Why Obama's "Stimulus" is pork

Commenter CJ Dunnaway has a hissey fit over my characterization of Obama's stimulus package as nothing but pork:

Every responsible economist in the world agrees we need to stimulate the economy, but a self-proclaimed 'Drunken Swede' from Hoosierville thinks it's all a big porkfest boondoggle. But I'm sure you're smarter than all those economists combined!

Wind turbines are a great method of providing clean, sustainable energy. Public housing is a great method of preventing homelessness in the richest nation on planet Earth. Systems for protecting our own citizens and school children are legitimate expenditures, and far, far better than subsidizing gasoline for your pollution-spewing vehicles.

A far better idea would just be to raise taxes on rich boys from Munster who earn far more money than they are worth; they aren't producing anything of value anyway!

Oh! And learn how to spell the name of your hometown, homey.

This comment has all the things I love about liberals: feelings put forth as fact, appeals to authority ("every responsible economist", etc.

First off, none other than Harvard Economics Professor Greg Mankiw, who literally wrote the book on economics (his text is used in just about every introductory course) says that pork is much less effective than tax cuts as a stimulus. The latest research shows that tax cuts are 5 times as effective as porkbarrel spending.

Next, the two things cited as worthwhile stimulus are the worst kinds of pork. Wind turbines are very capital intensive. They're not the kind of thing that you just put on the roof and get electricity. Engineering studies need to be done on the best place to site them, orient them, etc. Otherwise, the amount of electricity generated won't even pay off the cost of capital. These days, with the credit crunch, no one should be wasting capital on pork like wind turbines in Lake Station.

Regarding public housing, there is absolutely no correlation between the amount of public housing and the amount of homelessness. Homelessness isn't about housing, it's about mental illness and drug addiction. People who are homeless are people who are mentally ill and on drugs. In the past, before we had a homeless problem, these people would have been forcibly institutionalized. We don't do that anymore. Instead, we have things like halfway houses and such, but they require residents to refrain from drug use.

We could solve the homeless problem immediately if we reopened the state psychiatric hospitals. However, that would go against our societies trend towards extreme individualism.

So... let's forget the pork and just cut taxes. It looks like Obama is going to give people another stimulus check. Seeing how well the last 2 rounds of checks worked (i.e. they didn't), I'd prefer he just stop collecting payroll taxes for awhile. That would do more for people than another check.

What was that thump in the night?

Last Saturday, my wife and I were awoken in the middle of the night by loud banging. It sounded like someone was at the back door trying to kick it in. It was extremely windy, and the temperature was dropping quickly. I thought that it might be ice coming off the roof, or perhaps just the house settling violently.

Evidently, the banging was a regionwide phenomenon. The "experts" claim that it was ice breaking off the roof, but I didn't see any evidence of that. I think that it was just the house violently adjusting to the temperature change. I expect to find a lot of damaged shingles come spring.

Is Lake County REALLY the most corrupt county in America?

People doubt me when I say that Lake County is the most corrupt county in America. They point to Cook County in Illinois, where the Illinois governor is from, and his trying to sell Obama's Senate seat.

That's chump change. I bet Blago beat the rap on that one. Selling the seat for campaign favors and fundraising is entirely legal. It's called politics.

No, Lake County has that beat by a mile.

The latest example is from East Chicago, where Democrat Mayor George Pabey is accused of having a house that he owns in Gary have work done on it by East Chicago municipal workers. He also gets a homestead exemption on the house and his primary residence in East Chicago. So he is committing tax fraud, if nothing else. He claims that his daughter lives there, but she cast an absentee ballot from the home in East Chicago, so she may have committed vote fraud.

This is petty stuff, yes. But it is a way of life here. And it is way more illegal than "selling" a senate seat to the person who will do the most fundraising for your re-election campaign.

Mitch wants to stiff public employees statewide

Not content to deny state workers a raise this year, Mitch is "asking" localities to eliminate raises this year for local municipal workers and teachers.

This is actually a big deal in Lake County, where public employees haven't had a raise in 2 years. If they are denied a raise this year, that will be 3 years without a raise.

I didn't get a raise in 2002 or 2003, so I know how sucky that is. But with the state of the economy and tax reform, it does seem prudent. And public employees are vastly overpaid compared to the private sector when you add up the value of their benefits, especially their pensions.

If I were Mitch, I'd give them raises but eliminate the pensions. That's where the money is.

Obama's "Stimulus" is nothing but pork

Obama has asked local government for infrastructure projects that are "ready to go" to put in a stimulus plan, and Lake County has responded with nothing but pork.

Lake Station wants wind turbines. Gary wants money to build public housing. Other items are non-infrastructure like security lights, fire engines, police cars, police canine units and two new school resource officers.

What a joke. It this wasn't a recession, we would be calling this what it is: pork.

A far better idea would just be to cut taxes. How about giving us all a payroll tax holliday for a year? Eliminate the capital gains tax (it isn't generating any revenue anyway!).

Gary doesn't need new housing, much less more public housing.

Mitch targets local government

Mitch is making retooling of Indiana's antiquated system of local government a top priority.

There are a lot of no brainers in his proposal.

Eliminate townships and transfer their functions to the county.

Eliminate County Commisioners and have one County Executive in their place.

Make Auditors, Treasurers, Recorders, Surveyors, etc. appointments of the County Executive instead of elected.

Of course, the usual suspects are against this. Democrat Lake County Commisioner Roosevel Allen calls it a dictatorship! What a wanker.

The fact is that the Democrat machine benefits from there being too many elected positions. Who the hell knows what the recorder does, much less who is running for it. Instead, people just vote straight party.

Going to a unified County Executive will allow the Lake County Republican Party to muster its limited resources towards one high profile election. This could be the start of a revolution in Lake County, a way to clean sweep the entire county in one fell swoop.

Push is on for a food and beverage tax

The power that be in Lake County are pushing a food and beverage tax to fund busses to nowhere.

Seriously, the bus systems in Hammond, East Chicago, and Gary are busses to nowhere. What good is a bus system that ends at the city border?

Let the systems die. Let private individuals run jitney vans if there is a demand for transportation services.

Most of all, do not impose this tax. One of the only industries in Lake County that is making money is restraunts. People come over from Illinois to save on the sales tax and be able to smoke. Why would we want to kill that just so empty busses can run around Gary or East Chicago?

Gary is going to stiff businesses and landlords

In an article about how the public employee union is protesting The City of Gary laying off 20% of its members, there is this interesting tidbit:

Gary is petitioning to the Indiana Distressed Unit Appeals Board for relief from the tax laws. Celita Green, the city's controller, said Gary will ask that board to spare homeowners from a tax increase, but raise tax caps on other local properties.

So the solution to Gary's budget problems is to stiff landlords (and their renters, who will pay higher rents) and other businessess?

Seeing as how most city services are consumed by residents, especially homeowners, doesn't it make sense for those people to pay the taxes to fund those services?

Why does every Democrat look at businesses as nothing more than deep pockets to fund their every whim and desire?

More proof that Gary will go bankrupt

From the Times:

Gary Controller Celita Green has detailed fixed costs the city cannot reduce significantly -- worker's compensation and unemployment insurance, utility bills, postage and the like -- and steps the city is taking already, including putting workers on four-day weeks since Aug. 18 to shave expenses.

The city's reorganization plan calls for additional cuts, including further staff reductions and closing all but two of the city's swimming pools. It also is predicated upon adoption of a 1 percent county option income tax in 2012, something two of the three county commissioners campaigned against.

Gary's restructuring before the Distressed Unit Appeals Board is predicted on getting a Lake County Income Tax. I just don't see what happening, especially now that that information has come out. Nobody in Lake County will accept an income tax to bail out Gary.

Lake County tax news

Democrat Lake County Commisioner Tom O'Donnell is proposing a food and beverage tax.

I'm totally against such a tax. Areas of Lake County do an excellent business in people coming over from Illinois to eat and drink. Lake County allows smoking in restraunts. Illinois does not.

Cook County, Illinois also has a 10% sales tax, so it is very cost effective to drive over to Munster or Hammond and grab a bite to eat.

A food and beverage tax kills that goose.

And for what? Busses? Screw that. Busses don't work in Lake County, we all know that. People on busses are damned. It is an incredible waste of time, and all the bus systems waste an incredible amount of money.

Once again: No Lake County income tax. No Lake County food and beverage tax. Fund government through the existing property tax, and live within the limits imposed by Indianapolis. Is that so hard?

Mrs. Buzzcut will be standing in line to pay our property tax bill again this year

Lake County Property Tax Bills won't be sent out until January. Again.

Last year, my wife went down to the Treasurer's office in Hammond and paid the bill in December. They know how much the bill is, they just can't seem to get the bills sent out in a timely fashion.

Luckily, with the 2% cap, it makes it very easy to figure out the bill. You know your assessment (mine went up this year, which is allegedly why the bills are late) from the treasurer's website. You know what you paid for your estimated half year bill. Subtract one from the other, that should be your tax.

We need to get this paid this year in order to itemize it on our federal taxes. Luckily for us, we do not have taxes escrowed, or else we would be escrewed.

Who benefits from the tax caps?

Commenter BigReub sends along a link to a press release about who benefits from the tax caps:

Property tax caps, 1, 2, 3. It sounds so simple. It's so easy to understand. However, homeowners should be asking "who is getting a property tax cut and who is paying for it?" The General Assembly should fully analyze this issue before moving forward and amending the State Constitution with the 1, 2 and 3 percent caps.
Data from the Legislative Services Agency (LSA) and subsequent studies conducted by counties, indicate homeowners benefit the least from the property tax caps. You can link to the LSA report on our website and look at the types of parcels in your county that benefit from the caps. According to the LSA report, property owners are expected to realize a $524.3 million property tax cut due to the caps. How much of that property tax cut will be enjoyed by homeowners?

In 2010, when the caps are fully implemented, about 273,095 homesteads out of over 3.5 million parcels of property are expected to benefit from the caps. The dollar amount that benefits homeowners is $142.5 million. That means that non-homestead properties benefit to the tune of $381.8 million. Most of that $381.8 million tax cut goes to businesses, while some of it goes to people who own second homes.

Can local governments in the counties where the tax caps are prominent find efficiencies to net $524.3 million? There could be some savings through efficiencies but not over $500 million. The other option for local government is to increase income taxes. But who pays the bulk of income taxes? Individuals.

Individuals pay about 84% of local option income taxes (see DeBoer study on our website). So are we expecting individuals, who get a $142.5 million property tax cut because of the tax caps, to pay over $400 in new income taxes to make up the lost revenue because of the caps?

Reducing our reliance on property taxes is a goal of the Association of Indiana Counties. However, there needs to be a balance in the overall tax liability. We are concerned that shifting over $400 million in taxes to individual wage earners, who reside in homes that may or may not benefit from the tax caps, is not a tax policy that has been analyzed by the General Assembly or understood by the public. Taxpayers are not allowed to vote to place the tax caps in the Constitution until 2010. Waiting for more data to be analyzed is the proper action before the General Assembly moves forward with placing the caps in the Constitution.

I've always known that the loophole around the tax caps is the local option income tax. That's why I've been so adament that Lake County not get an income tax, so they can't drive the truck through that loophole.

It seems to me that it is not unreasonable that some of that property tax savings be captured by an income tax. Look, it is individuals, not businesses, that are the main beneficiaries of government spending. Individuals should pay more taxes than businesses do.

Also, I need to look at that study, but most of that lost revenue from the tax caps occurs in Lake County. That revenue comes from the BP refinery and the steel mills, for the most part, and is mostly revenue lost to Hammond, East Chicago, Whiting, and Gary. Those cities are a lost cause anyway. They need to go bankrupt and reorganize, not unlike GM and Chrysler.

Gary will go before the Distressed Unit Appeals Board

Faced with budget cuts of more than 50% in order to comply with property tax caps, Gary is officially going before the Indiana Distredded Unit Appeals Board.

There is a pretty easy way for Gary to get under the caps and not lay anyone off. Cut everyone's pay and benefits in half.

Gary did something like this this year when they started paying municipal workers 4 days pay for 5 days work. Just take that concept a little further!

The Divide in '09

I can't seem to find the article online, but there was an AP article in the Times on Monday documenting that the big divide in Indianapolis in '09 will be between Republicans trying to change the Constitution to make the tax caps permanent, and the Democrats who want to "wait and see how they impact local governments".

So the Republicans are on the side of taxpayers, and the Democrats are on the side of government. Surprise, surprise.

My state rep, Democrat Mara Candelaria-Reardon, is on the frontlines of the Democrat rear action against the tax caps (how's that for an analogy!).

We already know what impact the tax caps are going to have. Gary and Whiting are going to go bankrupt. Maybe Hammond and East Chicago, too (depends on how much casino revenue they can extract). Even towns like Munster are going to feel real pain. Some, like Highland, are going to do just fine.

Who gets hurt when towns downsize and cities go bankrupt? Public employees. It will be interesting to see who has more juice in Indianapolis: taxpayers or public employees.