problems facing the GOP -- promise to get much worse. Medicare's costly new prescription drug benefit, an $18 trillion unfunded liability sponsored by the White House and Republican leadership, starts in January. Just two years from now, in 2008, the enormous Baby Boom generation will begin retiring, ceasing income tax payments and starting to collect benefits, leading to a budget squeeze unprecedented in U.S. history.
"We're seeing the future," said Bruce Bartlett, a former Treasury official in the George H.W. Bush administration and tax-cut advocate. "The decisions that have been made over the last five years have resulted in the chickens coming home to roost."
Total spending increases under the current President Bush closely rival those of President Lyndon Johnson, a Democrat famous for conducting the Vietnam War while simultaneously increasing domestic spending.
Discretionary spending rose 48.5 percent in Bush's first term, according to an analysis by the libertarian Cato Institute, twice as much as in two terms under President Bill Clinton, when spending rose 21.6 percent. Adjusted for inflation, Bush has increased total spending at an annualized rate of 5.6 percent, compared with 1.5 percent under Clinton.
"It's only a matter of time before we stop talking about cutting taxes for a very long period of time and talk basically about increasing taxes," Bartlett predicted. "The end of the era of tax cutting is going to put tremendous strain on the Republican coalition, just as the end of the era of big spending put tremendous strain on the Democratic coalition" in the 1980s. "You're hearing more and more people on the Republican side talking about major losses in the congressional elections next year and about 2008 being a really, really bad year for Republicans."
In the two months since Republicans pulled their tax cut bills, the atmosphere has only gotten worse. Republicans lost two important off-year gubernatorial elections in Virginia and New Jersey. Bush's popularity has hit new lows, with the public now decidedly opposing the Iraq war. Leading GOP candidates, including Sen. Rick Santorum, a conservative member of the Senate leadership who faces a tough re-election fight in Pennsylvania, have refused to appear with Bush at campaign events.
"Republican members of Congress recognize that the president can't help them very much any more," said Cato Institute Chairman Bill Niskanen, a former Reagan administration economist. In addition, the indictment of former House Majority Leader Tom DeLay seriously weakened party discipline in the House and exposed deep divisions between fiscal conservatives and moderates.
"There is a substantial ideological split, particularly among House Republicans, on fiscal responsibility," Niskanen said. "A lot of them have gone along with a high rate of growth of spending but have done so without any enthusiasm."
As the post-Katrina conservative revolt gelled, the Republican leadership turned to Medicaid, food stamps and student loans for spending restraint. The Senate is proposing $35 billion in reductions and the House $50 billion; both chambers are also seeking between $56 billion and $59 billion in tax cuts.
Large gap to cross
There are enormous differences between the House and Senate on both measures. Reconciling them will be very difficult in the two weeks Congress has left before adjourning for Christmas.
Combined, the measures increase the deficit. The spending restraint appeased conservatives but provoked an outcry from Democrats and GOP moderates. Efforts to console moderates by dropping a measure for oil exploration in the Arctic National Wildlife Refuge and adding subsidies for home heating costs and dairy farmers have done little but stoke more controversy.
The Medicaid and food stamp cuts have attracted the most fire, and barely passed the House 217-215 before Thanksgiving, with no Democratic support. Republicans recessed before attempting to pass the tax cuts.
Much of the roughly $11 billion in cuts over five years proposed by the Senate for Medicaid, a health care program for the poor that many elderly use to pay nursing home costs, were recommended by state governors. They contend the program is becoming burdensome for the states, which must come up with money to match federal funding. Democrats have portrayed the reduction in the growth of Medicaid spending as dire, but even liberal analysts concede they are not severe. One provision would increase co-payments from $3 to $5, and another would allow elderly nursing home residents to shield $750,000 in home equity, raised from $500,000 after Republican moderates objected.
The cuts are "not awful," said Jason Furman, a former adviser to Democratic presidential candidate John Kerry now at the liberal Center for Budget and Policy Priorities.
"It's less about the magnitude and more about why should you be asking poor people to pay anything more for health care at the same time that you're giving brand-new tax cuts to the most fortunate," Furman said. "That is what is just completely wrong with this picture.
"A go-it-alone Republican strategy works when you're trying to cut taxes or increase spending, but when you're trying to make tougher choices, the only way to do it is to work together with the other party for shared sacrifice," Furman said. "Budget reality is starting to catch up with the Republican Party."
Heavy U.S. borrowing with much more on the horizon is stoking concern about a potential financial crisis. Any one of several big economic imbalances -- including looming pressures on the federal budget, the zero U.S. savings rate, the historically high trade deficit, a real estate boom that has supported consumer spending -- could provoke a sudden financial shift, economists say.
"It's not unrealistic to think that if we continue to delay -- and the Baby Boomers do start to retire as early as 2008 -- that sooner or later the lenders to this country may decide it's not the best place to park all their savings," said Maya MacGuineas, director of fiscal policy for centrist New American Foundation.
Bartlett warns of a "financial Katrina."
"It's just a matter of time before we have some kind of economic event that I think is just going to change the political situation 180 degrees and make deficit reduction the order of the day," he said. "I don't know what it will be. I just know that when you've got gasoline spilling onto the floor of your house, it doesn't really matter where the spark comes from."
Bush's Budget Sparks Bipartisan Protest
Treasury Secretary John Snow, among leadoff witnesses in a series of congressional hearings, said the administration had made the tough choices to fund programs that were working and eliminate those that were not.
"This budget represents the president's dedication to fiscal discipline, an efficient federal government and the continuation of a thriving U.S. economy," Snow told the Senate Finance Committee.
But critics noted that the deficit for the current budget year would rise to an all-time high of $423 billion and they questioned Bush's projections for declining deficits in future years.
Democrats said Bush's proposed budget for Fiscal 2007, beginning Oct. 1, was seriously understating spending that will be needed to fight wars in Iraq and Afghanistan and did not include the billions of dollars needed in future years to make sure the alternative minimum tax designed for the wealthy does not pinch more and more middle class taxpayers.
Sen. Max Baucus, D-Mont., said the explosion of federal deficits was adding to the national debt, requiring the administration to come to Congress in the next few weeks to raise the $8.18 trillion debt ceiling. He said all of that debt is being financed more and more by foreigners.
"America is borrowing 80 percent of the world's annual savings. We are handing our children and our children's children a set of obligations they will owe to foreign central banks," Baucus told Snow.
Sen. Kent Conrad, D-N.D., produced charts showing that the amount of federal government debt held by foreigners before Bush became president totaled $1 trillion and now in the first five years of his administration has more than doubled.
Snow said the ability of the United States to pay interest on the debt was a function of the economy's size and the vitality of the nation's bond markets.
"There is no doubt given the deep and liquid capital markets of the United States, that we will continue to attract capital from investors around the world," the Treasury secretary told the committee.
Testifying separately before the Senate Armed Services Committee, Defense Secretary Donald H. Rumsfeld said the military must continue to change in order to defend against terrorists who could get a nuclear weapon or launch a biological attack.
"No nation, no matter how powerful, has the resources or capability to defend everywhere, at every time, against every conceivable type of attack," Rumsfeld said. "The only way to protect the American people, therefore, is to provide our military with as wide a range of capabilities, rather than preparing to confront any one particular threat.
Bush's budget, which was sent to Congress on Monday, has faced predictable criticism from Democrats but it is also facing attacks from Republicans.
Sen. Arlen Specter, R-Pa., called Bush's proposed cuts in education and health "scandalous" while Sen. Olympia Snowe, R-Maine, said she was "disappointed and even surprised" at the extent of the administration's proposed cuts in Medicaid and Medicare.
Bush's spending blueprint for the 2007 budget year that begins Oct. 1 would provide large increases for the military and homeland security but would trim spending in the one-sixth of the budget that covers the rest of discretionary spending. Nine Cabinet agencies would see outright reductions with the biggest percentage cuts occurring in the departments of Transportation, Justice and Agriculture.
And in mandatory programs _ so-called because the government must provide benefits to all who qualify _ the president is seeking over the next five years savings of $36 billion in Medicare, $5 billion in farm subsidy programs, $4.9 billion in Medicaid support for poor children's health care and $16.7 billion in additional payments from companies to shore up the government's besieged pension benefit agency.
Senate Finance Committee Chairman Charles Grassley noted that Congress has just completed a yearlong battle to achieve far smaller savings in Medicaid and Medicare and "any more reductions of a significant scope could be difficult this year."
Bush's budget would meet his twin goals of making permanent his first-term tax cuts, which are set to expire by 2010, and cutting the deficit in half by 2009, the year he leaves office.
Democrats, hoping to wrest control of Congress from the Republicans in this year's election, charged that Bush was forced into an austere spending plan because of the estimated $1.35 trillion over the next decade that it will cost to extend his first-term tax cuts, which Democrats claim primarily benefit the very wealthy.
In addition to strict limits on most discretionary, non-security spending in the budget, Bush sought drastic cuts or total elimination on 141 programs that would produce savings of nearly $15 billion in 2007.
The targeted programs included 42 in the area of education ranging from drug-free schools to federal support for the arts, technology and parent-resource centers.
Even previously favored agencies such as the National Institutes of Health were not immune from the budget knife with overall funding essentially frozen and many individual programs seeing budget cuts. That brought objections from groups ranging from the American Heart Association to the American Diabetes Association.
Bush's budget submission is just the opening round in what opponents are promising will be a spirited fight in Congress over spending priorities.
"The president's budget slashes resources for exactly the priorities we should be supporting _ groundbreaking medical research, health care for our seniors, and education for our kids," said Sen. Tom Harkin, D-Iowa.
Bush's Legacy: Debt
UNITED STATES - The Bush legacy is going to include a nasty four-letter word: debt.
On second thought, make that staggering, long-term debt, perhaps in excess of $11 trillion, that will tie the hands of the next president and Congress, to say nothing of imposing a crushing burden on taxpayers.
Just a few months ago, the Iraq war looked like the biggest thing in the eight-year era of the second President Bush, during which his party controlled Congress for six years.
Just a couple of Sunday mornings ago, Bob Woodward of the Washington Post said on national television that the war in Iraq “is probably the most important thing going on right now,” adding that in January the war in Iraq will be topic one in the next administration, and topic two will be the war in Afghanistan.
Now the country suddenly is facing a financial crisis fraught with the possibility of unprecedented economic disaster.
If that isn’t enough to make you reach for the antacid tablets, the president still has about three months left in office, plenty of time for yet another calamitous turn of events.
The national debt was about $5.7 trillion when Bush took office in January 2001. Today, after almost eight years and a couple of wars, the debt has risen to about $9.7 trillion.
And, by the way, that figure might rise another $1 trillion or so before Bush steps down on Jan. 20.
The national debt ceiling today is $10.6 trillion. Treasury Secretary Henry Paulson wants Congress to raise that to $11.3 trillion to clear the decks for massive borrowing to deal with the nation’s financial crisis.
A national debt of $11.3 trillion would come to more than $37,000 each for every man, woman and child in the United States.
And all this comes during an era of allegedly conservative, fiscally responsible Republican domination in Washington.
Obama's Achilles Heel: China
The problem is its going to continue to skyrocket as long as the United States is fighting off a recession, two wars and high oil prices. US President Barack Obama thus has his work cut out for him, problems left behind by George W. Bush, and his problems are quantified by the statement that "Most Americans don't buy American, they buy Chinese."
"Most Americans don't buy American, they buy Chinese."That is not completely true. What is true that on average the USA imports $2 trillion USD worth of products every year of which approx. $300 billion is from China (approx 15%).
That is peanuts when you realize the USA only exports an average of $65 billion to China annually. The end result is an annual trade deficit of $235 billion taken out of the American economy and bolstering China's economy.
China is not the only country that enjoys a trade deficit with the United States. Japan, South Korea and numerous other countries trade heavily with the USA, often in products that Americans "need" in terms of electronics, but also a lot of products that could be made in North America but has been outsourced instead.
What the USA needs is more factories inside America that is hiring people, making products Americans can use (preferably products and equipment that will make them more competitive internationally) and are priced fairly.
Otherwise what we're opening ourselves up to is to communism... Oh dear, I said it. The dreaded C-word.
If the USA cannot shake off the recession and high unemployment rate America's economy will continue to flounder and will eventually be forced to create a more socialist-based economy as capitalism falls apart. This means government "work-fare programs", huge cutbacks to arts & culture funding (including Hollywood), an increase in food stamp usage, and a skyrocketing crime rate as Americans become more desperate for survival.
The 1st thing the USA needs to do is put a halt on all free trade discussions with Asia. America isn't ready for such big trading partners. The economy is too fragile right now.
The 2nd thing the USA needs to do is find cheaper alternatives to expensive oil. Oil prices are simply too high and its hampering transportation costs of materials/products. Hydrogen power perhaps.
The 3rd thing the USA needs to do is cut taxes on the poor, increase taxes on the rich. The poor will spend every dollar they have anyway, whereas the rich have a tendency to stick their money in the bank and sit on it.
The 4th thing is create tax breaks for companies that operate solely in the USA. This will benefit small businesses and new startups.
The 5th thing the USA needs to do is enforce mandatory retirements. Old people who keep working when they should be retired are essentially stealing jobs from younger Americans. Exceptions can be made for industries that have a shortage (ie. doctors), but otherwise these people need to be put out to pasture.
The end goal is to get more Americans working and building things again, creating opportunities for a new generation of hard working Americans.
5 Temmuz 2012 Perşembe
Louisiana's Bold Bid to Privatize Schools
By Stephanie Simon - June 1, 2012Louisiana is embarking on the nation'sboldest experiment in privatizing public education, with thestate preparing to shift tens of millions in tax dollars out ofthe public schools to pay private industry, businesses ownersand church pastors to educate children.
Starting this fall, thousands of poor and middle-class kidswill get vouchers covering the full cost of tuition at more than120 private schools across Louisiana, including small,Bible-based church schools.
The following year, students of any income will be eligiblefor mini-vouchers that they can use to pay a range ofprivate-sector vendors for classes and apprenticeships notoffered in traditional public schools. The money can go toindustry trade groups, businesses, online schools and tutors,among others.
Every time a student receives a voucher of either type, hislocal public school will lose a chunk of state funding.
"We are changing the way we deliver education," saidGovernor Bobby Jindal, a Republican who muscled the plan throughthe legislature this spring over fierce objections fromDemocrats and teachers unions. "We are letting parents decidewhat's best for their children, not government."
BIBLE-BASED MATH BOOKS
The concept of opening public schools to competition fromthe private sector has been widely promoted in recent years bywell-funded education reform groups.
Of the plans so far put forward, Louisiana's plan is by farthe broadest. This month, eligible families, including thosewith incomes nearing $60,000 a year, are submitting applicationsfor vouchers to state-approved private schools.
That list includes some of the most prestigious schools inthe state, which offer a rich menu of advanced placementcourses, college-style seminars and lush grounds. The topschools, however, have just a handful of slots open. The DunhamSchool in Baton Rouge, for instance, has said it will acceptjust four voucher students, all kindergartners. As elsewhere,they will be picked in a lottery.
Far more openings are available at smaller, less prestigiousreligious schools, including some that are just a few years oldand others that have struggled to attract tuition-payingstudents.
The school willing to accept the most voucher students --314 -- is New Living Word in Ruston, which has a top-rankedbasketball team but no library. Students spend most of the daywatching TVs in bare-bones classrooms. Each lesson consists ofan instructional DVD that intersperses Biblical verses withsubjects such chemistry or composition.
The Upperroom Bible Church Academy in New Orleans, abunker-like building with no windows or playground, also hasplenty of slots open. It seeks to bring in 214 voucher students,worth up to $1.8 million in state funding.
At Eternity Christian Academy in Westlake,pastor-turned-principal Marie Carrier hopes to secure extraspace to enroll 135 voucher students, though she now has roomfor just a few dozen. Her first- through eighth-grade studentssit in cubicles for much of the day and move at their own pacethrough Christian workbooks, such as a beginning science textthat explains "what God made" on each of the six days ofcreation. They are not exposed to the theory of evolution.
"We try to stay away from all those things that mightconfuse our children," Carrier said.
Other schools approved for state-funded vouchers use socialstudies texts warning that liberals threaten global prosperity;Bible-based math books that don't cover modern concepts such asset theory; and biology texts built around refuting evolution.
TEACHERS WEIGH LAWSUIT
The U.S. Supreme Court has ruled that vouchers can be usedfor religious education so long as the state is not promotingany one faith but letting parents choose where to enroll theirchildren.
In Louisiana, Superintendent of Education John White saidstate officials have at one time or another visited all 120schools in the voucher program and approved their curricula,including specific texts. He said the state plans more "duediligence" over the summer, including additional site visits toassess capacity.
In general, White said he will leave it to principals to besure their curriculum covers all subjects kids need and leave itto parents to judge the quality of each private school on thelist.
That infuriates the teachers union, which is weighing alawsuit accusing the state of improperly diverting funds frompublic schools to private programs of questionable value.
"Because it's private, it's considered to be inherentlybetter," said Steve Monaghan, president of the LouisianaFederation of Teachers. "From a consumer perspective, it's buyerbeware."
To date, private schools have not had to give their studentsstate standardized tests, so there's no straightforward way forparents to judge their performance. Starting next year, anystudent on a voucher will have to take the tests; each privateschool must report individual results to parents and aggregateresults to the state.
The 47-page bill setting up the voucher program does notoutline any consequences for private schools that get poor testscores. Instead, it requires the superintendent of schools tocome up with an "accountability system" by Aug. 1. Once he does,the system cannot be altered except by legislative vote.
White would not say whether he is prepared to pull vouchersfrom private schools that do poorly on tests.
He pointed out that many kids applying for vouchers are nowenrolled in dismal public schools where two-thirds of thestudents can't read or do math at grade level and half will dropout before they graduate high school. Given that track record,he argues it's worth sending a portion of the roughly $3.5billion a year the state spends on education to private schoolsthat may have developed different ways to reach kids.
"To me, it's a moral outrage that the government would say,'We know what's best for your child,'" White said. "Who are weto tell parents we know better?"
That message resonates with Terrica Dotson, whose12-year-old son, Tyler, attends public school in Baton Rouge. Hemakes the honor roll, but his mom says he isn't challenged inmath and science. This week she was out visiting privateschools. "I want him to have the education he needs," she said.
The state has run a pilot voucher program for several yearsin New Orleans and is pleased with the results. The proportionof kids scoring at or above grade level jumped 7 percentagepoints among voucher students this year, far outpacing thecitywide rise of 3 percentage points, state officials said.
Studies of other voucher programs in the U.S. have shownmixed results.
In Louisiana the vouchers are available to any low- tomiddle-income student who now attends a public school where atleast 25 percent of students test below grade level.
Households qualify with annual income up to 250 percent ofthe poverty line, or $57,625 for a family of four.
Statewide, 380,000 kids, more than half the total studentpopulation of 700,000, are eligible for vouchers. There are onlyabout 5,000 slots open in private schools for the coming year,but state officials expect that to ramp up quickly.
NO FISCAL ANALYSIS
Officials have not estimated the price tag of these programsbut expect the state will save money in the long run, becausethey believe the private sector can educate kids more cheaplythan public schools.
Whether those savings will materialize is unclear.
By law, the value of each voucher can't exceed the sum thestate would spend educating that child in public school -- onaverage, $8,800 a year. Small private schools often charge aslittle as $3,000 to $5,000 a year.
Yet at some private schools with low tuition, administratorscontacted by Reuters said they would also ask the state to coveradditional, unspecified fees, which would bring the cost totaxpayers close to the $8,800 cap. The law requires the state tocover both tuition and fees.
In the separate mini-voucher program due to launch in 2013,students across Louisiana, regardless of income, will be able totap the state treasury to pay for classes that are offered byprivate vendors and not available in their regular publicschools.
White said the state hopes to spur private industry to offervocational programs and apprenticeships in exchange for vouchersworth up to $1,300 per student per class. Students can also usethe mini-vouchers to design their own curriculum, tapping statefunds to pay for online classes or private tutors if they're notsatisfied with their public school's offerings.
State officials will review every private-sector classbefore approving it. They are still working out how to assessrigor and effectiveness.
The state has not done a formal fiscal analysis, but publicschool advocates say subtracting the costs of vouchers fromtheir budgets is unfair because they have the same fixed costs-- from utilities to custodial services -- whether a child is inthe building four hours a day or six. White responds that thestate is not in the business of funding buildings; it's fundingeducation.
While public schools fear fiscal disaster, many privateschool administrators see the voucher program as an economiclifeboat.
Valeria Thompson runs the Louisiana New School Academy inBaton Rouge, which prides itself on getting troubled studentsthrough middle and high school. Families have struggled to paytuition, she said, and enrollment is down to about 60 kids.
"We're a good school," Thompson said, "but we've beenstruggling fiscally."
The vouchers have brought in a flood of new applicants andthe promise of steady income from taxpayers. Thompson enrolled17 new students in two days last month and hopes to bring in asmany as 130. "I'm so grateful," she said. "You can't imagine howgrateful."
http://www.reuters.com/article/2012/06/01/us-education-vouchers-idUSL1E8H10AG20120601
Obamacare Has 'Bent the Insurance Cost-Curve North, Not South'
By Susan Jones - June 1, 2012 "There's no question that the (Affordable Care) Act has, to this date, bent the health insurance cost curve north, not south, and the forecast in that regard is growing darker," an insurance benefits executive told a House panel on Thursday.That's because the law requires health plans to cover individuals, such as adult children, that they did not cover in the past; it bars health plans from putting lifetime and annual dollar limits on benefits; and it requires plans to provide preventive care services -- including contraceptives in a few months' time -- at no out-of-pocket cost to the enrollee, Edward Fensholt told the House Subcommittee on Health, Employment, Labor, and Pensions.
"These mandates have increased our clients' health plan costs 2 to 3 percent on average to this point," he said. And he said the costs will escalate further when new rules -- such as reductions in waiting periods and the automatic enrollment requirement -- take effect in 2014.
Fensholt is a senior vice president of Lockton Companies, LLC, an insurance brokerage and consulting firm that provides employee-benefits expertise to 2,500 mostly middle-market employers.
In addition to the Affordable Care Act’s coverage mandates, Fensholt said a "great frustration" for his clients is the law's "many additional administrative burdens."
Under federal law right now, Fensholt said, a simple group health-care plan is required to supply up to 50 separate notices, disclosures and reports to enrollees or to the federal government -- often more than once. He noted that the Affordable Care Act added more than a dozen of those notices, disclosures and reports.
Fensholt gave several examples: Under the Affordable Care Act, health plans must provide a "four-page, double-sided summary of plan coverage in a very hard-wired format at specific times, not only to enrollees but to individuals who are merely eligible for coverage. And plans face fines of up to $1,000 per violation of this requirement," he said.
And starting in 2014, the law will require "significant and frequent reporting by employers," including what specific medical coverage the employer offers; a roster of employees who are eligible and enrolled in the company's health plan and whether those employees are full-time or part-time; the cost of the employer's health insurance offerings, and the employer's and employees' respective shares of that cost; and how many months of the year an employee and each of his enrolled dependents were covered by a company-sponsored plan.
"Our clients are already drowning under the cost of provi ding robust health insurance to employees," Fensholt said. "Rather than tossing employers a lifeline, the Affordable Care Act is in many ways an anchor -- albeit a well-intentioned one -- by piling on additional costs and burdens."
Fensholt said his clients don't understand why -- at a time when they're struggling to provide a fringe benefit -- "Congress would make the process more expensive and more complicated, rather than less so."
Bill Streitberger, vice president of human resources for the Red Robin restaurant chain, told the panel that when health care costs increase, his company has less money to invest in opening new restaurants.
For the last three years, he noted, Red Robin's health care costs per employee have increased more than six percent every year -- a much greater pace than the growth of Red Robin's sales or net income, he said.
The Affordable Care Act's 2014 mandates, Streitberger added, could negatively impact the ability of companies to grow and offer benefits to their employees.
He said the law will force companies like Red Robin "to decide on whether to reduce benefits to maintain affordable coverage, or accept the burden of increased company contributions, limiting our ability to continue to grow and create new jobs. Either way, we feel it could be a lose-lose for Red Robin" and its employees, he said.
http://cnsnews.com/news/article/obamacare-has-bent-insurance-cost-curve-north-not-south-insurance-executive-tells-house
Immigration Reform
by: Bryan Baumgart Incentive and Motivation
We have to take away the incentive to immigrate illegally and motivate LEGAL immigration. We do so by removing the job opportunities for ILLEGAL immigrants and replace them with job opportunity for LEGAL immigrants. This helps us keep better tabs on who is coming and going and helps immigrants become productive, contributing, taxpaying members of society rather than living at our expense.
Remove incentive for illegal immigration:
- Establish an effective “e-verify” system such as a website to verify the authenticity of social security numbers with the potential to print off the verification for record keeping.
- Crack down on employers that violate the law through huge crippling fines, especially for repeat offenders.
Motivate legal immigration:
- Streamline the immigration process so those immigrating legally don’t have to watch folks jump in line and avoid the long waits and outrageous costs associated with legal immigration.
- Increase the number of immigrants we welcome each year.
- Provide a one-year grace period for all illegal immigrants currently residing within the country to begin the process of legally immigrating to this country.
- Begin actually enforcing immigration laws including detention and detainment.