• “One of the first rules of negotiating is never to threaten to do something unless you are prepared to do it.”
• Policymakers and pundits assume the U.S. is so dominant that we’re prepared to fight multiple fronts at once, and that it won’t affect our security.
• Candidates for office should prepare to raise money, not rely on taxpayer subsidies.
• More market liberalization could help prepare Japan for any other natural disaster.
• Are Tea Party-backed Republicans prepared to go the distance on spending cuts?

This Thursday, April 7, Senator Corker of Tennessee will be the opening speaker at the Cato Institute’s conference on “The Economic Impact of Government Spending” (an event that is free and open to the public, so register here if you want to attend).

The Senator will be discussing his proposal to cap and then gradually reduce the burden of government spending, measured as a share of gross domestic product. With federal outlays currently consuming about 25 percent of economic output, excessive federal spending is America’s main fiscal problem.

Corker’s proposal would put federal spending on a 10-year glide path so that it eventually shrinks to 20.6 percent of GDP. This chart, from the Senator’s upcoming presentation, shows that government will grow at a much slower pace as a result of this restraint. Indeed, total savings over the 10-year period, measured against a baseline that assumes the federal government is left on auto-pilot, would exceed $5 trillion.

There are two things to admire about Senator Corker’s CAP plan.

First, he correctly understands that the problem is the size of government. As explained in this video, spending is the problem and deficits are a symptom of that problem.

Unfortunately, many policy makers focus on the budget deficit, which often makes them susceptible to misguided policies such as higher taxes. At best, such an approach merely substitutes one bad way of financing federal spending with another bad way of financing federal spending. And it’s much more likely that higher taxes will simply lead to more spending, thus exacerbating the real problem.

Second, Corker’s legislation has a real enforcement mechanism. If Congress fails to produce a budget that meets the annual spending cap, there is a “sequester” provision that automatically takes a slice out of almost every federal program.

Modeled after a similar provision in the successful Gramm-Rudman-Hollings law of the 1980s, this sequester puts real teeth in the CAP Act and ensures that the burden of government spending actually would be reduced.

In my Britannica Blog column today I look at some brand-new examples of what might seem to be liberal bias at NPR and PBS:

NPR’s Diane Rehm Show devoted an hour to Sen. Bernie Sanders, the independent socialist from Vermont, talking about his new book The Speech. But it looks like Diane has not interviewed Sen. Rand Paul, the constitutional conservative from Kentucky, about his new book The Tea Party Goes to Washington, even though it’s selling better than Sanders’s book. It’s pretty clear to book publicists that it’s much easier to get a liberal author on the Diane Rehm Show than a conservative or libertarian author.

Meanwhile, this week PBS is featuring the latest in its program Journey to Planet Earth, this episode featuring “environmental visionary Lester Brown,” the long-time president of the Worldwatch Institute. The episode, “Plan B: Mobilizing To Save Civilization,” “delivers a clear and unflinching message – either confront the realities of climate change or suffer the consequences of lost civilizations and failed political states.” Matt Damon hosts. But Lester Brown’s decades-long predictions about environmental disasters have been wrong more often than the 5.9 million NCAA brackets filled out on ESPN. See this review from 1999 or this one from 2000 or this one from 2009. Meanwhile, a PBS documentary featuring the ideas of Julian Simon, who challenged doomsday orthodoxy and notably got things right? Don’t bet on it.

For more examples and why it matters, read the whole thing.

A new study from the Adam Smith Institute in the United Kingdom provides overwhelming evidence that class-warfare tax policy is grossly misguided and self-destructive. The authors examine the likely impact of the 10-percentage point increase in the top income tax rate, which was imposed as an election-year stunt by former prime minister Gordon Brown and then kept in place by his feckless successor, David Cameron.

They find that boosting the top tax rate to 50 percent will slow economic performance. And because of both macroeconomic and microeconomic responses, tax revenues over the next 10 years are likely to drop by the equivalent of more than $550 billion. Here’s a key paragraph from the executive summary of the new study.

The country is suffering from a 50%-­plus marginal tax rate which even its architect admits was imposed without economic purpose. Now our analysis shows that the policy is set for failure: at best leading to flat growth for a decade and £350bn of lost revenue. The Chancellor should seize the occasion of the 2011 budget to reverse this disaster promptly, for the benefit of public revenues, economic growth, the government’s standing with domestic wealth-creators, and the UK’s reputation with world business.

The authors urge Prime Minister Cameron to reverse this disastrous policy, but the odds of that happening are very slight. I hope I’m wrong, but I have repeatedly noted that Cameron almost always makes the wrong choice when deciding between liberty and statism.

President Obama wants to impose similar policies in the United States and there is every reason to expect similarly poor results. I’ve already posted evidence from IRS data showing that the rich paid much more tax following the Reagan tax cuts, so it shouldn’t shock anybody when the reverse happens if Obama is successful in moving America back toward a 1970s-style tax system.

To emphasize these critical points, let’s close with two videos. This first video explains the Laffer Curve and why politicians are foolish if they assume that there is a fixed linear relationship between tax rates and tax revenue.

This second video debunks the notion of class-warfare tax policy.

The Washington Post said today that a plan to “cut $33 billion from the federal budget” would be “the largest one-time reduction in U.S. history.”

Really?

The $33 billion in Democratic-proposed cuts are less than 1 percent of this year’s total spending, so we are considering very small cuts here. However, it is also true that Congress has been far more interested in growing spending than in cutting in recent decades. Still, the Washington Post said “in U.S. history,” which is a long time.

This federal budget table shows total federal spending since 1901. Total spending fell in 22 years out of the last 110 years. In 19 of those 22 years, spending was cut by more than 1 percent, or more than this year’s proposed Democratic cuts of $33 billion.

Indeed, even with $33 billion in cuts, total federal spending will still rise by more than $200 billion this year due to rising “entitlement” costs. And even in raw nominal dollars, the Washington Post isn’t correct because total federal spending fell $37 billion in 1946 and $61 billion in 2010.

We can also consider the $33 billion in proposed cuts within the applicable budget category–nondefense discretionary (NDD) spending. And we can adjust for inflation in order to fairly compare cuts in different time periods.

A $33 billion cut would reduce NDD this year by about 7 percent in constant dollars. This budget table shows that President Reagan and Congress cut NDD by 13 percent in 1982 in constant dollars.

So here is what we have discovered: Congress has reduced overall spending numerous times in the past; total spending will rise substantially this year even with proposed cuts; and Reagan cut nondefense discretionary spending more than the current $33 billion proposal would.

One year of small budget cuts won’t solve our fiscal problems. The budget-cutting drives of the early 1980s and mid-1990s made a bit of progress because they were sustained over a number of years while the economy boomed. Thus, the real challenge for Republicans will be whether they can follow up this year’s small cuts with much bigger cuts next year and beyond.

Over at Downsizing the Federal Government, we focused on the following issues this week:

• Michael Tanner’s new paper is a sobering reminder that it’s the major entitlement programs that are pushing us toward the cliff’s edge.
• This week the House Republican leadership finally put the Pentagon on the chopping block. However, the cuts suggested by the GOP are pathetic.
• The federal government engages in a lot of activities that are difficult to defend. But when it comes to sugar, the government’s protections are clearly indefensible.
• We’re still looking for a convincing argument as to why farmers deserve taxpayer- and consumer-funded special treatment compared with other businesses.
• Record spending levels…trillion dollar plus deficits…mountainous debt…a weak economy…what, Congress worry?
• Uncle Sam sticks it to the Easter Bunny.

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Many presidential foreign policy doctrines ago, George Kennan figured out what was wrong with them. In my latest post for The Skeptics, I rely on his insight to try to stop pundits from inventing an Obama Doctrine.

The national effort to discern an Obama Doctrine from our attack on Libya is likely to be futile. If it succeeds, it will be harmful. No one can make foreign policy without some theory or strategy. But as Kennan’s lament about the Truman Doctrine points out, doctrines tend to be post-hoc rationales of actions that confuse policy later. If taken seriously, they typically encourage foolish wars.

Kennan attributed the American desire for doctrines to our love of law and rules. I see it more as a product of divided power, which heightens the need for sales. Doctrines have a pseudo-scientific air that helps legitimate policy. They endow the messy process of presidential decision-making with false order. They over-generalize.

The rest of the post briefly applies this formula to all our presidential doctrines, from Monroe to Bush. With the exception of Nixon’s, almost all arose to justify military action and thus tend to encourage war. While I can imagine doctrines, like Weinberger-Powell, that might marginally help keep us out of trouble, even that substitutes a formula for careful consideration of action based on theory.

So I propose the Kennan Doctrine, which says don’t have a doctrine.