Tag Archives: #Welfare

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Welfare for the well-to-do

If you watch the Weather Channel, whenever one of the bad winter storms hits, or hurricanes, tropical storms, etc, you’ll see that they always have a graphic showing how many “customers” are without power. Customers does not equal people, but residential and commercial units consuming power. As ’empty nesters,’ we count as one customer, but are two people. When the first tropical storm/category 1 hurricane hit the Lone Star State earlier in July, the Weather Channel was telling us about how long customers in Texas were dealing with near 100ºF temperatures with no sparktricity for air conditioners. Primarily distributed by overhead wires, electricity is our most vulnerable to the weather utility.

Heat pumps are having their moment. Are they right for you?

More homeowners are opting for heat pumps, once thought to be ill-suited to cold Northeast winters.

by Frank Kummer | Monday, July 29, 2024 | 5:00 AM EDT

For decades, Scott Nelson’s Oceanside Service has been installing traditional residential cooling systems and gas-powered furnaces in Jersey Shore communities such as Long Beach Island.

Within the past few years, however, the Allenhurst-based contractor has seen a big change: More homeowners are opting for heat pumps, once thought to be ill-suited to cold Northeast winters. The switch is fostered by warming winters, more efficient heat pump units, and federal and state incentives.

“We give everybody the option,” Nelson said, referring to a traditional system versus a heat pump. “And 8 out of 10″ have been buying heat pumps.

Heat pumps are having their moment, boosted in recent years by federal tax credits and other incentives that align their cost more closely with traditional fossil-fuel powered units, while also being highly efficient.

And there it is! You, the taxpayers, are on the hook to buy HVAC systems for Other People! And the homeowners in “Jersey Shore communities such as Long Beach Island” are much wealthier than the typical taxpayer in Flyover Country USA. In June of 2024, the median sale price in Long Beach Island, NJ, was $2,250,000, up 32.4% from the same time in 2023.[1]Data accessed on July 29, 2024, and may show differently in the future, as the referenced real estate site updates information as it is received.

The momentum could grow with the Environmental Protection Agency’s announcement last week of $4.3 billion in grants for projects in 30 states aimed at reducing climate change and air pollution, fostering environmental justice, and accelerating a transition to renewable energy. Pennsylvania received nearly $400 million, and New Jersey and a coalition of other states received nearly $250 million, all funded by the Inflation Reduction Act (IRA) as part of the Biden administration’s agenda.

The grants will be used to fund various programs, including those that encourage a switch to heat pumps such as Pennsylvania’s Priority Climate Action Plan.

So, even more of your taxed-away dollars — or that money borrowed from investors and repaid with interest — being given to Other People.

Our HVAC system, a circa 1995 heat pump system, was destroyed in the 2021 flood, and the $6,100 it cost to replace it came from our pockets, not the taxpayers. Remember that $6,100 figure; it will be important later. How much moolah is Uncle Sam giving to people wealthier than you? Skipping down a few paragraphs we find:

Heat pump installations can quality for federal tax credits valued at up to 30% of the cost paid for the unit, or up to $2,000 per year, for air-source heat pumps. There’s a rebate up to $8,000 for an ENERGY STAR-certified electric heat pump for space heating and cooling.

Pennsylvania anticipates using money from the Infrastructure Act to offer rebates starting in 2025 for heat pumps installed in low- to moderate-income households.

Further down, readers are told that the up-front costs for a heat pump are about $15,000, versus roughly $8,000 for a gas furnace. I guess that my $6,100 wasn’t so bad, huh?

Philadelphia has plans to try and push heat pumps, but has 440,000 mostly brick rowhomes, with an average age of 80 years. Many have insufficient electrical service to power a heat pump system. My heat pump system has not one but two 220-volt, 50-amphere circuits, one for the exterior condenser unit, and another for the blower unit in the crawlspace, which includes heating elements for the ’emergency’ heat cycle. With our ‘backup’ heating system, a propane fireplace, we’ve never needed to use the ’emergency’ heat cycle. A modern, 200-amp circuit breaker panel is needed for installation of a heat pump system, so many of the Philly rowhomes would also need an electrician to upgrade that before any heat pump system could be installed.

There’s more than just that, though. As Frank Kummer, the article author noted, many Philadelphia houses, particularly the rowhomes, “still have boilers that use radiators and baseboard heat. Those likely would need ductless, mini-split heat pumps.” While it is possible to mount mini-split units on interior walls, doing so is more complicated, and more expensive than mounting them on exterior walls.

This is a program that is nothing more than welfare for the already well-to-do. The heat pump systems do have tax credits, but that doesn’t mean that homeowners can simply stroke a check for $15 grand, and be able to wait for their tax credits. While some rowhouse neighborhoods like Fishtown are gentrifying, and might have some better-off homeowners who would consider heat pumps as they remodel, it’s more difficult to see how the working-class people in Philly’s working-class neighborhoods could do so. If their gas furnaces have to be replaced, it’s still cheaper for them to replace with new gas furnaces than heat pumps, as Mr Kummer’s article tells us.

And so I go back to the beginning, and how electricity is our most vulnerable to the weather utility. If you live in a Philly rowhome, and the power goes out on a bitterly cold February day, whether you had a heat pump based system, or your old natural gas fired boiler for radiators, both would be out. But a low-end home generator from Lowe’s or Home Despot can provide enough 110-volt, 20-amp power to run your natural gas furnace, while you’d need a substantial generator, providing 220-volts to run your heat pump system.

I have no objection at all to people being able to choose what kind of heating system they want; I do find it objectionable that the government has its snotty nose in these decisions, and that the feds are providing what amounts to welfare for already prosperous people.

References

References
↑1 Data accessed on July 29, 2024, and may show differently in the future, as the referenced real estate site updates information as it is received.
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Welfare for the well-to-do Joe Manchin's deal will have his West Virginia constituents helping to pay for electric vehicle purchases by Rhode Islanders!

Remember “Cash for clunkers”? From Investopedia:

Cash for Clunkers

By Julia Kagan | Reviewed by Lea D Uradu | Fact checked by Kirsten Rohrs Schmitt | September 30, 2021

Cash for Clunkers was a U.S. government program that provided financial incentives to car owners to trade in their old, less fuel-efficient vehicles and buy more fuel-efficient vehicles. The purpose of the program was primarily to act as an economic stimulus during the Great Recession by providing the population with monetary incentives to buy new cars, thereby increasing automobile sales, while at the same time reducing carbon emissions by replacing old vehicles with new, fuel-efficient ones.

The program, passed by a Congress controlled by Democrats and signed into law by President Barack Hussein Obama, the plan ran from June 2009 through August 24, 2009, when it ran out of money.

At the time, I called it welfare for the well-to-do, and I was right. Running during the so-called “great recession”, the only people who could afford to buy a new car were the ones whose jobs had survived the cuts, knew that their jobs were secure, and had good enough credit to qualify for a new car loan. In other words, they were the people during the “great recession” who didn’t need help from the government. Only 49% of the new vehicles sold through the cash for clunkers program were manufactured in the United States.

Now we have the ‘deal’ between Senator Joe Manchin (D-WV) and Senate Majority Leader Chuck Schumer (D-NY) on electric vehicles. From Reuters:

U.S. Senate Democratic deal would expand EV tax credits

By David Shepardson | July 27, 2022 | 11:00 PM EDT

WASHINGTON, July 27 (Reuters) – A Senate Democratic deal includes a new $4,000 tax credit for used electric vehicles and other new tax credits and grants for automakers to retool factories to build greener cars.

The deal struck between Senate Majority Leader Chuck Schumer and Democratic Senator Joe Manchin also includes an expansion of the existing $7,500 EV tax credit as well as a new $10 billion investment tax credit to build clean-technology manufacturing facilities, according to a summary from Schumer’s office.

The bill that Schumer and Manchin agreed to also includes $2 billion in cash grants to retool existing auto manufacturing facilities “to manufacture clean vehicles, ensuring that auto manufacturing jobs stay in the communities that depend on them.”

If it becomes law, it will further provide up to $20 billion in loans to build new clean vehicle manufacturing facilities and $30 billion for additional production tax credits “to accelerate U.S. manufacturing of solar panels, wind turbines, batteries, and critical minerals processing.”

Schumer said the Senate was expected to vote on the proposed legislation next week and it would next go to the Democratic-controlled House of Representatives.

President Joe Biden last year proposed boosting EV tax credits to up to $12,500 per vehicle — including $4,500 for union-made vehicles — and lifting a cap of 200,000 vehicles per manufacturer on the $7,500 credit. Automakers including General Motors (GM.N) and Tesla (TSLA.O) have hit the cap and are no longer eligible for the existing EV tax credit.

Toyota Motor Corp (7203.T) said this month it had hit the sales cap, which means its $7,500 credit will phase out over the next year.

Automakers have heavily lobbied for an extension of the EV tax credit, warning they cannot meet aggressive goals to cut emissions without tax incentives that make electric vehicles more cost competitive.

Also see: William Teach: NY Times: Democrats “Inflation” Plan May Lower Costs Sometime In The Future

In other words, plug-in electric vehicles cost more than gasoline engine vehicles. But tax credits only come after you have purchased the vehicle, which means that buyers will have to pay the full (negotiated) price for them, including whatever interest payments accrue. If you couldn’t afford the car without the tax credit, you still won’t be able to afford the car with the tax credit!

The new EV tax credits would be limited to trucks, vans and SUVs with a suggested retail price of no more than $80,000 and to cars priced at no more than $55,000. They would be limited to families with adjusted gross incomes of up to $300,000 annually.

This is kind of laughable. How many people, and, for Mr Manchin, how many West Virginians, can afford to buy an $80,000 truck or a $55,000 new car? Once again, this is welfare for the well-to-do!

Limited to families with an AGI of less than $300,000? Median household income was $67,521 in 2020, down 2.9% from the 2019 median of $69,560, thanks to the idiotic COVID restrictions. Guesstimates of current median family income vary, but this estimate of $76,563 seems at least somewhat realistic.

Of course, the median household income for Senator Manchin’s constituents is just $51,615. They could really use that $7,500 tax credit, but how many outside of Charleston or Morgantown will be able to afford to buy a Tesla? In reality, Mr Manchin’s constituents will be taxed to subsidize new car purchases for federal employees in Maryland and executives in New York and Connecticut. 🙂

I found nothing stating that the bill would require, as the old cash for clunkers bill did, that the cars the well-to-do traded in for a new electric vehicle be destroyed, so while the bill, theoretically reducing carbon emissions from new cars, wouldn’t take their older, gasoline-engines off the road, but hey, if the goal is to reduce emissions, then it should. Take the newer used cars — we assume here that the people who can afford to buy a new vehicle have the newest existing cars — off the road, and that not only reduces the total emissions, but makes the used car market relatively older, meaning that those gasoline-powered vehicles will wear out sooner. In 2021, there were 43.1 million used cars purchased, versus only 15.3 million new vehicles, meaning that roughly 73.8% of all car sales were of used, not new vehicles. And the poorer the state, the higher percentage of used cars bought, simply because fewer residents can afford new.[1]Full disclosure: when we bought Mrs Pico’s 2021 Toyota Camry in June, it had been a dealer demonstrator with just 6,000 miles on it. This was the second car we bought with just dealer demo … Continue reading

As always, this act will not do what it is purported to do. It was put together by Democrats, who have virtually no understanding of economics; if they actually did understand economics, they wouldn’t be Democrats! The only question is: just how badly will it fail?

References

References
↑1 Full disclosure: when we bought Mrs Pico’s 2021 Toyota Camry in June, it had been a dealer demonstrator with just 6,000 miles on it. This was the second car we bought with just dealer demo miles. If we had bought new, well, we probably wouldn’t even have the car yet, due to supply issues.