Archives: 01/2010

That’s Quite a Multiplier

Via Cato’s Director of Government Affairs, Brandon Arnold, comes this [$] bold claim by the National Journal’s Congress Daily (although, to be fair, they are just quoting the study):

U.S. wheat promotion programs increase sales more than programs for other grains and agricultural products, according to an analysis of wheat export programs released this week.

The study by Cornell University professor Harry Kaiser showed that for every dollar spent on wheat promotion, U.S. producers get $23 back in increased net revenue, Kaiser told U.S. Wheat Associates, which commissioned the study.

With that sort of return on “investment”, the U.S. government should devote all of its revenue to wheat promotion as an ultra-quick revenue raising measure. Right after they’ve bought the swampland in Florida that the U.S. Wheat Associates has to sell them.

Alternatively, since it is such a great deal, perhaps U.S. Wheat Associates should pick up all of the tab for the program, instead of saddling U.S. taxpayers with half the cost.

Wednesday Links

President to Call for Big New Ed. Spending.Here’s a Look at How that’s Worked in the Past

According to the Washington Post, “President Obama will propose a major increase in funding for elementary and secondary education for the coming year in Wednesday’s State of the Union address.” This, “senior White House aides said… fits into a broader effort by the administration to focus scarce resources on the nation’s long-term economic health.”

Give kids a better education and they’ll be more successful when they ultimately enter the workforce. Sounds plausible enough. And if you dig into the scholarly research you find that, lo and behold, it’s actually true. Nations that improve student achievement the most end up with faster economic growth.

But that leaves us with one important question: does higher government education spending raise academic achievement? At the risk of stepping on Ross Perot’s toes, let’s pull out the charts.

The first chart, below, shows the relationship between federal spending (adjusted for inflation) and the academic achievement of 17-year-olds since 1970. [The final years of high school are the decisive ones in this case, because we want to know how well our k-12 system has prepared kids for college and the workforce.]

Federal Spending and Achievement, Percent Change Since 1970 (Cato -- Andrew Coulson)

At first blush, there doesn’t seem to be much of a relationship between federal spending and student achievement–and so it looks like President Obama is barking up the wrong tree from a policy standpoint. But what if state and local education spending have been falling just as federal spending has been rising, nullifying its effects? After all, we read every day in the newspaper about how public schools are starved for funds. So our next  chart tooks at total expenditures per pupil and student achievement:

Total expenditures per pupil and achievement of 17-year-olds, percent change since 1970

Hmm. As we see here, total expenditures per pupil are nearly two-and-a-half times higher today than in 1970, after adjusting for inflation, while student achievement toward the end of high school has been flat or has even declined slightly (in science).

You may be wondering: “What did we get for that huge increase in spending?” The answer is: a lot more public school employees. The next chart adds an extra trend line to the one above: the number of public school employees divided by the number of students enrolled. This ratio of staff to students has gone up by 70 percent since 1970, swelling the ranks of the public school employee unions to about 4.5 million people.

What can we conclude from the above charts? By calling for a big increase in government education spending as a way to boost the U.S. economy, the president is doubling down on a bet that has already been lost, repeatedly, by his predecessors. Love isn’t the only thing money can’t buy. It can’t buy you an improved public school system either. And by extension, higher government education spending won’t buy you a better economy.

If the president goes ahead with his plan to spend billions more on public schooling, he’ll be driving this country deeper into dept for no good reason at all… unless of course you consider swelling the ranks of the public school employee unions a good reason.

A 10-Point, Libertarian, SOTU Address

1. Abandon Obamacare

2. Forget Cap and Trade

3. Reject the Card Check Bill

4. Withdraw from Iraq and Afghanistan

5. Legalize Drugs

6. Scrap the tax code and replace with a flat tax

7. Expand free trade and immigration

8. Stop the bailouts

9. Cut spending

10. Cut spending

BONUS -  Cut spending


Fresh Surveillance Data Show Spike in Traffic Tracking

The Department of Justice is required to report annually to Congress on its use of an array of surveillance tools. These include so-called “pen register” and “trap-and-trace” orders (often combined as “pen/trap orders”), which give investigators realtime access to traffic data from a target’s telephone or e-mail/Internet accounts.  In combination with another type of court order, these are sometimes used to gather location tracking data on cellular users, but they’re primarily used to establish patterns of communication—to determine who the target is in contact with, and when. (Those in contact with the target may then come under further scrutiny.)

Unfortunately, there’s been no public reporting on the use of pen-traps since a five-year dump the Justice Department submitted in 2004.  It’s not clear whether Congress, at least, has been getting them—other such surveillance reports are typically posted on the DOJ Web site—but thanks to intrepid privacy researcher Chris Soghoian and the Freedom of Information Act, we now have statistics on the use of pen-trap orders. In 2002, the federal government sought 4103 pen register orders (affecting 6540 people’s phone lines).  By 2008, that number had risen to a whopping 11,126 pen register orders (affecting 13,998 people’s phones)—in other words, an increase of more than 171%. Bear in mind, that’s 13,998 people having their call behavior monitored in realtime, just at the federal level, and not counting foreign intelligence pen/traps under FISA. (I nevertheless use the first full year after 9/11 as a comparison point, since one might expect an uptick in terror-related criminal investigations.) It’s also not counting government requests for people’s historical call records—records that USA Today reported in 2006 were being vacuumed into a massive database by the tens of millions.

As the graph makes clear, it has also become more common for agencies to routinely obtain trap-and-trace orders (for data on incoming calls) when they obtain a pen register order (for outgoing calls), though the extent of the increase may be exaggerated because the U.S. Marshals Service, which appears to get combined pen/trap orders by default, did not provide separate statistics for trap-and-trace requests prior to 2004. The Justice Department also now appears to have begun tracking orders for e-mail and electronic networks, though it’s unclear whether these are being counted separately or represent a subset of the general pen/trap figures. In 2008, the FBI, DEA, and U.S. Marshals Service reported a total of 208 such orders.

What explains that substantial spike, at a lag of several years after 9/11? One possibility is that increasingly sophisticated tools for social network analysis and pattern-based data mining have made pen/trap orders a more valuable tool—or at least made them appear more valuable to investigators—for ferreting out suspicious patterns or uncovering organizational structures.  Fans of the justly-celebrated HBO series The Wire may recall the episode “Back Burners,” in which Detective Lester Freamon shows a map of the Stanfield crew’s communication patterns, suggesting that it’s typical of a drug-dealing organization. There’s another technological angle to consider: If automation and digitization of the request process make it relatively painless to get pen/trap data, agents may be more likely to request more of them.

Intriguingly, the U.S. Marshals Service accounts for a huge proportion of the increase. In 2002, they sought only 556 pen registers (compared with 1703 for the FBI and 1841 for DEA). That had grown nearly tenfold by 2008, to a stunning 5475 (far more than the 2092 sought by FBI or 3260 for DEA). This, surely, is the figure that most cries out for further inquiry.  Why is the USMS doing ten times the amount of traffic surveillance they conducted in 2002?  I’ve put in a query with their public affairs office, but I’d encourage any enterprising reporters out there to follow up as well.

Obama’s Spending Freeze

President Obama is apparently planning to freeze a portion of federal spending for three years. The portion to be frozen is discretionary spending less spending on defense, homeland security, and veteran’s affairs. That portion of spending–about 13 percent of the overall budget–would be held to $447 billion between FY2010 and FY2012.

The chart puts the freeze in context by illustrating the recent growth in this portion of the federal budget. The data is in “budget authority,” which is the amount of new spending authorized each year. Note that a portion of that authorized spending usually splashes over into subsequent years.

The first thing to note is that the portion of the budget to be frozen grew 60 percent between 2000 and 2008, during a period of low inflation. And since this portion of spending excludes defense, homeland security, and veterans affairs, it has nothing to do with the reponse to 9/11 or various foreign wars.

Then comes 2009 and the massive “stimulus” bill, which pushed up spending on this part of the budget to $699 billion. Finally, the figure shows the freeze at $447 billion, which is 71 percent higher than the level of authorized spending in 2000.

Here’s the important point: a very large part of the 2009 spending spike of $699 billion will be sloshing forward into 2010 and later years. (As illustrated by my fancy arrow in the chart). The new CBO budget estimates (Table A-1) show that only 18 percent of authorized stimulus funding will be spent in 2009, with the rest sloshing forward.

Obama is “freezing” the budget only because he already has a large amount of cash floating around from the stimulus bill that he can spend on all his favorite big government projects in 2010 and beyond. In budget-speak, federal spending measured in “outlays” will be far from frozen.

Finally, a president’s proposals for discretionary spending beyond the current budget year are meaningless. Obama will be back with a new budget in February 2011, no doubt with a whole new set of assumptions and priorities.

Data note: chart data of budget authority from OMB, Mid-Session Review, Table S-14, and budget historical tables.