Discussing the Rail Runner Tax Hike

In case you missed it, a few weeks ago I appeared on Bob Clark's show on KKOB 770 to discuss the Rail Runner tax hike. A link to the show can be found here.

McCain Health Care Plan Best

Recently, two Rio Grande Foundation economists, Ken Brown and Micha Gisser, had a column in the Albuquerque Journal discussing the health care plans of Obama and McCain. While Obama claims his plan will not lead to "socialized medicine," Gisser and Brown believe that his reliance on government will inevitably lead to a breakdown of the current system.

As far as McCain's plan is concerned, they say that it would:

McCain's plan is radical yet simple: It would offer every individual $2,500 and every family a $5,000 refundable tax credit to purchase health insurance. He would abolish the current tax code where employers purchase health insurance for their employees with pre-tax dollars. We can safely assume that his plan, while subsuming Medicaid, would leave Medicare intact.

For the poor, McCain's tax credit would be offered in the form of a negative income tax. Thus, McCain's plan is in fact a voucher extended to every citizen, from Bill Gates to the poorest person sleeping under a bridge. Allowing people to purchase health insurance across state lines, and overriding the hundreds of state-coverage mandates, will open up a huge national market for the tens of millions of voucher holders. At long last the spiraling cost of health care will level out.

McCain's plan likely is better, but I wonder, even if he gets elected, will Congressional Democrats go along? I don't think we'll get to find out.

Big Surprise: Financial Intervention Failed

While it will take quite some time to discern the success or failure of the massive government intervention we have seen throughout the US economy in recent weeks, one policy -- the ban on short-selling -- has already been proven a failure. As the article points out, "The short selling ban hasn't stopped the decline in bank stocks. An index of the 34 U.K. financial stocks on the banned list has fallen 22 percent since Sept. 19, compared with an 18 percent drop for the FTSE 100 Index of the largest U.K. companies and 10 percent for the FTSE All-Share Index."

This is no surprise since government intervention in the economy caused this mess at the outset. As this article points out, it was government policy that created the Great Depression as well. Hopefully policymakers stop these interventions and let the economy run its course, but at this point there is no guessing what will happen next.

US Economic Freedom on the Decline -- even before the bailout

The Cato Institute recently released its annual "Economic Freedom of the World" Index. The full study can be found here. Unfortunately, the news for the United States is not good. Since 2000, our score has dropped from 8.55 which was good for second in the world, to 7.86 which was good for only 10th in the world (check page 177 of the index for US rankings and scores). I can only imagine how the current financial crisis and massive government intervention in the economy will affect our relative level of economic freedom.

According to the authors, "Lower ratings in the legal structure area and for the
administrative costs of clearing customs were primarily responsible for the rating reduction of the United States." Sound money, size of government and regulation have all suffered in recent years as well. It would be simple to lay blame for this slide at the feet of President Bush as he has presided over this decline in freedom, but our nation's entire political leadership has been working to destroy economic freedom in recent years and I see no lights at the end of the proverbial tunnel.

Who is Manipulating Oil and Gas Prices Now?

It seems like only yesterday that Congress and all manner of people who are ignorant of basic economics were bashing oil and gas companies for their supposed efforts to manipulate prices and keep them high. Now, with the global economy on the skids, crude prices are plummeting right along with the stock market and are likely to keep dropping.

So, the question must be asked: where are the speculators and manipulators? If Exxon has an iron lock grip on the prices it charges for its product, why aren't they keeping them high or at least stabilizing them? The simple fact in is that they don't control prices; they are "price takers."

While the information above is simple economics, the more interesting issue is how the collapse in oil and gas prices will impact New Mexico's budget and economy. Months ago I wrote about the impact lower oil and gas revenues could have on New Mexico. It would appear that the chickens are coming home to roost.

Jonah Goldberg's Albuquerque Talk Now Online

Jonah Goldberg spoke at a breakfast in Albuquerque on September 19th. The event was sponsored by the Rio Grande Foundation and New Mexico Prosperity Project. The event was outstanding and several people told me afterwards that it changed their entire outlook on politics (for the better). While the video is not perfect, the sound quality is very high, so turn up your speakers and listen to the talk.

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How Should I Vote Part II

A few weeks ago I posted information on some of the ballot measures that will appear on New Mexicans' ballots this fall. Not all of the information was available at the time, but at last, the Secretary of State's office has put sample ballots online. Ballots statewide are available here and are listed by county. They are long and have a lot of important races and ballot measures on them, so I recommend you look at them early and figure out your votes ahead of time.

At last, complete text of the Rail Runner tax hike is available. The Bernalillo County language is as follows: Shall Bernalillo County impose a one-eighth of one-percent gross receipts tax which shall be dedicated to the Rio Metro Regional Transit District in equal portions for the purpose of management, operations, capital planning, construction or maintenance of the New Mexico Rail Runner Express, and for the management, operations, capital, planning construction or maintenance of the Rio Metro Regional Transit District System, pursuant to the Regional Transit District Act?

State Insurance Plan Stops Enrolling: Costs $11,320 annually per insured person

According to this recent report from the Albuquerque Journal's Business section (subscription required although a shorter free article is available here), New Mexico's State Coverage Insurance program has stopped enrolling new members at 40,000. This has occurred two years earlier than the government originally expected.

SCI is a funded through the federal SCHIP Program. The state pays $100 million per year on the program, approximately 1/4th of the total cost. New Mexico uses SCHIP, a program intended for children, to fund insurance for adults under a waiver that expires in 2010. Because New Mexico already has such generous Medicaid standards, the state couldn't find enough people to spend SCHIP money on, so, in their infinite wisdom, the program was expanded.

The result is that between an employer and employee, costs for insurance under SCI come to $110 per insured person, per month. The cost of the program to federal and state taxpayers is $400 million annually and $40,000 people are covered for a total cost of $10,000 per insured person. This leaves a total cost per insured person of $11,320 annually. Considering that my Health Savings account costs my employer a total of $3,600 annually, we the people are getting ripped off big-time. Don't you just love government programs? Couldn't we just give everyone who doesn't have insurance in New Mexico a fully-funded HSA and be done with it?

He Who Giveth, Taketh (and gives to his friends)

In his posting below, Jim rightfully bashes Congress. I want to trash our beloved Albuquerque City Council too. During last night's meeting, Council approved $147 million in TIDD subsidies in order to redevelop Winrock Shopping Center. Abundant literature shows that TIDD and TIF are economic losers.

At the very same meeting, in a move that could have helped revitalize downtown -- yes, remember downtown, the area that is at the center of so many government planning experiments -- Council denied the Church of Scientology a permit that would have allowed them to get to work right away on moving into new digs.

The problem with putting government bureaucrats and politicians in charge of development is that they will subsidize their friends and contributors and they will obstruct those, like the Church of Scientology, that may be outsiders or hold unpopular views. Unfortunately, this is currently the way of the world.

Legislative Tracking Site in the news

I have written previously in this space about our new legislative tracking website, NewMexicoVotes.org. Recently, we released our "missed votes study" which simply tallies up which legislators are showing up to vote when they are supposed to.

Certainly, there are often legitimate excuses (illness being one example) for legislators to miss votes, but nonetheless, we feel that voters should have some idea if their elected officials are doing their jobs or not. One story from the Santa Fe New Mexican is available here. The Associated Press also picked up the story which can be found here.

The missed votes study itself can be found here.