If you have been out of the country or living under a rock the last few days, you may not have heard that the Internal Revenue Service has admitted to harassing and generally making life difficult (by blatantly breaking the law) for conservative groups including the Albuquerque Tea Party. It seems hard to believe that directives were coming from anywhere but the highest echelons of the Administration, but proving that will be another matter.

If you think that’s bad (and it is), wait until the IRS gets its grimy paws on American health care. As CNBC noted prior to the IRS scandal:

Get ready for the Internal Revenue Service to play a dominant role in health care. When Obamacare takes full effect next year, the agency will enforce most of the laws involved in the reform—even deciding who gets included in the health-care mandate.

“The impact of the IRS on health-care reform is huge,” said Paul Hamburger, a partner and employee benefits lawyer at Proskauer.

“Other agencies like Social Security will be checking for mistakes, but the IRS is the key enforcer,” Hamburger said. “It’s also going to help manage who might get health care.”

If that doesn’t send chills up your spine, I don’t know what will.

Check out the following chart illustrating the IRS’s dramatically-expanded role in US health care:

The big point made by advocates for Mora’s policy of banning oil and gas drilling (as I discussed recently) is that water is more important than oil or natural gas. That may sound like a valid point, but this is a very interesting article which notes that fracking uses far less water in the United States than golf courses. See the following chart on water usage by fuel source:

Of course, water IS a precious resource and the free market HATES the loss of a valuable resources. So, naturally, there are companies out there that are working to recycle frack water. And, according to the article, 20% of frack water is already recycled.

Rather than banning a particular process (Mora County hasn’t just banned fracking, but ALL oil and gas drilling), it might be worth pushing for procedures like water recycling that will make fracking and oil and gas drilling more environmentally-friendly than they already are.

Then, why is the Obama Administration reaching out to industry groups to help sell the law? We’ve heard so much from ObamaCare supporters and the Administration about how the law is going to hold those evil drug and insurance companies accountable. If that is the case, it sure has a funny way of doing so.

The reality is (as libertarians and some conservatives have repeatedly pointed out), the reality is that some of the biggest players in health care (especially those that already garner significant government support) have put up a great deal of money lobbying for the law. Now that the law is being implemented and the American people refuse to be “educated” in support of the law, the Administration is reaching out to those very same businesses they say the law is meant to hold accountable…got it?

The idea of putting solar panels on the Roundhouse parking garage is being pushed by an environmental group. The group managed to convince legislators to set aside $185,000 of taxpayers’ money aside for solar panels during the last legislative session, but alas (for them) Gov. Martinez vetoed it.

Readers in this space will know that we are not big fans of subsidies for ANY energy source (see chart below):

But that is not even the point when it comes to questioning the merits of this particular project:

1) The Roundhouse sits largely empty for 10 months out of the year (yes, there are interim committee hearings), will the electricity generated by sold on the grid?

2) Top electricity usage in the Roundhouse would be during the legislative session which takes place during January-February (or March) when the sun shines the least. How is this cost-effective?

3) While the group claims a repayment schedule that clearly seems to benefit taxpayers, can we get a full accounting of the costs and benefits of this project (including all subsidies) from a third-party auditor?

In this case, it is to look at the potential for them to purchase our clean, affordable natural gas to power their economy. See this brief write-up in the Albuquerque Business First.

What is not touched on in the article is that the Obama Administration needs to approve exports of LNG in order for some of the infrastructure to be developed for such exports. According to the Washington Post, it does appear that the Administration is leaning towards support of exports, but such support is not guaranteed.

As I write here, the benefits of exports far outweigh the potential negatives (if there even are any).

So, welcome to the Japanese delegation and kudos in particular to Michi Takahashi and the folks at New Mexico Solar Station for organizing this delegation. Hopefully Washington can get its act together to allow nations eager to purchase our natural gas bounty to do so.

In today’s Albuquerque Journal, Winthrop Quigley writes (with a local angle) about a recent report in the Washington Post which “uncovers” the “shocking” information that hospital prices have no basis in reality.

I suppose that having the actual pricing data is somewhat interesting, but having welcomed two babies into the world in the last five years, the lack of correlation between hospital prices and reality was well-known and expected even prior to walking into the hospital for the first birth. After all, hospitals don’t operate in anything even remotely resembling a competitive free market.

With third-party payers (be they insurance companies or the government, not to mention charity care), hospital pricing has almost no bearing on reality.

A few good quotes from Quigley’s piece, “The charges vary a great deal among hospitals, but what they are actually paid is either set by Medicare or negotiated with insurance companies, said Stephen Forney, Lovelace Health System chief financial officer. Medicare payments vary by where a hospital is located, and hospitals like UNMH get higher payments because that’s how the federal government helps fund graduate medical education.

“Payments don’t vary a lot, just the charges.”

Transparency in hospital pricing is a nice idea, but ObamaCare is only further removing patients from having to pay the costs of their care, so I don’t see this data as being very relevant to the health care discussion until and unless patients have some “skin in the game” and are treated like adults who can shop for the best “deals” in health care.

Welfare reform in the mid-1990s was highly-successful both in getting people off of welfare, but also in pushing them to enter the workforce. While the primary tangible benefit of work is in the actual economic output of the activity that thus benefits society, there is no doubt that having a job leads to societal involvement, self-esteem, and pride that simply cannot be achieved by getting a monthly check from the government.

Is it any coincidence or surprise that the Tsarnaev family (Boston Marathon bombers) received $100,000 in welfare benefits over a ten-year span? It’s not that welfare creates terrorism (thank goodness), but that idle hands are indeed the “devil’s workshop.” After all, if you aren’t working, gaining new skills, and developing some kind of a relationship to the society around you, alienation and a lack of respect are more likely to follow, plus you’ll have plenty of time on your hands for mischief.

And, as if the Tsarnaev’s aren’t enough of a reason to reconsider our welfare policies, check out this story on Denmark where the population and government officials are re-thinking their nation’s hyper-generous welfare benefits. Increasing the number of “makers” relative to the number of “takers” may be the single greatest problem of our age, especially in light of the aging population and depressed work-force participation rates.

Interesting information from The Economist Magazine.

My letter to the editor responding to a letter that appeared a few weeks before ran in today’s Albuquerque Journal business section. Full text below:

Deficit “deniers” like letter-writer Dan Metzger seem to believe that government, especially the US federal government, has magical powers. To them, federal debt and deficits are not a problem and in fact are good. How ridiculous!

For starters, Metzger seems to assume that research and development forms a large proportion of total federal spending. This is simply not the case. Total federal R&D spending is less than 5 percent of the overall budget. Far higher percentages go to transfer payments and other spending priorities that have no positive impact on economic growth.

Metzger is correct that the federal deficit has no “due date,” however interest payments on the ever-growing debt will kill economic growth if/when interest rates rise above their historically-low levels.

More importantly, the federal government simply wastes money on boondoggles costing millions or even billions of dollars including farm and ethanol subsidies (to name just two).

The economic problem we face today is not one of too little federal spending which has doubled since the end of the Clinton Administration; rather, it is too much spending which crowds out more efficient private sector investment and sustainable economic growth.

(Albuquerque) If the Obama Administration approves liquefied natural gas (LNG) exports to non-free trade nations (those that do not have separate trade agreements with the United States), New Mexico could see an immediate increase in economic output of $200 million and the addition of 2,000 jobs according to a new Rio Grande Foundation report.

The issue of whether or not to export a portion of America’s bounty of clean natural gas has generated heated debate pitting some environmentalists and manufacturers who oppose exports against producers and free trade supporters who wish to allow exports.

The Rio Grande Foundation has come down firmly on the side of free trade and those who wish to sell natural gas around the world.

Said Foundation President Paul Gessing, “Philosophically, this view flows directly from our support for free markets, but it also is a product of our desire to strengthen New Mexico’s economy by providing new markets for natural gas produced within our borders.”

To come to its conclusions regarding the jobs and economic input of natural gas exports, the Foundation relied on data available from IHS Global Insight which stated that “exports would create over 100,000 direct, indirect, and economy wide jobs and have an immediate impact resulting in between $3.6 and $5.2 billion in potential revenues.”

According to the US Energy Information Administration, New Mexico produces 5.3 percent of total US natural gas, thus making it likely that New Mexico would experience a similar ratio of economic benefits.

Continued Gessing, “The economic impact numbers outlined above are just a starting point in terms of economic impact, but 2,000 new jobs would be enough to qualify these new jobs as the 5th-largest private employer in New Mexico were they all at one company.”

In addition to New Mexico jobs, benefits of LNG exports include increasing tax revenues, reduced carbon emissions over other energy sources, reduced trade deficits, a display of principled support of free trade, and closer relations with foreign people and governments.

Concluded Gessing, “LNG exports are a true win-win-win policy, President Obama should act now.”

Gessing recently sat down with KNAT TV to discuss the issue of LNG exports. See that interview below:

Rio Grande Foundation president Paul Gessing discusses the potential for Liquefied Natural Gas Exports on Joy in Our Town from Paul Gessing on Vimeo.