Sept. 12, 2019
Permission to republish original opeds and cartoons granted.
Pelosi drug tax kills cures
House Speaker
Nancy Pelosi seems intent on destroying the hope of those afflicted by cancer
and other deadly diseases as legislation she is pushing under the guise of
lowering drug prices will effectively create a potential financial cost for
developing and inventing new life saving medicines. The only available summary
published of Pelosi’s H.R. 3 states, "If a manufacturer refuses to enter
negotiations after being selected by the Secretary, or if the manufacturer
leaves the negotiation before a maximum fair price is agreed to, then the
manufacturer will be assessed an excise tax equal to 75 percent of annual gross
sales in the prior year of the selected drug.” Note that the coerced payment
for a manufacturer who doesn’t agree to a lesser amount is “75 percent of
annual GROSS sales in the prior year of the selected drug.” This is not a tax on the profit, but instead
is a tax on the overall sales, meaning that if a company sells a drug for $100,
they owe a tax of $75 — no matter what profit they made. This means that the
Pelosi prescription medicine tax can easily exceed 100 percent of profits.
Video: Unemployment has never been so low for blacks, making the 2019 Trump economy the most equal ever
At 5.5 percent,
unemployment for African-Americans has never been so low, but can President
Donald Trump capitalize on the good news in his 2020 reelection bid?
Did anyone notice that the 10-year, 2-year un-inverted, forestalling recession fears?
Don’t look now,
but if you were planning on a severe recession and a spike in unemployment
before the 2020 elections in the hopes it would help oust President Donald
Trump, you might have to keep waiting. The spread between 10-year and 2-year
treasuries, the one that inverted in late August for a few trading days,
thought to be a fairly reliable predicter of a recession on the horizon and
certainly was widely reported as such, un-inverted on Sept. 4 without the same
fanfare. Usually, interest rate inversions between the long and short interest
rates like the 10-year, 2-year go fairly deep into negative territory for weeks
and months as a certain recession signal on average about 16 months after the
inversion, but in this case, the inversion was extremely shallow and only
lasted for six trading days. So, was it a false signal?
Time for Attorney General Barr to produce Brady material in Michael Flynn case
Americans for Limited Government President Rick
Manning: “It is incredibly frustrating that the Department of Justice continues
their policy of obstruction in the Michael Flynn case. The clear intent of the
career Justice Department lawyers is to run out the clock on the Trump
administration in the hopes he loses in 2020 in order to forever bury the
spying scandal. Attorney General William Barr has a responsibility to direct
attorneys in the Flynn case to comply with Judge Emmet Sullivan’s order to turn
over all exculpatory Brady and other materials to Flynn, so that justice can be
served.”
Washington Examiner: Median income hit record high in 2018 while poverty declined
“Median U.S.
household income reached $63,200 in 2018, the highest figure on record, new
data released Tuesday by the Census Bureau revealed. The official poverty rate
also reached its lowest level since at least 2001, dropping to 11.8 percent of
Americans, or 38.1 million people who are in poverty, according to the Census
Bureau measurements. The number of people in poverty in 2018 decreased by 1.4
million people from 2017 levels. Between 2014-2018, the United States
experienced the strongest four-year improvement in the official poverty rate in
decades. With the significant improvements to median income and poverty witnessed
from 2015-2017, 2018 was not a particularly unusual year in terms of economic
growth trends. It represents the cumulative effort of the economic recovery
that started in 2009.”
Pelosi drug tax kills cures
By Rick Manning
House Speaker Nancy Pelosi seems intent on destroying the hope of those afflicted by cancer and other deadly diseases as legislation she is pushing under the guise of lowering drug prices will effectively create a potential financial cost for developing and inventing new life saving medicines.
The only available summary published of Pelosi’s H.R. 3 published by FDANews.com states, "If a manufacturer refuses to enter negotiations after being selected by the Secretary, or if the manufacturer leaves the negotiation before a maximum fair price is agreed to, then the manufacturer will be assessed an excise tax equal to 75 percent of annual gross sales in the prior year of the selected drug.”
Note that the coerced payment for a manufacturer who doesn’t agree to a lesser amount is “75 percent of annual GROSS sales in the prior year of the selected drug.” This is not a tax on the profit, but instead is a tax on the overall sales, meaning that if a company sells a drug for $100, they owe a tax of $75 — no matter what profit they made. This means that the Pelosi prescription medicine tax can easily exceed 100 percent of profits.
What company in their right mind is going to invest in developing, testing and marketing the latest miracle cure when the federal government can punish the company for their success? In fact, since the proposed H.R. 3 only applies to the 250 brand-name drugs that “lack price competition with the greatest total cost to Medicare and the whole U.S. health system,” the financial incentive for any corporation is to limit the number of people who benefit from their latest medicines in order to avoid falling within the price extortion threshold.
Rather than encouraging the expanded availability of life saving drugs and biologics, instead the presumed unintended side-effect of the latest Democrat health care scheme would be to make these treatments less available and as a result of this exclusivity, even more costly.
Anyone who remembers the Obama lie that if you like your health insurance, you can keep your health insurance, should be shuddering under the prospects of the Pelosi prescription drug promise that, "This steep, retroactive penalty creates a powerful financial incentive for drug manufacturers to negotiate and abide by the final price, while ensuring that patients maintain uninterrupted access to the medicines they need. The penalty gives the HHS Secretary leverage without resorting to a restrictive formulary and without the interruptions of contracting, building, and approving a whole new production line."
Because the reality is that what the steep, retroactive excise tax penalty actually creates is a powerful incentive for manufacturers to ration cures to those who are willing to concierge health providers who serve the wealthiest Americans rather than put their entire companies at risk based upon a retroactive penalty that will likely exceed any profits they derive from it.
The other reality is that small and mid-size biologic and drug manufacturers would be unwilling to assume the costs associated with the marketing of their latest and greatest new meds, and as a result would be almost compelled to enter into agreements with pharmaceutical giants in order to protect themselves from being destroyed by a bureaucratic edict.
One of the truisms of government is that when you tax something, you get less of it. By taxing the 250 most common prescription medicines at rates approaching or exceeding 100 percent, the Pelosi prescription medicine tax will result in higher drug prices, rationing, and in the IRS inserting itself at your local drug store's pharmacy section.
President Trump has worked hard to make medicines and treatments more available to patients through landmark “Right to Try” legislation which gives dying patients the chance at life through not fully tested medicines. Destroying the companies who are creating these medicines ability to make a profit and offset research and development costs will undermine the ability of millions of Americans with cancer and other deadly or disabling diseases from having the latest hope for a cure at their disposal.
Punishing those who are inventing hope is not the answer. Congress and President Trump should reject H.R. 3, and just tell Speaker Pelosi no in her latest attempt to stymie the invention of cures here in America.
Rick Manning is the President of Americans for Limited Government.
Video: Unemployment has never been so low for blacks, making the 2019 Trump economy the most equal ever
To view online: https://www.youtube.com/watch?v=-HN7NxH3ngo
Did anyone notice that the 10-year, 2-year un-inverted, forestalling recession fears?
By Robert Romano
Don’t look now, but if you were planning on a severe recession and a spike in unemployment before the 2020 elections in the hopes it would help oust President Donald Trump, you might have to keep waiting.
The spread between 10-year and 2-year treasuries, the one that inverted in late August for a few trading days, thought to be a fairly reliable predicter of a recession on the horizon and certainly was widely reported as such, un-inverted on Sept. 4 without the same fanfare.
That’s too bad, because a lot of people could be getting this story wrong.
Usually, interest rate inversions between the long and short interest rates like the 10-year, 2-year go fairly deep into negative territory for weeks and months as a certain recession signal on average about 16 months after the inversion, but in this case, the inversion was extremely shallow and only lasted for six trading days.
So, was it a false signal?
The short answer is we don’t know yet. It could invert again today as it is not too far in positive territory since we are in fact nearing the end of the business cycle. But a hint could come from the month-long, shallow inversion between the 10-year, 2-year that occurred in 1998 that turned out to be too early to predict the March 2001 recession.
Then, the Federal Reserve acted quickly to cut interest rates, the inversion was cured and it turned out the boom economy of the 1990s had a couple of years left on it.
The same thing might be happening here. The central bank already cut the federal funds rate in its July meeting, and for the Sept. 17 and 18 Fed meetings, markets area expecting another rate cut amid strong dollar concerns. President Donald Trump has been saying interest rates are too high since last October and has been complaining about the dollar being too strong and flattening U.S. exports. He’s not wrong. On a trade-weighted basis, the U.S. dollar has never been stronger versus foreign currencies, and it has most certainly had a negative impact on U.S. bids to trade overseas as In periods when the dollar was weakening, U.S. exports have tended to accelerate, and in periods where it strengthened, exports slowed down or even contracted.
Adding to expectations for a rate cut, on Sept. 11, the President even called for negative interest rates, writing on Twitter, “The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet… The USA should always be paying the… lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of ‘Boneheads.’”
Here, Trump is referring to negative interest rates offered in countries like Germany and Japan, which artificially keep their interest rates lower than U.S. rates to incentivize purchases of U.S.-dollar-denominated assets like treasuries, which keeps the dollar strong, and the euro and yen weak to boost exports to the U.S.
On the flip side, negative rates also seem to foreshadow weaker economic growth and overall deflationary conditions. It wouldn’t necessarily be a positive thing to see them, anymore so than quantitative easing.
If interest rates go negative it will mean a world of perverse incentives (like earning interest by going deep into debt), but markets may leave the U.S. with little choice in the matter. As large as government and other debts are, and they number in the tens of trillions, there is simply far more demand for bonds than there is a supply, and so if markets push rates negative, the Fed will be left with a choice than to leave the federal funds rate inverted perhaps for years or to plunge into negative territory and start paying banks interest to borrow at the discount window.
Barring other mechanisms for weakening the dollar — the Fed could sop up foreign currencies along with the U.S. Treasury in so-called warehousing operations — interest rate cuts may be the only game in town that matters at the moment. Now everyone has to hold their breath and wait to see what the Fed does next week.
Robert Romano is the Vice President of Public Policy at Americans for Limited Government.
Time for Attorney General Barr to produce Brady material in Michael Flynn case
Sept. 11, 2019, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement urging Attorney General William Barr to have the Justice Department turn over all exculpatory Brady material to Michael Flynn and his attorneys:
“It is incredibly frustrating that the Department of Justice continues their policy of obstruction in the Michael Flynn case. The clear intent of the career Justice Department lawyers is to run out the clock on the Trump administration in the hopes he loses in 2020 in order to forever bury the spying scandal. Attorney General William Barr has a responsibility to direct attorneys in the Flynn case to comply with Judge Emmet Sullivan’s order to turn over all exculpatory Brady and other materials to Flynn, so that justice can be served.”
To view online: https://getliberty.org/2019/09/time-for-attorney-general-barr-to-produce-brady-material-in-michael-flynn-case/
ALG Editor’s Note: In the following featured report from the Washington Examiner’s Nihal Krishan, median income has hit a record high in 2018 according to the Census Bureau:
Median income hit record high in 2018 while poverty declined
by Nihal Krishan
Median U.S. household income reached $63,200 in 2018, the highest figure on record, new data released Tuesday by the Census Bureau revealed.
The official poverty rate also reached its lowest level since at least 2001, dropping to 11.8 percent of Americans, or 38.1 million people who are in poverty, according to the Census Bureau measurements. The number of people in poverty in 2018 decreased by 1.4 million people from 2017 levels.
Between 2014-2018, the United States experienced the strongest four-year improvement in the official poverty rate in decades.
With the significant improvements to median income and poverty witnessed from 2015-2017, 2018 was not a particularly unusual year in terms of economic growth trends. It represents the cumulative effort of the economic recovery that started in 2009.
In 2015, for example, the poverty rate dropped from 14.8 percent to 13.5 percent, more than any other year since 1969. Also, the median household income rose by a record amount in 2015, with figures dating back to 1967.
The latest Gini index, a measure of income inequality, shows that although income disparities are down a bit from 2017, inequality is still at near the highest it’s been in more than 50 years.
California has the highest levels of poverty, with 18.2 percent of its people, or 7 million, in poverty. This is essentially due to the high cost of living in California versus other states.
In Arkansas, 13.1 percent of people live in poverty, which is close to the average for the nation (13.2 percent), while Iowa, with 6.8 percent in poverty, is the lowest in the country.
The Census Bureau also released data on the Supplemental Poverty Measure, which goes further than the official poverty measure by showing the impact various government programs have in lifting people above the poverty line. The measure takes into account programs such as Supplemental Security Income for the elderly and disabled poor, Temporary Assistance for Needy Families for very low-income families with children, and SNAP (which used to be called food stamps). In 2018, SSI lifted 2.9 million people above the poverty line, while SNAP and TANF lifted 3.1 million and 0.4 million people out of poverty, respectively.
The Supplemental Poverty Measure rate in 2018 was 13.1 percent, which is not statistically different from the 2017 rate of 13 percent.
President Trump’s 2020 budget proposes deep cuts to the number of low-income assistance programs, as well as significant cuts to health insurance. It’s highly unlikely that the president’s budget will get enacted this year or in 2020, but it reflects his priorities in the years ahead.
