Only the Little People Pay Taxes by David Boaz

Tom Daschle has joined Timothy Geithner in the not-so-exclusive club of Obama Cabinet appointees who evaded tens of thousands of dollars in federal taxes until they were vetted for their Cabinet nominations. It's too bad Leona Helmsley can't be nominated as Commerce Secretary. I sympathize with anybody trying to hold down his tax bill. Government is too big and too expensive, few of us feel we get our money's worth from our taxes, and we all have better uses for our money than bridges to nowhere and free condoms.  But honestly, shouldn't people who want to increase taxes on the rest of us -- like Daschle, Geithner, Eleanor Holmes Norton, Chairman Charles Rangel, Al Franken, Governor David Paterson's top aide, Democratic National Convention staffers, Al Sharpton, and so on -- pay their own taxes?

Posted on January 30, 2009  Posted to Cato@Liberty

Flowers Aren’t Enough by David Boaz

"Small Government Returns as [Republican] Maxim," headlines the Washington Post.
The unanimous vote by House Republicans against President Obama's stimulus plan provided an early indication that the GOP hopes to regain power by becoming the champion of small government, a reputation many felt slipped away during the high-spending Bush years.
But small-government voters may not be persuaded that the GOP has returned to its principles on the basis of one vote against a bill proposed by the other party, which happens to be, in the words of Republican whip Eric Cantor, likely "the largest spending bill in history." Like a wife whose husband has strayed dozens of times over the past eight years, small-government voters may not feel that one Valentine's Day present is enough to restore trust. Especially when some of the prodigal Republicans are even now saying that they might vote for the largest spending bill in history on final passage.

Posted on January 30, 2009  Posted to Cato@Liberty

Political Prevaricators by David Boaz

As the Illinois Senate prepared to remove Gov. Rod Blagojevich from office, Republican state senator Mike Murphy said that Blagojevich "is an unusually good liar." Not that good, apparently. Not good enough to stay in office. As opposed to another controversial politician of whom those same words were said a few years ago. "Clinton is an unusually good liar," Senator Bob Kerrey (D-Nebraska) once told Esquire magazine. "Unusually good." Better than Blago, it would seem.

Posted on January 30, 2009  Posted to Cato@Liberty

Whatever Happened to the Blue Dog Democrats? by David Boaz

Remember the Blue Dog Democrats? They were the fiscally conservative Democrats from Southern and Western and rural districts who weren't going to go along with the big-spending leadership of their party. They've gotten a lot of attention, especially after a lot of new Blue Dogs were elected in 2006, helping to give the Democrats a majority in the House. But where are they now? After eight years of unprecedented profligacy, with a trillion-dollar increase in federal spending, and in the face of both trillion-dollar deficits and unimaginably large long-term fiscal imbalances, the House is just about to vote to spend $825 billion that the government doesn't have. Will any Blue Dogs vote no? Will any Blue Dogs live up to their campaign rhetoric about fiscal conservatism? Don't bet on it. Their record isn't as good as they'd like you to believe. John Fund pointed out back in 2005 that they were not supporting any Republican efforts to limit spending. But maybe that was just because the Republicans didn't try to work with them. Fair enough. Now they're part of the Democratic majority. And apparently they're satisfied with vague promises from the Obama administration that after we spend all this money, we'll get back to fiscal responsibility. (Lord, make me chaste, but not just yet.) Blue Dogs supported fiscal responsibility at some vague point in the misty past, and they will strongly support fiscal responsibility at some vague point in the future, but right now they're going to vote to put their constituents another $825 billion in debt. Their members range from Rep. Mike Arcuri of New York to Rep. Charlie Wilson of Ohio, and include the newly promoted Kirsten Gillibrand. If you seek their monument, look around you. UPDATE: By my colleague Tad DeHaven's count, 37 out of 43 "Blue Dogs" voted for the spending bill that will probably end up costing about $900 billion. Congratulations to actual Blue Dogs Allen Boyd, Jim Cooper, Brad Ellsworth, Collin Peterson, Heath Shuler, and Gene Taylor.

Posted on January 28, 2009  Posted to Cato@Liberty

Economists against the Stimulus by David Boaz

Cato has just published a full-page ad in the New York Times with the names of some 200 economists, including some Nobel laureates and other highly respected scholars, who "do not believe that more government spending is a way to improve economic performance" -- contrary to widespread claims that "Economists from across the political spectrum agree" on a massive fiscal stimulus package. Of course, many economists don't like to sign joint statements, so this is only a fraction of stimulus opponents in the profession. Greg Mankiw pointed to a few noted skeptics last week:
In a TV interview last month, Vice President Joe Biden said the following:
Every economist, as I've said, from conservative to liberal, acknowledges that direct government spending on a direct program now is the best way to infuse economic growth and create jobs.
That statement is clearly false. As I have documented on this blog in recent weeks, skeptics about a spending stimulus include quite a few well-known economists, such as (in alphabetical order) Alberto Alesina, Robert Barro, Gary Becker, John Cochrane, Eugene Fama, Robert Lucas, Greg Mankiw, Kevin Murphy, Thomas Sargent, Harald Uhlig, and Luigi Zingales--and I am sure there many others as well. Regardless of whether one agrees with them on the merits of the case, it is hard to dispute that this list is pretty impressive, as judged by the standard objective criteria by which economists evaluate one another. If any university managed to hire all of them, it would immediately have a top ranked economics department.
And of course Mankiw's list isn't comprehensive. There's also former Treasury economist Bruce Bartlett, former Yale professor Philip Levy, former Ohio State and Federal Reserve economist Alan Viard, Russell Roberts of George Mason, and many more. Under the current circumstances, plenty of economists are endorsing large fiscal stimulus programs. But it's just not correct to claim that there's any consensus or that "every economist . . . from conservative to liberal" supports the kind of massive spending program that the Obama-Biden administration has proposed. UPDATE: Martin Feldstein, whose support last October for a fiscal stimulus is the reed upon which journalists justify their claims about "economists across the political spectrum," now calls this stimulus bill "an $800 billion mistake."

Posted on January 28, 2009  Posted to Cato@Liberty

The Real Sprawl Problem: Government by David Boaz

Should we really give another trillion dollars to a government that doesn't know how big it already is?
Agriculture Secretary Tom Vilsack... learned that his new workplace contains a post office, fitness centers, cafeterias and 6,900 employees. But he remained uncertain about exactly how many employees he supervises nationwide. "I asked how many employees work at USDA, and nobody really knows," he said.

Posted on January 26, 2009  Posted to Cato@Liberty

Kirsten Gillibrand, a Not-Very-Blue-Dog Democrat by David Boaz

Journalists are calling the newly appointed senator from New York, Kirsten Gillibrand, a "fiscally conservative Blue Dog Democrat." Even some conservatives like Ed Morrissey have bought the line that she's a fiscal conservative. It's hard to find fiscally conservative Democrats. Have we indeed finally found one? Let's go to the tape. The National Taxpayers Union rates members of Congress on "all votes that could significantly affect the amounts of federal taxes, spending, debt, or regulatory impact" -- 427 House votes in 2007.  In that session of Congress, the only one that Gillibrand served in for which scores have been calculated, Gillibrand voted with the taxpayers 7 percent of the time. That's right, 7 percent. That makes her just as fiscally conservative as Rep. Barney Frank, Rep. Maxine Waters, and Rep. Henry Waxman. (Though, to be sure, it makes her just slightly more fiscally conservative than Rep. Rahm Emanuel, whom the newspapers have told us is a centrist.) The ratings from Citizens Against Government Waste, on spending, earmark, and porkbarrel bills, tell the same story: Rep. Gillibrand voted against wasteful spending 8 percent of the time. And similarly at the Club for Growth ratings: Gillibrand got a rating of 12. On the Club's ratings, she never once voted in the interests of taxpayers, but she did vote for the U.S.-Peru free trade agreement. She also voted against reinstatement of the Fairness Doctrine. Combined with her 90 percent rating from the ACLU and her A rating from the NRA, maybe she is indeed a free-trader and a civil libertarian. But the search for a fiscally conservative Democrat goes on.

Posted on January 25, 2009  Posted to Cato@Liberty

Small-Government Republicans by David Boaz

House Minority Leader John Boehner tells NPR, "I and most Republicans believe that a smaller, less costly government gives us a healthier economy and a healthier society." Reality check: How the federal budget grew during the years of President Bush and a Republican Congress:

Posted on January 22, 2009  Posted to Cato@Liberty

Can We Afford All This Spending? No We Can’t. by David Boaz

President Obama says that "our economy is badly weakened," partly because of "our collective failure to make hard choices." And that when government programs don't work, "programs will end." Yet he continues to press for a spending program that apparently only begins at $825 billion. In 1993 a Democratic Congress failed to pass President Clinton's request for a $16.3 billion stimulus package. A year ago Congress passed a $150 billion stimulus bill proposed by President Bush, a fitting cap to Bush's massive increase in federal spending. It had no apparent effect. And now, in a continuing ratcheting up of spending levels, President Obama and Congress propose to spend the not-very-long-ago unimaginable sum of roughly a trillion dollars. As Chris Edwards wrote recently, we're already looking at deficits of two trillion dollars in fiscal years 2008 and 2009. If that much deficit spending doesn't do the Keynesian trick, do we really expect that another trillion dollars will? Political leaders talk about making the hard choices and laying the groundwork for the future, but their actions demonstrate a different approach. They try to solve problems -- or at least to be seen to be solving problems -- today without in fact thinking about the long term. Where will this new spending come from? It could come from raising taxes; but even President Obama seems reluctant to raise taxes during a sharp economic slowdown, indicating that he does know that taxes reduce work, investment, and production. And would anyone propose to raise taxes by $825 billion? Or by the $3 trillion that it would take to cover the already-projected deficits and the current proposed spending? And of course money taxed away from those who earn it is taken out of the economy, only to be reinjected by politicians and planners rather than by consumers and investors. That means, as the Washington Post reported on Tuesday, "It will fall to Obama and his subordinates to decide winners and losers in the banking, financial services, automobile and other major industries, a span of control that dwarfs President Harry S. Truman's attempt to seize control of steel production." That's not good for freedom or for economic growth. Read more...

Posted on January 21, 2009  Posted to Cato@Liberty

Bush’s Gift to Obama: A More Powerful State by David Boaz

Friends of freedom, the Constitution, and limited government have plenty of reasons to deplore the past eight years. But in case you thought we might get some relief now, this Washington Post article from inauguration morning will change your mind. One of the points it makes -- as some of us warned during the past few years -- is that powers claimed by one president are left in the hands of the next, even though the first president's supporters might have less confidence in his successor's integrity and wisdom. So here's the government that President Bush and the Republicans have turned over to President Obama and the Democrats:
Barack Obama takes office today with a realistic prospect of joining the ranks of history's most powerful presidents.... Historians, recent White House officials and senior members of the incoming team expressed broad agreement that Obama begins his term in command of an office that is at or near its historic zenith.... The federal government itself is a far more potent instrument, in its breadth and depth of command over national life, than it has ever been before. Largely in response to the threat of terrorism, the Bush years and President Bill Clinton's two terms saw "an incredible period of state-building that's unrivaled in American history except by the creation of the national security state in the 1940s and '50s," said Jack Balkin, a professor of constitutional law at Yale whose blog, Balkinization, is often cited by members of the Obama team. By necessity or design, and most often by passive acquiescence, Congress and the courts have let presidents do most of the steering of the new and expanded institutions that govern finance, commerce, communications, travel, energy production and especially intelligence gathering. When there were struggles for dominance among the three branches, most of them ended with lopsided victories for the executive. The legislative power to declare war and ratify treaties, for example, has been deeply eroded by the practice of presidents to launch military operations on their own and to make major international commitments -- such as December's "status of forces" pact with Iraq -- by "executive agreement" rather than by treaty requiring a two-thirds Senate vote. After lengthy controversy over warrantless domestic surveillance in the Bush administration, Congress authorized the program without obtaining any details about what, exactly, is collected and how it is used. "Really, in the last 80 years we've seen a gradual, and at times not gradual, concentration of power in the executive office," said William P. Marshall, who served as deputy White House counsel under Clinton.... Even in its first iteration, the government's $700 billion expenditure to shore up U.S. financial systems will rival the roughly $1 trillion a year in "discretionary" federal spending -- the portion of the budget, not including interest on loans and mandatory benefits such as Social Security, that is negotiated each year between the White House and Congress. Obama, who told The Post last week that he must "go big" in response to "the biggest emergency since World War II," has spoken elliptically of the prospect that the cost could double.
Congress, the principal power of which is thought to be control of the national purse, has made little pretense of managing these vast expenditures. It will fall to Obama and his subordinates to decide winners and losers in the banking, financial services, automobile and other major industries, a span of control that dwarfs President Harry S. Truman's attempt to seize control of steel production.
We don't know yet whether President Obama will prove to be FDR or Jimmy Carter. But it's clear that the freedom movement faces challenges that aren't going away.

Posted on January 21, 2009  Posted to Cato@Liberty

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