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The Lighthouse

The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 20, Issue 9: February 28, 2018

  1. Republican Congress Rolls Back Entitlement Reform
  2. Is Proposed Age Limit on Rifle Purchases Unconstitutional?
  3. Getting Toll Roads Right
  4. Trade Restrictions: A Tax on Consumer Choice
  5. Independent Updates


1) Republican Congress Rolls Back Entitlement Reform

Independent Institute Research Fellow Craig Eyermann calls the recent bipartisan budget deal “ugly.” For anyone who read the fine print, it also came with a big surprise: It completely dismantled Obamacare’s cap on Medicare spending, arguably the only decent provision in the 2013 healthcare overhaul. The cap, which eliminated $52 trillion of unfunded federal government liability, was the largest reform in federal entitlements in our lifetime, according to Independent Institute Senior Fellow John C. Goodman and co-author Thomas R. Savings, in a new op-ed at Forbes. And yet Republican members of Congress just voted to scrap the Medicare spending cap.

It’s a classic case of elected officials promising one thing (entitlements reform, in this case) while delivering its opposite (reinstating a spending plan for which it has no dedicated funds). Unfortunately, examples of Congress failing to act on its better promises are too numerous to count.

Congress’s removal of the Medicare spending caps raises other questions related healthcare reform, Goodman and Saving write. “Instead of trips to the doctor’s office, why can’t seniors get consultation by phone or email or teleconference—the way many non-seniors do? Instead of a trip to the emergency room at nights and on weekends, why can’t they have access to Uber-type house calls?” Such changes would be adopted quickly—if only enough members of Congress followed through on a commitment to genuine reform.

The Trillion Dollar Surprise in the Budget Deal, by John C. Goodman and Thomas R. Saving (Forbes, 2/22/18)

Inside President Trump’s 2019 Budget Proposal, by Craig Eyermann (MyGovCost News & Blog, 2/19/18)

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

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

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2) Is Proposed Age Limit on Rifle Purchases Unconstitutional?

Last week, in response to the horrific mass shooting in Parkland, Florida, President Trump endorsed Sen. Dianne Feinstein’s call to raise the legal age for buying an AR-15-style semi-automatic rifle to 21 years and older. Would such a law pass constitutional muster? Independent Institute Research Fellow Stephen P. Halbrook, who has argued gun-law cases before the U.S. Supreme Court, doesn’t think so.

“The proposed ban on federally licensed dealers selling rifles, including the AR-15, to persons in the 18-to-20 age group would, in my view, violate the Second Amendment,” Halbrook told the Washington Examiner. “At the time of the founding, 18 was the age for membership in the militia under the federal Militia Acts of 1792 and the state militia laws. Each militiaman was required to provide his own musket or rifle.”

Although the 1968 federal gun law prohibited anyone under age 21 from purchasing a handgun, it did not restrict 18- to 20-year-olds from buying a rifle. “I predict that there will be significant pushback to a rifle sale ban on the 18-20 age group, as that has never been illegal in U.S. history,” Halbrook said. The author of several books on gun rights and gun control, including The Founders’ Second Amendment and Gun Control in the Third Reich, Halbook recently finished writing Gun Control in Nazi-Occupied France: Tyranny and Resistance, to be published by the Independent Institute this May.

Is Trump’s Push for an AR-15 Age Limit Constitutional? (Washington Examiner, 2/25/18)

Video: Sr. Fellow Stephen P. Halbrook on State and Federal Gun Laws (Fox News Channel, 2/20/18)

The Founders’ Second Amendment: Origins of the Right to Bear Arms, by Stephen P. Halbrook

Gun Control in the Third Reich: Disarming the Jews and “Enemies of the State”, by Stephen P. Halbrook

Gun Control in Nazi-Occupied France: Tyranny and Resistance, by Stephen P. Halbrook

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3) Getting Toll Roads Right

Tolls can reduce traffic congestion—but not if they’re designed haphazardly. Transit managers and commuters outside of Washington, DC, learned the cost of poorly structured road tolls in December, when newly introduced congestion-pricing tolls were set too high on a section of Interstate 66 in Northern Virginia, possibly setting back the cause of toll roads. It’s unfortunate, because tolls are a key tool to modernizing transportation infrastructure.

So, what went wrong? As Independent Institute Research Fellow Gabriel Roth notes in an op-ed at E21, Virginia’s transportation policymakers set their tolls based on an arbitrary target speed of 55 miles per hour. Unfortunately, they didn’t first validate their assumption that this target actually optimized economic benefits. Also, they unnecessarily exempted high-occupancy vehicles from the toll, in effect putting additional upward pressure on non-exempt vehicles to bear the toll burden.

Setting a lower toll limit—which would have attracted more drivers but slowed traffic speeds to 45 mph to 50 mph—would have softened the price hike for commuters and reduced dislocations caused by the sudden price surge. And even at those sub-55 mph speeds, commuters would have seen their travel times improve. Toll pricing should also be flexible, so that road managers can adjust traffic flows as they deem prudent. “Addressing these issues would make it easier to use tolls to reduce traffic congestion and fund infrastructure,” Roth writes. “Where public authorities have difficulty introducing tolls, private entities can be contracted to operate them, as has been done successfully elsewhere in Virginia.”

Tolls Can Fund Infrastructure and Reduce Congestion, by Gabriel Roth (E21, 2/20/18)

Street Smart: Competition, Entrepreneurship and the Future of Roads, edited by Gabriel Roth

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4) Trade Restrictions: A Tax on Consumer Choice

President Trump rightly considers his rollback of Obama-era regulatory edicts and the GOP’s overhaul of the federal tax code to be major boons for many American households and businesses. Unfortunately, his protectionist trade policies work in the opposite direction, making it harder for many to live comfortably and conduct business profitably, explains Independent Institute Research Fellow Gary M. Galles in a recent op-ed for The Hill.

Economic competition in a free market gives consumers—including domestic businesses that buy imports—“better options, lower prices, and higher quality,” Galles writes. Protectionism, in contrast, is a frontal assault on competition. “Consequently, it harms consumers by in effect taxing them and giving most of the benefits (in the form of higher prices) to government-favored domestic producers.”

The above wording has profound implications. Aside from their strictly economic damage, protectionist trade policies also make domestic politics more toxic, by creating a special category of beneficiaries at the expense of the broader public—the exact opposite of draining the political swamp. Galles writes: “White House assertions that consumers will gain from tariffs on Chinese solar panels and Korean washing machines are like so much other ‘fake news’ the president decries.”

Trade Restrictions Only Serve to Counteract Tax Cuts and Deregulation, by Gary M. Galles (The Hill, 2/9/18)

The Diffusion of Prosperity and Peace by Globalization, by Erich Weede (The Independent Review, Fall 2004)

Globalization as Framed by the Two Logics of Trade, by James M. Buchanan, Jr., Yong J. Yoon (The Independent Review, Winter 2002)

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5) Independent Updates

The Beacon: New Blog Posts

MyGovCost: New Blog Posts

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