Posts Tagged ‘CATO’

I’d Start By Cutting The B.S.

October 7, 2010 Leave a comment

Too few politicians are willing to say what they’d actually cut. It’s a bipartisan problem, but the hypocrisy runs a bit deeper with the GOP. After all, they’re the party running as the fiscally responsible counter to President Obama’s postulated lack of frugality.

The reality is cutting spending is hard. At least a few think tanks on the left and the right have taken up the challenge and said specifically what they’d cut. The progressive Center for American Progress details its “Thousand Cuts” here. The libertarian CATO Institute promotes its “Downsizing Government” website to outline what it would cut. These projects and others are extremely valuable, but I do recognize it is much easier for a think tank to say what it would cut than it is for an elected politician. In a way, I blame the electorate more than the politicians. We are the ones that elect the politicians who are only responding to how we vote. So, if you say you want a politician that is willing to cut spending make sure they are mentioning the types of things found in either of these reports. If they don’t and you vote for them anyway – you only have yourself to blame.

Does the VAT Increase Government?

April 11, 2010 Leave a comment

Daniel Mitchell from CATO argues that we shouldn’t accept a VAT. He makes 3 major points. My comments are bulleted. 

1. A VAT on top of our existing income tax wouldn’t reduce the “economic distortions” of our current tax code.

  • Well that’s hard to argue with. I’d hope we could ultimately replace the complexity of the old system with a simpler tax like a VAT. 

2. Starve the Beast. Mitchell writes,

Simply stated, there’s no way to finance all this new spending without an added broad-based tax. But this is exactly why we should vigorously resist a VAT.

Blocking a VAT may not be sufficient to control the size of government, but it’s necessary. Handing Washington a whole new source of revenue would be akin to giving keys to a liquor store to a bunch of alcoholics.

  • The problem with this argument is that “starve the beast” doesn’t work (see: here and here) – we get more spending anyway along with less revenue. It’s a great way to continue our path of huge deficits and will eventually lead to recessions and insolvency. 

3. A VAT will increase the size of government – i.e. feeding the beast will make it grow. He writes,

The real-world evidence shows that VATs are strongly linked with both higher overall tax burdens and more government spending.

  • Most of the evidence he points to reveals correlation not causation. I’m not saying he’s wrong, it is just hard to know. This ties into his overall narrative that “blocking a VAT” is “necessary” to “control the size of government.” I actually may have assumed he was right but a day earlier I read this at Marginal Revolution: “In a purely statistical sense, there is, thus, no strong evidence that the VAT has in itself caused the growth of government.” That’s from a paper Tyler Cowen links to which surveys a lot of evidence about the VAT around the world. 

Attempting to Mix a Hypocrisy Tonic

My uncle loves to send me right-wing chain emails about the dangers of government, the evilness of Obama, all the crazy things “the liberals” are up to, and sprinkles in some nativist xenophobic blather for good measure. Honestly, he’s a great guy personally, but seriously warped with partisanship, paranoia, and populism like others swept up with Tea Party style politics. His colleagues don’t seem much better. I recently got into an email row with one of them over the Massachusetts RMV offering a spanish language manuel and test (written by volunteers). I pointed out among other things that multiple studies and surveys (here, here, and here) show that 2nd and 3rd generation immigrants and Americans in general overwhelmingly speak English. He responded with “I think you’re wrong” and asked about some anecdotal cases. Failure to deal with actual evidence doesn’t often lead to a fruitful conversation.

Most of the emails I get sent end up being demonstrably false, yet that doesn’t appear to give my uncle any reservations. Bizarrely, these emails often bash big government and advance some pretty narrow (and wrongheaded) views about the constitutional limits placed on our government. I say bizarre because he works for the government. I hope this will be a hypocrisy tonic:

FAA wastes stimulus funds:

  • Lake Cumberland Regional Airport in Kentucky got $3.5 million to build a glass-fronted terminal in 2004 that was largely unused until the first passenger flights began this June. The airport now has six flights a week.
  • Montgomery Regional Airport in Alabama got $22 million to build a $35 million terminal with a sloping glass facade and a rotunda topped with a domed ceiling that reflects the historical architecture of the state Capitol.
  • Halliburton Field Airport in Duncan, Okla., got $700,000 for a terminal with a pilot room and a reception room. The airport, open only to private planes, has 24 landings and takeoffs a day, mostly local pilots in piston-engine planes.
We can privatize many of the FAA’s duties for example:

Air Traffic Control. The Federal Aviation Administration has been mismanaged for decades and provides Americans with second-rate air traffic control. The FAA has struggled to expand capacity and modernize its technology. Canada privatized its ATC system in 1996. It set up a private, nonprofit ATC corporation, Nav Canada, which is self-supporting from charges on aviation users. The Canadian system has received high marks for sound finances, solid management, and investment in new technologies.

Delayed? Blame the FAA:

Go to the site to watch the video. 

[update]: He does recognize the irony but it doesn’t seem to affect his politics. I think that might show the mind’s ability to compartmentalize and hold mutually contradictory beliefs. 

Partisanship Poisons Everything

March 13, 2010 Leave a comment

Ever ask why climate change, a scientific issue, became a partisan political issue? The New Republic looks at the recent partisanship citing a new Gallup poll:

That skepticism about global warming is almost exclusively on the rise among political conservatives. Two years ago, for instance, 50 percent of conservatives believed climate change was already happening—that’s now down to 30 percent.

The post considers a few possible reasons for the increase, but I’m curious why the issue ever became a political issue. I understand different scientists having different opinions on the matter but why, for example, would liberals and conservatives have different opinions on the underlying science not just on the best course of action? The libertarian think-tank CATO for as long as I can remember has been skeptical of climate change. 

I suspect that because if greenhouse gases truly have a large effect on climate change, the government (gasp!) has to correct the “market failure,” which puts no price on such a huge negative externality. That doesn’t easily fit with libertarian and conservatives prejudices. They need to get over it. I always wanted to ask CATO if you were convinced beyond a reasonable doubt that climate change is real and is a problem, would you acknowledge the need for government intervention? Their time could be better spent advocating more market friendly solutions. 

(HT: The Daily Dish)

Making America Drug-Free, 6 Dead Dogs at a Time

February 23, 2010 Leave a comment

Police killed 6 pit bulls during a bust of a marijuana grow house.

When the dogs began attacking officers and one another, police shot six of them to death and trapped the other 15.

Alejandro Campos-Rivera, 37, who lived at the home, was charged with unlawful production of cannabis plants and animal cruelty. His bail was set at $750,000 Saturday morning.

(h/t: Dan Savage)

The dogs were likely being trained for dog fighting.  I’m all for stopping dog fighting, but murdering them is a funny way to help.  This story reminds me of this CATO article by Radley Balko I read way back. 

One of the most appalling cases occurred in Maricopa County, Arizona, the home of Joe Arpaio, self-proclaimed “toughest sheriff in America.” In 2004 one of Arpaio’s SWAT teams conducted a bumbling raid in a Phoenix suburb. Among other weapons, it used tear gas and an armored personnel carrier that later rolled down the street and smashed into a car. The operation ended with the targeted home in flames and exactly one suspect in custody—for outstanding traffic violations. 

But for all that, the image that sticks in your head, as described by John Dougherty in the alternative weekly Phoenix New Times, is that of a puppy trying to escape the fire and a SWAT officer chasing him back into the burning building with puffs from a fire extinguisher. The dog burned to death.

VAT Watch

February 17, 2010 Leave a comment

Clive Crook continues to push for a VAT to help deal with long-term deficits.

I put in another word for a VAT, which is still regarded as an outlandish idea. You could make this the litmus test: as long as a VAT is regarded as political suicide, the country isn’t ready to be serious.

Veronique de Rugy over at a National Review blog counters VAT advocates who think it could be used to pay down debt.

I can’t understand how supposedly free-market advocates can consider a VAT. No matter what the positive theoretical characteristics of a VAT are, we must fight it to our last and dying breath. The VAT is an enormous money machine for governments and there is no doubt that if we give politicians in Washington a new source of revenue we will get more government and more spending, more corruption and more waste. How can anyone really believe that Washington will use this new source of revenue to just pay off its debt?

If you follow Rugy’s link to CATO, Daniel Mitchell tries to rebut Bartlett VAT championing.

[Bartlett] makes the point that a VAT does not do as much damage, per dollar raised, as the personal or corporate income tax, but so what? That would only be a compelling argument if the VAT was used to eliminate other taxes.

Like Rugy, Mitchell’s argument is that a VAT would make it too easy to raise revenue and thus help aid in the growth of government. Bartlett basically concedes this point, but Mitchell (like most Libertarians) is an idealist that doesn’t seem to ever recognize our democratic reality. In order to prevent absolute fiscal catastrophe, revenues need to rise – spending is just too politically impossible to cut enough to get away with not raising taxes. So, VAT proponents argue that if you have to raise taxes – do so efficiently. Europe can finance a huge state with a VAT without crippling economic growth (or freedom as Hayek worried). I’d love for politicians to wildly scale back the size of government. I’d vote for politicians that have the courage to do so. I’ll help libertarians and small government supporters however I can. But I’m not going to close the door on fiscal sanity to wait for an improbable political transformation that may never happen. In a democracy fighting for ideals is important, ignoring reality is naive.

[update]: Tyler Cowen at his Marginal Revolution blog makes the case for a VAT. 
%d bloggers like this: