Archives: 08/2015

A Bitcoin Constitutional Amendment

Some influential developers of the software that runs Bitcoin have proposed an important amendment to the functioning of the leading cryptocurrency. It’s a development as important to Bitcoin as a constitutional amendment aimed at the Fed would be to the dollar.

The debate has been characterized in some headlines as “existential,” and one write-up called it a “constitutional crisis.” Both are probably overstating the situation. But it’s worthwhile to dig in and see what we should make of the debate. Doing so can tell us how things might go for lots of things in the world of cryptocurrency, including potential future proposals to alter Bitcoin’s embedded monetary policy.

Overshoot Day Underestimates Human Ingenuity

Media outlets ranging from Newsweek and Time, to National Geographic and even the Weather Channel, all recently ran articles on the so-called “Overshoot Day,” which is defined by its official website as the day of the year

when humanity’s annual demand for the goods and services that our land and seas can provide—fruits and vegetables, meat, fish, wood, cotton for clothing, andcarbon dioxide absorption—exceeds what Earth’s ecosystems can renew in a year.

This year, the world allegedly reached the Overshoot Day on August 13th. Overshoot Day’s proponents claim that, having used up our ecological “budget” for the year and entered into “deficit spending,” all consumption after August 13th is unsustainable. Let’s look at the data concerning resources that, according to Overshoot Day’s definition, we are consuming unsustainably. (We’ll leave aside carbon dioxide absorption—as that issue is more complex—and focus on all the other resources).

Does Donald Trump Really Do Best Among Less Educated Voters?

Gage Skidmore/flickr

The short answer is: Yes, Donald Trump likely has greater appeal among less educated Americans.

While we should keep in mind that the margins of error are wider for subsets of national polls—Trump consistently performs better among Americans who have not graduated from college than among college graduates.

For instance, Rasmussen finds that among Republicans who have not finished college, 25 percent support Trump for president compared to 11 percent among Republican college grads.

No other Republican candidate comes within 16 points of Trump among GOP non-college grads. However, among Republicans with college degrees, Trump is just one of many favored candidates: Scott Walker (13 percent), and Carly Fiorina (12 percent) score slightly better, and Marco Rubio (11 percent) ties Trump. All of these are within the margin of error.

Similarly, an August CNN/ORC poll finds that in a hypothetical match-up, Hillary Clinton leads Trump by 15 points among college graduates nationally, but only leads by two points among non-college graduates. Moreover, another CNN/ORC poll found that among all Americans, Trump’s favorables were underwater: -32 points among college grads but only by -8 points among non-college grads.

These August polls line up with July polls finding Trump performing better among less educated voters, as I detail in this piece at Federalist.

Does this mean that Trump’s appeal is any less genuine or meaningful? Definitely not. But his candidacy has the capacity to divide the more educated from the less educated.

For more public opinion analysis sign up here for weekly digest of Cato Public Opinion Insights.

Can Alaska’s Governor Implement ObamaCare’s Medicaid Expansion without the Legislature?

Alaska Gov. Bill Walker (I) initially asked the legislature to approve the state’s participation in ObamaCare’s Medicaid expansion. The legislature has thus far declined. Now, Walker is trying to implement it anyway, and the legislature appears to be taking him to court. According to Alaska Dispatch News:

The Alaska Legislature on Tuesday said it will sue Gov. Bill Walker to block his move last month to expand the public Medicaid health care program without lawmakers’ approval.

Following a private discussion Tuesday morning, a Republican-controlled House-Senate committee voted 10-1 to spend up to $450,000 on two law firms to represent the Legislature in a suit against the governor.

One, Bancroft PLLC, is based in Washington, D.C., and represented more than two dozen states in their U.S. Supreme Court challenge to the Affordable Care Act, or “Obamacare.” The second, Holmes, Weddle & Barcott, is based in Anchorage.

In a news conference after the committee vote, Republican leaders framed their decision to challenge the governor as a constitutional one. They’re seeking an injunction to stop Medicaid expansion from going into effect Sept. 1.

“This is not a policy issue — we’re not discussing whether we should or shouldn’t expand Medicaid,” said Senate President Kevin Meyer, R-Anchorage. “This is a question of authority and process and our constitution.”

[…]

The Legislature is challenging Walker’s move based on a provision in Alaska statute that requires legislative approval before Medicaid coverage can be offered to people whose care is not required under federal law.

The version of “Obamacare” passed by Congress required states to expand Medicaid to cover low-income Americans, who can otherwise face steep health care costs without the subsidies that the legislation offers to individuals with higher incomes.

As written, the law would have revoked all federal Medicaid funding for states that didn’t go through with the expansion. But the U.S. Supreme Court said in 2012 that the threat of revoking the money was unconstitutional and coercive.

The ruling created ambiguity for Alaskan policymakers and legal experts: If Medicaid expansion is technically required under the ACA, but the Supreme Court has ruled the federal government can’t enforce the requirement by revoking money from states that don’t comply, does that make the newly eligible people under Walker’s proposed expansion an optional group that requires legislative approval?

Walker, citing a memorandum from Attorney General Craig Richards, says no. The Republican lawmakers that support the lawsuit say yes and argue the governor is circumventing their authority.

An initial filing in the Legislature’s lawsuit is expected next week.

Read the whole thing here. For more, see these posts from the Foundation for Government Accountability.

The IMF’s Little Greek Secret

Landon Thomas, Jr. of The New York Times reports that the International Monetary Fund (IMF) might not pony up any cash for the third Greek bailout. To calculate the odds on whether the IMF will, or will not, contribute bailout funds requires knowledge of the IMF’s little Greek secret.

By late 2009, Greece was clearly in big trouble. The European Commission (EC) and the European Central Bank (ECB) did not trust the Greek government. So, the IMF was called in to negotiate loan conditions for new Greek financing. Dominique Strauss-Kahn (DSK) was the IMF’s managing director and was preparing to run for the French presidency as the Socialist candidate. DSK was more than willing to give his socialist brothers in Athens a helping hand. As a result, in 2010, Greece received a massive bailout.

Just how massive? Normally, the IMF is limited to lending up to six times a country’s IMF quota subscription to that country. However, if the IMF judges a country’s debt to be sustainable, then that country can qualify for “exceptional access,” and the IMF credit extended to such a country can exceed the 600% limit. Thanks to DSK and the IMF experts, the debt sustainability reports were rosy, until recently. The IMF extended credit to Greece, and did so generously.

The following table tells the tale. Greece holds the record for the highest IMF credit level relative to a country’s quota.

What about the little secret? Well, the IMF has been caught out. It’s massively overextended to Greece. And that explains the cat and mouse game over whether the IMF will, or will not, deliver a present at the third Greek bailout party.

Lone Star Rail Insanity

Interstate 35 between San Antonio and Austin is congested, so obviously (to some people, at least) the solution is to run passenger trains between the two cities. Existing tracks are crowded with freight trains, so the Lone Star Rail District proposes to build a brand-new line for the freight trains and run passenger trains on the existing tracks. The total capital cost would be about $3 billion, up from just $0.6 billion in 2004 (which probably didn’t include the freight re-route).

Click image to download a PDF version of this map.

By coincidence, that was the projected capital cost for the proposed high-speed rail line between Tampa and Orlando (cancelled by Florida Governor Rick Scott), which are about the same 80-miles apart as Austin and San Antonio. But, despite the cost, Lone Star wouldn’t be a high-speed rail line. According to a 2004 feasibility study, trains would take about 90 minutes between the two cities, with two stops in between. While express trains with no stops would be a bit faster, cars driving at Texas speeds could still be faster.

Lone Star is asking the San Antonio city council for $500,000 to help pay for an environmental impact statement and other studies. Austin has supposedly already agreed to fund its share, though it isn’t in the city’s budget.

Lone Star is promising 32 trains (16 each way) carrying 20,000 riders (10,000 round trips) per day at fares of up to $12. That’s more than 600 riders per train; though some may not go the entire distance, it still seems high. Megabus currently operates three buses a day that take 85 minutes between the two cities at fares of $1.50 to $7.50. It seems likely that if there were 20,000 people per day wanting to pay $12 to take the trip at the same speed, Megabus would find them.

If the goal is to relieve congestion on I-35, two new lanes would probably cost less than a billion dollars and would be capable of moving far more vehicles per day than Lone Star would take off the road. Of course, the highway is probably not congested over the entire route, so two new lanes for the full length probably aren’t necessary. Besides, self-driving cars will probably go on sale and eliminate any need for passenger trains before the first Lone Star train would turn a wheel.

San Antonio Mayor Ivy Taylor, who famously cancelled the city’s even more backwards streetcar project, says that Lone Star isn’t one of her priorities. “There will be benefits from this alternative transit option, but we have to be good fiscal stewards,” she added. Local taxpayers should hope that she and the San Antonio city council can resist the starry-eyed Lone Star plan.

The Reigning School Choice Champion

On Monday, Education Next released the results of its 2015 survey on education policy. Neal McCluskey already summarized the key findings, but I want to highlight one finding in particular: scholarship tax credits (STCs) are the most popular form of private educational choice. 

STCs received the support of 55 percent of respondents compared to somewhere between 47 percent and 51 percent for charter schools (depending on whether the survey first explained what charter schools are), 27 percent to 46 percent for universal school vouchers (again, depending on the wording of the question), and 34 percent to 41 percent for low-income vouchers. Unfortunately, the survey did not ask about education savings accounts.

2015 Education Next survey: types of choice

Support for STCs was even higher among parents (57 percent), African-Americans (60 percent), and Hispanics (62 percent). This is not surprising since minorities are more likely to be low-income and therefore choice deprived. Those voicing support for STCs more than doubled those opposed in the general public (26 percent) and more than tripled the opposition among African-Americans (16 percent) and Hispanics (18 percent).

Previous Education Next surveys–as well as the Friedman Foundation’s survey last year–also found the most support for STCs among school choice policies. 

"A proposal has been made to offer a tax credit for individual and corporate donations that pay for scholarships to help low-income parents send their children to private schools. Would you favor or oppose such a proposal?"

Support for STCs dipped slightly from a high of 60 percent last year, but it is still higher than any other year since Education Next first started asking the question in 2009. (They did not ask about STCs in 2013.) However, the poll also revealed the second highest level of opposition since 2009.

In the Friedman Foundation’s 2015 survey, released in July, scholarship tax credits, school vouchers, and education savings accounts all received high levels of support that were within the margin of error of each other when the question was prefaced with an explanation of how the policy worked:

  • Scholarship tax credits: 60 percent support, 29 percent opposition;
  • Education savings accounts: 62 percent support, 28 percent opposition;
  • School vouchers: 61 percent support, 33 percent opposition.

However, when not preceded by a prompt, only 39 percent of respondents supported school vouchers while 26 percent were opposed. (The other questions were only asked with an explanatory prompt because few Americans are familiar with STCs or ESAs.) Charter schools were the least popular with 53 percent in support and 27 percent opposed.

Encouragingly, support for STCs and ESAs in the Friedman poll was highest among Americans aged 18-34 with 72 percent and 75 percent support respectively. These results may well indicate a coming school choice tidal wave.