Archives: March, 2013

The Ryan Budget: Is Returning to Clinton-Era Levels of Fiscal Restraint Really Asking too Much?

It can be very frustrating to work at the Cato Institute and fight for small government.

Consider what’s happened the past couple of days.

Congressman Paul Ryan introduces a budget and I dig through the numbers with a sense of disappointment because government spending will grow by an average of 3.4 percent annually, much faster than needed to keep pace with inflation.

But I don’t even want government to grow as fast as inflation. I want to reduce the size and scope of the federal government.

I want to shut down useless and counterproductive parts of Leviathan, including the Department of Housing and Urban Development, the Department of Education, the Department of Energy, the Department of Transportation, the Department of Agriculture, etc, etc…

I want to restore limited and constitutional government, which we had for much of our nation’s history, with the burden of federal spending consuming only about 3 percent of economic output.

So I look at the Ryan budget in the same way I look at sequestration – as a very modest step to curtail the growth of government. Sort of a rear-guard action to stem the bleeding and stabilize the patient.

But, to be colloquial, it sure ain’t libertarian Nirvana (though, to be fair, the reforms to Medicare and Medicaid are admirable and stem in part from the work of Cato’s healthcare experts).

But my frustration doesn’t exist merely because the Ryan budget is just a small step.

I also have to deal with the surreal experience of reading critics who assert that the Ryan budget is a cut-to-the-bone, harsh, draconian, dog-eat-dog, laissez-faire fiscal roadmap.

If only!

To get an idea of why this rhetoric is so over-the-top hysterical, here’s a chart showing how fast government spending is supposed to grow under the Ryan budget, compared to how fast it grew during the Clinton years and how fast it has been growing during the Bush-Obama years.

Ryan Clinton vs Bush Obama

I vaguely remember taking the SAT test in high school and dealing with questions entitled, “One of these things is not like the others.”

Well, I would have received a perfect score if asked to identify the outlier on this chart.

Bush and Obama have been irresponsible big spenders, while Clinton was comparatively frugal.

And all Paul Ryan is proposing is that we emulate the policy of the Clinton years.

Now ask yourself whether the economy was more robust during the Clinton years or the Bush-Obama years and think about what that implies for what we should do today about the federal budget.

At the very least, we should be copying what those “radical” Canadians and other have done, which is to impose some genuine restraint of government spending.

The Swiss debt brake, which is really a spending cap, might be a good place to start.

Some Pictures for Michael Moore

This week, Michael Moore took to his blog to ask someone to publish the assuredly horrific pictures of the Sandy Hook Elementary School crime scene. Like the horrific pictures of 1955 lynching victim Emmett Till, whose mom wanted the photographs published, or the heart-wrenching images of the Vietnam War, Moore believes that the pictures will finally galvanize people to meaningful gun control. He writes:

I believe someone in Newtown, Connecticut—a grieving parent, an upset law enforcement officer, a citizen who has seen enough of this carnage in our country—somebody, someday soon, is going to leak the crime scene photos of the Sandy Hook Elementary School massacre. And when the American people see what bullets from an assault rifle fired at close range do to a little child’s body, that’s the day the jig will be up for the NRA. It will be the day the debate on gun control will come to an end. There will be nothing left to argue over. It will just be over. And every sane American will demand action.

This is a horrible suggestion, obviously. I do, however, have some pictures for Michael Moore:

Sgt. Castellano

Jeanne Assam

The first picture is of Sgt. Lisa Castellano. Two days after the Newtown tragedy, Sgt. Castellano was off-duty and working security at a movie theater. A gunman walked in and began firing. She stopped the gunman after he had shot one man.

The second picture is of Jeanne Assam. In 2007, Assam stopped what could easily have been the largest mass shooting in U.S. history at the New Life Church in Colorado Springs. A severely deranged man, who had already killed two people at a youth mission in northern Denver the night before, entered the church with the same armament as Newtown killer Adam Lanza and began shooting. At the time, approximately 7,000 people were in the church. Assam stopped him after he had killed two and wounded three.

Why I’m Not a Conservative

The Washington Post notes the following quote from Rep. Paul Ryan in his CPAC speech: 

“We don’t see the debt as an excuse to cut with abandon, to shirk our obligations,” Ryan said. “We see it as an opportunity to reform government, to make it cleaner and more effective. That’s what conservatives stand for.” 

That’s interesting because more effective (or efficient) government is also what liberals stand for. 

As I wrote upon the release of Ryan’s latest budget proposal, more efficient government isn’t the same as limited government. I appreciate the argument being made by some limited-government advocates that Ryan’s budget is a “step in the right direction” because it would slow the growth in federal spending versus the Congressional Budget Office’s baseline. That’s a good thing—especially when compared to the bloated alternative put out by Sen. Patty Murray (D-WA). But I think that proponents of limited government should consider a “step in the right direction” to be a budget that actually attempts to extricate the federal government from involvement in every facet of our lives. In that regard, Ryan’s budget only represents a step toward a slightly cheaper big government. 

Note: Check out Veronique de Rugy’s commentary on the SKILLS Act for an example of what I’m talking about. 

Debating Intellectual Property

In remarks at the most recent meeting of the President’s Export Council, now-former U.S. trade representative Ron Kirk (he just stepped down yesterday) stated (see 25:10 of the video):

We have a knowledge-based economy, and we have to protect that. … We have to have the strongest intellectual property protection that we can possibly seek in these [trade]  agreements. … We are failing miserably in the public debate about the importance of protecting our intellectual property rights. … Somehow we [need] to fashion an argument for the American public that helps them to understand that if we give away our work product, we just don’t have  a future.

I agree that there should be some protection of intellectual property. But how much? I think a public debate about these issues would be great. From what I can see from my perspective in the trade world, there’s almost never a real discussion of this issue. Instead, there is just constant pushing from the U.S. government for stronger intellectual property protection.

If there is going to be a debate, here are some questions I have:

  • Why should patent terms be 20 years rather than, say, 10 or 30 years?  The 20-year term seems arbitrary, and I’d like to see some evidence that this is the right one. And are there some products that should not be eligible for patents?
  • Why should copyright terms be the life of the author plus 70 years? They used to be much shorter. Has copyright become unbalanced
  • Is there room for different views among different countries? Should the U.S. government be pushing other countries to adopt our model?

I don’t think that whether we should “give our work product away” is the right way to frame the issue. Rather, the question is, how much protection should intellectual property be given? By all means, let’s have a public debate about that.

A Copyright Comeback?

Register here now for next Wednesday’s book forum.

There is certainly excellent Cato work on copyright and intellectual property that predates mine, but the starting point for my work in the area was the 2006 “Copyright Controversies” conference. Along with considering whether copyright is founded in natural law or utilitarian considerations, we examined the challenges to copyright posed by emerging modes of creation and by enforcement issues.

Since then, I’ve made it my practice to periodically return to copyright, intellectual property law, and other information regulations when I’ve come across a new book that brings new ideas to the table.

At our most recent book event, on the Mercatus book Copyright Unbalanced: From Incentive to Excess, the case for copyright reform made by Cato alumni Jerry Brito and Tom W. Bell was met with a strong, first-principles defense of copyright by Mitch Glazier.

Now comes Laws of Creation: Property Rights in the World of Ideas, in which Ronald A. Cass and Keith Hylton reject the idea that changing technology undermines the case for intellectual property rights. They argue that making the work of inventors and creators free would be a costly mistake.

Between Glazier’s performance and this new book, perhaps the intellectual tide is turning back to support for copyright and intellectual property law. But two data points are probably not enough to identify a trend.

On March 20th, we’ll have Cass and Hylton at Cato to present their work, with Jerry Brito providing commentary. It’s up to you do decide for yourself whether copyright is making a comeback. The question is especially acute with the recent ruling that unlocking one’s cell phone in order to use it on another network is illegal.

Register now!

And the King of the Fiscal Squeeze Is…Bill Clinton?

When Congressman Paul Ryan takes the stage at CPAC Friday morning, he will, of course, tout his new budget as a solution to America’s spending problem. The 2014 Ryan plan does aim to balance the budget in 10 years. That said, it would leave government spending, as a percent of GDP, at a hefty 19% – as my colleague, Daniel J. Mitchell, points out in his recent blog.  

Proposals like the Ryan budget are all well and good, but they are ultimately just that – proposals. If Congressman Ryan really wants to get serious about cutting spending, he should look to the one U.S. President who has squeezed the federal budget, and squeezed hard.

So, who can Congressman Ryan look to for inspiration on how to actually cut spending? None other than President Bill Clinton.

How can this be? To even say such a thing verges on CPAC blasphemy. Well, as usual, the data don’t lie. Let’s see how Clinton stacks up against Presidents Barack Obama and George W. Bush. As the accompanying chart shows, Clinton was the king of the fiscal squeeze.

Yes, Bill Clinton cut government’s share of GDP by a whopping 3.9 percentage points over his eight years in office. But, what about President Ronald Reagan? Surely the great champion of small government took a bite out of spending during his two terms, right? Well, yes, he did. But let’s put Reagan and Clinton head to head – a little fiscal discipline show-down, if you will (see the accompanying chart).

And the winner is….Bill Clinton. While Reagan did lop off four-tenths of a percentage point of government spending, as a percent of GDP, it simply does not match up to the Clinton fiscal squeeze. When President Clinton took office in 1993, government expenditures accounted for 22.1% of GDP. At the end of his second term, President Clinton’s big squeeze left the size of government, as a percent of GDP, at 18.2%. Since 1952, no other president has even come close.

Some might argue that Clinton was the beneficiary of the so-called “peace dividend,” whereby the post-Cold-War military drawdown led to a reduction in defense expenditures. The problem with this explanation is that the majority of Clinton’s cuts came from non-defense expenditures (see the accompanying table).

Admittedly, Clinton did benefit from the peace dividend, but the defense drawdown simply doesn’t match up to the cuts in non-defense expenditures that we saw under Clinton. Of course, it should be noted that the driving force behind many of these non-defense cuts came from the other side of the aisle, under the leadership of Speaker Gingrich.

The jury is still out on whether Ryan (or Boehner) will prove to be a Gingrich – or Obama, a Clinton. But, at the end of the day, the presidential scoreboard is clear – Clinton is the king of the fiscal squeeze.

So, when Congressman Ryan rallies the troops at CPAC with a call for cutting government spending, perhaps the crowd ought to accompany a standing ovation for the Congressman with a chant of “Bring Back Bill!”

You can follow Prof. Hanke on Twitter at: @Steve_Hanke

Watch Don Kates a Quarter Century Before the Washington Post Put Him on Its Front Page

Today the Washington Post published a front page story about changing intepretations of the Second Amendment. The piece begins with a lecture by professor Don Kates.

In 1977 at a Denver hotel, Don Kates paced a conference room lecturing a small group of young scholars about the Second Amendment and tossing out ideas for law review articles. Back then, it was a pretty weird activity in pursuit of a wacky notion: that the Constitution confers an individual right to possess a firearm.

“This idea for a very long time was just laughed at,” said Nelson Lund, the Patrick Henry professor of constitutional law and the Second Amendment at George Mason University, a chair endowed by the National Rifle Association. “A lot of people thought it was preposterous and just propaganda from gun nuts.”

More than 35 years later, no one is laughing. In 2008, the Supreme Court endorsed for the first time an individual’s right to own a gun in the case of District of Columbia v. Heller. The 5 to 4 decision rendered ineffective some of the District’s strict gun-control laws. And Justice Antonin Scalia’s majority opinion echoed the work of Kates and his ideological comrades, who had pressed the argument that the Second Amendment articulates an individual right to keep and bear arms.

Kates–a liberal, civil rights attorney–published a seminal 1983 Michigan Law Review article arguing for an individual right interpretation of the Second Amendment, the same intepretation the Supreme Court endorsed 25 years later in District of Columbia v. Heller. Kates saw the crucial connection between civil rights and the natural right to self-defense–a connection most of his peers continue to miss.

Over at Libertarianism.org, you can watch one of Kates’s Constitutional jurisprudence changing lectures. Just two weeks back, we posted a talk he gave in 1989 on the history of gun ownership in America and the historical implications of the right to self-defense.