October 15, 2011

The Aristocracy of Government

Filed under: Articles + Blogs — smeyer @ 3:33 pm

For many years I have criticized the excesses of government spending in the United States. What may have begun as a means of honoring those who serve the public interest, salaries and benefits, has led to a group that sets it’s own pay scale far beyond the average pay of its constituents and a work schedule that amounts to a vacation schedule punctuated with occaisional work. We have created an Aristocracy of Government. Government officials who believe they may legislate the rules for others, but who are beyond the rules and laws they create.

One recent example is the First Lady’s recent trip to Spain. Largely ignored by the mainstream media in the US, it made the papers in the UK, one commentator comparing the First Lady to Marie Antoinette. The trip included hotel accommodations at a Ritz Carlton property and chartered air transportation to and from the King and Queen of Spain’s palace on the island of Majorca. Nice. If you’re royalty. Which our government leaders apparently think they are.

Across a dozen postings on the web, the reported “facts” of the trip vary significantly depending on whose account you read. That is always a disturbing sign. I will ignore the inconsistencies of the reports to focus on what I think is really relevant, the true economic impact of government spending.

The UK writer sets the cost to US taxpayers for the trip around $375,000. That’s a lot of money for a weekend trip anywhere. I’m lucky if I can spend $375. on a weekend trip near home. The trip includes round trip air transportation on a military 757 with Secret Service and a number of White House Staff members. Head count varies, again, depending on who you read.

Now $375,000 would be the equivalent of paying for 10 jobs at $37,500 a year. But since this is taxpayer money, the only way you create those jobs is if you hire more people to work for the US government. Which is what the federal government did with reckless abandon during the current administration’s first 18 months.

What is really surprising is that using the lowest IRS tax rate, 26%, it would require $1,442,308. in wages paid by employers to raise $375,000 in Federal taxes to pay for this trip. That means it takes 38 private sector employees producing something useful and working for a full year at $37,500 in gross income, to raise the tax revenues needed for the President’s wife to spend a weekend in Spain.

Aristocracy as a form of government is defined as “government by a privileged minority…”. Hallmarks of aristocratic government is the belief that the “ruling class” is entitled to their positions. Another is a certain inability to make connections with those ruled. Such as the fact that it is in the “government’s” interest to have high employment because people need to be employed in order to generate taxes.

I don’t think this is the kind of change anyone signed up for.

October 9, 2011

Trouble in the Green Economy

Filed under: Articles + Blogs — smeyer @ 3:43 pm

I have posted that the solar power industry has some serious problems and isn’t going to save the US economy. Certainly the Solyndra failure should be evidence of that. The solar industry is built on Federal incentive programs that are scheduled to end this year. The Federal subsidies are unlikely to continue given the current budget crisis and the wider reporting of the poor performance of “Green Energy” that is now showing up in the mainstream press.

This should come as no surprise. As an example of how it works, or actually how it doesn’t work, the industrial trade press has recently made a big deal about the new $6.25 million dollar solar installation at Groupe Schneider in Smyrna Tennessee.

Let’s see if I get this right, the folks at Groupe Schneider get 30% Federal rebate applied to this year’s taxes. That’ s roughly $2 million of money paid by you and me to the Federal government was given to Schneider in the form of a discount off their tax bill this year. That money is gone from the private economy where you and I make choices about what we will do with our money. $2 million in the private sector is the equivalent of 66 jobs paying a gross of $33,000 year. Instead of doing that, it was taken and transferred to a for-profit company. Then the electric utility company in Tennessee, that is probably owned by the citizens of Tennessee, is required to purchase power from the solar farm and pay a rate to Groupe Schneider that is above the going rate for electricity. So taxpayers in Tennessee get a second chance to put money into Groupe Schneider and get nothing back.

The solar project will reduce the cost of electricity to Groupe Schneider/Square D. While Square D and Groupe Schneider employee a lot of people in the US, and hopefully the money they save will allow them to continue to do that, any profits from the solar project will be going to the French parent company.

I am fairly certain this isn’t what Americans signed up for in the Green Economy.