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The Lighthouse®

The Lighthouse® is the weekly email newsletter of the Independent Institute.
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Volume 19, Issue 11: March 14, 2017

  1. Paul Ryan’s New Health Plan
  2. Fiscal Conservatives, Beware the Ides of March
  3. U.S. Energy Needs Tax “Fairness,” Not Wind Bags
  4. Peaceful Persuasion, Not Political Violence
  5. Independent Updates

1) Paul Ryan’s New Health Plan

Conservative critics of the American Health Care Act—House Speaker Paul Ryan’s proposed alternative to the Affordable Care Act—call it “Obamacare-lite.” The usual complaint is that its refundable tax credits look like a new entitlement program. According to Independent Institute Senior Fellow John C. Goodman, however, the tax credits are a feature, not a bug. The real problem with the new Republican health-reform legislation, he argues, is that it looks too much like the law it’s meant to replace.

“The Ryan health plan throws good money after bad by repeating the Obamacare mistake of spending all the reform money in what has become the most dysfunctional part of the system—the individual market,” Goodman writes in Forbes. The tax credit should apply, he argues, “in the group market, where premiums are lower and coverage is better.”

The current Republican replacement for Obamacare also suffers other serious problems—including lack of a workable safety net for the uninsured. In essence, Speaker Ryan’s new bill looks too much like last year’s model. “It appears that Paul Ryan has budged very little and Donald Trump has budged quite a lot,” Goodman continues. The best path forward was spelled out last year in a bill by Rep. Pete Sessions and Sen. Bill Cassidy. “This proposal would provide a minimum amount of health insurance to almost everyone, and it would give the private sector new tools to control costs.”

Paul Ryan’s Health Bill: Good, Bad, and Ugly, by John C. Goodman (Forbes, 3/13/17)

A Conservative Approach to Health Reform, by John C. Goodman (Forbes, 3/6/17)

“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


2) Fiscal Conservatives, Beware the Ides of March

It may not go down in the history books, but this Wednesday, March 15, marks an important occasion. As Independent Institute Research Fellow Craig Eyermann notes at MyGovCost News & Blog, it’s the last day that the U.S. government will be required to live under the statutory debt ceiling imposed on November 2, 2015. The following day, March 16, Treasury Secretary Steven Mnuchin will then move quickly to stave off a U.S. default.

The Treasury has, according to one research group, enough cash to avoid default until October or November. But that doesn’t mean the air will be still. In fact, a loud commotion is likely. In part that’s because on Thursday the White House will issue a sneak peek at its forthcoming budget. Team Trump will then face greater scrutiny for its spending priorities, including an expected $54 billion increase in the military budget and a $1 trillion infrastructure plan.

In one of Shakespeare’s great tragedies, a soothsayer warns Caeser, “Beware the Ides of March.” Caeser, unconcerned, tells his entourage, “He is a dreamer; let us leave him: pass.” If predictions about this week’s “skinny budget” hold true, fiscal conservatives may call President Trump a “dreamer,” but you can bet we will hear more than a little concern in their voices.

The Debt Ceiling and the Skinny Budget, by Craig Eyermann (MyGovCost News & Blog, 3/13/17)


3) U.S. Energy Needs Tax “Fairness,” Not Wind Bags

Former Texas governor, TV dance contestant, and new head of the U.S. Department of Energy Rick Perry has pledged to ensure that all firms in the energy industry are treated equally. It’s a simple message and one consistent with a pro-growth economic policy. But it’s also one that has fallen on deaf ears, judging by his confirmation hearing, according to Independent Institute Research Director William F. Shughart II.

Senators Al Franken and Bernie Sanders urged Perry to reconsider “special tax breaks” given to energy producers. Unfortunately, the Texan replied with coy deference rather than by offering a teaching moment. “Perry could have explained to Sanders and Franken that their assertions about so-called special breaks for the energy sector are dead wrong,” Shughart writes in The Hill. “The truth is that what the senators, along with other interest groups, often refer to as subsidies for the energy sector are really nothing more than customary tax deductions taken by virtually all U.S. manufacturers.”

Tax deductions for energy companies, even the maligned fossil-fuel producers, are a matter of fairness—equal treatment under the law. They also happen to generate net economic benefits. “The oil and gas sectors,” Shughart continues, “are engines of job growth, but also harbingers of economic health.” Contrary to Franken and Sanders, the same cannot be said for taxpayer subsidies given to wind- and solar-energy producers.

Tax Fairness Critical to Sustaining Growth of Energy Sector, by William F. Shughart II (The Hill, 2/16/17)

Taxing Choice: The Predatory Politics of Fiscal Discrimination, edited by William F. Shughart II

Risky Business: The DOE Loan Guarantee Program, by Ryan M. Yonk (2/15/17)


4) Peaceful Persuasion, Not Political Violence

If the shoe fits—the old adage goes—wear it. In the new college version, where campus activists exhort students to “Bash the fash!” (i.e., fascists, real or imagined), the word “shoe” is replaced by “jackboot.” Another adage also applies: Be careful what you wish for. As Independent Institute Research Fellow Michael C. Munger explains, violence begets violence, and the victor is often the state and its indifference or hostility to civic discourse.

As Munger writes, “The bullies of the left are physically brave when confronting a few, isolated ‘fascists’ on their ideologically segregated college campuses and ‘safe spaces.’ But if violence starts, that’s not where it will end.... The last thing that the political minority should advocate is violence.” The irony is tragic: When protestors endorse physical force, the resulting skirmishes usually serve to undermine whatever cause the protestors hoped to advance, including freedom of speech.

Munger, who has long campaigned on behalf of civil liberties, offers a sensible alternative. “Rather than bashing, you might want to try talking to the folks who disagree with you,” he writes. “At worst, you’d be asserting the right to talk, and to disagree, even if your side no longer controls the coercive apparatus of the state.”

Freedom Is Hard, by Michael C. Munger (North State Journal, 2/25/17)

Restoring Free Speech and Liberty on Campus, by Donald A. Downs


5) Independent Updates
The Beacon: New Blog Posts
MyGovCost: New Blog Posts
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