AFP’s “Common Sense”: Around the World on $69 Million in Welfare Funds

Quote of the Day 12/16/14

“Gas prices are expected to drop to around $3 a gallon by this fall. The price drop is the result of a complicated system. It’s called the election.” –comedian Jay Leno

The New Congress Must Save the USA from the EPA By Alan Caruba

When the Republican Party takes over majority control of Congress in January, it will face a number of battles that must be fought with the Obama administration ranging from its amnesty intentions to the repeal of ObamaCare, but high among the battles is the need to rein in the metastasizing power of the Environmental Protection Agency.

In many ways, it is the most essential battle because it involves the provision of sufficient electrical energy to the nation to keep its lights on. EPA “interpretations” of the Clean Air and Clean Water Acts have become an outrageous usurpation of power that the Constitution says belongs exclusively to the Congress.

As a policy advisor to The Heartland Institute, a free market think tank, I recall how in 2012 its president, Joe Bast, submitted 16,000 signed petitions to Congress calling on it to “rein in the EPA.” At the time he noted that “Today’s EPA spends billions of dollars (approximately $9 billion in 2012) imposing senseless regulations. Compliance with its unnecessary rules costs hundreds of billions of dollars more.”

Heartland’s Science Director, Dr. Jay Lehr, said “EPA’s budget could safely be cut by 80 percent or more without endangering the environment or human health. Most of what EPA does today could be done better by state government agencies, many of which didn’t exist or had much less expertise back in 1970 when EPA was created.”

The EPA has declared virtually everything a pollutant including the carbon dioxide (CO2) that 320 million Americans exhale with every breath. It has pursued President Obama’s “war on coal” for six years with a disastrous effect on coal miners, those who work for coal-fired plants that produce electricity, and on consumers who are seeing their energy bills soar.

As Edwin D. Hill, the president of the International Brotherhood of Electrical Workers, noted in August, “The EPA’s plan, according to its own estimates, will require closing coal-fired plants over the next five years that generate between 41 and 49 gigawatts (49,000 megawatts) of electricity” and its plan would “result in the loss of some 52,000 permanent direct jobs in utilities, mining and rail, and at least another 100,000 jobs in related industries. High skill, middle-class jobs would be lost, falling heavily in rural communities that have few comparable employment opportunities.”

“The United States cannot lose more than 100 gigawatts of power in five years without severely compromising the reliability and safety of the electrical grid,” warned Hill.

In October the Institute for Energy Research criticized the EPA’s war on coal based on its Mercury and Air Toxics Rule and its Cross State Air Pollution Rule, noting that 72.7 gigawatts of electrical generating capacity have already, or are scheduled to retire. “That’s enough to reliably power 44.7 million homes, or every home in every state west of the Mississippi river, excluding Texas.” How widespread are the closures? There are now 37 states with projected power plant closures, up from 30 in 2011. The five hardest hit states are Ohio, Pennsylvania, Indiana, Kentucky, and Georgia.

If a foreign nation had attacked the U.S. in this fashion, we would be at war with it.

The EPA is engaged in a full-scale war on the U.S. economy as it ruthlessly forces coal-fired plants out of operation. This form of electricity production has been around since the industry began to serve the public in 1882 when Edison installed the world’s first generating plants on Pearl Street in New York City’s financial district. Moreover, the U.S. has huge reserves of coal making it an extremely affordable source of energy, available for centuries to come.

The EPA’s actions have been criticized by one of the nation’s leading liberal attorneys, Harvard law professor Laurence Tribe, who has joined with Peabody Energy, the world’s largest private coal company, to criticize the “executive overreach” of the EPA’s proposed rule to regulate carbon emissions from existing power plants. He accused the agency of abusing statutory law, violating the Constitution’s Article I, Article II, the separations of powers, the Tenth and Fifth Amendments, and the agency’s general contempt for the law.

It is this contempt that can be found in virtually all of its efforts to exert power over every aspect of life in America from the air we breathe, the water we use, property rights, all forms of manufacturing, and, in general, everything that contributes to the economic security and strength of the nation.

That contempt is also revealed in the way the EPA spends its taxpayer funding. Senator Jeff Flake (R-AZ) released a report, “The Science of Splurging”, on December 2 in which he pointed to the $1,100,000 spent to pay the salaries of eight employees who were not working due to being placed on administrative leave, the $3,500,000 spent to fund “Planning for Economic and Fiscal Health” workshops around the nation, $1,500,000 annually to store out-of-date and unwanted publicans at an Ohio warehouse, and $700,000 to attempt to reduce methane emitted from pig flatulence in Thailand! “After years of handing out blank checks in the form of omnibus appropriations bills and continuing resolutions,” said Sen. Flake, “it’s time for Congress to return to regular order and restore accountability at the EPA.”

Whether it is its alleged protection of the air or water, the only limits that have been placed on the EPA have been by the courts. Time and again the EPA has been admonished for over-stating or deliberately falsifying its justification to control every aspect of life in the nation, often in league with the Army Corps of Engineers.

If the Republican controlled Congress does not launch legislative action to control the EPA the consequences for Americans will continue to mount, putting them at risk of losing electricity, being deprived of implicit property rights, and driving up the cost of transportation by demanding auto manufacturers increase miles-per-gallon requirements at a time when there is now a worldwide glut of oil and the price of gasoline is dropping.

The United States has plenty of enemies in the world that want it to fail. It is insane that we harbor one as a federal agency.

© Alan Caruba, 2014

Keynesian Economics and the Dead End Economy by Mark Thornton

While the headline numbers for the economy, including the stock markets and the unemployment rate, look very good, a “real” look at the economy produces an image of a dead end economy.

For example, if you look at Gross Domestic Product in the US economy from the beginning of 2008 to the present and adjust it for inflation and population–a period of 7 1/2 years it has increased a total of a mere 3.3%. Of that increase, the growth of government spending alone accounted for 65%. If we subtract out this increased government spending–in the spirit of Rothbard’s concept of Private Product Remaining–real income per capital has increased only 1.1% over the 7 1/2 year period.

Power to the People: Repealing and Replacing Obamacare with Patient Power by Peter Ferrara

Obamacare can be repealed and replaced by free-market, Patient Power health care reforms based on sharply expanding individuals’ power, control, and choice over their own health care, while ensuring health care for all, but with no employer mandate, no individual mandate, and sharply reduced taxes, federal spending, and regulation.

Unlike Obamacare, such reforms would actually reduce the growth of health care costs, through proven free-market incentives and competition and promote job creation, rising wages, economic growth, and general prosperity for working people.

Obamacare was sold with the promise of universal health coverage for all, but the Congressional Budget Office projects Obamacare will still leave 30 million uninsured 10 years after full implementation. Moreover, millions actually lost insurance on implementation of the individual mandate, and many millions more will likely lose coverage upon the delayed implementation of the employer mandate, which even the Obama administration unilaterally pushed back, fearing the political effects before the 2014 elections.

Tax Credits for All

The centerpiece of Patient Power reforms to replace Obamacare would be to extend to everyone the same tax preference as employer-provided health insurance receives. This should take the form of a refundable, universal, health insurance tax credit of roughly $2,500 per person per year or $8,000 for a family of four. That $2,500 would not be meant to pay for the entire cost of such insurance, but only to help pay for it, just as the tax preference for employer-provided insurance does not pay the entire cost of such insurance, but only helps pay for it.

The second component of the Patient Power reforms would be to transfer control over Medicaid to the states, with the federal financing of the program provided through fixed, finite, block grants to each state, similar to the successful 1996 welfare reform.

Under the fixed, finite, block grant formula, the state knows that if its redesigned state Medicaid program costs more, it is going to pay 100 percent of the difference. And if the program costs less, it will keep 100 percent of the savings. Preferably, each state would use its power under the Medicaid block grants to provide assistance to the poor through health insurance vouchers the beneficiaries could use to supplement the universal health insurance tax credit to help them obtain the private health insurance of their choice. Such Medicaid reform would be enormously beneficial for the poor.

States would each be free to use part of the Medicaid block grants to set up their own Uninsurable Risk Pools to provide coverage to those uninsured who become too sick and costly to obtain insurance in the market. Those insured by the pools would pay premiums based on their ability to pay, so the pools would serve a safety net function. The state would finance the remaining costs. This would assure health insurance coverage for everyone with costly pre-existing conditions.

Consumer Choice and Markets

Through these reforms, the choice of Health Savings Accounts (HSAs) would be extended throughout the whole health care marketplace. Those on Medicare would enjoy the freedom to choose HSAs for their Medicare coverage through Medicare Part C. The poor on Medicaid would enjoy the freedom to choose HSAs for their Medicaid coverage. Workers with employer-provided coverage would enjoy the freedom to choose HSAs instead through the universal health insurance tax credit.

Consumer choice, market incentives, and competition resulting from the universal health insurance tax credit would further help to reduce costs, as consumers choose among varying marketplace options. The reforms would greatly increase such competition, choice, and market incentives by allowing nationwide competition among insurers across state lines. Including medical malpractice reform as well would complete a highly effective reform package to control health care costs.

Peter Ferrara (peterferrara@msn.com) is senior fellow in entitlement and budget policy at The Heartland Institute.