Voice For Liberty

Tag: United States government

  • Wind Production Tax Credits Aren’t Free of Cost

    Nancy Jackson of the Climate and Energy Project in Kansas has some tips for citizens and candidates to use when talking about global warming. The article Tips for citizens and candidates – talking about the Production Tax Credit contains warnings about what will happen if the Production Tax Credit (PTC) isn’t extended beyond its scheduled expiration date at the end of 2008. Thousands of jobs and billions in investment will be at risk, the post says.

    Whether these tax credits are desirable is one issue. But what is not at issue is that these tax credits come with a cost. They aren’t free. Taxpayers have to pay for them, or, as is likely the case, the federal government borrows money to pay for them. Either way, the tax credits take money out of the pockets of people across the country to subsidize the production of wind power.

    When people have less money to spend because of the PTC, economic activity is reduced. Jobs are lost. Investment is not made or is deferred. The problem is that if the PTC is eliminated, the loss of jobs and investment will be concentrated and noticeable. Wind farms will cease to operate, it seems the alarmists are saying, and all the workers will be laid off. Television news crews will be at the wind farms on the workers’ last day on the job, and their plight will be reported and editorialized upon.

    But every day average people in America have a little less money in their pockets because of these tax credits. Their loss, on an individual basis, is small and not concentrated where it can be reported on. But it is real.

    We’ve seen how government subsidies to ethanol producers and corn growers have distorted markets worldwide. The same applies to wind power. To be a viable long-term strategy, wind power must be profitable on its own without subsidy.

  • Efforts to Regulate ‘Wild West’ Markets are Long Overdue

    A Christian Science Monitor article Efforts to regulate ‘Wild West’ markets are long overdue contains a number of misstatements.

    For one thing, characterization of the American West as “wild” in the sense that mayhem prevailed, and that life and property were not safe, is not correct. An article in the Journal of Libertarian Studies titled An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West tell us this:

    The West during this time often is perceived as a place of great chaos, with little respect for property or life. Our research indicates that this was not the case; property rights were protected and civil order prevailed. Private agencies provided the necessary basis for an orderly society in which property was protected and conflicts were resolved. These agencies often did not qualify as governments because they did not have a legal monopoly on “keeping order.” They soon discovered that “warfare” was a costly way of resolving disputes and lower cost methods of settlement (arbitration, courts, etc.) resulted. In summary, this paper argues that a characterization of the American West as chaotic would appear to be incorrect.

    The article quotes E.J. Dionne as saying “A well-functioning capitalist system relies on clear rules.” Very true, but there are two rules that anyone can understand that are in danger of being overturned. First, if you borrow money, make sure you understand the terms of the loan and are prepared to repay the loan as required. Second, if an institution such as a pension fund buys repackaged securities (like subprime loans) without understanding the risks, they shouldn’t expect others to make good their losses. These two clear principles or rules are in danger of being overturned.

    If they are overturned, then we might ask Mr. Dionne just what rules can be trusted to be clear?

    This article also states: “The oddity of today is that a Republican administration is pushing an expansion of government regulation.” If the author of this article did a little research, he would learn that regulation has increased rapidly in recent years. According to the Heritage Foundation” “Despite the claims of critics — and some supporters — of the Bush Administration, net regulatory burdens have increased in the years since George W. Bush assumed the presidency. Since 2001, the federal government has imposed almost $30 billion in new regulatory costs on Americans. About $11 billion was imposed in fiscal year (FY) 2007 alone.”

    If we look at the root causes of this crises, we would understand that excessive government control in the form of the Federal Reserve is largely responsible for this crisis, such that it is. Now government calls for even more power to solve the problem that it created. These extra powers, pitched to the public as necessary to deal with some current emergency, rarely disappear after the emergency has passed. Instead, they live on as a permanent part of expanded government.

  • Happy Cost of Government Day

    According to Americans for Tax Reform today, July 16, 2008, marks national Cost of Government Day:

    On July 16, Americans mark the national Cost of Government Day (COGD), the date on the calendar year when the average American finishes paying off his or her share of federal, state and local spending, and the regulatory burden. Cost of Government Day falling on July 16 means that you had to work 197 days out of the year just to meet all the costs imposed by government. In other words, the total cost of government – far more than taxation alone – consumes 53.9 percent of national income.

    Americans for Tax Reform also calculates Cost of Government Day by State. For each state, the number of days worked for the government is shown, ranging from 172 days for Alaska to 212 days for Connecticut. Kansas is state number 25 in these rankings, right in the middle. We work 192 days for government, meaning our freedom day was July 11, a few days ago.

  • A Mess of John McCain’s Own Making

    Kimberly A. Strassel of the Wall Street Journal explains a mess of John McCain’s own making, and which confirms to me that he is not suited to be President of the United States: McCain’s Campaign Finance Revelation.

    “The Arizonan may not yet fully understand that money is speech.” writes Ms. Strassel.

    As Thomas Sowell recently said: “Senator John McCain could never convince me to vote for him. Only Hillary Clinton or Barack Obama can cause me to vote for McCain.”

  • Missing From the Social Security Debate

    This is what I haven’t seen mentioned in the debate over the future of social security.

    Opponents of private accounts cite the risk inherent in investing in markets. Instead, they will rely on future generations of workers to pay the taxes necessary to pay promised social security benefits.

    It seems to me, though, that investments in U.S. securities markets, both stocks and bonds, derive their value from the underlying strength of the U.S. economy. If the economy does well, in the long run, markets do well. If the economy does not do well, the investments will not do well, and social security recipients will need to rely on a future generation of workers to pay taxes that will pay benefits.

    Where do these taxes come from? They come from workers, hopefully earning high salaries to pay the high taxes that will be needed. But if the economy does not do well, there will not be very many highly-paid workers, and the government may have trouble collecting enough taxes to pay social security benefits.

    So we need to hope that the U.S. economy performs well, so that private accounts earn a high return, or there will be workers earning enough to pay high social security payroll taxes.