Just Give Us the Data! End-of-Term Org-Chart Edition

Public oversight of government and internal managment could both improve dramatically with an authoritative, machine-readable representation of what the federal government is. Right now, there isn’t a list of all of the federal government’s agencies, bureaus, programs, and projects. That’s a big part of why the government is run so badly and so impervious to change. The government is illegible, even to many insiders.

Happily, the Obama Administration recently promised to produce a machine-readable federal government organization chart. And it promised to do so in a matter of months. That’s something the administration can do to leave a lasting legacy and fulfill an important part of his promise of more transparent government, something we touted here in a 2008 policy forum, Just Give Us the Data!

Europeans, not Americans, Should Spend More on Europe’s Defense

The U.S. plans on filling Eastern Europe with thousands of troops along with vehicles and weapons to equip an armored combat brigade. That will require a special budget request of $3.4 billion for next year.

An unnamed administration official told the New York Times, that the step “fulfills promises we’ve made to NATO” and “also shows our commitment and resolve.” Moreover, said another anonymous aide: “This reflects a new situation, where Russia has become a more difficult actor.”

However, the basic question remains unanswered: Why is the U.S. defending Europe? The need for America to play an overwhelming role disappeared as the continent recovered and the Cold War ended.

For Cam Newton, Adding Super Tax Insult to Super Bowl Injury

When I give speeches in favor of tax reform, I argue for policies such as the flat tax on the basis of both ethics and economics.

The ethical argument is about the desire for a fair system that neither punishes people for being productive nor rewards them for being politically powerful. As is etched above the entrance to the Supreme Court, the law should treat everyone equally.

The economic argument is about lowering tax rates, eliminating double taxation, and getting rid of distorting tax preferences.

Today, let’s focus on the importance of low tax rates and Cam Newton of the Carolina Panthers is going to be our poster child. But before we get to his story, let’s look at why it’s important to have a low marginal tax rate, which is the rate that applies when people earn more income.

Venezuela: Ricardo Hausmann versus Nicolas Maduro

Prof. Ricardo Hausmann, a native of Venezuela and professor at Harvard, concluded in a Financial Times op-ed last week that Venezuela will go down the tubes. Indeed, Hausmann wrote that “It is probably too late to avoid a Venezuelan catastrophe altogether. But to reduce its length and intensity, the country needs to adopt a sound economic plan that can garner ample international financial support. This is unlikely to happen while Mr. Maduro remains in power.”

The nub of Hausmann’s diagnosis of the infirmed patient is clear:

As bad as these numbers are, 2016 looks dramatically worse. Imports, which had already been compressed by 20 percent in 2015 to $37bn, would have to fall by over 40 percent, even if the country stopped servicing its debt. Why? If oil prices remain at January’s average levels, exports in 2016 will be less than $18bn, while servicing the debt will cost over $10bn. This leaves less than $8bn of current income to pay for imports, a fraction of the $37bn imported in 2015. Net reserves are less than $10bn and the country, trading as the riskiest in the world, has no access to financial markets.

There’s no doubt that Hausmann’s arithmetic is correct. Add to that the fact that Venezuela’s implied monthly inflation rate is 21%, according to my estimates, and its implied annual inflation rate is 442%. Not a pretty picture.

And that’s not all. As I observe the socialist destruction of Venezuela that has ensued under the reign of Hugo Chavez and now Nicolas Maduro, it is clear that Maduro has no economic strategy. Indeed, I doubt if Maduro knows what the word “strategy” means.

Venezuela is going down the tubes.

Coercion and Boondoggles in the Name of Green Transportation

For most of Obama’s years as president, he has opposed raising the gas tax. Now, in his last, lame-duck year, he is proposing a $10 per barrel tax on oil. Since a 42-gallon barrel of oil produces about 45 gallons of gasoline, Diesel, jet fuel, and other products, this is roughly equal to a 22 cent per gallon gas tax, well above the current 18.4 cent tax.

The distinction between Obama’s oil tax and a gas tax is that the oil tax wouldn’t go into the Highway Trust Fund, where up to 80 percent goes for roads and 20 percent goes for transit. Instead, he proposes to spend $20 billion per year on alternatives to autos, including urban transit, high-speed rail, and mag-lev. Another $10 billion per year would be given to the states for programs that would supposedly reduce carbon emissions such as “better land-use planning, clean fuel infrastructure, and public transportation.” Finally, $3 billion would go for self-driving vehicle infrastructure that is both unnecessary and intrusive.

Obama proposes that the oil tax be phased in over five years, so that $33 billion is the average of the first five years; when fully phased in, the tax would bring in nearly $60 billion a year. This would be a huge slush fund for all kinds of social engineering programs.

The Republicans who run Congress plan to ignore Obama’s plan. The president’s “proposals are not serious, and this is another one which is dead on arrival,” says Senate Environment & Public Works Committee Chair James Inhofe (R-OK). Still, it’s worth looking at the plan as a preview of what might be proposed by the next president if that president happens to be a Democrat.

The Educational Freedom Legacy of Andrew Coulson

Early yesterday morning, after a fifteen month battle with brain cancer, Senior Fellow in Education Policy Andrew Coulson passed away. He is survived by his beloved wife Kay. Andrew was 48 years old.

Andrew’s death is very sad news for everyone at Cato, but especially those of us at the Center for Educational Freedom, where Andrew was the director—and an almost impossibly sunny colleague—for more than a decade. Coming from a computer engineering background, Andrew seized on education reform—and the need for educational freedom—not because he had spent a career in education, but because he saw a system that was illogical, that was hurting society and children, and that needed to be fixed.

And when Andrew wanted to fix something, he went to work.

Andrew hit the radars of everyone involved in education reform—especially school choice—with his 1999 book Market Education: The Unknown History, which captured exactly what he wanted everyone to know about education. For much of history, Andrew made clear, education was grounded in the free and voluntary interactions of teachers, students, and families—and when it was, it worked better for everyone than the rigid, moribund, government-dominated model we have today.

Andrew was not in the reform vanguard just in laying out the historical, logical, and empirical case for truly free-market education, but also in determining how, practically, to do that. Andrew was perhaps the earliest and clearest voice calling for tax-credit funded choice in preference to publicly funded voucher programs, which are themselves infinitely preferable to being assigned to a school based simply on your home address. Tax credit programs, he argued, would be more attractive—except to those who would lard regulations onto schools – by breaking the connection between state money and school choices. People would choose whether to donate to scholarships, and even to which organizations or schools such donations would go, rather than have the state hand out funds from all taxpayers.

Today, the wisdom of this choice mechanism has been borne out, with tax-credit-based programs starting later than vouchers, but now exceeding total enrollment by about 53,000 students. And enrollment through private educational choice programs of all types—vouchers, tax credits, and education savings accounts—has ballooned since 1999, when Market Education was published, from just a few thousand children to nearly 400,000.

That is tremendous progress. But as Andrew would be the first to proclaim, it is not nearly enough. Indeed, with an eye to pushing choice much further, before he died Andrew was putting the finishing touches on a documentary series vividly and humorously illustrating why we need educational freedom, and the great benefits even limited freedom in education has produced. We hope Andrew’s labor of love will be appearing on television sets across the country in the coming months.

Andrew Coulson is no longer with us. Thankfully, his ideas remain, and they will always illuminate the pathway forward. 

Syrian Refugees and the Precautionary Principle

In environmental policy, the precautionary principle states that a new product, method, or proposal whose effects are disputed or unknown should not be introduced if it is harmful.  The burden of proving that it is harmless falls on its backers – virtually guaranteeing that it won’t be produced.  In contrast, a cost-benefit analysis that compares the probability of harm with the expected magnitude of the benefits is a better method. 

The methods of the precautionary principle are implicitly applied by many opposing the resettlement of Syrian refugees because they deem any risk of terrorism as too great.  The precautionary principle is as improper a standard for determining refugee policy as it is for guiding environmental policy. 

Arguments derived from the precautionary principles are often emotionally driven.  Senator Shelby (R-AL) made such an appeal  when he stated, “We don’t know much about these people. They haven’t really been vetted. They come from an area where there’s a lot of turmoil, a lot of terrorists come from. We don’t need one more terrorist; we got enough right now.”

Senator Shelby is correct that we don’t need another terrorist, but he didn’t explain that the risk of a terrorist coming through the refugee system is low. 

3,252,493 refugees were admitted to the United States from 1975-2015.  During that time period, 20 of those individuals attempted to carry out a terrorist attack or succeeded in doing so inside of the United States.  That is a single terrorist for every 162,625 refugees admitted or one every two years since 1975. 

Although there were only 20 refugee terrorists admitted since 1975, they have only succeeded in murdering three Americans.  Each one of those murders is a tragedy but the chance that an American would be successfully killed by a refugee terrorist was one in 3.6 billion.  Each year an American had a 0.000000028 percent chance of being murdered by a refugee terrorist (for those with poor eyesight, that’s seven zeros to the right of the decimal point).  That’s a small risk.

Pages