Category Archives: Spending

The Partisan Deficit

Posted on November 23, 2009 | Comments Off on The Partisan Deficit

When Republicans are in the White House, Paul Krugman thinks budget deficits are bad. When a Democrat is in the White House, deficits are no problem at all.

Correctly noting in 2005 that the Bush deficits were “comparable to the worst we’ve ever seen in this country,” Krugman worried that investor confidence would wilt under the difficulty of paying back such massive obligations.

Now that President Obama has tripled the Bush deficits, he has a column poo-pooing deficit worriers as “being terrorized by a phantom menace — a threat that exists only in their minds.” Investor confidence will be just fine.

Would he be so sanguine if a Republican president ran up a $1,400,000,000,000 budget deficit in his first year in office? The party in power has nothing to do with whether deficits are good or bad. Deficits are either a problem or they aren’t.

Krugman’s partisanship is regrettable. What’s more regrettable is that it is taken seriously. Such is the tragedy of the partisan mind.

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Posted in Economics, Spending, The Partisan Mind

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Unfunded Mandates

Posted on November 5, 2009 | Comments Off on Unfunded Mandates

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Today’s American Spectator Online has a piece by CEI VP Wayne Crews and I on curbing Congressional abuse of  unfunded mandates. If the term is new to you, unfunded mandates are basically an accounting gimmick that lets government understate how much it costs taxpayers:

rather than fund a new federal job training program through a Department of Labor appropriation, Congress could mandate that all Fortune 500 firms provide, and pay for, such training. The first appears on the federal budget, the second does not. For politicians, it’s the perfect scheme. The government can spend — or, rather, force other people to spend — as much as it wants without adding to the deficit.

Decency demands this trickery stop; a bill from Rep. Virginia Foxx looks like it would do some good on that front.

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Posted in Economics, Political Animals, Public Choice, Publications, regulation, Spending, Taxation

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Deficit Hits $1,400,000,000,000

Posted on October 17, 2009 | Comments Off on Deficit Hits $1,400,000,000,000

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President Bush’s $400 billion budget deficits were the largest in history. He deserved every bit of criticism he got for his big-spending ways.

Now comes news that the budget gap is up to $1.4 trillion. President Obama has broken Bush’s record by a trillion dollars. It took him less than a year.

A trillion.

Wow.

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Posted in Economics, Spending

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The Cost of Cybersecurity in Context

Posted on May 29, 2009 | Comments Off on The Cost of Cybersecurity in Context

President Obama has just announced the creation of a new “cyber czar.” During his remarks, he noted that “cyber crime has cost Americans more than $8 billion.”

He continued, “My presidency has so far cost Americans more than $4 trillion.”

Just kidding about that last part. Kind of.

(Cross-posted at Open Market)

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Posted in Economics, regulation, Spending, Technology

Fulfilling Prophecies

Posted on May 21, 2009 | Comments Off on Fulfilling Prophecies

CBO estimated today that unemployment will top out at around 10.5% before it recovers. Congress is doing its part to make CBO’s dire prophecy a reality.

Rep. Alan Grayson is set to introduce the Paid Vacation Act, which would make it federal law for employers to offer paid vacation for employees (hat tip to Marc Scribner for finding the story). Rep. Grayson believes his bill will stimulate the economy. “Fewer sick days, better productivity and happier employees” will boost GDP and employment.

The Congressman may be unaware that when workers become more expensive to hire, employers hire fewer of them. Or else he is more concerned with making CBO’s predictions come true.

(Cross-posted at Open Market)

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Posted in Economics, Predicting the Future, Spending

Change?

Posted on January 26, 2009 | Comments Off on Change?

Maybe President Obama really does believe that he can change Washington. Let us laud his intentions while smiling at his naivete. He’ll learn.

His first learning experience is happening right now. Obama has pledged that his stimulus package would be pork-free. All $825 billion of it.

But Washington does not work that way. President Obama’s earmark ban is only one more rule for lobbyists to circumvent; rules are made to be broken. This morning the AP reports that lobbyists are quick learners.

Washington’s Iron Triangle works like a balloon. President Obama is pushing down on one end of it. But the amount of air inside stays the same; it simply moves to the other end of the balloon.

Obama’s earmark ban may actually have an unintended negative consequence. Earmarks won’t go through the usual channels, where it’s easy to keep an eye on them. They will be forced underground. Less transparent. More secretive.

In this case, banning pork could mean more pork. A paradox. But it’s how Congress works.

Good luck to you, President Obama, in your fight against earmarks. You’ll need it. Just don’t expect very much to, ahem, change.

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Posted in Earmarks, Political Animals, Spending

The Cost of Regulation

Posted on August 5, 2008 | Comments Off on The Cost of Regulation

Wayne Crews and I have a piece in today’s Investor’s Business Daily about the extent and cost of regulation.

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Posted in Economics, Publications, regulation, Spending, Stimulus, Taxation

Transferring Wealth vs. Creating Wealth

Posted on February 3, 2008 | Comments Off on Transferring Wealth vs. Creating Wealth

Jesse Holland, AP Labor writer, asks, “Will more jobless benefits aid economy?”

The article is less than clear, but here’s my short answer: no.

Unemployment benefits are not new wealth. They are a transfer of already existing wealth from some people to others. To get the economy back on track, new wealth needs to be created. Which unemployment benefits cannot do.

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Posted in Economics, Spending