Perils of Government Investing
The questions at the center of the upcoming debate on Social Security’s future will be, What kind of private investment, and who should do the investing? Michael Tanner, director of Cato’s Project on Social Security Privatization, warns in “The Perils of Government Investing” (Briefing Paper no. 43) that those are critical questions because government investment of Social Security funds could make the federal government the largest shareholder in American corporations. Tanner points out that Federal Reserve chairman Alan Greenspan says that it is impossible to “insulate” government investment “from the political process.” Government investment of Social Security payroll taxes would result in a dangerous mix of government involvement in corporate governance and “social investing.”
Failed Intervention in Bosnia
The three‐year‐old Dayton Agreement has failed to accomplish its main objective and should be abandoned, writes Cato foreign policy analyst Gary Dempsey in a new study, “Rethinking the Dayton Agreement: Bosnia Three Years Later” (Policy Analysis no. 327). “The Clinton administration’s continued and uncritical devotion to the agreement is compromising U.S. national security and saddling the United States with an expensive yet futile nation‐building operation of unknown duration.” The study finds that the “goal of creating a unitary, multiethnic Bosnian state is not realistic.” The Clinton administration has refused to consider changing course, however. “The administration needs to jettison its presumption that there are only two options for U.S. policy on Bosnia: adhere to the Dayton Agreement or cut and run. There is another option: a negotiated three‐way partition of Bosnia overseen by a European‐led transition force. That is the most politically feasible way to create the conditions necessary to allow the departure of U.S. troops at the earliest possible date.”
Throw the Other Guy’s Bums Out, Too In the new Cato study “What Term Limits Do That Ordinary Voting Cannot” (Policy Analysis no. 328), Harvard Law School professor Einer Elhauge addresses the questions: Why do the same voters who vote for term limits also routinely vote to return senior incumbents to office? Why don’t they vote the bums out? The answer is straightforward: “Voting your bum out is not a solution when what you want to do is oust the other districts’ bums. For that you need term limits.” The fact that incumbents tend to get reelected at very high rates even though large majorities of voters favor term limits is perfectly logical, he notes. “A district that ousts its senior incumbent suffers a loss of relative clout in the legislature. To avoid that loss of power, it behooves individual districts to vote to retain their incumbents.” The solution is also straightforward: “If all the districts collectively could agree to oust their senior incumbents simultaneously, no district would suffer a loss of relative power, and each district would gain more accurate representation. Term limits are effectively just such an agreement.”
U.S. Foreign Policy Spawning Terrorism
One‐third of all terrorist attacks worldwide in 1997 were perpetrated against U.S. targets. That is a very high percentage “considering that the United States—unlike nations such as Algeria, Turkey, and the United Kingdom—has no internal civil war or quarrels with its neighbors that spawn terrorism,” writes Ivan Eland, Cato’s director of defense policy studies. “The major difference between the United States and other wealthy democratic nations is that it is an interventionist superpower.” In “Does U.S. Intervention Overseas Breed Terrorism? The Historical Record” (Foreign Policy Briefing no. 50), Eland points out that the Pentagon’s own Defense Science Board finds that “a strong correlation exists between U.S. involvement in international situations and an increase in terrorist attacks against the United States.” Eland recommends that the United States adopt a policy of military restraint: “The United States could reduce the chances of devastating—and potentially catastrophic—terrorist attacks by adopting a policy of military restraint overseas.”
Nuke the Test Ban Treaty
The U.S. Senate should reject the proposed Comprehensive Test Ban Treaty and fund the resumption of limited testing, writes defense analyst Kathleen C. Bailey in a new Cato paper. In “The Comprehensive Test Ban Treaty: The Costs Outweigh the Benefits” (Policy Analysis no. 330), Bailey argues that the treaty is unenforceable, unverifiable, and unwise policy. Signed by President Clinton in September 1996 and to be considered by the Senate this year, the CTBT has limited political benefits and is “not worth the high cost to U.S. national security.” Weapons testing is essential to U.S. national security, according to Bailey, because “evolution in technologies for safety, nuclear delivery systems, and enemy defenses may render the now‐modern U.S. nuclear arsenal technologically obsolete or less safe.” She notes that “at present, the United States is two years or more away from being able to conduct a nuclear test. This lack of readiness will inevitably worsen as skilled experts retire and die, equipment ages or becomes obsolete, and financial support erodes.” Bailey believes that, “from a purely technical standpoint, it would be most prudent for the U.S. Senate to reject the CTBT and to allocate funds for resumption of U.S. testing and for reconstruction of the U.S. nuclear weapons production infrastructure.” But she notes as well that “it may be politically desirable to undertake some limitations on testing.”
Trashing Government Intervention in Refuse
One of the biggest environmental issues at the state and local levels is garbage—how to collect it, dispose of it, recycle it, and pay for doing so. In a new Cato study, “Time to Trash Government Intervention in Garbage Service” (Policy Analysis no. 331), Peter VanDoren, assistant director of environmental studies at Cato, challenges the reigning orthodoxy that the government must decide those questions for citizens. That belief, VanDoren points out, is grounded in the assumption that economies of scale and collection route density mean the government must have a monopoly on trash collection. VanDoren’s research on the economics of refuse markets reveals that government management of garbage service is unnecessary and counterproductive. He argues that homeowners should be allowed to choose among competing collection firms and that homeowners, not bureaucrats, should have the final say about what kind of service they want.
This article originally appeared in the March/April 1999 edition of Cato Policy Report.
Full Issue in PDF (16 pp., 317 Kb)