QUOTE OF THE DAY
AEI: End the Amtrak experiment
Amtrak triumphantly proclaimed 2012 to be a success. The reason? It posted a loss of only $361 million for the year. That's its smallest operating loss since 1975, amid growing ridership along the Northeast Corridor between Washington and Boston. Although this represents progress in the right direction, Amtrak is still not worth what it costs American taxpayers.
Amtrak has never been profitable. From its outset in 1971, it has been backed by taxpayers with billions of dollars in direct aid and loans. Over the past three years alone, Amtrak has received more than $4.4 billion in federal aid, and it still was not able to finish any of those years in the black.
In 2011, passengers took about 30 million trips on Amtrak. More than 10 million of them were on Amtrak's Northeast Corridor, where tickets run from $49 to more than $300. Most riders pay about $150 to get from Washington to Boston -- a route that cost $125 in 1997 -- but today's real cost is much higher than it seems. Through subsidies, the federal government kicks in almost $50 for every Amtrak ticket, putting the average real fare of an Amtrak ticket close to $200.
Chicago Tribune: Quinn predicts $400 million less for education in next budget
Gov. Pat Quinn's administration is projecting a $400 million reduction in education spending in the next budget after the state failed to rein in government worker pension costs.
If that holds up, the governor would unveil a financial blueprint that would result in state education funding going down for the third consecutive year. The move also would be part of a broad-based, across-the-board slice made throughout most of state government. Among major exceptions would be health care spending for the poor, which is expected to rise after cuts last year, and public safety, an area projected to be mostly flat after the recent closure of two prisons, according to new preliminary figures.
NPR: Whole Foods CEO calls ObamaCare fascism
What he doesn't think is right is President Obama's health overhaul and the new costs that coverage requirements will place on businesses.
When Inskeep asks him if he still thinks the health law is a form of socialism, as he's said before, Mackey responds:
"Technically speaking, it's more like fascism. Socialism is where the government owns the means of production. In fascism, the government doesn't own the means of production, but they do control it — and that's what's happening with our health care programs and these reforms."
Real Clear Markets: Who Is the Fed Helping? Not the Little Guy
For more than five years the Federal Reserve has conducted an unprecedented monetary expansion. Over this stretch the Fed's balance sheet has tripled. Its key interest rate has been zero since December 2008, forcing down rates across the credit spectrum on everything from mortgages to municipal bonds. Various programs and objectives have been used to keep the ride going. What was conceived of as an emergency measure to provide liquidity to the banking system has morphed into a stimulus program that the Fed says is now supposed to heal the labor market. The real question is, who's benefited from this?
The answer is the economy's biggest borrowers. That starts with the government. Thanks to the Fed's bond-buying, Washington has been able to squeeze down interest payments as a percentage of the federal budget as it takes on record levels of debt. Last month Bloomberg reported that the Fed is absorbing about 90 percent of new issuance of Treasury and mortgage-backed debt. With the central bank as the ready buyer, Congress feels no market pressure to curtail its profligacy because paying for it has never been easier with the Fed's suppression of free-market interest rates. Why don't more "Tea Partiers" on Capitol Hill speak out against this?
Investor's Business Daily: As Europe Shows, Real Debt Danger Is From People's Sense Of Entitlement
If there's anything that sums up the brokenness of America's political class, it is the recent fiscal cliff fiasco.
After all the sound and fury, we've ended up with yet another refusal to make the hard choices concerning how the U.S. disciplines its apparently insatiable appetite for public spending.
In a way, however, the fiscal cliff circus was always a side-show to the main game. And this is the deeper existential problem that many Western European nations have long failed to master, but which America also now seems unable to address.
It's a crisis that flows from a very unwholesome dynamic between democracy and the fact that many people now assume they're entitled as a matter of right to be given any number of things by the state without too many questions being asked about how to pay for it all. The combination is presently proving toxic for much of Europe, but increasingly constitutes a profound danger to America's economic future.
FiveThirtyEight: What Is Driving Growth in Government Spending?
It’s one of the most fundamental political questions of our time: What’s driving the growth in government spending? And it has a relatively straightforward answer: first and foremost, spending on health care through Medicare and Medicaid, and other major social insurance and entitlement programs.
But I thought it was worth reviewing the evidence in a bit more detail. There are a few surprises along the way, some of which liberal readers might like and others of which will please conservative readers.
The Web site usgovernmentspending.com has an abundance of data on federal, state and local spending at different points in time. My focus will be on how government has been spending its money in the present and the past, rather than evaluating any future budgets or projections.
Pethokoukis: Is the big US budget problem entitlement spending or defense spending?
Reuters: U.S. business executives call for raising retirement age to 70
A business group of top executives on Wednesday proposed reforms to Social Security and Medicare that would raise the enrollment age for both programs to 70 but not raise Social Security taxes paid by upper-income Americans.
The Business Roundtable, which represents more than 200 chief executives from some of the largest U.S. corporations, also urged Congress to add a "premium support" mechanism to Medicare, peg Social Security cost-of-living adjustments to a lower inflation gauge and raise Medicare charges for wealthier beneficiaries.
This strategy for "modernizing and protecting our social safety net" would save $300 billion in Medicare spending over the next 10 years, make Social Security solvent for 75 years and help foster stronger economic growth, the group estimated.
Businessweek: SEC May Force Disclosure of Political Contributions
The U.S. Securities and Exchange Commission quietly announced last month that it’s considering forcing publicly traded companies to disclose political contributions. Such a regulation could transform the way money gets spent on elections, so it’s no surprise that two opposing camps are already preparing to try influence the agency’s decision.
On one side are such trade associations as the U.S. Chamber of Commerce, which spent nearly $30 million trying to defeat Democratic candidates during the 2012 election cycle. Because of their tax-exempt status with the IRS, trade associations aren’t required to reveal their donors. That essentially gives companies a free pass to donate to trade associations and influence elections without having to face public backlash. But the Chamber is arguing that investors don’t need to know about political donations because they’re too small to have a significant effect on a company’s bottom line. This may be the case, but right now investors have no way to confirm it because the amounts don’t have to be disclosed.
Opposing those groups are academics and shareholder activists who have long crusaded for greater disclosure. In 2011, Columbia University Law Professor Robert Jackson and nine other academics petitioned the S.E.C. to make companies report their political spending to investors. The petition got 322,000 favorable responses—reportedly the most the agency has ever received on any topic.
CARTOON OF THE DAY