What We Believe, Part 4: Natural Law

Bill Whittle examines the difference between Natural and Political Law and what makes some laws worth obeying, while others are overturned.

PSA From Zo

Zo pretty much covers my position when it comes to race relations and the Conservative message as a whole. Don't focus on race, because that's when you pretty much say what you didn't mean to (like meeting a person with a HUGE zit on their forehead, if try to ignore it, you'll probably stick your foot in your mouth). Be flexible when it comes to accusations of racism, because more often then not, that's all the other person has in a debate. The more time you spend defending yourself on a non-issue, the worse you end up looking. That's just a little bit (with some of my own points) of what Zo's covered.

New study shows ObamaCare subsidies potentially five times higher in first year than predicted

(Via Ed Morrissey)

In passing ObamaCare, Democrats argued that it would provide a net relief to the budget deficit in its balance of new taxes and fees, drastic cuts to Medicare Advantage, and the subsidies it would provide to Americans making $88,000 a year or less.  A new study commissioned by Families USA, a group that supports ObamaCare, shows that the Democrats and the CBO badly miscalculated the level of subsidies provided.  In the first year (2014), 28 million Americans would have eligibility for more than $110 billion, outstripping the Congressional/CBO estimate by almost 600%:

Families USA commissioned The Lewin Group to use its economic models to estimate how many individuals would benefit from the new premium tax credits in 2014 and the value of the dollars going to help pay for insurance (see the Methodology on page 12 for more details). We found that an estimated 28.6 million Americans will be eligible for the tax credits in 2014, and that the total value of the tax credits that year will be $110.1 billion.


The new tax credits will provide much-needed assistance to insured individuals and families who struggle harder each year to pay rising premiums, as well as to uninsured individuals and families who need help purchasing coverage that otherwise would be completely out of reach financially. Most of the families who will be eligible for the tax credits will be employed, many for small businesses, and will have incomes between two and four times poverty (between $44,100 and $88,200 for a family of four based on 2010 poverty guidelines). However, because the size of the tax credits will be determined on a sliding scale based on income, those with the lowest incomes will receive the largest tax credit, which will ensure that the assistance is targeted to those who need it the most.

That conflicts with the final CBO estimate that Barack Obama and Congressional Democrats used to argue for ObamaCare.  In his presentation to Congress, CBO director Douglas Elmendorf predicted a cost of only $20 billion on health-exchange subsidies and associated costs.  The Lewin Group, which conducted the study for Families USA, shows that four times as many people will become eligible for subsidies in 2014 than the CBO predicted in March and that the cost will be 550% higher as a result (page 4 of the linked study):
 
•„„ Nationally, approximately 28.6 million Americans will be eligible for these new premium tax credits in 2014 (see Table 1).„

•„ People in working families—those with annual incomes at or above 200 percent of the federal poverty level ($44,100 for a family of four in 2010)—will constitute nearly twothirds(65.6 percent) of the people who will be eligible for a premium tax credit (seeTable 1a).

Morgen at Verum Serum discovered the wide discrepancy and notes that the study wasn’t intended to argue against ObamaCare:
 
The Lewin Group study was commissioned by Families USA, a healthcare reform advocacy group based out of Washington D.C. which is closely allied with the White House and leading Democrats in Congress. Then Senator Obama was a keynote speaker at their annual Health Action conference in 2005 and 2007, and House Speaker Nancy Pelosi opened the 2008 event. Other leading Democrats who have participated at Families USA events in recent years include Hillary Clinton, John Kerry, and Ted Kennedy.

The study appears to be the centerpiece of a major media campaign initiated last month by Families USA to promote the benefits of the health reform legislation. A September 14 press release touts the projected $110 billion in federal subsidies as “one of the largest middle-income tax cuts in history”, but makes no mention of the discrepancy with the CBO’s earlier estimate.
Families USA also published state-by-state estimates by the Lewin Group of the number of people eligible to receive these subsidies and the associated costs. Numerous local media outlets around the country have reported on these figures over the past few weeks.
The CBO’s projection that the healthcare reform bill would reduce the deficit by an estimated $143 billion over 10 years was a critical factor in the enactment of the bill. Democrats lost their super-majority in the Senate in January 2010 when Scott Brown was elected in Massachusetts, and ultimately passed the bill in March only through the use of procedural tactics, and without a single Republican vote in the House or Senate.
The claim that the bill will reduce the deficit continues to be a leading selling point for proponents of reform. Just last month Families USA repeated this claim in a press release criticizing opponents of the legislation. But if the latest Lewin Group estimate is correct the initial 10-year cost of the bill will be significantly higher than what was forecast by the CBO, and would begin adding to the federal deficit as early as 2015.

Morgen also contacted Families USA to get an explanation of the difference, and was told that he made an “apples to oranges” comparison. Why? This survey, they explained, showed how many people would be eligible, while the CBO predicted how many people would actually take advantage of their eligibility for tax credits. This is an odd distinction to make, since the entire idea of the subsidies is to encourage uninsured Americans to buy health insurance through both mandates and generous subsidies. How likely will it be that people will pass on the notion of getting big tax credits to subsidize must-issue health insurance? And if the success rate in applying mandates, higher taxes, and more government authority to the 270 million Americans who are already insured is only 20-25% in getting the other 30 million insured, how is that at all successful?


The deficit projection given by Democrats was apparently based on 75% failure rates to get people into the system; their advocates are busy touting the massive amounts of subsidies in the program that will tip ObamaCare into a deficit exploder in Year 2. Either way this goes, it’s a massive failure.

What We Believe, Part 3: Wealth Creation

Part 3 of a Series, Bill Whittle covers the concept of being wealthy: what it is, how it is created, and how society progresses as a direct result of it. 

EVIL RICH PEOPLE! (Election Shenanigans)

Steven Crowder came back with this important message:

What We Believe, Part 2: The Problem with Elitism

In Part 2 of his series on what Tea Party Conservatives believe, Bill looks at the problems and dangers associated with elitism and elitist philosophy.

Restoring America's Promise

Proposed presentation by Paul Ryan used at a fiscal forum hosted by the Concord Coalition.

What We Believe, Part 1: Small Government and Free Enterprise.

Part 1 of a series of videos from Bill Whittle explaining conservatism and the idea of small government. As he states in the video, the concept is misrepresented in various ways by certain Liberal/Progressive individuals that either do not understand or intentionally mislead others into thinking of it as a call to abolish government entirely or regulations. Bill does an EXCELLENT job in getting the message across clearly:





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Reason TV: 3 Reasons Obama's Education Vision Deserves an F

Dan Mitchell Breaks it Down: It's Simple to Balance The Budget Without Higher Taxes

Even at the current spending levels, tax hikes aren't needed.....





We can simply start cutting vast amounts of federal agencies in jurisdictions outside those granted the federal government by the Constitution.  But as Mitchell puts it, no one in Washington cares about the Constitution anyway.  If we just put a hard cap on spending, the budget would naturally balance itself in five years — with the Bush tax cuts still in place.  The only reason to raise taxes is to allow Congress to spend more … which is the real reason for our massive deficits.

Think We're Headed For a 2nd Collapse? You aren't alone...

In his new treatise published by Encounter for its Broadsides collection, Broadside No. 17: President Obama’s Tax Piracy, Ferrara notes that Barack Obama has chosen the opposite strategy in economic policy from Ronald Reagan. Reagan cut taxes, especially on capital gains and dividends, and broke down regulatory hurdles.  Obama wants not only to raise taxes on those who have the most capital, he wants to make it harder for them to use it as well, quoting a similar analysis by Arthur Laffer:

[W]hen the U.S. economy comes to 2011, the train’s going to come off the tracks. . . . The tax boundary that will occur on January 1 , 2011 tells me that GDP growth in 2010 will be some 6 percent to 8 percent higher than GDP growth in 2011 . A year on year decline from trend of some 6 percent to 8 percent in 2011 growth would represent a larger collapse than occurred in 2008 and early 2009 .

Ferrara includes this helpful and rather cheerless chart to emphasize what Laffer predicts:

On top of that, the government won’t see the revenues it expects, either:

President Obama’s budget projects that his tax increases on “the rich” (singles making more than $200,000 and couples making more than $250,000) would raise $678 billion in increased revenue during the next 10 years. The ObamaCare legislation projected another $210 billion from the increased payroll taxes on those workers for a total of nearly $1 trillion. But these tax increases won’t raise anywhere near the revenue projected. Obama will be lucky if this tax piracy doesn’t result in less revenue. …

The projections of higher revenues from the other tax rate increases all fail to take into account the negative incentive effects discussed above and the counterproductive interactions from all those effects. Since we know from experience that those incentive effects are powerful and real, the result at a minimum will be less revenue than expected, if not less revenue overall.

All of this is based on the assumption that the changes in tax policy sets up no other incentives or changes any behavior.  Of course it does, though, as do even threatened changes.  This is called a static analysis on tax policy.  Ferrara believes that the economy may actually look better than it is this year because capital holders are moving gains and income into 2010 to avoid higher taxes next year.  After we hit the tax boundary, all the incentives go the other direction, and that means negative growth across the board. Essentially, that is why capital is moving about the economy, albeit at a slow pace.  Businesses are shoring profits by selling assets, limiting hiring or sitting on savings.  All of this to be ahead of the potential costs
 
Congress left Washington without addressing the massive tax hikes that will come at the end of the year as the tax-rate reductions of 2001 and 2003 expire.  Absent action on Capitol Hill, those increases will take $4 trillion out of the economy over the next ten years — and even if the lower tax bracket reductions get extended, $700 billion of capital will get redirected from the private sector to Washington.  How do you think that will that impact economic growth in the US?

Dick Blumenthal Stumped On How To Create A Job

Man, I wish I could participate in the CT election this year.....



“Creative policies” don’t create jobs. Creative policies usually interfere with job creation. We’ve seen that clearly enough in this administration.
McMahon (in a shorter amount of time) describes how jobs get created, but also consider the role of government in the process. Government has no direct role in the process. Government has a role in creating an environment in which entrepreneurs can create jobs by doing the following:

• securing a stable, predictable market without bias or tilt
• with a reliable rule of law rather than arbitrary interventions for preconceived outcomes
• utilizing a tax policy that encourages people to keep the fruit of their labor and investments to the greatest degree possible.

This will offend many public servants in the political world, but you shouldn't create laws pertaining to the economy if you don't know squat about business.