Health and Human Services Obama Care Gobbledygook

HHS paragraph 13.1 - Medicare Policies (Rev. 71, 04-09-04)

“The National Coverage Determinations (NCDs) are developed by CMS to describe the circumstances for Medicare coverage nationwide for a specific medical service procedure or device. NCDs generally outline the conditions for which a service is considered to be covered (or not covered) under §1862(a)(1) of the Act or other applicable provisions of the Act. NCDs are usually issued as a program instruction. Once published in a CMS program instruction, an NCD is binding on all Medicare carriers/DMERCS, FIs, Quality Improvement Organizations (QIOs, formerly known as Peer Review Organizations or PROs), Program Safeguard Contractors (PSCs) and beginning 10/1/01 are binding for Medicare+Choice organizations.”

 

Tax Breaks for Big Oil or for Big Hollywood?

Congress rejected the Obama administration’s proposal to “end tax breaks for big oil.” The White House will prominently feature the Republicans as the lackeys of Big Oil in the 2012 election.

The Obama administration tells us that “tax breaks for big oil” deprive our treasury of billions.  Besides that, the energy giants are making giant profits. They are greedy and don’t want to pay their fair share. Also we hear that tax subsidies are driving up the price of gas at the pump. (I guess no one in the Obama administration took an economics exam. Subsidies increase supply and drive down the price).

If we dig deeper into the tax code, we learn that “Big Oil” tax breaks apply, in most cases, to other industries, not just to “Big Oil” as we are led to think. These other beneficiaries are not under attack. I guess they are either less successful, less greedy, or give more to the White House.

If the Obama administration wants to be honest, it should propose to Congress to continue tax subsidies that other industries routinely receive with the exception of oil and gas, for which the tax breaks will be cancelled on a discriminatory basis.

For example: 1) Depletion allowances apply generally to industries with finite supplies of natural resources above and below ground. They even apply to timber, which I thought was a renewable resource; 2) Intangible drilling costs allow oil companies to write off in one year costs associated with drilling, such as building roads and transporting supplies. Many other companies and industries have similar provisions (see Hollywood below); 3) The sheltering of taxes on profits earned abroad applies to all companies with international operations, not just to “Big Oil.” Microsoft may save as much from this provision as “Big Oil,” but Microsoft is not a target at this moment. Maybe later.

After reading Sec. 181 of the IRS code on “Treatment of Certain Qualified Film and Television Productions,” I became more concerned about “Big Hollywood” than about “Big Oil.” It turns out the filmmakers can write off the entire costs of film or television productions up to $15 million. In a deft touch of social engineering, I further learn that filmmakers can write off more if the costs are incurred in a low-income community (under section 4-D) or an isolated area of distress (designated by the Delta Regional Authority under section 20009aa-1 of Title 7). The latter must be a pay off to New Orleans. I can also imagine an IRS agent tacking film crews through treacherous slums to make sure they are spending their money in the hood.

I favor the elimination of all tax subsidies – to oil, timber, Hollywood, renewable energy and so on (The list is without end).  All tax preferences, even beloved ones such as the home interest deduction, distort economic decision making. So let’s get rid of all of them and place all economic activity on a level playing field. In return, we can all enjoy lower tax rates, not just “Big Hollywood.”

A Community Organizer Among Hunter-Gatherers: Do We Have Socialist or Individualistic Genes?

 "I think when you spread the wealth around, it's good for everybody." Barack Obama October 13, 2008

A young community organizer is struck by lightning and is transported back to 20,000 BC, sitting around a fire as twenty five cold fur-clad men recount their day of hunting and gathering.

The community organizer feels an immediate kinship.  His Ivy League course on “Liberation Writings from Marx-Engels to Cornell West” taught him that these noble “first communists” constitute “our loving, peaceful, lyrically fair human core.”  Shared belief in collective production and equal distribution make us spiritual brothers. He is fortunate to be able to observe the “blissful conditions of a fabulous golden age of the remote past,” as one writer phrased it. This should be fun.

The glorious savages name him their leader.  Anyone who could make fire with the “flick of a Bic lighter” must be a god. Well, if our intrepid time traveler can organize tough Chicago neighborhoods, he can help this clan live up to its principles of  collectivism and redistribution.

The next day, the community organizer dispatches the hunters and gatherers. He divides them into groups of five and observes with dismay as they depart in ones and twos. He waits near the fire as they return – some with food, others empty handed. The rugged Thor returns with an antelope, and the clan gives him the place closest to the fire’s warmth.  The community organizer has to move.

Our community organizer writes observations in his notebook. Indeed, the successful hunters and gatherers share, except with two they call Hapless and Helpless. Our community organizer waits in vain for his share. Apparently hunter and gatherers think a god should know how to provide for himself. He goes to bed hungry.

The next day Gor bags a deer. He shares with all except Hapless, who got lost, and Helpless, who sprained his toe. Now Gor gets the place closest to the fire. The Community Organizer gets nothing.

Outraged, the community organizer rebukes Thor and Gor. They should pay their fair share!  Down-on-their-luck Hapless and Helpless need a helping hand. Also community organizers don’t work for nothing. In a dramatic gesture, he waves his magic cigarette lighter: “If you do not provide for me and the less fortunate, I will bring the wrath of the gods down upon you.”

The next morning Hapless, Helpless, and the community organizer awake to find the others gone. The community organizer snaps his fingers to return to the 21^st century, but he is stuck in time. He, Hapless and Helpless become weaker and weaker and die.

My story is based on Thomas Mayor’s Hunter-Gatherers: The Original Libertarians. He demonstrates that we are genetically programmed to respect  individual rights to the fruits of our own efforts. Our prehistoric forbearers did not engage in voluntary redistribution. They shared perishable food, not out of altruism, but as insurance and reciprocal gift giving. Consistent shirkers were expelled from the band. If anyone tried to force them to redistribute, they simply picked up and moved on to another hunting ground.

go to forbes.com

The Most Accurate Account of Russian's Presidential election

For an informative cartoon on Putin's re-election:

Click here

2011 Ruffin Gregory Awards for the Worst Treatment of Climate Change in an Economics Textbook.

Apparently, the 2011 Ruffin-Gregory Award for the Worst Treatment of Climate Change in an Economics Textbook are out. Roy Ruffin and I (who did not know this award existed until recently) congratulate this year’s co-winners (or are they losers?): Miller and Gwartney, Stroup, Sobel, and MacPhearson, who received the vaunted grade of F. Among the losers (with the best treatment of climate change) are Mankiw and Krugman and Wells, who were awarded coveted A’s.

We look forward with bated breathe for the announcement of the 2012 awards.

My Diminished Capacity to Understand Obama's Clean Energy Policy

It took President Obama’s Press Secretary Jay Carney to shock me to my senses. As someone who favors cutting government spending on clean energy and eliminating government subsidies in general, I was particularly distressed to learn (in Carney’s words) that “I am “aggressively and deliberately ignorant of the world economy not to know and understand that clean energy technologies are going to play a huge role in the 21st century.” Even worse, I learn that “I have a severely diminished capacity to understand what drives economic growth in industrialized countries in this century.”

And I had thought that if clean energy technologies were going to dominate the 21^st century, private enterprise would figure this out and develop them itself. In my ignorance, I thought that subsidies are dictated by and for special interests not by economic rationality. I also believed that Solyndra and SunPower were not aberrations but representative of what is going on in Secretary Chu’s and Obama’s energy department. What I fool I have been.

go to Forbes.com