Couldn’t Help But Notice (021507)

It’s not the New York Post (whose related article is still accessible), but it will nicely suffice — BizzyBlog’s post on the Monthly Treasury Report and the deficit situation was referenced in an opinion piece at dnronline.com, the web site for the Daily News Record in Harrisonburg, VA. It said, in part:

According to “Bizzyblog,” a Web site that specializes in business news, “There is a very real possibility that the federal budget will be in a surplus situation when President Bush hands over the keys to the White House in January 2009.”

Whichever side you are on in regard to the national and international issues of the day, this is astonishingly good news.

Obviously, there are still problems in such federal programs as Medicare and Social Security that need to be dealt with by fiscal reforms.

However, since the national economy is doing very well, the Congress needs to remember one basic law if members seek to tinker with it. It’s a rule usually applied to physicians, but is also pertinent to congressmen – First, do no harm.

Thanks to the DNR folks for noticing. Oh — There are two capital Bs in BizzyBlog.
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There’s pork, and then there’s P-O-R-K: The Council for Citizens Against Government Waste (CCAGW) has been fighting a humdinger (”billion” capitalized by me):

The Council ….. today highlighted taxpayers’ opposition to a record $2.3 BILLION federal loan from the Federal Railroad Administration (FRA) to the Dakota, Minnesota, and Eastern Railroad (DM&E). In less than a week, outraged CCAGW members and supporters have sent 10,258 letters to their representatives in Congress, telling them to stop this special-interest giveaway that puts taxpayers on the hook for billions of dollars.

….. According to BearingPoint (a strategic consulting firm), the loan would require an annual payment from DM&E of $246 million on top of the $15 million payment from another loan. Even if the rail upgrade increases DM&E’s current annual revenue of $200 million, the deal presents a poor credit risk to taxpayers, who will be forced to foot the bill if the company defaults.

I’m supposed believe that DM&E can more than DOUBLE its revenue with the loan? If true, why can’t they find private funding for this deal? From the facts presented (anyone with contrary facts is welcome to comment or e-mail), this would appear to be a default in the making that could cost the government taxpayers up to 10 times the $230 million that was involved in the infamous Alaska Bridge to Nowhere.

There’s much more at the link. Further explaining why the party of Ronald Reagan finds itself in the minority in Washington, the primary pork-pusher in this instance is a Republican, Sen. John Thune of South Dakota.

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Earth to Kings Island Amusement Park — These are politicians and bureaucrats we’re talking about here. You expect them to honor a promise never to have an admissions tax made by a previous City Manager that was never voted on by Council? You’re claiming that the city “has a moral obligation to keep its word.” That’s a bad argument. Better argument, if supportable –

….. a University of Cincinnati study showed that a 6 percent admissions tax at Kings Island, which attracts more than three million visitors a year, would negatively impact other businesses in the region such as hotels and restaurants by as much as 14 percent because fewer tourists would visit.

For what it’s worth, though I don’t support a tax, the estimated negative impact seems to be a big stretch. A different article on the same controversy claims that UC’s study project that the park’s revenue would fall by 14% with a 6% admissions tax. That seems flat-out ridiculous for something that economists would normally agree has an inelastic demand.

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Here’s another negative result from Sarbanes-Oxley:

Typically, if a company had a bond offering, it would have to register that with the SEC, a process that’s become quite burdensome. But, if the bonds are just traded among institutions, with no plans to make them available to the public, then the company doesn’t have to file anything. This practice has grown by 50% in the last two years, far outstripping the rest of the market. Of course, unregistered bonds carry a higher degree of risk, but because there’s a high demand for bonds these days, it’s a risk that buyers are willing to take. This is obviously the opposite of what Sarbanes-Oxley intended, but it’s the natural result of a law that imposes higher costs on companies that report publicly.