Newspaper column: Delusional candidates would rob Peter to pay Paul

Vice President Joe Biden breezed through Nevada one afternoon earlier this month, stopping long enough to pitch the idea of increasing the federal minimum wage 40 percent from $7.25 an hour to $10.10, saying this would not cost jobs and would pump $19 billion into the nation’s economy.

“All of this is disposable income, and it gets straight into the economy,” Biden said, which is utter Keynesian nonsense because it is nothing more than redistributionism, taking money from some pockets and putting it in others.

President Obama has called for raising the minimum wage. Nevada Sen. Harry Reid has repeatedly championed a higher minimum, though our junior Sen. Dean Heller has voted against it.

It is an issue in some of the four congressional races on the ballot, as recounted in this week’s newspaper column, available online at The Ely Times, the Mesquite Local News and the Elko Daily Free Press.

Bilbray and Heck take opposite stances on raising minimum wage. (R-J photo)

Asked about the minimum wage issue after his Democratic opponent came out in favor of raising it not to $10.10 but to $15, Republican Rep. Joe Heck, whose 3rd Congressional District covers the southernmost reaches of the state, replied, “The last thing our economy needs is another mandate from Washington that will cost us jobs. Raising the minimum wage will not increase jobs, expand opportunity, or be a silver bullet to reduce poverty. Instead, it will cost mainly young and low-skilled workers the chance to get a start in the working world and learn critical job skills that will help them transition to more gainful employment.”

In fact the Congressional Budget Office has estimated that raising the minimum wage to $10.10 could cost a half a million jobs.

But opponent Erin Bilbray told the Las Vegas newspaper, “I believe this will help the economy and make it stronger. I think when you give the middle class money it helps us all.”

In the 4th Congressional District, covering the southern half of rural Nevada and northern Clark County, Democratic incumbent Steven Horsford has supported the $10.10 minimum pay.

“I don’t support continuing to give corporations and billionaires tax subsidies and tax loop holes when we can’t give minimum wage workers — who make $14,500 — a raise,” Horsford said during a debate with Republican opponent Crescent Hardy.

For his part Hardy shrugged off the issue and replied, “To bring it to $10 an hour — it ain’t no big issue.”

In the 1st Congressional District in urban Las Vegas, incumbent Democrat Dina Titus has issued a statement saying, “I believe that everyone deserves the opportunity to earn a decent wage for a hard day’s work, whether they’re a young worker trying to earn money for college or a single mother supporting a family. In short, the minimum wage is about fairness …”

Republican opponent Dr. Annette Teijeiro replied to an inquiry by saying, “The myth of creating a ‘living wage’ by government fiat is just that, a myth. Artificial government mandates do not create prosperity and in some cases create financial ruin.

“As a small business person, I understand that if my payroll budget is tight then the only way to accommodate a mandated government wage increase is to fire enough workers to afford the increase or to increase the cost of the products and/or services I sell. So the end result of a government mandated minimum wage increase are more payroll taxes paid by the employer and the employee, and less workers to be able to pay for this new expense or higher prices to afford the payroll increase costs.”

In the northernmost part of the state, the 2nd Congressional District, Republican incumbent Mark Amodei in 2013 voted against raising the minimum wage to $10.10 and his Democratic opponent apparently has not made an issue of it.

The facts are on the side of the opponents of raising the minimum wage.

James Sherk, a senior policy analyst in labor economics at the Heritage Foundation, told Congress a year ago that every dollar increase in minimum wage really only raises take-home pay by 20 cents once welfare benefits are reduced and taxes are increased, meaning the $10.10 proposal nets only 57 cents an hour. Sherk noted a number of workers would lose their jobs and go from $7.25 to zero.

Then there are the affects on prices for everyone.

Mark Wilson, writing a policy analysis for Cato Institute, reports that a “comprehensive review of more than 20 minimum wage studies looking at price effects found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent and overall prices by up to 0.4 percent.”

If raising the minimum wage by 40 percent would pump $19 billion into the nation’s economy, image how the economy would purr like a kitten if Social Security checks next year were raised 40 percent instead of a paltry 1.7 percent. We don’t hear anyone calling for that do we?

 

Who is telling the big lies about health care research?

Bilbray and Heck (R-J photo)

Never let the facts get in the way of a campaign theme.

Democrat Erin Bilbray, in a debate with incumbent Republican Congressman Joe Heck covered by the Las Vegas newspaper, accused Heck and all GOP lawmakers of being responsible for the presence of Ebola due to federal budget cuts for health research.

Heck pointed out that Congress this year voted to boost funding for the Centers for Disease Control by 8.2 percent.

“Our CDC needs to be funded. Our hospitals are not prepared to address this issue,” Bilbray insisted.

IBD graphic

She obviously is getting her talking points from this administration.

CDC head Thomas Frieden blamed budget cuts when he said, “There are outbreaks happening today that we’re not able to recognize, stop or prevent as effectively as we should be able to.”

The head of the National Institutes of Health, Francis Collins, said if there had been no budget cuts “we probably would have had (an Ebola) vaccine in time for this.”

All lies. There have been no budget cuts. The CDC’s budget is 25 percent higher in 2008 and 188 percent higher than in 2000. The NIH budget is double that of 14 years ago.

It ain’t how much money they get that matters, but how they spend it.

According to the Washington Free Beacon, the NIH has spent more than $39 million on valuable research to cure what ails us.

For example, the agency spent:

— $2,873,440 trying to figure out why lesbians are obese.

— $466,642 to find out why fat girls have a tough time getting dates.

—  $2,075,611 encouraging old people to join choirs.

— $674,590 texting drunks in bars to try to get them to stop drinking.

— $2,101,064 on wearable insoles and buttons that can track a person’s weight, and $374,670 to put on fruit and vegetable puppet shows for preschoolers.

— $275, 227 on new children’s menus.

— $430,608 for mother-daughter dancing outreach to fight obesity.

— $105,066 following 16 schizophrenic LGBT Canadians for a study on their community experiences.

— And my favorite, $2,466,482 to a researcher to develop “origami condoms,” in male, female, and anal versions. The inventor has been accused of fraud for using grant money for plastic surgery and parties at the Playboy mansion.

— $5 million to “mine and analyze” social media to study American’s attitudes toward drug abuse, and $306,900 to use Twitter for surveillance on depressed people.

Free Beacon noted that Health and Human Services has just recently contracted with an outside source to spend $8.6 million to research and test an Ebola vaccine.

 

Candidate Bilbray: Rob from Peter to pay Paul and we improve the economy!!!

Congressional candidate Erin Bilbray-Kohn, who is running against Rep. Joe Heck, has revealed an astounding level of naiveté and economic illiteracy by coming out in favor of raising the minimum wage to $15 an hour from the current $7.25.

“I think we need a minimum wage where people can have a decent lifestyle,” Bilbray told the Las Vegas newspaper.

Erin Bilbray (R-J photo)

Asked by a reporter whether she thought that could cause the loss of jobs because businesses would cut workers to save money, Bilbray replied in the negative, insisting higher wages could lead to more spending, pumping money back into the economy.

“I believe this will help the economy and make it stronger,” she claimed. “I think when you give the middle class money it helps us all.”

She seems oblivious to the fact that raising the minimum wage merely takes money from one pocket and places it in another, doing nothing to increase productivity or wealth. Its called redistributionism.

Neither does she take into account the ramifications for those who would go from $7.25 an hour to zero and what that would do to the cost of welfare payouts.

The CBO estimates that a half a million workers would become unemployed if the minimum wage were raised to only $10.10 a hour, less than $3 and not $7.75.

Nor does Bilbray have any concept of just how much money would be “pumped” into the economy.

James Sherk, a senior policy analyst in labor economics at the Heritage Foundation, told Congress a year ago that every dollar increase in minimum wage really only raises take-home pay by 20 cents once welfare benefits are reduced and taxes are increased. Thus that $7.75 hour works out to $1.55.

Sherk told a Senate panel:

The minimum wage raises the pay of many workers at the cost of some jobs. A lot of advocates for minimum wage increases consider this a good trade-off. They argue that the gains for the workers who benefit far outweigh the costs to those who lose out. For example, raising the minimum wage by 40 percent – from $7.25 an hour to $10.10 an hour – would cost roughly 8 percent of heavily affected worker groups their jobs (although losses would be larger among the most disadvantaged workers). At first glance this may seem like a good deal.

However, this analysis ignores the way American tax and welfare programs claw back wage gains made by low-income workers. Congress has created many overlapping means-tested benefit programs: the supplemental nutrition assistance program (SNAP, formerly called food stamps), temporary assistance for needy families (TANF), the Earned Income Tax Credit (EITC), child-care subsidies, housing vouchers, and Women, Infants, and Children (WIC) benefits. The government also provides extensive in-kind health care benefits: Medicaid, SCHIP, and the soon to be operating health care exchange subsidies.

These benefits phase out at different rates as income rises. Earning an additional dollar of income reduces SNAP benefits by 24 cents. Workers in the EITC phase-out range lose 21 cents for each additional dollar they earn. Housing vouchers phase out at a 30 percent rate. Low-income workers must also pay payroll (15 percent) and income taxes (10-15 percent) on each additional dollar of income. Medicaid operates with a cliff: when workers’ incomes exceed a certain threshold, they lose all benefits.

Congress did not coordinate these benefit phase-outs across programs. Consequently low-income workers can face very high effective tax rates as they lose benefits from multiple programs. Consider workers both losing SNAP benefits and landing in the EITC phase out range. For each additional dollar they earn they pay 15 cents in additional payroll taxes, 15 cents in income taxes, an average of 5 cents in state income taxes, as well as losing 21 cents of their EITC benefit and forgoing 24 cents of SNAP benefits – an effective marginal tax rate of 80 percent. Each extra dollar earned increases their net income by only 20 cents. Not even millionaires pay such high tax rates.

The Congressional Budget Office studied this issue in a report released last year. It found that a single parent with one child earning between $15,000 to $25,000 experiences almost no financial benefit from working additional hours or getting a raise. What they gain in market income they lose in reduced benefits, leaving them no better off.

And that doesn’t take into account the ObamaCare subsidies that would be cut due to higher pay, perhaps wiping out even that 20 cents on the dollar.

Bilbray also ignores the effect raising the minimum wage would have on the rest of us, especially those on fixed income.

Mark Wilson, writing a policy analysis for Cato Institute, reports that a “comprehensive review of more than 20 minimum wage studies looking at price effects found that a 10 percent increase in the U.S. minimum wage raises food prices by up to 4 percent and overall prices by up to 0.4 percent.”

So, a few would get a little pay hike but others would have to pay 40 percent more for food.

Why not raise the minimum wage to $50 an hour? That would pump a lot of money into the economy. What not just print a couple trillion in money and leave duffel bags full of it on every doorstep?