Mar 09
If the power of capitalism and free markets were unleashed on health care, we would immediately see costs go down. The poorest people in society could afford high-quality health care products and services. Witness this story about fifty-cent microscopes. Private sector innovators have developed microscopes that can be sold for less than the price of a candy bar.
Mar 07
Entitlements such as Social Security change people’s behaviors. Where people expect to be supported by a government program, they tend to work less, retire earlier, save less, and invest less. The world is much poorer because of such programs. The United States (and the world) is less prosperous, much poorer, less productive and less comfortable because of such programs.
For years, some of the most compelling research in this area was done by Harvard Economics Professor Martin Feldstein. Feldstein is very much within the academic mainstream. The author of more than 300 published research articles, Feldstein was widely considered a leading candidate in 2005 to succeed chairman Alan Greenspan as Chairman of the Federal Reserve Board. This point needs to be understood because Feldstein’s findings regarding the impacts of Social Security are truly alarming and “radical,” according to contemporary popular understandings.
In a series of studies beginning in the early 1970s, Feldstein tracked people’s work, savings and investment behavior with an eye toward determining whether people are ultimately enriched or impoverished by the Social Security program. Feldstein concluded that each dollar of Social-Security “investment” (quotation marks quite deliberate) reduces private saving by between two and three cents. In the aggregate, the Program reduces overall private saving by nearly 60 percent. For a 1980 study, Feldstein revised his conclusion even higher, concluding that “each dollar of [Social Security] contribution corresponds to an 87 cent reduction in private saving.” (1980: 11)
But reducing personal saving is not the only negative impact of Social Security. The Program also induces Americans to work less. And most specifically, it induces them to retire earlier (Feldstein 1980: 2). And Social Security is far worse than other types of retirement investments such as tax-free accounts, because “social security wealth is in the form of an annuity; it cannot be used as collateral for a loan; its value depends on future Congressional action; etc.” 1980: 3 n.1
MACRO EFFECTS
In a few moments of macro-level insight, Feldstein occasionally calculated the impacts of Social Security on American GDP. He found in 1980 that American GDP—the entire output of the country—had been reduced by 3.2 percent by the Social Security program (1980: 10).
We think these figures actually understate the problem. Social Security and Medicare have cost Americans untold abundance and prosperity.
SOURCE: Martin Feldstein, “Social Security, Induced Retirement, and Aggregate Capital Accumulation: A Correction and Updating,” Working Paper for the National Bureau of Economic Research, November 1980.
Mar 06
Treasury Secretary Jack Lew just notified Congress that U.S. Government spending will hit its debt limit by March 16. U.S. tax revenues are now at an all-time high, with personal income taxes significantly higher than a decade ago, the world’s highest corporate tax rates, and zealous efforts by the IRS to collect more revenue.
But it’s not enough. Federal spending remains far above revenues, and the entitlement bubble has just barely begun to implode. In the past decade the U.S. government has savagely prosecuted users of tax havens such as Swiss bank accounts (damaging more than a century of U.S./Swiss relations), and has investigated “anti-government” nonprofits in a discriminatory manner while favoring “pro-government” nonprofits. Increasingly, the government is demanding disclosure of all things while insisting on the keeping of its own secrets.
Traditional tax havens such as academic institutions seem on the verge of an implosion. At least 250 small colleges are said to be on the verge of collapse.
The U.S. government’s heavy hand of taxation and spending continues its reach for more. This while even the “opposition party” has promised it will never, under any circumstances, allow the precious government to be shut down. In practice, this means that Congress will be forced by its own promises to raise the debt ceiling again–and keep searching for more tax revenues.
Mar 05
A new study of the financial condition of America’s workers finds that federal employees are far better off financially than average American workers. Federal workers are not just paid better. They have far better benefits than most workers, more days off per year and more vacation time. Other studies have found that federal workers work far fewer hours annually than average Americans.
Not since the feudal days of Old Europe have governing leaders been adorned with such comforts and riches compared to the peasantry.
Mar 05
The Institute For Justice reports a bizarre case of government licensing overreach. The State of North Carolina sought to shut down the blog and Facebook page of a man who shared advice on losing weight with a “paleo” diet (heavy on nuts, fruits and meats, light on grains and breads). The State claimed that Steve Cooksey was “practicing nutrition” without a government license! The State Board of Dietetics/Nutrition has waged a war to destroy Steve’s nutritional-advice blog for several years now. After the Institute intervened on Steve’s behalf, the State backed down. See the story here.
Mar 05
Last week, 3 of 5 Federal Communications Commission (FCC) Commissioners voted—without the slightest enabling legislation by Congress and in the face of substantial case law against their position—for the government to take over control of the internet and to treat the internet as a “public utility.” The two dissenting commissioners offered the following observations:
Commissioner Ajit Pai: net neutrality regulatory regime is a solution that won’t work in search of a problem that doesn’t exist.”
Commissioner Mike O’Rielly: “Rates are going to go up because of this.”
Commissioner Pai: “This issue has been largely fact-free for the better part of a decade, and I think it’s frankly shocking that decision-making on something as important as this has been thrown by the wayside in favor of what I consider to be an ideological agenda.”
Pai: the majority of the FCC commissioners are ideologically committed to trust in expansive government, and their decision was largely focused on the ends of Internet regulation rather than the means. Despite these government trusters’ promises of regulatory restraint, “a lot of these promises of regulatory restraint are pretty ephemeral.”
Just as with other government agencies, the FCC is seeking to expand government power for its own sake. The FCC’s new regulations are ideological, wide-ranging, costly and baseless. The FCC is an agency whose central role is of very questionable constitutionality. Is it time to abolish the Commission?
Mar 04
Remember that press conference when the governor of Massachusetts, standing shoulder-to-shoulder with FBI officials, claimed he had seen “the video” of the Boston Marathon Bombing Suspect Dzhokhar Tsarnaev placing a bomb-filled backpack at the finish line of the Marathon? Remember how government officials reassured the public that they had the right guys by claiming that a ‘smoking-gun’ video exists of the brothers planting the backpack bomb? Remember that they offered these reassurances in response to questions such as: “Was this another false flag staged attack to take our civil liberties and promote Homeland Security . . .?”
Now the government is admitting (or claiming) that no such video exists. See this story by crusading journalist Lara Turner.
Many commentators have questioned the government’s official story, especially after it has been revealed that the two suspects were themselves CIA and FBI contacts, and it came out that there were obvious drills and the very highest security in place at the Marathon finish line before the bombing. Numerous amateur videos have surfaced of government-contractor personnel at the scene appearing to be wearing similar backpacks. And there were attempts to silence the surviving Tsarnaev brother by slashing his throat at the time of his arrest.
Mar 02
The Washington Post, the voice of the Washington government establishment if there ever was one, has launched a scary news story about the purported growth of private (meaning, in this sense, contract, or privately-owned police companies licensed under a special Virginia statute) policing. The Washington Post story warns of private officers who may be undertrained. The story is long on anecdotes of imperfections but short on any details of serious abuses or mistakes by private officers.
Importantly, private security is much more liable to lawsuits than public-sector officers, whom are generally cloaked in expansive immunity from lawsuits. Such personal-injury liability makes private security workers MUCH LESS LIKELY to misbehave, use improper force or cause property damage than public officers.
And most data show that where police security has been privatized, there are fewer false arrests and malicious prosecutions, less police-caused property damage, fewer wrongful discharges of firearms and lower actual crime rates. See, for example, “Crime Falls After Houston Neighborhood Ditches Police; Hires Private Security.”
Mar 02
The great economist Robert Higgs has recently pointed out the importance of “real disposable income per capita” as a measure for economic health.
Arguably the best single, currently available measure of the entire public’s payoff from economic activity is real disposable income per capita. This is the average amount per annum that Americans receive in exchange for the use of their labor and other input services, after taxes, corrected for changes in the purchasing power of the dollar. …this measure of economic well-being has scarcely increased at all since 2007.
Higgs’ research is complimented by a recent essay by the economist Daniel Mitchell of Cato Institute.
Mar 02
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Many government officials and others seeking to build an even more socialistic and centrally-planned global economy offer alarming predictions. Now we hear that a federal government official—National Weather Service Senior Hydrologist Gina Loss—told Montana audiences in 2014 that there are two possible future weather patterns. If policymakers adopt more central planning and empower governments to decrease greenhouse gas emissions, there would be a 2 degree increase in world temperature in 10 years, and “double that” if voters and policymakers fail to do so. Source: Conrad Nystrom, “2014 Area III Meeting” (of the Montana Association of Conservation Districts), Conservation On the Land, p. 5 (January 2015).
