January 2012

Just How Much is $13 Trillion?

by Cord Blomquist on February 12, 2009 · 7 comments

in Bailout Watch, Economy, Features, Stimulus to Nowhere, Zeitgeist

Regardless of your political party or ideological leanings, the notion of the federal government spending $2 trillion, adding to the national debt of nearly $11 trillion already, should make you stop and consider the staggering size of our national tab.

If the irony of using debt-based spending to solve a problem caused by debt-based spending has escaped you, perhaps these fun facts will put things into perspective:

  • If you spent $1 every second, you’d have to keep spending for 412,000 years to get to $13 trillion.  That means you’d have to start shortly after the time human beings first starting using stone tools and fire to get to $13 trillion today.
  • $13 trillion in one dollar bills weighs 28 million pounds.  That’s as much as 87 blue whales or 462 Statues of Liberty.
  • If you laid 13 trillion one-dollar bills end-to-end they’d reach from the earth to the sun and back…five times over.  That’s 946 million miles of greenbacks.

The amount we’re looking at now—roughly $2 trillion between the Secretary Geithner’s new bank bailout plan  and President Obama’s stimulus package—isn’t small potatoes either.  So what is $2 trillion?

  • $2 trillion is bigger than the entire Gross Domestic Product of our neighbor to the north, Canada.  In fact, according to the IMF, only Japan, Germany, China, the United Kingdom, France, and Italy have bigger total economies than the combined bailout/stimulus plan—all other countries on Earth have economies smaller than $2 trillion per year.

Then there’s the interest on this staggering debt, which isn’t exactly small.  Paying the interest on the current $10.7 trillion debt cost Americans $451.1 billion last year alone.  How big is that?

  • That’s $1478 dollars in interest for every man, woman, and child in the United States.
  • That’s bigger than the annual budgets of  New York ($121.1 billion), California ($111.1 billion) and Texas ($83.8 billion) combined.

If you’re scared, upset, or disgusted by this, you can do something.  Visit BeyondBailouts.org and tell your Congressman and the President what you think of the bank bailout and stimulus.

You can also click on the “ShareThis” button at the top of this post to forward these fun facts to your friends or share them on your favorite social network.

Correction: I originally listed the state budget of Texas as $167 billion, but that figure was not annual.  Texas budgets for two years at a time, so the figure has been cut in half.

CEI Commends Sen. Judd Gregg

by Cord Blomquist on February 12, 2009 · 2 comments

in CEI Projects, Economy, Features, Stimulus to Nowhere, Zeitgeist

Wayne Crews, CEI’s Vice President of Policy, made this statement about Senator Judd Gregg’s withdrawing his name as the nominee for Commerce Secretary:

Congratulations to Sen. Judd Gregg (R-NH) for standing on principle and withdrawing his name as U.S. Commence Secretary nominee.

The easy path would be to stay in the job, and enter the history books as holder of one of the most prestigious titles in American government and society.

While Congress seems recklessly bent on “stimulating” this nation off an economic cliff, not just Gregg but the whole country should reject the idea that America can spend its way into prosperity. In fact, spending and decades of mixing of politics with free enterprise in virtually every realm of private endeavor has damaged this country’s economic prospects to a now-incalculable extent.

President Obama taunted critics by saying “Doing nothing is not an option.” In fact, this package does active damage, which is worse than nothing. Congress has received ample advice from numerous quarters on how to actually stimulate a faltering economy whether through tax reform, regulatory freezes and reform, liberalizing infrastructure and more. It has chosen to ignore pro-free enterprise reforms—reforms that would actually do something–at every turn.

This anti-stimulative piece of legislative wreckage posing as “stimulus” is an opportunistic and politically motivated abomination unrelated to economic recovery. We can’t know the full motivations of Sen. Gregg, but we do commend his refusal to legitimize the stimulus or be a part of it and its destructive aftermath.

I often tongue-in-cheek grant a Least-Objectionable Legislator (LOL) Award. Sen. Greg certainly warrants that distinction for this courageous move.

If only more politicians in Washington could stick to their principles like Senator Gregg.  We salute you sir!

Bottled Water “Myth Buster” Ill Informed

by Angela Logomasini on February 12, 2009

in Environment

A piece in the LA Examiner online shows how incredibly misinformed the bottled water debate has become.  The report is called “A Few Facts and Myths about Water,” but it is just riddled with misinformation! For example, consider some of the author’s claims:

She claims: “The Environmental Protections [sic] Agency keeps a strict watch on your local tap water, whereas bottled water companies are not as closely monitored.”
Reality: By law, bottle water must meet all EPA tap water standards where they apply or be stricter. There is no option for the Food and Drug Administration (which regulates bottled water as a food product) to allow lower quality water. Click here for details.

She claims: “The plastic bottles give off harmful chemical byproducts.”
Reality: The chemicals from the plastics appear only at trace levels that pose no significant risk. Click here for details.

She claims: “However, most companies are not using 100% natural spring water. You end up paying $2.00 for a bottle of water that may contain around 30% tap water. Due to the secrecy of bottled water companies, there is not enough information given to accurately asses what you are drinking.”
Reality: 70 percent of bottled water comes from natural sources, such as springs or underground sources. It is against the law to label a bottle of water as spring water if it contains tap water. It is not a secret what kind of water a bottle contains. Read the label. If it is not clear, find one that is or call the phone number provided on most bottles.   Click here for for details.

A matter of principle — Commerce nominee steps down

by Fran Smith on February 12, 2009 · 1 comment

in Odds & Ends, Stimulus to Nowhere

In a  startling development, President Obama’s latest nominee for the head of the Commerce Department withdrew his name from consideration – not because of tax returns or a federal investigation, but on principle.

Senator Judd Gregg (R-NH) in a statement today said that he was removing himself as a nominee because of “irresolvable conflicts” between him and the Obama Administration. He didn’t go into details except to mention the issues of the stimulus package and the Census.

Reading his bio on his website, one can get the idea that Gregg possibly couldn’t stomach the nearly $1 trillion stimulus package that is filled with pork.. His bio states:

As the Ranking Member of the Senate Budget Committee, Senator Gregg continues to emphasize the critical importance of a fiscally responsible federal budget — one that will fund U.S. defense and homeland security needs while controlling overall federal spending, so that future generations can inherit a government they can afford. Senator Gregg will work with other leaders in Congress to aggressively reduce the size of our federal budget deficit while addressing the rate of growth of entitlements.

If indeed that is the case, three cheers for a principled politician.

Cheers to the B.E.E.R. Act

by Michelle Minton on February 12, 2009 · 1 comment

in Odds & Ends

The beer industry is cheering a recently introduced bill that would roll back the excise tax on brewers in the Washington, DC area to pre-1991 levels. The industry sees the bill as a wise measure to relieve the economic pressures on small and large brewers alike. H.R. 836 the Brewers Excise and Economic Relief (BEER) Act was introduced by the bipartisan duo of Reps. Earl Pomeroy (D-ND) and Tom Latham (R-IA). And given that the prices of ingredients for beer are on the rise it does seem that this is a smart way to help out an industry that contributes more than 1.7 million jobs with wages and benefits of nearly $55 billion to the American economy.

However, this type of action is what congress should be doing across the board in order to deal with the current economic crisis. Instead of doling out tax payer money to prop up favored businesses and muddle competition, they should be working on ways to to get out of the way of economic progress, innovation, and small businesses; repealing cumbersome regulations and taxation is a very good start. This will save brewers millions of dollars and prevent innumerable layoffs, bankruptcies and the inevitable request for stimulus money. Reducing taxes on productive achievement is a win-win strategy for industry, consumers, and even government itself.

Travesty–Rep. Inslee’s behavior at Energy & Commerce hearing

by Marlo Lewis on February 12, 2009 · 5 comments

in Energy, Global Warming, Sanctimony

I just watched the Energy & Commerce Subcommittee hearing on “The Climate Crisis: National Security, Public Health, and Economic Threats.”

Committee rules allow the minority one-third of the witnesses. Originally, there were to be four majority witnesses, which works out to only one minority witness, or one-fourth (because two witnesses would equal two-fifths–slightly more than one-third). However, when Chairman Markey learned that Dr. Patrick Michaels of the Cato Institute was to be the minority witness, he added a 5th majority witness, Prof. Daniel Schragg of Harvard University. So the decks were stacked against Michaels 5 to 1.

However, even that was not enough to satisfy Rep. Jay Inslee (D-WA). He attacked Michaels personally, accusing him of not being “forthright” with the Committee, trying to “pull a fast one,” and treating the Members like “chumps.” Inslee demanded to know why it was even necessary to have witnesses like Michaels on the panel, when it’s so obvious that global warming is bad and nothing could be more costly than inaction on climate change.

Michaels’s oral testimony may be summarized as follows: (1) Forecasts of the impacts of climate change on national security, public health, and the economy cannot be better than the temperature projections on which they are based; (2) the 21 models used in the IPCC’s mid-range greenhouse gas emissions scenario project a constant, not accelerating rate of global warming through the 21st century; (3) the observed rate of temperature change over the past 20 years has been remarkably constant; (4) however, the observed rate is at or below the low-end of the range forecast by the models; (5) therefore, the models are too sensitive and likely over-predict future warming; (6) hence, also, impact assessments based on those model projections are unlikely to be correct.

In his fulmination, Inslee claimed (a) that Michaels compared apples (observed temperatures) to oranges (model projections of future warming), and (b) that global warming is accelerating. He is wrong on both counts. Michaels compared observed temperatures with model projections over the same period. Finding a poor fit, he drew the only reasonable conclusion: Model projections of future warming are also likely to be erroneous. Also, global warming is not accelerating. Since 1976, the observed rate has been about 0.17 degrees Celsius per decade. So, on the basis of two falsehoods, Inslee essentially called Michaels a liar.

Then, instead of letting Michaels respond, Inslee asked for commentary by Prof. Schragg. This left Michaels exactly 15 second to respond to 4-plus minutes of verbiage from Inslee and Schragg.

The contrast between Dr. Michaels’s calm, clear, patient exposition of scientific basics and Inslee’s rude, arrogant, intolerance of dissenting views could not have been clearer. Global warming zealotry is poisoning the atmosphere of public discourse–that is probably the main conclusion Web viewers draw from this hearing.

Stimulus Guts Welfare Reform, Is Deceptive

by Hans Bader on February 12, 2009 · 7 comments

in Bailout Watch, Economy, Politics as Usual, Stimulus to Nowhere

The stimulus package will gut welfare reform even more than previously feared. That’s the conclusion of Mickey Kaus, a moderate Democrat who now appears to regret voting for Obama. The stimulus package will reward states that promote welfare dependency, even more than federal subsidies did before the 1996 welfare reform law, and reduce economic growth.

Clayton Cramer notes that the stimulus package is being sold to the public under the false pretense that without it, we will go into another Great Depression, even though Congressional leaders know the economy will begin recovering soon even without any stimulus. He aptly compares the politics of the stimulus package to tribal leaders slaughtering cattle in order to make the sun rise, and then taking credit for the sun rising.

The Congressional Budget Office has admitted that within ten years, the economy will be smaller, not larger, because of the stimulus package, which will weigh down the economy under an enormous debt burden.

Many of the new, supposedly-temporary spending programs in the stimulus may wind up being made permanent, which could result in its true cost being above $3 trillion. Few rank-and-file members of Congress have actually read the 1,434-page stimulus bill, so it may be full of nasty surprises and hidden pork that we learn about only after it is signed into law.

Today, the Washington Examiner disclosed that the stimulus bill may end up funding the radical group ACORN. ACORN helped bring on the mortgage crisis by promoting “liar loans” and other high-risk loans to people with bad credit. It has a long history of financial fraud and vote fraud.

Coming to a Pharmacy Near You: One Size Fits All

by Greg Conko on February 12, 2009

in Features, Healthcare, Personal Liberty, Politics as Usual, Regulation, Stimulus to Nowhere, Zeitgeist

You’ll never see Bill Gates using an iPhone or see General Motors CEO Richard Wagoner driving a Ford. So, naturally, when Novartis pharmaceuticals’ CEO Daniel Vasella revealed last year that he takes the Pfizer statin drug Lipitor to treat his high cholesterol instead of Novartis’s Lescol, it raised more than a few eyebrows.

It’s well known among doctors that people respond differently to different medications that treat the same condition. Vasella says he had some unpleasant side-effects when taking Lescol. And plenty of others have tried one or another statin without reaching their cholesterol reduction goals, only to find success with a different one.

Unfortunately, the pharmaceutical industry’s biggest critics just don’t get it. Marcia Angell, a former editor of the New England Journal of Medicine, argues that drug companies are little more than “marketing machines” that produce few innovations, just “me-too” drugs that are similar to but no better than others on the market to treat the same condition. Public Citizen’s Sidney Wolfe argues that “most new drugs [a]re ‘me-too’ or copycat drugs that have little or no therapeutic gain over existing drugs.”

Unfortunately, former Senator and erstwhile health czar Tom Daschle and many other congressional Democrats have been listening. Tucked away in the stimulus bill is a provision providing $1.1 billion to fund a new government agency called the Federal Coordinating Council for Comparative Clinical Effectiveness Research. It’s goal, as Daschle wrote in his 2008 book, Critical: What We Can Do About the Health Care Crisis, will be to evaluate medicines an decide which ones are effective enough for government health care plans like Medicare and Medicaid to purchase. So, if the Council decides Lipitor is the most effective colesterol drug, Medicare recipients who, like Daniel Vasella, see better results with a different statin are out of luck.

Fortunately, critics of the proposal, like Arizona Republican John Shadegg, have been quick to blow the whistle on this outrage. While supporters claim the program is merely intended to supply doctors with better information about the drugs they prescribe, Shadegg and others have pointed out that the Council is modeled after the UK’s National Institute for Health and Clinical Excellence (which goes by the ironic acronym NICE), which has repeatedly denied citizens of that country access to breakthrough drugs for life-threatening conditions like cancer and multiple sclerosis. Shadegg notes the case of UK resident George Robinson, who died of lung cancer after NICE deemed the drug Tarceva not cost-effective.

Think that can’t happen here? Think again, because it already has. Last year, the state-run Oregon Health Plan refused to pay for the exact same drug to treat 64-year-old Barbara Wagner. Adding insult to injury, the private firm administering Wagner’s health benefits on behalf of the state informed her that Oregon would pay for a cheaper option. The state health plan would be happy to pay for Wagner to take advantage of Oregon’s legal doctor-assisted suicide, if she wished to hasten her death.

Dr. Walter Shaffer, medical director of the state Division of Medical Assistance Programs, defended the policy, telling the Eugene, Oregon Register-Guard that “[w]e can’t cover everything for everyone. Taxpayer dollars are limited for publicly funded programs.” Indeed.

As libertarians, we normally applaud government employees for trying to cut costs. But, when our government tries to herd us all into the same one-size-fits-all health care plan, I believe we should demand a bit more choice. Or, at the very least, options that provide just a bit of basic human dignity.

“Porkulus” has no relation to economic recovery; But other reforms do.

by Wayne Crews on February 12, 2009 · 1 comment

in Agenda for Congress, Bailout Watch, Deregulate to Stimulate, Economy, Energy, Environment, Personal Liberty, Regulation, Stimulus to Nowhere

Today CEI and other free-enterprise analysts and advocates are making one last pitch to stop the anti-stimulus package that President Obama is likely to sign tomorrow. In this weblog and elsewere we’ve often noted that the stimulus package, like those in decades past, is unrelated to economic recovery and serves other ends of career politicians, many of whom haven’t paid for so much as a potato with money they’ve earned or “created” in the private sector. Moreover, the uncertainty generated by every new “rescue” announcement from DC is starting to look downright diabolical, almost as if creating pandemonium and market confusion were an end in itself.

Anyway, we’ve called for wealth-creating alternatives to mega-spending packages, and various other reforms; virtually everything in the Anti-Stimulus actually merely stimulates government and political power, and each has a pro-free-enterprise mirror image that would grow the private sector and wealth instead–from irresponsible federal involvement in schools to infrastructure expansion. Today, since the regulatory state is such a huge component of Washington, I thought I’d point out again some ideas on how to “Liberate to Stimulate.”

Each year some 4,000 regulations pour out of Washington, imposing annual costs of $1 trillion (is that even a big number anymore?) Regardless, they need review and control; here are a few options (for detail, see the full report Jump, Jive an’ Reform Regulation: How Washington Can Take a Swing at Regulatory Reform):

–Halt Regulation Without Representation: Require Congress to Approve Costly or Controverial Agency Regulations
–Publish an Annual Regulatory Report Card
–Require that Agencies Calculate Costs, but not Benefits
–Lower “Major Rule” Thresholds for Formal Review
–Create New Categories of Major Rules to Improve Analysis
–Explore Regulatory Cost Budgets
–Publish Data on Economic and Health/Safety Regulations Separately
–Disclose Transfer, Administrative and Procedural Regulatory Costs
–Explicitly Note Indirect Regulatory Costs
–Agencies and the OMB Must: (1) Recommend Rules to Eliminate and (2) Rank Rules’ Effectiveness
–Create Benefit Yardsticks to Compare Agency Effectiveness
–Reconsider Review and Sunsetting of New and Existing Regulations
–Establish a Bipartisan Regulatory Reduction Commission to Survey Existing Rules and Assemble a Package to Eliminate

We’ll review all of these but the idea of a Regulatory Reduction Commission in particular is something we’ll return to here on OpenMarket shortly. Restoring government to something resembling it’s proper bounds will now require such major campaigns.

Iain Murray on the Anti-Stimulus

by Richard Morrison on February 12, 2009

in Deregulate to Stimulate, Economy, Stimulus to Nowhere

On behalf of my distinguished colleague Iain Murray, who is busy speaking at a very important press conference this morning, let me present his prepared remarks on the impending stimulus bill:

Remarks of Iain Murray, Director of Projects and Analysis, Competitive Enterprise Institute

Good morning. Others have already told you what an unutterable waste of money this so-called stimulus package is. I just want to make two points. First, that the American people have been misled about the nature of the bill, and been sold a pig in a poke. Second, that if you really want to stimulate economic activity, there is a very simple way to do it that doesn’t cost a penny; we call it “liberate to stimulate.”

The American people were told that this bill would give Americans jobs as a result of great public works projects. It won’t. Congress and the Agencies have between them made it very difficult to undertake great infrastructure projects, and impossible to do it quickly. That’s why almost all the supposed “shovel-ready” projects in the bill are maintenance projects and the like. If you thought Americans would be building roads, only 3 percent of the Senate stimulus package is for roads. Only 7 percent is for new infrastructure in general.

As for so-called “green energy,” the much-vaunted aim of doubling alternative energy can be achieved by business-as-usual, so little energy is provided by wind and solar. My colleague Jonathan Tolman and I also worked out that the House bill contains just about $6.4 billion aimed at creating “green jobs,” and only 70,000 would be created. This bill is not what was advertised.

So how can we stimulate the economy? As I mentioned, Congress has made it very difficult to build infrastructure. It needs to lift those restrictions. Gov. Schwarzenegger and three former California governors have all complained about the restrictions of the National Environmental Policy Act causing misallocations of infrastructure funding. Those restrictions need to be removed, as Gov. Schwarzenegger has asked. Similarly, we need clean electric power, and we need large amounts of it, but it takes ten years or more to break ground on a nuclear power plant. If the regulators sped up the permitting process like they’re doing in the UK, then we could get moving on new nuclear build very quickly. Those sorts of reforms don’t cost anything, and can get America back to work, which is what we all want to see.

Check out more on the topic under the “Deregulate to Stimulate” category.

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