NCPA - National Center for Policy Analysis
NCPA - National Center for Policy Analysis
Barry is a Senior Economist with the National Center for Policy Analysis, one of the most influential think tanks in America today.

The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, Social Security, welfare, criminal justice, education and environmental regulation.

NCPA Motto - Making Ideas Change the World - reflects the belief that ideas have enormous power to change the course of human events. The NCPA seeks to unleash the power of ideas for positive change by identifying, encouraging, and aggressively marketing the best scholarly research.

Daily Policy Digest

Provided courtesy of: NCPA

Daily Policy Digest

How Fast Internet Affects Home Prices
07 Jul 2015 07:00:58 CDT -

As the Internet becomes central to the way Americans work and live, the availability of speedy Internet service is starting to affect Americans' biggest purchase: their homes, according to Ryan Knutson writing for the Wall Street Journal.

Fiber-optic connections, the fastest type of high speed Internet available, can add $5,437 to the price of a $175,000 home — about as much as a fireplace, or half the value of a bathroom. Telecom companies by law are required to make telephone service available to every residence in their service areas, but the same isn't true for all high speed Internet providers.

  • Phone lines can deliver DSL service, typically slower than 10 megabits a second. Satellite service is usually even slower.
  • The impact is most acute in rural areas, where Internet speeds tend to drop dramatically. As of 2013, 92 percent of urban areas had high speed Internet, compared with 47 percent of rural areas.

In Western Massachusetts local officials are trying to solve the connectivity problem by building their own high speed networks. To accomplish that they're borrowing a tactic developed a century ago when the region was struggling to gain access to electricity.

  • More than 40 towns have formed a cooperative of Municipal Lighting Plants, a type of public utility first invented to build electricity infrastructure, and are raising funds to build out fiber connections.
  • So far this year, 19 of those towns have passed bond measures to fund construction. More than 40 percent of residents in 14 of those towns have already paid a deposit for service.

What people want in a home can vary a lot, and values can depend heavily on broader market forces. But broadband is starting to figure into that same calculus.

Source: Ryan Knutson, "How Fast Internet Affects Home Prices," Wall Street Journal, June 30, 2015.

For more on Economic Issues:

School Reform for Rural America
07 Jul 2015 07:00:57 CDT -

Texas, Kentucky, Mississippi, South Dakota, Louisiana, and Alabama include 66 of the nation's 100 poorest counties. 

  • One in four rural children live in poverty, and of the 50 U.S. counties with the highest child-poverty rates, 48 are rural.
  • Mental health issues complicate the process further. Individuals between 10 and 24 years of age living in rural areas are twice as likely to kill themselves as their urban peers.
  • Drug usage abounds. In the mid-2000s, rural 8th graders were 59 percent more likely than their urban peers to use methamphetamines and 104 percent more likely to use any amphetamine.

Changes to public funding schemes, policies, and economic incentives could encourage more initiatives that match educational opportunity to rural economic vitality. 

  • Local Innovation: Online adaptive learning delivered directly to schools and students, the development of fresh, locally relevant school models, and efforts to improve the quality of instruction and regulation benefit rural schools immensely.
  • Improving Rural School Choice: Chartering could be a tactic to liberate schools from meaningless or detrimental state regulation. The autonomy that charter laws afford could be put to good use in rural schools, which labor under rules often designed for their urban cousins. 
  • Increasing College Access:21 percent of 25- to 34-year-olds in rural communities hold a bachelor's degree or higher, compared with 13 percent of those 65 and older. An education system custom-made for rural communities would ensure that those who wish to stay in their community have access to relevant career education while they are in high school. Students should also be exposed to rural entrepreneurialism and encouraged to create new ventures in their communities.

An education system that is lackluster in urban America is perhaps even more so in rural areas. This need not continue to be the case. Political and education leaders should focus on creating the policy conditions and more fully integrating the industry opportunities that can best address rural education improvement.

Source: Dan Fishman, "School Reform for Rural America," Education Next, Summer 2015.

For more on Education Issues:

Domestic Manufacturing Costs to Fall Below China
07 Jul 2015 07:00:56 CDT -

A recent report projected that the cost of manufacturing in the U.S. will fall below costs in China within the next three years, in large part due to the rise of fracking. Fortune, citing an analysis by Boston Consulting Group, reported that the average cost to produce goods is currently only 5 percent higher in the United States than in China, and that the cost is expected to be 2 to 3 percent lower by 2018.

  • Rising wages in China and increased industrial productivity in the United States contributed to that trend, but the report cited hydraulic fracturing as the primary reason for the shift in costs.
  • Despite plummeting crude oil prices worldwide, the United States leads the global rankings in petroleum and natural gas production due to fracking.
  • As a result, the prices U.S. industrial customers pay for electricity are now 30 to 50 percent lower than the rates in other top exporting nations.
  • Falling energy prices particularly helped the metals, paper and petrochemicals sectors, which rely heavily on those fuels. A chemical trade group expects the plastics industry alone to create 127,500 jobs over the next decade due to decreasing natural gas prices.

The Fortune report noted that increased domestic production can also curb transportations costs, particularly with trucks fueled by natural gas.

Maintaining the country's fracking advantage over other nations could also help bring manufacturing jobs to the U.S. from overseas. A BCG analyst noted that even the current 5 percent cost gap between the U.S. and China could persuade companies to produce domestically, thereby avoiding potential shipping delays and political complications.

Source: Andy Szal, "Report: Fracking to Help U.S. Manufacturing Costs to Fall below China,", July 2, 2015.

For more on Environment Issues:

Cigarette Taxes Lead to Dangerous Behaviors
07 Jul 2015 07:00:55 CDT -

New York's cigarette taxes are the highest in the nation, at $4.35 per pack. Some New Yorkers naturally will seek to avoid cigarette excise taxes. People are tempted to buy cigarettes in a low-tax state such as North Carolina and sell them in New York, says Jonathan Nelson.

The black market created by cigarette taxes is very real. A report from Scott Drenkard of the Tax Foundation found a positive relationship between cigarette smuggling into a state and the state's cigarette excise tax rate. High tax rates produce an incentive for smugglers to purchase cigarettes in a low-tax state, and then sell them for a profit in a high-tax state.

The cigarette tax in New York may lower consumption, but it encourages smuggling.  In fact, notes Nelson, New York State has the highest smuggling rate (58 percent of all cigarettes).

A previous study conducted using data from 1991 to 2005 found a strong, negative relationship between cigarette tax rates and youth smoking participation rates.

  • Using data from 2007 to 2013, however, a new study found "little evidence that cigarette taxes discourage youth smoking."
  • The authors attribute this change in sensitivity to both anti-smoking efforts prior to 2005 — including cigarette tax increases — and to "an increasing reliance on online sources."

Increasing cigarette taxes disproportionately affects the poor. Low-income individuals tend to smoke more than higher-income individuals. Some smokers may quit if the cigarette tax rate continues to rise, but those who are strongly addicted will spend more of their income on cigarettes. This negatively affects their families.

Source: Jonathan Nelson, "High Cigarette Tax Rates May be More Harmful than Smoking," Economics21, July 5, 2015.

For more on Tax and Spending Issues:

Obama's Renewable-Energy Fantasy
07 Jul 2015 07:00:54 CDT -

On June 30, President Obama committed the United States to the goal of generating 20 percent of its electricity from renewable sources by 2030. This would nearly triple the amount of wind- and solar-generated electricity on the national grid, Rupert Darwall writes in the Wall Street Journal.

Recently Bill Gates explained why current renewables are dead-end technologies. They are unreliable. Battery storage is inadequate. Wind and solar output depends on the weather. The cost of decarbonization using today's technology is "beyond astronomical," Mr. Gates concluded.

If President Obama gets his way, the United States will follow the road traveled by the European Union. In 2007, Europe adopted the target of deriving 20 percent of its energy consumption from renewables by 2020. To see what the U.S. might look like, Europe is a good place to start.

  • Germany passed its first renewable law in 1991 and already has spent $440 billion on its so-called Energy Transition.
  • The German environment minister has estimated a cost of up to $1.1 trillion by the end of the 2030s.
  • With an economy nearly five times as large as Germany's and generating nearly seven times the amount of electricity, this suggests the cost of meeting Mr. Obama's pledge is of the order of $2 trillion.

One unintended consequence of the fracking boom, however, is the displacement of coal by natural gas. A 2014 Brookings Institution study estimated that replacing coal with modern combined-cycle gas turbines cuts 2.6 times more carbon-dioxide emissions than using wind does, and cuts four times as many emissions as solar.

Mr. Obama's renewable target does not produce jobs, growth or prosperity.

Source: Rupert Darwall, "Obama's Renewable-Energy Fantasy," Wall Street Journal, July 5, 2015.

For more on Environment Issues:

The Tanning Tax: Another Casualty of Obamacare
06 Jul 2015 07:00:53 CDT -

In the wake of the King v. Burwell Supreme Court decision, Congress must now turn their attention to fixing the most harmful parts of the law. As it turns out, the Affordable Care Act has not been "affordable" for women who own tanning salons -- or their customers. The so-called Tanning Tax imposed a 10 percent excise tax on tanning bed services, in addition to state sales taxes and taxes paid by the tanning salon owner, writes Cherylyn Harley LeBon, a former Senior Counsel to the U.S. Senate Judiciary Committee.

The Tanning Tax's impact on the tanning industry has been devastating. Since the tax was implemented in 2009, nearly 10,000 tanning salons have closed, according to the American Suntanning Association. This has resulted in a loss of 81,000 jobs. For instance:

  • In California, tanning salons employed 8,649 people in 2009; that number has fallen to 4,617.
  • Florida boasted 7,974 and now 4,617.
  • New York State had 5,508, and now has 2,755.
  • Texas saw a drop from 7,173 to 3,967.

Seventy percent of tanning salons are owned by women, while 95 percent of employees of tanning salons are women. In addition, women make up about three-fourths of tanning salon customers. The female owners, employees and the customers have become a casualty of the Tanning Tax. There are women business owners and employees who have lost businesses, jobs, and their livelihood, while customers are paying more for the service.

It is no surprise that some in Congress want to repeal the "Tanning Tax" and have introduced legislation. A good place to start would be to assist a specific sector of small businesses, comprised largely of women, that has been particularly affected by the legislation.

Source: Cherylyn Harley LeBon, "The Tanning Tax - Another Casualty of Obamacare", The Blaze, June 29, 2015.

For more on Tax and Spending Issues:

Health Policy Digest

Provided courtesy of: NCPA

Consumer Driven Health Care

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Saving Jobs from Health Reform's Harmful Regulations
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Does Health Insurance and Seeing the Doctor Keep You Out of the Hospital?
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The Case for Competition in Medicare
04 Oct 2011 12:43:58 GMT - A well-functioning marketplace would set in motion the forces needed to transform American medical care into a model of efficient patient-centered care...


Potential Effect of Health Care Reform on Emergency Department Utilization Not Clear
04 Oct 2011 12:43:58 GMT - In 2010, 71 percent of emergency physicians said that they expected emergency department visits to increase due to the implementation of the Affordable Care Act...


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