Richard Morrison and Marc Scribner welcome back long-lost co-host Michelle Minton to Episode 101 of the LibertyWeek podcast. We discuss the sobering recommendations of the White House debt commission, the intoxicating budgetary success of Chris Christie in New Jersey, the bunker mentality of UN climate scientists, the travails of urban homesteaders and the birth of scandal-based tourism.
debt
Rep. Ann Kirkpatrick is proposing a 5 percent pay cut for members of Congress.
“In the face of our ever-deepening federal debt, the federal government must follow their example by finding common-sense solutions to do more with less,” she told The Hill.
A noble sentiment. And one that would save $8700 per member. With 535 members of the House and Senate, the total savings are $4.65 million.
The federal government is on track to spend about $3.8 trillion this year. Trimming $4.65 million means that for every $816,502 the federal government spends, it would save one dollar.
Rep. Kirkpatrick is proposing a 0.00122 percent spending cut. That’s not even a rounding error.
I do not intend to mock Rep. Kirkpatrick. Her spending cut is better than nothing, and I am glad she is proposing it. But placed in proper context, it is very, very small. It is a largely symbolic proposal, and should be treated as such. A 5 percent pay cut for Congress is no austerity measure.
More fundamental solutions would involve fundamental entitlement reform paired with a deregulatory stimulus. Cato’s Chris Edwards has some other spending cut ideas that deserve a serious look. They total $380 billion, or ten percent of federal spending.
Today, April 9, is Tax Freedom Day. The good folks at the Tax Foundation calculated how much money local, state, and federal governments harvested last year from taxpayers ($3,469,000,000,000), and compared that to national income ($12,901,000,000,000). At 26.89 percent of national income, you basically work until April 9 just to pay off your taxes.
April 9 is the national average; different states have different tax burdens, so Tax Freedom Day actually varies from state to state. If you live in Alaska, you already celebrated Tax Freedom Day on March 26. But if you live in Connecticut, you have to keep the champagne on ice until April 27.
That isn’t the whole picture, though. The federal government spends far more than it taxes. $1,414,000,000,000 more, last year alone. The burden of federal deficit spending adds another 40 days. Not even counting state and local deficit spending, that puts us out to May 19 by my calculations (May 17 by the Tax Foundation’s).
Even that’s not all. The hidden tax of federal regulation cost businesses and consumers an additional $1,187,000,000,000 last year, according to Wayne Crews’ soon-to-be-released 2010 edition of Ten Thousand Commandments (previous editions are online here). None of that extra trillion-plus actually shows up in the federal budget. Regulation eats up an additional 9.2 percent of national income, or 8.3 percent of GDP. So you have to work an additional 34 days until you pay off the federal regulatory burden.
It’s tempting to brush off regulatory costs, since most of them are borne by businesses. But remember, businesses pass on their costs to consumers. You pay for the regulatory state. Its costs are real.
Adding together total taxes, plus federal deficit spending, plus federal regulations pushes us out to June 22 by calculations, or June 20 by the Tax Foundation’s.
And remember, that’s leaving out state and local deficit spending. Nor does it count state and local regulations. I don’t have the data handy for that. But if they add up to at least $460,000,000,000 then we’re past the half-way mark of the year. Just to pay for government.
Even using the larger number of GDP ($14,253,000,000,000 in 2009), and leaving state and local deficit spending and regulation, we’re still talking 42.9 percent of the economy going to pay for government. That’s 157 days out of the year. You’re not free until June 6 even by that generous measure.
I’d argue that government has grown too big, but the data have already done that for me.
This morning I read with interest – and amazement – the above headline. Does our president live in the same world that I inhabit? He’s worried about America’s increasing indebtedness and is pushing for a massive expansion of health entitlements (aka wealth redistribution programs) and the cap-and-tax global warming initiatives (aka wealth redistribution programs) and a host of other other wealth-destroying regulatory programs. Yet, he’s worried about America’s growing debt?
Our political system is only now perhaps emerging from a foolish policy of lowering credit standards to encourage universal home ownership. We’re now about to lower credit standards for health and energy investments. In effect, the problems of subprime mortgages are now being universalized. But, as in the subprime case, we’re assured that these moves will actually lower the national debt! Does reality have any relevancy?
Your host Richard Morrison teams up with Jeremy Lott and Josh Barro to bring you Episode 68 of the LibertyWeek podcast. We start with Saturday night’s healthcare vote in the House, Freddie Mac’s losing bets and a gift card scandal in Charm City. We then move on to Andrew Cuomo’s attack on Intel in New York and Josh tells us why we can expect more tax hikes in the future.
Host Richard Morrison welcomes guest co-hosts Michelle Minton and Lee Doren to Episode 59 of the LibertyWeek podcast. This week we take a detour from the usual format and focus on the upcoming 9/12 March on Washington, where thousands of Americans from across the country will converge on Capitol Hill to protest record levels of government spending and borrowing. The demonstration is about defending our liberty and about restoring our Constitution by reducing the size and scope of the federal government.
[youtube:http://www.youtube.com/watch?v=zS7phV9-0WA 285 234]
[youtube:http://www.youtube.com/watch?v=rKNBLsEzJmw 285 234]
On behalf of my distinguished colleague Iain Murray, who is busy speaking at a very important press conference this morning, let me present his prepared remarks on the impending stimulus bill:
Remarks of Iain Murray, Director of Projects and Analysis, Competitive Enterprise Institute
Good morning. Others have already told you what an unutterable waste of money this so-called stimulus package is. I just want to make two points. First, that the American people have been misled about the nature of the bill, and been sold a pig in a poke. Second, that if you really want to stimulate economic activity, there is a very simple way to do it that doesn’t cost a penny; we call it “liberate to stimulate.”
The American people were told that this bill would give Americans jobs as a result of great public works projects. It won’t. Congress and the Agencies have between them made it very difficult to undertake great infrastructure projects, and impossible to do it quickly. That’s why almost all the supposed “shovel-ready” projects in the bill are maintenance projects and the like. If you thought Americans would be building roads, only 3 percent of the Senate stimulus package is for roads. Only 7 percent is for new infrastructure in general.
As for so-called “green energy,” the much-vaunted aim of doubling alternative energy can be achieved by business-as-usual, so little energy is provided by wind and solar. My colleague Jonathan Tolman and I also worked out that the House bill contains just about $6.4 billion aimed at creating “green jobs,” and only 70,000 would be created. This bill is not what was advertised.
So how can we stimulate the economy? As I mentioned, Congress has made it very difficult to build infrastructure. It needs to lift those restrictions. Gov. Schwarzenegger and three former California governors have all complained about the restrictions of the National Environmental Policy Act causing misallocations of infrastructure funding. Those restrictions need to be removed, as Gov. Schwarzenegger has asked. Similarly, we need clean electric power, and we need large amounts of it, but it takes ten years or more to break ground on a nuclear power plant. If the regulators sped up the permitting process like they’re doing in the UK, then we could get moving on new nuclear build very quickly. Those sorts of reforms don’t cost anything, and can get America back to work, which is what we all want to see.
Check out more on the topic under the “Deregulate to Stimulate” category.
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