Topic: General

Challenge for Keynesian Anti-Sequester Hysterics, Part I: Why Did Canada’s Economy Boom When the Burden of Spending Was Sharply Reduced?

By
Daniel J. Mitchell

In this appearance on Canadian TV, I  debunk anti-sequester hysteria, pointing out that “automatic budget cuts” merely restrain government so that it grows $2.4 trillion over the next 10 years rather than $2.5 trillion.

I also point out that we shouldn’t worry about government employees getting a slight haircut since federal bureaucrats are overcompensated. Moreover, I warn that some agencies may deliberately try to inconvenience people in an attempt to extort more tax revenue.

Dan Mitchell Explaining What Americans Can Learn from Canada’s Fiscal Restraint in the 1990s

But I think the most important point in the interview was the discussion of what happened in Canada in the 1990s.

This example is important because the Obama White House is making the Keynesian argument that a smaller burden of government spending somehow will translate into less growth and fewer jobs.

Nobody should believe them, of course, since they used this same discredited theory to justify the so-called stimulus and all their predictions were wildly wrong.

But the failed 2009 stimulus showed the bad things that happen when government spending rises, and maybe the big spenders want us to think the relationship doesn’t hold when government gets put on a diet?

Well, here’s some data from the International Monetary Fund showing that the Canadian economy enjoyed very strong growth when policymakers imposed a near-freeze on government outlays between 1992 and 1997. 

 

For more information on this remarkable period of fiscal restraint, as well as evidence of what happened in other nations that curtailed government spending, here’s a video with lots of additional information.

Spending Restraint, Part II: Lessons from Canada, Ireland, Slovakia, and New Zealand

By the way, we also have a more recent example of successful budget reductions. Estonia and the other Baltic nations ignored Keynesian snake-oil when the financial crisis hit and instead imposed genuine spending cuts.

The result? Growth has recovered and these nations are doing much better than the European countries that decided that big tax hikes and/or Keynesian spending binges were the right approach.

Paul Krugman, not surprisingly, got this wrong.

Topics: 
General, Government and Politics, International Economics and Development, Tax and Budget Policy

Unlike Policymakers, Consumers Use Logic to Avoid Horsemeat

By
K. William Watson

A scandal has recently erupted in Europe after it was discovered that horsemeat was being sold to consumers in processed foods claiming to be 100% beef. This is, of course, already blatantly illegal, but that hasn’t stopped regulators from trying to figure out how to increase their oversight of Europe’s already highly regulated food market.

Unfortunately, some policymakers have used this scandal to push for increased trade barriers within the European Union. Their preferred barrier is the increased use of mandatory country of origin labels. This policy ignores the fact that horsemeat can be passed off as beef in any country and that doing so is illegal in all of them.

Nevertheless, this call for labels reveals a justified concern that complex supply chains obscure relevant information from consumers. But, consumers don’t need protectionist mandates to solve their problems; a little common sense will do just fine. The Scottish Farmer, an advocacy group for Scottish agriculture, reports that 92% of local butcher shops in Scotland have reported increased patronage since the horsemeat scandal broke.

If complex supply chains are perceived as unreliable, consumers will forego the price benefits of frozen packaged food and choose to buy meat from a simpler and more transparent source. Such rational consumer behavior will likely do more to improve the quality of international supply chains than any tweak in complex regulatory oversight.

Topics: 
General, Regulatory Studies, Trade and Immigration

The Fed: ObamaCare “Leading to Layoffs”

By
Michael F. Cannon

The Hill has the story:

The Federal Reserve on Wednesday released an edition of its so-called “beige book,” that said the 2010 healthcare law is being cited as a reason for layoffs and a slowdown in hiring.

“Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff,” said the March 6 beige book, which examines economic conditions across various Federal Reserve districts across the country.

Or in other words, yes, ObamaCare will eliminate some 800,000 jobs.

Topics: 
General, Government and Politics, Health Care

Will the CR Delay ObamaCare?

By
Michael F. Cannon

Rep. Nita Lowey (D-NY) fears it will:

Lowey Statement on 2013 Continuing Resolution

Congresswoman Nita Lowey, Ranking Democrat on the House Appropriations Committee, today delivered the following statement on the House floor regarding the FY2013 Continuing Resolution and Defense and Military Construction/VA Appropriations bills:

Mr. Speaker, the bill before us contains a defense bill and a military construction/Veterans Affairs bill adjusting the FY 2012 funding levels to meet FY 2013 needs. It is unacceptable that federal agencies and departments covered by the 10 remaining bills would be forced to operate under full-year continuing resolutions based on plans and spending levels enacted 15-18 months ago.

Congress’ failure to do our jobs and pass responsible, annual spending bills limits our ability to respond to changing circumstances, implement other laws enacted by Congress, and eliminate funding that is no longer necessary.

Specifically, this bill will delay implementation of the Affordable Care Act, scheduled to begin enrolling participants in October. Without IT infrastructure to process enrollments and payments, verify eligibility and establish call centers, health insurance for millions of Americans could be further delayed.

But wait. The Obama administration says ObamaCare will roll out on schedule. Does Lowey know something?

Topics: 
General, Government and Politics, Health Care

I Was a Rand Paul Fan Before It Was Cool

By
David Boaz

Sure, everybody’s a Rand Paul fan this morning, from the Heritage Foundation to the Huffington Post. Well, maybe not President Obama, John Brennan, and Harry Reid. And alas my good friends at the Wall Street Journal editorial board. But still, a wide array across the political spectrum. Me, I was a Rand Paul fan back in 2010. Indeed, I blogged this picture from Kentucky’s legendary Fancy Farm picnic:

And a couple of weeks later on “The McLaughlin Group” I noted:

In Kentucky, the Democrats are calling Rand Paul an extremist. Rand Paul is responding by calling his opponent a Democrat. In the end, the voters will be more scared of a Democrat. 

But even before that, I’d written up Paul’s Republican primary victory with this graphic illustration:

 

And I’d pointed out that Washington’s neoconservative establishment – from Dick Cheney to David Frum, Mitch McConnell, and Rick Santorum – had campaigned hard against Paul in the primary, and been soundly repudiated. They ran some nasty ads against Paul, and his Democratic opponent kept up the attack in the fall. And again the voters saw the attacks on “radical” Rand Paul and voted for him.

So anyway, I’m happy today to welcome all the new fans who made #StandWithRand a number one topic on Twitter last night. And let’s hope they all stick around, and keep trying to rein in the president’s authority to incarcerate and even assassinate American citizens on American soil.

Topics: 
General, Government and Politics

Better than Medicaid Expansion: Missouri Senate Approves ‘Good Samaritan’ Law

By
Michael F. Cannon

Never mind Medicaid expansion. The Missouri Senate has approved a bill that would allow doctors to give free medical care to the poor. 

You wouldn’t think the government would have to pass a law to let doctors give free health care to the poor. Yet nearly every state prohibits out-of-state physicians and other clinicians from providing free charitable care to the poor unless those clinicians obtain a new medical license from that state.

In a forthcoming paper for the Cato Institute, I explain how medical licensing laws deny care to the poor, and how reforming those laws is a better alternative than Medicaid expansion:

Remote Area Medical has had to turn away patients or scrap clinics in places California, Florida, and Georgia. “Before Georgia told us to stop,” says founder Stan Brock, “we used to go down to southern Georgia and work with the Lions Club there treating patients.” After a tornado devastated Joplin, Missouri, Remote Area Medical arrived with a mobile eyeglass lab, yet state officials prohibited the visiting optometrists from giving away free glasses.

These stories belie the claim that government licensing of medical practitioners protects patients. Instead, they block access to care for the most vulnerable patients.

States should adopt “Good Samaritan” laws, like those enacted in Tennessee, Illinois, and Connecticut. Those states allow out-of-state-licensed clinicians to deliver free charitable care in their states without obtaining a new license. To protect patients, visiting clinicians are and should be subject to the licensing malpractice laws of the state in which they are practicing.

This week, Missouri’s Senate passed such a Good Samaritan law. (It even lets licensed veterinarians come to the state to provide free charitable care to animals.) The bill also provides an inducement to out-of-state clinicians by reducing their liability exposure for malpractice. It would be better if the state were to let doctors and patients choose their own malpractice liability rules via contract. Unlike ObamaCare’s massive Medicaid expansion, this bill would expand access to care for the poor without costing states or taxpayers a dime.

Here’s a video on Remote Area Medical, the good that it does–and the good that licensing laws prevent it from doing.

What is Remote Area Medical?

Even if you’re not ready to concede that medical licensing laws are harmful and should be repealed, you would have to admit it makes no sense for the government to block licensed doctors from treating the poor for free.

Topics: 
General, Government and Politics, Health Care

Florida House Committee, Speaker Reject ObamaCare’s Medicaid Expansion

By
Michael F. Cannon

On Monday, a select committee of the Florida House of Representatives rejected ObamaCare’s Medicaid expansion. Shortly thereafter, the speaker of the Florida House announced his opposition:

I am proud of the thoughtful, thorough and deliberative approach that our Select Committee took on the important issues related to Medicaid expansion and health exchanges. I received their recommendations and agree that expanding Medicaid and setting up a state exchange is not in the best interest of our state. We simply cannot count on the federal government to pay 100 percent of the cost for expansion. The facts show that healthcare costs will go up for many Floridians, while access to and quality of healthcare will go down. The ‘all or nothing’ approach that the Obama administration is offering will not work for our state. I know there will be continued discussion about this matter, and I look forward to exploring better policies for our state.

It looks like Medicaid expansion in Florida may not be the foregone conclusion that some people thought.

Topics: 
General, Health Care

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