College: What Are You Paying For?

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Randall Smith on the explosion of college tuition costs. Education is very expensive, and it’s important for parents and students to know exactly what they’re paying for.

It’s late August, and young adults across the country are headed to college, and parents across the country are writing large tuition checks.

Americans worry incessantly about the inflation in medical costs – and with good reason. But over the past fifteen years, the inflation in college and university costs has been even greater.  Colleges and universities across the country have been raising tuition at a rate four times faster than the overall inflation rate.

What does that money pay for? A little thought experiment may help. Let’s imagine, for a moment, educational institutions in which the buildings are modest and fully financed so that, not only are the costs of their construction paid off, but their financing has been sufficient to cover depreciation and maintenance. Since such financing is rarely included in the costs of new buildings. When they are opened (to great fanfare and praise for administrators), what should be an asset becomes a liability, and a further drain on general operating expenses.

But let’s say the buildings are fully financed and that the endowment has been developed sufficiently to cover operating expenses. What, then, on our little ideally financed campus, would the basic costs of instruction be? Let’s say we set the salary for faculty at $75,000 per year, which is near the current average. To that rather generous salary, we’ll add another 20 percent to pay for benefits – also generous, but this is what private contractors are required by the government to put aside. The total would be $90,000 dollars per year. Let’s say that we asked our professors to teach three classes per semester, with an average of twenty students per class (a low number for many college classes). In that case, faculty members would be teaching roughly 120 students per year.

Here’s where it gets interesting. To make the $90,000 we need to pay our faculty – and remember, we’ve got the lights and electricity and all the rest taken care of – we would only need to charge each student $750 per course. If each student took five courses per semester, tuition per student would be $3,750 per semester or $7,500 per year. That’s it.

Now if you’re paying more than $7,500 per year in tuition – and everyone is – what, you might wonder, is all the rest of the money being used for? I teach at a university, and I don’t know. Nor do any of my colleagues. We regularly ask to inspect the budget figures, but they are not forthcoming.

Click here to read the rest of Professor Smith’s column . . .

 

Man On the Street: Income Inequality

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We know progressives deplore income inequality and believe the idea of income equality will bring about a better world, one that is more “socially just.” But do they know anything about what actually happens when their dream comes true?

Like, what do “income equality” societies (like Venezuela) look like?

Which society should the U.S. model itself after?

Documentary filmmaker Ami Horowitz asks progressives what they know about income equality. Turns out, not that much. Watch Ami’s video here.

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U.S. Pays $50 Mil for Luxury Cars, Weapons, Booze to Mentor Afghan Intel Officers

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A foreign company hired by the U.S. government to mentor and train Afghan intelligence officers billed Uncle Sam for more than $50 million in luxury cars — including Porsches, an Aston Martin, and a Bentley — and the lucrative salaries of executives and their spouses (who didn’t do any work). The firm also spent $1,500 on alcohol and $42,000 on automatic weapons prohibited under the terms of the contract, according to figures provided by a U.S. Senator from a federal audit that has not been released to the public. It marks the latest of many scandals involving the free-flow of American dollars to controversial causes in Afghanistan, where fraud and corruption are rampant in all sectors.

In this latest case, the Department of Defense (DOD) hired a British firm called New Century Consulting (NCC) to operate a program called “Legacy East” that was supposed to provide counterinsurgency intelligence experts to mentor and train Afghan National Security Forces. Instead, NCC billed the Pentagon millions of dollars in questionable or unallowable expenses, including seven luxury cars and exorbitant $400,000 average salaries for the “significant others” of corporate officers to serve as “executive assistants.” Other prohibited expenses include severance payments, rent, unnecessary licensing fees, extensive austerity pay, and the cost of personal air travel. The outrageous figures became public when the top-ranking Democrat on the Senate Homeland Security and Governmental Affairs Committee, Claire McCaskill, wrote a letter to Defense Secretary James Mattis demanding answers. As a federal lawmaker McCaskill had access to the information after viewing a report from the Defense Contract Audit Agency (DCAA), which provides financial oversight of government contracts for the Pentagon and operates under the Secretary of Defense.

McCaskill discloses that the British firm continued receiving lucrative DOD contracts despite having “many previous problems,” involving billing and performance practices. The senator also questions why the Pentagon kept pouring money into a “troubled” program that a separate federal audit had determined was likely ineffective. That assessment, made by the Special Inspector General for Afghanistan Reconstruction (SIGAR), came after investigators found that a lack of performance metrics makes it nearly impossible to assess whether the hundreds of millions of dollars spent on the mentoring and training programs for Afghan intel personnel are effective. “Despite all of the listed issues with NCC’s performance and billing practices, the Army continued to engage in contracting with NCC for sensitive work in Afghanistan,” McCaskill states in her letter to Mattis.

Afghanistan reconstruction has been a huge debacle that continues fleecing American taxpayers to the tune of billions and Judicial Watch has reported extensively on it over the years. Many of the details are regularly disclosed in provoking reports published on the SIGAR website. Highlights include the mysterious disappearance of nearly half a billion dollars in oil destined for the Afghan National Army, a $335 million Afghan power plant that’s seldom used and an $18.5 million renovation for a prison that remains unfinished and unused years after the U.S.-funded work began. Among the more outrageous expenditures are U.S. Army contracts with dozens of companies tied to Al Qaeda and the Taliban. The reconstruction watchdog recommended that the Army immediately cut business ties to the terrorists but the deals continued. Another big waste reported by Judicial Watch a few years ago, involves a $65 million initiative to help Afghan women escape repression. The government admits that, because there’s no accountability, record-keeping or follow-up, it has no clue if the program was effective.

Back in 2013 Judicial Watch reported that, despite multiple warnings of fraud and corruption inside the Afghan Ministry of Public Health, the U.S. keeps sending hundreds of millions of dollars to support the Islamic republic’s scandal-plagued healthcare system. In that infuriating case, the money—$236 million over nine years—flowed through the scandal-plagued U.S. Agency for International Development (USAID), which is charged with providing economic, development and humanitarian assistance worldwide. It was supposed to fund prenatal care for women, hospitals, physicians’ salaries and other medical costs. Instead, a federal audit found pervasive, waste, fraud and abuse that warranted an immediate cutoff of U.S. assistance. In a scathing report SIGAR called it a reckless disregard toward the management of U.S. taxpayer dollars.

President Trump to ‘cut all military aid to Pakistan’, thinks U.S. is being ‘ripped off’

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I had just about given up on Trump, and then he says this. We can only hope that he will follow through, and not be persuaded by McMaster that all Pakistan needs is a few more U.S. billions to turn it into a reliable ally.

“Trump to ‘cut all military aid to Pakistan’, thinks Washington is being ‘ripped off’ by Islamabad: report,” Reuters, August 19, 2017:

US President Donald Trump is mulling cutting off all military aid to Pakistan because ‘Washington is being ripped off by Islamabad’, claims a Foreign Policy report….

The FP report quoted a White House official as saying that “the President thinks we’re being ripped off by Pakistan. The president wants to cut off all military aid to Pakistan. That’s part of the strategy”….

During the discussions at Camp David, there were differences of opinion over taking a harder line on Pakistan for failing to close Afghan Taliban sanctuaries and arrest Afghan extremist leaders. US officials say the Afghan Taliban are supported by elements of Pakistan’s military and top intelligence agency, a charge Islamabad denies.

Pentagon has already frozen support to Islamabad under the coalition support fund, which provides Pakistan with payments to finance counter-terrorism operations. Mattis claims he could not find evidence that Pakistan had taken enough action against the Haqqani network.

Amid relentless criticism of Pakistan from the Trump administration, army chief General Qamar Javed Bajwa has told a top US military commander that Pakistan doesn’t need aid, all it wants is acknowledgement of its efforts in the fight against terrorism.

“More than financial or material assistance, we seek acknowledgement of our decades-long contributions towards regional peace and stability, understanding of our challenges and most importantly the sacrifices the Pakistani nation and its security forces have rendered in [the] fight against terrorism and militancy,” he told Centcom chief General Joseph L Votel during a meeting at the GHQ on Friday….

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Tax Withholding Is Miracle-Grow for Government by Daniel J. Mitchell

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The internal revenue code is a reprehensible mess that torments taxpayers and undermines American competitiveness.

The good news is that Americans don’t like the tax system.

The bad news is that they don’t dislike it nearly as much as they should. At least in my humble opinion.

There are two reasons for the inadequate level of disdain.

  • First, nearly half of all households are no longer are subject to the income tax. Indeed, the system is actually a revenue generator for some households since the EITC wage subsidy is a redistribution program laundered through the tax code.
  • Second, many people get a warm and fuzzy feeling when they file their taxes because of the expectation that they will get a sizable refund, even though that payment from the IRS is simply a reflection of having paid too much tax during the prior year.

For those of us who want to scrap the tax system, this is a challenge.

And I’m not shy about admitting the problem.

About three-quarters typically get money back, with refunds so far this year averaging almost $3,000. For many, it will be the single biggest payment they receive all year. …the fact that so many people are getting paid by the IRS, and not the other way around, takes some of the edge off a day when they’re trying to stoke public anger at the tax system. “The fact that people are looking forward to tax time rubs me the wrong way,” said Dan Mitchell, a tax expert at the libertarian Cato Institute. “I would like them to be upset.”

I also have a good idea of why the problem exists.

It’s withholding. And it started back during World War II. Here’s some background.

During the war, tax rates went up, and a broader number of people were expected to pay them. Professor Anuj Desai from the University of Wisconsin Law School said there was a saying that income tax went from “a class tax to a mass tax.” …“The thought was that if we withhold a little bit every bit every paycheck, people won’t have to worry about the problem of coming up with a huge chunk of money,” Desai said. But withholding is also a remarkably efficient way for the government to raise money, and policymakers knew that. …“You could never have the taxes that were levied during World War II without withholding. It was absolutely essential for that purpose,” economist Milton Friedman said in an interview… Friedman worked with the Treasury Department at the time withholding was introduced. Withholding stuck around after the war, much to Friedman’s chagrin. “Unfortunately, once you got it installed, it’s almost impossible to get rid of it,” Friedman said. “It’s too useful to the people in power.”

Jeffrey Tucker of the Foundation for Economic Education elaborates.

The problem is…the withholding tax. Instead of being collected directly from the payer, the government collects them “at the source,” which is to say that they are collected from the institution that pays wages and salaries — on behalf of the taxpayer. …one of the most amazingly brilliant innovations of the modern state. This tinkering with the system — the creation of the institution called withholding — has created an illusion that paying taxes is really about getting free money! When the check arrives from the government a month or so later, the taxpayer is actually tempted to think: wow, this is really great! A pillaging has been spun to look like a gift. …Withholding dramatically changed the psychology of paying taxes. It almost feels like you aren’t paying any at all. The worker gets used to how much after-tax income she makes and adapts to it quickly. Then when tax time arrives, there is no more to pay. Instead you file and find yourself on the receiving end of what seems like an unexpected gift of a check from government. Yet in reality your refund is nothing more than the belated return of a zero-interest loan you were forced to provide the government.

Exactly.

Every time I talk to somehow who is happy about a refund, I ask them whether they will give me an interest-free loan instead. After all, I’d be happy to collect money from them all year long and then return it the following April.

But I’m digressing.

Jeffrey points out how the political dynamics of tax day would change in the absence of withholding.

If we really wanted to make a wonderful change in favor of transparency and decency, one that would mark a shift in people’s perceptions of the costs of government, the withholding tax could just be repealed completely. …every taxpayer would pay the full amount owed to the government every April 15 and otherwise receive full compensation the rest of the year. Such a seemingly small change would have a dramatic effect on public perceptions of taxation and government. Even from the age of 16, every citizen would have a more pungent reminder of the costs of government. We would no longer live the illusion that we can all get something for nothing and that government isn’t really expensive after all.

Ben Domenech of the Federalist agrees.

The overwhelming majority of Americans pay their taxes by having them extracted from their paychecks before they ever see the money. Operating under the fiction that the government is giving you money as opposed to returning what it has already taken is damaging to the psyche of the nation’s taxpayers. …Withholding was originally mandated as a wartime step, but its continuation since then disguises the property rights involved, essentially offers the government an interest free loan, and shields taxpayers from the ramifications of federal spending. The country would be better off if everyone experienced what entrepreneurs and business owners do: writing the most sizable checks every year to the government, and watching that hard-earned money walk out the door.

By the way, this isn’t merely impractical libertarian fantasy.

There’s a real-world example of a tax system where people actually write checks to the government and are much more aware of the cost of the public sector. It’s called Hong Kong, which is – not coincidentally – an economic success story in large part because of a good fiscal system.

And I would argue that good fiscal system exists because taxpayers are directly sensitive to the cost of government (it also helps that there’s a spending cap in Hong Kong).

Let’s close with some government propaganda. This Disney cartoon was produced before withholding. As you can see the government basically had to make the case that people should set aside money out of their paychecks so they would have enough money to make periodic tax payments.

This was a plausible case when seeking to finance a war against National Socialism and Japanese imperialism. It wouldn’t be nearly as persuasive today when the government seems to specialize in financing waste, fraud, and abuse.

P.S. At the bottom of this column, you can watch a much better cartoon from the 1940s.

Reprinted from International Liberty.

Daniel J. Mitchell

Daniel J. Mitchell

Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

Everything You Need to Know about Government, in One Story by Daniel J. Mitchell

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Every so often, I run across a chart, cartoon, or story that captures the essence of an issue. And when that happens, I make it part of my “everything you need to know” series.

I don’t actually think those columns tell us everything we need to know, of course, but they do show something very important. At least I hope.

And now, from our (normally) semi-rational northern neighbor, I have a new example.

This story from Toronto truly is a powerful example of the difference between government action and private action.

A Toronto man who spent $550 building a set of stairs in his community park says he has no regrets, despite the city’s insistence that he should have waited for a $65,000 city project to handle the problem. 
Retired mechanic Adi Astl says he took it upon himself to build the stairs after several neighbours fell down the steep path to a community garden in Tom Riley Park, in Etobicoke, Ont. Astl says his neighbours chipped in on the project, which only ended up costing $550 – a far cry from the $65,000-$150,000 price tag the city had estimated for the job. …Astl says he hired a homeless person to help him and built the eight steps in a matter of hours. …Astl says members of his gardening group have been thanking him for taking care of the project, especially after one of them broke her wrist falling down the slope last year.

There are actually two profound lessons to learn from this story.

Since I’m a fiscal wonk, the part that grabbed my attention was the $550 cost of private action compared to $65,000 for government. Or maybe $150,000. Heck, probably more considering government cost overruns.

Though we’re not actually talking about government action. God only knows how long it would have taken the bureaucracy to complete this task. So this is a story of inexpensive private action vs. costly government inaction.

But there’s another part of this story that also caught my eye. The bureaucracy is responding with spite.

The city is now threatening to tear down the stairs because they were not built to regulation standards…City bylaw officers have taped off the stairs while officials make a decision on what to do with it. …Mayor John Tory…says that still doesn’t justify allowing private citizens to bypass city bylaws to build public structures themselves. …“We just can’t have people decide to go out to Home Depot and build a staircase in a park because that’s what they would like to have.”

But there is a silver lining. With infinite mercy, the government isn’t going to throw Mr. Astl in jail or make him pay a fine. At least not yet.

Astl has not been charged with any sort of violation.

Gee, how nice and thoughtful.

One woman has drawn the appropriate conclusion from this episode.

Area resident Dana Beamon told CTV Toronto she’s happy to have the stairs there, whether or not they are up to city standards. “We have far too much bureaucracy,” she said. “We don’t have enough self-initiative in our city, so I’m impressed.”

Which is the lesson I think everybody should take away. Private initiative works much faster and much cheaper than government.

P.S. Let’s also call this an example of super-federalism, or super-decentralization. Imagine how expensive it would have been for the national government in Ottawa to build the stairs? Or how long it would have taken? Probably millions of dollars and a couple of years.

Now imagine how costly and time-consuming it would have been if the Ontario provincial government was in charge? Perhaps not as bad, but still very expensive and time-consuming.

And we already know the cost (and inaction) of the city government. Reminds me of the $1 million bus stop in Arlington, VA.

But when actual users of the park take responsibility (both in terms of action and money), the stairs were built quickly and efficiently.

In other words, let’s have decentralization. But the most radical federalism is when private action replaces government.

Reprinted from International Liberty

Editors Note: Since this article was originally published, the local government tore down Astl’s $500 stairs, citing “safety standards,” and plans to replace it with a $10,000 set.

Daniel J. Mitchell

Daniel J. Mitchell

Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

This is How You Make Health Care Affordable by Jay Bowen

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As the debate continues to rage in Washington, D.C., and around the country regarding the fate of Obamacare, one elegantly simple concept that would have a dramatic impact on healthcare costs is being drowned out by inflammatory rhetoric.

The One Area of Health Care That’s Defying Massive Inflation

Out-of-pocket payment (OPP) by consumers for routine medical care would transform the system from one dominated by third party payers toward a model that would put consumers in charge of their healthcare dollars, and for the first time unleash market disciplines into the equation.

After all, we can all only imagine what our grocery carts would look like, not to mention our restaurant tabs, if a third party was paying for our food. Unfortunately, out-of-pocket payments have steadily trended down over the last 60 years and now account for only 10.5% of healthcare expenditures.

It is both stunning and disconcerting that the myriad of benefits that flow from a competitive, market driven system have never, in any substantial way, penetrated the healthcare and medical services arena. However, one striking exception to this competitive wet blanket is the $15 billion cosmetic surgery industry, the poster child for out of pocket payments, where innovation and price disinflation have been hallmarks for decades. Examples abound.

As Mark Perry has pointed out on his brilliant economic blog, Carpe Diem, over the past 19 years, the 20 most popular cosmetic procedures have increased at a rate 32% below the consumer price index (CPI) and 68% below the rate of medical services inflation.

Thus, the backbone of a productive reform plan must include a move away from third parties and employers controlling health care dollars toward individuals holding sway over their medical purse strings.

Removing Constraints

This would mean that the “employer contribution” that currently is used to fund corporate group policies would transition to an increase in an employee’s compensation, which would be funneled tax-free into a robust health savings account (HSA) that the employee would control for routine medical expenses.

As Michael Cannon of the Cato Institute has pointed out, “The employer contribution for health care is part of a worker’s earnings and averages $13,000 per family. Yet the tax code gives control over that money to employers rather than the workers who earned it.”

Importantly, this HSA would be paired with a high-deductible catastrophic policy and also be valid in the individual marketplace. Additionally, this would go a long way in helping to solve the portability issue that some employees face when changing jobs or careers.Essential to making these individual plans more attractive and affordable would be the abolition of both the “community rating” and “essential health benefits” mandates currently embedded in Obamacare policies. These concepts make a mockery of a legitimate, actuarially sound insurance market by shifting costs from older and sicker people to younger and healthier people, thus promoting adverse selection.

Without these constraints, families could focus on basic and affordable policies that would better match their needs and also begin building a “rainy day health fund” via their HSA accounts.

Regarding both Medicaid and pre-existing conditions, a strong dose of old fashioned, Tenth Amendment-oriented federalism is long overdue in dealing with these issues.

In fact, both from a philosophical and practical standpoint, they should never have come under the purview of the federal government and are best left to the individual states where diverse, vibrant, and innovative solutions could be implemented. This could include the establishment of reinsurance programs and high-risk pools for those with pre-existing conditions, and the phasing out of the open-ended federal entitlement status of Medicaid through a multi-year block grant program.

A Patient-Centered System

The current third party payment/community rating model for delivering healthcare is unsustainable and rapidly headed for the dreaded “death spiral,” which occurs when an escalation of sick people flock to the exchanges for insurance, while an increasing number of healthy people choose to leave the market. In fact, Aetna CEO Mark Bertolini has recently acknowledged as much.

Make no mistake, Obamacare was designed to invariably lead to a government-run, single-payer model, with its global budgeting, rationing of care, and long wait times for vital procedures in tow.

Without swift and decisive intervention with a system based on patient-centered choice and market mechanisms, the end result will be a Veterans Affairs (VA)-like model that would combine the worst aspects of government inefficiencies and substandard care.

A quick glance at the dismal state of Great Britain’s National Health Service (NHS), Canada’s single payer scheme, or our own insolvent Medicare and Medicaid plans provides Americans with an acutely unpleasant hint of what is in store if a single-payer model does indeed transpire.

Jay Bowen

Jay Bowen

Mr. Bowen joined Bowen, Hanes & Company, Inc. in 1986. As the firm’s Chief Investment Officer and economic strategist, Mr. Bowen is responsible for the formulation and implementation of the firm’s economic and investment strategies.

Steve Jobs Wanted to Break Up the Education Monopoly by Joe Kent

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Steve Jobs said in a 1995 interview, “The unions are the worst thing that ever happened in education.”

Jobs spoke with Computerworld’s Daniel Morrow in a 1995 interview, which covered a wide range of topics, but frequently delved into Jobs’s views on the American education system. As he said, “I’d like the people teaching my kids to be good enough that they could get a job at the company I work for making $100,000 a year.”

“Schools are not a meritocracy. They’re a bureaucracy.”

But Jobs blamed teachers unions for getting in the way of good teachers getting better pay. “It’s not a meritocracy,” said Jobs. “It turns into a bureaucracy, which is exactly what’s happened. And teachers can’t teach, and administrators run the place, and nobody can be fired. It’s terrible.”He noted that one solution is school choice: “I’ve been a very strong believer that what we need to do in education is go to the full voucher system.” Jobs explained that education in America had been taken over by a government monopoly, which was providing a poor quality education for children.

He referenced the government-created phone monopoly, broken up in 1982: “I remember seeing a bumper sticker with the Bell logo on it and it said, ‘We don’t care, we don’t have to.’ That’s certainly what the public school system is. They don’t have to care.”

Jobs said that one way to open up a free market in education would be to offer a voucher to families. He gave an example of the California public school system, which in 1995 spent $4,400 per pupil: “I believe strongly that if the country gave each parent a voucher – a check for $4,400 that they could only spend at any accredited school – that several things would happen.”

First, “Schools would start marketing themselves like crazy to parents, to get students.”

Second, many new schools would begin popping up. “You could have 25-year-old kids out of college – very idealistic, full of energy – instead of starting a Silicon Valley company, they would start a school, and I believe they would do far better than many of our public school teachers do.”

“A lot of competition forces providers to get better and better.”

Finally, the quality of education would rise in a competitive market: “A lot of schools would go broke, there’s no question about it. It would be rather painful for the first several years, but I think far less painful than the kids going through the system as it is right now.”Jobs said that the main complaint against school choice is that schools would cater only to rich kids, and the poor kids would be “left to wallow together.”

However, he said, “that’s like saying, well, all the car manufacturers are going to make BMWs and Mercedes and nobody’s going to make a $10,000 car. Well, I think the most hotly competitive market right now is the $10,000 car.”

In other words, Jobs said, all students would benefit from more school choice, as the monopoly in education was broken up.

“The market competition model seems to indicate that where there is a need, there is a lot of providers willing to tailor their products to fit that need, and a lot of competition which keeps forcing them to get better and better.”

Joe Kent

Joe Kent

Joe Kent is the Vice President of Research at the Grassroot Institute of Hawaii, a free market think tank. Joe previously worked as a public school teacher for eight years, both in Hawaii and in Minnesota.

Thank President Trump for Draining the Swamp

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President Trump recently made several attempts to drain the D.C. Swamp. Sign the petition and tell President Trump: Thank you for going against the political establishment and the progressive agenda.

Thank the president for:

President Trump is responding to what the American people called for when they elected him to roll back the decades-long, progressive march on the United States.

Thank President Trump and encourage him to stay the course.

If our mission resonates with you, please consider supporting our work financially with a tax-deductible donation. The easiest way to do that is through online giving. It is easy to use, and most of all, it is secure.

President Trump cuts number of bureaucrats attending UN annual event saving taxpayer dollars

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The United Nations holds its fall general assembly in September.  This is when ‘diplomats’ from all over the world come to New York for really what amounts to one big party on the town.

Here we learn that to save money, the Trump Administration will be limiting the number of State Department and other DC bureaucrats who will be attending the confab on the taxpayers’ dime.It is also a time when the UN has an opportunity to bash America (except for when Obama was prezsident).

Not mentioned here, but just a reminder to readers, September will be the time of  Trump’s big test on the UN/US Refugee Admissions Program because according to the Kennedy/Carter Refugee Act of 1980, the President submits his annual ‘determination’ for the upcoming fiscal year to Congress.

Just about the time Trump speaks to the UN, he will have determined how many refugees will be admitted in the year beginning October 1 for FY18, and from what regions of the world they will come.

From AP at the Democrat Gazette:

The State Department plans to scale back its diplomatic presence at this year’s annual United Nations gathering of world leaders in September as a cost-saving initiative, according to four well-placed diplomatic sources. [Those leakers again?—ed]

For more than seven decades, American presidents from Harry Truman to Ronald Reagan to Barack Obama have attended the fall U.N. General Assembly general debate in New York to project their vision of American foreign policy to the world. They have been accompanied by a growing entourage of American diplomats, lawyers and technical experts who negotiate a wide range of issues, from nuclear arms treaties to climate change pacts and conflicts.

But the ranks of professional diplomats, aides and officials who attend the event to promote American policy priorities on a range of issues will be thinned out. For now, it remains unclear precisely how large of a cut in U.S. staff is envisioned, but two officials said the State Department is seeking to keep a ceiling down to about 300 people, including everyone from the president to support staff who schedule meetings and copy speeches.President Donald Trump does plan to address other world leaders at the U.N. General Assembly, and he will be accompanied by other top advisers, including his son-in-law, Jared Kushner, and his daughter Ivanka Trump, who stopped by U.N. headquarters Friday for a private lunch with U.N. Secretary-General Antonio Guterres.

[….]

The diplomatic culling is being enforced by Tillerson, the former ExxonMobil chief who has shown little interest in U.N. diplomacy during his first six months on the job. It comes at a time when the White House is seeking as much as a 30 percent cut in U.S. funding to the State Department and even deeper cuts in U.N. operations.

More here.

Will Donald Trump seek to cut the State Department budget by 30%? Will he cut even deeper in to the pile of money we give the UN? And, will he cut refugee numbers and seek to abolish or reform the UN/US Refugee Admissions Program? 

Answers will come in September!

Your job is to let the President know what you think on a daily basis!  Click here.

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7 Republicans voted to keep Obamacare — what they said then and did now

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Seven Republican senators voted against Obamacare repeal this week after previously pledging to support it. Here’s a list of the seven senators along with their previous quotes supporting repeal.

Please help us replace them with true conservative leaders by making a contribution to the Senate Conservatives Fund.

Here are the seven Republicans who voted to keep Obamacare

LISA MURKOWSKI (R-AK)

THEN: “This law is not affordable for anyone in Alaska. That is why I will support the bill that repeals the ACA and wipes out its harmful impacts.”
NOW: Voted Against Repeal

DEAN HELLER (R-NV)

THEN: “The repeal of this law will not only reduce federal spending, but it will also allow Congress to address problems within the current health care system.”
NOW: Voted Against Repeal

SHELLEY MOORE CAPITO (R-WV)

THEN: “I have consistently voted to repeal and replace this disastrous health care law, and I am glad that a repeal bill will finally reach the president’s desk.”
NOW: Voted Against Repeal

LAMAR ALEXANDER (R-TN)

THEN: “Obamacare was an historic mistake, and should be repealed and replaced with step-by-step reforms that transform the health care delivery system.”
NOW: Voted Against Repeal

SUSAN COLLINS (R-ME)

THEN: “I believe that we made – that Congress made – a real error in passing Obamacare, we should repeal the law so that we can start over.”
NOW: Voted Against Repeal

JOHN McCAIN (R-AZ)

THEN: “It is clear that any serious attempt to improve our health care system must begin with a full repeal and replacement of Obamacare.”
NOW: Voted Against Repeal

ROB PORTMAN (R-OH)

THEN: “[Obamacare] is fundamentally flawed. I do think we ought to delay … and then we’ve got to repeal this thing and start over.”
NOW: Voted Against Repeal

RELATED ARTICLE: John McCain and the Swamp – 1, the American people – 0

EDITORS NOTE: This column is based upon information provided by the Senate Conservatives Fund.

Dear White House: Refugee Resettlement. It isn’t just about the numbers!

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I’m sorry to keep repeating myself, but this whole refugee controversy has devolved in to a discussion about two issues—the number of refugees we admit and security screening.

What happened to the idea that communities would be informed about refugees arriving in their neighborhoods? What happened to any discussion about the enormous costs of resettling refugees with little education who will be dependent on welfare most likely for life even as they take jobs from low-skilled Americans? What happened to any discussion about massive cultural disruption in some locations? What happened to any discussion about the fact that health screening of refugees seems virtually non-existent with cases of TB and HIV Aids stressing local health departments?

In short, what happened to any discussion about dumping or reforming the whole UN/US Refugee Admissions Program? Or, getting rid of the contractor middlemen***?

Are we simply going to battle over numbers? 

Sure sounds like it!

I’m told I should be heartened by the news that someone in the  White House (Stephen Miller) will be the point man on refugees, but really, can we expect Anthony Scaramucci to peg him as a f****** racist tomorrow? (If Scaramucci is crazy enough to say something about Miller like that, Trump can forget about his base!).

From Reuters:

WASHINGTON (Reuters) – The White House Domestic Policy Council (DPC) is taking the lead on a decision about how many refugees to admit to the United States next year, two current and three former officials said, a move that may empower those who wish to reduce immigration. [Who are Reuters sources—the leakers in Tillerson’s State Department and its hangers-on?—ed]

The council, which reports to U.S. President Donald Trump’s senior adviser for policy Stephen Miller, an architect of Trump’s initial travel ban, is adopting a role traditionally handled by National Security Council and State Department officials.

The shift may strengthen the hand of officials who, like Trump himself, wish to cut the number of refugees resettled in the United States, against foreign policy experts who view the issue through an international humanitarian lens and say taking them in is vital to getting others to keep their borders open.

The bureaucratic maneuver appears to be part of a wider Washington fight over steps that the Trump administration has taken to limit immigration to the United States.

Continue reading, there is lots more.

Again, if we see simply a slight reduction in the number of refugees to be admitted in FY18 (Trump will announce in September), and no effort to tell Congress to reform the monstrosity—Ted Kennedy’s Refugee Act of 1980—Trump will have (hugely) let us down.

***Federal contractors/middlemen/propagandists/lobbyists/community organizers paid by you to place refugees in your towns and cities.  Under the nine major contractors are hundreds of subcontractors.  Every week representatives of the nine meet with DOS officials and literally divvy up the refugee dossiers deciding where in 49 states (WY takes zero!) they will be (without your knowledge) placed.

The contractors income is largely dependent on taxpayer dollars based on the number of refugees admitted to the US. Those Aussie rejects (I told you about here yesterday) come with a dollar value to the contractor and they have no obligation to tell community leaders/police who they are placing in US towns and cities.

The only way for real reform of how the US admits refugees is to remove the contractors/propagandists/community organizers from the process.

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Winooski, Vermont: Somali boy drowns, police criticized for poor communication with family

Can’t say it often enough: UN supports mass migration going on worldwide

Two US refugee Islamic terrorists, caught earlier, are back in the news

Catholic Bishops & Lutherans lament not enough U.S. taxpayer funded refugees coming in to pay their bills

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No of course they didn’t say it that way, but that is what they mean.  Instead, once again, it is about the poor refugees left in the lurch in some third world hell hole because of that meany Donald J. Trump.

This is a broken record alert, but I plan to continue to pound the issue of payment to contractors being tied to the number of refugees admitted, so there is never a reasonable discussion about any slowdown or reform of the UN/US Refugee Admissions Program.

If they were paying for their Christian ‘charity’ out of the pockets of good and kind-hearted parishioners, I would have nothing to say. But, until the USCCB admits to the media that they receive 97% of their annual migration fund budget (about $83 million in 2014) from taxpayers, I will be a broken record on the issue.

It was only six days ago I did a new accounting report for the nine federal refugee contractors*** quasi-government agencies that monopolize all resettlement in the US.

Both the Bishops and the Lutheran contractor are 96-97% funded by US taxpayers!

You will never know that by reading this news.  Indeed, Charity Navigator, a service that rates charities to help you decide if you want to give, said this about LIRS (they would have said the same about the USCCB except that outfit doesn’t file a Form 990, that we can find).

This organization is not eligible to be rated by Charity Navigator because, as a service for individual givers, we only rate organizations that depend on support from individual contributors and foundations. Organizations such as this, that get most of their revenue from the government or from program services, are therefore not eligible to be rated.

In this story from Crux (a Catholic publication) we learn that Catholics and Lutherans are #1 and #2 in the number of refugees they drop off in American towns and cities.

Here is Crux (lamentations):

WASHINGTON, D.C. – Amid a federal judge ordering the government to broaden the exemptions to the immigration travel ban partially upheld by the Supreme Court, Catholic and Lutheran leaders lamented that the immigration cap had been reached for refugees without such exemptions for the 2017 fiscal year.

The federal government suspended travel July 12 for refugee immigrants without close family connections after confirming that 50,000 refugees – the limit imposed by President Donald Trump in a March 6 executive order – had arrived on U.S. soil.

“We remain deeply troubled by the human consequences of the revised executive order on refugee admissions and the travel ban,” said Bishop Joe S. Vasquez of Austin, Texas, chairman of the U.S. bishops’ Committee on Migration, in a July 13 statement.

“Resettling only 50,000 refugees a year, down from 110,000, does not reflect the need, our compassion, and our capacity as a nation,” Vasquez added. “We have the ability to continue to assist the most vulnerable among us without sacrificing our values as Americans or the safety and security of our nation.” [Be sure to see my post on the ceilings going back 30 years, here.  Note that Obama got no where near 110,000 until he was virtually walking out the door, now that has become the standard measure!—ed]

William Canny, U.S. Conference of Catholic Bishops’ lobbyist in Washington, D.C.

“The pause on resettlement and restrictions on the number of persons who can enter our country as refugees will have an immediate effect on our ability to conduct the lifesaving work of providing safety and protection,” said a July 12 statement by Kay Bellor, vice president for programs of Lutheran Immigrant and Refugee Service, which is second only to the U.S. bishops’ Migration and Refugee Services in the number of refugees it helps resettle in the United States.  [Yes, it will have an immediate effect because your organization raised virtually NO PRIVATE MONEY!—ed]

[….]

“As Bishop Vasquez said, it’s very sad, deeply troubling,” MRS executive director William Canny told Catholic News Service July 14.

Pushing for 75,000 refugees in FY18!

At least they have tempered the demand for 200,000 they made of Obama for his last year. If Trump admits 75,000 he will be about 10,000 above the average admissions for the last ten years (which included their dear leader’s years).

Crux continues….

“What we’re advocating for is 75,000” refugees to come into the United States during fiscal 2018, Canny told CNS. “We understand that the administration has security concerns. The administration made some initiative to reduce the number of refugees coming into the country. We don’t agree with it, so at a minimum, we think we should be bringing in 75,000.”

Bellor agreed with the 75,000 figure, noting the number is “less than the need.” Citing United Nations World Refugee Day figures, “the numbers are definitely not shrinking,” she said. “The number of people on the move is 66 million.”

LOL! 75,000 must be the point where they can keep their budgets plenty full with your money!

There is more at Crux, go here to read it all.

Come on all of you (not just the Lutherans and the Catholics), admit that your ‘charitable’ work with refugees could not happen without a huge infusion of more than a half a billion $ a year in federal funding.

And, come on mainstream media, it is time you told the truth!

***Federal contractors/middlemen/lobbyists/community organizers paid by you to place refugees in your towns and cities.  Because their income is largely dependent on taxpayer dollars based on the number of refugees admitted to the US, the only way for real reform of how the US admits refugees is to remove the contractors from the process.

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The 20 diseases ‘refugees’ bring into the West

Australia “dumb deal” looks dead for now

Hetfield of the Hebrew Immigrant Aid Society thinks Hawaiian judge just opened floodgates

New Hampshire: Congolese refugee escapes prosecution in domestic violence case

Hawaiian rogue judge has until Tuesday to respond to Trump SCOTUS motion

Obamacare Is Dying. Let It. by John Tamny

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The alleged failure of Republicans to repeal the misnamed Affordable Care Act (ACA) predictably has the conservative punditry up in arms. “Why Can’t Republicans Get Anything Done?” was one of many frustrated headlines lamenting the GOP’s lack of legislative success.The politics of repeal would have been worse than doing nothing.

One editorial asserted that Republican failure to ‘do something’ about the ACA “is one of the great political failures in recent U.S. history, and the damage will echo for years.” Really?

Implicit in all the conservative ranting about the need to repeal, or worse, fix the ACA, is that health care was a wholly unfettered, dynamic source of free-market driven innovation before President Obama was elected. Let’s try to be serious for a moment.

Letting Obamacare Fail

Repeal of the ACA would have been an impressive headline, but the short and long-term politics of repeal for Republicans would have been worse than doing nothing. That is so because expectations about a looming nirvana would have been created, only for health care to, at best, return to its less-than-stellar-self that existed before passage of the ACA in 2010.

Importantly, none of what’s been written so far should be construed as support for the ACA. It was foolish legislation, and evidence supporting the previous contention is that the ACA was already dying before our eyes. No surprise there. Legislation meant to give some Americans a lot for a little, with a lot taken from others in return for very little, was bound to fail.

The ACA was plainly imploding as the constant rush of insurance companies out of ACA exchanges revealed in bright colors. Why abolish what the laws of economics were already abolishing?The half-measures offered by Republicans were plainly worse than simply doing nothing.

And that’s why the half-measures offered by Republican compromisers were plainly worse than simply doing nothing. Why legislate away one central plan in return for an allegedly improved central plan; essentially exchanging bad legislation for bad legislation on top of what already wasn’t working before 2010? The politics of repeal or partial repeal spoke to the horror of Washington doing anything to legislate a right to what was and is a market good like any other.

Not discussed enough by either side is that it’s impossible to invent a right to a good or service of any kind to begin with. This is certainly true with regard to health care when we remember that it didn’t realistically exist until the 20th century. Lest we forget, in the 19th it was a death sentence if you were shot in the abdomen. If you broke your femur, you had 1 in 3 odds of dying. Broken hip? Dead. Cancer? Forget about it. You were going to die.

Legislation didn’t reverse the previously mentioned odds as much as trial and error in the area of healing led to healing advances such that a market eventually formed. The shame here is that politicians discovered health care in the first place. Imagine how much more advanced we’d be had they left what was advancing alone.

We Don’t Have a Crystal Ball

All of the above has seemingly been ignored by Republicans ever eager to prove they’re as compassionate as their reliably hysterical opponents on the other side of the aisle. And there lies the problem.

Much as health care didn’t broadly exist when the 20th century dawned, so were automobiles the microscopic exception to the horse rule. Imagine if politicians, sensing what few did about the car’s potential, had legislated broad access to what very few people owned. If so, it’s safe to say that the American automobile industry would never have taken shape, mainly because politicians can’t possibly divine what we want, let alone need. The car evolved into a common good thanks to relentless experimentation that occurred alongside a 99% percent failure rate for American car companies.

Thinking about the computer, while few could get by without one today, as late as 1943, IBM Chairman Tom Watson confidently asserted that the market for computers wouldn’t expand beyond five total computers. Decades later, and billions of dollars worth of failed companies later, the computer is the can’t-live-without rule, including the supercomputers that increasingly line the pockets of rich and poor alike.

At present, politicians in both major political parties are thinking about ways to spend trillions in tax dollars on enhanced roads, just as entrepreneurs like Jeff Bezos are aggressively thinking of ways to deliver us goods and services by air, care of drones. Yet conservatives are comfortable allowing Republicans to add more laws to an already over-controlled health care market?

Despite the historical truth that the present rarely predicts the future of goods and services, politicians in both parties pretend that they know what the market for health care should look like. But how could they?

For Republicans and Democrats to legislate a right to medical services in the present is every bit as lame-brained as it would have been had they legislated access to specific kinds of cars, computers, and smartphones in 1900, 1950 and 2000. Whatever they would have dreamed up for all three would have been a fraction of what intrepid entrepreneurs divined through feverish trial and error.

What Is and What Will Be

Seemingly forgotten by Republicans is that legislation is the absolute worst way to solve any problem, real or imagined, particularly one involving goods and services created in the marketplace.

Lawmaking by definition deals with what is while thriving markets are all about sleuthing out what will be. We’ll only arrive at what will be in the health care space insofar as individuals and businesses are free to experiment without limits, yet Republicans and Democrats in their infinite confusion are trying to create rights for people with what already is.

Ok, but that’s cruel. It’s the hypothetical equivalent of politicians legislating access to the cars, computers, and smartphones of today at a time when all three were likely on the verge of rapid evolution. Health care is no different. If the goal is that everyone should have access to it, the only response from Congress should be that it will cease legislating access to what it can’t give, and more important, what it doesn’t understand. If so, watch health care markets evolve in amazing ways that redound to us all.

Reprinted from Real Clear Markets.

John Tamny

John Tamny

John Tamny is a Forbes contributor, editor of RealClearMarkets, a senior fellow in economics at Reason, and a senior economic adviser to Toreador Research & Trading. He’s the author of the 2016 book Who Needs the Fed? (Encounter), along with Popular Economics (Regnery Publishing, 2015).

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VIDEO: Taxes Are Killing Small Businesses

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Did you know that the livelihood of 85 million Americans depends on the success of small businesses? So you’d think that the government would encourage the creation and preservation of small businesses. Instead, the federal government taxes small business owners at about 40% — not including additional state or local taxes. Watch this week’s video to find out the effect of that tax rate on small business owners, on job creation, and on the economy as a whole.

Our business and economics series is a collaborative project with Job Creators Network. To learn more about JCN, visit www.jobcreatorsnetwork.com.

TRANSCRIPT

No matter where you come from, what your job is, or where you stand politically, you have to pay taxes. Uncle Sam needs taxpayer dollars to pay for things like schools, fire fighters, and the military.

There are all sorts of different taxes: income taxes, payroll taxes and sales taxes just to name a few. But individuals aren’t the only ones who pay taxes—businesses pay income taxes too.

Businesses that are set up as corporations pay taxes on their income at the US corporate tax rate of around 35 percent—one of the highest in the developed world. Countries like Ireland and Switzerland have corporate tax rates well under 25 percent, which can give companies based there a competitive advantage.

But there’s another taxed group that we’re forgetting…small businesses. There are 29 million of them in the US and they employ nearly 56 million people. That’s a total of 85 million people dependent on the success of small businesses!

Small businesses are most often set up as sole proprietorships, partnerships or another designation called an S-corp. But the money they make isn’t taxed at the corporate rate. The profits earned by these small businesses are “passed through” to the owner and counted as individual income on their personal tax return. That’s why you might hear small businesses referred to as “Pass-throughs.”

These entrepreneurs can pay tax rates as high as 40 percent not including additional state and local taxes, that means many American small businesses are being taxed at a higher rate than businesses anywhere in the world.

Why should you care? Because high taxes hurt small businesses ability to grow and expand, causing them to raise prices or even trim jobs to stay within their budget constraints.

Lowering taxes for small businesses or “pass-throughs” results in the growth of small businesses—allowing them to provide more jobs and boost the economy for everyone. After all two thirds of all new jobs come from small businesses and lowering taxes can have a big effect on the entire economy for all Americans.

So the next time you hear someone supporting an increase in tax rates on businesses, remember that very important group of small business owners and the 85 million people dependent on their success.