If the history of the Obama administration is any indication, one of the most efficient ways for the federal government to waste money is to “invest” it in green energy projects. Projects that are doomed to fail because they are nowhere near being economically viable.
In fact, we could argue that the green energy industry itself just isn’t sustainable, which makes these kinds of government-subsidized “investments” a very bad deal for taxpayers.
It would be one thing if only the money of millionaires and billionaires were at high risk of being lost, but when ventures like these are entirely dependent upon government subsidies to even exist in the first place, that’s a very good indication that there are a lot of better and smarter things that could be done with the taxpayers’ money. Especially when there is no hope of the green energy projects ever living up to their promises.
Unfortunately, because the green energy industry is so dependent upon the government’s subsidized support for its existence, rather than developing economically viable technologies and businesses, it spends a lot of its limited resources on keeping the stream of government subsidies that feed it going. Their latest gambit has reached all the way into the White House, as President Obama’s latest budget proposal is actually proposing disadvantaging their profitable competitors while making their own subsidized support permanent:
Yesterday, President Obama unveiled his proposed national budget for fiscal year 2015, and it includes a smorgasbord of efforts on climate issues.
“We know that future generations will continue to deal with the effects of a warming planet,” the President said yesterday in a speech introducing the budget.
The $3.9 trillion document allocates about $1 trillion for discretionary spending across both defense and non-defense, with the rest going to mandatory programs like Social Security and Medicare. Within that $1 trillion, Obama carves out numerous programs to push forward the climate action plan he announced last year….
This includes a permanent extension of the production tax credit for wind — a cost of $19.2 billion over ten years — which expired at the end of 2013….
It must be really nice to have a “friend” in the White House who is willing to help you stack the deck in your favor, no matter the cost to taxpayers. Bloomberg Businessweek explains how important it is for the wind energy lobby to get that tax credit made permanent:
In Texas, the wind tends to blow the hardest in the middle of the night. That’s also when most people are asleep and electricity prices drop, which would be a big problem for the companies that own the state’s 7,690 wind turbines if not for a 20-year-old federal subsidy that effectively pays them a flat rate for making clean energy no matter what time it is. Wind farms, whether privately owned or part of a public utility, receive a $23 tax credit for every megawatt-hour of electricity they generate. (A megawatt-hour is enough juice to power about 1,000 homes for one hour.) This credit, which was worth about $2 billion for all U.S. wind projects in 2013, has helped lower the price of electricity in parts of the country where wind power is prevalent, since wind producers can charge less and still turn a profit. In Texas, the biggest wind-producing state in the U.S., wind farms have occasionally sold electricity for less than zero—that is, they’ve paid to provide power to the grid to undercut the state’s nuclear or coal energy providers.
This sweetheart deal looks to be on its way out, in part because it succeeded in what it set out to do. Over the past five years, wind has accounted for 36 percent of all new electricity generation installed in the U.S., second only to new natural gas installations. Wind now supplies more than 4 percent of the country’s electricity. At about 60,000 megawatts, there’s enough wind energy capacity to power 15.2 million U.S. homes, a more than twentyfold increase since 2000. It’s still tiny compared to fossil fuel: Combined, coal and natural gas supply roughly two-thirds of U.S. electricity. But wind produces about six times more electricity than solar. That’s led Congress to take steps to do away with tax incentives first established in 1992 to help the fledgling industry take root. In December lawmakers allowed the credit to expire.
That the green energy lobby is now working to make the wind energy tax credit a permanent burden upon U.S. taxpayers, even as the industry supporters claim the industry’s “success”, really means that the entire industry’s business model is fatally flawed. In calling to make the tax credit permanent at their behest, President Obama is really communicating on their behalf that the wind energy industry will never be able to sustain itself without it.
A smart investor would recognize these things and cut their losses so they could move on to greener opportunities. Allowing the wind energy industry’s tax credit to permanently expire rather than be made a permanent burden for American taxpayers would make that possible.
As we recently noted, deploying the IRS, NSA, ATF, EPA and now the FCC against Americans shows that ruling-class abuse has become inclusive. But some think the abuse is not quite inclusive enough, or severe enough. Consider, for example, this remark about critics of Obamacare.
“There’s plenty of horror stories being told. All of them are untrue, but they’re being told all over America.”
That is not a drunk in some waterfront bar in San Francisco, or an unemployed carnival worker in Boston. That is Nevada Democrat Harry Reid, Majority Leader of the U.S. Senate. Reid backtracked a bit, but one gets his drift. Senator, let this writer assure you that Obamabuse has no existential problem.
Cut loose from a job after more than 13 years with no warning or severance, in a conference call, this writer had a hard time finding health insurance. But with some effort he did find a plan he liked, and he wanted to keep it. Barack Obama, President of the United States, said he could keep it, but that was a lie. Obamacare slapped this writer with a 50-percent increase in premiums for decidedly inferior coverage with ludicrous deductibles.
As Screamin’ Jay Hawkins said, “I ain’t lyin.” Neither are millions of others with Obamacare horror stories, particularly those with serious medical issues who want to keep their doctor and hospital but now find they can’t do that. The government health websites remain largely dysfunctional and insecure, and the worst is yet to come.
To charge that this is all untrue, as Senator Reid did, is verbal abuse of the highest order but it does confirm a couple of things. Some politicians nurse a grudge against reality. And some politicians recall why the American and French Revolutions actually happened. The people of that day had experienced enough ruling-class abuse for one lifetime.
Meanwhile, elimination of Obamacare horror stories is not a difficult matter.
Let all Americans choose the quality health care they want, instead of forcing on them the seventh-rate health care the government wants them to have.
There are lots of provisions that deserve detailed attention, but I always look first at the overall trends. Most specifically, I want to see what’s happening with the burden of government spending.
And you probably won’t be surprised to see that Obama isn’t imposing any fiscal restraint. He wants spending to increase more than twice as fast as needed to keep pace with inflation.
What makes these numbers so disappointing is that we learned last month that even a modest bit of spending discipline is all that’s needed to balance the budget.
By the way, you probably won’t be surprised to learn that the President also wants a $651 billion tax hike.
To avoid increasing the burden of government spending upon typical Americans, the rate at which the federal government spends money would need to be less than the combined average rate of inflation and population growth.
As you can see in Dan’s chart above, the average rate of inflation is about 2.2%. According to the U.S. Census Bureau, the average rate of population growth (the resident U.S. population plus Armed Forces members stationed outside of the U.S.) from April 2010 through January 2014 works out to be about 0.7%. That puts the combined average rate of inflation and population growth at 2.9%.
Meanwhile, President Obama wants to increase federal spending by 5.0%, which means that the burden of supporting that spending upon Americans will be increased. That, in turn, means two things: taxes need to go up and the federal government needs to borrow more money.
Keeping true to form, President Obama is seeking to directly increase the burden of that additional spending upon Americans through a $651 billion tax hike.
Coincidentally, that tax hike would appear designed to offset the “unexpectedly” $621 billion higher cost of the federal government’s expected spending for health care over the next 10 years, which is being caused by the implementation of the Affordable Care Act (aka “Obamacare”).
Just so we’re clear that the amount of President Obama’s newly proposed tax hike wasn’t arrived at by accident!
We recently noted massive dysfunction at Covered California, the state subsidiary of Obamacare, which, among other things, wasted $1.3 million on an absurd promotional video. But as Emily Bazar of the CHCF Center for Health Reporting notes, these are hardly the only problems.
She writes that California paid Accenture $359 million to set up a “consumer-friendly web portal” that would “simplify and streamline” the application process under Obamacare. Says Bazar, “there must be another definition of ‘consumer friendly’ I’m not familiar with.”
The enrollment deadline is looming but “Californians are still struggling with the website, including some of its basic functions.” And the website does not allow anybody to reset their password. “Instead you have to call the jammed customer service number and wait on hold until someone can help.” As a rule, they are unable to help. The IT people “take hours, days or weeks” to resolve the issue, and this is not simple a tech glitch. Says Bazar, who does not work for Fox News, “you can’t sign up for a health plan online without being signed into your account.”
San Francisco web engineer Sean Knox, 33, knew what plan he wanted and even had the money for it. But he found himself “hamstrung by the most basic process on any website that has been rolled out in the last 15 years.” Says Bazar, “That, my fellow Californians, is what $359 million buys you.”
Given that kind of waste and dysfunction, nobody has grounds to believe any glowing report from Covered California. Californians would do well to get out of there altogether, which is what Sean Knox finally did. Actually, Californians would be better off avoiding the site altogether, but nobody should think that Covered California exhausts the state’s problems with government waste.
Last year, as the Los Angeles Times observed, “California’s computer problems, which have already cost taxpayers hundreds of millions of dollars, have mounted as state officials cut short work on a $208-million DMV technology overhaul that is only half done.”
Remember, this is supposed to be a high-tech state.
The Federal Communications Commission planned a “Multi-Market Study of Critical Information Needs” that would monitor newspapers, websites and broadcast stations for the way they select stories and for their political leanings. The plan sparked enough outrage that the FCC backed off. Now various theories abound as to what the FCC may still be up to.
Some speculate this may be an attempt to revive the Fairness Doctrine, which was not about fairness at all. Some see the hand of leftist bagman George Soros, and others find a push for minority ownership of major media outlets. A key advocate of the study, they note, is Obama appointee Mignon Clyburn, an FCC commissioner and the daughter of Rep. James Clyburn. Those views all have merit but another FCC Commissioner went to the heart of the matter.
“The government has no place pressuring media organizations into covering certain stories,” wrote Ajit Pai in the Wall Street Journal. Pai also wondered why the “critical information needs” study included newspapers “when the FCC has no authority to regulate print media.” So what are they up to anyway?
Last week an FCC mouthpiece said “Any suggestion that the FCC intends to regulate the speech of news media or plans to put monitors in America’s newsrooms is false.” With the federal government one should never believe anything until it is officially denied. The FCC is clearly out to infringe on free speech and freedom of the press. The attempt shows that government is being inclusive in the way it abuses Americans.
The NSA has taken away Americans’ right to privacy and the IRS has harassed groups less than worshipful of big government. The EPA regularly violates Americans’ property and economic rights. The ACA, the Affordable Care Act, takes away the health plans Americans want and forces them into inferior plans the government wants them to have. In similar style, the FCC wants the news media to cover the stories government thinks they should cover. The American Counterrevolution is mounting a surge and federal agencies are the shock troops.
The eastern United States is not showing much evidence of global warming this winter. Blizzards have slammed southern cities such as Atlanta, leaving motorists stranded on icy highways. That type of problem is not new in states such as New Jersey. They fight back with rock salt, which melts the ice and gets people moving. New Jersey’s salt stocks are way low but 40,000 tons of the stuff was sitting in Searsport, Maine. New Jersey wanted to buy the salt and ship it to Port Newark but that didn’t happen because as New Jersey transportation commissioner James S. Simpson told reporters “government, the federal government, gets in the way.”
The Jones Act, passed in 1920 during the administration of Woodrow Wilson, mandates that only ships with U.S. flags and crews can transport goods between American ports. So the salt New Jersey needed sat in Maine, and this was not the first time the Jones Act block emergency supplies.
After Hurricane Sandy in 2012, the government granted only limited waivers to speed the movement of fuel and oil to areas battered by the storm. But gaining a waiver requires so many hurdles some officials never even applied. This year New Jersey officials did apply but bosses at the U.S. Department of Homeland Security, with a budget of nearly $60 billion, said they could only grant a waiver if no U.S. vessels were available and if the waiver was in the interests of national defense.
No national security interest is apparent here and a U.S. barge was not readily available to ship the salt in a timely way. So Mr. Simpson is right. Government did get in the way of an emergency situation, based on a law nearly 100 years old. But there’s more to it. The federal government is bigger than ever, more costly than ever, resists reform more than ever, and elevates bureaucratic concerns over the safety of citizens.
Now that the Olympics are over, we have some interesting budget news coming out of Washington D.C. – the Obama administration is proposing cuts to the U.S. military, but much smaller cuts than what would have occurred under President Obama’s budget sequester, which was adopted as part of the Budget Control Act of 2012. The Washington Post reports on the newly reduced cuts:
The Defense Department on Monday proposed cutting the Army to its smallest size in 74 years, slashing a class of attack jets and rolling back personnel costs in an effort to adjust a department buoyed by a decade of war to an era of leaner budgets.
Under the proposal, during the next five years the Pentagon would get $115 billion above the savings it would have had to find under sequestration but $113 billion less than the spending levels contemplated in last year’s budget proposal.
Doing the math, what that means is that instead of having to cut $228 billion of its spending over the next five years, as it otherwise would have to cut under the terms of the budget sequester, the Defense Department will instead cut its spending by just under half of that amount.
Originally, the U.S. Defense Department was going to have to bear half of all spending cuts mandated under President Obama’s budget sequester, with the other half of the mandated spending cuts to be applied to “civilian” government agencies, like the Arthritis and Musculoskeletal Interagency Coordinating Committee, the Japan-United States Friendship Commission and the Department of Education, which saw 95% of its employees declared to be nonessential during the partial federal government shutdown during the first two-and-a-half weeks of October 2013.
Word has leaked out of the White House however that rather than seeing any reductions in spending, President Obama’s next budget proposal will boost that kind of discretionary spending instead:
With the 2015 budget request, Obama will call for an end to the era of austerity that has dogged much of his presidency and to his efforts to find common ground with Republicans. Instead, the president will focus on pumping new cash into job training, early-childhood education and other programs aimed at bolstering the middle class, providing Democrats with a policy blueprint heading into the midterm elections.
At least we know what President Obama’s priorities really are now, which can be summed up by the last two words of the preceding paragraph.
Obamacare, so says the Congressional Budget Office, will lead some 2.5 million workers to drop out of the labor force. But the White House sees the silver lining:
“Over the longer run, CBO finds that because of this law [Obamacare], individuals will be empowered to make choices about their own lives and livelihoods like retiring on time rather than working into their elderly years or choosing to spend more time with their families. At the beginning of this year, we noted that as part of this new day in health care, Americans would no longer be trapped in a job to provide coverage for their families, and would have the opportunity to pursue their dreams.”
Source: White House Press Secretary, February 4, 2014;
I think the White House is on to something: Work is work, that’s why it’s called “work” not “fun;” Not having a job provides leisure and leisure is good. Retiring before you can privately save enough money liberates people to pursue their dreams and increases quality family time. Working to get benefits such as wages and health insurance is so, well, yesterday. Wow! Consider the following political spins that are likely to come from the White House in the future:
1. Obamacare has forced millions of Americans into part-time employment as employers avoid hiring full-time employees that require providing health care benefits. The spin: These part-timers with spare time on their hands are now free to pursue their dreams and spend quality time with their families. Score one more for the White House. Sadly, some of these part-timers are taking two jobs to make ends meet. These two-timing part-timers are failing to spend socially desirable time with their families and to dream sufficiently. But rest assured, the White House can be expected to address this regulatory deficiency with new regulations preventing this socially undesirable lack of dreaming and family time.
2. Raising the minimum wage to $10 an hour will reduce employment by approximately 500,000. The spin: Nearly a half million Americans will be liberated from the drudgery of employment. But $10 per hour will only free 500,000 Americans. Raising the minimum wage to $20 or $30 per hour should cause much more dreaming and family time.
3. The U.S. labor force participation rate is at a thirty-year low. The spin: millions of Americans are no longer trapped in a job. The extra dreaming and quality family time vastly improves family life across the nation.
I see a Nobel Prize in economics in President Obama’s future.
As Obamacare continues to fail its apologists look to state exchanges such as California’s for signs of success. There might be a couple but this report does a decent job of finding failure.
“The state health insurance exchange’s online enrollment portal remains down because of a software malfunction that has dogged consumers,” says the report. Three days earlier on Feb. 19 Covered Cal bosses “took the enrollment offline.” They didn’t go into detail about the problems, so they probably don’t know what they are. But they are not new.
CoveredCA.com “experienced computer and phone troubles while accepting applications to train health insurance agents, and then with the launch of the sign-up portal.” And earlier this month, “officials were forced to temporarily discontinue the exchange’s provider directory after complaints about errors in the physician list.” Covered California boss Peter Lee said “it was put online prematurely.” So like the rest of Obamacare, they knew it was a bust but went ahead with it anyway. But as we noted, Covered California does succeed as a cushy landing spot for washed up government officials.
Covered California is paying Ana Matosantos, California’s former director of finance, $20,000 a month to advise the state exchange on “financial sustainability and budgeting issues, and evaluation analytics.” Matosantos was evidently unable to evaluate the site’s problems, much less do anything to correct them. That comes as no surprise since she was unqualified and incompetent in her previous job.
Covered California faces a budget shortfall of $78 million but still spent $1.37 million on an outreach video featuring Richard Simmons. The young people they want to reach likely don’t know who this guy is, and wouldn’t care if they did But all Americans can thank Simmons for demonstrating the posture Obamacare wants everyone to assume. Robert Downey Jr. demonstrates the same pose in this movie scene, with appropriate dialogue.
So as a cash cow and Obamacare symbol Covered California may be better than Oregon’s exchange. Last November it had received more than $305 million in federal funds and launched an aggressive advertising campaign. Not a single person signed up and Cover Oregon’s boss told legislators he doubted the website would ever work. Now Oregon contemplates taking down their dysfunctional website and hooking up to the federal exchange. Good luck with that.
For several years now, 24/7 Wall Street has analyzed how well each state within the United States is run by its elected officials and government bureaucrats. To determine how well each state is run, they looked at each state’s financial data as well the services that each provides to its residents, while also factoring in their standard of living.
To determine how well the states are run, 24/7 Wall St. reviewed hundreds of data sets from dozens of sources. We looked at each state’s debt, revenue, expenditure, and deficit to determine how well it was managed fiscally. We reviewed taxes, exports, and GDP growth, including a breakdown by sector, to identify how each state was managing its resources. We looked at poverty, income, unemployment, high school graduation, violent crime and foreclosure rates to assess the well-being of the state’s residents.
While each state is different, the best-run states share certain characteristics, as do the worst run. For example, the populations of the worse-off states tended to have lower standards of living. Violent crime rates in these states were usually higher and residents were much less likely to have a high school diploma.
The worst-run states also tended to have weak fiscal management reflected in higher budget shortfalls and lower credit ratings by Moody’s Investors Service and Standard & Poors.
The better-run states tended to display stable fiscal management. Pensions were more likely to be fully funded, debt was lower, and budget deficits smaller. Credit ratings agencies also were much more likely to rate the well-run states favorably. Only two poorly run states received a perfect credit rating from either agency. California and Illinois, which are ranked worst and third worst, received the lowest ratings from both agencies.
The states that were well-managed also tended to have lower unemployment rates.
The four runner-up worst-run states, in order from least badly run to most badly run, were Nevada, Rhode Island, Connecticut and Illinois. Meanwhile, the most badly run state in America is California.
24/7 Wall Street notes their 2013 finding isn’t the first time California has come out on the bottom:
For the third year in a row, California is the worst-run state in America. California faced a nearly $24 billion in budget shortfall in fiscal 2012, including a mid-year shortfall of $930 million and $8.2 billion carried over from the year before. California carries an A credit rating from Standard & Poor’s, and an A1 from Moody’s — both worse than any other state except for Illinois. Explaining its rating, Moody’s pointed to the state’s history of one-time solutions to resolve its budgetary gaps. It also noted the state’s “highly volatile revenue structure,” due to its over reliance on wealthy taxpayers. The Golden State was also among the worst states in the nation for educational attainment, health coverage, and unemployment.
California’s over reliance upon high income-earning taxpayers for the state’s revenues, counting upon them having good years to sustain their spending, virtually ensures that the state will experience a fiscal crisis in the future. To understand why that’s the case, just consider how much the income threshold to be in the Top 50%, Top 1% or the very Top 0.1% has changed from year to year over the most recent 10 years for which the IRS has published data:
With volatility like that in just the past 10 years, the bottom line is that if any state government is counting upon millionaires and billionaires for the revenue needed to sustain their spending, it is being run very badly indeed, as its fiscal house is out of whack. So badly, in fact, that the state’s residents can expect to experience a major government fiscal crisis whenever the state’s highest income earning residents have a bad year.