Cato Daily Dispatch for December 13, 2005
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Big Money and GovernmentRedistricting Dispute Heads to High Court
E.U. Blasts U.S. Food Aid
Big Money and Government
"The federal deficit rose sharply in November as spending raced ahead of tax receipts. The Treasury Department said yesterday that the $83.1 billion was the biggest imbalance ever recorded in November," the Associated Press reports.
"For the first two months of the 2006 budget year, which began Oct. 1, the deficit was $130.3 billion, 13.1 percent higher than the $115.2 billion deficit during the same period last year."
In "The Grand Old Spending Party: How Republicans Became Big Spenders," Stephen Slivinski, Cato's director of budget studies, writes: "President Bush has presided over the largest overall increase in inflation-adjusted federal spending since Lyndon B. Johnson. Even after excluding spending on defense and homeland security, Bush is still the biggest-spending president in 30 years. His 2006 budget doesn't cut enough spending to change his place in history, either."
Redistricting Dispute Heads to High Court
"The Supreme Court agreed Monday to hear a constitutional challenge to the hotly disputed Texas redistricting plan engineered by former House Majority Leader Tom DeLay in 2003 that handed Republicans six extra seats in the U.S. House of Representatives," according to The Chicago Tribune.
"The high court previously has rejected such challenges, concluding it is impossible to separate partisan politics from the drawing of electoral districts. But the Texas case stands out because Republicans pushed through the redistricting as soon as they gained control of both houses of the state Legislature. Two years earlier, a different redistricting plan based on the latest census, the traditional yardstick, had been approved by the courts."
In "Uncompetitive Elections and the American Political System," Patrick Basham, senior fellow at Cato's Center for Representative Government, and Dennis Polhill, senior fellow at the Independence Institute, argue that American representative government suffers from the handicap of a largely uncompetitive political system. American politics has fewer and fewer competitive elections.
"Current redistricting practices and campaign finance regulations, in tandem with publicly financed careerism, have significantly negative consequences for the health of the political system," they write. "Changes in the manner in which districts are designed, campaigns are funded, and politicians are tenured require immediate implementation. In short, elected officials should be disconnected from campaign and election rule making and regulation. There will not be an improvement in political competition until the incumbent fox ends his tenure as guardian of the democratic henhouse."
E.U. Blasts U.S. Food Aid
"A row between Washington and Brussels over food aid to poor countries intensified on Tuesday with E.U. trade chief Peter Mandelson demanding 'radical reform' of the U.S. system as part of a broader deal on trade in farm goods," reports Reuters. "The United States currently sends donations to developing countries in the form of its own domestic corn, wheat and other commodities. The European Union argues that cash is quicker and less likely to affect the delicate balance of local trade."
In "Poverty That Defies Aid," Marian L. Tupy, assistant director of the Project on Global Economic Liberty at the Cato Institute, writes, "In the 1960s, many developmental economists believed in the 'vicious cycle of poverty' theory, which argued poverty in the developing world prevented accumulation of domestic savings. Low savings resulted in low domestic investment and low investment was seen as the main impediment to rapid economic growth. Foreign aid, therefore, was intended to fill that apparent gap between insufficient savings and the requisite investment in the economy.
"And so, between 1960 and 2005, foreign aid worth more than $450 billion, inflation adjusted, poured into Africa. Result? Between 1975 and 2000, African gross domestic product (GDP) per capita declined at an average annual 0.59 percent rate. Over the same period, African GDP per capita fell from $1,770 in constant 1995 dollars adjusted for purchasing power parity (PPP) to $1,479.
"As a result of the widespread corruption among politicians in Africa and other parts of the developing world, development economists began emphasizing good governance as a solution to underdevelopment."
Holiday Dmitri, editor, hdmitri@cato.org
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