Tag: Government spending

  • Kansas and Wichita quick takes: Monday February 14, 2011

    KRA guide to elected officials. The Kansas Republican Assembly has created a guide to Kansas elected officials. Besides contact information, it also holds things like committee membership for legislators. The links to the information are on the right side of KRA’s home page.

    Wichita Eagle voter guide. Click here. You can get a list of the candidates, along with their responses to questions, customized for your address.

    Campaign signs. The placement of political campaign signs can be an issue. Here is a City of Wichita letter describing placement rules, and a diagram. … If you live in a neighborhood with covenants prohibiting campaign signs, the covenants don’t apply at election time. See In Kansas, political signs are okay, despite covenants.

    Rasmussen polls last week. “Most voters continue to strongly favor repeal of the national health care law and they’re evenly divided as to whether the new law will force them to change insurance coverage.” Survey is here. … In a video Scott Rasmussen explains explains that 1954 was the last year that government spending declined from the previous year. Video is here, and an article is here. The article holds a chart that compares the difference between what government spending would be if it grew at the rate of population plus inflation, versus its actual growth. It’s a big difference.

    Organ recital tomorrow. On Tuesday (February 15) Wichita State University’s Lynne Davis presents a faculty organ recital. The event starts at 7:30 pm and has a small admission charge. The location is Wiedemann Recital Hall (map) on the campus of Wichita State University. For more about Davis and WSU’s Great Marcussen Organ, see my story from last year.

    Funny campaign stuff. Funny or sad, you decide. Proofreading always helps. A candidate for city council’s campaign website — right on the front page — reads: “The future of our great city rest in the voter’s hands, your hands.” Another page for this candidate states: “We must realize that things that use to work in our community, may no longer work.” … The Wichita Eagle voter guide has a spot for candidates to list their endorsements. Usually candidates would list prominent people or organizations that are supporting them. But one candidate used this opportunity to list a number of products that he recommends.

    Wichita teachers union contract. Public school teachers want to be treated as professionals. But their union contracts read like something we’d expect to see in a United Auto Workers contract, and we know what that union did to the American automotive industry. Here’s an example from the contract between USD 259, the Wichita public school district, and United Teachers of Wichita: “The ending time of the school day in each building shall be seven (7) hours and ten (10) minutes after the beginning time. The Superintendent and the UTW President will review all requests submitted to extend the school day prior to April 1 of each year. Their joint recommendation shall be subject to Board approval. All requests must be first supported by 80 percent of the affected staff as determined by a secret ballot election conducted by the UTW.”

    What public sector union leaders think. Speaking of public sector unions, here’s a video featuring John Gage, who is president of American Federation of Government Employees, and what he thinks of those who want to control federal spending. It’s not complimentary.

    City council candidates to meet. This week’s (February 18) meeting of the Wichita Pachyderm Club features Wichita city council candidates from district 3. Scheduled to appear are James Clendenin, Clinton D. Coen, Mark S. Gietzen, and Hoyt Hillman. The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Politicians’ Top 10 Promises Gone Wrong. This Monday (February 14) Americans for Prosperity will show the 2010 John Stossel documentary “Politicians’ Top 10 Promises Gone Wrong.” For a preview and interview with Stossel, click here. For my reporting and review of the show, click on Stossel on politicians’ promises. … This event, sponsored by Americans for Prosperity, will be held on Monday, February 14 from 7:00 pm to 8:30 pm at the Lionel D. Alford Library located at 3447 S. Meridian in Wichita. The library is just north of the I-235 exit on Meridian. For more information on this event contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

  • AFP Kansas legislative agenda

    Americans for Prosperity Kansas has released its legislative agenda for the 2011 session of the Kansas Legislature. AFP advocates for limited government and free markets, and its recommendations are aimed at reducing the growth of Kansas state government spending and placing the state’s budget on a fiscally sound footing.

    Regarding the Kansas state budget, AFP Kansas recommends these items:

    • Rainy day fund. “Building reserves during times of revenue increases are crucial to weathering economic downturns.” The passage of last year’s sales tax increase, pitched by former Governor Parkinson as a temporary measure, would not have been necessary if Kansas had such a fund. The danger is that even though the sales tax is designed to be temporary, Kansas has had a temporary sales tax increase in the recent past, and it did not go away as planned. Last year there was a proposal for a rainy day fund, but it did not advance into law.
    • Limit the growth of revenue and spending to the sum of inflation and population growth. This idea makes tremendous sense, and is vigorously opposed by those who thrive on and benefit from state spending. But if we are satisfied with the current level of states services, there is no reason why spending should increase faster than inflation and the growth in the number of people in Kansas.
    • Require local governments (cities, counties and school districts) to participate in KanView, the state’s transparency Web site, with uniform budget reporting.
    • Encourage the state to reduce its debt. Kansas state government debt is now $1,140 per capita.
    • Zero-based budgeting for state agencies. This is a very important reform that could help Kansas identify unnecessary programs and related spending. An example of how this reform would help is this: It is not uncommon for the state to participate in programs where the federal government sends the state funds for a program, on the condition that the state match the federal funds. So the legislature makes an appropriation. Then, in a few years, the federal program may end. But with the current system of budgeting, in which last year’s budget is used as the basis for this year’s, the state appropriation is likely to continue, even through the program is over. Zero-based budget can spot situations like this. There is an increased cost, but the benefits could be large.
    • Allow statutory flexibility to utilize unencumbered cash funds for varying purposes.

    On tax policy, AFP Kansas recommends repealing last year’s sales tax increase, requirement of a legislative super-majority to raise taxes, and rejection of all attempts to increase taxes this year.

    AFP recommends reforms to taxpayer-funded lobbying: “Currently, more than 100 lobbyists with more than 60 government entities/associations have been hired by your tax dollars, lobbying for more and more of your money. Taxpayer funded lobbying propagates the cycle of more spending and more programs that call for more spending.”

    On judicial selection, AFP recommends a process of legislative confirmation of judges, Currently Kansas uses a secretive system that gives undue influence to the state’s lawyers.

    AFP also supports “a program, similar to what the federal government uses to decide which military bases to close, to scrutinize every program and agency and root out wasteful spending.” Governor Brownback has made some recommendations along this line.

    A press release is available, and the four-page legislative agenda is located at 2011 Kansas Legislative Agenda: Prosperity for our Future.

  • Arts funding in Kansas

    Arts funding by the State of Kansas has been in the news recently, as Governor Sam Brownback has proposed that the state stop funding the Kansas Arts Commission. This is a good move, as Kansas would be better off without state-funded art for two reasons: economic and artistic.

    The economic case for government art funding

    Supporters of government art funding make the case that government-funded art is good for business and the economy. They have an impressive-looking study titled Arts & Economic Prosperity III: The Economic Impact of the Nonprofit Arts and Culture Industry in the State of Kansas, which makes the case that “communities that invest in the arts reap the additional benefit of jobs, economic growth, and a quality of life that positions those communities to compete in our 21st century creative economy.”

    I read this report in 2007 when it was first used to promote government funding of arts in Wichita. Its single greatest defect is that it selectively ignores the secondary effects of government spending on the arts.

    As an example, the report concludes that the return on dollars spent on the arts is “a spectacular 7-to-1 return on investment that would even thrill Wall Street veterans.” It hardly merits mention that there aren’t legitimate investments that generate this type of return in any short time frame. If these returns were in fact true and valid, we should invest more — not less — in the arts. But as we shall see, these returns are not valid in any meaningful economic sense.

    Where do these fabulous returns come from? Here’s a passage from the report that government art spending promoters rely on:

    A theater company purchases a gallon of paint from the local hardware store for $20, generating the direct economic impact of the expenditure. The hardware store then uses a portion of the aforementioned $20 to pay the sales clerk’s salary; the sales clerk respends some of the money for groceries; the grocery store uses some of the money to pay its cashier; the cashier then spends some for the utility bill; and so on. The subsequent rounds of spending are the indirect economic impacts.

    Thus, the initial expenditure by the theater company was followed by four additional rounds of spending (by the hardware store, sales clerk, grocery store, and the cashier). The effect of the theater company’s initial expenditure is the direct economic impact. The subsequent rounds of spending are all of the indirect impacts. The total impact is the sum of the direct and indirect impacts.

    The fabulous returns erroneously attributed to spending on the arts derive from this chain of spending starting at the hardware store. But there’s a problem with this reasoning. It ignores the secondary effects of economic action. What the authors of this study fail to see is that anyone who buys a gallon of paint for any reason sets off the same chain of economic activity. There is no difference — except that a homeowner buying the paint is doing so voluntarily, while an arts organization using taxpayer-supplied money to buy the paint is using someone else’s money. Money, we might add, that is taken through the government’s power to tax.

    The study also pumps up the return on government spending on arts by noting all the other spending that arts patrons do on things like dinner before and desert after arts events. But if people kept their own money instead of being taxed to support the arts, they would spend this money on other things, and those things might include restaurant meals, too.

    This report — like most of its type that attempt to justify and promote government “investment” in someone’s pet program — focuses only on the benefits without considering secondary consequences or how these benefits are paid for. Henry Hazlitt, in his masterful book Economics in One Lesson explains:

    While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.

    It is, as Hazlitt terms it, “the special pleading of selfish interests” that drive much of the desire for government spending on the arts. Government-funded arts advocates can promote their case with economic fallacies all they want, but in the end that’s what their case relies on: “the special pleading of selfish interests.” You can see an example of this type of campaign by visiting the Kansas Arts Commission.

    No government art means better art

    Arts organizations need to survive on their own merits. They need to produce a product or service that satisfies their customers and patrons just as any other business or human endeavor must. This is especially true and important with something so personal as art. David Boaz, in his book The Politics of Freedom: Taking on The Left, The Right and Threats to Our Liberties writes this in a chapter titled “The Separation of Art and State”:

    It is precisely because art has power, because it deals with basic human truths, that it must be kept separate from government. Government, as I noted earlier, involves the organization of coercion. In a free society coercion should be reserved only for such essential functions of government as protecting rights and punishing criminals. People should not be forced to contribute money to artistic endeavors that they may not approve, nor should artists be forced to trim their sails to meet government standards.

    Government funding of anything involves government control. That insight, of course, is part of our folk wisdom: “He who pays the piper calls the tune.” “Who takes the king’s shilling sings the king’s song.”

    Government art. Is this not a sterling example of an oxymoron? Must government weasel its way into every aspect of our lives? And the fact that government arts funding means tax dollars taken through coercion — don’t the government arts promoters realize this? How better to crush the human spirit — the same spirit that the arts are meant to uplift and enrich.

    Government arts funding means that artists and arts organizations are distanced from their customers. Instead of having to continuously meet the test of the market, they must please government bureaucrats and politicians to get their funding. Instead of producing what the great unwashed mass of people want, they produce what they think will get government funding.

    Without government funding, organizations that provide culture and art will have to satisfy their customers by providing products that people really want. That is, products that people are willing to pay for themselves, not what people say they want when someone else is paying the bill. With government funding, these organizations don’t have to face the discipline of the market. They can largely ignore what their customers really want. They can provide what they think their customers want, or, as I suspect is the case, what they believe the people of Kansas should want, if only we were as enlightened as the elitists that staff arts commissions.

    Without the discipline of the market, arts organizations will never know how their customers truly value their product. The safety net of government funding allows them to escape this reality. We have seen this many times in Wichita and Sedgwick County, as organizations fail to generate enough revenue to cover their costs, only to be bailed out by the government. Other businesses learn very quickly what their customers really want — that is, what their customers are willing to pay for — or they go out of business. That’s the profit and loss system. It provides all the feedback we need to determine whether an organization is meeting its customers’ desires. The arts are no different.

    Some say that without government support there wouldn’t be any arts or museums. They say that art shouldn’t be subject to the harsh discipline of markets. Personally, I believe there is little doubt that art improves our lives. If we had more art and music, I feel we would have a better state. But asking government commissions to judge how much art and which art we should have is not the way to provide it. Instead, let the people tell us, through the mechanism of markets, what art and culture they really want.

    It might turn out that what people want is different than from what government arts commission members believe the people should want. Would that be a surprise? Not to me. In the name of the people, we should disband government arts councils and government funding and let people decide on their own — without government intervention — how to spend their personal arts budgets on what they really value.

    (The material by David Boaz is from a speech which may be read here: The Separation of Art and State.)

  • In Wichita, start of a solution to federal spending

    At the Sedgwick County Commission, newly-elected commissioner Richard Ranzau voted three times against the county applying for grants of federal funds, showing a possible way that federal spending might be brought under control.

    During the meeting, Ranzau asked staff questions about where the funding for the grant programs was coming from, which, of course, is the federal government, sometimes routed through the Kansas Department of Commerce. Sometimes local spending is required by these grants.

    In opposing the programs, Ranzau said that federal government spending is too high. Also, our level of debt is too high, and that the cost of these spending programs is passed on to future generations. He also didn’t see where the U.S. Constitution authorizes activity like the commission — in partnership with the federal government — is considering undertaking.

    Ranzau offered an alternative: if the commission believes these projects are important to us as a community, we could pay for them ourselves and pay for them now.

    Commissioner Jim Skelton argued that if we don’t apply for and receive this money, the federal government will spend it anyway, and someone else will receive it. “I think we can end up screwing our constituency by opposing this on the philosophy that our government is too big.”

    He said he doesn’t agree with the “rampant spending of stimulus money” and would like to see it end, but he didn’t see how refusing this money would make a difference.

    Constitutional basis questioned

    During discussion, Skelton asked county counselor Richard Euson a question: “Can you tell me about the constitutionality of this issue? How on earth can this happen if it’s not constitutional?”

    Euson was flummoxed by the question, and admitted that he was not prepared to answer the question. This is not to be held against the county’s attorney, as questions like this are rarely asked — an indication of the novelty of Ranzau’s position and how infrequently elected officials and staff consider questions such as the fundamental role of government and its level of involvement.

    The job of a commissioner, according to Norton

    In discussion about one grant program, Commissioner Tim Norton asked a question designed to make sure that Ranzau knew that the project was located in his district. On a grant for a transportation plan, Norton again asked a question designed to make sure that Ranzau knew whose district this plan would serve, referring to former commissioner Kelly Parks’ support of the program.

    These questions by Norton highlight the problem with district-based representation, where representatives of districts are expected to bring as much government largess as possible back to their districts. At the federal level this problem is illustrated by the earmarking process. Locally, we see that Sedgwick County Commissioners are assumed to be in favor of any project that benefits their districts, regardless of the overall worth of the project or its cost.

    A bottom-up solution to federal spending?

    At a town hall meeting on Saturday, I asked Kansas fourth district Congressman Mike Pompeo, who represents all of Sedgwick County, about his opinion of ground-up opposition to federal spending and debt, rather than waiting for Congress and the President to solve the problem from the top down.

    Pompeo didn’t answer the question directly, but said that from now on, each law passed by Congress will have a section that states the constitutional authority for the legislation. He also said that the federal government is involved in many areas that it should not be involved in, adding “So many times the question is ‘should we reduce this agency’s budget by three percent,’ and the proper question is ‘why does this agency exist?’”

    While the new U.S. House of Representatives is full of enthusiasm for cutting spending, here we see an example of just how difficult cutting spending will be. Local governments are addicted to grants like the three discussed above. A congressman who voted to cut programs like these will hear from the affected constituents, and would also likely hear from the Sedgwick County staff who are advocates for these projects and spending. If more elected officials would vote against these programs, that would make it easier for Congress to cut off the flow of spending.

    We should also remember that Ranzau offered an alternative: fund the programs ourselves. The problem is that we are funding them ourselves, through the roundabout trip of tax dollars going to Washington, which then sends them back, in this case in the form of grants with many conditions and restrictions on the way the money can be spent. So Skelton is correct: the federal government will spend the money anyway. But to go along means that the hole is dug deeper. More crudely, the federal government says: implement this program in our way, because you’ve already paid for it, and you don’t want to piss away your taxes somewhere else.

    Perhaps a coalition of forward-thinking local government officeholders like Ranzau and U.S. Congressmen like Pompeo can join together to bring the spending under control. It will take courage, especially from the local officeholders.

  • Debt ceiling poses challenge and opportunity

    As the U.S. government’s borrowing approaches its statutory limit, the House of Representatives has a decision to make: does it support raising that limit so that the government can continue borrowing? Some warn of disastrous consequences if the limit is not raised, such as government shutting down or suffering a drop in its credit rating. Below, Americans for Limited Government’s Bill Wilson says this is a moment of decision for three players: Speaker John Boehner, Majority Leader Harry Reid, and President Barack Obama. Either we go along as we have, or we use this moment to make serious change.

    Use Debt Ceiling Increase to Cut Spending by $800 Billion

    by Bill Wilson, Americans for Limited Government

    This is where we are. With the national debt topping $14 trillion, it stands at 95 percent of the Gross Domestic Product, which is almost a full year of all goods and services the entire economy can produce. As it approaches the $14.294 trillion debt ceiling, incoming House Speaker John Boehner has a decision to make. Attaching $100 billion of spending cuts to that vote may sound nice, but it isn’t one-tenth enough of what needs to be done.

    Instead, House Republicans should use that leverage to extract at least $800 billion of across the board cuts, bringing the budget to 2007 spending levels of $2.7 trillion. Then if lawmakers wished to keep entitlement and defense spending where they currently are, they would have to find about another $200 billion of cuts or so to make from the discretionary budget. And then after that, keep cutting until the budget is balanced, no more debt needs to be contracted, and the debt can finally begin to be paid off.

    The way to begin to do that is to attach the $800 billion of spending cuts to the debt ceiling increase legislation. That includes ending the bailouts, “stimulus”, and selling government ownership of Fannie Mae and Freddie Mac. The House will have done its job and increased the debt ceiling to help refinance current debts. Then Harry Reid and Barack Obama will have the choice to make: Accept the spending cuts or block the debt ceiling increase and default. The burden will be on them, and the blame will be on them should they fail to raise the debt limit. Those are the terms of the American people.

    The alternative is to just kick the can and raise the ceiling without any cuts or too little cuts attached, and watch as the debt becomes larger than the entire economy this year or next. As the Federal Reserve becomes the government’s top lender, printing hundreds of billions of dollars just to refinance the debt. And, as the national credit rating is eventually downgraded. The dollar will continue to sink, interest rates will have nowhere to go but up, and the ultimate collapse that occurs will be on the heads of every politician who refused to cut spending when they had the chance.

  • Kansas Governor Parkinson says “thank you”

    This week outgoing Kansas Governor Mark Parkinson released a “thank you” to Kansans that has been commented on — favorably — in many Kansas newspapers and media outlets. The entire piece may be read at the governor’s site at Thanks So Much.

    The governor’s list of “achievements” — his language, not mine — is a reminder that under Parkinson and his predecessor Kathleen Sebelius Kansans have lost economic and personal freedom. It’s nothing that we should thank Parkinson for, and nothing he should be proud of.

    Under achievement number one (“Steering the state budget through a very challenging time”) Parkinson wrote “Suffice it to say that I cut state spending more than any governor in Kansas history.” He doesn’t mention that he was forced to make these cuts, as Kansas can’t run deficits like the federal government.

    Achievements two, three, and four have to do with his promotion of wind power in Kansas. It’s almost impossible to overstate how unwise these policies are. See Wind power: a wise investment for Wichita and Kansas? for a recent discussion of why wind power is a bad investment. Relying on the manufacturing of wind power equipment as an economic development strategy is an even worse idea. The governor praises legislation that requires utilities to increase their usage of renewable power such as wind. But I’d ask the governor this: If electricity from wind is so desirable, why do utilities have to be forced — and heavily subsidized — to produce it?

    Achievement seven highlights “Economic development wins,” mentioning Black and Veatch, Cerner, Bombardier LearJet, and Hawker Beechcraft in particular. Each of these “wins” required large subsidy from the state. Worse, these taxpayer giveaways cement our practice of bureaucratic management of economic development instead of creating a vibrant Kansas business climate where innovation and entrepreneurship thrive. This state policy filters down to counties and cities, to the point where the first consideration for businesses and entrepreneurs is not is this something that will create value for customers and profit for me and my investors but rather what type of government help can I get?

    Achievement eight is the statewide smoking ban. Parkinson’s championing of it means that he doesn’t believe that adult Kansans can decide for themselves whether they want to be around smokey places, and that he has little respect for private property rights.

    Achievement nine is the new transportation plan. The governor claims it will create or keep 175,000 jobs. Most of these must be highway construction jobs, as it is that industry that heavily supported the plan. As usual, the governor and other advocates of government spending fail to see the jobs that are lost due to the government spending and the taxes necessary to pay for it. Veronique de Rugy explains: “Taxes simply transfer resources from consumers to government, displacing private spending and investment. Families whose taxes have increased will have less money to spend on themselves. They are poorer and will consume less. They also save less money, which in turn reduces the resources available for lending.” In addition, Kansas roads rate very well, even number one among the states in one highly-publicized study. Why the need to so much new investment?

    Finally, achievement number ten is “Keeping Kansas a great place to do business.” If this is true, I wonder why do we have to spend so much on subsidies to keep Kansas companies from expanding elsewhere or packing up and leaving entirely, as with Hawker Beechcraft?

  • Earmark requests for Kansas

    The federal omnibus spending bill introduced earlier this week has now been abandoned. That’s good, because even with all the talk about earmark reform, this bill was loaded. Based on a database compiled by Taxpayers for Common Sense, I’ve compiled a list of earmarks requested for Kansas. These are requested, not passed, and their future status is unknown.

    The list is presented below. It’s illuminating to experience the breadth of earmark requests made and their justifications.

    Here’s an example of just how out of control these requests can become. A request by Senator Sam Brownback, who is soon to become Governor of Kansas, is titled “75th Street Utility Undergrounding.” It asks for $4,500,000 to convert overhead utility wires to underground on a 2.9 mile section of a major arterial street in Prairie Village, in Johnson County.

    I suppose that most cities have streets where it would be desirable to replace overhead utilities with underground. There are many advantages, not to mention aesthetic appeal. But why should one suburban Kansas City town be singled out from all others for this special treatment?

    According to an analysis by Taxpayers for Common Sense, Brownback has requested, either by himself or with another member of Congress, 61 earmarks with a cost of $125,552,000. That ranked 29th among senators.

    Kansas Requested Earmarks, Fiscal Year 2011

  • Kansas and Wichita quick takes: Friday December 10, 2010

    This Week in Kansas. On This Week in Kansas guests Rebecca Zepick of State of the State KS, Joe Aistrup of Kansas State University, and myself discuss Kansas House of Representatives leadership, Governor-elect Brownback’s appointments, and voter ID. Tim Brown is the host. This Week in Kansas airs on KAKE TV channel 10, Sunday morning at 9:00 am.

    Cato scholar to speak on economic freedom. Today’s meeting (December 10) of the Wichita Pachyderm Club features noted Cato Institute scholar, Principal Attorney at the Pacific Legal Foundation, and author Timothy Sandefur. He will discuss his recent book The Right to Earn a Living: Economic Freedom and the Law. A description of the book at Amazon.com reads: “America’s founders thought the right to earn a living was so basic and obvious that it didn’t need to be mentioned in the Bill of Rights. Yet today that right is burdened by a wide array of government rules and regulations that play favorites, rewrite contracts, encourage frivolous lawsuits, seize private property, and manipulate economic choices to achieve outcomes that bureaucrats favor. The Right to Earn a Living charts the history of this fundamental human right, from the constitutional system that was designed to protect it by limiting government’s powers, to the Civil War Amendments that expanded protection to all Americans, regardless of race. It then focuses on the Progressive-era judges who began to erode those protections, and concludes with today’s controversies over abusive occupational licensing laws, freedom of speech in advertising, regulatory takings, and much more.” … Of the book, Dick Armey said: “Government today puts so many burdens and restrictions on entrepreneurs and business owners that we’re squandering our most precious resource: the entrepreneurial spirit and drive of our people. Sandefur’s book explains how this problem began, and what steps we can take to ensure that we all enjoy the freedom to pursue the American Dream.” … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Tea party regional blogs compiled. Phillip Donovan has compiled a list of top tea party-related blogs by region, and Voice for Liberty in Wichita is on the list. Of my blog, Donovan wrote “Bob Weeks has been blogging the perspective of free markets, personal liberty, and limited government since 2004, long before the ‘tea party movement’ was born.”

    Tax rates still a secret. Rhonda Holman’s Wichita Eagle editorial asks the central question about signage requirements warning customers of Community Improvement Districts that they will be paying higher sales tax: “But if transparency about CIDs is bad for business, how can CIDs be good for citizens and the community?”

    Federal spending oversight. In the U.S. House of Representatives, the actual spending of money happens in the Appropriations Committee, and this committee is a large source of the problems we have with federal spending. The Wall Street Journal column Oversight for the Spenders explains why: “The Members who join the Appropriations subcommittee on, say, agriculture do so precisely because they are advocates of farm spending. They have no interest in subjecting their own programs to greater public scrutiny.” What is the outlook going forward for this committee? Incoming Speaker John Boehner appointed Kentucky’s Hal Rogers as chair. The Journal column says his “spending record rivals that of any free-wheeling Democrat.” A bright spot: reformer Jeff Flake of Arizona is appointed to the committee, but his request to run an investigations subcommittee was not granted. The Journal is not impressed, concluding “Mr. Boehner’s selection of Mr. Rogers is a major disappointment and makes his promises to control spending suspect. If he really wants to change the spending culture, he should unleash Mr. Flake.”

    Slow death for high-speed rail. From Randal O’Toole: “New transportation technologies are successful when they are faster, more convenient, and less expensive than the technologies they replace. High-speed rail is slower than flying, less convenient than driving, and at least five times more expensive than either one. It is only feasible with heavy taxpayer subsidies and even then it will only serve a tiny portion of the nation’s population.”

    Does the New York Times have a double standard? John LaPlante in LaPlante: NY Times leaky double-standard: “Many newspapers in America reprint articles from the New York Times on a regular basis. So their editorial slant is of importance beyond the (direct) readership of the Gray Lady. Compare and contrast how the Times treated two recent leaks: ‘The documents appear to have been acquired illegally and contain all manner of private information and statements that were never intended for the public eye, so they won’t be posted here. — New York Times, on the Climategate emails, Nov. 20, 2009. … ‘The articles published today and in coming days are based on thousands of United States embassy cables, the daily reports from the field intended for the eyes of senior policy makers in Washington. … The Times believes that the documents serve an important public interest, illuminating the goals, successes, compromises and frustrations of American diplomacy in a way that other accounts cannot match.. — New York Times, on the WikiLeaks documents, Nov. 29, 2010.” I’ll let you make the call.

    Wichita Eagle Opinion Line. “The party of the wealthy triumphs again. Congratulations, Republican voters. By extending the handout to the wealthy, you just increased the national debt.” I would say to this writer that action to prevent an increase in income tax from occurring is not a handout. The only way that extending the present tax rates qualifies as a handout is if you believe that the income people earn belongs first to government. This is entirely backwards and violates self-ownership. Further, the national debt — actually the deficit — has two moving parts: the government’s income, and its spending. We choose as a nation to spend more than the government takes in. That is the cause of the deficit.

  • Obama’s spending stimulus failed

    The school of thinking known as Keynesian economics holds that government should actively and aggressively manage the economy, most importantly by stepping up spending when demand is low. Through this deficit spending, it is said that government action can increase employment. This government spending purportedly accomplishes this through a multiplier effect, as dollars are spent again and again.

    The value of the spending multiplier — is it big or small? — is an important question. Also, the multiplier effect may be different for government spending versus private spending.

    Now, we’re starting to understand why Keynesian economics doesn’t work. Writing in the Wall Street Journal, Stanford economist Michael J. Boskin summarizes recent research that finds that the spending multiplier is small, and actually turns negative by the start of the second year. Furthermore, the government spending crowds out private sector spending. The effect of Obama’s 2009 stimulus bill is estimated at 0.2 percent of GDP, an amount described as “puny.”

    Tax cuts, however, are estimated to have a multiplier of 3.0, with “substantial tax cuts” having a multiplier of up to 5.0.

    In context, Obama’s economic advisers, at the time he took office, estimated that the spending multiplier for government purchases was 1.57, while the multiplier for tax cuts was 0.99.

    Of the new studies finding a small spending multiplier, Boskin writes: “These empirical studies leave many leading economists dubious about the ability of government spending to boost the economy in the short run. Worse, the large long-term costs of debt-financed spending are ignored in most studies of short-run fiscal stimulus and even more so in the political debate.”

    In conclusion, he writes: “The complexity of a dynamic market economy is not easily captured even by sophisticated modeling (an idea stressed by Friedrich Hayek and Robert Solow). But based on the best economic evidence, we should reject increased spending and increased taxes.” He calls for reductions in personal and corporate marginal tax rates and an “enforceable gradual phase-down of the spending explosion of recent years.”

    We should note that Obama and many of those in government are easily seduced by the allure of Keynesian deficit spending. It’s government, after all, that gets to spend the money. Republicans, even those who consider themselves conservative, have been seduced in this way, too.

    Tax cuts, on the other hand, leave money and spending decisions in the private sector.

    Why the Spending Stimulus Failed

    New economic research shows why lower tax rates do far more to spur growth.

    By Michael J. Boskin

    President Obama and congressional leaders meeting yesterday confronted calls for four key fiscal decisions: short-run fiscal stimulus, medium-term fiscal consolidation, and long-run tax and entitlement reform. Mr. Obama wants more spending, especially on infrastructure, and higher tax rates on income, capital gains and dividends (by allowing the lower Bush rates to expire). The intellectual and political left argues that the failed $814 billion stimulus in 2009 wasn’t big enough, and that spending control any time soon will derail the economy.

    But economic theory, history and statistical studies reveal that more taxes and spending are more likely to harm than help the economy. Those who demand spending control and oppose tax hikes hold the intellectual high ground.

    Continue reading at the Wall Street Journal (subscription not required)