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Volume 12, Issue 37: September 14, 2010
- The Futility of Another Economic Stimulus Plan
- Fixing the Social Security Disaster
- The End of the U.S. Empire
- Economic Religion vs. Environmental Religion in America (Washington, DC; 10/7/10)
- This Week in The Beacon
1) The Futility of Another Economic Stimulus Plan
The economic stimulus policies failed, but more are in the works: President Obama has recently proposed to spend $50 billion for infrastructure projects, and Fed Chairman Bernanke has suggested further increasing the growth of money and credit. In his latest column for the Washington Post Writers Group, Independent Institute Senior Fellow Alvaro Vargas Llosa sheds light on the dangers of attempting to spend our way to economic health.
If almost $1 trillion of fiscal spending and a tripling of the Feds balance sheet have not done the trick, leaders should realize by now that the process of economic healingpaying down debts, liquidating redundant assets, saving and, eventually, investing and consuming againcannot be altered by political diktat, writes Vargas Llosa. Responding to a recession with another artificial credit expansion postpones the recovery and engenders, well, more boom and bust.
Fiscal uncertainties also loom large. Nearly half of the U.S. debt outstanding will mature in the next two yearsand perhaps more will also come due soon. If foreign investors, who already own about half the U.S. debt, decide that Treasury securities would be too risky to purchase, what then? The United States has a large reserve of entrepreneurial know-how that can pull the economy out from under the rubble. But for that to occur, our leaders in Washington must recognize the harm they are doing and stop piling up more and more rubble.
The Illusion of a Stimulus, by Alvaro Vargas Llosa (9/8/10) Spanish Translation
Lessons from the Poor: Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa
Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa
The Che Guevara Myth and the Future of Liberty, by Alvaro Vargas Llosa
2) Fixing the Social Security Disaster
The Congressional Budget Office reports that Social Security will pay out more than it takes in six years ahead of earlier estimates. Other problems have also been long apparent: Social Security redistributes money from relatively poor young workers to better-off retirees. It also shortchanges groups with shorter life expectancies such as African Americans who die on average about five years earlier than whites. And Social Security taxes have grown and grown, with FICA taxes having risen more than six-fold, from 2 percent in the 1930s to more than 12 percent today, including both employee and employer shares.
Fixing a deeply flawed system requires bold measures. The partial privatization schemes proposed by Bush and Clinton would likely have been disastrous, given the recent financial debacle, according to Independent Institute Research Analyst Anthony Gregory. Whats needed is something more radical, he argues in a new op-ed.
Instead of trying to save this horrible program, as politicians of both parties perennially propose, we should end it, writes Gregory. Short of simple abolition, the program should be phased out, beneficiaries should be paid out of the general fund as with any other welfare program (which is at least honest accounting) and young people should be free to opt out of the tax with the full understanding that there will be no government retirement check for them when they hit old age. There wont be anyway.
The Flaws of Social Security, by Anthony Gregory (Human Events, 9/2/10)
The Anatomy of Social Security and Medicare, by Edgar K. Browning (The Independent Review, Summer 2008)
Privatizing Social Security the Right Way, by Laurence J. Kotlikoff (The Independent Review, Summer 2000)
More on Social Security
3) The End of the U.S. Empire
A growing need to focus on mending a domestic economy crippled by massive public debt may necessitate a smaller role for the United States on the world stage. Internationalists such as New York Times columnist Thomas Friedman and Johns Hopkins University professor Michael Mandelbaum fear that this prospect would threaten global peace and prosperity. Ivan Eland, director of the Independent Institutes Center on Peace and Liberty, is of a different mind.
In fact, Americans will be better off without the burdens and false blessings of empire, Eland argues in his latest op-ed. Consider history. Had Woodrow Wilson not intervened in World War I, Russia would likely have pulled out of the war and Lenin might not have risen to power. Had the United States not fought an expansive Cold War, Moscow would have spent more on aid and governance for developing countries, thereby hastening the fall of the Soviet Union. And the United States would not have helped to create the conditions for the rise of al-Qaeda.
[T]o accurately portray U.S. interventionist empire-building, especially after World War II, is not to always blame America first, writes Eland. In fact, disagreeing with the governments foreign policy is different from hating Americas society and way of life. The founders of the United States, who are regularly idolized by most Americans, would roll over in their graves at the mutation of their traditional, peaceful, and restrained foreign policy into a militaristic, globe-girdling empire that is exhausting the country economically and ruining the republic that they created.
No Tears Needed Over the Demise of the U.S. Empire, by Ivan Eland (9/8/10)
Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, by Ivan Eland
The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland
Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland
4) Economic Religion vs. Environmental Religion in America (Washington, DC; 10/7/10)
Economics and environmentalism are types of modern religions. So says Robert H. Nelson in his analysis of the roots of economics and environmentalism and their mutually antagonistic relations in the twentieth and twenty-first centuries. The present debate raging over global warming exemplifies the clash of these two public theologies. On one side, environmentalists warn of certain catastrophe if we do not take steps now to reduce the release of greenhouse gases; on the other side, economists are concerned with whether the benefits of action to prevent anthropomorphic global warming scenarios will be worth the high costs.
Join Nelson, Steven Hayward, F. K. Weyerhaeuser Fellow at the American Enterprise Institute, and Max L. Stackhouse, theologian and Professor Emeritus, Princeton Theological Seminary, as they discuss these contemporary struggles and the heated battle between these competing secularized religions of economics and environmentalism. The outcome will have consequences for us all.
Robert H. Nelson is Senior Fellow of the Independent Institute and Professor at the School of Public Policy of the University of Maryland. He is author of The New Holy Wars: Economic Religion vs. Environmental Religion in Contemporary America (winner of the Eric Hoffer Grand Prize Book Award).
Steven F. Hayward is F. K. Weyerhaeuser Fellow at the American Enterprise Institute, Senior Fellow at Pacific Research Institute, co-author of the annual Index of Leading Environmental Indicators, and author of biographies of Ronald Reagan, Jimmy Carter, and Winston Churchill.
Max L. Stackhouse is the Rimmer and Ruth de Vries Professor of Reformed Theology and Public Life Emeritus, Princeton Theological Seminary, and the General Editor of the four-volume God and Globalization series.
Thursday, October 7, 2010
Wine & Cheese Reception: 5:00 PM
Program: 67:30 PM
The Independent Institute
1319 18th St., NW, Washington, DC, 20036
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Free. RSVP Today. Reservations are suggested. Phone: 800-927-8733.
Praise for The New Holy Wars: Economic Religion vs. Environmental Religion in Contemporary America, by Robert H. Nelson:
A completely different framework for thinking about ways in which both politics and theology have affected thinking about climate change is found in The New Holy Wars: Economic Religion Versus Environmental Religion in Contemporary America by Robert H. Nelson. Nelson, an economist who worked in the Department of the Interior for 18 years and now teaches environmental policy at the University of Maryland, offers a provocative analysis of environmentalism and economics as two competing forms of secular religion in America.
Nelson makes an overwhelmingly persuasive case that in our times the leading secular religion was once economics and is now environmentalism. . . . Out of that utterly original idea for scholarly crossoversgood Lord, an economist reading environmentalism and even economics itself as theology!come scores of true and striking conclusions. . . . Its a brilliant book, which anyone who cares about the economy or the environment or religion needs to read. Thats most of us.
Deirdre McCloskey, Distinguished Professor of Economics, History, English, and Communication, University of Illinois at Chicago
Anyone who wants to understand twenty-first century politics should begin with The New Holy Wars, which makes clear the fundamental conflict between how economists and environmentalists see the world.
Andrew P. Morriss, H. Ross and Helen Workman Professor of Law and Business, University of Illinois, Urbana-Champaign
Purchase The New Holy Wars.
Read a detailed book summary.
Event Website: Economic Religion vs. Environmental Religion in America
5) This Week in The Beacon
Stay informed. Enter the fray. Read and comment on the Independent Institute blog.