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Volume 32, Issue 11: August 11, 2008

  1. Next Administration and Congress Unlikely to Slow Federal Spending
  2. The Real Bioterror Threat
  3. Raiding California’s Earmarked Revenue Fund
  4. Bosnia Revisited
  5. This Week in The Beacon

1) Next Administration and Congress Unlikely to Slow Federal Spending

Federal spending is large and getting larger, explains William F. Shughart II, Independent Institute Senior Fellow, in a new op-ed published in the Detroit Free Press. Not only is the federal government bailing out Fannie Mae and Freddie Mac—in response to a crisis brought on partly by investors’ expectations that the feds would bail them out if they got into trouble—but also Congress has agreed to raise the national debt ceiling by $800 billion.

The two leading presidential candidates are also proposing a variety of new programs: Barack Obama calls for significantly more spending to fix the nation’s transportation infrastructure, for example, whereas John McCain calls for a taxpayer bailout of General Motors.

Industries are also renewing their efforts to obtain special protective favors. “Responding to concerns about the safety and effectiveness of prescription drugs, pharmaceutical companies have been lobbying Congress to grant greater regulatory powers to the Food and Drug Administration,” writes Shughart. “For their part, U.S. food manufacturers want the federal government to exercise stricter controls over imports. Reacting to the recent salmonella outbreak thought to have been caused by contaminated tomatoes—or was it jalapeño peppers?—Florida has already imposed additional inspection requirements on tomato growers.”

“Problems, and Government Interventions, Keep Growing,” by William F. Shughart II (Detroit Free Press, 8/6/08)

Taxing Choice: The Political Economy of Fiscal Discrimination, edited by William F. Shughart II


2) The Real Bioterror Threat

Government scientist Bruce Ivins may or may not have caused the anthrax attacks that claimed five lives in the weeks after September 11, 2001. Ivins may have had motive and opportunity (and he threatened to kill his therapist), but this does not prove his guilt. What seems more certain is that Americans today are at greater risk of similar attacks due to the surge in government funding of biological weapons research since 9/11.

“In all, nationwide, 14,000 scientists can work on such lethal biological agents, many of which are researchers at non-governmental universities,” writes Independent Institute Senior Fellow Ivan Eland, director of the Center on Peace & Liberty. “According to experts, security at such facilities is lax; the government merely requires them to have locked doors but no video surveillance. And government background checks of employees would not prevent a person who had homicidal tendencies or a sociopathic personality—allegedly exhibited by Ivins—from working in them.”

Government funding may be a necessary condition to create lethal biological weapons: small terrorist groups have had limited ability to carry out biological weapons attacks. (The well-funded Japanese terrorist group Aum Shinrikyo hired Ph.D. scientists, but it couldn’t pull off such an attack. Its chemical weapons attack on a Tokyo train took 12 lives. A successful bioterrorist attack could take many, many more.) Eland continues: “Thus, to combat a minimal bioterror threat from ragtag terrorist groups, the government has actually dramatically increased the probability of another bioattack from a trained scientist—whether because of malicious criminal intent, mental illness, or a desire to increase funding for his or her antidote or vaccine programs—who could competently carry out such an attack.”

“The U.S. Government Is the Real Bioterror Threat,” by Ivan Eland (8/8/08)

The Empire Has No Clothes: U.S. Foreign Policy Exposed (Updated Edition), by Ivan Eland

Center on Peace & Liberty (Ivan Eland, Director)


3) Raiding California’s Earmarked Revenue Fund

In 2006, California voters passed two propositions designed to earmark certain taxes for transportation spending. However, with a news-making budget impasse in Sacramento, state legislators—with apparent acquiescence from Gov. Arnold Schwarzenneger—plan to raid that fund of earmarked revenues, as Independent Institute Research Fellow Michael Reksulak explains in a recent op-ed.

�“What nobody wants to admit in this clamor of financial chaos . . . are the facts,” writes Reksulak. “Namely, everybody involved in this budgetary pileup is at fault due to additions to a seemingly endless list of yearly spending requests.”

No matter how popular an idea the “earmarking” of certain tax revenues may be, those funds will inevitably be used by other purposes so long as politicians and voters push for more and more spending. “In that sense, the déjà vu proposal to raid funds that were supposed to be locked away may actually start a necessary, if unwelcome, rethinking of this dead-end approach to budgeting.”

“Politicians, Voters Pillage Set-Aside Funds to Plug Budget Gaps,” by Michael Reksulak (Los Angeles Business Journal, 8/4/08)

Taxing Choice: The Political Economy of Fiscal Discrimination, edited by William F. Shughart II


4) Bosnia Revisited

Bosnia and Herzegovina began the 20th century as a civilized, pluralist society, yet nearly a century later it collapsed into brutal tribalism. The recent capture of Rodavan Karadzic—the psychiatrist and poet who became president of Bosnia’s breakaway Serbs—reminds us that peace and civility can be fleeting things.

“Although nationalism is an extended form of tribalism, its worst exponents are often a country’s more cultivated people,” writes Alvaro Vargas Llosa, Senior Fellow at the Independent Institute, in his latest column for the Washington Post Writers Group. “That Kardzic was an average psychiatrist and a mediocre poet does not detract from the fact that he was also well-read, that he had studied abroad (including a spell in the United States) and that his father had fought against Nazism and communism. He defended his conduct of the war, centered on ethnic cleansing, with elaborate sophistry.”

Vargas Llosa, who visited Serbia during the conflict, argues that “all sides in the former Yugoslavia bear responsibility for the war.” He also notes that of the two entities created in the aftermath of the conflict, the Republic of Serbia has been more far more successful than the other, the Republic of Croatia. Serbia’s “market-friendly policies have turned it into a more prosperous society than the Muslim-Croat coalition, which is one huge welfare program supported and directed by the international community through a high representative who calls the shots at the federal level.” Many businesses in Croatia have even voted with their feet by relocating to Serbia.

“Bosnia Revisited,” by Alvaro Vargas Llosa (8/6/08) Spanish Translation

Center on Global Prosperity (Alvaro Vargas Llosa, Director)

Purchase Lessons from the Poor: The Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa.

Purchase Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa.


5) This Week in The Beacon

The Beacon—the blog of the Independent Institute�-- is always open for reader comments. Here is what Beacon bloggers posted this past week:

A Query on Two Secessions: Kosovo and South Ossetia, by David Beito
Gasoline as Money in Zimbabwe, by David Theroux
Olympic Games, by David Theroux
The Decline and Fall of Imprimis, by Peter Klein
August 9, 1945, a Date that Will Live in Infamy, by Robert Higgs on Aug 9, 2008
News Flash: Washington Is Corrupt!, by Robert Higgs
New Deals and American Fascism, by Anthony Gregory
Hurston and Paterson: Two Libertarians Against the Atomic Bomb, by David Beito
Radical Reform Is Needed in California, by Anthony Gregory
A Predecessor of George W. Bush’s Contempt for the Constitution, by Robert Higgs
Army Recruiters Lie to and Threaten Teenagers with Jail, by Anthony Gregory


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