Four Major Problems with Senator Romney’s Plan for Universal Child Allowances

My late friend Walter Williams was a first-rate economist, an important public intellectual, and a truly great American. He also was an amazing communicator, with an unparalleled ability to make important points in a succinct and easy-to-understand manner.

My favorite Walter quote is about how capitalism enabled positive-sum wealth creation.

Today, though, I want to share Walter’s quote about the simple rules for life that basically eliminate poverty.

Sadly, the current welfare state undermines those rules and instead lures many people into self-destructive behaviors. Choices that are bad for them and bad for society.

• Have kids out of wedlock? No problem, Uncle Sam will take care of you with a plethora of handouts.
• Watch TV on the sofa all day rather than work? No problem, Washington will provide you with benefits.

As an economist, I’m especially concerned that redistribution programs discourage employment. That’s bad for the economy. Even more important, it’s very bad for people who get trapped in lives of dependency.

Oh, and let’s not forget that the welfare state also is a big burden on taxpayers.

The reason for highlighting these problems is that Senator Mitt Romney has unveiled a plan (the “Family Security Act”) to have the federal government provide universal child allowances.

The good news is that his plan will mitigate some of the problems with the current system. The bad news is that his proposal will exacerbate other problems.

Here are some excerpts from the Senator’s summary of the proposal.

The Family Security Act would provide a monthly cash benefit for families, amounting to $350 a month for each young child, and $250 a month for each school-aged child. …Promoting marriage; Providing equal treatment for both working and stay-at-home parents; and Reforming and consolidating outmoded federal programs, including by fully paying for the new proposal….a new national commitment to American families by modernizing and streamlining antiquated federal policies into a monthly cash benefit. …The bill consolidates overlapping and often duplicative federal policies into direct support for families. …deficit-neutral.

That description sounds nice, and the proposal would be beneficial in some ways.

Most notably, there would not be high implicit marginal tax rates on work (a big problem in the current system) since people would get the child allowances regardless of employment status.

But there are some serious drawbacks to the plan. Here are four things that cause concern.

First, it increases the burden of government.

Senator Romney (as well as proponents of the plan such as the Niskanen Center) highlight the fact that the plan is “deficit neutral.” But that doesn’t tell us whether the plan increases or reduces the size and scope of the federal government.

Unfortunately, if you take a close look at the Senator’s summary, it’s clear the proposal would be a net increase in the burden of spending.

Here’s the relevant table, which ostensibly shows Romney’s new spending along with the “spending offsets” that make the plan deficit neutral.

For what it’s worth, I’m disappointed that the Senator (his staff?) chose to be dishonest. Three of the “spending offsets” are actually measures that would increase tax revenue (circled in red).

And when you fix that dodgy bit of accounting, Romney’s plan would add more than $45 billion per year to America’s fiscal burden.

Second, why would anyone think it’s a good idea to copy Europe?

According to an article from HuffPost, “The U.S. is one of the only developed countries that doesn’t pay parents a child benefit or child allowance. Romney’s proposal shows there is bipartisan support for the policy.”

This is an accurate observation, but it’s hardly persuasive. Yes, European nations generally send people money simply because they have children.

But why on earth would we want to copy nations where living standards are far below American levels? Heck, poor people in America tend to be more prosperous than middle-class people in Europe.

By the way, some like Romney’s plan because they think it will boost marriage rates and fertility rates (i.e., lure people into having more children). Seems like that might be theoretically true, but the data show that European birth rates are very low, significantly below American levels.

In other words, don’t hold your breath waiting for more marriages and more children.

Third, it undermines federalism by giving Washington a bigger role rather than smaller role.

I’ve argued that the so-called War on Poverty has been very bad news. We have a Byzantine system of handouts that require an army of bureaucrats to administer dozens of handouts that subsidize bad behavior.

It’s created dependency and the data show it actually has had a negative impact on the trend of poverty reduction and self sufficiency (same thing has happened in other nations as well).

The right approach is to get Washington out of the business of income redistribution. We’re far more likely to get good outcomes if we let states decide (and learn from each other on) how best to reduce poverty.

Fourth, it is akin to a “basic income” that may have a very corrosive impact on societal capital.

I was very opposed to Andrew Yang’s plan to provide universal handouts, in large part because I feared it would undermine personal independence, the work ethic, the spirit of self reliance, and other traits that are critical for a successful society. And I also didn’t trust (for good reason) Yang’s claim that his scheme would replace other redistribution programs.

Well, Romney’s proposal is like a starter version of a basic income, but with the handouts based on the number of children.

I fear this will enable some people to decide they can drop out of the labor force.

Scott Winship of the American Enterprise Institute shares my concerns.

The Romney proposal would take us back to the bad old days in key ways, and policymakers are playing Russian roulette with low-income families’ wellbeing. …some people (including future people) who would choose single parenthood or non-work except that the current safety net makes it unaffordable would be able to afford these choices under child allowances. For them, child allowances are allowances for behavior that would be expected to hurt their own long-term prospects and, more importantly, the wellbeing of their children.

I’ll conclude by observing that Romney’s plan is nowhere near as bad as Congresswoman Ocasio-Cortez’s scheme for universal handouts.

But that’s hardly the test for good legislation. For those who prefer smaller government, less dependency, and less centralization, Romney’s plan is bad news.

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Did George H.W. Bush, Bob Dole, George W. Bush, John McCain, and Mitt Romney Suffer from “Libertarian Economics”?

Even though I’m a staunch libertarian, I’m not under any illusion that everyone is open to our ideas. Particularly since, as I wrote a couple of weeks ago, we get falsely stereotyped as being heartless, hedonistic, anti-social, and naively isolationist.

That’s why I’m willing to accept incremental reforms. Compared to my libertarian dream world, for instance, the entitlement reforms in the Ryan budget are very modest. But they may be the most we can achieve in the short run, so I don’t make the perfect the enemy of the good.

But I do make the bad the enemy of the good. Politicians who expand the size and scope of government get on my wrong side, regardless of whether they are Republicans or Democrats.

Which explains why I haven’t approved of any Republican presidential candidate since Ronald Reagan.

With this in mind, you can imagine my shock when I read Robert Patterson’s recent column that blames recent GOP presidential woes on…you guessed it, “far-right libertarians.”

…in the political big leagues, …the GOP strikes out with the popular vote in five of the past six presidential elections… That familiar lineup shares one big liability: libertarian economics, which has been undermining the Republican brand… That message represents the heart and soul of a party that started sleeping with far-right libertarians in 1990. …In the libertarian universe, “economic freedom” trumps everything: civilization, nation, statecraft, patriotism, industry, culture and family. This “economic freedom,” however, diverges greatly from the liberty that transformed the United States into an industrial, financial and military colossus.

What the [expletive deleted]!

Let’s go down the list of  recent GOP presidential candidates and assess whether they were captured by “far-right libertarians” and their dangerous philosophy of “economic freedom.”

• George H.W. Bush – He increased spending, raised tax rates, and imposed costly new regulations. If that’s libertarian, I’d hate to see how Patterson defines statism.
• 

  Do you see any libertarians? Me neither.

  Robert Dole – All you need to know is that he described his three proudest accomplishments as the creation of the food stamp program, the imposition of the costly Americans with Disabilities Act, and the Social Security bailout. I don’t see anything on that list that’s remotely libertarian.

• George W. Bush – I’ve written several times about Bush’s depressing record of statism. Yes, we got some lower tax rates, but that policy was easily offset by new spending, new intervention, new regulation, and bailouts. No wonder economic freedom declined significantly during his tenure. Not exactly a libertarian track record.
• 

  No libertarians here, either

  John McCain – His track record on spending is somewhat admirable, but he was far from libertarian on key issues such as tax rates, global warming, bailouts, and healthcare.

• Mitt Romney – He was sympathetic to a VAT. He criticized personal retirement accounts. He supported corrupt ethanol subsidies. And he said nice things about the TARP bailout. And I don’t need to remind anybody about Obamacare’s evil twin. Is that a libertarian agenda?

I also disagree with several of the policies that Patterson advocates, such as protectionism and industrial subsidies.

But that’s not the purpose of this post. Libertarians already face an uphill battle. The last thing we need is to be linked to a bunch of big-government Republicans when we share almost nothing in common on economic policy.

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What’s the Difference Between Romneycare and Obamacare?

That’s a trick question, of course, as illustrated by this biting Henry Payne cartoon.

But let’s look at one of the commonalities of Romneycare and Obamacare – higher premiums, thanks to mandates and third-party payer.

Here’s a quick look at what’s been happening to premiums in Massachusetts.

The same thing is already happening with Obamacare, as explained in a Wall Street Journal column by Merrill Matthews and Mark Litow.

The congressional Democrats who crafted the legislation ignored virtually every actuarial principle governing rational insurance pricing. Premiums will soon reflect that disregard—indeed, premiums are already reflecting it. …Guaranteed issue incentivizes people to forgo buying a policy until they get sick and need coverage (and then drop the policy after they get well). While ObamaCare imposes a financial penalty—or is it a tax?—to discourage people from gaming the system, it is too low to be a real disincentive. The result will be insurance pools that are smaller and sicker, and therefore more expensive.

How bad will it be? Well…

Many actuaries, such as those in the international consulting firm Oliver Wyman, are now predicting an average increase of roughly 50% in premiums for some in the individual market for the same coverage. …Arizona, Arkansas, Georgia, Idaho, Iowa, Kentucky, Missouri, Ohio, Oklahoma, Tennessee, Utah, Wyoming and Virginia will likely see the largest increases—somewhere between 65% and 100%. Another 18 states, including Texas and Michigan, could see their rates rise between 35% and 65%.

Which is why 2014 is the “Year of the Snake” in more places than just China.

If you like Ramirez cartoons, you can see some of my favorites here, here, here, here, and here.

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The Final 2012 Election Prediction: Everything from the Electoral College Map to Which Party Controls the House and Senate

If readers of this blog were the only ones voting, Mitt Romney would win in a landslide with 70 percent of the vote and Gary Johnson would edge out Barack Obama for second place.

But I have a sneaking suspicion that readers of International Liberty are not quite representative of the overall population (I need more looters and moochers in my audience, sort of like what you see in this cartoon).

Yes, I’m going to be bold and say that Obama will get more than 12.5 percent of the vote.

Indeed, I’m guessing he’ll get at least a plurality of the vote. And I’m specifically predicting he’ll get a majority of the electoral college.

I’ve been predicting that Obama would win re-election for the past six months, and I see no reason to change my mind now that it’s election day. I’m even moving two more states – New Hampshire and Virginia – into Obama’s column, which will be enough to give him a 294-244 margin in the electoral college.

As you can see from the large number of states in the “leaning” category, I don’t have a high level of confidence in my prediction. And plenty of my Republican friends have made strong arguments that the polls are flawed because of “turnout” assumptions.

But I have no competence to judge the veracity of these claims, so I’m going with my gut instinct and calling it for the Spender-in-Chief.

If my guess of an Obama victory turns out to be correct, I suppose I could claim special insight because of my January 1 prediction that Obama would win if the unemployment rate fell under 8 percent. But as you can see from this graph, I’ve always shown Obama ahead, even when the joblessness rate was higher.

For what it’s worth, I don’t think there’s anything terribly unusual or unconventional about my predictions for the electoral college. But I am going to be a non-conformist in my guesses about the partisan breakdown of the U.S. House and U.S. Senate.

Republicans began the year with high hopes of taking control of the Senate, but a series of mis-steps have hurt the GOP and some people even predict they will lose seats. That’s possible, but I’m going out on a limb and predicting a two-seat gain for Republicans.

I’m also going to be a non-conformist in my predictions for the lower chamber, guessing a one-seat pick-up for the GOP.

I’ll also make two final predictions. First, drawing from my post yesterday about key ballot initiatives, I predict that California voters will reject all the proposed tax increases. This will prove that left-wingers are capable of being right-wingers when their own money is on the table.

Second, I’ll offer a prediction that’s about as controversial as asserting that the sun will rise in the east and set in the west. I predict that government will get even bigger over the next four years, which will mean more corruption and weaker economic performance.

P.S. My predictions for the U.S. Senate assume that the independent candidate will win in Maine and will ally himself with the Democrats.

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The Penultimate Electoral Map Prediction for the 2012 Election…Plus a Reader Poll

I was going to wait until the morning of the election to make my final prediction for the 2012 elections, but I’m inexplicably getting a lot of emails asking whether I’ve changed my mind since I predicted last month that Obama would eke out a narrow 271-267 victory.

So I’m going to cave to peer pressure and make a next-to-final guess about the outcome.

But my GOP friends won’t be happy, because the only thing I’m changing is that I’m putting Nevada in Obama’s column.

You’ll also notice I’m hedging my bets by putting lots of states in the “leaning” category. Depending on how these states break, we could get everything from a 332-206 rout for Obama to a comfortable 301-237 victory for Romney.

I’m curious, by the way, to see who readers support. Please vote below, and feel free to add additional thoughts in the comments section. This is a highly scientific poll (at least by the standards of the global warming cranks who say that “climate change” causes AIDS and that skeptics are racist).

The candidates are in alphabetical order, by the way, so Gary Johnson’s position has no significance beyond the fact that “J” comes before “O” or “R.”

Next Tuesday, I’ll include my predictions for the House and Senate when I make my final guess about the presidential election. Not to brag too much, but I was right on the mark in my prediction for the U.S. House and off by just one seat in my prediction for the U.S. Senate.

P.S. I’ll be very happy next Wednesday because the political silly season will be over and we can get back to what really matters – figuring out how to control the burden of government spending, how to implement much-needed entitlement reform, and how to fix the corrupt tax system.

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Is There a Libertarian Argument for another Four Years of Barack Obama?!?

From a rational perspective, the logical choice is not voting. After all, the odds of your vote making a difference are infinitesimally small.

But that’s if you view voting as an “investment” choice – i.e., you taking time and effort to do X in hopes of getting Y in return.

The other view is that voting is a “consumption” choice – i.e., something we do for enjoyment, like eating a hamburger or going to a movie. You recognize your vote almost surely won’t matter, but you do it because it gives you pleasure to vote for someone (or, in my case, it gives you pleasure to vote against someone).

Now let’s consider libertarians, conservatives, and other advocates of small government. Regardless of whether they’re investment voters or consumption voters, what should they do this election?

You could take an online test and see which candidate matches your views.

Mike Godwin of Reason, however, says you should vote for Barack Obama. Though he starts out by suggesting that most of us should vote for the Libertarian candidate.

…if you’re a Libertarian who’s not in a swing state – you live in California, maybe, or Texas – there’s no compelling reason for you to cast your vote for anyone other than Gary Johnson.

But then he argues that voters in battleground states should prefer Obama over Romney.

…you should give some thought to voting for Obama as the lesser of the two big-government, Harvard-educated evils. …Romney seems perfectly capable of adopting a liberal government program when it suits him. While Romney officially opposes Obamacare, it’s scarcely different from the health-care reform Romney presided over in Massachusetts.

I suspect most supporters of limited government won’t disagree with his assertion that Romney is squishy, but then Godwin goes off the reservation.

…there actually is a libertarian argument for Obamacare. …a truly universal system is the best option for maximizing health-care efficiencies. And if we can preserve some aspects of competition among insurers (which Obamacare, mimicking the health-care plan proposed by the GOP to counter Bill Clinton’s efforts at health-care reform, attempts to do), that’s all to the good. But there’s an even stronger libertarian argument for Obamacare. Namely, it frees more Americans to take better jobs without worrying about losing the health care plan they had in their old jobs. Worker mobility is one of the things that reliably fuels free enterprise, and workers will be more mobile under Obamacare than they would be under Romney’s semi-dismantled version of it.

I obviously disagree, but Godwin isn’t being crazy. Indeed, he’s basically echoing the pro-mandate position that was advanced by my former colleagues at the Heritage Foundation.

This is a reasonable position if you start from the premise that there’s no way of unwinding most of the existing government policies that have prevented markets from operating in the healthcare sector. That’s not my view, so I’m merely saying Godwin has a legitimate point, not that he’s right.

Getting back to his pro-Obama argument, he closes with discussion of social issues.

…let me underscore three points where Obama is surely closer to libertarians than Romney is. One of these is abortion rights, self-evidently. …Another is immigration. …A third quasi-libertarian position is Obama’s late-arriving but still-welcome stance on gay marriage.

I don’t find these arguments compelling. Libertarians are not monolithically pro-life or pro-choice. But to the extent there’s unanimity, they agree that Roe v. Wade was a nonsensical decision and that the issue should be decided by state legislatures. Which sort of makes them allies with Republicans, even if they don’t necessarily agree with how states should handle the issue.

I’m also more skeptical of immigration amnesty than the average libertarian, largely because I agree with Milton Friedman about the risks of combining open borders with a welfare state.

And I also think marriage should be a private institution with no role for government, though if you read the details of the article, it appears that Godwin has the same perspective.

“Me, the choice of libertarians?!?”

To summarize, I don’t find Godwin’s arguments convincing. If he really wanted to convince conservatives, libertarians, and other supporters of small government that Obama was the right choice, he should have argued that Romney would be another big-government statist like Bush. That’s a very compelling argument, as you can see from this list of Romney transgressions.

He even could have made the argument that keeping Obama for an additional four years would be the best way of laying the groundwork for a Reagan-style victory in 2016 with a presumably small-government advocate like Rand Paul, Marco Rubio, or Paul Ryan at the top of the ticket. That would have caught my attention since my first political decision was to favor Carter over Ford in 1976 in hopes of paving the way for Reagan in 1980.

By the way, I’m not saying it’s right or wrong to vote for Romney, Obama, or Johnson. My job is to focus on policy, not politics. But it is the silly season of politics, so I can’t resist making some observations.

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According to an Online Survey, Gary Johnson Is the Presidential Candidate Closest to My Views

About one year ago, I took an online quiz put together by the folks at Reason and discovered that Ron Paul was closest to my views.

Not that I was terribly surprised, though I confess that I don’t remember if Gary Johnson was part of the quiz. And, if so, whether there were any differences between him and Ron Paul.

Speaking of Gary Johnson, I just took a quiz at the ISideWith website and it tells me that Gary Johnson shares 97 percent of my views.

That’s not a big shock, but I was surprised that the poll says I’m more Republican than Libertarian.

Methinks the people who put together the poll must be high on crystal meth. Yes, I’m probably a bit more conservative than the average libertarian on issues like terrorism and immigration, but I’m a far, far stronger advocate of limited government than the average GOPer.

But I gather the poll probably matches your views with the rhetoric of various candidates and parties, not their actual records.

And the gap between Republican rhetoric and Republican performance probably explains why just about every prominent libertarian is ignoring the GOP and voting for Gary Johnson, according to this survey by Reason. Unless, of course, they think voting is a waste of time.

P.S. In the for-what-it’s-worth department, the ISideWith people report that Gary Johnson’s views attract majority or plurality support from voters in South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, Oklahoma, Arkansas, Texas, Arizona, Utah, Idaho, and Nevada.

P.P.S. Mitt Romney’s views don’t have majority support in any state.

P.P.P.S. Since the United States is supposed to be a constitutional republic rather than a majoritarian democracy, I don’t like any group of voters having the power to muck up my life.

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Finally, a Compelling Argument for Romney

I’ve repeatedly expressed my concerns that Romney would be another Bush, expanding the burden of government spending and failing to engage in desperately needed entitlement reform.

I’ve even shared some R-rated anti-Romney humor, so folks know I’m not a knee-jerk Republican.

But I have to confess that this new global poll is the most persuasive pro-Romney information that I’ve seen. Simply stated, if the nation that elected an idiot like Hollande overwhelmingly supports Obama, then maybe the alternative is acceptable.

On the other hand, I’m mystified why the Aussies are so in the tank for Obama. I thought they were rather sensible, based on their good economic reforms.

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Insightful Debate Response

I showed the winner of the debate the other day.

Now it’s time to show the loser. Or, to be more precise, here’s a couple who would be among the losers if they were willing to be victimized.

Now time for a caveat. if the election somehow results in genuine entitlement reform, I will gladly advise this couple to return.

P.S. The cartoon is humorous, but there is a serious point to be made about the fight-or-flight response to bad government policy. I’m obviously committed to fighting for liberty, but I don’t blame people who move to other nations in search of more freedom.

But Americans have to do more than simply move since the United States has the worst worldwide tax system of all nations. To escape the greedy and grasping claws of the IRS, they have to disengage with the U.S. government, either by legally giving up citizenship or by dropping off the grid.

I’ve met probably more than 100 Americans in about a dozen nations who have felt compelled to exercise one of these options, sometimes known as “going Galt.” Usually they choose the latter, which generally requires them to first move all their assets out of America and to make sure those assets are managed by non-U.S. firms.

P.P.S. There are also statists who sometime seek to leave America when they disapprove of the government. At least that’s the implication of this humorous report about leftists trying to escape after the 2010 elections.

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Supporters Urge Romney to Announce that He Intends to Reverse the Statist Policies of Obama…and Bush

People in the political world say that President Obama threw Secretary of State Clinton under the bus in an attempt to protect himself from political fallout from Libya.

I don’t follow those issues, so I can’t comment about the veracity of that charge, but I find it very interesting that some conservatives are urging Mitt Romney to throw former President George W. Bush under the bus.

More specifically, they’re urging him to condemn Bush’s statism and to attack Obama for continuing Bush’s failed policies.

Since I’ve attacked Bush for expanding the burden of government spending and reducing economic freedom, this resonates with me.

Phil Kerpen of American Commitment nails the issue in a column for Fox News.

Romney’s biggest missed opportunity in the second debate wasn’t on Libya…he should have connected the dots between Obama and Bush to illustrate the accurate point that on the most significant dimensions of economic policy, Obama has accelerated Bush’s policy errors rather than reversing them. In the crucible of the 2008 financial crisis, President Bush famously remarked that “I chucked aside my free-market principles .” He was referring to TARP, his infamous big bank bailout. Obama supported the bill and voted for it. …On government spending, it’s the same story. Bush racked up one of the most disastrous records of out-of-control spending and debt the country had ever seen. Every aspect of the federal budget jumped under Bush. …Obama came in and continued spending recklessly. Bush’s $152 billion stimulus bill failed and so did Obama’s $821 billion stimulus bill. Bush flushed $25 billion in bailout funds to Chrysler and General Motors, and Obama added another $20 billion before finally recognizing that the companies would inevitably file for bankruptcy. All of the pre-bankruptcy bailout dollars were lost. …On the biggest economic policy questions, the Bush/Geithner/Bernanke approach is almost indistinguishable from the Obama/Geithner/Bernanke approach. It hasn’t worked. Obama’s failed policies of the present are all too similar to Bush’s failed policies of the past.

Amen. Bush was a statist, period.

Peter Wallison of the American Enterprise Institute made similar points in an article for the Weekly Standard.

Obama’s claim that Bush’s policies caused the recession resonates with American voters. Almost four years after George W. Bush left office, polls show the American people continue to blame him—more than Obama—for the recession that created today’s dismal economic conditions. Throughout the fall and in their debates, it’s a sure thing that Obama will continue to argue that Romney is just another George W. Bush. How can Romney respond? …Romney should not deny Bush’s error. Although Clinton began the process of forcing low mortgage underwriting standards, Bush continued and enhanced it. Instead, Romney should point out that the government should never have been in the housing finance business, and that he will eliminate Fannie and Freddie to restore a functioning housing market—something Obama has failed to do in almost four years.

But here’s where I disagree with Kerpen and Wallison, or at least where I would add a big caveat to their analysis. What makes them think that Romney would be any different that Bush or Obama?

This post highlights a few of Romney’s policies that would undermine free markets and expand the public sector.

If all one cares about is whether politicians have an “R” or a “D” after their names, then my concerns don’t matter.

But if you’re actually interested in making America a better place, then policy matters a lot.

I’ll close with a final point. I have no idea whether Romney is a closet statist or a closet Reaganite. All I’m saying is that, if Romney wins, people who value limited government and freedom should begin working on November 7 to take whatever steps are necessary to prevent Romney from becoming another RINO such as Bush or Nixon.

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Definitive Proof Showing the Guy Who Won the Debate

Partisans for both Obama and Romney are arguing about who won the debate.

But having listened to all the debates so far, I think this guy has been the clear winner.

With the exception of Romney saying he wants to defund Big Bird and the rest of the moochers at PBS, I don’t think either candidate has breathed a word about the need to reduce the burden of government spending.

And because neither candidate seems serious about following Mitchell’s Golden Rule, their assertions about middle-class tax relief almost surely are insincere.

P.S. Though, to give Obama credit, I think he is completely serious about wanting to impose class-warfare tax hikes.

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After Obama’s Weak Debate Performance, I’m Now Predicting a Razor-Thin Election

On the big issue of who wins the presidential election, I’ve been as constant as the north star.

But for state-by-state estimates, I’ve been flipping back and forth like a corrupt politician (pardon my redundancy) trying to decide between two interest groups.

• Four months ago, I predicted that Obama would win reelection with 297 electoral votes, 27 more than needed.
• Back in July, I shifted Virginia to Romney’s column and predicted Obama would still win, but with 284 votes.
• Then in August, I predicted things were moving even farther in the GOP direction. By moving Colorado to the Republican side, I guessed the outcome would be 275-263 for Obama.
• Last month, I shook things up a bit and gave Florida to Obama and Wisconsin and Iowa to Romney, resulting in a 288-250 margin in Obama’s favor.

This month, I’m reversing everything from last month. I give Florida back to Romney, largely on the basis of his performance in the debate. Moreover, I was thinking of giving Virginia and Colorado back to Obama, thus changing what I did in July and August, but decided to leave those states in the GOP camp because of what happened on the stage in Denver.

But I decided I was wrong about Iowa and Wisconsin. The polls from those two states are simply too unfriendly and I’m guessing the Obama turnout operation will be stronger.

However, I’ve decided to shift New Hampshire to Romney, again because of the debate, so the net effect is a very close election. But Obama still prevails.

For what it’s worth, the folks at Real Clear Politics show Obama winning 303 electoral votes. The difference in our projections is that they give Nevada, Colorado, Virginia, and New Hampshire to Obama.

Are they right? Well, their estimates are based on polling data, so you have to ask yourself if the polls are accurate and/or if the polls today reflect what will happen on November 6.

Intrade says Obama is a 2-1 favorite, so the people putting money on the table certainly think the election isn’t that close. Then again, Intrade had Obama as a 3-1 favorite before the debate, so that number also can move a lot.

P.S. I realize Romney supporters probably aren’t very happy with my prediction. To compensate for being the bearer of bad news, you can see some viciously funny anti-Obama jokes here, here, and here.

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Can the Secret Service Protect Romney from the Muppets?

Since the greatest threat to America’s future is a growing burden of government spending, I watched last night’s debate with hopes of seeing some evidence that either candidate understood that challenge and was determined to put Washington on a diet.

Needless to say, I didn’t have much hope for Obama, who has spent the past four years recycling Bush’s mistakes.

And I wasn’t too optimistic about Romney, either, though he’s tentatively open to entitlement reform.

Romney, however, did provide my favorite moment in the debate. He unambiguously said it’s time to wean PBS from the public teat.

I’ve already written about the need to defund state radio and state TV, so this was music to my ears.

But, as you can see from the attached image, I wonder whether Romney inadvertently put himself at risk.

We’ve already seen from the riots in nations such as Greece and England that people who get lured into government dependency have a tendency to lash out when faced with even minor cutbacks in their subsidies.

Well, Romney is suggesting cold turkey for the moochers at National Public Radio and the Public Broadcasting system, so the Secret Service needs to be prepared for Big Bird run amok.

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Debunking Obama’s Flawed Assertions on Tax Deductions and Corporate Welfare

In a violation of the 8th Amendment’s prohibition against cruel and unusual punishment, my brutal overseers at the Cato Institute required me to watch last night’s debate (you can see what Cato scholars said by clicking here).

Tweedle Dee and Tweedle Dum

But I will admit that it was good to see Obama finally put on the defensive, something that almost never happens since the press protects him (with one key exception, as shown in this cartoon).

This doesn’t mean I like Romney, who would probably be another Bush if he got to the White House.

On the specifics, I obviously didn’t like Obama’s predictable push for class warfare tax policy, but I’ve addressed that issue often enough that I don’t have anything new to add.

I was irked, though, by Obama’s illiteracy on the matter of business deductions for corporate jets, oil companies, and firms that “ship jobs overseas.”

Let’s start by reiterating what I wrote last year about how to define corporate income: At the risk of stating the obvious, profit is total revenues minus total costs. Unfortunately, that’s not how the corporate tax system works.

Sometimes the government allows a company to have special tax breaks that reduce tax liabilities (such as the ethanol credit) and sometimes the government makes a company overstate its profits by not allowing it to fully deduct costs.

During the debate, Obama was endorsing policies that would prevent companies from doing the latter.

The irreplaceable Tim Carney explains in today’s Washington Examiner. Let’s start with what he wrote about oil companies.

…the “oil subsidies” Obama points to are broad-based tax deductions that oil companies also happen to get. I wrote last year about Democratic rhetoric on this issue: “tax provisions that treat oil companies like other companies become a ‘giveaway,’…”

I thought Romney’s response about corrupt Solyndra-type preferences was quite strong.

Here’s what Tim wrote about corporate jets.

…there’s no big giveaway to corporate jets. Instead, some jets are depreciated over five years and others are depreciated over seven years. I explained it last year. When it comes to actual corporate welfare for corporate jets, the Obama administration wants to ramp it up — his Export-Import Bank chief has explicitly stated he wants to subsidize more corporate-jet sales.

By the way, depreciation is a penalty against companies, not a preference, since it means they can’t fully deduct costs in the year they are incurred.

On another matter, kudos to Tim for mentioning corrupt Export-Import Bank subsidies. Too bad Romney, like Obama, isn’t on the right side of that issue.

And here’s what Tim wrote about “shipping jobs overseas.”

Obama rolled out the canard about tax breaks for “companies that ship jobs overseas.” Romney was right to fire back that this tax break doesn’t exist. Instead, all ordinary business expenses are deductible — that is, you are only taxed on profits, which are revenues minus expenses.

Tim’s actually too generous in his analysis of this issue, which deals with Obama’s proposal to end “deferral.” I explain in this post how the President’s policy would undermine the ability of American companies to earn market share when competing abroad – and how this would harm American exports and reduce American jobs.

To close on a broader point, I’ve written before about the principles of tax reform and explained that it’s important to have a low tax rate.

But I’ve also noted that it’s equally important to have a non-distortionary tax code so that taxpayers aren’t lured into making economically inefficient choices solely for tax reasons.

That’s why there shouldn’t be double taxation of income that is saved and invested, and it’s also why there shouldn’t be loopholes that favor some forms of economic activity.

Too bad the folks in government have such a hard time even measuring what’s a loophole and what isn’t.

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Have Fun with Both Anti-Obama Jokes and Anti-Romney Jokes

I can’t think of a better way to begin a weekend than by abusing the clowns who want to control our lives.

So, courtesy of News-max.com, here are some of the one-liners bashing the political elite from the late-night talk shows.

Jay Leno (the 5th joke reminds me of this amusing poster)

• It’s been a rough week for Mitt Romney. Former Minnesota Governor Tim Pawlenty has quit as co-chair of Mitt Romney’s presidential campaign. I think the technical term is “jumping ship.”
• I saw a guy today scraping a Romney bumper sticker off his car. It was Paul Ryan.
• Political pundits are taking Mitt Romney to task, saying his latest gaffe was not “presidential.” Vice presidential, sure. That’s Joe Biden territory.
• According to the Labor Department, unemployment fell from 8.3 percent to 8.1 percent last month. But that’s because 368,000 Americans gave up looking for work. Today, President Obama said that’s a step in the right direction, and he is encouraging more Americans to give up looking for work.
• Bill Clinton said that President Obama inherited a deeply damaged economy. And if he’s re-elected he’ll inherit an even more deeply damaged economy.
• President Obama’s re-election campaign said that this year they’ll knock on 150 percent more doors than they did in 2008. Well, of course they will. They have to. There’s so many foreclosures it’s tough to tell where people live.
• I’m very excited; we have Ron Paul on the show tonight. Unlike the Republicans, we’re actually going to let him speak.
• A man in Florida has been arrested for wearing a President Obama mask while robbing a McDonald’s. To show you how good this guy’s disguise was, instead of a holdup note he was reading from a teleprompter.
• This Obama robber made some pretty scary threats to the McDonald’s employees. He said, “Give me your money, or else my economic plan will have you working here for the rest of your life.”
• According to The New York Times, more than half of President Obama’s Twitter followers are fake. They don’t even exist. Which is actually a good thing because if they did exist there wouldn’t be any jobs for them.
• President Obama is seeking to make his case with first-time voters. Well, you can understand why. Second-time voters have graduated and can’t find a job.
• It looks like Hurricane Isaac has delayed the Republican convention for one day. This is a big storm. In fact, Isaac has scared more senior citizens than Paul Ryan.
• Some of the Republicans, I think, are over-reacting to Hurricane Isaac — like today Rick Santorum was seen gathering up two of every animal.
• Herman Cain was in Tampa. When a reporter asked him if Isaac reminded him of Katrina, he said, “I never even met the woman.”

David Letterman

• Leaves are falling, temperatures are falling, Romney’s poll numbers are dropping. It must be autumn.
• Happy birthday to New Jersey Gov. Chris Christie, who is 50 years old. They had a cake for him. He blew out the candles and then he wished for another cake.
• Are you excited about Labor Day weekend? That’s a holiday where Americans take three days off from looking for a job.

Conan

• A lot of people are commenting that Mitt Romney is looking extremely tan lately. In fact, if Romney gets any darker he’s not going to vote for himself.
• Mitt Romney is trailing in the polls. After being accused of being too vague, Romney’s campaign team says they will start being more specific. When asked when, they said, “Soon-ish.”
• New polling shows President Obama has a 10-point lead in Mitt Romney’s home state of Michigan. Although in Obama’s home state of Hawaii, Romney has a 10-house lead.
• Early this morning in Los Angeles police were involved with a high-speed chase with a suspect drawing a crowd by throwing money out the window. Is it me or is Mitt Romney getting desperate?
• In Yemen, a U.S. drone strike has killed al-Qaida’s number two leader, the sixth second in command the U.S. has killed. This is one area where Obama can say he definitely is creating jobs.
• Over the weekend Mitt Romney made an appearance at a NASCAR race in Virginia. There was an awkward moment when he asked a NASCAR driver why he didn’t just hire a chauffeur.
• Mitt Romney released another ad that features Hispanic voters speaking in Spanish. The ad ends with him saying, “I’m Mitt Romney, and I have no idea what these people are saying.”
• Today Scarlett Johansson, Kerry Washington, and Eva Longoria all spoke at the Democratic convention. This means that Obama has all but clinched the crucial 13-year-old boy vote.
• If you’re a donor to President Obama’s campaign, you were promised exclusive access to Joe Biden — and for an extra $10,000 absolutely no access to Joe Biden.
• A group of coal miners in Ohio said that their bosses forced them to attend a Mitt Romney campaign event. You know you’re boring when people would rather dig coal than listen to you speak.

Jimmy Kimmel

• Mitt Romney was on “Live With Kelly and Michael.” At one point Mitt was asked what he wears to bed. He said as little as possible. It’s the same philosophy that Mitt has in regard to paying taxes.

Jimmy Fallon (his next-to-last joke reminds me of this classic from Craig Ferguson)

• On Saturday, Mitt Romney took some time off from campaigning to watch his grandson’s soccer game. Though it got awkward when one team pulled their goalie and Romney was like, “Look at that — another job lost under President Obama.”
• Yesterday in Nevada, President Obama said he’ll win the election if the turnout is anything like it was in 2008. While voters said he’d win if he were anything like he was in 2008.
• Actually, members of Mitt Romney’s own party are starting to criticize him for being too vague. When asked if that bothers him, Romney said, “Maybe.”
• A new CNN poll shows that President Obama now has a six-point lead over Mitt Romney. You can tell Romney’s depressed — last night he just sat on his couch and bought the Häagen-Dazs corporation.
• Yesterday, Paul Ryan said that he and Mitt Romney won’t reveal their tax plan to the public until after the election. Other politicians couldn’t believe it. They were like, “At least do the honorable thing and lie.”
• A new poll shows that President Obama has expanded his lead over Mitt Romney since the Democratic National Convention. Of course, it didn’t help Obama as much as that other event — the Republican National Convention.
• There are reports that nine of the hotels being used for politicians at the Democratic National Convention have bedbugs. When asked what it’s like to have to deal with thousands of ruthless bloodsuckers, the bedbugs were like, “Eh, it’s OK.”
• Over the weekend, a chef in Minnesota created the world’s largest bacon cheeseburger, weighing in at over 2,000 pounds. And if you want to hear what it tasted like, you’ll just have to wait until I interview Chris Christie.

Craig Ferguson

• Over the weekend, Vice President Joe Biden hung out with a biker gang in Ohio. I don’t know if that’s wise. It’s not always a good idea to be associating with shady characters. So next time, think twice, bikers.
• Former Democratic nominee John Kerry is going to give a speech about foreign policy. It will be like Clint Eastwood’s speech except this time the empty chairs will be in the audience.
• At the convention tonight, the surprise speaker was Clint Eastwood. What’s more surprising than a grumpy old white guy at the Republican convention?
• I can’t wait to see the debate between Ryan and Joe Biden. Biden is said to be already trying out different strategies. So far the one that Obama likes is where Biden pretends to have food poisoning and they cancel the debate.

As always, here are previous editions of the jokes from the late-night talk show hosts: here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

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Three States Flip in New Projection of 2012 Electoral Map, but Obama Still Leads

Three months ago, I predicted that Obama would win reelection with 297 electoral votes, 27 more than needed.

Back in July, I shifted Virginia to Romney’s column and predicted Obama would still win, but with 284 votes.

Last month, I predicted things were moving even farther in the GOP direction. By moving Colorado to the Republican side, I guessed the outcome would be 275-263 for Obama.

Romney partisans will be disappointed to learn, though, that their candidate has fallen a bit further behind in my new prediction for the 2012 election.

The big change is that I moved Florida to the “leaning Obama” category and those 29 electoral votes more than offset the impact of shifting Iowa and Wisconsin to the “leaning Romney” column.

Why these changes? Well, I suspect that the demagoguery on Social Security and Medicare will hurt in Florida, even though the GOP platform on entitlement reform is that people over age 55 are exempt.

I’m shifting Wisconsin because of Paul Ryan. As for Iowa, I’m going by nothing but gut instinct.

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Romney is Right that You Can Lower Tax Rates and Reduce Tax Preferences without Hurting the Middle Class

Even though I’m not a Romney fan, I sometimes feel compelled to defend him against leftist demagoguery.

But instead of writing about tax havens, as I’ve done in the past, today we’re going to look at incremental tax reform.

The left has been loudly asserting that the middle class would lose under Mitt Romney’s plan to cut tax rates by 20 percent and finance those reductions by closing loopholes.

That class-warfare accusation struck me as a bit sketchy because when I looked at the data a couple of years ago, I put together this chart showing that rich people, on average, enjoyed deductions that were seven times as large as the deductions of middle-income taxpayers.

And the chart includes only the big itemized deductions. There are dozens of other special tax preferences, as shown in this depressing image, and you can be sure that rich people are far more likely to have the lawyers, lobbyists, and accountants needed to exploit those provisions.

But that’s not a surprise since the internal revenue code has morphed into a 72,000-page monstrosity (this is why I sometimes try to convince honest leftists that a flat tax is a great way of reducing political corruption).

But this chart doesn’t disprove the leftist talking point, so I’m glad that Martin Feldstein addressed the issue in today’s Wall Street Journal. Here’s some of what he wrote.

The IRS data show that taxpayers with adjusted gross incomes over $100,000 (the top 21% of all taxpayers) made itemized deductions totaling $636 billion in 2009. Those high-income taxpayers paid marginal tax rates of 25% to 35%, with most $200,000-plus earners paying marginal rates of 33% or 35%. And what do we get when we apply a 30% marginal tax rate to the $636 billion in itemized deductions? Extra revenue of $191 billion—more than enough to offset the revenue losses from the individual income tax cuts proposed by Gov. Romney. …Additional revenue could be raised from high-income taxpayers by limiting the use of the “preferences” identified for the Alternative Minimum Tax (such as excess oil depletion allowances) or the broader list of all official individual “tax expenditures” (such as tax credits for energy efficiency improvements in homes), among other credits and exclusions. None of this base-broadening would require taxing capital gains or making other changes that would reduce the incentives for saving and investment. …Since broadening the tax base would produce enough revenue to pay for cutting everyone’s tax rates, it is clear that the proposed Romney cuts wouldn’t require any middle-class tax increase, nor would they produce a net windfall for high-income taxpayers. The Tax Policy Center and others are wrong to claim otherwise.

In other words, even with a very modest assumption about the Laffer Curve, it would be quite possible to implement something akin to what Romney’s proposing and not “lose” tax revenue.

This doesn’t mean, of course, that Romney seriously intends to push for good policy. I’m much more concerned, for instance, that he’ll wander in the wrong direction and propose something very bad such as a value-added tax.

But Romney certainly can do the right thing if he wins. Assuming that’s what he wants to do.

Just like he can fulfill his promise the reduce the burden of government spending by implementing Paul Ryan’s entitlement reforms. But don’t hold your breath waiting for that to happen.

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Do You Trust the Republican Party to Protect, Promote, and Defend Liberty?

While I have strongly praised the GOP for embracing entitlement reform and supporting the Ryan budget, I’m not under any illusions that the average Republican politician is fully committed to free markets and limited government.

Even after the Tea Party election of 2010, there have been some very disappointing moments.

• Republicans have been using Keynesian arguments to oppose budget cuts.
• Republicans have expanded federal transportation funding.
• Republicans have increased the budget of the Export-Import Bank.
• Republicans have boosted subsidies for housing.

This doesn’t mean that GOPers are hopeless, but it does confirm my point that almost all politicians are a combination of good and bad impulses. It’s sort of like they have an angel on one shoulder and a devil on the other shoulder.

So who is winning, the angel or the devil? The Wall Street Journal opines in favor of the angel.

Four years in the wilderness seem to have had the salutary effect of returning the Party of Lincoln to a focus on government reform and economic revival. …The surprise is how quickly the GOP has rebounded from the routs of 2006 and 2008, starting in the states. …The reform momentum has since gained speed as a reaction to the Obama Presidency. First in 2009 with Chris Christie in New Jersey and Bob McDonnell in Virginia, Governors from the East across the Midwest and through the Southwest have won on reform agendas that they have been able to implement to varying degrees. …The common theme is ‘s ability to finance them. The contrast of these GOP states couldn’t be greater with the union-dominated Democratic governments of Illinois, California and Connecticut, which resist reform and simply default to ever-higher taxes. …The reform impulse has carried over to Washington, thanks to the Congressional victories of 2010. …Much of the credit here goes to the Tea Party, which has used GOP primaries to elevate reformers and motivate incumbents to change or face defeat.

I agree with much of the column, particularly the credit to the Tea Party and the indirect reference (“restraining governments that were growing far more rapidly than the private economy”) to Mitchell’s Golden Rule.

But I’m more pessimistic about whether the GOP has truly learned the right lessons from the failures of Bush-Rove era. Take this quiz and see if you share my qualms.

1. If Mitt Romney wins and proposes to burden the U.S. economy with a value-added tax, would a majority of Republicans rise up in revolt and oppose that dangerous idea?
2. If Mitt Romney wins and decides to only make cosmetic changes to Obamacare, would most Republicans rebel and push to fully repeal the costly legislation?
3. If Mitt Romney wins and endorses a new version of TARP, would the Republican caucus stand firm in opposition?

To be blunt, I don’t think a majority of Republicans would do the right thing if these tests took place. The GOP leaders on the Hill, after all, are the same crowd that gladly supported all the reckless spending and foolish intervention of the Bush years.

Yes, there are some fresh faces and Tea Party types who would stand with taxpayers, but I don’t think they’re anywhere close to being a majority of the GOP caucus.

And don’t forget that the Republican establishment in Washington is heavily influenced by corrupt lobbyists – many of them former GOP politicians!

So what’s it all mean? Well, as the cartoon indicates, Republicans are now more likely to say the right thing. But rhetoric is easy. I’m much more interested in their actions.

The only great president of my lifetime famously said “trust, but verify.” But I don’t even trust the GOP, so I definitely want to see results first.

P.S. If you like the cartoon, you’ll like this poster featuring Ron Paul and this English-to-Republicanese dictionary.

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Two Good Anti-Romney Videos and One Good Anti-Obama Video

Earlier this month, I posted some risqué Romney humor, and a few days later I hit Obama with a very funny poster.

Today, in keeping with this bipartisan approach, here are three videos. Two of them make fun of the presumptive GOP nominee and one mocks the boy-crying-wolf way that the left cries racism whenever someone criticizes Obama.

We’ll start with this video, which effectively dings Romney for his lack of core convictions. The guy who does Romney’s voice is very good.

I’ve criticized Romney for a bunch of statist policy positions, but I confess that I have no idea if he actually believes in those views – just like I have no idea if he’s sincere when he says something I like.

That’s what makes the video so effective.

Obama girl could influence my vote

This next video is also worth sharing, but I don’t think it’s as effective. First, the “Romney Girl” isn’t as attractive as the “Obama Girl,” and that matters when trying to reach immature males in the audience (like me!).

Second, the guy playing Romney doesn’t look like him.

On the other hand, the video deals with one of my favorite topics and also involves one of my favorite nations.

So watch and judge for yourself.

If you want a quick and serious explanation of why the “tax haven” charge against Romney is without merit, feel free to peruse this post.

But this post is more about whether videos are politically effective, not whether they’re accurate.

Now let’s look at a video mocking the Obamanoids for reflexively crying racism.

I have no doubt that there are some racists who don’t like Obama, but it is a bit over the top to see some leftists routinely cry race when they’re losing arguments.

But if I had to defend Obama’s miserable economic record, I supposed I’d have to cry wolf as well.

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President Obama Is MIA on Fiscal Policy

I feel like a pendulum this election season. Something will happen that makes me want to eviscerate Obama’s statist policies and I’ll write a foaming-at-the-mouth post warning that the President is turning America into Greece.

But then Romney will do something odious and I’ll sound the warning sign with a we-don’t-need-another-big-spender-like-Bush post.

Today, it’s Obama’s turn on the chopping block. I went on Neil Cavuto’s Fox Business News program and commented on the fact that the President doesn’t have a fiscal plan.

We started by discussing the President’s failure to embrace the findings of his own Fiscal Commission and then shifted to the big-picture issue of whether the American people have become ensnared by the dependency mindset and are willing to vote for Greek-style fiscal policy.

One thing I should have added is that Obama actually does have a fiscal plan. He’s just not willing to be as honest as the leftists who have admitted that you need to screw the middle class with higher taxes to fund big government.

My own personal guess is that he would impose a value-added tax if he thought it was politically feasible. Not that I’m showing any great insight. After all, Obama already has made the ridiculous statement that a VAT is “something that has worked for other countries.”

But because he’s running for reelection, he’d rather just demagogue the Ryan plan rather than show his own cards.

P.S. Even the cartoonist for the Washington Post doesn’t think the VAT is something that is working for other countries. This cartoon is a classic and definitely worth sharing. And you can enjoy other VAT cartoons here and here.

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Romney’s Disingenuous Mediscare Attack

Republicans are despicable people.

Some of you may be wondering why I would say such a thing. After all, I periodically express my profound admiration for Ronald Reagan (as well as my appreciation for the only other good President of the past 100-plus years).

Moreover, I just wrote a Wall Street Journal editorial saying nice things about the Ryan budget.  And I also have done a couple of TV interviews explaining how that plan would do a good job of controlling the burden of government spending.

But these are the exceptions. What really matters is what Republicans do when they actually hold power. By that standard, most GOPers are terrible.

Bush was a reckless big spender, for instance, and I’ve compiled a list of examples that make me think Romney would be equally disappointing.

And now I have something new for my list of Romney transgressions. Take a look at this awful campaign commercial.

Several things about this commercial make me nauseous.

• First, current seniors did not pay for Medicare. The Medicare payroll tax only covers about one-third of projected costs. To be fair, the ad doesn’t claim that seniors completely self-financed their benefits, but it clearly promotes the entitlement mindset – particularly with the nonsense about “guaranteed healthcare.”
• Second, while I agree that Obamacare is a “massive new government program,” it’s downright pathetic to run an ad defending an even more massive old government program.
• Third, Obama did not cut Medicare. He merely reduced the program’s rate of growth. Republicans correctly complain when leftists demagogue about non-existent spending cuts, but they lose all credibility when they use the same dishonest tactics.

You might be thinking that Romney was out of the loop when some campaign consultants went rogue and put together a deeply flawed commercial.

Don’t kid yourself. Here’s what Romney just said, as reported by the L.A. Times.

At a campaign fundraiser in Charlotte on Wednesday, Romney told NASCAR team owners and other donors that Obama “cut Medicare funding for current Medicare retirees” to pay for his healthcare overhaul. “That came out of the Medicare trust fund,” Romney told supporters at Duke Mansion, a colonial-style banquet hall. “He raided that trust fund to pay for Obamacare. And as seniors hear this, they’re going to be angry.” …Restoring the cuts, as Romney advocated Wednesday in a CBS interview, would swell the federal deficit in kind. Romney, who has named deficit reduction as a top priority, said nothing about how he would cover the expense.

In other words, Romney not only is criticizing Obama for restraining the growth of Medicare spending, he’s also promising to increase outlays on the program if he gets to the White House.

By the way, none of this should be interpreted as an endorsement of what Obama did. As you can see from these two charts (from Medicare’s Chief Actuary), the reductions in the rate of growth of Medicare spending basically were used to finance higher spending in other areas such as Medicaid.

But Romney’s basically promising to do nothing more than reverse these two charts. And that’s assuming we can trust his campaign promise to undo Obamacare. This cartoon shows why I’m not going to hold my breath waiting for that to happen.

I don’t care whether politicians are Republicans or Democrats. I care whether they are going to increase economic freedom so that we can enjoy more liberty and prosperity.

Based on his approach to Medicare, Romney at best wants to rearrange the deck chairs on the Titanic.

If Romney actually cared about taxpayers and the economy, he would promise to repeal the costly Obamacare program and then build upon that small first step with a commitment to reform the other unaffordable entitlement programs.

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Explaining Ryan’s Budget in the Wall Street Journal

Even though I’ve already made clear that I am less-than-overwhelmed by the thought of Mitt Romney in the White House, I worry that people will become to think I’m a GOP toady.

That’s because I’ve been spending a lot of time providing favorable analysis and commentary on the relative merits of the Ryan budget (particularly proposed reforms to Medicare and Medicaid) compared to President Obama’s statist agenda of class warfare and bigger government.

I’ve already done a couple of TV interviews on Ryanomics vs Obamanomics and the Wall Street Journal this morning published my column explaining the key features of the Ryan budget.

Here are some highlights. In one of my early paragraphs, I give Ryan credit for steering the GOP back in the right direction after the fiscal recklessness of the Bush years.

…the era of bipartisan big government may have come to an end. Largely thanks to Rep. Paul Ryan and the fiscal blueprint he prepared as chairman of the House Budget Committee earlier this year, the GOP has begun climbing back on the wagon of fiscal sobriety and has shown at least some willingness to restrain the growth of government.

I probably should have also credited the Tea Party, but I’ll try to make up for that omission in the future.

These next couple of sentences are the main point of my column.

The most important headline about the Ryan budget is that it limits the growth rate of federal spending, with outlays increasing by an average of 3.1% annually over the next 10 years. …limiting spending so it grows by 3.1% per year, as Mr. Ryan proposes, quickly leads to less red ink. This is because federal tax revenues are projected by the House Budget Committee to increase 6.6% annually over the next 10 years if the House budget is approved (and this assumes the Bush tax cuts are made permanent).

Some conservatives complain that the Ryan budget doesn’t balance the budget in 10 years. I explain how that could happen, but I then emphasize that what really matters is shrinking the burden of government spending.

To balance the budget within 10 years would require that outlays grow by about 2% each year. …There are many who would prefer that the deficit come down more quickly, but from a jobs and growth perspective, it isn’t the deficit that matters. Rather, what matters for prosperity and living standards is the degree to which labor and capital are used productively. This is why policy makers should focus on reducing the burden of government spending as a share of GDP—leaving more resources in the private economy. The simple way of making this happen is to follow what I’ve been calling the golden rule of good fiscal policy: The private sector should grow faster than the government.

Actually, I’ve been calling it Mitchell’s Golden Rule, but I couldn’t bring myself to be that narcissistic and self-aggrandizing on the nation’s most important and influential editorial page.

One final point from the column that’s worth emphasizing is that Ryan does the right kind of entitlement reform.

One of the best features of the Ryan budget is that he reforms the two big health entitlements instead of simply trying to save money. Medicaid gets block-granted to the states, building on the success of welfare reform in the 1990s. And Medicare is modernized by creating a premium-support option for people retiring in 2022 and beyond. This is much better than the traditional Beltway approach of trying to save money with price controls on health-care providers and means testing on health-care consumers. …But good entitlement policy also is a godsend for taxpayers, particularly in the long run. Without reform, the burden of federal spending will jump to 35% of GDP by 2040, compared to 18.75% of output under the Ryan budget.

The last sentence of the excerpt is critical. If the Golden Rule of fiscal policy is to have the private sector grow faster than government, then the Golden Goal is to reduce government spending as a share of GDP.

I’ve commented before how America will become Greece in the absence of reform. Well, that’s basically the Obama fiscal plan, as illustrated by this amusing cartoon.

What makes the Ryan budget so impressive is that it includes the reforms that are needed to avoid this fate.

No, it doesn’t bring the federal government back down to 3 percent of GDP, so it’s not libertarian Nirvana.

But we manage to stay out of fiscal hell, so that counts for something.

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I Don’t Know if Ryan Will Help Romney Win, but His Budget Would Help the Economy

While most people in Washington are focused on the political implications of adding Paul Ryan to the GOP ticket, my only concern is trying to limit the size and scope of government so we can enjoy more freedom and prosperity.

In this debate for PBS, I explain that the Ryan budget would boost the economy – but only if Republicans actually followed through on their rhetoric and did the right thing after obtaining power.

A few comments on the debate. I channel the wisdom of Mitchell’s Golden Rule by saying the most important goal is restraining the growth of federal spending.

I fully agree with Jared that the GOP economic plans won’t work if Republicans get squeamish about doing what’s best for America. If Romney wins, and does a repeat of the statist Bush years, the GOP will deserve to be cast out of power for decades.

At the end of our interview, I obviously disagreed with Jared’s embrace of the Keynesian fantasy that more government spending magically increases growth. If I was feeling mean, I could have pointed out that he was the co-author of the infamous report claiming that Obama’s so-called stimulus would keep unemployment below 8 percent.

I also appeared on Bloomberg TV to comment on Ryan’s economic plan.

It won’t surprise regular readers of this blog that I emphasized the importance of restraining the growth of government so that the burden of the public sector shrinks as a share of overall economic output.

In my second soundbite, I make a simple point about the Laffer Curve. As we saw in the 1980s, lower tax rates don’t automatically mean lower tax revenues.

I also point out the similarities between what Paul Ryan is proposing today with what was achieved in the 1990s during the Clinton Administration.

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Does It Matter that Paul Ryan Is on the GOP Ticket?

The honest answer is that it probably means nothing. I don’t think there’s been an election in my lifetime that was impacted by the second person on a presidential ticket.

And a quick look at Intrade.com shows that Ryan’s selection hasn’t (at least yet) moved the needle. Obama is still in the high 50s.

Moreover, the person who becomes Vice President usually plays only a minor role in Administration policy.

With those caveats out of the way, the Ryan pick is mostly good news.

Here are the reasons why I’m happy.

• I think Ryan genuinely believes in small government, low tax rates, and free markets. Heck, he’s even read Ayn Rand, and is willing to admit that he likes her writings.
• Ryan put together a good budget and got the Republican Party to rally around the plan – a remarkable achievement considering that the same GOPers had just spent 8 years supporting the irresponsible fiscal policies of the Bush Administration.
• He understands that not all entitlement reform is created equal. Instead of supporting means-testing (which produces implicit higher marginal tax rates) and unsustainable price controls, Ryan got his colleagues to support Medicaid block grants and premium support (or vouchers) for Medicare.
• Ryan is a proponent of the flat tax and can competently discuss not only the importance of low tax rates, but also why double taxation is misguided and why it’s wrong to use the tax code to pick winners and losers.

Here are two reasons why I’m worried.

• Both Romney and Ryan are somewhat sympathetic to a value-added tax. My worst-case scenario is they win the election, but then can’t get a good budget approved because of some squishy Republican senators who put self interest above national interest. Romney and Ryan then decide that this European-style national sales tax is the only way – on paper – of making the budget balance. In reality, of course, we’ll suffer the same fate as Europe since the VAT revenues will be used to finance ever-larger government.
• Ryan has some very bad votes in his past, including support for TARP, the auto bailout, the no-bureaucrat-left-behind education legislation, and the reckless Medicare prescription drug entitlement. Everyone says to ignore those votes because Ryan knew he was voting the wrong way, but if he’s already made some deliberately bad decisions for political reasons, what’s to stop him from making more deliberately bad decisions for political reasons?

But as I said above, don’t read too much into Ryan’s selection. if Republicans win, Romney will be the one calling the shots.

Though this does give Ryan a big advantage the next time there’s an open contest for the GOP nomination – either 2016 or 2020.

P.S. I suspect putting Ryan on the ticket will shift Wisconsin into the GOP column. Based on my last prediction, that would be enough to defeat Obama. But I’ll have to contemplate whether the pick hurts Romney’s chances in another state. You’ll have to wait until September 6 for my updated election prediction.

P.P.S. For those who care about politics, some are saying that selecting Ryan was risky because it gives Obama and his allies an opportunity to demagogue the GOP ticket about entitlement reform. I disagree. Even if Romney picked Nancy Pelosi, that demagoguery was going to happen. Heck, they’ve already accused Romney of causing a woman’s death, so I hardly think they’ll be bashful about throwing around other accusations.

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The Deadly Impact of President Obama’s Economic Policies: 59,757 Needless Deaths…and Counting

In what will almost surely be the nastiest campaign ad of the political season, a pro-Obama super PAC basically accuses Mitt Romney and Bain Capital of causing a woman’s death.

Viewers are supposed to hold Romney responsible because the woman’s husband lost his job, and the resulting lack of insurance prevented her from getting health care in time to stop her cancer.

The ad has been debunked for several reasons, including the fact that the woman apparently had her own job with her own insurance for two years after her husband lost his job and her cancer wasn’t even discovered until seven years after Romney left Bain, but let’s set those issues aside, assume all the facts are true, and contemplate what it means if we apply the same standard of accountability to the Obama Administration.

Here’s a simple chain of reasoning.

1. There’s a well-established relationship between a nation’s prosperity and the lifespan of its people (see Figures 1 and 2 in my 1992 article in the Journal of Regulation and Social Cost).

2. Obama’s policies have dampened growth in the United States (according to data from the Congressional Budget Office and the St. Louis Federal Reserve Bank, actual GDP (in today’s dollars) is $836.6 billion below potential GDP).

3. Based on these two simple facts, we can conclude that the foregone growth is causing needless premature deaths.

But how many deaths are being caused? Do we have to make a wild guess?

It turns out that there’s a considerable amount of academic research on this topic. It doesn’t make for exciting reading, unless you like learning about concepts such as “usable income” and “value of a statistical life.” Or how about “valuation of statistical mortality risk” and “implicit income gains.”

But the academics find ways of measuring the relationship between economic performance and mortality.

To make sure we’re being fair, we’ll first look at the research compiled by Cass Sunstein, who served as President Obama’s Administrator of the Office of Information and Regulatory Affairs. Writing back in 1997, he compiled 11 studies from the late 1980s and early 1990s that estimated that a premature death was caused when income fell by some amount between $1.8 million and $12.4 million (roughly between $3.3 million and $22.9 million in today’s dollars).

There’s also a very thorough study by Ralph Keeney of the University of Southern California. He found that an additional fatality was linked to income losses (adjusted to today’s dollars) of between $8.42 million and $23.59 million.

“This is more fun than a death panel!”

Looking over much of this research, it appears that $14 million is a reasonable middle-ground estimate of how much foregone income is associated with a needless death.

Now let’s do some simple math to get an estimate of the total number of preventable deaths caused by the economy’s sub-par performance during Obama’s reign. Going by the lofty standards of Priorities USA super PAC, we’ll call this number the “Obamanomics Death Toll.”

So let’s divide $836.6 billion (our earlier estimate of foregone growth) by $14 million and we get an estimate that Obama’s policies have caused 59,757 deaths.

I wouldn’t put much faith in my back-of-the-envelope calculations. Experts in the field doubtlessly could point out several methodological mistakes, so I have no idea if the weak economy has caused 10,000 premature deaths or ten times that amount.

But I can say with complete certainty that if you took all the experts and gave them a month to work on the answer, the final number would be far higher than Romney’s supposed death toll.

And I’m also quite confident that my analysis – however inadequate – is far more defensible than the garbage from the pro-Obama super PAC.

Now let’s be serious. It’s ridiculous to hold Romney personally responsible for the unfortunate death of the woman mentioned in the super PAC commercial. And it’s also absurd to hold Obama personally responsible for the 59,757 people who may have prematurely died because of the weak economy.

Wouldn’t it be nice if we could actually have an open and honest debate about real issues, such as entitlement reform? Or how best to fix our corrupt tax system?

P.S. If you want to heap scorn on people who genuinely are responsible for deaths, think of the 62 million butchered by the dictators of the Soviet Union and the 76 million killed by the communist tyrants in China.

Gee, isn’t communism just wonderful? Something to think about the next time you see some jackass with a Che Guevara t-shirt.

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R-Rated Anti-Romney Humor

Every so often I find some political humor that is worth sharing, but also not exactly appropriate for all audiences.

So I create thumbnails of the images and let readers decide whether to look. Examples include:

• The link between physics and Obama.
• A bonding moment between Bill Clinton and Arnold Schwarzenegger.
• This not-safe-for-work Obamacare joke.
• The three-part jobs legacy.
• Another risqué Obamacare joke.

We can now augment that list with some humor that someone posted as a comment on my Facebook page. It definitely will appeal to leftists and other Romney critics.

And it’s very timely since my previous post mentioned that Jenna Jameson, a famous porn star, just endorsed the presumptive GOP nominee.

By the way, I’m more than willing to share humor that is not in line with my philosophy. I’ve shared many examples of anti-libertarian humor, for instance, and I also posted this very clever pro-Obama image.

So if you see something good, feel free to send it my direction.

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A New Prediction for the Electoral Map (and the All-Important Contest for Porn Star Endorsements)

Two months ago, I predicted that Obama would win reelection with 297 electoral votes, 27 more than needed.

Last month, I shifted Virginia to Romney’s column and predicted Obama would still win, but with 284 votes.

Today, with just three months to go, I’m guessing the election will be even closer. In my latest electoral map, I’m moving Colorado from the lean-Obama category to the lean-Romney category. This leaves Obama with a lead of just 275-263 in the electoral college.

Now let me preemptively deal with some complaints and criticisms.

Some people ask why I’m so pro-Obama. After all, the unemployment rate is above 8 percent and I’ve told audiences that Obama won’t win unless the joblessness rate drops under that level. Surely I must have my thumb on the scale for Obama.

Other people ask why I’m so pro-Romney. After all, Real Clear Politics gives Obama 332 electoral votes and Intrade gives Obama a 58 percent chance of winning (up from 56 percent last month). Surely I must have my thumb on the scale for Romney.

Folks, I don’t have a dog in this fight. I’m just giving you my best guess as to the map we’ll see early in the morning of November 7.

Now let’s move to the really interesting political news. I noticed on Twitter that people seemed to think it was somehow important that Jenna Jameson endorsed Romney. I’m not sure that her profession and her endorsement are all that helpful, but judge for yourself.

Porn star Jenna Jameson chose a familiar stage to make her endorsement for the 2012 presidential election Thursday night. At a San Francisco strip club, the former adult actress and stage performer said she was ready for a Romney presidency. “I’m very looking forward to a Republican being back in office,” Jameson said while sipping champagne in a VIP room at Gold Club in the city’s South of Market neighborhood. “When you’re rich, you want a Republican in office.”

For what it’s worth, Obama has porn star supporters as well. Ron Jeremy says nice things about Romney, but he’s supporting the incumbent.

In an interview with the Boston Herald, Jeremy said he’s voting for President Barack Obama in November. But he told the paper he still gives Romney “credit.” “I think he means well, I think he’s a good man,” Jeremy told the Herald. “I think the fact that he’s such an amazing father proves a lot. I give him a lot of credit. He’s raised some good sons. When a man is a really, really good father, that’s very important… It’s a good race.”

The presumptive Republican nominee wins the tiebreaker, though, with support from Michael Lucas, one of the world’s leading gay porn stars.

Lucas, who grew up in the former Soviet Union and immigrated to the United States in 1997 after working in Europe as a male prostitute, founded Lucas Entertainment in 1998, which flourished into a mega-enterprise that produces some of the most lavish gay porn films in the industry. …Lucas, by the way, considers himself a conservative, votes Republican and donates generously to several libertarian and right-wing causes. …”I would support Romney of course,” the director of “Men in Stockings” and “Hunt & Plunge” told Yahoo News. “There is nobody else to support.”

For some reason, I don’t think we’ll see this endorsement featured in any of Romney’s commercials, but you never know.

P.S. Never forget that economists are lousy forecasters.

P.P.S. Like all good libertarians, I don’t want the government trying to outlaw porn when it involves consenting adults. But I’m mystified that it makes so much money. It’s the same thing over and over again, and it’s dull. But maybe this is just my inner social conservative speaking.

P.P.P.S. I’ll be in Colorado later this month for a visit to the High Lonesome Ranch and to speak at the Steamboat Institute’s Freedom Conference. I reserve the right to change my prediction for the Centennial State after meeting with folks on that trip.

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I Worry about How Obama Is Spending My Money, Not What Romney Is Doing with His Own Money

I’ve defended Mitt Romney for utilizing the efficient financial services sectors of so-called tax havens.

But I may have been focusing on the trees and missed the forest. By highlighting the perfectly legal nature of Romney’s investments and commenting on the valuable role of tax havens in the global economy, I’ve neglected the main argument, which is that people have a right to do whatever they want with their own money and it’s none of our damn business.

What is our business, by contrast, is what politicians are doing with the money they confiscate from us. This Lisa Benson cartoon helps to make that point, though it would be even better if she had written “Romney’s Stash for His Own Money” and “Obama’s Stash for Our Money.”

Obama, needless to say, is an expert at squandering other people’s money, as illustrated by money pits such as the faux stimulus and the green energy scam.

P.S. Lest anyone think I’m being partisan, the headline of this would be just as accurate if I added “How Bush Spent My Money” or “How Romney Would Spend My Money.” Bush, after all, followed the same fiscal agenda as Obama, and Romney’s track record suggests he will be similarly profligate.

P.P.S. Which makes me miss Bill Clinton, who was frugal by comparison. Or Ronald Reagan, who actually did the right things for the right reason.

P.P.P.S. You can find more Lisa Benson cartoons here, here, here, here, here, here, and here.

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Since Mitt Romney Won’t Defend Himself, I Guess It’s Up to Me to Debunk the Left’s Tax Haven Demagoguery

Earlier this year, I defended Mitt Romney and Bain Capital from the absurd accusation that they did something wrong by utilizing low-tax jurisdictions.

So-called tax havens, as I’ve explained on many occasions, play a valuable role in the world economy. Indeed, they should be emulated rather than persecuted.

In a follow-up post, I mocked ABC News for a ridiculous non-story as they tried to make Romney appear guilty for following good business practices.

The issue has become hot again, so I talked about Romney and tax havens with Jason Riley at the Wall Street Journal.

Since nobody has claimed that Romney violated U.S. tax law, this kerfuffle only exists because the left wants to create the impression that tax havens are bad and then tar the GOP’s presumptive nominee with guilt by association.

Brian Garst of the Center for Freedom and Prosperity nails the issue in his column for the Daily Caller.

People who invest or bank overseas do not hate America. Oftentimes, they are simply banking where their money is earned to avoid the hassle of exchange rate and wire transfer fees. …It’s also smart practice to diversify. …Mitt Romney should not be cowed into shame over his banking practices just because he doesn’t strictly park his after-tax earnings in American banks, but should instead seize the opportunity to more aggressively defend against populist attacks on financial privacy and explain the benefits of jurisdictional tax competition.

That’s good advice, but I’m not holding my breath waiting for Romney to defend Switzerland and other jurisdictions with good policy. That would require an underlying belief in freedom and liberty, which seems to be lacking.

But you would think that he might respond by noting that many top Democrats directly invest in tax havens, and that presumably all of them – as I noted in my WSJ interview – are indirectly invested in these financial centers.

P.S. It’s probably a lost cause, but I’m an old-fashioned guy who thinks that people shouldn’t blatantly lie, so here’s my obligatory complaint that many politicians, journalists, and policy folks are repeating the debunked assertion that so-called tax havens deprive the U.S. Treasury of $100 billion per year. Obama threw around that make-believe number in the 2008 campaign, as seen in this video. But as shown in the final video of this post, the $100 billion figure was concocted out of thin air by a former John Kerry staffer, who confessed he made up the number when the Congressional Research Service asked for his methodology.

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Predicting the November Election with Four Months to Go

Here’s the second of my electoral map predictions for the November elections. In my first estimate last month, I showed Obama winning with 297 electoral votes.

This new map still shows him in the lead, but I’ve switched my home state of Virginia to the GOP column. Northern Virginia is filled with government bureaucrats and corrupt lobbyists, both pro-Obama groups, but I now think they’ll be out-voted by what my ex-wife referred to as the people from “real Virginia.”

Interestingly, Intrade.com now has Obama up to a 56 percent favorite, which is higher than he was on June 6. So either I’m wrong in thinking the race is moving in Romney’s direction or Intrade.com is wrong for thinking it is moving in Obama’s direction.

You can decide who to believe. Just keep in mind that my 2010 election predictions were very accurate and Intrade.com was wrong on the Obamacare Supreme Court decision.

P.S. My ex generated some controversy with her comment about “real Virginia,” but I’ve always been mystified by the kerfuffle. Just look at this map and see how the counties in Northern Virginia are among the wealthiest in America thanks to all the loot being redistributed from the rest of the country to the metro-DC area. Those looters and moochers have very little in common with the people in the rest of the Commonwealth.

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