Showing posts with label carbon tax. Show all posts
Showing posts with label carbon tax. Show all posts
07 September 2019
There is NO climate emergency! by Dr. Jay Lehr and Tom Harris
There is NO climate emergency!
Climate models predict disaster – but real world evidence shows no such thing
Dr. Jay Lehr & Tom Harris
Speaking at the 13th International Conference on Climate Change, held July 25 in Washington, DC, Dr. Roy W. Spencer of the University of Alabama in Huntsville said: “There is no climate crisis. Even if all the warming we’ve seen in any observational dataset is due to increasing CO2 (carbon dioxide), which I don’t believe it is, it’s probably too small for any person to feel in their lifetime.”
And yet, that same month, Democrat Representatives Alexandria Ocasio-Cortez and Earl Blumenauer and Democrat Senator Bernie Sanders introduced a non-binding resolution that demands a “national, social, industrial and economic mobilization” – to “halt, reverse, mitigate and prepare for the consequences of the climate emergency, and to restore the climate for future generations.” Six Democrat presidential candidates immediately supported the resolution, as a way to spur “sweeping reforms” to stem a “dangerous rise in global temperatures.”
In their view, apparently, asserting a climate emergency makes it a reality and justifies national or even global control and transformation of our energy, social, industrial, economic, legal and social systems.
Thus, in an effort to drum up support for its costly “carbon tax,” the Liberal government of Canada has also declared a climate emergency. So has Britain’s Parliament, to back up a call by opposition Labour Party leader Jeremy Corbyn for “rapid and dramatic action” to protect the environment , following weeks of protests by the Extinction Rebellion climate movement, the Reuters News Agency reported.
The Climate Mobilization group proclaimed that “Over 790 local governments in 17 countries have declared a climate emergency and committed to action to drive down emissions at emergency speed.”
In considering whether this makes any sense, let’s take a page out of Blumenauer’s book and, as he put it, “tell the truth about the nature of this threat.”
The so-called emergency is based on nothing but the over-active imaginations of activists who put too much faith in computer model forecasts, while ignoring historic records and observational data that tell us nothing extraordinary or unprecedented is happening – and demonstrate that the models are wrong.
NASA’s Goddard Institute for Space Studies asserts that between 1880 and 2017 there has been only slightly more than 1 degree C (1.8 F) rise in the so-called global average temperature, despite a supposed 40% rise in atmospheric CO2 concentration. The National Oceanic and Atmospheric Administration (NOAA) database of state-wide extreme weather records, arguably the best of its kind in the world, shows that so far in 2019 only one weather record has been set: the lowest temperature in Illinois history.
In 2018, the only records set were: the largest hailstone in Alabama history; the most rainfall in a 24-hour period in Hawaii; and the most precipitation in one year in Maryland, North Carolina, South Carolina and West Virginia. Many of these records broke, sometimes barely, records that had stood for many decades.
In 2017, the only record set was for the fastest wind gust in California. No records were set in 2016. In 2015, only two records: the most precipitation in a year in Arkansas and the largest hailstone in Illinois history. In 2014, only one record: the most rainfall in a 24-hour period in New York.
And so it goes, year after year, as we move into the past with the occasional state record set, as one would expect due to natural climate variability. In the first 18+ years of the 21st century, only two states recorded their maximum temperatures: South Carolina in 2012 and South Dakota in 2006. Contrast that with 1936, when 15 states set their all-time maximum temperature records.
Meanwhile, NOAA’s updated coastal sea level tide gauge data for 2016 show no evidence that the rate of sea level rise is accelerating. Seas are rising no faster than they have for many decades.
NOAA’s hurricane records go back to 1851. The data show that for almost 12 consecutive years – October 24, 2005 (after Wilma) until August 25, 2017 (Harvey) – not one major or moderate (Category 3-5) hurricane made landfall in the continental United States. That is the longest such period in history. In 2018, for the first time ever, not one “violent” (F4-5) tornado touched down in the United States.
To the great frustration of climate alarmists, the real-world instrumental record clearly shows that, not only is no climate emergency underway, but today’s climate is actually quite stable. Aside from the drive for world socialism, the climate scare is based on only one thing: computer model forecasts of what some say could happen someday if we do not restrict our use of fossil fuels to reduce CO2 emissions.
However, the models do not work. That’s because they focus predominantly on greenhouse gases, and because scientists do not understand planetary climate processes well enough to know what mathematical equations to program into the models. Observations demonstrate that the actual rate of warming between 1979 and 2017 is one-third of what the average of 102 different climate models predicted. In fact, that climate model average is now almost one full degree Fahrenheit above what satellites have measured!
It is also important to realize that your own local weather forecasts just one week ahead are accurate only half the time. Let’s drill a bit deeper into this scandal.
For the better part of three decades, governments have financed more than one hundred efforts to model our planet. They continue to do so even though none of the models has been able to recreate (hindcast) the known past, or after a decade of study accurately predict what was to happen just ten years later.
People are led astray, because generally speaking, the public has no clue what mathematical models actually are, how they work, and what they can and cannot do. To provide a simple insight into this complex subject, before we build airplanes or buildings, we make small scale physical models and test them against the stress and performances that will be required of them when they are actually built.
When dealing with systems that are totally beyond our control, we try to describe them with computer programs or mathematical equations that we hope may give answers to questions we have about how the system works today and in the future. We attempt to understand the variables that affect the system’s operation. Then we alter the variables and see how the outcomes are affected. This is called sensitivity testing and is the very best use of mathematical models.
Historically, we were never foolish enough to make economic decisions based on predictions calculated from equations we think might control how nature works. Perhaps the most active area for mathematical modeling is the economy and stock market. No one has ever succeeded in getting it right, and they have far fewer variables than Earth’s climate, which is governed by many powerful natural forces.
Yet, today, in the climate sphere, we are doing just that – and using the models to justify massive changes in our energy and economic systems. While no one knows all the variables affecting climate, there are likely hundreds of them. Here are some important factors for which we have limited understanding:
1) seasonal, annual and decadal changes in solar irradiation; 2) energy flows between the ocean and atmosphere; 3) energy flows between the air and land; 4) balance between Earth’s water, water vapor and ice; 5) the impacts of clouds, both trapping heat below and preventing solar radiation from reaching Earth; 6) understanding the planet’s ice; 7) changes in mass among ice sheets, seal levels and glaciers; 8) our ability to factor in hurricanes and tornadoes; 9) the impact of vegetation on temperature; 10) tectonic movements on ocean bottoms; 11) differential rotation between Earth’s surface and its core; and 12) solar system magnetic field and gravitational interactions.
Despite this vast uncertainty, today’s modelers claim they can forecast our planet’s climate for decades or even a century in the future – by looking primarily or solely at “greenhouse gases.” And they want our leaders to manage our energy, economic, agricultural, transportation and other systems accordingly.
Yes, there is a climate-related emergency. It is the threat to our way of life in the free democratic world – imposed on us by climate alarmists, many of whom do not really care about climate change, people or the environment. It is an assault no less frightening and damaging than the wars that have plagued mankind since the dawn of time. It’s time for people and governments to stand up to the power-hungry alarmists.
Dr. Jay Lehr is Senior Policy Advisor with of the Ottawa, Canada-based International Climate Science Coalition (ICSC) and former Science Director of The Heartland Institute, in Arlington Heights, Illinois. Tom Harris is Executive Director of ICSC and a policy advisor to Heartland.
15 June 2010
EPA Rewrites the Clean Air Act for CO2
The Obama EPA has ruled that CO2 is a dangerous pollutant and is to be regulated under the Clean Air Act of 1970. This act was not intended to regulate CO2. It was intended to regulate such gases as SO2 and NO2 and the regulated emissions threshold was set at 250 tons per year as a result. The 2006 case of Massachusetts v. EPA was decided by the Supreme Court by a 5-4 decision and ruled that the EPA was empowered to make an endangerment decision on CO2, then widely claimed to be the cause of catastrophic man-made global warming due to the use of fossil fuels, such as coal and oil. The EPA has since declared that CO2 emissions are emissions of a pollutant that it will regulate them under the Clean Air Act. This ruling has been challenged with many lawsuits, see here and here.
The 250-ton per year pollutant level in the Clean Air Act requires that every establishment emitting that amount of a pollutant be restricted from doing so. If CO2 is such a pollutant, then the 280 Prevention of Significant Deterioration pre-construction permits per year will shoot up to an estimated 41,000 per year. The present 14,700 Title V operating permits per year will become over 6 million! This is why the EPA is trying to use a tailoring rule to change the legislated 250 ton per year requirement of the Clean Air Act to a limit two orders of magnitude larger of 25,000 tons per year for CO2. This is unconstitutional and we can be certain that environmentalists will challenge this to force the EPA to regulate smaller and smaller emitters of CO2. Opponents of the regulation of CO2 emissions under the Clean Air Act should be able to challenge the EPA's change from the clearly legislated and required threshold of 250 tons of emissions per year, to force the EPA to stop claiming the Clean Air Act as their authority for regulating those emissions.
Just as the economic damage and the human carnage of the high energy tax on carbon or the cap and trade legislation has kept the Senate from passing a bill to that purpose, despite the House having passed such a ridiculous bill, the consequences of the EPA enforcing the Clean Air Act for CO2 emissions would be catastrophic. This is why it is desperately trying to change the CO2 emissions limits, though it does not have the legislative power to do so. The EPA will have a terrible political backlash on its hands if it tries to regulate CO2 emissions at a 250 ton level. Apartment buildings, bakeries, restaurants, and many more very moderate sized businesses would then have to deal with the EPA's emissions regulatory paperwork, legal, and expense nightmare.
The 250-ton per year pollutant level in the Clean Air Act requires that every establishment emitting that amount of a pollutant be restricted from doing so. If CO2 is such a pollutant, then the 280 Prevention of Significant Deterioration pre-construction permits per year will shoot up to an estimated 41,000 per year. The present 14,700 Title V operating permits per year will become over 6 million! This is why the EPA is trying to use a tailoring rule to change the legislated 250 ton per year requirement of the Clean Air Act to a limit two orders of magnitude larger of 25,000 tons per year for CO2. This is unconstitutional and we can be certain that environmentalists will challenge this to force the EPA to regulate smaller and smaller emitters of CO2. Opponents of the regulation of CO2 emissions under the Clean Air Act should be able to challenge the EPA's change from the clearly legislated and required threshold of 250 tons of emissions per year, to force the EPA to stop claiming the Clean Air Act as their authority for regulating those emissions.
Just as the economic damage and the human carnage of the high energy tax on carbon or the cap and trade legislation has kept the Senate from passing a bill to that purpose, despite the House having passed such a ridiculous bill, the consequences of the EPA enforcing the Clean Air Act for CO2 emissions would be catastrophic. This is why it is desperately trying to change the CO2 emissions limits, though it does not have the legislative power to do so. The EPA will have a terrible political backlash on its hands if it tries to regulate CO2 emissions at a 250 ton level. Apartment buildings, bakeries, restaurants, and many more very moderate sized businesses would then have to deal with the EPA's emissions regulatory paperwork, legal, and expense nightmare.
31 December 2009
The French Carbon Tax Bill is Found Unconstitutional
The new French carbon tax was scheduled to go into law on 1 January 2010. The tax was 17 euros per ton of carbon dioxide (USD $24.40). In France, if at least 60 Deputies of the House and 60 Senators appeal to the Constitutional Council, it has the power to determine the constitutionality of a proposed law. The 2010 national budget of France, which contained enabling provisions for a carbon tax has been ruled unconstitutional on two grounds:
- The exemptions contained within the provisions for a carbon levy vitiated the primary declared purpose of the levy, to combat carbon emissions and hence “global warming”
- The exemptions would cause the levy to fall disproportionately on gasoline and heating oils and not on other carbon emissions, thereby breaching the principle that taxation should be evenly and fairly borne.
18 September 2009
The Cost of Waxman-Markey Carbon Cap and Trade
The Competitive Enterprise Institute used the Freedom of Information Act to discover on 15 September that Obama's Treasury Department estimated the cost of the Waxman-Markey Carbon Cap and Trade Bill to be from $100 billion to $200 billion per year. The average cost per household at this total cost has been calculated and found to be $1,761 per household based on the higher end of that range, apparently. [In 2000 there were almost 106 million households and there are more now.] Of course, no such figure was ever announced by the Obama administration. If it had been, Waxman-Markey would not have passed in the House of Representatives.
The Heritage Foundation believes the cost of Waxman-Markey will turn out to be about $2,979 per year from 2012 to 2035 for a family of four and that about 1.1 million jobs will be lost on average because of it between 2012 and 2035. By 2035, there will be 2.5 million fewer jobs due to cap and trade. The average GDP lost will be $393 billion per year from 2012 to 2035, with the lost GDP at $662 billion in 2035. From 2012 to 2035, the accumulated loss of GDP will be $9.4 trillion in 2009 dollars. I expect they are much closer to being right than even the new higher Treasury Department figure as this program matures.
Media Matters for America, a leftist organ, responds that the uncovered report was based on a version of Waxman-Markey prior to the version passed, which included the 300 pages of changes dumped into it in the early morning hours prior to the vote. Many of the carbon emission certificates had to be given away in order to get the bill passed. I would not be surprised if they are right in making this claim. They also point out that Obama plans to redistribute much of this money to those taxpayers or tax filers whom he happens to favor, so many households will not pay anywhere near so much as they would otherwise.
This is beside the point really. The bill passed was just to get the government's foot in the door, so they could control the use of energy in America. That they will achieve, if they can get this bill or something like it through the Senate. To do that, there will be more horse trading. The socialists then intend to use the income from the still sizable effective tax increase to both build a further constituency of dependent voters and to bribe further industries and private companies to build up pressure to expand the reach of the carbon cap and trade bill. Remember, the cost estimates were only for the early years anyway. The bill clearly says that the carbon emission certificates will not be given away as the years go by. The cost of the program to the economy will increase at a rapid rate.
Yes, some of the money may be given back to some individual households. One way or another this is usually what happens when government spends our money. We get some service or other, often one we do not want. Someone is paid to work for the government and they pay taxes and buy goods and services from the private sector. The money filters its way back into general circulation. Unfortunately, it does so with huge waste as measured against the only valid method to make such judgments. How would each individual have spent his money if the choice had been left to him?
OK, so you and your household have $1761. Would you choose to voluntarily send it in to the federal government for the purpose of reducing the use of fossil fuel energy? Actually, it would do no such thing. The government would spend most of it on other purposes. But, of course, there is nothing keeping you from reducing your use of fossil fuels if you think that is a worthwhile thing. Ride a bike to work instead of driving. Take a train to NYC instead of flying. Put better insulation into your house. Hey, go do your environmentally conscientious thing. Just get off this kick of hiring the government to force all of your neighbors to make the same effort to achieve your environmental values. They may believe their time, effort, and money is better devoted to other values.
Besides, the global warming of the late 20th Century was not caused by man's emissions of CO2 and such emissions have not been and will not become the cause of a catastrophe. That this is so is pretty well understood now scientifically. But, the politicians and bureaucrats need every excuse they can find for expanding the power of government and for the formation of international cabals of governments, so they are doing everything they can to perpetuate the myth of man-made global warming due to CO2 emissions.
Obama is giving his first speech to the U.N. next week. It will be given at a one-day session on climate change. More than 100 leaders of nations are gathering for the event. They are laying the groundwork for the Copenhagen conference in December on climate change which is supposed to take nations around the world much deeper into reduced energy use than did the Kyoto conference. These world leaders are firing themselves up to bring more massive use of force down upon the heads of their people to reduce energy use. They will do great mischief, causing the loss of many jobs and bringing on much misery in their efforts to deprive us all of the great facilitator of comfort and action, energy.
Life is all about being able to take action to achieve our self-chosen values. To do this, we need the freedom to choose our own values. A part of the necessary process for choosing our values is to be able to freely explore our world and to experiment scientifically and with our own lives. Choosing your values is itself a long process of exploration and development. That process requires individual liberty and the recognition that each of us owns his own unique life. Having identified our values, we must act to achieve them. One of the great advances in the industrial age was the development of power sources that greatly enhanced our efficiency in action. We could travel further and therefore explore further. We could transport goods over greater distances and hence trade with many more people in many different geographical locations. We learned from them in the process. Man's ability to feed, clothe, and house himself became much easier. This gave many men more time to devote to learning and developing highly specialized skills and knowledge. Energy use to increase the efficiency of human action has become a cornerstone of modern civilized life.
We have been steadily using energy more efficiently. We now insulate buildings better than ever before. We have vehicles that use energy more efficiently. Industries use it more efficiently in manufacturing. Home appliances use it more efficiently. All the normal effects of supply and demand have worked to cause people to use energy ever more efficiently. The more developed countries use it more efficiently than the little developed countries. In some ways the government has encouraged this. In others, it has discouraged this. We have to remember that if government did not take about half of the entire economy's output from us, a substantial part of that output would have been used to further increase the efficient use of energy. Government, as usual, is surely more a problem than a solution.
We should oppose the Obama administrations energy restriction policies for all of the following reasons:
The Heritage Foundation believes the cost of Waxman-Markey will turn out to be about $2,979 per year from 2012 to 2035 for a family of four and that about 1.1 million jobs will be lost on average because of it between 2012 and 2035. By 2035, there will be 2.5 million fewer jobs due to cap and trade. The average GDP lost will be $393 billion per year from 2012 to 2035, with the lost GDP at $662 billion in 2035. From 2012 to 2035, the accumulated loss of GDP will be $9.4 trillion in 2009 dollars. I expect they are much closer to being right than even the new higher Treasury Department figure as this program matures.
Media Matters for America, a leftist organ, responds that the uncovered report was based on a version of Waxman-Markey prior to the version passed, which included the 300 pages of changes dumped into it in the early morning hours prior to the vote. Many of the carbon emission certificates had to be given away in order to get the bill passed. I would not be surprised if they are right in making this claim. They also point out that Obama plans to redistribute much of this money to those taxpayers or tax filers whom he happens to favor, so many households will not pay anywhere near so much as they would otherwise.
This is beside the point really. The bill passed was just to get the government's foot in the door, so they could control the use of energy in America. That they will achieve, if they can get this bill or something like it through the Senate. To do that, there will be more horse trading. The socialists then intend to use the income from the still sizable effective tax increase to both build a further constituency of dependent voters and to bribe further industries and private companies to build up pressure to expand the reach of the carbon cap and trade bill. Remember, the cost estimates were only for the early years anyway. The bill clearly says that the carbon emission certificates will not be given away as the years go by. The cost of the program to the economy will increase at a rapid rate.
Yes, some of the money may be given back to some individual households. One way or another this is usually what happens when government spends our money. We get some service or other, often one we do not want. Someone is paid to work for the government and they pay taxes and buy goods and services from the private sector. The money filters its way back into general circulation. Unfortunately, it does so with huge waste as measured against the only valid method to make such judgments. How would each individual have spent his money if the choice had been left to him?
OK, so you and your household have $1761. Would you choose to voluntarily send it in to the federal government for the purpose of reducing the use of fossil fuel energy? Actually, it would do no such thing. The government would spend most of it on other purposes. But, of course, there is nothing keeping you from reducing your use of fossil fuels if you think that is a worthwhile thing. Ride a bike to work instead of driving. Take a train to NYC instead of flying. Put better insulation into your house. Hey, go do your environmentally conscientious thing. Just get off this kick of hiring the government to force all of your neighbors to make the same effort to achieve your environmental values. They may believe their time, effort, and money is better devoted to other values.
Besides, the global warming of the late 20th Century was not caused by man's emissions of CO2 and such emissions have not been and will not become the cause of a catastrophe. That this is so is pretty well understood now scientifically. But, the politicians and bureaucrats need every excuse they can find for expanding the power of government and for the formation of international cabals of governments, so they are doing everything they can to perpetuate the myth of man-made global warming due to CO2 emissions.
Obama is giving his first speech to the U.N. next week. It will be given at a one-day session on climate change. More than 100 leaders of nations are gathering for the event. They are laying the groundwork for the Copenhagen conference in December on climate change which is supposed to take nations around the world much deeper into reduced energy use than did the Kyoto conference. These world leaders are firing themselves up to bring more massive use of force down upon the heads of their people to reduce energy use. They will do great mischief, causing the loss of many jobs and bringing on much misery in their efforts to deprive us all of the great facilitator of comfort and action, energy.
Life is all about being able to take action to achieve our self-chosen values. To do this, we need the freedom to choose our own values. A part of the necessary process for choosing our values is to be able to freely explore our world and to experiment scientifically and with our own lives. Choosing your values is itself a long process of exploration and development. That process requires individual liberty and the recognition that each of us owns his own unique life. Having identified our values, we must act to achieve them. One of the great advances in the industrial age was the development of power sources that greatly enhanced our efficiency in action. We could travel further and therefore explore further. We could transport goods over greater distances and hence trade with many more people in many different geographical locations. We learned from them in the process. Man's ability to feed, clothe, and house himself became much easier. This gave many men more time to devote to learning and developing highly specialized skills and knowledge. Energy use to increase the efficiency of human action has become a cornerstone of modern civilized life.
We have been steadily using energy more efficiently. We now insulate buildings better than ever before. We have vehicles that use energy more efficiently. Industries use it more efficiently in manufacturing. Home appliances use it more efficiently. All the normal effects of supply and demand have worked to cause people to use energy ever more efficiently. The more developed countries use it more efficiently than the little developed countries. In some ways the government has encouraged this. In others, it has discouraged this. We have to remember that if government did not take about half of the entire economy's output from us, a substantial part of that output would have been used to further increase the efficient use of energy. Government, as usual, is surely more a problem than a solution.
We should oppose the Obama administrations energy restriction policies for all of the following reasons:
- They infringe upon our individual rights.
- The government does not have a Constitutional power to limit the use of energy.
- Energy use is a cornerstone of modern civilization.
- The redistribution of income by government is immoral.
- The claim that CO2 is a pollutant is wrong and foolish.
- Smaller, lighter cars are more dangerous.
- Mercury-containing light sources are dangerous.
- CO2 makes our plants grow better and allows them to make more oxygen.
- Coal-fired power plants with good scrubbers for sulfur products are less expensive and more reliable than solar power or wind generators.
- The U. S. has huge coal reserves.
- The coal industry employs many people.
- Biofuel is a terrible waste of farm land and resources.
- It is a mistake to give government more power. It will abuse its use.
- Every act Obama undertakes is to advance socialism and/or internationalism.
31 August 2009
The Real, Really High Unemployment Rate
The media has been happy to report to us that the unemployment rate in July 2009 was slightly improved to 9.4%, compared to a 9.5% rate in June. They also reported that the number of jobs lost was fewer than in most prior months. But this is an odd combination. For the real unemployment rate to drop, some number of net new jobs must be created, yet another 247,000 net jobs were lost in July. Some time ago, I remember that for the unemployment rate not to go up, 154,000 new net jobs had to be created in a month. So, the net number of new jobs appears to be about 401,000 jobs fewer than used to be needed to keep percent unemployed static.
Is this anything to crow about? Apparently it is not as bad as earlier in the year, but is it not awful nonetheless? Well apparently it is good if you are Obama and his Democrat Congress. It is improvement. Or maybe not. What if the recession long ago weeded out the worst employees and companies are simply reluctant to let their better employees go? And, what if the real unemployment rate is being very badly understated?
The unemployment rate does not count the underemployed or those who are involuntarily working fewer hours than they would like. It also does not count those "who have not searched for work in the last 4 weeks." In reality, no one really knows how many people want a job, but have not searched for it for 4 weeks. The government assumes that people who had been telling them they were searching for work while they were collecting unemployment benefits, but stopped doing so when their unemployment benefits ran out, are not searching for work. So they are not counted as unemployed. But, would you go down to an unemployment office looking for work for more than 26 weeks when they were not going to give you any money for doing so and when they had done nothing in 26 weeks to get you employed? Of course not. Thus, when things really get bad, the unemployment rate falls even when the number of really unemployed workers increases!
The number of people who were looking for work a while back, but have not done so recently, though they are still unemployed is estimated at 2.3 million. Adding them to the number in the official unemployment count at 9.4% unemployed, raises the real unemployment rate to 10.9%. So, Obama and the Democrat Congress now have a real unemployment rate of 10.9% and this rate is not going down!
Or, we could add in the 8.8 million workers who are on involuntary part time work. The total unemployed or underemployed would then be 16.6%. Nothing for the Democrats to crow about and hardly good evidence that the Stimulus Package is accomplishing much of anything.
In the 4th Quarter of 2008, the GDP shrank by 5.4%, in the 1st Quarter of 2009 by 6.4%, and in the 2nd Quarter of 2009 by 1.0%. Construction and manufacturing sectors have been hit very hard. They totaled 15% of jobs, but they account for 40% of the unemployment. 9.8% of adult men are unemployed, while 7.5% of adult women are unemployed. Asians are 8.3% unemployed, while whites are 8.6% unemployed, Hispanics are 12.3%, and blacks are 14.5% unemployed. All of these numbers are for the usual, under-reported statistics giving the 9.4% total unemployment rate.
Great job Obama. You really have been great at putting it to those terrible employers and wealthy investors. You scared the tar out of them even during the presidential campaign and with the known desire of the already Democrat Congress for increasing taxes and piling on regulations on businesses and investors, you made the recession worse long before you took office. Since then, your constant bad-mouthing and threats combined with those of the leadership of the House and Senate, has done a great job of keeping employers uncertain and scared. In such times, they are pulling themselves back into their shells. This is hardly surprising.
Guess what? It is all about being able to believe you will be allowed to make a reasonable profit, stupid! If you tell businessmen that they are going to taxed much more, but do not even tell them how they will be taxed, they cannot calculate whether a business operation can make money. If you tell them they will be more heavily regulated, but they do not know how they will be regulated, they cannot tell whether they can make money in those operations which may be restricted. If you tell them you will dictate management compensation, they do not know why they should bother to undertake new operations or even continue working hard on older operations. The value of the dollar is very uncertain, thanks to you. Increasing taxes and regulations are likely to make it harder for U.S. operations to make money relative to overseas operations. Besides, where will the energy come from for manufacturing and transportation and heating buildings in the U.S. with Waxman-Markey type carbon cap and trade? What on Earth are employee health insurance costs going to be when you have finished mandating many benefit additions?
It is unreasonable to expect employers and investors to hire workers under these circumstances. You must allow employers some reasonable level of certainty, but you, like FDR, love uncertainty, experimentation, and socialist redistribution and equalization. It is you who have given us 10.9% unemployment. Take credit for it and live up to it.
Is this anything to crow about? Apparently it is not as bad as earlier in the year, but is it not awful nonetheless? Well apparently it is good if you are Obama and his Democrat Congress. It is improvement. Or maybe not. What if the recession long ago weeded out the worst employees and companies are simply reluctant to let their better employees go? And, what if the real unemployment rate is being very badly understated?
The unemployment rate does not count the underemployed or those who are involuntarily working fewer hours than they would like. It also does not count those "who have not searched for work in the last 4 weeks." In reality, no one really knows how many people want a job, but have not searched for it for 4 weeks. The government assumes that people who had been telling them they were searching for work while they were collecting unemployment benefits, but stopped doing so when their unemployment benefits ran out, are not searching for work. So they are not counted as unemployed. But, would you go down to an unemployment office looking for work for more than 26 weeks when they were not going to give you any money for doing so and when they had done nothing in 26 weeks to get you employed? Of course not. Thus, when things really get bad, the unemployment rate falls even when the number of really unemployed workers increases!
The number of people who were looking for work a while back, but have not done so recently, though they are still unemployed is estimated at 2.3 million. Adding them to the number in the official unemployment count at 9.4% unemployed, raises the real unemployment rate to 10.9%. So, Obama and the Democrat Congress now have a real unemployment rate of 10.9% and this rate is not going down!
Or, we could add in the 8.8 million workers who are on involuntary part time work. The total unemployed or underemployed would then be 16.6%. Nothing for the Democrats to crow about and hardly good evidence that the Stimulus Package is accomplishing much of anything.
In the 4th Quarter of 2008, the GDP shrank by 5.4%, in the 1st Quarter of 2009 by 6.4%, and in the 2nd Quarter of 2009 by 1.0%. Construction and manufacturing sectors have been hit very hard. They totaled 15% of jobs, but they account for 40% of the unemployment. 9.8% of adult men are unemployed, while 7.5% of adult women are unemployed. Asians are 8.3% unemployed, while whites are 8.6% unemployed, Hispanics are 12.3%, and blacks are 14.5% unemployed. All of these numbers are for the usual, under-reported statistics giving the 9.4% total unemployment rate.
Great job Obama. You really have been great at putting it to those terrible employers and wealthy investors. You scared the tar out of them even during the presidential campaign and with the known desire of the already Democrat Congress for increasing taxes and piling on regulations on businesses and investors, you made the recession worse long before you took office. Since then, your constant bad-mouthing and threats combined with those of the leadership of the House and Senate, has done a great job of keeping employers uncertain and scared. In such times, they are pulling themselves back into their shells. This is hardly surprising.
Guess what? It is all about being able to believe you will be allowed to make a reasonable profit, stupid! If you tell businessmen that they are going to taxed much more, but do not even tell them how they will be taxed, they cannot calculate whether a business operation can make money. If you tell them they will be more heavily regulated, but they do not know how they will be regulated, they cannot tell whether they can make money in those operations which may be restricted. If you tell them you will dictate management compensation, they do not know why they should bother to undertake new operations or even continue working hard on older operations. The value of the dollar is very uncertain, thanks to you. Increasing taxes and regulations are likely to make it harder for U.S. operations to make money relative to overseas operations. Besides, where will the energy come from for manufacturing and transportation and heating buildings in the U.S. with Waxman-Markey type carbon cap and trade? What on Earth are employee health insurance costs going to be when you have finished mandating many benefit additions?
It is unreasonable to expect employers and investors to hire workers under these circumstances. You must allow employers some reasonable level of certainty, but you, like FDR, love uncertainty, experimentation, and socialist redistribution and equalization. It is you who have given us 10.9% unemployment. Take credit for it and live up to it.
09 August 2009
States Hardest Hit by Carbon Cap and Trade
The carbon cap and trade bill which passed the House and is awaiting consideration by the Senate will have a very uneven impact on the various states. A very simple formula using the % of a states workers in manufacturing multiplied times the % of the state's electricity generated from coal was used to evaluate the impact state by state of Waxman-Markey.
The twenty most badly hurt states will be:
Pennsylvania
West Virginia
North Carolina
Georgia
Alabama
Tennessee
Kentucky
Ohio
Michigan
Indiana
Illinois
Wisconsin
Minnesota
Iowa
Missouri
Arkansas
Kansas
Nebraska
North Dakota
Utah
The ten next worst hit states are:
Delaware
Virginia
South Carolina
Mississippi
Texas
Oklahoma
South Dakota
Wyoming
Colorado
New Mexico
I cannot imagine anyone in these states voting for Democrats in the 2010 election or in the 2012 election. According to the Congressional Budget Office, the average family will experience an increase in their energy costs of $1,300. The impact in the first 20 states above will be greater than that. The harm the Democrats are trying to do is just too transparent, so strongly motivated by a lust for power, and in such disregard for science, that by election time in 2010 anyone not brain-dead will be in a rage against the Democrats. If the People are worthy of any respect, they will turn massively against the Democrats in at least the 20 hardest hit states and that should be enough to throw them out of power in the House in the 2010 election and both the House and Senate by the 2012 election. This is not even counting the mounting fury over the Democrat attempted takeover of the health care industries.
The twenty most badly hurt states will be:
Pennsylvania
West Virginia
North Carolina
Georgia
Alabama
Tennessee
Kentucky
Ohio
Michigan
Indiana
Illinois
Wisconsin
Minnesota
Iowa
Missouri
Arkansas
Kansas
Nebraska
North Dakota
Utah
The ten next worst hit states are:
Delaware
Virginia
South Carolina
Mississippi
Texas
Oklahoma
South Dakota
Wyoming
Colorado
New Mexico
I cannot imagine anyone in these states voting for Democrats in the 2010 election or in the 2012 election. According to the Congressional Budget Office, the average family will experience an increase in their energy costs of $1,300. The impact in the first 20 states above will be greater than that. The harm the Democrats are trying to do is just too transparent, so strongly motivated by a lust for power, and in such disregard for science, that by election time in 2010 anyone not brain-dead will be in a rage against the Democrats. If the People are worthy of any respect, they will turn massively against the Democrats in at least the 20 hardest hit states and that should be enough to throw them out of power in the House in the 2010 election and both the House and Senate by the 2012 election. This is not even counting the mounting fury over the Democrat attempted takeover of the health care industries.
22 July 2009
Some Perspective on the Last Few Decades of Temperature Change

The very interesting graph of temperature over the last couple hundred years at the Watts Up With That? website is shown above. There is a gradual, approximately linear temperature increase since the end of the Little Ice Age and there are multi-decadal oscillations in temperature about that. It is not well-understood why the linear increase since the end of the Little Ice Age, but there is no particular reason to believe that it has anything to do with man-made CO2 emissions. The alarmists have taken the rise in temperature since the last negative deviation from the linear increasing baseline at its lowest point and screamed that the rate of temperature increase is without precedent. Meanwhile we are now at the red dot which is pointed out with the green arrow. It appears that we have started the downward swing on the multi-decadal positive side of the normal oscillation and are in the process of returning to the slowly increasing baseline.
The box is from 1880 to 2000, and the total temperature change in that time was less than 0.5 degrees C. But, the UN IPCC projections of temperature change are implying a 2 to 6 degrees C increase by 2100, which is only 93 years after the release of the 2007 report, as shown in the graph in the pink area indicating the range of its projections. Already, the earth's global temperature lies well below the bottom edge of those projections despite rising CO2 in the atmosphere in the meantime. Comments by Dr. Syun Akasofu of the International Arctic Research Center at the University of Alaska Fairbanks accompanying the graph above at Watts Up With That? add that the high IPCC temperature predictions for 2100
are simply an extension of the observed increase from 1975 to 2000, which was caused by the multi-decadal oscillation. The Global Climate Models (GCMs) are programmed to reproduce the observed increase from 1975 to 2000 in terms of CO2 effect and to extend the reproduced curve to 2100.In other words, the normal multi-decadal oscillation effect caused by natural forces has been attributed instead to an increasing concentration of CO2 in the atmosphere, making that seem to be a very much more powerful effect than it actually is. As I have noted in earlier blog entries, the actual increase in temperature due to increasing concentrations of CO2 by 2100 is unlikely to be as much as 0.5 degrees C.
Akasofu also says:
The IPCC seems to imply that the halting is a temporary one. However, they cannot give the reason. Several recent trends, including the phase of the Pacific Decadal Oscillation (PDO), the halting of sea level increase, and the cooling of the Arctic Ocean, indicate that the halting is likely to be due to the multi-decadal change.In addition, the sun has entered a period of low sunspot activity, which surely is also causing some cooling. It is clear that the temperature is in the process of returning to the long-term slowing rising linear trendline and that it is likely to cross it once again to the negative side of that line. You might note that only the low end of the U.N. IPCC predicted temperature increase is a linear projection of the 1975 to 2000 temperature increase. The range above that is all predicated on a non-linear greater rate of temperature increase over time, despite the fact that more and more CO2 in the atmosphere has less and less effect in absorbing emitted infra-red radiation! But, they imagine that other effects will amplify the CO2 greenhouse gas effect. More recent research, however, actually shows that counterbalancing effects come into play to decrease, rather than increase, the warming effect of CO2 as a greenhouse gas.
So, meanwhile, we have a President and a Democrat Congress who are eager to put major restrictions on energy use and to increase taxes on its use in the name of preventing the global temperature increases predicted by the UN IPCC analysis. The G8 nations are also lined up to do the same thing. The U.N. is pushing all the countries of the world to get on board and take orders from the U.N. to solve this looming catastrophe. Of course, it wants the developed countries to feel most of the pain from the imposed restrictions on human lifestyles.
All of this is clearly a play for power based upon amateurish science. Some much better science has been done in the last decade and it is way past time for the federal government and many academics to understand that it is clearly the case that natural forces still dominate the climate and will still be the dominant cause of global temperatures in 2100 in all likelihood.
It is a measure of the strength of the lust for power that so much effort is made to manufacture a human catastrophe which might be averted by human action, if only directed by much more powerful governments, and that this scientifically slovenly work of the UN IPCC is still taken seriously by many. They just cannot give up the justification for their power grab, no matter how badly flawed and nonsensical it is.
This failure to correct actions based on arguments found to be wrong is characteristic of most politicians and of those of their backers who favor ever-expanding government. The health insurance and health care takeover, the ethanol subsidies, the financial bailout and controls, the takeover of GM and Chrysler, the increase in the minimum wage, the move to hand more businesses over to unions, the increased taxes on businesses under the guise of health insurance reform, the mandates and subsidies for alternative energy industries, and much more are cases of the desire for power motivating a pretense that the offered arguments are valid, even when those arguments are well-known to be false. The political animal is a very devious animal and has always succeeded in leading democracies into tyranny despite their very poor arguments for their acquisition of ever more power. This is why the Framers of the Constitution did what they could to minimize democratic elements in the form of our government. At our peril, we have undone much of what they wisely did.
26 June 2009
Democrats - The Party of Mass Destruction
As I noted earlier, the Democrats in the House of Representatives have made the compromise they were working on to assuage agricultural and Midwest interests and pass the carbon cap and trade tax. This legislation rests for justification on the not only unproven, but actually incorrect claim that man-made CO2 emissions are causing a catastrophic global warming. Yet, a doubling of the atmospheric CO2 concentration would only cause about 0.5C temperature increase! The multiplying effects put into the bogus computer models which spew out larger temperature increases are now known to be of the wrong sign. Increased CO2 causes feedback which moderates, not increases, the heating effect of CO2 by means of more cloud cover.
In the face of the global cooling due to the decrease in solar activity, the microscopic temperature increases due to increased atmospheric CO2 should be welcomed. In addition, the cooling is likely to cause crop yield decreases, which are offset by the growth enhancement provided by higher levels of CO2 fertilizer. So, the present rates of CO2 atmospheric concentration increases are good, not bad. But to prevent this good thing, our very insipid Democrat power elite is trying to wreck the American economy. What they are doing is stupid in so many ways that it is clear that many of them must have been bought and sold for some combination of power lust and goodies from special interest groups.
The carbon tax will cause the loss of many more jobs than it will create. Many jobs destroyed will surface in other, wiser parts of the world. Americans will not be able to affordably produce high energy input goods such as aluminum, steel, concrete, and much more. We will lose jobs in the oil and gas industry and the pipeline industry and much of the transportation industry that supports it. The coal, power, and railroad industries will all suffer and many of their jobs will be lost. Meanwhile every small business, home owner, and apartment renter will see major increases in their heating, cooling, and power costs. Cars will become still more expensive, harder to maintain, and some will be more costly to operate. For what?
Yes, a piddling number of jobs in wind generation and solar power will be produced. A few industries given free carbon permits will have an advantage for awhile over others. Big business will wheedle these permits out of Washington and small businesses with no political clout will suffer in comparison. But, in the end, the entire American economy will suffer a serious Democrat kick to the head. Eventually, the taxes will be increased on most of the big businesses initially exempt and the many jobs produced by small businesses will be greatly curtailed.
Already the American economy is staggering under the weight of huge government debt and taxes to pay for mostly unnecessary bailouts. The Medicaid and Medicare welfare programs are staggering under unfunded debt, which is about to become far worse. Taxes will be raised to pay their bills. The personal retirement savings of many a soon-to-retire baby boomer crashed when the stock market plummeted by 40%. The Social Security system is clearly going to stagger as the same Baby Boomers retire in a slow-growing economy, so social security taxes will go up. The new government subsidized health insurance program will cost still more. The energy tax and many other taxes will greatly depress the American economy for a very long time.
It is not possible to come up with a more wrongheaded plan to rule the country than these power-lusting Democrats are pursuing with incredible vigor. There is something truly awesome in such a determination to blow-up and pulverize the mechanisms of a voluntary, productive free market to make room for a fascist command economy. The new economy will be run by bureaucrats and motivated by envy to destroy all that is free, individual, and enlightened. All the lessons of history are being ignored.
The Democrats are the party of awesome mass destruction and that destruction is directed inward upon ourselves. This is a party to celebrate self-immolation as it has never before been celebrated in the United States of America. Is this really the Change Americans wanted?
In the face of the global cooling due to the decrease in solar activity, the microscopic temperature increases due to increased atmospheric CO2 should be welcomed. In addition, the cooling is likely to cause crop yield decreases, which are offset by the growth enhancement provided by higher levels of CO2 fertilizer. So, the present rates of CO2 atmospheric concentration increases are good, not bad. But to prevent this good thing, our very insipid Democrat power elite is trying to wreck the American economy. What they are doing is stupid in so many ways that it is clear that many of them must have been bought and sold for some combination of power lust and goodies from special interest groups.
The carbon tax will cause the loss of many more jobs than it will create. Many jobs destroyed will surface in other, wiser parts of the world. Americans will not be able to affordably produce high energy input goods such as aluminum, steel, concrete, and much more. We will lose jobs in the oil and gas industry and the pipeline industry and much of the transportation industry that supports it. The coal, power, and railroad industries will all suffer and many of their jobs will be lost. Meanwhile every small business, home owner, and apartment renter will see major increases in their heating, cooling, and power costs. Cars will become still more expensive, harder to maintain, and some will be more costly to operate. For what?
Yes, a piddling number of jobs in wind generation and solar power will be produced. A few industries given free carbon permits will have an advantage for awhile over others. Big business will wheedle these permits out of Washington and small businesses with no political clout will suffer in comparison. But, in the end, the entire American economy will suffer a serious Democrat kick to the head. Eventually, the taxes will be increased on most of the big businesses initially exempt and the many jobs produced by small businesses will be greatly curtailed.
Already the American economy is staggering under the weight of huge government debt and taxes to pay for mostly unnecessary bailouts. The Medicaid and Medicare welfare programs are staggering under unfunded debt, which is about to become far worse. Taxes will be raised to pay their bills. The personal retirement savings of many a soon-to-retire baby boomer crashed when the stock market plummeted by 40%. The Social Security system is clearly going to stagger as the same Baby Boomers retire in a slow-growing economy, so social security taxes will go up. The new government subsidized health insurance program will cost still more. The energy tax and many other taxes will greatly depress the American economy for a very long time.
It is not possible to come up with a more wrongheaded plan to rule the country than these power-lusting Democrats are pursuing with incredible vigor. There is something truly awesome in such a determination to blow-up and pulverize the mechanisms of a voluntary, productive free market to make room for a fascist command economy. The new economy will be run by bureaucrats and motivated by envy to destroy all that is free, individual, and enlightened. All the lessons of history are being ignored.
The Democrats are the party of awesome mass destruction and that destruction is directed inward upon ourselves. This is a party to celebrate self-immolation as it has never before been celebrated in the United States of America. Is this really the Change Americans wanted?
30 March 2009
Obama's Carbon Tax is Fading
Donald Lambro believes that Obama's anti-fossil fuel carbon cap-and-trade tax on all Americans will not pass Congress. Democratic Congressmen from the Midwest, which has many coal-fired power plants and factories, are turning against the idea as they realize that their constituents are not as interested in the environment as they are in economic growth. Gallup Poll asked Americans last week if given the choice between economic growth and environmental protection, 51% of Americans would now give growth priority even if the environment suffers somewhat.
Obama had been counting on the cap-and-trade tax to pay for his middle-class tax cuts after 2010 and for funding alternative energy research and development projects. He may lose the means to fund his cockamamie alternative energy dreams, but from the start of his administration he has consistently taken actions to hurt the oil and coal industries and everyone who uses oil and coal. He has increased regulations and taxes on these industries already. His $4 trillion budget is full of anti-fossil fuel provisions designed to increase energy costs, kill jobs in the oil, gas, and coal industries, and to make us more dependent upon foreign oil. Obama has shut down all efforts to increase oil and gas exploration, development, and production. He has denied permits to drill for oil and gas in the Gulf of Mexico and shut down hopes of doing so in ANWR. He is adding a 25% tax on all oil production and a 15% tax on all natural gas production in the Gulf of Mexico as part of his budget. This will kill jobs in the Gulf states, not to mention the effect it will have on everyone in higher fuel costs.
The House had been committed to making its offices carbon neutral. But last month, they dropped this plan. Meanwhile, the Capitol Power Plant, a few blocks from the Capitol, burns coal for 35% of the power it produces. It is the leading source of air pollution in the District of Columbia. The Democrat Congress will not apply the same rules to itself which it has wanted to impose on the American people.
Obama had been counting on the cap-and-trade tax to pay for his middle-class tax cuts after 2010 and for funding alternative energy research and development projects. He may lose the means to fund his cockamamie alternative energy dreams, but from the start of his administration he has consistently taken actions to hurt the oil and coal industries and everyone who uses oil and coal. He has increased regulations and taxes on these industries already. His $4 trillion budget is full of anti-fossil fuel provisions designed to increase energy costs, kill jobs in the oil, gas, and coal industries, and to make us more dependent upon foreign oil. Obama has shut down all efforts to increase oil and gas exploration, development, and production. He has denied permits to drill for oil and gas in the Gulf of Mexico and shut down hopes of doing so in ANWR. He is adding a 25% tax on all oil production and a 15% tax on all natural gas production in the Gulf of Mexico as part of his budget. This will kill jobs in the Gulf states, not to mention the effect it will have on everyone in higher fuel costs.
The House had been committed to making its offices carbon neutral. But last month, they dropped this plan. Meanwhile, the Capitol Power Plant, a few blocks from the Capitol, burns coal for 35% of the power it produces. It is the leading source of air pollution in the District of Columbia. The Democrat Congress will not apply the same rules to itself which it has wanted to impose on the American people.
07 June 2008
Taxes, the Economy, and Solving Problems
There is a mind-set that any problem at large in one's society should be addressed with new laws establishing new redistributions of income either through taxes or by mandating required actions. Often these problems are viewed as righting an inequality, though with the elevation of environmentalism into a religion, especially among those formerly of the socialist political spectrum, drastic new programs and taxes are being proposed simply to punish human beings for exhibiting the ability to make the world a better place for human beings. Actually, government and tax policy has long been about punishing human beings for exhibiting productive ability. Those with ability seem to earn more envy than appreciation from a plurality of voters.
What is the rational approach to determining the scale of government and taxes? It has long been clear that minimizing both provides maximal freedom, maximal creative and productive output, and allows people ever-increasing resources to devote to human problem solutions. But this is not a viewpoint people keep clearly in mind as they approach any given problem. This rational, principled perspective is usually lost when it is most needed.
As I have noted several times, one of the undoubted reasons for the present economic slowdown has to be the uncertainty that businessmen have to have about future tax rates in the United States. Many business investments have payback periods extending many years into the future. They require a great deal of capital being invested over the course of a year or two or more, which is justified only if a profit can be reasonably anticipated from the investment over a number of years after the losses of the first year or two. Some investments have a shorter payback time, but very many require years. Consequently, with the Bush tax cuts expiring in 2011, businesses must be worried about their calculations on anticipated net income for investments being made now and next year. With the Democrats in firm control of the Senate and the House of Representatives and the expectation that they will strengthen their grasp of power in those bodies in the 2008 elections and grab the Presidency with a far-left socialist radical, businessmen have to be figuring that future taxes will be heavier than they are now. This rules that many investments that would have been profitable with present tax law, will not be profitable with the expected tax increases. Companies respond by buying fewer capital goods than they would have and by hiring fewer new employees.
It is simple. The calculations on any given investment decision are anything but simple, especially given that one does not know what the future tax structure will be and what future mandates will exist. This uncertainty is always present to too large a degree with activist, expanding government. But with an activist socialist presidential candidate whose stated program is "Change you can believe in", uncertainty is at a maximum. Then there is the huge power grab over most every aspect of our lives represented by the Warner-Lieberman Energy Security Act's crushing fuel taxes and their uncertain administration. Only idiots would not refrain from making many investments in this climate. That this climate of uncertainty (climate change?) depresses investment is what is very simple to understand.
So, let us examine a commentary by Ed Feulner, President of the Heritage Foundation, on some aspects of our tax policy and its effects. Five years ago, key provisions of the 2001 tax cut were accelerated to take effect in 2003, including doubling the child tax credit to $1,000, ending the marriage penalty, expanding the earned income credit for married joint filers, a new 10% tax bracket for low-income taxpayers, reduced marginal tax rates for other income brackets, the top capital-gains tax rate was cut from 20% to 15%, and the tax rate on dividends was reduced from as high as 39.6% to 15%. The result was that the economy added jobs every month from August 2003 until January 2008. 8 million new jobs were created and economic growth rates more than doubled.
In the static economy mindset, the tax cuts reduced taxes by $1.3 trillion from then through the end of 2007. But actually, because the economy grew so much more and investors could invest more wisely with lower tax rates, the government collected more tax revenue, not less. In 2003, federal revenues were 16.1% of GDP, but by 2006 they were 18.6% of a larger GDP than we would have had with the original higher tax rates! With lower tax rates, Federal government tax revenues increased from $1.77 trillion in 2003 to $2.41 trillion in 2006. This is a 36% increase in Federal revenue in 3 years! Despite that huge increase, Democrats act as though government was starved for money to spend on essential programs.
It is a marvelous thing when you can have a tax cut that leaves more money in the hands of the people and at the same time gives more money to the government to tackle such issues as it should, or more likely that it should not. This additional money paid for the war in Iraq and Afghanistan and many, many unsound Congressional giveaways. There were other effects also. The top 5% of income earners paid 59.7% of all income taxes by 2005, which was the highest % paid by that group since such records were kept in the mid-1980s. The cut in the double-taxation capital-gains tax resulted in a doubling of capital-gains tax revenues.
So, why would Democrats want to end the Bush tax cuts? It sure is not so that they will have more tax revenues to help the poor and the disadvantaged with. No, it is purely for demagogic reasons. They wish to pose before an ignorant public as the champions of the poor and the disadvantaged by piling more taxes on those who are already paying the vast majority of income, capital-gains, and dividend taxes. If they really were champions of the poor and disadvantaged groups, they would leave these tax cuts in place.
Worse yet, many of them back the Lieberman-Warner carbon tax bill which will raise taxes still higher and produce huge uncertainties for business planning. It will give Congress hugely greater power and give them many more opportunities to milk money out of lobbyists for all the groups who use energy and want special exemptions, energy credits, or who want alternative fuel and energy efficiency development monies. What a bonanza of power for Congress, while the people suffer economic stagnation and the end of many of their dreams. How many diseases will not be cured, how many products that enrich our lives will not be developed and produced, how many homes will not be bought, and how many jobs will be lost in America to India and China where a carbon tax will rightfully not be adopted?
What is the rational approach to determining the scale of government and taxes? It has long been clear that minimizing both provides maximal freedom, maximal creative and productive output, and allows people ever-increasing resources to devote to human problem solutions. But this is not a viewpoint people keep clearly in mind as they approach any given problem. This rational, principled perspective is usually lost when it is most needed.
As I have noted several times, one of the undoubted reasons for the present economic slowdown has to be the uncertainty that businessmen have to have about future tax rates in the United States. Many business investments have payback periods extending many years into the future. They require a great deal of capital being invested over the course of a year or two or more, which is justified only if a profit can be reasonably anticipated from the investment over a number of years after the losses of the first year or two. Some investments have a shorter payback time, but very many require years. Consequently, with the Bush tax cuts expiring in 2011, businesses must be worried about their calculations on anticipated net income for investments being made now and next year. With the Democrats in firm control of the Senate and the House of Representatives and the expectation that they will strengthen their grasp of power in those bodies in the 2008 elections and grab the Presidency with a far-left socialist radical, businessmen have to be figuring that future taxes will be heavier than they are now. This rules that many investments that would have been profitable with present tax law, will not be profitable with the expected tax increases. Companies respond by buying fewer capital goods than they would have and by hiring fewer new employees.
It is simple. The calculations on any given investment decision are anything but simple, especially given that one does not know what the future tax structure will be and what future mandates will exist. This uncertainty is always present to too large a degree with activist, expanding government. But with an activist socialist presidential candidate whose stated program is "Change you can believe in", uncertainty is at a maximum. Then there is the huge power grab over most every aspect of our lives represented by the Warner-Lieberman Energy Security Act's crushing fuel taxes and their uncertain administration. Only idiots would not refrain from making many investments in this climate. That this climate of uncertainty (climate change?) depresses investment is what is very simple to understand.
So, let us examine a commentary by Ed Feulner, President of the Heritage Foundation, on some aspects of our tax policy and its effects. Five years ago, key provisions of the 2001 tax cut were accelerated to take effect in 2003, including doubling the child tax credit to $1,000, ending the marriage penalty, expanding the earned income credit for married joint filers, a new 10% tax bracket for low-income taxpayers, reduced marginal tax rates for other income brackets, the top capital-gains tax rate was cut from 20% to 15%, and the tax rate on dividends was reduced from as high as 39.6% to 15%. The result was that the economy added jobs every month from August 2003 until January 2008. 8 million new jobs were created and economic growth rates more than doubled.
In the static economy mindset, the tax cuts reduced taxes by $1.3 trillion from then through the end of 2007. But actually, because the economy grew so much more and investors could invest more wisely with lower tax rates, the government collected more tax revenue, not less. In 2003, federal revenues were 16.1% of GDP, but by 2006 they were 18.6% of a larger GDP than we would have had with the original higher tax rates! With lower tax rates, Federal government tax revenues increased from $1.77 trillion in 2003 to $2.41 trillion in 2006. This is a 36% increase in Federal revenue in 3 years! Despite that huge increase, Democrats act as though government was starved for money to spend on essential programs.
It is a marvelous thing when you can have a tax cut that leaves more money in the hands of the people and at the same time gives more money to the government to tackle such issues as it should, or more likely that it should not. This additional money paid for the war in Iraq and Afghanistan and many, many unsound Congressional giveaways. There were other effects also. The top 5% of income earners paid 59.7% of all income taxes by 2005, which was the highest % paid by that group since such records were kept in the mid-1980s. The cut in the double-taxation capital-gains tax resulted in a doubling of capital-gains tax revenues.
So, why would Democrats want to end the Bush tax cuts? It sure is not so that they will have more tax revenues to help the poor and the disadvantaged with. No, it is purely for demagogic reasons. They wish to pose before an ignorant public as the champions of the poor and the disadvantaged by piling more taxes on those who are already paying the vast majority of income, capital-gains, and dividend taxes. If they really were champions of the poor and disadvantaged groups, they would leave these tax cuts in place.
Worse yet, many of them back the Lieberman-Warner carbon tax bill which will raise taxes still higher and produce huge uncertainties for business planning. It will give Congress hugely greater power and give them many more opportunities to milk money out of lobbyists for all the groups who use energy and want special exemptions, energy credits, or who want alternative fuel and energy efficiency development monies. What a bonanza of power for Congress, while the people suffer economic stagnation and the end of many of their dreams. How many diseases will not be cured, how many products that enrich our lives will not be developed and produced, how many homes will not be bought, and how many jobs will be lost in America to India and China where a carbon tax will rightfully not be adopted?
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