Have you ever wondered how much a small lie can cost all of us?
A few messages earlier posted at
http://groups.yahoo.com/group/NWIGOPAC I included an article on
"Hedonic Adjustments" to economic data. One economist claimed that the CPI or Consumer Price Index is understated by around 2.7 percent.
For the purpose of this article, let's suppose just 2 percent.
I will illustrate to you how lying on one end of government can cause
a gross miscalculation and actually "cost or tax" our people of Indiana.
The Indiana Toll Road 75 year Leasing Deal has been describe in the
newspapers as worth 3.8 billion dollars, plus billions more for
infrastructure upgrading.
In theory, I agree with the basic principles behind this initiative.
Mainly, that business can run a toll business more efficiently than
government. However, my main concerns revolve around having it 1.
properly indexed to future inflation, and 2. having a buyback or
buyout provision for our kids generation between 25 and 75 years down the road.
For purpose of simplification, I will run the numbers on the 3.8
billion dollar near "present value" benefit. And, I will illustrate to
you how lying on one end of government ( Hedonic Adjustments to the
CPI ) can cause a gross miscalculation and actually "cost or tax" our
people of Indiana.
If the CPI is understated by just 2 percent, that 2 percent lie can
produce a compounded 432 percent difference over 75 years. How? Take an excel spreadsheet and start with 1.02, and compound that amount over 74 years. That compounded 1.02 grows to 4.32 over the next 74 years. 3,800,000,000 times 432 equals $16,451,151,696.
That is over 16 billion dollars. So, unless this deal is more
properly indexed to inflation and the real CPI, it may end up costing
the people of Indiana nearly $12,651,151,696.
12.6 billion dollars. While I am not a professional politician, I may
have saved you from being "taxed" over 12 billion dollars. All I ask
for is that you consider voting for me in the 1st Congressional
District Republican Primary in May of 2006.
Bud Labitan
