Category Archives: Taxes

Videos by Cato Institute on failed stimulus plans

June 4, 2012 – 8:02 am

In this post I have gathered several videos from the Cato Institute concerning the subject of failed stimulus plans.

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Government Spending Doesn’t Create Jobs

Uploaded by on Sep 7, 2011

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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.

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Keynesian Catastrophe: Big Money, Big Government & Big Lies

Uploaded by on Jan 19, 2012

The Cato Institute’s Dan Mitchell explains why Obama’s stimulus was a flop! With Glenn Reynolds.

See more at http://www.pjtv.com and http://www.cato.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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Keynesian Economics Is Wrong: Economic Growth Causes Consumer Spending, Not the Other Way

Uploaded by on Nov 29, 2010

Politicians and journalists who fixate on consumer spending are putting the cart before the horse. Consumer spending generally is a consequence of growth, not the cause of growth. This Center for Freedom and Prosperity video helps explain how to achieve more prosperity by looking at the differences between gross domestic product and gross domestic income. www.freedomandprosperity.org

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Deficits, Debts and Unfunded Liabilities: The Consequences of Excessive Government Spending

Uploaded by on May 10, 2010

Huge budget deficits and record levels of national debt are getting a lot of attention, but this video explains that unfunded liabilities for entitlement programs are Americas real red-ink challenge. More important, this CF&P mini-documentary reveals that deficits and debt are symptoms of the real problem of an excessive burden of government spending. www.freedomandprosperity.org

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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

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It seems that liberals will never wake up. On 3-8-12 a Arkansas Times blogger pointed out that Obama’s stimulus in 2009 was not made up of just increased but also tax cuts. That is true but the real truth is that there have been about 1/2 dozen stimulus efforts by President Obama and all of them have failed.  Over and over they have tried stimulus plans but they don’t work. Take a look at this excellent article from the Cato Institute:

Keynesian Policies Have Failed

by Chris Edwards

Chris Edwards is the director of tax policy studies at the Cato Institute and the editor of Downsizing Government.org.

Added to cato.org on December 2, 2011

This article appeared on U.S. News & World Report Online on December 2, 2011

Lawmakers are considering extending temporary payroll tax cuts. But the policy is based on faulty Keynesian theories and misplaced confidence in the government’s ability to micromanage short-run growth.

In textbook Keynesian terms, federal deficits stimulate growth by goosing “aggregate demand,” or consumer spending. Since the recession began, we’ve had a lot of goosing — deficits were $459 billion in 2008, $1.4 trillion in 2009, $1.3 trillion in 2010, and $1.3 trillion in 2011. Despite that huge supposed stimulus, unemployment remains remarkably high and the recovery has been the slowest since World War II.

Policymakers should ignore the Keynesians and their faulty models, and instead focus on reforms to aid long-run growth…

Yet supporters of extending payroll tax cuts think that adding another $265 billion to the deficit next year will somehow spur growth. That “stimulus” would be on top of the $1 trillion in deficit spending that is already expected in 2012. Far from helping the economy, all this deficit spending is destabilizing financial markets, scaring businesses away from investing, and imposing crushing debt burdens on young people.

For three years, policymakers have tried to manipulate short-run economic growth, and they have failed. They have put too much trust in macroeconomists, who are frankly lousy at modeling the complex workings of the short-run economy. In early 2008, the Congressional Budget Office projected that economic growth would strengthen in subsequent years, and thus completely missed the deep recession that had already begun. And then there was the infamously bad projection by Obama’s macroeconomists that unemployment would peak at 8 percent and then fall steadily if the 2009 stimulus plan was passed.

Chris Edwards is the director of tax policy studies at the Cato Institute and the editor of Downsizing Government.org.

 

More by Chris Edwards

Some of the same Keynesian macroeconomists who got it wrong on the recession and stimulus are now claiming that a temporary payroll tax break would boost growth. But as Stanford University economist John Taylor has argued, the supposed benefits of government stimulus have been “built in” or predetermined by the underlying assumptions of the Keynesian models.

Policymakers should ignore the Keynesians and their faulty models, and instead focus on reforms to aid long-run growth, which economists know a lot more about. Cutting the corporate tax rate, for example, is an overdue reform with bipartisan support that would enhance America’s long-run productivity and competitiveness.

If Congress is intent on cutting payroll taxes, it should do so within the context of long-run fiscal reforms. One idea is to allow workers to steer a portion of their payroll taxes into personal retirement accounts, as Chile and other nations have done. That reform would feel like a tax cut to workers because they would retain ownership of the funds, and it would begin solving the long-term budget crisis that looms over the economy.

Related posts:

Stimulus plans do not work (part 2)

Dan Mitchell discusses the effectiveness of the stimulus Uploaded by catoinstitutevideo on Nov 3, 2009 11-2-09 When I think of all our hard earned money that has been wasted on stimulus programs it makes me sad. It has never worked and will not in the future too. Take a look at a few thoughts from […]

Stimulus plans do not work (Part 1)

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 goal, one point is forgotten: Government doesn’t create jobs. Government only diverts resources from one use to another, which doesn’t […]

Dumas thinks we don’t need Balanced Budget Amendment but should balance it on our own

In his recent article Ernie Dumas sticks to his guns that we should balance the budget without being forced to with a “Balanced Budget Amendment,” but I wonder how well that has worked so far? I have made this a key issue for this blog in the past as you can tell below: Dear Senator […]

Maybe the “Occupy Wall Street” crowd should be angry at Obama

(Picture from Arkansas Times Blog) When I think about all the anger and hate coming from the Occupy Wall Street crowd, I wonder if they have read this story below? Solyndra: Crooked Politics or Just Bad Economics? Posted by David Boaz Amy Harder has a good take on the Solyndra issue in National Journal Daily […]

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 13 Thirsty Thursday, Open letter to Senator Pryor)

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 13 Thirsty Thursday, Open letter to Senator Pryor) Office of the Majority Whip | Balanced Budget Amendment Video In 1995, Congress nearly passed a constitutional amendment mandating a balanced budget. The Balanced Budget Amendment would have forced the federal government to live within its […]

Mark Pryor not for President’s job bill even though he voted for it

Andrew Demillo pointed this out  and also Jason Tolbert noted: PRYOR OPPOSES THE OBAMA JOBS BILL THAT HE VOTED TO ADVANCE  Sen. Mark Pryor has been traveling around the state touting a six-part jobs plan that he says “includes a number of bipartisan initiatives, is aimed at creating jobs by setting the table for growth, encouraging new […]

Is a lack of money the problem for our public schools?

Is a lack of money the problem for our public schools? Everything You Need to Know About Public School Spending in Less Than 2½ Minutes Posted by Adam Schaeffer Neal McCluskey gutted the President’s new “Save the Teachers” American Jobs Act sales pitch a good while back, as did Andrew Coulson here. Thankfully, it seems […]

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

Some Tea Party heroes (Part 4)

June 4, 2012 – 7:19 am

What future does our country have if we never even attempt to balance our budget. I read some wise words by Congressman Jeff Landry (R, LA-03) regarding the  debt ceiling deal that was passed on August 1, 2011:”Throughout this debate, the American people have demanded a real cure to America’s spending addiction – a Balanced Budget Amendment to the U.S. Constitution. Unfortunately, today’s Washington deal transforms last week’s strong Balanced Budget requirement into a toothless suggestion.”

If we are going to get the budget to balance it will take a Balanced Budget Amendment to force us to do so. There is no other way around that fact!!!

Ted DeHaven noted his his article, “Freshman Republicans switch from Tea to Kool-Aid,”  Cato Institute Blog, May 17, 2012:

This week the Club for Growth released a study of votes cast in 2011 by the 87 Republicans elected to the House in November 2010. The Club found that “In many cases, the rhetoric of the so-called “Tea Party” freshmen simply didn’t match their records.” Particularly disconcerting is the fact that so many GOP newcomers cast votes against spending cuts.

The study comes on the heels of three telling votes taken last week in the House that should have been slam-dunks for members who possess the slightest regard for limited government and free markets. Alas, only 26 of the 87 members of the “Tea Party class” voted to defund both the Economic Development Administration and the president’s new Advanced Manufacturing Technology Consortia program (see my previous discussion of these votes here) and against reauthorizing the Export-Import Bank (see my colleague Sallie James’s excoriation of that vote here).

One of those Tea Party heroes was Congressman Jeff Landry (R, LA-03). Last year I posted this below concerning his conservative views and his willingness to vote against the debt ceiling increase:

Congressman Landry’s Statement on Today’s Debt Ceiling Deal

Millard Mulé
 

WASHINGTON, DC – Congressman Jeff Landry (R, LA-03) issued the following statement regarding today’s debt ceiling deal:

“I’m sure by Washington standards, today’s deal is a great accomplishment; but by American standards, it comes up short. Throughout this debate, the American people have demanded a real cure to America’s spending addiction – a Balanced Budget Amendment to the U.S. Constitution. Unfortunately, today’s Washington deal transforms last week’s strong Balanced Budget requirement into a toothless suggestion. And today’s Washington deal puts at risk the security and pay of our brave men and women in uniform. It’s disheartening that Washington continues skirting the problem, instead of passing long-term solutions to end it. As evident by my decision today, I stand with the American people and choose to put the next generation above my next election.”

By Everette Hatcher III | Also posted in spending out of control | Comments (0)

Austerity has not happened in Italy yet

June 1, 2012 – 7:02 am

Max Brantley and Paul Krugman are constantly being critical of the austerity in Europe but in most cases in Europe what we have is tax increases and fake spending cuts. Instead of destroying economic growth with tax increases the right method would be real spending cuts.

We need some austerity in the USA and I don’t mean tax increases. That never helps. However, just like many of the European countries we have run away federal government spending that needs to be cut. Why can’t we learn from others mistakes?

Looking at Austerity in Italy

Posted by Juan Carlos Hidalgo

The Italian economy contracted for a third quarter in a row, deepening the country’s recession and adding to the fire of the euro crisis. Italy is the third largest economy in the Eurozone, and many view it as the endgame of an eventual collapse of the common currency because it is too big to fail. Neither the EU nor the IMF have enough cash to rescue it. If the country defaults, that would probably spell the end of the euro.

Austerity is being blamed for Italy’s economic troubles. Chiara Corsa, an economist at UniCredit, wrote that “The key factor is austerity, which is weighing heavily on consumption and investment.” Recent local elections saw the rise of anti-austerity parties. Paul Krugman warned about this back in December when he described the austerity push of Prime Minister Mario Monti as “self-defeating” and “delusional.”

However, as is the case for Britain, France and Greece, commentators are unclear about what austerity means for Italy, although many seem to imply spending cuts. For example, if Krugman’s criticism about Italian austerity is consistent with his critiques about austerity elsewhere in Europe, we know he means spending cuts. So let’s take a look and see if there has been any:


* Using GDP deflator.
Source: European Commission, Economic and Financial Affairs.

Spending in nominal terms increased by a yearly average of 4.1% between 2000 and 2009, and then fell slightly the following year. In 2011 government spending was just 0.14% below its 2009 level. As for spending in real terms, there’s no cut whatsoever. And as a share of the economy, total spending reached a peak in 2009 at 51.6% of GDP, and it fell to 49.6% last year, a decline far from significant.

So what’s austerity all about in Italy so far? According to The Financial Times, the “government’s €30 billion austerity package, passed in December, was heavily oriented towards tax increases rather than spending cuts, an emphasis that is now widely recognized by ministers as having driven Italy deeper into recession.” The FT adds that the Monti administration is facing “intense pressure from business, politicians and the public to shift the burden of austerity away from heavy taxation towards cuts in public spending.” As a result, the Italian Prime Minister announced €4.2 billion in spending cuts starting in June, still less than 1% of total public spending. That doesn’t sound savage to me.

But it’s quite fascinating to see the hysteria surrounding non existent spending cuts and its supposedly negative impact on economic growth. For example, last December The Economist warned:

“But too great an emphasis on austerity in the short run risks sending the continent’s economy into a deep recession; the latest data on Italian industrial production showed an annual fall of 4.1% in October, even before budget cuts were introduced by the new government.”

Interestingly, according to The Economist, spending cuts were somehow responsible for a decline in economic output in Italy even before being implemented!

If austerity is to blame for Italy’s recession, we need to be clear that by austerity we mean mostly tax increases with almost no reduction in government spending.

Related posts:

Austerity has not happened in Italy yet

Max Brantley and Paul Krugman are constantly being critical of the austerity in Europe but in most cases in Europe what we have is tax increases and fake spending cuts. Instead of destroying economic growth with tax increases the right method would be real spending cuts. We need some austerity in the USA and I […]

Austerity not practiced in Britain yet

Uploaded by danmitchellcato on Feb 26, 2012 I wish we would put in real spending cuts in the USA instead of fake ones like the ones in the United Kingdom. Looking at ‘Austerity’ in Britain Posted by Juan Carlos Hidalgo I’m going to jump into the debate about austerity in Europe because it is being […]

Dan Mitchell of Cato Institute: low taxes best for creating jobs

Dan Mitchell on Soaking the Rich There are many economic approaches out there but the one that works best is the free market approach of low taxes and low amounts of government spending and intervention. Daniel in the Lion’s Den: Fighting for Liberty at the United Nations May 18, 2012 by Dan Mitchell I posted yesterday […]

Got to avoid raising taxes if we want the economy to grow and eventually balance the budget

Dan Mitchell on Austerity in Europe 2012 In order to balance the budget we must make deep cuts. Take a look at the study refers to below by Dan Mitchell of the Cato Institute in his fine article on the French mess. Raising taxes has not worked in the thirty countries studied. Some French Economic Humor […]

Obama brags of progress in USA on economy to G-8 audience

1,000 Days Without A Budget Uploaded by HeritageFoundation on Jan 24, 2012 http://blog.heritage.org | Today marks the 1,000th day since the United States Senate has passed a budget. While the House has put forth (and passed) its own budget, the Senate has failed to do the same. To help illustrate how extraordinary this failure has […]

If Europe follows Obama’s plan it would go broke even faster

U.S. President Barack Obama (R) waves as French President Francois Hollande looks on following their bilateral meeting in the Oval Office of the White House in Washington May 18, 2012. Hollande is in the United States to join other leaders of the major industrial economies and meet for a G8 Summit at Camp David this […]

France today: government spending is at 55 percent of GDP

The liberals in France do not want austerity but more spending but who will pay for their party? Morning Bell: Socialism Rises Again Mike Brownfield May 8, 2012 at 8:55 am Last weekend, the people of France took a sharp turn to the left, and the rest of Europe may be on the brink of […]

Europe has a bleak future because they don’t want austerity

The medicine for the sickness of spending is real budget cuts but no one in liberal europe wants to hear that. Sadly we are on the same road in the USA. Liberals (like my blogger opponent “the Outlier” and others) love to say that austerity has been tried in Europe and it doesn’t work but the truth […]

 

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

A flat tax is the answer

May 27, 2012 – 7:57 pm

Uploaded by on Mar 29, 2010

This Center for Freedom and Prosperity Foundation video shows how the flat tax would benefit families and businesses, and also explains how this simple and fair system would boost economic growth and eliminate the special-interest corruption of the internal revenue code. www.freedomandprosperity.org

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Dan Mitchell hits the nail on the head again.

A Flat Tax Is the Answer

by Daniel J. Mitchell

Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute.

Added to cato.org on January 31, 2012

This article appeared on US News and World Report Online on January 31, 2012.

The class-warfare crowd is predictably outraged that Mitt Romney supposedly paid just 13.9 percent of his income to the crowd in Washington. Surely this is a sign of both inequity and iniquity. Meanwhile, previewing a theme for the general election, President Obama said in his State of the Union address that “millionaires and billionaires” should cough up at least 30 percent of their earnings to the IRS.

This is bad policy based on inaccurate data.

Let’s deal first with the flawed numbers. Capital gains taxes and dividend taxes are both forms of double taxation. That income already is hit by the 35 percent corporate income tax. So the real tax rate for people like Mitt Romney is closer to 45 percent. And if you add the death tax to the equation, the effective tax rate begins to approach 60 percent.

Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute.

More by Daniel J. Mitchell

Here’s a simply analogy. Imagine you make $50,000 per year and your employer withholds $5,000 for personal income tax. How would you feel if the IRS then told you that your income was $45,000 and you had to pay full tax on that amount, and that you weren’t allowed to count the $5,000 withholding when you filled out your 1040 form? You would be outraged, correctly yelling and screaming that you should be allowed to count those withheld tax payments.

Welcome to the world of double taxation.

The Obama approach is also bad economics. Every economic theory — even socialism and Marxism — agrees that saving and investment are the key to long-run growth and higher living standards. So does it make sense to deprive the economy of productive capital by imposing punitive layers of double taxation? To make matters worse, double taxation means transferring the money to the buffoons in Washington, where it will be squandered on inefficient and wasteful programs.

Europe’s welfare states are on the brink of collapse because they adopted the mentality that government spending was better than private saving and investment. Should we copy their failures?

The right way to ensure both fairness and growth is the flat tax. Get rid of the 72,000 pages of corruption and complexity in the Internal Revenue Service code and replace it with a postcard-sized flat tax. One low tax rate with no double taxation. That’s good for the economy and competitiveness.

And if Mitt Romney makes 100,000 times more than me, he’ll pay 100,000 times more in tax.

By Everette Hatcher III | Also posted in Cato Institute | Tagged , , , | Comments (0)

Some Tea Party heroes (Part 3)

May 25, 2012 – 11:46 am

I read some wise comments by Idaho First District Congressman Raúl R. Labrador concerning the passage of the Budget Control Act on August 1, 2011 and I wanted to point them out: “The legislation  lacks a rock solid commitment to passage of a balanced budget amendment, which I believe is necessary to saving our nation.”

I just don’t understand why we don’t have a Balanced Budget Amendment in this country. In Arkansas we have balanced our budget every year because we have a Balanced Budget Law!!!

Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted:

After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined.

We need some national statesmen (and ladies) who are willing to stop running up the nation’s credit card.

Ted DeHaven noted his his article, “Freshman Republicans switch from Tea to Kool-Aid,”  Cato Institute Blog, May 17, 2012:

This week the Club for Growth released a study of votes cast in 2011 by the 87 Republicans elected to the House in November 2010. The Club found that “In many cases, the rhetoric of the so-called “Tea Party” freshmen simply didn’t match their records.” Particularly disconcerting is the fact that so many GOP newcomers cast votes against spending cuts.

The study comes on the heels of three telling votes taken last week in the House that should have been slam-dunks for members who possess the slightest regard for limited government and free markets. Alas, only 26 of the 87 members of the “Tea Party class” voted to defund both the Economic Development Administration and the president’s new Advanced Manufacturing Technology Consortia program (see my previous discussion of these votes here) and against reauthorizing the Export-Import Bank (see my colleague Sallie James’s excoriation of that vote here).

One of those Tea Party heroes was Congressman Labrodor of Idaho. Last year I posted this below concerning his conservative views and his willingness to vote against the debt ceiling increase:

Labrador Statement on Budget Control Act

Aug 1, 2011 Issues: Budget and Spending
 
 

Washington, D.C.—Idaho First District Congressman Raúl R. Labrador today issued the following statement following the passage of the Budget Control Act of 2011.

“The debt ceiling agreement that was considered by Congress today represents a good plan to resolve the uncertainty surrounding the debt ceiling debate.  It immediately cuts federal spending and implements new spending caps to prevent government expansion when our economy begins to recover.  While this bill has the potential to reduce the size of our budget and the trajectory of government spending, this bill doesn’t go far enough to make the changes necessary to get us out of our fiscal mess.

“I promised my constituents that I would come to Congress to fundamentally change the way the federal government operates. While this legislation is a good first step towards that goal, it also relies on the time honored Washington tradition of delegating problems to commissions instead of solving them ourselves. It places more confidence in its Super Commission than is warranted.  The legislation also lacks a rock solid commitment to passage of a balanced budget amendment, which I believe is necessary to saving our nation. With the help of the new members of Congress, the standard operating procedure in Washington has begun to change from spending recklessly to cutting spending sensibly, but there is a lot more that needs to change.  ”

By Everette Hatcher III | Also posted in spending out of control | Comments (0)

Some Tea Party heroes (Part 2)

May 25, 2012 – 7:00 am

Congressmen Tim Huelskamp on the debt ceiling

I just don’t understand why people think we can go on and act like everything is okay when we have a trillion dollar deficit. Sometimes you run across some very wise words like I did the other day. Kansas Congressman Tim Huelskamp made the following comment on the irresponsible  Budget Control Act of August 1, 2011:

I refuse to dig America into a deeper and un-scalable hole. I refuse to be complicit in recklessly spending and borrowing on the backs of the next generation. And, I believe conservatives should make good on their promises to cut trillions in spending…”

Ted DeHaven noted his his article, “Freshman Republicans switch from Tea to Kool-Aid,”  Cato Institute Blog, May 17, 2012:

This week the Club for Growth released a study of votes cast in 2011 by the 87 Republicans elected to the House in November 2010. The Club found that “In many cases, the rhetoric of the so-called “Tea Party” freshmen simply didn’t match their records.” Particularly disconcerting is the fact that so many GOP newcomers cast votes against spending cuts.

The study comes on the heels of three telling votes taken last week in the House that should have been slam-dunks for members who possess the slightest regard for limited government and free markets. Alas, only 26 of the 87 members of the “Tea Party class” voted to defund both the Economic Development Administration and the president’s new Advanced Manufacturing Technology Consortia program (see my previous discussion of these votes here) and against reauthorizing the Export-Import Bank (see my colleague Sallie James’s excoriation of that vote here).

One of those Tea Party heroes was Tim Huelskamp of Kansas. Last year I posted this below concerning his conservative views and his willingness to vote against the debt ceiling increase:

August 1, 2011

Congressman Huelskamp: My Constituents and Our Economy Deserve a Long-Term Solution

(WASHINGTON) – Kansas Congressman Tim Huelskamp issued the following statement after voting against the Budget Control Act:

“My fellow freshmen and I were sent to Washington to end tricks and gimmicks that put America in this position,” Congressman Tim Huelskamp said. “I voted ‘no’ today because I refuse to dig America into a deeper and un-scalable hole. I refuse to be complicit in recklessly spending and borrowing on the backs of the next generation. And, I believe conservatives should make good on their promises to cut trillions in spending, enact structural reforms, and fill the role of elected representatives, rather than hand control to an exclusive committee.”

“Back in April – when I voted against the continuing resolution for this year – I said ‘no’ because the cuts were minimal. I came to the same conclusion today: these are paltry cuts compared to the $14.3 trillion in debt we already have and the $7 trillion in new debt we can expect in the next decade. This is not a path to fiscal solvency, it’s a path to fiscal insanity. My constituents and our economy deserve a long-term solution that ends the biggest problem: we simply spend too much.”

“Despite having pledged to the American people an open and transparent process and despite having months to fix this problem, we were asked to vote in the 11th hour for a bill that the public had less than 16 hours to read and understand. The culture of fiscal irresponsibility may not have been created by this Congress, but we were sent here to put an end to it; I’m afraid this bill does not rise to that occasion.”

By Everette Hatcher III | Also posted in spending out of control | Comments (0)

Dan Mitchell of Cato Institute: low taxes best for creating jobs

May 25, 2012 – 7:00 am

Dan Mitchell on Soaking the Rich

There are many economic approaches out there but the one that works best is the free market approach of low taxes and low amounts of government spending and intervention.

I posted yesterday about visiting the United Nations to participate in “The High Level Thematic Debate on the State of the World Economy.”

There were five speakers on my panel, including yours truly. Here are my thoughts on what the others said.

Dr. Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development, must have been part of the buzz-word contest I mentioned yesterday. Lots of rhetoric that theoretically was inoffensive, but I had the feeling that it translated into a call for more government. But maybe I’m paranoid SOB, so who knows.

Professor Dato’ Dr. Zaleha Kamaruddin, Rector of the International Islamic University of Malaysia, was an interesting mix. At some points, she sounded like Ron Paul, saying nice things about the gold standard and low tax rates. But she also called for debt forgiveness and other forms of intervention. She explicitly said she was providing Islamic insights, so perhaps the strange mix makes sense from that perspective.

Former Senator Alan K. Simpson also was a mixed bag. Simpson was co-chair of Obama’s fiscal commission, which I thought was a disappointment because it endorsed higher taxes and urged sub-par entitlement changes rather than much-needed structural reforms. He also went after Grover Norquist because of the no-tax pledge, which I think is a valuable tool to keep Republicans from selling out for bigger government. All that being said, Senator Simpson is a promoter of smaller government and he wants lower tax rates. So while I disagree with some of his tactical decisions, he was an ally on the panel and would probably do a pretty good job if he was economic czar.

Last but not least, Professor Jeffrey Sachs of Columbia University was a statist, as one would expect based on what I wrote about him last year. We clashed the most, arguing about everything from tax havens to the size of government. Interestingly, we both said nice things about Sweden, but I was focusing on policies such as school choice and pension reform, while he admired the large public sector. But I will admit he was a nice guy. We sat next to each other and did find a bit of common ground in that we both were sympathetic to the way Sweden dealt with its financial crisis about 20 years ago (a version of the FDIC-resolution approach rather than the corrupt TARP bailout approach).

My message, by the way, was very simple. Higher taxes won’t work. The “growth” vs. “austerity” debate in Europe is really a no-win fight between those who want higher spending vs. those who want higher taxes. The only good answer is to restrain spending with…you guessed it, Mitchell’s Golden Rule.

I’m not safely out of New York City, and I promise I didn’t drink any of the Kool-Aid. I’m still a critic of international bureaucracies. And I wouldn’t allow myself to be bought off by a lavish, tax-free job at the United Nations.

Unless, perhaps, it was a Special Envoy position with Angelina Jolie.

By Everette Hatcher III | Also posted in Cato Institute | Comments (0)

California has forgotten the lessons of Ronald Reagan

May 25, 2012 – 6:33 am

If our country is the grow the economy and get our budget balanced it will not be by raising taxes!!! The recipe for success was followed by Ronald Reagan in the 1980’s when he cut taxes and limited spending. As far as limiting spending goes only Bill Clinton (with his Republican Congress) were ability to control the growth of government better than Reagan.

I had the pleasure of hearing Arthur Laffer speak in 1981 and he predicted all the economic growth that we would see because of the Reagan tax cuts and he was right. Unfortunately in California today they have forgotten all of those lessons!!!

President Obama’s fiscal policy is a dismal mixture. On spending, he wants a European-style welfare state. On taxes, he is fixated on class-warfare tax policy.

If we want to know the consequences of that approach, we can look at the ongoing collapse of Greece. Or, if we don’t like overseas examples, we can look at California.

If the (formerly) Golden State is any example, it turns out that having high tax rates doesn’t necessarily translate into high tax revenues. Here’s a blurb from an editorial in today’s Wall Street Journal.

California Controller John Chiang reported last week that April tax collections were a gigantic 20.2%, or $2.44 billion, below 2012-13 budget projections. …Among the biggest surprises is a 21.5% or nearly $2 billion decline in personal income tax payments from what Governor Jerry Brown had anticipated. This reinforces the point that when states rely too heavily on the top 1% of taxpayers to pay the bills, fiscal policy is a roller coaster ride. California is suffering this tax drought even as most other states enjoy a revenue rebound. State tax collections were up nationally by 8.9% last year, according to the Census Bureau, and this year revenues are up by double digits in many states. The state comptroller reports that Texas is enjoying 10.9% growth in its sales taxes (it has no income tax), while California can’t seem to keep up despite one of the highest tax rates in the land.

The WSJ editorial suggests a supply-side response, but you won’t be surprised to learn that the state’s kleptomaniac governor is pushing an Obama-style soak-the-rich tax hike.

This would seem to suggest that California should try cutting tax rates to keep more people and business in the state, but Sacramento is intent on raising them again. Governor Brown and the public-employee unions are sponsoring a ballot initiative in November to raise the state sales tax by a quarter point to 7.5% and to raise the top marginal income-tax rate to 13.3% from 10.3%. This will make the state even more reliant on the fickle revenue streams provided by the rich. Meanwhile, an analysis by Joseph Vranich, who studies migration of businesses from one state to another, finds that since 2009 the flight of businesses out of California “has increased fivefold due to high taxes and regulatory costs.”

I’ll be very curious to see what happens this November when the people of California vote in the referendum. Will they be like the morons in Oregon, who approved a class-warfare tax hike? Or will they be like the voters of Switzerland and reject class warfare?

Sadly, I suspect Oregon will be their role model – even though that decision hurt the Beaver State’s economy.

But while voters can impose higher taxes, they can’t repeal the laws of economics. So if California voters do the wrong thing, they will learn a hard lesson about the Laffer Curve.

And then, as this cartoon demonstrates, they’ll learn the ultimate lesson about not biting the hand that you mooch from.

The Laffer Curve, Part III: Dynamic Scoring

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

Exclusive Interview with Heritage Foundation: John Stossel Says Government Can’t Solve Our Problems

May 23, 2012 – 10:00 am

Rob Bluey and Brandon Stewart

April 12, 2012 at 11:51 am

John Stossel on Government, Free Enterprise, and Media

Published on Apr 12, 2012 by

http://blog.heritage.org/2012/04/12/exclusive-interview-john-stossel-says-gov… | John Stossel’s skepticism of government and his storytelling approach about free-market economics have made him a rock star in conservative and libertarian circles.

He spoke at The Heritage Foundation on Wednesday about his new book, “No, They Can’t: Why Government Fails—But Individuals Succeed.” It is Stossel’s latest attempt to debunk the myths that government can solve America’s problems. He tackles everything from crony capitalism and federal regulations to teachers’ unions and gun control.

______________________

John Stossel’s skepticism of government and his storytelling approach about free-market economics have made him a rock star in conservative and libertarian circles.

He spoke at The Heritage Foundation on Wednesday about his new book, “No, They Can’t: Why Government Fails—But Individuals Succeed.” It is Stossel’s latest attempt to debunk the myths that government can solve America’s problems. He tackles everything from crony capitalism and federal regulations to teachers’ unions and gun control.

“Our instinct is to believe in the central planners,” Stossel said in the interview. “It was nuts in the Obama election. It was like he was a magic politician who was going to do these things.”

Yet despite government’s failures, the left never retreats. President Obama’s class-warfare rhetoric, Stossel conceded, is a current example of how liberals shape the narrative.

“I live in the shallow media world,” Stossel said, “and on a subject like that, shallow wins.”

In the interview, Stossel didn’t mince words when asked why he left ABC News in 2009: “Because it sucked there.”

He currently hosts “Stossel,” a one-hour weekly Fox Business Network show and other specials on Fox News. The book reveals his rift with ABC and why Stossel approached Fox for a job.

Here’s what he told us:

They were hostile to these ideas that have made us prosperous and I consider so important. I mean, they tolerated me for years. I got good ratings, so they put the stuff on. They sort of held their nose and put it on. But by the end, they were saying, ‘Ah, you’re predictable Stossel. You use libertarian economics all the time. I don’t want to watch that.’ … I was not offered a job by Fox. I went over and begged, ‘Please, hire me, I cannot stand it anymore.’

The interview runs about five minutes. Hosted by Rob Bluey and produced by Brandon Stewart. For more videos from Heritage, subscribe to our YouTube channel.

By Everette Hatcher III | Also posted in Current Events | Comments (0)

Sweden reaps benefits of tax cuts

May 23, 2012 – 5:50 am

We need to cut taxes and not raise them if we want the economy to grow. Sweden is a good example of that lately.

David Weinberger

May 11, 2012 at 10:00 am

Since the beginning of the recession, academics, authoritative international institutions, and most government officials pushed for massive stimulus spending. Sweden bucked the trend, focusing instead on slashing marginal tax rates and peeling government back. How did it fare?

The Spectator reports:

While most countries in Europeborrowed 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. To critics, this was fiscal lunacy — the so-called ‘punk tax cutting’ agenda. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result.

Three years on, it’s pretty clear who was right. ‘Look atSpain,Portugalor theUK, 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-cuttingSweden, by contrast, had the fastest growth inEuropelast year, when it also celebrated the abolition of its deficit.

Too bad the U.S. decided against Sweden’s advice. Still, missing one opportunity doesn’t mean we have to miss another: Tax reform is calling.   

By Everette Hatcher III | Comments (0)