Andy Matthews >> Nevada Policy Research Institute

Andy Matthews

New

January 18, 2013

You know the excitement you feel when you buy something new? A new suit, new shoes, new sporting equipment? That’s the feeling I’ve had this week when I visit NPRI’s homepage, http://npri.org.

Coming soon

January 11, 2013

Is Nevada one of the most business-friendly states in the country? Is Nevada a low-tax state? Does Nevada exemplify what a free market looks like?

Many people think the answer to each of those questions is yes, but they're wrong.

I was asked the other day if I was planning any New Year's resolutions. Since I already lead a flawless life, I see no need.

I jest, I jest.

Seriously, though, I'm sure that many of you participate in that annual ritual of pledging to learn a new skill, kick a bad habit or otherwise improve something about yourself in the year ahead. A few of you may even stick to it beyond mid-January.

Well, here's something I hope you'll all pledge to do, not next year, but during the few days remaining in this one:

Take a break.

For those who are entrenched in our public policy battles — and I mean not only those of us who make our living that way, but those who follow the process closely as well — it's easy to forget that there's more to life than debates over tax policy, charter schools and prevailing-wage laws.

Don't get me wrong: Those debates are extremely important. And you can be sure that we at NPRI will be fully engaged in them in the year ahead.

But for now, with the holiday season upon us, I hope you'll take some time to clear your head, enjoy the company of your loved ones and reflect on the deeper things that make this a uniquely special time of year.

I don't need to tell you that 2012 has been an arduous year in so many ways. But just as our victories and achievements are more enjoyable because they are shared with those closest to us, so, too, are our setbacks easier to endure because of the strength we draw from each other. Over the next few days, I hope you're able to surround yourself with the people and things that strengthen and comfort you the most, to put aside the worries that weigh on your mind throughout the year, and to have a joyful and peaceful holiday.

And to the staff here at NPRI, this all goes for you, too. Anyone who follows our work closely has likely gotten to know some of us, or at least our public personas, to some degree. In particular, Geoff Lawrence, Victor Joecks and I tend to be the ones who give the speeches, do the TV and radio interviews and get our names in the newspaper, and it's often said that we are the "faces" of the organization.

I can't say enough about how much I admire Geoff and Victor for their intelligence, work ethic and devotion to the cause that NPRI serves. But the same is true for each and every person who works here at the Institute. Not all of the names are well known, but the reason we've been able to thrive as an organization is the unyielding commitment of each and every member of our team.

I am so blessed and grateful to be a part of that team — and deeply indebted to my predecessor, Sharon Rossie, for her role in building it — and I want to offer my sincerest gratitude to the entire staff at NPRI for making the past year so amazing. It's an honor and a joy to work alongside all of you, and I hope you have a wonderful holiday season — and a much-deserved rest.

Best wishes to you all, and may God bless you.

Andy Matthews
NPRI President

Principles

December 19, 2012

Earlier this week, Gov. Brian Sandoval announced that he would extend Medicaid to able-bodied, childless adults with incomes over the poverty line. While there are plenty of practical reasonsthat this decision will have a negative impact on Nevadans, whichNPRI's Geoffrey Lawrence has outlined here, what the governor said in defense of his decision is even more alarming.

I couldn't sit here and defend to any of you $16 million that just went away because of principle. I think, when you take the opportunity to look through all of this, at least the fiscal part of this, it makes perfect sense. (Emphasis added.)

A little background: Because the federal government has promised to cover the costs of Medicaid expansion for the first three years, it appears Gov. Sandoval is able to shuffle some currently provided services onto the federal government's tab.

But while saving money is usually a good idea, it's not a good deal if you're going to be stuck with a larger bill in the long run — which Nevada's taxpayers, in this case, would be. This is like a used-car dealer giving you $500 cash back and "no payments for the first two months" on the $25,000 car you purchased. You'd be laughed at if you claimed you made the deal to "save money," but that's analogous to what the governor is claiming here.

But what's more troubling is that Gov. Sandoval has, by his own admission, sacrificed a principle for short-term gains.

The very reason you have principles is to help you do what's rightdespite the allure of short-term and usually temporary gains.

Consider principles in a different context. Let's say you're a parent. In raising your children, you would try to instill many principles in them — tell the truth, do unto others as you would have them do unto you, obey your mother and father, etc.

Why are those principles so important? Because it's easy to tell the truth? Because it's easy to follow the Golden Rule? Because it's easy for kids to obey their parents?

No. You make a point of teaching your children principles precisely because it's easier, in the short run, to lie, to be self-centered and to mouth off to Mom and Dad.

Principles help teach children the importance of foregoing immediate gratification in order to do what's right — which also helps them avoid the long-term negative consequences that follow from taking the wrong actions.

That's also why principles are so important in government. Every government action has both short- and long-term consequences, and often those consequences are contradictory. In the case of Medicaid expansion, you have the contrast of short-term savings with long-term liabilities.

Adhering to principle would have helped Nevada's taxpayers tremendously — even if the benefits came primarily after Gov. Sandoval left office. And while some are seeking to attach a provision that would sunset the expansion if the federal match rate were to go down, such a move, though prudent on its face, would be effectively worthless. Just look at the "temporary" tax increases passed in 2009, which the governor has already promised to extend through 2015, to see how "sunsets" of government expansions turn out.

Gov. Sandoval claims he made the right decision by abandoning a principle for $16 million.

But if you understand how important principles are, you know he sold that which is most precious for chump change.

What do you think about this? You can email me, but I encourage you to call Gov. Sandoval and politely offer your thoughts. His office number is (775) 684-5670.

Take care,

Andy Matthews
NPRI President

Your Money

December 7, 2012

As you know, NPRI is a 501(c)(3) organization that neither seeks nor accepts any government funding, meaning we rely solely on the generosity of freedom-loving Nevadans like you to fund our work.

But even though we don't accept money from the government, that doesn't mean that the government doesn't affect our funding. Changes at the federal level on tax deductibility for charitable gifts can play a role in our donors' decisions to give — and changes are likely coming.

I'd like to share with you a portion of an email I received from Chris Askin, president and CEO of the Community Foundation of Western Nevada. Chris wrote:

Simply put, most professional advisors whose clients are high income earners suggest now is the time to make a large charitable contribution. We now know who will be President for the next term and we know his position on the tax deductibility for charitable gifts.

President Obama's proposal includes a provision to limit all tax deductions, including giving to charity, to 28 percent. Even though he is proposing raising overall income tax rates, anyone in a tax bracket higher than 28% will not receive a charitable deduction for the full amount of their gift. For the highest-bracket taxpayers this is a potential decline from 35% this year to 28% in 2013, a 20% decrease.

Taxpayers in brackets below the highest 35% marginal rate also may receive less benefit when giving to charity. Under the proposed Obama plan, there will be a haircut to the charitable deduction of 20% for tax brackets above 28%. (Emphasis added.)

Advisors across the state and the nation are telling their clients that now is the time to make their charitable gifts in order to lock in the current benefits.

I hope that as 2012 comes to a close, you'll consider a year-end gift to NPRI.

For those of you who'd like to make a lasting gift, please consider joining our Legacy Society. Information about the Legacy Society at NPRI may be found here: http://www.npri.org/join/legacy-society.

Investing in NPRI is a great way to build a free and prosperous future for our great state. For more than 21 years, we have advanced sound public policy solutions that improve the lives of all Nevadans. Elections, campaigns and politicians come and go, but NPRI's commitment to free-market principles will always remain.

I am grateful for every single one of NPRI's supporters. Without your generosity, the Institute would not exist, and the cause we serve would suffer.

Thank you, most sincerely, for your generosity.

While there may be a lack of certainty regarding charitable-gift deduction in future years, we do have certainty through the end of this year. I hope that during this holiday season, you'll be able to make donations to all the organizations and causes that you value. And I hope you'll consider a year-end gift to NPRI.

Take care,

Andy Matthews
NPRI President

Liberalism is like eating your seed corn

November 30, 2012

Imagine you're a farmer facing a long winter. You had a rough harvest. You and your family will be able to make it through the winter, but food will be tight and appetites won't always be fully satisfied. You also have a large barrel of seed corn to plant in the spring that will provide food for you next year.

Do you eat the seed corn this winter?

If you answered no, you're probably a fiscal conservative, because you understand that many times you need to delay gratification in the present in order to create a better future.

In contrast, many liberal policies benefit some in the short term while increasing the risk of suffering in the long term.

A great example is socialized medicine. To hear a liberal describe it, you'd get universal health care by making all medicine "free" to the consumer, since it's paid for by the government.

Now, the immediate reaction might be to think that this sounds good — just as it might sound good to your family when they're told they can eat the seed corn in the winter. But in each case, the consequences of that decision — while not immediately apparent — would be devastating.

In the case of government-run health care, this decision would not simply be unwise. It would also be immoral. That's because the process involves the government taking money from someone for purposes beyond what is necessary to defend life, liberty and property. Governments are created to protect rights, not to redistribute property, and the mere fact that government confiscation of wealth may be legal — and deemed by some to be "for the common good" — doesn't make it legitimate or morally justifiable.

But let's focus on the practical consequences of government-run medicine. One result is that it exacerbates shortages of medical care. Scarcity is a reality in any economic system, but the beauty of the free market (which we don't currently have in American health care) is two-fold.

One, prices tell people how scarce something is, which allows individuals to reduce demand for care by comparing it to their next best alternative — "Do I have to go to the ER, or would an urgent-care option work?" Also, high prices encourage more individuals to become doctors and nurses, while also spurring innovation. While demand for medical care will always outstrip supply (scarcity), individuals in a free-market society will create ever more supply, which increases access by lowering prices.

Contrast this with a system of government-run health care. When you make something free, you greatly increase the demand for it, as a basic supply-and-demand chart shows. And unlike in a free-market system, government control deprives doctors of major financial and other incentives, like being able to set their own hours, which leads to "brain drain." The inevitable inefficiencies of government also decrease supply.

Finally, because of skyrocketing demand and diminishing supply, government-run medicine leads to rationing.

This is inevitable. Consuming the wealth of a nation through the taxing or borrowing that government-run medicine requires — akin to eating your seed corn — may delay this for a time. But ultimately it will happen. And in the case of government medicine, rationing can take the form of extensive waiting lists, denial of treatment or "helping" sick patients die faster.

Great Britain, which has had socialized medicine for decades, does all three.

Under optimal conditions, British heart-disease and cancer patients wait more than five-and-a-half months for treatment. British "health" officials have rejected the use of a life-saving liver- cancer drug because it cost too much. British doctors use a "death pathway" — removing food and hydration — to kill 130,000 elderly patients per year. Tragically, this practice is nowbeing used to kill children and disabled infants.

One doctor described the impact of depriving a child of food and water as "the unique horror of witnessing a child become smaller and shrunken."

Once a society eats its seed corn, it eats is children.

May America — by understanding the morality and functionality of free markets — wake up in time.

Take care,