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The Lighthouse®

The Lighthouse® is the weekly email newsletter of the Independent Institute.
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Volume 19, Issue 14: April 4, 2017

  1. How Not to Replace Obamacare
  2. New Bridges
  3. Federal Spending Like There’s No Tomorrow
  4. Event: School Choice in 2017
  5. China’s Useful Idea for the U.S. and North Korea
  6. Promoting Free Speech on Campus
  7. Independent Updates

1) How Not to Replace Obamacare

Last week we offered an autopsy of the American Health Care Act—House Speaker Paul Ryan’s withdrawn replacement for Obamacare. This week we continue the analysis. A key reason the bill lacked sufficient Republican support—and perhaps its greatest flaw, according to Independent Institute Senior Fellow John C. Goodman—is that it would have abolished the taxes embedded in Obamacare without tying their elimination to reforms that would have maintained or expanded healthcare coverage.

“Since the tax cut took money out of the system, the spending cuts paired with it also removed money from the system,” Goodman writes. This is one major factor for the Congressional Budget Office’s huge estimate of the millions of people predicted to lose coverage under the Ryan bill. Had the tax cut been tied to healthcare in the right way, the result would have been a happy ending: a politically viable Obamacare replacement that worked as advertised. Ironically, Goodman notes, it wasn’t very long ago that the Republicans were united behind health reforms that would have done the trick—including the Patients Care Act, co-sponsored in 2009 by Paul Ryan himself. (The best Obamacare alternative today, Goodman maintains, is still the proposal by Rep. Pete Sessions and Sen. Bill Cassidy, which has often been discussed in The Lighthouse.)

All of this goes to show that, particularly for healthcare policy, the devil is in the details. Speaking of which, Independent Institute Research Fellow Gary M. Galles would like to have exorcised MIT economist Jonathan Gruber from his role in selling Obamacare. The 2010 healthcare legislation had many deceptive features designed to make it politically palatable, from its disguise of the ultimate payees of the “Cadillac” tax to its pushing of many costs of Obamacare beyond the 10-year time period examined by the Congressional Budget Office. “Given his track record,” Galles writes in the Washington Examiner, “Gruber’s assertion that the Republican ‘repeal and replace’ effort is a scam would be laughable if it wasn’t so tragic.’”

Republican Health Care Fiasco, Part II, by John C. Goodman (Forbes, 3/27/17)

Comparing Obamacare Scams, by Gary M. Galles (Washington Examiner, 3/27/17)

Video: Goodman on why the American Health Care Act was pulled (Fox Business, 3/24/17)

Video: Goodman on the withdrawal of the Republican healthcare bill (MSNBC, 3/24/17)

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

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


2) New Bridges

How can we restore liberty and transform the relationship between government and the citizenry to provide opportunities for all--from Silicon Valley to the urban poor? Join with us as some of today’s most innovative thinkers and doers take on today’s challenges and offer inventive and achievable, free-market solutions for bridging to a more peaceful, free and prosperous future.

  • Are there key lessons from America's Founding to guide us today?
  • How will we as consumers and workers be transformed by the coming innovations in technology, the marketplace, and the workplace?
  • What about jobs, healthcare, education, housing, energy, transportation, privacy, etc.?
  • What measures can be adopted now to ensure a future of prosperity and avoid peril?

Featuring speakers Patrick M. Byrne, William J. Watkins, Jr., Robert P. Murphy, Lawrence J. McQuillan, Mary L. G. Theroux, and Alexander Lloyd

Purchase tickets


3) Federal Spending Like There’s No Tomorrow

The Congressional Budget Office (CBO) has just released its 2017 Long-Term Budget Outlook, and the projections are highly worrisome: If federal spending trends continue, federal debt held by the public will in 30 years reach 150 percent of GDP—5 percentage points greater than the agency estimated in January. Independent Institute Research Fellow Craig Eyermann, creator of the Government Cost Calculator at, shares the report’s disturbing findings.

“The CBO has also projected that Social Security’s combined Old Age and Survivor’s Insurance and Disability trust funds will be fully depleted in 2030, one year earlier than they had previously indicated, which is only 13 years from now,” Eyermman writes at MyGovCost News & Blog.

The horizon is looking darker and darker. The growing national debt raises the risk of the United States entering into a debt death spiral, in which the government’s only option would be some combination of debt restructuring, inflation of the money supply, and drastic tax hikes and abrupt spending cuts. (The agency overlooks the option of raising revenue through a massive liquidation of federal assets, as Independent Institute Senior Fellow William Shughart II and Senior Editor Carl Close recently proposed.) Also, Eyermann notes that CBO’s analysis is based on current spending rates established during the Obama administration; Trump’s actual fiscal policies are still to be determined. “Time will tell how seriously federal politicians and bureaucrats take the CBO's worsening long-term outlook for the U.S. fiscal situation,” Eyermann concludes.

The New Long-Term Budget Outlook, by Craig Eyermann (MyGovCost News & Blog, 3/31/17)

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, 3/6/17)


4) Event: School Choice in 2017

Independent Institute Research Fellow Vicki E. Alger, author of Failure: The Federal Misedukation of America’s Children, will discuss school choice and other educational reforms at the Independent Women’s Forum, April 13, in Washington, DC.

If you’re in the area and you care about the advancement of academic achievement, don’t miss it!


5) China’s Useful Idea for the U.S. and North Korea

Last month, China offered a promising idea for cooling off U.S.-North Korea relations: It proposed that the United States halt joint military exercises with South Korea and, in return, North Korea would suspend its nuclear and missile activities. It’s a worthwhile suggestion that all sides should consider, according to Independent Institute Senior Fellow Ivan Eland.

In the short run, a suspension-for-suspension deal would prevent a war of words from metastasizing into a war of weapons and casualties. In the long run, Eland notes, it would help bring about one of Donald Trump’s campaign talking points: It would encourage South Korea to build up its own defense capability instead of relying on the United States.

In addition to saving money for U.S. taxpayers, reducing North Korean paranoia, and strengthening American national security, the removal of the U.S. military umbrella would make it easier for American firms to compete against South Korean firms that for decades have enjoyed a de facto subsidy. Well-developed U.S. allies such as South Korea and Japan, Eland argues, “have become rich in part by using the money they save in reduced defense spending to compete with American companies around the world.” With Washington, DC, in political disarray, some might find it highly comforting that China, a frequent target of U.S. economic “nationalists,” has proposed a measure that could potentially bring Americans such good fortune.

If Trump Wants China to Pressure North Korea, He Must Compromise, By Ivan Eland (Huffington Post, 3/29/17)

Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, by Ivan Eland


6) Promoting Free Speech on Campus

Public controversies—even highly charged ones—are nothing new on American college campuses. Unfortunately, when institutions of higher learning become known for conflicts about freedom of expression itself, the greatest consequence can be what philosopher Allan Bloom called “the closing of the American mind.” The best known recent episodes involve scheduled talks by social critic Charles Murray at Middlebury College and former Breitbart gadfly Milo Yiannopoulos at several campuses around the country.

The good news is that oftentimes everything goes right, just as planned. Students get to see a controversial speaker, and discussion, although it may be heated, never degenerates into physical threats or violence. This was the case when Yiannopolous spoke at Florida State University. One faculty member who saw the events unfold, Independent Institute Research Fellow Samuel R. Staley, shares his take on how the school helped achieve what he reports was “a civil outcome.”

Staley discusses four elements of Florida State’s approach: (1) an administration committed to universal freedom of expression, (2) established protocols that prioritizes public safety, (3) close collaboration between the school’s event personnel and student leaders, and (4) a clear line for unacceptable behavior, the crossing of which triggers de-escalation measures. The result: a civil climate, in which the speaker was heard and protestors respected reasonable boundaries. It’s not a strategy that guarantees success, Staley notes, but it’s certainly one that increases the likelihood that people will get to hear—and properly debate—ideas that may challenge some of our deepest beliefs.

From Milo Yiannopoulos to Middlebury College, by Samuel R. Staley (Inside Sources, 3/31/17)

Review: Did Can We Take a Joke? Forewarn Middlebury College?, by Samuel R. Staley (The Beacon, 3/14/17)

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


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