DeLuca defends Gambling; Senate approves budget

Following the Obamacare ruling that upheld perhaps the most unconstitutional legislation in U.S. history, the Delaware General Assembly has begun its mad dash to pass as much legislation as it can in the last few days of session.  First up, Senator DeLuca pushes legislation to legalize internet gambling.

Senator DeLuca says that we should allow internet gambling because “it’s already available, it’s just illegal”.  And when you put it that way, who could argue with the logic?  Well until you apply that same logic to prostitution, crack cocaine and heroin.  I mean prostitutes, crack cocaine and heroin are already available, so why not make them legal?  Think gambling doesn’t measure up?  Well ask the millions of people affected each year by the disease of problem gambling if they think that their addiction is not as bad as a drug.  The bill passed the Senate 14-6 and it doesn’t just allow internet gambling but expands table gaming outside of the 3 racinos that the state was promised gambling would remain at.  Full disclosure, I am running against Senator DeLuca in the 11^th District.  I can promise you this, I would not vote for this kind of bill as it sets a unique precedent and endangers our elderly, children and families.  It also will no doubt detract from the casino revenues that our state relies on to balance its budget.  Speaking of budgets…

Delaware State Senate voted 16-4 to pass a $3.6 billion budget that was boosted by a pay raise for government workers that will cost taxpayers $21 million.  $10 million more was added by the legislature as a boost to retiree healthcare and pension benefits.  The final bill breakdown includes $1.2 billion on public schools and over $1 billion for health and social services (which will more than triple next year when the Democrats pass their single payer healthcare bill).  Once again, the single party rule in Dover has spent more money than we can afford and has failed to deal with the major problems of growing government, failing schools and rising healthcare costs (especially now that Obamacare has been upheld).  If we don’t act in November, 2013 will be the end of Delaware as we know it.  Our budget will explode, jobs will disintegrate and we will become a wasteland in the image of Detroit.  Support your local opposition candidates in November. 

Herman Cain's 9-9-9 Plan Explained

It's no secret that I am a big supporter of Herman Cain.  If someone were to ask who I was endorsing, I would say Mr. Cain and there are a number of reasons for that.  I think he is the most qualified candidate in the room to fix the economy, get us out of debt and lead us in the right direction.  Fellow blogger Ted Belman over at Israpundit lays out Cain's impressive resume of accomplishments.  To put it simply, he has the educational pedigree of Obama (a Masters in Comp. Sci), better business experience than Romney, the family background of Santorum, the TEA Party fire of Bachmann and dare I say it the gall to say what he means that Ron Paul has!  What he DOESN'T have, are the chains of a lifetime of politics dragging him down.  He doesn't have the baggage of  being a politician.  He's been a citizen, a problem solver, a military man and yes, he's been a rocket scientist!  So while it doesn't take a rocket scientist to solve our problems, I'd feel better having someone who is one working on the solutions!

With that said, Cain's often attacked over his controversial 9-9-9 plan by people who either don't understand it or are misrepresenting it for political gain.  While I don't have the credentials to pretend I know everything, this plan is one that I feel comfortable speaking about because it's just that simple.  For many years now, our government has increasingly tried to make things more complicated than they are in an effort to get us to turn away and "leave it to them to deal with".  The fact is that it's really NOT that complicated.  The economy of the nation is no different than the economy at home.  They've over time convinced us that deficit spending is OK, that we don't need to even have a budget and that our nations credit would never be questioned.  Well that wall of straw came crashing down when America lost her AAA rating with S&P.  While the politicians will demonize S&P for their downgrade, the real fault lies with those politicians who have run up $18 Trillion in debt, treated our Constitution like a wet rag and played fast and loose with the rules.  Cain's plan is not a political plan, but a practical business solution to the problem.  He started by identifying the problem, which we will do below.

In our homes, if the bills come up off and we owe more than we take in, maybe we get away with that for a month or two but eventually the bills come due.  It's no different for government, no matter what they say, the rules of physics, mathematics and accounting are the same.  At home, when you see debt you look for ways to pay it off, either you cut down on spending to even it out or you have to find a way to make more money, either with a second job, a raise or some other increase in "revenue".  For government, "revenue" (what we call "income" at home) is taxes and fees that citizens are charged to ensure that the bills are met.  Government has to take in enough to provide a benefit to the people and cover the cost of the projects.  What's happened over time is that as government has convinced us that deficit spending (a.k.a. running up credit card debt) is OK, we've added another cost to the list, interest.  So now, government has to spend enough to provide a benefit, cover costs AND pay interest on the debt.  Their answer?  Borrow more money.  It's like at home, instead of cutting back on spending or picking up that part time job, you went out and got another credit card with a higher limit.  When it gets really bad, they authorize the Fed to print more money (which we would go to prison for) which really is just borrowing from one hand to pay another, a little like using your rent payment to pay your electric bill.  The rent will still come due, you've just kicked the can down the road except when you print MORE money, you decrease the value of it and so you need more of it to pay your bills.  Fast forward a little and what you have is the equivalent of the government maxing out credit cards at all of the nations banks, the major international banks, local credit unions and now looking for even MORE.  If it sounds insane, it is.  This is what the government has done behind our backs and NOW, when their scheme is finally exposed, they look at the banks (credit card lenders) and say "Why did you give us all this MONEY!?" or they look at big business (which eventually becomes small businesses) and say "HEY!  You're stealing from us because you have money and we need money!"(like demanding a raise from your boss because you're overspending at home).  One day they will look at all of us as taxpayers and demand a raise.  So we know the problem, spending, debt and an inability to make the tough choice due to moral and ethical bankruptcy.  Why is 9-9-9 such a great solution?

The genius is in the simplicity.  The current tax code is more than 60,000 pages of loopholes, legalese and special interest giveaways that confuse, confound and distract from the fact that there are a dozen major federal taxes not to mention the fees charged to people and businesses as a result of our regulatory climate. Cain's plan doesn't tinker around the edges of the code, delete a few loopholes or monkey around with the language.  It throws the old system out (and good riddance!) and replaces it with 3 simple taxes for us to follow.  No more chasing the other hand and looking for the many hands.  It's divided up into 3 parts, a corporate tax of 9% which lowers our current corporate tax from the highest in the world at 35% down to one of the lowest in the world and which will stimulate growth (more on this tax later); an income tax of 9% (currently those making between $0 and $8,500 are taxed at 10% so EVEN those Americans get a tax cut); and finally a 9% national sales tax (this seems to give people the most heartburn but as I'll explain, this is actually far closer to the principles of America's founding than the income tax is).  That's it folks, all other taxes go away, no Capital Gains taxes, dividend taxes, death taxes, payroll taxes, medicare taxes, social security taxes, zip,zilch NADA.  It's GONE!  And we are left with just 3 taxes to keep an eye on.  So let's look at those taxes and how they compare to the current system.

9% Corporate Tax
As I mentioned above, America's corporate tax rate is 35% which makes it the highest in the world.  This is a tax put on businesses of a certain size that basically allows them to do business in America.  It's also the main factor behind these corporations "shipping jobs overseas" (well this and regulations like Obamacare...but I digress) and putting Americans out of work.  So next time Barack Obama starts yapping about the evil corporations, ask him why the country taxes them so high as compared to the rest of the world and what he would do if he were running that business.  Another thing we know about corporate taxes is that they are "regressive" and passed along to consumers in the price of goods and services.  This is a word you'll hear Ron Paul supporters and the left use a lot to frighten the poor (we'll cover regressive taxes later when we talk about the national sales tax).  So we know that 35% corporate tax gets pushed through on the price of everything you buy, which means there is an automatic 35% markup in pretty much everything you buy.  Cain's plan slashes that tax rate from 35% down to 9% which will make it one of the worlds lowest rates and encourage businesses to return to America and employ American workers.  That will strengthen the economy, widen the tax base, put more people back to work and generally create MORE revenue and more prosperity.  It will also lower the cost of goods, no longer will there be a 35% markup on every product, it will be reduced to 9% which will make everything you buy cheaper and lower the threshold for poverty.  These are improvements we can all get behind.

9% National Sales Tax
Now let's talk about he boogieman in the room, the National Sales Tax.  As I said above, the far left AND the far right, the Obama supporters and the Ron Paul supporters are already running around calling this a "regressive tax".  Basically, a regressive tax is one that affects the poor more than the rich and it's usually used to discourage sales taxes.  The idea is that the poor spend a higher percentage of their income on necessities than the rich do.  Perhaps this is true on paper BUT in reality the rich spend far MORE in terms of dollars (and often percentage as well) on products than the poor do.  The rich buy bigger and more expensive houses, cars, boats, etc.  They often spend more on their clothes, eat more expensive food and require more (and higher costing) utilities than the poor.  With that said, keep in mind that the slashing of the corporate tax will also drive down the PRICE of goods and stretch American dollars that much farther.  Now, a national sales tax is a scary proposition, especially with a Congress like we have.  With that said, almost every state in the nation has a state sales tax and have since the beginning of the country so it can't be too bad for the poor or no one would live in a state with a sales tax!  The reality is that the corporate taxes DO get passed on but really a sales tax is fair, not regressive.  It allows each of us to contribute to our nation's future and with the boost to the economy that the corporate tax reduction would grant, the impact would be far less than it might be if say they were to institute it now with no other changes.    Given the savings of all the other taxes that are being dropped completely, this works out in almost every ones favor.  In fact, without loopholes, the only people who might be hurt by this are government and the corporations who rely on loopholes to dodge their tax burden today.


FAQ/Myths
1.) Isn't this just a tax increase? - The answer is no.  This is not a tax increase.  Let's do some simple calculations.  As we discussed, you pay a 35% tax on everything you buy today PLUS your income tax of at least 10% (I know that SOME people pay 0 tax but those are anomalies easily dealt with) so your total tax burden is a minimum of 45% of your total income and expenses.  Under Cain's plan, with the 9% sales tax, 9% income tax and 9% corporate tax, your total tax burden is just 27% which results in at least a net 18% cut for even the lowest paid Americans.
2.) Won't the politicians just increase the taxes from say 9-9-9 to 15-15-15 and drive our burden up? - The answer is maybe.  See, the reason our taxes are so high today is because we have allowed them to get out of control and take more and more and spend more and more without holding them accountable.  Our government is not designed to run on auto pilot.  We MUST be vigilant and while that requires work on our part, the upside is that WE have the power and control to get them OUT of office.  So theoretically, yes they could increase the taxes but with only three to look at, it would be hard to hide an increase and protections in Cain's plan make it harder.  #1 Since this is Cain's plan, he would be President and thus would have to sign any increases.  Veto anyone?  #2 It requires 2/3 majority in both houses to pass and as we've seen in 2011, you try herding these cats to do anything by 2/3rds majority!
3.) How will the poor be protected? - Rick Santorum, Mitt Romney and Rick Perry all brought this up during the last CNN debate and quite honestly I think Cain missed an opportunity here.  He talked about the fact that there is no sales tax on used goods and since poor people buy more used goods than new goods (cars, houses, etc.) there is less opportunity for those folks to pay the sales tax.  He also talked about the Empowerment zones which will be areas in which his plan would focus to rebuild struggling communities.  I'm thinking about places like Detroit and other such places devastated throughout the years.  What he missed hitting on was the simplest face of all.  His plan will drive DOWN the price of goods DRAMATICALLY.  Think about this a second, the difference in the cost of an item under his plan in terms of the corporate tax is this, under the current system an item worth $100 ends up being marked up 35% ($35 for every $100) and the total cost to the consumer is $135.  Under Cain's plan, the markup drops to 9% making that same $100 item cost $109.  That's a savings of $16 in this example.  The results are even better in almost every case, when you factor in all of the current taxes vs. Cain's whole plan.
4.) Will this affect Social Security/Medicare revenues? - No, these revenues will be collected from the pool created by the 9-9-9 plan so the only difference will be that they are not going to be separate taxes.  Also, Herman would lock those funds back up and make sure Congress stops spending them on wars, roads and welfare. 
5.) How will this affect underground consumer markets? - It will bring underground markets back into the tax fold.  How?  Consider this, today, an illegal immigrant worker is paid under the table where they pay no taxes on the income.  They can then go to a state with no sales tax and buy a product off the shelf only paying the 35% markup meanwhile, you and I pay10% percent on income, then the additional 35% markup.  Under Cain's plan, the incentive for companies to hire illegal workers under the table is reduced and these illegal workers are then paying into the national tax system via the national sales tax.
6.) What about states who don't have a sales tax like New Hampshire and Delaware? - This is another question that came up in the debate that I think ALL of the other candidates are disingenuous about.  #1 - Cain is right when he says that comparing the national sales tax to the state tax is like comparing apples to oranges.  They are entirely different things and state taxes will ALWAYS exist.  They will exist with the current plan OR with a new plan and so there is no reason to count them.  With the national sales tax or without it, Delaware for instance, will not show a state sales tax on the receipt but Pennsylvania, Maryland and New Jersey all will.  The price of products will STILL be lower.  In fact, there is some talk about not itemizing the national sales tax on the receipt but that will be fleshed out as we go along.
7.) How come no one else has thought of this if it's such a good idea? -These are not necessarily brand new ideas but what Herman has that the others don't is a a lack of political fear.  He is not, as I said earlier, shackled to politics like the others.  He's a business man and a problem solver and he designs programs to solve problems.  9-9-9 is not a perfect end solution and Herman freely admits that he wants to transition to a Fair Tax system, eliminate the corporate and income taxes all together and get America's engine humming again.  This is a stepping stone that takes the best elements from the Flat Tax, the Fair Tax and corporate taxes  (if there are any) and rolls them together in a transitional ball.
8) Can this pass the Congress? - The answer is yes.  Such sweeping changes to the current system have met with opposition from both sides yes, but there is enough support on the right and among moderates that an election mandate would allow Cain's plan some traction.  That's not to say that he would force it through or that he would need a super-majority to pass it the way Obama did to pass his healthcare bill (but it wouldn't hurt to swing the balance of power to the GOP!) but rather that he would be able to present it.  Sure the plan will be argued, debated and potentially modified but the upside to that, with Herman Cain in the White House, if it doesn't make sense, he ain't signing it!  And, if we don't like it, we throw the bums out and move on!

I know this is long and so I won't take up anymore time.  If I haven't convinced you by now, I'm not sure what else I can do BUT if you have a question, drop a comment and I'll get back to you.
*Updates*
10/20/2011 - My good friend Charlie Copeland, who is widely considered one of the smartest guys in Delaware, looks at the 9-9-9 plan from the perspective of economic growth and the drop in prices as a result of the reduced costs on business.  http://resolutedetermination.wordpress.com/2011/10/19/9-9-9-if-taxes-are-higher-but-costs-are-lower-americans-are-happier/

The Talking Points Are Out

Friday, Standard & Poor’s, one of the largest credit rating agencies, downgraded America’s credit rating from AAA to AA+. This was the first time in history that America’s credit rating has been downgraded. Downgrades are a sign that the credit rating agencies are losing faith in a nation’s ability to repay its debts. It didn’t take long for the Democrat Party to cobble together talking points and protect President Obama either. By Sunday the Democrats were on message and blaming the downgrade on the TEA Party. Both David Axelrod and John Kerry were out publicly calling this a TEA Party downgrade on the Sunday talk shows.

For the last few months, the Democrats, President Obama and the Republicans (led by the TEA Party Freshmen) have argued over raising America’s debt ceiling. Democrats and Republicans battled over the actual debt ceiling increase while the TEA Party freshmen focused on lowering the actual debt numbers instead of increasing the borrowing limit. Marco Rubio implored the Congress to focus on lowering the debt instead of raising the debt ceiling and the TEA Party Republicans put forth a Cut, Cap and Balance plan that called for $4 Trillion dollars in cuts to the more than $14 Trillion national debt, a cap on future spending and a Balanced Budget Amendment to the U.S. Constitution. 

S&P issued the following statement with its downgrade of the U.S. credit rating:

– We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.

– We have also removed both the short- and long-term ratings from CreditWatch negative.

– The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

– More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

 – Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

 – The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case…

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

As you can see, S&P plays the fence on the exact answer to the debt crisis but their focus is in fact on the debt burden and not the borrowing limit. They suggest a need for “progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues”. Now, each of us has to make a decision on whether we believe that raising taxes or cutting spending is the right answer but for those who look objectively at all of the facts, the best course of action is clear. We’ve absolutely GOT to reduce our spending and reform entitlements. Interestingly, the CBO released a report this weekend that shows that Social Security outlays already exceed collected revenues and in fact, without major reforms, our Social Security system is in jeopardy of complete collapse within the next 30 years or so. For current recipients, this means nothing at all if ones view is only of what directly affects them. If you look at it more broadly, that means people who are 30 years of age today and who have paid and still pay into the Social Security system may not see the fruits of their labors. Raising revenues instead of reforming entitlements or cutting spending is a feel good discussion. Sticking it to those who have more than we do is always more palatable than reducing our own comfort levels but if life teaches us anything, it’s that the easy way is hardly ever the right way. Even the most extreme of revenue increase plans does absolutely nothing substantial in the long term. 

Check out this video from Bill Whittle and then you tell me, address spending or “raise revenues” (a.k.a increase taxes, especially on the rich)?

 

CREW continues to attack an exonerated O'Donnell

So, Melanie Sloan, the Soros attack animal who leads CREW, still hasn’t gotten the message.  Very well then.  Enough is enough.  America is sick and tired of these kinds of unfounded, wasteful accusations based on politics and not evidence.  It’s time we had a new dialogue in America.  It’s time that we talked about the issues and really discussed facts and not fear mongering.  We’ve got to get away from the President erroneously claiming that “I cannot guarantee that Social Security checks will be sent out on Aug. 3 if a debt ceiling agreement isn’t reached.”  This is complete hogwash, the facts are that there are two kinds of spending in Washington, Mandatory spending, like Social Security, Medicare/Medicaid and Defense; and the second is Discretionary spending which encompasses everything else the government spends money on, like shrimp fitness, Jell-O wrestling and curbing the drinking of Chinese prostitutes.  While Obama and the Democrats are pressing the idea that simply increasing our spending limit is the answer, Republicans are looking to make the cuts to sustain our nation.  Ask yourself this, if you made $20,000 per year, owed your credit card company $140,000 and your debt limit is $150,000 which has already been increased a dozen times, is the answer to curbing your debt limit another increase?  Any rational thinking person knows the answer is no, it’s cutting your debt, paying off that credit card and understanding your limits.

The reality is that simply cutting discretionary spending, even if you cut all of it, wouldn’t fix our debt situation.  The real beef when it comes to our federal budget is in the Mandatory spending.  In 2011 (as of 9AM on July 22), our largest budget items are Medicare/Medicaid ($822.5 Billion), Social Security ($715.4 Billion) and Defense ($701.8).  They are followed by Income Security/Welfare ($421.8 Billion), Interest on the Debt ($212.6 Billion) and Federal Pensions ($212 Billion).  We have a national debt over $14.5 Trillion that works out to $46,577 of debt for every man, woman and child in the United States.  Think about that for a moment when you hear “fair share”, if you’re pregnant or just had a baby, your child automatically owes $46,577.  As soon as he/she is born, they start life with more than $46,000 of debt.  Do you think it’s fair to start your son or daughter out owing money before they can even crawl?  We have to start addressing the largest items in the budget instead of ignoring them.  The Democrats would have you believe that income tax revenue is the answer, taking as much as you can from the richest Americans is the answer and attacking corporations is the answer.  You can explore that here, where you will see what happens if you go ahead and “soak the rich”.  The current federal tax revenue is almost $2.2 Trillion while our budget is more than $3.5 Trillion (the Big 6 budget items above, total $3.086 Trillion alone) and the top 50% of wage earners (over $33,048) pay more than 97% of the taxes.  With that said, the top 1%, those earning more than $380,354, pay more than 38% of the federal personal income tax.  What’s fair?  Should they pay 40%, 50%, 60% of the federal income tax?

I’ve laid out facts above and I’ve asked questions of you, as a person.  What’s the right answer?  Is there any way to get to even without cutting spending on the Big 6 budget items?  After watching the Eat the Rich video, seeing the facts about taxes and our debt, can you see any way to get around some cuts to our largest budget items?  So why are the Democrats stalling with a discussion about raising our debt limit?  Because they can use the line, “Well, ok, the Republicans can play chicken with America’s credit rating if they want to but we can’t guarantee that Social Security checks will go out on time.”  They know that you, the average American, the senior, the soon to be retired, the bleeding heart will panic and demand that we continue to be irresponsible with our money.  It’s totally ridiculous.  The Big 6 get paid before the shrimp treadmills, before starving artists and before Jell-O wrestling.  It’s time to stop believing it just because it scares us.  Look it up, find it be true yourself, do your own homework and don’t take my word for it.  Look up the facts I cite and decide for YOURSELF what is true.  I ask you to do the same thing for Melanie Sloan and Christine O’Donnell.  Sloan’s attacks are purely politically based and they are not rooted in any facts.  The few so-called facts she has cited turned out to be outright lies by a man who had no knowledge of any of the events of which he spoke.  We’ve got to question everything she says and take her words with a grain of salt.  Every charge thrown at O’Donnell has ended up being totally false and yet how can we continue to levy a stigma against her?  Imagine if someone accused you of molesting their child who you had never even met and those charges were found to be completely false.  Would you want that accusation to remain on your record regardless of the outcome?  Is that “fair”?

New Castle County/ public employees reach sweet deal with taxpayer dollars

Readers of this blog will remember back in January when we did a story on a report from the Wilmington News Journal confirming an allegation made during the 2010 U.S. Senate campaign that New Castle County was broke.  Dace Blaskowitz, a political independent, found that the "NCCo government is simply unsustainable" and that the answer to their rampant overspending has consistently been higher and higher property taxes and sewer fees.  You may also remember that Mr. Blaskowitz found that 75% of New Castle County government costs are tied up in personnel and that is after a 2.5%paycut in 2009 and anotherin 2010.

Blaskowitz suggested a reduction in staff levels and contraction of benefit obligations yet New Castle County has gone on a hiring spree lately.  He also suggested some minimal concessions from the unions with regard to pay/benefits might be necessary to close the gap between revenue and expenditures.  The Clark Administration has said that it will work with the unions but that it is getting serious about the County finances.  Today however, sources within the County unions confirm that a deal has been reached and will be signed tomorrow.  The deal is reported to be a two year deal with county employees contributing $1200 per year to a healthcare savings fund.  In exchange for this surcharge payment, county employees will get a 5% increase (covering their two 2.5% reductions in the past 2 years) plus 3 new paid fulough days each year.  County employees will not have any holidays or current off time taken away.  Sources say that County Council Executive Paul Clark will sign the deal tomorrow afternoon.

Does this mean that our County finances are back in order?  Just a month ago when County Council passed the FY 2012 budget, Clark was talking about another 2.5% cut and other concessions from the unions.  In fact, his budget passed, despite strong opposition from Council President Kovach with the specific plan to make those cuts.  Kovach cited concerns that the budget did not properly address the current debt and also questions as to how unions would rollback 5% of their pay and then agree to ANOTHER cut of 2.5%.  Also, is it possible that the 3 extra paid furlough days are equal to that 2.5% cut?

Deconstructing the Delaware Liberal Myth

So I heard Rick Jensen talking about this blog post over at Delaware Liberal by "Cassandra_m".  Usually I don't even bother to present my fellow Delawareans over there with common sense facts because they often fail to listen to reason.  Governor Markell and I don't agree on much, including his own opinion that he is "pro-business".  Thus far Markell has shown himself to be almost anything but "pro-business".  When Delaware had the opportunity to push for an opt-out of Obamacare which threatens to destroy small-medium businesses and will demand more layoffs even from Fortune 500 companies, Markell supported it and refused to save Delaware businesses.  When the Obama Administration pushed Financial Regulatory reform through the Congress which has already shut down many jobs (potentially a thousand +) in the financial sector in Delaware, Markell supported it.  Markell has shown support for not only RGGI, the regional cap and trade system but also a national Cap and Trade system that would further punish (destroy) Delaware businesses and kill jobs.  So I decided to go ahead and post my critique of her blog posting here.  My comments are in bold.

Building Delaware's Future or How to Throw Taxpayer Money at BusinessesBy cassandra_m

Governor Markell has spent the past three days rolling out his plan to spend newly DEFAC-found revenues of $320M. Links to the Governor’s Press Releases on this are below, and worth looking at in their entirety:
Part I — Building Delaware’s Future Fund, Infrastructure:
Part II — Building Delaware’s Future, Tax Cuts
Part III — Building Delaware’s Future, Education
This is all being billed as a jobs plan, and some of it definitely supports the creation of employment — the Infrastructure proposals look like old school stimulus and takes into consideration that some newly built plant here will need expansion or adjustments to current infrastructure to operate.

Typically, the liberal spirit is to spend money in GOVERNMENT and to buy up as much land as possible so that future land use can be centrally planned.  In other words, if DuPont isn't playing ball with the government (say...on climate change) but Gore is playing ball, why not sell the government owned land to Gore instead of DuPont?  Don't think this could happen?  Well it already has.  Case in point: DelDOT land deals and Chris Tigani.

<back to Cassandra> The disappointing part of this is Part II, in which we find the Governor doing something I don’t think I thought I’d see — actually buying into the fairy tale that tax cuts create jobs. They don’t, of course, otherwise the 2000’s would have been way more robust than they were. And this plan actually extends the fairy tale — while it is certain that the financial industry is changing, there is no way to look at this industry and not see that the changes we see here in Delaware are structural ones. Jobs lost at Wilmington Trust and HSBC (and others, really) are due to serious restructurings that tax cuts won’t undo to any great extent.

Another glimpse into the liberal mindset here shows a complete and total unwillingness to put fact over ideology when they don't mix.  The reality is that going back to the 1920's, every time taxes have been cut, the economy has grown and revenues to the government have increased.  Every time.  Ok, ok, so THAT link was to a Heritage article and I know, YOU say they are biased.  Well, I guess that means that this link to the USA Today opinion piece by Bill Frist is out too?  Fine, I can understand that, but then how do you explain the jump in revenues in 2006 as reported by the New York Times?  The fact is that cutting taxes stimulates the economy as well as it does personal incomes.  It creates more wealth which can then be invested in new businesses or in expansion of current businesses.

<back to Cassandra> Tax cuts targeted at the Financial Industry are particularly galling — this industry has had the benefit of rivers of taxpayer funds in the form of TARP and multiple cheap lending facilities and now Delaware taxpayers are supposed to help support banks that are in trouble because of their own bad risk management. Again, without paying attention to the fact that there are quite a few of these jobs that won’t be coming back, no matter how healthy the economy gets.

Whoops!  Cassandra forgot to mention the REASON why these jobs "won't be coming back" to Delaware.  Part of it is because banks are under assault from all sides thanks to the financial meltdown.  Some of it is warranted and some of it is not so warranted.  A much larger part of it is Financial Regulatory Reform, also known as Reg Z.  Reg Z changed so much within the financial system (and the full impact to companies hasn't even been realized yet) that financial institutions now have some of their costs increased by 200% or more.  And while those who are committed to the causes of the left, namely bringing down the capitalist system in favor of a more redistributive model where your success only means we get to share more of YOUR wealth will not be convinced by a "biased source" it's telling to see what the company Accenture thinks of financial regulatory reform:
As we have seen, The Dodd-Frank Act has many interrelated implications for how all financial services firms will run their businesses, both short-term and long-term, and as a result, the financial services industry could look very different in five years time. The Act will increase costs, potentially hurt profits, produce new operational challenges and pose significant strategic questions about how firms will prop up their return on equity while absorbing the cost of more reporting to regulators, a more expensive cost of capital and the loss of some of their most profitable businesses. The most nimble and efficient banks, insurers and broker-dealers could pick up market share at the expense of their larger, less efficient competitors, which makes it crucial that firms make an efficient strategy for implementing reform part of the DNA of their businesses.
This is no insignificant point folks.  It's the very reason why banks are shedding jobs here in Delaware.  Key sponsors of the bill, Senator Tom Carper, Former Congressman Mike Castle and Vice President Joe Biden, all from Delaware.

<back to Cassandra> Tax cuts targeted at the top rate make no sense at all. (Full disclosure, I would benefit from this tax cut.) We are still in an economy that is finding its sea legs. It will take quite a long time to get to 7% unemployment rate, much less 5%.

And why would we want to cut tax rates on the people who create the jobs we are going to need in order to lower the unemployment rate?  Even if you don't buy the logic that I listed above, with a number of different factual sources from across the political spectrum that shows tax cuts in the past have always increased revenues and lifted the economy, you still can surely see how the rich provide the jobs.  People like Cassandra always like to go after the people making more than $250,000 as some sort of evil rich people who just want to take everything they can get their hands on.  The reality is that these are the people that create the jobs that lift our unemployment rate.  They are the small business owners, the upper level managers and the executives who create jobs.  With that said, it is easy to fall into the trap of desiring what others have, believe me there are times when I would LOVE to be a DuPont heir but we all have to remember that in America, you reap what you sow.  Until recently, America has been a place where you can keep the fruits of your labor but now it is increasingly becoming a place where government takes more of what YOU earn and gives it to those who have not earned it.  It's especially helpful to the liberal cause when these words come from someone who is part of that upper class.  When Joe Biden says "skin in the game" and people like Cassandra who claim to be in the upper class call for more like them to pay more in taxes, it sounds great!  But watch it, because most of them have found loopholes in the tax system that allows THEIR skin to be just a little smaller than most people.  (Tim Geithner anyone?)

<back to Cassandra> And while Delaware seems to have some control over its previous revenue problem, it is not in control of the *real* problem of government budgets everywhere — health care. Deliberately letting go of revenue streams in the midst of all of this uncertainty with no idea what kind of risks will be present next year or the following year can only make sense if you expect that you can just cover any future shortfalls by asking state workers to finance the gaps. Again. Besides, one of the *principles* of using this money is supposed to be:

Limiting our dependence on less reliable sources of revenue, specifically abandoned property. The plan suggests the best way to accomplish this is to cap the amount of this revenue being used to fund the state’s operating budget, and to use any additional collections for one-time investments.

First of all, Delaware does not HAVE a revenue problem, it has a SPENDING problem.  In 2009, Delaware spent $27,362 per taxpayer and we have gone from spending $8.3 Billion in 2009 to spending more than $10.6 Billion now in 2011.  The other problem that I have here is this idea that taxes are "revenue" to be "adjusted" at the will of the elites.  Taxes are "revenue" only in that they are income to the government.  Taxes are a public trust that the people pay to the government in exchange for core services.  With that said, our "core services" haven't been looked at in many years.  I ask you, are two golf courses and two marinas "core services"?  *I* can live without a couple of golf courses and a couple of marinas, how about you?  So if you reduce spending on these "discretionary" items, you free up enough money to reduce the tax burden on businesses and individuals.  As for asking state workers to "finance the gaps", Cassandra is using liberal speak for "taking pay cuts", I say that the New York Times admits the wage/benefit gap between the public and private sector workers.  In addition, there is plenty of room for public employees to contribute a little more toward their pensions and health care.  With that said, if you eliminate redundant, wasteful and costly state programs, it will reduce any potential pay cuts or increased benefit contributions.  But let's live in the world where taxes are "revenue"...even under that idea, tax cuts INCREASE revenue.

Bush Tax Cuts:  President George W. Bush’s 2003 tax cuts generated a massive increase in federal tax revenue and were followed by 52 consecutive months of economic growth. From 2004 to 2007, federal tax revenue increased by $780 billion, the largest four-year increase in American history.  Total federal revenue from 2003 to 2007:

2003 -- $1.78 trillion

2004 -- $1.88 trillion

2005 -- $2.15 trillion

2006 -- $2.40 trillion

2007 -- $2.56 trillion

<back to Cassandra> Unless these tax cuts are just for one year, you’ve just financed this tax cut for years assuming you’ll have this revenue on a recurring basis. And tax cuts of this kind are NOT an investment.
Reducing business taxes provides balance sheet support — not real incentives to hire. Because the majority of businesses on the planet will hire people because they can keep a pair of hands busy, cover the costs of that pair of hands and still make some money.

Oh Cassandra, you miss the points so eloquently.  Tax cuts ARE an investment, especially tax cuts for businesses and those who create jobs.  Reducing taxes provides PROFITS (what she refers to as "balance sheet support") to businesses and those profits are used by business owners to reinvest in their businesses, to expand production and yes, to create jobs.  Likewise, tax cuts for the wealthy put more money back into the pockets of the people who invest in businesses (venture capital anyone?).  This is a concept that JFK espoused and that the Congress in the 1990's confirmed. 

<back to Cassandra> Nowhere that *I’ve* ever worked has justified hiring based on the tax cuts available. (And yes, I hire people.) Tax cuts cover some of the costs of that pair of hands and/or maybe some of the profits. This is why lots of businesses who get a great deal of support from local governments can get up and go after that support sunsets.

No one has ever suggested that companies hire people only because of tax cuts.  What we've said is that tax cuts stimulate growth and stimulate hiring which is absolutely true.  This is why business exploded from 2000 to 2007 despite the 9/11 terrorist attacks, two wars and Hurricane Katrina.  

<back to Cassandra> See this book and this book for the gory details.

And once you read those books by the committed leftist former "journalist" whose wife runs a philanthropic distribution group that handled more than $160 million in donations, please take a look at this book and this book.

<back to Cassandra> It is possible that we do not have all of the details here, but there has to be a smarter use of found money than these tax cuts. At least a smarter use that still acknowledges that we are economically no where near being out of the woods. And if someone from the Administration wants to tell you that these tax cuts will pay for themselves, demand to see their calculations. Because this will be the first time that this has ever been true.

Cassandra, it wouldn't be the first time it's ever been true, in fact, Michael T. Griffith can point to 5 major tax cuts that DID pay for themselves, the Bush, Clinton, Reagan, JFK and Mellon (Harding & Coolidge administrations) cuts.  They didn't just pay for themselves, they preceded times of great economic growth and increased revenues.

<back to Cassandra> The recent budget submitted by the Governor reduced some of the grant funds available to service providers in the state. Groups that are doing extraordinary work in their communities. Groups that may be laying people off or not help others to become employable due to the reduced funds. And yet this doesn’t count in the employment calculation.

My first question is, if the work is so great, why does it require government to fund it?  As someone who runs a non-profit organization that does NOT accept government funds (by choice) I can tell you that the world of community "service providers" is muddied by many who are swimming in taxpayer dollars and providing little return on investment.  I know what it takes to run an organization on nothing but donations and I think it's a testament to the longevity of groups like Founders Values, Delaware Family Policy Council and others who operate solely on the donations of like minded individuals.  In fact, some of those groups even have entirely volunteer staff and still need to produce high quality results in order to continue providing their services.  These organizations should compete like everyone else instead of reaching for handouts of taxpayer dollars.  The best will rise to the top and the worst will dissolve and contribute their good ideas to those effective organizations.

<back to Cassandra> What is truly unfortunate is to see this genuinely smart man reduced to pushing the horribly false narrative about taxes, and basically work at reinforcing the republican-pushed idea that you can have All of the Government You Can Eat for Free. And provide a revenue stream to businesses too! Don’t expect leadership on this to come from the Dem Caucus, either. Because if Governor Markell can succumb to this fairy tale, there’s no chance the Caucus will get a sudden attack of responsibility.

What is even more unfortunate is that Cassandra does such a poor job of attempting to explain "Republican-pushed" ideas and that she attributes Governor Markell's mad dash to spend the cash to Republicans.  As you can see from this week's proposal from the Republican caucus in Dover, the Governor's plans don't even come close to meeting Republican goals.  Instead of going on a spending spree like a 17yr old girl with daddy's credit card in the Mall of America, Republicans have proposed tax cuts to stimulate the economy, spur investment, ease the pain at the pump and to fix failures in government that cost taxpayers millions of dollars.  Republicans show their responsibility and leadership in their plan by proposing to fix the way that DelDOT operating funds are spent and to provide transparency and openness with respect to how the agency works. 

Republicans as a rule call for a LIMITED GOVERNMENT (not "All of the Government You Can Eat for Free") but I'm glad that Cassandra agrees that government isn't free.  Now all we need to do is remind her that you can't get to a balanced budget simply by eating the rich:

I'm also happy to see her admitting that the Democrats have their own problems with leadership.

Job Losses and Toll HIkes: Markell's legacy of pain

Since Jack Markell took office in 2008, following 8 years of the most corrupt administration in Delaware's modern history, Delaware has indeed experienced "change".  Both Governor Markell and President Obama promised a healthy dose of change in their 2008 campaign.  For my money, I'd trade all of the change they gave us for some jobs.

Since Jack Markell took office and named Alan Levin as Secretary of the Delaware Economic Development Office, Delaware has experienced a net loss of 36,000 jobs.  That means that today, there are 36,000 Delawareans who cannot find work.  Meanwhile, as the layoffs keep coming, Markell and Levin do nothing.  Markell just inked a deal with China, the largest foreign holder of U.S. debt, to invest in Delaware bio tech.  In reality, this deal doesn't do squat to create jobs.  It provides Markell with a photo op and a favorable news story which gives the appearance of him actually doing something.  If anything does come of it, Markell has just invited China, America's largest debt holder, to purchase their way into the Delaware economy.  Since Markell took office, Delaware's industrial footprint has died.  Some may think that is by design, and while that might seem outrageous, there certainly has been a real and wholesale loss of blue collar jobs in Delaware's private sector.  I find it difficult to believe that Markell and Levin don't WANT to create jobs but I submit to you that GM and Chrysler (closed in 2008 under the Minner Administration where Markell served as Treasurer) left the state which left thousands of Delaware Autoworkers without jobs, Valero closed and shed nearly 1000 jobs, HSBC and Wilmington Trust cut more than 1200 jobs, DuPont and AstraZeneca have laid off more than 1,000 workers and scores of small businesses around the state have closed.  Even with the purchase of the Chrysler plant by U of D, Fisker moving into the GM Plant and the new owner of the Valero plant moving in, Delaware faces a net loss of 36,000 jobs.  In January alone, Delaware shed 700 jobs and the unemployment percentage stayed flat at 8.5%.  Even the News Journal, not known for displaying the failures of Delaware Democrats, has had to admit that the employment picture in Delaware is not good.  The Markell Administration has consistently talked about the budding Delaware bio tech industry, green energy jobs, healthcare and financial services as being Delaware's economic future yet the only thing materializing in those areas is government spending and job cuts.  Healthcare dropped 600 jobs in January while banks and finance companies have been shedding Delaware jobs by the thousands since the passage of the financial regulatory bill. 

Regulations, especially as they pertain to the environment in Delaware have increased and so has Delaware's spending.  In fact, Delaware's personnel costs and the cost of government services are so high that there isn't an opportunity for the state to commit to creating a pro-business climate.  Markell and the General Assembly have been content to focus on social issues like homosexual equality and gimmicks like Markell's bottle bill rather than to address Delaware's problems with job creation and spending.  In 2011, Delaware faces a $377 million budget shortfall that must be closed by the General Assembly and the Markell Administration.  This is the 3rd straight increase in budget gaps under Markell and his accounting gimmicks and tricks will only work for so long before it becomes undeniable that Delaware has a spending problem.  I only hope that enough of us wake up by 2012 to stop this train before it totally derails.

Speaking of shortfalls, DelDOT (whose budget is a mere 8.5% of the entire Delaware budget...dwarfed by education and health and social services) is facing a shortfalls totalling "$1 Billion over the next 5 years and more than $3.7 Billion through 2023" says Jeff Montgomery of the News Journal.  State Senator Robert Venables from Laurel doesn't think the General Assembly understands the severity of the problems (and he's a Democrat by the way) and outgoing DelDOT head Carolann Wicks says that "We're now down to the core programs, primarily,".  Still, the following excerpt from Jeff's story is chilling:

Filling the budget gap without cutting back on projects would require more than $169 million in new revenue just for the budget year that begins July 1, an amount DelDOT officials said could be raised with $85 million in new taxes or fees and an additional $85 million in borrowing.

By 2023, however, the single-year shortfall could grow to nearly $498 million.

Confining DelDOT spending only to "core" maintenance, safety, operating and vehicle replacement spending would still leave a $125 million gap next year that would rise to a cumulative $545 million by 2016 and nearly $1.4 billion by 2023, officials said.

State officials have blamed a combination of rising costs, growing demand for services, inadequate funding and rising debt-service payments for the trust fund's quandary. Payments on past loans and interest alone now amount to about $123 million a year.

Folks, this is STAGGERING.  Even if we ONLY spent money on core services from DelDOT, we're looking at a $125 million gap in 2012.  That's no new roads, no updates that aren't critical, no new bus routes, etc.  The blame from the state officials goes not on poor planning, excessive borrowing and administration failures but on the INTEREST for the debt they ran up.  Folks, the payments for the past debt alone total $123 million per year.  So next time you hear that Delaware's financial situation is better than the federal government and that we have nothing to worry about, remember that DelDOT...who makes up just 8.5% of the state budget pays out an amount equal to about 1/3 of the FY2012 budget shortfall.

There is an interesting sidebar in Jeff's story:

TOP REVENUE-GENERATING OPTIONS

Impose $1 per barrel fee for crude oil barge transfers in Delaware Bay: $100 million

Raise Del. 1 weekday toll to $2, weekend toll to $3: $36.4 million

Raise all I-95 tolls by $1: $24.5 million

Shift DelDOT operating funds from Trust Fund to General Fund: $14.1 million yearly for 10 years
Eliminate trade-in discount for new vehicle document fee: $12.2 million
Charge toll for new Indian River Inlet bridge: $7.6 million
Hike vehicle registration fee by $10: $6.7 million
Raise Del. 1 commercial vehicle toll by $1: $4.5 million
Increase gas tax by 1 cent: $4.5 million
Shift Paratransit service costs to General Fund: $4.3 million yearly for 10 years 

 

HIGHEST-RANKED TRANSPORTATION TRUST FUND REVENUE OPTIONS

$1 increase in Del. 1 commercial tolls: $4.5 million

10 percent fee on sale of Delaware tags: $15,000

Illegal sign fees: $9,000

Shift Paratransit service costs to General Fund: $4.3 million yearly for 10 years

Double current $25 fee for driver's license suspension reinstatement: $510,000

$10 additional for driver's license permanent renewal: $87,000

Increase revocation reinstatement to $200 from $143: $230,000

Double late registration renewal fee to $20: $831,000

Double over-size vehicle permits to $40: $903,000

Double fee for paratransit trips outside regular transit corridor: $2.1 million

These are the ways that the special planning board that the Markell Administration created has come up with to "fix" the problems.  You'll notice that there are a lot of fee increases and toll charges but no real cuts.  Oh, and you'll see that they recommend shifting costs...which only hides the costs in the General Fund budget instead of spotlighting it like the rest of the transportation spending.

This is how Delaware Democrats deal with our problems.  They bury them.  We saw it with Chris Coons in New Castle County as we are finding out, his accounting gimmicks masked the fact that our County is bankrupt and in danger of becoming insolvent and we've seen it now at the state level.  The only way we're ever going to fix our problems is to make big changes in the way we do things.  Delaware is in trouble.  We've got to cut spending, cut regulations to bring jobs back to the state immediately and reduce the size and scope of government at all levels.  If we don't make some real changes, face some pain today and get our house in order, we're going to face FAR worse pain in the future. 

Taking a Stand for Sanity

Jack Markell was elected in 2008 after a long primary with then former Lt. Gov. (now Congressman) John Carney.  Carney was considered the more liberal of the two and at the behest of nationwide conservative talk radio host Rush Limbaugh, thousands of Delaware Republicans changed their political party affiliation not only to ensure that Markell was the gubenatorial candidate but also that Barack Obama beat Hillary Clinton in a move dubbed "Operation Chaos".  This move in Delaware created artificially high Democrat registration margins, gave the liberals in the Delaware Democrat Party a dataset to use in order to claim a massive liberal mandate. 

The Delaware Republican Party has been largely silent in the last 3 years as Jack Markell and the Democrat controlled General Assembly has "balanced the budget" by using accounting tricks and half measures that ignore the real roots of our problems, the rampant over spending and bloated size of Delaware's state and local govenrments.  To be fair, I should point out that government largesse is concentrated in State government, New Castle County government and Wilmington city government.  While Sussex and Kent have largely controlled the size of their governments, the northern half of the state has exploded.  While some descrepency is expected since the majority of Delawareans live in New Castle County, government has taken advantage of that fact.  We can no longer be silent about the fact that Jack Markell and his ENTIRE administration is failing the people of Delaware.  This includes DEDO chief Alan Levin who is the real reason why the GOP is silent about Markell's failures.  Levin was brought in by Markell to show his bi-partisanship and was hailed as a brilliant economic mind.  Delaware has a higher unemployment rate than it did when Levin/Markell took over, a higher unemployment rate than the national average and is continuing to lose jobs left and right.  HSBC, Wilmington Trust and countless small businesses have laid off thousands since they took office.  Fisker has yet to build a car, the University of Delaware hasn't yet created a job at the Chrysler plant and the reopening of the Valero plant has produced a net loss of 200 jobs.  Yet, the Delaware Republican leadership is SILENT...because of Levin.   Mr. Levin, you HAVE FAILED.  It's time that you followed the lead of former DelDOT chief Carolann Wicks and resign.  Perhaps you could start another drug store and create more private sector jobs than you have as DEDO head.

I'm not willing to pull the same punches as the Delaware GOP leadership.  They live in a world where a few ultra rich people control their every move.  I don't.  Where I live, the people of Delaware MATTER.  Where I live, jobs need to be created and created NOW.  Where I live, spending is out of control and the answer is to cut the size and scope of government.  Where I live our children are failing and out administrators make millions in unearned taxpayer dollars.  Where I live we owe them a better education system and a better chance at making it.  Where I live the city of Wilmington needs an injection of hope, capital and common sense.  Where I live is with you, the people.  This is the first in a series that will highlight the problems we face and how we fix them.  I'm not going to sugarcoat it folks, our situation is dire.  With that said, we can survive and if we work together we will.  I don't pretend to have all the answers but I know the fools in office now don't seem to have any.  Let's rescue Delaware.

Indiana Dems have joined Wisconsin Dems in running for Illinois to hide out.  Below you can see a video of them leaving for Kentucky and Illinois.

Please read my full Examiner article which contains the excerpt below:


What does this all mean for Delaware? Well, as I've mentioned in previous posts, the personnel costs in Delaware are 30% of the total budget. Meanwhile, the leadership of Delaware's public employee unions say:

In Delaware, public employees' health insurance and pension programs do not constitute a huge "budget buster," as they do in other financially troubled states. Our budget woes result primarily from the continuing effect of the Great Recession on state revenues.

Well there must be a fundamental disconnect her because I see 30% of the budget being devoted to employee costs as a "budget buster". The slide show on the left contains a couple of charts that show the benefit packages that state workers recieve and the current underfunding of Delaware's state worker pension packages. Also, let's keep in mind that Delaware state workers contribute 3% to their pension accounts while the state contributes 7.5% to that plan over and above. Add to that the fact that state workers are becomming more brazen and demanding to know "When am I going to get a raise..." even as the Governor is looking at the budget and seeing a nearly $300 million shortfall (almost twice what Wisconsin is closing with their bill). At some point, Governor Markell is going to have to face the facts that DSEA, AFSCME and other unions MUST have their deals restructured to ensure that out state remains solvent. That doesn't mean that we have to destroy the current way of life of union workers. We can institute changes that affect new hires, we can offer early retirement to those who are at the end of their careers and we can make minor changes to the current benefit packages (like increasing employee contribution by 2% and decreasing State contributions by the same amount making the contributions equal at 5% each).

Senator Carper upset over House plan to cut rail funding

Amtrak costs taxpayers more than $1.5 BILLION each year.  That means that once all the bills are paid, Amtrak brings in $1.5 Billion LESS than it spends.  This is not a new occurrence either.  Amtrak has lost money every year (since 1970) it has been in operation.  I can certainly understand Senator Carper's concerns over cutting funding to Amtrak, which he uses to go back and forth to D.C. everyday with Chris Coons and John Carney.  Also, the union membership of the Amtrak employees is a key voting bloc for Delaware's congressional delegations.  Without Amtrak, Carper would either have to get an apartment in D.C., sleep in his office or pay more than $3.20 per gallon for gas to drive (or be driven) to D.C. and back everyday. 

The reality is that Amtrak is a drain on America's pocketbook and for those who are VICIOUSLY attacking the Army, National Guard and the Air Force for spending $10 million sponsoring motor sports to boost recruiting, perhaps we can also look at saving a much larger amount through Amtrak.  To look at the nuts and bolts of Amtrak, you can see that only 4 out of the 45 active lines make a profit.  In any business, the 41 lines losing money would be cut back, eliminated or otherwise reformed to ensure a profit.  Our government, is content with just sticking you and I with the bill.  Further, if someone suggests privatizing the service, the left HOWLS about how horrible it would be for the people.  Yes, I guess it would be terrible if we had to actually break even through Amtrak.  5 people travelling from Los Angeles to Houston might have to fly (and spend less money to arrive sooner) instead of take the train.

Liberals will point to Japan, England, Germany and other European nations as proof that rail works.  I wonder if they know that each of those nations employees various degrees of private rail ownership.  Further, you might look at those nations and see how many of them you can fit into the United States.  The answer, all of them.  America is a big country and rail, even high speed rail, will not work everywhere but it does have it's advantages in some places.  What about the rail lines?  Surely the government must own and protect those lines right?  Well, currently, most of the rail lines in America are owned by private freight rail companies.  With that said, those places where highspeed rail DOES work would easily attract private investors who could fund the projects and make them profitable (and perhaps pay off the debt Amtrak has racked up).  The eastern corridor, from Boston to D.C. and the western coast from San Francisco to San Diego are two areas where high speed rail would be very effective.  There may also be some use for a line from San Antonio to Orlando (or Atlanta) but studies would have to determine the effectiveness.

So, Senator Carper, why exactly should we keep pouring money into a venture that has never made money...EVER?  The bottom line is that privatizing our nations rail system would save us more than $1.5 Billion and could possibly increase our GNP by hundreds of millions more or even billions more with highspeed rail.  From a practical standpoint it's a no brainer.  The question isn't IF...it's WHEN...and hopefully the answer is sooner...rather than later.