It’s About The Money–Health Concerns Are Being Ignored

Many of our more liberal states are looking for additional sources of revenue. Unfunded liabilities and expanded welfare programs and medical programs have been very expensive to the states that have embraced them. One thing that many states are looking at to increase tax revenue is the legalization of marijuana. On Saturday, Yahoo Finance posted an article about how much income legal marijuana is actually generating in California.

The article reports:

California’s legal cannabis revenue isn’t growing as fast as many state officials anticipated, recent data suggests. And one industry expert believes that taxes and a still thriving black market for marijuana, are partly to blame.

“The legal market is struggling with the set of regulatory rules and tax rates that are pretty onerous and make it fairly uncompetitive versus a thriving black market that’s had the whole industry for 60 years now,” Tom Adams, BDS Analytics managing director, told Yahoo Finance’s YFi PM in an interview this week.

California’s marijuana excise tax produced $74.2 million in revenue for the second quarter of this year, according to the California Department of Tax and Fee Administration.

Yet back in January, Governor Gavin Newsom’s proposed budget predicted the state would generate $355 million in excise tax revenues for the fiscal year. That projection was later revised down again to $288 million back in May.

The shortfall is reminiscent of Michigan, where a nascent medical marijuana market has resulted in lower than expected revenue.

Adams contended the legal market faces additional expenses like the cost of testing, that the illegal market does not.

Meanwhile, there is evidence that marijuana is harmful to the developing brains of young adults. There also may be a link between marijuana and mental illness.

In January 2019 I posted an article which stated:

After an exhaustive review, the National Academy of Medicine found in 2017 that “cannabis use is likely to increase the risk of developing schizophrenia and other psychoses; the higher the use, the greater the risk.” Also that “regular cannabis use is likely to increase the risk for developing social anxiety disorder.”

…These new patterns of use have caused problems with the drug to soar. In 2014, people who had diagnosable cannabis use disorder, the medical term for marijuana abuse or addiction, made up about 1.5 percent of Americans. But they accounted for eleven percent of all the psychosis cases in emergency rooms—90,000 cases, 250 a day, triple the number in 2006. In states like Colorado, emergency room physicians have become experts on dealing with cannabis-induced psychosis.

Cannabis advocates often argue that the drug can’t be as neurotoxic as studies suggest, because otherwise Western countries would have seen population-wide increases in psychosis alongside rising use. In reality, accurately tracking psychosis cases is impossible in the United States. The government carefully tracks diseases like cancer with central registries, but no such registry exists for schizophrenia or other severe mental illnesses.

On the other hand, research from Finland and Denmark, two countries that track mental illness more comprehensively, shows a significant increase in psychosis since 2000, following an increase in cannabis use. And in September of last year, a large federal survey found a rise in serious mental illness in the United States as well, especially among young adults, the heaviest users of cannabis.

Is the extra tax revenue worth it?

Socialism In The Nordic Countries

On Monday The Washington Post posted an article about how the economies of the Nordic countries work.

These are some of the things noted:

Undoubtedly, the Nordic nations, with their high incomes, low inequality, free politics and strong rule of law, represent success stories. What this has to do with socialism, though, is another question.

And the answer, according to a highly clarifying new report from analysts at JPMorgan Chase, is “not much.”

Drawing on data from the World Bank, the Organization of Economic Cooperation and Development and other reputable sources, the report shows that five nations — Sweden, Denmark, Finland, Norway and the Netherlands — protect property rights somewhat more aggressively than the United States, on average; exercise less control over private enterprise; permit greater concentration in the banking sector; and distribute a smaller share of their total income to workers.

“Copy the Nordic model if you like, but understand that it entails a lot of capitalism and pro-business policies, a lot of taxation on middle class spending and wages, minimal reliance on corporate taxation and plenty of co-pays and deductibles in its healthcare system,” the report notes.

This really does not sound like the utopia that Bernie Sanders is pushing–particularly the co-pays and deductions.

The article continues:

Sanders and other left-leaning Democrats promise to pay for tuition-free college and Medicare-for-all with higher taxes on the top 1 percent of earners. Most Nordic countries, by contrast, have zero estate tax. They fund generous programs with the help of value-added taxes that heavily affect middle-class consumers.

In Sweden, for example, consumption, social security and payroll taxes total 27 percent of gross domestic product, as compared with 10.6 percent in the United States, according to the JPMorgan Chase report. The Nordic countries tried direct wealth taxes such as the one that figures prominently in the plans of Sen. Elizabeth Warren (D-Mass.); all but Norway abandoned them because of widespread implementation problems.

The Nordic countries’ use of co-pays and deductibles in health care may be especially eye-opening to anyone considering Sanders’s Medicare-for-all plan, which the presidential candidate pitches as an effort to bring the United States into line with European standards.

His plan offers an all-encompassing, government-funded zero-co-pay, zero-deductible suite of benefits, from dental checkups to major surgery — which no Nordic nation provides.

The Netherlands’ health insurance system centers on an Obamacare-like mandate to buy a private plan; individuals face an annual deductible of $465 (as of 2016), according to the Boston-based Commonwealth Fund.

Dutch consumers’ out-of-pocket spending on health care represented 11 percent of total health expenditures in 2016, according to the Peterson-Kaiser Health System Tracker — the same percentage as in the United States. In Sweden, meanwhile, out-of-pocket spending accounted for 15 percent of health expenditures. Who knew?

The article concludes by noting that the burden for these programs falls on the middle class–the rich will always have tax accountants to limit the amount of taxes they pay–the middle class has no such luxury. Bernie Sanders’ proposals will essentially rob the poor to pay the rich. I really don’t think that is what most Americans have in mind.

This Is Not Legislation Without Consequences

In October I posted an article based on an opinion piece from The New York Times. The New York Times article was posted October 6th and told the story of a man who was addicted to marijuana. Yes, despite what you have been told, addiction to marijuana is a real thing. The people pushing for the legalization of marijuana are very similar to the people who for years tried to tell us that smoking tobacco had no negative impact on the smokers’ health. This month Imprimis (the monthly magazine of Hillsdale College) posted a more disturbing article about the effects of marijuana. I strongly suggest that you follow the link and read the entire article. I will try to summarize parts of it here.

The article reports:

Over the last 30 years, psychiatrists and epidemiologists have turned speculation about marijuana’s dangers into science. Yet over the same period, a shrewd and expensive lobbying campaign has pushed public attitudes about marijuana the other way. And the effects are now becoming apparent.

Almost everything you think you know about the health effects of cannabis, almost everything advocates and the media have told you for a generation, is wrong.

They’ve told you marijuana has many different medical uses. In reality marijuana and THC, its active ingredient, have been shown to work only in a few narrow conditions. They are most commonly prescribed for pain relief. But they are rarely tested against other pain relief drugs like ibuprofen—and in July, a large four-year study of patients with chronic pain in Australia showed cannabis use was associated with greater pain over time.

They’ve told you cannabis can stem opioid use—“Two new studies show how marijuana can help fight the opioid epidemic,” according to Wonkblog, a Washington Post website, in April 2018— and that marijuana’s effects as a painkiller make it a potential substitute for opiates. In reality, like alcohol, marijuana is too weak as a painkiller to work for most people who truly need opiates, such as terminal cancer patients. Even cannabis advocates, like Rob Kampia, the co-founder of the Marijuana Policy Project, acknowledge that they have always viewed medical marijuana laws primarily as a way to protect recreational users.

As for the marijuana-reduces-opiate-use theory, it is based largely on a single paper comparing overdose deaths by state before 2010 to the spread of medical marijuana laws— and the paper’s finding is probably a result of simple geographic coincidence. The opiate epidemic began in Appalachia, while the first states to legalize medical marijuana were in the West. Since 2010, as both the epidemic and medical marijuana laws have spread nationally, the finding has vanished. And the United States, the Western country with the most cannabis use, also has by far the worst problem with opioids.

The article also notes:

After an exhaustive review, the National Academy of Medicine found in 2017 that “cannabis use is likely to increase the risk of developing schizophrenia and other psychoses; the higher the use, the greater the risk.” Also that “regular cannabis use is likely to increase the risk for developing social anxiety disorder.”

…These new patterns of use have caused problems with the drug to soar. In 2014, people who had diagnosable cannabis use disorder, the medical term for marijuana abuse or addiction, made up about 1.5 percent of Americans. But they accounted for eleven percent of all the psychosis cases in emergency rooms—90,000 cases, 250 a day, triple the number in 2006. In states like Colorado, emergency room physicians have become experts on dealing with cannabis-induced psychosis.

Cannabis advocates often argue that the drug can’t be as neurotoxic as studies suggest, because otherwise Western countries would have seen population-wide increases in psychosis alongside rising use. In reality, accurately tracking psychosis cases is impossible in the United States. The government carefully tracks diseases like cancer with central registries, but no such registry exists for schizophrenia or other severe mental illnesses.

On the other hand, research from Finland and Denmark, two countries that track mental illness more comprehensively, shows a significant increase in psychosis since 2000, following an increase in cannabis use. And in September of last year, a large federal survey found a rise in serious mental illness in the United States as well, especially among young adults, the heaviest users of cannabis.

According to this latter study, 7.5 percent of adults age 18-25 met the criteria for serious mental illness in 2017, double the rate in 2008. What’s especially striking is that adolescents age 12-17 don’t show these increases in cannabis use and severe mental illness.

A caveat: this federal survey doesn’t count individual cases, and it lumps psychosis with other severe mental illness. So it isn’t as accurate as the Finnish or Danish studies. Nor do any of these studies prove that rising cannabis use has caused population-wide increases in psychosis or other mental illness. The most that can be said is that they offer intriguing evidence of a link.

Please read the entire article. Remember how hard the tobacco lobby worked to keep pushing smoking cigarettes as cool, glamorous, and not hazardous to your health. The marijuana lobby is following the same pattern. You have been warned.

It Has Never Worked, Why Did They Think It Would Work?

Fox News posted an article today about Finland’s decision to end its universal basic income program by the end of the year.

The article reports:

The Finnish government reportedly announced Tuesday that it will end the country’s universal basic income program by year’s end — and appears to be taking on new measures to cut benefits to those who do not actively seek employment.

Finland was considered the first European country to pay a monthly check of $685 to its unemployed between ages 25 and 58. It was considered a pilot program — serving 2,000 randomly selected jobless people — that its founders hoped to expand.

…”Proponents said the program wasn’t comprehensive enough to gauge its merits,” Whitley wrote. “Critics say it would have required a 30 percent tax increase on an already over-taxed population to be viable.”

This is a chart showing Finland’s Personal Income Tax Rate. The source is a website called tradingeconomics:

This is what taxes look like under socialism. Consider this–if you are making $15 an hour in Finland, you are making slightly less than $8 an hour after taxes. This is what the conservative members of Congress are trying to avoid. We need to cut spending in America–we need to learn the lesson of socialism–giving people something they did not work for is not a plan for a successful economy.

The critics of the program may have known something that those backing the program did not:

The initial move was met with skepticism from citizens who questioned whether an unemployed young person would be motivated to find a job if they were making a steady income, albeit small.

“There is a fear that with basic income they would just stay at home and play computer games,” Heikki Hiilamo, a professor at the University of Helsinki, told the paper.

The problem isn’t really socialism as much as it is human nature. There is something built into us that generally is not willing to work for something we can get for free.

The Next Step After Ukraine?

Yesterday NBC News posted a story about Russian military drills near Finland.

The article reports:

Troops and jet fighters from all four military regions of Russia were deployed Sunday about 150 miles east of the Finnish border, according to the English-language newspaper Finnbay. The Russian defense ministry said in a statement that the exercises were pre-planned and that more than 50 fighter pilots took part.

Vladimir Putin has stated that he wants to restore Russia to its former glory. The article reminds us that Finland was part of the Russian empire for 108 years, from 1809 until Russia’s withdrawal from World War I in 1917.

The article explains Vladimire Putin’s goal:

This anxiety was heightened Sunday after one of Putin’s closest former advisers told the Swedish newspaper Svenska Dagbladet that the Kremlin would seek “historical justice” by reclaiming Finland and ex-Soviet countries as part of an enlarged Russian Federation.

 “Putin’s view is that he protects what belongs to him and his predecessors,” wrote Andrei Illarionov, according to a translation by the Moscow Times.

“Parts of Georgia, Ukraine, Belarus, the Baltic states and Finland are states where Putin claims to have ownership,” said Illarionov, who is now a senior fellow at the Washington, D.C.,-based Cato Institute.

Finland is a member of the European Union. Theoretically, Europe would come to its defense if it were attacked. Finland was also the only European nation involved in World War II to avert a foreign occupation. Obviously we would all be better off if Russia were not flexing its muscles at Ukraine and Finland, but until America has a strong leader in the White House we can expect to see more of this.

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