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Search Results for 'austerity'

In the world of fiscal policy, there are actually two big debates. One debate revolves around the appropriate size of government in the long run. Folks on the left argue that government spending generates a lot of value and that bigger government is a recipe for more prosperity. Libertarians and their allies, by contrast, point […]

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The European Commission’s data-gathering bureaucracy, Eurostat, has just published a new report on government finances for the region. And with Greece’s ongoing fiscal turmoil getting headlines, this Eurostat publication is worthwhile because it debunks the notion, peddled by folks like Paul Krugman, that Europe has been harmed by “savage” and “harsh” spending cuts. Here’s some […]

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It’s remarkable to read that European politicians are agitating to spend more money, supposedly to make up for “spending cuts” and austerity. To put it mildly, their Keynesian-based arguments reflect a reality-optional understanding of recent fiscal policy on the other side of the Atlantic. Here’s some of what Leonid Bershidsky wrote for Bloomberg. Just as […]

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There’s an ongoing debate about Keynesian economics, stimulus spending, and various versions of fiscal austerity, and regular readers know I do everything possible to explain that you can promote added prosperity by reducing the burden of government spending. Simply stated, we get more jobs, output, and growth when resources are allocated by competitive markets. But […]

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I’m not reluctant to criticize my friends at the Heritage Foundation. In some cases, it is good-natured ribbing because of the Cato-Heritage softball rivalry, but there are also real policy disagreements. For instance, even though it is much better than current policy, I don’t like parts of Heritage’s “Saving the American Dream” budget plan. It’s […]

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I want a smaller burden of government spending, so you can only imagine how frustrating it is for me to observe the fight in Europe. On one side of the debate you have pro-spenders, who call themselves “growth” advocates, but are really just Keynesians. On the other side of the debate, you have pro-taxers, who […]

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Statists are in a tough position. For years, they’ve been saying the United States should be more like Europe. And, as shown in these very funny cartoons by Michael Ramirez and Bob Gorrell, President Obama is a cheerleader for that effort. But now Europe’s welfare states are collapsing, so the left is scrambling to come […]

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I have great fondness for Estonia, in part because it was the first post-communist nation to adopt the flat tax, but also because of the country’s remarkable scenery. Most recently, though, I’ve been bragging about Estonia (along with Latvia and Lithuania, the other two Baltic nations) for implementing genuine spending cuts. I’ve argued that Estonia […]

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I wrote a detailed blog post yesterday, showing that European governments have been very reluctant to restrain the burden of government spending. Part of the problem is that the debate in Europe is a no-win exercise, pitting proponents of higher taxes (which is largely how Europe’s political elite defines “austerity”) against proponents of higher spending […]

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With both France and Greece deciding to jump out of the left-wing frying pan into the even-more-left-wing fire, European fiscal policy has become quite a controversial topic. But I find this debate and discussion rather tedious and unrewarding, largely because it pits advocates of Keynesian spending (the so-called “growth” camp) against supporters of higher taxes […]

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I realize the title of this post sounds like the beginning of a joke, along the lines of “A priest, a minister, and a rabbi walk into a bar…”, but this is a serious topic. A big problem in fiscal debates is that people can’t even agree on what they mean by certain words. For […]

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Demonstrating that he’s probably not a fan of Mitchell’s Golden Rule, Paul Krugman recently asserted that fiscal austerity has failed in the United Kingdom. Citing Keynesian theory and weak economics numbers, he warned about “the austerity doctrine that has dominated elite policy discussion” and says that the British government made a mistake when it decided […]

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London was just hit by heavy riots as part of a protest against the “deep” and “savage” budget cuts of the Cameron government. This is not the first time the U.K. has endured riots. The welfare lobby, bureaucrats, and other recipients of taxpayer largesse are becoming increasingly agitated that their gravy train may be derailed. […]

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I periodically mock the New York Times when editors, reporters, and columnists engage in sloppy and biased analysis. Claiming Medicaid cuts in a piece that shows rising outlays for the program. Asserting that government schools are “starved of funding” when taxpayer subsidies actually have skyrocketed. Claiming that budget-cutting austerity nations are doing worse than “stimulus” nations, but getting the numbers […]

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When I write about Estonia, I generally have something nice to say. Estonia has a non-discriminatory flat tax. Estonian lawmakers know how to cut spending. Estonia has a very good corporate tax system. Estonia has a high level of economic freedom. Estonia shrank governmental power to reduce corruption. Today, I want to add to my […]

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I’ve labeled the International Monetary Fund as the “dumpster fire” of the world economy. I’ve also called the bureaucracy the “Dr. Kevorkian” of international economic policy, though that reference many not mean anything to younger readers. My main complaint is that the IMF is always urging – or even extorting – nations to impose higher […]

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I’m a big fan of many of the economic reforms that have been implemented in Estonia, Latvia, and Lithuania. All three of the Baltic nations rank highly according to Economic Freedom of the World. Estonia and Lithuania are tied for #13, and Latvia isn’t far behind at #23. Rather impressive for nations that suffered decades […]

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Iceland is a tiny little country with just 338,000 people (about the population of Santa Ana, CA), but that doesn’t mean it can’t teach us lessons about public policy. I wrote about the nation’s approach to fisheries in 2016, and explained that the property rights-based system is the best way of protecting fish stocks from […]

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I’m not an optimist about the future of Europe, mostly because welfare states are unaffordable in nations suffering from demographic decline. Given the grim trends on the continent, I expect many other nations (probably led by Italy) will experience the fiscal and economic mess that we’ve seen in Greece. Let’s dig into this issue by […]

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In Part I of this series, we examined the horrific tragedy of Venezuelan statism, and in Part II of this series, we looked at the Scandinavian “free-market welfare state.” Today, Part III will look at the ongoing deterioration of Greece. I’ve written many times about how the mess in Greece was caused by an ever-rising […]

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I recently wrote about the failed 1990 budget deal. My big complaint was that President George H.W. Bush compounded the mistake of higher taxes by also allowing a big increase in the burden of government spending. However, I didn’t blame the agreement for that year’s recession for the simple reason that the downturn began in […]

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I periodically mock the New York Times when editors, reporters, and columnists engage in sloppy and biased analysis. Claiming Medicaid cuts in a piece that shows rising outlays for the program. Asserting that government schools are “starved of funding” when taxpayer subsidies actually have skyrocketed. Claiming that budget-cutting austerity nations are doing worse than “stimulus” nations, but getting […]

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The most disturbing outcome of the recent mid-term election isn’t that Alexandria Ocasio-Cortez will be a Member of Congress. I actually look forward to that because of the humor value. Instead, with the Democrats now controlling the House of Representatives, I’m more worried about Donald Trump getting tricked into a “budget summit” that inevitably would […]

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I wrote in 2010 that Keynesian economics is like the Freddy Krueger movies. It refuses to die despite powerful evidence that you don’t help an economy by increasing the burden of government. In 2014, I wrote the theory was based on “fairy dust.” And in 2015, I said Keynesianism was akin to a perpetual motion […]

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Paul Krugman has butchered numbers when writing about fiscal policy in nations such as France, Estonia, Germany, and the United Kingdom. Today, we’re going to peruse his writings on Denmark. Here’s some of what he wrote earlier this month. Denmark can teach us…about the possibilities of creating a decent society. …Denmark, where tax receipts are 46 percent of GDP compared with […]

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Last September, I shared some very encouraging data showing how extreme poverty dramatically has declined in the developing world. And I noted that this progress happened during a time when the “Washington Consensus” was resulting in “neoliberal” policies (meaning “classical liberal“) in those nations (confirmed by data from Economic Freedom of the World). In other […]

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Shortly after the fiscal crisis began in Greece, I explained that the country got in trouble because of too much government spending. More specifically, I pointed out that the country was violating my Golden Rule, which meant that the burden of spending was rising relative to the private economy. That’s a recipe for trouble. Unfortunately, […]

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At some point in the next 10 years, there will be a huge fight in the United States over fiscal policy. This battle is inevitable because politicians are violating the Golden Rule of fiscal policy by allowing government spending to grow faster than the private sector (exacerbated by the recent budget deal), leading to ever-larger […]

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I don’t focus much on media bias because journalists generally aren’t dishonest. Instead, they choose which stories to highlight or downplay based on what advances their political agenda. Though every so often I’ll highlight an example of where bias leads to an egregious (maybe even deliberately dishonest) mistake. Like the time a column in the […]

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Since the House has passed a tax cut and the Senate has passed a tax cut, it’s quite likely that there will be a consensus deal that will be signed into law. Which makes me happy since any agreement presumably will include a lower corporate tax rate and the elimination of the deduction for state […]

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