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2016 Georgia Republican Primary

76 Delegates: Allocated Proportional in Winner-Take-Most (March 1, 2016)

(Total delegates include 10 base at-large, 42 via 14 congressional districts, 3 party and 21 bonus.)

[election_2016_polls]

Polling Data

[wpdatatable id=36]

 

Latest 2016 Georgia Republican Primary polls and aggregate PPD polling average the March 1, Peach State contest on Super Tuesday, the SEC primary.

All 76 of Georgia’s delegates to the Republican National Convention are bound to candidates on the day of the Georgia Republican Primary. The 42 district delegates are bound to candidates based on the primary results in each of the 14 congressional districts, with each congressional district being assigned 3 National Convention delegates.

If a candidate receives a majority of the vote–more than 50%–then that candidate is allocated all 3 of the district’s delegates.

If no candidate receives a majority of the vote, the candidate with the most votes (plurality) receives 2 delegates and the candidate receiving the next highest number of votes receives 1 delegate. [Rules of the Georgia Republican Party. 7.3(B)(3)]

34 statewide delegates (10 base at-large, 21 bonus, plus 3 RNC delegates) are bound to presidential contenders according to the statewide vote. A mandatory 20% threshold is required for a presidential contender to receive National Convention delegates. If no candidate receives 20%, the threshold is 15%, if no candidate receives 15%, the threshold is 10%. [Rules of the Georgia Republican Party. 7.3(B)(4)]

If a candidate receives a majority of the vote (more than 50%), or only 1 candidate meets the threshold, that candidate is allocated the 34 statewide delegates.
If no candidate receives a majority of the vote then, for each candidate receiving the threshold or more of the vote, delegates = [the number of votes received by that candidate] × [31 statewide delegates] ÷ [the statewide vote for those candidates received the threshold or more]. Each candidate receives the whole number of delegates (that is, round down to the whole number). If delegates remain, award them to the candidate receiving the most votes statewide (not sure of rounding). [Rules of the Georgia Republican Party. 7.3(B)(4)]

The 3 RNC party leader delegates, the National Committeeman, National Committeewoman, and the chairman of the Georgia’s Republican Party are bound to the candidate receiving the most votes statewide. [Rules of the Georgia Republican Party. 7.3(B)(4)]

[ssbp]

2016 Georgia Republican Primary 76 Delegates: Allocated Proportional in

Policy

Long-run trends are an enormously important–yet greatly under-appreciated–feature of public policy.

  • Slight differences in growth can have enormous implications for a nation’s long-run prosperity.
  • Gradual shifts in population trends may determine whether a nation faces demographic decline.
  • Modest changes in the growth of government can make the difference between budgetary stability and fiscal crisis.
  • And migration patterns can impact a jurisdiction’s viability.

Or, in the case of California, its lack of viability. Simply stated, the Golden State is committing slow-motion suicide by discouraging jobs, entrepreneurs, investors, and workers.

Let’s look at some of the data. Carson Bruno of the Hoover Institution reviews data showing that the aspirational class is escaping California.

California’s consistent net domestic out-migration should be concerning to Sacramento as it develops state policy. As the adage goes, people vote with their feet and one thing is clear, more people are choosing to leave California than come. …Between 2004 and 2015, roughly 930,000 more people left California than moved to the Golden State… The biggest beneficiaries of California’s net loss are Arizona, Texas, Nevada, Oregon, and Washington. California is bleeding working young professional families. …those in the heart of their prime working-age are moving out. Moreover, while 18-to-24 year olds (college-age individuals) make up just 1% of the net domestic out-migrants, the percentage swells to 17% for recent college graduates (25 to 39 year olds).

And here’s why these long-run migration trends matter.

…while there is a narrative that the rich are fleeing California, the real flight is among the middle-class. …the Golden State’s oppressive tax burden – California ranks 6th, nationally, in state-local tax burdens – those living in California are hit with a variety of higher bills, which cuts into their bottom line. …which leads to a less economically productive environment and less tax revenue for the state and municipalities, but a need for more social services. And when coupled with the fact that immigrants – who are helping to drive population growth in California – tend to be, on average, less affluent and educated and also are more likely to need more social services, state, county, and municipal governments could find themselves under serious administrative and financial stress. …the state’s favorable climate and natural beauty can only anchor the working young professionals for so long.

We’re concentrating today on California, but other high-tax states are making the same mistake.

Here’s some data from a recent Gallup survey.

Residents living in states with the highest aggregated state tax burden are the most likely to report they would like to leave their state if they had the opportunity.Connecticut and New Jersey lead in the percentage of residents who would like to leave… Nearly half (46%) of Connecticut and New Jersey residents say they would like to leave their state if they had the opportunity. …States with growing populations typically have strong advantages, which include growing economies and a larger tax base. Gallup data indicate that states with the highest state tax burden may be vulnerable to migration out of the state…data suggest that even moderate reductions in the tax burden in these states could alleviate residents’ desire to leave the state.

Writing for the Orange County Register, Joel Kotkin explains how statist policies have created a moribund and unequal society.

…in the Middle Ages, and throughout much of Europe, conservatism meant something very different: a focus primarily on maintaining comfortable places for the gentry… California’s new conservatism, often misleadingly called progressivism, seeks to prevent change by discouraging everything – from the construction of new job-generating infrastructure to virtually any kind of family-friendly housing. …since 2000 the state has lost a net 1.7 million domestic migrants. …California’s middle class is being hammered. …Rather than a land of opportunity, our “new” California increasingly resembles a class-bound medieval society. …California is the most unequal state when it comes to well-being… Like a medieval cleric railing against sin, Brown seems somewhat unconcerned that his beloved “coercive power of the state” is also largely responsible for California’s high electricity prices, regulation-driven spikes in home values and the highest oil prices in the continental United States. Once the beacon of opportunity, California is becoming a graveyard for middle-class aspiration, particularly among the young.

In other words, class-warfare policies have a very negative impact_ on ordinary people.

Meanwhile, returning to California, a post at the American Interest ponders some of the grim implications of bad policy.

…many of the biggest, bluest states in the country—including New York, Illinois, and Massachusetts—have also experienced major exoduses over the last five years (although these outflows have been offset, to varying degrees, by foreign immigration). These large out-migrations represent serious policy failures… The new statistics out of California are a bad omen for the future of the state’s doctrinaire blue model governance. …if families and the young continue to flee California, the population will become older and less economically dynamic, creating a shortfall in tax revenue and possibly pressuring Sacramento raise rates even higher. Meanwhile, California faces a severe pension shortfall, both at the state and local level.

Here’s a map from the Tax Foundation showing top income tax rates in each state. If you remember what Carson Bruno wrote about California’s emigrants, you’ll notice that states with no income tax (Washington, Texas, and Nevada) are among the main beneficiaries.

So the moral of the story is that states with no income taxes are winning, attracting jobs and investment. And high-tax states like California are losing.

But remember that the most important variable, at least for purposes of today’s discussion, is how these migration trends impact long-run prosperity. More jobs and investment mean a bigger tax base, which means the legitimate and proper functions of a state government can be financed with a modest tax burden.

In states such as California, by contrast, even small levels of emigration begin to erode the tax base. And if emigration is a long-run trend (as is the case in California), there’s a very serious risk of a “death spiral” as politicians respond to a shrinking tax base by imposing even higher rates, which then results in even higher levels of emigration.

Think France and Greece and you’ll understand what that means in the long run.

In California, the Golden State has a

Economy

pending-home-sales-sale-sign

Home for sale sign (Realtors) and potential exiting and pending home sales contract. (PHOTO: REUTERS)

The National Association of Realtors (NAR) reported on Monday the Pending Home Sales Index dropped 2.5% last month, missing the media forecast. The Pending Home Sales Index fell to 106.0 in January from an upwardly revised 108.7 in December.

“While January’s blizzard possibly caused some of the pullback in the Northeast, the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would-be buyers,” he said. “Additionally, some buyers could be waiting for a hike in listings come springtime.”

Wall Street expected a 0.5% gain in contracts to buy previously-owned homes. While pending home sales are still 1.4% above January 2015 (104.5) and the index has increased year-over-year for 17 consecutive months, last month’s annual gain was the second smallest (September 2014 at 1.2 percent) during the timeframe.

“First-time buyers in high demand areas continue to encounter instances where their offer is trumped by cash buyers and investors,” adds Yun. “Without a much-needed boost in new and existing-homes for sale in their price range, their path to homeownership will remain an uphill climb.”

Existing-homes sales are forecast to be around 5.38 million for 2016, representing a gain of 2.5% from the prior year. The national median existing-home price for all of this year is expected to increase between 4% and 5%. In 2015, existing-home sales increased 6.3% and prices rose 6.8%.

The PHSI in the Northeast fell 3.2% to 94.5 in January, but were still 10.9% above a year ago. In the Midwest, the Pending Home Sales index fell 4.9% to 101.1 in January, but is still 1.4% above January 2015.

Pending home sales in the South inched up 0.3% to an index of 121.1 in January but remain 1.3% lower than last January. The index in the West decreased 4.5% in January to 96.5, but is still 0.4% above a year ago.

[brid video=”29019″ player=”2077″ title=”Pending Sales Ease Slightly in January”]

The National Association of Realtors (NAR) reported

Economy

midwest-manufacturing-goods

Surveys gauging growth or contraction in Midwest manufacturing. (REUTERS)

The Chicago Business Barometer, the Institute for Supply Management-Chicago’s gauge of manufacturing activity in the Midwest region fell to 47.6, down in February from 55.6 the month prior. Wall Street expected a much shallower decline to 53. Readings above 50 point to expansion, while those below indicate contraction.

“If one looks beyond the gyrations seen over the past three months then trend activity has been running a little below the 50 neutral mark, highlighting continued sluggish activity levels, with manufacturers under particular pressure,” Chief Economist of MNI Indicators Philip Uglow said. “Still, given the weakness in Q4, it looks like activity should pick up during Q1.”

[caption id="attachment_25679" align="aligncenter" width="740"] Surveys gauging growth

Editorials

Nikki-Haley-Marco-Rubio

South Carolina Gov. Nikki Haley and Florida Sen. Marco Rubio. (Photo: Getty Images)

In the fall of 2009, Marco Rubio was trailing by double-digits in Senate primary polls against Charlie Crist, a former and once-popular Republican governor. The would-be senator sent surrogates to grassroots activists with a simple message: Support me over the more well-known Crist because, well, he’s a RINO (Republican in name only). I’m a true conservative. I’m one of you.

Now, winless after four contests for the Republican nomination, two of which (South Carolina and Nevada) were previously cited as firewalls by his campaign, Mr. Rubio has become desperate. Worse still, in his desperation, he has become an embarrassment to the great state of Florida.

Look, America. Take it from Florida, take it from those of us who know him best. Marco Rubio is not one of you. He’s not a conservative. He’s whatever he needs to be, to whomever is willing to listen. Polls show Republican voters is his own state prefer Donald J. Trump by 20 points, or 14 points in a one-on-one. In a general election, Sen. Rubio has consistently trailed Hillary Clinton among Floridians even as Mr. Trump has pulled ahead of the likely Democratic nominee.

The reason is simple. Marco Rubio is the con artist. Marco Rubio is the fraud. And Floridians know it.

Let’s take a trip down memory lane.

The eventual support Sen. Rubio received from Florida tea party groups in his 2010 U.S. Senate race didn’t come easy and, in fact, it almost didn’t come at all. Sen. Rubio, as the former speaker of the Florida House, had a questionable record that wasn’t particularly conservative.

He supported in-state tuition for illegal immigrants and backed cap and trade. When the Saint Petersburg Times and Miami Herald battered Crist over his record on cap in trade in Florida, Mr. Rubio said the Sunshine State should comply with the federal government to “access early compliance funds,” rather than fight.

[brid video=”28960″ player=”2077″ title=”Rubio in 2008 I Would Direct Florida’ EPA To Create A CapAndTrade Or Carbon Tax Program”]

“So, I’m in favor of giving the Department of Environmental Protection a mandate that they go out and design a cap and trade or a carbon tax program and bring it back to the legislature for ratification some time in the next two years,” Mr. Rubio said in 2008.

In Alachua County, for instance, the Gainesville Tea Party wasn’t taking any chances and sent a candidate questionnaire to Mr. Rubio, which included a pledge on issues such as cap and trade, health care and amnesty for illegal immigrants. At first, he flat out refused to return the questionnaire.

Finally, only after the People’s Pundit made it clear that he would need to return the questionnaire if he hoped to close the 10-point deficit with Gov. Crist, he reluctantly complied with the request.

If elected America will quickly find out that Mr. Rubio doesn’t intend to keep the promises he is making to voters. When Gov. Mitt Romney lost Florida to President Barack Obama, he made a calculated political decision masked as a deeply personal choice. He broke his pledge to the base, joined with Barack Obama, Harry Reid and Chuck Schumer and attempted to ram the 2013 “Gang of Eight” Senate immigration bill down your throats.

It’s important to note that Sen. Rubio didn’t ever explain himself to the base he betrayed, he went radio silent. He was hiding and didn’t emerge until the nightmare amnesty bill was defeated by a conservative effort led by Sen. Jeff Sessions, who on Sunday endorsed Donald Trump. Mr. Rubio pretends like he heard the voice of the people and pulled his support for the bill. No, he ignored the voice of the people, voted for it and was defeated.

Gov. Jeb Bush, the senator’s mentor, has been remarkably silent since quitting the race after the Feb. 20 primary in South Carolina. Mr. Bush is yet another prime example of Sen. Rubio’s character and loyalty, which goes beyond simply not “waiting your turn” to run for president.

Behind the scenes, third-party attempts to broker a ceasefire between the two former friends have failed miserably. Sen. Rubio called Gov. Bush on Monday but, according to sources familiar with the phone call, their conversation did not last long and Mr. Rubio did not even ask for his endorsement.

That’s because endorsements have become a sticky topic for the two men, that is, ever since Mr. Rubio essentially bribed South Carolina Gov. Nikki Haley with the vice presidency. According to two former Bush aides, Sen. Rubio offered Gov. Haley the nomination to reconsider her endorsement of Gov. Bush. In a meeting a little less than a week before the primary, Gov. Haley told Gov. Bush that she agreed with New Jersey Gov. Chris Christie that Sen. Rubio was not prepared, not experienced enough for the Office of the President.

Mr. Rubio now has about as many friends among of the state party’s old guard as he does the party’s base. For those who do support him, it is a “lesser of the two evils” nose-holding decision, rather than an affirmation of his vision and leadership.

In fact, Mr. Rubio is so disliked by the grassroots and traditional Republican voting blocs that the PPD Election Projection Model considers his pledge not to run for reelection to be a net positive for Republicans in the 2016 Florida Senate race.

The language we have used in this editorial is sadly appropriate after the senator’s behavior last week. Out of desperation, the junior senator has taken the presidential election to a whole new low, one that has prioritized that desperation over behavior worthy of a presidential candidate. Last but not least, we cannot end this editorial without mentioning one of the hundreds of veterans who have reached out to us with their story and a simple request.

They are politely requesting Mr. Rubio stop claiming during stump-speeches and debates that he has been a champion of veterans. They disagree, and don’t appreciate their struggles being reduced to campaign talking points. During the debate hosted by ABC News in New Hampshire, Sen. Rubio claimed to have achieved “VA accountability for my Florida residents,” which greatly insulted a retired U.S. Air Force veteran, who was essentially assaulted at the VA hospital miles away from Mr. Rubio’s house.

When he reached out to him for “VA accountability,” he was ignored. More than six months have past since the incident, and he’s had nothing but radio silence. That’s the pattern.

Let this editorial serve as a warning. This Editorial Board, of this Florida-based news organization, will under no circumstances support Sen. Marco Rubio for president, senator or dog-catcher. Marco Rubio is the last and only hope for the status quo in an otherwise anti-establishment, anti-status quo election. Floridians, and the American people, clearly want a change.

Whether it’s RobotRubio 1.0, who was exposed by Gov. Christie before New Hampshire, or RobotRubio 2.0, who got a donor-financed upgrade last week, he will not bring that change.

Senator Marco Rubio has been rejected by his own state for a reason. America. You should, too.

Marco Rubio cannot carry his own home

Video

[brid video=”28948″ player=”2077″ title=”Ted Cruz on Meet the Press February 28 2016 Ted Cruz for President”]

Texas Sen. Ted Cruz speculated on Sunday that Donald Trump has not yet released his tax returns because they may show “business dealings with the mob.” In an interview on NBC’s Meet the Press, the senator and fellow Republican presidential candidate joined the conspiracy theorists in the Republican Establishment who claim the frontrunner is hiding something in his taxes.

“Maybe it is the case that Donald, there have been multiple media reports about Donald’s business dealings with the mob, with the mafia. Maybe his taxes show those business dealings are a lot more extensive than has been reported,” Sen. Cruz said to host Chuck Todd.

Sen. Cruz, who is losing every single Super Tuesday state in the SEC primary except for Texas, was just dealt a serious blow when Alabama Sen. Jeff Sessions on Sunday endorsed Mr. Trump for the Republican nomination. For at least the last six months, Sen. Cruz has repeated on the campaign trail that he stood with Sen. Sessions in fighting the “Gang of Eight” amnesty bill, which was co-sponsored by Florida Sen. Marco Rubio.

If the goal was to make the most outrageous comment he could to attract media headlines and attention away from the endorsement, he might have succeeded.

“Wait a minute. Senator Cruz, let me stop you there. That’s openly speculative. Do you have any facts to support that Donald Trump has mob ties?” a shocked Todd asked.

Texas Sen. Ted Cruz speculated on Sunday

Politics

Jeff-Session-Donald-Trump

Sen. Jeff Sessions, left, with Donald Trump at a campaign event in Alabama.

Sen. Jeff Sessions, an anti-amnesty hero who led the fight against the 2013 “Gang of Eight” Senate bill, endorsed Donald Trump at a rally on Sunday in Alabama. The endorsement is a major blow to Texas Sen. Ted Cruz, who has been repeating on the campaign trail that he stood with Sen. Sessions in fighting the amnesty bill, which was co-sponsored by Florida Sen. Marco Rubio.

“I am thrilled today to offer my endorsement of Donald J. Trump for President. This election is our last chance to save U.S. sovereignty and to end the domination of the political establishment over the interests of working Americans,” Sen. Sessions said, donning one of the red caps emblazoned with the Trump “Make America Great Again” campaign slogan. “Trump alone has rejected the donor class, defending America’s jobs and wages from open borders, uncontrolled immigration and the massive Trans-Pacific Partnership that will cede U.S. authority to foreign powers.”

“Trump’s trade and immigration plans will revitalize our shrinking middle class, keeping jobs and wealth and income inside the United States of America,” Sen. Sessions added. “Trump understands that a nation must always place the interests of its own people first.”

Mr. Trump teased the announcement on Twitter as he made his way to a rally just ahead of the biggest day on the election calendar.

“I am deeply honored to have the endorsement of Senator Jeff Sessions, leader of congressional conservatives. He has been called the Senate’s indispensable man and the gold standard,” Mr. Trump said in a statement.

“He led the fight against the Gang of Eight, against Obama’s trade deal, against Obama’s judges, and for American sovereignty,” the frontrunner added. “He has stood up to special interests as few have. There is no more respected man in Congress and we are closely aligned on many issues, including trade and illegal immigration, and I am proud to consider Jeff Sessions an advisor, friend and ally.”

On Sunday in Madison, Sen. Sessions said Mr. Trump is the candidate to finally address illegal immigration and fix a broken system that works against the American worker. But it was Trump’s message of negotiating and dropping bad trade agreements that appeared to be decisive to the popular senator.

Ultimately, Sen. Cruz voted to give President Barack Obama fast-track trade authority for the Trans-Pacific Pact, which critics argue gives away American sovereignty, hurts American workers and makes backdoor amnesty a requirement for participation.

While the Cruz campaign had hoped for both the endorsement of Sen. Sessions and a win in most SEC Primary states, including Alabama, Trump now gets a big boost ahead of Super Tuesday. Mr. Trump also leads in the PPD average of Alabama Republican Primary polls by double-digits (15%). There are 50 delegates up for grabs in Alabama, which awards its delegates on a “Winner-Take-Most” basis.

However, due to the voting threshold, it is possible that Mr. Trump takes all 50 delegates at play, as he did in South Carolina.

“We are nearing fast the point of no return. The people are hurting. Their wages are declining. Their schools are overburdened. Their hospitals are stretched past the breaking point. Crime is up, and community confidence is down,” Sen. Sessions added. “Americans of all backgrounds and ethnicities, immigrant and US-born, are crying out for leadership that puts their needs first, that takes care of those living and dreaming here today, leadership that understands that there is no constituency other than the American constituency. Mr. Trump is that leader.”

Sen. Jeff Sessions, the man who led

Politics

Hillary-Clinton-SC-Primary

Democratic presidential candidate Hillary Clinton greets supporters as she arrives to speak to supporters at her election night watch party for the South Carolina Democratic primary in Columbia, S.C., Saturday, Feb. 27, 2016. (AP Photo/Gerald Herbert)

Hillary Clinton defeated socialist Vermont Sen. Bernie Sanders in the South Carolina Democratic primary on Saturday by 47.%, with 100% of precincts reporting. The crushing victory reasserts Mrs. Clinton’s status as the presumptive frontrunner and odds-on favorite to win the nomination, as her Southern firewall made up of black voters should little to zero sign of cracking against Sanders.

“And now you know why we have always favored Mrs. Clinton to win the nomination,” said PPD’s senior political analyst, Richard Baris. “You cannot win the nomination in a modern Democratic Party with only white, largely younger voters.”

South Carolina exit polls showed black voters made up about 60% of the Democratic electorate on Saturday, blowing past their average 55% in prior primaries.

Worse still, the youth vote did not show up for the socialist senator, who has overwhelmingly carried the pivotal bloc of voters in prior contests. Spring break appears to have been more important to them then getting to the polls, an ominous sign not only for Sanders but the Democratic coalition in November. Young voters made up a significant force in the Obama coalition.

“Tomorrow this campaign goes national,” proclaimed Mrs. Clinton in her victory rally at University of South Carolina, sending the crowd into a frenzy of cheers and applause. “I am so greatly appreciative because today you send a message that today in America we stand together and there is no barrier too big to break.”

While Sen. Sanders closed a huge gap on the PPD average South Carolina Democratic Primary polls leading up to the election, he rarely got within 20 points of Mrs. Clinton. By this week, he had all but given up on the state and spent most of his time campaigning in states voting Super Tuesday and later.

Hillary Clinton defeated socialist Vermont Sen. Bernie

Policy

Bernie Sanders and Hillary Clinton

2016 Democratic presidential candidates Bernie Sanders, a socialist senator from Vermont, left, and former secretary of state Hillary Clinton. (Photos: AP)

With both Hillary Clinton and Bernie Sanders agitating for higher taxes (and with more than a few Republicans also favoring more revenue because they don’t want to do any heavy lifting to restrain a growing burden of government), it’s time to examine the real-world evidence on what happens when politicians actually do get their hands on more money.

Is it true, as we are constantly told by the establishment, that higher tax burdens a necessary and practical way to reduce budget deficits and lower debt levels?

This is an empirical question rather than an ideological one, and the numbers from Europe (especially when looking at the data from the advanced nations that are most similar to the US) are especially persuasive.

I examined the European fiscal data back in 2012 to see whether the big increase in tax revenue starting in the late 1960s led to more red ink or less red ink.

You won’t be surprised to learn that giving more money to politicians didn’t lead to fiscal probity. The burden of taxation climbed by about 10-percentage points of economic output over four decades, but governments spent every single penny of the additional revenue.

They actually spent more than 100 percent of the additional revenue. The average debt burden in these Western European nations jumped from 45 percent of GDP to 60 percent of GDP.

I often share this data when giving speeches since it is powerful evidence that tax increases are not a practical way of dealing with debt and deficits.

But in recent years, audiences have begun to ask why I compare numbers from the late 1960s (1965-1969) with the data from the last half of last decade (2006-2010). What would the data show, they’ve asked, if I used more up-to-date numbers.

So it’s time to re-calculate the numbers using the latest data and share some new charts about what happened in Europe. Here’s the first chart, which shows on the left that there’s been a big increase in the tax burden over the past 45 years and shows on the right average debt levels at the beginning of the period. And I ask the rhetorical question about whether higher taxes led to less red ink.

Now here’s the updated answer.

What we find is that debt levels have soared. Not just from 45 percent of GDP to 60 percent of GDP, as shown by the 2012 numbers, but now to more than 80 percent of economic output.

In other words, we can confirm that the giant increase in the tax burden over the past few decades has backfired. And we can also confirm that the big income tax hikes and increases in value-added taxes in more recent years have made matters worse rather than better.

I can’t imagine that anyone needs any additional evidence that tax increases are misguided.

But just in case, let’s look at the findings in some newly released research from the European Central Bank.

Since the start of the sovereign debt crisis, in early 2010, many Euro area countries have adopted fiscal consolidation measures in an attempt to reduce fiscal imbalances and preserve their sovereign creditworthiness. Nonetheless, in most cases, fiscal consolidation did not result.

That doesn’t sound like good news.

I wonder whether it has anything to do with the fact that “fiscal consolidation” in Europe almost always means higher taxes? And, indeed, the ECB number crunchers have confirmed that the tax-hike approach is bad news.

The aim of this paper is to investigate the effects of fiscal consolidation on the general government debt-to-GDP ratio in order to assess whether and under which conditions self-defeating effects are likely to materialise… In the case of revenue-based consolidations the increase in the debt-to-GDP ratio tends to be larger and to last longer than in the case of spending-based consolidations. The composition also matters for the long term effects of fiscal consolidations. Spending-based consolidations tend to generate a durable reduction of the debt-to-GDP ratio compared to the pre-shock level, whereas revenue-based consolidations do not produce any lasting improvement in the sustainability prospects as the debt-to-GDP ratio tends to revert to the pre-shock level.

The two scholars at the ECB then highlight the lessons to be learned.

…strategy is more likely to succeed when the consolidation strategy relies on a durable reduction of spending, whereas revenue-based consolidations do not appear to bring about a durable improvement in debt sustainability. Moreover, delaying fiscal consolidation until financial markets pressures threaten a country’s ability to issue debt, may have a cost in terms of a less sizeable reduction in the debt-to-GDP ratio for given consolidation effort, even if it is undertaken on the spending side. This is an important policy lesson also in view of the fact that revenue-based consolidations tend to be the preferred form of austerity, at least in the short run, given also the political costs that a durable reduction in government spending entail.

In other words, the bottom line is a) that tax hikes don’t work, b) reform is harder if you wait until a crisis has begun, and c) the real challenge is convincing politicians to do the right thing when they instinctively prefer tax hikes.

P.S. It’s worth pointing out that the value-added tax has generated much of the additional tax revenue (and therefore enabled much of the added burden of government spending) in Europe.

The real-world evidence shows when politicians get

Opinion

Supreme Court

Supreme Court Justice Antonin Scalia (Photo: AP)

Justice Antonin Scalia’s death leaves questions.

There – it’s said.

Others put it differently. Comedian and social justice activist Dick Gregory put it this way: “You know they murdered him, right? … One of the most powerful people in the world and he ain’t got no bodyguard, man?”

Radio giant Michael Savage put it this way: “Was Scalia murdered? We need a Warren Commission-like investigation. This is serious business.”

Republican presidential front-runner Donald Trump put it this way, first on a Savage show that was later widely quoted: It’s “pretty unusual” Scalia was found with “a pillow on his face.”

And Judy Melinek, a forensic pathologist who conducts autopsies for the Alameda County Sheriff Coroner’s Office in California and is also the CEO of the consultant firm PathologyExpert Inc., put it this way, in a lengthy opinion piece for CNN: “Even if this decedent weren’t a controversial and powerful national figure, he should have had an autopsy. Why? Because whenever someone is dead in bed at a private residence with a pillow over his head, there is the possibility that the death was not a natural one.”

Well, no du’h.

Did the West Texas authorities who opted against performing an autopsy think — after what the Washington Post labeled in a headline, The Death of Antonin Scalia: Chaos, confusion and conflicting reports, – their decision would simply send the justice quietly into that good night? The reason questions persist in Scalia’s death is that questions have gone unanswered – and no matter how many claims are made to the contrary, the truth is nothing speaks truth like an old-fashioned autopsy.

Look at what the Associated Press just reported: Presidio County District Attorney Rod Ponton, in an interview with the AP, cited a letter from Rear Adm. Brian Monahan, the doctor who serves members of Congress and the Supreme Court, to make this well-repeated point: Nothing to see here about Scalia’s death. Move along. But the letter is hardly proof positive. It was addressed to Presidio County Judge Cinderela Guevara – the local point person who wrapped her death inquiry by telephone, based on findings of local law enforcement rather than on visits to the scene – and concluded Scalia’s sleep apnea, degenerative joint disease, pulmonary problems, high blood pressure and penchant for smoking all contributed to his death. Well, how did Monahan know that, without examining Scalia’s body or the death scene? Yet it was that letter that led Ponton to conclude Scalia’s “significant medical conditions led to his death,” AP reported.

That’s all fine and dandy, but why not release that letter to the public? The AP asked for it, and was given the run-around, first from Ponton then from Guevara, and then from the Texas Department of State Health Services, which denied releasing a copy of Scalia’s death certificate.

How does all this add up to a suspicious-free death?

One more fun fact, fueling the fire: One of Scalia’s close friends, Bryan Garner, returned from a trip to Singapore and Hong Kong with the justice on February 4. After learning of Scalia’s death, he spoke of their trip in an interview with the National Law Journal: “[Scalia] was unbelievably energetic and always on the go. … Having spent 14 hours a day with him so recently, he seemed very strong. I was stunned and shocked [at this death].”

Look, Scalia’s sudden and shocking death could be nothing more than that – a sudden and shocking albeit natural death. But the fact that so many questions have gone unanswered, and that those in position to answer those questions are shrugging their shoulders –a la “Questions? What questions?” – is suspicious in and of itself. An autopsy could have quieted all the whispers. Unfortunately, historical accounts of Scalia’s life and his considerable list of accomplishments, both in and out of court, are now going to be marked with a giant asterisk that overshadows and prods: But was his death really natural?

And rightly so.

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Weeks after Justice Antonin Scalia was found

People's Pundit Daily
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