You are browsing the archive for 2014 May 07.

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Medicaid Expansion Will Bust Virginia’s Budget

May 7, 2014 in Economics

By Nicole Kaeding

Nicole Kaeding

Virginia is grappling with a tough decision: Should the Commonwealth expand their Medicaid programs as desired by Obamacare? Policymakers are waging a fierce battle threatening to shut down the Commonwealth’s government over the issue. Governor McAuliffe and other proponents argue that expansion is a good deal for the state because it’s free. However, regardless of what supporters may say, Medicaid expansion is a bad deal for Virginia, adding billions of new spending to the Commonwealth’s budget over the next ten years.

Medicaid is a joint state-federal program in which the costs are split and the administrative burden is borne mostly by the states. The program has traditionally provided insurance coverage to low-income populations, primarily children, pregnant women, and the disabled.

Medicaid expansion under Obamacare, according to the Congressional Budget Office (CBO), could add up to 13 million new individuals to the program by 2023, almost entirely consisting of healthy adults. An estimated 400,000 would join the rolls in Virginia. It is one of the main vehicles for expanded coverage under the health law.

It’s not only a bad idea; it’s fiscally irresponsible to expand this broken system.”

The costs of this expansion will be massive. Medicaid is already the largest spending item in state budgets according to the National Association of State Budget Officers. Virginia is no exception. The states spends more on Medicaid than K-12 education. The national program, as it is now, costs the federal government an estimated $250 billion each year, with states spending another $150 billion.

To get states to participate in the expansion, the federal government decided to sweeten the deal for them. For any individual that is newly eligible, the federal government will pay 100 percent of the costs for three years, with the federal contribution eventually falling to 90 percent by 2020 and into perpetuity. CBO estimates that it will cost the federal government $792 billion for the next ten years, with states paying an additional $46 billion. Virginia’s share would be in excess of $1 billion.

Supporters argue this is a great deal for states. They get to provide health insurance for their residents at little to no cost. According analysis by the left-leaning Center for Budget and Policy Priorities, more than 95 percent of the expansion costs would be assumed by the federal government.

While technically correct, the CBPP analysis ignores the fiscal reality of the situation. Almost $800 billion is an enormous sum of money, …read more

Source: OP-EDS

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Yellen to End QE Someday, Maybe

May 7, 2014 in Economics

By Ryan McMaken

126px-US-FederalReserveSystem-Seal.svg

Janet Yellen spoke to lawmakers today. After making it very, very clear that bad weather is the cause of the lackluster economy,  Yellen then went on to confirm that the Fed will wind down quantitative easing (specifically, the bond-buying stimulus program) seven months from now if ”the labor market continues to improve and inflation remains low.”

Yellen is clear that if the Fed concludes that things are just right somewhere down the line, the Fed may or may not reduce bond-buying to zero. Even then, however, the Fed’s commitment to low interest rates remains in force indefinitely, we’re told.

In other words, there’s no new information at all here, and nothing has changed. The Fed is maintaining it’s usual position which is: “things are getting better, but just to make sure they get better even faster, we’ll continue with easy money until some point in the future, but we can’t know when that is, or what we’ll do.”

At some point, QE became a permanent, accepted part of the American economy. Once seen as a radical expansion of the Fed’s power, it’s now just what reasonable people support, and no member of Congress would ever dare suggest that it should be ended, not even at some definite point in the future.

Yellen also managed to get a comment about “rising inequality” in there, even though the Fed causes a lot of it, but one can argue that the only new comment of any substance is Yellen’s comment that “flattening out in housing activity could prove more protracted than currently expected.”

Here’s a helpful live blog of the event.

…read more

Source: MISES INSTITUTE

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Four Ways to Value the Stock Market

May 7, 2014 in Economics

By David Howden

Philippine-stock-market-board

With the Dow Jones closing above 16,600 for the first time ever last week, investors are overjoyed by the signal this sends. Apparently all is well in the economy, and those pesky threats of unemployment and sluggish income growth are figments of your imagination.

Over at Mises Canada today, my daily article shows how well the stock market has been performing in something other than money. It turns out its unsettling. Since 2000, the stock market has just barely maintained its value in inflation-adjusted terms, this despite being over 5000 points higher today.

In terms of gold the collapse is even more pronounced. It takes nearly 75% fewer gold ounces to buy a “unit” of the Dow today than it did 14 years ago!

That´s not exactly what I think stock market cheerleaders have in mind when they talk about “investing for the long run.”

Read more here.

…read more

Source: MISES INSTITUTE

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Help Build the New Mises Website!

May 7, 2014 in Economics

By Mises Updates

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Thanks to donors like you, Mises.org has become a huge digital university, library, and media outlet, and it continues to grow every day. In fact, it would be impossible to read and experience everything Mises.org has to offer in a single human lifetime.

But the time has come to make Mises.org better than ever, and to make it compatible with new technologies, new users, and a growing interest that has become much bigger, much faster than we ever thought it would. We have the team in place to put together a new web site that is going to keep pace with the new technologies and new scholars of the 21st century to search, and just simply easier to use.

Please join us in making this important and challenging project a reality. Donors who make a monthly recurring gift of $15 or more, or a single gift of $100 or more, will receive our amazing Mises.org t-shirt (Next Level 100 percent cotton).

…read more

Source: MISES INSTITUTE

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Should E-Cig Manufacturers Love the FDA?

May 7, 2014 in Economics

By Mises Updates

6743 (1)

Christopher Westley writes in today’s Mises Daily:

If the purpose of anti-smoking regulation was about, you know, actually reducing smoking, then one might presume regulatory authorities would champion the emergence of smoking substitutes. But it was never about this. It was, and is, always about control, and the result is a Bizarro World in which e-cig manufacturers apparently support the use of extra-market force against the sale of their products.

…read more

Source: MISES INSTITUTE

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Video: Mark Thornton Discusses the Unemployment Rate

May 7, 2014 in Economics

By Mises Updates

Mark Thornton explains why the government’s latest unemployment numbers are a sham, and the labor market is nowhere near recovered.

…read more

Source: MISES INSTITUTE

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National Climate Assessment Report Raises False Alarm

May 7, 2014 in Economics

By Paul C. "Chip" Knappenberger

Paul C. “Chip” Knappenberger

The Obama Administration’s just-released National Climate Assessment report leaves the impression that if we don’t quickly launch into action to reduce our emissions of greenhouse gases (primarily by shifting away from using fossil fuels), we will be inundated by an endless flow of misfortune unleashed by the ensuing climate change. The flood has already begun.

Nothing could be further from the truth.

First, the assessment report frequently confuses climate with climate change. The natural climate of the United States is constantly overflowing with extreme weather hazards of all sorts — hurricanes, tornadoes, droughts, floods, blizzards, heat waves, hard freezes and on and on. It’s the norm. The assessment would have you think that every time one of these types of events happens, now or in the future, it is because we are emitting carbon dioxide into the atmosphere. Such a conclusion is a stretch and has never been proven. A thorough review of climate science would demonstrate that the impact of human-caused climate change on the behavior of most types of extreme weather is poorly understood. Instead, the vagaries of climate dominate our experiences.

The National Climate Assessment is a political call to action document meant for the president’s left-leaning constituency.”

Second, greenhouse gas emissions from the United States have a truly minimal and diminishing effect on the future course of the Earth’s climate. Rather, that course is being set by developing nations such as China and, soon, India. Research has shown that eliminating all greenhouse gas emissions from the United States now and forever only mitigates less than two-tenths of a one degree of warming by the end of the century — but the cost to do so would hurt our economy dearly. Few folks are willing to pay such a price for no measureable return.

Third, a growing body of scientific evidence — which is based in observations rather than climate models — strongly suggests that future climate change is going to be smaller than we are commonly told in reports such as this National Climate Assessment or those from the United Nations Intergovernmental Panel on Climate Change. This means that reducing carbon-dioxide emissions from the United States will have even less of an impact than the tiny number mentioned above.

Finally, suggesting that we will be overwhelmed by negative impacts from climate change ignores our demonstrated human ability to respond to environmental challenges. A …read more

Source: OP-EDS

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Don’t Assume Putin Could End the Bloodshed in Ukraine

May 7, 2014 in Economics

By Christopher A. Preble

Christopher A. Preble

The Obama administration’s approach to events in Ukraine and the approach favored by the president’s critics are based on the same faulty premise. Both parties assume Russian President Vladimir Putin has firm control of pro-Russian forces in Ukraine. Therefore, the right combination of coercion and threats will convince him to order a retreat.

However, while pro-Russian forces in Ukraine undoubtedly enjoy Putin’s support, it is not clear that these same forces would stand down if Putin gave the order to do so. Worse, any control that Putin does have rapidly diminishes as the violence escalates.

No one, including Vladimir Putin, controls events in Ukraine.”

As often happens, U.S. policymakers feel the need to do something. The policies being debated in Washington fall into two categories. Obama favors economic sanctions. Hawks push a military solution, albeit one fought through proxies.

Sanctions that would be palatable to the Europeans won’t be strong enough to compel Putin to reverse course, even if ending the conflict was within his power. And providing arms to the fragile Ukrainian government won’t solve the country’s deep political and economic dysfunction.

Obama’s approach is at least consistent with the wishes of the American people, who support sanctions against Russia but not providing arms to Ukrainians, and is less likely than his critics’ alternative to draw the United States into a conflict that no one wants.

But that’s not saying much. Considering that U.S. vital security interests are not at stake in Ukraine, the United States should not accept even a small risk of becoming more deeply involved.

Those with the most at stake — pro- and anti-Russian Ukrainians — have demonstrated their willingness to go to extremes to get what they want — namely, to get rid of their enemies. Dozens have been killed or died in violent clashes and the number of incidents appears to be on the rise.

German Foreign Minister Frank-Walter Steinmeier warned yesterday, “we are reaching the point of no return — a moment when the escalation cannot be stopped anymore and we literally are on the threshold of a war in Eastern Europe.”

Diplomacy can work when carrots or sticks convince the other side to act in a certain way and when there is an acceptable compromise to be had. In this case, sensible people on both sides might be willing to accept a Ukraine that is independent of foreign influence and …read more

Source: OP-EDS

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Next President Must Fill Supreme Court Vacancies with True Constitutionalists

May 7, 2014 in Economics

By Nat Hentoff

Nat Hentoff

On Monday, April 28, the Supreme Court unanimously refused to hear Hedges v. Obama, a case that includes the most broadly dangerous attacks on citizens’ individual constitutional liberties in our history. Not a single justice was sufficiently shocked to sign a dissent against this grim silence, and the media have been largely indifferent.

The plaintiffs brought the lawsuit in protest of sections of the National Defense Authorization Act (NDAA) that were signed into law by President Barack Obama in December 2011. Read this part of Section 1021 of the NDAA and judge for yourself if I am exaggerating the far-ranging unconstitutionality of this law:

The Armed Forces of the United States, at the behest of the president, has the power to indefinitely “detain” without trial “a person” (including any American citizen) “who was a part of or substantially supported al-Qaeda, the Taliban, or associated forces that are engaged in hostilities against the United States or its coalition partners, including any person who has committed a belligerent act or has directly supported such hostilities in aid of such enemy forces.”

Take note: The word “detain” is Obama’s euphemism for “imprison.”

John Whitehead’s Rutherford Institute filed an amicus brief in a lower court on behalf of the plaintiffs in Hedges v. Obama. The brief explained how the Supreme Court abandoned our First Amendment and other constitutional rights:

“Nobody — including the Government arguing in favor of this provision — can define the terms ‘belligerent act,’ ‘substantial support’ and ‘associated groups’ with any precision …

“Unlike the definition of ‘material support’ in the Antiterrorism and Effective Death Penalty Act, which lists specific forms of prohibited assistance such as giving money, arms, or training to terrorist groups, the broad term ‘substantial support’ in the NDAA could be read to encompass an enormous range — not only of conduct but of political speech and journalism.

“For example, would a journalist interviewing an al-Qaeda member be ‘substantially supporting’ al-Qaeda by giving that terrorist a media voice? What if the journalist were to ask a question or to make a comment that the Government deemed sympathetic to the interviewee? The terms of the statute could be read to penalize such press activities with indefinite detention without trial.”

In fact, as this Rutherford Institute amicus brief indicated, the term “substantial support” could apply to this journalist: “Could someone protesting the detention of a terrorist held without trial, or even assisting in …read more

Source: OP-EDS

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Obamacare: A Famous Victory

May 7, 2014 in Economics

By Michael D. Tanner

Michael D. Tanner

In the month since the formal end of Obamacare’senrollment period (actual enrollment limped on through mid-April), the Obama administration and its supporters have been on something of a victory tour.

“Obamacare has won,” announced Ezra Klein. “The Affordable Care Act is one of the great comeback stories of public policy,” declared Paul Krugman. “It is working,” the president himself told reporters.

Given the debacles of healthcare.gov and the initial rollout of the health-care exchanges, the fact that slightly more than 8 million Americans have signed up for exchange-based plans is a significant accomplishment. In addition, a few million more Americans have enrolled in Medicaid, and some more young people were able to remain on their parents’ insurance policies. Certainly, things could have been worse.

Obamacare’s supporters are lauding its dramatic turnaround. The facts give them the lie.”

But if this is victory, I’d hate to see defeat.

Let’s start with that 8 million figure.

Republicans were a bit premature last week when they jumped on the House Energy and Commerce Committee’s report stating that more than a third of enrollees had not paid their first month’s premium. That number was skewed by the surge of late enrollees, many of whom had not even received their first bill and so obviously hadn’t paid. However, the administration can’t be let entirely off the hook, since it has steadfastly refused to provide any information on actual payment rates. Its insistence that insurance companies won’t provide it with those data is risible. On the basis of earlier numbers, it seems likely that 15 to 20 percent of those signing up will never pay, and perhaps 3 to 5 percent will ultimately stop paying and drop their coverage.

Moreover, we still don’t know how many of those signing up through the exchanges were previously uninsured, as opposed to people voluntarily or involuntarily switching plans. We do know that as many as 6 million Americans lost their coverage because it was not compliant with Obamacare’s many mandates, and that perhaps 1 million of those remain uninsured. How many of the rest bought new coverage through an exchange remains murky, though some estimates suggest that the majority of these people found new insurance through the exchanges or Medicaid, or from an employer.

Enrollment also varies significantly from state to state. There is no doubt that some states were very successful in getting people to sign up. Nearly 48 …read more

Source: OP-EDS