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The Frightening Ghost of Illinois Future


Thursday May 11th, 2017   •   Posted by Craig Eyermann at 6:22am PDT   •  

15684271 - frightening ghost When the U.S. territory of Puerto Rico filed for bankruptcy last week, we took the opportunity to identify the most likely candidates among U.S. states to follow the new legal precedents that are now being set by its example. The editorial board of a leading newspaper in one of those states, Illinois, argues that Puerto Rico’s bankruptcy filing represents the “frightening ghost” of that state’s debt-laden future.

Here are some excerpts from the Chicago Tribune‘s editorial. They first set the stage:

Puerto Rico is the terrifying Ghost of Illinois Future: a worst-case example of what happens when a government no longer can pay its bills.

The island, an American territory, is weighed down by $123 billion in bond and pension debt it cannot afford. Illinois, meanwhile, has about $130 billion in unfunded pension obligations alone, plus billions more in retiree health care and other liabilities. The circumstances are different, but no government can function properly—indefinitely—under ever-rising debt. Eventually something gives.

The day of reckoning for Puerto Rico came Wednesday when the island filed for a form of bankruptcy court protection—an emergency action unprecedented for a U.S. state or territory.

The editors go on to explain why the prospect of a state-level government going bankrupt should be terrifying to the state of Illinois:

Puerto Rico is what a debt-fueled nightmare looks like. Total indebtedness includes $74 billion in bond debt and $49 billion in unfunded pension obligations. The road to ruin traces back to a 2006 recession that never ended. To make up for budget shortfalls, the government borrowed ... and borrowed. As Puerto Rican joblessness increased, tens of thousands of residents left for the mainland, further eroding the economy. “People sometimes just leave the key in the house or the car in the airport and just go,” a resident told The Wall Street Journal. Last March, the struggling power company temporarily shut off electricity to a hospital that couldn’t pay its bills. Talk about a Dickensian scene.

Let’s see: vast government borrowing, and outmigration removing taxpayers from the workforce. Sound familiar?

The Chicago Tribune‘s editors next consider what would happen if Illinois’ fiscal situation were to continue deteriorating and the state followed Puerto Rico’s path.

If bankruptcy protection became an option, bondholders would charge punishing interest rates, or quit buying Illinois bonds, because of the increased risk that the state couldn’t make its interest payments. Just the specter of Puerto Rico is chilling. “I think it will make life more difficult in places like Illinois and New Jersey and Connecticut, where investors are already reluctant to loan the government money,” Matt Fabian of Municipal Market Analytics told USA Today. “It’s going to increase investor trepidation.”

What the editors are describing is what happens when a government’s debt has entered into a debt death spiral, when the economy is crushed as both investors and residents are compelled to become refugees as the government becomes increasingly tyrannical in its attempts to take more and more to prop itself up while providing less and less of the things people count on the government to do.

We can see that happen on a state-level scale with the example of Puerto Rico, where the New York Times‘ Frances Robles describes the kinds of sacrifices that those who remain in Puerto Rico will be compelled to make after the bankruptcy filing:

Although the move on Wednesday was hardly a surprise, it left a sense of gloom and anxiety here, as civil servants question whether their pensions will ever be paid and private companies suffer the consequences of the brutal domino effect that results when taxes rise, salaries drop and the middle class takes off on a mass exodus for Florida....

The government plans sweeping austerity measures in the coming months that will hit teachers especially hard. On Friday, Puerto Rico’s education secretary announced a proposal to close 184 schools. Teachers may see their hours trimmed by two days a month.

So while the government seeks protection from lawsuits from the hedge funds and other financial firms that invested in Puerto Rico’s risky debt, residents of this United States territory are taking the squeeze. Fines for parking and other traffic violations have doubled. Dozens of government agencies are on the chopping block, while perks like the annual Christmas bonus and pay for unused sick time make for wistful memories.

Illinois isn’t there yet. The Chicago Tribune‘s editorial board offers that state’s government some advice for learning from Puerto Rico’s wake up call.

The right response for Illinois is to look at the ruin of Puerto Rico and take its fate as a dire warning: This state has an unsustainable debt load. Eventually it will overwhelm government and taxpayers. No plan to reform the economy to spur growth and create more taxpayers. A $12 billion backlog of unpaid bills. Only gridlock and infighting as the debt load grows. But it is not too late for Illinois to change its ways.

And there’s the problem. Illinois wouldn’t be a leading candidate to be the next state-level government in the U.S. to pursue federal bankruptcy protections if its legislators were truly willing to fix the state’s fiscal problems, for which they bear full responsibility for having created.

Until that changes with the state’s politicians putting aside their own petty interests in asserting their long-entrenched power, Illinois will continue following Puerto Rico’s path. Until it can no longer avoid its fate.

RepealAndReplaceACA.Con


Monday May 8th, 2017   •   Posted by K. Lloyd Billingsley at 12:08pm PDT   •  

“House Approval Of Health Care Bill Represents Major Victory For Trump,” ran the headline on a National Public Radio story, and the Washington Post said the new bill was a “major victory” for Republicans. Whether the measure, yet to face the Senate, is a victory for the people is dubious at best.

The Affordable Care Act, which the Republicans say they want to repeal and replace, was a statist coup disguised in a white coat. Under this plan, the people don’t get the health care they want. Instead they get only the care the government wants them to have. The ACA was responsible for “widespread consumer misery,” and prompted victims to wonder if the ACA was just laying groundwork for what Hillary Clinton calls the “public option” or “single payer.” Both mean government monopoly health care, what some politicians persist in calling “socialized medicine.”

Hillary Clinton failed to win the election but the effort to repeal the ACA is really a victory for the 44th president, who understood the dynamic of the bipartisan ruling class. Liberal and left-wing Democrats take the lead in the expansion of government, as in the FDR’s New Deal and Lyndon Johnson’s Great Society, with its vaunted “War on Poverty” that proved particularly destructive. Republicans have been in a position to scale back or eliminate these statist programs but declined to do so. Instead they do their best to “fix” or “repair” them, to “make them work,” and so on.

Like the ACA, you have to pass the Republican bill to find out what’s in it. Like the ACA, it shapes up as government giving people the health care it wants them to have. On the other hand, for the people got the health care they want and need, competition is the best mechanism. Television ads for health insurance should be common as ads for car insurance, but don’t look for that anytime soon.

Meanwhile, the socialist Bernie Sanders is pushing for California to adopt “single payer,” the kind of system they had in the USSR, where Sanders spent his honeymoon. The prime beneficiary of government monopoly health care would be government employee unions. True to form, appearing with Sanders was RoseAnn DeMoro of the national nurses union. Sanders claims health care is a “right” but as John Graham has noted, there is no right to health care even in Canada’s government monopoly system.

Portraits of Public Bureaucrats


Monday May 8th, 2017   •   Posted by Craig Eyermann at 5:54am PDT   •  

19422222 - teen girl painter drawing portrait with oil paints, professional painter at work over white bacground One of the little known perks of being appointed to head one of the major departments of the U.S. government is that you can have your official portrait painted to become an immortal part of the government’s growing collection of artwork.

James Varney of RealClearInvestigations reports on the downside for U.S. taxpayers of that practice.

In late 15th century Florence, members of the fabled house of Medici paid artists such as Sandro Botticelli to produce portraits of themselves worthy the world’s greatest museums. Today American taxpayers spend millions of dollars on portraits of government bureaucrats.

Most are hidden from public view, which may be a blessing, according to Sen. Bill Cassidy, R-La., who notes, “I’m not so sure the public cares who the secretary of agriculture was 10 years ago.”

Cassidy wants to end such indulgences permanently. In recent years, he has managed to attach a rider to appropriations bills barring the use of public money for portraits of Washington officials. Now’s he’s aiming to stop it outright with his Eliminating Government-Funded Oil Painting Act, or the EGO Act, which recently passed out of the Senate’s Homeland Security and Government Affairs Committee. The act’s cheeky acronym captures what’s really at play so far as Cassidy is concerned.

“We’re not against portraiture, and we understand a painting of a president, say, might be priceless,” he said. “But you can’t tell me we should pay for a portrait of an EPA director that hangs in some back hallway where people can’t find it or the public doesn’t have access.”

Cassidy’s mention of the portrait of an EPA director isn’t random. Back in 2012, Representative Cassidy sent his communications director on a mission to find the government-commissioned portrait of President Obama’s first EPA director Lisa Perez Jackson, who occupied that post during his first term in office.

While you can see photographs of the unique portrait on the web site of Portrait Consultants, the firm that was commissioned to produce it, and even pictures of Jackson visiting the portrait studio to select a frame for it, it proved to be difficult to find after it was delivered to the federal government.

In 2012, when then-Rep. Cassidy first pushed a law banning the portraits, his communications director, John Cummins, went looking for the painting of EPA head Lisa Jackson, which cost taxpayers $40,000. He couldn’t find it. And that was with his congressional ID.

“The security guard had no idea what we were talking about,” Cummins said.

Eventually, the painted portrait of Jackson turned up, but nowhere the public who paid $38,350 for it and its frame in 2012 could view it.

Cassidy, who has been seeking to end the federal financing of such vanity portraits for years, has once again reintroduced legislation with bipartisan support earlier this year. The primary supporters of the Eliminating Government-Funded Oil-Painting (EGO) Act of 2017 make their arguments in the press release announcing the bill’s introduction:

WASHINGTON—US Senators Bill Cassidy, MD (R-LA), Ron Johnson (R-WI), Claire McCaskill (D-MO), and Deb Fischer (R-NE) introduced the Eliminating Government-Funded Oil-Painting (EGO) Act of 2017 in the US Senate.

“When America is trillions of dollars in debt, we should take every reasonable measure to reduce the burden passed on to our children and grandchildren,” said Dr. Cassidy. “Tax dollars should go to building roads and improving schools—not oil paintings that very few people ever see or care about. Congress has passed the EGO Act before, let’s pass it again.”

“Banning government officials from spending taxpayer dollars on expensive self-portraits is a no-brainer, and a great step toward draining the Washington swamp,” Sen. Johnson said. “I look forward to continuing to use the Homeland Security and Governmental Affairs Committee to eliminate government waste wherever possible.”

“I’d encourage anyone who’s commissioned a portrait using Missourians’ hard-earned tax dollars to come back to my state with me and ask folks how they feel about it—they’ll get an earful,” McCaskill said. “This bill just says you should pay for your own portraits and not ask taxpayers to foot the bill. I can’t imagine anyone who’d disagree with that.”

“The EGO Act would save taxpayer dollars by cutting frivolous spending on lavish portraits of government officials. Congress has a responsibility to conduct proper oversight and root out all forms of government waste. It’s pretty simple: if you want a portrait, pay for it yourself,” said Fischer.

The last time the bill was introduced back in 2015, it was blocked, without any statement of justification, by then-minority leader Harry Reid of Nevada, who has since retired from the Senate.

The portraits cost anywhere from $20,000 to $40,000 apiece. The federal government has hundreds of them in its collections, as this limited selection of federally-commissioned portraits makes clear.

The EGO Act of 2017 is a bill whose time is long past due. Today’s members of the Senate and the House have an opportunity to demonstrate that they’re willing to set aside the publicly-financed demonstration of their egos to benefit millions of American taxpayers, many of whom would never consider wasting their money on having their own portraits painted, much less those of government bureaucrats.

U.S. Territory of Puerto Rico Files for Bankruptcy


Thursday May 4th, 2017   •   Posted by Craig Eyermann at 6:23am PDT   •  

30172048 - tattered flag of puerto rico The U.S. territory of Puerto Rico is the oldest colony in the world. Part of the United States since 1898, the Caribbean island with a predominantly Spanish-speaking population of over 3.7 million has often been promoted as a candidate to become the nation’s 51st state.

But May 3, 2017 marked the beginning of a new era for the island, coming over 523 years after being discovered by Christopher Columbus during his second expedition to the New World, as Puerto Rico’s territorial government filed for bankruptcy, just over one year after it first defaulted on paying its debts, and nearly 10 months after it began defaulting on its constitutionally guaranteed debt. Reuters describes the magnitude of the event and what finally touched it off:

Puerto Rico announced a historic restructuring of its public debt on Wednesday, touching off what may be the biggest bankruptcy ever in the $3.8 trillion U.S. municipal bond market.

While it was not immediately clear just how much of Puerto Rico’s $70 billion of debt would be included in the bankruptcy filing, the case is sure to dwarf Detroit’s insolvency in 2013.

The move comes a day after several major creditors sued Puerto Rico over defaults [of] its bonds.

The government of Puerto Rico’s day of reckoning had been delayed for a year after it first began defaulting on paying back its credit because of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), which President Obama signed into law on June 29, 2016. From that time, the territorial government had until May 1, 2017 to negotiate settlements with its creditors, primarily hedge and pension funds, who had been enticed to loan money to Puerto Rico because of high interest rates and the territorial government’s constitutional guarantee to pay back money it borrowed.

When that deadline passed without deals to either settle the claims of its creditors or sufficient tax revenue to make payments on its debt, the future of Puerto Rico in U.S. bankruptcy court was all but assured, as the PROMESA law made it possible for the first time for a U.S. territory or state to file for bankruptcy protection from its creditors.

In this case, the law allows the government to force the restructuring of its debts under Title III of the U.S. bankruptcy code, much like the kind of bankruptcies that have been filed by smaller units of government such as cities and counties.

With filing for bankruptcy now an option and Puerto Rico taking the lead in setting the legal precedents for the equivalent of state-level governments, there’s some interesting speculation on which U.S. state might be the next to seriously pursue the option. Analyst Mike Shedlock makes the case for Illinois to be next, given that state’s completely dysfunctional legislature combined with its enormous public employee pension liabilities.

Meanwhile, accounting firm PriceWaterhouseCooper includes Massachusetts, Connecticut, Kentucky and New Jersey along with Illinois at the bottom of its listing of the relative financial strength of the states, but notes that Puerto Rico would be “ranked last by a wide margin”. Meanwhile, Eileen Norcross and Olivia Gonzales of the nonprofit Mercatus Center place the same five states at the bottom of their 2016 rankings of U.S. states by their government’s fiscal condition, giving the following reasons:

Kentucky, Illinois, New Jersey, Massachusetts, and Connecticut rank in the bottom five states, largely owing to the low amounts of cash they have on hand and their large debt obligations.

  • Each state has massive debt obligations. Each of the bottom five states exhibits serious signs of fiscal distress. Though their economies may be stronger than Puerto Rico’s, allowing them to better navigate fis­cal crises, their large liabilities still raise serious concerns.
  • Unfunded liabilities continue to be a problem. High deficits and debt obligations in the forms of unfunded pensions and healthcare benefits continue to drive each state into fiscal peril. Each holds tens, if not hundreds, of billions of dollars in unfunded liabilities—constituting a significant risk to taxpayers in both the short and the long term.
  • The bottom five states have changed since last year. Kentucky’s position has declined, plac­ing it in the bottom five this year. New York is no longer in the bottom five. New Jersey and Illinois improved slightly, but remain in the bottom five. Connecticut and Massachusetts also remain in the bottom five, in slightly worse positions than last year.

Of these states, Connecticut might the most likely to provide serious competition to Illinois in the unofficial race to be the next state-level government to file for bankruptcy, given the breaking news that its highly progressive income taxes are failing to deliver anticipated revenues to that fiscally-strained state government.

Which state would you predict will be the next to head to U.S. federal bankruptcy court?

State Stem Cell Scammers Want Another $5 Billion


Wednesday May 3rd, 2017   •   Posted by K. Lloyd Billingsley at 9:34am PDT   •  

Randal Mills is stepping down as president of the California Institute for Regenerative Medicine, but that’s not the news. The $3 billion state stem-cell agency is running out of money and according to David Jensen of the California Stem Cell Report, founder Robert Klein “is talking about asking California voters for another $5 billion.” Klein, a wealthy real estate developer, is now with Americans For Cures, which beats the drum for “public funding for stem cell research.”

As taxpayers will recall, Klein was the prime mover of the 2004 Proposition 71, which promised life-saving cures and therapies for a host of diseases, plus a revenue stream from the royalties. A ballpark figure for the royalties is zero because CIRM has failed to create any of the promised cures and therapies. As Jensen delicately puts it, “so far the agency has not backed a stem cell therapy that is widely available.” It’s a $3 billion bust, in other words, but false promises, lack of results and wasteful spending have never prevented California politicians from lending a hand.

The push for $5 billion comes from Art Torres, the former state senator and Democratic Party boss CIRM hired in the early going and immediately tripled his salary. As we noted, former Pete Wilson cabinet secretary Joe Rodota also likes the new $5 billion but wants to fold CIRM into the University of California. He claims this would “build an army of new companies working on cures,” allow the UC to hire more professors, and even reduce the cost of higher education.

Klein might float the $5 billion bond issue in 2018 or 2020. Voters and taxpayers might recall that CIRM handed 90 percent of its grants to institutions with links to past or present board members and the CIRM board was very kind to for-profit companies for whom Klein had lobbied. Based on the record so far, another $5 billion will produce none of the cures and therapies CIRM failed to produce with $3 billion. On the other hand, another $5 billion is certain to secure more conflict of interest, more sinecures for washed-up politicians, and more absurd salaries for bosses. Last year, CIRM paid president C. Randal Mills $573,000, higher than the President of the United States and more than three times the $173,987 salary of governor Jerry Brown.

 

 

Federal Judge Cuts Killer Deal on Apparel, Jewelry


Monday May 1st, 2017   •   Posted by K. Lloyd Billingsley at 10:43am PDT   •  

The filing deadline has passed so taxpayers might take inventory of what government is doing with their money. By the April 28 order of U.S. District judge Jon Tigar, taxpayers will be paying for undergarments known as binders or compression tops that flatten the chest of transgender inmates at women’s prisons. Such inmates at men’s prisons may have sandals, t-shirts and walking shoes. Judge Tigar ruled that they must now have pajamas, nightgowns, robes and scarves, along with “access” to bracelets, earrings, hair brushes and hair clips. Taxpayers who find this disturbing should remember that, in at least one case, they paid for a convicted murderer’s sex-change operation.

That would be Shiloh Heavenly Quine, who as Rodney Quine murdered Shahid Ali Baig, a father of three, and stole his car. Quine claimed he was really a woman and wanted the state to pay for his tuck and roll job, but his demand was denied. Enter judge Jon Tigar, an appointee of the 44th president, who assigned himself to Quine’s case and appointed a team of San Francisco lawyers and the Transgender Law Center to represent the convict. Tigar ruled that the denial of a sex-change operation constituted “deliberate indifference” to the murderer’s medical needs, and was therefore “cruel and unusual punishment.” In 2015 California agreed to pay and on January 5, 2017, Rodney Quine duly got the “reassignment,” surgery at a cost to taxpayers of $100,000. The state duly transferred Quine from Mule Creek, a tough men’s prison, to the women’s prison at Chowchilla where life will be much easier. And thanks to judge Tigar, a one-man robed politburo, taxpayers will now be springing for Shiloh Heavenly Quine’s jewelry and sartorial needs, right down to the bracelets, earrings and compression tops. It’s the kind of change taxpayers can’t believe in.

No Government Shutdown in FY 2017!


Monday May 1st, 2017   •   Posted by Craig Eyermann at 6:46am PDT   •  

23065962 - washington dc us capitol building with we are open sign on us american flag background illustration In case you missed it over the weekend, there’s big news from Washington D.C. regarding the U.S. government’s budget for the rest of its 2017 fiscal year – no federal government shutdown!

Reuters reports:

Negotiators in the U.S. Congress reached a deal late on Sunday on around $1 trillion in federal funding that would avert a government shutdown later this week, while handing President Donald Trump a down payment on his promised military build-up.

The full House of Representatives and Senate must still approve the bipartisan pact, which would be the first major legislation to clear Congress since Trump became president on Jan. 20.

Prompt passage of the legislation was expected this week.

The funds, which should have been locked into place seven months ago with the start of fiscal 2017 on Oct. 1, would pay for an array of federal programs from airport and border security operations to soldiers’ pay, medical research, foreign aid, space exploration, and education.

“The agreement will move the needle forward on conservative priorities and will ensure that the essential functions of the federal government are maintained, said Jennifer Hing, a spokeswoman for Republicans on the House Appropriations Committee.

What the budget deal won’t do is provide funding to start construction President Trump’s desired border wall before the end of the U.S. government’s 2017 fiscal year on September 30, 2017. Instead, any funding for that initiative would be negotiated as part of the federal government’s 2018 fiscal year, which begins on October 1, 2017.

That doesn’t mean however that President Trump is walking away empty-handed. The new budget deal would immediately increase funding for border enforcement activities.

Several other important White House initiatives were rejected by the Republican and Democratic negotiators, including money for a wall on the U.S.-Mexico border that Trump has argued is needed to stop illegal immigrants and drugs.

Instead, congressional negotiators settled on $1.5 billion more for border security, including more money for new technology and repairing existing infrastructure, the aide said.

Other key points in the deal include a commitment from President Trump to continue subsidy payments to health insurance companies that charge below-cost premiums on the Affordable Care Act’s health insurance exchanges, where the corporate welfare is expected to keep the program from failing before the end of the government’s 2017 fiscal year.

The U.S. government is also providing a bailout to Puerto Rico’s Medicaid program, assisting that U.S. territory’s government as it officially enters into Title III bankruptcy proceedings.

The budget deal is unusual because it suggests a break in the kind of political brinksmanship that has come to typify Federal Government Shutdown Theater, where no deals are made until the last possible minute. Commenting at Hot Air, Andrew Malcolm is amazed that the political negotiations didn’t drag out longer.

Sitting down? This is not The Onion.

Republicans and Democrats have reached bipartisan agreement on a spending bill that would last not for a week or month. But for five whole months. This would seem to avoid a partial government shutdown for now.

Yes, you’re right, in a properly-functioning Congress, budgets would be crafted for an entire fiscal year, allowing agencies to plan ahead. But, hey, let’s be thankful for five-month blessings. The last, last-minute spending agreement to come out of Congress was last Friday. And it lasts for seven whole days.

The new interim budget agreement, announced late Sunday night, involves about $1 trillion in spending. It’s something called “a compromise.” You’ve rarely seen such a thing on Capitol Hill in recent years.

Malcolm goes on to note that the “compromise” involves an agreement between politicians to spend more tax dollars, rather than less. So at least some things haven’t changed about how Washington D.C. operates.

Reject UN-Healthy Intervention


Friday April 28th, 2017   •   Posted by K. Lloyd Billingsley at 9:31am PDT   •  

Dainius Puras is professor of child psychiatry at Vilnius University in Lithuania, a Distinguished Visitor with the O’Neill Institute for National and Global Health Law at Georgetown University, and a “Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of health,” with the United Nations. In that capacity, on February 2, in a letter obtained by the Washington Post, Dr. Puras wrote to acting U.S. Secretary of State Thomas Shannon about his “serious concern” that repeal of the Affordable Care Act would strip Americans of their rights. “There is a strong presumption” Dr. Puras wrote, “that retrogressive measures taken in relation to the right to health are not permissible,” under international law.

Actually, doc, the United States has no obligation to heed a “Special Rapporteur” or anybody else from the United Nations, particularly on health. The UN has admitted its role in a 2010 cholera epidemic in Haiti that killed nearly 10,000 people and afflicted 800,000. Doctors Without Borders estimates the number of deaths at three times higher. Aside from that and other lapses, the UN is unaccountable international bureaucracy heavily subsidized by U.S. taxpayers.

As we noted, UN salaries are more than 50 percent higher than U.S. government executive salaries, and the actual salary is 161.3 percent of what the UN pay chart shows. For all its peace rhetoric, the UN has failed to prevent wars such as the 1980-88 Iran-Iraq conflict and has been useless against terrorism. The UN has promoted collectivist schemes such as the North-South Economic Dialogue and New World Information Order, a design for international press censorship. And don’t forget, Kurt Waldheim, UN Secretary General from 1972-1982, was a Nazi war criminal. After this emerged, Waldheim still got his gold-plated pension.

Meanwhile, the Trump administration should ignore Dr. Puras and replace the ACA with a system that empowers patients, not government. That done, start scaling back payments to the UN, which is really the United Governments, wasteful, counterproductive and intrusive.

Trump Tax Plan Ignores Basic Injustice


Thursday April 27th, 2017   •   Posted by K. Lloyd Billingsley at 9:43am PDT   •  

President Trump’s new tax plan will cut seven tax brackets down to three, with rates of 10, 25 and 35 percent. The Trump plan also drops the top rate of taxation from 39.6 to 35 percent. The corporate income tax rate falls from 35 to 15 percent, and the estate tax is eliminated. Those who see this as serious tax reform might consider what the plan does not do.

It does not change the basic system, which statist types call “progressive,” of punishing high earners with higher rates of taxation. The plan is not a flat tax, and a drop of less than 5 percent in the most punitive rate is essentially tokenism. On the other hand, the plan does not “give” anything to anybody, as statists contend. To allow workers to keep more of what they earn is not to give them anything.

The government currently gets workers’ money before they do, in the form of withholding from their paychecks. This practice dates from World War II and was supposed to be temporary. As a matter of basic justice, nobody should get workers’ money before they do. This is sheer government greed and the Trump plan leaves it in place.

The Trump plan does nothing to reduce the power of the Internal Revenue Service, a powerful, intrusive agency that violates basic rights by presuming guilt in tax matters. The previous president deployed the IRS against groups that favor lower taxes, limited government, and clean elections. The point man for that campaign was IRS boss John Koskinen, a terrible administrator and professional prevaricator. He should have been fired long ago and probably prosecuted, but President Trump has kept Koskinen in place. Turns out, on one of Trump’s first major real-estate deals back in the day, John Koskinen handled the sale as vice president of the Palmieri Company.

This kind of cronyism is typical of Washington. Like other presidents, Donald Trump talks a good game on reform, but he’s essentially an establishment man. His tax plan tinkers with a ponderous code, and the president is content to leave basic injustices in place. The harder you work, the more government takes, and the government still gets your money before you do.

University of California’s Secret Slush Funds


Thursday April 27th, 2017   •   Posted by Craig Eyermann at 8:22am PDT   •  

32556287 - negative human emotion facial expression feeling - hiding moneyUniversity of California President Janet Napolitano, the former Secretary of the U.S. Department of Homeland Security and also the former governor of the state of Arizona, appears to have been caught by California state auditors with her hand in the proverbial public tax dollar cookie jar.

Writing at Coyote Blog, Warren Meyer, who runs a business that manages campgrounds at publicly-owned parks and forests, remembers that another California state agency’s bureaucrats were also caught hiding state taxpayer funds from the state’s legislature, and even used the same excuses now being offered up by Napolitano and her fellow university administrators.

Pretty much the entire management team of California State Parks got fired for doing almost the exact same thing, with the exact same excuses.

California state parks Director Ruth Coleman resigned and her second-in-command was fired Friday after officials discovered the department has been sitting on “hidden assets” totalling [sic] nearly $54 million.

The money accumulated over 12 years in two special funds the department uses to collect revenue and pay for operations: $20.4 million in the Parks and Recreation Fund, and $33.5 million in the Off Highway Vehicle Trust Fund.

The money accumulated, state officials said, because the parks department had a pattern of under-reporting the actual size of the funds in its regular dealings with the state Department of Finance.

Ms. Coleman (who I worked with a few times and liked) was frankly an easier “kill” because, while long tenured in the state parks job, she really did not have a lot of political muscle. Napolitano does. Relying on consistent standards would say Napolitano should go, but government has never been about applying consistent standards, only power. So we shall see.

With such a history, perhaps a good question to ask is how many other California state government agencies are similarly attempting to stash taxpayer funds out of the sight of the state’s taxpayers? If that unethical practice is likewise occurring at multiple state agencies, it might provide the leverage needed by responsible state officials to clean house and to oust the politically-entrenched administrators at the University of California.

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