To the editor:
In light of the state’s ballooning budget deficit and Gov. Jim Gibbons’ refusal to consider any offsetting tax increases, the experience of Texas in 2002 may offer Nevada a blueprint.
Two years after passing a number of unfunded “feel-good” programs with the blessing of then-Gov. George W. Bush, including improved health insurance benefits for teachers, the Texas Legislature was forced to deal with a $15 billion budget shortfall. Politically divided and unable to prioritize one program vs. another, and unwilling to raise taxes, the Legislature instituted cuts to every state program and institution, with spending reductions of 15 percent in 2002-03 and 7.2 percent in 2003-04.
These cuts included refusing 3-to-1 federal Medicaid matching funds, with a 7.5 percent decrease in Texas’ Medicaid rolls, closing hospital floors at state universities and medical centers, postponing state infrastructure projects and laying off thousands of state employees. The human suffering was intense, but two years later, with the price of oil doubling and Texas consumers consuming, the Texas economy was booming and its budget was back in the black.
Were across-the-board cuts achievable? Yes. Were they reasonable? I don’t think so. The magnitude of the Texas cuts ruined many people’s health and lives, particularly untold numbers of poor children.
Other lessons: George W. Bush has never been a fiscal conservative; rather, he is and always has been a “spend and borrow” politician. Fiscal irresponsibility can cause severe human suffering, although usually such suffering is not blamed on the politicians who cause it. Finally if a state has a vibrant economy and a productive citizenry, budget shortfalls are usually short-term situations.
Jeffrey M. Shear
NORTH LAS VEGAS
The price of profit
To the editor:
Today, gasoline is selling for more than $4.20 per gallon in Las Vegas. This was not caused by “supply and demand,” nor by fuel shortages. This is being caused by market speculators. These are people who buy commodity futures based on what they believe the market will do (hopefully at a lower price), then sell at the actual price. The only problem is, these people are setting the cost of gasoline.
There is no gasoline shortage. It is the same people who pump it from the ground, ship it to the United States, process it, truck it to the gas stations and fill our tanks. There are no increased costs. Only increased profits. There was a bill in Congress that would have forced the oil companies to roll back their profits to 2005 levels. That was voted down.
There is talk from presidential candidate John McCain to rescind the fuel tax. First, this would halt all transportation-related construction, putting thousands out of work, and it would put off only projects that are needed. Second, in Nevada, our constitution has a provision that would increase the state gasoline tax by any amount the federal gasoline tax is reduced. Therefore, we would see no decrease in price.
Now the president wants to drill off the U.S. coasts in an effort to stabilize or reduce the price of gasoline. This is a good thought, however, do we have any guarantee that the oil pumped from our coasts would stay in the United States, or would it be sold at a grotesque profit overseas?
Mistakes of the past
To the editor:
From the rhetoric in the current election, it appears the Democratic Party has not learned much about the political mistakes of other countries throughout history.
I cannot believe that Democrats are even suggesting nationalizing the oil industry. Hugo Chavez did the exact same thing last year in Venezuela, and now that country hardly produces oil due to inefficiency and corruption. ExxonMobil and ConocoPhillips walked away from billions of dollars rather be taken over and forced to accept unreasonable terms.
Sen. Barack Obama and other Democrats are also talking about raising capital gains taxes and instituting windfall profit taxes. A historical problem. The United States paid the price in the ’70s during the Carter administration for the same policies. The results: gas lines and double-digit inflation. The same has held true in other countries that have enacted similar policies.
The truth is that Democratic Party’s energy platform is neither progressive nor beneficial, but regressive and destructive. Their policies are similar to the failing governments of Venezuela and Argentina, which have instituted similar, if not identical, policies that the Democrats are now proposing here.
It seems that the Democrats are counting on people being unaware that the policies they are proposing have failed in other countries. It seems they are counting on an uninformed voting population.
Rein in speculators
To the editor:
I’m surprised at all the people who can’t see through the pandering of the offshore drilling rhetoric and those who think we can drill our way out of high oil prices. The truth is we can’t.
According to a report by the House Natural Resources Committee, in the past nine years, drilling permits on public lands increased by more than 361 percent. In that same time, gasoline prices have gone up almost 150 percent. For example, in 2006 the federal government opened up 8.3 million acres of waters in the Gulf of Mexico to oil and gas drilling. The Energy Information Administration estimates that if we open the Arctic National Wildlife Refuge to oil exploration today, 20 years down the road gasoline prices will decrease by only a few cents a gallon.
A better long-term solution is conservation and alternative energy investment. A quick solution would be to regulate the speculators. There were two great articles in last week’s Review-Journal addressing this problem. An estimated 25 percent to 60 percent of today’s crude oil price is purely speculation-driven by trader banks and hedge funds.
If you want to blame Congress for something in this mess, you can blame lawmakers for not regulating the oil speculation market.
To the editor:
Your June 20 editorial, “Deja vu all over again,” adroitly exposed the unfairness and undermining economic damage of the alternative minimum tax. However, you fell short of a complete answer in advocating Nevada Sen. John Ensign’s bill to abolish the AMT.
The best solution is to enact HR-25, The Fair Tax Act, which would abolish the Internal Revenue Code, the income tax, the IRS — the entire Byzantine federal tax mess — and replace it all with a fair, simple national retail sales tax.
To date, 72 members of the House have co-sponsored the bill. Sadly not a single Nevada representative is among them. GOP Reps. Dean Heller and Jon Porter have indicated an interest in the bill, but Democratic Rep. Shelley Berkley apparently won’t commit either way.
If you would like never again to have to wrestle with an incomprehensible and unfair tax form and simply pay your dues to Uncle Sam at the cash register every time you choose to make a purchase, your representative needs to know. They are all up for election in November, so if they ever are going to listen and take us seriously, now is the time.
Think of the trees that could be saved by abolishing all the income tax forms. Call or write your representative and urge them to co-sponsor HR-25.