Bucknell vs. Relay for Life

For many, Greek Life in college is one of the most memorable parts of their experience. While some of these memories aren’t terribly wholesome, others are. At Bucknell, we have the Plan for Prominence, a program designed to ensure that our Greek System – one of the most thriving of any on college campuses – is doing good while having a good time.

The Plan focuses on eight pillars: academics, alumni relations, community service and philanthropy, educational programming, campus involvement, new member education, chapter management, and social responsibility. It operates by granting Chapters different awards – or just letting them stay on campus – based on point values associated with performance in each of those categories.

It’s a great idea and has enabled Bucknell’s system to become a true source of self-improvement for students. Bucknell should be rightfully proud of it. After all, the Greek System raised $173,000 in philanthropy in 2008 – that’s a ton of money.

Speaking of tons of money, here’s another one: $82,000. That’s how much Relay for Life raised at its Bucknell event in 2008, an amount that the co-chair of the event that year said it “couldn’t have done… without the Bucknell Greek organizations.”

Greeks participate by getting donations and going – in hordes – to the Fieldhouse for the twelve-hour event. In fact, there were twenty more Greek teams than non-Greek teams this year, and the fraternity and sorority teams were responsible for 61 percent of the $86,320 raised. It’s quite clear that Greeks are a pivotal part of the event every year.

Bucknell, however, seems uninterested in ensuring such good deeds continue. Today – nearly three weeks after this year’s Relay – fraternity and sorority officers received an email stating that the rules regarding the hour tallies from the event changed after the fact. In the past, each person at the event got an hour for an hour spent in the Fieldhouse. Many went and walked; others went and sat. All got hours.

Today, the Administration announced this was no longer the case: “as there only needs to be one person per team walking at one time,” each team will only get 12 hours for the event. The extremely inequitable decision to say this after the event aside, there’s another issue here.

The crucial point is that those who weren’t walking (some play games, sew pillowcases for cancer patients, and other beneficial things, too) still participated in the event. The overarching purpose for what goes on in the Fieldhouse is to show support; by being present, you’re showing support.

The service hours gave an additional, but important, incentive for students to attend. Without that incentive, there will be far less reason to be present. Plus, the Administration’s decision to yank credit for many of this year’s attendees sends an unmistakably negative message about the overall merit of the event. For many Bucknellians, this decision will convince them that there’s not enough benefit – from either an individual or community standpoint – to sacrifice a Saturday night.

By cutting the hours per team to just 12, participation will likely plummet. This decreased presence impacts the most basic reason for Relay’s existence: raising awareness of cancer.

If Bucknell wants its Greek System to help the community, the Administration must do its part to encourage students to do so. Indeed, the service done at the Fieldhouse extends far past the Bucknell Bubble or the middle-of-nowhere, Pennsylvania: Relay for Life benefits citizens everywhere.

What the Greek Office did today is frustrating to many. For some, it means their fraternity or sorority will no longer be able to receive hard-earned Plan for Prominence awards. Others see it diminishing Relay’s chance to help do its part to bring an end to cancer.

Hopefully, Bucknell will not tarnish its long heritage of service by maintaining this recent decision: so much more than just hour tallies is at stake.

Crist & Obama at Fort Myers

Florida faces the threat of hurricanes, which wreak havoc across the state’s coastlines. The seasonal damage of hurricanes made homeowner insurance more expensive, as property and casualty insurers adjusted their premiums to reflect the risk. Crist’s solution to Florida’s natural-disaster problem, however, has been an unnatural disaster.

At Crist’s behest, Floridian insurance regulators regularly refused to allow insurers to raise premiums, despite their necessity. For example, State Farm’s subsidiary in Florida reported that in 2008 it lost $20 million monthly, and that since 2000 it was paying $1.21 in claims per $1 in revenue. Nevertheless, the state regulators effectively imposed price controls on insurers, forcing it to take losses.

Crist also spearheaded Citizens Property Insurance Corporation, a “public option” homeowner-insurance plan, whose monopsony power, taxpayer guarantee, and rosy actuarial assumptions allowed it to offer sub-market premiums to property-owners. Given these unfair advantages, Citizens Property has enrolled 1.1 million policies, making it the largest insurer in the state. Private insurers, already hamstrung by price controls, could not compete with the government, and so now are abandoning Florida altogether.

Without private insurance, Florida’s losses from a hurricane are confined to the state’s taxpayers rather than spread among a global industry, where the claims would be painlessly diffused. Unfortunately, Citizens Property is not prepared to deal with such a catastrophe. Its liabilities exceed its assets by nearly $400 billion, meaning in the event of a hurricane it would almost certainly fail to meet its claims and become insolvent. The Florida legislature, ever-eager to pander to the people, has declined to adjust premiums, leaving them artificially depressed beneath market levels. Everything is sunny so long as hurricanes steer clear of Florida, but when the inevitable storm ravages Florida’s coast, taxpayers will bear the burden thanks to Crist’s price controls and public option.

Crist also opened his arms to President Barack Obama’s stimulus, bailing out the state budget in the short run, but incurring costs which will require future taxes from Floridians in the long run. Besides the $4 billion that went to balance the state budget, the most infamous use of stimulus funds in Florida is the proposed Tampa-Orlando high-speed rail, an expensive project without any conceivable benefit. Floridians will be paying for Crist’s endorsement of the stimulus for a very long time.

As a candidate for the Senate, Crist has run a despicable campaign, declining to seriously address public-policy issues in favor of impugning the ethics of his conservative opponent, Marco Rubio, to whom he is deservedly losing. In a purely self-interested political maneuver, Crist vetoed an education-reform bill which would have replaced lifetime teacher tenure – given to over 99% of applicants – with single-year contracts and tied teacher pay to student performance on standardized tests. Just month ago, Crist supported the bill – “I think I would say that this is a bill that really focuses on trying to help children and encouraging better teachers. Pays better teachers more, and that just seems like the right thing to do” – but hypocritically reversed position, perhaps hoping to ingratiate himself to the teachers unions. For the sake of Crist’s political ambitions, students will suffer and taxpayers will be robbed.

Crist has governed erratically without any coherent principles, save remaining popular among Floridians. Ironically, the destructive policies he undertook in order to stay popular have earned him the people’s ire, and now his demise appears inevitable. By betraying former governor Jeb Bush’s strong legacy of conservative reform, Crist has sealed his own fate, though thankfully Florida is not yet doomed.

Strawberries at the Florida Strawberry Festival in Plant City

Florida strawberries suffered unusually low temperatures this winter. During the cold, strawberry production slowed, and in some cases halted entirely as farmers took drastic measures to protect their crop from freezing. When warm weather returned, however, the strawberry harvest was especially plentiful. “The cold weather shocks the plants,” said a strawberry farmer in Plant City. “It induced more blooms.” This would prove troublesome later.

After a wasted winter season, farmers were eager to get these bountiful harvests to market. Supply of strawberries having dwindled over time, those first to market were able to take advantage of higher prices. Eventually, as more farmers entered the market with their harvests, the price fell to its competitive equilibrium level, around $20 per flat. Unfortunately, this year’s bountiful harvest led to an increased supply of strawberries, driving strawberry prices down beyond profitable levels to about $5.90 per flat. At this price, the total costs of planting, growing, and shipping strawberries exceeded the sales revenue, according to a Valrico strawberry farmer. In fact, for most farmers – save for the fortunate few who are vertically-integrated – losses occur around $6.90, a full $1 above the current price. Given these depressed prices, many farmers are praying not to profit this year, but merely to break even.

If an excess of farmers producing a surplus of strawberries had depressed prices, the market would eventually correct itself by forcing out the least-competitive farmers until the surplus supply was eliminated and prices were stabilized. Fortunately, this year’s losses are an isolated phenomenon, the result of a cold front and bumper crop, and do not portend any fundamental shifts in the market. Assuming Florida is not cursed with more cold weather, next year’s harvest should not produce the unsustainable abundance of this spring.

Since farmers cannot profitably sell their strawberries at current prices, to avoid further losses they must plow under – meaning leave out in the fields to rot – most of their remaining crop. This one-time destruction will minimize any losses, reducing variable costs like labor and shipping. Plowing under will also quickly decrease supply, thus lifting prices to their normal level, allowing business to resume in the strawberry market. Although farmers would prefer to sell their strawberries rather than destroy them, so long as prices are too low, market conditions leave them no choice.

Despite the necessity of the decision to plow under, some locals are still outraged. Patrons of a Plant-City soup kitchen described plowing under as “senseless,” and “sheer greed,” declaring that it “should be a crime.” Such comments betray a disturbing sense of entitlement, as if farmers existed not for their own sake but for the sake of others. It is not “senseless” for farmers to plow under in this market, but would be senseless for them to jeopardize their entire livelihood by losing money on sales. It is not any more “greedy” for farmers to avoid losses than it is greedy for someone to expect them to incur losses for his sake. It should no more be a “crime” for farmers to manage their crops than it is for anyone to dispose of his property as he sees fit. Never mind, of course, that some farmers have opened up their fields to the public, permitting anyone to freely harvest whatever they can for themselves. The masses understand very little beyond their own shallow wants, and even then petty emotions often blind them.

Of course, most consumers – meaning those who actually pay for their food rather than relying on private charity or government largesse – have no quarrel with plowing under, though they may miss the cheap cartons currently available after a winter in which strawberries were scarce and expensive.

Plowing under is not wasting valuable resources or causing a strawberry shortage. Rather, it is a calculated business decision to avoid losses by cutting costs, correcting the spring surplus in the process. Failure to temporarily adjust costs according to the market would lead many firms – not just strawberry farms – to failure. To adapt to the temporary plunge in price, plowing under is the only option available to strawberry farmers.

Simple economics, not conspiracy theories or populist diatribes about greed and waste, explain why farmers must plow under. The strawberry market was shocked by excessive supply in the spring harvest, creating a surplus which depressed prices beyond profitable levels, forcing farmers to take cost-cutting measures which incidentally reduced supply. If strawberry farmers are to stay in business then they must plow under, whether or not the masses can stomach that reality.

Florida

Education

Florida has already made major strides in overcoming obstacles hindering education in the state. Former Governor Jeb Bush’s “A-Plus” plan kept schools accountable with performance measurements (the FCAT), created incentives to reward success and punish failure, and gave options for students in forever-failing schools. These reforms centered on schools, but now lawmakers want teachers to answer for their performance.

Although Florida has made some gains in education, its teachers are comfortably insulated from accountability. “Professional-services” contracts, awarded a mere three years after employment, resemble academic tenure. Under such contracts, teachers are offered multi-year or “continuing” contracts, making them less responsible for their yearly performance. This disconnect distances teachers from their students – there is little reason to worry about one class after securing lifetime job security – while also making it difficult for schools to hold teachers accountable.

The proposed legislation eliminates professional-services contracts between the state and teachers, replacing them with single-year contracts. The legislation also ties half of teacher pay to student performance on the FCAT and their final exams, ending the current seniority- and degree-based pay scale. Keeping teachers accountable should compel them to improve student performance while also making it easier for schools to fire poor teachers. K-12 education is essential to economic growth and a stable republic, and any reform that truly benefits the education of the state’s youth should be welcome.

Even the change god, Barack Obama, has looked down with favor upon mere mortals of Florida’s efforts, placing the state on his 16-strong list of finalists for “Race to the Top” funds. Whether or not this ostensibly merit-based fund is a pretense for more spending on education is unclear, though Obama and Secretary of Education Arne Duncan have at least talked tough. If Obama – a trusty tool of unions – can support keeping teachers accountable to students, any politician can.

Tort Law

Trial lawyers have twisted tort law into a wicked weapon wielded to abuse the legal system, twisting law meant to protect the innocent into a tool to pillage the innocent to enrich themselves. Injustices such as shakedowns and ambulance chasing lead to broad inconveniences, though liberal lawmakers abide them due to their lucrative relationship with trial lawyers. In Florida, however, an economy devastated by the housing-bubble hurricane has persuaded politicians to consider reform to promote prosperity rather than redistribution.

A “slip-and-fall” lawsuits, in which the plaintiff sues the owner of a property on which he injured himself, is a classic shakedown. That is, the cost of fighting the lawsuit in court – sometimes the cost merely replying to it – exceeds the cost of a potential settlement, compelling defendants to simply settle regardless of the merits of the plaintiff’s claim. While such scams have profited a few lawyers and their clumsy clients, they terrorize businesses, forcing them to waste revenue on insurance premiums, useless precautionary measures, and legal fees – revenue which could have been otherwise spent productively.

Ambulance chasing is another popular shakedown sport. Plaintiffs sue healthcare professionals – from technicians to nurses to doctors – alleging negligence, expecting the defendants to settle. Of course, if the defendants choose to litigate, the plaintiff will attempt to sway the jury through courtroom theatrics and emotional appeals. Unfortunately, medicine is not miracles, and sometimes doctors cannot meet the unrealistic expectations of their patients. Trial lawyers exploit the misguided outrage of patients, convincing them that they were somehow wronged and are entitled to compensation. A local Tampa attorney’s advertisement nicely sums up the gimme mentality behind ambulance chasing: “Somebody Should Pay For Your Injuries.”

Although medical failure is not logical evidence of malpractice, it is still an opportunity for a lawsuit. Fear of such lawsuits drives up malpractice premiums, creates a distortion favoring safer over riskier specialties, and leads doctors to practice “defensive medicine,” which contributes to ever-increasing healthcare-insurance premiums. Naturally, despite debating healthcare reform for over a year, Congress ignores this crucial issue in both its bills, more preoccupied with punishing private insurers than slowing healthcare spending or expanding coverage.

In slip-and-fall cases, current Florida law requires that businesses “exercise reasonable care,” an ambiguous mandate vulnerable to the whims of juries. The proposed legislation would justly shift the burden onto the plaintiff, forcing them to prove that the defendant “knowingly put customers in danger.” For example, if a plaintiff injures himself on a business’ property, he would no longer be able to simply argue that the business failed to “exercise reasonable care,” but instead have to prove that the business not only knew about but also failed to fix whatever caused his accident.

Medical-malpractice reform would also protect Floridian emergency-room workers by limiting the damages that plaintiffs can seek against them. Emergency-room workers must quickly make decisive decisions about a patient, and cannot be burdened with legal concerns when answering a life-or-death question. Furthermore, many patients in the emergency room lack insurance coverage or the means to pay out of pocket, yet receive healthcare anyway. Punishing healthcare professionals for their generosity to the poor would be perverse. Protecting emergency-room workers from excessive damages is a step towards reducing malpractice premiums, encouraging doctors into the risky but necessary specialties, and promoting more efficiently-practiced medicine.

Predictably, Floridian teachers unions and the trial bar are against the reforms. Understandably so, since these reforms threaten the system upon which they have enriched themselves at the expense of others, whether businesses, doctors, patients, students, or taxpayers. Tort law and public education are valuable resources that have been sadly hijacked, and are long overdue for an overhaul. These reforms will not only benefit Florida, but also serve as an example for other states terrorized by trial lawyers and entitled educators.

Tampa

After wasting the past year bitterly battling for healthcare reform, the Obama Administration now claims that it will focus on employment, as if that were not the intent of last year’s $862 billion stimulus. The Administration assured Americans that the so-called stimulus would keep the unemployment rate below 8%, but a year later it was over 10%. In addition to the usual self-congratulatory rhetoric, teleprompter-fed lectures, deceitful claims, and fallacious depiction of opponents that accompany any Obama initiative, the Administration is attempting to put a new spin on its failure by touting some of the stimulus’ most impressive projects. Projects about which the Administration is especially enthusiastic are the high-speed rails across the country, particularly between Tampa and Orlando. Although the Administration considers this rail a success story, it is actually an impending disaster for Florida, and an example of how stimulus spending will burden state budgets.

The best policy to increase employment during a recession is to let the business cycle work naturally, allowing depressed markets to purge excesses and find their bottom. Any action taken to expedite recovery should be to benefit the supply-side of the economy, such as tax-rate cuts or deregulation. Naturally, Obama will not do this, and will likely do the opposite. Since his presidential campaign, Obama has been terrorizing businesses, investors, and entrepreneurs with the threat of anti-growth policies, such as the stimulus, cap and trade, and healthcare reform. Frightened by Obama’s radical rhetoric of redistribution, this productive class is reluctant to take any risks – investing or expanding, for instance – which means employment will stay stagnant.

To increase employment – what last year’s stimulus utterly failed to do – Obama is demanding even more government spending. While most of last year’s stimulus spending went to bail out state and local governments, this year projects more infrastructure projects. Obama is championing a high-speed rail in Florida – between Tampa and Orlando – to illustrate such infrastructure spending. Descending from on high in D.C. to Tampa, the change god pontificated about the virtues of the rail to a congregation of local acolytes.

Florida, a decisive swing state, as well as a battlefield in the war between the GOP’s liberals – Governor Charlie Crist, who betrayed his party to embrace the stimulus and Obama himself – and conservatives – former Speaker of the House Marco Rubio, currently leading in polls – is a fateful place for Obama’s stimulus to make its last stand. If it succeeds, the Obama agenda will be vindicated, its critics shamed and silenced. If it fails, however, Obama’s ambitions will suffer a mortal blow, limping along to die an ignominious death in 2012. Of course, Keynesian policies have been failing spectacularly since the New Deal, and there is no reason to assume that Obama’s oratory will negate the laws of economics ensuring their demise.

The Obama Administration estimates that the high-speed rail will cost $1.25 billion, but this is certainly wrong. Florida’s Department of Transportation estimates $3.5 billion, and a 2009 Government Accountability Office report suggests that costs could be $51 million per mile, totaling $4.28 billion. Since the federal government has only granted its projected $1.25 billion to Florida, Floridian taxpayers will be responsible for the expected cost overruns.

Politicians regularly trout out high-speed rails for different reasons, and this year it is to “create jobs and generate and economic activity.” Of course, these would not be real jobs created in the private sector, but taxpayer-funded jobs protected by politics. In 2014, when the project is completed, the construction jobs will disappear, and the only thing left behind will be needless new costs for Floridians.

The Tampa-Orlando high-speed rail will serve no useful purpose, cost far more than expected, and burden Floridians with new taxes that will jeopardize Florida’s success.

Tampa and Orlando are completely arbitrary destinations; there is no relationship between Tampa and Orland to justify connecting the two. Orlando residents are not regularly traveling to Tampa – to cheer on the 3-13 Buccaneers, for example – in significant numbers. Orlando may be a popular vacation destination due to its amusement parks, but Tampa residents do not visit Disney World any more than anyone else in the United States. Based on this rationale, Orlando could just as logically be connected to Lewisburg.

Driving the 84 miles between Tampa and Orlando takes about 90 minutes on I-4, a federal highway through each city. A high-speed rail would make the trip 30 minutes faster. Rails make more sense when built over long distances – like they are in Europe and Japan – not between two close cities in the same state. Even if the rail only costs Obama’s rosy $1.25 billion, spending that much for a slightly-faster 84-mile drive is wasteful.

Although riding the rail would yield gas savings, there is not enough regular traffic between the two cities to make a meaningful difference. Saving a Tampa family the cost of gassing up the minivan every summer does not justify such an expensive endeavor. Furthermore, without a car, visitors to each city must either call a cab (negating any gas savings) or impractically trudge around town. If the rail connected Tampa to Disney World, this flaw might not be so bad, but Disney is several miles outside of downtown Orlando.

In addition to financing the high-speed rail’s busted budget, Floridian taxpayers will also be responsible for operating and maintaining the rail. Floridians understand this, and so have voted three times – as recently as 2004 – to reject plans for a high-speed rail. Floridian voters are against the rail because they know it is impractical, expensive, and would threaten their state’s unique appeal. Florida’s warm weather and beautiful beaches are not its only attractive quality. Low taxes – no income or estate tax, for example – have promoted strong economic growth, making Florida one of the most prosperous states in America. Over-taxed residents from other states (like New Jersey) move to Florida to avoid oppressive tax rates, and businesses invest in Florida because their after-tax return is higher there than elsewhere.

Property and sales taxes were Florida’s main source of government revenue, but have been undermined by the housing crisis and recession. Last summer, Florida struggled to balance its $66.5 billion budget, relying on $4.7-billion stimulus bailout, as well as a new revenue from tobacco taxes and gambling. Given the precarious condition of Florida’s economy and budget, new multi-billion dollar spending should be out of the question, yet that is exactly what the high-speed rail will bring. Construction of the rail is not financed beyond the federal grant of $1.25 billion, which means the state will raise taxes or cut spending to afford the rail. Once the rail is built, Floridian taxpayers will also be responsible for the maintenance and operation of the rail, which will require additional revenue or savings. The most recent budget dispute, however, suggests that the government is more likely to increase taxes than decrease spending.

Florida has succeeded because its low taxes encourage investment and expansion. Projects like the high-speed rail, however, threaten Floridians with higher taxes, compromising the state’s economic growth. A state income tax on “the rich” to pay for the rail, for example, would diminish Florida’s appeal to businesses, investors, and other over-taxed Americans. Instead of moving to or investing in Florida, they would select states where they have the sense not to punish their most productive citizens. Fortunately, Florida is currently one such state, though it is poised to forfeit that advantage. Rather than clamoring for stimulus funds it cannot handle from D.C., Florida should continue to uphold its pro-growth policies, trusting the free market to triumph over the central planning of politicians. An even-faster trip to Disney World may be a child’s dream come true, but its cost is an adult’s worst nightmare.

As if this were not bad enough, White-House court jester Joe Biden described this multi-billion train wreck as mere “seed money” to lay the foundation for more federal meddling in Florida, such as another connecting rail to Miami. An expensive and useless catastrophe careening towards taxpayers, the high-speed rail may darken Florida’s sunny future.

Now, this post has nothing to do with the election from this point forward, promise. It’s about butchering American prosperity for failed environmental regulation. Interested now?

Unless you’ve been under a rock for the last year, you’ve probably seen the AGW/climate change tear-fest take some major hits. At the end of the day, the simple fact is that Climategate showed the world what climate change “experts” have been up to.

Even just yesterday Professor Phil Jones, director of University of East Anglia’s Climatic Research Unit (the place where Climategate’s emails are from) and the individual in charge of two key datasets that the IPCC relies on, admitted that “there has been no ’statistically significant’ rise in temperatures since 1995″ – an admission he wouldn’t have made if not under recent scrutiny. Want to see more fallout from Climategate? Just use Google – it’s eerily funny.

Just how much of an impact Climategate had on policy is still to be seen, but if the complete failure of Copenhagen is any sign, Climategate might have saved the world from financial ruin (OK, so maybe increased financial ruin since things weren’t that great already).

Today, Texas – with Perry’s support – filed a suit to challenge regulation of U.S. greenhouse gas emissions by the government. Now, Texas isn’t alone – there are several national industry groups that filed as well – but it is important to note its suit because of the connotations. While environmentalists could claim industry groups are filing suits for corporate reasons, an entire state filing shows that there is a more significant issue here: the prosperity of Americans. Cap-and-trade – or most likely any form of greenhouse gas regulation – would have no impact on CO2 levels without significant work by other nations who have already said they won’t change.

Why should Americans suffer knowing full well there would be no benefit to the Earth? They shouldn’t, and Texas has stepped forward to let Washington know. Maybe now people will actually care the next time Perry says we’re going to secede.

Naturally, Obama blames the need for such deficits on the Bush Administration. Obama did indeed inherit a deficit, though as a senator in a Democratic-controlled Congress, he voted with a majority of other Democrats for legislation that created the deficit, such as TARP. As President, however, Obama has only worsened the deficit situation, presiding over a $1.4 trillion deficit in 2010, now proposing a $1.56 trillion deficit for 2011, and projecting future deficits for the rest of his term.

There is also a great deal of grandstanding about the budget’s “freeze” on some discretionary programs. This proposal, which applies to only 17% of the budget for three years, conveniently occurs after large increases in appropriations to discretionary programs. Despite the fact that it will have a negligible effect on the projected deficits of the United States, Obama is peddling the gesture as evidence of his commitment to fiscal responsibility.

This budget is based on the mistaken economic theory that government expenditures – in this case, deficit-financed expenditures – have a beneficial macroeconomic effect by increasing “aggregate demand,” and thus output. Government spending, however, must be financed by taxes and borrowing, which undermines the net effect of any expenditure. For every dollar of spending, the government confiscates one dollar from the private sector, canceling out any supposed benefits.

Taxes and borrowing also distort the economic activity upon which they are levied, leading to microeconomic inefficiencies in the markets. This “efficiency cost” reduces economic activity, ultimately decreasing the economy’s output and the government’s tax revenues. To increase output and tax revenue simultaneously, the government should implement policies that promote economic activity, particularly supply-side incentives.

Obama’s 2011 budget is oblivious to the abject failure of the government’s stimulus efforts, and is a grave threat to future generations of Americans. Fortunately, for all their power, politicians cannot repeal the laws of economics.

1) “Let me repeat: we cut taxes. We cut taxes for 95 percent of working families.”

First of all, 95% of Americans do not pay taxes, and it is impossible to cut taxes for those who pay none. In fact, according to the latest Census, the bottom 40% of Americans paid no income tax, while the top 5% (whose taxes Obama refuses to decrease, and is in fact planning to increase) paid 60% of income taxes. True, “working families” pay the payroll tax, but that grants eligibility in entitlement programs like Social Security and Medicare, as well as insurance for unemployment or disability.

What Obama and Congress did was issue “refundable tax credits” to Americans, most of whom have little or no tax liability. Typical tax credits are reductions in an individual’s owed taxes, but “refundable” tax credits  are not limited by any tax liability. So even if an individual owes no taxes, he is still eligible for a refundable tax credit (or according to Obama, a “tax cut”), paid to him as income rather than as a decrease in tax liability. A more accurate term for this policy is “income redistribution,” since it is essentially redistributing income from taxpayers to non-taxpayers.

Refundable tax credits have no significant effect on long-term economic performance. People’s consumption is based on a projection of their permanent income over their lifetime, and is not very responsive to brief fluctuations. Effective tax policy should permanently decrease tax rates on payroll, income, and capital gains. Permanently lowering these rates creates firm incentives to spend, save, and invest, which will increase output, improve economic efficiency, and expand employment. Temporarily redistributing income does nothing to ensure lasting prosperity.

2) “Because of the steps we took, there are about 2 million Americans working right now who would otherwise be unemployed.”

Obama is referring to the utterly specious “created-or-saved” concept, something never before measured in economics until his infamous stimulus. White House economists concocted this bogus metric to insure against the failure of the stimulus; “jobs saved” could always be cited as an illusory caveat to “jobs lost.” When the stimulus failed to keep the unemployment rate below 8% (it has grown to 10.8%), Democrats began trumpeting “jobs saved,” rather than “jobs created.”

To illustrate the absurdity of the “created-or-saved” fiction, if there are only 3.5 million jobs – the amount which Obama swore he would “create or save” – left in the United States in 2012, Obama will be able to claim that he fulfilled his stimulus promise.

3) “According to the Congressional Budget Office — the independent organization that both parties have cited as the official scorekeeper for Congress — our approach would bring down the deficit by as much as $1 trillion over the next two decades.”

This outrageous claim is based upon a deceptive budget trick devised to hide the full cost of ObamaCare from the public. Nevertheless, Democrats have shamelessly seized this flawed factoid to hype healthcare reform as fiscally responsible, though in reality it is prohibitively expensive and ultimately unsustainable.

The Senate healthcare bill implements new taxes years before new expenditures, phasing in the full cost later to make it appear more affordable in the short-term. In fact, 98% of the bill’s new expenditures occur after 2014 – so much for all the hysteric the-time-is-now rhetoric – though new taxes – such as a payroll tax increase of .9% on income exceeding $200,000 – begin immediately in 2010. Unsurprisingly, the media has mostly fallen for this gimmick – front-loading taxes and back-loading expenditures – and have only publicized the Congressional Budget Office’s evaluation of the deceptive initial ten-year projection, ignoring that the next ten years are estimated to cost an additional $2.8 trillion (three times the cost of the first decade), totaling $3.6 trillion over 20 years, or $180 billion per year.

4) “We have made substantial investments…”

The Democrats have cleverly misappropriated the term “investment” to replace “spending.” In the State of the Union, Obama celebrated new government “investments” – rather than more spending – in environmental technology, education, healthcare, and the military. Investment has a more positive connotation than spending, since the former expects a return while the latter does not. Describing government expenditures as investments makes the spending sound less wasteful and arbitrary, and gives the impression that it will yield something valuable over time.

Government expenditures, however, do not even slightly resemble investments. An investment is the purchase of an asset – such as a stock or commodity – which may depreciate or appreciate in value over time. When the government budgets tax revenue, it is not investing in assets, but either consuming goods and services or redistributing income. Neither of these activities can be considered an investment in anything except perhaps the careers of politicians.

5) “Starting in 2011, we are prepared to freeze government spending for three years. Spending related to our national security, Medicare, Medicaid and Social Security will not be affected. But all other discretionary government programs will.”

This pledge is mere political posturing, not meaningful policymaking. Obama has shown no real concern for the economic consequences of deficit-financed spending, though he is fond of lecturing others about them between bouts of fiscal incontinence. Over the past year, Obama presided over an 18% increase in federal expenditures of $536 billion. After accounting for all the exceptions to his “spending freeze,” the proposal only applies to 17% of the federal budget, the annual appropriations of which Obama already increased by 22%.

This spending spree is not fully financed by tax receipts. The Congressional Budget Office estimates that in the next three years of the Obama Administration, outlays will exceed receipts by $3.7 trillion. The CBO projection, however, fancifully assumes that Congress will repeal all of Bush’s 2001 and 2003 tax cuts, make unrealistic decreases in Medicare reimbursements which lawmakers have avoided doing for over a decade, and does not even include the impending cost of ObamaCare. Discounting the CBO’s optimism, Obama’s deficits could easily exceed $4 trillion.

Now, after setting record increases in the budget, senselessly approving wasteful deficit spending, and adding vast sums to the national debt, Obama is now preaching fiscal discipline, and will “freeze” his recently bloated budgets to much fanfare. This utterly insincere gesture will have a negligible effect on the government’s unsustainable spending trends and mounting debt, forcing future generations to answer for the fiscal profligacy of politicians like Obama.

The State of the Union betrayed Obama’s ideological radicalism and staggering arrogance. Obama has committed to a divisive agenda of intrusive government, and is employing dishonest tactics to disguise his liberal agenda of intrusive government as “common sense” and “pragmatism.” Rather than assume responsibility for his failures, Obama blames others – Republicans, Wall Street, Big Oil, Fox News, and insurance companies – for the country’s problems. The redistribution of resources from useful sectors of the economy to useless sectors, nationalization of failing industries, corrupt dealings with favored special interests, and shakedown of businesses will continue to plague American prosperity. Under the Obama Presidency, the United States faces a dismal future.

The purpose of the tax is ostensibly for direct beneficiaries of TARP – the 2008 “bailout” legislation – to repay the government. “We want out money back, and we’re going to get it,” claims President Obama. The rationale of TARP and “too-big-to-fail” policy in general, however, was that the failure of financial institutions was a “systemic risk” to the economy, and that preventing failure would indirectly benefit the public. Depicting financial institutions as the sole beneficiaries of TARP misrepresents the entire purpose of the legislation.

TARP funds, furthermore, were not distributed solely according to financial need; in order to protect runs on failing financial institutions, all were required to accept some TARP funds regardless of need.  Many of the financial institutions this tax targets have already repaid the government for TARP. For example, of the 10 major financial institutions which received TARP funds – some of which neither needed nor wanted it – only 1 has not fully repaid the government.

In fact, the government’s biggest losses are from the bailout of Fannie Mae, Freddie Mac, General Motors, and Chrysler, yet these government-sponsored enterprises and union-backed automakers are exempted from the new tax. Perhaps the Obama Administration’s ulterior motive is to tax financial institutions in order to recoup its losses from bailing out its favored failures; Fannie and Freddie can continue to underwrite risky mortgages, and Detroit unions can continue to fund the Democratic Party. Or maybe the tax is simply an election-year stunt to pander to public resentment of “Wall Street,” sacrificing innocent financial institutions on the altar of reelection. With such a disingenuous rationale and unfair administration, this tax cannot be considered serious policymaking, but rather a shameless political ploy.

Levying a tax upon a financial institution’s liabilities has the potential for negative economic effects, particularly decreased lending operations and a globally disadvantaged American financial industry. Given that the tax is levied upon liabilities (rather than a more liquid base), financial institutions will pay the tax from net income, though cash-flow problems may force them to pay from retained earnings. Since lending is a “fractional reserve” process (meaning bank reserves are only a fraction of their total loans), any such decrease in the equity of financial institutions will exponentially decrease lending. Of course, financial institutions – like all taxed corporations – will cancel out the tax by passing its costs along to the consumer as much as possible. If the tax becomes too burdensome, however, financial institutions can relocate to more competitive financial centers like London or Tokyo, thus depriving the American economy of valuable financial services, and the government of corporate and income tax revenue. Although Obama wishes to gratify liberal rage at financial institutions, this tax will do the economy more harm than good.

The Obama Administration’s financial-crisis-responsibility fee is based on false pretenses, an egregious display of political favoritism, and will negatively affect the economy. The American people should reject Obama’s populism and demagoguery for rational economic policymaking.

On August 25, 2009, Senator Ted Kennedy passed away from brain cancer. The seat he had held since 1962 became vacant. But it’s Massachusetts – an election really isn’t necessary. Just have the Democratic primary and be done with it, right? Unfortunately for liberals, there will be an election, and that means they’ve already lost.

Republican State Senator Scott Brown has consistently decreased the lead held by Democratic Attorney General Martha Coakley. The election is now 49/47% Coakley/Brown. Even if he doesn’t win, the fact that an election in Massachusetts – one of the greatest bastions of American liberalism – has a Republican with such high numbers is staggering. Democrats are on the retreat in their stronghold – a victory for the right.

The numbers game goes deeper than 49/47 in the polls; it goes to 41. If Brown wins, Republicans would destroy the Democrats’ supermajority in the Senate, disabling the only way Reid can get his healthcare reform bill passed. With Brown’s election, the current bill will fail. When asked how he would feel if he sat in Kennedy’s seat and killed the current healthcare reform bill, Brown responded “it’s not the Kennedy’s seat, it’s not the Democrats’ seat, it’s the people’s seat.”

The people will vote on Tuesday in Massachusetts and again this November. If this progress keeps up, many Democrats should go pick up change of address forms. I’ve heard it’s easier to buy early and in bulk.