Tag Archives: michael d tanner.

Tax increases are not the way to go

July 24, 2012 – 12:36 am

Tax increases are not the way to go

President Obama just does not get it.

Liberals love tax increases.

Seven Reasons Why Tax Increases Are the Wrong Approach

Uploaded by on May 3, 2011

This Economics 101 video from the Center for Freedom and Prosperity gives seven reasons why the political elite are wrong to push for more taxes. If allowed to succeed, the hopelessly misguided pushing to raise taxes would only worsen our fiscal mess while harming the economy.

The seven reasons provided by the video against this approach are as follows:

1) Tax increases are not needed;
2) Tax increases encourage more spending;
3) Tax increases harm economic performance;
4) Tax increases foment social discord;
5) Tax increases almost never raise as much revenue as projected;
6) Tax increases encourage more loopholes; and,
7) Tax increases undermine competitiveness

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The Real Budget Problem

by Michael D. Tanner

Michael Tanner is a senior fellow at the Cato Institute and coauthor of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Added to cato.org on June 15, 2011

This article appeared on National Review (Online) on June 15, 2011.

If you listen to the discussion of the deficit in the mainstream media or the talking points from leading Democrats on the Hill (but I repeat myself), the refrain is that tax increases must be part of any deficit fix.

There is a superficial moderation to that appeal, a sort of splitting the difference between Republicans who want to cut spending and Democrats who want to pay for popular programs. And, frankly, some tax breaks and loopholes should be eliminated — ethanol subsidies, for example — not as revenue raisers, but because they are such bad economic policies.

But raising taxes to reduce the deficit would be bad policy for several reasons:

There’s not really a revenue problem. Democrats correctly point out that federal tax revenues are now just 16.5 percent of GDP, well below the post–World War II average of roughly 18 percent. This would have meant a bigger budget deficit than usual even if spending hadn’t exploded in recent years. But much of that decline is due to the economic slowdown, not to the Bush tax cuts or other policy changes. In fact, the Congressional Budget Office predicts that as economic growth returns, federal tax revenues will grow by an average of 7.3 percent annually over the next ten years. By the end of the decade, taxes will have pushed back through the 18 percent level, and be headed toward 20 percent — all without any changes in tax policy.

Government is too big, too intrusive, and too expensive. It doesn’t take more taxes to fix that.

There is a spending problem. Focusing on taxes implies that the problem is how to pay for spending — taxes or debt — not the spending itself. But, as Milton Friedman constantly pointed out, the real cost of government is the size of government. According to the CBO, the federal government is on track to consume 42 percent of GDP by 2050. (State and local governments will consume another 10 to 15 percent of GDP.) Would we really be better off if we raised taxes enough to pay for all that spending?

You can’t tax enough. The president keeps talking about solving our deficit problems by taxing millionaires and billionaires. Congressional Democrats throw in oil companies. But you could confiscate — not tax, confiscate — every penny belonging to every millionaire in America and cover barely one-tenth of our government’s total indebtedness (including the unfunded liabilities of Social Security and Medicare). Meanwhile the tax breaks for oil and gas companies amount to about $1.4 billion annually. Those tax breaks may or may not be defensible, but they amount to less than 1 percent of this year’s budget deficit.

Bait and switch.  If you look at most of the deficit-cutting proposals, including the president’s, they call for tax increases today in exchange for spending cuts somewhere in the future. I think we’ve seen that movie before. In fact, the president’s proposal actually makes the bait-and-switch game worse. His proposal says that if Congress didn’t actually make those spending cuts, there would be additional tax increases. So Republicans would be agreeing to tax increases today in exchange for . . . more tax increases tomorrow.

Tax hikes are bad for the economy and for freedom. Of course it’s an exaggeration to suggest that all tax cuts pay for themselves, but there is no doubt that high taxes discourage the type of investment and risk-taking necessary to grow the economy and create jobs. Every dollar that the federal government takes in taxes is one less dollar that the private sector can save, invest, or spend as it sees fit. Unless you believe that the government knows better than the private sector what to do with that money, this exchange hurts the economy. And unless you believe that our money really belongs to the government, it means we are less free to make use of the fruits of our labor as we see fit.

Republicans should not fall into the trap of reflexively defending every special-interest loophole in the tax code. But neither should they be seduced by the argument that we need a “balanced” approach to deficit reduction that includes tax increases. Government is too big, too intrusive, and too expensive. It doesn’t take more taxes to fix that.

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

Government Spending Doesn’t Create Jobs

February 1, 2012 – 2:13 pm

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.

___________________________

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 Cato Institute:

Feeling Spent

by Michael D. Tanner

This article appeared in The New York Poston September 13, 2011. 

On Thursday night, the president laid out his plan for job creation, a $447 billion stimulus proposal, most of which we have seen before. After all, if Congress passes this new round of government spending, it would be the seventh such stimulus program since the recession began. George W. Bush pushed through two of them, totaling some $200 billion, and Obama already has enacted four more, with a total price tag of roughly $1.3 trillion.

The result: Three years and $1.5 trillion of spending later, we are back to the same gallimaufry of failed ideas. Among the worst:

1. Temporary Tax Cuts. The president wants to extend and expand the temporary reduction in the Social Security payroll tax that Congress enacted last December. The president also called for a grab-bag of tax credits for businesses that buy new equipment, hire veterans or even give workers a raise. There is obviously nothing wrong with letting workers keep a bit more of their money. And some of the tax breaks might encourage businesses to speed up otherwise planned hiring or purchases, providing a short-term economic boost. But neither people nor businesses tend to make the sort of long-term plans needed to boost production, generate growth and create jobs on the basis of temporary tax changes. This is especially true when businesses can look down the road and see tax hikes in their future.

If government spending brought about prosperity, we should be experiencing a golden age.

2. Further Extending Unemployment Benefits. The president wants to spend $49 billion to provide another extension of unemployment benefits to 99 weeks. Of course everyone can sympathize with the plight of the long-term unemployed. But, the overwhelming body of economic evidence suggests that extending unemployment benefits may actually increase unemployment and keep people out of work for longer. In fact, many economists believe that current extensions of unemployment benefits have already extended the average length of unemployment by three weeks or more.

By Everette Hatcher III | Posted in spending out of control | Also tagged , , , | Comments (0)

Stimulus plans do not work (Part 1)

November 24, 2011 – 2:11 pm

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.

___________________________

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 Cato Institute:

Feeling Spent

by Michael D. Tanner

This article appeared in The New York Poston September 13, 2011. 

On Thursday night, the president laid out his plan for job creation, a $447 billion stimulus proposal, most of which we have seen before. After all, if Congress passes this new round of government spending, it would be the seventh such stimulus program since the recession began. George W. Bush pushed through two of them, totaling some $200 billion, and Obama already has enacted four more, with a total price tag of roughly $1.3 trillion.

The result: Three years and $1.5 trillion of spending later, we are back to the same gallimaufry of failed ideas. Among the worst:

1. Temporary Tax Cuts. The president wants to extend and expand the temporary reduction in the Social Security payroll tax that Congress enacted last December. The president also called for a grab-bag of tax credits for businesses that buy new equipment, hire veterans or even give workers a raise. There is obviously nothing wrong with letting workers keep a bit more of their money. And some of the tax breaks might encourage businesses to speed up otherwise planned hiring or purchases, providing a short-term economic boost. But neither people nor businesses tend to make the sort of long-term plans needed to boost production, generate growth and create jobs on the basis of temporary tax changes. This is especially true when businesses can look down the road and see tax hikes in their future.

If government spending brought about prosperity, we should be experiencing a golden age.

2. Further Extending Unemployment Benefits. The president wants to spend $49 billion to provide another extension of unemployment benefits to 99 weeks. Of course everyone can sympathize with the plight of the long-term unemployed. But, the overwhelming body of economic evidence suggests that extending unemployment benefits may actually increase unemployment and keep people out of work for longer. In fact, many economists believe that current extensions of unemployment benefits have already extended the average length of unemployment by three weeks or more.

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

“Trust-fund babies?”

November 9, 2011 – 10:49 am

President Obama and other politicians are advocating higher taxes, with a particular emphasis on class-warfare taxes targeting the so-called rich. This Center for Freedom and Prosperity Foundation video explains why fiscal policy based on hate and envy is fundamentally misguided. For more information please visit our web page: www.freedomandprosperity.org.

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Are all those rich people born that way?

The Real “1 Percent”

by Michael D. Tanner

This article appeared in The New York Post on November 8, 2011.

So just who are those top 1 percent of Americans that we’re all supposed to hate?

If you listen to President Obama, the protesters at Occupy Wall Street, and much of the media, it’s obvious. They’re either “trust-fund babies” who inherited their money, or greedy bankers and hedge-fund managers. Certainly, they haven’t worked especially hard for their money. While the recession has thrown millions of Americans out of work, they’ve been getting even richer. Worse, they don’t even pay their fair share in taxes: Millionaires and billionaires are paying a lower tax rate than their secretaries.

In reality, each of these stereotypes is wrong.

By and large, the wealthy have worked hard for their money.

Roughly 80 percent of millionaires in America are the first generation of their family to be rich. They didn’t inherit their wealth; they earned it. How? According to a recent survey of the top 1 percent of American earners, slightly less than 14 percent were involved in banking or finance.

Roughly a third were entrepreneurs or managers of nonfinancial businesses. Nearly 16 percent were doctors or other medical professionals.

Lawyers made up slightly more than 8 percent, and engineers, scientists and computer professionals another 6.6 percent.

Sports and entertainment figures — the folks flying in on their private jets to express solidarity with Occupy Wall Street — composed almost 2 percent.

By and large, the wealthy have worked hard for their money. NYU sociologist Dalton Conley says that “higher-income folks work more hours than lower-wage earners do.”

Because so much of their income is tied up in investments, the recession has hit the rich especially hard. Much attention has been paid recently to a Congressional Budget Office study that showed incomes for the top 1 percent rose far faster from 1980 until 2007 than for the rest of us. But the nonpartisan Tax Foundation has found that since 2007, there has been a 39 percent decline in the number of American millionaires.

Among the “super-rich,” the decline has been even sharper: The number of Americans earning more than $10 million a year has fallen by 55 percent. In fact, while in 2008 the top 1 percent earned 20 percent of all income here, that figure has declined to just 16 percent. Inequality in America is declining.

As for not paying their fair share, the top 1 percent pay 36.7 percent of all federal income taxes. Because, as noted above, they earn just 16 percent of all income, that certainly seems likemore than a fair share.

Maybe Warren Buffett is paying a lower tax rate than his secretary, as he claims. But the comparison is misleading because Buffett’s income comes mostly from capital gains, which were already taxed at their origin through the corporate-income tax.

Moreover, the Buffetts of the world are clearly an exception. Overall, the rich pay an effective tax rate (after all deductions and exemptions) of roughly 24 percent. For all taxpayers as a group, the average effective tax rate is about 11 percent.

Beyond taxes, the rich also pay in terms of private charity. Households with more than $1 million in income donated more than $150 billion to charity last year, roughly half of all US charitable donations. Greedy? It hardly seems so.

Michael Tanner is a Cato Institute senior fellow.

More by Michael D. Tanner

And let us not forget the fact that the rich provide the investment capital that funds ventures, creates jobs and spurs innovation. The money that the rich save and invest is the money that companies use to start or expand businesses, buy machinery and other physical capital and hire workers.

It has become fashionable to ridicule the idea of the rich as “job creators,” but if the rich don’t create jobs, who will? How many workers have been hired recently by the poor?

No doubt dishonest or unscrupulous businessmen have gotten rich by taking advantage of others. And few of us are likely to lose much sleep over the plight of the rich.

But shouldn’t public policy be based on something more than class warfare, envy and stereotypes?

By Everette Hatcher III | Posted in Cato Institute | Also tagged , , , | Comments (0)

All candidates respond to last question in Republican debate of October 11, 2011 (with video clip)

October 28, 2011 – 3:59 pm

You can get a good comparison of the candidates from this clip above. Below is a very good summary of the candidates from early this summer.

The 2012 Contenders and the Debt Ceiling

by Michael D. Tanner

Michael Tanner is a senior fellow at the Cato Institute and coauthor of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Added to cato.org on June 29, 2011

This article appeared on National Review (Online) on June 29, 2011.

You can tell that we are getting close to the deadline for a deal on raising the debt ceiling, because President Obama has finally noticed the issue. Not a “put forward an actual plan” notice, but at least a “denounce the Republicans as immoral” notice. Republicans rightly criticize this lack of presidential leadership. But what about Republicans who want to be president? Republicans in Congress, of course, have been willing to put specific ideas on the table, and, since the responsibility for voting on the debt limit will actually fall on them, that’s key. But Republicans should also want to know where the would-be 2012 presidential candidates stand on this vital issue.

At one end of the Republican spectrum are those who would answer the question with “Yes, but …” These candidates agree that the debt ceiling will eventually have to be raised. But in return they demand Democratic concessions on spending or other policy matters.

Generally, these candidates are seeking some sort of restraint on future spending. Jon Huntsman, for example, wants to cap spending at 18 to 19 percent of GDP. Similarly Newt Gingrich would raise the debt limit only in exchange for — unspecified — spending cuts. Gingrich has suggested that in the absence of a grand compromise, Congress could pass a series of three-week increases, sort of like the series of continuing resolutions that substitute for a budget. Other Republicans would tie their agreement to raise the debt ceiling to other policy matters. For example, Rick Santorum would demand the repeal of Obamacare. And sometimes potential candidate Sarah Palin has suggested that drilling in Alaska could be attached to any debt-ceiling vote.

[R]epublicans should also want to know where the would-be 2012 presidential candidates stand on this vital issue.

At the other end of the line are those who respond, “Hell, no.” For the most part though, this appears to be a tactical position — more a matter of tone rather than policy from those above. When really pressed, most of these candidates leave room to eventually vote for an increase if the concessions are big enough.

For example, Michele Bachmann is firmly in the “Hell, no” camp, saying that she will vote against any increase in the debt ceiling. What if the Republican leadership cuts a deal? She would “have to tell you then. But right now I’m a no vote.” Tim Pawlenty also opposes any increase, writing in the Washington Post, “Don’t raise the debt limit — reform entitlement spending.” That does leave a problem, however. While he is entirely correct about the need for entitlement reform, any changes to those programs will involve long-term, not short-term savings, meaning they won’t solve the immediate debt-ceiling problem.

Unsurprisingly, the two libertarians in the race, Ron Paul and Gary Johnson, oppose raising the debt ceiling regardless of any Democratic concessions. Paul, who has always voted against debt increases, will do so again this time. Similarly, Johnson cannot foresee circumstances under which he would support an increase.

In between these two camps are those whose position is, well, a bit fuzzy. Mitt Romney, for example, has “repeatedly refused to answer multiple questions from reporters about whether the nation’s debt ceiling should be raised,” according to news reports. Romney has, however, praised Republicans for insisting on spending cuts as a precondition for a debt-ceiling increase. At the same time, he has not said what conditions he would demand or whether he would support raising the debt ceiling if those conditions were (or were not) met. And, Herman Cain started out as a firm “Hell, no,” but has since backed away, saying that he agreed with Federal Reserve chairman Ben Bernanke that failing to raise the debt limit would mean financial chaos.

Of course, with the exception of Bachmann and Paul, none of these candidates will actually have to vote on the issue. Nonetheless, with so much on the line, its time for those who want to be president to step up and be heard.

Related posts:

All candidates respond to last question in Republican debate of October 11, 2011 (with video clip)

You can get a good comparison of the candidates from this clip above. Below is a very good summary of the candidates from early this summer. The 2012 Contenders and the Debt Ceiling by Michael D. Tanner Michael Tanner is a senior fellow at the Cato Institute and coauthor of Leviathan on the Right: How […]

Mitt Romney attacked for Romney Care (with video clip from October 11, 2011 Republican debate)

I have been against Romney because of the reasons found in this article below which I read 3 years ago: Lessons from the Fall of RomneyCare By Michael Tanner Michael Tanner is director of health and welfare studies at the Cato Institute. He is the author of Leviathan on the Right: How Big-Government Conservatism Brought […]

Video clip of Michele Bachmann in interview after October 11, 2011 Republican debate

I do like Michele Bachmann a lot and I love what she has to say in the article below too. Slate.com vs. Tea-Party/Christians/Bachmann Posted by Andrew J. Coulson Slate worked itself into a lather yesterday over the insidious education policy implications of Michele Bachmann’s Iowa Straw Poll victory: As recently as a decade ago, Republicans […]

Rick Perry’s answer in Republican debate of October 11, 2011 (with video clip)

I really like Rick Perry because he was right when he called Social Security a “Ponzi Scheme” which it is. How did he do in the last debate? You be the judge by watching his response above. Rick Perry’s Moment Posted by Roger Pilon Last night POLITICO Arena asked: Who won the Reagan debate? My […]

Romney attacked in Republican debate of October 11, 2011 (with video clip)

I am not too pleased with Mitt Romney and the article below shows one good reason to oppose him. Can Mitt Romney Escape His Romneycare Albatross? by Doug Bandow Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to Ronald Reagan, he is the author of Foreign Follies: America’s New […]

Barney Frank and Chris Dodd mentioned in October 11, 2011 Republican debate with video clip

Dodd and Frank are the real villians of the mortgage mess and I knew that 3 years ago after reading this article below. Who did the Democrats get to clean up this mess? You guessed it. What a joke. Who Are the Villains of the Mortgage Mess? by Daniel J. Mitchell  Daniel J. Mitchell is […]

Reagan’s 1982 tax increase mentioned during the Republican debate of October 11, 2011 with video clip

Reagan’s statement concerning 1982 tax increase is responded to by Republican Candidates in this clip below: Washington Could Learn a Lot from a Drug Addict Concerning spending cuts Reagan believed, that members of Congress “wouldn’t lie to him when he should have known better.” However, can you believe a drug addict when he tells you […]

Ron Paul on Fed during the Republican debate of October 11, 2011 with video clip

I really like Ron Paul a lot and the reasons I like him are in this article below and in the clip above. Ron Paul’s Success Posted by David Boaz The Washington Post reports that Ron Paul “is enjoying a surge in support and the most high-profile campaign of his life. ” Paul’s unwavering ideals […]

Cain’s 9-9-9 plan center stage at Republican debate of October 11, 2011 (with video clip)

Herman Cain’s 9-9-9 plan did steal the show at the Republican debate of October 11, 2011. Take a look at this article below: The Republican presidential debate in Hanover, N.H. (AP) There was one clear winner from Tuesday’s Republican presidential debate, based on the simple metrics of name recognition: businessman Herman Cain’s “9-9-9 Plan.” Virtually […]

Romney not conservative enough (clip from Republican debate of 10-11-11)

Mitt Romney is not a true conservative. Exhibit #1 Romney wants to start trade wars. Romney for Panderer-in-Chief? by Gene Healy  Gene Healy is a vice president at the Cato Institute and the author of The Cult of the Presidency: America’s Dangerous Devotion to Executive Power. Added to cato.org on October 11, 2011 This article […]

By Everette Hatcher III | Posted in Uncategorized | Also tagged , , , | Comments (0)

Mark Pryor voted for latest Obama stimulus

October 12, 2011 – 1:41 pm

It seems like Pryor would have figured out that government stimulus bills do not work.

The Arkansas Times Blog reported last night:

Mark Pryor statement on Obama jobs bill

Posted by Max Brantley on Tue, Oct 11, 2011 at 6:29 PM

U.S. Sen. Mark Pryor’s office issued the following statement tonight:

In order to reach better days, job creation should be the number one priority in Congress. This jobs package, far from perfect, deserves debate and a vigorous amendment process. I see it as an opportunity to insert proposals to fix the fundamental challenges holding our economy back and chart a long-term course to move us forward. Only then can we inspire the confidence and certainty to get banks financing and businesses growing and hiring again.

_________________

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.

___________________________

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 Cato Institute:

Feeling Spent

by Michael D. Tanner

This article appeared in The New York Poston September 13, 2011. 

On Thursday night, the president laid out his plan for job creation, a $447 billion stimulus proposal, most of which we have seen before. After all, if Congress passes this new round of government spending, it would be the seventh such stimulus program since the recession began. George W. Bush pushed through two of them, totaling some $200 billion, and Obama already has enacted four more, with a total price tag of roughly $1.3 trillion.

The result: Three years and $1.5 trillion of spending later, we are back to the same gallimaufry of failed ideas. Among the worst:

1. Temporary Tax Cuts. The president wants to extend and expand the temporary reduction in the Social Security payroll tax that Congress enacted last December. The president also called for a grab-bag of tax credits for businesses that buy new equipment, hire veterans or even give workers a raise. There is obviously nothing wrong with letting workers keep a bit more of their money. And some of the tax breaks might encourage businesses to speed up otherwise planned hiring or purchases, providing a short-term economic boost. But neither people nor businesses tend to make the sort of long-term plans needed to boost production, generate growth and create jobs on the basis of temporary tax changes. This is especially true when businesses can look down the road and see tax hikes in their future.

If government spending brought about prosperity, we should be experiencing a golden age.

2. Further Extending Unemployment Benefits. The president wants to spend $49 billion to provide another extension of unemployment benefits to 99 weeks. Of course everyone can sympathize with the plight of the long-term unemployed. But, the overwhelming body of economic evidence suggests that extending unemployment benefits may actually increase unemployment and keep people out of work for longer. In fact, many economists believe that current extensions of unemployment benefits have already extended the average length of unemployment by three weeks or more.

Related post:

Obama has not learned that government stimulus will not work

President Obama just does not learn from the past. The Stimulus: The Government Job Creation Myth by Tad DeHaven   Tad DeHaven is a budget analyst at the Cato Institute and co-editor of Downsizing the Federal Government. Added to cato.org on August 2, 2010 This article appeared in the Richmond Times-Dispatch on August 1, 2010 […]

Bill Clinton praises Obama
By Everette Hatcher III | Posted in spending out of control | Also tagged , , | Comments (0)

Occupy Wall Street vs. Steve Jobs

October 12, 2011 – 1:11 pm
COUNTER-DEMONSTRATION: At Kappa Sigma house in Fayetteville.

  • COUNTER-DEMONSTRATION: At Kappa Sigma house in Fayetteville.

The Drew Wilson photo above went viral last night — at least in Arkansas e-mail and social media users — after the Fayetteville Flyer posted it in coverage of an Occupy Northwest Arkansas demonstration in Fayetteville. The 1 percent banner was unfurled briefly on the Kappa Sigma frat house at UA.

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I read this material above from the Arkansas Times Blog today.

I have posted a lot about Steve Jobs and I think this article below from the Cato Institute is probably one of the finest I have ever read on him.

I love reading the Arkansas Times Blog because Max Brantley does a great job of keeping us up with all the latest national and Arkansas news. However, when I read this article today on the Cato Institute, I thought of Max and his failed liberal ideas. Max is great at trying to fire up the middle class against the rich.

Michael Tanner of the Cato Institute said it all baby with this paragraph:

The next time someone suggests that what we need is more taxes, more regulation, more class warfare, more government programs, we should instead suggest that what we really need are policies that encourages a poor boy from San Francisco to become rich and thereby make the rest of us a little richer as well.

Occupy Wall Street vs. Jobs

by Michael D. Tanner

Michael Tanner is a senior fellow at the Cato Institute and coauthor of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Added to cato.org on October 12, 2011

This article appeared on National Review (Online) on October 12, 2011.

The last week brought us a striking contrast that tells us much about the current debate over the direction of this country.

On one hand were the perpetually aggrieved protestors of Occupy Wall Street. While much of the media, desperate to find a liberal counterpart to the Tea Party (remember coverage of the state-house takeover in Wisconsin?), tried to pretend that this was an organic and leaderless uprising by middle America, the reality was that most of the demonstrators were the same motley crew that regularly shows up to demonstrate against the World Bank or G8 meetings, their ranks bolstered by union activists, MoveOn.org, and the Obama front group Organizing for America — not to mention the usual collection of filthy-rich movie stars who flew in on private jets and then climbed into waiting limousines to show up to denounce the filthy rich.

But while Roseanne Barr was suggesting that the rich should be beheaded and demonstrators were making such reasonable demands as the forgiveness of all debt, much of the rest of the world was mourning the death of Steve Jobs, the filthy-rich businessman who was responsible for all those iPhones and iPads that the iPod-sporting protestors used to organize their demonstrations.

[W]hat government jobs program has created as many net new jobs as Jobs?

Jobs certainly was rich. Estimates suggest he was worth more than $7 billion. But it’s important to realize that he didn’t start out that way. Jobs’s story was a quintessential American one. Born poor (and out of wedlock), he achieved success through hard work and brilliance. Along the way he failed sometimes. But when he did, he didn’t beg Washington for a bailout. Instead he frequently put his own capital at risk, taking chances, because entrepreneurship truly is risky. And he showed us that no amount of adversity can stop someone who is truly determined and talented from achieving the American dream.

Does it really matter what tax rate Steve Jobs paid? He was not even a notable contributor to charity. Yet, he did more to contribute to American prosperity and the general betterment of mankind than any government program could ever hope to. Start with the obvious: The various businesses started and run by Jobs employed more than 30,000 Americans and thousands more around the world. Jobs truly was one of those job creators so disparaged by the Occupy Wall Street crowd.

Estimates suggest that Jobs generated as much as $30 billion annually in increased wealth for the U.S. economy. Obviously, without the wealth that Jobs created, all of society would be that much poorer. And, of course, as Jobs drove the value of Apple from $2 billion to $350 billion following his return as CEO in 1997, all of us moved a bit closer to a comfortable retirement as the value of our pension plans and 401(k)s, almost all of which include Apple stock, increased.

But that only captures a small fraction of the social benefits generated by Jobs.

The technology that Jobs brought to the mainstream of American life doesn’t just let us listen to music or play Angry Birds. It has made businesses more efficient, lowering the cost of goods and services for all of us. It has made it easier for everyone from doctors to teachers and students to soldiers on the battlefield to access information and stay in contact with others. It has disseminated knowledge, improved medical diagnostics, and helped bring about the overthrow of dictators. It has helped the blind read the denominations of dollar bills and alleviated the symptoms of children with autism.

The Occupy Wall Street crowd, and for that matter President Obama, see government as the center of our existence. It is government that makes for a better society, while the rich, businessmen, and entrepreneurs are “takers” who don’t “pay their fair share.” But would we really have been better off if we had taken more of Jobs’s wealth and given it to the government? Would President Obama really have used it better than Jobs did? Would the government have given us all that Jobs did?

Government has spent trillions on schools that don’t educate, anti-poverty programs that don’t lift people out of poverty, stimulus programs that don’t stimulate, and health-care programs that don’t control the cost of health care. Compare Apple or Pixar’s record of success with the failures of government. For that matter, what government jobs program has created as many net new jobs as Jobs?

In fact, the next time someone suggests that what we need is more taxes, more regulation, more class warfare, more government programs, we should instead suggest that what we really need are policies that encourages a poor boy from San Francisco to become rich and thereby make the rest of us a little richer as well.

Related posts:

Steve Jobs’ Father

(If you want to check out other posts I have done about about Steve Jobs:Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible has to say about it ,8 things you might not know about Steve Jobs ,Steve […]

Steve Jobs at Stanford

(If you want to check out other posts I have done about about Steve Jobs:Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible has to say about it ,8 things you might not know about Steve Jobs ,Steve […]

Steve Jobs depicted at pearly gates with Saint Peter

It is strange that the New Yorker Magazine did no research. (If you want to check out other posts I have done about about Steve Jobs:Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible […]

Steve Jobs: Great Entrepreneur

(If you want to check out other posts I have done about about Steve Jobs:Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible has to say about it ,8 things you might not know about Steve Jobs ,Steve […]

Some say Steve Jobs was an atheist

Some people have called Steve Jobs an atheist. According to published reports Steve Jobs was a Buddhist and he had a very interesting quote on death which I discussed in another post. Back in 1979 I saw the film series HOW SHOULD WE THEN LIVE? by Francis Schaeffer and I also read the book. Francis Schaeffer observes […]

Steve Jobs and Adoption

Steve Jobs’ 2005 Stanford Commencement Address Uploaded by StanfordUniversity on Mar 7, 2008 It was a quite moving story to hear about Steve Jobs’ adoption. Ryan Scott Bomberger (www.toomanyaborted.com), co-founder of The Radiance Foundation, an adoptee and adoptive father: “As a creative professional, [Jobs’] visionary work has helped my own visions become reality. But his […]

What is the eternal impact of Steve Jobs’ life?

(If you want to check out other posts I have done about about Steve Jobs:Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible has to say about it ,8 things you might not know about Steve Jobs ,Steve […]

Steve Jobs versus President Obama: Who created more jobs?

I loved reading this article below. (Take a look at the link to other posts I have done on Steve Jobs.) David Boaz makes some great observations: How much value is the Post Office creating this year? Or Amtrak? Or Solyndra? And if you point out that the Post Office does create value for its […]

Steve Jobs’ view of death and what the Bible has to say about it

(If you want to check out other posts I have done about about Steve Jobs:Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible has to say about it ,8 things you might not know about Steve Jobs ,Steve […]

8 things you might not know about Steve Jobs

(If you want to check out other posts I have done about about Steve Jobs:Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible has to say about it ,8 things you might not know about Steve Jobs ,Steve […]

Steve Jobs was a Buddhist: What is Buddhism?

(If you want to check out other posts I have done about about Steve Jobs: Some say Steve Jobs was an atheist , Steve Jobs and Adoption , What is the eternal impact of Steve Jobs’ life? ,Steve Jobs versus President Obama: Who created more jobs? ,Steve Jobs’ view of death and what the Bible has to say about it ,8 things you might not […]

 
Did Steve Jobs help people even though he did not give away a lot of money?

  Did Steve Jobs help people even though he did not give away a lot of money? (I just finished a post concerning Steve’s religious beliefs and a post about 8 things you may not know about Steve Jobs) Uploaded by UM0kusha0kusha on Sep 16, 2010 clip from The First Round Up *1934* ~~enjoy!! ______________________________________________ In the short film […]

 

By Everette Hatcher III | Posted in Cato Institute, Current Events | Also tagged , , , | Comments (0)

Tax increases are not the way to go

October 11, 2011 – 1:46 pm

Tax increases are not the way to go, but the president doesn’t get that.

Liberals love tax increases.

Seven Reasons Why Tax Increases Are the Wrong Approach

Uploaded by on May 3, 2011

This Economics 101 video from the Center for Freedom and Prosperity gives seven reasons why the political elite are wrong to push for more taxes. If allowed to succeed, the hopelessly misguided pushing to raise taxes would only worsen our fiscal mess while harming the economy.

The seven reasons provided by the video against this approach are as follows:

1) Tax increases are not needed;
2) Tax increases encourage more spending;
3) Tax increases harm economic performance;
4) Tax increases foment social discord;
5) Tax increases almost never raise as much revenue as projected;
6) Tax increases encourage more loopholes; and,
7) Tax increases undermine competitiveness

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The Real Budget Problem

by Michael D. Tanner 

Michael Tanner is a senior fellow at the Cato Institute and coauthor of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Added to cato.org on June 15, 2011

This article appeared on National Review (Online) on June 15, 2011.

If you listen to the discussion of the deficit in the mainstream media or the talking points from leading Democrats on the Hill (but I repeat myself), the refrain is that tax increases must be part of any deficit fix.

There is a superficial moderation to that appeal, a sort of splitting the difference between Republicans who want to cut spending and Democrats who want to pay for popular programs. And, frankly, some tax breaks and loopholes should be eliminated — ethanol subsidies, for example — not as revenue raisers, but because they are such bad economic policies. 

But raising taxes to reduce the deficit would be bad policy for several reasons:

There’s not really a revenue problem. Democrats correctly point out that federal tax revenues are now just 16.5 percent of GDP, well below the post–World War II average of roughly 18 percent. This would have meant a bigger budget deficit than usual even if spending hadn’t exploded in recent years. But much of that decline is due to the economic slowdown, not to the Bush tax cuts or other policy changes. In fact, the Congressional Budget Office predicts that as economic growth returns, federal tax revenues will grow by an average of 7.3 percent annually over the next ten years. By the end of the decade, taxes will have pushed back through the 18 percent level, and be headed toward 20 percent — all without any changes in tax policy.

Government is too big, too intrusive, and too expensive. It doesn’t take more taxes to fix that.

There is a spending problem. Focusing on taxes implies that the problem is how to pay for spending — taxes or debt — not the spending itself. But, as Milton Friedman constantly pointed out, the real cost of government is the size of government. According to the CBO, the federal government is on track to consume 42 percent of GDP by 2050. (State and local governments will consume another 10 to 15 percent of GDP.) Would we really be better off if we raised taxes enough to pay for all that spending?

You can’t tax enough. The president keeps talking about solving our deficit problems by taxing millionaires and billionaires. Congressional Democrats throw in oil companies. But you could confiscate — not tax, confiscate — every penny belonging to every millionaire in America and cover barely one-tenth of our government’s total indebtedness (including the unfunded liabilities of Social Security and Medicare). Meanwhile the tax breaks for oil and gas companies amount to about $1.4 billion annually. Those tax breaks may or may not be defensible, but they amount to less than 1 percent of this year’s budget deficit.

Bait and switch.  If you look at most of the deficit-cutting proposals, including the president’s, they call for tax increases today in exchange for spending cuts somewhere in the future. I think we’ve seen that movie before. In fact, the president’s proposal actually makes the bait-and-switch game worse. His proposal says that if Congress didn’t actually make those spending cuts, there would be additional tax increases. So Republicans would be agreeing to tax increases today in exchange for . . . more tax increases tomorrow.

Tax hikes are bad for the economy and for freedom. Of course it’s an exaggeration to suggest that all tax cuts pay for themselves, but there is no doubt that high taxes discourage the type of investment and risk-taking necessary to grow the economy and create jobs. Every dollar that the federal government takes in taxes is one less dollar that the private sector can save, invest, or spend as it sees fit. Unless you believe that the government knows better than the private sector what to do with that money, this exchange hurts the economy. And unless you believe that our money really belongs to the government, it means we are less free to make use of the fruits of our labor as we see fit.

Republicans should not fall into the trap of reflexively defending every special-interest loophole in the tax code. But neither should they be seduced by the argument that we need a “balanced” approach to deficit reduction that includes tax increases. Government is too big, too intrusive, and too expensive. It doesn’t take more taxes to fix that.

By Everette Hatcher III | Posted in Cato Institute, Milton Friedman, Taxes | Also tagged , , , | Comments (0)

99th anniversary of Milton Friedman’s birth (Part 13) Milton Friedman on freedom of choice

October 5, 2011 – 10:27 am

Next year is the 100th anniversary of Milton Friedman’s birth and I get on the computer today and read an article published today on the National Review Online and it quotes Milton Friedman.

I wish we would listen to Milton Friedman more often. This article below quotes Friedman and today I am starting a series on what Friedman had to say about the voucher system for our schools. Parents should be allowed to choose what school their children can go to.

Paternalism and Principle

by Michael D. Tanner

Michael Tanner is a senior fellow at the Cato Institute and coauthor of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Added to cato.org on October 5, 2011

This article appeared on National Review (Online) on October 5, 20

If you are looking for a single statement that defines the essence of the modern welfare state, look no further than Secretary of Energy Steven Chu’s defense of the administration’s efforts to ban incandescent light bulbs. “We are taking away a choice that continues to let people waste their own money,” Chu said, quite satisfied with government’s efforts to protect Americans from their own choices.

Contrast this with Milton Friedman’s view that

those of us who believe in freedom must believe also in the freedom of individuals to make their own mistakes. If a man knowingly prefers to live for today, to use his resources for current enjoyment, deliberately choosing a penurious old age, by what right do we prevent him from doing so? We may argue with him, seek to persuade him that he is wrong, but are we entitled to use coercion to prevent him from doing what he chooses to do? Is there not always the possibility that he is right and we are wrong? Humility is the distinguishing characteristic of the believer in freedom, arrogance of the paternalist.

For too long, both liberals and too many conservatives have attempted to impose on people the government’s standards of what is best for them rather than leaving them to their own decisions, merely because those decisions may be mistaken. That is the real legacy of the welfare state as expanded by President Obama and as it has been practiced on a bipartisan basis for the last half century or more: We are, quite simply, less free.

Once you accept the paternalistic premise, there is no end to government interference.

In some cases, the restrictions on liberty are tangible and easily seen. As the economy becomes more and more socialized, so too do the consequences of individuals’ behavior. This, in turn, creates an incentive for the state to control that behavior. After all, if individual decisions impose a collective cost, it is only rational for those bearing that cost to demand input on those decisions. Thus, the nanny state seeks to restrict all manner of private consensual activity, whether it is eating fast foods and smoking or having consensual sex or driving without a seat belt. 

But there are other equally important, if less obvious, ways that the welfare state restricts liberty. Government-run health-care systems, for example, impose a minimum amount that you must spend on health care, either through taxes or through insurance mandates, as with the Patient Protection and Affordable Care Act. They determine which medical conditions and eventualities you must insure against, even if you would prefer not to cover such conditions. Thus, they turn individual moral decisions, such as whether to buy insurance that covers abortion, contraception, or drug-abuse treatment, into political questions. And in some government-run systems they deny people the right to purchase the health care they want even with their own money.

By the same token, government-run anti-poverty programs limit your ability to support the charity of your choice. Money you pay in taxes to support government charity is money that you cannot donate to private charity. Yet the charitable activities chosen by the government may not be the ones that you would have chosen, or even the ones most needed. Indeed, the government’s charitable decisions are likely to be driven by politics, favoring those constituencies with the greatest voting power or those causes that capture the public imagination because they are on television or in the newspapers.

Government-run schools automatically pit the values of one group of parents against the values of other groups. How many textbook controversies or debates about what to teach about homosexuality, whether students may pray, or phonics versus whole language could be avoided if parents could choose the school their child attended?

Social Security may or may not be a Ponzi scheme, but it prevents people — especially poor people — from saving and investing for their own retirement in ways that would allow them to build real, inheritable wealth.

Beyond the programs themselves, there is the simple fact that every dollar that the welfare state consumes to pay for itself is one fewer dollar that individuals have to spend the way that they want to, however that may be. As the French economist Frederic Bastiat put it in his parable of the shopkeeper with the broken window, “He would, perhaps, have replaced his old shoes, or added another book to his library.” Or to put it in today’s context, he might have purchased health care, saved for his retirement, or donated to charity. He might have started a business and hired workers. Or he might have spent it entirely on pleasure or frivolities. He might even have bought energy-inefficient light bulbs.

Whatever he might have done, he is now deprived of that choice. He is, in fact, less free.

Once paternalism is accepted in principle, there is no limit to the actions that government may take in controlling our lives and restricting liberty. The ultimate result, as Friedman writes, is “dictatorship, benevolent and maybe majoritarian, but dictatorship nonetheless.”

As we debate the ever-expanding welfare state and all its consequences — joblessness, a crushing debt burden on our children and grandchildren, and the loss of opportunity for the neediest among us — let us not forget the other casualty of big government: freedom.

By Everette Hatcher III | Posted in Cato Institute, Current Events, Milton Friedman, Vouchers | Also tagged , , | Comments (0)

Obama’s funny math: Saving money that never was going to be spent

September 22, 2011 – 12:36 pm

Addington, McConaghy Debate Obama’s Jobs Plan

Published on Sep 9, 2011 by

Sept. 9 (Bloomberg) — David Addington, vice president at the Heritage Foundation, and Ryan McConaghy, economic director at Third Way, discuss President Barack Obama’s $447 billion jobs plan. They speak with Deirdre Bolton and Erik Schatzker on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

_______________________________

We have been hearing about how the stimulus saved jobs that would have been losted even though unemployment went up after the stimulus was passed. Now we are hearing about the money Obama’s plan will save.

Still Spreading the Wealth

by Michael D. Tanner

Michael Tanner is a senior fellow at the Cato Institute and coauthor of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Added to cato.org on September 21, 2011

This article appeared on National Review (Online on September 21, 2011.

Back when Barack Obama was running for president, he famously told Joe the Plumber that his goal was to “spread the wealth around.” Judging from the deficit-reduction plan that the president introduced on Monday, he really meant it.

The president’s plan barely makes a pretense of reducing spending. The Obama administration claims that its proposal would reduce future budget deficits by roughly $4.4 trillion. But that includes $1.1 trillion in savings from troop draw-downs in Afghanistan and Iraq that were already going to occur. This is an old trick by which the president gets to “save” money that was never going to be spent. The president also reaches back to include $1.2 trillion in savings from the debt-ceiling deal that was signed into law last month. And, he includes $430 billion in savings from lower interest payments as a result of the reduced debt.

The president’s actual cuts total less than $580 billion over the next ten years. That amounts to less than 1.3 percent of expected total federal spending over that period. It barely offsets the cost of the new stimulus bill he announced last week.

The American welfare state is alive and well.

Entitlement reform, once the supposed basis for a grand compromise, is now off the table. Social Security is running a deficit and facing more than $20 trillion in unfunded liabilities, but the president makes no changes to the program. Medicaid would be cut by roughly $72 billion over ten years, barely more than $7 billion per year in a program that today costs $276 billion annually. The president would trim Medicare by $248 billion over ten years. Depending on which accounting measure you use, that program is facing unfunded liabilities of $30–90 trillion, meaning that under the best-case scenario, the president is proposing a reduction of less than 1 percent. And none of the president’s proposed Medicare savings amounts to structural change in the program, which is what is needed. Instead, the president falls back on the usual grab-bag of cuts in provider reimbursements. Those cuts are likely to drive providers out of the program, making it harder for seniors to see a doctor, while doing nothing to change the program’s path towards insolvency.

The American welfare state is alive and well.

On the other hand, the president throws his weight fully behind tax hikes. His plan would increase taxes by $1.5 trillion over the next ten years. That’s on top of $450 billion in tax hikes that the president proposed last week to pay for the stimulus package. In total, the president is seeking nearly $2 trillion in higher taxes, compared to $580 billion in spending cuts. That amounts to nearly $4 in taxes for every $1 in cuts.

And, let’s look at those taxes. The president continues to focus his rhetoric on millionaires and billionaires, but his proposal includes the expiration of the Bush tax cuts for people earning as little as $200,000 per year. That tax hike would also fall heavily on small businesses and almost certainly would slow job creation.

The president’s other big tax initiative is, of course, the new “Buffet rule,” a new alternative-minimum tax designed to ensure that “millionaires and billionaires” pay the same effective tax rate as middle-income workers. While that populist pitch may well prove politically popular, numerous studies have shown that it is highly misleading. Few millionaires and billionaires actually pay taxes at such low effective tax rates. Those that do are receiving the majority of their income from capital gains, income that has already been taxed multiple times before it is subject to the capital-gains tax.

Besides, we should never forget that investment is both risky and necessary for job creation. It is exactly the sort of thing we should be encouraging.

But in the end, economic growth and job creation is secondary to the president. So is deficit reduction. This proposal is about the president’s idea of “fairness,” as he has said over and over. The president sees the wealthy as achieving their success not through hard work and initiative but by exploiting the less well-off or through pure luck. They are the winners of life’s lottery, in his view. It is his job, therefore, to remedy this injustice. That means taking money from some and giving it to others.

It’s about “spreading the wealth around.”

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