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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 11: March 17, 2015

  1. How Much Is Federal Spending Costing You?
  2. More Economic Flimflam on the Left
  3. Congressional Critics Miss Mark on Pot Legalization
  4. The Golden State’s Parks May Miss a Golden Opportunity
  5. New Blog Posts
  6. Selected News Alerts


1) How Much Is Federal Spending Costing You?

The federal government is not known for any predisposition toward full disclosure. Nevertheless, it periodically sheds light on what it has in store for ordinary people. The Independent Institute tries to decipher these clues and make sense of them for our growing audience. Most recently, we have updated our MyGovCost Government Cost Calculator, using newly available data and estimates from the Congressional Budget Office and the White House’s Office of Management and Budget. Now more than ever, it’s possible to estimate your lifetime federal tax liability.

Our calculator even tells you how much you would have earned had the money you sent to the Internal Revenue Service been invested in the stock market and earned historically average returns. The only information anyone needs to enter in our Government Cost Calculator is current age, current income, and level of educational attainment. Not only does our calculator give you a tax estimate and an alternative return, it can also tells you how much of your tax dollars will go to 18 different federal spending areas, such as healthcare, defense, and Social Security.

So check out our updated MyGovCost Government Cost Calculator! And after checking out your own numbers, see how the numbers would differ if you were someone like Apple’s Tim Cook, television icon Oprah Winfrey, or former U.S. President Bill Clinton, or if you were at the opposite end of the income distribution.

MyGovCost Updated!, by Craig Eyermann (MyGovCost News & Blog, 3/13/15)

MyGovCost.org – Home of the Government Cost Calculator

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2) More Economic Flimflam on the Left

The White House and its supporters are cheering the official jobs report for February as encouraging. The fine print, however, paints a different picture. Although the national unemployment rate fell from 5.7 percent to 5.5 percent, focus on this change ignores a worrisome statistic from the Bureau of Labor Statistics: the rate of labor-force participation (i.e., the percentage of the U.S. population that is available to work, including those working and unemployed job-seekers) actually fell last month, from 62.9 percent to 62.8 percent. This small percentage decline is bad news that overwhelms the good news of unemployment falling by two-tenths of a percentage point, according to Independent Institute Senior Fellow John C. Goodman. It suggests that some people who could have been job hunting no longer feel encouraged to do so.

The latest misdirection about the jobs-report isn’t the only economic con job that some on the left have tried to pull off. Perhaps the leading mischaracterization has to do with income stagnation. The common complaint, put forth by people like Paul Krugman and Thomas Piketty, is that average incomes have stagnated for the past 40 years. One thing they fail to note, however, is that non-wage compensation, in the form of Social Security, unemployment benefits, and total health and retirement benefits, have risen over the past four decades. In 1970, they amounted to 24 percent of personal income. In 2008, they represented 37 percent. In 2011, they accounted for 40 percent of personal income.

“Have middle-class incomes been stagnate for 40 years?” asks Goodman. “Only if you leave out 40 percent of their income. And more.”

February’s Job Numbers Are Worse than You Think, by John Goodman (Forbes, 3/10/15)

Priceless: Curing the Healthcare Crisis, by John C. Goodman

A Better Choice: Healthcare Solutions for America, by John C. Goodman

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3) Congressional Critics Miss Mark on Pot Legalization

In late February, Alaska and Washington, DC, did what many states and cities have already done: they legalized recreational use and possession of marijuana in small quantities. In response, two Republicans in the House of Representatives, Jason Chafetz of Utah and Mark Meadows of North Carolina, dashed off a complaint letter to District of Columbia mayor Muriel Bowser, reminding her that DC’s new pot policies violate federal law. What they didn’t do, however, was to look at the experiences of two states that legalized cannabis in 2012: Colorado and Washington State. Had they done so, they would have found that full pot legalization has not led to an increase in crime or traffic fatalities, according to Independent Institute Senior Fellow Benjamin W. Powell and doctoral student in economics, Audrey Redford.

Even more surprising to some is that pot smoking among teenage minors has failed to rise in Colorado and Washington State as some expected. “Survey data indicates that rates of recent marijuana usage by 12- to 17-year-olds dropped slightly from 4.14 percent to 3.72 percent in Colorado and from 4.49 percent to 3.70 percent in Washington between 2011-2012 and 2012-2013, respectively,” Powell and Redford write. Drug consumption, it turns out, is not very price sensitive. But this has long been known. That’s because lack of price sensitivity is one reason why, despite billions spent on drug prohibition since the early 1970s, the war on drugs has done little to lower consumption. Enforcing the nation’s drug laws has increased the prices of illicit substances, but instead of reducing consumption, this has merely encouraged suppliers to bring potent, and in some cases more dangerous, drugs to market.

“Instead of hindering D.C.’s effort to legalize marijuana, Congress should be eliminating federal laws that are inconsistent with states’ legalizations,” Powell and Redford continue. “In fact, evidence indicates that we would likely be better off if they legalized marijuana at the federal level too.”

Recent Marijuana Legalizations Are a Step in the Right Direction, by Benjamin W. Powell and Audrey Redford (Dallas Morning News, 3/12/2015)

Drug War Crimes: The Consequences of Prohibition, by Jeffrey Miron

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4) The Golden State’s Parks May Miss a Golden Opportunity

Will California’s state parks ever emerge from under the rubble of mismanagement, bureaucracy, and environmental decay? A blue-ribbon organization called Parks Forward has issued a gorgeous, full-color report filled with recommendations for revamping the troubled state park system. Unfortunately, it falls short of articulating the parks’ most essential needs, according to Independent Institute Policy Fellow Aaron L. White.

Three years ago, just as the state department of parks and recreation was on the verge of shutting down up to 70 of the state’s 280 parks due to budget cuts, agency officials mysteriously found $58 million needed to keep the parks open. Financial transparency is therefore essential (but not sufficient) for properly managing the 1.6 million acres of parkland in the state’s possession. To pull this feat off, greater outside management would be invaluable. Unfortunately, although the Parks Forward commission recommended that outside groups be utilized to help improve the parks, but it didn’t call for maximizing their use to achieve full financial transparency. Nor did it call for the kind of private-public partnerships have successfully managed public land in places like New York City’s Central Park.

The commission also fell short of ceding parkland control to non-profit land trusts, even though it acknowledges their success throughout the state. “In both approaches, an independent entity does what the state has failed to do—account for funds and balance an operating budget,” White writes. “The Parks Forward initiative is flawed on fiscal and environmental grounds and should not be implemented,” he continues. “Instead, California should expand public-private partnerships and land trusts to include every state park. That is a better way to expand accountability, environmental quality, and recreation for all Californians.”

California Parks Forward Initiative Is Step Backward , by Aaron L. White (Sacramento Bee, 3/11/2015)

The New Holy Wars: Economic Religion vs. Environmental Religion, by Robert H. Nelson

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5) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

Consuming More Taxpayer Dollars
K. Lloyd Billingsley (3/16/15)

MyGovCost Updated!
Craig Eyermann (3/13/15)

Trends for Federal Taxes and Spending
Craig Eyermann (3/10/15)

You can find the Independent Institute’s Spanish-language website here and blog here.

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6) Selected News Alerts

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