"Knowledge will forever govern ignorance

 and a people who mean to be their own governors

 must arm themselves with the power which knowledge gives."

Tuesday, February 28, 2006

Last Call - Walter Perry Johnson Award Nominations

Walter Perry Johnson Award

This is the last call for nominating a right leaning blog for the Walter Perry Johnson Award for blogs most deserving of wider recognition. So far 55 blogs have been nominated.

To nominate a blog, submit the blog’s name and URL in the comments section of this post or by emailing us at enlightennj@gmail.com.

Monday, February 27, 2006

The Freshman

The Taliban's former spokesman is now a Yale student. Anyone see a problem with that?

"Never has an article made me blink with astonishment as much as when I read in yesterday's New York Times magazine that Sayed Rahmatullah Hashemi, former ambassador-at-large for the Taliban, is now studying at Yale on a U.S. student visa. This is taking the obsession that U.S. universities have with promoting diversity a bit too far. "

Saturday, February 25, 2006

Updating The Blogroll

Jim at Parkway Rest stop has a list of things to do when you have blogblock. Item number one on his list is “update the ‘ol blogroll”.

Then again, that means I have to open “Mr. Template”, which is something that always gives me a case of the hot squirts.
We’ve been meaning to update our blogroll, but like Jim the fear of screwing up the template always gives us pause. Then there’s always the excuse on a group blog of “it’s not my turn, I did the last update.”

We tried using the BlogRolling.com service, but it often seemed to be “down” and at times would “hang” our page loading. We wanted to have two blogrolls, one for New Jersey blogs and one for others, but no one over here could figure out how to use the Blogroll.com widget to make that happen. So the decision was made that we would manually enter the links into our template. Great, but no one does it.

Fear and laziness are the excuses, but now we are so far behind I don’t know where to begin. There has to be a zillion New Jersey blogs that should be on our New Jersey Carnival blogroll that aren’t, and the other blogroll, who knows.

Anyway, I think I did the last blogroll update. So I’m sticking with that story and opting for number six on Jim’s list:

Read a couple blogs and then head for Mr. Recliner: Yeah, that’s the ticket.
P.S. If someone has a better way of blogrolling, please let us know.

Friday, February 24, 2006


Debra Galant, the Barista of Bloomfield Avenue, is making a name for herself with her first novel, Rattled:

Galant skewers the shallow, striving, McMansion-dwelling suburbanites in this engaging satire. Heather Peters is staring 35 in the face—though "depending on the light, [she could] still pass for a high school cheerleader"; her husband, Kevin, can barely stand her half the time, and her son, Conner, is a complete misfit—but at least they've just landed their dream home in Galapagos Estates, a new development in New Jersey.

The book is moving up the ranks quickly over on Amazon.com. Rattled was number 3,949 yesterday in Amazon books and today it’s 2,870. For some reason Galant’s publisher did not send us a copy for review, but the New York Times, the Boston Globe, USA TODAY and the magazine More have good things to say in their reviews. From USA TODAY:

Galant crafts a clever plot that builds to a screamingly funny climax. It is so well-constructed that P.G. Wodehouse, the master of madcap humor, might approve.
Congratulations Debra!

Thursday, February 23, 2006

Assemblyman Vas Pushing For Drivers Licenses For Illegal Aliens

Why is Assemblyman Joseph Vas (D-Perth Amboy) introducing legislation to create a special New Jersey driver’s license for illegal aliens?

"We need to stop being hypocrites and not accepting that they are an important part of the economy of our state," said Martin Perez, president of the Latino Leadership Alliance. "If we use this labor force, we have to assume some responsibility for making sure they get to their jobs legally and safely."
That brings us to the question of why people are employing illegal aliens in the first place? To begin with it’s against the law and secondly, the unemployment rate in the United States or in New Jersey, for that matter, is not zero.

Hiring illegal aliens depresses the wages of low-skilled American workers and of those just entering the workforce. It sets up the opportunity for employers to take advantage of undocumented workers and we’ve already heard too many horror stories to discount the problem.

Employers hiring illegal aliens should be prosecuted for breaking the law and elected official should not be working to make this illegal behavior easier or accepted.

Vas’ driver’s license for illegals is a companion to the bill State Senator Ronald Rice (D-Essex) is pushing to grant in-state college tuition for illegal aliens. Rewarding illegal behavior only encourages more of the same. When are our ‘leaders’ in Trenton going to recognize this fact? Maybe they do and they just don’t care.

Wednesday, February 22, 2006

Working Against Taxpayer Interests

While most states are making it easier for the public to access public records through the web, New Jersey State Senator Ronald Rice (D-Essex) is working to limit access to property tax records. Rice has introduced a bill that would prevent taxpayers from viewing all property tax records, except their own.

Sen. Ronald Rice, D-Essex, a real estate broker, is pushing a bill that would exempt property record cards, maintained by local tax assessors, from the definition of a government record. That means the public would no longer be able to access the cards through an Open Public Records Act request. Yet Rice's bill would give real estate professionals, such as himself, open access.

Rice's bill would let homeowners access their own cards, which contain information such as assessed value, ownership, lot size and number of rooms. But homeowners who wanted to review the cards of other homes in their neighborhoods, which is commonly done to support tax appeals, would be blocked from doing so.
Without access to property tax information, taxpayers will not be able to compare and analyze property valuations and other pertinent information to identify inequities in property tax assessments. There is already a lack of public trust in government and property taxes are at the top of the list of taxpayer complaints. Why compound the problem with a new law?

Rice said the bill would enable real estate brokers to obtain property tax information more quickly in cities where tax assessors have been inundated with requests. But as one attorney who reviewed the bill noted, if there is a big demand for the records, there's a good reason for it: because the public has a need for them. Another attorney familiar with property tax law called it a step backward while "other states are making property record information available on their Web sites."
Only one lone Senator has stuck up for taxpayers:

The bill sailed through the Senate Community and Urban Affairs Committee — chaired by Rice — earlier this month, with Sen. Leonard T. Connors Jr., R-Ocean, casting the lone committee vote against the bill.
State legislators should work to make life easier and less costly for their constituents, not ease regulations that benefit themselves and a narrow constituency. If Rice is truly interested in providing quicker, easier access to property tax cards, he should follow the lead of other states and make the records fully accessible on the Web — to the industry and the public alike.

Tuesday, February 21, 2006

Federal Spending 2001-2006

How often have you read and heard about federal spending cuts to antipoverty, education and other programs during President Bush’s time in office? The fact that it isn’t true doesn’t stop people from believing and repeating this myth.

As can be seen from the chart below, federal government spending has increased in every budget category from 2001 through 2006. And federal spending has been increased dramatically in the areas where the weeping and wailing about “cuts” are generally the loudest.

So can we all agree on the definition of a few basic terms? A cut in spending is when less is spent than the previous year and an increase in spending is when more is spent than the previous year.

Assuming we are all in agreement with these basic definitions, can we now all agree there haven’t been cuts in federal spending?

Federal Spending By Category, 2001-2006
(Nominal $Millions)

Federal Spending 2001-2005
Source: Heritage Foundation calculations based on Office of Management and Budget (OMB) data.

Click chart to Enlarge

Monday, February 20, 2006

New Jersey - The Gimme State

What a shock. Another New Jersey trust fund is going broke and once again Trenton will be looking to taxpayers for a bail out.

New Jersey’s Garden State Preservation Trust will run out of money next year, two years ahead of schedule and well below the goal of preserving 1 million acres of land.

The Garden State Preservation Trust has conserved less than 250,000 acres of farms, open space and historic sites thus far -- still a success, conservationists say, but well short of what was advertised when voters approved the $3 billion fund in 1998.
Republicans and Democrats, including Governor Corzine, say they'll go back to voters with another multibillion-dollar bond measure to replenish the fund.

"My biggest concern," said Jeff Tittel, director of the state Sierra Club, "is that there may be some voters out there who say, 'You told us you wouldn't have to go back to the voters and that this would buy 1 million acres. Why are you coming back to us now when we have all these other problems?' "

Conservation has been political gold at the polls for years -- the trust fund passed by a 2-1 ratio. But this year could be different, some fear, with the state facing a budget deficit as high as $6 billion and voters already fuming over high property taxes.
As far as we are concerned there aren’t enough taxpayers asking “why are you coming back to us”. The money the state wastes is enough to make you sick and the open space trust fund is no different:

Tittel, meanwhile, charges some of the money was misspent on land that couldn't be developed anyway. The state paid the city of Newark about $26 million, for example, to buy property around reservoirs in Passaic, Morris and Sussex counties even though a building moratorium already protected watershed properties in New Jersey.
The Transportation Trust Fund is broke, the Schools Construction fund is bankrupt, the unemployment insurance fund is nearly insolvent, the public employee retirement funds needs $30 billion or so, the Meadowlands sports complex needs more than $150 million, the Governor wants billions more for the uninsured and other pet projects and now the open space trust fund is about to go bust. Gimme, gimme, gimme. It's all a game to them and taxpayers are the pawns.

Open space supporters are surveying the next two elections like a chessboard, debating strategies over when to ask voters for more money.

Most would like to see a referendum this fall -- but only if they don't have to share the ballot with another big-ticket request: borrowing to replenish the even-worse-off Transportation Trust Fund.
Have the powers to be in Trenton ever considered you can’t have everything? Setting priorities and living within your means are obviously foreign concepts to the majority of New Jersey’s elected officials. Our politicians are like parents that can’t say “no” to their special interest children. Only in this case they’re spending and often wasting someone else’s money. This has to stop.

There’s an article today from the AP - Gov. Corzine, you've got mail! And lots of it!. Why not add to the pile labeled “cut state spending and forget about raising taxes.” Don’t be apathetic, make your opinion count.

Governor Jon Corzine’s contact information:
Telephone: 609-292-6000
Mail: Office of the Governor, PO Box 001 Trenton, NJ 08625
Email: Governor’s email form

Sunday, February 19, 2006

Carnival of the New Jersey Bloggers # 40

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Steve Hart began hosting the Carnival of the New Jersey Bloggers #40 and found himself caught in the Twilight Zone - er, the Opinion Mill Jersey Zone. Prepare yourself for a journey into a wondrous land, whose boundaries are that of the imagination...

Saturday, February 18, 2006

Corzine’s Hard Choice

DynamoBuzz has a good post about Governor Corzine’s New Jersey’s Transportation Trust Fund refinancing gimmick. As Roberto points out, the TTF will get an infusion of cash, but taxpayers will wind up with $11 billion in new debt. Why should anyone be surprised - that’s what Jon Corzine did for a living a Goldman Sachs, he sold debt. The Governor is a financial genius isn’t he?

Rather than cutting state spending on other programs or biting the bullet and raising the gas tax, Corzine has opted for the dig a bigger hole option. That’s the same option used time and again which has placed New Jersey in its present financial position – broke.

Beyond not wanting to waste political capital at the start of his term Jon Corzine and his Democrat pals don’t want to increase a tax that just about everyone will have to pay. The gas tax is a visible one and everyone will know exactly how much more the tax will cost them at the pump.

Democrats prefer raising taxes on the “rich”, an undefined group that makes people feel a tax increase isn’t going to apply to them. Many people feel that as long as someone else has to pay more in taxes, that’s just fine. Of course “rich” winds up being any person or family making more than $70,000 and all the various taxes and fees add up hurting almost everyone.

If people are unwilling to be taxed for something as basic as road maintenance and construction, we wonder how they feel about being taxed for the billions spent on any number of failed state programs – take your pick.

If Governor Corzine doesn’t cut spending, he is left with only one other choice – tax increases. How many of the nearly 1.3 million people that voted for our spendthrift Governor will be paying them? Work out that number and you’ll know why Corzine will make the “hard choices” he inevitably will – he’s going to tax the productive, hard working people. Tax receivers will cheer.

Friday, February 17, 2006

Corzine Considers Stealth Tax

Governor Jon Corzine is considering a stealth sales tax to help close New Jersey’s $4-$6 billion budget gap. The stealth tax is called a gross receipts tax.
During a radio talk show appearance Wednesday night, the new governor said he is exploring the possibility of a gross receipts tax, similar to those that a handful of states like New Mexico use instead of a sales tax.

Corzine did not say whether he would consider using it to replace, or to supplement, New Jersey's current 6 percent sales tax.
This is a very clever way to tax items currently exempt from New Jersey’s sales tax – food, clothing, medicine and services – and to hide the tax from the public. A consumer’s receipt won’t have a line showing the amount of tax paid, but it will be reflected in the increased price of the good or service purchased. The Governor can then proclaim the general public isn’t being taxed, businesses are being taxed. Very sneaky.
Unlike the sales tax, which is collected from individuals through millions of transactions, a gross receipts tax is assessed as a percentage of the total sales of affected businesses, which then decide whether to add the cost to the prices they charge customers.
A business wouldn’t be in business very long if they decided not to add the tax on to the price of their merchandise or services. The average net profit margin for retailers is very slim, about 3 to 5% in good years and for grocery stores it’s a razor thin 1%. A gross receipts tax is a cost of doing business, no different than employee compensation, utilities and all the other expenses a business pays to bring a product or service to consumers.

However Governor Corzine may try to hide a tax increase, you’ll be paying it.

Corzine has floated about a zillion new tax ideas. How many of his cost cutting ideas have you heard? You have not heard any Corzine ideas for reducing state spending because Corzine has been too busy thinking up new ways to increase state spending and taxes.

Is this really what the people of New Jersey want? Why not write or call Governor Corzine and tell him your thoughts? Governor Jon Corzine contact information:

Telephone: 609-292-6000
Mail: Office of the Governor, PO Box 001 Trenton, NJ 08625
Email: Governor’s email form

Thursday, February 16, 2006

Raising Taxes to Pay For "Savings"

Maine’s Democratic Governor John Baldacci created a program to provide healthcare coverage for his state’s uninsured and claimed it would save taxpayers the cost of charity care. Sound familiar? It should. Governor Jon Corzine promoted a similar program for New Jersey during last year’s election campaign.

We said at the time, Corzine’s numbers just don’t add up and now it clear it hasn’t added up to savings for Maine’s taxpayers. Instead Maine’s program has added up to a new tax on the state’s privately insured citizens.

Corzine’s plan was supposed to cover an additional 776,000 to 1.2 million people for an unbelievable up front investment of $15 million. Given the state’s multibillion dollar deficit, Governor Corzine has scaled back his plans for the coming year and proposes adding 259,000 uninsured children. Once again, this is supposed to save taxpayers money by reducing expensive charity care costs.

Here’s how well this concept worked in Maine:

Gov. Baldacci promised that his new program would insure the uninsured and save the state money. It's a bit hard to see how, when it cost $19.5 million to cover 1,600 previously uninsured people. Nevertheless, the governor says that it does--and that now Mainers must pay it all back!

The reasoning goes like this. By enrolling the uninsured, Dirigo Health [the state of Maine’s Health Care System] would reduce "cost shifting," which happens when unpaid bills are passed along to other paying patients in the form of higher costs. So when individuals have coverage, the insurer pays most of the bills, reducing the chance of unpaid bills. This reduction in bad debt would become savings--which Maine could claim for the state.

The Dirigo board is levying a Savings Offset Payment, or SOP--a remarkably innovative name for a new claims tax--to "recover" every dollar that the state says it has "saved." This SOP is similar to a sales tax; a 2.4% surcharge is added to all paid health-care claims. When applied, this new tax will cost the average individual about $70 and the average family about $200 a year--at a time when most individual insurance policyholders are already absorbing a 16% increase in their insurance premiums.

But, you may ask, if the program is saving all this money, why is a new tax necessary? The answer is that without the SOP, Dirigo Health's high costs would bankrupt the program.

The SOP, effective last month, applies only to individuals, small businesses and other businesses buying health insurance from a Maine insurer or using a third-party administrator. By raising insurance costs, this tax may end up compelling some individuals to drop their coverage. But, hey, maybe they too can get subsidized coverage under Dirigo.

It also threatens the very financial viability of the private insurance market in Maine.

Wednesday, February 15, 2006

OpinionJournal Federation

The Wall Street Journal is launching a new website called the OpinionJournal Federation which will offer daily content from top political Web sites and blogs. OpinionJournal.com editors will select at least one article each week from a Federation member site for publication on OpinionJournal.com, which will also feature overviews and links to all Federation members.

Charter members of the OpinionJournal.com Federation include RealClearPolitics.com, the American Council on Science and Health, The American Spectator magazine, City Journal from the Manhattan Institute, the Claremont Institute, Commentary magazine, the Competitive Enterprise Institute, the Federalist Society, First Things magazine, the Heritage Foundation, Larry Sabato's Crystal Ball, The New Criterion magazine, the Pacific Research Institute, the Property and Environment Research Center, and the Reason Foundation.

Political blogs also will participate, including Dynamist.com, Eduwonk.com, Instapundit.com, Overlawyered.com, Volokh.com and Enlighten-NewJersey*. All participating members will provide articles for publication on OpinionJournal.com.

"The OpinionJournal.com Federation will be the premiere gateway to political commentary on the Web," says Tony Lee, publisher, OpinonJournal.com. "This Federation will offer viewpoints and commentary that will enhance the observations of our editors and columnists."

The first featured article is – Divided We Stand. Check it out.

*Just kidding about ENJ

A New Jersey First

A new ad program, currently launching in New Jersey will allow advertisers to have logos and text messages engraved on eggs. Chains such as Albertsons, Food Town and IGA, will be included in the initial roll-out of the program.

Total number of views per egg is 4.4, according to a 2005 study by Knowledge Systems & Research of Syracuse. The etching process has been approved by the FDA originally to allow etching of expiration dates and egg tracking numbers.

Tuesday, February 14, 2006

A Giant Property Tax Break

James Cassella, Mayor of East Rutherford: "Why all of the sudden do the Jets and Giants not have to pay property taxes? How can they legitimately say all this retail can be built without somebody having to pay property taxes, just like everyone else in East Rutherford, and for that matter, everywhere else in the state of New Jersey?"

It’s not really all of a sudden. We noted back in April the stadium deal called for the team’s property taxes to be frozen for an additional 25 years. We also said nearly a year ago, that if the teams “were taxed at the same rate as our property, the New York football teams would be paying well over $12 million a year in property taxes”.

Under the deal, the teams would pay a flat $1.3 million fee, similar to a property tax assessment, called a Payment In Lieu Of Taxes or PILOT. The $1.3 million figure is based on the amount currently paid by the New Jersey Sports and Exposition Authority.

But Cassella says taking into consideration the much-enhanced new stadium and its related development, a more realistic figure for the PILOT would be $10 million to $15 million.
The Mayor is right, why do New York football teams get a break on their property taxes? It’s just a shame it took Cassella a year longer than us to figure it out. The again, we are in the habit of looking out for New Jersey’s taxpayers. It’s too bad the majority of the state’s politicians could care less about those paying the bills – we’re just taxpayers.

Property tax breaks on top of paying off the debt on the old stadium to the tune of $115 to $120 million and ten of millions more in infrastructure upgrades, all at taxpayers expense. Cheaper rent on the land than the teams presently pay, less revenue for the state…. There’s nothing in this deal for New Jersey besides debt and the thrill of hosting two New York football teams.

Kill the deal Governor Corzine, there’s still time.

Monday, February 13, 2006

The Dominance of the American Economy

We had written a second response to Thurman Hart’s “The State of the Lie and his follow-up post - Correction - and further analysis, but have decided to hold off publishing it until it could be rewritten more charitably towards the XpatriatedTexan. Our goal on this blog is to enlighten and not lambaste a fellow New Jersey blogger. With that in mind we are busy editing.

Hopefully our post, when published, will provide readers with an understanding of the state of the U.S. economy and why as President Bush said: “the American people have turned in an economic performance that is the envy of the world”.

Until then, this one quote from Going for Growth, a report produced by the Paris based Organization for Economic Co-operation and Development (OECD), sums up our findings:

Over the past decade, the gap in GDP per capita relative to the United States has widened in a number of countries, including the large continental European economies and Japan.
Today we came across an article by Fareed Zakaria in Newsweek that goes to the heart of our discussion about the U.S. economy in comparison to our European counterparts. Zakaria’s article, The Decline and Fall of Europe, highlights some of the findings of the Going for Growth report and its stark conclusion – “Europe is in deep trouble.”

Europe is in deep trouble because many of the economic and social polices the left in the United States clamors for are in fact the root cause of Europe’s decline. Perhaps this is why many “progressives” refuse to acknowledge the success of the American economy and attempt to discredit any U.S. tax, economic or social policy that is the antithesis of those typical in Europe.

The following are some key points from Zakaria’s piece:

It's often noted that the European Union has a combined gross domestic product that is approximately the same as that of the United States. But the EU has 170 million more people. Its per capita GDP is 25 percent lower than that of the U.S. and, most important, that gap has been widening for 15 years.

If present trends continue, the chief economist at the OECD argues, in 20 years the average U.S. citizen will be twice as rich as the average Frenchman or German. (Britain is an exception on most of these measures, lying somewhere between Continental Europe and the U.S.)

People have argued that Europeans simply value leisure more and, as a result, are poorer but have a better quality of life. That's fine if you're taking a 10 percent pay cut and choosing to have longer lunches and vacations.
But if you're only half as well off as the U.S, that will translate into poorer health care and education, diminished access to all kinds of goods and services, and a lower quality of life.

Two Swedish researchers, Frederik Bergstrom and Robert Gidehag, note in a monograph published last year that "40 percent of Swedish households would rank as low-income households in the U.S." In many European countries, the percentage would be even greater.

Talk to top-level scientists and educators about the future of scientific research, and they will rarely even mention Europe. In the biomedical sciences, for example, Europe is not on the map, and it might well be surpassed by much poorer Asian countries. The CEO of a large pharmaceutical company told me that in 10 years, the three most important countries for his industry would be the United States, China and India.

In 25 years, the number of working-age Europeans will decline by 7 percent, while those over 65 will increase by 50 percent. One solution: let older people work. But Europe's employment rate for people over 60 is low: 7 percent in France and 12 percent in Germany (compared with 27 percent in the U.S.). Modest efforts to allow people to retire later have been met with the usual avalanche of protests.

What does all this add up to? Less European influence in the world. Its dwindling defense spending weakens its ability to be a military partner of the U.S. or to project military power abroad even for peacekeeping purposes. Its cramped, increasingly protectionist outlook will further sap its vitality.

The decline of Europe means a world with a greater diffusion of power and a lessened ability to create international norms and rules of the road.

Think of the dollar. For years people have argued that it is due for a massive drop as countries around the world diversify their savings. But as people looked at the alternatives, they decided that the chief rivals, the euro and the yen, represented economies that were structurally weak.

Conspiring With al-Qaeda – Intended Targets Included NJ Refinery

The FBI believes Michael Curtis Reynolds from Wilkes-Barre, Pa. tried to conspire with al-Qaeda to wreck the American economy. Reynolds plotted to blow up the Trans-Alaska Pipeline, a Pennsylvania pipeline, and a New Jersey refinery owned by Standard Oil Co. in Perth Amboy, N.J.

In the FBI sting two months ago, Reynolds was drawn to a meeting with a purported al-Qaeda operative about 25 miles from the hotel, where he expected to receive $40,000 to finance the alleged plot.

The al-Qaeda contact was actually Shannen Rossmiller, a 36-year-old judge who lives in Conrad, Mont. She was working for the FBI.

The sensational allegations, disclosed in a federal transcript obtained by The Inquirer on Friday, reveal a convoluted plot that includes cyberspace intrigue, an elaborate FBI sting, and a clandestine money-drop on a deserted Idaho road.

Authorities said Reynolds' letters, computer drawings and e-mails spelled out his plot to detonate trucks filled with propane along the Alaskan pipeline. This included "information on explosive devices, site plans and placement of explosive devices." He also allegedly planned to blow up sections of the Transcontinental Pipeline, a natural-gas pipeline that runs from the Gulf Coast, through Pennsylvania, to New Jersey and New York City.

"He was doing it as a plan to disrupt governmental function, to change the government's actions in foreign countries, and to impact on the national debate about the war," Assistant U.S. Attorney John C. Gurganus Jr. said at the hearing in Wilkes-Barre.

Reynolds has been held without bail since Dec. 5 on unrelated weapons charges. A U.S. citizen, he is being detained in the Lackawanna County jail.

Sunday, February 12, 2006

Carnival of the New Jersey Bloggers # 39

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Check out the eCache - Blizzard of '06 Edition - of the Carnival of the New Jersey Bloggers #39.

Saturday, February 11, 2006

eCache Hosting Carnival of the New Jersey Bloggers #39

Bob at eCache is hosting the Carnival of the New Jersey Bloggers this Sunday, so get your links over to him by 6:00 pm if you’d like to be included. Send your post information to NJcarnival@gmail.com .

Friday, February 10, 2006

The Birth Of A Tax

State Senator Robert Smith (D-Piscataway) said: "It's a very tiny tax."

That’s the way all taxes are born, tiny. For example, when the federal income tax began in 1913, the tax rate was 1% for the majority of taxpayers and the maximum rate was 7% for people with incomes over $500,000. When the Social Security tax was enacted in 1935, the rate was 1% on the employer and 1% on the employee, on a maximum $3,000 of income.

The same is true of state taxes. New Jersey’s sales tax began at 3%, it’s now 6%, our state income began with a top rate of 2.5 %, and it’s now 9%. And on it goes with every tax government has ever imposed. They start tiny and grow into full fledged monsters, each with their own costly bureaucracies that must be supported with ever more tax dollars.

Smith has introduced legislation in the state’s senate that would create "a new tax on anyone using public water, a proposal Governor Jon Corzine said is worth considering".

Sen. Anthony Bucco, R-Boonton, said the proposal doesn't prevent the state from taking money collected from the water tax and using it for other purposes, as the state has done for 12 years with the now nearly insolvent Unemployment Insurance Trust Fund.
Not to mention the other bankrupt state run trust funds for – transportation, property tax relief and school construction – that quickly come to mind.

We don’t need another new tax, along with the attendant bureaucracy that will be required to monitor and collect the new water tax. We are all for preserving clean water, but the state should use funds from one of the other gazillion fees and taxes it already collects to pay for any necessary programs.

The last thing New Jersey needs is another tax, no matter how "tiny".

Thursday, February 09, 2006

The Boom, Bust and Tax Cycle

New Jersey’s unemployment insurance (UI) fund is now "dangerously close to insolvency” because lawmakers have diverted the money to reimburse hospitals for treating the uninsured.

The state has taken $4.67 billion from the UI fund since 1993, leaving it with a projected balance of about $1 billion on March 31, an amount barely above a mandated trigger that would automatically increase unemployment taxes on employers by as much as $400 million.

If that trigger isn't reached this year, Corzine's group predicted it will almost certainly occur in 2007 when unemployment taxes on employers might have to increase as much as $700 million.

Corzine's advisers suggested unemployment tax increases for employers and employees are inevitable.
Gas taxes were diverted from the state’s transportation fund, the fund is now broke and there’s no money for future road construction and maintenance. Unemployment insurance taxes paid by workers and employers were used by politicians in to pay medical bills for the uninsured and now the UI fund is near insolvency.

This is what happens when government takes in surplus taxes in ‘good years” - politicians spend the money on new programs, pet projects or the usual special interest groups. When the ‘bad years’ come and tax revenue is down, the knee-jerk reaction by politicians is to raise taxes. This cycle is repeated over and over again and not just with the unemployment and transportation trust funds.

The state’s income tax revenue is solely dedicated to New Jersey’s Property Tax Relief Trust Fund. The ‘good years’ came and the Abbott School Districts were lavished with money to the point were schools in these districts spend 35 percent or more per student than their non-Abbott counter parts. The ‘bad years’ came and the property tax relief (state aid) to the Abbott schools continued at the same generous levels, while property tax relief (state aid) to the others districts declined and rebate checks were cut. Now the cry is to raise taxes, again.

Before passing laws to raise taxes, lawmakers should pass laws mandating transportation and unemployment trust fund tax revenue be used solely for the purpose the taxes were enacted – transportation infrastructure and unemployment compensation. Revenue from the state’s income tax must be distributed equitably and in surplus years, placed in a ‘rainy day fund’ for property tax relief in down years or returned to the people who actually paid the surplus taxes.

The lawmakers in Trenton have spent every tax dime they could get there hands on and then some. Surpluses were spent and built into all future state budgets, with never a thought given to the inevitable downturn in the business cycle. Taxes are then raised, more revenue is taken in than needed and then that money is spent. On and on the boom, bust and then tax cycle goes.

This has got to stop now. This year’s state budget must be based upon existing revenue streams period - no increased or new taxes. The state should live within its means, that is what responsible taxpayers must do, so should the state.

Update: A Blog For All has more on this subject. And NJ Conservative reminds us the NJ Schools Construction Corp. is another bankrupt, bottomless money pit for tax receivers.

Wednesday, February 08, 2006

Auditor: New Jersey Budget Saving Ideas Ignored

This should come as no surprise. New Jersey State Auditor Richard Fair told lawmakers Tuesday that his department’s money saving recommendations have been ignored, costing taxpayers millions of dollars in unnecessary government spending.

Lawmakers beginning to grapple with a 2006-07 budget deficit that could exceed $5 billion — and facing the prospect of possible tax increases — questioned why no one followed up on the audits.
Fair explained that the audit department’s money saving recommendations had faced resistance from state government departments and pointed out the State Auditor does not have the power to force departments to make recommended changes. Fair said his recommendations included more than $100 million in recurring revenues the state could generate and millions more in one-time savings.

"When people find out no one's minding the store, they start taking advantage," Fair said.

"There's less concern about finding efficiencies than there used to be and there's less understanding about the rules and regulations than there used to be," he added later. "You wouldn't have seen all these no-bid contracts 25 years ago because there was someone making sure that it didn't happen."
For those interesting in giving Trenton a hand in the budget process, the state has a new website where anyone can suggest budget cuts, with their names or anonymously - http://www.njbudgetcuts.com/.

Roberto at DynamoBuzz has already submitted his ideas; why not join him with yours?

Tuesday, February 07, 2006

Democrats Seeking New Laws To Drive Businesses and Jobs From New Jersey

Democrat lawmakers in Trenton have done a fabulous job of enacting policies and tax laws to drive businesses and high paying jobs out of New Jersey. As Governor Jon Corzine said in this inaugural address just this past month:

New Jersey’s prosperity is challenged by the deteriorating fundamentals of our economy. To put it simply, we are growing too few jobs, losing high paying, value-added jobs and replacing them with lower paying service work.
Now Democrats in New Jersey’s senate are working on driving out entry level and service sector jobs from the state:

Senator Stephen Sweeney (D-3 of West Deptford), introduced a bill that would require businesses employing 1,000 or more employees in New Jersey to pay at least $9.68 per hour plus $4.17 per employee hour in health insurance benefits.

Sweeney’s move is aimed at jacking up the cost of labor and consumer prices at Wal-Mart and other "big box" retailers like Target, Home Depot and Lowe's Home Improvement. Just one more law to make New Jersey ‘more affordable’ - assuming of course, a combination of fewer jobs and higher prices is your idea of more affordable.

During a Monday debate in the Senate Labor Committee Sweeney said: "New Jersey is broke. I think everyone recognizes that. The taxpayers of the state of New Jersey should no longer be burdened." Sweeney wants people to believe Wal-Mart is to blame for people without health insurance and the high tax burden in our state.

Sweeney must also want people to believe that the added jobs, plus business taxes, property taxes, state payroll taxes, sales and other taxes derived from “big box” employers, their employees and customers are causing New Jersey to go broke. What burden would Sweeney place on taxpayers if “big box” jobs are lost and consumers pay more for goods? That doesn’t matter to guys like Sweeney.

But to really understand Sweeney’s motivation you should know that in addition to being a state senator, Sweeney is also a union official “who has criticized Wal-Mart for what he deems anti-organized labor practices.” In other words, Wal-Mart and other “big box” employees have repeatedly shown no interest in joining unions and paying dues to guys like Sweeney. His union muscle has failed and so now he’s flexing his political muscle to “even the playing field” for union employees. Sweeney and his fellow travelers just don’t want you to figure that out. No, Democrats would rather cloud the issue and blame Wal-Mart for the decline in union rolls, people without health insurance and New Jersey’s financial mess.

Obviously not every “big box” employee is without health insurance, as many are actually covered through their employer’s health care plans or the plans of parents, spouses and domestic partners. Wal-Mart, for example, offers health insurance to every employee, full and part-time. Some elect not to enroll in these programs for a variety of reasons, including cost.

The lawmakers in Trenton are the ones that have caused health insurance premiums in New Jersey to be the highest in the nation and they are the ones that have saddled taxpayers with burden of picking up the tab for the uninsured. The problem is not businesses like Wal-Mart or their employees; the problem is with the laws passed in Trenton that have priced insurance out of reach for many lower income workers.

If Democrats in Trenton were really interested in reducing the cost of health insurance in New Jersey, they should take a lesson from Kansas where a health insurance policy for a family of four can be purchased for little in as $172 per month as compared to $1,200 per month in New Jersey. However, it seems they would rather demagogue the issue and work towards adding more people to the state’s health care rolls, placing an even greater burden on taxpayers.

The same goes for the Democrat’s anti-business, anti-job policies and laws they have foisted on New Jersey:

"The state should not be in the business of micro-managing companies' payrolls," said Jeanette Issenman, vice president of government affairs with the New Jersey Commerce and Industry Association. "This bill sends an anti-business message to companies across the nation at a time New Jersey is trying to attract corporations."
When all else fails the Democrats can always blame President Bush.

Monday, February 06, 2006

Democrats Call For Tax Cuts and Flat Income Tax Rate

American real GDP, “the most comprehensive measure of economic activity”, has increased by an average of 3.85% in the last two years. During those same two years, federal tax revenue has increased by 22%. Those “Bush tax cuts” have certainly been effective, haven’t they?

In Massachusetts, happy to have a flat income tax, the Republican Governor is tallying up the state’s surplus and proposing a tax cut. Good for our friends in Mass, they knew better than to vote for tax increases and progressive rates. Their smart thinking and voting has paid off. (We’re beginning to think Mass. voters send Kennedy and Kerry to the U.S. Senate to keep them out of the state and away from their state’s economy.)

Now it looks as though Rhode Island Democrats have decided to face facts - their state’s progressive income tax is hurting the state’s economy. The state’s lawmakers are calling for a flat tax – one that would change the current income tax rates, ranging from 3.75% - 9.9%, to a flat rate of 5.5%. Will wonders never cease?

Here’s hoping New Jersey’s Democrats will discover reality and take a lesson from President Bush and their “progressive” New England counterparts, lower tax rates and tax cuts work. Cut state spending and lower New Jersey’s tax rates and watch our economy fly. Hey, hope springs eternal. (You didn't think our post title applied to the federal government or New Jersey did you? - We should be so lucky!)

From today’s Political Diary (subscription required):

For all of their famous liberalism, Massachusetts voters have consistently voted down attempts to modify their state's flat tax, which imposes a single rate of 5.3% on all taxpayers regardless of income.

Now neighboring Rhode Island, which has a progressive income tax with rates ranging from 3.75% to a staggering 9.9%, is considering its own flat-rate tax to keep jobs and businesses from leaving the state.

The news is that the campaign is being led by Democrats. Last week, House Speaker William Murphy and fellow House Democratic leaders held a press conference in which they talked up the need to make Rhode Island more tax-friendly to high-income "decision makers." Mr. Murphy told the Providence Journal that the Ocean State's high tax rates not only drive away jobs but also chase away charitable contributions when its wealthy residents move to Florida, a state with no income tax.

Under the Democratic proposal, taxpayers would have the option of paying a flat-rate tax that would eventually fall to 5.5% with no exemptions and no deductions. To sweeten the pot, the Democratic proposal also includes a two-day sales tax holiday set for next August as well as a tax-free week in which residents could buy up to $2,500 worth of "energy efficient" items without any sales tax.

Astonishingly, the flat tax proposal may not even be much of a point of dispute in this year's race for governor. A spokesman for Republican Governor Don Carcieri welcomed the Democratic tax cut plan and said he looked forward to negotiations over it.

Lt. Governor Charles Fogarty, the most likely Democratic candidate, also endorsed the proposal by House Democrats as "an excellent starting point" in an effort to improve the state's economic climate, although he said he would continue to focus more on cutting property taxes.

The sour grapes were left to Kate Brewster, director of Rhode Island College's Poverty Institute, who complained that there "is absolutely no evidence or research that cutting taxes for a handful of wealthy individuals will stimulate economic growth."

Perhaps she hasn't noticed that the capital gains tax cut passed by Congress in 2003 has already brought in enough new revenue to pay for itself, and that overall the federal government has taken in 22% more in revenue over the last two years -- a development fueled in large part by the 2003 tax cuts.

It's certainly true that Washington D.C. policymakers -- along with the ones in Rhode Island -- have to do a better job controlling spending but the message that tax cuts work to stimulate the economy is now such a powerful one it's even impressing New England Democrats.

Taxing and Spending New Jersey Into Debt

The Star-Ledger has an article today about New Jersey’s fiscal crisis - Bill comes due for years of fiscal irresponsibility – that sums up what conservatives have been saying for years. The state’s politicians have taxed and spent New Jersey into the ground, while almost all other states are booming.

Despite recurring deficits, the state budget grew about $5 billion the past four years.

What's worse, states like Florida, Massachusetts and New York are talking about cutting taxes even as New Jerseyans digest the fact that their taxes have been raised more per capita than any state's the past five years.
Economists and budget-watchers note the Garden State has a problem mirrored only by a few others - those ravaged by hurricanes or mass layoffs in the auto industry.

At least Mississippi and Louisiana have an excuse. They got clobbered by Hurricane Katrina. Michigan has chronic budget problems. But it has lost more than 300,000 jobs in the auto industry in the past few years.
The country as a whole has experienced growing prosperity and most state coffers are swelling with surpluses. That’s not the case in New Jersey despite “nearly $4 billion in tax increases enacted since 2002”.

In New Jersey, it didn't require a natural disaster to create the $5 billion-and-counting budget gap. Politicians produced it all by themselves.
New Jersey’s budget has increased from $22.5 billion in 2002 to $28.1 billion in 2005 – a 25% increase in state spending in just four years. As Governor Corzine repeated again Thursday night before the New Jersey Chamber of Commerce in Washington: "Our state is pretty much broke." The state now faces a budget gap for next year estimated to be in excess of $5 billion.

Over the past five years, taxes rose $434 per capita, far more than any other state. At the same time, the state went on a spending spree financed in part by deficit borrowing now banned by the state Supreme Court.
As we have previously pointed out, Georgia has a population slightly larger than New Jersey’s, but has a state budget that is 60 percent less. That’s a huge difference in spending, even through Georgia is geographically much larger and provides 60% of the necessary funding for its public schools. The reverse is true for New Jersey, where 60% of the total tab for schools is funded through property taxes.

For a comparison closer to home, look at the difference between Pennsylvania and New Jersey. Pennsylvania is a much larger state and has a population about 43% greater than New Jersey’s, and yet has a state budget that is about 20 percent less than ours.

New Jersey's budget is now $4.5 billion bigger than Pennsylvania's, even though that state is much larger and has 3.7 million more people.
New Jersey has enacted huge tax increases since 2002, while the politicians in Trenton have “spent like drunken sailors.” Property taxes have continued soaring to keep up with the rising cost of public schools. Meanwhile, the percent of state property tax relief, to all but the Abbott school districts, has continued to slide.

The budget adopted last July totaled $28.3 billion. Corzine's transition team estimates that a combination of soaring expenses and declining revenues could create a gap as wide as $5.5 billion if nothing is done to address it.
The Democrats in Trenton have slapped the people of New Jersey with $4 billion more in taxes and yet the state is facing declining revenues. Gee, how’d that happen? The answer is quite simple. You can’t tax a state into prosperity and high tax burdens actually drive taxpayers, investment and businesses out of the state. When something is taxed you get less of it, whether it’s income, smoking, investment or imports.

Dan Clifton, a budget analyst with Americans for Tax Reform believes the nearly $4 billion in tax increases enacted since 2002 is one reason for the state's malaise. "There was no cutting," Clifton said. "It all was smoke and mirrors."
Former state Treasurer Clifford Goldman, a Corzine transition team adviser said: "We have dug our own hole." A huge hole to be more precise, one that has been exacerbated by promising unsustainable benefits to state workers and teachers.

Former Acting Governor and now Senate President Dick Codey said “Corzine can't eliminate the budget woes in one year. He questions whether the state can make the full $1.7 billion pension payment Corzine promised during the campaign.”

"We've got to start addressing the structural deficit, no ifs, ands and buts about it," Codey said. "I don't expect, and I don't expect the governor does, that we can fix it all in one year."

Codey believes the actual deficit is in the $3.7 billion range -- if Corzine doesn't make such a big pension payment and foregoes his campaign promise to boost property tax rebates by $550 million.
So what’s to be done about the state’s financial mess beyond breaking campaign promises? Well, as you might expect the usual liberal response is to raise taxes. While other states were counting their surpluses, New Jersey was raising taxes and counting its deficit. While other states held the line on spending, New Jersey couldn’t spend taxpayer money fast enough to suit the usual special interests.

Jon Shure, president of New Jersey Policy Perspective, a liberal think tank, traces some of the budget problems to the sales and income tax cuts of the 1990s. He said by one estimate, those tax reductions cost New Jersey coffers about $15 billion over a dozen years.
That’s right, according to the “progressive” way of thinking, budget problems arise because taxes aren’t high enough. The Jon Shures of New Jersey never notice that states like Georgia and Pennsylvania live quite nicely with far less state spending.

It never dawns on “progressives” that it is spending that causes deficits and that New Jersey spends too much. No, according to folks like Jon Shure, it’s the fault of the hard working people of the state for not giving up more of their income to taxes. The liberal crowd hasn’t taken stock of the fact that New Jersey has enacted huge taxes increases since 2002 and still we find ourselves with a mammoth state budget deficit.

"Not only is our economy lagging, but we squandered prosperity when we had it and we're paying the price for that," Shure said. He believes the state should expand the sales tax to items that weren't available a few decades ago, such as use of the Internet.
New Jersey’s economy may be lagging, but it is not because the people of New Jersey haven’t been taxed enough. Rather it is precisely because the state has taxed and spent too much. Our prosperity has been squandered alright, by the politicians in Trenton.

Governor Corzine will deliver his budget address on March 21, any bets on who will be called upon to ‘sacrifice’?

Sunday, February 05, 2006

Carnival of the New Jersey Bloggers # 38

Click the Graphic for More Information

Philomathean hosts the Carnival of the New Jersey Bloggers #38 this Super Bowl Sunday.

Friday, February 03, 2006

Justin J. Rivera: His Thoughts On Creating a Better New Jersey and NJGOP

I would like to get started by letting you know who I am and how I got into politics and why I feel the way I do about the current state of the Republican Party. My name is Justin J. Rivera. I'm twenty-four years old and started getting into politics when I was twenty, back in 2001.

I volunteered for the Schundler for Governor Campaign because as a young conservative, I really saw him as a perfect example of how conservative values work anywhere you institute them. Even in the face of Hudson County Democratic Machine.

Unfortunately as the campaign progressed I saw how Party moderates basically turned their backs on Mayor Schundler because he was beating one of their machine moderates. I thought it spoke volumes about the NJGOP - they would rather hand New Jersey over to Jim McGreevey than support a conservative.

I did small local things politically over the years to follow, and even ran in a couple of School Board elections in Guttenberg, losing both times by slim margins, until I moved to North Bergen, where I currently reside.

I've been really discouraged over how spineless New Jersey Republicans have become while the GOP does so well all throughout the rest of the country. The day Doug Forrester won the GOP primary I knew that it going to be more of the same.

I really felt like there was no hope for me as a conservative Republican in New Jersey. That was until I read the day after the election that Bogota Mayor Steve Lonegan was calling on NJGOP Chairman Tom Wilson to resign over the mistreatment of hard working conservatives who were silenced by moderates.

I decided to look Mayor Lonegan up and contacted him letting him know that he really put a spring back in my step. I'm motivated now more than ever to do whatever I can to give conservatives a voice and show what Republicans are REALLY supposed to stand for.

Of course the first thing I feel any aspiring New Jersey Republican legislator should be advocating is real and substantive tax relief and reform. New Jersey taxpayers are looking for answers when it comes to their heavy tax burdens and neither the Republican nor Democrat Party has given them any real answers. This has been going on for decades. There is no time like the present to show that CONSERVATIVE Republicans have the answer.

For starters, Jim McGreevey's disastrous "Millionaire's Tax" needs to be immediately repealed. Every action has an equal and opposite reaction and raising taxes on "rich" people is no exception. This tax will drive thousands of high-income residents nearing retirement age to relocate their tax residences to Florida, Nevada, Texas or New Hampshire, none of which have any income tax at all. The result is that instead of a 41 percent increase in tax collections, these new tax brackets will actually bring in less revenue which puts an even greater burden on the already overtaxed middle class.

We also need to do away with the "Inheritance Tax" or Death Tax as it should be called. This in my opinion is perhaps the most despicable tax of them all. When you wake up in the morning and drink a cup of coffee, you pay a sales tax. When you drive to work, you pay a gas tax. At work, you pay an income tax. If you flick on the light in your home, you get hit with an electricity tax. Flush your toilet, get hit with a water tax. Arrive back home and get hit with a property tax and then you turn on your television only to get hit with a cable tax. Finally when your life is complete you must pay a death tax! In your passing you can't even leave your loved ones some financial stability without Trenton wanting to get their grubby little hands on it!

We need to start lowering things like the income tax, the real estate tax and property taxes. For years politicians have thought that taxing our way out of our problems was a solution. In 1966 liberal politicians promised that a three percent sales tax would "control" property taxes. Then in 1971 it was raised to five percent and raised again in 1982 to the current six percent. The income tax was created in 1977 with a top rate of 2.5 percent. This was raised to 3.5 percent just five years later, then raised to seven percent in 1990 and finally to nine percent today.

New Jersey politicians, Republican and Democrat alike, have taxed and taxed and borrowed and borrowed. The end result? Nothing left with lots of bills to pay! It is absolutely imperative that Republicans stand up for the elimination of wasteful spending. This includes sweeping reforms in the state's welfare programs. Many people receiving assistance are blatantly abusing the system and cheating taxpayers simply because they do not want to work. It is also abused by people who work, but want to get one by on the system.

I can't tell you how many times I've seen this kind of abuse growing up over the years and working as a night manager of a convenience store. This behavior is costing taxpayers dearly and cannot be tolerated anymore. While these changes will take time and tireless effort to implement, I really feel that if Conservatives are given a chance to govern the NJGOP that we can get these reforms through.

I realize that I've said a mouthful and I’m really sorry if this is too long but once I get started it's really hard for me to stop! I would really like to thank you again for giving me the opportunity to go in depth with you about my views and my vision for a better New Jersey.

Justin J. Rivera
North Bergen

Evaluating New Jersey’s Public Schools

The Star-Ledger has put together a great tool to help you evaluate New Jersey’s public schools. They’ve pulled out key information from the New Jersey School Report Card data base – school performance on tests, median teacher salary and experience, spending per pupil, percent school is funded by local revenue sources, and other key financial information.

You can view and rank the information by county or by school district and then drill down to a specific school for more comprehensive information.

This is the second great tool the Star-Ledger has developed recently to help you evaluate property taxes, school funding and performance.

Click for Public School Tool

Click for Property Tax Tool

Thursday, February 02, 2006

The Art of the Lie

Xpatriated Texan doesn’t believe the American economy has fared well under President Bush and takes exception to much the President had to say about it in his State of the Union address.

In his post, the State of the Lie, Hart disputes the President’s assertion that the American economy is the fastest growing of any major industrialized nation. He tries to prove his point, first by using GDP statistics from 2000 through 2004.

Why did he begin his assessment in the year 2000? Well, as Hart explains later, ‘Bush took office in 2000’. Of course President Bush was sworn into office January 20, 2001. What happened to 2005? Who knows, but the 3.5% rate of growth in the U.S. economy last year may have bolstered the President’s case. You know, there’s lies, damn lies and statistics. We’ll give you the real statistics.

The actual annualized GPD growth rate per quarter for the past four years, are shown below. The forth quarter may yet be adjusted, but it did break a streak in which the economy had real growth rates of 3.0% or higher in 10 consecutive quarters. The last time the U.S. economy was on such a rip? That would be 1983-1986, when Ronald Reagan was President.

U.S. GDP Growth

1.1 - Q4 2005
4.1 - Q3 2005
3.3 - Q2 2005
3.8 - Q1 2005
3.3 - Q4 2004
4.0 - Q3 2004
3.5 - Q2 2004
4.3 - Q1 2004
3.6 - Q4 2003
7.2 - Q3 2003
3.7 - Q2 2003
1.7 - Q1 2003
0.2 - Q4 2002
2.4 - Q3 2002
2.2 - Q2 2002
2.7 - Q1 2002

Hart also has calculated GDP growth rates for the same erroneous time period for other selected countries, thus supposedly showing the U.S. economy is not the envy of the world. But, before we get to that, let’s see what the President actually said:

Our economy is healthy and vigorous, and growing faster than other major industrialized nations. In the last two-and-a-half years, America has created 4.6 million new jobs -- more than Japan and the European Union combined. Even in the face of higher energy prices and natural disasters, the American people have turned in an economic performance that is the envy of the world.
Hart says: “We aren't growing faster - we're barely keeping pace.” Well, let’s see, in terms of GDP per capita for the countries our friend has chosen: it’s the United States - $41,800; Canada - $32,800; Australia - $32,000; U.K. - $30,900; France - $29,900; and Germany – $29,700. We’d say the United States is setting the pace, wouldn’t you?

Hart rambles on about capital formation, inflation, net-positive cash flow and budget deficits for his selected countries. We have no idea what he’s talking about as he doesn’t provide much in the way of data. Anyway, he’s concluded the U.S. economy is lagging its peers.

It’s a rather suspect conclusion when you consider the World Economic Forum’s Global Competitiveness analysis agrees with President Bush. In a recently released report assessing the relative condition of economies in 117 countries, here are the results. The group ranked the United States as number 2 in the world behind Finland. Australia comes in at #10; Japan - #11; Canada - #14; Germany - #15, and France - #30. (FYI, you might remember the name of the group – Senator Kerry jetted back from Davos, Switzerland, where he was attending the World Economic Forum, to rally his colleagues for a filibuster against Alito.)

Oh, and creating 4.6 million new jobs -- more than Japan and the European Union combined, despite recent events? It didn’t factor into Hart’s analysis. Why? And then we realized, Hart was quoting from the 2005 State of the Union address, and not the one given this past Tuesday. We checked his SOTU link and sure enough, the date was February 2. 2005.

Okay, we’ll play along. Here’s the Bush quote Hart dissects next, albeit from last year’s SOTU:

In the past four years, we have provided tax relief to every person who pays income taxes, overcome a recession, opened up new markets abroad, prosecuted corporate criminals, raised homeownership to its highest level in history. And in the last year alone, the United States has added 2.3 million new jobs.
First, Hart takes up the tax issue and says: “Technically, it's correct.” But, apparently the stated fact is beside the point. Our friend then moves into the tax cuts have caused a huge federal deficit argument. We beg to differ, government spending causes deficits. In any case, after the ‘Bush tax cuts’ federal revenue increased to the highest levels in history.

On to overcoming a recession. Hart does some analysis and concludes – “No recession. How can we bounce back from a recession that never happened?” That might come as a bit of a shock to Senator John Kerry. During the presidential campaign of 2004, Kerry used to say Bush has “the worst economic record since Herbert Hoover.” Herbert Hoover is usually blamed for starting the Great Depression, and for good reason. Hoover raised the top income tax rate from 25 percent to 63 percent and signed the Smoot-Hawley tariff, a 40 percent tax on imports. But we digress. Most people acknowledge Bush inherited the start of a recession when he took office in 2001.

Hart grudgingly concludes if you fudge the numbers, maybe there was a recession in 2001, but it was one of the shortest in history. “I would hope, after four years, that we would be recovered. It's no great accomplishment.” Bush was actually speaking after three years - Hart’s quoting from last year’s SOTU, remember? But, why is limiting the duration of a recession not an accomplishment? Two things happened in 2001 that had a major impact of the nation’s economy - first was the ‘Bush tax cut of June 2001’ and second, the terrorist attacks of September 11, 2001. Obviously, 9-11 was a costly blow to the economy and thankfully, the tax cuts were already in place to mitigate the economic repercussions.

Next Hart disputes the President’s claim that new markets were opened abroad. He doesn’t provide a link or time period, but cites a World Bank statistic indicating U.S. exports as a percent of GDP “shrunk slightly from 11% to 10%.” He does link to a third quarter 2005 BEA report showing a foreign trade deficit. Does he prove new markets have not been opened abroad? Hardly. The U.S. is the largest exporter in the world (importer too) and total U.S. exports grew from $1.072 trillion in 2000 to $1.152 trillion in 2004. For a review of the new markets opened to the American economy, please see U.S. Trade Policy Agenda and Annual Reports.

Next, “prosecuted corporate criminals.” Hart writes: “Everything, except for Martha Stewart's conviction, has been incredibly slow to develop and there has been absolutely no action on corporate accountability. Read the Corporate Crime Reporter and see if you agree. As for no action on corporate accountability, how about the Sarbanes-Oxley Act of 2002, does that little piece of corporate accountability legislation count? For more on the Bush administration efforts in this area, check out the Justice Department Memo on Federal Prosecution of Business Organizations.

Homeownership? Hart notes “the growth in home ownership is very slight” and “more people own homes, but that's due to a growing population, not growing prosperity.” First of all, growth in homeownership is reported as a percent of U.S. households owning versus renting a home. As the population grows, so do the number of households. That’s why the statistic is reported as a percentage. It enables comparisons from year to year, regardless of population growth.

Homeownership in the United States is at the highest level in history at 69% both this year and last year. Over the last 30 years homeownership had remained at about 64% until 1995, when it increased to 65.1%. By the end of President Clinton’s term in 2000, homeownership was at 67.5%. Interestingly, Republicans took control of Congress in 1994 for the first time in 40 years. The baby boomers coming into their peak income years didn’t hurt.

Unsurprisingly, homeownership in the high tax/ high cost-of-living northeast and west now stands at 65.4% and 64.6%, respectively. While in fly-over-country - the south and midwest -with lower taxes and a lower cost-of- living, homeownership rates are 71.1% and 72.8%. The west and the northeast have lagged in homeowner for the entire 30 year period.

Hart ends his post with these words:” I don't know where the President is seeing all this wonderful growth he babbling about. Perhaps he needs glasses. Perhaps he needs new advisors that don't lie to him. We definitely need a new President.”

Someone may need glasses, advisors that don’t lie and to stop babbling – it just doesn’t happen to be President Bush. The country will have a new President in 2009. What do we do about getting political science professors that know what the hell they are talking about?

Update: This update is in response to a comment left by Thurman Hart on this post, the Art of the Lie.

In you comment you concluded: “It is, unfortunately, what I've come to expect from this blog. It's a shame, because I've seen flashes of intelligent and straightforward discussion. To this point, they remain flashes only.”

Who are you kidding? You attempted to prove various statements Bush made in his SOTU were misleading - “the state of the lie” - and we proved each of your conclusions wrong. You have not refuted any data or conclusions we presented in our post. Now you have the temerity to wag your finger at us.

You obviously felt no compunction about claming we need a new President based on the baloney you wrote or in calling Bush’s advisors liars. If you didn’t know ‘where the President was seeing wonderful growth’ when you wrote your post, you should know it now after reading ours. You certainly have no qualms with “quoting around parts” of our post or the President’s SOTU. We dispute your claim we did so in our post.

We realize you are human and anyone can make an honest mistake, but your post was riddled with mistakes, unsubstantiated claims and false conclusions. The fact that you are a political science professor is all the more troubling.

Yes, you linked to the wrong SOTU, but that was the least of your errors. The following are the President’s points you considered ‘misleading. And we repeat you failed to prove any of his points were untrue or misleading.

America's economy is the fastest growing of any major industrialized nation.
Provided tax relief to every person who pays income taxes
Overcame a recession
Opened up new markets abroad
Prosecuted corporate criminals
Raised homeownership to its highest level in history
Now, as to the remainder of your comments:

You attempted to prove the U.S. economy was not the fastest growing of any major industrialized nation by presenting average growth in GDP purportedly for the years 2000-2004. You erroneously stated President Bush was in office in 2000 and you mistakenly cite data from 2000 in other areas of your analysis. Perhaps it’s just another of your “careless” mistakes, like quoting form the 2005 rather than the 2006 SOTU. For us it reinforces the idea that you don’t know what you’re talking about.

Your excuse for not including 2005 GDP data was “If you look at the data I used, then it's pretty easy to see why my analysis is cut short - that's where the data ends.” So if you can’t find the essential data in question, you can just pretend it doesn’t exist? You are unable to back up your snide comment “So much for the contention that we're growing faster than anyone else. ”You are proving our point; you don’t know what you’re talking about.

We provided data, with link, showing U.S. GDP growth has in fact been excellent over the past several years. We also provided data, with source, proving our country’s per capita GDP far exceeds the “peers” you selected for comparison. Your statement - “We aren't growing faster - we're barely keeping pace” - is totally false. Once again demonstrating you don’t know what you’re talking about.

You wrote in your comment: “However, you admit: "We have no idea what he’s talking about" and conclude: "What do we do about getting political science professors that know what the hell they are talking about?" and Um, forgive the observation, but if you don't know what I'm talking about, then how can you judge what I'm talking about?

Here is what we actually wrote: “Hart rambles on about capital formation, inflation, net-positive cash flow and budget deficits for his selected countries. We have no idea what he’s talking about as he doesn’t provide much in the way of data. Anyway, he’s concluded the U.S. economy is lagging its peers.”

Why did you purposely use a partial quote, take it of context and attempt to make it sound as though we didn’t grasp your post? Let us take a guess. You were trying to discredit us in a false and condescending manner.

Beyond you erroneous GDP data sets and conclusions, you attempted to prove our economy is not the fastest growing of any major industrialized nation with a few more ‘facts’. The ‘facts’ you throw out are actually conclusions and are not backed up with data to prove your point or a link to a fuller explanation of how one might reach your conclusions regarding the current state of the U.S. economy.

Your additional “facts’ were as follows:

Of the countries listed, only the UK lags the US in capital formation.
What year or years did you use to arrive at this conclusion? Is the U.S. currently lagging in capital formation? What are the statistics for each country? If the U.S. is currently lagging in this area, by how much? Is the difference widely considered to be significant? We don’t know the answers to these questions because you didn’t provide the data. It was your job to prove your conclusion with the relevant facts. You haven’t provided facts, only your opinion based upon data unknown by your readers.

France and Germany have lower inflation, with the other countries slightly higher than our 2% average.
What year or years did you use to arrive at this conclusion? What is the current rate of inflation for each country? How much lower is inflation in France and Germany? Are France and Germany experiencing deflation? What do you mean by slight? Why did you even bother to bring up inflation, as it is low and appears to be under control? Given all the economic measures, why did you choose inflation, rather than say, unemployment, for comparison? We don’t know because you didn’t provide the data or an explanation as to why you considered current rates of U.S. inflation significant or alarming.

Oh yeah, Australia and Canada both have a net positive cash-flow (no deficit). Germany and the UK have a lower deficit and France is about even with us.
Once again you provided no specific information for you readers to evaluate – years analyzed, actual statistics, etc. While cash flow is one economic measure, do you believe it is used to calculate economic growth?

Now do you understand why we wrote “we don’t know what he’s talking about” in relation to your points on capital formation, inflation and deficits? How could anyone know, because you failed to provide the necessary time frame, statistics, etc. for each of your statements. The only conclusion a reader could reach was the on that we did – “Anyway, he’s concluded the U.S. economy is lagging its peers.” Did we miss your point?

We provided data, with link, to the World Economic Forum’s Global Competitiveness analysis that proved otherwise. The U.S. may not be #1 in every single economic metric, but the Forum’s analysis and rank provides the complete economic picture for the 117 countries evaluated. Your cherry picked data and conclusion the U.S. lags its peers are off the mark. Again, highlighting you don’t know what you are talking about.

In your comment you write: “As far as not giving data, I linked directly to the World Bank and the US Bureau of Economic Analysis. So, you can look for different figures (and there are a ton of economic analyses out there) but it's simply wrong to say that the data isn't there.”

Yes, you linked to the World Bank site and now you tell us we “can look for different figures (and there are a ton of economic analyses out there)”. Why should we waste our time looking for “figures” in a vain attempt to prove your point? If the “figures” were “out there”, why didn’t you provide them? Our guess is you can’t or you would have included them in your post or in your comment. That was our point.

It’s clear the President was speaking about the state of our economy at the time of his address. Using old data is not relevant to the President’s point about the current state of the economy. Further, he was comparing the U.S. against the economies of major industrialized nations. This refers to the G7 – United States, Canada, United Kingdom, France, Germany, Italy and Japan. This is something you should have known.

In your GDP analysis you left out two G7 countries, Italy and Japan, and replaced them with Australia and high income“(HI) countries. Australia has a workforce of about 11 million people, hardly an economic peer to the U.S.

The World Bank source you used considers a high income country to be one with per capita GDP of $10,066 or more. (U.S. per capita GDP is $41,800). High income countries include such major industrialized powerhouses as Andorra, Cayman Islands, Greenland, Liechtenstein, Slovenia, U.S Virgin Islands. The list does, of course, include others, plus the G7.

Your comparison of major industrialized nations to “high income” nations is a poor comparison and basically meaningless. To include this statistic demonstrates you don’t know what you’re talking about.

We did notice 2004 GDP growth rates for the G7 from the source you cite - World Bank - World Development Indicators database – here they are:

G7 GDP - 2004
Australia – 3%
Canada - 3%
France – 2%
Germany – 2%
Japan – 3%
U,,K - 3%
Italy – 1
U.S. - 4%

Most people would conclude the U.S. GDP was growing at a faster rate then the major industrialized countries for 2004. For some reason you don’t. Could it be because you don’t know what you’re talking about?

Your link to the US Bureau of Economic Analysis was provided to supposedly prove there was no recession in 2001 and the link comes after your conclusion “So much for the contention that we're growing faster than anyone else.” Our comment about your lack of data and links referred to your ‘points’ on capital formation, inflation and deficits.

You wrote in your comment: “I don't mind disagreement, and although I hate that I linked to the wrong statement, I don't mind that you caught that mistake. I am, after all, human. However, I really wish you would actually represent what I said rather than quoting around certain parts of the post.”

It would seem that you mind disagreement very much and make excuses for your errors and lack of data to back up your claims and unfounded conclusions. You pretend our comment “we don’t know he’s talking about” applied to your entire post when in fact it’s clear we referring to your lack of data to support your points in specific parts of your post.

You provide one example of our supposed misrepresenting your writing, taking exception with our statement:” Hart notes “the growth in home ownership is very slight” and “more people own homes, but that's due to a growing population, not growing prosperity.” Perhaps you could explain how we misconstrued your point? What is you point? We thought we were attempting to prove the President’s remark - “raised homeownership to its highest level in history” - to be false.

Your linked source proves the rate of homeownership is at the highest level in history and therefore, Bush’s statement was true.

You compare growth in homeownership during Clinton’s 8 years in office to Bush’s 5 years. What was that supposed to prove? It's not an appropriate comaprison - 5 years to 8 years.

You also claim there was a net loss in homeownership under President Bush I, as well as, President Reagan. How did you arrive at those conclusions? For example, the average homeownership rate for GHW Bush’s first year in office was 63.9 and in his last year it was 64.2.
In any case, what do these statistics have to do with refuting the President's claim about current homeownership rates? Nothing.

Bush was referring to the rate of homeownership and you understood he was referring to the current rate. And we know that because you started your paragraph with "Home ownership rates?” All of the data you provided were in terms of the rate (percent) of homeownership. Then you concluded your paragraph with: “More people own homes, but that's due to a growing population, not growing prosperity." So what conclusion did you want your readers to draw from your final sentence on the topic? We concluded you didn’t know what you were talking about.

You wrote in your comment:: “In fact, it's the exact same link that you provide. I wonder how you found it...” What are we supposed to get out of that snarky comment? That we wouldn’t have been able to find U.S. homeownership data without your help? And by the way, we linked to a different U.S. Census report than you. Your link was to a report entitled, 4th quarter 2005 - Table 5, and our link was to a report entitled, Historical Tables – Table 14. Our link provided more comprehensive data, including homeownership rates by region. As you would say “so much for” exact same. We would say you don’t know what you’re talking about.

So what was unfortunate about our post? That fact we pointed out your analysis was poorly sourced and reasoned? The fact we demolished every false claim you made against the President in your post?

You are quick to call others liars, wing nuts and other pejoratives. We may be only humble “plumbers” and you a “noble professor”, but at least we can recognize bullshit when we see it and your post was complete bullshit.

Yes, we read your post last month that included your thoughts on social class, your ’’noble calling’ and your high regard for a professor’s opinion:

Money, surprisingly, isn't enough to boost you into the next social class. Otherwise union plumbers would be ranked above university professors, and most people would agree that they aren't. The professor has more prestige attached to his or her profession, is generally considered to follow a more noble calling, and his or her opinion will generally carry more weight in an open debate.
We’ll take a plumber’s facts over a professor’s opinion any day. Most sensible people would.

Update II: This update is in response to a second comment left by Thurman Hart on this post, the Art of the Lie.

You wrote: "As I said, take a class and learn what you are talking about."

We’ve taken our classes and we know what we are talking about. If your post – “state of the lie” is representative of your understanding of economics, then you should consider remedial classes in the subject.

You apparently also have a problem with reading comprehension if your comment is representative of your skills in that area. Here’s what you wrote in your comment : “To say a plumber knows more about everything than anyone else, however, is about as stupid of a statement that anyone can make.”

Yes, that would be a stupid statement; the thing is we didn’t make it. Here’s what we wrote: “We’ll take a plumber’s facts over a professor’s opinion any day.”

Our comparison was between a plumber with facts vs. a professor with merely an opinion. Facts are objective and opinions are subjective, regardless of who presents them.

Did you happen to notice the quotes around the word plumber in our sentence that included these words: “We may be only humble “plumbers”.” Our use of the word ‘plumbers‘ was a metaphor.

You wrote: “I have no idea if you're a plumber or not - you simply haven't the courage to even disclose your real name, much less any real area of expertise.”

Does name and occupation really matter when verifiable facts are presented and discussed? Facts don’t change based upon the presenter, because if they did, then they wouldn’t be facts, right? And no, unfortunately we are not plumbers.

Why do you assume it is a lack of courage that prevents us from disclosing “our real names”? That’s your opinion and not a fact. The name or occupation of the person(s) presenting documented arguments and facts is of no consequence. You have disclosed your name and occupation, but we are not aware of “any real area of expertise” you have.

You wrote: “It’s easy to throw stones when you can avoid responsibility by wrapping yourself in anonymity.” How are we avoiding responsibility? Our words and facts are there for all to see and to verify. And in terms of throwing stones – you were the one claiming the President was misleading and his advisors were liars. You were throwing stones at the President and we were deflecting them by presenting the actual facts about the economy. What stones did we throw at you? We presented facts, do you call them stones?

Or perhaps you consider this remark as throwing a stone: “What do we do about getting political science professors that know what the hell they are talking about?” Apparently you thought the shoe fit and you wore it. Note we used the plural – professors.

From our vantage point it seems as though you wrap yourself up in the robes of a professor, as one “follow[ing] a more noble calling” and whose “opinion will generally carry more weight in an open debate.” For those that buy into your notions of social class and status, perhaps knowing occupation makes a difference. It doesn’t to us.

We are not hung up about occupation, level of education, titles, etc. and see no honest purpose in trying to sway opinion one way or the other with these details. Perceived social, professional or academic status has never impressed us and we prefer to let facts and logic do the persuading. The fact we are anonymous is a red herring, is off topic and has nothing to do with our debate about the state of the U.S. economy or the President’s SOTU address.

Although, we freely admit it has troubled us to read your posts in which you have described your opinions that you have presented to your students as facts. And our fear is you have been teaching your students the same baloney as contained in your post we have been debating.

You wrote: “Again, I give people credit for being able to follow a discussion. If you can't; then it isn't my fault at all.”

Again you make this false charge. Another condescending attempt to discredit and deflect your failure to prove the President was lying in his statements about the American economy. We give people credit for backing up conclusions with widely recognized facts. We demolished the nonsense in your post and you are trying to claim we just don’t get it. We get it. You are not used to be challenged on the baloney you dish out.

You wrote: “The same thing applies for your station in life - if you feel slighted by the statement that a professor's job carries more status than a plumber's; then you have a problem with reality, not the statement.”

Another condescending statement and one that confuses opinion for fact. In whose reality is a plumber of lower “status” or “station in life” as compared to a professor? Yours? Why don’t you give us the official “station in life” list so that everyone will know where they stand in your pecking order?

Slighted by you remark? No, amused that someone who supposedly holds and promotes so-called “progressive values” writes about “station in life” and believes “a professor's job carries more status than a plumber's” We reject stereotyping people, but then again we aren’t liberal professors.

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