Sago » Entries tagged with "debt"
Gov. Dayton, what about the miners?
Earlier this week, Gov. Dayton joined DFL lawmakers in Duluth to pretend that building a new Vikings stadium was all that was needed for a great Minnesota economy: “Thousands of people are going to be working on that stadium, and on the transit center in Duluth. Those aren’t just words, those are real jobs,” Dayton said, referring to $6 million included in the state bonding construction bill for the $27 million downtown transit hub supporters say will link bus, taxi and train passengers with hikers and bikers. Senate Minority Leader Tom Bakk, DFL-Cook, said Republicans seemed content the past two years with passing little or no legislation to create jobs or move the state forward. “We saved the Republicans from what would have been the largest do-nothing session in state history,” Bakk said, … Read entire article »
Filed under: Raw
Some French Economic Humor
Having written several times about crazy French statism, you will understand why I like this cartoon. Though, to be fair, France hasn’t gotten to the point where it’s being bailed out (it’s probably just a matter of time). If you want some good analysis of the situation in Europe, Veronique de Rugy of the Mercatus Center hits the nail on the head in her column in today’s Washington Examiner. France has yet to cut spending. In fact, to the extent that the French are frustrated with “budget cuts,” it’s only because the increase in future spending won’t be as large as they had planned. The same can be said about the United Kingdom. Spain, Italy and Greece have had no choice to cut some spending. However, in the case of these particular countries, … Read entire article »
Filed under: Page Two
Debunking the Austerity Charade in Europe
I wrote a detailed blog post yesterday, showing that European governments have been very reluctant to restrain the burden of government spending. Part of the problem is that the debate in Europe is a no-win exercise, pitting proponents of higher taxes (which is largely how Europe’s political elite defines “austerity”) against proponents of higher spending (notwithstanding a long track record of failure, the Keynesians have come out of woodwork and are claiming that bigger government stimulates “growth”). With these terrible choices, no wonder the continent has such a bleak future. Here’s a recent appearance on Fox Business News, where I discuss these topics. I explain that Europe can grow and prosper, but only if politicians are willing to reduce the burden of government spending and lower tax rates. But don’t hold your breath waiting for … Read entire article »
Filed under: Raw
Paul Krugman and the European Austerity Myth
With both France and Greece deciding to jump out of the left-wing frying pan into the even-more-left-wing fire, European fiscal policy has become quite a controversial topic. But I find this debate and discussion rather tedious and unrewarding, largely because it pits advocates of Keynesian spending (the so-called “growth” camp) against supporters of higher taxes (the “austerity” camp). Since I’m a big fan of nations lowering taxes and reducing the burden of government spending, I would like to see the pro-tax hike and the pro-spending sides both lose (wasn’t that Kissinger’s attitude about the Iran-Iraq war?). Indeed, this is why I put together this matrix, to show that there is an alternative approach. One of my many frustrations with this debate (Veronique de Rugy is similarly irritated) is that many observers make the … Read entire article »
Filed under: Raw
Measuring the Federal Government’s Spending Problem
I’ve complained endlessly that America’s fiscal problem is too much spending, and that deficits and debt are best understood as symptoms of that underlying disease. So I’m obviously a big fan of this new video from the folks at Learn Liberty. I like how they use several types of measurements to show that there’s plenty of tax revenue. Indeed, the best line, near the end of the video, is when the narrator points out that higher taxes will simply exacerbate the spending problem (as I have noted). Two final items. First, the folks from the Institute for Humane Studies have a bunch of great videos as part of the Learn Liberty series. I’ve already highlighted the one on free trade vs. protectionism, and I include eight challenging questions for those who think it … Read entire article »
Filed under: Raw
Growth Union
In relying only on austerity and cheap bailout loans, the German-led strategy has proffered a false sense of European integration in the E.U. Even as expanding the bailout funds to roughly 800 billion euros and strengthening the E.U.’s means of enforcing limits on state deficits and debt are along the line of continued incremental shifts of governmental sovereignty from the state governments to that of the E.U., the related austerity (and recession) sparked a populist backlash in several states. At the state level (and this level has a major role at the E.U. level—unlike in the U.S.), the state-rights (i.e., anti-E.U.) parties have been the beneficiaries even if they could not gain outright majorities. The National Front in the state of France is an obvious example, as it captured 18% … Read entire article »
Filed under: Raw
Switzerland’s “Debt Brake” Is a Role Model for Spending Control and Fiscal Restraint
I’ve argued, ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve cited nations that have made progress by restraining government spending. But what’s the best way of actually imposing such a rule, particularly since politicians like using taxpayer money as a slush fund? Well, the Swiss voters took matters into their own hands, as I describe in today’s Wall Street Journal. Americans looking for a way to tame government profligacy should look to Switzerland. In 2001, 85% of its voters approved an initiative that effectively requires its central government spending to grow no faster than trendline revenue. The reform, called … Read entire article »
Filed under: Raw
The 2012 National Debt Road Trip
Yes, yes, yes, this representation of the national debt story is misleading/unfair/whatever. Well. Except the last 35 seconds. It’s been pointed to before about the president’s economic philosophy. There. Is. No. Plan. Authored By Scott W The Troglodyte … Read entire article »
Filed under: Raw
3 ½ Time-outs
Around the Horn Edition (sports, culture, economy, science/tech) Hosted by Acts of the Apostasy. -1- The University of Minnesota has hired Norwood Teague as its new athletic director. Mr. Teague comes to the U from Virginia Commonwealth, where he established a record of fundraising and facilities development, both of which are glaring and growing needs at Minnesota. Critics are concerned that VCU does not have a varsity football program indicates a hole in his background, but supporters are quick to point out that that should make Teague feel right at home with the Golden Gophers. -2- The split earlier this month of “Mike and Ike” over “creative differences” has been characterized on both the left and the right as a gay “divorce.” However, as Anderson Cooper has reported, Mike and Ike are not gay, much less … Read entire article »
Filed under: Half Baked
Quietly robbing Peter (and his parents) to pay Peter
Several things are abundantly clear about the federal student loan program. The first thing that’s clear is that it’s been a mix of blessings and curses to students. Another thing that’s clear is that it’s a way of hiding the fact that the cost of tuition is too high. The third thing that’s clear is that it first robs Peter to borrow money to Peter. Actually, it’s more likely that the federal government is robbing from Peter’s parents today to borrow money to Peter. In return for doing Peter this ‘favor’, Peter ‘gets’ to pay the money that the federal government took from Peter’s parent with a tidy interest rate tacked on, thereby adding interest rates to the injury. To court the vote of young people, President Obama is promising to steal … Read entire article »
Filed under: Page Two
Is MnSCU overfunded?
Back in March, 2007, DFL Sen. Sandy Pappas said that the GOP was “starving higher education.” The higher education budget increased by $296,000,000 that biennium: Under the Senate targets, public education would get the most of $1.3 billion in new money: $498 million in the next two years. Following would be higher education ($296 million) and health and human services ($245 million). Other parts of the budget would get relatively insignificant increases considering the total state spending will top $34 billion over the next two years. Despite that 11.3% increase, DFL Sen. Pappas still said this: Higher Education Chairwoman Sandy Pappas, DFL-St. Paul, said college and university funding is far from enough. “We are starving higher education,” she said. It’s worth noting that tuition increased at Minnesota universities despite that hefty increase. Besides, I’d … Read entire article »
Filed under: Raw
Congressman Ryan’s Budget Restrains Spending Growth, Allows Private Sector to Expand Faster than Burden of Government
The Chairman of the House Budget Committee has produced a new budget plan which contrasts very favorably with the tax-heavy, big-spending proposal submitted by the President last month. Perhaps most important, Congressman Ryan’s plan restrains spending growth, allowing the private sector to grow faster than the burden of government, thus satisfying Mitchell’s Golden Rule so that spending falls as a share of GDP. The most important detail in the proposal is that the federal budget, which currently consumes 24 percent of GDP, would fall to less than 20 percent of GDP beginning in 2016. That’s the good news. There are three pieces of not-so-good news. 1. Ryan’s plan allows spending to grow by an average of 3.1 percent annually over the next 10 years, with is faster than the 2.8 percent average annual growth … Read entire article »
Filed under: Raw
Rep. Thissen: longterm debt key to creating jobs
Apparently, Rep. Thissen thinks that taking on longterm debt is the key to creating jobs. Apparently, most DFL politicians agree with him. For months, DFL politicians, from Gov. Dayton to Rep. Thissen to backbench bombthrower Rep. Ryan Winkler, have talked about a “jobs bill.” In the same breath, they’ve talked about a bonding bill being their first choice of a jobs bill. Legislation that takes away money from the private sector in terms of banks’ borrowing capability while not producing meaningful demand for new purchases create jobs? That’s what bonding bills do. The DFL’s definition of a jobs bill is unknown in some respects. The DFL, especially Carrie Lucking, has talked plenty about Gov. Dayton’s amazing jobs bill. They just won’t explain how jobs are created. It’s as if this is their explanation … Read entire article »
Filed under: Raw
By Restraining Burden of Federal Spending, Senator Paul Shows How It’s Simple to Balance the Budget
Last year, while lounging on the beach in the Caribbean…oops, I mean while doing off-site research, I developed the first iteration of a rule to describe how fiscal policy should operate. Good fiscal policy exists when the private sector grows faster than the public sector, while fiscal ruin is inevitable if government spending grows faster than the productive part of the economy. My motivation was to help people understand that America’s fiscal problem is excessive government spending, not red ink. Deficits and debt are undesirable, of course, but they are best understood as symptoms. The underlying disease is a bloated federal budget that diverts resources from the productive sector of the economy and subsidizes dependency. But after getting feedback, I realized that the rule was too wordy. So, after a bit of tweaking … Read entire article »
Filed under: Raw
A Fiscal Policy Tutorial: Everything You Need to Know about the Economics of Government Spending
Almost exactly one year ago, I did a post entitled “A Laffer Curve Tutorial” because I wanted readers to have all the arguments and data in one place (and also because it meant I wouldn’t have to track down all the videos when someone asked me for the full set). Riders from the fiscal policy short bus Today, I’m doing the same thing on the issue of government spending. If you watch these four videos, you will know more about the economics of government spending than 99.9 percent of the people in Washington. That’s not a big achievement, to be sure, since you’re being compared to a remedial class, but it’s nonetheless good to have a solid understanding of an issue. The first video defines the problem, explaining that deficits and debt are … Read entire article »
Filed under: Raw
Higher Education: A Public Good or Commodity?
According to theNew York Times, the American states, much more so than their Europeancounterparts, began a gradual trend of what the paper calls “withdrawal” fromhigher education during the recession in the early 1990s. It is perhaps moreaccurate to say “decreased financial support” as the governments have not cutoff their own universities. Even so, the change has been significant. The Timesreports that the governments’ appropriations for their colleges anduniversities decreased by 7.6% in 2011-2012. This represents the largest annualdecline in at least the previous fifty years—since the time of JFK—according toa report issued by Illinois State University. As of 2012, Arizona had decreasedits higher education budget by 31 percent since the recession began in 2007.The housing market decline hit Arizona hard. I would not be surprised to findsimilar numbers in California, … Read entire article »
Filed under: Raw
Ways & Means Committee Republicans Achieve the Dubious Honor of Winning the First Bob Dole Award
I confess to being monotonous and repetitive when it comes to explaining that America’s fiscal problem is too much spending, and that debt and deficits are simply symptoms of that underlying problem of excessive government. But no matter how often I repeat myself, the message isn’t sinking in – even among people who should know better. That’s why I’ve created the “Bob Dole Award.” I’m hoping that a bit of well-intentioned moral suasion may convince people (at least the ones who presumably are on the right side) to be a bit more careful with their rhetoric. The first winner of this (hopefully uncoveted) award are the Republicans of the House Ways & Means Committee. These are the GOPers with the most influence over both tax and entitlement policy, so it’s very important that they … Read entire article »
Filed under: Raw
Debunking the DFL’s ‘Jobs Bill’ mantra
This year more than most, the DFL is whining about how Republicans aren’t stealing enough money from the private sector moving fast enough on Gov. Dayton’s jobs bill. That’s the bill ABM’s Carrie Lucking once called “Gov. Dayton’s amazing jobs bill.” To be polite, after talking with local businesspeople, they don’t share Ms. Lucking’s opinion of Dayton’s debt and gimmicks bill. As usual, the DFL is telling the world that another bonding bill, aka debt bill, aka state stimulus bill, aka stealing money from the private sector bill, will create tons of new jobs that will reinvigorate Minnesota’s economy. It’s a myth to think that bonding bills create jobs or invigorate a state’s economy. That isn’t a reflexive statement against all bonding. It’s a statement that says creating a great business climate that … Read entire article »
Filed under: Raw
According to Obama’s Budget, Burden of Federal Spending Will Be $2 Trillion Higher in 10 Years
President Obama’s budget proposal was unveiled today, generating all sorts of conflicting statements from both parties. Some of the assertions wrongly focus on red ink rather than the size of government. Others rely on dishonest Washington budget math, which means spending increases magically become budget cuts simply because outlays are growing at a slower rate than previously planned. When you strip away all the misleading and inaccurate rhetoric, here’s the one set of numbers that really matters. If we believe the President’s forecasts (which may be a best-case scenario), the burden of federal spending will grow by $2 trillion between this year and 2022. In all likelihood, the actual numbers will be worse than this forecast. The President’s budget, for instance, projects that the burden of federal spending will expand by less than 1 … Read entire article »
Filed under: Raw
Announcing the “Bob Dole Award” for Misguided Conservatives
I’m getting very frustrated. I spend too much time reminding my supposed allies that America’s fiscal problem is too much government. Deficits and debt, I constantly explain, are best understood as symptoms, whereas a bloated public sector is the underlying disease. Even people who are very solid on fiscal policy make the mistake of sometimes focusing too much on red ink rather than the size of government, including Senator Jim DeMint, Mark Steyn of National Review, Representative Paul Ryan, and my old friends at the Heritage Foundation. So I’ve decided to create a new award. But unlike my other awards, which are exercises in narcissism (Mitchell’s Law, Mitchell’s Golden Rule), I’m naming this award after former Senator Bob Dole. The message is very simple. Whenever people complain about red ink, even if they … Read entire article »
Filed under: Raw
Europe’s Fiscal Crisis Is Caused by too Much Government, and Deficits and Debt Are Merely Symptoms of that Problem
I don’t expect a good outcome to the European fiscal crisis, largely because nobody seems to understand that the real problem is excessive government spending. The economic illiterates in the press sometimes say the fight in Europe is between austerity and Keynesianism, but that’s not accurate. It’s really a battle between those who think big government should be financed by taxes and those who think big government should be funded by taxes and debt. And it doesn’t help that the supposedly conservative governments in places such as Spain, Germany, France, and the United Kingdom are run by statists. The good news is that some people understand the real problem. The bad news is that they generally don’t live in Europe. Writing for the Australian, Professor Judith Sloan cites the Rahn Curve as she … Read entire article »
Filed under: Sago
Illinois Downgrade Provides More Evidence that Higher Taxes Make Fiscal Problems Worse, not Better
I don’t blame the Democrats for wanting to seduce Republicans into a tax-increase trap. Indeed, I completely understand why some Democrats said their top political goal was getting the GOP to surrender the no-tax-hike position. I’m mystified, though, why some Republicans are willing to walk into such a trap. If you were playing chess against someone, and that person kept pleading with you to make a certain move, wouldn’t you be a tad bit suspicious that they weren’t trying to help you win? When I talk to the Republicans who are open to tax hikes, they sometimes admit that their party will suffer at the polls, but they say it’s the right thing to do because of red ink. I suppose that’s a noble sentiment, though I find that most GOPers who are … Read entire article »
Filed under: Raw
