Voice For Liberty

Tag: Government spending

  • Kansas and Wichita quick takes: Thursday December 2, 2010

    Kansas lags in charter schools. It won’t be a surprise to regular readers of this site, but Kansas is way behind most states in taking advantage of charter schools. This is a school reform measure that, while not perfect and doesn’t succeed in all cases, provides a way to increase opportunity for often the most disadvantaged students. It also increases opportunity for those students who don’t directly use them. Paul Soutar takes a look at how Kansas earns such a poor evaluation regarding charter schools in his article Weak Charter School Law Works Against Taxpayers’ Interests.

    Bureaucrats Gone Wild in Cancun. Global warming alarmists are meeting, and Americans for Prosperity is there to keep an eye on them. AFP says: “The United Nations Climate Change Conference is meeting in Cancun, Mexico from November 29 — December 10, 2010 where bureaucrats will work to transfer wealth and technology from developed to developing nations by raising the cost of traditional energy. But before these international bureaucrats get to ‘work’, they decided to throw a lavish party for themselves.” A news headline spotlighted in a video produced by AFP reads “Cancun climate change summit: scientists call for rationing in the developed world. The video is here: Bureaucrats Gone Wild in Cancun. AFP is taking its Hot Air Tour there. There are two ways to view this event: online, or by attending a watch party. There’s one in Wichita Thursday evening. Click on Hot Air Tour: Live from Cancun for more information and to register.

    Obama federal employee pay freeze — or not. President Barack Obama has been praised for instituting a pay freeze for federal employees. But the freeze may not be all it seems to be. Vincent Vernuccio of the Competitive Enterprise Institute reports: “President Obama’s proposal of a pay freeze for federal employees is a small step towards curbing government spending. However, a closer look shows there is less to it than meets the eye. In fact, many federal employees will still see their salaries increased. While Obama’s plan would stop the annual across-the-board cost of living adjustment (COLA) for all federal workers, it will not stop workers from getting raises altogether. The freeze will not affect pay raises for job classification upgrades. As an official at the Office of Management and Budget told Federal News Radio, ’employees will still be eligible for step increases.’” The full analysis is at the Daily Caller in Federal workers will still receive raises despite pay freeze.

    The moral case against spreading the wealth. From The Moral Case Against Spreading the Wealth by Leslie Carbone: “After two years, the results of President Obama’s wealth-spreading policies have confirmed centuries of economics, political philosophy, and common sense: Forced wealth redistribution doesn’t make things good for everybody; it makes things worse, both fiscally and morally.” Carbone explains the two reasons: Government-mandated wealth distribution does create prosperity, and it’s not a legitimate function of government. On the type of behavior we’d like to see in people, she writes: “Wealth redistribution discourages the virtuous behavior that creates wealth: hard work, saving, investment, personal responsibility.” After explaining other problems that progressive taxation — wealth redistribution — causes, she sounds a note of optimism: “Through Tea Parties and popular protests, millions of Peters and Pauls, and Joe the Plumbers are rejecting what F.A. Hayek so aptly called the fatal conceit of paternalistic government. Decades of federal expansion have demonstrated what history, economics, philosophy, and common sense have told us all along: People, working through the market, are the engines of prosperity, both moral and financial — but only if we get government out of their way.” Leslie Carbone is the author of Slaying Leviathan: The Moral Case for Tax Reform. That book expands on the ideas presented in this article.

  • Pompeo, back from Washington, gives update

    Yesterday Congressman-elect for the fourth district of Kansas Mike Pompeo met in his campaign office with news media for a question-and-answer session. Newly-elected members of the next Congress were in Washington last week for orientation, office selection, and leadership elections.

    The current Congress resumes its session on December 6th, and the plan is to be in session for two weeks — another so-called “lame duck” session. Pompeo says that a good thing Congress could do is to extend the current tax rates — the Bush tax cuts — so that the new Congress doesn’t have to deal with this issue in January. “It makes no sense to be talking about raising taxes in today’s economic environment, so I hope they’ll do that,” he said.

    There are risks that the lame duck session will pass legislation like card check and other legislation favored by liberals and Democrats. But Pompeo said that voters spoke on November 2nd, that there is a set of things that voters don’t want done, and he hopes that the current Congress will honor those wishes and not pass card check or other matters that may be brought up.

    Committee membership is important to incoming members of Congress. Describing the process of committee assignment, Pompeo said there is a steering committee that includes three of the incoming freshman class, and this committee decides committee assignments. It is to this body that members make their requests for committee assignments. Pompeo mentioned three committees in particular that he is interested in joining: Energy and Commerce, Transportation and Infrastructure, and Armed Services. Energy and Commerce handles issues related to the oil and gas industry, which Pompeo has experience in. Transportation and Infrastructure covers general aviation issues, another industry in which Pompeo has experience, and one very important to Wichita.

    He added that no other Kansans are on any of these committees.

    On the Air Force tanker procurement, Pompeo said the decision has been delayed until spring, perhaps March. He said it is time to make a decision, and that the tanker needs to be built. But the recent disclosure of proprietary bidding information being wrongly sent to each party, even though accidental, will likely mean the decision will be protested.

    Asked whether he would join the Congressional Tea Party Caucus founded by Michele Bachmann, Pompeo said he “hadn’t given much consideration” to which caucuses he would join.

    Between now and January 5th Pompeo said he has two offices to open and staff, one in Wichita, and his congressional office in Washington.

    Asked about the one thing he’s most eager to get working on, Pompeo said that federal government spending must be brought under control. “What we know at the end of the day is that you only can take so much money out of the private sector before you begin to destroy the entrepreneurial engine that’s made America great. And today we’re there. So we have to move it back.”

    It will not be easy, he said. But he believes the other freshmen Republicans that were elected along with him are serious people, with many campaigning on the same issues that he did — a “smaller, humbler federal government that was more efficient and did the right things, and didn’t do everything.”

    I mentioned several polls since the election that show that Americans are skeptical about the new Congress and its ability to change things. Pompeo said that voters are right to be skeptical, based on history. But he is optimistic. Voters were boisterous, he said, adding that “Americans have found their voice.” So if the new members of Congress don’t fulfill the promises they made, or at least begin the process, Pompeo said voters will reject this group, “and properly so,” he added.

    He added that voters did not elect a Republican senate, and the president still has a deep liberal agenda: “There is still a lot of resistance to smaller government, certainly in the Senate, and absolutely in the White House.” If the House of Representatives is true to what voters asked it to do, that will set up an important election in 2012 where voters can elect a senate and president. He framed the choice: “Do we want to be more statist, or do we prefer individual responsibility and free enterprise,” adding that he is confident Americans will choose free enterprise and individual responsibility.

    I asked about tension between tea party activists and establishment Republicans. Pompeo said he doesn’t see the tension between the two groups. Of people who participate in tea parties, Pompeo said these are “Americans in the deepest tradition of standing up and saying ‘No, we’re not going to let our country go away. We’re going to work our tails off to reclaim it.’”

    He said that many of his incoming colleagues in the new Congress are deeply committed to the ideals of the tea party, adding that he is too. There is a “new idea” now, he said, which is really the idea that the Founders had. This idea had been lost, moved away from the forefront for thirty years, even within the Republican party: “This conservative notion of states’ rights, smaller federal government, and individual responsibility is moving back to the forefront.” People who have participated in tea party events are an important part of this, he said, and he implored them to keep up their efforts.

  • KansasOpenGov.org provides state data to citizens

    KansasOpenGov.org provides an easy-to-access repository of data about Kansas state and local governments, giving citizens the data they need to hold officials accountable.

    KansasOpenGov.org is a project of the Kansas Policy Institute. This week I spoke to KPI President Dave Trabert and received a demonstration of the website and some ways it can be used.

    On its opening page, KansasOpenGov.org displays a map of Kansas, showing the county boundaries. As you roll the pointer over each county, data about taxes and population appears. Clicking on a county displays a table of tax and population data for the last 12 years.

    Many subject areas of KansasOpenGov.org allow you to search the database in your own way, but also provide pre-defined reports and charts that can be accessed with one click. For example, under “Pay and Benefits” there are two such reports, showing state employees earning $100,000 or more, and another showing overtime pay.

    The overtime pay report holds some interesting numbers, as shown in the accompanying video walkthrough. Some employees are earning a lot in overtime. Trabert said: “When government says we couldn’t possibly spend any less — as we heard from the governor and others in the last session in order to justify a tax increase — when you have people who sit behind desks such as planners and program consultants earning over $30,000 in overtime — it begs the question: How close are you looking?”

    High overtime expenses may mean that agencies should look to hire additional employees rather than paying expensive overtime. Some jobs, such as highway patrol officers, are stressful, and high overtime earnings may mean employees are working long hours. This may be unfair to them as well as unproductive.

    Another subject area of KansasOpenGov.org is school district revenue and spending. This data is supplied by the Kansas State Department of Education, which in turn gets data from school districts. The “District Comparison Tool” displays two charts, side-by-side, and visitors can select different districts to be shown in each chart.

    KansasOpenGov.org has added some additional data, such as an indication for each school district as to whether it has joined Schools for Fair Funding, the organization that is suing the state for more funding. This allows users to compare these schools with all schools. Interestingly, the SFFF schools receive substantially more state and federal funding (on a per-pupil basis) than the statewide average for all Kansas schools. The SFFF schools receive less local funding, however. But overall, they received more funding than the average school district.

    Other insight that can be found at KansasOpenGov.org is the fact that schools increased their contingency fund balances last year at the same time they laid off teachers and other staff. Again, this lead Trabert to question the claims of spenders, this time the schools: “What we want to show is that when people say we can’t spend any less, you’re hurting the kids, and they’re asking for a tax increase: taxpayers have the right to know the facts. … The state has the right to justify the spending, but people don’t get a chance to ask for the justification if they don’t know the facts.”

    Growth in Kansas property taxesGrowth in Kansas property taxes. Click for a larger view.

    The section on property taxes lets visitors create charts for each county showing the growth in taxes, inflation, and population. For most counties, and for the state as a whole, taxes increase much faster than inflation or population.

    Some of the data the system makes available requires additional explanation. For example, looking at the state’s checkbook shows a check written by the treasurer for $269,940,000.00 with the notation “DEFEASED DEBT – PRINCIPAL PAYMENTS.” This language — provided to KansasOpenGov.org by the state — certainly needs explanation.

    In other cases, some of the data the state supplies may be misleading at first glance. For example, a look at employees of the Legislature and their pay shows one member of the Kansas House of Representatives being paid over $106,000 in one year — way more than legislators actually earn. But this person also has another state job, and the two pay sources are combined in the data the state supplies.

    KansasOpenGov.org lets users download most data to spreadsheet programs such as Microsoft Excel, which means that the data can be further analyzed and presented.

    Going forward, the system is built and operating, and Trabert said that new data will be added to the database as it becomes available from the state. He also plans to add more data about individual school districts. The state refused to provide benefits costs for state employees, and Trabert hopes the state will provide this data in addition to base pay and overtime data.

  • Kansas and Wichita quick takes: Tuesday November 16, 2010

    Future of California. George Gilder, writing in the Wall Street Journal, lays out a grim future for California based on voters’ refusal to overturn AB 32, the Global Warming Solutions Act. Of the requirement to reduce greenhouse gas emissions in the state, Gilder writes: “That’s a 30% drop followed by a mandated 80% overall drop by 2050. Together with a $500 billion public-pension overhang, the new energy cap dooms the state to bankruptcy.” He says that AB 32 may not be necessary at all: “The irony is that a century-long trend of advance in conventional ‘non-renewable’ energy — from wood to oil to natural gas and nuclear — has already wrought a roughly 60% drop in carbon emissions per watt. Thus the long-term California targets might well be achieved globally in the normal course of technological advance. The obvious next step is aggressive exploitation of the trillions of cubic feet of low-carbon natural gas discovered over the last two years, essentially ending the U.S. energy crisis.” … Referring to green energy radicals, Gilder writes: “Their economic model sees new wealth emerge from jobs dismantling the existing energy economy and replacing it with a medieval system of windmills and solar collectors. By this logic we could all get rich by razing the existing housing plant and replacing it with new-fangled tents.” Which reminds me of when I criticized those who promote wind power for its job creation: “After all, if we view our energy policy as a jobs creation program, why not build wind turbines and haul them to western Kansas without the use of machinery? Think of the jobs that would create.” An economic boom to those along the Santa Fe Trail, no doubt.

    All the billionaires. An amusing commentary — amusing until you realize what it really means — by Scott Burns in the Austin American-Statesman takes a look at how long the wealth of America’s billionaires could fund the federal government deficit. The upshot is that there are about 400 billionaires, and their combined wealth could fund the deficit for about nine months. What’s sobering about this? All this wealth would go to fund only the deficit — that portion of federal spending above revenue for the year. There’s still all the base spending to pay for. And the wealth of these people, which in many cases is in the substance of the companies they founded or own — Microsoft, Oracle, Koch Industries, Wal-Mart, Google, etc. — would be gone.

    Kansas has sold assets before. In this year’s session of the Kansas Legislature, there was a proposal to sell state-owned assets in order to raise funds and reduce costs. Kansas Reporter’s Rachel Whitten reports it’s been done before, with success.

    Where are the airlines? James Fallows of The Atlantic regarding the new “groping” TSA screenings at airports. Echoing Wichitan John Todd from last week, one reader writes: “And again, where are the airlines? When TSA begins to drive away customers, they’ll react, is the stock answer. I would argue that it already does drive away customers (certainly if the emails I receive are any indication), but what of those it ‘merely’ makes angry? There’s something wrong with a business model that accepts angry and harassed customers as an acceptable option to no customers at all.” Wichitan Mike Smith writes in: “Tomorrow, the U.S. Senate is having a hearing regarding the TSA’s new procedures that I hope results in the procedures being rescinded. If your readers want to make last minute contact with Kansas Senators Pat Roberts and Sam Brownback (who is on the committee with TSA oversight), I urge them to do so.”

    Next for the tea party. Patrick Ruffini in National Review looks at the future of the tea party. Ruffini notes the difficulty in maintaining the momentum of grassroots efforts. Both Bush and Obama have faced this. He cautions: “The experience should provide a cautionary tale to the Tea Partiers, with their more humble origins: Hitch yourself to established power institutions at your own peril.” But other, newer organizations have sprung up to help tea party activisits: “Ned Ryun, executive director of American Majority — one of the more promising new institutions that have risen up around the Tea Party movement — wants to ignore Washington and go local. ‘What the movement is really about, quite frankly, is the local leaders, and I’ve made a point with American Majority of going directly to them, and ignoring the so-called national leaders of the movement,’ he told me. ‘I think the national leaders are beside the point; if they go away, the movement still exists. If the local leaders go away, the movement dies.’” Kansas is one of the states that American Majority has been active in since its inception. American Majority plans to be involved at the local government level in the 2012 elections.

    The new naysayers. President Obama and others have criticized Republicans for being the party of “No.” Now that some of the president’s deficit reduction commission recommendations are starting to be known, there’s a new party of “No.” Writes Ross Douthat in the New York Times: “But Erskine Bowles and Alan Simpson performed a valuable public service nonetheless: the reaction to their proposals demonstrated that when it comes to addressing the long-term challenges facing this country, the Democrats, too, can play the Party of No.”

    Community Improvement Districts spread to Overland Park. As reported in Kansas Reporter, Overland Park is considering whether to create its first Community Improvement District. In this case, the district — which allows merchants within to charge extra sales tax for their own benefit — would benefit a proposed residential and retail complex. More about these tax districts may be found here.

  • Kansas election was about taxes, spending

    Derrick Sontag of Americans for Prosperity, Kansas chapter analyzes the recent Kansas election and what the results mean. Sontag is optimistic when he writes — referring to the many new conservatives elected to the Kansas House of Representatives — “These new statehouse members will not bow to the demands of taxpayer-funded lobbyists as their predecessors did.” I hope he’s correct.

    Read a paper, watch the news, or venture online and one will find numerous opinions as to why this month’s election results were as one-sided as they were in Kansas. Experts have compared campaign strategies, analyzed campaign finance reports, even opined about which side had the most enthusiasm amongst its base of supporters. But what few have concluded is what I believe to be the truth: the candidates who won simply had the winning message.

    When looking at the victorious candidates in Kansas or across the country, you’ll find individuals who pledged to adhere to fiscally conservative and limited government principles. You’ll find candidates who pledged to cut spending, reduce government debt, and to stop the knee-jerk reaction to increase the tax burden on families and businesses during economic downturns. You’ll find candidates who pledged to reject implementing the federal government’s takeover of our health care system.

    The election results weren’t even close, with all five contested statewide races decided by double digits. What makes it even more impressive is three of the statewide races saw the incumbent lose by 22, 18, and 13 points. The closest race — that of Attorney General — was more than likely decided by the candidates’ stance on joining the suit to fight the federal health care bill, something that incumbent Attorney General Steve Six declined to do.

    Equally as impressive were the results in the Kansas House of Representatives where — counting the primary cycle — 20 seats switched hands from liberal legislators to fiscally conservative candidates who all openly campaigned against the tax-and-spend philosophy that dominated the debate in Topeka last year.

    These new statehouse members will not bow to the demands of taxpayer-funded lobbyists as their predecessors did when they passed the second largest tax increase in state history in order to pay for an increase in spending of $200 million. Rather, they will adhere to the demands of taxpayers and remember the message their future constituents delivered; be more responsive, be more accountable and be an advocate for us, and not proponents of the big government polices proven to be harmful to the Kansas economy.

    Led by Governor-Elect Sen. Sam Brownback, our state has a bright future of returning power to the people by delivering a more efficient and responsive government. Americans for Prosperity looks forward to working with these public servants in an attempt to reform our government.

    Derrick Sontag is the state director of the grassroots group Americans for Prosperity-Kansas. He lives in Topeka.

  • U.S. national debt clock

    U.S. national debt clockU.S. national debt clock

    A handy reference source for figures about U.S. debt and spending, as well as a place to spend a few moments watching the live numbers spin by, is U.S. national debt clock.

    The large panel has live-updated numbers for national debt and spending, tax revenue, state and local revenue and debt, spending on large budget items, gross domestic product, and many other items. Explanations of the meaning of each item, as well as sources for each data item, are supplied.

    One of the most ominous figures on the display is gross debt to GDP ratio, which is at about 93.5 percent. This means that our national debt is almost equal to one year’s output of the entire U.S. economy, meaning it would require everyone in the country to work 48 weeks to pay off the national debt.

  • Kansas and Wichita quick takes: Tuesday October 26, 2010

    Karl Rove. “Former George W. Bush aide Matt Latimer was there to observe the dealings of Karl Rove during the previous administration, and he writes that there’s no secret why most conservatives have now come to view Rove as a fraud. Latimer says that Rove has become symbolic of a GOP establishment that’s known for its utter betrayal and ruin of the Party that Reagan had left so strong. Now that his secret is out, Rove’s influence will only continue to diminish as time goes on and the Tea Parties take over.” A fascinating look at the legacy of Rove, and illustrates the tension between the tea party and the Republican establishment. From Karl Rove’s Flameout.

    Waiting for Superman. The Kansas Policy Institute will host a free screening of Waiting for Superman on Thursday November 4th. Of the film, the Wall Street Journal wrote: “The new film ‘Waiting for ‘Superman’” is getting good reviews for its portrayal of children seeking alternatives to dreadful public schools, and to judge by the film’s opponents it is having an impact. Witness the scene on a recent Friday night in front of a Loews multiplex in New York City, where some 50 protestors blasted the film as propaganda for charter schools.” In Kansas, the Wichita Eagle printed an op-ed penned by the education bureaucracy status quo — Sharon Hartin Iorio, dean of the Wichita State University College of Education in this case — to inoculate Wichitans against the effects of what I am told is a powerful film. Let’s hope this film gets Kansans to thinking about public schools in our state, as Kansas is way behind the curve on innovation, compared to other states. The film will be shown at 7:00pm at the Warren Theatre East (11611 E. 13th St.). KPI asks that you RSVP by Tuesday, November 2 to James Franko at james.franko@kansaspolicy.org. Space is limited.

    Brownback at Wichita Pachyderm. Friday’s meeting of the Wichita Pachyderm club will feature United States Senator and candidate for Kansas governor Sam Brownback. The public is welcome at Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

    Right to work = economic growth. In The Daily Caller, Emporia State University’s Greg Schneider looks at the history of unions in America and right-to-work laws. The number of union jobs has declined as unionized companies became less competitive, not because of right-to-work laws.

    Kansas private sector loses jobs, government grows. “Roughly 7,600 private sector jobs in Kansas disappeared from August to September, while government jobs grew by 21,000 over the same time period.” Most of the government jobs were in schools, writes Rachel Whitten in the Kansas Reporter.

    Tea Party plans to exert influence. As newly-elected members of Congress arrive in Washington to assume their seats, a tea party group plans to lay down expectations. “The meeting of newly elected officials, the date of which hasn’t been set, is designed to keep new representatives connected to ‘what we expect from them,’ according to the memo. Incumbent Republican members of Congress and the party’s national leadership won’t be invited, said Mark Meckler, co-founder of the Tea Party Patriots, in an interview. ‘The incumbents have allowed us to get into the problems we are in now,’ he said. ‘We hope to get to the freshmen before the incumbents get to them, and start twisting their arms.”” The full story in the Wall Street Journal is Group Plans to Keep Pressure on Newly Elected Conservatives. There is definitely conflict between the Tea Party and the Republican Establishment.

    Goyle numbers explained by rats and cats. Candidate for U.S. Congress from the Kansas fourth district Raj Goyle says he has voted with Republicans in the Kansas House of Representatives 80 percent of the time. While a detailed analysis of the votes would be difficult and time-consuming, the majority of measures voted on by legislatures pass nearly unanimously — the so-called “rats and cats” bills. The important cases this year where Goyle voted against his party — the big-spending budget and the statewide sales tax increase — represent either a genuine change in Goyle’s political philosophy, or election-year window dressing. Voters have to make the call.

    Holland claim doubted. In an interview with the Dodge City Daily Globe, Kansas governor hopeful Democrat Tom Holland said “Now I have a proven track record in the Kansas Legislature of reaching across the aisle and working with Republicans.” Evidence, however, points the other way. In the Kansas Economic Freedom Index for this year, Holland is the only Kansas Senator that earned a score of 0 percent. KEFI is not designed to group legislators into Republican or Democratic camps, but Holland ranks alone at the extreme end of the spectrum — voting against economic freedom in all cases.

    Arts in Wichita promoted. Today John D’Angelo, manager of Wichita’s Division of Arts and Cultural Services, contributes a piece to the Wichita Eagle titled How can Wichita sustain, grow arts sector? The answer to this question is: reduce government involvement in the arts, first by abolishing Mr. D’Angelo’s department and city taxation for spending on the arts. This will force arts organizations to meet the demands of consumers as expressed in free markets. Currently, a board of cronies dishes out tax money to arts organizations using political rather than market criteria. This process lets these organizations exists by appealing to Wichita’s cultural elites, rather than the broad market. See Government Art in Wichita. Economic fallacy supports arts in Wichita provides background to D’Angelo’s claim of the economic benefit of the arts, at least government spending on arts.

  • Kansas Statehouse renovations examined

    The restoration of the Kansas Statehouse was featured on a recent episode of Sunflower Journeys. While providing an interesting look at the history of the stonecarvings on the building’s exterior, the show made a mistaken argument about the economics of the project.

    During the episode Vance Kelley, a project manager for Treanor Architects, promoted the economic development aspects of the capitol building’s restoration. Since the workers are local, he said that utilizing local labor forces, means that tax dollars get passed along to local merchants: “Actually we’re generating, I think it’s been estimated between six and seven times the amount of money within the local economy. Preservation actually creates jobs. It is economic development in itself.”

    This argument — that government spending of this type creates jobs — is commonly heard from advocates of more government spending. It’s a popular argument among historic preservationists, too, as they seek to justify why their work is so expensive, and why public money should be expended on it.

    Does government spending create jobs? The short answer is no. The primary reason is that government can only spend what it takes from someone else. It might do the taking now, in the form of taxation, or it might borrow, which delays taxation to the future. Either way, many people have less money to spend, save, and invest because of the taxation.

    Kelley’s argument does have a ring of truth to it. Local merchants — Topeka, he means — are benefiting. Taxpayers across the state are taxed to send money to be spent largely in Topeka. This benefit, however, comes at the expense of spending — and related jobs — in other parts of Kansas. This, however, is a selfish argument.

    Kelley may not be aware of the seen and unseen fallacy that pervades popular thinking. When we go to Topeka — or watch taxpayer-funded public television — we can see the glory and magnificence of the government spending on the Kansas Capitol. Finding the harm caused by the taxation necessary to pay for this, however, is disbursed across the state and very difficult to find. But it exists.

    Kelley also referenced the multiplier. That’s the observation that money spent gets spent again, and again, and again. That’s true. But advocates of government spending like Kelley think that only government spending is magically multiplied. The truth is that any spending is multiplied in this way. It’s a natural phenomenon of economics.

    Some people make the argument that people may not spend their money during uncertain times. Instead, they may save it. But where do savings go? Many people put their money in a bank, which then lends it to people who want to spend it. Other people buy stocks or bonds, or pay down debt. Either action provides funds for others to spend. It’s only when people save money by stuffing it in their mattresses that this argument — that government must spend — applies. And very few people do this.

    The further truth is that when spending their own money, people are usually careful. Government? Not so much. Evidence of this is the ornate decorative carvings illustrated in the Sunflower Journeys episode. Few private building are built to this standard, because people — even wealthy people — spending their own money don’t value this frivolity very highly.

    Instead, it’s government, spending taxpayers’ money, that ends up building elaborate monuments to itself.

    There are some cases where government spending creates wealth, such as in the building of needed highways. It does not follow, however, that only government is capable of making this investment. Further, streets and highways are far removed from ornate stonecarvings on a government monument.

  • Goyle on Social Security protection

    Raj Goyle, candidate for U.S. Congress from Kansas, pledges to protect Social Security from changes, including partial privatization and increases in the retirement age. On his campaign website, he says we must work in a “bipartisan, responsible way to adjust Social Security to ensure its long-term stability.” Goyle’s website doesn’t say this, but the only way to make these adjustments is to increases taxes or the deficit — which pushes taxation off to the future.

    Goyle’s opponents in the campaign for United States Congress from the fourth district of Kansas are Reform party candidate Susan Ducey, Republican Mike Pompeo, and Libertarian Shawn Smith.

    In his pledge, Goyle promises to “work for real solutions that strengthen Social Security for the long term.” Specifically, he pledges to oppose all efforts at privatization and raising the retirement age to 70.

    The problem is that after ruling out reforms like these, there’s not much left to do except to raise taxes or borrow more. Evidence of this can be found in an editorial from the Los Angeles Times recently printed by the Wichita Eagle. Titled Ignore fearmongering on Social Security, it mostly looks back at opposition to the formation of the Social Security system 75 years ago.

    But the article recognizes that the system needs “minor adjustments” to remain solvent. The authors write: “Economists say that raising the income ceiling on the payroll tax, applying the Social Security tax to nonwage income or adding a modest increase to the payroll tax could add decades to the health of the Social Security trust fund.”

    Each of these policy changes is a tax increase. The article lists no other solutions than these.

    These recommendations are not Goyle’s. He hasn’t said what he would do to place the system on a sound financial footing, although he uses the same term — “adjustments” — as does the Times editorial.

    But the reality is there’s not much that we can do except raise taxes or increase the deficit if we want to keep the current system.

    We need to do something quickly. Social Security will pay out more in benefits this year than it receives in contributions from payroll taxes. It had been thought that this milestone would not be reached until 2017 or later.

    There are those who cite the Social Security trust fund and its large balance of over $2 trillion as evidence that the system is doing well. Goyle himself recently mentioned that Social Security would be solvent for the next 30 years. Goyle didn’t mention the trust fund, but that is the source of the system’s purported solvency.

    The problem is, as Thomas Sowell explains, the trust fund is merely an illusion. The money in the fund has already been spent by government agencies. The only way they can pay back the fund is through tax revenues or additional borrowing, which increases the deficit and pushes taxes to future generations.

    It’s not as though most Republicans are confronting the problem head-on. One of the few officeholders willing to do so is Wisconsin Congressman Paul Ryan, who is ranking member of the House Budget Committee. His Roadmap for America’s future is a plan that recognizes the seriousness of the current situation, not only with Social Security, but in other areas of the federal budget.

    His recommendations, specific as they are, cause consternation among some Republicans who would rather talk about problems in general terms rather than specifics. A recent Washington Post profile of Ryan referred to “… many Republican colleagues, who, even as they praise Ryan for his doggedness, privately consider the Roadmap a path to electoral disaster. Unlike most politicians of either party, he doesn’t speak generically about reducing spending, but he does acknowledge the very real cuts in popular programs that will be required to bring down the debt.”

    That frank talk about the budget and government spending might be an electoral disaster is a bad sign for America. We need Raj Goyle to be specific about his plans for Social Security adjustments, too.