Liddick: It’s 2013. Open your wallets…
December 31, 2012
Xcel wants $114 million more from you for natural gas over the next two years. That’s a 3.6 percent increase, an average of $1.75 per month through 2015. In return, the company promised not to file another rate increase during the period. Remember, it last raised rates in 2010. Aren’t they being generous?
This increase is on top of the 5.5 percent rate hike Xcel was granted for supplying consumer electricity last year, in return for a promise to “probably” not seek another increase until…2015. And that doesn’t count the $44 million Colorado ratepayers are shelling out for the failed Boulder “smart grid.” Remember when companies paid for their mistakes themselves? Executives at Xcel may, but as long as they are dealing with a supine Public Utilities Commission, why should they? Without doubt, we’ll have to bail them out.
The wind-power industry is also demanding that you continue to cover the cost of its inability to compete. Industrial giants like Vestas, Siemens and President Obama’s pet corporation, General Electric, are teaming up with radical environmentalists and “global warming” fearmongers to push further subsidies for this inefficient source of electrical power. With former governor Ritter in the running to be the next Energy Secretary, expect to pay plenty for this boondoggle. After all, it’s for your own good.
If you like milk on your Cheerios, expect to pay twice as much for it in the New Year. Ditto for many other types of agricultural commodities. So you’re going to have less discretionary income. Will that make a difference to our political leaders? Don’t bet on it.
“Fiscal cliff” or not, taxes rise this year. Payroll taxes increase about 2 percent for everyone. If a couple makes more than $250,000 per year, they will be charged a 3.8 percent tax for Obamacare and 1 percent additional for Medicare. The threshold for medical deductions will be raised to 10 percent of total income, making it harder to use. Any solution to the “fiscal cliff” will probably involve taxation of employer-provided health care as income. And heaven help us if Congress can’t get it together to patch the Alternative Minimum Tax once again; if they don’t, 27 million Americans with incomes down to about $57,000 will fall into the “greedy millionaires” category.
State Sen. Irene Aguilar wants universal health care for Coloradans through Medicaid, and thinks you should pay for it. Gov. Hickenlooper wants you to pay more for mental health care. Since the Democrats now control both the Legislature and the governor’s office, you will. How much will this cost? More than you’re being told.
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Expect proliferation of TABOR work-arounds like the “FASTER” program with its false-front “Bridge Enterprise” government corporation, funded last year by $100 million in vehicle-registration “fees.” Denver needs FasTracks. I-70 needs a monorail. It all needs funding, so expect to do your bit.
With all these new demands for your money, has the federal government got any plans to tighten its belt? Yes, but most will pinch Democrat favorites, so expect obscurantism. One example is a possible change in the way inflation is calculated.
Since 1973, cost of living adjustments (COLAs) factoring inflation into government entitlements from Social Security payments to “extended” unemployment benefits and food stamps to pensions of all sorts, has been based on something called the “CPI-W,” a consumer price index which covers about 32 percent of the urban workforce. In 1995, Congress mandated a redesign of the index, incorporating product-switching, meaning that if the price of steak rises to a certain point, it’s no longer included in the calculation; instead, it’s simply assumed that people have switched to buying hamburger. Many non-government economists think that the CBI-W underestimates real inflation by as much as .9-1.6 percent a year.
We might soon see a switch to a new methodology: the “Personal Consumption Expenditures” index, which stresses substitution and calculates everything from airfares to medical costs differently. The Federal Reserve has used this index since 2005; since then, the PCE has consistently measured inflation at about two-thirds of the CPI-W level, which explains why the Fed continues pouring a river of money into the economy without worrying about inflation: one doesn’t see what one willfully ignores.
So more of us will have to pay more money for more government involved in more areas of our lives. We will have less personal income to pay for increasingly expensive necessities. This unpleasantness will be directed by politicians unable to govern and unwilling to face the realities that their ineptitude, monomania and personal agendas have imposed on us. And to whom we have just handed a four-year mandate to continue doing the same.
Happy New Year.
Summit County resident Morgan Liddick pens a Tuesday column. Email him at email@example.com.