The Immutable Law Of The Potomac

Climate Bill: Sen. Joe Lieberman believes American households are “willing to pay less than $1″ a day to stop global warming. The Connecticut independent needs a lesson in the history of government program costs.

Lieberman and Democratic Sen. John Kerry of Massachusetts introduced in May a nearly 1,000-page climate bill they say is necessary for cutting the man-made carbon dioxide emissions they believe are warming the earth. Their goal, through the legislation’s cap-and-trade components, is to reduce CO2 emissions 17% below 2005 levels 10 years from now by setting prices on carbon.

A 74-page study by the Environmental Protection Agency released Tuesday said that the cap-and-trade provisions of the American Power Act would cost an average U.S. household from $80 to $150 a year. Lieberman was clearly pleased by the analysis.

But he nonetheless warned that “there’ll be some people who will want to demagogue that politically” — before resorting himself to a bit of demagoguery by noting that the EPA’s cost estimate is “less than $1 a day.”

Lieberman should be disabused of this fantasy and shamed into telling the country the truth. The cost will be higher, much higher. A Heritage Foundation analysis of a similar cap-and-trade bill found that the legislation would by 2035 cause a total GDP loss of $9.4 trillion, reduce the average family’s net worth by $40,000 and cost 2.5 million jobs.

In making his less-than-a-dollar-a-day claim, Lieberman ignores a law of the Potomac: Government programs are never as inexpensive as those who support them say they will be. Neither are the taxpayers as unmolested as the lawmakers who pile on larger loads of mandates promise they will be. It is the nature of government programs and regulations to cost more than their advertised price.

As we have noted before, no program has exceeded its projected costs more egregiously than Medicare. When it was created in 1965, the public was told that its hospital portion would cost a mere $9 billion by 1990. The real cost, though, was $66 billion.

For all parts of the Medicare program, the cost was projected to be $12 billion by 1990. Yet it actually cost $107 billion.

When a fourth part — the prescription drug benefit — was added to Medicare in 2003, Washington was still having trouble calculating future costs. When the program was being debated, the public was told it would cost $400 billion in its first decade. After it was passed, forecasts assumed the program would cost $534 billion across its first 10 years.

Then, within the space of a few months, the projection jumped to $1.2 trillion.

The cost of Medicaid, the government’s health care system for the poor, has followed an upward trend similar to that of Medicare. Launched in 1965, it was supposed to cost $9 billion by 1990. But after that quarter of a century, Medicaid’s real cost was $67 billion.

A special hospital subsidy was added to Medicaid in 1987 that Washington said would cost $100 million in five years. Yet the government spent $11 billion on it.

The architects of Medicare and Medicaid should have learned from Social Security, which began collecting payroll taxes 28 years earlier. The tax rate needed to keep that monster fed has grown sharply, from 1% to 12.4%, (total of the combined “contributions” from both employee and employer).

Less than a dollar a day? Not a chance. And Lieberman should know better. He’s been in Washington long enough to appreciate that spending estimates in that town are worth less than a congressman’s word.

Even if the EPA estimate is correct, there is also the question of effectiveness. Why should Americans be forced to spend even a single dime on a program that’s not needed and would be grossly ineffective?

Not needed, because the scientists who believe in global warming are just guessing.

And grossly ineffective because, according to climatologist Paul C. Knappenberger, the American Power Act would cut global temperatures by only 0.077 of a degree Fahrenheit by 2050 and 0.2 of a degree by 2100.

At less than a dollar a day, it’s still a poor investment because there simply is no return. Paying for Lieberman and Kerry’s vanity legislation would be like paying for a ride on a unicorn: The promise will never materialize.

http://www.investors.com/NewsAndAnalysis/Article/537595/201006161850/The-Immutable-Law-Of-The-Potomac.aspx

I wear many hats but history, economics and political observance have always been a passion. I am a graduate of the University of Cincinnati College of Business with a degree in Information Systems and Digital Business with a minor in European History. I work for a small mom-and-pop IT consulting and software design company. We deal in servicing mostly government funded non-profit mental and behavioral health care agencies in the state of Ohio. In this I deal with Medicaid and Medicare funds and have a little insight on the boondoggles of government there. Thankfully the undemanding nature of my daily profession gives me ample time to read and stay aware of our current state of affairs which I find stranger than fiction in many instances. In addition to being in the IT field, I have also been self employed with a small contracting company so I might know a thing or two about the plight of small business that employs 71% of the American workforce. I however don't draw my knowledge from my day jobs, which I have had a few; I draw it from an intense obsession with facts and observation about the world in which I live. I do have formal education in things such as history, economics and finance particularly as it pertains to global issues, but I have come to find much of what I thought I knew from the formalities of a state university I had to unlearn through much time and independent research. I hope you enjoy what I bring you which is not often heard in the mainstream news outlets. I would like to think my own personal editorializing is not only edifying but thought provoking while not at all obnoxious. That last one may be a hard to achieve.

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