A Backlash AGAINST the Minimum Wage?

The only thing we heard prior to Congress’s recent vote on a higher mandated wage was that Republicans were acting before the November elections in order to appear more friendly to low-wage workers.
Of course, we might never hear widespread talk of the backlash against Chicago’s recent minimum wage hike due to the fact that it will keep poor and low-income workers out of the work force where they can earn valuable skills that will allow them to move up the economic ladder. Perhaps minimum wage advocates really just want to keep these people on welfare and expand the size of government?

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United States Bankruptcy

We are quickly going broke according to economist Larry Kotlikoff. Kotlikoff

concludes that countries can go broke, that the United States is going
broke, that remaining open to foreign investment can help stave off bankruptcy, but that radical
reform of U.S. fiscal institutions is essential to secure the nation’s economic future. The paper
offers three policies to eliminate the nation’s enormous fiscal gap and avert bankruptcy: a retail
sales tax, personalized Social Security, and a globally budgeted universal healthcare system.

Neither major party has shown much interest in the radical reform of fiscal institutions that Kotlikoff recommends. Closer to home, Governor Richardson is counterproductively trying to exacerbate our long-term Medicaid budget problems.
I do wonder about Kotlikoff’s proposed retail sales tax rate of 33 percent. Combined with state sales tax rates the large (40 percent or more) tax wedge between buyer and seller would encourage tax avoidance. Maybe the proposal should be somewhat less vast. That is my feeling about Charles Murray’s recent welfare reform proposal too. But at least these reform ideas are on the right track.
BTW, I find our bankruptcy problem to be orders of magnitude more important than global warming. Yet global warming seems to be getting orders of magnitude more attention.

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Buddy, Can you Spare an Emissions Credit?

Under the pretense of trying “leading the way” on global warming, the Albuquerque Journal reported today (link available to subscribers) that because the state has failed to cut emissions adequately under its self-imposed effort to reduce greenhouse gas emissions, the state is going to spend 30 to 50 thousand taxpayer dollars to purchase emissions credits from some lucky source that will cash in on the state’s wasteful use of taxpayer money for meaningless credits.
Of course, this has very little to do with “global warming,” rather it is about Governor Richardson position himself as a national leader on the before the Democratic primaries two years from now. Of course, NM is the only state in the program so we are the only taxpayers being gouged for no reason at this point.
According to the story, New Mexico’s efforts supposedly removed a whopping 433 cars off the road. I’m sure that if global warming is caused by humans and their use of carbon-based fuels that we are well on our way to solving the problem now.
Oh well, it just goes to show that politicians will never run out of creative ways to waste our tax money.

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Spending — the Richardson Record

New Mexico has been on a spending spree over the last four fiscal years. The Richardson record is now clear: The general fund budget has increased by 31.2 percent. When adjusted for inflation and population growth, the budget has grown by 13 percent. That means New Mexico is spending 13 percent more in current dollars (FY2007) per person than it did four years ago.
The general fund budget in FY2003 was $3,873,944,000; and this year (FY2007) it is $5,084,063,000. If we could have held government growth to inflation plus population growth, then $659,771,000 would be available for the hard working taxpayers. That is enough money to have eliminated our personal income tax altogether. Or we could have lowered the statewide gross receipts tax rate from five percent to three percent.
Of particular concern is the growth of welfare. We seem to be very good at rewarding unproductive behavior while punishing work and saving. The budget for Medicaid has increased by over 40 percent in current, per capita dollars! The remainder of Health and Human Serivces has increased by over 22 percent. As a percentage of the general fund budget these welfare programs now consume 23.9 percent compared to 20.9 percent four years ago. Now we are being told to expect another major expansion of Medicaid while no one notices why what we have doesn’t work very well as they engage in more wishful thinking.
More detailed explanations of the budget data appear below the fold. Contact me if you have any questions.

Continue reading “Spending — the Richardson Record”

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New Mexico’s Pigs

Sadly, and typical of New Mexico politics, our Cong are at or near the bottom of the rankings in the fight against pork barrel spending. See the nationwide Club for Growth’s rankings here (a score of 19 is perfect, meaning that that particular Cong voted for 19 out of 19 anti-pork meaures). New Mexico’s scores from best to worst:
Tom Udall – 5
Steve Pearce – 1
Heather Wilson – a big fat ZERO
Update: Over half of the Cong nationwide had a score of ZERO. That is bad news for the prospect of budget discipline. Only 21 protectors of taxpayers had a perfect score of 19.

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A Government Shopping List

Out enjoying the gross receipts tax holiday this weekend, but confused about which items are exempt? Be sure to bring a shopping list–in this case, the state’s 7-page list of taxable and nontaxable items.
You’re going to need it…
Belts aren’t taxed, but the buckles are if sold separately. Bowling shirts aren’t taxed, but bowling shoes are. Sweat suiits and sweatpants are tax free, but forget about the sweatbands. Golf clothing isn’t taxed, and neither are most gloves, except for golf gloves which are still taxed. If you’re cold, ear muffs aren’t taxed but hand muffs are. Neckware such as ties and scarves are tax free, but you’ll pay taxes to tie a new bandana or handkerchief around your neck. Antique clothing will be taxed if you don’t wear it, but won’t be if you do. I could go on like this forever.
This would all be so much simpler if the tax holiday was applied across the board to all goods and services.

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John Dendahl’s Misstep

When you are running for governor against a powerful incumbent and you lack the financial resources to put your message out in a massive media blitz, the last thing you should be doing is unnecessarily attacking large voting blocks. Unfortunately, that is exactly what Republican gubernatorial nominee John Dendahl did recently in attacking teachers themselves for New Mexico’s abysmal education results.
Rather than attacking teachers themselves, Dendahl should have used the lousy results as an opportunity to speak out about a failing monopolitic model of education that discourges innovation and initiative while encouraging mediocrity. After all, in a free market system, parents would have the ability to choose whether sex-ed is tought in their children’s school or whether the focus is placed on the basics like reading, writing and arithmetic.
Governor Richardson does indeed deserve some blame for our failing schools, but he is only one of many governors in the nation — Republican or Democrat — that presides over a failing monopoly.

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More evidence that New Mexico’s schools are failing

As if we needed any more proof that New Mexico’s schools are doing a poor job, the latest statewide testing administered under No Child Left Behind shows that most of the state’s schools are failing. Given Justin’s post below on the relatively low number of high school graduates in New Mexico, it is hard to believe that our political leaders have not done more to provide choice and competition in public education.

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