Ethanol Mandate to Add Twenty to Thirty-Five Cents Per Gallon in 2014 to Gas Cost

The 20-21 July 2013 Wall Street Journal notes that the ever-increasing ethanol requirement would now force refiners to exceed the 10% ethanol content in gasoline over which consumers will not go.  Consequently, the refiners are forced to buy Renewable Energy Credits at great expense.  These are called RINs.  This is increasing the cost of gasoline by about 10 cents a gallon.  Because the mandate requirement goes up each year and the cost of RINs is skyrocketing, the cost per gallon in 2014 due to the ethanol mandate is expected to be between 20 and 35 cents a gallon!

Obama's wish to see gasoline prices skyrocket is being promoted by his administration by limiting oil production on federal land and off-shore, by limiting oil refinery capacity, by limiting pipeline construction, and with the ethanol mandate.  His White House energy adviser, Heather Zichal, is still making the false claim that ethanol use reduces climate change!  This is just one of many ways in which Obama's ideas and supporters are very old-fashioned.  Add this to the old-timers list of Marxism, peak-oil, environmental doom, and a longing for a ruling aristocracy dedicated to caring for the incompetent peasant masses, while enjoying the honors and wealth of their ruling positions.

As I have pointed out many times, ethanol use neither decreases pollution nor increases the energy supply, contrary to the claims made in 2007 when the ethanol mandate was put into effect.  The ethanol mandate would be repealed if Congress were at all interested in the best interest of the People.  That Congress has left this mandate in effect is proof-positive of the venality of Congress.  That they cannot be bothered to repeal such an unnecessary expense for Americans informs us of how little they actually do represent us.

Congresswoman Donna Edwards Replies

Periodically, I send my Congressional Representative or my two Senators notes expressing my abhorrence about something or other they are about to do to suppress the rights of the individual.  Usually, the response indicates no appreciation for my note in the form of acknowledging the legitimacy of my points.  But, most of the time, it at least broadly indicates something about what I was addressing.  Sometimes they respond as though I agreed with them, as all right-thinking Progressive Elitists, or Aristocrats, do in Maryland, where the Free State of old has long been a sad, poorly used skeleton.  They simply cannot conceive that a decently written note could come from someone who opposes the Nanny State and their Progressive Aristocracy dedication to the victims of a society that has made almost everyone rich and free by the low standards of most of the world.  Today, I received a particularly aggravating non-response from Congresswoman Donna Edwards.  My reply is given below:

Donna Edwards,

I contacted you last year when I was still in your gerrymandered district.  I am not sure about what and I cannot find a hint about what from your response.  Now I am in the most incredibly gerrymandered district of John Sarbanes.
Of course, neither of you are in the least interested in my one, dominant need for the freedom to exercise my equal, sovereign individual rights to life, liberty, property, the ownership of my own body, mind, and labor, and for the pursuit of my own personal happiness.  You are both enthusiastic supporters of tyrannical, rights-violating, and illegitimate government.  If you think your government is legitimate, re-read the Declaration of Independence.  You might also observe that the reason for a Constitution was for the People to mandate a government of highly limited and precisely enumerated powers which would operate as a legitimate government as defined by the Declaration of Independence.

I am a small business owner and operator who can no longer provide as many jobs as I could before the government-induced recession, from which my business is still suffering.  Thank you for the big government model of special interest controls which has brought about a total stagnation of the real per capita private sector portion of GDP.  It is so clever of you to understate inflation, which acts as a hidden tax on all of us Americans.  It is a neat trick to take any increase in GDP, even government spending on your favored special interests and campaign donors with dummy green energy companies, and attribute that to the health of the economy.  It is especially neat that we are not supposed to be aware of the fact that what matters is the size of the per capita private sector, hence a stagnant economy is one that grows in real value at the same rate as the population is growing.  The number of missing jobs has remained constant over the last 3 years (see http://objectivistindividualist.blogspot.com/2013/03/obama-jobs-recovery-in-99-years.html).  With the booming potential of our fossil fuel supplies and American innovative proficiency, it is a really amazing feat that big government has been able to totally stagnant our economy.  Industry-killing regulations, ever increasing taxes, and many unfunded mandated expenses imposed on the private sector are your stock-in-trade.

Finally, I will always remember that you voted for ObamaCare, really ObamaUncaringTax according to our crazy Supreme Court.  That unread bill is an attempt to steal the very ownership of my body from me.  It expects me to sign over my body by filling in an IRS tax form that acknowledges government ownership of my body.  I am supposed to bow and scrape and prove that I have submitted to the government directive on how I will maintain and support my body.  The draconian 5-year prison sentence you voted for, is supposed to cow me into slavery as a numbered body owned by the government.  Nothing about my individual nature is of interest to the government that aims to take control.  To be sure, you hope to simply steal money from me or that I will submit instead of revealing your tyranny so dramatically as to be hauled off to prison by tyrannical government thugs.  The theft of hard-earned income or the draconian prison sentence are supposed to prevent such public displays of principled stands for liberty.  As the Congress, President, and the Supreme Court have abandoned the Constitution and the concept of equal, inalienable individual rights, so are we the People supposed to abandon them.  I will not do so.

Perhaps that is why you are buying up so many assault weapons, as you call them, and so many rounds of ammunition for domestic government agencies.  American government has undergone quite an amazing transformation toward tyranny.

An American Dedicated to Liberty,

Charles R. Anderson, Ph.D.
Lab: (410) 740-8562
Mobile: (301) 830-1886
Home: (301) 384-3253
http://www.AndersonMaterials.com
http://AndersonMaterials.blogspot.com
http://ObjectivistIndividualist.blogspot.com/

Obama Jobs Bill Will Kill Jobs

The Obama Jobs Bill is supposed to cost $447 billion, create as many as 1.9 million jobs according to economists who have already proven they have no clue, and increase the GDP by 2%, again according to those same clueless economists.  Let us examine the effects of the Obama Jobs Bill in a simple and rational manner.

The GDP in 2011 is estimated to be $15.012 trillion.  Obama's clueless economists say that his jobs bill will increase the GDP by 2% because simply printing money you do not have always increases the size of the economy.  Hmmm....., no wonder many of them keep saying we just need bigger stimulus packages and with an outpouring of enough newly printed dollars, the economy will grow and we will all have dream jobs.  If this effect works, then the government should print up $15.012 trillion and the economy will take a Great Leap Forward!  Apparently some us are just too timid to do this.  But Paul Krugman would be happy to push us into it.  OK, so yes, I do not believe this is the way the economy works for a minute, or even a second.  But still, it is interesting to examine whether the Obama Jobs Bill makes some kind of sense even on the numbers given by the clueless Obama economists.

First, we need to note that the cost of the bill, $447 billion, is 2.98% of the GDP.  That is more than the 2% growth of GDP claimed to result from this expenditure!  In fact, we can calculate from these numbers that for every dollar spent by the government in this Obama Jobs Bill $0.33 simply vanishes into thin air.  The Obama economists are claiming that this government expenditure is only 2/3 as effective as other money in the economy, which already includes huge inefficiencies due to the cost of overblown governments with their over-compensated employees and all of the mandates and regulations they impose without regard to cost upon the much more efficient private sector.

But, it gets worse.  Assuming that, most unbelievably, Obama's Job Bill does create the wishful 1.9 million jobs, each job costs $235,263.  This comes from dividing $447 billion by 1.9 million jobs.  We can compare this number with the cost of the jobs we presently have.  Of course the cost of those jobs is already grossly cranked skyward by the many prior costs of government, so we should remember that real private sector jobs cost less than the amount we are about to calculate because we are including all jobs and that includes all of those very expensive government jobs.  At present, each job costs ($15.012 trillion)/(140,335,000 jobs) = $106,973, where the present number of jobs comes from the Bureau of Labor Statistics Unemployment Report for September 2011.  So a new Obama job will cost 2.2 times as much as the composite of private sector and government jobs presently costs.  Surely, taking 2.2 times as much money out of the private sector as it takes to create a job there and giving it to Obama to create a job is not a good idea.  It is a great way to bankrupt America and many of its families.

Now, some economists believe in magic and they will disagree with me on what I am about to point out.  When you remove 2.2 times as much from the private sector as it takes for the private sector to create a job, you actually destroy 2.2 jobs for every job you create.  Yes, Obama will create jobs with his $447 billion expenditure of our money, but he will kill more than 2.2 jobs in the private sector for every job he will create for his campaign contributors.  He will create some union jobs to build and repair infrastructure.  He will maintain some teaching positions for the teachers unions in public schools.  He will create some temporary green energy jobs, but the collapse of those businesses will still occur soon, as it did with Solyndra and numerous other green jobs companies producing expensive and unreliable energy products.  Obama will try to point out the jobs created, so this is what will be seen.  What will not be seen, except partially in the rising unemployment statistics, will be the 2.2 minimum number of jobs destroyed in the private sector.  Obama is counting on our failing to see those jobs die.

What I am saying is based on recognizing that if government spends money, it is taken out of the private sector one way or another.  Generally, it is either taken out in taxes, by borrowing it with the payment of interest paid with future taxes, by simply printing it and diluting the value of all other money and assets, and by imposing mandates upon the private sector that cost them time and money.  In this case, Obama wants to raise taxes on the "rich" or companies which will remove money from the private sector in a simple and straightforward way to pay for this turkey bill.

Now I do not believe the Obama Jobs Bill will create 1.9 million jobs at all, even if we do not subtract the jobs killed by Obama.  We can easily calculate the number of jobs that will be killed.  These jobs are jobs that might well have been jobs long sustained by the private sector and they will be replaced by a smaller number of jobs that will not make economic sense once the immediate government expenditure runs out.  The private sector jobs killed will be about $447,000,000,000 / $106,973 = 4,178,625 jobs, or more than 4 million jobs, to be replaced with maybe 1 million jobs for Obama's cronies.

As I said, it gets worse.  Creating about 1 million temporary jobs while killing more than 4 million longer term jobs cannot be the act of rational men and women.  But it is the way the wrongheaded Obama wants badly to drag the country.  It is Obama who will throw most of us off the cliff.

Someone should make an ad of a jackbooted Obama marching shackled American workers to a cliff and then pushing them over the edge, one by one, with the calculations above overprinted on the images of a fascist Obama.  This would only be justice to pay back the injustice done to Paul Ryan.

Justice Department Claims Taxing Power is Constitutionally Unlimited in Defense of ObamaCare

U.S. District Judge Henry Hudson ruled in Richmond, VA on 2 August that the Virginia attorney general lawsuit claiming that ObamaCare was unconstitutional had enough merit that he would not stop it from moving to a trial in October in Richmond.  The Virginia legislature has also passed a law protecting its citizens from being forced to buy health insurance by the federal government.  Virginia Attorney General Ken Cuccinelli said, "The government cannot draft an unwilling citizen into commerce just so it can regulate him under the commerce clause."  Foolishly, the state of Virginia's lawyers have conceded that the federal government has broad powers to impose a tax, but they claim it has less power to impose a penalty. 

The Justice Department claims that Congress has broad authority to regulate private decisions on health care since those decisions affect the health care system and therefore interstate commerce.  They also claim the power to tax people who refuse to join mandated programs.  In fact, they go so far as to claim that the "courts are without authority to limit the exercise of the taxing power."

Now, the Justice Department is insanely wrong on both claims it is making.  This is not to say that they will not carry the day in court, but they are clearly making two unconstitutional arguments at the core of their case. 

First, they are claiming that anyone who does not purchase a health insurance plan acceptable to the federal government is affecting the health care system because at some time they will need to use the health care system.  This in turn means it affects interstate commerce.  So, a person is to be forced to buy a particular, mandated health insurance policy or one of a few such policies so that he will be forced to affect interstate commerce.  Well, actually, this may not be true at all.  First, some people will actually die without getting health care, though we do not know who they will be.  Second, some people are so wealthy that they have no need to purchase insurance to provide for their own health needs.  It is clear that the Obama faction want to force such people to buy policies which will subsidize others with less income, but such wealthy people are not evading a personal responsibility as the Justice Department argues they are.  Third, the policy best suited to some individuals will surely be different than the government mandated policies.  Fourth, it is a novel legal claim to force people to buy a product so that they have been forced to participate in commerce they did not want to participate in.  Fifth, that commerce still may not truly be interstate commerce since health plans are to be formulated and administered state by state.

Recall that Congress voted for ObamaCare while claiming that it did not represent a tax, which was a point Obama was very insistent upon.  But now, in the face of the challenge by the state of Virginia, and a separate lawsuit by the attorney generals of 20 other states, which is coming up for a similar ruling on whether it will be allowed to proceed, the Justice Department is claiming that Congress has the authority to pass ObamaCare based on its taxing power.  In fact, it has no such power since the taxing power only exists for the purpose of exercising the strictly enumerated powers in Article I, Section 8 of the Constitution, where there is no mention of caring for the medical needs of the People.  This inconvenient fact has long been ignored, however.

The current Justice Department claim goes even further than this usual usurpation of power by Congress.  It claims that the courts have no power to limit the taxation power!  Why is this going much further?  Because the Constitution places a further restriction on what Congress can do beyond enumerating its powers.  It says that Congress must legislate in such a way that it does not harm the General Welfare.  So, if ObamaCare is not consistent with the General Welfare, then it is unconstitutional.  Some will debate whether it is or not, though most of the American People have concluded that it is harmful to them.  What cannot be debated is this:  The taxing power of Congress is limited by the General Welfare and therefore it is a serious usurpation of power by Congress and the Justice Department to claim that power is unlimited.  This is clearly the claim of megalomaniacs.  There can be no question that if Congress levels a tax of 100% of income upon any American citizen, it has fundamentally violated his right to life, liberty, and the pursuit of happiness.  The power to tax must have limits.  It cannot be unlimited.  If Congress were not to have enough sense to recognize this, then the courts would have to step in and declare the excessive taxes unconstitutional.

Judge Hudson recognized some of these problems.  He said, "Never before has the [Constitution's] commerce clause and associated necessary and proper clause been extended this far."  Indeed, if they are extended so far, then there are no limits to the power of the federal government except the few among the many rights still protected in the Bill of Rights and the 14th Amendment.  We can then be forced to participate in any market for any good or service and then be controlled by regulation.  We can be taxed in any way to any degree by government so that it can acquire all of our income and wealth, leaving us even homeless, without clothing, and without food.  Clearly, it is the job of the federal courts to squash these hugely inflated claims of power made by the Obama Justice Department in the name of the Democrat Congress.  Your life is at stake in this.  This is a claim of a right to tyrannical rule which King George III would not have attempted.

Now that the Justice Department has claimed that ObamaCare actually invokes taxation, let us examine the evolving size of this tax.  The Kaiser Family Foundation survey of employers in 2009 found that the average premium for employer-provided family policies was $13,375.  This is the kind of policy that ObamaCare is expected to mandate, when the bureaucrats come forth with their mandates.  This is 26% of the median household income of $52,000.  ObamaCare will provide some subsidies for incomes up to $88,000, but this is still a massive tax on many earning less than $88,000 and the subsidy cost will be shifted to everyone making more than $88,000 and fall back in increased prices for all goods and services upon those who are subsidized as well.  The new tax on a family with a household income of $88,000 will be 15.2%!

It gets worse.  The Arizona Republic said in July that "State and university employees with families can expect to see their monthly health insurance costs rise as much as 37% next year."  The reason for the increase is ObamaCare!  If this kind of severe health insurance premium increase continues into 2014 when ObamaCare requires everyone to purchase the federally mandated health insurance policies, then this tax upon the People will be the most gigantic tax ever in the history of the United States!  Obama and the Democrat Congress have foisted the highest tax increase in our history upon us in a law most Americans clearly opposed then and continue to oppose today.

Throw these tyrannical bums out of office as a matter of self-preservation!  Meanwhile, we must hope the federal courts have enough sense to declare ObamaCare unconstitutional.  It clearly is.

Tax Slavery

We should all be keenly aware that we not only pay taxes, but we also bear costs in the time it takes to keep records for tax purposes and to fill out tax forms. We should also be very aware of the costs in general of our time to abide with such government regulations as are irrational and excessive.

It is not really the tax money itself that we should be focused on. We should be focused on the cost in our time to taxes, regulations, and mandates. Viewed that way, it is much clearer that we are not the masters of that time. Our masters in Washington and in our state and local governments are taking those hours of our lives from us. To the degree that those governments exceed their proper role of serving as the protectors of our sovereign individual rights, they are enslaving us. In our time, government violations of this rule for good government are so prevalent that the great majority of the time represented by taxes, regulations, and mandates is that time we serve as Slaves.

Most Americans greatly underestimate the amount of taxes that they pay. We are taxed on our incomes for Social Security, Medicare, unemployment taxes (both state and federal), and Workman's Compensation Insurance. You may argue that the employer pays some of these taxes, but that is a pretense. They all really come out of your pocket. You are generally hit with sales taxes, utility taxes, luxury or bad habit taxes, tariffs, corporate taxes, capital gains taxes, license fees, car registrations, title fees on cars and homes, real estate taxes, higher food costs due to farm subsidies, fuel taxes, inflation, and death taxes. Very few people have any idea how much they are paying in taxes. Almost everyone thinks it is far less than it is. For instance, almost no one thinks they pay corporate taxes. But they do every time they buy something made by a corporation. And how many realize that the time their employer spends on accounting, on paying payroll taxes, on filing other taxes, and paying real estate and property taxes is all taking away other uses of money and time which could have been used to make the company stronger.

I am sure that many of you are still busy filing your taxes. I still have to do mine. But, when you can, you should pay more attention to the many costs of government that you are paying with your time and money. You should then carefully assess whether the services you get are really worth what is taken from you. You should also think about whether governments taking your time and money has a moral or an immoral justification.

Congress Backpeddling on Ethanol

It seems clear now that both the Democrats and the Republicans in Congress are largely coming to the conclusion that they made a big mistake in backing ethanol mandates, subsidies, and exclusionary tariffs. Some aspects of the magnitude of their mistake have only relatively recently become clear such as the fact that there is probably no net energy achieved with the use of farmed plants to create ethanol, with the possible exception of sugar cane grown in some very favorable areas. Another example of recent knowledge is that ethanol use does not likely reduce net pollution when all factors are accounted for. On the other hand, the idea that one-quarter of all corn could be used to create ethanol and that this would not greatly increase the cost of corn, those end products dependent upon corn such as beef, pork, chicken, corn oil, and corn syrup, and of soybeans and wheat as corn was planted in their stead, was ludicrous. This year, 35% of the corn crop may be going to ethanol production.

President Bush is still saying that the ethanol mandates are not barely responsible for the food cost increases. He is disappointingly slow on coming around on this. It is true that corn and other food prices are going up both because of the reduction of supply due to the ethanol mandates and due to a major increase in world-wide demand for better and more food.

Congress has pleasantly surprised me by starting to change course so soon. House Minority Leader Steny Hoyer, Democrat, is not as nimble-minded as he should be, but he is now advocating that the upcoming farm bill, delayed from last year, should reduce the ethanol subsidy. They would also increase the subsidy for cellulosic ethanol. He has said, "Obviously, sometimes there are unforseen or unintended consequences of actions." Imagine a committed socialist allowing that he is not omnipotent! Even that he may have been wrong-headed!

Republicans in Congress actually want now to remove mandates requiring the blending of ethanol with gasoline. Representative Jeff Flake, Arizona Republican, introduced a bill to end all federal ethanol supports, including the requirement to blend it with gas, the tax credits for ethanol refiners, and the tariffs to prevent the importation of sugar cane produced ethanol, primarily from Brazil. He recognizes that our economy does not need big increases in food prices on top of those for energy, such as oil. Senator Kay Bailey Hutchison, Texas Republican, wants to freeze the ethanol mandate for gasoline at this year's level. On Rush Limmbaugh's program, she noted that cattle and pig producers were being hurt badly. Apparently there are a few of them in Texas! Rick Perry, Texas governor, has asked the EPA to allow Texas to use only half as much ethanol in gasoline blends as is required.

Meanwhile, some farmers are asking Congress to put windfall taxes on oil producing companies, claiming that these companies are responsible for driving up their costs. The National Corn Growers Association made the foolish claim that the use of biofuels with gasoline was saving Americans $69 billion a year. Others such as Hillary Clinton are also demagogically calling for windfall profit taxes on the oil companies.