Keith Hennessey explains the looming crisis of entitlement spending

This is the best post I have ever seen on the problem of demographics and entitlement spending, which is due to explode in about a few years. I’ll summarize so that you will click through and read this post for yourself. There is almost no text in the post, it is all graphs, and they are self explanatory. It will take your about 5 minutes to scare yourself into a coma.

Summary of the post:

  • There are 3 entitlement programs: social security, medicare and medicaid
  • These programs are funded by taxes on young people who are still working
  • These 3 programs currently cost 9% of GDP.
  • By 2050, the costs will have doubled to 18% GDP.
  • Some of this increase will be due to excess growth in health costs
  • And some of this increase will be due to demographics

Let me talk more about the demographics problem:

  • More people are living longer
  • That means that benefits are being paid out over more years, per person
  • A huge group of babies from the Baby Boom started retiring in 2008
  • But the number of younger workers who pay their benefits is not growing fast enough
  • The number of workers needed to pay each retiree’s benefits is shrinking
  • Taxes will have to increase, or benefits will have to decrease

Please read the article. It will help you to put Obama’s massive spending and tax hikes in perspective. By the way, this is a great post to forward to your friends and neighbor’s who voted for Obama who do not like to read about economics and finance.

How big business and enviro-charlatans benefit from Obama’s cap-and-trade energy tax

Recently, I posted about the economic effects of the Waxman-Markey cap-and-trade bill, including how it would impact individual families. I wrote about the true effects of Obama’s green jobs initiative, which will actually decrease employment instead of increasing it.

I also posted before about scientific dissent from global warming, the alleged melting polar ice caps, Obama’s planned tax hikes on oil and gas, deceptive alarmism to procure research funding, the alleged warming of the oceans, and the use of made-up crises in order to impose socialism. You can also read the testimony of a Princeton University physicist who is against global warming alarmism.

Who will pay for cap-and-trade?

ECM e-mailed me this story from PowerLine Blog, which explains how much each state will pay if cap and trade passes. John Hinderacker asks whether Obama things that the electorate is stupid enough to believe that the firms who must absorb this tax will just take it out of their profits and leave consumers untouched. He argues that Obama thinks we are stupid enough to believe that.

One commenter to the post writes:

No, he like many liberals actually believe corporations don’t pass on the tax to consumers but it is extracted from profits (lowering them). Remember, they have a very static, zero-sum view of the world.

This is also my view of Obama. He has been indoctrinated with socialist views and he has no freaking idea why they don’t work. He will be as shocked and surprised as any child is when they first learn that the Tooth Fairy is a myth. But that won’t stop him from nationalizing companies once he sees the mess that his interventions have made. Probably his handlers have this all planned out for him.

And where will that money be redistributed to?

But today I wanted to tell you about the people and corporations that are actively pushing for cap-and-trade, because if it passes they will suddenly become very, very rich.

The full story is posted at Steve Milloy’s Green Hell blog.

Big business meddling in government

Excerpt:

Although many businesses have been coerced into supporting Waxman-Markey, much of big business has actively pushed for the bill. Many Wall Street banks hope to profit from the trading of the $9 trillion in emissions allowances to be created under Waxman-Markey. Goldman Sachs would be the preeminent global warming bookie as it owns the exchanges where carbon allowances would be traded.

General Electric, whose CEO sits on Barack Obama’s Economic Recovery Advisory Board, was instrumental in putting together the U.S. Climate Action Partnership (USCAP), a bizarre big business-environmental activist group lobbying consortium that is a primary driver of global warming legislation. USCAP has even taken credit for drafting parts of Waxman-Markey. GE, it seems, would like a federal law requiring electric utilities buy the wind turbines and other energy technologies manufactured by — guess who — GE.

Republican James Sensenbrenner recently asked the Department of Justice to investigate USCAP members General Motors and Chrysler for illegally using taxpayer bailout money to lobby for global warming legislation. AIG, the insurance giant that is now a ward of U.S. taxpayers, only dropped out of USCAP after Rep. Joe Barton pointed out the illegality of accepting federal money and then using it to lobby the federal government.

Enviro-charlatan greed

Excerpt:

And then there’s Al Gore, who stands to become the first “carbon billionaire” through his partnership in the venture capital firm of Kleiner Perkins Caufield and Byers and the UK-based investment firm of Generation Investment Management. When Gore testified in favor of global warming legislation before the Senate Foreign Relations Committee in January, he failed to disclose his personal financial interests and no Senator came close to asking him about them.

When he testified in April before the House Energy and Environment Subcommittee in favor of Waxman-Markey, Gore again failed to disclose his conflicts-of-interest. When Reps. Marsha Blackburn (R-TN) and Steve Scalise (R-LA) probed into these matters, Gore feigned ignorance and pretended that he would not personally benefit from Waxman-Markey. Although Rep. Waxman made baseball players testify under oath to Congress about the comparatively petty issue of drug use in baseball, he did not subject Gore to penalty for perjury.

And more fascism, too

Competing for most-appalling character in the Waxman-Markey saga is Rep. Ed Markey. Immediately after the head of Warren Buffet’s electric utility unit testified against Waxman-Markey’s cap-and-trade provision, Markey fired off a letter to the Federal Energy Regulatory Commission (FERC) specifically requesting that Buffet’s utility be investigated. After being rebuked by House Republicans for this blatant intimidation, Markey then asked FERC to expand the requested investigation to all investor-owned utilities, rather than appearing to single out Buffet’s. Now all utilities are under operating with a Markey-pointed gun to their heads.

They told lies about Bush’s “abuses of power” all through his presidency. Now that they are in control, and every new day brings to light more greed, bullying, corruption and fraud than we saw in Bush’s entire eight years in office. And that’s not even to mention that the average unemployment rate under Bush was about half of what it is today under Obama.

Kevin Boland reports on John Boehner’s blog that the bill is up for a floor vote in the House this week.

Economist Walter Williams evaluates whether teachers are earning their huge salaries

I wanted to review a previous post before I go on to discuss some news regarding teacher’s unions and whether they contribute to improving the academic performance of their customers (students).

Here is my recent post about Walter Williams, on the education system.

I want to highlight this part where Williams explains how the schools that charge taxpayers the most money achieve the worst academic results for their customers (students):

The teaching establishment and politicians have hoodwinked taxpayers into believing that more money is needed to improve education. The Washington, D.C., school budget is about the nation’s costliest, spending about $15,000 per pupil. Its student/teacher ratio, at 15.2 to 1, is lower than the nation’s average. Yet student achievement is just about the lowest in the nation.

In that same post, I linked to an L.A. Times article about a charter school that produces amazingly high academic output for a tiny fraction of the cost, and with some very poor students who are from first-generation immigrant families that can barely speak English.

Here is the secret of this high-performing school:

That, it turns out, is just the beginning of the ways in which American Indian Public Charter and its two sibling schools spit in the eye of mainstream education. These small, no-frills, independent public schools in the hardscrabble flats of Oakland sometimes seem like creations of television’s “Colbert Report.” They mock liberal orthodoxy with such zeal that it can seem like a parody.

…School administrators take pride in their record of frequently firing teachers they consider to be underperforming. Unions are embraced with the same warmth accorded “self-esteem experts, panhandlers, drug dealers and those snapping turtles who refuse to put forth their best effort,” to quote the school’s website.

Read the whole post for the whole amazing story.

Below, Ed Morrissey explains why public schools suck up so much taxpayer money, while providing horrible results.

Do teacher unions help students to learn?

This is a MUST-READ story from Ed Morrissey, writing at Hot Air. (H/T Ace of Spades)

In a free market capitalist system, teachers, like other grown-ups, are paid based on their performance. Parents should have a choice of schools, and they should be able to pull their children out of any school that doesn’t produce a quality education for their customers, the children. But what happens when the government, to please their union supporters, decouples teacher pay from educational outcomes?

Yahoo News reports:

Hundreds of New York City public school teachers accused of offenses ranging from insubordination to sexual misconduct are being paid their full salaries to sit around all day playing Scrabble, surfing the Internet or just staring at the wall, if that’s what they want to do.

Because their union contract makes it extremely difficult to fire them, the teachers have been banished by the school system to its “rubber rooms” — off-campus office space where they wait months, even years, for their disciplinary hearings.

The 700 or so teachers can practice yoga, work on their novels, paint portraits of their colleagues — pretty much anything but school work. They have summer vacation just like their classroom colleagues and enjoy weekends and holidays through the school year.

…“You just basically sit there for eight hours,” said Orlando Ramos, who spent seven months in a rubber room, officially known as a temporary reassignment center, in 2004-05. “I saw several near-fights. `This is my seat.’ `I’ve been sitting here for six months.’ That sort of thing.”

Unbelievable. These unions got Obama elected and they are no different than the auto union workers who expect something for nothing. Who cares about whether children learn anything? So long as Democrat supporters get their taxpayer money, why should they have to produce any results?

Ed Morrissey continues:

If ever one wanted an argument against Card Check, this would be it.  Imagine if you will an entire private sector with “rubber rooms” filled with employees left dangling in limbo because their union contracts made them “extremely difficult to fire.”  There are enough teachers in these rooms in NYC to fill several schools, and yet the taxpayers are shelling out money to have them sit in rooms, play Scrabble, and act like children.

The Big Apple isn’t alone in this process, either.  Los Angeles has almost 200 teachers in rubber rooms at the moment.  Apparently, neither system has the competence nor the inclination to process wrongful conduct or poor-performance hearings with any speed, which is not just unfair to the taxpayers, but also unfair to those teachers wrongfully accused of either or both.

If this was the private sector, it would at least get handled expeditiously, as no business can afford to have hundreds of people sitting around and producing nothing.  Perhaps as well as a cautionary tale about Card Check and the expansion of unions, it also serves as warning to those who want to replace the private sector in health care and energy production with public employees instead.

This is why I am a small-government capitalist. I want Democrat-supporting unions abolished. Let them earn their salaries like everyone else who works in the free market economy. Consumers deserve performance in exchange for their hard-earned money. And if consumers don’t get value, we should demand refunds so that we can take our money to a competitor.

To understand why school choice matters, take look at this video posted over at the Heritage Foundation, featuring 14-year old Johnathan Krohn. Notice how he is the only one of the panel of 3 kids who isn’t reciting memorized facts but is actually make a cause-and-effect economics argument.