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Archive for May, 2012

I’ve been quite involved in the debate over which Presidents were big spenders.

I started with an analytical post that crunched the data from the Office of Management and Budget, and I showed that Obama was only a fiscal conservative if you ignored the budget impact of the TARP bailout.

I then augmented that analysis with a second post showing in more detail that Obama deserves a bad grade because of spending on social welfare programs.

Last but not least, my most recent post stated that Bush also was a big spender and I cited Jonah Goldberg’s excellent column suggesting that Romney should admit that Republicans bear some blame for the fiscal mess in Washington.

So we’ve been entirely too serious about this topic. Time for some cartoons! We’ll start with this gem from Eric Allie.

Now let’s look at a good one from Lisa Benson. The dirt being swept under the carpet is TARP, of course.

I think that’s the first cartoon I’ve used from Mr. Allie, but I have shared Ms. Benson’s work before. You can find some of my favorites here, herehere and here.

P.S. Getting back to the serious issue, much of the debate over Obama’s spending record revolves around TARP, but there’s also some discussion of how to divvy up blame for spending in Bush’s last fiscal year (FY2009, which began October 1, 2008). You can find some of my analysis on that issue here and here.

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I’m not a big fan of international bureaucracies, mostly because they always seem to promote bad policy such as higher tax rates.

To add insult to injury, the bureaucrats who work at these organizations have created very comfortable lives for themselves while the rest of us pick up the tab, as documented here and here.

But the ultimate insult is that the overpaid and pampered bureaucrats receive tax-free salaries while they jet-set around the world pushing for higher taxes.

Yes, you read correctly. They demand higher taxes for everyone else, but their bloated salaries are exempt!

Here’s some of what the UK-based Guardian just reported about the head of the IMF.

“Taxes for thee, but not for me”

Christine Lagarde, the IMF boss who caused international outrage after she suggested in an interview with the Guardian on Friday that beleaguered Greeks might do well to pay their taxes, pays no taxes, it has emerged. As an official of an international institution, her salary of $467,940 (£298,675) a year plus $83,760 additional allowance a year is not subject to any taxes. …Lagarde, 56, receives a pay and benefits package worth more than American president Barack Obama earns from the United States government, and he pays taxes on it. The same applies to nearly all United Nations employees.

To make matters worse, these globe-trotting bureaucrats have figured out all sorts of ways of padding their pay.

Base salaries range from $46,000 to $80,521. Senior salaries range between $95,394 and $123,033 but these are topped up with adjustments for the cost of living in different countries. A UN worker based in Geneva, for example, will see their base salary increased by 106%, in Bonn by 50.6%, Paris 62% and Peshawar 38.6%. Even in Juba, the capital of South Sudan, one of the poorest areas of the world, a UN employee’s salary will be increased by 53.2%. Other benefits include rent subsidies, dependency allowances for spouses and children, education grants for school-age children and travel and shipping expenses, as well as subsidised medical insurance. For many years critics have complained that IMF, World Bank, and United Nations employees are able to live large at international taxpayers’ expense.

So how do these bureaucrats justify their lavish salaries and gold-plated benefits?

Officials from the various organisations have long maintained that the high salaries are a way of attracting talent from the private sector. In fact, most senior employees are recruited from government posts.

Kudos to the Guardian for exposing this nonsense, particularly the fraudulent claim that lavish compensation packages are need to attract and retain these incompetent bureaucrats.

But let me add to the Guardian’s analysis. In a recent email exchange with several people, I addressed this issue, specifically commenting on whether the head of the IMF, Ms. Lagarde, should get a giant salary because she could earn more money in the private sector. I wrote that there were two responses to this assertion.

1. She has genuine skills as a wealth creator. In which case, we should force her out of the IMF as soon as possible so her talents can be used productively rather than destructively.

2. She can get big bucks by trading on her connections and entering the world of corporatism. Work for KPMG, or the Carlyle Group, or some other entity that specializes in getting favorable deals for the elite. That’s not the private sector.

In either case, her salary in her current position should be zero. Unless we think she should be paid the value of her marginal product, in which case she probably owes the world’s taxpayers several hundred billion dollars.

In other words, it doesn’t matter whether Ms. Largarde’s ability to earn lots of money is the result of genuine ability or cronyism. Since the IMF is pursuing bad policy, her value in that position is below zero.

My Cato colleague Richard Rahn was correct when he wrote that it is the ultimate hypocrisy for tax-free bureaucrats to lobby for higher taxes on the rest of us.

And that’s why defunding these parasitic international bureaucracies is not just good fiscal policy and good economic policy, it’s also the morally just policy.

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I’m not quite ready to trade places with Canada, but it may just be a matter of time. Like Germany and Sweden, they seem to be slowly but surely trying to move in the right direction.

I’ve already commented on good Canadian fiscal policy (including a much-needed lesson for Paul Krugman), and I’ve also praised our northern neighbors for privatizing their air traffic control system and opposing global bank taxes.

But I’ve just been skating along the surface. My Cato colleague Chris Edwards (a Canadian transplant) has just written up a report with some of the key details.

Two decades ago Canada suffered a deep recession and teetered on the brink of a debt crisis caused by rising government spending. The Wall Street Journalsaid that growing debt was making Canada an “honorary member of the third world” with the “northern peso” as its currency. But Canada reversed course and cut spending, balanced its budget, and enacted various pro-market reforms. The economy boomed, unemployment plunged, and the formerly weak Canadian dollar soared to reach parity with the U.S. dollar. …[In] the early 1990s combined federal, provincial, and local spending peaked at more than half of gross domestic product (GDP). In the 1993 elections, Prime Minister Jean Chretien’s Liberals gained power promising fiscal restraint, but this was the party of Trudeau, and so major reforms seemed unlikely. In the first Liberal budget in 1994, Finance Minister Paul Martin provided some modest spending restraint. But in his second budget in 1995, he began serious cutting. In just two years, total noninterest spending fell by 10 percent, which would be like the U.S. Congress chopping $340 billion from this year’s noninterest federal spending of $3.4 trillion. When U.S. policymakers talk about “cutting” spending, they usually mean reducing spending growth rates, but the Canadians actually spent less when they reformed their budget in the 1990s. The Canadian government cut defense, unemployment insurance, transportation, business subsidies, aid to provincial governments, and many other items. After the first two years of cuts, the government held spending growth to about 2 percent for the next three years. With this restraint, federal spending as a share of GDP plunged from 22 percent in 1995 to 17 percent by 2000. The spending share kept falling during the 2000s to reach 15 percent by 2006, which was the lowest level since the 1940s. …The spending reforms of the 1990s allowed the Canadian federal government to balance its budget every year between 1998 and 2008. The government’s debt plunged from 68 percent of GDP in 1995 to just 34 percent today.

Total government spending, including sub-national units such as states and provinces, is still slightly higher in Canada than in the United States. But I suspect that will change within the next five years.

Not surprisingly, good spending policy leads to good tax policy, as Chris explains.

a slimmed-down Canadian government under the Liberals enjoyed large budget surpluses and pursued an array of tax cuts. The Conservatives continued cutting after they assumed power in 2006. During the 2000s the top capital gains tax rate was cut to 14.5 percent, special “capital taxes” on businesses were mainly abolished, income taxes were trimmed, and income tax brackets were fully indexed for inflation. Another reform was the creation of Tax-Free Savings Accounts, which are like Roth IRAs in the United States, except more flexible. The most dramatic cuts were to corporate taxes. The federal corporate tax rate was cut from 29 percent in 2000 to 15 percent in 2012. Most provinces also trimmed their corporate taxes, so that the overall average rate in Canada is just 27 percent today. By contrast, the average U.S. federal-state rate is 40 percent. …Canada’s federal corporate tax rate has been cut from 38 percent in the early 1980s to just 15 percent today. Despite the much lower rate, tax revenues have not declined. Indeed, corporate tax revenues averaged 2.1 percent of GDP during the 1980s and a slightly higher 2.3 percent during the 2000s.

The Laffer Curve effect of higher tax revenue shouldn’t be surprising, though American policymakers still operate in a fantasy world where taxes are assumed to have no impact on the economy and no impact on taxable income.

But that’s a secondary point. The main lesson of this research by Chris is that it is both possible and desirable to shrink the burden of government spending.

And it’s not just Canada that has done the right thing. This video outlines past reforms in Ireland, Slovakia, and New Zealand as well.

P.S. Other than the cold weather, another reason why I don’t quite yet want to trade places with Canada is the government-run healthcare system. Right now, high-ranking politicians from the frozen wastelands can escape to America when they fall ill. If we copy Canada (and we’re already pretty far down that path), then where will we be able to go to get high-quality and cutting-edge care?

P.P.S. The Canadians aren’t know for having a sense of humor, but the person who wrote this parody about emigrating American leftists definitely has a good sense of humor.

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In a post last week, I explained that Obama has been a big spender, but noted his profligacy is disguised because TARP outlays caused a spike in spending during Bush’s last fiscal year (FY2009, which began October 1, 2008). Meanwhile, repayments from banks in subsequent years count as “negative spending,” further hiding the underlying trend in outlays.

When you strip away those one-time factors, it turns out that Obama has allowed domestic spending to increase at the fastest rate since Richard Nixon.

I then did another post yesterday, where I looked at total spending (other than interest payments and bailout costs) and showed that Obama has presided over the biggest spending increases since Lyndon Johnson.

Looking at the charts, it’s also rather obvious that party labels don’t mean much. Bill Clinton presided during a period of spending restraint, while every Republican other than Reagan has a dismal track record.

President George W. Bush, for instance, scores below both Clinton and Jimmy Carter, regardless of whether defense outlays are included in the calculations. That’s not a fiscally conservative record, even if you’re grading on a generous curve.

This leads Jonah Goldberg to offer some sage advice to the GOP.

Here’s a simple suggestion for Mitt Romney: Admit that the Democrats have a point. Right before the Memorial Day weekend, Washington was consumed by a debate over how much Barack Obama has spent as president, and it looks like it’s picking up again. …all of these numbers are a sideshow: Republicans in Washington helped create the problem, and Romney should concede the point. Focused on fighting a war, Bush — never a tightwad to begin with — handed the keys to the Treasury to Tom DeLay and Denny Hastert, and they spent enough money to burn a wet mule. On Bush’s watch, education spending more than doubled, the government enacted the biggest expansion in entitlements since the Great Society (Medicare Part D), and we created a vast new government agency (the Department of Homeland Security). …Nearly every problem with spending and debt associated with the Bush years was made far worse under Obama. The man campaigned as an outsider who was going to change course before we went over a fiscal cliff. Instead, when he got behind the wheel, as it were, he hit the gas instead of the brakes — and yet has the temerity to claim that all of the forward momentum is Bush’s fault. …Romney is under no obligation to defend the Republican performance during the Bush years. Indeed, if he’s serious about fixing what’s wrong with Washington, he has an obligation not to defend it. This is an argument that the Tea Party — which famously dealt Obama’s party a shellacking in 2010 — and independents alike are entirely open to. Voters don’t want a president to rein in runaway Democratic spending; they want one to rein in runaway Washington spending.

Jonah’s point about “fixing what’s wrong with Washington” is not a throwaway line. Romney has pledged to voters that he won’t raise taxes. He also has promised to bring the burden of federal spending down to 20 percent of GDP by the end of a first term.

But even those modest commitments will be difficult to achieve if he isn’t willing to gain credibility with the American people by admitting that Republicans helped create the fiscal mess in Washington. Especially since today’s GOP leaders in the House and Senate were all in office last decade and voted for Bush’s wasteful spending.

It actually doesn’t even take much to move fiscal policy in the right direction. All that’s required is to restrain spending so that is grows more slowly than the private sector (with the kind of humility you only find in Washington, I call this “Mitchell’s Golden Rule“). The entitlement reforms in the Ryan budget would be a good start, along with some much-needed pruning of discretionary spending.

And if you address the underlying problem by limiting spending growth to about 2 percent annually, you can balance the budget in about 10 years. No need for higher taxes, notwithstanding the rhetoric of the fiscal frauds in Washington who salivate at the thought of another failed 1990s-style tax hike deal.

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The fiscal nightmare in Europe should be all the proof that’s needed about the dangers of wasteful spending and punitive tax rates. Unfortunately, if his proposals for bigger government and class-warfare tax policy are any indication, President Obama still seems to think those policies would be good for America.

“Let’s mimic California and France!”

American states also are a laboratory, showing that states with better tax policy create more jobs and grow much faster. And many state policy makers have learned the right lesson.

Here’s some of what the Wall Street Journal said in an editorial this morning.

Last week Governor Sam Brownback continued the post-2010 reform trend among GOP Governors by signing the biggest tax cut in Kansas history. The plan chops the state income tax rate to 4.9% from 6.45% and eliminates income taxes on about 190,000 Kansas small businesses. …Mr. Brownback says the income tax cut will put Kansas “on a road to faster growth.” Although no one in Europe or the White House agrees with the philosophy, tax-cut initiatives have been spreading in the states. Already this year Tennessee has eliminated its gift and estate tax, Arizona has cut its capital gains tax (to 3.4% from 4.54%), and Idaho and Nebraska have cut income tax rates. Oklahoma is expected to cut tax rates. The tax cutting Governors all say they hope to be more like no-income-tax Texas, which has far outpaced other states in job creation.

Sadly, the folks in the White House aren’t hopping on the tax cut bandwagon.

Instead, they want America to be more like the President’s home state of Illinois, a fiscal basket case. But it’s not just Illinois that’s in trouble because of a bloated and expensive public sector.

It turns out that millions of Americans are voting with their feet to escape states with excessive taxes.

Here are some passages from a CNS report on some fascinating data from the Tax Foundation.

New York State accounted for the biggest migration exodus of any state in the nation between 2000 and 2010, with 3.4 million residents leaving over that period, according to the Tax Foundation. Over that decade the state gained 2.1 million, so net migration amounted to 1.3 million, representing a loss of $45.6 billion in income. Where are they escaping to?  The Tax Foundation found that more than 600,000 New York residents moved to Florida over the decade – opting perhaps for the Sunshine State’s more lenient tax system – taking nearly $20 billion in adjusted gross income with them. Over that same time period, 208,794 Pennsylvanians moved to Florida, taking $8 billion in income. …California is also known for more onerous taxes and regulations, and the foundation shows similar trends of migration from there to other states like Texas and Arizona. The Tax Foundation ranked the Golden State sixth highest in the nation for state and local tax burden in 2009. Between 2000 and 2010, the most recent data available, 551,914 people left California for Texas, taking $14.3 billion in income.  Texas has no state income tax or estate tax. …Another 28,088 from California relocated to Nevada and 30,663 to Arizona, a loss of  $699.1 million and $707.8 million in income respectively.

While these are remarkable numbers, they shouldn’t be a surprise. I’ve written about the failures of New York and California, and I’ve also commented on the success of Texas.

And for those who prefer international evidence, I’ve cited the differences between successful low-tax jurisdictions such as Hong Kong and Singapore and decrepit high-tax nations such as France.

This doesn’t mean that fiscal policy is a silver bullet. There are reasonably successful nations with big governments, but they compensate with ultra-free markets in other areas. And there are also low-tax nations that languish because of mistakes such as excessive regulation and failure to protect property rights.

But all other things being equal, big government and high tax rates are a recipe for decline. Yet that’s the only item on the White House menu.

P.S. If you think people should have the right to lower their tax burdens by moving from California to Nevada, shouldn’t they also have the right to do the same thing by moving from the United States to Singapore?

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Last week, I jumped into the surreal debate about whether Obama has been the most fiscally conservative president in recent history.

I sliced the historical data from the Office of Management and Budget a couple of ways, showing that overall spending has grown at a relatively slow rate during the Obama years. Adjusted for inflation, both total spending and primary spending (total spending minus interest payments) have been restrained.

So does this make Obama a fiscal conservative?

And how can these numbers make sense when the President saddled the nation with the faux stimulus and Obamacare?

Good questions. It turns out that Obama supposed frugality is largely the result of how TARP is measured in the federal budget. To put it simply, TARP pushed spending up in Bush’s final fiscal year (FY2009, which began October 1, 2008) and then repayments from the banks (which count as “negative spending”) artificially reduced spending in subsequent years.

The combination of those two factors made a big difference in the numbers. Here’s another table from my prior post, looking at how the presidents rank when you subtract both defense and the fiscal impact of deposit insurance and TARP.

All of a sudden, Obama drops down to the second-to-last position, sandwiched between two of the worst presidents in American history. Not exactly a ringing endorsement.

But this ranking is incomplete. At that point, I was trying to gauge Obama’s record on domestic spending, and the numbers certainly provide some evidence that he is a stereotypical big-spending liberal.

But the main debate is about which president was the biggest overall spender. So I’ve run through the numbers again, and here’s a new table looking at the rankings based on average annual changes in inflation-adjusted primary spending, minus the distorting impact of deposit insurance and TARP.

Obama is still in the second-to-last position, but spending is increasing by “only” 5.5 percent per year rather than 7.0 percent annually. This is obviously because defense spending is not growing as fast as domestic spending.

Reagan remains in first place, though his score drops now that his defense buildup is part of the calculations. Clinton, conversely, stays in second place but his score jumps because he benefited from the peace dividend after Reagan’s policies led to the collapse of the Soviet Empire.

Let’s now look at these numbers from a policy perspective. Rahn Curve research shows that government is far too big today, so the goal of fiscal policy should be to restrain the burden of government spending relative to economic output.

This means that policy moves in the right direction when government grows more slowly than the private sector, as it did under Reagan and Clinton.

But if government spending is growing faster than the productive sector of the economy, as has been the case during the Bush-Obama years, then a nation eventually will become Greece.

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I suppose I could draw some sort of policy message from this video, perhaps by comparing the effectiveness of private sector charity with the blundering incompetence of government.

But this video wasn’t done to make that kind of point. So just enjoy the quiet patriotism of “Ryan’s Story.”

And here’s another video on the same general topic.

I remember being at Reagan Airport when one of the honor flights landed. It was very moving to see everyone in the terminal cheer as the veterans came off the plane. That’s true patriotism.

Unlike clowns such as Joe Biden who think higher taxes are patriotic.

P.S. Watch this Penn and Teller video if you want a good message about patriotism.

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I don’t like the international bureaucrats at the IMF, and I don’t like the corrupt politicians of Greece, so for whom do I cheer if there’s a fight between those two groups?

Ideally, both sides will lose (which is also my view of the European fight between Keynesians and tax increasers).

You’ll understand when you read about the recent remarks by Christine Lagarde, the head of the International Monetary Fund. Here’s what the UK-based Guardian reported.

IMF chief Christine Lagarde’s uncompromising description of Greeks as rampant tax-dodgers has provoked a furious reaction in Athens less than a month before the crisis-hit country heads to the polls. With Greece mired in ever-worsening recession, with cutbacks and tax rises, the IMF managing director was rounded on by almost the entire political establishment. In an interview with the Guardian, Lagarde said she had more sympathy for victims of poverty in sub-Saharan Africa than Greeks hit by the economic crisis. “As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax.” Evangelos Venizelos, the Greek socialist leader, who met Lagarde several times as finance minister, accused her of “insulting” Greeks. “Nobody has the right to humiliate the Greek people during the crisis, and I say this today specifically addressing Ms Lagarde … who with her stance insulted the Greek people.”

So what should we think of this fight?

Well, I agree with Lagarde that the people of sub-Saharan Africa are more deserving of sympathy. After all, the Greek people repeatedly voted to steal money from their fellow citizens by using the coercive power of government, so it’s hard to feel much sympathy for people who thought that scam could continue indefinitely.

Though, to be fair, the people in sub-Saharan Africa would probably make the same venal choices if they had democracy.

Top IMF Moocher

On the other hand, I am nauseated by Lagarde’s comments about tax evasion. She is one of the world’s biggest leeches, with annual compensation of more than $550,000 that is diverted from the productive sector of the economy. And, adding insult to injury, her bloated salary is tax free. So we have the grotesque spectacle of a pampered international bureaucrat whining and moaning that ordinary people aren’t paying enough tax.

Keep in mind, by the way, that the tax burden in Greece is more than 40 percent of economic output (see annex table 26), which (at least to normal people) shows that the problems is that the Greek government is spending far too much.

Leading Greek Kleptocrat

Then we have the sniveling comments of Greece’s former socialist finance minister, who says the Greek people have been “insulted.” Well, they should be insulted. And mocked. And berated. After all, these are the people who voted for one kleptocrat government after another.

These are the people who thought it was a good idea to elect governments that made insane decisions such as choosing to subsidize pedophiles and imposing a regulatory requirement to collect stool samples from entrepreneurs setting up online companies.

I think “a pox on both your houses” was a line in one of Shakespeare’s plays. But wherever it comes from, it sums up my view of this spat between the IMF and Greece. The only good decision for the United States would be to back away and not be involved. Unfortunately, the Obama Administration wants American taxpayers on the hook for the reckless overspending of foreign politicians.

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Who are the worst people in America? For sheer evil, I’m sure murderers, rapists, and child molesters belong at the top of the list. But if we’re talking about overall damage to society, it’s hard to imagine that any group is as counterproductive as politicians.

Whether they’re causing financial crises, undermining American competitiveness, crippling upward mobility for the poor, or giving away our money in corrupt vote-buying schemes, it seems that politicians have a reverse Midas touch.

That’s why I enjoy sharing the jokes from the late-night comics. It’s important to mock these pretentious windbags. So enjoy the latest batch.

Jay Leno

  • It’s been a rough week for Facebook and Mark Zuckerberg. Zuckerberg has lost so much money in the market that President Obama is going to have him replace Ben Bernanke.
  • The Center for Responsive Politics reports that President Obama has become the first politician in history to raise $1 billion in his political career. Imagine how much more he could have raised if people hadn’t lost it all in his economic plan.
  • Police in South Dakota arrested a 53-year-old man formerly from Chicago who’s trying to climb Mount Rushmore. The guy is in his 50s, from Chicago, and he’s desperate to get on Mount Rushmore. Oh my God, it’s Obama!
  • Just two weeks after a felon in jail got 41 percent of the Democratic vote in West Virginia, President Obama got embarrassed again in Arkansas yesterday when an unknown lawyer got 42 percent. See, that proves once and for all that there’s only a 1 percent difference between a lawyer and a convicted felon.
  • Congratulations to former Speaker of the House Nancy Pelosi. The city of San Francisco has named a street after her today. It’s called Botox Avenue.
  • President Obama gave the commencement speech at Barnard College the other day. He told graduates their future is bright unless they want jobs.
  • Have you heard about Facebook co-founder Eduardo Saverin? He’s renounced his U.S. citizenship because it’ll save him millions of dollars of taxes — to which Mitt Romney said, “That’s what the Cayman Islands are for.”
  • President Obama is calling for more government reform after JPMorgan’s $2 billion loss. Really, is that what we need — the government stepping in? You know what’s going to happen? The government’s going to teach them how to lose $2 billion a DAY!
  • Mitt Romney has jumped to a seven-point lead over President Obama in a national poll. I think Romney’s starting to get cocky. Today he threatened to pin down Joe Biden and pull out all of his hair plugs.
  • President Obama was in Nevada this weekend. Finally some good news for the Secret Service — a place in America where prostitution is legal.

David Letterman

  • Facebook is worth $100 billion. Today it was friended by Greece.
  • Over the weekend Betty White endorsed Barack Obama. I think I’m going to wait and hear what Angela Lansbury has to say.

Conan

  • A new study shows current members of Congress speak at a 10th grade level. When reached for comment, Congressman Eric Cantor said, “Nuh-uh!”
  • A Republican official says that Mitt Romney should pick “an incredibly boring white guy as running mate.” When he heard that, Joe Biden said, “Thanks, I’ve already got a gig.”

Jimmy Fallon

  • Here’s an election update. Today Mitt Romney met with a group of wealthy Latino business owners. Or as Romney calls them, “the Juan percent.”
  • While attending meetings in Chicago this week, President Obama stayed at a hotel instead of his own house. It was annoying. When he asked for a wake-up call, they just showed him the latest poll numbers.
  • This week Mitt Romney started giving speeches while standing in front of a giant U.S. debt clock. When asked what it was like campaigning with a large electronic object, the debt clock was like, “Not bad.”

You can see previous collections of late-night jokes by clicking here, here, herehere, here, here, here, hereherehereherehereherehere, and here.

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I’ve written about the high cost of red tape, and have cited crazy examples of regulation run amok.

The list could go on forever, so let’s look at a new example of regulatory stupidity.

Back during the Clinton years, the pinheads at the Equal Employment Opportunity Commission tried to coerce Hooters into ending its discriminatory hiring practices. These clueless bureaucrats thought it was unfair that fat, middle-aged men weren’t properly represented on the serving staff.

In a rare victory for common sense, the EEOC eventually backed down, in large part because Hooters launched a public “get a grip” campaign to embarrass the government which included newspaper ads and billboards showing how absurd it would be to change the company’s hiring practices.

Now, as Yogi Berra would say, it’s deja vu all over again. The EEOC is agitated because a Massachusetts coffee chain apparently has hired too many attractive young women. Here’s some of what the Boston Herald reported.

South Shore coffee chain Marylou’s is singing the blues over a federal employment-discrimination investigation, crying foul that the feds are going after its long-standing practice of hiring bubbly young bombshells to peddle the shop’s trademark joe. The Equal Employment Opportunity Commission has been quietly probing Marylou’s’ hiring practices for nearly a year, the Herald has learned, with investigators pulling reams of job applications, interviewing company brass and grilling the 29-store chain’s pink-clad clerks about their co-workers’ gender, age, race and body type, according to the company. …Katherine J. Michon, a Boston lawyer who specializes in discrimination cases, said the length and scope of the investigation indicates the feds are serious about cracking down on the company. …he company also complained about the probe to state Sen. Robert L. Hedlund, who blasted the EEOC as “a meddlesome, overblown, intrusive federal agency.” He said he plans to contact the local congressional delegation, and is dumbfounded the agency is probing the stalwart South Shore coffee shop. “Why, because they haven’t hired old overweight men who want to wear a pink T-shirt and serve coffee?” Hedlund said. “The federal government has better things to do with my tax dollars than to harass a legitimate business.”

What’s especially nauseating about this case is that nobody complained about discrimination. Instead, some moron bureaucrats got upset that the TV ads featured attractive young women. Here’s more from a follow-up story in the Herald.

She [the head of the EEOC] refused to answer general questions about the agency, which critics say has run amok by initiating investigations into businesses even if no one has complained about their hiring procedures. Marylou’s execs, for example, say the feds’ yearlong inquiry started when investigators saw the chain’s flirty TV commercials. Sandry said the groundswell of support for Marylou’s has remained strong since the Herald broke the news Wednesday of the yearlong EEOC inquiry, which company founder Marylou Sandry has called “a witch hunt.” “It’s been crazy, but everywhere I go people are cheering the girls,” Ronnie Sandry said. “Boy, people hate the government.”

I’m greatly encouraged by the last sentence in the excerpt. We should all be very upset that overpaid bureaucrats are harassing and pestering people in the productive sector of the economy. These leeches should be immediately terminated.

Even though I don’t like coffee, I wish Marylou’s had some branches in the DC area. I would find something to buy just to show my support.

P.S. In the interests of fairness, I should point out that the federal government is not the only entity to pursue idiotic regulations. California lawmakers, for instance, have considered rules to regulate babysitting. And since we’re on the topic of coffee, let’s not forget the Seattle campaign to ban scantily clad baristas. But the all-time record for strangest government regulation belongs to Japan, which actually has government rules on the application of coffee enemas.

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Last year, I made fun of the Washington Post for biased reporting when they used the world “slash” to describe a budget proposal that would have trimmed $6 billion out of a giant $3,800 billion budget.

I wrote that this was the budgetary equivalent of “going on a diet by leaving a couple of french fries in the bottom of the bag after bingeing on three Big Mac meals at McDonald’s.” A couple of other bloggers then had some fun by doing the exact calculations of what this would mean.

Now we have a cartoon version of Washington budgeting, authored by Gary Varvel.

Keep in mind, though, that this cartoon actually is inaccurate because it implicitly accepts the dishonest Washington definition of a budget cut (having spending grow, but not as fast as previously planned).

Every budget plan, even the very admirable proposals put forth by Sen. Rand Paul and the House Republican Study Committee, merely restrains the growth of federal spending.

So the cartoon should show Uncle Same with some clippers, simply seeking to keep the weed from growing even faster.

And if we replaced Uncle Sam with Barack Obama, instead of scissors or clippers, he’d be holding fertilizer.

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I’ve mocked France on several occasions, and I thought Sarkozy was so bad that I figured (in the long run) the election of Hollande was a step in the right direction.

But in certain ways, France isn’t as bad as the United States.

The New York Times has a big story about French entrepreneurs and investors looking to escape looming class-warfare tax hikes. Here are a few excerpts

Benoît Pous-Bertran de Balanda, the descendant of a French general who fought for the Americans, is trying to help his wealthy countrymen escape what he calls the tyranny of a new Socialist government primed to severely tax the rich. …Well-heeled French citizens are scouring real estate opportunities in neighboring countries like Britain and Switzerland. The United States — particularly New York and Miami— is also drawing French investors looking to pick up rental properties or pieds-à-terre, brokers say. The French buyers most active in recent months are generally looking at properties between $500,000 and $5 million, brokers say. What the French are so concerned about is Mr. Hollande’s campaign vow to tax income over 1 million euros at a 75 percent rate. …it will also raise the tax rate on capital gains to the same level as the tax on ordinary income.

Normally, this type of story would be an excuse for me to write about the Laffer Curve and the foolishness of penalizing success.

But I want to focus instead on the right to emigrate. Specifically, there are two ways in which France has better policy than the United States.

1. France, like almost every other civilized nation, does not have worldwide taxation. So when French citizens move to Switzerland, Hong Kong, or the United States, they pay tax to those nations. But they’re no longer subject to French taxes on this foreign-source income. Sadly, that is not true for overseas Americans, who are subject to tax in the nations where they live AND the IRS. Their only choice, if they want to escape this punitive and unfair form of double taxation, is to give up U.S. citizenship.

2. But when Americans like Eduardo Saverin decide to surrender their passports, they are hit by punitive exit taxes. This is the type of policy normally associated with some of the world’s most odious regimes, such as Nazi Germany and the Soviet Union. France, I am told, is not perfect in this regard, but the tax treatment of people re-domiciling in another country is not nearly so onerous (especially if they go to another EU nation).

I want good tax policy, like the flat tax, regardless of what’s happening in other nations. But it says a lot (and none of it good) when one of the world’s most statist nations has better policy than America.

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It seems I was put on the planet to educate people about the negative economic impact of excessive government. Though I must be doing a bad job because the burden of the public sector keeps rising.

But hope springs eternal. To help make the case, I’ve cited research from international bureaucracies such as the Organization for Economic Cooperation and Development, International Monetary Fund, World Bank, and European Central Bank. And since most of those organizations lean to the left, these results should be particularly persuasive.

I’ve also cited the work of academic scholars from all over the world, including the United States, Australia, and Sweden. The evidence is very persuasive that big government is associated with weaker economic performance.

Now we have some new research from the United Kingdom. The Centre for Policy Studies has released a new study, authored by Ryan Bourne and Thomas Oechsle,  examining the relationship between economic growth and the size of the public sector.

The chart compares growth rates for nations with big governments and small governments over the past two decades. The difference is significant, but that’s just the tip of the iceberg. The most important findings of the report are the estimates showing how more spending and more taxes are associated with weaker performance.

Here are some key passages from the study.

Using tax to GDP and spending to GDP ratios as a proxy for size of government, regression analysis can be used to estimate the effect of government size on GDP growth in a set of countries defined as advanced by the IMF between 1965 and 2010. …As supply-side economists would expect, the coefficients on the tax revenue to GDP and government spending to GDP ratios are negative and statistically significant. This suggests that, ceteris paribus, a larger tax burden results in a slower annual growth of real GDP per capita. Though it is unlikely that this effect would be linear (we might expect the effect to be larger for countries with huge tax burdens), the regressions suggest that an increase in the tax revenue to GDP ratio by 10 percentage points will, if the other variables do not change, lead to a decrease in the rate of economic growth per capita by 1.2 percentage points. The result is very similar for government outlays to GDP, where an increase by 10 percentage points is associated with a fall in the economic growth rate of 1.1 percentage points.16 This is in line with other findings in the academic literature. …The two small government economies with the lowest marginal tax rates, Singapore and Hong Kong, were also those which experienced the fastest average real GDP growth.

The folks at CPS also put together a short video to describe the results. It’s very well done, though I’m not a big fan of the argument near then end that faster growth is a good thing because it generates more tax revenue to finance more government. Since I’m a big proponent of the Laffer Curve, I don’t disagree with the premise, but I would argue that additional revenues should be used to finance lower tax rates.

Since I’m nit-picking, I’ll also say that the study should have emphasized that government spending is bad for growth because it inevitably and necessarily leads to the inefficient allocation of resources, and that would be true even if revenues magically floated down from heaven and there was no need for punitive tax rates.

This is my message in this video on the Rahn Curve.

When the issue is government, size matters, and bigger is not better.

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Guido Westerwelle is supposed to be the German version of a libertarian. Currently serving as Foreign Minister, he was the chairman of the supposedly pro-market Free Democratic Party for 10 years and Wikipedia says he was known as a “proponent of an unlimited free market economy.”

Sounds like a good guy, right? Just the type of person who can explain that Europe’s problem is too much government. The kind of policy maker who can argue for cutting back the welfare state, slashing tax rates, and ending bailouts.

That’s the optimistic spin, but now let’s look at the column Westerwelle wrote for the Washington Post yesterday. Entitled “A Growth Pact for Europe,” he called for six reforms. Unfortunately, four of the reforms mean more government and two were meaningless boilerplate. Let’s look at what he proposed.

First, the European Union’s budget should be consistently oriented toward growth… The E.U. must utilize its resources better than before without spending more. Money is available for future-oriented tasks; in recent months, E.U. officials have been negotiating a 1 trillion-euro budget for 2014 to 2020. We should concentrate on using this huge sum consistently to promote growth and employment, innovation and competitiveness.

I’m glad he says they shouldn’t spend even more than is currently in the EU budget, but he apparently believes that government can redistribute 1 trillion euro in a way that boosts the economy. Good luck with that.

Second, unused E.U. funds must be activated. Around 80 billion euros in the regional cohesion fund have not been allocated to any concrete projects. The European Commission and member states must invest these funds quickly and effectively in new growth through better competitiveness.

Wow, he wants us to believe that wasting money faster is a recipe for growth. This is the same nonsense the Obama Administration was peddling.

Third, access to capital must be improved. …companies are not in a position to make sensible investments that would stimulate growth. The European Investment Bank is an instrument we could use to a greater extent and in a more targeted fashion, not least to ensure that small and medium-size businesses have better access to loans.

I guess this is the European version of the bastard child of Fannie Mae and the Export-Import Bank. But if anybody thinks government-subsidized cronyism is a route to prosperity, they’ve been asleep for the past 40 years.

Fourth, infrastructure projects must be promoted. …Our roads, railways, and energy and telecommunication networks are among the European economy’s trump cards. …State-of-the-art infrastructure opens new prospects for growth by making private-sector investment more attractive. We need to mobilize private capital for the cross-border expansion of European infrastructure and look at innovative forms of public-private partnership.

I’ll be the first to admit that infrastructure spending is less damaging that social welfare spending, but it is a bit of a fantasy to assume that there are lots of high-return projects languishing on the shelves.

Fifth, we must complete Europe’s internal market. In the 1980s and ’90s, realizing the “four freedoms” — the free flow of goods, capital, services and people within the E.U. — released tremendous forces for growth. Today, the expansion of the internal market to cover new spheres again offers great opportunities. That applies to the digitized economy, e-commerce and the energy sector, and it will strengthen small and medium-size companies by reducing red tape and ensuring better access to venture capital.

This boilerplate support for more free trade is fine, but I think all the big benefits of ending protectionism inside Europe already have been captured (and this is the one area where the European project has been a success).

Sixth, we want to strengthen free trade. Three-quarters of the world’s trade occurs outside the European Union. More than 80 percent of global growth is produced outside Europe. The E.U. must work toward making the Doha Round a success while also concluding more free-trade agreements with new and long-established centers of power.

Again, this a good sentiment, but I fear it is a throwaway passage. Almost every nation has empty rhetoric about completing the Doha round, but don’t hold your breath expecting it to happen anytime soon.

What’s notable about Westerwelle’s list is that there is nothing about the overall burden of spending, even though Europe is saddled with bloated welfare states. There is nothing about high tax rates, even though most nations have punitive systems that discourage work, saving, investment, and entrepreneurship. There is nothing about the overall burden of regulation and red tape, particularly the supposedly pro-labor rules that actually discourage hiring (the Germans did implement successful reforms last decade, so he would have been in a strong position to urge other nations to copy those changes).

Heck, even the World Bank has been willing to point out that big government has failed in Europe. So it’s hardly a positive sign that a supposedly strong free market lawmaker is basically arguing that even more government is the way to boost growth on the continent.

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A financial columnist named Rex Nutting recently triggered a firestorm of controversy by claiming that Barack Obama is not a big spender.

Here’s the chart he prepared, which certainly seems to indicate that Obama is a fiscal conservative. Not only that, it shows that Republicans generally are the big spenders, while Democrats are frugal with other people’s money.

In some ways, these numbers don’t surprise me. I’ve explained before that Bush bears a lot of blame for the big expansion in the burden of government this century, and I’ve specifically pointed out that he deserves the blame for most of the higher spending from the 2009 fiscal year (which began October 1, 2008).

That being said, Nutting’s numbers seemed a bit nutty. Sorry, couldn’t resist. Nutting’s numbers actually seem accurate, including the fact that he decided that Obama should be responsible for $140 billion of the spending in Bush’s last fiscal year (a number he may have taken from one of my posts).

But sometimes accurate can be misleading, so I decided to dig into the data.

I went to the Historical Tables of the Budget from the Office of Management and Budget, and I calculated all the numbers for every President since LBJ (with the exception of Gerald Ford, whose 2-year reign didn’t seem worth including).

But I corrected a big mistake in Nutting’s analysis. I adjusted the numbers for inflation, using OMB’s GDP deflator.

As you can see, this changes the results. My chart isn’t as pretty, but based on the inflation-adjusted average annual growth of outlays, it shows that Clinton was the most frugal president, followed by the first President Bush and Obama.

With his guns-n-butter Keynesianism, it’s no big surprise that LBJ ranks last. And “W” also gets a very low grade.

But then I figured we should take interest payments out of the budget and focus on inflation-adjusted “primary spending.” After all, Presidents shouldn’t be held responsible for the national debt that existed before they took office.

Looking at these numbers, it turns out that Obama does win the prize for being the most fiscally conservative president in recent memory. Reagan jumps to second place. Clinton is in third place, which won’t surprise people who watched this video, while W and LBJ again are in last place.

But I don’t want my Republican friends to get too angry with me, so let’s expand our analysis. Just as we don’t want to blame Presidents for net interest payments on debt that was accrued before their tenure, perhaps we should make sure they don’t get credit or blame for defense outlays that often are dictated by external events.

There’s obviously room for disagreement, but most people will agree that the Cold War and 9/11 meant higher defense spending, regardless of which party controlled the White House. Similarly, the collapse of the Soviet Empire inevitably meant lower military expenditures, regardless of whether Republicans or Democrats were in charge.

So let’s now look at primary spending after subtracting defense outlays (still adjusting for inflation, of course). All of a sudden, Reagan jumps to the top of the list by a comfortable margin. LBJ and W continue to score poorly, but Nixon takes over last place.

But it’s also worth noting that Obama still scores relatively well, beating Clinton for second place. Inflation-adjusted domestic spending (which is mostly what we’re measuring) has grown by 2.0 percent annually during his three years in office.

So does that mean Obama deserves re-election? Well, before you answer, I want to make one final calculation. Just as there are good reasons to exclude interest payments because they’re not something a president can control, we also should take a look at what spending would be if we don’t count the cost of bailouts.

To be sure, these types of expenditures can be controlled, but if we go with the assumption that the federal government was going to re-capitalize the banking system (whether using the good FDIC-resolution approach or the corrupt TARP approach), then it seems that Presidents shouldn’t get arbitrary blame or credit simply because some financial institutions failed during their tenure.

So let’s take the preceding set of numbers and subtract out the long-run numbers for deposit insurance, as well as the TARP outlays since 2009. And keep in mind that repayments of TARP monies (as well as deposit insurance premiums) show up in the budget as “negative spending.”

As you can see, this produces a remarkable result. All of a sudden, Obama drops from second to second-to-last.

This is because there was a lot of TARP spending in Bush’s last fiscal year (FY2009), which created an artificially high benchmark. And then repayments by banks during Obama’s fiscal years counted as negative spending.

When you subtract out the big TARP spending surge, as well as the repayments, then Bush 43 doesn’t look quite as bad (though still worse than Carter and Clinton), while Obama takes a big fall.

In other words, Obama’s track record does show that he favors an expanding social welfare state. Outlays on those programs have jumped by 7.0 percent annually. And that’s after adjusting for inflation! Not as bad as Nixon, but that’s not saying much since he was one of America’s most statist presidents.

Allow me to conclude with some caveats. None of the tables perfectly captures what any president’s fiscal record. Even my first table may be wrong if you want to blame or credit presidents for the inflation that occurs on their watch. And there certainly are strong arguments that bailout spending and defense spending are affected by presidential policies rather than external events.

And keep in mind that presidents don’t have full power over fiscal policy. The folks on Capitol Hill are the ones who actually enact the bills and appropriate the money.

Moreover, the federal government is akin to a big rusty cargo ship that is traveling in a certain direction, and presidents are like tugboats trying to nudge the boat one way or the other.

But enough equivocating. The four different tables at least show more clearly which presidents presided over faster-growing government or slower-growing government. More importantly, the various tables provide a good idea of where most of the new spending was taking place.

We can presumably say Reagan and Clinton were comparatively frugal, and we can also say that Nixon, LBJ, and Bush 43 were relatively profligate. As for Obama, I think his tugboat is pushing in the wrong direction, but it’s only apparent when you strip out the distorting budgetary impact of TARP.

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Elizabeth Warren is a left-wing hack running for the United States Senate in Massachusetts. For a while, her only claim to fame was that she got statists all excited when she asserted that rich people only became wealthy because of government.

Professor Russ Roberts of George Mason University demolished that silly claim, pointing out that the vast majority of federal government spending is not for genuine public goods that help a market economy function.

And who can forget the hilarious parody showing what Warren’s redistributionist philosophy would mean if applied to attractive women.

But now Ms. Warren has become infamous for a different reason. It seems that she lied about having American Indian heritage in order to gain preferential status for teaching positions at law schools. This has generated new displays of humor, including this wicked video (featuring a cameo appearance by Anthony Weiner!).

This video was made by some Republicans, so they obviously have a partisan agenda, but there’s a very good point about Warren exploiting indigenous people for personal gain.

Indeed, there was something vaguely familiar about this entire kerfuffle. And then it hit me. Elizabeth Warren is the 21st Century version of “Soul Man”!

As you can see from this movie trailer, “Soul Man” was a 1986 film about a white kid who pretends to be black to gain a scholarship to Harvard Law School.

I don’t want to spoil the film, but I will say that the kid learns a very important lesson and gives up his scholarship to a real black person. Sadly, Elizabeth Warren does not have the same moral character. So in this 2012 version of the film, “Soul Woman” has dug in her heels (moccasins?) and is refusing to behave honorably and resign her position and apologize.

I suppose there’s a lesson in this story about racial preferences, particularly the way they have corrupted higher education.

But that’s secondary. This is an issue of individual integrity. If we assume that Harvard Law School wanted to hire a minority to satisfy the diversity crowd, then Elizabeth Warren did take a job that otherwise would have gone to someone else. The same is true about her previous teaching positions.

Hollywood, at least in the 1980s, knew that was wrong and made a movie mocking that kind of scam.

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I sometimes wonder whether journalists have the slightest idea of how capitalism works.

In recent weeks, we’ve seen breathless reporting on the $2 billion loss at JP Morgan Chase, and now there’s a big kerfuffle about the falling value of Facebook stock.

In response to these supposed scandals, there are all sorts of articles being written (see here, here, here, and here, for just a few examples) about the need for more regulation to protect the economy.

Underlying these stories seems to be a Lake Wobegon view of financial markets. But instead of Garrison Keillor’s imaginary town where “all children are above average, we have a fantasy economy where “all investments make money.”

I don’t want to burst anyone’s bubble or shatter any childhood illusions, but losses are an inherent part of the free market movement. As the saying goes, “capitalism without bankruptcy is like religion without hell.”

Unlike today’s chattering class, King Canute understood limits to power

Moreover, losses (just like gains) play an important role in that they signal to investors and entrepreneurs that resources should be reallocated in ways that are more productive for the economy.

Legend tells us that King Canute commanded the tides not to advance and learned there are limits to the power of a king when his orders had no effect.

Sadly, modern journalists, regulators, and politicians lack the same wisdom and think that government somehow can prevent losses.

But perhaps that’s unfair. They probably understand that losses sometimes happen, but they want to provide bailouts so that nobody ever learns a lesson about what happens when you touch a hot stove.

Government-subsidized risk, though, is just as foolish as government-subsidized success.

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I’ve written many times about the foolishness of bailing out profligate governments (or, for that matter, mismanaged banks and inefficient car companies).

Bailouts reward bad past behavior, encourage bad future behavior, and make the debt bubble bigger – thus increasing the likelihood of deeper economic problems. At the risk of stating the obvious, there’s a reason for the second word in the “moral hazard” phrase.

But I’m not surprised that politicians continue to advocate more bailouts. The latest version is the “eurobond,” sometimes referred to as “fiscal liability sharing.”

It doesn’t matter what it’s called, though, since we’re talking about the foolish idea of having Germany (with a few other small nations chipping in) guaranteeing the debt of Europe’s collapsing welfare states. Here’s how the New York Times described the issue.

When European leaders meet on Wednesday to discuss the troubles of the euro zone, France’s president will press the issue of euro bonds, his finance minister said in Berlin on Monday. …Pierre Moscovici, France’s newly appointed finance minister, traveled to Berlin for talks with his counterpart, Wolfgang Schäuble. In a news conference after the closed-door meeting, both characterized the exchange as friendly and productive, but Mr. Moscovici acknowledged that the two men, and their governments, had real differences of opinion over pooling obligations to use the credit of the strongest European countries to prop up the weaker ones, an approach achieved through euro bonds.

The good news is that the German government is opposed to this idea.

Steffen Kampeter, was much more forthcoming in reiterating German opposition to any such proposal. Mr. Kampeter called the joint bonds “a prescription at the wrong time with the wrong side effects,” in an interview with German public radio. “The government has repeatedly made clear that collective state borrowing — that is, euro bonds — are no way to overcome the current crisis,” said Georg Streiter, a spokesman for Ms. Merkel on Monday. “It is still the case that the government rejects euro bonds.” …German policy makers say, euro bonds would be comparable to the United States’ agreeing to pay off Mexico’s debts, almost like a blank check for nations that are in trouble for overspending in the first place. “Euro bonds are not where the keys to heaven lie,” said Michael Hüther, director of the Cologne Institute for Economic Research, because it would “mix up risk” and act as a disincentive for less competitive economies to reform.

The bad news is that the Germans support other bad policies instead.

Ms. Merkel has signaled flexibility on some of Mr. Hollande’s ideas, including more financing for the European Investment Bank and redirecting unspent European Union funds to try to fight unemployment.

And even when Merkel opposes bad policies, she indicates she will change her mind if one bad policy is mixed with another bad policy!

…the German government is staunchly opposed to euro bonds until deeper integration and harmonization of budgetary and public spending policies have been achieved.

If Ms. Merkel genuinely believes that political and fiscal union will solve Europe’s problems, she’s probably ingesting illegal substances. Centralization of European government will have the same unfortunate pro-statist impact as centralization of American government in the 1930s and 1960s.

Integration and harmonization simply means voters in the rest of Europe will take German funds using the ballot box.

Not surprisingly, all of the international bureaucracies are on the wrong side of this issue. The NY Times story notes that the European Commission is using the fiscal crisis to push for more centralization.

The European Commission floated the idea of bonds issued jointly by euro zone governments in November, suggesting that such “stability bonds” could be created “in parallel” with moves toward closer fiscal union, rather than at the end of the process, as the German government prefers, to “alleviate tension” in sovereign debt markets. “From an economic point of view this makes sense,” a commission spokesman, Amadeu Altafaj, said Monday. “But at the end of the day this is a political decision that has to be taken by the member states of the euro area.” Mr. Altafaj added that “any form of common debt issuance requires a closer coordination of fiscal policies, moving toward a fiscal union, it is a prerequisite.”

And the Financial Times reports that the Organization for Economic Cooperation and Development, which is reflexively supportive of bigger government and more intervention, has endorsed eurobonds.

Mr Hollande…won backing from the OECD, which in its twice-yearly economic outlook specifically called for such bonds…“We need to get on the path towards the issuance of euro bonds sooner rather than later,” Pier Carlo Padoan, the OECD chief economist, told the Financial Times.

The fiscal pyromaniacs at the IMF also are pushing to make the debt bubble bigger according to the FT.

Christine Lagarde, the IMF chief, also called for more burden-sharing. Though she stopped short of explicitly backing euro bonds, she said “more needs to be done, particularly by way of fiscal liability sharing” – a thinly veiled reference to such debt instruments.

What makes this particularly frustrating is that American taxpayers provide the largest share of the subsidies that keep the IMF and OECD afloat. In other words, we’re paying for left-wing bureaucrats, who then turn around and push for bad policies that will result in bigger bailouts in the future.

Episodes like this make me understand why so many people believe in conspiracy theories. Folks watch something like this unfold and they can’t help but suspect that people in these governments and international bureaucracies want to deliberately destroy the global economy.

But as I’ve noted before, it’s not smart to believe conspiracies when corruption, incompetence, politics, ideology, greed, and self-interest provide better explanations for bad policy.

If the Europeans want to hit the self-destruct button, I’m happy to explain why it’s a bad idea, and I’m willing to educate them about better alternatives.

But I damn sure don’t want to subsidize their foolishness when they do the wrong thing.

P.S. It’s very appropriate to close this post with a link to this parody of Hitler complaining about debt crisis.

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It’s not easy being a libertarian, especially if your job is to convince the looters and moochers in Washington that they should stop pilfering. The Cato Institute is a great place to work, to be sure, but my job is akin to standing outside an all-you-can-eat buffet and trying to convince the bloated patrons to munch on celery stalks instead of going in for a 3-hour binge.

To add insult to injury, almost all of my personal interactions with government are unpleasant.

But even during my off hours, the annoying presence of government seems to follow me around. Driving back and forth to softball games this past weekend, I was irked that the radio was filled with vapid taxpayer-financed ads from fatherhood.gov and letsmove.gov.

The government apparently has so much money to burn that these empty bits of proselytizing were on conservative talk radio programs!

Now we have a new outrage to add to the list. President Obama is using $20 million of our money so a firm of PR hacks can promote Obamacare.

The Health and Human Services Department has signed a $20 million contract with a public-relations firm to highlight part of the Affordable Care Act. The new, multimedia ad campaign is designed to educate the public about how to stay healthy and prevent illnesses, an HHS official said. …The PR firm Porter Novelli won the…$20 million contract… Porter Novelli did not immediately respond to a request for comment.

If this sounds familiar, it may be because the thugs at the IRS recently decided to squander $15 million on a contract to show the tax agency’s warm and fuzzy side. Interestingly, the same Porter Novelli firm got that contract, so they must specialize in sucking on the public teat. What a bunch of reprehensible leeches.

I’m sure there are many other examples of taxpayer-funded propaganda, though the only other two episodes that I recall writing about were the Census Bureau’s grotesque $2.5 million ad during the Super Bowl and dishonest television ads by Government Motors.

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Over the years, I’ve strenuously objected to schemes that would enable international bureaucracies to levy taxes. That’s why I’ve criticized “direct funding” proposals, most of which seem to emanate from the United Nations.

Interestingly, the American left is somewhat divided on these schemes. House Democrats have expressed sympathy for global taxes, but the Obama Administration has come out against at least certain worldwide tax proposals.

Unfortunately, proponents of global taxes are like the Energizer Bunny of big government, relentlessly pushing a statist agenda. If the world economy is growing, it’s time for a global tax. If the world economy is stagnant, it’s time for a global tax. If it’s hot outside or cold outside, it’s time for a global tax (since “global warming” is one of the justifications for global taxation, I’m not joking).

Given this ongoing threat, I’m glad that Brian Garst of the Center for Freedom and Prosperity has put together a two-page Libertas explaining why international bureaucracies should not get taxing powers or direct funding.

…it would be imprudent to give international bureaucracies an independent source of revenue. Not only would this augment the already considerable risk of imprudent budgetary practices, it would exacerbate the pro-statism bias in these organizations. …The issue of taxing powers and direct funding has become an important issue because international organizations are challenging the contribution model and pushing for independent sources of revenue. The United Nations has been particularly aggressive in pushing for global taxes, seeking to expand its budget with levies on everything from carbon to financial transactions.

He then highlights one of the most dangerous proposals, a scheme by the World Health Organization to impose a “Solidarity Tobacco Contribution.”

Another subsidiary of the United Nations, the World Health Organization (WHO), is also looking to self-fund through global taxes. The WHO in 2010 publicly considered asking for global consumer taxes on internet activity, online bill paying, or the always popular financial transaction tax. Currently the WHO is pushing for increased excise taxes on cigarettes, but with an important condition that they get a slice of the added revenue. The so-called Solidarity Tobacco Contribution would provide billions of dollars to the WHO, but with no ability for taxpayers or national governments to monitor how the money is spent.

I have to give the left credit. They understand that few people are willing to defend tobacco, so proposing a global tax on cigarettes sounds noble, even though the real goal is to give the WHO a permanent stream of revenue.

Brian explains, though, why any global tax would be a mistake.

What all of these proposals have in common – in addition to their obvious intended use in promoting statist policies – is that they would erode the influence of national governments, reduce international accountability, promote waste, and undermine individual sovereignty and liberty. …Before long, international organizations will begin proposing – no doubt in the name of efficiency or reducing the burden on nation states – that affected taxpayers withhold and transfer taxes directly to the international body. This would effectively mean the end of the Westphalian system of sovereign nation states, and would result in a slew of new statist policies, and increased waste and corruption, as bureaucrats make use of their greater freedom to act without political constraint.

He concludes by noting that a global tobacco tax would be the proverbial camel’s nose under the tent. Once the statists succeed in imposing the first global tax, it will simply be a matter of time before additional levies are imposed.

National governments should not be fooled. Any sort of taxing power or direct funding for international bureaucracies would undermine national sovereignty. More importantly, it will further weaken the ability of people to influence and control the policies to which they are subjected. Moreover, once the first global tax is imposed, the floodgates will be opened for similar proposals.

The point about fiscal sovereignty is also important. Not because national governments are keen to adopt good policy, but because nations at least have to compete against each other.

Over the years, tax competition among governments has led to lower tax rates on personal and corporate income, as well as reductions in the double taxation of income that is saved and invested.

Politicians don’t like being pressured to lower tax rates, which is why international bureaucracies such as the Organization for Economic Cooperation and Development, acting on behalf of Europe’s welfare states, are pushing to undermine tax competition. But so long as there’s fiscal sovereignty, governments will have a hard time imposing confiscatory tax burdens.

Any form of global taxation, however, cripples this liberalizing process since taxpayers would have no safe havens.

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One of the big stories from Washington is that there may be another fight over the debt limit, which could mean…gasp, hide the women and children…gridlock, downgrades, government shutdown, default, and tooth decay.

Okay, perhaps not tooth decay, but the DC establishment nonetheless is aghast.

Last year, there were actually two big confrontations between House Republicans and President Obama.

The first fight occurred early in the year and revolved around spending levels for the remainder of the 2011 fiscal year. I explained in February of that year how advocates of smaller government could prevail in a government shutdown fight, especially since the “essential” parts of the government wouldn’t be affected.

But I wasn’t surprised when GOPers buckled under pressure and accepted a deal that – at best – could be categorized as a kiss-your-sister compromise (and, as I noted elsewhere, our sister wasn’t Claudia Schiffer).

Then we had the big debt limit fight later in the year, which led to absurd claims that failure to increase the debt limit would lead to default – even though the federal government was collecting ten times as much revenue as was needed to pay interest on the debt.

Once again, Republicans were unable to withstand the demagoguery and they basically gave Obama what he wanted after agreeing to a “supercommittee” that was designed to seduce them into a tax increase.

Now the game is about to start over. It’s deja vu all over again, as Yogi Berra might say.

Here’s some of what the L.A. Times reported.

Republicans in Congress are heading into summer much the way they did last year — instigating a showdown with the White House by demanding massive federal budget cuts in exchange for what used to be the routine task of raising the nation’s debt limit to pay the government’s bills. House Speaker John A. Boehner (R-Ohio) is doubling down on the strategy that ended in mixed results last year after the country came to the brink of a federal default before a deal was struck with President Obama. In that go-round, both sides saw their approval ratings with voters plummet and the nation’s credit was downgraded. …The risk for Republicans is not only in presenting another high-stakes showdown at a time when voters have grown weary of the gridlock in Washington.

The reporter’s assertion that the debt limit fight led to the downgrade is a bit silly, as I explain here, but that’s now part of the official narrative.

On a separate matter, I can’t help but shake my head with frustration that GOPers still haven’t learned that America’s fiscal problem is too much spending, and that deficits and debt are symptoms of that problem. Here’s another passage from the L.A. Times story.

“The issue is the debt,” Boehner said Sunday on ABC’s “This Week With George Stephanopoulos.” “Dealing with our deficit and our debt would help create more economic growth in the United States and it would lift this cloud of uncertainty that’s causing employers to wonder what’s next.”

No, Mr. Speaker. The problem is spending, spending, spending.

Returning to the main issue, the debt limit isn’t the only big fiscal fight that may happen this year. There will also be the spending bills for the 2013 fiscal year, which starts on October 1 of this year. That will mean another fight, particularly since the left has no intention of abiding by the spending limit that was part of last year’s debt limit deal.

And if Republicans hold firm, that means another “government shutdown.” Though it really should be called a “government slowdown” since it’s only the non-essential bureaucrats who get sent home.

In any event, since I’m glum about the likelihood of anything good happening, let’s at least enjoy some good cartoons from Jeff MacNelly. He passed away a number of years ago, but these cartoons from the mid-1990s are just as applicable today as they were then.

These are amusing cartoons, so long as you don’t actually think about the fact that government is bloated in part because Washington is littered with programs, departments, and agencies that are filled with non-essential bureaucrats. And don’t forget that these bureaucrats are overpaid, getting, on average, twice the compensation of workers in the productive sector of the economy.

But I don’t want to end this post on a sour note, so here are some good jokes from the late-night comics about government shutdowns.

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I hope you’re a libertarian already. But if you’re not, I hope you’ll be one after you finish reading this post.

And if you’re not a libertarian after reading this post, I suggest you emigrate to Zimbabwe, or some other place where government has unchecked and arbitrary power to steal. You’ll feel right at home.

This post is about the disgusting practice of “asset forfeiture,” which is basically a scheme that allows government to steal people’s property and money.

I’ve already posted a great video from the Institute for Justice about this topic, and I also suggest you read this horror story and this nauseating episode to see how asset forfeiture works in the real world.

Now let’s look at two new examples of theft by government.

Let’s start with some excerpts from a George Will column.

Russ Caswell, 68, is bewildered: “What country are we in?” He and his wife, Pat, are ensnared in a Kafkaesque nightmare unfolding in Orwellian language. This town’s police department is conniving with the federal government to circumvent Massachusetts law — which is less permissive than federal law — to seize his livelihood and retirement asset. In the lawsuit titled United States of America v. 434 Main Street, Tewksbury, Massachusetts, the government is suing an inanimate object, the motel Caswell’s father built in 1955. The U.S. Department of Justice intends to seize it, sell it for perhaps $1.5 million and give up to 80 percent of that to the Tewksbury Police Department, whose budget is just $5.5 million. The Caswells have not been charged with, let alone convicted of, a crime.

Is Will’s language over the top? Hardly, as you can see from this excerpt. The government is trying to steal the hotel because a tiny percentage of guests engaged in victimless crimes.

Since 1994, about 30 motel customers have been arrested on drug-dealing charges. Even if those police figures are accurate — the police have a substantial monetary incentive to exaggerate — these 30 episodes involved less than 5/100ths of 1 percent of the 125,000 rooms Caswell has rented over those more than 6,700 days. Yet this is the government’s excuse for impoverishing the Caswells by seizing this property, which is their only significant source of income and all of their retirement security. The government says the rooms were used to “facilitate” a crime. It does not say the Caswells knew or even that they were supposed to know what was going on in all their rooms all the time. Civil forfeiture law treats citizens worse than criminals, requiring them to prove their innocence — to prove they did everything possible to prevent those rare crimes from occurring in a few of those rooms. What counts as possible remains vague.

Amazing. You’re guilty until you prove yourself innocent, even though you’ve done nothing wrong.

The government officials should be the ones arrested and thrown in jail.

Now let’s look at a Huff Post column by Radley Balko.

When the Brown County, Wis., Drug Task Force arrested her son Joel last February, Beverly Greer started piecing together his bail. She used part of her disability payment and her tax return. Joel Greer’s wife also chipped in, as did his brother and two sisters. On Feb. 29, a judge set Greer’s bail at $7,500, and his mother called the Brown County jail to see where and how she could get him out. “The police specifically told us to bring cash,” Greer says. “Not a cashier’s check or a credit card. They said cash.” So Greer and her family visited a series of ATMs, and on March 1, she brought the money to the jail, thinking she’d be taking Joel Greer home. But she left without her money, or her son. Instead jail officials called in the same Drug Task Force that arrested Greer. A drug-sniffing dog inspected the Greers’ cash, and about a half-hour later, Beverly Greer said, a police officer told her the dog had alerted to the presence of narcotics on the bills — and that the police department would be confiscating the bail money.

You probably can figure out the rest of the story. Radley’s column has a lot of additional details, but here are a couple of passages to whet your appetite.

The Greers had been subjected to civil asset forfeiture, a policy that lets police confiscate money and property even if they can only loosely connect them to drug activity. The cash, or revenue from the property seized, often goes back to the coffers of the police department that confiscated it. It’s a policy critics say is often abused, but experts told The HuffPost that the way the law is applied to bail money in Brown County is exceptionally unfair. It took four months for Beverly Greer to get her family’s money back, and then only after attorney Andy Williams agreed to take their case. “The family produced the ATM receipts proving that had recently withdrawn the money,” Williams says. “Beverly Greer had documentation for her disability check and her tax return. Even then, the police tried to keep their money.” …Civil asset forfeiture is based on the premise that a piece of property — a car, a pile of cash, a house — can be guilty of a crime. Laws vary from state to state, but generally, law enforcement officials can seize property if they can show any connection between the property and illegal activity. It is then up to the owner of the property to prove in court that he owns it or earned it legitimately. It doesn’t require a property owner to actually be convicted of a crime. In fact, most people who lose property to civil asset forfeiture are never charged.

It’s probably worth noting that this is another example of government stealing when the underlying offense was a victimless crime. I reckon this must be a turbo-charged version of Mitchell’s Law.

P.S. Just in case you’re pro-Drug War, here are some examples of government thuggery that don’t involve persecution of victimless crimes. This post shows how the IRS can run amok, engaging in brutal persecution. And here’s a story of the government targeting a low-level person for inexplicable reasons.

Both these stories should turn you into a raving libertarian. In which case, welcome to the club!

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It seems that there’s nothing but bad news coming from Europe. Whether we’re talking about fake austerity in the United Kingdom, confiscatory tax schemes in France, or bailouts in Greece, the continent seems to be a case study of failed statism.

But that’s not completely accurate. Every so often I highlight good news, such as Switzerland’s successful spending cap, Sweden’s shift to the right on spending, Germany’s wise decision not to be Keynesian, and Portugal’s admission that “stimulus” doesn’t work.

Admittedly, the good news from Europe is oftentimes merely the failure to do something bad. But I’ll take victories in any form.

And that’s why I’m happy that Austria and Luxembourg are blocking a misguided European Commission plan to undermine financial privacy in order to increase double taxation of income that is saved and invested.

Here are some cheerful passages from a story in the EU Observer.

“Completely unjustifiable … grossly unfair … a mystery” – the European Commission and the Danish EU presidency have given Austria and Luxembourg a tongue-lashing for protecting tax evaders. The harsh words came after the two countries on Tuesday (15 May) blocked the commission from holding talks with Switzerland on a new savings tax law designed to recoup some of the estimated €1 trillion a year lost to EU exchequers in tax fraud and evasion. Tax commissioner Algirdas Semeta in a press conference in Brussels said: “The position that Austria and Luxembourg have taken on this issue is grossly unfair. They are hindering 25 willing member states from improving tax compliance and finding additional sources of income.” …Danish economic affairs minister Margrethe Vestager took his side. “It is a mystery why we shouldn’t move on making people pay the taxes that they should pay,” she noted. She described Austria and Luxembourg’s decision as “unfortunate.” For their part, Luxembourg and Austria have declined to publicly explain why they are against the move. Semeta on Tuesday indicated they object to “automatic transfer” of tax data between EU countries and Switzerland, even though the alternative is trusting Switzerland to decide which data it gives and which it withholds. He added that automatic exchange is becoming the international gold standard in the field, with “the US moving in the same direction.”

The quote from the Danish economic affairs minister is especially nauseating. It’s not the “taxes that they should pay.” It’s the “taxes that greedy politicians demand.”

Good tax policy is predicated on the notion that there should not be a bias against income that is saved and invested. This is because double taxation undermines capital formation and thus reduces long-run growth.

Yet European politicians, like many of their American counterparts, are drawn to class warfare tax policy and can’t resist trying to penalize the “evil rich.”

So let’s tip our proverbial hats to Austria and Luxembourg. This is probably just a short-term victory over the unrelenting forces of statism, but let’s enjoy it while it lasts.

P.S. This European kerfuffle is a fight over tax competition vs. tax harmonization. To understand why financial privacy and fiscal sovereignty are desirable, watch the four-part video series at this post.

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Most of my work on government stimulus focuses on economic theory and evidence.

But every so often it’s a good idea to remind ourselves of the ridiculous ways that government wastes money.

Here are some details from a boondoggle in West Virginia.

Nobody told Hurricane librarian Rebecca Elliot that the $22,600 Internet router in the branch library’s storage closet was powerful enough to serve an entire college campus. Nobody told Elliot how much the router cost or who paid for it. Workers just showed up and installed the device. They left behind no instructions, no user manual. The high-end router serves four public computer terminals at the small library in Putnam County. …The state of West Virginia is using $24 million in federal economic stimulus money to put high-powered Internet computer routers in small libraries, elementary schools and health clinics, even though the pricey equipment is designed to serve major research universities, medical centers and large corporations, a Gazette-Mail investigation has found. …The Cisco 3945 series routers, which cost $22,600 each, are built to serve “tens of thousands” of users or device connections, according to a Cisco sales agent. The routers are designed to serve a minimum of 500 users. Yet state broadband project officials directed the installation of the stimulus-funded Cisco routers in West Virginia schools with fewer than a dozen computers and libraries that have only a single terminal for patrons.

Sounds like the government could have bought every user a laptop and squandered less money.

It’s important to realize that this type of boondoggle is the rule, not the exception. Every so often, we see stories about absurd waste, such as the $423,000 study to find out that men don’t like to wear condoms, the Pentagon spending $900 on a $7 control switch, or a $100,000 library grant to a city without a library.

We should get upset about these examples. But remember that the second cartoon in this post is exactly right. The waste, fraud, and pork that we find out about is dwarfed by what remains hidden.

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Singapore has been in the news because one of the Facebook billionaires has decided to re-domicile to that low-tax jurisdictions.

Some American politicians reacted by blaming the victim and are urging tax policies that are disturbingly similar to those adopted by totalitarian regimes such as the Soviet Union and Nazi Germany.

Maybe they should go on one of their fancy junkets instead and take a visit to Hong Kong and Singapore. Even with first-class airfare and 5-star hotels, taxpayers might wind up benefiting if lawmakers actually paid attention to the policies that enable these jurisdictions to grow so fast.

They would learn (hopefully!) some of what was just reported in the Wall Street Journal.

Facebook  co-founder Eduardo Saverin’s recent decision to give up his U.S. citizenship in favor of long-term residence in Singapore has drawn fresh attention to the appeal of residing and investing in the wealthy city-state and other parts of Asia, where tax burdens are significantly lighter than in many Western countries. …Some 100 Americans opted out of U.S. citizenship in Singapore last year, almost double the 58 that did so in 2009, according to data from the U.S. Embassy in Singapore. …The increase of Americans choosing to renounce their citizenship comes amid heated tax debates in the U.S. Many businesses and high-income individuals are worried…[about]…tax increases in future years.

It’s not just that America is moving in the wrong direction. That’s important, but it’s also noteworthy that some jurisdictions have good policy, and Hong Kong and Singapore are always at the top of those lists.

The Asian financial hubs of Singapore and Hong Kong, on the other hand, have kept personal and corporate taxes among the lowest in the world to attract more foreign investment. Top individual income-tax rates are 20% in Singapore and 17% in Hong Kong, compared with 35% at the federal level in the U.S., according to an Ernst & Young report. The two Asian financial centers have also been praised by experts for having simpler taxation systems than the U.S. and other countries. …The tax codes are also more transparent so that many people don’t require a consultant or adviser.

Keep in mind that Hong Kong and Singapore also avoid double taxation, so there’s nothing remotely close to the punitive tax laws that America has for interest, dividends, capital gains, and inheritances.

One reason they have good tax policy is that the burden of government spending is relatively modest, usually less than 20 percent of economic output (maybe their politicians have heard of the Rahn Curve!).

No wonder some Americans are shifting economic activity to these pro-growth jurisdictions.

“The U.S. used to be a moderate tax jurisdiction compared with other countries and it used to be at the forefront of development,” said Lora Wilkinson, senior tax consultant at U.S. Tax Advisory International, a Singapore-based tax services firm that specializes in U.S. taxation laws. Now “it seems to be lagging behind countries like Singapore in creating policies to attract business.” She said she gets at least one query per week from Americans who are interested in renouncing their citizenship in favor of becoming Singaporeans. …Asian countries offer a business climate and lifestyle that many find attractive: “America is no longer the Holy Grail.”

That last quote really irks me. I have a knee-jerk patriotic strain, so I want America to be special for reasons above and beyond my support for good economic policy.

But the laws of economics do not share my sentimentality. So long as Hong Kong and Singapore have better policy, they will grow faster.

To get an idea of what this means, let’s look at some historical data from 1950-2008 on per-capita GDP from Angus Maddison’s database. As you can see, Hong Kong and Singapore used to be quite poor compared to the United States. But free markets, small government, and low taxes have paid dividends and both jurisdictions erased the gap.

Wow, America used to be 4 times richer, and that huge gap disappeared in just 60 years. But now let’s look at the most recent data from the World Bank, showing Gross National Income for 2010.

It’s not the same data source, so the numbers aren’t directly comparable, but the 2010 data shows that the United States has now fallen behind both Hong Kong and Singapore.

These charts should worry us. Not because it’s bad for Hong Kong and Singapore to become rich. That’s very good news.

Instead, these charts are worrisome because trend lines are important. Here’s one final chart showing how long it takes for a nation to double economic output at varying growth rates.

As you can see, it’s much better to be like Hong Kong and Singapore, which have been growing, on average, by more than 5 percent annually.

Unfortunately, the United States has not been growing as fast as Hong Kong and Singapore. Indeed, last year I shared some data from a Nobel Prize winner, which showed that America may have suffered a permanent loss in economic output because of the statist policies of Bush and Obama.

What makes this so frustrating is that we know the policies that are needed to boost growth. But those reforms would mean less power for the political class, so we face an uphill battle.

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I’ve explained before that “high-speed rail” is a boondoggle, and I’ve also posted a thorough presentation on the topic from the folks at Reason about this issue.

But some politicians can’t resist throwing good money after bad on these money-losing schemes. The latest example is from the People’s Republic of California, where Governor Jerry Brown is acting as if he wants the state to become a basket case.

Here are some passages from the Wall Street Journal’s editorial on the topic.

The good news in this debacle is that the state’s fiscal woes will make it nearly impossible to complete Governor Jerry Brown’s runaway high-speed rail train. The bad news is that the Governor is going to try anyway. Transportation experts warn that the 500-mile bullet train from San Francisco to Los Angeles could cost more than $100 billion, though the Governor pegs the price at a mere $68 billion. The state has $12.3 billion in pocket, $9 billion from the state and $3.3 billion from the feds, but Mr. Brown hasn’t a clue where he’ll get the rest. …In 2008 voters approved $9 billion in bonds for construction under the pretense that the train would cost only $33 billion and be financed primarily by the federal government and private enterprise. Investors, however, won’t put up any money because the rail authority’s business plans are too risky. Rail companies have refused to operate the train without a revenue guarantee, which the ballot initiative prohibits. Even contractors are declining to bid on the project because they’re worried they won’t get paid. Mr. Brown is hoping that Washington will pony up more than $50 billion, but the feds have committed only $3.3 billion so far—and Republicans intend to claw it back if they take the Senate and White House this fall. If that happens, the state won’t have enough money to complete its first 130-mile segment in the lightly populated Central Valley, which in any event wouldn’t be operable since the state can’t afford to electrify the tracks. …Mr. Brown and the White House are betting that the state will be in far too deep when the money runs out to abandon this mission on Camino Unreal. The Governor also figures that the $100 billion bill will seem smaller spread out over 30 years. What’s an extra $3 billion a year when the state’s already $16 billion in the hole?

The uncharitable part of me is thinking “Good, these morons are getting exactly what they deserve since voters were foolish enough to approve the 2008 referendum.”

But even though I think there is a value in having bad examples (whether cities or countries), it is tragic to see a beautiful state destroyed by reckless politicians and their big-government schemes.

I wrote that year that the last job creator to leave California should make sure to turn off the lights. I doubt that will be necessary since the electrical system probably will have failed by that time.

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I wrote about Julia the Moocher earlier this month, linking the Obama campaign’s make-believe leech with a real-world Greek woman who thought the government should take care of her.

I also shared an amusing parody of Julia by Iowahawk (the creator of the famous Pelosi car commercial).

Now Michael Ramirez has weighed in, producing a great cartoon about Obama’s dream woman.

Needless to say, Julia is the type of person who believes in riding in the wagon rather than pulling it. Heck, she wants the wagon to be a party bus, as suggested by this cartoon about the rise and fall of the welfare state.

My daughter’s given me a few gray hairs, but thankfully she didn’t turn into a slug like Julia.

P.S. Some of my favorite Ramirez cartoons can be seen here, here, hereherehereherehereherehere, and here.

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I posted yesterday about visiting the United Nations to participate in “The High Level Thematic Debate on the State of the World Economy.”

There were five speakers on my panel, including yours truly. Here are my thoughts on what the others said.

Dr. Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development, must have been part of the buzz-word contest I mentioned yesterday. Lots of rhetoric that theoretically was inoffensive, but I had the feeling that it translated into a call for more government. But maybe I’m paranoid SOB, so who knows.

Professor Dato’ Dr. Zaleha Kamaruddin, Rector of the International Islamic University of Malaysia, was an interesting mix. At some points, she sounded like Ron Paul, saying nice things about the gold standard and low tax rates. But she also called for debt forgiveness and other forms of intervention. She explicitly said she was providing Islamic insights, so perhaps the strange mix makes sense from that perspective.

Former Senator Alan K. Simpson also was a mixed bag. Simpson was co-chair of Obama’s fiscal commission, which I thought was a disappointment because it endorsed higher taxes and urged sub-par entitlement changes rather than much-needed structural reforms. He also went after Grover Norquist because of the no-tax pledge, which I think is a valuable tool to keep Republicans from selling out for bigger government. All that being said, Senator Simpson is a promoter of smaller government and he wants lower tax rates. So while I disagree with some of his tactical decisions, he was an ally on the panel and would probably do a pretty good job if he was economic czar.

Last but not least, Professor Jeffrey Sachs of Columbia University was a statist, as one would expect based on what I wrote about him last year. We clashed the most, arguing about everything from tax havens to the size of government. Interestingly, we both said nice things about Sweden, but I was focusing on policies such as school choice and pension reform, while he admired the large public sector. But I will admit he was a nice guy. We sat next to each other and did find a bit of common ground in that we both were sympathetic to the way Sweden dealt with its financial crisis about 20 years ago (a version of the FDIC-resolution approach rather than the corrupt TARP bailout approach).

My message, by the way, was very simple. Higher taxes won’t work. The “growth” vs. “austerity” debate in Europe is really a no-win fight between those who want higher spending vs. those who want higher taxes. The only good answer is to restrain spending with…you guessed it, Mitchell’s Golden Rule.

I’m not safely out of New York City, and I promise I didn’t drink any of the Kool-Aid. I’m still a critic of international bureaucracies. And I wouldn’t allow myself to be bought off by a lavish, tax-free job at the United Nations.

Unless, perhaps, it was a Special Envoy position with Angelina Jolie.

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I’m at the United Nations in New York City for something called “The High Level Thematic Debate on the State of the World Economy.”

Most speakers so far, including the Secretary General of the United Nations, the President of the European Commission, Paul Volcker, and Professor Joseph Stiglitz, have to varying degrees blamed private markets and called for more government.

I speak later today as part of a roundtable on the economic crisis (see full schedule here), and I will be offering a different point of view.

The other thing I’ve noticed is the over-use of certain terms. Reminded me of the state-of-the-union bingo game about Obama’s buzz words. It seems every speaker was required to use all of the following phrases.

From a philosophical perspective, I’d rather be sitting next to the Liechtenstein delegation

  • “sustainable development”
  • “equitable growth”
  • “forward looking”
  • “transparent”
  • “interdependence”
  • “collective action”
  • “firewalls”
  • “women and youth”

Other than “collective action,” these are all fine concepts. Unfortunately, most of the speakers use them as part of speeches urging more statism.

Assuming I don’t get burnt at the stake for heretical thoughts, I’ll give an update tomorrow on how my remarks were received.

I will say, though, that at least the United Nations is willing to have contrary voices – unlike the Organization for Economic Cooperation and Development, which threatened to cancel a Global Tax Forum because of my short-lived participation.

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A few months ago, I wrote some very nice things about a budget plan put together by Senator Rand Paul of Kentucky, noting that:

Senator Paul and his colleagues are highlighting the fact that the plan generates a balanced budget in just five years. That’s a good outcome, but it should be a secondary selling point. All the good results in the plan – including the reduction in red ink and the flat tax – are made possible because the overall burden of federal spending is lowered.

Not surprising, one of the columnists at the Washington Post has a different perspective. In his hyperventilating column today, Dana Milbank says that Senator’s Paul’s proposal is “monstrous” and “nasty” for reining in the federal government.

The tea party darling’s plan would, among other things, cut the average Social Security recipient’s benefits by nearly 40 percent, reduce defense spending by nearly $100 billion below a level the Pentagon calls “devastating,” and end the current Medicare program in two years — even for current recipients, according to the Senate Budget Committee staff. It would eliminate the education, energy, housing and commerce departments, decimate homeland security, eviscerate programs for the poor, and give the wealthy a bonanza by reducing tax rates to 17 percent and eliminating taxes on capital gains and dividends. It is, all in all, quite a nasty piece of work.

Setting aside some of the inaccuracies (Social Security benefits would rise, for instance, but not as fast as they would under current law), I have two reactions to Milbank’s screed.

1. Milbank seems to think that Rand Paul’s budget is heartless and mean. Does that mean it would be nice and caring to let America descend into Greek-style fiscal chaos and economic decline? Should the United States be more like Europe, even though living standards are about 30 percent lower?

2. More amusingly, what does he think about the fact that the Senate voted against Obama’s tax-and-spend budget by a stunning margin of 99-0? That’s even worse than the 97-0 vote against the budget Obama proposed last year. The 16 votes for Rand Paul’s budget may not sound like much, but 16 is a lot more than zero.

Setting aside the snarky comments, all that Rand Paul is proposing is to limit the growth of government so that the federal budget grows by an average of about 2 percent annually.

Other nations, such as Canada and New Zealand were much more frugal when they solved their fiscal problems. But for leftists such as Milbank, any fiscal restraint apparently is “nasty” and “monsrous.”

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