Month: May 2008

What Is A Billion

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I got a forwarded email about putting some perspective on what “a Billion” is and how easily politicians throw around numbers on that order of magnitude. Here’s a summary from the email that attempts to put some perspective on the “one billion” figure:

A billion seconds ago it was 1959.

A billion minutes ago Jesus was alive.

A billion hours ago our ancestors were living in the Stone Age.

A billion days ago no-one walked on the earth on two feet.

A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.

While this thought is still fresh in our brain, let’s take a look at New Orleans It’s amazing what you can learn with some simple division. Louisiana Senator, Mary Landrieu (D), is presently asking the Congress for $250 BILLION to rebuild New Orleans. Interesting number, what does it mean?

Well, if you are one of 484,674 residents of New Orleans (every man, woman, child), you each get $516,528.

Or, if you have one of the 188,251 homes in New Orleans , your home gets $1,329,787.

Or, if you are a family of four, your family gets $2,066,012.

The first two numbers got me thinking because if it was 1959 a billion seconds ago then it was 1000 B.C. a billion minutes ago. It turns out that a billion seconds is 31.7 years (so 1976) and a billion minutes is 1901 years (107 A.D.). If those numbers were calculated in 1992 then the 1959 number would be correct for a billion seconds and the billion minutes would have been nearly 60 years after Jesus died.

Despite that discrepancy, the value of $250 Billion dollars for New Orleans should open our eyes to the sloppy and generous spending practices of Washington. $250 Billion is nearly $1000 for every man, woman, and child in this country. Our government thinks that it can stimulate the entire national economy for less than it would take to rebuild New Orleans ($165 Billion vs $250 Billion). With numbers like that anyone should start being interested in making our government more fiscally conservative.

Tags economics, email, money, numbers, waste

Local

Increasing City Council Pay

Post author By David
Post date May 19, 2008
6 Comments on Increasing City Council Pay

The news that our mayor asked city council to raise his pay and theirs got me thinking about this issue more closely than I’ve ever thought about it before. It makes sense that it would be a sensitive issue, but even in the private sector I’m a bit leery of giving someone the power to set their own level of compensation with money from other people. Congress is a good example of the abuse of this power as they have set a system of automatic pay increases (every year as I recall) unless they take action to prevent the pay increase.

I’m not accusing our city council of anything even remotely like that but I wanted to see if anyone had any thoughts or experience with this type of issue that might help shape my position. I’m trying to balance fair compensation with maintaining the integrity of the public service aspect of serving in city government as an elected officer. I’ll share my position after I firm it up a bit. I plan to be talking with Johnny Revill (a member of our city council) about the issue since he lives near me.

Tags city council, Lehi, money, public service

National

Federalist Nos. 11 – 12

Federalist Nos. 11 – 12 follow the same overarching argument that many of their predecessors followed. It can be boiled down to the truths concerning economies of scale. A larger union has great advantages over a smaller nation in many aspects of government. Number 12, which deals with government revenue, reminded me of a few issues related to taxes that I had not remembered and a few that I had never considered.

One of the things that has always been a pet peeve of mine is the incessant focus on the necessity of an ever expanding economy. I was reminded of why that would be when I read:

The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money in circulation, and to the celerity (speed) with which it circulates. Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury.

Money is only valuable because of the fact that it acts as a lubricant in the mechanisms of commerce. Because of our ever expanding demands for government services and intervention the government has an ever increasing need to generate more and more revenue through taxation and that is best done by faster and faster monetary circulation – although they are not above inserting more otherwise worthless paper into the system to increase their revenue when they feel it is necessary.

What I had never considered was the following:

It is evident from the state of the country, from the habits of the people, from the experience we have had on the point itself, that it is impracticable to raise any very considerable sums by direct taxation. Tax laws have in vain been multiplied; new methods to enforce the collection have in vain been tried; the public expectation has been uniformly disappointed, and the treasuries of the States have remained empty. . . . No person acquainted with what happens in other countries will be surprised at this circumstance. In so opulent a nation as that of Britain, where direct taxes from superior wealth must be much more tolerable, and, from the vigor of the government, much more practicable, than in America, far the greatest part of the national revenue is derived from taxes of the indirect kind, from imposts, and from excises.

It is that understanding about the difficulty of collecting direct taxes (such as income tax) that led our founders to codify in the constitution that the federal government should not have the power to levy an income tax. Indeed, reading that statement makes the FairTax proposal look all the more enticing since it rests on indirect taxation.

If anyone doubts the reality of the assertion that direct taxes are harder to collect consider the amount of money and time that Americans spend each year in tax preparation in an effort to pay as little income tax as they can and then combine that with the amount of money and time the IRS spends trying to ensure that nobody failed to pay their allotted share of income tax. Now compare that vast sum with the amount of time and money that people spend trying to avoid indirect taxes like a sales tax.

That explains why the only patriotic thing to do with our stimulus checks is to spend them the day we get them if not before.

Tags documents, economics, federalist, taxes

Local

Re: Growth Will Force a Lake Bridge

Post author By David
Post date May 15, 2008
3 Comments on Re: Growth Will Force a Lake Bridge

It must be nice to be paid to publish your opinions – especially when there is nobody to dispute your position. With the power of the press you get to proclaim who is right and who is wrong, and you get to make your living taking the time to make a considered opinion not only about the right answer to current issues, but also to the best way to sell that position without regard to the truth. Such an attitude appears to be the driving force behind the Editorial Board of the Provo Daily Herald (DHEB) as they criticize Lehi city for what they see as the inevitability of a bridge across Utah Lake.

Using little more than their own words and logic from that one editorial it is clear that they are using Lehi as a scapegoat on an issue that is uncomfortable but which has no real villain.

Based on their words, only 17% of wage earners in Cedar Valley will be heading north for work in 2040. Would those headed East be very excited to drive to 2100 N in Lehi to travel to Provo/Orem just because it is a full freeway instead of a 6 or 8 lane arterial road (which it will undoubtedly be by 2040)?

The DHEB argues that there are “a dozen east-west corridors of five to seven lanes each” in Salt Lake County and only two in Utah County. If we compare apples to apples then we must recognize that the “measly two-lane compromise that Lehi forced on Utah County” is actually a 4 lane road (two lanes each direction) and will likely be at least 6 lanes within 15 years. That’s respectable compared to the 5 – 7 lane roads in Salt Lake County they are comparing it to as well as the 6 or 8 lane freeway that it is replacing. In addition, this compromise should be built in under 5 years rather than the 2100 N freeway which would not even be started for nearly 10 years. This early increase in capacity should allow for Main Street in Lehi to receive a long overdue widening as well so we could have an extra 10 east/west lanes within 15 years (not counting the 4 lanes at 1000 S. in Lehi). Between main street, 2100 N, and 1000 S, Lehi will have at least 14 east-west lanes for travel on the west side of I-15 – you could hardly expect more form a single city.

Do I expect that 14 lanes would be able to handle the traffic from 1/4 Million people expected to be in Cedar Valley? No. The real limitation on east-west travel in the county is that we have a lake spanning most of our north-south distance between our east and west side communities – why should the DHEB blame that on Lehi? The only possible solutions to that problem are a bridge over the lake or else a reduction in the necessity of east-west travel. Even the DHEB wording that this “will only hasten the construction of an east-west bridge across Utah Lake” is a reminder that such a bridge is a matter of when more than if. Is there any extra environmental impact if it is built 5 years earlier rather than 5 years later?

I find it ironic that it is the Mayor of Lehi, and not the DHEB, that has been talking for years about the need for a Cedar Valley highway (that DHEB is now calling an inevitability) and a lake bridge.

Tags Daily Herald, Lehi, media, transportation, Utah County

Picking Up the Pace

I realized yesterday that I have been losing steam on my review of the Federalist papers partly because the idea of 84 posts is rather daunting. I also realize that I am not obligated to break them up exactly as they were published. I have determined that I could have covered 2 – 5 in one post 6 & 7 in another and 9 & 10 together as well. Right there I would have cut the number of posts so far in half. In the future I will combine papers as it seems appropriate to me.

Another realization was that, while I hope to generate some discussion and even awareness of the contents of these founding documents, another result of this undertaking is to solidify the foundation of my own thoughts on issues of government so that I can write more soundly as well as return to a record of my conclusions.

Tags documents, federalist, foundation, thoughts

National State

Fortune 535

Post author By David
Post date May 13, 2008
No Comments on Fortune 535

Check out the Sunlight Foundation’s Fortune 535. It gives numbers of the net worth of each member of Congress based on congressional reporting requirements. Some of the numbers won’t be very surprising, but others will probably make you take a second look. In any case, make sure you do more than just look at the final number. For example – I looked at the Utah congressional delegation and saw that Sen. Bennett was the richest of the 5 ($5 million) and Rep. Bishop was the poorest ($16,000). Another glance shows that there’s more to the story. Rep. Bishop started his congressional career 6 years ago with a net worth of negative $55,000 and Sen. Bennett has seen his net worth drop by $43 million over the last decade (losing nearly 90% of his original worth).

I’m not trying to argue who is a good guy, or a bad guy. Nor am I trying to stir up pity for either of them. They just make a good illustration of the need to look deeper than any one number to get a better picture of the intersection of money and political figures.

Tags change congress, money, Utah

General

Federalist No. 10

Federalist No. 10 makes a statement that really rings true for me at both the federal and the state level of my government.

Complaints are everywhere heard from our most considerate and virtuous citizens, equally the friends of public and private faith, and of public and personal liberty, that our governments are too unstable, that the public good is disregarded in the conflicts of rival parties, and that measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority. However anxiously we may wish that these complaints had no foundation, the evidence, of known facts will not permit us to deny that they are in some degree true.

Of course, the important thing is not the statement of the problem, but the analysis of the available solutions. The primary solution offered is that the form of government being proposed in the Constitution would be supportable over a larger republic and thus would be less susceptible to factions (as it would be harder to form a majority) and that the multi-level structure of government would allow for issues of local concern to be solved at a local level with only “the great and aggregate interests being referred to the national.”

In theory the advantages of a larger nation controlling the influence of factions is good, but that advantage breaks down when large groups of people abandon their own thinking in favor of adopting the thinking of someone else – as Frank Staheli suggested yesterday.

Likewise, the advantages of a multi-level governmental structure evaporate when the vast majority of issues are presented as falling into the category of “great and aggregate interests.” Because of our propensity to elevate everything to the level of national importance the state governments are often left in the position of simply administering programs which are not within their control.

Tags documents, federalist

culture National

Establish Criteria, Not Quotas

Post author By David
Post date May 9, 2008
No Comments on Establish Criteria, Not Quotas

My wife was politically low-key when I first met her. I have enjoyed the fact that she has started to become more interested in political issues and principles of good government. This morning at breakfast, without any warning, she asked me about my thoughts on the issue of immigration. The conversation that followed led to some interesting insights (and must have been incomprehensible to our children).

First, as I have stated before, we need to make an informed decision on where we stand on the issue of immigration. Knee-jerk reactions (whether it’s “close the border” or “grant some legal status”) don’t fix the fundamental problem that we have created immigration laws that we are unwilling or unable to enforce.

One of the things that came out of the conversation was the idea that quotas are an arbitrary, and hence therefore poor, method for determining who can legally enter the country. In fact, quotas are a bad way to make any public policy. No matter where you set the numbers they are essentially arbitrary. There is no reason why person X+1 has greater potential to burden the nation than person X.

If we think that we should not have completely open borders then we should set criteria for who is allowed to come and then allow all people who meet the criteria to enter. Prior to 1924 when we started using quotas the criteria were essentially that we allowed anyone without major criminal backgrounds or communicable diseases to enter the country. I think those are good criteria to keep and there is no reason that we cannot develop other criteria to keep immigration at sustainable levels and make sure that we are getting the people that we want. For example, if we are looking for people to do menial jobs for us then we should allow people in who have arranged to take those jobs. If we only want people who will work to become citizens then we set criteria that they must achieve citizenship within a set amount of time or be deported.

I’m not saying what criteria we should use – I think that’s a national debate that we need to undertake – but I am saying that the land of the free should not be free only to the first 10000 people in line each year.

Tags citizenship, immigration, Laura, liberty

National

Delving Into “Six Steps”

Joe Jarvis is a doctor and a candidate for the Utah legislature. I was very interested in exploring the six steps to bring about true health-care reform in Utah that he outlined in the Salt Lake Tribune. He has been kind enough to answer some of my questions and I want to share what I have learned from him and from digging into his sources.

Health underwriting

Every critically ill or injured person will be treated in our health system whether they have health insurance or not.

The realization that doctors and hospitals are obligated under the law to treat people in need should really change the way we look at the issue of universal coverage and the underwriting process. It deserves to be one of the areas we look at to make fundamental change to improve our health care system.

Unsafe hospital practices

Another cause of inefficiency in the system. Dr. Jarvis pointed me to studies by the Institute of Medicine demonstrating the statistical results of accidents and poor industry practices. (I say statistical to make it clear that the above link does not lead to grotesque images of hospital injuries.)

Inappropriate care

Inappropriate care seems to be the symbol of all that is wrong with our system. It appears to be a direct result of a medical industry that is being controlled by the insurance industry which is more interested in avoiding legal repercussions than in keeping people healthy

Perverse incentives

Dr. Jarvis quoted an article from the Wall Street Journal on April 5. I was unable to find that article to confirm the numbers he quoted (“if everyone in America went to the Mayo Clinic, our annual health-care bill would be 25 percent lower (more than $500 billion) and the average quality of care would improve.”) I did find an article from April 7th in the Wall Street Journal, More Choices Drive Cost of Health Care, that appeared to be the same except that it had different numbers ($50 billion saved over 5 years). (Follow the link here to see more than the free preview.) While I could not verify the numbers he quoted, the concept that we must eliminate the perverse incentives that drive the health care system is sound.

Market-based health policy

Dr. Jarvis argues that “health care is not subject to market forces, such as a lowered price increasing demand. No one ever had an appendectomy because the price was right. The occurrence of illness and injury primarily determine demand for health services.” While I would agree with him in the case of an appendectomy there are services (lasik, orthodontics, or well child checkups for example) where demand will rise as prices fall. Besides that, the WSJ article cited above indicates that many people, fueled by a “more is better” attitude, will indulge in available health services that are unnecessary. This would probably not be the case if they had to pay more than a token amount for those extra procedures. Also, at times when the patient is not the driving force behind extra procedures the findings are that

More office visits, hospital stays and diagnostic procedures likely indicate poor coordination among doctors and facilities that can lead to worse care and outcomes.

So far I am not convinced that real market forces do not have a significant role to play in radically improving our health care system.

Benefit denial

I had never previously considered the cost associated with claim denials, but Dr. Jarvis provided some eye opening data. In his article he stated that “Claims costs are at least 10 percent higher in Utah than would be optimally efficient.” He was gracious enough to allow me to look through the data he used to arrive at that figure and answer my questions to help me understand what I was seeing.

Here’s what I learned; the claims cost is the percentage of the insurance company’s revenue that is spent in evaluating and denying claims – it does not count the cost of claims paid, just the cost of processing the claims. The 10% figure is a bit misleading. Let me try to clarify the numbers. The most efficient insurance provider in Utah is apparently the Public Employees Health Plan (PEHP) which spends nearly 4% of revenue in processing claims. The data from the other major health insurance providers (IHC, Blue Cross, Altius, and UHC) shows that they spend between 12% and 19% of revenue on the processing of claims. To put that in perspective, PEHP spends 1 of every 25 dollars in claims processing while the other providers spend between 1 in 8 and 1 in 5 dollars. That is 3 to 5 times higher than optimal. It is a difference of 10% of their revenue but it is not evidence that they spend 1.1 times the optimal amount on claims processing.

Conclusion

Even where I do not fully agree with the details of Dr. Jarvis’ claims about these six steps I do agree that all six of these steps are important issues to address if we are to come up with a decent approach to improving health care in our state. I also agree wholeheartedly with Dr. Jarvis that the system requires a major overhaul, not just some tinkering if we are to avoid the looming crisis in the health care system.

Tags connections, free markets, health care, Utah

National

A Good Summary of the FLDS Situation in Texas

Post author By David
Post date May 6, 2008
6 Comments on A Good Summary of the FLDS Situation in Texas

I really liked the content of the well titled San Angelo Witch Hunts. The author does a good job of outlining the case and demonstrating that so far we have ample evidence that the authorities are and were violating the Constitutional rights of the FLDS people (even if they were breaking the law) and that we have zero solid evidence that the FLDS people were actually violating the laws. Either there is a lot of evidence that is not being made public (which would still not excuse the illegal actions of the authorities) or else this is an example of authorities who have zero respect for the most fundamental laws of the nation.

I don’t think anyone could read that post and still excuse the actions of the Texas authorities.

Tags Constitution, FLDS, government, Texas