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Most state pension plans are not adequately prepared for a recession

In Politics by Michael Rae

In July 2022, the Federal Reserve System estimated there’s a 60% chance that the United States will enter a recession, under a tighter monetary environment, by the end of 2023. Since the U.S. reported two negative quarters of gross domestic product (GDP) in the first two quarters of 2022, technically the country is likely already in a recession. 

Recessions can hit retirees and public pension plans hard, so public pension plans reporting large investment losses for 2022 could just be a prelude to rough times for public pension systems.  A continued market downturn could potentially add trillions to public retirement systems’

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A perilous point in Ukraine war, ending hypocrisy on Israel/Palestine and more

In Opinion by Michael Rae

In the wake of continuing Ukrainian military gains in northeastern Ukraine, Russian President Putin gave a televised address on 21 September, the essence of which was succinctly described by Reuters:
Putin on Wednesday ordered Russia’s first mobilisation since World War Two and backed a plan to annex swathes of Ukraine, warning

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State Vehicle Inspections

In Analysis by Michael Rae

A student of mine asks about annual, mandatory car inspections. In Pennsylvania, they’re required.
In states like Kentucky or Indiana (my home state), they’re not. To my eye, the distribution of cars looks roughly the same. Yes, you’re more likely, in Indiana, to see an outlier that looks something like this:

Economists have written extensively about price floors, spilling much less ink on quality floors. The most basic point to make is that a quality floor’s level is necessarily arbitrary. Don’t the good citizens of Pennsylvania deserve even better, in their automobiles, than the state government has legislated? I see so many, myself

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Biden’s “Cancer Moonshot” Boosts Bureaucracy

In Analysis by Michael Rae

On September 12, the 60th anniversary of President Kennedy’s famous “moonshot” speech, Joe Biden proclaimed that “beating cancer is something we can do together and that’s why I’m here today.” Those gathered at the John Fitzgerald Kennedy Presidential Library in Boston, like many across the country, may have been unaware that this was a repeat performance. 
“The time has come in America when the same kind of concentrated effort that split the atom and took man to the moon should be turned toward conquering this dread disease,” President Richard Nixon proclaimed in his 1971 State of the Union address. “Let us make a total

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Privatization and Government Reform News: Expensive ambulances, Jackson’s water crisis, FDA reform, and more

In Politics by Michael Rae

MAIN ARTICLES 

New Medi-Cal Amendment Ensures More Expensive Ambulance Rides 

A recently passed amendment to California’s Medicaid program, Medi-Cal, is set to raise the average cost of an ambulance ride from about $120 per trip to over $1,000 per trip without justification. Local California fire departments were a large advocate for the change, which they seem to see as a potential financial windfall if they are can shift emergency medical services (EMS) to be under the purview of their departments. In a new article in the Orange County Register, Reason Foundation’s Austill Stuart explains why the Medi-Cal amendment will hurt taxpayers and how

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Maryland Question 4 (2022): Marijuana legalization amendment

In Politics by Michael Rae

Summary

Question 4 on the Maryland ballot is a legislatively referred constitutional amendment that would legalize the use of marijuana for adults 21 years of age and older. It would add a new article—Article XX—to the Maryland Constitution stating this policy would take effect on July 1, 2023, and charge the General Assembly to pass laws governing the “use, distribution, possession, regulation, and taxation of cannabis.” 

Fiscal Impact

Question 4 is not directly associated with any fiscal impact on state or local governments. It would simply establish a new constitutional right for adults to use marijuana.  However, Maryland House Bill 837, which would

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Best practices for pension debt amortization

In Politics by Michael Rae

State and local public pensions in the U.S. in 2020 faced a total unfunded actuarial liability (UAL) of about $1.4 trillion, and the average pension plan was only 73% funded. Although preliminary data suggest that the current average funded status is closer to 85%, thanks to the substantial investment returns in 2021, the 2022 Public Pension Forecaster finds aggregate unfunded liabilities will jump back over $1 trillion if 2022 investment results end up at or below 0%.

However, despite funding developments from year to year, public pension plans remain subject to an uncertain economic climate, and the next downturn can

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How drug decriminalization affects policing

In Politics by Michael Rae

Introduction

In November 2014, police pulled over a disabled veteran in South Carolina for a minor traffic violation. After searching the veteran’s car, the police discovered small amounts of cannabis. Officers gave the veteran an ultimatum: help them or face stiff charges. Out of fear of criminal punishment, the veteran agreed to a controlled purchase of cannabis— roughly 100 dollars’ worth—from her friend, Julian, in Myrtle Beach. As a result, the police had enough information to establish probable cause to obtain a search warrant for Julian’s home.

A few months later, 12 officers from a multi-jurisdictional Drug Enforcement Unit (DEU) prepared to

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Webinar: ESG trends and impacts on public pensions

In Politics by Michael Rae

Former U.S. Securities and Exchange Commission Commissioner Paul Atkins, former CKE Restaurants Chief Executive Officer Andy Puzder, and Reason Foundation Vice President Leonard Gilroy discuss how environmental, social, and governance (ESG) strategies and trends are impacting public pension systems and taxpayers.

They examine how public pension plans factoring ESG into investment decisions may be neglecting their fiduciary obligations to maximize returns at acceptable risk levels and debate whether states pushing broad anti-ESG laws may unintentionally harm their own underfunded public pension systems.

You can view the Sept. 20, 2022, webinar below.

The post Webinar: ESG trends and impacts on public pensions appeared first on Reason

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How state reforms changed federal enforcement of marijuana prohibition

In Politics by Michael Rae

Introduction

The history of drug prohibitions and enforcement efforts in the United States always reflects a kind of federalism in action. Because the federal government always lacks the resources and often the political will to fully enforce drug prohibitions nationwide, state laws and local practices will inevitably shape and color the full picture of U.S. drug policy and enforcement. When alcohol prohibition was written into our nation’s Constitution, for example, state and local officials embraced an array of different approaches to enforcing temperance, which produced a patchwork of on-the-ground practices across the nation.In modern times, marijuana prohibitions and reforms present the

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Aviation Policy News: Passenger facility charge, flight delays in New York, and more

In Politics by Michael Rae

In this issue:

Reforming the passenger facility chargeSecondary cockpit barriers back on the agendaDenver post-mortem reveals flawed terminal P3 processNew York airspace still a messNews NotesQuotable Quotes

Reforming the Passenger Facility Charge to Support Aviation RecoveryBy Marc Scribner

The COVID-19 pandemic and responses to it injected an unprecedented amount of uncertainty into the air travel market. Nearly overnight, year-over-year passenger boardings in the U.S. cratered by 95%. Aviation and travel industry analysts were predicting recovery time horizons of four or more years, but domestic air travel demand came roaring back to almost pre-pandemic levels after less than two years.

This surging demand caught

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