Monthly Archives: July 2012

Obama promotes food stamps but Milton Friedman had a better suggestion

July 8, 2012 – 6:04 am

Milton Friedman’s negative income tax explained by Friedman in 1968:

We need to cut back on the Food Stamp program and not try to increase it. What really upsets me is that when the government gets involved in welfare there is a welfare trap created for those who become dependent on the program. Once they go out and get a job then they are stripped away from the welfare program and that encourages them to avoid working and sit on the couch. (Milton Friedman’s negative income tax is a good solution.)

Now we have the government running ads trying to get people to join this type of lifestyle. I think it is the most cruel thing you can do to a struggling poor person. Working is the only way a person can climb up the ladder and falling in the welfare trap hurts the poor’s chance of succeeding in the future.

Obama’s Using Our Tax Dollars to Leverage More Food Stamp Dependency

June 26, 2012 by Dan Mitchell

In past posts, I’ve groused about food stamp abuse, including people using them to buy luxury coffee at Starbucks and to purchase steaks and lobster. I’ve complained about college kids scamming the program, the “Octo-Mom” mooching off the program, and the Obama Administration rewarding states that sign up more food stamp recipients.

Well, the Obama White House is doubling down on creating more dependency, spending tax dollars to increase the number of people on food stamps.

Here are some of disturbing details from a CNN report.

More than one in seven Americans are on food stamps, but the federal government wants even more people to sign up for the safety net program. The U.S. Department of Agriculture has been running radio ads for the past four months encouraging those eligible to enroll. …The department is spending between $2.5 million and $3 million on paid spots, and free public service announcements are also airing. The campaign can be heard in California, Texas, North Carolina, South Carolina, Ohio, and the New York metro area. …President Bush launched a recruitment campaign, which pushed average participation up by 63% during his eight years in office. The USDA began airing paid radio spots in 2004. President Obama’s stimulus act made it easier for childless, jobless adults to qualify for the program and increased the monthly benefit by about 15% through 2013.

Last year, I semi-defended Newt Gingrich when he was attacked for calling Obama the “Food Stamp” President. Citing this chart, I wrote that, “It certainly looks like America is becoming a food stamp nation.”

But my bigger point is that welfare is bad for both taxpayers and the people who get trapped into relying on big government.

The ideal approach, as explained in this video, is to get the federal government out of the business of redistributing income. We are far more likely to get better results if we let states experiment with different approaches.

House Republicans, to their credit, already want to do this with Medicaid. So why not block grant all social welfare programs?

The icing on the cake is that no longer would the federal government be running ads to lure people into dependency.

Related posts:

We can no longer afford the welfare state (Part 7)

Ep. 4 – From Cradle to Grave [7/7]. Milton Friedman’s Free to Choose (1980) With the national debt increasing faster than ever we must make the hard decisions to balance the budget now. If we wait another decade to balance the budget then we will surely risk our economic collapse. The first step is to […]

We can no longer afford the welfare state (Part 6)

Ep. 4 – From Cradle to Grave [6/7]. Milton Friedman’s Free to Choose (1980) With the national debt increasing faster than ever we must make the hard decisions to balance the budget now. If we wait another decade to balance the budget then we will surely risk our economic collapse. The first step is to […]

We can no longer afford the welfare state (Part 5)

Ep. 4 – From Cradle to Grave [5/7]. Milton Friedman’s Free to Choose (1980) With the national debt increasing faster than ever we must make the hard decisions to balance the budget now. If we wait another decade to balance the budget then we will surely risk our economic collapse. The first step is to […]

We can no longer afford the welfare state (Part 4)

 Ep. 4 – From Cradle to Grave [4/7]. Milton Friedman’s Free to Choose (1980) With the national debt increasing faster than ever we must make the hard decisions to balance the budget now. If we wait another decade to balance the budget then we will surely risk our economic collapse. The first step is to […]

We can no longer afford the welfare state (Part 3)

Ep. 4 – From Cradle to Grave [3/7]. Milton Friedman’s Free to Choose (1980) With the national debt increasing faster than ever we must make the hard decisions to balance the budget now. If we wait another decade to balance the budget then we will surely risk our economic collapse. The first step is to […]

We can no longer afford the welfare state (Part 2)

With the national debt increasing faster than ever we must make the hard decisions to balance the budget now. If we wait another decade to balance the budget then we will surely risk our economic collapse. The first step is to remove all welfare programs and replace them with the negative income tax program that […]

We can no longer afford the welfare state (Part 1)

Milton Friedman – The Negative Income Tax Published on May 11, 2012 by LibertyPen In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com Source: Firing Line with William F Buckley Jr. ________________ Milton […]

By Everette Hatcher III | Posted in Milton Friedman, President Obama, spending out of control | Comments (0)

Open letter to President Obama (Part 110)

July 8, 2012 – 6:03 am

The Rahn Curve and the Growth-Maximizing Level of Government

Uploaded by on Jun 29, 2010

Government spending can promote economic growth if money is used for core “public goods” such as rule of law and property rights. But the burden of government spending in the United States and other industrialized nations is far higher than needed to finance such activities. Citing scholarly studies, this CF&P Foundation video examines the Rahn Curve, which graphically illustrates the negative impact of excessive government spending. www.freedomandprosperity.org

___________

These images are remarkably accurate. The welfare state starts with small programs targeted at a handful of genuinely needy people. But as  politicians figure out the electoral benefits of expanding programs and people figure out the that they can let others work on their behalf, the ratio of producers to consumers begins to worsen.

_________

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.

When the government gets so big that it distorts the behavior of the private market then it is too big. The federal government is  now spending 24.8% of GDP and traditionally for the first 150 years of our nation’s history we spent under 5% unless in wartime. This massive spending now by the federal encourages people to lie in order to get money for the government too instead of trying to work hard to earn money in the private market.

Why is big government bad for an economy? The easy answer is that big government usually means high tax rates, and this penalizes work, saving, investment, and entrepreneurship. And perhaps some of the spending is financed by borrowing, and this diverts money from private investment.

That’s a correct answer, but it’s only part of the story. In most cases, there is added damage because politicians spend money in ways that further undermine incentives to produce.

For instance, let’s assume a government spends $1 billion on some sort of redistribution program. Extracting that money from the productive sector of the economy obviously will cause some damage, but it’s also important to estimate how the supposed beneficiaries of the money will react. What if they decide to earn less income in order to be eligible for the handouts, as even the statists at the OECD have recognized?

In other words, it hurts the economy when government collects money, and it often hurts the economy when government spends money. Sort of a perverse 2-for-1 special (though “Rahn Curve” analysis does show that some types of spending – on core public goods – is correlated with better economic performance)

Let’s look at an example from Greece, showing how handouts distort behavior and corrupt people. Here are some remarkable tidbits from a Wall Street Journal story.

The Greek health ministry is investigating on Zakynthos after local officials flagged records showing what they said is an implausibly high number of disability claims for blindness. About 1.8% of the island’s population of 39,000 claimed the benefit last year, according to the health ministry. That is around nine times the prevalence of blindness estimated for many European countries in a 2004 study published in a World Health Organization journal. Among those who put in for the blindness benefit on Zakynthos, a local official said, were a taxi driver and a bird hunter. …But the island is hardly alone, according to health ministry officials, who say fraudulent disability claims are a problem across the nation… Zakynthos Mayor Stelios Bozikis on a Greek television talk show said residents angry about the benefits crackdown and other financial overhauls pelted him with yogurt at a recent event.

Before sneering at the Greeks, keep in mind that “disability” claims also are rising in the United States, which is rather remarkable since jobs have become less arduous over time. Heck, the Social Security Administration decided to give disability payments to a grown man who gets his jollies by wearing diapers.

I’m not sure if that’s better or worse than the Greek government deciding to reward pedophiles with disability payments, but taxpayers are getting screwed in both examples.

Let’s go back to the story and look at a rough estimate of how much fraud exists.

In an attempt to root out fraud, the Greek health ministry recently required disability claimants nationwide to register in a centralized database, appearing in person or sending a representative. The registration resulted in 36,000 fewer disability claims than in 2011, the health ministry said. The ministry alleges these dropped claims were fraudulent, in many cases reflecting multiple claims for the same disability or payments in the name of dead beneficiaries. It also alleges that some doctors accepted money for false diagnoses and some local politicians signed off on the benefits to win support, and said it is giving public prosecutors information about areas where it suspects a high level of fraud. Only 190 of the nearly 700 people it says had been collecting the blindness benefit on Zakynthos participated in the registration, the ministry said.

I have no idea if Zakynthos is representative, but that’s an incredibly high fraud rate. And this is just a glimpse at the workings of one government program. Now multiply that by some large number and you’ll begin to understand the damage caused by government.

And America is not immune. When politicians make it easier to ride in the wagon than to pull the wagon (as this cartoon illustrates), society sooner or later gets in trouble.

____________

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

By Everette Hatcher III | Posted in Cato Institute, President Obama, spending out of control | Tagged | Comments (0)

Jeb Bush and Lindsey Graham join small naive group of Republicans that want to raise taxes

July 8, 2012 – 6:02 am

Below is a speech by George W. Bush honoring Milton Friedman:

Milton Friedman Honored for Lifetime Achievements 2002/5/9

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. I wonder if Jeb Bush has the same genes as his father.

What we need is some people in Washington that are brave enough to say that we have taken too much of the american people’s money and we have to make the painful spending cuts in order to balance the budget and not ask for any more tax increases!!!! Arkansas’ congressman Rick Crawford has also made the Charlie Brown mistake.

Even though America’s fiscal problem is entirely the result of too much government spending, I wrote earlier this year that there were all sorts of scenarios where I would agree to a tax increase.

But I then pointed out that all of those scenarios were total fantasies and that it would be more realistic to envision me playing center field for the New York Yankees.

The fundamental problem is that politicians never follow through on promises to reduce spending – even if you use the dishonest Washington definition that a spending cut occurs whenever the budget doesn’t rise as fast as previously planned.

And to make matters worse, they always seem to want class-warfare tax hikes that do heavy economic damage rather than the loophole closers that at least get rid of some of the inefficient corruption in the tax code.

That’s why I like the anti-tax pledge of Americans for Tax Reform. You don’t solve America’s fiscal problems by saying no to all tax increases, but at least you don’t move in the wrong direction at a faster rate.

Notwithstanding the principled and pragmatic arguments against putting tax increases on the table, some Republicans – in a triumph of hope over experience – are preemptively acquiescing to tax hikes.

Here’s what Jeb Bush said.

Jeb Bush, the former Florida governor, said Friday that he could back a broad deficit plan that increased taxes, a stance that puts him at odds with other prominent Republicans. Bush told a House panel he could get behind a plan that combined 10 dollars in spending cuts for every dollar of new revenue… “The problem is the 10 never materializes,” [Congressman Paul] Ryan said after Bush said he could support a revenue-increasing deficit deal. Norquist also has criticized deficit deals crafted in 1982 and 1990 – the latter agreed to by then-President George H.W. Bush, Jeb’s father – for failing to deliver on the spending side.

Kudos to Paul Ryan for making the obvious point about make-believe spending cuts. And Grover is correct about the failure of previous budget deals.

Indeed, I cited a New York Times column that inadvertently revealed that the only budget deal that worked was the 1997 pact that cut taxes rather than raised them.

Jeb Bush isn’t the only apostate. Here’s what Senator Graham had to say.

Sen. Lindsey Graham (R-S.C.) said Tuesday he believed Republicans should consider eliminating loopholes in the tax code even if they aren’t replaced by additional tax cuts, a move that would break with an anti-tax pledge many GOP lawmakers have signed with activist Grover Norquist. “When you eliminate a deduction, it’s OK with me to use some of that money to get us out of debt. That’s where I disagree with the pledge,” Graham told ABC News. …”I’m willing to move my party, or try to, on the tax issue. I need someone on the Democratic side being willing to move their party on structural changes to entitlements.” Graham said, for instance, he would support a plan that included $4 in spending cuts for every $1 in tax increases. During a Republican debate last August, all eight Republican candidates in attendance said they would reject a proposal to trade $10 in spending cuts for even $1 in tax increases.

In some sense, Senator Graham’s comments are reasonable. With real spending cuts and less-damaging forms of tax hikes, an acceptable deal is possible. But only in Fantasia, not in Washington.

In the real world, all that Senator Graham has done is to move the debate slightly to the left.

I’ve noted that tax increases are political poison for the Republican Party, but I don’t lose sleep worrying about the GOP.

But I do have nightmares about government getting even bigger, and that’s why I don’t want tax increases on the table. I don’t even want them in the room. Or the house. Or the neighborhood.

That’s why Jeb Bush and Lindsey Graham are the newest winners of the Charlie Brown Award. They’ve put blood in the water. I wonder if they’ll act surprised when hungry sharks show up looking for a meal?

By Everette Hatcher III | Posted in Cato Institute, spending out of control, Taxes | Tagged | Comments (0)

Open letter to President Obama (Part 109)

July 8, 2012 – 6:01 am

Government Spending Doesn’t Create Jobs

Uploaded by on Sep 7, 2011

Share this on Facebook: http://on.fb.me/qnjkn9 Tweet it: http://tiny.cc/o9v9t

In the debate of job creation and how best to pursue it as a policy goal, one point is forgotten: Government doesn’t create jobs. Government only diverts resources from one use to another, which doesn’t create new employment.

Video produced by Caleb Brown and Austin Bragg.

_________

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.

Judging from what you had to say in your State of the Union address you haven’t changed at all. You still believe we should make “investments” but what you really mean is that government can provide everyone jobs. I just don’t believe that and I don’t believe you are brave enough to make the tough cuts in government spending to bring down out federal spending from almost 25% of GDP to more acceptable levels like under 19% under Clinton.

After saddling the nation with trillion-dollar boondoggles like the faux stimulus and Obamacare, I’m not sure it’s possible for Obama to reinvent himself as a budget cutter before the election.

But I welcome converts, even ones that are insincere, so I’m happy he’s at least pretending to want to deal with waste and duplication in the federal budget.

Here’s a blurb from the Daily Beast about his new idea.

President Barack Obama is seeking the power to merge agencies in a bid to shrink the federal government in a sweeping move. Obama will ask Congress to give him authority to consolidate six trade and commerce agencies that have overlapping programs, cutting up to 2,000 jobs and saving $3 billion over 10 years. He’ll call for a vote by Congress within 90 days.

But I’ll definitely wait to see the fine print. After all, the President claimed in 2009 that he was directing his Cabinet to find $100 million of budget cuts.

“I hate pretending to be a fiscal conservative”

But even that trivial gesture (almost immeasurably small compared to t a$3.6 trillion budget) turned out to be empty rhetoric.

And even if he’s serious about this latest plan, $3 billion of saving over 10 years is chicken feed compared to all of his new spending.

But if you allow me to modify an old saying, a journey of tens of trillions of dollars begins with the first $3 billion.

__________

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

By Everette Hatcher III | Posted in President Obama, spending out of control | Tagged | Comments (0)

How to keep medicare prices down

July 8, 2012 – 6:00 am

Moving Forward On Entitlements: Dan Mitchell

Entitlement spending will bury this country if we do nothing about it.

Drew Gonshorowski

June 6, 2012 at 7:03 am

Some policymakers have difficulty understanding competition’s role in health care. There is a historical reason: With a legacy of third-party micromanagement, something like Medicare Part D—a program where about 1,100 drug plans compete for enrollees—is remarkably foreign. Several analysts cite this program as a marked success for competition in health care. However, a recent Kaiser Family Foundation issue brief claimed that the effect of competition was overstated and unclear.

Interestingly, the arguments intended to downplay the role of competition actually provide evidence that Medicare Part D competition is working. Consider these examples.

Departure from original cost projections. There was a difference between budget projections and actual spending in Part D, which can be explained partly by an overestimate of Part D enrollment; still, market competition clearly provided savings. Enrollment in Medicare Part D was lower than the original Congressional Budget Office projections over the past six years by an average of 7.1 million people per year. Research calculations show, however, that this effect can account for only 17 percent of the difference in actual cost.

Prescription drug costs. One example of competition working is the “flat price trend.” In other words, people substitute their brand-name prescriptions with generics in order to save money. For example, if a patient was taking Niaspan, which averages around $125 for a prescription, he could switch to Niacin, a generic version, which costs $70 on average for the same refill. Many Medicare beneficiaries switch to generics just for this reason. Although brand-name drugs have experienced a modest increase in price, this generic effect has kept prices of prescription drugs relatively constant. Hence, spending grows more slowly.

Those who downplay the role of competition claim that such behavior is not competitive, but understanding this behavior in a context without competition is simply impossible. As Joseph Antos of the American Enterprise Institute points out, “If we paid for each individual prescription the way we pay for each individual health service, there would be no incentive for drug plans to encourage the use of generics over brands.” Competition in Medicare Part D allows individual choice to play a role in prescription drug consumption. This directly encourages generic substitution, since individuals seek out the best value.

Few patients switching plans. Another critique of competition is that a general reluctance to switch plans “reflects the large number of plan choices available combined with the costs in terms of time and energy of doing research and of actually making a switch.” This claim, taken from behavioral economics, does not negate a person’s price sensitivity. Experience with the Federal Employees Health Benefits Plan (FEHBP) shows that about 5 percent of patients switch plans each year. This reluctance to switch reflects well-documented satisfaction with plan choices. This only proves that people make decisions based on many factors, including how much they like their plans.

Considering the growth figures in Medicare, competition appears to be working. Spending in Medicare Parts A and B has grown at an average of 4.9 percent over the past six years, while Medicare Part D grew at 2.8 percent. Imagine if total Medicare spending grew at 2.8 percent—as opposed to its actual growth rate of 8.7 percent. This is the effect of market-based reforms. For example, if Heritage’s Saving the American Dream plan had been implemented five years ago, annual Medicare spending growth would have likely topped out at 3.5 percent.

In health care, competition allows individual behavior to drive down costs and constrains spending without top-down mandates that ultimately limit choice and freedom. A fundamental shift toward reform that focuses on consumer choice and market competition, like Heritage’s Saving the American Dream plan, is good not only for the federal budget, but also for the individual who desires to secure the best value for his or her health care dollars.

By Everette Hatcher III | Posted in Healthcare | Comments (0)

“Schaeffer Sundays” can be seen on the www.thedailyhatch.org

July 8, 2012 – 3:49 am

What Ever Happened to the Human Race?

Francis Schaeffer  

  I learned so much from Francis Schaeffer and as a result I have posted a lot of posts with his film clips and articles. Below are a few.

Related posts:

Francis Schaeffer: We can’t possess ultimate answers apart from the reference point of the infinite personal God himself (Schaeffer Sunday)

Dr. Francis Schaeffer – The Biblical flow of Truth & History (intro) Uploaded by Scott87508 on Oct 3, 2010 __________________ Some wise words below I got off the internet: Tuesday, July 01, 2008 The Infinite-Personal God: Thoughts from Francis Schaeffer’s Escape from Reason   Perhaps you are familiar with the indie band Arcade Fire. Their […]

Francis Schaeffer’s L’Abri Fellowship in Switzerland (Schaeffer Sunday)

L’Abri : Sounds & Sites of a Shelter Uploaded by mdshivers on Nov 12, 2006 A fun video of the day in the life at L’Abri Fellowship in Switzerland. I made this video in 2003 while there and I was trying to capture the sounds and everyday life of it. Was on the Labri.org site […]

Francis Schaeffer would be 100 years old this year (Schaeffer Sunday)

Dr. Francis Schaeffer – Extra – Interview – Part 2 Francis Schaeffer had a big impact on me in the late 1970′s and I have been enjoying his books and films ever since. Here is great video clip of an interview and below is a fine article about him. Francis Schaeffer 1912-1984 Christian Theologian, Philosopher, […]

Francis Schaeffer’s “How should we then live?” Video and outline of episode 10 “Final Choices” (Schaeffer Sundays)

E P I S O D E 1 0 How Should We Then Live 10#1 FINAL CHOICES I. Authoritarianism the Only Humanistic Social Option One man or an elite giving authoritative arbitrary absolutes. A. Society is sole absolute in absence of other absolutes. B. But society has to be led by an elite: John Kenneth […]

A Christian Manifesto by Francis Schaeffer (Part 9) (Schaeffer Sundays)

Part 1 Part 2 Below is a summary of “A Christian Manifesto” which is a very important book written by Francis Schaeffer just a couple of years before his death in 1984. A Christian Manifesto by Dr. Francis A. Schaeffer This address was delivered by the late Dr. Schaeffer in 1982 at the Coral Ridge Presbyterian […]

Francis Schaeffer and C. Everett Koop were prophetic (jh29)

Francis Schaeffer and C. Everett Koop were prophetic (jh29) What Ever Happened to the Human Race? I recently heard this Breakpoint Commentary by Chuck Colson and it just reminded me of how prophetic Francis Schaeffer and C. Everett Koop were in the late 1970′s with their book and film series “Whatever happened to the human […]

Francis Schaeffer noted “If there are no absolutes by which to judge society, then society is absolute.” (“Schaeffer Sundays” Part 4)

___________________________________________ Francis Schaeffer is a hero of mine and I want to honor him with a series of posts on Sundays called “Schaeffer Sundays” which will include his writings and clips from his film series. I have posted many times in the past using his material. Philosopher and Theologian, Francis A. Schaeffer has argued, “If […]

Communism catches the attention of the young at heart but it has always brought repression wherever it is tried (“Schaeffer Sundays” Part 1)

 (“Schaeffer Sundays” Part 1)   Francis Schaeffer is a hero of mine and I want to honor him with a series of posts on Sundays called “Schaeffer Sundays” which will include his writings and clips from his film series. I have posted many times in the past using his material.   Communism has never been […]

 

By Everette Hatcher III | Posted in Francis Schaeffer, Prolife | Comments (0)

Open letter to President Obama (Part 108)

July 8, 2012 – 12:59 am

The Economic Case for Tax Havens

Uploaded by on Sep 10, 2008

Statist politicians and international bureaucracies such as the OECD and UN routinely attack tax havens, claiming that they lead to “harmful tax competition.” Yet at no point do critics bother to provide any evidence for this claim. This mini-documentary from the Center for Freedom and Prosperity looks at the empirical data and scholarly research and reports that tax havens actually have a very positive impact on the global economy.

______________

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 size of government needs to be reduced. Eventually people will revolt against the tremendous amount of taxes they are forced to pay. Furthermore, corrupt scams like Solyndra and bailouts make people resent paying their taxes and people will look for tax havens in other countries if taxes are not reduced. Please look at ways to decrease taxes so people will not flee with their money!!!

I wrote last year about a backlash from long-suffering Greek taxpayers. These people – the ones pulling the wagon rather than riding in the wagon – are being raped and pillaged by a political class that is trying to protect the greedy interest groups that benefit from Greece’s bloated public sector.

We now have another group of taxpayers who are fighting back against greedy government. My ancestors in Ireland have decided that enough is enough and there is widespread civil disobedience against a new property tax.

Here are the key details from an AP report.

The Serfs Fight Back

Ireland is facing a revolt over its new property tax. The government said less than half of the country’s 1.6 million households paid the charge by Saturday’s deadline to avoid penalties. And about 5,000 marched in protest against the annual conference of Prime Minister Enda Kenny’s Fine Gael party. Emotions ran raw as police backed by officers on horseback stopped demonstrators from entering the Dublin Convention Centre. …One man mistakenly identified as the government minister responsible for collecting the tax had to be rescued by police from an angry scrum. Kenny said his government had no choice, but to impose the new charge as part of the nation’s efforts to emerge from an international bailout. …The charge this year is a flat-fee €100 ($130) per dwelling, but is expected to rise dramatically next year once Ireland starts to vary the charge based on a property’s estimated value. Anti-tax campaigners have urged the public to ignore the tax demand, arguing that the government doesn’t have the power to collect it.

What makes this new tax so outrageous is that Irish taxpayers already have been victimized with higher income tax rates and a more onerous value-added tax. Yet they weren’t the ones to cause the nation’s fiscal crisis. Ireland is in trouble for two reasons, and both deal with the spending side of the fiscal equation.

1. The burden of government spending exploded last decade, more than doubling in less than 10 years. This wiped out all the gains from fiscal restraint in the 1980s and 1990s.

2. Irish politicians decided to give a bailout not only to depositors of the nation’s failed banks, but also to bondholders. This is a grotesque transfer of wealth from ordinary people to those with higher incomes – and therefore a violation of Mitchell’s Guide to an Ethical Bleeding Heart.

It’s worth noting that academic studies find that tax evasion is driven largely by high tax rates. This makes sense since there is more incentive to hide money when the government is being very greedy. But there is also evidence that tax evasion rises when people perceive that government is wasting money and being corrupt.

Heck, no wonder the Irish people are up in arms. They’re being asked to cough up more money to finance a bailout that was both corrupt and wasteful.

Let’s close by looking at American attitudes about tax evasion. Here’s part of a column from Forbes, which expresses surprise that Americans view tax evasion more favorably than behaviors such as shoplifting and littering.

A new survey suggests Americans consider cheating on their taxes more socially acceptable than shoplifting, drunk driving or even throwing trash out the window of a moving car. …only 66% of  the participants said they “completely agree” that “everyone who cheats on their taxes should be held accountable”  and only 72% completely agreed that “it’s every American’s civic duty to pay their fair share of taxes”–suggesting, as the Shelton study does, that perhaps disapproval of tax evasion is not as strong as, say, disapproval of stealing from private businesses.

I’m not sure, though, why anybody would be shocked by these results. We have a government in Washington that is pervasively corrupt, funneling money to corrupt scams like Solyndra.

These same people want higher tax rates, which will further encourage people to protect their income.

If we really want to promote better tax compliance, whether in the U.S., Ireland, or anywhere in the world, there are two simple answers. First, enact a simple and fair flat tax to keep rates low. Second, shrink government to its proper size, which will automatically reduce waste and limit opportunities for corruption.

But none of this is in the interests of the political class, so don’t hold your breath waiting for these reforms.

____________

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

________

The Moral Case for Tax Havens

Uploaded by on Oct 22, 2008

This Center for Freedom and Prosperity Foundation video demonstrates that low-tax jurisdictions offer millions of people around the world a safe haven from tyrannical and oppressive government. For this, and many other reasons, there is a powerful moral case for preserving and promoting tax havens. This mini-documentary is the second installment of a three-part series on the beneficial impact of low-tax jurisdictions. In addition to showing how tax havens promote human rights and individual liberty, the video exposes the hypocritical anti-tax competition efforts of statist international bureaucracies such as the Organization for Economic Cooperation and Development. For more information: http://www.freedomandprosperity.org Link to Part 1 — The Economic Case for Tax Havens: http://www.youtube.com/watch?v=yi0lkJBTi58

Related posts:

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Videos by Cato Institute on failed stimulus plans

In this post I have gathered several videos from the Cato Institute concerning the subject of failed stimulus plans. _____ Government Spending Doesn’t Create Jobs Uploaded by catoinstitutevideo on Sep 7, 2011 Share this on Facebook: http://on.fb.me/qnjkn9 Tweet it: http://tiny.cc/o9v9t In the debate of job creation and how best to pursue it as a policy […]

Balanced Budget Amendment the answer? Boozman says yes, Pryor no, Part 28 (Input from Norm Coleman, former Republican Senator from MN)

  It’s Simple to Balance The Budget Without Higher Taxes Steve Brawner in his article “Safer roads and balanced budgets,” Arkansas News Bureau, April 13, 2011, noted: The disagreement is over the solutions — on what spending to cut; what taxes to raise (basically none ever, according to Boozman); whether or not to enact a […]

Obama’s plan is not too smart on taxes

Dan Mitchell did a great article concerning the affect of raising taxes in these two areas and horrible results: How Can Obama Look at these Two Charts and Conclude that America Should Have Higher Double Taxation of Dividends and Capital Gains? Posted by Daniel J. Mitchell As discussed yesterday, the most important number in Obama’s […]

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Tax Havens: Myths vs. Facts

Uploaded by on Dec 1, 2008

The Center for Freedom and Prosperity Foundation has produced videos showing the economic and moral benefits of so-called tax havens. This final video in the three-part series addresses some of the most common myths put forth by politicians from high-tax nations. Using academic research and data from international organizations, the video shows that the most common attacks made against low-tax jurisdictions are empty demagoguery.

By Everette Hatcher III | Posted in Cato Institute, President Obama, Taxes | Tagged | Comments (0)

Obamacare not going to lower government spending

July 8, 2012 – 12:58 am

Since I’ve bashed the biased and inaccurate work of the Congressional Budget Office, I found this cartoon very amusing.

And this cartoon on business taxation is very appropriate after yesterday’s post about a potential corporate tax rate reduction from the Obama Administration.

Many of us know that Obamacare will be very expensive and that supporters, aided and abetted by the Congressional Budget Office, deliberately low-balled the cost estimates.

I’ve also cited my Cato colleague Chris Edwards, who has made a more comprehensive (and well-documented) claim that government officials systematically lie about the cost of new projects.

Now we have a rather remarkable example of this fiscal prevarication from across the ocean.

In 2002, the British government estimated the cost of hosting the Olympic Games at $2.8 billion. Ten years later, the price has passed $15 billion and is still rising. When everything is added up — lost business, as many as 13,500 British soldiers patrolling the streets of London (more than are in Afghanistan) — the expenses may come to $38 billion.

Wow, cost overruns of somewhere between 500 percent and 1300 percent. That’s bad, even by government standards.

Though I imagine that moronic advocates of Keynesian economics will argue that the $15 billion-$38 billion is a form of stimulus that will percolate through the economy – conveniently forgetting that the money had to be taxed and borrowed from the private economy in the first place.

P.S. The top cartoon in this post is a good description of how government officials come up with their fiscal estimates.

By Everette Hatcher III | Posted in Healthcare | Comments (0)

Open letter to President Obama (Part 107)

July 8, 2012 – 12:57 am

Sweden produced ABBA in the 1970’s, but now they are producing some pretty good economic policies.

One of my favorite groups growing up was ABBA. Here are some of my favorite songs:

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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.

I have been impressed recently with Sweden’s resolve to cut taxes and how that has caused growth.

Sweden has a very large and expensive welfare state, but it’s actually becoming a bit of a role model for economic reform. I’ve already commented on the country’s impressive school choice system and noted that the Swedes have partially privatized their Social Security system.

I even wrote a Cato study looking at the good and bad features of economic policy in the Nordic nations, and cited a Swedish parliamentarian who explained that his nation became rich because of small government and free markets and how he is hopeful his country is returning to its libertarian roots.

Notwithstanding the many admirable features of Sweden, I never thought they would be moving in the right direction on fiscal policy while the United States was heading in the opposite direction.

Yet that’s the case. We all know that America has had made many mistakes during the Bush-Obama years, particularly with failed stimulus schemes in 2008 and 2009.

Sweden, by contrast, has put in place pro-growth reforms. Here’s what Fraser Nelson wrote for the UK-based Spectator.

Can we trade Geithner for Borg?

When Europe’s finance ministers meet for a group photo, it’s easy to spot the rebel — Anders Borg has a ponytail and earring. What actually marks him out, though, is how he responded to the crash. While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden’s finance minister, his mission has been to pare back government. His ‘stimulus’ was a permanent tax cut. …Three years on, it’s pretty clear who was right. ‘Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus,’ he says. ‘Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.’ Tax-cutting Sweden, by contrast, had the fastest growth in Europe last year, when it also celebrated the abolition of its deficit. …‘Everybody was told “stimulus, stimulus, stimulus”,’ he says — referring to the EU, IMF and the alphabet soup of agencies urging a global, debt-fuelled spending splurge. Borg, an economist, couldn’t work out how this would help. ‘It was surprising that Europe, given what we experienced in the 1970s and 80s with structural unemployment, believed that short-term Keynesianism could solve the problem.’ …He continued to cut taxes and cut welfare-spending to pay for it; he even cut property taxes for the rich to lure entrepreneurs back to Sweden. The last bit was the most unpopular, but for Borg, economic recovery starts with entrepreneurs. If cutting taxes for the rich encouraged risk-taking, then it had to be done.

The article notes that government is still far too large in Sweden, but it’s also clear that moving in the right direction generates immediate benefits.

I posted a video back in 2010, narrated by a Swedish economics student, and asked a rhetorical question of why Obama wants to make America more like Sweden when the Swedes are moving in the other direction.

Unfortunately, there was no good answer then and there’s no good answer now.

Let’s close with some irony. Last year, I cited a study showing how large public sectors undermine economic performance. The study was written by two Swedish economists. In addition to trading Geithner for Borg, perhaps we can ship Krugman to Stockholm and bring those economists to America.

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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

By Everette Hatcher III | Posted in Cato Institute, President Obama, Taxes | Comments (0)

Videos by Dan Mitchell of the Cato Institute found here on www.thedailyhatch.org

July 8, 2012 – 12:56 am

Dan Mitchell of the Cato Institute has some great videos and I have posted lots of them on my blog. I like to go to Dan’s blog too. Take a look at some of them below and then the links to my blog.

It’s Simple to Balance The Budget Without Higher Taxes

Uploaded by on Oct 4, 2010

Politicians and interest groups claim higher taxes are necessary because it would be impossible to cut spending by enough to get rid of red ink. This Center for Freedom and Prosperity video shows that these assertions are nonsense. The budget can be balanced very quickly by simply limiting the annual growth of federal spending.

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Six Reasons Why the Capital Gains Tax Should Be Abolished

Uploaded by on May 3, 2010

The correct capital gains tax rate is zero because there should be no double taxation of income that is saved and invested. This is why all pro-growth tax reform plans, such as the flat tax and national sales tax, eliminate the capital gains tax. Unfortunately, the President wants to boost the official capital gains tax rate to 20 percent, and that is in addition to the higher tax rate on capital gains included in the government-run healthcare legislation. http://www.freedomandprosperity.org

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Keynesian Economics Is Wrong: Bigger Gov’t Is Not Stimulus

Uploaded by on Dec 15, 2008

Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance.

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Obama’s So-Called Stimulus: Good For Government, Bad For the Economy

Uploaded by on Jan 26, 2009

President Obama wants Congress to dramatically expand the burden of government spending. This CF&P Foundation mini-documentary explains why such a policy, based on the discredited Keynesian theory of economics, will not be successful. Indeed, the video demonstrates that Obama is proposing – for all intents and purposes – to repeat Bush’s mistakes. Government will be bigger, even though global evidence shows that nations with small governments are more prosperous.

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Big Government Is Not Stimulus: Why Keynes Was Wrong (The Condensed Version)

Uploaded by on Jan 13, 2009

The CF&P Foundation has released a condensed version of our successful mini-documentary explaining why so-called stimulus schemes do not work. Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance.

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Eight Reasons Why Big Government Hurts Economic Growth

Uploaded by on Aug 17, 2009

This Center for Freedom and Prosperity Foundation video analyzes how excessive government spending undermines economic performance. While acknowledging that a very modest level of government spending on things such as “public goods” can facilitate growth, the video outlines eight different ways that that big government hinders prosperity. This video focuses on theory and will be augmented by a second video looking at the empirical evidence favoring smaller government.

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Now that I have been critical of the Democrat President, I wanted to show that I am not concerned about taking up for Republicans but looking at the facts. President Clinton did increase government spending at a slower rate than many other presidents. Here are two  videos that praise both Reagan and Clinton for both accomplished this feat.

Spending Restraint, Part I: Lessons from Ronald Reagan and Bill Clinton

Uploaded by on Feb 14, 2011

Ronald Reagan and Bill Clinton both reduced the relative burden of government, largely because they were able to restrain the growth of domestic spending. The mini-documentary from the Center for Freedom and Prosperity uses data from the Historical Tables of the Budget to show how Reagan and Clinton succeeded and compares their record to the fiscal profligacy of the Bush-Obama years.

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Spending Restraint, Part II: Lessons from Canada, Ireland, Slovakia, and New Zealand

Uploaded by on Feb 22, 2011

Nations can make remarkable fiscal progress if policy makers simply limit the growth of government spending. This video, which is Part II of a series, uses examples from recent history in Canada, Ireland, Slovakia, and New Zealand to demonstrate how it is possible to achieve rapid improvements in fiscal policy by restraining the burden of government spending. Part I of the series examined how Ronald Reagan and Bill Clinton were successful in controlling government outlays — particularly the burden of domestic spending programs. www.freedomandprosperity.org

Here are some posts that include videos from Dan Mitchell:

Videos by Cato Institute on failed stimulus plans

In this post I have gathered several videos from the Cato Institute concerning the subject of failed stimulus plans. _____ Government Spending Doesn’t Create Jobs Uploaded by catoinstitutevideo on Sep 7, 2011 Share this on Facebook: http://on.fb.me/qnjkn9 Tweet it: http://tiny.cc/o9v9t In the debate of job creation and how best to pursue it as a policy […]

Balanced Budget Amendment the answer? Boozman says yes, Pryor no, Part 28 (Input from Norm Coleman, former Republican Senator from MN)

  It’s Simple to Balance The Budget Without Higher Taxes Steve Brawner in his article “Safer roads and balanced budgets,” Arkansas News Bureau, April 13, 2011, noted: The disagreement is over the solutions — on what spending to cut; what taxes to raise (basically none ever, according to Boozman); whether or not to enact a […]

Obama’s plan is not too smart on taxes

Dan Mitchell did a great article concerning the affect of raising taxes in these two areas and horrible results: How Can Obama Look at these Two Charts and Conclude that America Should Have Higher Double Taxation of Dividends and Capital Gains? Posted by Daniel J. Mitchell As discussed yesterday, the most important number in Obama’s […]

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By Everette Hatcher III | Posted in Cato Institute, spending out of control, Taxes | Comments (0)