photo credit: 401K

The institution of marriage, as traditionally defined between one man and one woman, is the bedrock of society. Before there can be a government or an economy, there is first the family. It is within the family that children learn the social virtues that made America the envy of the world.

Unfortunately, the last few decades have not been kind to the family. The starting point of this decline in the institution of marriage was the adoption of no-fault divorce. Now, decades later, we can begin to assess the damage to society. In particular, the economic costs.

A few years ago, a pathbreaking study was released that made the first attempt at quantifying the economic costs of divorce titled: “The Taxpayer Costs of Divorce and Unwed Childbearing” The study found:

Why should legislators and policymakers care about marriage? Public debate on marriage in this country has focused on the “social costs” of family fragmentation (that is, divorce and unwed childbearing), and research suggests that these are indeed extensive. But marriage is more than a moral or social institution; it is also an economic one, a generator of social and human capital, especially when it comes to children.

Research on family structure suggests a variety of mechanisms, or processes, through which marriage may reduce the need for costly social programs. In this study, we adopt the simplifying and extremely cautious assumption that all of the taxpayer costs of divorce and unmarried childbearing stem from the effects that family fragmentation has on poverty, a causal mechanism that is well-accepted and has been reasonably well-quantified in the literature.

Based on the methodology, we estimate that family fragmentation costs U.S. taxpayers at least $112 billion each and every year, or more than $1 trillion each decade.

More specifically, New Hampshire’s share of this burden comes to $99 million per year.

Additionally, it’s not just the negative impact on children that make divorce such an economic disaster. As America ages, the need to create a nest egg is more important than ever. Yet, a recent article from the Wall Street Journal titled “When Divorce Unravels Your Retirement Plans” highlights the dangers of divorce as one approaches the golden years:

Whatever its other benefits, divorcing later in life is one of the worst financial moves you can make.

“The quickest way to cut your assets in half is to get a divorce,” says Renee Hanson, a wealth adviser with Ameriprise Financial in Phoenix. She has seen a number of clients, including Ms. Ward, divorce during—or close to—retirement, and says that it is critical for a couple to understand the financial consequences before they untie the knot.

For starters, both parties in a divorce are likely to face a drop in their living standard. But women tend to fare worse, says Karen C. Altfest, executive vice president at Altfest Personal Wealth Management in New York. On average, they work fewer years than men since they are more likely to take time off to raise the children. This means they haven’t built up as many assets and therefore have less negotiating power.

If divorce wrecks a couple’s ability to privately fund their retirement, that means government safety-net programs such as Social Security, Medicare and Medicaid will have a greater load to bear . . . programs that are already insolvent with America’s total debt burden estimated to be over $77 trillion.

Recently, the Union Leader ran this editorial against expanded gambling stating:

It is ironic that Republicans are pushing casino gambling bills, as casinos would  destroy the incentive for legislators to behave like Republicans . . .

Casinos would erase the discipline Republicans just imposed on the state budget, and  any incentive to be disciplined in the future. We would go from a state that believes  “low taxes are the result of low spending” to one that believes “low taxes are the  result of lots of casinos.” It would be a permanent — and negative — change in New  Hampshire’s culture. All for money we don’t need anyway.

Cornerstone agrees with the Union Leader and below is a list of more reasons to oppose expanded gambling in New Hampshire:

• Legalized gambling is driven by and subsists on greed: For this reason, the activity is morally bankrupt from its very foundation.  Gambling is also an activity which exploits the vulnerable — the young, the old, and those susceptible to addictive behaviors. Further, gambling entices the financially disadvantaged classes with the unrealistic hope of escape from poverty through instant riches, thus ultimately worsening the plight of our poorest citizens.

• Legalized gambling undermines the work ethic: It is based on the premise of something for nothing, a concept that sanctions idleness rather than industriousness, slothfulness instead of initiative.

• Legalized gambling creates gambling addicts: An abundance of research and expert testimony demonstrates that as gambling expands, so does the number of those with serious gambling problems. Millions more Americans have developed devastating gambling addictions over the last few years as a direct result of gambling’s rapid proliferation. Further, these newly created addicts are the lifeblood of the industry.

• Legalized gambling breeds crime: Communities that welcome gambling also welcome an increase in crime. Much of this is attributed to the newly created gambling addicts who, in desperation, turn to crime to finance their addiction.  Also, legalized gambling makes an attractive target for career criminals. Organized crime has infiltrated numerous legal gambling operations in various states in recent years.

• Legalized gambling is an economic negative: Gambling often hurts, not helps, existing businesses by siphoning away discretionary dollars that might otherwise have been spent at local shops. Also, the economic costs associated with gambling — such as losses due to crime, additional law enforcement costs, gambling addiction treatment costs, and lost work productivity — are staggering, often far exceeding a state or community’s total revenues from gambling.

• Legalized gambling devastates families: Authorities in gambling jurisdictions report dramatic increases in divorce, suicide, bankruptcy, and child abuse and domestic violence related to gambling. Research shows that children of gambling addicts experience lower levels of mental health and physical well-being.

photo credit: Daquella manera

As America continues to recover from the “Great Recession,” we’ve heard a lot from politicians how federal spending was critical to preventing an even worse downturn. You’ll have to excuse us for being a bit skeptical. Now, however, you don’t just have to take our word for it.

Consider this new study that was just released by the well-respected National Bureau of Economic Research titled “Government Spending and Private Activity.” From the abstract:

This paper asks whether increases in government spending stimulate private activity. The first part of the paper studies private spending. Using a variety of identification methods and samples, I find that in most cases private spending falls significantly in response to an increase in government spending. These results imply that the average GDP multiplier lies below unity. In order to determine whether concurrent increases in tax rates dampen the spending multiplier, I use two different methods to adjust for tax effects. Neither method suggests significant effects of current tax rate changes on the spending multiplier. In the second part of the paper, I explore the effects of government spending on labor markets. I find that increases in government spending lower unemployment. Most specifications and samples imply, however, that virtually all of the effect is through an increase in government employment, not private employment. I thus conclude that on balance government spending does not appear to stimulate private activity. [emphasis added]

In a nutshell, increased government spending crowds-out the private sector. The so-called “stimulus” was good for government but not-so-much for the rest of the economy. Now America’s families are saddled with trillions more in debt and get to look forward to future higher taxes (or inflation) to pay for it. Isn’t it bad enough that the current “progressive” tax code already penalizes our families?

Same-Sex Marriage and Usurpation by Redefinition

By Rep. Paul Ingbretson (Grafton 5)

Should any changes to our Constitution be more worrisome to the people than those imposed by simple redefinition or reinterpretation of terms?

Having received several emails this past couple of weeks on both sides of House Bill 437 “relative to the definition of marriage”, clarification of our position regarding a bill that would repeal the recently enacted “same-sex marriage” statute in New Hampshire is timely.

We all know that the New Hampshire Supreme Court did a great disservice to the people of the state in their Claremont education opinions when they redefined out of thin air the word “cherish” in our Constitution (Part II, Art. 83) to “must fund”. We’ve been paying the price ever since for that unconstitutional redefinition. Part of that price is that it encouraged the Democrat majority’s willy-nilly usurpation-by-redefinition of the Constitution’s word “marriage” in their ‘same-sex marriage’ legislation a couple years ago.

Since 1784 the New Hampshire Constitution has included Marriage in Part II, Art. 76. Because that article includes the word Marriage, it’s required meaning is the 1784 definition. (Some would argue that since the word is capitalized, the actual definition precedes our Constitution.) In any case, the Constitutional definition of Marriage in New Hampshire has been, and still is, the 1784 definition: one man and one woman. In an arrogant “usurpation-by-statute” the Constitutional definition was altered two years ago.

Regardless of the branch of government that usurps the people’s authority and oversteps the Constitutional limits set for each branch, the redefinition of words in our Constitution by fiat or legislation is wrong and dangerous. For any branch of government to change a single word’s meaning is abhorrent to the very nature of a Constitutional Republic. HB 437 would restore in statute the original Constitutional definition of Marriage and we are bound by oath to support that restoration.

If supporters of same-sex marriage want to include same-sex marriage in New Hampshire law, they are bound to first change the Constitution by the amendment process. Until then the Constitutional definition of Marriage remains one man and one woman. Claiming new meanings for the words in our Constitution without going through the amendment process is a form of theft and is anathema to the people’s rights. When any branch of government does so it must be opposed and, in this case, HB 437 is the appropriate remedy.

Thanks to Rep. Michael Balboni (R-Nashua) for his assistance putting this together.

More generally, the New Hampshire Constitution succinctly states the important relationship between morality and liberty. Consider these articles contained in the Bill of Rights:

[Art.] 6. [Morality and Piety.] As morality and piety, rightly grounded on high principles, will give the best and greatest security to government, and will lay, in the hearts of men, the strongest obligations to due subjection; and as the knowledge of these is most likely to be propagated through a society, therefore, the several parishes, bodies, corporate, or religious societies shall at all times have the right of electing their own teachers, and of contracting with them for their support or maintenance, or both. But no person shall ever be compelled to pay towards the support of the schools of any sect or denomination. And every person, denomination or sect shall be equally under the protection of the law; and no subordination of any one sect, denomination or persuasion to another shall ever be established. [emphasis added]

[Art.] 38. [Social Virtues Inculcated.] A frequent recurrence to the fundamental principles of the constitution, and a constant adherence to justice, moderation, temperance, industry, frugality, and all the social virtues, are indispensably necessary to preserve the blessings of liberty and good government; the people ought, therefore, to have a particular regard to all those principles in the choice of their officers and representatives, and they have a right to require of their lawgivers and magistrates, an exact and constant observance of them, in the formation and execution of the laws necessary for the good administration of government. [emphasis added]

On January 31, Susan B. Komen for the Cure, a charity founded to promote breast cancer research and prevention, announced its decision to cease providing grants to Planned Parenthood affiliates. Describing PP as “a longstanding partner”, the Komen foundation nonetheless put grants on hold pending the outcome of a Congressional investigation. The Komen charity recently adopted criteria barring grants to organizations that are under investigation by local, state or federal authorities.

We note that the Komen decision was not affected by PP’s abortion business. Even so, we’re glad that even temporarily, Komen’s work for women’s health is no longer entangled with the business of the nation’s largest abortion provider. Numerous agencies that provide breast health care and screenings, without also providing abortions, would be happy to apply for Komen grant money and put it to work promoting women’s health.

We flatly disbelieve any assertion that the Komen decision will interfere with cancer screenings by PP. According to CBS News, PP said the Komen grants totaled roughly $680,000 last year and $580,000 the year before. That amount, covering PP affiliates all over the country, is less than the public policy expenditures by just one PP affiliate: Planned Parenthood of Northern New England, whose 2010 annual report shows $822,481 spent on “public policy.” Any decision to deny cancer screenings as a result of a loss of Komen funds is a business decision by PP to make women’s health a secondary concern. Women seeking health care deserve better from their providers.

The response of PP supporters has been interesting, particularly on social media. There has been no acknowledgment from PP, either formal or informal, that Komen has the responsibility for good stewardship of its funds, and that it is legitimate to take a wait-and-see approach while a Congressional investigation is pending for a potential grant recipient. Instead, Cecile Richards, president of the Planned Parenthood Federation of America, accuses Komen of submitting to “bullying.”

Susan G. Komen for the Cure has made a good decision, and pro-life women can finally participate in its activities without fear that  donations will be sent to the nation’s largest abortion provider. We encourage all who applaud this decision to participate in a Komen event, and to let the foundation know the reason. We also note that any dollar spent on a publicity campaign by PP to pressure Komen is a dollar that is not going to promote women’s health.

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photo credit: kenteegardin

Ever since our Foster’s Editorial Board meeting for restoring traditional marriage was published, the premise that the decline in the institution of marriage has had an economic price has been called into question. Yet, we are hardly the only ones making such an obvious connection.

David P. Goldman, a.k.a., “Spengler,” made the same argument several years ago and has since gone one step further by publishing a best-selling book called: “How Civilizations Die (and why Islam is Dying Too)” Consider these thoughts from Spengler as written in the Financial Times in an article titled “Demographics & Depression.”

Unless we restore the traditional family to a central position in American life, we cannot expect to return to the kind of wealth accumulation that characterized the 1980s and 1990s. Theoretically, we might recruit immigrants to replace the children we did not rear, or we might invest capital overseas with the children of other countries. From the standpoint of economic policy, neither of those possibilities can be dismissed. But the contributions of immigration or capital export will be marginal at best compared to the central issue of whether the demographics of America reverts to health.

Life is sacred for its own sake. It is not an instrument to provide us with fatter IRAs or better real-estate values. But it is fair to point out that wealth depends ultimately on the natural order of human life. Failing to rear a new generation in sufficient numbers to replace the present one violates that order, and it has consequences for wealth, among many other things. Americans who rejected the mild yoke of family responsibility in pursuit of atavistic enjoyment will find at last that this is not to be theirs, either.

And he concludes with:

It was always morally wrong for conservatives to attempt to segregate the emotionally charged issues of public morals from the conservative growth agenda. We know now that it was also incompetent from a purely economic point of view. Without life, there is no wealth; without families, there is no economic future. The value of future income streams traded in capital markets will fall in accordance with our impoverished demography. We cannot pursue the acquisition of wealth and the provision of upward mobility except through the reconquest of the American polity on behalf of the American family.

The simple truth is that same-sex marriage in New Hampshire will further weaken the definition of traditional marriage and, consequently, will reinforce the trend toward Demographic Winter. This has an economic price that all residents of New Hampshire will bear–it seems social conservatives and fiscal conservatives have a lot more in common than even they realize.

CORNERSTONE THANKS THE NH HOUSE FOR ADOPTING HB 228

A bill that will end the practice of sending NH taxpayer dollars to abortion providers like Planned Parenthood of Northern New England

CONCORD - Cornerstone thanks the New Hampshire House for adopting HB 228, a bill that will end the practice of sending NH taxpayer dollars to abortion providers like Planned Parenthood of Northern New England.  The January 19, 2012 roll call vote was 207 Yea to 147 Nay.

We are especially grateful to Rep. Warren Groen (R-Rochester) for his courageous leadership on this bill. A majority of House members have made the common-sense declaration that no NH resident should be compelled to subsidize abortion providers. This is entirely consistent with Roe v. Wade. The bill respects the conscience rights of everyone in NH who opposes abortion, while leaving abortion rights intact.

When NH’s financial resources are stretched so thin, this is hardly the time to send state money to agencies that have enough money to provide abortions as well as health care to their patients. Abortion providers have the choice between doing business without state involvement, or of establishing separate businesses to keep abortion segregated from health care. This has worked in Texas and would work in NH.

The principal abortion provider in our state, Planned Parenthood of Northern New England (PPNNE), has objected to the loss of state funds for family planning services at the same time it is spending hundreds of thousands of dollars on marketing and “public policy” work. If PPNNE chooses to put marketing above health care, that is their business decision. Let them make it without the support, direct or indirect, of NH taxpayers.

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photo credit: George Rex

A new study, “Demographic Changes, Financial Markets, and the Economy,”does not paint an encouraging picture for the future growth of New Hampshire’s economy now entering Demographic Winter (where a shrinking number of young people cannot support current population levels).  From the study:

It seems natural that the shifting composition of a nation’s population ought to influence GDP growth and perhaps also capital markets returns. Entrepreneurialism, innovation, and invention tend to be associated with young adults. Accordingly, GDP growth should perhaps be best when there is a preponderance of young adults in a population. Investing for retirement is associated with middle-age, with a shift in preferences toward bonds with late-middle-age. So, stock and bond returns might be best in populations with growing rosters of these age groups, respectively. Our data—spanning over 60 years and 22 countries in our main tests and roughly 175 countries in out-of-sample robustness checks—support all of our priors . . .

Children are not immediately helpful to GDP: they don’t contribute to it. Nor do they help stock and bond market returns in any meaningful way: their parents are likely disinvesting to pay their support. Young adults are the driving force in GDP growth; they are the sources of innovation and entrepreneurial spirit. But, they are not yet investing as they are overspending against their future human capital. Middle adults are the engine for capital markets returns; they are in their prime for income, savings, and investments. And senior citizens contribute to neither GDP growth nor stock and bond market returns, as they disinvest to buy goods and services that they no longer produce.

Therefore, according to this study, New Hampshire is currently in its demographic prime of middle adults.  However, the demographic picture will soon start to dramatically shift to the 65 and older crowd–which already spiked 20 percent in the last 10 years. Moving forward this means, at best, a stagnation in GDP growth or, at worst, negative GDP growth.

New Hampshire needs to find a way to keep or get some younger blood in the state ASAP before Demographic Winter begins to eat away at the economy–not to mention state and local government revenue. Yet, in the long term, that means strengthening New Hampshire’s families such that we start having more babies.

Following on the recent post on New Hampshire’s slide into Demographic Winter, one critical piece of information that we need is whether or not the decline in folks under the age of 18 is a one-time blip or something more permanent?

As shown in the chart below, between 1991 and 2011 the number of births in New Hampshire has plummeted by 25 percent to 12,795 in 2011 from 16,977 in 1991. Interestingly, you can also the effects of the business cycle on births with a spike in births during the housing boom (2005 and 2006) and now a steep drop-off since the beginning of the “Great Recession.”

While the long-term reality is somewhere in-between, as represented by the trend-line, the direction is clearly downward. This means that as we move forward, the number of children under the age of 18 will continue to shrink in both numbers and as a percent of the total population (assuming we don’t see a boom in net in-migration of young families).

This will also mean that New Hampshire will face an educational crisis as school enrollment follows this trend leaving many schools under-utilized. At the same time, the costs of operating them will not drop in proportion. As a state, we will have to become more flexible with our educational options since the old system is unsustainable with an ever shrinking enrollment.

One option you’ll hear more about from Cornerstone Policy Research are Education Savings Accounts which are being implemented all over the country . . . stay tuned.

According to the latest population data from the U.S. Census Bureau, New Hampshire is facing a “demographic winter” which means that there are too few young people to support the current population level. As shown in the chart below, between 2000 and 2010, the number of people under the age of 18 fell by 8 percent while the number of people over the age of 65 soared by 20 percent.

If you think generating economic growth is hard with a growing population, try doing it with a shrinking population. This is why protecting the traditional definition of marriage is so important, especially in regards to children. If we don’t have enough children to sustain the economy, everyone suffers–Who will plow the roads? Buy our houses when we’re ready to retire? Or create the next Google?

For more information, check out the movie below titled “Demographic Winter” which has been posted on YouTube in its entirety. The movie explains the concept and how it is becoming rampant all over the world. It runs for about 50 minutes, but I promise it is worth the trip . . . also, there is a follow-up movie called Demographic Bomb but is available only by purchase (watch Demographic Bomb trailer here).