Topic: Government and Politics

Big Government Guy Backs McCain

Sen. Joseph Lieberman, the 2000 Democratic nominee for vice president, has endorsed Republican Sen. John McCain for president. It’s a coup for McCain, struggling to reignite his once frontrunning campaign. And looking over the rest of the field, libertarian voters might even conclude that McCain has a pretty good record on a lot of economic issues.

But the Lieberman endorsement will remind those libertarian voters of all the positions that pushed them away from McCain in the first place. Lieberman and McCain are perhaps the two leading supporters of the Iraq war in the Senate. They are coauthors of a bill to impose costly new regulations to fight global warming. They both support restrictions on political speech.

As I’ve noted before, some Republicans think no issue matters except doubling down on the floundering war effort, so they consider Lieberman an ally, even a man who should be a heartbeat from the Oval Office in the next Republican administration. But you have to ignore Lieberman’s entire career to see him as an ally of conservatives.

As Robert Novak pointed out back when Republicans were endorsing Lieberman for reelection,

Lieberman followed the liberal line in opposing oil drilling in ANWR, Bush tax cuts, overtime pay reform, the energy bill, and bans on partial-birth abortion and same-sex marriage. Similarly, he voted in support of Roe vs. Wade and for banning assault weapons and bunker buster bombs. His only two pro-Bush votes were to fund the Iraq war and support missile defense (duplicating Sen. Hillary Clinton’s course on both).

Lieberman’s most recent ratings by the American Conservative Union were 7 percent in 2003, zero in 2004 and 8 percent in 2005.

I actually agree with him on a couple of those votes, though I wouldn’t expect that conservatives would. The National Taxpayers Union said that he voted with taxpayers 9 percent of the time in 2005, worse than Chris Dodd or Barbara Boxer. Maybe because of all the Republican love in 2006, he soared to a 15 percent rating.

In a previous speech, Lieberman called for a tax increase so that we could continue the war without “squeezing important domestic programs, as we have been doing”–his view of a period during which federal spending rose by one trillion dollars:

During the Second World War, our government raised taxes and we spent as much as 30 percent of our Gross Domestic Product to defeat fascism and Nazism. During the war in Korea, we raised taxes and spent fourteen percent of GDP on our military…Today, in the midst of a war against a brutal enemy in a dangerous world, we have cut taxes and are spending less than five percent of GDP to support our military…It is not an acceptable answer to push the sacrifice of this war against terrorism onto our children and grandchildren through deficit spending, as we have been doing. And it is not an acceptable answer to pay the costs of this war by squeezing important domestic programs, as we have been doing.

Lieberman may help McCain with Republican hawks, but he’s not likely to help with New Hampshire’s growing contingent of disaffected libertarian, centrist, and independent voters, the ones who swung the state firmly into the blue zone last fall.

Rudy, Hillary, and Power

I have some thoughts in last Tuesday’s New Hampshire Union Leader about Senator Clinton, Mayor Giuliani, and the use and abuse of power:

Clinton, always eager to wield power on behalf of her vision of the public good, has just endorsed new government mandates on health care and energy along with a $50 billion spending program for global AIDS. Meanwhile, revelations about Giuliani’s secretive use of New York City police and his refusal to allow the city comptroller to audit his security spending reflect his lifelong affinity for using and abusing power.

Clinton calls herself a “government junkie.” She says, “There is no such thing as other people’s children” and promises to work on “redefining who we are as human beings in the post-modern age.”…

Giuliani seems much less committed to any particular vision of government’s role. Rather, throughout his career Giuliani has displayed an authoritarian streak that is deeply troubling in a potential President who would assume executive powers vastly expanded by President Bush….

Giuliani wants power concentrated in whatever position he holds at the time, and Clinton wants the federal government to have vast powers to do good as she sees it. Not a happy choice for the voters in a free country.

It’s Always in the Last Place You Look

Ed Morrissey at Captain’s Quarters writes, “In the first five years of his presidency, Bush could barely find his veto pen. Now, however, freed of the burden of defending a free-spending Republican Congress, Bush has discovered his inner Reagan.”

Maybe the veto pen really was lost for years, and it just turned up in the White House Book Room.

This Post Won’t Treat Bob Frank Like a Piñata

The New York Times’ Sunday column “Economic View” is a must-read for anyone who cares about economic issues. Four academics (one of whom is Cato adjunct scholar Tyler Cowen) take turns writing the column, and they often use the academic literature to shed light on current issues.

But readers of this blog probably won’t like last weekend’s column, penned by Cornell economist Robert Frank. Frank argues that “realistic proposals for solving our budget problems must include higher revenue,” i.e., new taxes or tax increases. Those proposals, he says, are being blocked by “powerful anti-tax rhetoric [that] has made legislators at every level of government afraid to talk publicly about a need to raise taxes.” 

(I’m not sure how big that phobia is, given the numerous tax increases on the state level in recent years.  But let’s put that aside.)

Frank has spent much of his academic career arguing for raising taxes on wealthier people so as to create greater income equality (some of his work can be found here, here, and here). It would thus be expected that a Cato analyst would bash Frank’s column like a piñata. But I believe there’s merit to what he writes.

Whatever the political power of anti-tax rhetoric, it’s clear from the last seven years that it doesn’t have much effect on government spending. Despite the tax cuts of 2001–2003, Congress and the White House have found all sorts of hyper-expensive programs and actions on which to spend money, from the Iraq War and expanded overall defense spending to the new Medicare Part D, the proposed farm bill, the latest round of energy subsidies, more and more corporate welfareNo Child Left Behind, and a whole new, giant federal agency — (forget the relative spare change of all those wacky transportation earmarks). Whatever criticisms can be lobbed against the 2001–2003 tax cuts (and lower taxes in general), it can’t be said that they’ve hamstrung the government’s ability to spend

Why have the tax cuts not slowed government growth? Because Uncle Sam is quite happy to borrow money. Frank points out that the national debt has increased $3 trillion since 2002, and it will likely rise an additional $5 trillion over the next decade. As NYU law professor Dan Shaviro notes in this 2004 Regulation cover story, that debt is future taxes.

This borrow-and-spend spree means that America has been getting bigger government while (so far) paying the price of smaller government. As Cato chairman Bill Niskanen points out, this dynamic drives the growth of even-bigger government. The First Law of Demand postulates that, ceteris paribus, if the price of a product declines, demand for the product will rise. The apparent price of government has declined — and we’re getting more and more government all the time.

This leads to the core problem of borrow-and-spend public finance: Because today’s taxpayers receive government services without paying the full cost, they (and their political leaders) are not forced to consider:

  • Is this service worth its cost?
  • Would we be better off if government spent its money differently?
  • Would we be better off if government did not tax that money away from us, but we instead spent it privately?

Instead, borrow-and-spend lets both the Big Government crowd and the Anti-Taxes crowd get what they want: the Big Government folks can keep expanding government and the Anti-Taxes folks pay lower taxes — for now.

That’s why there’s merit to Frank’s column — if we were to pay, today, the full cost of government, we’d give much more thought to the opportunity cost of government spending. I strongly suspect there’d be much less demand for government services and much stronger outcry against current spending and spending proposals.

Frank, in the column, appears not to consider that possibility. Instead, he seems to assume that government activity would continue at its current pace, or even expand, under the justification that government must “provide a variety of public goods and services that would be impractical for private citizens to provide for themselves.” But let’s be real here: government spending  is far, far, far beyond anything that could be justified by a public goods problem.

Much public spending — and most all new public spending — is nothing more than government-mandated consumption. Because people don’t value a good or service enough to spend a lot of money on it privately, government forces them to buy the good publicly. That type of public finance is neither welfare-enhancing nor financially responsible — but it certainly earns the love of special interests. That’s how we end up with (pardon the cut-n-paste) Medicare Part D, the proposed farm bill, the latest round of energy subsidies, more and more corporate welfareNo Child Left Behind, and all those wacky transportation earmarks.

So, Prof. Frank, I say bully for you! If we follow your proposal, I think we’ll move several steps closer to limited government.

Cult Kidney Donations

Today’s Wall Street Journal has an article on live kidney donation as a form of charity. Half the members of a Christian sect have gone through the surgical operation of donating a kidney to a stranger. The article questions whether pressure from “cult” members creates undue influence. Social and government pressure to donate both at death and while living is mounting. See Cato’s recent Policy Analysis “A Gift of Life Deserves Compensation.”

There Is No Such Thing as Mandatory Federal Spending

Sometimes, governments lie.  For example, the U.S. government describes outlays for Social Security, Medicare, and Medicaid as “mandatory” spending, in contrast to “discretionary” spending on things like national defense and bridges to nowhere.

Yet “mandatory” spending is not really mandatory.  It too is discretionary, and everyone knows it.  The only thing that makes “mandatory” spending different is that Congress creates legislative formulas that automatically determine spending levels, instead of determining spending levels each year through the regular appropriations process.  Congress can change those formulas at its discretion, which means that such spending is actually … discretionary.  Calling such spending “mandatory” is therefore a lie that serves only to conceal the choices Congress has made.

The U.S. government, its officers, and its agents should describe federal spending as either “automatic” or “appropriated.”  There is no such thing as mandatory federal spending.

Update: I stand corrected.