Wintery Knight

…integrating Christian faith and knowledge in the public square

Do tax hikes, welfare spending and minimum wage hikes lower income inequality?

Here’s Heritage Foundation economist Stephen Moore to explain.

He writes:

Massachusetts Sen. Elizabeth Warren recently appeared on one of the late night talk shows, beating the class warfare drum and arguing for billions of dollars in new social programs paid for with higher taxes on millionaires and billionaires. In recent years, though, blue states such as California, Illinois, Delaware, Connecticut, Hawaii, Maryland and Minnesota adopted this very strategy, and they raised taxes on their wealthy residents. How did it work out? Almost all of these states lag behind the national average in growth of jobs and incomes.

So, if income redistribution policies are the solution to shrinking the gap between rich and poor, why do they fail so miserably in the states?

The blue states that try to lift up the poor with high taxes, high welfare benefits, high minimum wages and other Robin Hood policies tend to be the places where the rich end up the richest and the poor the poorest.

California is the prototypical example. It has the highest tax rates of any state. It has very generous welfare benefits. Many of its cities have a high minimum wage. But day after day, the middle class keeps leaving. The wealthy areas such as San Francisco and the Silicon Valley boom. Yet the state has nearly the highest poverty rate in the nation. The Golden State, alas, has become the inequality state.

In a new report called “Rich States, Poor States” that I write each year for the American Legislative Exchange Council with Arthur Laffer and Jonathan Williams, we find that five of the highest-tax blue states in the nation—California, New York, New Jersey, Connecticut and Illinois—lost some 4 million more U.S. residents than entered these states over the last decade. Meanwhile, the big low-tax red states—Texas, Florida, North Carolina, Arizona and Georgia—gained about this many new residents.

What’s wrong? Isn’t raising taxes, growing government and spending more on welfare supposed to make reduce income inequality? Well, the trouble is that you need to think about things from the point of view of the people who create the jobs. People who want to start a business prefer to move to states where they can keep more of the money they earned. So, that’s why there is a mass exodus from states that don’t allow job creators to keep the money they earn. And naturally, they hire workers in their new state once they get there. Eventually people in the high-tax states move to where the jobs are, too.

Stephen Moore has actually measured it:

The least “regressive” tax states [high tax states] had average population growth from 2003 to 2013 that lagged below the national trend. The 10 most highly “regressive” tax states [low tax states], including nine with no state income tax, had population growth on average 4 percent above the U.S. average. Why was that? Because states without income taxes have twice the job growth of states with high tax rates. 

[…]Ohio University economist Richard Vedder and I compared the income gap in states with higher tax rates, higher minimum wages and more welfare benefits with states on the other side of the policy spectrum. There was no evidence that states with these liberal policies had helped the poor much and, in many cases, these states recorded more income inequality than other states as measured by the left’s favorite statistic called the Gini Coefficient.

[…]The 19 states with minimum wages above the $7.25 per hour federal minimum do not have lower income inequality. States with a super minimum wage—such as Connecticut ($9.15), California ($9.00), New York ($8.75), and Vermont ($9.15)—have significantly wider gaps between rich and poor than states without a super minimum wage.

No, I am not an economist, but I think that this is because the real minimum wage is ZERO, and that’s what more people in high minimum wage states make compared to people in low minimum wage states. If Seattle raises the minimum wage to $15 and the workers end up making the real minimum wage (ZERO) because job creators can’t pay them, then naturally the gap between rich and poor increases.

I think it’s always a good idea for people to think about things from the point of view of the small business job creator, and it all makes sense. If you want to get trained in how to do this, I recommend picking up introductory books by economists like Thomas Sowell, Milton Friedman or even F.A. Hayek. The goal here is to achieve good results, not to have good intentions.

Filed under: Commentary, , , , , , , ,

Obama’s irresponsible student loan policies leave taxpayers with trillion-dollar bubble

President Obama's student loan bubble

President Obama’s student loan bubble

This is from Investors Business Daily.

It says:

In 2010, Obama eliminated the federal guaranteed loan program, which let private lenders offer student loans at low interest rates. Now, the Department of Education is the only place to go for such loans.

Obama sold this government takeover as a way to save money — why bear the costs of guaranteeing private loans, he said, when the government could cut out the middleman and lend the money itself?

The cost savings didn’t happen. In fact, the Congressional Budget Office just increased its 10-year forecast for the loan program’s costs by $27 billion, or 30%.

What did happen was an explosive growth in the amount of federal student loan debt. President Clinton phased in direct federal lending in 1993 as an option, but over the next 15 years the amount of loans was fairly stable. The result of Obama’s action is striking. In each of the past six years, federal direct student loan debt has climbed by more than $100 billion. (See chart.)

And since Obama keeps making it easier and easier to avoid repaying those loans, it’s a problem that taxpayers will eventually have to shoulder.

Through words and actions, Obama has encouraged irresponsibility on the part of student borrowers. He constantly talks as if student debt were an unfair burden they unknowingly had foisted upon them.

At the same time, he’s made it easier and easier to avoid paying back student loans in full. Earlier this year, for example, Obama expanded eligibility for his “pay as you earn” program, which limits loan payments to 10% of income, with any debt left after 20 years forgiven.

Students got the message. The St. Louis Fed reports that 27.3% of student loans in repayment are at least a month behind in payments. That’s a far higher delinquency rate than any other kind of debt, and it’s significantly higher than the delinquency rate 10 years ago.

“This overall level of delinquency is very concerning,” concluded authors Juan Sanchez and Lijin Zhu.

A 2013 Consumer Financial Protection Board report found that less than half of this federal loan money was actually being paid. About 30% was held by borrowers still in school or in a grace period, another chunk in deferment or forbearance, and almost 14% was in default.

The problem here is that whenever the government nationalizes something that the private sector is doing, it always creates a problem. Let me explain. If student loans (or mortgage loans) are run solely by the private sector, then the motivation for lending money out at interest is to make money for the bank’s depositors and investors. In other words, because the bankers are in a free market and have to compete for depositors and investors, they have an interest in making sure that the loans they make get paid back.

But when the government takes over loans, they are not interested in being wise with the money they lend out – it’s not their money. They want to lend out as much as possible today in order to buy votes, and then kick the can down the road on the repayment. So instead of being careful about asking “will this get paid back?” they ask “how can I borrow from the future in order to buy as many votes as I can right now?” And that’s how we got the housing crisis of 2008, as well as this trillion-dollar student loan crisis.

When you take the profit motive out of the lending decision, then money gets lend to people who will never be able to pay it back. No private bank that has to answer to shareholders hands out money to students who want to study underwater basket-weaving. But the government does. They want to buy as many votes as possible. And besides, this is not their money. They are borrowing it from the future earnings of the very students they are giving it to! That’s what happens when you let big government decide everything.

Whenever big government politicians want to buy votes with taxpayer money, they always sell it to the people with sob stories about some poor, helpless group of people will suffer through no fault of their own. There are a lot of voters who will vote for politicians who cry crocodile tears for them, especially ones who don’t understand economics. There is no free lunch – somebody has to pay. Democrats are basically throwing a party for students, and then mailing them the (unexpected) bill for it, with interest.

Filed under: News, , , , , , , , , , , , , ,

Colorado Civil Rights Commission: anti-conscience laws can only target Christians

This is from Todd Starnes, writing at The Stream.

He writes:

Bill Jack wants to make one thing perfectly clear: Bakers should not be forced to make a cake that would violate their conscience or freedom of expression.

Jack, of Castle Rock, Colo., is making national headlines over an experiment he conducted in the wake of attacks on Christian business owners who refuse to provide services for same-sex marriages.

Last year, the Colorado Civil Rights Commission ruled that the Masterpiece Cakeshop in Lakewood unlawfully discriminated against a gay couple who wanted a wedding cake. Jack Phillips, the owner of the cake shop, is a devout Christian, and his attorneys argued that to force him to participate in the gay wedding would violate his religious beliefs.

The Civil Rights Commission saw it differently.

So if Christian bakers who oppose gay marriage are compelled under law to violate their beliefs — what about bakers who support gay marriage? Would they be compelled to make an anti-gay marriage cake?

[…]As you probably guessed, the bakeries rejected Jack’s request for what some would call “anti-gay” cakes.

“If he wants to hate people, he can hate them not here in my bakery,” Azucar Bakery owner Marjorie Silva told 7NEWS. She called the writing and imagery “hateful and offensive.”

But hating Christians enough to force your morality on them with fines and emprisonment – that’s not hatred at all.

More:

So Jack filed a discrimination complaint with the Colorado Civil Rights Commission — just as the gay couple did in the Masterpiece Cakeshop case.

Using the commission’s logic — if a Christian baker is forced to violate his beliefs, shouldn’t all bakers be forced to violate theirs, too?

Absolutely not, says the Colorado Civil Rights Commission.

It ruled that Azucar did not discriminate against Jack based on his creed. It argued that the bakery refused to make the cakes because of the “derogatory language and imagery,” The Denver Channel reported.

Jack told me it’s a double standard — pure and simple.

“I think it is hypocritical,” he said. “It’s unequal treatment before the law. The Colorado Anti-Discrimination Act is being used to coerce businesses to participate in events that violate their consciences.”

Jack said he decided to conduct his experiment to prove the Colorado law was “only being applied to Christian business people.”

“Christians need to understand that this is the state of Christianity in the United States,” he said. “We are now second-class citizens. Our free speech is being censored.”

To be clear, Jack believes the bakeries had the right to deny him service. His point was to draw attention to the hypocrisy.

“I stand for liberty for all, not liberty for some,” he said. “If we don’t have liberty for all, then we have liberty for none.”

So. Although Christians may have voted for these laws thinking that they were “nice”, the truth is that every scrap of Christianity that anyone finds of offensive is going to become illegal. At some point, we are all going to have to choose between the Bible and being punished by the state.

Filed under: News, , , , , , ,

After destroying religion and marriage, Europe tries to convince people to make babies

Fertility rates in European countries

Fertility rates in European countries (click for larger image)

This is from the radically leftist New York Times, of all places.

They write:

Recently, Sex and Society, a nonprofit group that provides much of Denmark’s sex education, adjusted its curriculum. The group no longer has a sole emphasis on how to prevent getting pregnant but now also talks about pregnancy in a more positive light.

It is all part of a not-so-subtle push in Europe to encourage people to have more babies. Denmark, like a number of European countries, is growing increasingly anxious about low birthrates. Those concerns have only been intensified by the region’s financial and economic crisis, with high unemployment rates among the young viewed as discouraging potential parents.

The Italian health minister described Italy as a “dying country” in February. Germany has spent heavily on family subsidies but has little to show for it. Greece’s depression hasfurther stalled its birthrate. And in Denmark, the birthrate has been below the so-called replacement rate needed to keep a population from declining — just over two children per woman — since the early 1970s.

“For many, many years, we only talked about safe sex, how to prevent getting pregnant,” said Marianne Lomholt, the national director of Sex and Society. “Suddenly we just thought, maybe we should actually also tell them about how to get pregnant.”

The demographic shift is more pressing in Europe than almost any other major region, save Japan. There are an estimated 28 Europeans 65 or older for every 100 residents ages 20 to 64, almost twice the world average, according to the United Nations, and compared with 24.7 for the United States. By the end of the century, the United Nations expects the European figure to double.

Such trends will transform societies, potentially reducing economic growth and increasing stress on public pension systems and requiring more elder care. Japan already faces existential questions in a country whereadult diaper sales are beginning to eclipse those of baby diapers.

But there is not a consensus about the impact of demographics. Some see a natural maturing of developed societies. Others see disaster ahead, because with fewer workers and more retirees, the active work force faces an increased burden to sustain social programs.

Productivity gains over time, though, can make up for such population stresses. Declining birthrates can also lead to labor shortages, and Germany has faced a gap in skilled labor. But that is hardly an issue now for much of Europe, which is mired in high unemployment.

OK, so it’s a crisis. But how did it happen?

Nicholas Eberstadt explains what’s happening to marriage and parenting, in this Wall Street Journal article.

Why is it happening?

All around the world today, pre-existing family patterns are being upended by a revolutionary new force: the seemingly unstoppable quest for convenience by adults demanding ever-greater autonomy. We can think of this as another triumph of consumer sovereignty, which has at last brought rational choice and elective affinities into a bastion heretofore governed by traditions and duties—many of them onerous. Thanks to this revolution, it is perhaps easier than ever before to free oneself from the burdens that would otherwise be imposed by spouses, children, relatives or significant others with whom one shares a hearth.

People are rejecting responsibilities, expectations, and obligations because they are selfish.

When he talks about Europe, he offers an explanation for this:

Now consider Europe, where the revolution in the family has gained still more ground. European demographers even have an elegant name for the phenomenon: They call it the Second Demographic Transition (the First being the shift from high birth rates and death rates to low ones that began in Europe in the early industrial era and by now encompasses almost every society). In the schema of the Second Demographic Transition, long, stable marriages are out, and divorce or separation are in, along with serial cohabitation and increasingly contingent liaisons. Not surprisingly, this new environment of perennially conditional, no-fault unions was also seen as ushering in an era of more or less permanent sub-replacement fertility.

According to Eurostat, the European Union’s statistical agency, the probability of marriage before age 50 has been plummeting for European women and men, while the chance of divorce for those who do marry has been soaring. In Belgium—the birth-land of the scholars who initially detected this Second Transition—the likelihood of a first marriage for a woman of reproductive age is now down to 40%, and the likelihood of divorce is over 50%. This means that in Belgium the odds of getting married and staying married are under one in five. A number of other European countries have similar or even lower odds.

Europe has also seen a surge in “child-free” adults—voluntary childlessness. The proportion of childless 40-something women is one in five for Sweden and Switzerland, and one in four for Italy. In Berlin and in the German city-state of Hamburg, it’s nearly one in three, and rising swiftly. Europe’s most rapidly growing family type is the one-person household: the home not only child-free, but partner- and relative-free as well. In Western Europe, nearly one home in three (32%) is already a one-person unit, while in autonomy-prizing Denmark the number exceeds 45%. The rise of the one-person home coincides with population aging. But it is not primarily driven by the graying of European society, at least thus far: Over twice as many Danes under 65 are living alone as those over 65.

“Perenially conditional, no-fault unions”. That means that either party can leave at any time, for any reason.

Basically, people became skeptical of objective morality and the afterlife, and they have decided to follow their hearts and go more the most happiness they can have in this life. And they’ve noticed that relationships with other people – with all the nasty expectations, obligations and responsibilities – get in the way of this self-centeredness. To get married and have children is to embrace responsibility. It means that you are accepting the obligation to learn the needs of other people and care for those needs. Something has gone wrong in European society where these social obligations declined, just as religion declined. And the same thing is being taught to the next generation in our most prestigious universities.

This is a bird’s-eye view. I’ll have a closer look at the problem in my next post.

Filed under: News, , , , , , , , , , ,

Indiana RFRA “fix” is a full repeal, religious liberty will be no defense

CNS News analyzes the “fix” proposed by Indiana Republicans.

Excerpt:

Indiana House Speaker Brian Bosma and Senate President Pro Tem David Long announced Thursday that they would submit a new versionof the state’s Religious Freedom Restoration Act (RFRA) to Gov. Mike Pence to counter criticism that it discriminates against gays and lesbians.

“It was never intended to discriminate against anyone,” Long told reporters. “That perception led to the national protests we’ve seen.”

But a lawyer for The Becket Fund for Religious Liberty says the proposed legislative “fix” is not only unnecessary, it would undermine the religious rights of Hoosiers and leave them vulnerable to criminal prosecution for following their religious beliefs, the opposite of what RFRA was intended to do.

“We think the Indiana law is a very good law which is modeled on what has worked at the federal and state level for 20 years, and which is similar to constitutional provisions that are backed up by 50 years of jurisprudence,” Becket legal counsel Daniel Blomberg told CNSNews.com. “These laws work very well to protect the religious rights of minorities.

“All the Indiana law does is the same thing that’s been working very well for a long time,” he pointed out. “Today the Indiana legislature proposed a ‘fix’ that we think is 1) unnecessary; and 2) itself is broken and would create a very dangerous change in Indiana law.

“Individuals asked to be part of a same-sex wedding who decline because they feel it violates their religious beliefs would not be able to raise the RFRA under the ‘fix’,” Blomberg told CNSNews.com. “It would leave them defenseless. It also makes specific allowances for criminal prosecution. So not only is the ‘fix’ not helpful, it should not be accepted.

“We have a choice on how to handle these situations. We can allow government to drive religious people out of business, fine them and possibly imprison them, or we can allow religious people to have their day in court, and let the courts balance their religious claims against other competing values.”

Gary Bauer explains what’s at stake:

“Gov. [Mike] Pence is going through a rhetorical lynching,” Gary Bauer, former Republican presidential candidate and president of American Values, told CNSNews.com. “This is what we were warning about in the [Manhattan] Declaration, and why the Declaration was written.”

Besides upholding the “sanctity of life” and the “dignity of marriage,” the Manhattan Declaration, which was signed by Bauer and a number of other religious and political leaders in 2009, championed “religious freedom”. “No one should be compelled to embrace any religion against his will, nor should persons of faith be forbidden to worship God according to the dictates of conscience or to express freely and publicly their deeply held religious convictions,” the Declaration stated.

It warned that “freedom of religion and the rights of conscience are gravely jeopardized by those who would use the instruments of coercion to compel persons of faith to compromise their deepest convictions.”

Such restrictions “undermine the viability of the intermediate structures of society, the essential buffer against the overweening authority of the state, resulting in the soft despotism [Alexis de] Tocqueville so prophetically warned of,” the Declaration continued. “Disintegration of civil society is a prelude to tyranny.”

“It’s becoming clearer and clearer that the tolerance movement used by the cultural Left in recent decades was just a poll-driven strategy and not an actual commitment to tolerance,” Bauer continued, adding that the Indiana law is being used to cut off debate and redefine anyone with traditional moral values as a bigot. “Every pastor and every parent should be deeply worried about what is happening in Indianapolis,” he said.

I guess I blame the church for this. I go to church. I know what goes on in there. It’s a sermon on the gospel every week. There is about 20 minutes of singing. Current events are never mentioned. The existence of God and the resurrection are never explained or defended. The Bible is just assumed to be true, and no issues outside it are ever discussed. Objections to Christian theism are never named, much less defended against. Reasons and evidence are never provided for the Biblical view on topics like abortion or same-sex marriage, much less economics, the environment, etc. The emphasis is on comforting people. The emphasis is on not judging. The emphasis is on making people feel good and leaving them free to do whatever makes them feel good.

I just don’t see young people having any interest in defending Christianity any more against the culture. I mean, I am seeing “pro-life”, “pro-marriage” evangelicals voting for Democrats because they want a bigger secular government.  They want more money to be transferred from Christian families to Solyndra so we can fight the global warming monster. They believed Obama about keeping your doctor, keeping your health plan, and not funding abortions – but Obama lied on all three of these. They want to vote for Obama’s promise that health insurance premiums will drop $3000 in 2008, and then vote for the same guy again in 2012 when the premiums have actually gone up $2500. They voted for Obama saying that he supported traditional marriage, but then his Justice Department declined to defend the Defense of Marriage Act.

Young Christians just don’t care about marriage as Jesus defined it – one man, one woman, for life.  They say they do, but then they vote for the party that opposes religious liberty when they get the chance. Global warming and raising the minimum wage are more important. Why? Because the secular culture told them so. And that’s their authority when it comes to voting.

Young Christians just seem to be completely disloyal to God as he really is. I don’t think that Christians really want to have to think about what would work to defend God’s reputation and character from these attacks. They just want to do their own thing, and get the praise from men, rather than the praise from God. In my own case, I am now in my upper 30s and still very much respecting the Biblical standards around sex: no pre-marital sex, no adultery, no frivolous divorce. Why is it such a difficult standard for younger evangelicals to accept and to defend? They seem to believe that chastity, natural marriage, and natural child-bearing are all unimportant things. The only rule now is to have fun with sex, and to never judge anyone for breaking the rules. That’s not what the Bible teaches, but that’s what young Christians believe. Who is going to talk to them about it? Not the pastors. Not their parents. And not their friends.

Filed under: News, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Click to see recent visitors

  Visitors Online Now

Page views since 1/30/09

  • 5,069,034 hits

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 1,727 other followers

Archives

Follow

Get every new post delivered to your Inbox.

Join 1,727 other followers

%d bloggers like this: