Category: too much government

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too much government

The Real Whopper

“Today, government at all levels consumes 37 percent of the total economy, or GDP,” Mitt Romney said earlier this month. “If Obamacare is allowed to stand, government will reach half of the American economy.”

Glenn Kessler’s Fact Checker column at the Washington Post slapped that statement with four “Pinocchios,” the worst possible condemnation for telling “whoppers.”

Yet, Kessler acknowledges Romney’s point. In 2011, local, state and federal “government expenditures amounted to 37.34 percent of the gross domestic product.” That percentage is expected to climb to just over 39 percent by 2020.

“But Romney goes way too far,” writes Kessler. Romney counts private medical expenditures, which will supposedly account for 10 percent of the projected 2020 economy. Romney’s campaign spokesperson argues Obamacare in part mandates that spending and thus the 10 percent is part of government’s “reach.”

Of course, the vast majority of all private payments for medical care — the 10 percent — would happen with or without Obamacare. So Romney’s figure does exaggerate. Still, government commandeering 37 or 39 percent of our economy seems a whopping amount.

Moreover, in making his case against including private health care spending, Kessler argues, under Romney’s notion of government reach, “a wide variety of industries, such as banking or housing, should also be counted as part of this government-controlled economy.” Well, yes. Government spending accounts for nearly 40 percent of America’s GDP. Plus, government heavily regulates and interjects itself into major parts of the private sector.

Kessler thinks Romney’s statement is a real whopper, but Romney is on to something. What’s really whopping is government’s full reach, which includes over-reach.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets responsibility too much government

Legislating Only Profits

J.P. Morgan Chase CEO Jamie Dimon testified before the Senate Banking Committee yesterday about the $2 billion in trading losses suffered by his company’s London office last month.

Congress is shocked that money can be lost trading derivatives. And our legislative leaders seem to seriously think they can write rules for banks and other financial institutions that protect everyone from such losses, making certain any trading in financial securities is guaranteed to earn a profit.Jamie Dimon

“We will lose some of our shareholders’ money,” Dimon acknowledged, “and for that, we feel terrible. But no client, customer or taxpayer money was impacted by this incident.” In fact, J.P. Morgan Chase is nonetheless expected to turn a profit this quarter — as it has consistently done since the financial crisis.

Still, some politicians and policy makers fear the nation’s largest bank is “too big to fail,” that a collapse could again threaten the stability of the entire economy.

I liked what Rob Cox of Reuters TV’s Fast Forward urged Dimon to tell the senators: “We are not going to fail, but if we do, the failure will be our own. We will bear it on our bond holders, our investors and it will not be a public problem.”

Cox went on to endorse “this idea that banks can go out and they can lose money and they can make money,” adding that “at the end of the day it’s their money, not our money, that’s at risk.”

In other words, no bailouts.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies political challengers too much government

The Monkey on Their Backs

The “war on drugs” is not a mere metaphorical war, like the “war on poverty.”

The biggest problem with the term is not the subject, but the object: Our forces don’t shoot at pills and pipes and chemicals and syringes.

They shoot at people.

Sometimes dealers. Often just users. Too often innocents . . . “collateral damage” in a war that seems never to end, because impossible to win.

But if the war seems bad in America — now a land with the world’s largest gulag — it’s far, far worse in Mexico, especially since President Felipe Calderón turned the military on his own people, in the vain hope of subduing the drug traffickers.

What did he get for his efforts? Blood, death and terror.

The body count is over 50,000.

I’ve long advocated drug legalization. I don’t need to elaborate the reasons, not after 50,000 deaths have been weighed in on the pro-drug war side, but I probably should mention a few notions that the drug-war mentality suppresses: individual responsibility, a rule of law, and peace.

In America, our politicians slowly awake to the truth that killing people to prevent them from ruining their lives with drugs is a fool’s mission. But few yet commit to actual change.

In Mexico, on the other hand, the top three candidates to replace Calderón — whose service is limited, by law, to just the one term — go a step further: All agree that the drug war has to be scaled down.

Little talk, so far, of legalization, but hey: The addiction to war is a tough monkey to shrug off.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

How Not to Help the Poor

Q. When’s the best time to kick out the bottom rungs of a ladder?

A. After everybody’s climbed it.

So, when’s the best time to raise the minimum wage?

After everybody is being paid at a higher rate.

Contrary to innocent expectations, minimum wage laws don’t guarantee that people will be hired to work at or above the minimum. Instead, they prohibit businesses from hiring (or workers from accepting jobs) below the minimum rate. That is, rates are guaranteed, but the jobs are discouraged.

A recent push by House Democrats to raise the national minimum wage to ten bucks per hour was stalled by leadership. Left-leaning representatives cried foul. But a report in The Hill explains the reluctance: “Concerns about the economy have increased since last Friday, when a jobs report showed an anemic May during which only 69,000 jobs were added. A higher minimum wage could discourage employers from creating more jobs and that, in turn, could hurt President Obama in the election.”

It turns out that the more clever Democrats are considering, instead, a plan to slowly, gradually raise the rates.

This would mean fewer unemployed right away. The fewer people hurt, all the less likely that voters would put two and two together and blame them, and their minimum wage rate hike.

This is how politicians hurt Americans, most of the time: In increments small enough not to cause an uproar.

In this case, it’s the poorest who are hurt most, those who haven’t yet climbed the proverbial ladder. Democrats, ideologically blind to the results of their regulations, feel nothing.

Besides, they know that, in America, most poor folks don’t vote.

This is Common Sense. I’m Paul Jacob.

Categories
ideological culture too much government

Divided by Government

Politics used to be less socially divisive.

That’s the gist of a new study by the Pew Research Center, as explained by Dan Balz at the Washington Post. By “almost every measure,” Pew claims to have found that the gaps between Republicans and Democrats “have increased over the past 2 years, and in some cases now seem to represent almost unbridgeable divisions.”Divided America

Americans may bemoan partisan gridlock in Washington, but they need only look at the report to understand the root of the problem. Polarization in Washington is not just politicians behaving badly. It reflects what is happening around the country. Partisanship has grown dramatically and shows no sign of abating. . . .

Not exactly shocking news, eh? Over what are we divided? Balz states the obvious: “Some of the most significant differences . . . were on core issues of the 2012 campaign: the role and scope of government and the social safety net.”

Why more division now than in the past?

Because in the past government was smaller. As more and more people become sated with the level of government we have, they start objecting to increases in its size and scope. There have always been folks who want more government. Now their number effectively dwindles. In the “good old days,” there was a “consensus” — a larger percentage — for more government.

Well, we got that “more government.” And fewer and fewer folks like what they see.

Unlike when I was a kid, today the protest against government growth has the teeth of large numbers. So of course “mainstream” discourse has become divisive. It will remain so until the numbers of pro-government-growth-at-all-costs folks dwindle into insignificance.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy too much government

A Tale of Two States

Tuesday is Election Day for Wisconsin’s gubernatorial recall, pitting Republican Gov. Scott Walker against Democratic Milwaukee Mayor Tom Barrett in a rematch of their 2010 contest, won by Walker. Polls show Walker leading, and likely to become the first “recalled” governor to ultimately defeat his recall and retain his office.

In fact, after all the massive protests and the recall campaign, Walker’s popularity has increased.Governors Walker and Quinn

Why?

Mr. Walker has done what he said he would. He hasn’t raised taxes. He staked out his position on ending collective bargaining for most public employees as well as requiring them to pay something toward healthcare and pension benefits, and, against a flurry of opposition, stuck to his guns.

Now the Badger State’s unemployment rate is down below the national average and economic prospects are up.

For a very different story, look south, to Illinois.

Gov. Patrick Quinn supports initiative, referendum and recall, but gets demerits for his response to the current economic difficulties. In 2010, Illinois raised the state income tax by 66 percent. But the $7 billion in extra revenue has done little to solve the state’s chief budget woe — Illinois was $8 billion in the hole when the income tax was hiked, and somehow faces that same $8 billion shortfall today.

So, just a week ago, lawmakers slapped a $1-per-pack tax on cigarettes.

If a state could tax itself out of trouble, Illinois would be a near paradise today.

Walker took on the government employee unions; Quinn took on the taxpayers. That’s why Wisconsin — including their embattled governor — is on the upswing and Illinois is not.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

Withdrawal, with Enduring Presence

President Barack Obama recently signed a much ballyhooed Strategic Partnership Declaration with Afghan President Harmid Karzai, ostensibly to remove all U.S. combat troops from Afghanistan by the end of 2014. He trumpeted the withdrawal in pursuing a second term, aware that most Americans want out. A late March New York Times poll found 69 percent of the public against our continued presence.

Yet when Mr. Obama’s Secretary of Defense Leon Panetta was questioned, last Sunday, on ABC’s “This Week,” about the Taliban gaining strength awaiting a U.S. pullout, he replied, “Well, the most important point is that we’re not going anyplace. We’re gonna, we have an enduring presence that will be in Afghanistan.”Afghanistan

So, our forces can somehow both leave the country and remain there . . . simultaneously?

Yes, they can!

Well, no. The administration is being duplicitous. Our leaders plan to leave a “residual force” in country for the next ten years. Americans will train (and pay for) the Afghan army. When our state-fed media report that U.S. combat troops are all leaving, tens of thousands of U.S. and NATO soldiers will almost certainly remain.

If you ask me, our original goals in going to war in Afghanistan have been achieved — it is long past time to bring all troops home. But whatever one’s view, we can surely agree that our leaders ought to talk honestly about issues of war and peace. Not trick us.

President Obama should admit that just like his likely Republican challenger, Mitt Romney, he has no plan to actually remove the United States military from Afghanistan within the next decade . . . or ever.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

Dragon by the Tail

The idea of a man-made satellite was conceived first by a science fiction writer. Space travel was often depicted as a private activity in that genre, with sci-fi master Robert Heinlein, especially, imagining private launches of rockets as well as private travel from Earth to Moon, and beyond.

But for fifty years, governments have directed — and still direct — money, technology and manpower to develop outposts in space. The current International Space Station is a multi-government project. The rockets that lift payloads of Earth’s surface and into orbit, allowing the station to continue to operate, have all been state-run efforts.SpaceX Falcon rocket launch for Dragon

Until now.

Last week, a private company launched a rocket into orbit, and this weekend its unmanned cargo ship, named Dragon, was caught by a robotic arm and dragged in to dock with the space station.

“Looks like we got us a Dragon by the tail,” came the words from out there.

Since mothballing the Shuttle program, NASA has been hiring Russian rockets to launch American payloads, thus meeting American “obligations” to the international effort. Now, with this first successful private launch to a space station, NASA will be able to rely on more local technology and expertise.

By contracting with private firms like SpaceX — the enterprise that launched Dragon — NASA hopes to save money. Its current contract with SpaceX amounts about $1.6 billion.

We can argue about the necessity of developing “outer space,” I know. But if contracting out with private enterprise can save money over government-run efforts, and at the same time encourage the old science fiction dream of private business in space, that seems like progress.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

Slowest Spending in Decades?

Government tends to grow in spurts, with budgets not decreasing after each spurt. This “ratchet effect” of fast growth then tapering off amounts to a long-term trend: growth.

You’ve probably seen Rex Nutting’s MarketWatch squib, the subject of many a Tweet and Facebook post. Entitled “Obama spending binge never happened,” it begins, “Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree.” Nutting reframes the issue as one of the rate of spending growth . . . just as Republican apologists did in the ’80s, even though spending under Ronald Reagan’s first term grew at a whopping 8.7 percent — a bigger rate increase than Obama’s. Nutting entitles his graph comparing administrations’ spending growth rates “Slowest spending in decades,” indicating not how much Obama has been spending over revenue, but year-to-year rates of increase.Barack Obama, Spree Spender

The prez gets a bad rap.

Well, yes and no. The graph should make party-loyal Republicans and Bush admirers cringe with shame. Sure. But Obama and the current Congress are still spending. Hugely. And rapidly — those dollars fly out the door!

Further, by maintaining high annual deficits, Obama has increased the federal debt so that this year it has shot above 100 percent of current Gross Domestic Product, a first for my lifetime.

Obama can be blamed for not doing the decent thing after the horrible six years of united government under the Republicans, he didn’t reduce spending.

In other words, he’s no Warren G. Harding, who presided over a huge contraction of government spending, thereby helping usher in a quick recovery from the post-Great War bust.

We could use a man like Warren Harding again.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall too much government

Spending Cuts, Seriously

Taking on the government employees’ unions was a gutsy move for Wisconsin’s freshman governor, Scott Walker. Now facing recall, he’s caught in a swarm of controversy, his opponents as angry as bees near a kicked hive.

Nick Gillespie and Jim Epstein, in a Reason TV video segment called “3 Lies About the Wisconsin Gov. Scott Walker Recall,” look behind the hysterical denunciations and at the facts. All three of their points deserve consideration, but I’m most interested in the first, their debunking of the “lie” that “Gov. Walker Cut Spending.” Surprise, surprise — total spending in Wisconsin is going up:

Gov. Walker has cut the rate at which Wisconsin’s state budget is growing, but he hasn’t actually cut spending. In fact, the state’s biennial budget is scheduled to increase by about 3 percent on Walker’s watch, rising from $62.6 billion (2009-11) to $64.3 billion (2011-13).

We see the same disconnect at the federal level. A few Republicans present budgets that slow growth in spending, yet do not decrease spending in total. But, since we do see cuts here and there, to this program or that, Democrats take each minor cut as an occasion to scream and holler about how indecent and heartless “greedy Republicans” are for cutting spending.

And yet spending has gone up.

The complainers, by focusing on those few actual cuts, ignore the overall increases. They thus effectively demand that government spending increase always and everywhere.

While talk of Republican “cutters” must be taken with a grain of salt, it’s impossible to take their critics seriously at all.

This is Common Sense. I’m Paul Jacob.