Volume 14, Issue 52: December 27, 2012
- Job Creators vs. Government Spenders
- Policymakers Must Verify Environmental Claims
- How to Cut Pentagon Pork
- Promote Liberty and Reduce Your Taxes
- New Blog Posts
- Selected News Alerts
Politicians love to play Santa Claus, promising people things from the government that it simply cannot deliverespecially jobs that will contribute to meaningful economic growth. Savvy citizens are therefore wise to save their gift receipts: for when it comes to creating sustainable, gainful employment, theres little that federal officials can do other than to stay out of the way of a free-market job-creation engine that runs on private investment, not on government largesse. As J. Geoffrey Colton of the Independent Institute writes at Forbes.com, Contrary to what politicians claim, jobs start not with government but investors.
Private investors are essentialand unique. They provide the fuel that drives job growth and economic progress by taking calculated risks designed to yield more than the value of the resources used up in production. Government spending, in contrast, diverts scarce resources toward activities that fail to earn a positive return: the economic value created by government jobs is typically less than the value of the resources they use up.
Government officials cant make good on many of their economic promises, but they can in principle undo the damage they inflict on employment and economic progress. They can foster productive job growth by cutting government spending and freeing up the resources that can be used by genuine job creators. According to Colton, policymakers can encourage sustainable employment by avoiding punitive taxation and simplifying the tax code; by reducing onerous regulations that discourage investment; by fostering a stable decision-making climate conducive to long-term planning and investment; and by avoiding favoritism thats antithetical to free-market competition. If politicians adopt this approach, Colton writes, American business will likely reemerge sooner rather than later.
Can the Federal Government Actually Encourage Job Creation?, by J. Geoffrey Colton (Forbes.com, 12/20/12)
Out of Work, by Richard K. Vedder and Lowell E. Gallaway
Should congressional Republicans follow Ronald Reagan and rely on cost-benefit studies to guide their policies on environmental issues, such as global warming and CO2 emissions? In a recent op-ed in the New York Times, Harvard law professor and former Obama administration official Cass R. Sunstein urges GOP lawmakers to do exactly that. But according to atmospheric physicist S. Fred Singer, theres a hole in that approach, one perhaps as large as a focal point in Reagans environmental policy: the Antarctic Ozone Hole.
As Singer notes, Reagan urged his advisors to use cost-benefit studies to shape his administrations policy on manmade CFCs, chemicals that deplete the stratospheric ozone layer that protects human beings from harmful ultraviolet radiation. But what ultimately drove policy was the lurid reporting on the ozone hole, which was discovered in 1985. Panicky responses to the media coverage are what led the White House to support the international CFC phase-out under the Montreal Protocol in 1987, not cost-benefit analysis. At the time, published evidence did not indicate a detectable human contribution to stratospheric chlorine, writes Singer, a research fellow at the Independent Institute. The importance of the human contribution of stratospheric chlorine, he explains, was not established until years after the Montreal Protocol.
Had Reagan applied his national-security principle of trust, but verify to the issue of the Antarctic Ozone Hole, Singer writes, he might not have been as quick in his support [for the Montreal Protocol] as Sunstein suggests. Singer also blames scientific errors and mistaken inferences for flawed environmental policies adopted by the administrations of George H. W. Bush and Bill Clinton. Singer continues: The moral of the story: Cost-benefit analysis is fine, but the numbers must be supported by sound science.
Environmental Protection Lessons from Ronald Reagan: Trust but Verify, by S. Fred Singer (American Thinker, 12/22/12)
Hot Talk, Cold Science: Global Warmings Unfinished Debate, by S. Fred Singer
Regulation and the Reagan Era: Politics, Bureaucracy and the Public Interest, edited by Roger E. Meiners and Bruce Yandle
If sequestration went through, U.S. public debt would still rise to 84 percent of GDP by 2035. And defense spending would fall by $55 billion per year for ten yearsa small reduction for a budget that has grown more than 50 percent since 2000. But President Obama has proposed to House Speaker Boehner a budget deal that would cut defense by only $10 billion per year. Thus, no meaningful reductions in Pentagon spending appear to be imminent. This is a shame, because the U.S. military spending is larded with waste, fraud, and abuse, according to Independent Institute Senior Fellow Ivan Eland.
In his latest op-ed, Eland, director of the Independent Institutes Center on Peace & Liberty, offers several ideas for cutting waste from the Pentagon budget. Here are a few: Reduce the number of aircraft carries from 11 to 6. Cancel purchases of Virginia-class submarines and use some of the savings to support the existing submarine infrastructure. Rely more on the civilian market to supply the military with housing, health care, and commissary systems. And drastically eliminate overseas U.S. military bases and decommission the forces stationed there.
Alas, however, the [military-industrial complex] would probably have success in nixing such much-needed reductions, as they have in beating back automatic defense cuts, Eland writes. To avoid the fiscal cliff, it looks like Obama and Boehner will instead slam straight into the mountain of rising debt.
Reducing Defense...Cuts, by Ivan Eland (12/18/12)
No War for Oil: U.S. Dependency and the Middle East, by Ivan Eland
The Independent Institute has good news to sharesome of our highlights from 2012. In the past twelve months, we published seven books: Financing Failure, Delusions of Power, Aquanomics, Living Economics, Priceless, Boom and Bust Banking, and Crisis and Leviathan (25th Anniversary Edition), as well as four issues of the acclaimed quarterly, The Independent Review. Article downloads averaged almost 25,000 per month, up 17 percent from last year. Our radio and television appearances rose to 300, a 75 percent increase over 2011. And as of December 24, the Independent Institute has 183,146 fans on Facebook, and our website MyGovCost.org has another 136,668 Facebook fans. (Thanks for liking us and interacting with us on Facebook!)
Before 2013 arrives, please remember the Independent Institute with a tax-deductible contribution. Your donation carries double benefits: it lowers your tax bill and supports principled and effective programs to reverse massive spending and debt, counterproductive government policies, and infringements on personal and economic liberties. And with an astounding 86¢ of every dollar going to program services, you can rest assured that your donation will help make a difference.
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From The Beacon:
How Wasteful Is Medicaid? (12/24/12)
John C. Goodman
A December 1941 Speech that FDR Never Delivered (12/22/12)
Who Goes to Prison Due to Gun Control? (12/21/12)
Krugman on Regime Uncertainty (12/21/12)
James Madison Analyzed Regime Uncertainty in 1788 (12/20/12)
Unprecedented Household Deleveraging since 2007 (12/20/12)
Bork on Antitrust (12/20/12)
Robert Bork (1927-2012) (12/19/12)
How Bad Is Care under Medicaid? (12/19/12)
John C. Goodman
From MyGovCost News & Blog:
Golden State Gravy Train
K. Lloyd Billingsley (12/24/12)
Burt Abrams (12/21/12)
Blowing in the Wind: Taxpayers Dollars
Burt Abrams (12/21/12)
Fed Otter Ban a Bust
K. Lloyd Billingsley (12/21/12)
Taxpayers Lose Billions on GM Bailout
Craig Eyermann (12/20/12)
UC Logo Symbolizes Waste and Failure
K. Lloyd Billingsley (12/19/12)