The Wisconsin legislative session is about to end (today) and not a moment too soon. Fortunately, the most damaging legislation such as the 'Green Jobs Bill' and the bill to create a Milwaukee regional transit authority won't be enacted.
As I watch public policy and economic policy for a living, I have been truly amazed at how off course the Federal and State government has gone over the past four to six months. Completing and paying my taxes last week (yes, I am part of the group that actually pays taxes every year as opposed to getting a refund or paying no income tax at all) reminded me that it was time to reflect a bit on where my hard-earned dollars would go. In my reflection, I concluded that wherever my dollars were headed, they were destined to be parceled among more governmental 'black-holes' than beneficial programs. So, as any part-time author and full-time economic and policy geek would do, I fashioned my list of political and economic concerns that from my perspective, really need attention. FYI: These are not in any particular order.
- Deficit Spending: With the lone exception of good news from Milwaukee County ( a modest budget surplus), every major governmental entity that I see is bleeding red ink and seeking to create more. I know how much Scott Walker is despised by the labor unions and the self-important hypocrites on the County Board but credit him this; he's actually led a government entity that spends within its means. At least Walker is capable of doing what is necessary which is to cut spending or at a minimum hold spending within the boundary of revenues. Looking around, Walker stands essentially alone as the State budget is a mess, awash in IOUs and structural deficits. The Milwaukee Public Schools haven't yet seen a bogus program, spending binge, or other non-results producing educational program that they won't invest in, necessitating more tax increases all while producing a fantastic graduation rate hovering around 50%. And of course, the cherry on the debt sundae is the Federal government. No other country in the world carries as much debt as the U.S., cranks on more to the tune of a trillion plus, and maintains a AAA credit rating (albeit, not for long). In spite of warnings from economists world-wide, Moody's, and even the socialistic gang at the EU, President Obama and the Congress continue to crank-out unfunded legislative initiatives one after another. Their cure? Raise the federal debt ceiling and pass the buck to the next greatest fool (meaning any of us who still pay taxes).
- Tax Payers: Who would have thought that people who pay income taxes in the U.S. would soon become a minority? According to the National Taxpayers Union, 47% of all Americans will pay no taxes or receive incentive money (not a refund) from the government for the tax year 2009. This same group estimates that by 2014, slightly more than half of all Americans will pay no taxes (or effectively zero plus or minus $500) http://www.ntu.org/ I am very concerned that a growing percentage of Americans are becoming too disconnected from their government and its resulting policies by never having to see the price tag. Think about it this way. If a person could go car shopping and effectively buy any car available with someone else's credit card, what car do you think he or she would buy?
- Health Care Reform: Already I am astonished by the number of politicians and pro-reform supporters claiming that 'they misunderstood the unintended consequences'. My answer: Wait, you ain't seen nothing yet. In the next three years, I guarantee the following will happen. First, premiums for all types of health insurance coverage will rise dramatically (group, individual, etc.). Second, the impact of all of the additional taxes, penalties and fees will bite and the effect won't be a nibble, rather a chomp that draws real blood. Third, the costs of actual care will rise far faster than predicted or even, currently experienced. Providers will cost-shift like crazy, wherever and however they can. With hundreds of billions in Medicare cuts, something has to give somewhere and it will be access and price (less access and at a premium price - simple economics).
- More Taxes: When politicians become incapable of reducing spending they raise taxes (or, if you prefer, 'fees' because taxes sounds dirty). Until such time that politicians are required by the voters to be accountable for spending, they will seek to raise taxes on anything and everything imaginable. Typically, the selling point, ala President Obama, is that the taxes will only fall on the wealthy. For anyone who believes this and doesn't understand the 'law of unintended consequences', drop me a note and I will explain it to you as I do have space limitations here. Listen to the already audible tone in Washington regarding a Value-Added Tax if you want proof that higher taxes are just around the corner. Oh, and lest anyone forget, we are still mired in the basement of a recessionary economy, beginning to climb the first few stairs out but nowhere near the exit. Higher taxes, taxes which are profoundly regressive (VAT) and mounting deficits are ten thousand ton weights on an economic recovery; tough to carry up the stairs.
- Green is Good: Somehow as a nation, we've been sold on the junk science that anything 'green' is good and therefore, we should fully embrace any policy that furthers a cleaner, more eco-friendly world even if such policy, a) fails to do that, and; b) is economically unsound or preposterous. I am a wildlife guy; an avid outdoorsman, supporter of Ducks Unlimited and a conservationist. I like the outdoors and support policy that protects natural habitats and restores prairies and wetlands, etc. I also am an economist and as a result, I balance risk-reward and understand intimately, how not everything has a 'more is better' return proposition. Green fits into that category. Energy policy such as Cap and Trade or the Wisconsin Green Jobs bill are examples of where Green isn't good and in fact, Green doesn't really happen to any great magnitude (the world will not be less dirty and not even in little bits) and economically, the legislation is preposterous, toxic economically and socially regressive (more expensive energy hurts poorer people disproportionately compared to the wealthy).
My current list condensed. More to come in future articles.