Idaho Prop 1, Flock Cameras & Why Groceries Get Taxed

Bob Neugebauer Welcome to the Idaho Pulse. This is your host, Tea Party. Bob, here to inform you of all of the interesting things happening in this wonderful state of Idaho that we live in. And joining me today is our good friend, Ronald Nate, president of the Idaho Freedom Foundation, who is going to enlighten us on all of the important things that are happening here. So let’s get on with the show and welcome our guest, Ron Nate, to the Idaho Pulse. And welcome Mr. Nate.

Ron Nate Well, good. Good morning. Afternoon, evening. Whatever the case may be. How you doing, Bob? It’s great to be on Idaho Pulse, as always. And, uh, to talk a little bit about Idaho politics, a little bit about Idaho policy and, uh, a little bit about economics just in general. And so happy to visit.

Bob Neugebauer Actually, I’m enjoying the elasticity that’s going to go on today, because this was one of my favorite subjects when I was in college.

Ron Nate Oh that’s great. Well, you are a nerd then, because, uh, most people, when they talk about what they enjoyed in college was not elasticity of demand. It was more like, uh, brewskies of demand or something. Um.

Bob Neugebauer I never had those.

Ron Nate Well that’s great. Well, uh, stuff going on at Idaho Freedom Foundation, of course, we always have our, our research going on in the articles from our, from our crack, uh, research team, you know, our, our policy analysts and, and everyone here at Idaho Freedom Foundation doing the important work that, uh, Idaho needs. And so if you want to track some of the articles we’ve been working on this week, you can go to Idaho, freedom dot org, that’s Idaho, freedom dot org. And you can see our articles We just published one yesterday on Monsanto and People versus poison. You know, Monsanto and Bayer wanted, uh, corporate immunity from any damages caused by roundup or other herbicides or pesticides they used. And, uh, we stopped that as an Idaho law. It doesn’t make sense to hold somebody harmless for whatever damages they do to hold them immune. I mean, how did that work during the vaccination thing, during Covid? Did it make sense to, uh, give, give companies or pharmaceutical pharmaceuticals complete immunity? It doesn’t and it didn’t. Doesn’t make sense for anyone producing chemicals or anything that might be potentially harmful, uh, that they need to be vigilant in protecting consumers and, and Americans in general. So there’s that article, um, though we stopped the law in Idaho, uh, a similar law passed in Missouri, but then the Supreme Court overruled the case in question. And so that’s a fascinating read. We also talked about, you know, we also have an article on on silencing medical dissent and the Ryan Cole story. Uh, we also have how, um, city councils, some of them are reconsidering their flock camera proposals. Some are still going forward with plans to, to implement more flock cameras if is is on top of those cases. And this week, uh, our, our new local government analyst, Aaron Van Natta, she is going to be publishing an article on Lava Hot Springs and how much money they spend, how much their city overspends and the, the lack of transparency and fiscal controls in that city. So that’ll be a fascinating article too. So lots going on in Idaho Freedom Foundation, you can get on Idaho freedom dot org and see what we’re up to.

Bob Neugebauer I’m on it right now, my friend. I’m reading as you speak.

Ron Nate That’s good. Good. We got good stuff on there. Good stuff going. Um, also at the top of our, our list of issues is prop one. And for any, uh, Idaho Pulse listeners who aren’t aware, prop one is the ballot initiative that will be voted on the first Tuesday of November. That is November third. And prop one, if passed, would undo the protection of unborn babies from abortion for pretty much any reason, pretty much up to nine months, and pretty much for minors without consent or notification of parents. It is an extreme measure to, uh, to dial back our abortion laws, not just to what they were under Roe v Wade, but even more liberal, shall I say. And by liberal, I mean baby killing. That, uh. Before the Dobbs decision undid Roe v Wade, there were one thousand five hundred abortions a year in Idaho. And I worry that if this prop one passes, it won’t just it won’t merely be fifteen hundred babies. It will be maybe multiples of that, because it would allow more abortions than happened before later into the, into the term, uh, without parental notification or consent and done by people who may not even be doctors because all the law would say is licensed health care professionals. So it’s an extreme measure. It goes way too far. It’s not right for Idaho.

Bob Neugebauer I do think that if this is publicized the right way, we’re going to have a bevy of Idahoans who are very much old school that are going to vote against this proposition, I doubt very seriously whether it will even come close to passing.

Ron Nate Well, I hope so. Nonetheless, we need constant vigilance, actually heightened vigilance on this one because the stakes are far too high. You know, if it passes by a narrow margin, that will be just horrible for Idaho. But even worse, it will mean babies being killed. And so, uh, we not only need to defeat it, we need to defeat it roundly so that, uh, the leftists don’t consider going, okay, well, we’ll just do a prop one soft and, and, and just, uh, have it later into the term than it is now. And, and, uh, still keep some of the, the provisions that they’re shooting for now. And so we want to soundly defeat this so that the pro abortionists out there go, Idaho is not the place to, to go and try and push this abortion nonsense.

Bob Neugebauer You know, I just finished an article talking about immigration and how we have two choices. Since we are not producing enough babies and replicating fast enough, our choices are to start having more babies or increase the immigration.

Ron Nate Yeah, well, you know, part of Iff’s mission here is to promote traditional Western family values. And it has been a little distressing and and frankly, sad to see America and even Idaho move away from the nuclear family model where you have a mom and a dad and several kids. And, and, uh, that was generally the recipe for happiness and a satisfied, well lived life. But now it seems like with with multimedia and so many other distractions, the family is losing its importance as a priority for people that, uh, you know, old folks like us, Bob, we know that what has made us happy is, is family and kids and seeing and, uh, seeing them grow and be successful. It isn’t how many cats we have or how many followers we have on Facebook or what kind of battles we went on social media. It’s really having family in a, in a God centered life. And so we want to promote that too.

Bob Neugebauer You’ll find in my house. We do not bring cell phones to the dinner table.

Ron Nate Oh that’s great. One of my favorite movies is Shenandoah with, uh, with Jimmy Stewart. And right at the beginning of Shenandoah, the first ten minutes in, uh, it shows them having a dinner and, uh, he walks into the dining room and, uh, the entire family stands at the table. He comes in and says something. They all sit down. They immediately start by saying a prayer and a a blessing of thanks over the food. And then they eat and enjoy a meal as a family, talking with one another. Isn’t that what everyone wants?

Bob Neugebauer Yeah, but unfortunately, that’s not the way things are currently. Today, everybody goes their own way and we have their own things to do. I mean, I see my kids, uh, as they were growing up, even my grandchildren, they change as technology changes.

Ron Nate Yep.

Bob Neugebauer And the more technology changes, the more they change.

Ron Nate Yep. So I personally, I’d like to promote a return to traditional family values. And this starts by protecting life. You know, Thomas Jefferson, Declaration of Independence, those fifty six signers, they signed a document that said that recognized we are all endowed by our creator with certain unalienable rights. And among those are life, liberty and the pursuit of happiness. And notice, life came first because if you can’t preserve life. There’s no other rights that even matter after that. So life is the first one. Proposition one needs to be defeated. We’re going to do everything we can to defeat it and crush it by a lot.

Bob Neugebauer You know, I need to ask you a quick question. With all of the elections that are going on currently with the Democrats, what do you think of what do you think of this DSA movement? And the economy comes running into the elections of senators and congressmen and mayors?

Ron Nate Well, it is a sign of the times that, uh, Democrats who I always think have socialist tendencies had to run, as, you know, freedom, patriot loving Americans, you know that. But they would they would cloak their socialism under flowery words like, uh, you know, a safety net for everyone and, you know, a caring government or something like that. But now they’re not even doing that. Democratic Socialists of America, they they are saying we’re socialists and we’re running that way. And, uh, unfortunately, too many of our young folks, our young voters out there, think that socialism is an answer. But I will put it this way socialism has never succeeded where it’s been tried. Capitalism, although not the perfect, not perfect in its nature and outcomes, has been the most successful, the most, uh, the most rewarding, the most secure path to, um, to prosperity, wealth and happiness of the masses that has been yet discovered by man. And so, uh, Milton Friedman said it, there’s no other system so far discovered that has allowed the, the grinding masses to escape from poverty as much as, uh, free enterprise capitalist system.

Bob Neugebauer I think we found out socialism is never going to be an economic system that works. Um, and by the same token, I look at all of this, uh, change that they’re trying to make take place is going to benefit the Republicans in this next election, uh, and give us more seats in the Senate and the House. My opinion.

Ron Nate It’s probably true. Probably true. So we have our work to do. We need to preserve Idaho as that oasis in the desert of of socialism. This is the oasis of freedom, uh, free markets, prosperity. And, uh, the proof will will rise to the top soon enough as the rest of the country becomes socialist. If Idaho can preserve its, its freedom and, and market values, it will be seen as the, the, uh, formula for prosperity. People scratch their heads and go, why? What’s going on in Idaho? Is it a better people? Are they just nicer there? Do they? Are they blessed with some sort, certain set of resources that the rest of the country doesn’t have? People will be confused, but we will know it is because of economic freedom.

Bob Neugebauer So it’s also because we have constitutional carry freedom to.

Ron Nate That’s right. And how how important is that in light of what has been happening in Idaho over the last weekend? We. Earlier this year, the Idaho Freedom Foundation celebrated ten years of constitutional carry in Idaho. It was myself, Representative Scott, the Idaho Second Amendment Alliance who worked like dogs in twenty sixteen to get that constitutional carry bill passed in Idaho. And since then, I think Idaho wasn’t even the first state. We’re like the seventh state, but you can freely carry a firearm in Idaho, whether it’s in the open or concealed carry without a permit, because the Constitution says the right to keep and bear arms shall not be infringed. And, uh, how important is it for Idaho citizens to stand at the ready to defend their fellow citizens, to protect their own lives, protect their families? Um, uh, Mr. Salinas there in Twin Falls is a hero because he trained, he carried, and he was ready when a deranged gunman decided that, that he wanted to end lives of of innocent, innocent people just going to in and out for a burger. But Salinas stepped up and, uh, fired back. Idaho shoots back and and, uh, deterred that gunman. And so though three people died and several more were injured, it could have been a lot worse. So Idaho Freedom Foundation stands with those families in mourning the losses, but also stands with the hero in celebrating How an armed citizenry, a good guy with a gun, can protect a lot of lives.

Bob Neugebauer I think it also teaches us the fact that these citizens that, uh, go a little wild and grab a gun and go out and think they’re going to be able to shoot somebody unimpaired. Once they meet a challenge, they think twice.

Ron Nate That’s right. And that’s why I think this messaging that has come out from this, this Idaho shoots back, is a powerful message for reinforcing the idea that our constitutional rights matter, and also for reinforcing the idea that if you want to go and be a deranged man, man, man, man, maybe you shouldn’t choose Idaho to do it because Idaho does shoot back. Idaho protects, protects itself. And we stand ready.

Bob Neugebauer I’ll tell you, I don’t go any place without a gun on my hip, any place. And I mean that seriously. And

Ron Nate Absolutely.

Bob Neugebauer that includes that includes church.

Ron Nate Absolutely. And so yeah. Um, and it’s, it’s, it’s not to be some sort of wild West, you know, type motif. It’s just that you’re like, you know what? There are crazies in the world. And, uh, the best deterrent is, is an armed citizenry. And, you know, Idaho’s not unique in this. We saw, we saw a video that in a Texas church, unarmed person came in with a gun to shoot people in the church, a security guard, not even uniformed, a guy that was there. And you know who the church has said, you know, would you come and just be security, just, you know, a member of the church who, uh, just was there every Sunday with his gun just to kind of stand watch, took out that gunman and, uh, saved a lot of people in that church. And so I, I hope the message is getting out that if you want to go and shoot up people, these Constitutional carry states are not the place to do it, and hopefully it creates the incentive for every state to follow suit and say, you know what? It’s better to have citizens armed than to be sitting ducks.

Bob Neugebauer Well, I’ll tell you. Our church armed have an armed guard group at at our Sunday services, literally for the last five years.

Ron Nate Yeah. And instead of having signs on schools that say gun free zones, they ought to say, uh, armed administration, armed teachers, armed

Bob Neugebauer Yes.

Ron Nate citizens zones. And that would deter what goes on far too often.

Bob Neugebauer I’ve been talking about that for years. And thank you for mentioning it.

Ron Nate You don’t see mass shootings at gun shows, do you? Do you? No.

Bob Neugebauer Nope, nope.

Ron Nate Well, um, the other thing that that we’re doing here is if is being vigilant about this flock camera issue and you know, Nobody ever really thought of the US becoming a mass surveillance state as a positive. In fact, we used to shake our head at, you know, China being a mass surveillance state or North Korea. And now it’s happening with flock cameras. And you watch this. I’ve been seeing this messaging bubble toward the top is that elected officials, government officials, law enforcement are saying this is important for public safety. Give up some of your constitutional rights, protected privacy because safety matters more. But that has never been the model of a free society. The Constitution. The Constitution protects our privacy. So we should not be a mass surveillance state. Too many times these flock cameras are not being used just to read license plates or to track down someone. It is being used to watch what people do all the time, and police officers and law enforcement having the search capabilities on all this data, on all this stored video, they can violate your privacy in a number of ways by doing searches. We saw an officer in Jerome, Idaho, doing searches on his wife, tracking his wife, you know, hundreds of searches to see where she is and what she’s doing all the time. That is not a proper use of a government tool. We’ve we’ve seen officers just search weird things like flipped someone off. So they do a search for using AI to find videos where that happened. And is that a proper use of the data? It isn’t. It’ll be abused.

Bob Neugebauer Well, look at the data that they received just from your electric meters. Now, the smart meters, how much you’re using, what you’re using when you’re using it.

Ron Nate That’s right. And then they’ll want to control it. They’ll say, oh, you’re a high user. We’re going to shut yours off for X number of hours because you’ve been overusing, even

Bob Neugebauer Yep.

Ron Nate though you’re paying for every ounce that you use. Well, on this flock camera thing, we do something at Idaho Freedom Foundation for, for all of our partners and contributors to if we do first Friday Falcon calls. So I do a phone call every Friday morning, and it’s at every first Friday of the month, every first Friday of the month at ten a m for those who are on our list as being contributors, and they get some kind of behind the scenes look at Idaho policy and what’s going on. And what if is doing, we will have, uh, the, the founder and chairman of Idaho on Taylor or, uh, Tyler Kane. He’ll be on this Friday on our first Friday Falcon call. And so, uh, if, if you’re not already a contributor, get on our website, give a contribution, we’ll get you signed up so you can be on those first Friday Falcon calls and hear about flock cameras this Friday.

Bob Neugebauer Sounds good, my friend.

Ron Nate Cool. Cool.

Bob Neugebauer What else do you got for us here

Ron Nate Well,

Bob Neugebauer today?

Ron Nate those are all the issues I wanted to update everyone on, but I do want to talk a little economics. Do you want to talk some economics today?

Bob Neugebauer Oh! Let’s go. How elastic are you?

Ron Nate All right. Econ one hundred and one one of my favorite topics to teach. Uh, in my classes, I taught for twenty five years economics. And it was elasticity. And it sounds like a complicated word and everything, but it’s really not a complicated concept. A few weeks ago on this show, we talked about supply and demand, and we talked about, you know, how prices fluctuating allow markets to adjust toward equilibrium. In other words, that there won’t be persistent shortages or persistent surpluses if prices are allowed to adjust. And whenever there’s a surplus of a good, the price tends to drop. You reach an equilibrium where exactly the number of people who want something at a price, are able to find it, and whoever wants to sell at that price are able to sell it. It’s great functioning of the of the price to set that up though. We talked about when prices go up, people tend to demand less of goods and services. When prices go down, people tend to demand more. And it’s the inverse on the supply side. When prices go up, suppliers are more excited about supplying things. When prices go down, they’re less excited about supplying things. And so that’s a very qualitative look at it. Prices go up, people buy less. Elasticity goes one step further and starts to quantify that. Like saying if price goes up, how much less do people buy? And elasticity is simply a concept that is a measure of how responsive consumers are or how responsive suppliers are. So when I tell you when the price of gasoline goes up, People conserve more and they buy less gas. But how much less elasticity tells you that? And so when we talk about price elasticity of demand would say this. We do it in percentage terms. Now, I don’t want to lose the audience here in terms of talking percentage. So I’ll just do it in terms of a lot and a little, if you don’t mind, that we would say consumers are elastic or very responsive to changes in prices if a price goes up by a little bit, but their demand drops by a lot, that’s a very elastic response. That’s very sensitive consumers price goes up a little bit and they buy a lot less of something. And that is true with what we call very elastic goods that, uh, that people are very responsive to changes in price. On the other hand, sometimes the price may go up by a lot, but people still keep buying it because they just want it. They need it. They have to have it. Price goes up. They have to pay for it. And believe it or not, gasoline is one of those kind of items even though the price goes up. This is why people are so, so upset about gasoline prices, because they still got to get to work. They still got to get their kids to school. They still got to do their, their weekend errands. And so if the price goes up, they still have to buy gas, they still have to get around. And so they don’t have the ability to reduce their demand that much. They just have to pay the price. So when goods are inelastic like that, demand is very inelastic. Raising the price hurts families a lot more when demand is elastic and they can be very responsive. And here’s something that’s that’s that way like movie theater tickets. If the price goes up, people might go to the movies a lot less and just stay on their phones more or read books more or something. there’s a lot of alternatives to do. Instead of going to a movie, they don’t have to go to a movie every week. Like they have to drive to work every week. So if the price of a movie goes up, consumers are a lot more responsive in their demand. And that’s that’s really the concept of elasticity. How responsive would consumers be to a change in price? But the policy that comes from this is amazing. Do you want to hear it?

Bob Neugebauer Sure. Go right ahead.

Ron Nate Okay. Um, this this concept of elasticity is not lost on policy makers. And I don’t know if they intentionally look at it this way or if policy is just gravitated toward this, that when government wants to raise some money by issuing taxes, sometimes they issue taxes on specific goods or services. Can you name some goods that have a particular tax on them. Name one.

Bob Neugebauer Oh, you mean in terms of being sold by municipalities?

Ron Nate No, no, I’m just talking about a good being sold by a company. But that good by its nature, has a special tax on it. Can you think of goods that government has specially taxed that good?

Bob Neugebauer I try not to buy those goods.

Ron Nate Yeah, I know you do. Uh, cigarettes,

Bob Neugebauer Of

Ron Nate alcohol,

Bob Neugebauer course.

Ron Nate gasoline, cell phone services. Did you know tires have a special tax on them? So

Bob Neugebauer Yeah.

Ron Nate there are some goods that have special taxes on them. But you know what all of those goods have in common. They are very inelastic in demand, meaning

Bob Neugebauer Right.

Ron Nate that if the price goes up, consumers still tend to buy them. They don’t change their quantity very much. And if price goes down, they still buy the same quantity. They don’t tend to change their price, their quantity very much because these are goods that consumers need. Their necessities. And so when the price of when when there’s a tax on cigarettes that makes it more expensive to buy cigarettes. But if people are inelastic in their demand because they’re addicted, they will still keep buying cigarettes. And therefore, the government finds that a very lucrative tax because people continue to buy even though the tax drives up the price.

Bob Neugebauer Well, where do you stand when it comes to a sales tax on everything?

Ron Nate A sales tax on everything is kind of interesting. Idaho government has been very loathe, very reluctant to remove the tax on groceries. And you will hear embedded in their answers as to why. They’re like, well, it’s a stable tax because people are always buying groceries. That is just code for saying groceries are very inelastic in demand. People will buy them even if there’s a tax on them, that the government finds that a very lucrative thing to tax. Now, does that sound very family and business oriented that we’re just going to put a tax on something that people have to buy and pass along these costs on to consumers so that they can fund government and, uh, coercively with a grocery tax. It doesn’t to me. But Idaho lawmakers do that. Idaho is only one of one of only four states that fully tax groceries.

Bob Neugebauer But a also hits the lowest economic level of earners. That’s

Ron Nate Yeah. It’s

Bob Neugebauer where

Ron Nate very

Bob Neugebauer the

Ron Nate regressive

Bob Neugebauer that’s where the

Ron Nate tax.

Bob Neugebauer critical is. That’s

Ron Nate Yeah.

Bob Neugebauer what’s critical about this.

Ron Nate The lower income earners spend a larger proportion of their income on groceries than do higher income earners, because groceries tend to be inelastic in demand and are viewed as necessities. They are because people need groceries to live. Uh, they also need, you know, rents. Property taxes are on a very necessity type item. So this, this concept of elasticity, although it sounds maybe a little economically complicated, it is so basic, it is used by lawmakers all the time. Tax the inelastic goods and the elastic goods don’t generate as much revenue because people adjust their quantity so quickly. So there’s not a special tax on movie tickets. If there was, people would go to movies a lot less. But there is a tax on cell phone usage because people want their phones, dang it. They want their phones, they want their usage. And so government is found out that they can tax cell phones. The quantity stays the same and they get a lot of revenue for it.

Bob Neugebauer But they always have a reason for doing it with

Ron Nate Yeah.

Bob Neugebauer the cell phones is to provide for those who can’t afford them to put cell service into places where most people don’t use it anyway. So

Ron Nate That’s true.

Bob Neugebauer are are they really filling a void or are they just sending.

Ron Nate That’s true. That’s true. I you know who who who knows what they’re thinking there. Are they feeling void? I don’t know. How about this? You want to look into American culture? If we. Their elasticity can be used to measure necessities versus luxuries. And I’ll put it this way. When elasticity is greater than one, it means that if you raise the tax by or raise the price by, say, ten percent and the quantity drops by more than ten percent, that’s viewed very elastic. And so the ratio of those two numbers say the quantity drops by thirty percent. When you raise the price by ten percent, that’s a three to one ratio. That would be an elasticity of three very elastic response. But on the other hand, if you raise the price of something by ten percent and people buy the same amount, in other words, zero percent change in quantity, that’s very inelastic. You have a ratio of zero percent over ten percent. That is less than one. In fact, that’s a number of zero. So there would be no response. Very inelastic demand. Here’s a fascinating thing. Look at elasticity of demand numbers. And it tells you how people do their consumption. Any good that has an elasticity less than one means that when prices go up, the quantity response is less than proportional. Some good and we would call those necessities. People tend to buy nearly the same amount even though the price goes up. You want to know some goods that fit this necessity category. This is amazing medical care. Price goes up. You have to have the medical care, right? Food. Gasoline fits as a necessity. Here’s some that you wouldn’t think fit as a necessity, but based on Americans consumption patterns, they fit the category. Beer consumption price goes up. Still got to have the brewskis.

Bob Neugebauer Not me. I don’t drink them.

Ron Nate Okay. Soda pop fits the necessity category. Cigarettes. Alcohol. But on the other hand, we can talk about things that are more luxuries that. Where the elasticity is greater than one, where the percentage price goes up, the demand drops by a lot more because people only buy them when they can afford them. And that is things like new car purchases, home purchases. And that might sound like a necessity, but rent is more of a necessity than a home purchase. Uh. Wine. Movies. Education is treated like a luxury. Dental services treated like a luxury. More elective than medical services. Restaurant consumption. Those fit as more like luxuries. So it’s interesting that beer and soda are necessities. Education. Dentist. A movie consumption are viewed as luxuries.

Bob Neugebauer Do you do your shopping for your household?

Ron Nate Yeah.

Bob Neugebauer Okay, I do. I go like maybe once every two weeks or once a month down to Costco. And there are certain things I buy, certain things I don’t buy. But I always look at the pricing. And I remember when olive oil, a certain type of olive oil, I really like the price went from fourteen dollars to twenty seven dollars, and all of a sudden the shelves were always stocked. They were completely full. Well, of course

Ron Nate Yeah.

Bob Neugebauer I stopped buying that kind and found something else to fill my bill. I had actually, I already had six bottles of it put away because I like to buy when they’re cheap. Most people don’t do that anymore, and when they put the date on it, it says expires on don’t believe that crap.

Ron Nate That’s right. And you just touched on an important thing here. The how responsive consumers are or how big their elasticity is depends on the availability of substitutes. So if their competitors out there whose price hasn’t changed and the price that you use, the good you usually buy went up in price, you can just switch over and buy the other good instead. More substitutes means more elasticity. But when the government puts a tax on a class of goods like cigarettes, what is the substitute for a cigarette? Well, there might be different brands, but if all of their prices went up because of a tax, there’s really a lack of substitutes. That’s why consumers are more inelastic. And so it should not be a surprise to us that when government wants to raise tax revenues, get more money for itself. It taxes those goods that have relatively few substitutes and that consumers are inelastic. They will keep buying it regardless of the tax on it. And that’s alcohol, cigarettes, gasoline, cell phone services, things that you need.

Bob Neugebauer Well, the government will also use those taxes to change the way we think and what we do. I mean, you see that when they had the smoking, uh, well, let’s

Ron Nate Oh

Bob Neugebauer say

Ron Nate yeah.

Bob Neugebauer smoking’s gonna kill you. And so the taxes went up in every state in the country. Um, so yes, they can literally train you to do certain things by their prices of taxing.

Ron Nate Yeah. Um, let me give you an example. In Wyoming, this is back two thousand and four, way back in the day, Wyoming decided to increase its tax on cigarettes from twelve cents a pack to sixty cents a pack, a five times increase in the tax. Right. We’re going to what’s more than quadruple quintuple. Yeah. Quintuple the tax on cigarettes. So the price went up from twelve cents a pack to sixty cents forty eight cents increase the and they sold this as we want to deter people from smoking. You know the politicians as they’re voting on this. Yeah. We want to get people to smoke less, but they know darn well that people are going to keep smoking because cigarettes

Bob Neugebauer Their

Ron Nate are

Bob Neugebauer addict.

Ron Nate inelastic. Good. And so the quantity did drop by seventeen percent, but the price increase was four hundred percent, four hundred percent price increase quantity dropped by only seventeen percent. Um, why do you think Wyoming did that? To deter smoking? That’s what they said. But they also wanted to raise revenue.

Bob Neugebauer Exactly.

Ron Nate Their their tax revenues more than tripled when they did that. The politicians knew that. Yeah. A few people would smoke less, but by and large people would keep smoking. And they actually increase their tax revenues by triple on cigarettes by doing that.

Bob Neugebauer You know, I used to be a smoker. I stopped eleven years ago.

Ron Nate Mhm.

Bob Neugebauer Um, but when I think back of the amount of money that I spent on cigarettes and the taxi that they did to me on those. It irritates me to no end. But again, I was the fool who got addicted.

Ron Nate There you go. And oh, here, here is kind of a, a, a Christian morality concept tied into this. A lot of religions teach you temperance and moderation and to avoid addictive things, right? That is a very, um, economic argument to that. When you’re addicted to something, you’re inelastic in your demand and you’re very susceptible to getting hurt by price and tax changes. And so as churches teach about temperance and moderation and to avoid addiction, whether it’s cigarettes, alcohol, or being addicted to too many sweets or fatty foods or whatever, that advice is not just good personal advice. It’s good economic advice, too, because it protects you from market fluctuations when you’re not always consuming addictive things. So when you can be more responsive to changes in price by consuming non addictive things, you’re better off. But when you’re addicted to things and their prices change or their taxes change, you’re on the hook. And so these Christian principles of avoiding addiction and, and being dependent on things actually turns out to be great economic advice, great personal advice, and just will make you happier in general in life. Once again, economics helps explain everything.

Bob Neugebauer Then look at it in reverse. All the people who got fat because of the sweets and and the carbs that they consume and all of the fast food they consume all of a sudden now can buy GLP for ninety nine dollars instead of five hundred dollars.

Ron Nate That’s right. And, and watch out what happens with that is g o p addictive. Is it? Does it really increase your health. Well we’ll see. I think the jury’s still out on that one.

Bob Neugebauer I agree, it is still out, but by the same token, government has interceded once again and told the drug companies dropped the price.

Ron Nate Yeah, that that doesn’t make me feel good either. But anyway, that is my little lesson on elasticity. Elasticity goes a step further than supply and demand. Instead of saying price and quantity are inversely related for the law of demand, it gives us a measure of how inversely related they are. And it also gives us a window into one avoiding addictive behavior. Number two, government will hold you hostage if they know that you’re inelastic to something, and they will want to raise tax revenues from it, knowing that you’ll keep buying it because of your inelastic response. And so again, economics explaining how government works and how to make your life better. Arthur Brooks said, you know, in his pursuit of the Pursuit of Happiness book that, uh, the, the secret to a successful life is or a happy life is earned success and freedom in your economic decision making. Avoiding addictive behavior leads to your long term happiness.

Bob Neugebauer Um, curious. Do you have another minute or two?

Ron Nate I do.

Bob Neugebauer I just want to touch base, uh, on something that I had worked on last week, which is the cost of immigration and who pays illegal immigration. And what I’ve come down to, uh, basically is a scenario where the states pay short term, they pay the bill for education, medical costs and other sundry items. By the same token, the federal the feds, they get more money from tax and Social Security and other means that it actually improves the GDP.

Ron Nate Yeah. You know, when I learned in economics how to calculate Production in an economy. GDP gross domestic product. I mean, that’s what the P is the production of goods and services. One way to calculate was to add up all the spending on the production of goods and services. Uh, and so that is when you buy a good or a service as a consumer that is consumption spending. So you add that up when businesses buy goods or services, that is investment spending. So that’s added in when foreigners buy our goods and services, those net export spending is counted as GDP. But also here’s the anomaly. Government spending on goods and services is counted as GM as as gross domestic product, because they view government as buying things that are produced or government spending as producing those things itself. But here’s the problem. If you measure GDP by adding in government spending. Government can always make GDP look good just by spending a lot of money, even though government doesn’t have it. They borrow to spend it. They print it through the Federal Reserve. They can make the economic numbers artificially look better than they are just by spending more money, even if it’s wasteful spending.

Bob Neugebauer For collecting taxes from illegals who don’t have a choice and don’t get any benefits.

Ron Nate That’s right. And so we we always have to be careful when government is telling you the news of something that itself has the control over, and not just information, but control over the levers of making that number look better. And so we should always be suspicious of government GDP numbers. And, um, we should not be fooled into thinking an economy is better than it is when government is comprising a larger and larger share of that economy.

Bob Neugebauer Well, they already do consume an enormous portion of what’s going on. When you start looking at trillion dollar deficits and two trillion dollar deficits.

Ron Nate Absolutely. And I’ll just leave the show and your listeners with this little word of warning. Historically, no economy has been able to survive economic collapse when its debt level, its national debt exceeded its annual GDP. So if its debt to GDP ratio was ever above one hundred percent, no economy has shown it’s been able to survive that scenario. Currently, the United States has a debt to GDP ratio of about one hundred and thirty percent.

Bob Neugebauer Uh, just for your information, I don’t know whether you read anything by an economist named Martin Armstrong,

Ron Nate I’ve

Bob Neugebauer but

Ron Nate heard of it. Yeah.

Bob Neugebauer he is predicting nineteen thirty two as the year for collapse of the European governments and possibly even ours.

Ron Nate Yeah. I mean, um, as Americans rely more and more on the idea that the government is here to protect you, the government is is, uh, providing for your security, providing for your needs, uh, providing the safety net. Uh, as we get lulled into that, we are more and more susceptible to the, to the collapse of the economy because government cannot sustain itself.

Bob Neugebauer Agreed. Ron, thank you very much for your time today. I do appreciate it, and I’m sure our listeners do also.

Ron Nate Thank you too. I love the Idaho Pulse. I appreciate being on. Thanks.

Bob Neugebauer Have a great week. See you soon.

Ron Nate Peace out.