Archives: 10/2008

Can We Cut Government Spending If They Have Less Work?

The U.S. Postal Service has far less mail to carry, but they’re still not quite ready to cut their massive workforce.

Never before has the U.S. Postal Service laid off workers. Now, it’s a real possibility.

“For the first time in history, that is being considered,” said Gerald McKiernan, a USPS spokesman.

Already, the Postal Service is not hiring because it simply doesn’t move as much mail as it once did. E-mail has taken an increasing amount of its business. McKiernan says mail volume dropped 11 percent in fiscal 2008, which ended Tuesday. That resulted in the service spending $2.3 billion more than it took in.

The workload is down 11 percent, but they’re not yet ready to lay anybody off? That’s government at work. Or non-work.

National Debt Soars under Bush

NPR’s “Studio 360” ran a segment Saturday on conservative folk music of the ’60s. Yes, it existed, though it seems to have been largely parodies of lefty folk songs. One of the clips included was a 1964 tune from the Goldwaters: “Oh, what have you done, left wing, left wing? Oh, what have you done for our country? Well, we’ve raised the national debt, Yeah, it’s going higher yet!”

So it must be a great disappointment to Goldwater Republicans to discover this story that got almost no notice this week:

With no fanfare and little notice, the national debt has grown by more than $4 trillion during George W. Bush’s presidency.

It’s the biggest increase under any president in U.S history.

On the day President Bush took office, the national debt stood at $5.727 trillion. The latest number from the Treasury Department shows the national debt now stands at more than $9.849 trillion. That’s a 71.9 percent increase on Mr. Bush’s watch.

The bailout plan now pending in Congress could add hundreds of billions of dollars to the national debt – though President Bush said this morning he expects that over time, “much if not all” of the bailout money “will be paid back.”

But the government is taking no chances. Buried deep in the hundred pages of bailout legislation is a provision that would raise the statutory ceiling on the national debt to $11.315 trillion. It’ll be the 7th time the debt limit has been raised during this administration.

Which might be why the former lead singer of the Goldwaters says he would describe himself “as a Libertarian today.”

Joe Biden’s Health Care Whopper

…is the title of my oped in today’s New York Daily News.  It seems that I am of the opinion that when it comes to Sen. John McCain’s proposed health-insurance tax credit, Sen. Joe Biden (D-DE) doesn’t know what he’s talking about.  An excerpt:

…the most important part of McCain’s tax credit is something that Biden still doesn’t get: McCain would replace the current tax break with not one tax cut, but two…

…over the next 10 years McCain’s tax credit would let workers control $7 trillion of their own earnings that they otherwise would not control. This effective $7 trillion tax cut completely swamps the $3.6 trillion tax increase Barack Obama advisers claim would result from McCain’s tax credits not growing as rapidly as the current tax “break.”

The Obama-Biden campaign seems determined to deny the reality of McCain’s tax-credit proposal. Perhaps that’s because they would prefer to let the government control that $9,000 you’ve got coming to you.

It’s as full-throated a defense of McCain’s tax credit as you’ll find from someone who doesn’t even like the proposal.  Read the whole thing here.

Reagan (and Hayek), Not Entirely Off-Base

Left-wing blogger Jonathan Chait and others have been knocking Gov. Sarah Palin for quoting Ronald Reagan in the vice-presidential debate.  Palin said:

It was Ronald Reagan who said that freedom is always just one generation away from extinction. We don’t pass it to our children in the bloodstream; we have to fight for it and protect it, and then hand it to them so that they shall do the same, or we’re going to find ourselves spending our sunset years telling our children and our children’s children about a time in America, back in the day, when men and women were free.

Chait noticed that Palin pulled that Reagan quote not from The Speech, nor from Reagan’s 1987 remarks at the Brandenburg Gate, but from this 1961 AMA-sponsored effort to block the enactment of Medicare:

It is notable that neither Chait nor the others took issue with Reagan’s claim that Medicare is a step toward ushering all Americans into a socialized health-care system.

Instead, they seized on Reagan’s argument that Medicare – and then fully socialized medicine, plus a few other steps – would lead the United States into totalitarianism.  Matthew Yglesias truncated Reagan’s argument in the title of his blog post, “Palin: Medicare Leads to Totalitarianism.”

To a supporter of Medicare, this is patently absurd.  Providing health care to grandma is going to turn us all into Nazis?  Puh-lease.  One blogger wonders, “So what’s worse; overwrought bullshit, quoting overwrought bullshit, or improperly using a quote that is overwrought bullshit?”

Essentially, Chait and Yglesias are resurrecting a debate that goes back at least to 1944, when economist (and later Nobel-laureate) Friedrich Hayek argued in The Road to Serfdom that a democracy that pursues socialism will end up with totalitarianism.  Hayek warned “the socialists of all parties” that government is institutionally incapable of planning economic activity, and that the resulting failures would draw into government characters who promise to use increasingly repressive measures to get the job done. 

At the time and since, socialists and skeptics have mocked Hayek’s prediction, noting that Sweden isn’t exactly governed by goose-stepping morons.  A fair point, I suppose.

And yet…

The very political movement that praises Medicare and ridicules Hayek and Reagan has a bit of a pet peeve.  It’s the health-care industry, you see.  Those industry rascals just won’t leave their beautiful, beloved Medicare program alone.  If it’s not the doctors and hospitals wasting one-third of Medicare outlays on useless services, then it’s the private insurers stealing from the public purse.  Or the durable medical equipment manufacturers charging Medicare more than they charge Wal-Mart.  Or the drug manufacturers legislating themselves a sweetheart deal and blocking price controls.

And every time Medicare’s virtuous supporters try to stop those venal vermin from desecrating their pure, precious, pristine program, what happens?  The industry runs to Congress.  The industry knocks off or buys off as many congresscritters as they need to preserve their special subsidies.  There’s no telling how well Medicare’s supporters could plan this sector of the economy if only they didn’t have to worry about the industry undoing their handiwork.  If they could shut up the industry, why, Medicare could start actually paying for quality!  Or it could start providing coordinated care!  Or fer chrissake, could we at least stop rewarding doctors for medical errors!?!?!?

That’s when something occurs to them: maybe we can shut up the industry.  Maybe the government should limit what the industry can say, to Congress and to the voters, about Medicare.  Do that, and Medicare’s supporters would have the running room to remake the world according to their ideals. 

We call those efforts to shut up the industry “campaign finance reform,” whereby this political movement seeks to “ration the amount and control the timing and content of political speech,” so as to restrict the ability of those with disagreeable views from influencing the political process. 

And so, because some people frustrate its high-minded efforts to manage our lives, including its beloved Medicare, this political movement chips away at the freedom of speech and the freedom to petition the government for a redress of grievances.  Cross those campaign finance laws – say the wrong thing about a political issue at the wrong time – and your government will put you in jail.  And our nation becomes just that much more repressive a place to live.

It’s not that Chait and his fellow travelers have proven Hayek and Reagan wrong.  They just haven’t yet proven Hayek and Reagan right.

And what do the devotees of this political movement call themselves? 


Could We Just Get One Thing Straight?

John McCain has done a pretty good job of making school choice at least the rhetorical center of his education plan. He has also been fairly clear that spending is not the key to educational effectiveness. Too bad he hasn’t gotten the latter message to his running mate.

“I say, too, with education, America needs to be putting a lot more focus on that and our schools have got to be really ramped up in terms of the funding that they are deserving,” declared Governor Palin, painfully, last night.

Could we please put this underfunding myth to rest? Real, per-pupil expenditures in American public elementary and secondary schools have more than doubled since 1970, ballooning from $5,393 in the 1970-71 school year to $11,470 in 2004-05 (the latest year available). In 2005, we spent more, adjusted for purchasing power, per primary-school pupil than all but two industrialized nation (Iceland and Luxembourg) and per secondary-school pupil than three nations (Luxembourg, Switzerland, and Norway). Yet, we get results like these! No wonder in 2003 OECD education director Barry McGaw concluded that “there are countries which don’t get the bang for the bucks, and the U.S. is one of them.”

Keep on repeating the myth, and the bang will only get quieter.

Former GOP Congressman’s 1996 Prognostication a Tough Reminder

In between expansions of Medicare and the passage of bloated farm bills — not to mention socialistic bailouts — it is not uncommon for limited government folks to pause and lament the failure of the short-lived GOP “revolution” of the mid-1990s. That was a hopeful time when budget resolutions actually included the dismantling of entire cabinet-level bureaucracies.

Today I came across a reminder of those seemingly ancient limited-government days in a 1996 Washington Post article on the budget just signed into law by then-President Clinton. It quoted then-House Appropriations Committee Chairman Bob Livingston (R-LA) as saying, “Thirty years from now…They’re going to say this is where the cost of government began going down.”

In fiscal year 1996 the federal government spent $1.5 trillion. The figure for 2008 will be around $3 trillion. Adjusting for inflation narrows the spread but not nearly enough — ditto spending on a per capita basis. Only when you calculate spending as a percentage of GDP does it get close.

Regardless, 12 years since Congressman Livingston made his prediction, the cost of government has certainly not gone down. Dimming the prospect of it doing so is the looming entitlement spending explosion that will be set off as the baby boomers begin to retire en masse. The good news is there are 18 years to go until the outcome is officially decided. Furthermore, although Congressman Livingston is gone and the embers from the “revolution” have long since burned out, Cato is still here to help present and future legislators make downsizing the federal government a reality.

Strong American Schools, We Hardly Knew Ye

It was recently announced that Strong American Schools, the group founded by magnates Bill Gates and Eli Broad to put education high on the presidential-election docket, will die in March. It will, in all likelihood, expire in relative anonymity. 

The initiative’s biggest problem has been having to compete against behemoths like war and Wall Street for headlines–a struggle education couldn’t possibly win–but as I wrote back in May, the group also hasn’t offered anything new or noteworthy, a sure way to go unnoticed. Top-down, “government should do more of x” reforms just don’t fire anyone’s imagination because, well, that’s what we’ve been doing for decades and things just haven’t gotten much better.

And so, Strong American Schools, you will be missed…but not for very long.