The Lighthouse® is the weekly email newsletter of the Independent Institute.
Subscribe now, or browse Back Issues.
Volume 19, Issue 10: March 7, 2017
- Selling Federal Assets: The Best Way to End the U.S. Debt Crisis?
- Clean-Energy Loan Guarantees: The Dirty Truth
- Obamacare Not a Good Jobs Bill
- The Public-Health Case for Drug Decriminalization
- Independent Updates
The $20 trillion national debt may be the biggest problem that lawmakers in Washington, DC, are unwilling to confrontperhaps because they fear that slashing the debt would require politically unpopular tax hikes and spending cuts that would get them voted out of office. The best solution to Americas fiscal woes, however, may not entail those measures. According Independent Institute Research Director William F. Shughart II and Research Fellow Carl P. Close, the most promising approach to debt reduction is to raise revenue by selling federal assets, especially mineral rights to oil, natural gas, and coal deposits.
The road to national solvency is paved with sales receipts from the U.S. governments vast property holdings, particularly its untapped treasure trove of energy deposits, Shughart and Close write in Liquidating Federal Assets: A Promising Tool for Ending the U.S. Debt Crisis. Using 2016 average prices, they estimate the value of the federal governments oil and natural gas deposits at about $55.6 trillion, or nearly 2.8 times the size of the U.S. national debt. Whatever the precise value that the marketplace would set for deposit rights, it is clear that selling them would reap ample rewards for debt reduction, they write.
Federal asset liquidation could also gain broad political supportespecially if it were designed to attract coalitions that would directly benefit. For evidence, Shughart and Close offer the Federal Asset Sale and Transfer Act of 2016. Signed into law by President Obama last December, the Act had support from homeless-assistance groups, which in 1987 were given the right of first refusal to purchase surplus federal buildings. Just as homeless groups had material reasons to support the 2016 asset liquidation law, a broader coalition of interest groups could be formed and incentivized to support a bold initiative to sell a much larger portfolio of federal assets, including the rights to most oil, natural gas, and coal deposits on federal lands.
Liquidating Federal Assets: A Promising Tool for Ending the U.S. Debt Crisis, by William F. Shughart II and Carl P. Close (Independent Institute Executive Summary, 3/1/17)
Book review: Randall G. Holcombe on The Public Debt Problem: A Comprehensive Guide, by Pierre Lemieux (The Independent Review, Fall 2013)
MyGovCost.org How much will Gov cost you?
Federal loan guarantees for clean energy technology may have helped companies with political connections, but theyve failed to provide a satisfactory returnin either financial or environmental benefitsfor the American taxpayer. This finding comes from Independent Institute Research Fellow Ryan M. Yonk, who made his case against the Department of Energys Title XVII federal loan guarantees last month before a congressional committee.
Government support may make it easier for those who receive support, but it also makes it more difficult for new ideas to gain private funding and grow, Yonk told the Joint Energy Subcommittee and Oversight Subcommittee. The net result of loan guarantee programs is likely a loss in meaningful innovation.
The public may have the impression that the Department of Energy offers its loan guarantees to innovative start-ups working on the cutting edge. Such an impression is inaccurate. But even if it were, federal loan guarantees would be a poor method for encouraging genuine innovation. The primary takeaway from my analysis, Yonk continues, is that governments attempts to promote innovation have likely done exactly the opposite. In place of these programs, government would do better to simply step out of the way of entrepreneurs and individuals.
Risky Business: The DOE Loan Guarantee Program, by Ryan M. Yonk (Testimony to U.S. Joint Energy Subcommittee and Oversight Subcommittee, 2/15/17)
Five Ways Trump Can Improve Environmental Policy, by Ryan M. Yonk (Independent Institute Executive Summary, 2/13/17)
Nature Unbound: Bureaucracy vs. the Environment, by Randy T Simmons, Ryan M. Yonk, and Kenneth J. Sim
Researchers at George Washington Universitys Milken Institute School of Public Health recently concluded that repealing Obamacare would cost the economy 2.6 million jobs by 2019. Their diagnosis, however, is highly misleading and lends false support for continuing a policy prescription that has harmed, not healed, American healthcare, according to Independent Institute Senior Fellow John R. Graham.
The 2.6 million jobs figure, Graham notes, is a residual of the multiplier effect of healthcare spending. But there is nothing unique about healthcare in this regard: Large expenditures on virtually anything will have significant multiplier effects, as the money is spent and re-spent throughout the economy. In addition, the healthcare jobs added by Obamacare have more to do with administrative workbureaucratic bloatthan with the provision of actual care by doctors, nurses, lab technicians, and the like.
George Washington Universitys researchers also seem to overlook Obamacares harmful effects on employment. Workers and businesses outside the health care bureaucracy have been paying the price of Obamacares rules, regulations, and mandates with sluggish job and wage growth, Graham writes. The Affordable Care Act was not a jobs bill. Hospitals do not need Obamacare to maintain steady employment. The rest of us, however, need Obamacare repealed so the rest of the economy can add jobs at a more normal pace.
Repealing Obamacare Will Create, Not Kill, Jobs, by John R. Graham (Sun-Sentinel, 2/27/17)
Replacing Obamacare and Insuring the Uninsured, by John C. Goodman, Rep. Pete Sessions, and Sen. Bill Cassidy (Independent Institute Executive Summary, 2/13/17)
A Better Choice: Healthcare Solutions for America, by John C. Goodman
Priceless: Curing the Healthcare Crisis, by John C. Goodman
The United States has witnessed a deadly surge in heroin overdosesa nearly ten-fold increase in accidental fatalities since 2010, according to the National Institute on Drug Abuse. This disturbing trend might seem to strengthen the case for drug prohibition. A close look at Portugals experience with drug decriminalization, however, argues against the War on Drugs: Drug fatalities in the United States would likely fallperhaps significantlyif hard drugs were decriminalized, according to Independent Institute Research Fellow Abigail R. Hall and Kaila Preston.
In the midst of its own heroin problem, Portugal voted in 2001 to decriminalize drug use. The benefits were impressive. Drug use among 15- to 24-year-olds has decreased dramatically and drug-induced deaths dropped from 80 in 2001 to 16 in 2012, write Hall and Preston.
Portugal still kept it illegal for drug users to possess more than a 10-day supply of drugs and to engage in drug trafficking. Nevertheless, the number of drug-related convictions plummeted. Before 2001 Portugal confined around 100,000 drug users, Hall and Preston continue. Within the first 10 years of the policys adoption, this number halved. Such a reduction of incarceration rates in the United States would greatly benefit the overburdened criminal-justice system: About half of all inmates in federal prisons owe their imprisonment to a drug conviction.
What We Can Learn from Portugals Drug Policy, by Abigail R. Hall and Kaila Preston (InsideSources.com, 2/28/17)
Drug War Crimes: The Consequences of Prohibition, by Jeffrey A. Miron
- Why Do Late Middle-Aged Women Allow Obamacare to Gouge Them?
- Employer-Based Coverage Does Not Equalize Access to Health Care
- Federal Cuts to the Arts No Big Deal
- Lessons from the North Hollywood Shootout
- No to Government Identity Theft
- The Return of the Debt Ceiling