Who Pays?

CNN reports that in 2009, 47% of Americans, or roughly 71 million people, won’t pay a dime in federal income taxes. In fact, some of these folks will actually be owed money by the government because of various social safety net programs.

At first glance, this might seem like welcome news. Maybe the summer tea parties really had an effect.

Unfortunately, however, all it really means is a smaller and smaller pool of taxpayers are responsible for financing the growing largess of the federal government.

And although every American aged 18 and older has the right to vote for our representatives in Washington, it turns out that only about 50% of them will actually pay for effects of those votes.

And the result, as a number of folks have pointed out, is this:


It is much easier to be complacent to massive increases in government spending, and vote for those who support it, if the dollars aren’t coming out of your pocket.

House Democrats Voting to NOT Read the Bills

Despite polls saying that over 80% of voters would like Congress to post legislation for review prior to votes, Senate Democrats earlier this week voted to do the exact opposite.

In fact, Democrats on the Senate Finance Committee (the Committee currently most responsible for shaping health care reform legislation) voted to continue advancing legislation to the Senate floor that is neither in its final form (as in even they haven’t read the bill) nor been scored by the Congressional Budget Office (no one knows what it will really cost).

You see, at least according to Democrats on the Finance Committee, ordinary Americans would think the legislation too complex and showing it to them ahead of time would only confuse us all.

As such, Finance Democrats claim “tradition” to keep the text of this massive policy overhaul away form the American public for as long as possible.

The Heritage Foundation has an informative post on the whole situation and the vote here. This is their conclusion:

Right now, the media that is covering every twist and turn of the committee’s “mark up” has ignored this quaint Senate tradition and what it means. Weren’t we taught after all, in our high school civics classes that lawmakers work on laws, not vague concepts? And where is all the analysis of the implications of this tradition on the calls for transparency? And what of the growing demands from citizens that lawmakers read the bill before voting for it? What if there is no bill to read?

The Journal Takes a Fresh Swipe at the Stimulus

In a paper being prepared for the National Bureau of Economic Research, two Harvard affiliated scholars, one a professor the other a recent grad, tested the theory that stimulus spending boosts economic growth "exponentially." In other words, for every dollar of government spending (or in this case increased debt) do we actually reap a dollar or more of benefit?

As can be expected, the WSJ adaptation isn't an excessively easy read however, the eventual conclusion punches a few more holes in the rescue scenario being pushed by the Obama Administration:

The bottom line is this: The available empirical evidence does not support the idea that spending multipliers typically exceed one, and thus spending stimulus programs will likely raise GDP by less than the increase in government spending. Defense-spending multipliers exceeding one likely apply only at very high unemployment rates, and nondefense multipliers are probably smaller. However, there is empirical support for the proposition that tax rate reductions will increase real GDP.

Cash for Clunkers: Part Duex

Cash for Clunkers is back, though this time the wildly successful program will be focused on household appliances. From today's Eagle Tribune:

Now that you've traded in your 1989 junker, it's time to trade in the old refrigerator for a new, energy-efficient model.

The Department of Energy has made about $7 million available for New Hampshire and Massachusetts residents to purchase new, energy-efficient appliances in a program that will operate similar to the Cash for Clunkers program for automobiles.

Almost $300 million will be available nationwide, with $1.2 million allocated for New Hampshire and $6 million for Massachusetts.

But states are still working out the details of the program, which will operate differently in each state. Final applications aren't due to the federal energy department until Oct. 15.

Lisa Capone, spokeswoman for the Massachusetts Office of Energy and Environmental Affairs, said after the application is filed, the federal government still has to approve each state's plan.

Unsurprisingly, retailers aren't sold on this new government gimmick:

Rick Dube, president of Dick's TV and Appliance in Methuen, said he just hopes this program operates smoother than the first Cash for Clunkers.

"I hope they do better with appliances than the cars," Dube said. Until he hears what appliances will be covered under the program, Dube said, he's not making any guesses as to how it will affect his business.

Jamie Paquet, a sales consultant with Baron's Major Brands Appliances, with stores in Plaistow and Salem, said their store is also waiting for more information from the state before they get excited.

"It's a very cloudy picture," Paquet said.

Even with a lot of unanswered questions, Paquet said he's not convinced this program will be as beneficial to the customer.

More Unemployed Seeking Fewer Jobs

Despite claims by the main stream media and the stimulus czar himself, VP Joe Biden, that the economy is getting better, signs continue to point to a sustained downturn not at all allevaited by the stimulus package.

The New York Times reports today:

Job seekers now outnumber openings six to one, the worst ratio since the government began tracking open positions in 2000. According to the Labor Department’s latest numbers, from July, only 2.4 million full-time permanent jobs were open, with 14.5 million people officially unemployed. ...

During the last recession, in 2001, the number of jobless people reached little more than double the number of full-time job openings, according to the Labor Department data. By the beginning of this year, job seekers outnumbered jobs four-to-one, with the ratio growing ever more lopsided in recent months.

As you can see from this NYT chart, the gap has only grown since early 2009 when the stimulus was enacted.

Stimulus "Success" Impresses Biden, Rest of America? Not so much.

Vice-President Biden recently told a collection of the nation's governors that in his "wildest dreams" he never though the stimulus would work as well as it has.

Unsure what Biden offered as evidence for this resounding success, but in typical fashion he talked enough to avoid having to answer many questions regarding the subject. "The session lasted 45 minutes," reports the Wall Street Journal, "but there was time for only four questions from governors."

Despite Biden's review, the American people remain unconvinced. In a recent CBS poll, less than 40% of respondents believe the $800 pork package has impacted the economy in any meaningful way.

Stimulus Bloats the Federal Government

USA Today is reporting:

The $787 billion economic recovery package also is stimulating growth in the federal government as agencies hire thousands of workers and spend millions of dollars to oversee and implement the package, according to government records and spokesmen.

Fourteen of the top federal agencies responsible for spending under the American Recovery and Reinvestment Act say they've hired about 3,000 workers with stimulus money. That's helped fuel the continued growth of the federal government, which increased by more than 25,000 employees, or 1.3%, since December 2008, according to the latest quarterly report. During that time, the ranks of the nation's unemployed increased by nearly 4 million, Labor Department statistics show.

Overall, there are about 2 million federal workers, the data show.

Thirteen agencies that report stimulus-related administrative expenses separately on their weekly spending reports say they've spent $186.8 million so far on salaries and other overhead. Those agencies have reported spending $46.1 billion in stimulus funds overall.

This helps to explain another stimulus problem that has begun manifesting itself, the bureaucracy responsible for transparency is crushing any hope of it, according to Reuters:

U.S. President Barack Obama's pledge to flood Americans with information about economic stimulus spending could misfire, the independent Congressional auditor said on Wednesday.

The volume of information required for a report due next month may be creating problems with the quality of data, the Government Accountability Office said in a special report.

"This unprecedented level of detailed information to be reported by a large number of recipients into a new centralized reporting system raises possible risk for the quality and reliability of these data," said the report. …

Other problems identified by the GAO include states, which provide a large portion of the data, not being reimbursed by the federal government at a rate that covers the costs of collecting and reporting it.

"These additional costs can exacerbate states' existing fiscal stress," said the report.