The Daily HatchEveryone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
Without significant spending reforms, the national debt is projected to reach 185 percent of GDP by 2035. Under the Heritage plan, federal spending would be reduced by about half, which would dramatically lower the debt to 30 percent.
Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:
Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.
On May 11, 2011, I emailed to this above address and I got this email back from Senator Pryor’s office:
Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner. I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.
I just did. I went to the Senator’s website and sent this below:
“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.
Summary
Over the past decade, Congresses and Presidents have undertaken a
surge of spending that has accelerated America’s speed along the road to
economic ruin. Since 2000, non-defense discretionary outlays have expanded 50 percent faster than inflation. Antipoverty spending has risen 83 percent faster than inflation, and other programs have grown rapidly. Despite multiple government audits that have shown many programs to be duplicative or ineffective, no significant federal program has been eliminated in more than a decade. Government continues to grow, financed by taxes on Americans and an explosion of borrowing that is imposing huge additional burdens on future generations.
Thus, although the major entitlement programs are the primary driver of
long-term spending and debt, Congress must take tough action on discretionary programs and smaller entitlement programs to reach a balanced budget and ensure that federal spending is smaller, more effective, and more efficient.
Under the Heritage plan, non-defense discretionary spending—appropriated programs such as foreign aid, K–12 education, transportation, health research, housing, community development, and veterans health care, which account for 4.5 percent of GDP—is reduced to 2.0 percent of GDP by 2021. These reforms will reduce the burden of government, thereby empowering families and entrepreneurs and promoting economic prosperity.
In addition, antipoverty spending is reformed. Obamacare is repealed, as
noted earlier, and replaced with an alternative solution to uninsurance and high costs. Agriculture and education programs are structurally reformed. The central goal for defense is to guarantee national security as prudently and economically as possible. With improvements in efficiency, we estimate that defense needs will require spending approximately 4 percent of GDP for the foreseeable future.
Rather than across-the-board spending reductions, which would not set true priorities for government, the Heritage plan follows six guidelines in designing reforms:
By following these six guidelines, the Heritage plan produces a more
effective and efficient government and promotes stronger economic growth.
By far the most memorable line from President Obama’s address on the debt ceiling last night was his quoting “one of my predecessors” on a measure similar to the budget proposal Obama supports to “raise revenue” by closing loopholes on higher-income-earning Americans.
The predecessor cited by Obama was Ronald Reagan, who appears to be agreeing with the incumbent by saying: “Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates and higher unemployment?”
The quote, from an address by Reagan to the Centennial Celebration of Billings and Yellowstone County (Montana) on Aug. 11, 1982, is accurate. But it is a bit unfair, because Reagan’s remarks were made in support of a measure he came to deeply regret.
That year, nervous about deficit projections from the Reagan tax cuts of 1981, a bipartisan group of members of Congress known as the “Gang of 17” (sound familiar?) came up with TEFRA—the Tax Equity and Fiscal Responsibility Act—which former Reagan administration official Gary Hoitsma described as “a legislative package sold to President Reagan as a grand compromise constituting a 3-to-1 rate of spending cuts to tax increases.”
Reagan, as Hoitsma wrote in the Washington Examiner, “reluctantly agreed” with TEFRA and campaigned for it in addresses such as those in Billings on Aug. 11 of 1982 and in a nationally televised address Aug. 16.
When TEFRA was passed and signed by Reagan, the 40th President described it as “a limited loophole-closing tax increase to raise more than $98.3 billion over three years in return for … agreement to cut spending by $280 billion during the same period.”
While the closing of the loopholes was quickly put into place, Congress never enacted any of the spending cuts. Reagan came to regret his support for TEFRA, and years later he wrote: “The Democrats reneged on their pledge [to cut spending] and we never got those cuts.”
“I believe that the TEFRA compromise—the ‘Debacle of 1982’—was the greatest domestic error of the Reagan administration,” Edwin Meese III, Reagan’s counselor at the time, wrote in his 1992 book, With Reagan: The Inside Story. “It was a complete departure from our tax-cutting mandate, failed to reduce the growth of government spending [and] did not decrease the deficit. … Judged by the results, TEFRA was not only a mistake, it was an abject lesson in how not to reduce the deficit.”
So Obama did indeed quote Reagan accurately, but rather unfairly. He was quoting Reagan’s words about something he soon came to regret—a lot.
John Gizzi is Political Editor of HUMAN EVENTS.
Dr. Francis schaeffer – The flow of Materialism
I learned so much from the books and films of Francis Schaeffer. He really got me excited about the pro-life movement. In order to understand where I am coming from it is best to take a look at where Schaeffer was coming from and his thought processes. Take a look at this article below that appeared 13 years after his death in Christianity Today.
Schaeffer really brought great historical lessons to the common man. Michael Hamilton stated:
Like the great popularizers H. G. Wells and Will Durant, Schaeffer placed accessible versions of academic subjects into a coherent, meaningful framework that highlighted broad connections through time and across disciplines. Durant wrote The Story of Philosophy “to pour warmth and blood into the fruits of scholarship”; this is what Schaeffer did for evangelicals. The result for innumerable high-school and college-age readers was a first awareness of the significance of ideas in history and culture and the intellectual richness of Christianity.
The Schaeffers showed an extraordinary ability to identify with the issues that concerned the student generation of the 1960s and early 1970s. Francis scorned postwar materialism, insisting that most Americans had no higher philosophy of life than “personal peace and affluence.” Though strongly opposed to communism, he refused to condone the arms race: “In the race of fission versus fission, fusion versus fusion, missile versus missile, what reason is there to think that those conceiving and engineering these things on ‘our side’ believe anything basically different … from those on the ‘other side,’ the Communists?” He urged respect for nature in a society that had fouled its own nest. He preached against racism, and at L’Abri he practiced what he preached. He sympathized with dropouts and drug users “because they are smart enough to know that they have been given no answers, and they are opting out. … The older generation hasn’t given them anything to care about.”
Francis also thundered against the middle-class sins of the evangelical churches. He challenged evangelicals to adopt a “revolutionary” mindset, to think about getting rid of the American flags in their sanctuaries: “Patriotic loyalty must not be identified with Christianity.” He insisted that American evangelicalism was too individualistic: “Christianity is an individual thing, but it is not only an individual thing. There is to be true community, offering true spiritual and material help to each other.” He therefore urged Christians to welcome intellectuals, hippies, drug addicts—whomever God should send: “I dare you. I dare you in the name of Jesus Christ. Do what I am going to suggest. Begin by opening your home for community.” But he warned that real community would require that the churches “buck the evangelical establishment” and kick their habit of hypocrisy: “Don’t talk about being against the affluent society unless you put that share of the affluent society which is your hoard on the line. And don’t dare respond that these things I’m saying are not a part of the teaching of the Word of God.”
Schaeffer’s message was like fresh air to the emerging evangelical youth culture. Jack Sparks, founder of Berkeley’s Christian World Liberation Front, visited L’Abri and hoped that his organization could have the same kind of intellectual impact. Schaeffer had a profound influence on Larry Norman, “poet laureate of the Jesus Revolution.” (One Norman lyric places L’Abri on a par with Holy Land pilgrimage sites: “We’ll honeymoon at Haifa and have lunch in Galilee / Then we’ll hitchhike up to Switzerland and drop in at L’Abri.”) In the late 1970s, Norman formed his own record company and performing arts society, which he intended as a “musical L’Abri.” One of its musicians was Mark Heard, who studied at L’Abri himself because it was a place where people could honestly ask hard questions about Christianity.
Despite the countercultural rhetoric, in the early 1970s the Schaeffers began forming ties with Christians who were national political figures in the conservative wing of the Republican party. They were introduced to then-Congressman Jack Kemp in 1971, who in turn introduced the Schaeffers to a wider circle of Washington officials. For ten years Kemp’s wife, Joanne, led a class for other congressional wives in which they read all the Schaeffers’ books. One L’Abri student was Gerald Ford’s son Michael, which led to a private dinner in the Ford White House.
Francis also remained unfailingly suspicious of any theology that strayed from the propositional inerrancy that he learned at Westminster and Faith seminaries. He steered students away from Fuller Theological Seminary and from most Christian colleges. He addressed Billy Graham’s international congresses on evangelism in 1966 and 1974, but he disliked Graham’s style of evangelism. By Schaeffer’s lights, it was too centered in experience and not vocal enough about inerrancy. However, at the time he refrained from publicly criticizing evangelical individuals and institutions by name.
Thus Schaeffer created for himself a highly independent place in the public world of evangelicalism. He had wide appeal to students with countercultural leanings, but also to conservative politicians. He remained in touch with but aloof from the other leading figures of American evangelicalism. And though he had wide international connections, he soon left behind the European context—so crucial to the formation of his thought—in exchange for increased involvement in the internal affairs of America and its evangelical subculture.
Turn to activism
In 1974 Franky, now 21, propelled Francis in a new ministry direction that would end up leading toward an old ministry style. Franky dreamed up a ten-part documentary film series with the working title “The Rise and Decline of Western Thought and Culture.” It was to be a Christian response to Kenneth Clark’s widely viewed Civilisation series. The project—How Should We Then Live? (1976-77)—was a resounding success in bringing to the general evangelical public Schaeffer’s message about the rotting intellectual pilings of Western culture. The film series and book were both bestsellers, and an 18-city seminar tour drew tens of thousands of people.
Less happily, the project caused real dissension within L’Abri. The community had always discussed and prayed over major decisions before they were made, but in this case, the Schaeffers asked for prayer after making the decision to go ahead. They also broke precedent to solicit funds directly from their supporters in order partly to defray a budget that exceeded $1 million.
The project added voices to the chorus of Schaeffer’s critics. During his first talk at Wheaton College, the faculty had been much more skeptical than the students. Philosophy professor Arthur Holmes had been put off by Schaeffer’s summary dismissal of the entire field of analytic philosophy, and he was later quoted in Newsweek to the effect that he used Schaeffer’s books in his classes as examples of how not to do philosophy. Even in his more careful early work, Schaeffer ranged so widely over disciplines and broad periods of time that specialists could not help noticing embarrassing errors of detail and facile oversimplifications. How Should We Then Live? brought even more criticism because it was essentially a reprise of the early Schaeffer material boiled down into an even simpler form.
The academic critics seldom, however, grappled with the role of what might be called “stepping stone” scholarship. Like the great popularizers H. G. Wells and Will Durant, Schaeffer placed accessible versions of academic subjects into a coherent, meaningful framework that highlighted broad connections through time and across disciplines. Durant wrote The Story of Philosophy “to pour warmth and blood into the fruits of scholarship”; this is what Schaeffer did for evangelicals. The result for innumerable high-school and college-age readers was a first awareness of the significance of ideas in history and culture and the intellectual richness of Christianity. As far away as Pakistan, secondary students in a boarding school for missionary kids eagerly read and reread a package of the Schaeffers’ books brought in by Youth with a Mission outreach workers in 1971. Church youth leaders and campus ministers introduced their brighter students to Schaeffer’s books, launching scores of evangelical scholars on their careers. Philosopher Jerry Walls of Asbury Theological Seminary recalls, “Reading Schaeffer transformed my understanding of Christianity. He helped me to think of my faith in a much more comprehensive fashion than I had done before. My faith was becoming a more or less complete world-view, which embraced all kinds of things I had never associated very clearly with spirituality.”
The major departure in How Should We Then Live? was its extended look at legalized abortion as a case study in arbitrary government and the imminent threat of authoritarianism. Schaeffer had always opposed abortion, but the matter only became prominent in his work after February 1973, when the U.S. Supreme Court declared abortion a constitutional right. Beginning in 1977, Schaeffer began devoting his full attention to the issue. Francis, Franky, and their old family friend C. Everett Koop (at that time a nationally known pioneer of pediatric surgery and one of the best-known evangelical opponents of abortion) collaborated on a five-part film series with accompanying book, action handbook, and international lecture tour. The project, Whatever Happened to the Human Race? (1979), coupled Francis’s familiar explication of how secular humanism led inexorably to the devaluation of human life with Koop’s devastating testimony about the widespread practice of infanticide in hospitals and its links to abortion. Koop later wrote that his involvement in this project was his first step toward becoming President Reagan’s surgeon general.
The outcome of the project itself was mixed. The lecture tour drew disappointingly small audiences and in some locales lost money. Francis blamed “an attitude among [evangelical] leaders to keep people away from the seminars so that their own acceptance by the surrounding culture would not be disturbed.” Compounding the disappointment were the physical stress and attendant depression that Francis experienced in the chemotherapy treatment he was receiving for cancer, which had been diagnosed at the Mayo Clinic in 1978. However, even though audiences and church showings were smaller than hoped, they still represented a considerable grassroots mobilization against abortion. Many individuals mark this film and the seminars as the beginning point of their personal involvement in pro-life activities, and it may well be that the actual impact from this project was greater than that of the better attended seminars in conjunction with How Should We Then Live?
The Schaeffers’ disappointment magnified their growing frustration with mainstream evangelicalism for its apparent unwillingness to defend inerrancy and take up the pro-life cause. For instance, the celebrated “Chicago Declaration” of November 1973—a call to social action spearheaded by evangelicals from the counterculture generation—never once mentioned abortion. The Schaeffers therefore began to keep company instead with the leaders of the New Christian Right, which was coalescing around the pro-life movement.
Francis’s writings helped convince Jerry Falwell to take a stand against abortion. Francis also tutored Falwell in the concept of cobelligerence (Schaeffer’s belief that Christians ought to stand with non-Christians against social injustice), which led Falwell to try to bring Catholics, Jews, Mormons, and others into the Moral Majority in 1979. Francis and Franky both made public appearances with Falwell and with Pat Robertson. Francis’s A Christian Manifesto (1981) defined abortion as the hinge issue for American society, called Christians to civil disobedience, and even broached the idea of resisting the government by force. The book is one of Robertson’s all-time favorites, and it inspired a young man at Elim Bible School named Randall Terry to start a new kind of abortion protest employing passive resistance techniques used in the civil-rights struggle. “If you want to understand Operation Rescue,” says Terry, “you have to read Schaeffer’s Christian Manifesto.”
By this point, several people from the counterculture generation began to wonder publicly what had happened to Francis Schaeffer. In 1970 Francis had written that “one of the greatest injustices we do to our young people is to ask them to be conservative,” but in Manifesto he wrote that with “the conservative swing in the United States in the election of 1980 … there is a unique window open. … Let us hope that the window stays open, and not on just one issue.” In 1970 he had warned against wrapping Christianity in the American flag, but in Manifesto he took the unprecedented step of praising the Moral Majority—a group whose genuine passion to defend the unborn was conjoined with an equal passion for intertwining loyalty to God with loyalty to America. The countercultural Francis Schaeffer seemed to have disappeared.
The relationship between Francis and mainstream evangelicalism got even rockier in the early 1980s when Franky published several sarcastic books that attacked the “pathetic servility” of prominent evangelical figures and institutions. Francis never reined in his son—partly out of family loyalty, but partly because Franky was saying things that Francis thought needed to be said. Francis’s final book, The Great Evangelical Disaster (1984), approvingly cited Franky’s “incisive critique” of evangelicalism and went on to follow Franky’s lead in naming names. The book warned that evangelicalism’s accommodation to culture in the 1980s had led it to the brink of apostasy. In early 1984, Francis had just enough strength left from his battle with cancer to complete a 13-city tour lecturing on this theme. A month after the tour was complete, he died at home near the Mayo Clinic in Rochester, Minnesota.
Edith carried on the work at the L’Abri in Rochester, where she continues to live and write. The original L’Abri in Switzerland remains in operation, as do L’Abri sites in Massachusetts, Australia, Holland, England, India, South Korea, and Sweden. All three daughters and their husbands are still involved in L’Abri work around the world. Franky—now Frank—turned from berating evangelicalism to filmmaking; he then wrote a novel about his family that is well-crafted, funny, charming, and cruel. More recently he left evangelicalism for Eastern Orthodoxy, and he now speaks and writes about his conversion with the same kind of intensity that marked his father’s work.
-Michael S. Hamilton is coordinator of the Pew Scholars Programs and concurrent assistant professor of history, University of Notre Dame.
Dr. Francis Schaeffer – The Biblical Flow of Truth & History (part 2)
Milton Friedman said that getting George Bush I to be his vice president was his biggest mistake because he knew that Bush was not a true conservative and sure enough George Bush did raise taxes when he later became President. Below is a speech by George W. Bush honoring Milton Friedman:
Milton Friedman Honored for Lifetime Achievements 2002/5/9
_____________-
President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Dear Mr. President,
I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.
The USA’s grand economy was built by the free enterprise system and basically the government got out of the way most of the time. That is what works everywhere you have wealth built up. If socialists get their way then they will piggyback on the success the capitalists have created and many times when socialist policies take over things start to fall apart with the vast welfare states that are created. Take a look at this fine article by Dan Mitchell of the Cato Institute below.
June 19, 2012 by Dan Mitchell
To answer the question in the title, it means you need to read the fine print.
This is because we have a president who thinks the government shouldn’t confiscate more than 20 percent of a company’s income, but he only gives that advice when he’s in Ghana.
And the same president says it’s time to “let the market work on its own,” but he only says that when talking about China’s economy.
Now we have more evidence that the President understands the dangers of class-warfare taxation and burdensome government spending. At least when he’s not talking about American fiscal policy.
After the Greek elections, which saw the defeat of the pro-big government Syriza coalition and a victory for the supposedly conservative New Democracy Party, here’s some of what Politico reported.
President Barack Obama on Monday called the results of Greece’s election a “positive prospect” with the potential to form a government willing to cooperate with Europe. “I think the election in Greece yesterday indicates a positive prospect for not only them forming a government, but also them working constructively with their international partners in order that they can continue on the path of reform and do so in a way that also offers the prospects for the Greek people to succeed and prosper,” Obama said after a meeting with the G-20 Summit’s host, Mexican President Felipe Calderon.
In other words, it’s “positive” when other nations reject big government and vote for right-of-center parties, but Heaven forbid that this advice apply to the United States.
Interestingly, it’s not just Obama who is rejecting (when talking about other nations) the welfare-state vision of bigger government and higher taxes.
Check out this remarkable excerpt from a Washington Post column by Larry Summers, the former Chairman of the President’s National Economic Council.
… it is far from clear, especially after the French election, that there is any kind of majority or even plurality support for responsible policies.
Remarkable. Larry Summers is dissing Francois Hollande and the French people by implying they want irresponsible policies, even though the Hollande’s views about Keynesian economics and soak-the-rich taxation are basically identical to the nonsense Summers was peddling while in the White House.
It’s almost enough to make you cynical about America’s political elite. Perish the thought!
_________
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
State and local government spending per household imposes a significant, and growing, burden on taxpayers on top of federal spending. In 1970, median household income was $17,839 greater than total government spending per household, compared to only $2,431 in 2009.
Chart 5 of 42
The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More
Emily GoffResearch Assistant
Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor
Below is a discussion from Milton Friedman on Bill Clinton and Ronald Reagan.
Milton Friedman, Senior Research Fellow, Hoover Institution and Nobel Laureate in Economic Sciences grades the achievements of the Clinton administration and evaluates the programs the President proposed in his 1999 State of the Union address.
Milton Friedman vs Bill Clinton (1999)
Published on May 28, 2012 by BasicEconomics
______________________
ROBINSON Welcome to Uncommon Knowledge, I’m Peter Robinson. Our show today: The State of the Union, or more precisely, The State of the Union According to the Nobel Prize Winning Economist, Milton Friedman. Every year the President of the United States travels from the White House to the House of Representatives to deliver a major televised address, the State of the Union Address. The President outlines for the American people the accomplishments of his administration to date, the challenges the nation still faces, and his programs for meeting those challenges. Now, by the time the President delivers his address, it will have been worked on for many days by the President himself and by a large team of speech-writers. There will have been draft after draft after draft, mark-ups, cross-outs, corrections of all kinds. Yet, when we finally see the address, when we watch the President seem to speak all but flawlessly for thirty, forty minutes or more, delivering a speech that must be many pages in length, we never see him refer to a single sheet of paper. The trick: a machine called a Teleprompter that projects the text of the speech onto a plate of glass in such a way that the President, and he alone, can see it. A trick with mirrors. An illusion. Milton Friedman, perhaps the most influential economist of the last half century, believes that when Bill Clinton gave his own most recent State of the Union Address, the Teleprompter wasn’t the only illusion the speech involved.
ROBINSON Milton Friedman, we are in the sixth year of the Clinton Administration, the nation is at peace, the economy is booming, the federal government has gone from a budget deficit of 290 billion dollars in 1992, the year Bill Clinton was elected, to a surplus of at least 76 billion dollars for this year. Don’t you want to give Bill Clinton an A?
FRIEDMAN (laughs) No, I want to give the economy an A.
ROBINSON Give the economy an A. How much credit does he deserve?
FRIEDMAN Well, there’s only one way in which I believe he deserves some credit. Because you have a Democrat in the White House and Republicans control the Congress, it’s hard to get any laws passed, and that’s been a great advantage. The source of our prosperity in my opinion dates back to Mr. Reagan’s reductions in tax rates…
ROBINSON 1982.
FRIEDMAN …1982, and deregulation during the Reagan Administration, also go down to the 1986 Tax Act which eliminated a lot of interventions, unfortunately which have been creeping back in. And that unleashed a private enterprise boom which we’re still benefitting from.
ROBINSON We’re not in the sixth year of the Clinton expansion, we’re in the seventeenth year of the Reagan boom.
FRIEDMAN Exactly. The Reagan— I won’t call it a boom, because it really hasn’t been a boom, it’s been a very good, healthy expansion.
ROBINSON Steady, sustainable…
FRIEDMAN It’s a boom in the stock market, but so far as the economy is concerned the average rate of growth is not out of line with what it’s been in the past many times.
ROBINSON It’s in line with historical standards.
FRIEDMAN The long-term rate of growth since the Civil War, for example, is in the order of about three to four percent a year, of which one percent is population growth, one-and-a-half to two percent per capita growth, and we’re in about that same range. But it’s been a notable period for other things. It’s been a notable period because we’ve had this expansion at the same time that inflation has been brought down and relatively stable, and for that the credit belongs to the Federal Reserve under the leadership of Alan Greenspan. I think Alan Greenspan deserves more credit for that than anything else.
ROBINSON More credit than he’s being given, or more credit than Bill Clinton’s being given.
FRIEDMAN No, no— oh, Bill Clinton deserves no credit for that. That’s entirely a result of the Fed and its behavior. The Fed has done a lot of bad things in the past, so I’m delighted to be able to give it credit for one good thing, and it’s done very well under Alan Greenspan.
ROBINSON Does the so-to-speak extra-constitutionality of the Fed disturb you?
FRIEDMAN Yes. I have always been in favor of abolishing the Fed, primarily from a political point of view.
ROBINSON And how would you handle the currency, how would you then manage the currency without the Fed?
FRIEDMAN My favorite proposal is to have a fixed amount of what’s called high-powered money and just keep it there.
ROBINSON Just keep the money supply static?
FRIEDMAN Not the money supply. High-powered money…
ROBINSON Which is…
FRIEDMAN …the currency plus the reserves in the banking system that are now deposits in the Fed, under my system you would convert to currency.
ROBINSON So you would eliminate the policy functions of the Fed, but you might keep a few of their statisticians around to keep tabs on the money supply… but that’s a relatively technical and modest…
FRIEDMAN Well, no, you don’t even have to do that. You just have to keep somebody around to make sure that you replace the worn-out notes and keep the stock quantity of money, in the narrow sense of currency, essentially unchanged, or if you want, growing at three percent a year. But some purely mechanical regime. Given that you do have a Fed, it makes a great deal of difference how it performs. I believe that the inflation that we had in the ’70s was primarily the responsibility of the Fed. I believe that the Great Depression of the ’30s was primarily the responsibility of the Fed. So I’m not… it has in the past done a great deal of harm, but as it happens in this last eight years or so it’s been very good and has brought about…
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Dan Mitchell Explaining Why “Taxing the Rich” Is a Precursor for Going after the Middle Class
Published on Apr 13, 2012 by danmitchellcato
_________________
Raising taxes is not the answer but we must lower spending in order to balance the budget. That is the lesson from history too.
This should be a lesson for Obama and any Republican out there that wants to raise taxes:
July 3, 2012 by Dan Mitchell
Back in April, I explained that I would accept a tax increase if “the net long-run effect is more freedom, liberty, and prosperity.”
I even outlined several specific scenarios where that might occur, including giving the politicians more money in exchange for a flat tax or giving them additional revenue in exchange for real entitlement reform.
But I then pointed out that all of those options are unrealistic. And I’ve expanded on that thesis in a new article. Here’s some of what I wrote for The Blaze.
The no-tax pledge of Americans for Tax Reform generates a lot of controversy. With record levels of red ink, the political elite incessantly proclaims that all options must be “on the table.” This sounds reasonable. And when some Republicans say no tax hikes under any circumstances, there’s a lot of criticism about dogmatism. Theoretically, I agree with the elitists.
So does that make me a squish, the fiscal equivalent of Chief Justice John Roberts?
Nope, because I’m tethered to the real world. I know that there is zero chance of getting a good agreement. Once you put taxes “on the table,” any impetus for spending restraint evaporates.
But even though I’m theoretically open to a tax hike, I am a de facto opponent of tax increases for the simple reason that we will never get a good deal. We won’t get sustainable spending cuts. Not even in our dreams. We won’t get real entitlement reforms. Even if we hold our breath ‘til we turn blue. And we won’t get the “Simpson-Bowles” tax reform swap, where taxpayers give up $2 of deductions in exchange for $1 of lower tax rates. Let’s not kid ourselves. In other words, reality trumps theory. Yes, there are tax-hike deals that would be good, but they’re about as realistic as me speculating on whether I’d be willing to play for the New York Yankees, but only if they guarantee me $5 million per year.
I then point out that a budget deal inevitably would lead to bad policy – just as we saw in 1982 and 1990.
Here’s the bottom line: There is no practical way to get a good deal from either the Democrats in the Senate or the Obama Administration. Notwithstanding the good intentions of some people, any grand bargain would be a failure that leads to higher spending and more red ink, just as we saw after the 1982 and 1990 budget deals. The tax increases would not be relatively benign loophole closers. Instead, the economy would be hit by higher marginal tax rates on work, savings, investment, and entrepreneurship. And the entitlement reform would be unsustainable gimmicks rather than structural changes to fix the underlying programs. Ironically, when a columnist for the New York Times complained that Republicans were being unreasonable for opposing tax hikes, she inadvertently revealed that the only successful budget deal was the one in 1997 – the one that had no tax hikes!
The last sentence is worth some additional commentary. As I explained in a previous post, the only bipartisan budget agreement that generated a balanced budget was the 1997 pact – and that deal lowered taxes rather than increasing them.
Some people try to argue that Bill Clinton’s 1993 tax hike deserves some of the credit, but I previously showed that the Administration’s Office of Management and Budget admitted – 18 months later! – that the nation would have triple-digit budget deficits for the foreseeable future.
What changed (and this is where Bill Clinton deserves credit) is that the nation enjoyed a multi-year period of spending restraint in the mid-1990s.
And when policy makers addressed the underlying disease of too much government spending, they solved the symptom of red ink.
Milton Friedman and Chile – The Power of Choice
Uploaded by FreeToChooseNetwork on May 13, 2011
In this excerpt from Free To Choose Network’s “The Power of Choice (2006)”, we set the record straight on Milton Friedman’s dealings with Chile — including training the Chicago Boys and his meeting with Augusto Pinochet. Was the tremendous prosperity unleashed after the Chicago Boys reforms worth the free-market therapy Friedman suggested? You be the judge. But when doing so, just remember the policies leading up to liberalization (land seizures, industry nationalizations and price controls).
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Milton Friedman got the ball rolling in Chili a long time ago. Take a look at the video above.
July 19, 2012 by Dan Mitchell
One of the reasons why this blog is called International Liberty is that the world is a laboratory, with some nations (such as France) showing why statism is a mistake, other jurisdictions (such as Hong Kong) showing that freedom is a key to prosperity, and other countries (such as Sweden) having good and bad features.
It’s time to include Chile in the list of nations with generally good policies. That nation’s transition from statism and dictatorship to freedom and prosperity must rank as one of the most positive developments over the past 30 years.
Here’s some of what I wrote with Julia Morriss for the Daily Caller. Let’s start with the bad news.
Thirty years ago, Chile was a basket case. A socialist government in the 1970s had crippled the economy and destabilized society, leading to civil unrest and a military coup. Given the dismal situation, it’s no surprise that Chile’s economy was moribund and other Latin American countries, such as Mexico, Venezuela, and Argentina, had about twice as much per-capita economic output.
Realizing that change was necessary, the nation began to adopt pro-market reforms. Many people in the policy world are at least vaguely familiar with the system of personal retirement accounts that was introduced in the early 1980s, but we explain in the article that pension reform was just the beginning.
Let’s look at how Chile became the Latin Tiger. Pension reform is the best-known economic reform in Chile. Ever since the early 1980s, workers have been allowed to put 10 percent of their income into a personal retirement account. This system, implemented by José Piñera, has been remarkably successful, reducing the burden of taxes and spending and increasing saving and investment, while also producing a 50-100 percent increase in retirement benefits. Chile is now a nation of capitalists. But it takes a lot more than entitlement reform, however impressive, to turn a nation into an economic success story. What made Chile special was across-the-board economic liberalization.
We then show the data (on a scale of 1-10) from the Fraser Institute’s Economic Freedom of the World, which confirm significant pro-market reforms in just about all facets of economic policy over the past three decades.
But have these reforms made a difference for the Chilean people? The answer seems to be a firm yes.
This has meant good things for all segments of the population. The number of people below the poverty line dropped from 40 percent to 20 percent between 1985 and 1997 and then to 15.1 percent in 2009. Public debt is now under 10 percent of GDP and after 1983 GDP grew an average of 4.6 percent per year. But growth isn’t a random event. Chile has prospered because the burden of government has declined. Chile is now ranked number one for freedom in its region and number seven in the world, even ahead of the United States.
But I think the most important piece of evidence (building on the powerful comparison in this chart) is in the second table we included with the article.
Chile’s per-capita GDP has increased by about 130 percent, while other major Latin American nations have experienced much more modest growth (or, in the tragic case of Venezuela, almost no growth).
Perhaps not as impressive as the performance of Hong Kong and Singapore, but that’s to be expected since they regularly rank as the world’s two most pro-market jurisdictions.
But that’s not to take the limelight away from Chile. That nation’s reforms are impressive – particularly considering the grim developments of the 1970s. So our takeaway is rather obvious.
The lesson from Chile is that free markets and small government are a recipe for prosperity. The key for other developing nations is to figure out how to achieve these benefits without first suffering through a period of socialist tyranny and military dictatorship.
Heck, if other developing nations learn the right lessons from Chile, maybe we can even educate policy makers in America about the benefits of restraining Leviathan.
P.S. One thing that Julia and I forgot to include in the article is that Chile has reformed its education system with vouchers, similar to the good reforms in Sweden and the Netherlands.
Dan Mitchell’s video on Social Security mentions Chili:
Uploaded by afq2007 on Jan 10, 2011
There are two crises facing Social Security. First the program has a gigantic unfunded liability, largely thanks to demographics. Second, the program is a very bad deal for younger workers, making them pay record amounts of tax in exchange for comparatively meager benefits. This video explains how personal accounts can solve both problems, and also notes that nations as varied as Australia, Chile, Sweden, and Hong Kong have implemented this pro-growth reform. http://www.freedomandprosperity.org
John Stossel report “Myth: Gun Control Reduces Crime
Sadly another mass murder happened last night. This time it was at a midnight showing of “The Dark Knight Rises” in Colorado. Over 50 people were shot by a gunman and many died as the Arkansas Times reported.
This will start the gun control debate again and the conservative answer to this will always be the same. Criminals will get the guns even if there is lots of gun control but only the honest people will not have them. The answer to this problem is the second amendment right that everyone has in the USA to carry guns for their own protection. Dan Mitchell has editorial cartoon that demonstrates this principle very well. I have actually written the White House about gun control and the White House actually responded with an email on May 23, 2012.
Let handle a couple of myths out there:
Both John Brummett and Max Brantley have made it clear that they support gun control. I am going to start a series today debunking popular myths about guns and gun control.
During this series on gun control, I will be quoting from an article “Gun Control:Myths and Realities” by David Lampo of the Cato Institute.
This happens to be true. The 31 states that have “shall issue” laws allowing private citizens to carry concealed weapons have, on average, a 24 percent lower violent crime rate, a 19 percent lower murder rate and a 39 percent lower robbery rate than states that forbid concealed weapons. In fact, the nine states with the lowest violent crime rates are all right-to-carry states. Remarkably, guns are used for self-defense more than 2 million times a year, three to five times the estimated number of violent crimes committed with guns.
European Economic Crisis Highlights an Increasingly Important Reason to Oppose Gun Control
Uploaded by NRAVideos on Dec 1, 2011
Ginny Simone talks to Dan Mitchell from the CATO Institute – NRA News – December 1, 2011
Glenn Beck’s guest mentions Mike Ross and 65 other Democrats upset at Gun Control bills sent up by White House
“I would close the gun show loophole…” President Clinton on NBC’s Tom Brokaw discusses gun control with the president, April 12, 2000)
This is the second in a series on Gun Control. During this series on gun control, I will be quoting from an article “Gun Control:Myths and Realities” by David Lampo of the Cato Institute.
2. Gun shows are responsible for a large number of firearms falling into the hands of criminals.
False. Contrary to President Clinton’s claims, there is no “gun show loophole.” All commercial arms dealers at gun shows must run background checks, and the only people exempt from them are the small number of non-commercial sellers. According to the U.S. Department of Justice, at most 2 percent of guns used by criminals are purchased at gun shows, and most of those were purchased legally by people who passed background checks.
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More details from last night’s tragic shooting:
Police are pictured outside of a Century 16 movie theatre where as many as 12 people were killed and many injured …A lone gunman burst into a movie theater in Aurora, Colo., at a midnight showing of the latest Batman film, “The Dark Knight Rises,” and opened fire, killing at least 12 people and injuring at least 50, police said.
A 24-year-old suspect, who was apprehended at the scene, was clad in a bullet-proof vest and riot helmet when he crashed into the movie theater from an emergency exit door at the front of the auditorium, setting off a smoke bomb and then shooting off dozens of rounds from multiple firearms, police told ABC News.
The man was caught by police in the parking lot of the Century 16 Movie Theaters, nine miles outside of Denver, after police began receiving dozens of 911 calls at 12:39 a.m. MT. He was carrying a gas mask, rifle, and handgun, and police believe at least one other gun was left in the movie theater. Police said the suspect mentioned having explosives stored, leading them to evacuate his entire North Aurora apartment complex and search the buildings.
Dozens of victims were taken to local hospitals, including a child as young as 6 years old.
Witnesses said that the man stalked the aisles of the theater as panicked movie-watchers in the packed theater tried to escape.
“The suspect throws tear gas in the air, and as the tear gas appears he started shooting,” said Lamar Lane, who was watching the midnight showing of the movie with his brother. “It was very hard to breathe. I told my brother to take cover. It took awhile. I started seeing flashes and screaming, I just saw blood and people yelling and a quick glimpse of the guy who had a gas mask on. I was pushed out. There was chaos, we started running.”
Witnesses described the confusion as the smoke bomb filled the theater and the man opened fire.
“We were maybe 20 or 30 minutes into the movie and all you hear, first you smell smoke, everybody thought it was fireworks or something like that, and then you just see people dropping and the gunshots are constant,” witness Christ Jones told ABC’s Denver affiliate KMGH. “I heard at least 20 to 30 rounds within that minute or two.”
A man who talked to a couple who was inside the theater told ABC News, “They got up and they started to run through the emergency exit, and that when she turned around, she said all she saw was the guy slowly making his way up the stairs and just firing at people, just picking random people,” he said. “The gunshot continued to go on and on and then after we didn’t hear anything,” the couple told the man, “we finally got up and there was people bleeding, there was people obviously may have been actually dead or anything, and we just ran up out of there, there was chaos everywhere.”
Witnesses and victims were taken to Gateway High School for questioning.
There’s about 100 FBI agents on the scene assisting with the investigation, according to the local special agent in charge. Once apprehended, the gunman told authorities that there were explosives in his North Aurora residence. Investigators rushed to the apartment complex, which was quickly evacuated and is now under lockdown. A senior official who is monitoring the situation in Washington said that early guidance based on the early snapshot of this man’s background indicated that this act does not appear to be linked to radical terrorism or anything related to Islamic terrorism.
In a statement, President Obama said, “Michelle and I are shocked and saddened by the horrific and tragic shooting in Colorado. Federal and local law enforcement are still responding, and my administration will do everything that we can to support the people of Aurora in this extraordinarily difficult time. We are committed to bringing whoever was responsible to justice, ensuring the safety of our people, and caring for those who have been wounded.”
Investigators confirmed that explosives were found. It is unclear if they were scheduled to detonate or if it was part of a stockpile.
Though police have said that they believe the shooter was acting alone, they checked all cars in the parking lot and cleared thge area near the theater.
Patrons in the theater where the shooting took place, along with those in an adjacent theater also viewing the action-packed movie, were unsure of what was happening, although bullets penetrated the adjacent theater. A man who was in the adjacent theater with his son, said that the commotion began as one of the action scenes was starting up.
“These guys came through, and they say someone’s shooting,” he said. “I thought, ‘Oh, they must have heard the fireworks, you know … I had no idea. And then the alarms started to go off in the theater.'”
An explosive device was also found inside the movie house. Police are not sure whether the device, which investigators are calling a bomb, was already in place or whether it was thrown into the crowd.
Ambulances rushed to the scene as audience members fled the theater. Aurora’s police chief said that he could not elaborate on women or children injured or dead in the shooting.
Investigators are now interviewing friends and associates of the suspect to get a sense of the man’s background.
Federal Spending Is Outpacing Inflation
Mandatory Spending Has Increased Five Times Faster Than Discretionary Spending
The Daily Hatch 