Topic: General

We Need a Debate about the Size of Government, but It Helps to Understand Basic Fiscal Facts

Self awareness is supposed to be a good thing, so I’m going to openly acknowledge that I have an unusual fixation on the size of government.

I don’t lose a wink of sleep thinking about deficits, but I toss and turn all night fretting about the overall burden of government spending.

My peculiar focus on the size and scope of government can be seen in this video, which explains that spending is the disease and deficits are just a symptom.

Moreover, my Golden Rule explicitly targets the spending side of the budget. And I also came up with a “Bob Dole Award” to mock those who mistakenly dwell on deficits.

With all this as background, you’ll understand why I got excited when I started reading Robert Samuelson’s column in today’s Washington Post.

Well, there’s a presidential whopper. Obama is right that the role of the federal government deserves an important debate, but he is wrong when he says that we’ve had that debate. Just the opposite: The White House and Congress have spent the past five years evading the debate. They’ve argued over federal budget deficits without addressing the underlying issues of what the government should do, what programs are unneeded, whether some beneficiaries are undeserving… The avoidance is entirely bipartisan. Congressional Republicans have been just as allergic to genuine debate as the White House and its Democratic congressional allies.

George F. Will Weighs in on the Halbig Cases

Last year, along with Jonathan Adler, I published this law-review article that explains how the IRS has now begun to tax, borrow, and spend hundreds of billions of dollars ultra vires – that is, without any statutory authorization from Congress. Today, George F. Will writes about our research, and the lawsuits that have sprang from it, in his syndicated column: 

Someone you probably are not familiar with has filed a suit you probably have not heard about concerning a four-word phrase you should know about. The suit could blow to smithereens something everyone has heard altogether too much about, the Patient Protection and Affordable Care Act (hereafter, ACA).

Scott Pruitt and some kindred spirits might accelerate the ACA’s collapse by blocking another of the Obama administration’s lawless uses of the Internal Revenue Service. Pruitt was elected Oklahoma’s attorney general by promising to defend states’ prerogatives against federal encroachment, and today he and some properly litigious people elsewhere are defending a state prerogative that the ACA explicitly created. If they succeed, the ACA’s disintegration will accelerate.

Pruitt is the plaintiff in, well, Pruitt v. Sebelius. I call these “the Halbig cases,” because even though Pruitt was first out of the gate, Halbig v. Sebelius is the farthest along of the four lawsuits that have been filed so far. 

Over at DarwinsFool.com, I tweak a couple of things Will writes about these cases, and give a little more context. For example, it’s not just four little words that prevent the IRS from taxing, borrowing, and spending those billions of dollars. It is a tightly worded set of eligibility rules that unequivocally precludes what the IRS is trying to do. Also, it is not accurate to say that these lawsuits would blow ObamaCare to smithereens. For more, including a classic Ferris Bueller clip, see here.

And click here for a comprehensive list of reference materials and commentary about the Halbig cases. 

The More We Learn about ObamaCare, the Less the President Wants to Discuss It

Remember how the more we learned about ObamaCare, the more we would like it? Well, it seems the more we learn about this law, the less President Obama wants to talk about it. He relegated it to just a few paragraphs, tucked away near the end of his latest State of the Union political rally speech. And while he defended the law, he closed his health care remarks by begging Congress not to repeal it, and asking the American people to nag each other into buying his health plans.

My full response to the president’s health care remarks are over at my Forbes blog, Darwin’s Fool. Here’s an excerpt:

Note what the president did not say: he did not say that [Amanda] Shelley would not have gotten the care she needed. That was already guaranteed pre-ObamaCare. If ObamaCare saved Shelley from something, it was health care bills that she couldn’t pay. It’s impossible to know from this brief account just how much that might have been. But we can say this: making health care more affordable for Shelley should not have cost anyone else their job. It may be that ObamaCare doesn’t reduce bankruptcies at all, but merely shifts them from medical bankruptcies to other types of bankruptcies because more people cannot find work.

Read the whole thing.

Actually, I should amend that. Making health care more affordable will cost some people their jobs, and that’s okay. Progress on affordability comes when less-trained people (e.g., nurse practitioners) can provide services that could previously be provided only by highly trained people (e.g., doctors). When that happens, whether enabled by technology or removing regulatory barriers, prices fall – and high-cost providers could lose their jobs. The same thing has happened in agriculture, allowing food prices to drop and making it easier to reduce hunger. My point was that we should not be making health care more affordable for Ms. Shelley by taxing her neighbor out of a job.

The Freedom’s the Thing

We are in the midst of National School Choice Week, and much of the talk is about test scores, helping poor children access better schools, getting more bang for our bucks, and lots of other, very worthy, important things. But something often seems to get lost in the shuffle not just of School Choice Week, but the overall choice and education debate: freedom. The most fundamental American value is liberty – individual freedom – and not only is an education system rooted in free choice the only system consistent with a free society, it is key to peaceful coexistence among the nations’ hugely diverse people.

That only an education system rooted in free choice is consistent with a free society should be self-evident. Should be, but isn’t, with “social reproduction” – shaping the young to conform with and perpetuate present society – thought by many to be a primary purpose of education, and one which must be controlled by government. As long as a “democratic” process is employed – often poorly defined as some sort of vague, deliberative/majoritarian system – then all is well.

Political Inequality: Residents of Washington are Different from the Rest of Us

America is a class-based society. Based on politics, not economics. An elite political class runs the state to their benefit. The rest of us pay the bill.

The differences between the assumptions and values of people within and without Washington’s 68 square miles of fantasy long have been on ostentatious display. The Democrats’ health care “reform” has become the latest example, offering tender treatment for those in the capital who approved the measure despite opposition from those outside the capital.

Critics of ObamaCare successfully pushed an amendment requiring congressmen and congressional staffers to purchase their health insurance through the new government exchanges. Being tossed from their special plans meant the end of federal subsidies, which run $5000 annually for individuals and $11,000 for families.

The new rule was meant to diffuse the anger of tens of millions of Americans who were forced to change plans and pay more for health care coverage. No surprise, residents of Capitol Hill were not happy. Alas, it wouldn’t look good to voters if Congress now enacted a special exemption. So without any legal authority, President Barack Obama maintained existing federal contributions.

Rep. Chris Stewart (R-Utah) observed:  “There’s no question it was the right thing to do. Not just for me, but for my staff. Heavens, I have staff who don’t make much money. This would be a really big bite for them.”

Too bad the president didn’t similarly step in to ensure that the rest of us won’t have to suffer “a really big bite” from ObamaCare.

Mirror, Mirror, on the Wall, Which Nation Has Increased Welfare Spending the Fastest of All?

There’s an old joke about two guys camping in the woods, when suddenly they see a hungry bear charging over a hill in their direction. One of the guys starts lacing up his sneakers and his friend says, “What are you doing? You can’t outrun a bear.” The other guys says, I don’t have to outrun the bear, I just need to outrun you.”

That’s reasonably amusing, but it also provides some insight into national competitiveness. In the battle for jobs and investments, nations can change policy to impact their attractiveness, but they also can gain ground or lose ground because of what happens in other nations.

The corporate tax rate in the United States hasn’t been changed in decades, for instance, but the United States has fallen further and further behind the rest of the world because other nations have lowered their rates.

Courtesy of a report in the UK-based Telegraph, here’s another example of how relative policy changes can impact growth and competitiveness.

Orange Revolution Redux in the Ukraine: America Should Stay Out

Nine years after the so-called Orange Revolution against electoral fraud, opponents of Ukrainian President Viktor Yanukovich hope to stage a repeat.  But the issue today, whether Kiev aligns economically with Europe or Russia, doesn’t much concern the U.S. 

In 2004 the Orange Revolution helped deliver the presidency to Western-favorite Viktor Yushchenko, a disastrous incompetent.  Yanukovich narrowly won the 2009 race. 

He has been negotiating over an Association Agreement with the European Union.  However, Brussels demanded political concessions, most importantly the freeing of opposition leader Yulia Tymoshenko, who had been prosecuted by Yanukovich’s government, and refused to offer cash assistance. 

At the same time Vladimir Putin pushed Kiev to forswear the EU and join the Moscow-led Customs Union.  And Moscow brought cash to the table.  To the consternation of Brussels, last month the Yanukovich government signed an accord with Russia—though without joining the CU.

Brussels and Washington were shocked, shocked.  New German Foreign Minister Frank-Walter Steinmeier said “It is utterly scandalous how Russia used Ukraine’s economic plight for its own ends.”

Sen. John McCain visited Kiev, where he complained that “President Putin has pulled out all the stops to coerce, intimidate and threaten Ukraine away from Europe.”  Former Undersecretary of State Paula Dobriansky demanded “a broad range of measures, including WTO sanctions, Russian expulsion from the Group of Eight and even a boycott of the 2014 Winter Olympics by political leaders, unless Moscow abandons its strong-arm tactics toward Kiev.” 

The hypocrisy is breathtaking. 

After all, the EU was pushing Kiev into making political concessions and choosing Europe over Russia.  In return, the Europeans offered the prospect of economic gain through increased trade.  After Kiev said no European officials said billions in grants and loans would have been forthcoming had Ukraine signed with the EU. 

As I point out in my latest Forbes online column:

Of course, Washington goes not one hour, let alone one day, without attempting to bribe or coerce another government to do something.  The American secretary of state circles the globe constantly lecturing other nations how to behave.  Since the end of the Cold War the U.S. has been the warrior state, routinely using military means to achieve its ends.  Indeed, Sen. McCain has variously supported war against Iran, Iraq, Libya, North Korea, Serbia, and Syria.

Russia is guilty of heavy-handedness?

Yes, the West offers a better, freer path.  Which is why protests have broken out over Ukraine’s abandonment of the EU.  It’s fair for Washington to wish the critics well and warn Kiev against a violent response. 

But why should Brussels or Washington meddle in the decision itself?  The Wall Street Journal insisted that the Obama administration “stand up for America’s interests and values.”  But what are they in Ukraine? 

Assistant Secretary of State for European Affairs Victoria Nuland declared at the opposition rally in Kiev:  “the U.S. stands with you in your search for justice, for human dignity and security, for economic health, and the European future that you have chosen and deserve.” 

Washington should endorse justice and human dignity, which justifies support for honest elections and warnings against police brutality.  But Ukraine’s “economic health” and “European future” aren’t American values and are barely American interests.  How would Americans feel if Ukrainian politicians showed up at a Republican rally in Washington vowing to stand with protestors in the name of Ukrainian “interests and values”?

A stable, democratic Ukraine would be benefit all.  However, Russia’s activities in Ukraine do not threaten the U.S.  In contrast, bringing NATO up to Russia’s southern border could not help but be seen as threatening by Moscow—imagine the Warsaw Pact expanding to Mexico. 

The West should acknowledge legitimate Russian interests in Ukraine, while offering new incentives for Kiev to look westward.  Moreover, Europe should seek compromise with Moscow.  Ukraine has proposed creation of “a tripartite commission to handle complex issues,” including greater links between the EU and the Russian-lead CU, which might reduce Moscow’s pressure on Kiev.

If Ukraine wants to look east, so be it.  Even with Russia’s money Yanukovich’s reelection prospects are weak and Ukraine is likely to eventually join the West.  If not, the country never was the EU’s or Washington’s to lose.