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Archive for the ‘Australia’ Category

I’m a bleeding heart libertarian in that I get most upset about statist policies that make life harder for disadvantaged people so that folks with more money can get undeserved goodies.

  • For instance, I despise anti-school choice leftists because they value political support from teacher unions more than they value opportunity for poor kids.
  • And I get very agitated that about the Export-Import Bank, which is a form of corporate welfare that transfers money from the general population to the rich.

Another example is occupational licensing, which occurs when politicians require newcomers to jump through expensive and/or time-consuming hoops before getting “permission” to provide a good or service. These licensing rules create unjust profits for established businesses by hindering competition, and they are especially burdensome for poor people, all of which is explained in this superb video from the Institute for Justice.

But if there’s a sliver lining to that dark cloud, it’s this image that I will add to my collection of libertarian humor. To be fair, I don’t know if it counts as purely libertarian humor, but I saw it on Reddit‘s libertarian page and it definitely makes the right points.

If you like libertarian humor, both pro and con, click here, here, and here for other examples.

P.S. Let’s close by sharing some good news on a serious topic.

Unlike the short-sighted politicians in the United States, the crowd in Australia seems a bit more level-headed on the issue of competitive corporate taxation. Here are some excerpts from a story in the U.K.-based Guardian.

The Turnbull government has given big business exactly what it wants – a substantial tax cut. It has also extended the Abbott government’s small business tax package by giving small and medium businesses more tax cuts and incentives. …“Our corporate tax rate is high by international standards and well above the average for OECD countries and those in the Asian region,” the budget papers say. “This will make Australian companies more internationally competitive in a tough global market place.” The government plans to cut the corporate tax rate significantly, from 30% to 25%. …The cut will be phased in over 10 years… The treasurer, Scott Morrison, says treasury modelling suggests the measures will grow the economy by 1% over the long term. He says they will lead to higher living standards, via increased business investment and more jobs.

I certainly don’t think “significantly” is a word to describe a modest five-percentage-point reduction in the rate, but kudos to Aussie politicians for moving in the right direction. I also like the part about “treasury modelling,” which suggests that the Australians also have a sensible approach on the issue of static scoring vs. dynamic scoring.

So perhaps now you can understand why Australia is my choice if (when?) the welfare state collapses in the United States (though I’m still of the opinion that the Swiss are the world’s most sensible people).

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I recently wrote about gun control, noting how there’s less murder in demographically similar U.S. states than there is in matching Canadian provinces.

This is one of the reasons why I’m optimistic about protecting the Second Amendment. The empirical evidence is so strong that law-abiding people are safer in well-armed societies.

But let’s see how the rest of the world is faring on this issue.

Let’s start with a story from Switzerland, a nation that has a very strong tradition of gun rights.

Switzerland is becoming safer. Police recently flagged up that crime rates fell by 7% in 2015, reaching a seven-year low. In 2014, homicide was actually at its lowest level in 30 years. …A survey by swissinfo.ch shows gun permit applications were up almost everywhere in Switzerland in 2015.

Hmmm…, more guns and less crime. The person who slapped the headline on the story seems to think it’s a mystery why that relationship exists.

But anybody capable of passing my IQ test for criminals and liberals understands that the title should be changed to “Lower crime because Swiss have more guns” or something like that.

The article also includes a section on Switzerland’s gun culture.

Switzerland has one of the highest gun ownership rates in the world because of its militia army. The defence ministry estimates that some two million guns are in private hands in a population of 8.3 million. An estimated 750,000 of those guns have been recorded in a local register. Under the militia system soldiers keep their army-issue weapons at home. Voters in recent years have rejected tighter gun controls. In 2011, voters rejected a proposal to restrict access to guns by banning the purchase of automatic weapons and introducing a licensing system for the use of firearms.

Ah, those sensible Swiss voters. Not only are they against tax hikes and regulatory intervention, but they also reject licensing and support the right to purchase automatic weapons.

Now let’s travel Down Under and see what happens when a government takes the wrong approach to guns.

Hillary Clinton says “Australia is a good example”… The man Clinton wants to succeed, Barack Obama, noted, “Australia … imposed very severe, tough gun laws.  And they haven’t had a mass shooting since.” …Maybe it’s time to tell the president and his likely successor that the policies they so admire have been largely flouted… Clinton and Obama tout a 1996 “gun buyback” that was actually a compensated confiscation of self-loading rifles, self-loading shotguns, and pump-action shotguns in response to the Port Arthur mass shooting. The seizure took around 650,000 firearms out of civilian hands and tightened the rules on legal acquisition and ownership of weapons going forward. …What the law couldn’t do—what prohibitions can never accomplish—was eliminate demand for what was forbidden. …The Sporting Shooters’ Association of Australia estimates compliance with the “buyback” at 19 percent. Other researchers agree. In a white paper on the results of gun control efforts around the world, Franz Csaszar, a professor of criminology at the University of Vienna, Austria, gives examples of large-scale non-compliance with the ban. He points out, “In Australia it is estimated that only about 20% of all banned self-loading rifles have been given up to the authorities.”

There is one group benefiting from the attempted gun ban. Criminal gangs are big winners.

“Australians may be more at risk from gun crime than ever before with the country’s underground market for firearms ballooning in the past decade,” the report added. “[T]he national ban on semi-automatic weapons following the Port Arthur massacre had spawned criminal demand for handguns.” …Once you enable organized crime, there are no boundaries. Australia’s criminal gangs supply not just pistols, but weapons up to and including rocket launchers—some of which may have ended up in terrorist hands. …like American bootleggers who supplemented smuggled booze with bathtub gin, Australia’s organized criminal outfits have learned the joy of DIY production. …Australia will have to live with the rise in organized crime for years to come.

Such a disappointment that Australia, which is a role model on some issues, is so anti-civil rights when it comes to guns.

Now let’s travel to France, where there are at least one person doesn’t think it’s a good idea to let terrorists be the only ones with guns.

The leader of the rock band playing the Bataclan in Paris the night ISIS terrorists killed 90 in the concert hall three months ago ripped French gun control laws and urged “everybody” to get a gun. “I can’t let the bad guys win,” said Jesse Hughes of Eagles of Death Metal. …Speaking in a sometimes tearful interview to iTele, Hughes added, “Did your French gun control stop a single fu—– person from dying at the Bataclan? And if anyone can answer yes, I’d like to hear it, because I don’t think so.”

Amen. It’s downright bizarre that European politicians think it’s a good idea for citizens to be disarmed while crazies get to stock up on weapons.

Now let’s turn to America, where New Jersey (again) is a national embarrassment.

A New Jersey actor faces 10 years in prison for firing a prop pellet gun while filming an independent film. Carlo Goias, who uses the stage name Carlo Bellario, was charged with firing the fake gun without a state gun permit as part of the Garden State’s insanely strict gun laws. In New Jersey, all guns require a state permit, even non-lethal airsoft guns like the one Goias was using. …just seeing Goias pretending to fire from a car window prompted neighborhood residents to call the police. “I pretended to shoot out the window; they were going to dub in the sound later,” Goias told the Associated Press. “We get back, and within a couple of minutes we’re surrounded by cop cars.” …being sent away for 10 years over a fake gun is a reminder of just how absurd New Jersey’s gun laws still are.

Speaking of gun control, here’s radio shock jock Howard Stern making mostly sensible comments on the right to keep and bear arms.

It’s a bit disappointing that he supports a national gun registry, but I assume that’s because he doesn’t realize that the left supports registration primarily as a predicate for gun confiscation.

But he atones for that error by mocking leftists who have personal (and well-armed) security guards. Gee, I wonder if we might have an example of such a person.

And it’s also good that Howard mentions that most cops support gun rights, something that we see in the polling data.

P.S. Click here and here for some good gun control humor.

P.P.S. And click here for some entertaining videos mocking gun control.

P.P.P.S. Even some leftists have seen the light on gun rights, as you can see here, here, and here.

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Australia is one of my favorite nations, and not just because the people are friendly.

It has a modest-sized government, at least compared to other developed nations (see table 25 of this OECD data), and it has a very attractive private Social Security system that puts Australia in relatively good shape when looking at the long-run fiscal health of countries.

Indeed, this is one of the reasons why I picked Australia when asked which nation to choose if (when?) America suffers a Greek-style fiscal and economic collapse.

But this surely doesn’t mean that Australia has ideal public policy. It ranks #11 for economic freedom, which is better than America, but the Aussies trail first-place Hong Kong by more than one full point in the 1-10 scoring system.

That being said, Australia will probably move in the right direction if Prime Minister Malcolm Turnbull succeeds in his plan to implement real federalism by shrinking the central government and returning tax and spending authority to the states.

Here’s how an Australian media report characterized the issue.

Returning income taxing power to the states would have resulted in a fierce interstate economic battle that would see Australians vote with their feet and move their lives across borders to get a better deal, economists warn.

The reporter obviously is talking to left-wing economists. If she talked to sensible economists, the above sentence would end with “hope” rather than “warn.”

Here are some of the specific details.

The Prime Minister met with state premiers and territory chief ministers yesterday to discuss his plan to lower the federal government’s income tax and have the states make up the rest by collecting their own tax, to do with which whatever they please. If his bold scheme had gone ahead, they would eventually have been able to set their own tax rates as well.

Unfortunately, state-level politicians apparently are not happy with the notion of having real responsibility.

…premiers and chief ministers weren’t keen and the idea is now off the table, for now, after Malcolm Turnbull conceded there was “nothing like a consensus”.

Actually, there was a consensus of the state politicians. If you’ll allow me to provide a negative interpretation, they want the empty-suit job of taking money from the nation’s central government and then playing Santa Claus by distributing that money to various interest groups.

But I hope Turnbull isn’t giving up because of resistance by these hacks.

Here are some more excerpts that help to explain why he has a very good idea.

What he had been attempting to do with the tax shift was to force more responsibility onto state governments, and encourage greater accountability to its voters. It’s a new way of funding school and hospitals and is also designed to encourage competition between the states and force them to operate more efficiently. It’s a model called competitive federalism, which allows states to battle it out over a range of issues to compete to provide their citizens with the best value goods and services at the best cost.

And the reporter did talk to at least one good economist, my buddy Sinclair Davidson.

RMIT economist Professor Sinclair Davidson explains…“At the moment, because the federal government has so much power over the revenue that goes into health and education, for example, there’s not much difference between the states…But once that changes, for people whose state’s bundles of goods and services don’t suit their needs, they can start looking around.” With a mobile population threatening to abandon its state government, effectively stripping it of a major revenue supply, the voting public would have a lot more control over state governments, Prof Davidson says. …With state governments made more eager to please, it sounds like this new tax plan would be a win for voters, if those downward pressures on tax rates the system’s meant to encourage do come off.

Here’s a different prespective.

Curtin University Associate Professor Helen Hodgson argues state tax competition could lead to a race to the bottom. “The biggest challenge that would emerge is if states chose to exercise the right to increase or decrease their income tax rates,” she writes… Prof Hodgson says boosting migration between the states would put pressure on state governments to reduce their own rates as they compete to retain their populations, while “a general lowering of tax rates would defeat the stated intention of allowing states to raise additional funding for health and education.”

Methinks Professor Hodgson’s “stated intention” is not the same as Prime Minister Turnbull’s “stated intention.”

Here’s some more analysis from a column in The Conversation.

Malcolm Turnbull has called for a dramatic shift in Australia’s model of federalism… Many economists regard this as sensible and much-overdue reform…the argument is for a shift from a federal income tax to a state income tax. In principle, this can be done in a completely revenue-neutral way. …that would, on the whole, benefit Australian taxpayers because a more efficient tax system is a less costly tax system.

But it wouldn’t benefit state politicians in Australia. With the exception of Western Australia’s Colin Barnett, they don’t like accountability and responsibility.

state premiers…hated the idea. It’s important to understand why. This is not because the idea is bad for the citizens of the states, with the premiers being outraged on their behalf. Rather it is because it is bad for the political classes themselves, and the premiers in particular.

Citing the groundbreaking work of economist Charles Tiebout, the article includes a description of why tax competition between sub-national governments is desirable.

The basic idea is that the states compete with each other by offering bundles of public goods at different prices (i.e. taxes). This is the significance of the state-level income tax. Victoria, for example, may offer very high levels of public services, but also at a high price through high state income taxes. NSW may offer more moderate public services, but also much lighter taxes. What happens next is that citizens sort themselves over the states according to their preferences. Those who value high levels of public services move to Victoria, where they pay that marginal valuation in high taxes. Citizens with preferences for lower levels of public services and also taxes move to NSW. This is a market, not a political, model of local public goods. Economists like it because it encourages competition between the states to provide an efficient bundle of public goods and services at a point that voters (as consumers) are willing to pay. This competition tends to produce an efficient outcome.

Here’s the bottom line. The current system creates a perverse incentive for state officials to endlessly whine for more money. Putting state governments in charge creates an appropriate balance of responsibility and accountability.

That is not the situation we have now. Premiers are incentivised to represent their citizens as all wanting the maximum amount of public goods and services, because someone else is paying for them. State income taxes (coupled with reduced federal income taxes) are a way of implementing this mechanism. The main winners from this will be the 7 million or so Australian taxpayers, because it will deliver a much more efficient supply of public goods and services. The main losers will be the state and territory premiers, because they will have to compete in the market for political goods and services.

Heaven forbid, politicians actually having to collect and spend their own money. Especially in a system where taxpayers can look across state borders to see which states are doing a bad job or good job (think Texas vs. California). How cruel that would be! They would be forced…gasp…to compete.

But let’s set aside sarcasm. It’s worth noting that the most decentralized major economy is Switzerland, and that system has worked quite well.

And the United States also compares favorably with other developed nations, even though we’ve allowed Washington to grab powers that more properly belong at the state level (or in the private sector).

Hopefully, Turnbull’s plan in Australia will move forward and create additional evidence that America should return to the more robust federalist system that our Founders envisioned.

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I’m in Australia for Consilium, an annual conference which is hosted by the Centre for Independent Studies.

I spoke on fiscal policy and pontificated on the need for nations to restrain government spending.

That’s an important message (at least in my humble option), but I thought it was more interesting to learn more about the tax and spending policies of Australia’s current government, which is led by the supposedly right-of-Center Liberal Party (Aussies still use “liberal” in the European sense of classical liberalism).

Unfortunately, I learned that the Australian Liberals (like British Tories) need some remedial work on fiscal policy.

Prime Minister Abbott and his team, for instance, have proposed to increase Australia’s top tax rate. Here’s some of what’s been reported by the Australian Financial Review.

The Abbott government’s deficit tax means top earners will face a 49 per cent marginal tax rate, the eighth ­highest among developed countries. …. Australia already holds one of the highest personal income and company tax rates in the OECD. The 30 per cent corporate tax rate and 45 per cent personal income tax rate are higher than the average of 25.32 per cent for companies and 41.51 per cent for individuals. A personal tax increase will worsen the impact of “bracket creep”. …a higher income tax rate could also make Australia less competitive globally.

And the AFR also reports that a visiting scholar has thrown cold water on the idea of mimicking European fiscal policy.

Professor Prescott, who won the Nobel Prize for ­economics in 2004, …said that at 49 per cent the top marginal tax rate would hurt growth and the government should redouble its efforts to bring down expenditure instead. “It’s too high,” said Professor Prescott, who has written on the negative impact of increased taxes on economic growth in Europe. “You’re killing the goose that lays the golden egg.” …Lamenting “as sad” the standard of public and academic debate over budget deficits – both here and abroad – Professor Prescott said the focus should be on productivity and ­government spending. “What matters is expenditure. To spend is to tax and to tax is to depress.”

So why is an ostensibly right-of-center government copying Obama’s class warfare tax policy?

Beats me, though I’m told it’s because the politicians in Canberra (the nation’s capital) thinks this will appease the left and show “fairness.”

I imagine that strategy will be a flop, just like the first President Bush didn’t win any friends when he capitulated to a tax hike in 1990.

In any event, the Australian Taxpayers’ Alliance warns that the tax hike may lose revenue because of Laffer Curve effects.

“The idea of increasing the top marginal tax rate in Australia is unlikely to raise any revenue, and may actually decrease government revenue due to a shrinking in the tax base, as high-income people reduce their labour supply, investment, innovation and tax compliance,” said John Humphreys, the deputy director of the Australian Taxpayers Alliance and an economics lecturer at the University of Queensland. …“Based on mainstream estimates of the high-income elasticity of taxable income, it is fairly straight forward to calculate the tax rate that will raise the maximum amount of revenue, and in Australia that is about 45%. If tax is increased beyond that level, then it is unlikely to raise revenue, and may actually cause a drop in revenue.…” The modeling by Humphreys is due to be published in Policy Journal in the coming months.

I’m skeptical about the finding that the revenue-maximizing rate for the personal income tax is 45 percent, particularly when there is very rigorous analysis suggesting that 20 percent is much closer to the mark.

But I definitely agree that pushing the rate to 49 percent will backfire on the Australian government.

And the folks at the ATA do make the very sound point that politicians shouldn’t try to set the top rate at the revenue-maximizing level regardless.

“There is no logical argument for increasing marginal tax rates about the revenue-maximising level, and indeed there is no good argument for having tax rates anywhere near the revenue-maximising level since those taxes raise very little money but cause significant economic damage.”

Amen. Indeed, allow me to call your attention to some very impressive academic work on this issue.

Now let’s shift to the spending side of Australian fiscal policy.

The good news is that the Abbott government isn’t proposing big increases in the burden of government spending.

The bad news, however, is that there doesn’t seem to be any commitment to a short-term or long-term effort to shrink the public sector.

Here’s a chart, based on IMF data, looking at what’s happened to Australian government spending over the past 20-plus years. The purple-ish line is nominal government spending (left axis) and the blue line is government spending as a share of economic output (right axis).

Australia Spending

In the long run, the trend of the blue line is the most important variable.

Unfortunately, the burden of government spending has climbed since the late 1980s. It’s still much lower than the burden of spending in places such as France, but the line is moving in the wrong direction.

On the other hand, if you look at the data since 2000, you could accurately say that Australian policy makers have succeeded in keeping the burden of spending from climbing above 34 percent of GDP (there was some foolish stimulus spending beginning back in 2009, but it didn’t lead to a permanent expansion in the size of government).

But let me share some remarkable data showing Australia’s missed fiscal opportunity. If you look at the IMF’s annual government spending and do the calculations, you’ll find that government spending since 1988 has grown by an average of 6.8 percent each year.

Since nominal GDP also has increased at a good pace, the actual burden of government has “only” risen from about 30 percent to 34 percent of economic output.

But imagine if Australian policy makers had merely imposed some version of Mitchell’s Golden Rule and limited spending so that it grew by, say, 3 percent annually.

If they had engaged in that modest level of fiscal restraint, the burden of the public sector today would be only about half its current size. In other words, government spending in Australia would be less than 17 percent of economic output, which would be even better than Hong Kong and Singapore.

This explains why I’m so fixated on expenditure limitations. You can make big progress over just a couple of decades if politicians somehow can be convinced to restrain the rate of growth of government spending.

Or, as the people of Switzerland figured out, you can enjoy that progress if you impose a spending limit on the politicians.

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As part of my “Question of the Week” series, I said that Australia probably would be the best option if the United States suffered some sort of Greek-style fiscal meltdown that led to a societal collapse.*

One reason I’m so bullish on Australia is that the nation has a privatized Social Security system called “Superannuation,” with workers setting aside 9 percent of their income in personal retirement accounts (rising to 12 percent by 2020).

Established almost 30 years ago, and made virtually universal about 20 years ago, this system is far superior to the actuarially bankrupt Social Security system in the United States.

Probably the most sobering comparison is to look at a chart of how much private wealth has been created in Superannuation accounts and then look at a chart of the debt that we face for Social Security.

To be blunt, the Aussies are kicking our butts. Their system gets stronger every day and our system generates more red ink every day.

And their system is earning praise from unexpected places. The Center for Retirement Research at Boston College, led by a former Clinton Administration official, is not a right-wing bastion. So it’s noteworthy when it publishes a study praising Superannuation.

Australia’s retirement income system is regarded by some as among the best in the world. It has achieved high individual saving rates and broad coverage at reasonably low cost to the government.

Since I wrote my dissertation on Australia’s system, I can say with confidence that the author is not exaggerating. It’s a very good role model, for reasons I’ve previously discussed.

Here’s more from the Boston College study.

The program requires employers to contribute 9 percent of earnings, rising to 12 percent by 2020, to a tax-advantaged retirement plan for each employee age 18 to 70 who earns more than a specified minimum amount. …Over 90 percent of employed Australians have savings in a Superannuation account, and the total assets in these accounts now exceed Australia’s Gross Domestic Product. …Australia has been extremely effective in achieving key goals of any retirement income system. …Its Superannuation Guarantee program has generated high and rising levels of saving by essentially the entire active workforce.

The study does include some criticisms, some of which are warranted. The system can be gamed by those who want to take advantage of the safety net retirement system maintained by the government.

Australia’s means-tested Age Pension creates incentives to reduce one’s “means” in order to collect a higher means-tested benefit. This can be done by spending down one’s savings and/or investing these savings in assets excluded from the Age Pension means test. What makes this situation especially problematic is that workers can currently access their Superannuation savings at age 55, ten years before becoming eligible for Age Pension benefits at 65. This ability creates an incentive to retire early, live on these savings until eligible for an Age Pension, and collect a higher benefit, sometimes referred to as “double dipping.”

Though I admit dealing with this issue may require a bit of paternalism. Should individuals be forced to turn their retirement accounts into an income stream (called annuitization) once they reach retirement age?

I’m torn on this issue. Paternalists sometimes do have good ideas, but shouldn’t people have the freedom to make their own decisions, even if they make mistakes? But does the answer to that question change when mistakes mean that those people will be taking money from taxpayers?

Fortunately, I don’t need to be wishy-washy on the other criticism in the study.

Australia’s system does have shortcomings. It is heavily dependent on defined contribution plans and is vulnerable to weaknesses in such programs.

I strongly disagree. A “defined contribution” account is something to applaud, not a shortcoming.

The author presumably is worried that a “DC” account leaves a worker vulnerable to the ups and downs of the market, whereas a “defined benefit” account promises a specific payment and removes that uncertainty. Sounds great, but the problem with “DB” accounts is that they almost inevitably seem to promise more than they can deliver. And that seems to be the case whether they’re supposedly based on real savings (like company retirement plans or pension funds for state and local bureaucrats) or based on pay-as-you-go taxation (like Social Security).

*Since I’m somewhat optimistic that America can be saved, I’m not recommending you head Down Under just yet.

P.S. I’m also a huge fan of Chile’s system of private accounts. At the risk of oversimplifying, Chile’s system is sort of like universal IRAs and Australia’s system is sort of like universal 401(k)s.

P.P.S. There’s much to admire about Australia, but its government is plenty capable of boneheaded policy. Heck, the government even provides workers’ compensation payments to people who get injured while having sex after work hours, simply because they were on a business-related trip. Talk about double dipping!

P.P.P.S. Here’s my video explaining why we should implement personal retirement accounts in the United States.

P.P.P.S. The death tax has been abolished in Australia, so there’s more to admire than just personal retirement accounts.

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A reader from New York has a follow-up question for me.

Referencing a “Question of the Week” from last month, in which I expressed guarded optimism that America could be saved, she wants to know what I would do if things go the wrong way.

In other words, what if things go really wrong and America suffers a Greek-style fiscal collapse? And imagine how bad that might be since there wouldn’t be an IMF or European Central Bank capable of providing bailouts to the United States.

Perhaps because of an irrational form of patriotism, I’m fairly certain that I will always live in the United States and I will be fighting to preserve (or restore) liberty until my last breath.

But I probably would want my children someplace safe and stable, so I’ll answer the question from that perspective.

The obvious first choice is a zero-income tax jurisdiction like the Cayman Islands that is prosperous and reasonably well governed.

But I’m not sure about the long-run outlook for the Cayman Islands, in part because the politicians there have flirted with an income tax and in part because the jurisdiction inevitably would suffer if the United States was falling apart.

So what’s a place that is stable and not overly tied to the American economy.

Then the obvious choice is Switzerland. That nation’s long-run fiscal outlook is relatively favorable because of  modest-sized government and a very good spending control mechanism.

But while Switzerland is not dependent on the U.S. economy, it is surrounded by European welfare states. And I’m fairly certain that nations such as France, Italy, and (perhaps) Germany will collapse before America.

And even though most Swiss households have machine guns and the nation presumably can defend itself from barbarian hordes in search of a new welfare check, Switzerland’s probably not the ideal location.

Estonia is one of my favorite countries, and they’ve implemented some good reforms such as the flat tax. But I worry about demographic decline. Plus, I’m a weather wimp and it’s too chilly most of the year.

Another option is a stable nation in Latin America, perhaps Chile, Panama, or Costa Rica. I haven’t been to Chile, but I’m very impressed by the nation’s incredible progress in recent decades. I have been to Panama many times and it is one of my favorite nations. I’ve only been to Costa Rica two times, but it also seems like a nice country.

The bad news is that I don’t speak Spanish (and my kids don’t speak the language, either). The good news is that Hispanics appear to be the world’s happiest people, so that should count for something.

“G’day mate, we’ve privatized our social security system!”

This brings me to Australia, the country that probably would be at the top of my list. The burden of government spending in Australia is less than it is in the United States.

But the gap isn’t that large. The reason I like Australia is that the nation has a privatized Social Security system (called Superannuation) and the long-run fiscal outlook is much, much better than the United States.

Plus the Aussies are genuinely friendly and they speak an entertaining form of English.

So if America goes under, I recommend going Down Under.

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Australia is perhaps my favorite country. In part this is because there have been some good economic reforms, such as personal retirement accounts.

But there’s more to life than public policy, and I like Australia because the people are so outgoing and friendly.

Though sometimes their outgoing friendliness, so to speak, creates opportunities for really stupid government policy. A judge in Australia has ruled, for instance, that a woman deserves employment compensation after injuring herself while having sex. Here are some of the remarkable details.

The battle for compensation is not over for a woman who was injured while having sex in a motel on a work trip. Comcare, the Federal Government workplace safety body, has lodged an appeal against the Federal Court decision that the public servant, aged in her late 30s, was entitled to workers’ compensation.Comcare is appealing the judgment on four grounds, including that the court was wrong in finding the woman’s injuries were caused “in the course of her employment”.She is claiming compensation for facial and psychological injuries suffered when a glass light fitting above the bed was pulled from its mount while the woman was having sex in November 2007.Justice John Nicholas said it was not relevant whether it was the woman or her partner – who she met about a month earlier – who pulled the light fitting from the wall.The Administrative Appeals Tribunal had earlier upheld Comcare’s decision, finding that sexual activity was “not an ordinary incident of an overnight stay like showering, sleeping or eating”.”…She was involved in a recreational activity which her employer had not induced, encouraged or countenanced.”However Justice Nicholas overruled that decision and found in favour of the woman.

I have two reactions to this story.

Aussie sex position?

First, what am I doing wrong? How come I’ve never caused light fixtures to be pulled from a wall? That might be worth a facial injury.

Second, what sort of idiot judge concludes that an injury suffered during a sexual relationship entitles someone to get employment compensation money from taxpayers. Sounds like the Appeals Tribunal showed a lot more common sense in ruling that her sexcapades were a “recreational activity” and not “induced, encouraged or countenanced” by her employer.

I’ve come across lots of crazy government decisions in my time, but this is near the top of the list. Probably not as bad as the Greek government subsidizing pedophiles or demanding stool samples before letting entrepreneurs set up online companies, but still amazingly foolish.

It’s also at least as silly as the European courts that have ruled that there’s an entitlement to free soccer broadcasts and a right to satellite TV.

And it’s probably worse than the Finnish court that ruled there’s a right to broadband access, though not as nutty as the Bolivian decision that there’s a human right to receive stolen property.

In any event, at least the Australian government is appealing this moronic decision, so that’s another reason to think it’s a good country. Maybe when America falls apart and enters a Greek-style fiscal death spiral, I can emigrate.

Though I would still need to fight for freedom since Australia’s government does plenty of bad things, such as their version of wasteful “stimulus” and very shameful efforts to stifle political dissent on global warming hysteria.

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