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Archive for the ‘England’ Category

It’s time for an updated version of the U.S. vs U.K. government stupidity contest.

This ongoing series has featured amazing feats of inane government, including the world’s most pointless road markings, photo-ID requirements for drain cleaner purchases, and a government so incompetent that it couldn’t give money away.

Today’s contest, though, is going to focus on examples of wimpiness from both sides of the Atlantic.

Here’s an excerpt from a story out of the United Kingdom. Apparently, one neurotic mother thinks her son is some sort of incompetent misfit.

OMG, he’s going to become a serial killer!!

A mother was left horrified after her 10-year-old son returned form Tesco’s supermarket with a pumpkin carving kit which included a sharp serrated blade. Natalie Greaves from Sheffield in South Yorkshire described her reaction to Shay returning home with the one pound kit: ‘I went berserk when he came home with it. ‘I couldn’t believe that he could pick that sort of thing up as a child – there should have been an age restriction on it.’

“Horrified”? “Beserk”? You must be kidding. If there’s someone in that family who shouldn’t be allowed around sharp objects, it’s the mother.

It’s almost enough to make me think the kid would be better off in foster care, notwithstanding my libertarian instincts that even bad homes are oftentimes better than state control.

But I also wonder what this says about the entire nation. Back in 2012, I shared some laughably pathetic examples of anti-gun political correctness from the United Kingdom and wondered how such inane behavior could exist in a country that “once ruled half the world.”

Needless to say, this story doesn’t reflect well on our cousins across the ocean.

But Americans are in no position to make fun of others since there are plenty of examples of brain-dead political correctness in the United States.

After all, you don’t want to throw stones if you live in a glass house. And when it comes to absurd anti-gun hysteria, government schools make Americans look like infantile idiots.

Here are parts of a story from a local news outlet in Alabama.

A Mobile mother is not happy about a controversial Mobile County School contract her daughter signed without her consent. The contract promises that her daughter will not kill or injure herself and others. …She said E R Dickson school officials crossed the line when they had her daughter sign a Mobile County Public Safety Contract without her being present.

This sounds serious. Are we talking about a 16-yr old gang member? A 17-yr old with psychiatric issues? A 15-yr old with a history of violence.

Ummm…not exactly.

The student, a 5-yr old girl named Elizabeth, was playing like a normal kid. Here are some of the details.

School officials told Rebecca they had to send Elizabeth home after an incident in class.  “They told me she drew something that resembled a gun,” said Rebecca. “According to them she pointed a crayon at another student and said, ‘pew pew,” said Rebecca. She said her child was given a questionnaire to evaluate her for suicidal thoughts. “[They] Asked her if she was depressed now,” said Rebecca. Without her permission, Rebecca said her child was given the Mobile County Public School Safety Contract to sign stating she wouldn’t kill herself or others. “While I was in the lobby waiting they had my 5-year-old sign a contract about suicide and homicide,” said Rebecca. …Rebecca is pushing to have the incident removed from her child’s record. She said school officials have requested Elizabeth see a psychiatrist.

As I’ve argued before, in cases like this it’s the school bureaucrats who need counseling.

So which nation wins the prize for the worst example of P.C. wimpiness?

I’m ashamed to say that the United States probably deserves that dubious honor. After all, the story from the U.K. involves one weird parent while the U.S. story involves a deliberate decision by an arm of government.

Though I will point out that it’s not just one screwy parent in the United Kingdom. Wimpiness appears to be pervasive.

The mum-of-three checked online and found similar carving kits with restrictions allowing only people over-18 to buy it. A Tesco spokesperson responded to this mother’s anger… ‘We were concerned by this incident and acted immediately to ensure all pumpkin carving knives will trigger an age restriction till prompt.’

So maybe the U.K. story belongs in the U.K. vs. U.S. private sector political correctness contest.

P.S. Let’s shift to a different topic. I recently wrote that the jihad against tobacco at the U.N.’s World Health Organization was a classic (and tragic) case of resources being diverted from something that genuinely matters, such as fighting deadly infectious disease.

A column in the Wall Street Journal makes the same point, only it identifies the silly crusade against sugar as the main example of mission creep.

The WHO’s record of handling epidemics over 30 years reveals a health system that is getting worse, not better. On at least four occasions the U.N. organization has failed to deal with major outbreaks of communicable disease. …The list of internal problems that cause the WHO to fumble when faced with an epidemic is no secret. …an array of disparate programs within the WHO—such as the current crusade against processed sugar and sugar beverages—have diverted time, attention and money from higher priorities, such as tracking and responding to epidemic diseases.

And the Washington Examiner has opined on the same issue.

Years of dramatically overstaffed city agencies, over-generous retirement promises to public employee unions, and white-elephant development projects had left the city unable to police its streets, keep street lamps on, maintain parks, or provide other basic government services, no matter how much the city government raised taxes. The lesson of Detroit is one that governments everywhere can learn: In a world with finite resources, governments that try to do too much end up neglecting even the essential. Detroit’s case is a microcosm of what Americans are now experiencing nationwide in several different areas — the evident inability of public health officials to manage the Ebola scare competently is just one of them. The Centers for Disease Control and Prevention, the agency that instructed a mildly symptomatic patient with known exposure to Ebola to board a commercial flight this week, spends millions annually on bonuses for top employees, bicycle paths, farmers markets, and other luxuries. …Even if they enjoy using the money the nation has for disease control and vaccine research to fund instead research on origami condoms and to appease politically active bicyclists, public health bureaucrats might do better in the future putting their massive budgets toward basic preparedness for precisely the kind of emergency the CDC was created to address.

The link between small government and effective government is something Calvin Coolidge understood. Needless to say, that’s not the attitude of the current occupant of the White House, which is why this bit of humor is worth sharing.

I think the unintentional video on Obama’s new Ebola Czar is even funnier, but whoever put this together gets high marks for cleverness.

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It’s time to add to our collection of horror stories from the U.K.’s government-run healthcare system (previous examples can be found here, herehereherehereherehereherehere, here, here, here, here, here, here, and here).

What makes today’s story different, though, is that the bureaucracy not only is denying care to a small child, but also seeking to prevent the family from seeking treatment elsewhere.

Check out these excerpts from a blood-chilling story in USA Today.

The parents of a child suffering from a severe brain tumor signaled Monday they would defy efforts to force them to return to Britain, days after their family fled.

So why did they feel the need to escape a presumably civilized nation?

It seems government-run healthcare isn’t exactly on the cutting edge when it comes to life-saving treatments.

The family had fled to Spain in hopes of selling a property to obtain enough cash for a new treatment in the Czech Republic or the United States they hope will help their child. Police pursued them and issued an arrest warrant on suspicion of neglect after Southampton General Hospital realized their patient — Ashya King, 5 — was gone, without their consent. British authorities have made no apology for the warrant.

I can’t resist interrupting the main focus of the story at this point because the story then includes this line.

The case has riveted Britain, which is proud of a health service that offers universal care.

Maybe Brits are proud of their NHS, which would be a poor reflection on the collective IQ of the nation, but it certainly doesn’t offer universal care.

Unless, of course, you include neglect and torture in your definition of care.

Now back to our main story.

…the saga has…raised volatile questions of how much power authorities should have in interfering in some of the most sensitive of questions — and whether it has the right to insist that treatment dictates be followed. …Television images have shown the Kings being loaded into a Spanish squad car in handcuffs. When asked by the BBC on their views, the couple told the reporter they are just trying to help their child. …The family has criticized Britain’s health care system, saying he has a serious tumor that needs an advanced treatment option called proton beam therapy and that it wasn’t being made available to him. …Unlike other types of cancer treatment, it doesn’t indiscriminately kill surrounding healthy tissue, so there could be fewer long term effects.

But fear not. If little Ashya can somehow hold on until 2018, maybe the bureaucrats will be able to help.

Britain’s health department announced in 2011 it will build two treatment centers to make proton beam therapy available in London and Manchester from 2018. Until those facilities open, Britain will pay for patients eligible for the therapy to go to the USA and Switzerland for treatment. It wasn’t immediately clear why health care officials didn’t make this option available to Aysha.

As a parent, I know I would break the law if faced with the same situation.

It’s outrageous and disgusting, though, that such laws even exist.

P.S. I don’t mean to pick on the United Kingdom. We also have horror stories about government-run healthcare in the United States.

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The polling data I shared last month about confused young people was a bit of a downer, so let’s look at three different polls that are a bit more encouraging.

First, I’m glad to see that many Americans feel that government and politicians are their leading cause of daily stress.

Here’s some of what the Washington Post reported on this poll.

…much of that emotional response is completely justified. As if it weren’t enough that our politicians are actively working to harm the global economy and otherwise failing to do their jobs or even show up for work in general, they’re also stressing everyone out with the astonishing breadth and depth of their incompetence. And since high stress is linked to shorter life expectancy, they are also literally killing us with their incompetence. In other words, thanks, Obama (and everyone in Congress too).

My job is to connect the dots so that people understand that the only way to reduce stress is to make government smaller.

And, for what it’s worth, that’s the best way to make government at least semi-competent.

Our second batch of polling numbers come from Rasmussen. I’ve shared research and data on the negative impact of redistribution spending (as illustrated by this powerful chart), but I figured most Americans didn’t understand that such programs trap people in dependency.

I’m glad to read that I’m wrong. In an article entitled, “49% Believe Government Programs Increase Poverty in America,” Rasmussen reports the following.

Most Americans still believe current government anti-poverty programs have no impact on poverty in this country or actually increase it. A new Rasmussen Reports national telephone survey finds that a plurality (44%) of American Adults still think the government spends too much on poverty programs.

The Rasmussen folks also have this encouraging bit of public opinion research.

A new Rasmussen Reports national telephone survey finds that 67% of American Adults think there are too many in this country who are dependent on the government for financial aid, up slightly from 64% in September of last year.

Our third set of polling numbers come from the periodic Reason-Rupe poll.

I’ll share several pieces of data, but here are the numbers I find most encouraging. Apparently most people realize that pro-growth policy is the right approach, not class warfare and redistribution.

In terms of economic policies, 74 percent of Americans would like Congress to focus on policies to promote economic growth, while 20 percent favor policies to reduce income inequality.

I guess I’m also happy about these results, though I can’t help but think that there are some very confused folks in the Tea Party.

Fifty-five percent of Americans tell Reason-Rupe they have a favorable opinion of capitalism. Meanwhile, 36 percent of those surveyed, including 33 percent of independents and 26 percent of self-described Tea Party supporters, have a favorable opinion of socialism.

I don’t even think Obama’s a socialist, so these ostensibly anti-Obama folks apparently favor even more government than our statist President. Go figure.

Last but not least, I should like this result, but I’m actually disturbed since the margin is much smaller than it should be.

When asked about the size of government, 54 percent of Americans favor a smaller government providing fewer services. Forty-two percent favor a larger government providing more services.

P.S. Remember when I warned that the one downside to personal retirement accounts is that future politicians might steal the money?

Well, it’s happened again according to Reuters, this time in Russia.

Russia’s government has approved a plan to use contributions to employees’ privately-managed pension funds to plug budget holes for a second year running. The move was confirmed by Labour Minister Maxim Topilin on Tuesday in comments published on the ministry’s website. It has been heavily criticised by some officials and analysts, who say it will hurt the pensions industry and financial markets.

P.P.S. I was beginning to feel a bit more positive about the Tory-led government in the United Kingdom, particularly after reading about some well-designed welfare reform, significant corporate tax cuts, and postal service privatization.

Then I read something awful. And what could be worse than imposing a death tax on people who are still alive.

Savers could be forced to pay inheritance tax while they are still alive, under a new drive against tax avoidance planned by the Government. …Under plans put out for consultation, HM Revenue & Customs would have powers to subject people minimising inheritance tax to “accelerated payment” laws, meaning they would be forced to pay up front if officials suspect them of using new schemes to avoid tax. Experts have warned that under the rules, taxpayers will be treated as “guilty until proven innocent”. …there will be concerns that innocent people could be investigated and made to pay large sums before they are able to defend themselves. …Economists, tax experts and Tory MPs have called for reform of the tax, warning that it predominantly hits middle-class families.

Shame on David Cameron for allowing this to happen. But I’m not surprised given the government’s track record.

And what else would you expect from a government that brainwashes children to rat out their parents and also puts despicable Orwellian ads on subways and trains?

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Since I’m an economist, I generally support competition.

But it’s time to admit that competition isn’t always a good idea. Particularly when international bureaucracies compete to see which one can promote the most-destructive pro-tax policies.

For instance, I noted early last year that the bureaucrats at the Organization for Economic Cooperation and Development (OECD) were pushing a new scheme to increase the global tax burden on the business community.

Then I wrote later in the year that the International Monetary Fund was even more aggressive about pushing tax hikes, earning it the label of being the Dr. Kevorkian of the world economy.

That must have created some jealousy at the OECD, so those bureaucrats earlier this year had a taxpalooza party and endorsed a plethora of class-warfare tax hikes.

Now the IMF has responded to the challenge and is pushing additional tax increases all over the world.

For example, the bureaucrats want much higher taxes on energy use, both in the United States and all around the world.

This chart from the IMF shows how much the bureaucracy thinks that the tax should be increased just on coal consumption.

The chart doesn’t make much sense, particularly if you don’t know anything about “gigajoules.” Fortunately, Ronald Bailey of Reason translates the jargon and tells us how this will impact the average American household.

The National Journal reports that the tax rate would be $8 per gigajoule of coal and a bit over $3 per gigajoule of natural gas. Roughly speaking a ton of coal contains somewhere around 25 gigajoules of energy, which implies a tax rate of $200 per ton. …The average American household uses about 11,000 kilowatt hours annually, implying a hike in electric rates of about $1,100 per year due to the new carbon tax. Since the average monthly electric bill is about $107, the IMF’s proposed tax hike on coal would approximately double how much Americans pay for coal-fired electricity. A thousand cubic feet (mcf) of natural gas contains about 1 gigajoule of energy. The average American household burns about 75 mcf of natural gas annually so that implies a total tax burden of $225 per residential customer.

To be fair, the IMF crowd asserts that all these new taxes can be – at least in theory – offset by lower taxes elsewhere.

…we are generally talking about smarter taxes rather than higher taxes. This means re-calibrating tax systems to achieve fiscal objectives more efficiently, most obviously by using the proceeds to lower other burdensome taxes. The revenue from energy taxes could of course also be used to pay down public debt.

Needless to say, I strongly suspect that politicians would use any new revenue to finance a larger burden of government spending. That’s what happened when the income tax was enacted. That’s what happened when the payroll tax was enacted. That’s what happened when the value-added tax was enacted.

If you think something different would happen following the implementation of an energy tax, you win the grand prize for gullibility.

But let’s give the IMF credit. The bureaucrats are equal opportunity tax hikers. They don’t just want higher taxes in the United States. They give the same message everywhere in the world.

Here are some excerpts from an editorial about Spanish fiscal policy in the Wall Street Journal.

Madrid last month cut corporate and personal tax rates, simplified Spain’s personal-income tax system and vowed to close loopholes. That’s good news… So leave it to the austerity scolds at the International Monetary Fund to call for tax increases. …Specifically, the Fund wants Spain to raise value-added taxes, alcohol and tobacco excise taxes, tourism taxes, and various environmental and energy levies: “It will be critical to protect the most vulnerable by increasing the support system for them via the transfer and tax system.”

Gee, I suppose that we should be happy the IMF didn’t endorse higher income taxes as well.

The good news is that the Spanish government may have learned from previous mistakes that tax hikes don’t work.

Rather than heed this bad advice, Prime Minister Mariano Rajoy and Finance Minister Cristobal Montoro are cutting government spending and eliminating wasteful programs to reduce pressure on the public fisc. Public spending amounted to 44.8% of GDP in 2013, which is still too high but down from 46.3% in 2010. The government projects it will fall to 40% by 2017.Madrid has also made clear that it believes private growth is the real answer to its fiscal woes. …In other words, economic growth spurred by low taxes and less state intervention yields more revenue over time. If Mr. Montoro can pursue the logic of that insight, there’s hope for Spain’s beleaguered economy.

I’m not overly confident about Spain’s future, but it is worth noting that, according to IMF data, government spending has basically been flat since 2010 (after rising by an average of about 10 percent annually in the previous three decades).

So if the politicians can maintain fiscal discipline by following my Golden Rule, maybe Spain can undo decades of profligacy and become the success story of the Mediterranean.

Let’s hope so. In any event, we know some Spanish taxpayers have decided that they’re tired of being fleeced.

We have one final example of the IMF’s compulsive tax-aholic instincts.

Allister Heath explains that the bureaucracy is pushing for a plethora of new taxes on the U.K. economy.

The IMF wants an increase in the VAT burden.

…the IMF wants to get rid or significantly reduce the zero-rated exemption on VAT, which covers food, children’s clothes and the rest. While it is true that the exemptions reduce economic efficiency, ditching them would necessitate a big hike in benefits and a major uplift in the minimum wage, which would be far more damaging to the economy’s performance and ability to create jobs for the low-skilled. It’s a stupid idea and one which would destroy any government that sought to implement it, with zero real net benefit. It would be a horrendous waste of precious political capital that ought instead to be invested in real reform of the public sector.

And an increase in energy taxes.

The report also calls for a greater reliance on so-called Pigouvian taxes, which are supposed to discourage externalities and behaviour which inflicts costs on others. It mentions higher taxes on carbon and on congestion as examples. But what this really means is that the IMF is advocating a massive tax increase on motorists, even though there is robust evidence which suggests that they already pay much more, in the aggregate, than any sensible measure of the combined cost of road upkeep and development, pollution and congestion.

And higher property taxes.

It gets worse: these days, one cannot read a document from an international body that doesn’t call for greater taxes on property. This war on homeowners is based on the faulty notion that taxing people who own their homes doesn’t affect their behaviour, which is clearly ridiculous. This latest missive from the IMF doesn’t disappoint on this front: it calls for the revaluation of property for tax purposes, which is code for a massive increase in council tax for millions of homes, especially in London and the home counties.

Understandably, Allister is not thrilled by the IMF’s proposed tax orgy.

The tax burden is already too high; increasing it further would be a terrible mistake. The problem is that spending still accounts for an excessively large share of the economy, and the political challenge is to find a way of re-engineering the welfare state to allow the state to shrink and the private sector to expand. The model should be Australia, Switzerland or Singapore, countries that boast low taxes and high quality services.

And I particularly like that Allister correctly pinpoints the main flaw in the IMF’s thinking. The bureaucrats look at deficits and they instinctively think about how to close the gap with tax hikes.

That’s flawed from a practical perspective, both because of the Laffer Curve and because politicians will respond to the expectation of higher revenue by boosting spending.

But it’s also flawed from a theoretical perspective because the real problem is that the public sector is far too large in all developed nations. So replacing debt-financed spending with tax-financed spending doesn’t address the real problem (even if one heroically assumes revenues actually materialize and further assumes politicians didn’t exacerbate the problem with more spending).

Here’s a remedial course for politicians, international bureaucrats, and others who don’t understand fiscal policy.

P.S. Wise people have speculated that international bureaucrats are quick to urge higher taxes because they don’t have to pay taxes on their lavish salaries.

P.P.S. This isn’t the first time the IMF has proposed massive tax hikes on energy consumption.

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When government suppresses the free market and takes over the healthcare sector, you get some really odd results.

Consider these stories from Sweden:

 A man sewing up his own leg after getting frustrated with a long wait.

The government denying a wheelchair to a double amputee because the bureaucrats decided his impairment might not be permanent.

Speaking of amputations, an unfortunate man was put on such a long waiting list that his only treatment, when he was finally seen, was to have his penis removed.

Today, we’re going to augment that list. But not with another story from Sweden, which is actually a much better country in terms of public policy than most folks realize.

Instead, we’re going to look at some great moments in government-run healthcare in both the United States and the United Kingdom.

Our first story is from the Chicago Tribune and it deals with Medicaid and Medicare spending.

But we’re not going to look at the aggregate data. Those numbers are very sobering, to be sure, and you can click here and here to learn more about that problem.

Instead, we’re going to drill down into the details and get some up-close evidence of why the programs are so costly. Simply stated, providers learn how to bilk the government.

A few years ago, Illinois’ Medicaid program for the poor noticed some odd trends in its billings for group psychotherapy sessions. Nursing home residents were being taken several times a week to off-site locations, and Medicaid was picking up the tab for both the services and the transportation.  And then there was this: The sessions were often being performed by obstetricians and gynecologists, oncologists and urologists — “people who didn’t have any training really in psychiatry,” Medicaid director Theresa Eagleson recalled. So Medicaid began cracking down, and spending plummeted after new rules were implemented.Illinois doctors are still billing the federal Medicare program for large numbers of the same services, a ProPublica analysis of federal data shows. Medicare paid Illinois providers for more than 290,000 group psychotherapy sessions in 2012 — more than twice as many sessions as were reimbursed to providers in New York, the state with the second-highest total. Among the highest billers for group psychotherapy in Illinois were three OB-GYNs and a thoracic surgeon. The four combined for 37,864 sessions that year, more than the total for all providers in the state of California. They were reimbursed more than $730,000 by Medicare in 2012 just for psychotherapy sessions, according to an analysis of a separate Medicare data set released in April.

Some of the specific examples are beyond belief. Keep in mind as you read the next passage that there are only 365 days in a year, and only about 261 workdays.

Of the Illinois OB-GYNs billing for group psychotherapy, Dr. Josephine Kamper had the highest number of sessions. She was paid for 10,399 sessions in 2012, at a cost to Medicare of $207,980. …Another OB-GYN, Lofton Kennedy Jr., billed for 9,154 group psychotherapy services. He declined to comment. The third-highest-billing OB-GYN, Philip Okwuje, charged Medicare for 8,584 group therapy sessions.  

Illinois isn’t the only place where taxpayers are getting ripped off.

A Queens, N.Y., primary care doctor, Mark Burke, was paid for more sessions than anyone else in the country — 20,841. He accounted for nearly one in every six sessions delivered in the entire state of New York in Medicare, separate data show. He did not return messages left at his office. Another large biller was Makeba Gordon, a social worker in Detroit. She was reimbursed for nearly 5,000 group therapy sessions for her 26 Medicare patients, an average of 190 each. She also billed for 2,820 individual psychotherapy visits for the same 26 patients, who allegedly would have received an average of 298 therapy sessions apiece in 2012. Gordon could not be reached for comment.

And I’m sure you won’t be surprised to learn that the bureaucracy in Washington doesn’t seem overly worried about this preposterous waste of money.

Aaron Albright, a spokesman for the U.S. Centers for Medicare & Medicaid Services, said in an email that Medicare has no policy regarding which physicians may perform group psychotherapy. During such sessions, “personal and group dynamics are discussed and explored in a therapeutic setting allowing emotional catharsis, instruction, insight, and support,” according to rules set out by one of Medicare’s contractors.

The second story comes from the United Kingdom.

Regular readers know that the government-run healthcare system in the United Kingdom is an ongoing horror story of denied care, sub-standard care, and patient brutality (click here to see some sickening examples).

You would think the U.K.’s political class would respond by trying to use money more effectively.

You would be wrong. The bureaucrats somehow have decided that tax monies should be used to finance a sperm bank, even though private sperm banks already exist.

Here are some excerpts from a report in the Daily Mail.

Britain is to get its first NHS-funded national sperm bank to make it easier for lesbian couples and single women to have children.For as little as £300 – less than half the cost of the service at a private clinic –  they will be able to search an online database and choose an anonymous donor on the basis of his ethnicity, height, profession and even hobbies. …The National Sperm Bank will be based at Birmingham Women’s NHS Foundation Trust, which currently runs an existing NHS fertility clinic and recruits sperm donors from the local population. Funded by a £77,000 Government grant, the bank will be run by the National Gamete Donation Trust (NGDT) which this year received  an additional £120,000 of public money to organise egg and sperm donation.

Some have criticized the initiative because it will purposefully increase the number of fatherless children.

…the move – funded by the Department of Health – is largely designed to meet the increasing demand from thousands of women who want to start a family without having a relationship with a man. Critics last night called it a ‘dangerous social experiment’ that could result in hundreds of fatherless ‘designer families’. …Ms Witjens rejected suggestions that children suffer adverse consequences from lacking a father figure. …Ms Witjens pointed to the removal of the reference to a ‘need for a father’ in the Human Fertilisation and Embryology Act, when taking account of a child’s welfare when providing fertility treatment.

I’m sympathetic to the argument that children do best in conventional households with fathers, but my main reaction to this story is that government shouldn’t try to either penalize or subsidize unconventional households.

And a government-sponsored sperm bank definitely falls into the latter category.

But I’m not surprised. Governments love to squanders other people’s money, and the U.K. government has considerable expertise (if you can call it that) in this regard.

Heck, the U.K. healthcare system is even financing boob jobs. But we’re not talking about reconstructive surgery for women who had mastectomies. They pay for breast augmentation for women who claim “emotional distress.”

Though maybe the U.K. government deserves a special prize. It developed a giveaway program that was so convoluted that nobody signed up to take the money.

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I’ve written many times about America’s looming fiscal collapse, and I’ve also pontificated about America’s costly and failed welfare state.

I even have speculated about when America reaches a tipping point, with too many people riding in the wagon of government dependency (as illustrated by these famous cartoons, which even have a Danish equivalent).

If you read all my posts on these issues, I like to think you’d be very well informed on these topics. But if you want to save time, my colleague Tom Palmer put all these issues together in a recent speech in Australia.

Best of all, he includes lots of great material on the moral and historical aspects of this discussion.

The good news is that there are signs of progress, at least outside the United States. Denmark, for instance, has cut back on its welfare state.

And now, even the United Kingdom has engaged in some serious welfare reform.

Here are some excerpts from a column in the UK-based Telegraph.

 Why should there have been this improvement in the labour market? …The most convincing explanation is surely the Government’s welfare reforms. They have made it more difficult and less attractive to live off benefits, thereby increasing the supply of workers. In economists’ jargon, the natural rate of unemployment has fallen.

Another Telegraph column digs into the details.

…more jobs are being created in Britain than in the rest of Europe put together. …There has clearly been a game-changer… What confounded the eggheads was that the number of workers is growing four times faster than the number of working-age people: in other words, Britons have become far more likely than pretty much anyone else to look for –and find – work. Why?

The answer is simple economics and incentives.

Fewer people now claim the three main out-of-work benefits than at any time during the Labour years. This, of course, is perfectly explained by IDS’s reforms, which make it a lot harder to live on welfare. Those who have been on incapacity benefit for years have been summoned to assessment centres to see what work they’re fit to do. Far more of the unemployed are being penalised for missing job interviews. A benefits cap has been imposed; housing benefit is being reformed; and the so-called “spare room subsidy” has been abolished, making life more expensive for those on benefits with unused rooms. …this is not about punishing “shirkers”, but helping good people trapped in a bad system. Fixing that system means making life harder for people who have it pretty tough already, at least for a short while. But under the Labour regime, such people were being led down the path to dependency and poverty. A new road had to be built, leading to work. And only now is it becoming clear quite how many people are taking it.

Here’s a chart showing how actual job creation is beating the forecasts.

These are remarkable numbers, particularly when you compare them to the job forecast put forth by the Obama White House, which grossly over-stated the number of jobs that would exist under the so-called stimulus.

The key takeaway is that incentives matter. When you give people unemployment insurance, you reduce incentives to find work. When you give people Obamacare, you reduce incentives to earn income. When you give people welfare and food stamps, you reduce incentives for self-reliance.

And when you add together the panoply of redistribution programs operated by government, it’s easy to see why far too many people are being trapped in government dependency.

If you like charts, here’s a very sobering image of how the welfare state destroys incentives for upward mobility. And if you like anecdotes, here’s a dismal story about government making leisure more attractive than productivity.

P.S. At least one honest leftist acknowledges that there’s a problem.

P.P.S. On a lighter note, here’s a satirical Declaration of Dependency from the left.

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When the new Tory-led government came to power in the United Kingdom, I was rather unimpressed.

David Cameron positioned himself as a British version of George W. Bush, full of “compassionate conservative” ideas to expand the burden of government.

But even worse than Bush, because Cameron also jacked up taxes when he first took office, including big increases in the capital gains tax and the value-added tax.

But I must admit that policy in recent years has moved in the right direction, at least with regard to corporate taxation.

Writing for the U.K.-based Telegraph, Jeremy Warner remarks that business activity has significantly strengthened.

A survey by EY, published on Monday, showed that the UK is continuing to pull away from the rest of Europe in terms of Foreign Direct Investment (FDI). The UK secured nearly 800 projects last year, the highest ever, accounting for around a fifth of all European FDI, far in advance of any other country. …Such investment is in turn helping to fuel Britain’s economic recovery… Go back 10 years and it was all the other way; companies were scrambling to leave the country and domicile somewhere else. It is perhaps the Coalition’s biggest unsung achievement that it has managed to reverse this flow.

So why has the United Kingdom experienced this economic rebound?

Lower corporate tax rates are key, Warner explains.

…it has done so largely through the tax system, where it has been as good as its promise to make the UK the most competitive in the G20. By next year, Britain will have the equal lowest headline rate of corporation tax – along with Russia and Saudi Arabia – in this eclectic group of economies, as well as at 20pc the lowest by some distance of the G7 major advanced economies. Other G7 countries range from 25pc to a crushing 38pc and 39pc in France and the US. …Britain has also halted the double taxation of repatriated foreign profits and the taxation of controlled foreign subsidiaries.

So the 20 percent corporate tax rate has yielded good results.

Now let’s connect the dots.

More economic activity means more income for taxpayers.

And more income means a bigger tax base.

Which means…can you guess?…yup, it means revenue feedback.

In other words, we have another piece of evidence that the Laffer Curve is very real.

…Reducing corporation tax has reversed the outflow of corporate head office functions, and doing so has substantially added to overall employment, output, income tax, national insurance and VAT receipts. Dynamic modelling by the UK Treasury has shown that lower tax rates are helping to drive a higher overall tax take. The “Laffer curve” lives. …Let business profit from its own enterprise. It’s amazing how effective this principle can be in generating growth, and yes, taxes, too.

If you want more evidence about the Laffer Curve, here’s one of the videos I narrated.

Warner points out, by the way, that the United Kingdom should not rest on its laurels.

If modest reductions in the corporate tax rate are good, then deeper cuts should be even better.

If comparatively minor changes like these to the competitiveness of the tax system can have such dramatic effects, just think what more serious, root and branch tax reform might achieve. In Singapore, the headline rate is 17pc, in Hong Kong 16.5pc and in Ireland just 12.5pc. There’s a way to go.

Though if The U.K. keeps moving in the right direction, that may arouse hostility and attacks from countries with uncompetitive tax systems.

Indeed, the statists at the European Commission have just launched an investigation of three countries for supposedly under-taxing companies.

Here are some blurbs from a report in the Wall Street Journal.

European Union regulators are preparing to open a formal investigation into corporate-tax regimes in Ireland, Luxembourg and the Netherlands… The probe by the European Commission, the EU’s executive arm, follows criticism in Europe of low tax rates paid by global corporations… The probe is likely to consider whether generous corporate-tax regimes in Ireland, Luxembourg and the Netherlands amount to illegal state aid. …The EU’s tax commissioner, Algirdas Semeta, has warned that the region “can no longer afford freeloaders who reap huge profits in the EU without contributing to the public purse.”

This is remarkable.

In the twisted minds of the euro-crats in Brussels, it is “state aid” if you let companies keep some of the money they earn.

This is horrible economics, but it’s even worse from a moral perspective.

A subsidy (or “state aid”) occurs when the government taxes money from Person A and gives it to Person B. But it’s a perversion of the English language to say that a subsidy takes place if Person A gets a tax cut.

By the way, this perverse mentality is not limited to Europe.

The “tax expenditure” concept in the United States is based on the twisted notion that a tax cut that results in more money in your pocket is economically (and morally) equivalent to a spending handout that puts more money in your pocket.

P.S. The United Kingdom also provides us with powerful evidence that the Laffer Curve plays a big role when there are changes in the personal income tax.

P.P.S. Notwithstanding a bit of good news on corporate tax, I’m not optimistic about the U.K.’s long-run outlook. Simply stated, the nation’s political elite is too statist.

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