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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 43: October 27, 2015

  1. How Big Is Big Government?
  2. Two Cheers for Jeb Bush’s Health Plan
  3. Race for the White House: Race to the Bottom?
  4. Government’s Toxic Disasters
  5. New Blog Posts
  6. Selected News Alerts



1) How Big Is Big Government?

Americans complain about Big Government, but exactly how big is it? Economists have tried to answer the question using simple math: by comparing total government spending in a given year (G) to the value of a nation’s total final output of goods and services sold during that year (GDP). Unfortunately, this method utterly fails to measure the size of government, as Independent Institute Senior Fellow Robert Higgs, author of Taking a Stand: Reflections on Life, Liberty, and the Economy, explains in the current issue of The Independent Review.

It fails in part because official estimates of the dollar value of government spending and unsold government services are completely arbitrary. They are “calculated” using non-market—and therefore fictional—“prices.” This method also fails because it overlooks the hidden costs of government via its imposition of legal and regulatory requirements. The costs are staggering: by one estimate, it cost Americans $1.83 trillion to comply with federal regulations in 2013.

That figure doesn’t include the costs of conforming with state and local edicts, obviously. If anyone ever manages to tally up this component, we will of course get a much better (and more arresting) picture of the size of government in the United States. “No one needs to tell Americans, however, how onerous and exasperating the entire burden of government regulations and related red tape has become,” Higgs writes. “Virtually every part of economic and social life now bears these heavy burdens, and any truly meaningful appraisal of the size of government today must take them into consideration along with the amounts the various governments are spending.”

How Big Is Government in the United States? by Robert Higgs (The Independent Review, Fall 2015)

Taking a Stand: Reflections on Life, Liberty, and the Economy, by Robert Higgs

Read Judge Andrew P. Napolitano's Foreword to Taking a Stand (pdf)

Get your e-subscription or print subscription to The Independent Review today! (Print subscription includes FREE book.)

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2) Two Cheers for Jeb Bush’s Health Plan

If opponents of the Affordable Care Act sweep Congress and the White House next year, what will they do about healthcare reform? In a recent piece for Forbes, Independent Institute Senior Fellow John C. Goodman looks at Jeb Bush’s proposal and finds that it offers many advantages over Obamacare.

Florida’s former governor has a plan with five major features in its favor, according to Goodman. It has no individual or employer mandates. It ends the tax bias against consumers in the individual market. Small businesses would be allowed to help their workers get coverage they could keep if they change employers. Health Savings Accounts would be greatly improved. And state governments would be able to allow insurers to offer risk-adjusted plans.

Despite his general approval of the plan, Goodman has a few quibbles. “The Bush team doesn’t say how they would pay for this plan. So let me nominate a candidate: use the Obamacare revenues.”

The Jeb Bush Health Plan: Five Ways It Differs From What Obama’s Done, by John C. Goodman (Forbes, 10/13/15)

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

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

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3) Race for the White House: Race to the Bottom?

Is there a single presidential candidate this election season who is “very good” or “great” on the issues of peace, prosperity, and liberty? Why is it so hard for voters to find a candidate who supports free enterprise and knows how and why to keep American troops at home? It can’t be because a politician would need to reinvent the pro-growth, pro-peace, pro-liberty wheel. In principle it’s easy to find and articulate the right principles. Long ago Adam Smith made the case against economic restrictions that make prosperity so elusive for so many; James Madison explained why the greatest enemy of liberty is war; and William Graham Sumner argued the pro-liberty case for reducing the U.S. government’s footprint overseas. And yet no single candidate who has a chance of living in the White House embodies each of those ideas, according to Independent Institute Research Fellow Sheldon Richman.

“For peace and freedom lovers, it’ll be a long road to Nov. 8, 2016,” Richman writes in an op-ed for Intellectual Conservative.

In his latest column at the Huffington Post, Ivan Eland, senior fellow and director of Independent Institute’s Center on Peace and Prosperity concurs. No candidate from either electable party embodies all the right principles. And in the realm of foreign policy, most seem eager to adopt policies destined to backfire. GOP members of the House Benghazi Committee even failed to name Hillary Clinton’s worst mistakes on Libya. “In the constricted American political system, a voter only gets two real choices for president, so it all depends now on who the Republicans put up against her,” Eland writes. “Somehow, in the end, I doubt that the American people will be given a sensible choice for whom to vote.”

Presidential Hopefuls Ignore Key Pro-Freedom Principles, by Sheldon Richman (Intellectual Conservative, 10/25/15)

Republican Buffoons Have Handed the Nomination to Hillary; Let’s Examine Her Record, by Ivan Eland (The Huffington Post, 10/26/15)

Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty (Updated Edition), by Ivan Eland

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4) Government’s Toxic Disasters

The federal Department of the Interior last week issued a 132-page study faulting the Environmental Protection Agency for accidentally spilling three million gallons of toxic wastewater in Colorado’s Animas River in early August. The EPA “lacks the technical skills to handle such tricky projects, a government assessment reported,” the New York Times put it. By no means was this the first time a major environmental disaster came about through government ineptitude. One of the most important toxic calamities—Love Canal—“was a disaster traceable to government misdeeds,” writes Independent Institute Research Fellow Gary M. Galles.

The toxic leak at Love Canal, near Niagara Falls, is widely blamed on private parties, but not only was it caused by government, several levels of government share blame, Galles explains. After the Hooker Chemical Company capped the dumpsite, years after its purchase in 1942, the local school board seized it by eminent domain and built a school on the site—even though Hooker had shown officials the toxic sludge that oozed from it. Years later, the city of Niagara Falls installed sewers and punctured the dump’s walls and caps, exposing more people to toxins during the rains of 1976. Hooker was fined more than $100 million. The Love Canal spill also spawned the EPA’s painfully slow and costly Superfund clean up program, which has forced companies not at fault to cover the costs of pollution remediation.

“As with Love Canal, the Animas River disaster underscores the dangers of irresponsible government,” Galles writes. “Hopefully, its legacy will not be to have spawned more bad legislation based on a false narrative. Instead, it should always remind us that in the realm of natural resources, government too often acts less like a competent environmental sheriff and more like a bumbling Barney Fife.”

EPA’s Toxic Spill in Colorado Recalls Government Misdeeds in Love Canal Disaster, by Gary M. Galles (InsideSources, 10/9/15)

Cutting Green Tape: Toxic Pollutants, Environmental Regulation and the Law, edited by Richard L. Stroup and Roger E. Meiners

Re-Thinking Green: Alternatives to Environmental Bureaucracy, edited by Robert Higgs and Carl P. Close

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5) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

Bullet Train Has Costly Tunnel Vision
K. Lloyd Billingsley (10/26/15)

Negotiating in Bad Faith
Craig Eyermann (10/25/15)

The Truth on Unfunded Pension Liability
K. Lloyd Billingsley (10/21/15)

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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  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org