Voice For Liberty

Tag: Stimulus bill

  • Fake stimulus exposed by Watchdog group

    There’s a new dog in town, and doing a great job already.

    In New Mexico, the New Mexico Watchdog reported the story More Than 4,800 New Jobs Created in New Mexico in Less than a Month from Stimulus, According to Obama Administration Data, which is apparently the first news story to notice the glaring errors — some say fraud — in stimulus data provided by the government website Recovery.gov.

    The national Watchdog site then reported $6.4 Billion Stimulus Goes to Phantom Districts.

    Watchdog.org is a project of the Franklin Center for Government & Public Integrity. There are state-level watchdogs in a growing number of states, including Kansas at Kansas Watchdog. The Kansas group has done some great work already, to the annoyance of some Kansas politicians and bureaucrats who prefer to operate under less scrutiny. It’s worthwhile to bookmark the Kansas Watchdog web site, and to subscribe to their various other contact methods such as their rss feed, Facebook presence, email updates, and Twitter stream.

  • Stop spending our future

    It’s hard to comprehend the spending by the federal government over the last year. The numbers are so large, the spending programs announced so quickly, one after another, that sometimes we need to step back and take a look at the big picture. When we do, it’s quite terrifying, especially when we realize that the Obama administration and Congress have several more large programs to pass.

    A video that places these programs and spending in context is available from StopSpendingOurFuture.org. It’s short and to the point. The companion website, a joint effort of The Heritage Foundation and Americans for Prosperity Foundation, provides additional information and background.

  • Wichita school district’s cost-shifting burdens federal coffers

    When USD 259, the Wichita public school district, recently sold some bonds, they took advantage of a new program called Build America Bonds. This program was passed as part of the federal stimulus program earlier this year.

    The benefit to the Wichita school district is that the federal government will pay 35% of the interest on the bonds. Reading the news release from the school district, it’s just like free money. Pennies from heaven, as it were.

    The problem is that the Build America Bonds are a tremendous burden to federal taxpayers, and will likely be so for some time. As a recent Wall Street Journal article reported: “With every new Build America sale, which applies to only taxable debt, interest payments as long as 30 years in the future are added to the government’s obligations. By even conservative estimates, the program is racking up ‘staggering’ costs, according to Municipal Market Advisors.”

    Cost-shifting to other taxpayers is a favorite tactic of the Wichita school district. Campaign buttons worn during the bond issue boldly proclaimed 25%, that being the percentage of the Wichita bond issue costs that taxpayers living in other Kansas school districts would pay. Not wanting to miss out on a good thing, many other Kansas school districts have passed bond issues that we in Wichita have to pay for.

    Now, through the Obama administration’s Build America Bonds program, the Wichita school district is able to spread its costs across the entire county.

  • Wichita school bond sale claims mislead

    In a news release, USD 259, the Wichita public school district, is claiming a huge victory in the first sale of bonds authorized by last year’s election. But if you place the facts in context, with proper background, it turns out the conditions of the sale are quite different from what USD 259 claims.

    Here’s the biggest discrepancy in the Wichita school district’s telling of the story: During last year’s campaign for the bond issue, the district used 4.75% as an estimate for the interest rate for the bonds. The news release is correct in stating that the rate the district faced when they sold the bonds was 6.22%. That’s a rate 147 basis points higher than the estimate — a huge difference.

    Another way to look at what happened is to examine the repayment costs of the bonds. Selling $132.5 million in bonds at 4.75% interest (the estimated rate) means the district would pay $6,293,750 in interest each year. The same amount at 6.22% interest (the actual rate) means paying $8,241,500 in interest. That’s an increase of $1,947,750 per year, or 30.9% more than what the district estimated residents of the district would pay. This looks like a big problem for the taxpayers living in the Wichita school district.

    But wait: USD 259 is claiming the bond sale saved money. How so? Enter the United States government in the form of the Obama stimulus plan. Specifically, the “Buy America Bonds” program, which pays 35% of the interest for bond issuers. Subtract 35% from 6.22%, and you get 4.043%. That’s the effective interest rate the district is paying on these bonds.

    This is the basis on which USD 259 claims victory. But consider a few questions:

    Last year, did the school district know there would be a recession, and that a stimulus bill providing a subsidy would be passed? Of course not.

    Then, consider who pays the 35% subsidy? The answer, of course, is you and I, as federal taxpayers. But the Wichita school district treats the subsidy as free money. These bonds are being issued all over the country, and Wichitans have to pay for them in order for others to help us with our bonds.

    Cost-shifting to other taxpayers is a favorite tactic of the Wichita school district. Campaign buttons worn during the bond issue boldly proclaimed 25%, that being the percentage of the Wichita bond issue costs that taxpayers living in other Kansas school districts would pay. Not wanting to miss out on a good thing, many other Kansas school districts have passed bond issues that we in Wichita have to pay for.

    There’s also the district’s contention that they sold the bonds in May to “take advantage of favorable interest rates.” There are a few problems with this statement, the first being that at any given moment in time, we really don’t know if interest rates are favorable. We can compare today’s rate to last month’s or last year’s, but that’s all. No one knows what rates will be in the future.

    In any case, if USD 259 received advice that interest rates were going up, it was bad advice. That’s because the yield of these bonds on the market today is 5.475%. This implies that if the bonds were sold today, the district could issue them at that rate instead of the higher 6.22% rate they were sold at. Then, of course, we’d subtract the 35% Build America Bonds subsidy from that, for a net rate of 3.56%. That’s what we’re missing out on due to selling the bonds when the district thought rates were “favorable.”

    So here we have the Wichita school district snatching apparent victory from the jaws of defeat. Discerning taxpayers will realize, however, that the circumstances surrounding this victory — such that it is — are only serendipity. For the district to claim otherwise is shameful.

    Here’s the news release from USD 259, dated May 11, 2009:

    First set of bonds sold — low interest rates save millions

    The Wichita Board of Education approved the sale of $188 million of bonds from the $370 million bond issue approved by voters on November 4, 2008. The Board made the decision to sell to take advantage of favorable interest rates. The BOE approved bonds at rates below pre-election estimates, saving taxpayers more than $19.9 million in reduced interest costs.

    The district marketed $132.5 million of the bonds as Build America Bonds. These bonds are a new option created by the federal Stimulus Plan of 2009. The bonds are issued as taxable securities with the district receiving a subsidy of 35% of the interest direct from the federal Treasury. This portion of the financing was sold at a rate of 6.22%; however, with the 35% subsidy, the net cost to the Wichita Public Schools is 4.043% interest.

    The remaining Phase I bonds were issued as traditional tax-exempt bonds totaling $58.76 million. A portion of these bonds refunded previously issued bonds of the district, reducing the interest rate and saving approximately $368,000 in future debt service payments.

    The combination of the Build America Bonds and traditional tax-exempt bonds resulted in an all inclusive cost of less than 4% for the district. Compared to the pre-election estimated of 4.75% for the financing, the reduced interest cost is $19,944,807.

    USD 259 plans on the marketing of additional bonds in 2010 and 2011.

    During the 2000 bond issue, the district was able to take advantage of lower interest rates which will save taxpayers approximately $49 million. The district has refinanced a portion of all three series of 2000 bond issue bonds to take advantage of lower interest rates, which saves taxpayers an additional $4 million.

  • Maybe props are stimulus, too

    The Kansas Meadowlark wonders about construction equipment moved into place apparently just for effect: Tax dollars for props for Biden’s visit to Overland Park? Wasteful spending for Biden to avoid?

    By the way, why was it necessary for our former governor Kathleen Sebelius, now Secretary of the Department of Health and Human Services, to travel to Kansas for this event? Doesn’t she have national health care to plan for, or at least swine flu to stomp out?

  • Stimulus is theft

    In Theft In Name Of Stimulus Is Still Theft, economist Walter E. Williams makes a powerful argument for something that those who love liberty know: self-ownership is the foundation.

    “If we accept the idea of self-ownership, then certain acts are readily revealed as moral or immoral. Acts such as rape and murder are immoral because they violate one’s private property rights. Theft of the physical things that we own, such as cars, jewelry and money, also violates our ownership rights.”

    Why aren’t some people able to accept this?

    The reason why your college professor, politician or minister cannot give a simple yes or no answer to the question of whether one person should be used to serve the purposes of another is because they are sly enough to know that either answer would be troublesome for their agenda.

    A yes answer would put them firmly in the position of supporting some of mankind’s most horrible injustices such as slavery. After all, what is slavery but the forcible use of one person to serve the purposes of another?

    A no answer would put them on the spot as well because that would mean they would have to come out against taking the earnings of one American to give to another in the forms of farm and business handouts, Medicare, Medicaid, food stamps and thousands of similar programs that account for more than two-thirds of the federal budget. There is neither moral justification nor constitutional authority for what amounts to legalized theft.

    That’s it right there. It’s really very simple.

    I recently experienced how even some religious leaders don’t understand this when I wrote about Kansas Interfaith Power and Light. This organization has a plan, outlined in a Wichita Eagle op-ed written by Moti Rieber and Connie Pace-Adair, to provide programmable thermostats and weatherization rebates to people. How will these things be paid for?

    The op-ed doesn’t say so, but how can government give something to one person if it does not take something away from another?

    For making this argument, I was told by Rieber that my “philosophy is bankrupt, literally and figuratively.”

    (On Williams’ page at George Mason University, the article is titled Our Problem Is Immorality.)

  • Myths of Roosevelt and the New Deal presented in Wichita

    Yesterday Burton W. Folsom, professor of history at Hillsdale College spoke to a capacity crowd at a luncheon sponsored by Americans for Prosperity-Kansas and the Flint Hills Center for Public Policy.

    His topic was three myths of the New Deal, based on his recent book
    New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America.

    The first myth is that the New Deal got us out of the Great Depression, or at least made good headway. Massive spending and a doubling of the public debt, however, didn’t do much to cure unemployment, as admitted by Roosevelt’s treasury secretary Henry Morgenthau, Jr.

    Besides unemployment, other measures were bad. The arrest and murder rate was high throughout the 1930s. Life expectancy, which had increased rapidly in the decades before Roosevelt’s presidency, declined slightly during his first two terms.

    Why didn’t spending solve the problem and lift us out of the Great Depression? The money to support government spending has to come from somewhere. Even if the money is well spent — and there’s ample evidence it isn’t — it would have been spent in the private sector when it was in the hands of taxpayers. Government spending only shifts jobs from the private sector to the public sector.

    The second myth is that if the New Deal didn’t get us out of the Great Depression, it was at least a step in the right direction, a view commonly held today. A look at specific programs tells a different story.

    The Agricultural Adjustment Act (AAA) paid farmers to leave some of their land vacant, thereby reducing their production. Prices for crops, then, should go up. Some farmers, however, took the money, and then planted on the land that was to remain vacant. So Roosevelt sent inspectors. Farmers bribed the inspectors, so Roosevelt had inspectors inspect the inspectors. Then aerial surveillance started.

    Then, in 1935 there were shortages of farm products. We imported 11 million bushels of wheat, 34 million bushels of corn, and 36 million pounds of cotton — at the same time we were paying farmers to not produce these products.

    The National Recovery Act (NRA), another of Roosevelt’s programs, lasted for 2.5 years before it was unanimously ruled unconstitutional by the Supreme Court.

    Folsom told how Massachusetts — back then a conservative state with a free-market orientation — took care of their own hungry people. But after seeing what other states (Illinois in particular) did to get federal funds, Massachusetts decided to take federal money.

    The third myth is that Roosevelt had good intentions. His actual goal was to put together a political coalition so he could remain in office. The WPA, in particular, served to reward loyal Democrats with jobs, and to do actual campaigning for Roosevelt. He was also the first to use the IRS as a weapon against his political opponents.

    Concluding, Folsom gave his recommendation for today: “We need to remember that massive spending did not work well back then. It carries with it a host of unintended consequences. Cutting taxes can often liberate people, produce more freedom, and turning the American economy loose with lower tax rates and more individual liberty would provide more of an opportunity to get us out of the current recession.”

  • AIG hysteria tramples liberty

    From Dave Trabert, president of the Flint Hills Center for Public Policy.

    The Founding Fathers, who took such deliberate care to preserve personal liberty in our Constitution, would be ashamed by the hysteria and pandering that have consumed Washington, D.C., over bonuses paid to employees of American International Group.

    There is no justification for rewarding people for failure, but the conduct of elected officials calling for legislative retribution is far more egregious.

    Members of both parties are tripping over one another in a rush to endorse legislation that would tax bonuses paid to employees of companies receiving bailout money at rates as high as 90 percent.

    Not that Congress should be giving away taxpayer money for handouts to failed companies, but it easily could have prevented this mess by putting some restrictions on the money.

    Taxpayers are justifiably angered by the lack of fiduciary responsibility, and Congress is predictably responding with diversionary tactics.

    House Minority Leader John Boehner, R-Ohio, hit the nail on the head, saying, “This bill is nothing more than an attempt for everyone to cover their butt.”

    As unseemly as that is, it pales in comparison with the assault on the Constitution and our personal freedom. Rep. Ron Paul, R-Texas, called the legislation “an ex post facto bill as well as a bill of attainder, which is unconstitutional, so they’re using the tax code to punish people.”

    “Ex post facto” is a legal term referring to an attempt to go back in time and apply new circumstances to something that already has occurred. A bill of attainder is a legislative act that singles out an individual or group for punishment. Both are prohibited by the Constitution.

    Some members of Congress may be acting like children, but this isn’t a game in which the rules can be changed to alter the outcome. It is of paramount importance that Congress act responsibly to preserve the principles of liberty and freedom. Today the issue is bonuses paid to AIG employees, but there are endless opportunities to use the tax code punitively.

    For example, House and Senate leaders are pursuing the elimination of secret balloting in order to make it easier for unions to form. Imagine if they decided to encourage the behavior they wanted by imposing special taxes on nonunion workers.

    Using the tax code to punish people who raise the ire of Congress is wrong under any circumstance.

    If Congress really wants to show leadership in going after those responsible for this latest abuse of taxpayer money, it should pass the hat at the next joint session.

    In the meanwhile, we must send a very strong message to Washington:

    Knock off the grandstanding, start acting like the leaders you promised to be, and keep your hands off our constitutionally guaranteed freedoms and liberties.

  • Wichita Tea Party on Tax Day Flyer

    Wichita Tea Party Protest: Flush Twice

    Susan Estes has created a printable flyer to promote the Wichita tea party protest on tax day, April 15. Click on Wichita Tea Party Planned for Tax Day, April 15 to learn more about the event.

    Thanks to Susan Estes for creating the flyer, and for the great imagery. It hints of one of the themes of the protest, which is “Flush twice, it’s a long way to Washington!”

    Click on Wichita Tea Party Tax Day Flyer to download the printable flyer. It’s a pdf file.