Bacon's Rebellion

Democracy Thrives in Sunlight

GRAPHIC PROOF

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by

James A. Bacon
in

The front page of today’s WaPo Business section has a graphic that should become the screen saver for every politician and every advocate for Fundamental Change.

The graphic portrays federal spending as a percentage of GNP — history and projections to 2050.

The article has the “positions” of six of the 37 people who has declared an interest in being the next president.

Read it and weep.

Then figure out how much new spending will be needed in Virginia to fix the mental health system to avoid more VaTechs.

In the Metro section there is an article on how much paying low wages to teachers costs in recruiting and retraining.

Then there is the Mobility and Access Crisis and the Affordable and Accessible Housing Crisis and the Energy Crisis and the Food Security Crisis and the….

If anyone thinks that in 2007 or 2008 the “do not raise taxes” crowd will get a word in edgewise with all these “needs” …

The only answer is Fundamental Change.

Sorry, you are going to have to come to understand the meaning, scope and path to implementation of Fundamental Change of human settlement patterns and Fundamental Change in governance structure.

There is no other exit.

EMR

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26 responses to “GRAPHIC PROOF”

  1. Ray Hyde Avatar
    Ray Hyde

    If we can’t afford to raise the taxes to fix a few of our little niggling needs at the margin, then how are we going to afford a fundamental change, which will of course amount to a whole bunch of niggling little changes that we can’t afford?

  2. Freedom Works Avatar
    Freedom Works

    Jim:

    Do your hear a subtle pro-regulation, pro-tax increase drumbeat when you read comments like this from EMR?

    “If anyone thinks that in 2007 or 2008 the “do not raise taxes” crowd will get a word in edgewise with all these “needs” …

    The only answer is Fundamental Change.”

    Excuse me.

    Taxes are too high already, and 5 of the tax-hiking RINOS retired or were defeated in primaries. There will be no way for Kaine and the remaining RINO’s to raise our taxes in the next session of the General Assembly.

    This makes Til Hazel, EMR’s old employer, unhappy. Hazel is one of those developers who promote higher taxes for more transportation spending to keep the sprawl party going and the real costs of his developments passed on to the general public.

    EMR sounds like he is parroting Hazel’s call for higher taxes.

    The only “Fundamental Change” we need is more individual freedom.

    The chart in the Washington Post today provides additional proof that sooner or later socialism will bankrupt any economy.

    It is time to begin to humanely phase out all entitlement programs. It is time to liberate the American worker from the shackles of forced labor for someone else’s benefit.

    This includes all socialist transportation projects that are not user pays.

    This editorial from the Examiner says it all. 



    “How’s this for a deal? Riding the $5.14 billion Dulles Rail extension will take twice as long as taking a $300 million Bus Rapid Transit vehicle (BRT) to the same place. That’s right, a 25-minute express bus trip from the Pentagon to Reston would take 57 minutes on the proposed Metrorail extension and cost much more per trip for a lower level of service, according to international transportation economist Gabriel Roth.”

    http://www.examiner.com/a-789649~Paying_more_and_getting_less.html

    Add to the $5.14 billion construction cost the annual operating subsidy of an additional $41 million per year forever. This system is bankrupt before it is built.

    This is a dysfunctional government spending pattern. We need Fundamental Change in government spending patterns. This will require a change in governance.

  3. Ray Hyde Avatar
    Ray Hyde

    I’m with you except for this part:

    “….to keep the sprawl party going and the real costs of his developments passed on to the general public.”

    Who do we think is living in these developments, if it isn’t the general public?

    You are suggesting that developers make more money than they should by billing the public through taxes for infrastructure that makes their developments possible, and that they profit from.

    Let’s assume that we could somehow segregate that part of the infrastructure that they profit from from the part that needs built or upgraded whether we build anything new or not. So we’ll bill the developers for all this stuff or make them build it for us. They will tack on theri profit and pass the bill to the buyers, which is the general public, or a good part of it.

    And we would still need a lot of new taxes for all the OTHER infrastructure we need anyway. If we don’t build anything, rents will go up, people will double up in homes, and they will still drive to work.

    You act like the sprawl party is the only thing costing us money. How about the $20 billion Metro party, which is partially justified by increasing development?

    I know that sprawl/developer bashing is a popular position, but I just don’t get it. Sprawl has got problems. Developers have got problems. But I’m pretty sure that if we did away with both we would be worse off, not better. I can’t see how concentrating the costs on fewer people is going to make this less painful or happen sooner.

    ——————————-

    “Riding the $5.14 billion Dulles Rail extension will take twice as long as taking a $300 million Bus Rapid Transit vehicle (BRT) to the same place.”

    Darn straight it will. And it will probably cost a lot more, too.

    here is an interesting link on whiy people won’t use mass transit.

    http://www.uwgb.edu/dutchs/PSEUDOSC/MassTransit.HTM

  4. Groveton Avatar
    Groveton

    These arguments need a little more business thinking.

    Let’s say that there is a 20 acre tract of land that is planted with petunias.

    That land generates very liitle tax revenue.

    Now the land is sub-divided into 20 one acre lots. The reason that these lots are one acre is because THAT’S WHAT THE MARKET IS BUYING.

    A large house is built one each lot. The houses are sold for $700,000 each. The families who move into these houses have a combined income of $300,000.

    The real estate tax rate (for the sake of simplicity) is 1%.

    The state tax rate is 5.75%.

    In real estate and state income taxes alone these 20 houses generate $485,000 per year in taxes.

    Is the state economically better off with the 20 houses or the field of petunias?

    Sprawl is a NIMBY-ish expression for housing. It is used by the very rich who live out in areas that are still somewhat rural but are close to cities. These NIMBYs want to live close enough to the cities to have their limo driver take them to see the opera in the city on Friday night. Almost all of them moved to these areas vs. growing up in the area. They feel no sense of responsibility for those cities at all. And they also are convinced that they are “too good for the suburbs”. They are the born rich gentlemen farmers who got a new Beemer from Dadsy on their 16th birthday.

    They live in mortal fear that the suburbs will expand out to them and they will be suburbanites. Then what good would be all that money they inherited when Dadsy passed? So, they use any government angle they can find to prevent people from developing the land near them and adding people who generate more tax revenue than they consume. They know that the state needs the money that these people would bring but they just don’t care. They are rich, selfish preppies and their lifestyle is more important than anything else.

    They coin terms like suburban sprawl and MacMansions.

    They want you to believe that upper middle class people who live in places like Loudoun County cost the state more than they contribute.

    And they sponsor commentators and web sites to perpetuate this myth.

  5. Anonymous Avatar
    Anonymous

    I believe it went something like this;

    Of the People, By the People, For the People.

    Today’s society is Of the corporation, By the corporation and For the corporation.

  6. Freedom Works Avatar
    Freedom Works

    Ray, I am not anti-developer.

    I was highlighting the hypocrisy of developers (like Til Hazel) who champion property rights when it comes to developing their own land in the outlying counties, while at the same time advocating more socialist redistribution to pay for the necessary infrastructure.

    If you respect private property, you will keep your hands off my wallet.

    Metro through Tysons is a classic example of dysfunctional socialist government spending that forces one group of people to subsidize another. Taxpayers and commuters will pay billions so West Group and Lerner can make billions.

    I am for a free market in land use. I am also for using free market principles in transportation.

    This includes supporting toll roads with peak hour congestion pricing on all limited access roadways, and spending those toll dollars to add capacity and improvements in the corridors where the tolls are collected. This would most likely include a BRT system to add capacity and help minimize congestion on the toll roads. Metro is an outrageously bad deal compared to BRT in removing traffic from the Toll Road.

    It looks like we are going to get HOT lanes on the Beltway paid for from private dollars. Why not do the same thing on I-66?

    Why is the new Wilson Bridge not being financed by tolls?

    Only with user pays transportation systems will we get a truly free market development pattern. It will probably have a lot less sprawl in it. Without making value judgments about sprawl, my point is simply that there would be a lot less of it without the subsidies and the land use controls.

  7. Groveton Avatar
    Groveton

    Nothing wrong with user pays transportation as long as users pay everywhere. NIMBY logic would have it that users only pay in NoVA, Richmond and Tidewater. Time for users to pay everywhere. If you’re driving down Rt 81 – you’re paying a toll. Drive down Rt 15? You pay a toll. Go across a bridge in Roanoke? You pay a toll.

    All roads cost money, all roads require maintenance and all roads should be user pay.

  8. Larry Gross Avatar
    Larry Gross

    “In real estate and state income taxes alone these 20 houses generate $485,000 per year in taxes.

    Is the state economically better off with the 20 houses or the field of petunias?”

    Actually if you believe the analyses – the petunias. The Farm Bureau and American Farmland Trust make this argument all the time.

    $485K sounds like a lot of money but talley up the cost of the infrastructure and services necessary for those homes.

    It’s pretty well acknowledged that residential does not pay for itself.

    When land is developed – it requires infrastructure and services that were not requird when it was planted in petunias.

    Then we have the folks who say that – that is okay because if you have the “right” mix of commercial, it will help keep property taxes low and generate additional money for infrastructure and services.

    Why do folks buy this obvious untruth?

    Beyond the fact that commercial business does not pay a tax but instead incorporates ALL of their costs INCLUDING taxes into their selling price… beyond that fact,

    adding the property taxes to the commercial taxes STILL will not pay fully for both the needed infrastructure and the services.

    The way they “balance” the equation is by tolerating/acknowledging decreases in the levels of services standards for roads, schools, etc AND by hoping that they have more commercial than their neighborhing jursidiction so that folks who live out of jurisdiction will “help” by paying sales taxes when they shop at the neighboring jurisdiction.

    This is why you see abandoned commercial.. as each jurisdiction attempts to ratchet up newer commercial.. to attract more shoppers.

    What’s the answer if folks have to have a place to live to start with?

    Well.. it’s simple and it’s like “Freedom Works” states.

    Instead of everyone thinking that others will pay taxes (including developers and businesses) to “support their needs” – each person need to “user pay” and that includes the roads they need.

    Now .. before folks start saying that this will drive the poor underpaid workers out of a place to live and make them walk to work.. or HORRORS use a bus to get to work.. get a grip.

    Ultimately – who ACTUALLY will pay for the infrastructure and services if not the folks who need and use them?

    Apparently, somewhere in the back of some folks heads is the idea that there are “out there” other taxpayers who do not pay enough in taxes that should be taxed to pay for the services and infrastructure needed by the folks who don’t want to pay more for same.

    and the game is played like this:

    You set up a system where
    everyone pay taxes into a BIG pot of money… then the folks who have the most/best political acumen will manage to get more than their share (what they put in) back out of the pot for their “needs”.. and the folks who lost their share – well.. they must not have needed it because they didn’t fight hard enough to keep it.

    so I don’t hate developers. They do provide a needed service to all of us and I don’t blame them for resisting paying for instrastructure if it put’s them at a competitive disadvantage that ultimately would drive them out of business.

    What I do support – is HOAs and CDAs for infrastructure that directly serves a subdivision including the interior roads and the exterior connecting arterials.

    Then for the bigger major roads and bridges (that Freedom Works alluded to) – electronic tolls.

    To a certain extent – what we have – is folks who can afford thousands of dollars of “extras” for their home – because they are not assessed the full cost of the infrastructure needed to properly serve their home to start with then they go lobby their elected to raise taxes (on others of course) to “help” them with their infrastructure needs.

    You know.. this is like buying a car .. with a fancy nav system and ttereo but no tires ..and then expecting other taxpayers to “help” you with the tires – never once realizing apparently that if all the other taxpayers are doing the same thing – that it is indeed a zero sum game.

  9. Ray Hyde Avatar
    Ray Hyde

    “It’s pretty well acknowledged that residential does not pay for itself.”

    This argument is frequently made and supported by organizations like the American Farmland Trust. However, I have an article published by professors at the Colorado school of agriculture and rural economics that argue otherwise.

    The Farmland Trust argument is based on a snapshot in time. A few years ago, the argument was that any home valued at less than $350,000 wouldn’t pay its own way. now the argument is $700,000. But, those $350,000 homes of a few years ago are now $700,000.

    If you take a time based view of the situation, and include all the other income homeowner provide to the government, then the argument comes out a lot different.

    Put it this way. 50 years ago Loudoun County and Fauquier county were roughly similar. Today, the percapita income, and the percapita net worth in Loudoun is far higher than it is in Fauquier. Much of Fauquier (at least in area) has a mre rural lifestyle, and more conservation. what they have is different, and maybe better, but you can’t say they saved money in the process.

    You will notice that when Farmland Trust makes the argument that farms pay more than their share or more than they cost the government, that there is little mention of the “user pays” philosophy. There is little mention of how penalizing farms is supposed to make them more competitive in the free market.

    That guy raisning pansies is probably counting onthe value of his land increasing over time, as much as he is counting on the pansies. If you take that away, you will have fewer people growing pansies.

    ————————–

    “HOAs and CDAs for infrastructure that directly serves a subdivision including the interior roads and the exterior connecting arterials.

    Then for the bigger major roads and bridges (that Freedom Works alluded to) – electronic tolls.”

    I wouldn’t have any problem with that.

    Now consider the costs and continuing losses associated with Metro: like yousaid ” if all the other taxpayers are doing the same thing – that it is indeed a zero sum game. “

    I dont see that we can reasonably call a plan that calls for autos to pay their full costs, and for auto users to also support mass transit, one that we can describe as “user pays”.

    I don’t see this as much different from everyone putting their money into a big pot, and then arguing politically over “priorities”.

  10. Anonymous Avatar
    Anonymous

    Food for thought

    Would you rather live in Fauqier or Loudoun

    Points for Loudoun more stuff to do more job opportunites

    Points for Fauquer less traffic, lower taxes

    The freedom of choice to pick which one you prefer. Everybody wins 🙂

    NMM

    As a business owner you would probably prefer Loudoun right?

  11. Larry Gross Avatar
    Larry Gross

    re: “I have an article published by professors at the Colorado school of agriculture and rural economics that argue otherwise.”

    Then you’d be believing that proffers are … legalized robbery?

    Gee… I wonder what they spend all that proffer money on… twinkies and coffee for the employees?

    🙂

    re: transit

    as you know.. I’m conflicted by transit especially with regard to the costs – but I think others are also.

    For instance,once transit is in the ground.. and forms an elemental transportation backbone for places like New York, Chicago, Loundon, etc… every seems to agree that to shut it down… would cause huge economic disruptions.. while at the same time the claim is that they cannot be econoimcally justified.

    .. so which is it?

    If they cannot be justified on a farebox basis – why do they continue to operate? It would seem that voters would throw out of office any elected that agreed to the continuing squandering of tax dollars – right?

    so.. if you can answer than question .. then I might buy the argument about why new transit is wrong…

  12. Larry Gross Avatar
    Larry Gross

    re: “money into a big pot, and then arguing politically over “priorities”.”

    I would agree on the macro scale where it is decided how much to spend on Education.. say verses Mental Health and so on.

    But once you are within a category – like transportation – a uniform and consistent performance based criteria needs to be the process for deciding WHICH are priorities.

    When politics get involved in the allocation of funds for an agency then we have some serious problems in my view.

  13. brimur Avatar
    brimur

    EMR- I was thinking about writing about this interesting graphic and story yesterday but I couldn’t find the attribution for which projections they were using. Do you happen to know?

  14. Anonymous Avatar
    Anonymous

    “It’s pretty well acknowledged that residential does not pay for itself.”

    Only because of our socialist education system!

    If education were “parents of user pays”, all the arguments against residential go out the window.

  15. E M Risse Avatar
    E M Risse

    At 8:52 AM, brimur said…

    EMR- I was thinking about writing about this interesting graphic and story yesterday but I couldn’t find the attribution for which projections they were using. Do you happen to know?

    Brimur:

    I have no more information than what was in the story. The lead is being played by GAO head Walker with support from Brookings, Heritage and Concord.

    My assumption was that these were GOAs best current estimates.

    It is interesting that WaPo did not footnote the graphic.

    You seem to be about the only one who read this post that is interested in the fact-base of numbers.

    Rail to Dulles and the cost of alternative settlement patterns are interesting topics but have little directly to do with the post other than demonstate how hard it will be to cut through the narrow agenda driven drivel to get to the issue of Fundamental Change.

    The note about the “do not raise the taxes crowd” was intended to suggest that those who think “taxes are already too high” had better come up with ways to imporve governance and the provision of services because that is what citizens will be demanding in 2007 and 2008.

    Jumping to silly conslusions about hidden agendas, secret supporters and cooking up unfounded hypotheticals is not a move in that direction.

    Sorry, Larry, I think you are trying to move in the right direction but it is hard given the context you have to work with.

    EMR

  16. Larry Gross Avatar
    Larry Gross

    re: school costs

    yes – unfortunately and relunctantly agree.

    We pay 10K per student per year, (tops in the world) and we are .. maybe 12th compared to other industrialized countries on achievement….levels – and this is not just test scores – it’s our own World Economy employers like Bill Gates who are saying that our kids are not ready to compete for world economy jobs….

    We kid ourselves by trumpheting our SOLs, while ignoring the NAEP proficiency standards – that reveal the ugly truth. Fully 50% of Virginia’s students do not meet minimum proficiency standards – which are the same standards that kids in other countries exceed and take those world jobs.

    while 1/2 of our kids can only compete for service sector jobs that can and are being taken by those with even lesser educations.

    Most counties in Va allocate 1/2 to 2/3 of the property tax for education.

    Take a look at your own tax bill and do the math. Most of us, including those on fixed incomes pay hundreds – thousands of dollars every year and it is to the detriment of other needed infrastructure such as roads.

    So WHERE does the money go?

    Much of the cost is spent on “quality-of-life” enhancements or extra-curricula activities depending on one’s view of what “curricula” is.

    I feel that our education system is really upside down because we essentially abandon the kids who will become future tax burdens if they cannot compete for a world class job by diverting money towards add-on courses desired by parents of substantial means for their kids.

    I’d like to be wrong about my views.

    I’d like to be able to say that every one of us should always want to “fully fund” education but reality intrudes… and all I can think of .. is if we adopted the same attitude with regard to roads

    .. let’s “fully fund” our roads…

    hmmm.. now THAT’s a concept! 🙂

    Let’s raise our taxes.. to whatever it takes to fully fund both schools and roads…

  17. Larry Gross Avatar
    Larry Gross

    re: “Sorry, Larry, I think you are trying to move in the right direction but it is hard given the context you have to work with.”

    well .. for what it is worth – I agree that there are subsidies – hidden and otherwise

    .. but I’m still thinking that if you removed ALL of the subsidies and let everyone pay for their locational choices that

    … settlement pattern nirvana would not be the result…

    .. It’s like the guy who buys the Chevy Tahoe to commute 100 miles a day in… but he makes 150K and it’s worth it to him to be able to pass gas in his own private compartment… 🙂

    You can make it more expensive.. but won’t he just get a Prius to perfume rather than haul his family and kids to a one bedroom 4th floor flat.. 2 miles from work?

    I dunno EMR.. still trying to figure this stuff out..

  18. E M Risse Avatar
    E M Risse

    Larry:

    You are still not paying attetion:

    In a democracy there may be “subsidies” but they are open, well understood and agreed to by the majority of the citizens as being in the best interest of society.

    Given how badly we have done, especially over the past 50 years and to whom the subsidies we have are going now, it will take a lot of time, effort and money to get back on track.

    And we do not have much time left.

    EMR

  19. Reid Greenmun Avatar
    Reid Greenmun

    We don’t live in a democracy – we live in a Republic.

  20. Ray Hyde Avatar
    Ray Hyde

    “Points for Loudoun more stuff to do more job opportunites

    Points for Fauquer less traffic, lower taxes. The freedom of choice to pick which one you prefer. Everybody wins :-)”

    Absolutely right.

    I agree entirely.

    Except, realistically you cannot “choose” Fauquier county. Ther are no lots available, other than those that resemble lots in Loudoun.

    And, by the way, the lower taxes argument is bogus. Because you will be “required” to own a larger lto in Fauquier (none others are available) the taxes are the same.

    My taxes in Fauquier are actually higher than my taxes in Fairfax, all things considered.

    And, in Fairfax, I get at least something for my money.

    Why don’t I move back to Fairfax, if I like it so much??

    1)I’m closer to my job here.
    2)My wife won’t hear of it.
    3)My ROI on renting my FAirfax property is higher than my ROI for renting the farm.
    4)Actually, I enjoy working the farm. It is a monumental program and financial management problem.

    I have the same problems at work, times 6500. But here, the problems are reduced to elemental issues. I am the program mangaer, the budget manager, the priorities manager, the salesman. I am responsible for the resources, the schedule, and the marketing.

    I can’t possibly resolve all the problems I have with the resources at hand, given the time available. I would need truly massive infusions of patient capital, which does not exist, int this business.

    I’m used to it. It doesn’t bother me that I will die before I will get anywher near the end of my to-do list.

    But, when I go to my real job, and I look around at the immense complexities. When I look at thousands of people with different backgrounds and training, struggling in different directions toward the same general end (a year end bonus); then, I compare it to my own relatively manageable problems and I wonder how it ever works.

    It is like a drunken sled dog team.
    (Sort of) pulling in different real-time directions, but averaging out, over all.

    It is an image that this blog could profit from.

  21. Ray Hyde Avatar
    Ray Hyde

    once transit is in the ground.. and forms an elemental “transportation backbone for places like New York, Chicago, Loundon, etc… every seems to agree that to shut it down… would cause huge economic disruptions.. while at the same time the claim is that they cannot be econoimcally justified.

    .. so which is it?”

    Sorry, Larry, but this is beyond dumb.

    Take any section of mass transit (Other than the IRT in New York) and any section of competing highway.

    Auction them both off, and see what you get. (Implicit in the deal is that the public overhead will actually be reduced by a similar amount.)

    The relative amounts bid would be a bad joke considering the relative amount of public money already spent.

  22. Ray Hyde Avatar
    Ray Hyde

    “In a democracy there may be “subsidies” but they are open, well understood and agreed to by the majority of the citizens as being in the best interest of society.”

    Right. So what, exactly, is the problem with the present situation?

    Don’t we subsidize sprawl and developers for a reason?

  23. Ray Hyde Avatar
    Ray Hyde

    “And we do not have much time left.”

    Might as well live well while we can, then; hadn’t we?

  24. Ray Hyde Avatar
    Ray Hyde

    “let’s “fully fund” our roads…”

    But at least roads have some near term pay back. At least if we fully funded our roads, then we might have enough money to fully fund education. We could fund education out of the billions presently wasted sittingin traffic.

    We can hardly see any scenario where the reverse is true.

  25. Larry Gross Avatar
    Larry Gross

    “Take any section of mass transit (Other than the IRT in New York) and any section of competing highway.”

    What makes the IRT different?

    why can’t other systems emulate the IRT if you believe it has merit?

    Is there something inherent wrong and wasteful for all systems EXCEPT IRT?

  26. Larry Gross Avatar
    Larry Gross

    re: “fully fund”

    you and I probably pay… on the order of 4 to 5 times as much for education as we do for roads.

    Are you advocating.. (agreeing with my tongue-in-cheek) that we raise taxes by several hundred/thousand dollars a year to “fully fund” roads?

    and actually.. I think you just got much of that wish with the NoVa Regional Transportation Authority… right?

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