The federal government’s $800 billion stimulus package, which failed to cut unemployment, is now forcing states and local governments to raise taxes. The Wall Street Journal describes how “stimulus dollars came with strings attached that are now causing enormous budget headaches . . . At the behest of the public employee unions, Congress imposed ‘maintenance of effort’ spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs,” such as ”welfare, if the state took even a dollar of stimulus cash,” even if a state’s tax revenue has since fallen due to the recession. “So when states should be reducing” their spending ”to match. . . lower revenue collections, federal stimulus rules mean many states will have little choice but to raise taxes.”
Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package actually would shrink the economy “in the long run.” Unemployment has skyrocketed past European levels, as big-spending countries have fared worse than thrifty ones.
The Washington Examiner says that “75,000 jobs” Obama has claimed credit for are “clearly imaginary” or “highly doubtful.” That includes thousands of jobs the administration claims credit for creating in nonexistent Congressional districts. As the Examiner notes:
If his stimulus program was approved, Obama promised, unemployment would not go above 8 percent this year. The reality is that it passed 10.3 percent in October. So now the stimulus books are being cooked to mollify an anxious public worried that real-world jobs continue to disappear and angry that Obama has thrown almost $1 trillion down the stimulus rathole.
The stimulus package actually destroyed thousands of real world jobs by triggering trade wars with Canada and Mexico that killed jobs in America’s export sector (the stimulus package barred a measley 97 Mexican truckers from U.S. roads, a minor NAFTA violation that led to massive Mexican retaliation against U.S. exports of 40 farm products and kitchen goods worth $2.4 billion). It also is wiping out jobs by inflicting costly mandates on state governments (such as repealing welfare reform, and imposing costly “prevailing wage” regulations and expensive racial set-asides).
The stimulus package has since spawned countless examples of government waste and corruption. Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento. Obama’s alleged justification for firing the inspector general turned out to be false.
Congress has used the financial crisis as an excuse to regulate what it calls “predatory lending.” As so often happens, its new regulations have had unintended consequences.
A bank in South Dakota, in order to comply with the new rules, is charging 79.9 percent interest for one of its low-limit credit cards. The pre-regulation rate was 9.9 percent.
The Credit Card Accountability, Responsibility and Disclosure Act of 2009 makes it illegal to charge annual fees greater than a quarter of a card’s limit. For small-balance cards, the allowable fees are tiny now. That leaves banks with three options:
-1. Lose money. The Wall Street Journal correctly notes that “Banks can’t be expected to give money away, even if Congress is in the habit of doing just that.” So this option is unlikely.
-2. Stop offering low-limit cards. This will hurt people who need them, such as people with low incomes, people with bad credit records, and young people who are trying to establish a credit record.
-3. Charge higher interest rates to make up for the money lost in fees. This is exactly what is happening here with the 79.9 percent rate for a $250-limit card.
If the bank calculated correctly, the 79.9 percent rate will be roughly a wash compared to the earlier high-fee, low-rate policy. But different customers will be paying. The people who incur a lot of interest-rate charges are usually the people who can’t afford them. And they’ll be paying a lot more than they were before the CCARD Act.
People who can afford to pay their balances on time often don’t pay little or no interest interest anyway. The 79.9 percent rate doesn’t really affect them. And now their annual fees have gone way down. The CCARD Act is, completely unintentionally, a wealth transfer from poor people to richer people. Congress is actively hurting the very people it intended to help.
Radley Balko points to an article that shows exactly how rare terrorism is.
The figure that caught my eye was the last one. There were 647 deaths due to airborne terrorism over the last last ten years. There were 7,015,630,000 passengers over the same period. Yes, that figure is higher than current world population. That’s because each time someone flies, they count as one passenger. You take ten trips, you’re counted ten times. That represents each opportunity to become a terrorist victim, and is therefore the correct measure to use.
Each time you board a plane, your odds of being a victim of terrorism are about 1 in 10,408,947 (my own calculations yielded 1 in 10,843,323, but the point holds either way). Your odds of being struck by lighting are over twenty times higher!
Terrorists are so rare that they can’t win by killing people. There are too many of us and too few of them. Terrorists can only win by scaring people. Making them overreact. Making them trade away their freedom for for the illusion of security. The TSA, which is based on exactly that, represents the terrorists’ greatest victory yet.
That’s why people need to know just how safe we really are, even with all of the terrorists out there. The more we know, the less scary they become. And fear is their only effective weapon. If we take it away, the terrorists lose.
It’s a holiday so we’ll make this quick. Infections have somehow managed to drop again as have deaths and hospitalizations. Just 15 deaths reported this past week, versus 257 a week for seasonal flu during the season. Only four states reported widespread flu activity. Early January is when seasonal flu normally really gets going so we might see something of a bounce up in the next couple of weeks, especially since at 15 deaths there’s nowhere to go but up. But it shouldn’t be by much. Swine flu came in 2009 like a piglet and went out like a piglet.
CEI Weekly is a compilation of articles and blog posts from CEI’s fellows and associates sent out via e-mail every Friday. Also included in the Weekly newsletter is a brief description of CEI’s weekly podcast and a feature on a major CEI breakthrough made during the week. To sign up for CEI Weekly, go to http://cei.org/newsletters.
CEI Weekly
January 1, 2010
>>In the News: A 2009 Recap
2009 has been noted in CEI’s history as an important year in the fight for liberty. Among the events that occurred in 2009, such as the Waxman-Markey Cap and Trade bill, the silencing of EPA climate change skeptic, Alan Carlin, and the Supreme Court case against Sarbanes Oxley,
2009 was also a significant year in terms of events that happened in the past. 2009 was the 20th anniversary of the fall of the Berlin Wall and also the 25th anniversary of the founding of CEI. But the best is yet to come as CEI’s work becomes more recognized and, thus, reaches more readers. This is evidenced in one example as CEI’s William Yeatman’s article on Copenhagen has been translated into Korean and is also published on Korean news site, Segye.com.
>>Shaping the Debate
Seven Quotes About Communism
Sam Kazman’s op-ed in the Washington Examiner
No Government in the Bedroom
Michelle Minton’s letter to the editor in the Los Angeles Times
>>Best of the Blogs
Is ObamaCare’s “Individual Mandate” Unconstitutional?
by Hans Bader
Obamacare is certainly controversial, with most Americans opposing it. It would reduce lifesaving medical innovation, raise many taxes, drive up insurance premiums and the deficit, break many campaign promises, and impose heavy burdens on state budgets. . . But bad policy is not synonymous with unconstitutionality. If the “individual mandate” is struck down, it will be because of Congress imposed it directly, rather than as a condition of states receiving federal funds, and clumsily drafted the penalties for the mandate in way that takes them outside the reach of its tax powers.
Michigan Senate not “FAIR” and it’s a Good Thing
by Michelle Minton
The Michigan Senate recessed last week without passing the proposed insurance reforms that would, among other things, prevent insurers from using factors such as education level, occupation, credit scores, and would prevent them from setting rates without approval from the state’s insurance commissioner. The proposal which was passed in the House hopes to reduce Michigan’s exorbitant premiums which rank among the highest in the nation.
Say no to EFCA in 2010
by Ivan Osorio
The first calendar year of the Obama administration draws to a close with organized labor not achieving its top legislative priority: the horribly misnamed Employee Free Choice Act (EFCA). That doesn’t mean that union-supported Democrats are going to stop trying. We should expect to see “compromise” proposals that replace EFCA’s most controversial provision, the “card check” provision that would effectively do away with secret balloting in union representation elections, with some form of “expedited” election process, or possibly take out card check and leave the rest of the bill intact.
>>LibertyWeek Podcast
Episode 74: TSA Under Fire
We investigate the Department of Homeland Security’s antiterrorism efforts, China’s climate change conundrum and California’s chance at closing her budget gap. We finish with some dangerous snowballing in the streets and the last echoes in the Ballad of Kwame Kilpatrick.
>>Support CEI
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