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Social Security can’t afford tax cut to benefits (8/12/24)Social Security is facing enormous shortfalls. It is insolvent. Within the next 10 years, no one will be able to avoid this reality — despite decades of politically expedient denial. Yet as of today, both presidential candidates, Vice President Kamala Harris and former President Donald Trump, have announced they won’t touch the program. In fact, Mr. Trump wants to make it even more insolvent by lifting taxes seniors pay on benefits. ...
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J.D. Vance and the bipartisan itch to tax behavior (8/5/24)Republican vice presidential nominee J.D. Vance has been in the news for an old clip of him talking about how the tax code should punish adults without kids. While Vance’s proposal probably aims to address demographic concerns, it represents a misguided approach that contradicts fundamental principles of economic freedom and fairness. ...
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What a real ‘pro-worker’ GOP would look like (7/29/24)Members of the new right wing of the Republican Party have proclaimed themselves the champions of the working class. I am sure they mean it, despite many of them being among the elite of the elite. And because so many are lawyers — including those such as VP nominee J.D. Vance who come from elite Ivy League schools — we can forgive them for failing to understand that their economic policies would hurt, not help, the working class. ...
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How to pay for Trump’s tax cuts (7/22/24)The situation is indeed dire. The national debt has reached staggering levels, and the next president will inherit a ticking time bomb of fiscal deadlines that could significantly worsen the burden. ...
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Make America affordable again (7/15/24)The Republican National Committee just released its 2024 platform. While calling it a platform is a stretch, the list of bullet points gives an idea of what the potential next Trump administration’s goals are. Here’s one issue that should be front and center: End inflation and make America affordable again.
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Don’t let calm seas in uncharted fiscal waters fool you (7/9/24)The United States is full steam ahead into uncharted fiscal waters, with rapidly growing federal debt promising a choppy economic future. Candidates Joe Biden and Donald Trump have added trillions to the national debt during their recent presidential administrations, leaving America at a critical juncture that demands urgent, bipartisan action.
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True test of leadership: Fiscal responsibility in the Presidential debate (6/28/24)During and after this week’s presidential debate, we must look beyond rhetoric and personality to the core issues shaping America’s future. The most pressing is the unsustainable growth of government spending and ballooning national debt, which promises to rob Americans of wealth and living standards in the coming decades. Make no mistake, it’s a genuine crisis demanding immediate attention. Dealing with it responsibly should be the litmus test for presidential leadership.
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SCOTUS takes on Congressional malaise and executive branch overreach (6/22/24)The United States Constitution vests all legislative powers in Congress. Yet, over the past century, we’ve witnessed a disturbing trend of legislators increasingly delegating much of the authority to set the laws that govern the land to the executive branch, which includes unelected officials at administrative agencies. This undermines democratic accountability, contributes to government bloat and abuse of powers, and disrupts the balance of power crafted so carefully by the framers.
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Biden points the bill (and the blame) elsewhere (6/13/24)Government overspending, an activity the Biden administration has taken to a new level, has sent the country into an inflationary spiral. Through trillions of dollars in COVID-19 relief programs, infrastructure spending, vote-buying student loan forgiveness programs and a political "Build Back Better Agenda," the White House has flooded the economy and decimated consumers’ purchasing power. We’re paying more and getting less for everything from energy to food. ...
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Social Security reform is coming (really) and will bring political rewards (6/8/24)No matter what President Joe Biden and former President Donald Trump promise you, and no matter its past as the untouchable "third rail" of American politics, Social Security will be modified one way or another within the next 10 years. While both candidates are misleading their voters, the party with the most to lose from ignoring Social Security’s troubles is the GOP.
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Projections vs. scenarios, and why politicians should care (5/31/24)Congressional Budget Office projections provide valuable insights into how a big chunk of your income is being spent and reveal the long-term consequences of our government’s current fiscal policies -- you may endure them, and your children most certainly will. Yet, like most other projections looking into our future, these numbers should be taken with a grain of salt. So should claims that CBO projections validate anyone’s fiscal track record.
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Making it easier to make things in America (5/27/24)With more tariffs on electric vehicles and an election featuring two pro-tariff presidential candidates on the way, the debate about how best to support and strengthen the U.S. manufacturing sector is back. Some argue, mistakenly, that the key to protecting American industries and manufacturing jobs is a set of tariffs on industrial imports. This approach is ultimately counterproductive. There are better ways to help American manufacturing, not the least of which is to remove regulatory barriers and reform the tax code. ...
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Why no politician can ‘fix’ prices (and why that’s OK) (5/20/24)Prices are threads stitching together the fabric of our economy. They guide countless producers, here and abroad, to meet the most urgent demands of countless consumers. Prices enable the economic coordination of millions of individuals — each with his or her own unique preferences, skills and resources — with no need for a central planner. They direct entrepreneurs and innovators, signaling where opportunities lie and where resources are most needed. ...
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Will California hobble the US railroad industry? (5/6/24)American federalism is struggling. Federal rules are an overwhelming presence in every state government, and some states, due to their size or other leverage, can impose their own policies on much or all of the country. The problem has been made clearer by an under-the-radar plan to phase out diesel locomotives in California. If the federal government provides the state with a helping hand, it would bring nationwide repercussions for a vital, overlooked industry. ...
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Stop the ‘emergency spending’ charade already (4/29/24)Last week, Congress moved closer to passing four separate bills with $95 billion in funding for Ukraine, Israel, Indo-Pacific allies and the domestic submarine industrial base. This funding has been debated for months, with much of it intended for wars that have been going on — and likely will continue — for a while. In other words, it’s not new or surprising. Yet once again, it will be labeled "emergency spending", a tool allowing legislators to double down on their fiscal irresponsibility. ...
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Tax time myths and truths (4/20/24)Another Tax Day has come and gone, and most Americans believe they pay too much. One recent poll revealed that 56% say they pay more than their fair share. Unfortunately, I fear this is just the beginning considering the insane level of debt Washington policymakers have accumulated over the years. With this in mind, here are some important facts about our tax system that you might not know.
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The erosion of fiscal responsibility (4/15/24)Washington Post columnist Megan McArdle recently wrote that the best argument made in favor of limiting the size of the stimulus during the Great Recession — part of a larger conversation about austerity — was one of ethos. "We weren’t spending the money in theory," she wrote, "or in 1945, when an ethos of fiscal responsibility prevailed. We were spending it in the 21st century, when that ethos had collapsed, so there was a considerable chance that when the good times finally rolled around, no politician would willingly undertake the sacrifices necessary to get the budget back in shape." ...
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Washington’s ‘job creation’ circus is hitting the road (4/8/24)In the grand circus of politics, where elephants and donkeys alike perform under the big top, there’s one act that never fails to draw a crowd: the venerable "job creation" routine. Putting people back to work, especially those without college degrees and in the manufacturing world, is in the center ring. Unfortunately, when you look behind the smoke, mirrors and rabbits hidden in hats, you’ll see that promises to rebuild America through industrial policy are just plain old corporate welfare. ...
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Americans can tell the difference between rosy economic data and reality (3/30/24)The economy is growing, unemployment is low, wages are up, and inflation is down. However, the American people remain grumpy about the state of the economy. This puzzle was just investigated by four economists. They found that people often know that something is wrong even if statistics don't reflect the problem. In this case, people are perceiving that inflation is still, in fact, high.
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U.S. Steel-Nippon Steel: A global deal for American prosperity (3/23/24)The Pennsylvania-based U.S. Steel company recently agreed to be purchased by the Tokyo-headquartered publicly traded company Nippon Steel. This deal makes sense to economists. It will encourage other foreign companies to invest in the U.S., creating wealth and new job opportunities, and further shoring up the U.S. economy, particularly amid inflation worries. More importantly, this deal makes sense to the owners of U.S. Steel...
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Biden's corporate tax hike: populism versus economic literacy (3/18/24)In the latest volley of policy proposals that seem more rooted in populist rhetoric than economic knowledge, President Joe Biden’s budget plan to hike the corporate income tax rate from 21% to 28% strikes me as particularly misguided. This move, ostensibly aimed at ensuring a “fair share” of contributions from corporate America, is a glaring testament to a simplistic and all-too-common type of economic thinking that already hamstrings our nation’s competitiveness, stifles innovation and ultimately penalizes the average American worker and consumer. ...
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A new fiscal commission must heed the lesson of '97 (3/11/24)The Republican chairman of the House Budget Committee made news recently by announcing that if his party is serious about changing the fiscal path we are on, they'll have to consider raising taxes. Politics is about compromise, so the chairman is right. Every side must give a little. However, "putting taxes on the table" is not as simple a fix to our debt problems as some think...
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Nostalgia versus numbers: challenging america's economic pessimism (3/2/24)America is celebrated for its economic dynamism and ample and generously paid employment opportunities. It's a nation that attracts immigrants from around the world. Yet Americans are bummed, and have been for a while. They believe that life was better 40 years ago. And maybe it was on some fronts, but not economically...
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Does another child tax credit help families? (2/26/24)In the well-intentioned rush to support American families by expanding the Child Tax Credit (CTC), critical questions are often ignored: Aren’t we already doing enough, and is this the best way to help? It’s imperative to step back and examine the assumptions at the heart of this ongoing debate. ...
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Biden's Super Bowl shrinkflation blame game (2/17/24)President Joe Biden wants to remind you that your Super Bowl party was more expensive than it used to be. The reason, he claims, is corporate greed and "shrinkflation." In a social media video before Sunday night's game, he spoke of companies selling "smaller-than-usual products where the price stays the same." He opposes this behavior and is "calling on the big consumer brands to put a stop to it."...
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The CFPB is putting our banking arrangements at risk (2/13/24)Nobody likes paying fees. A fee, however, is a transparent way to reflect the price of something. And in a market economy, prices convey vital information that consumers and producers use to make good decisions. A rise in the price of apples tells producers that consumers want more apples. This prompts more apple production (and eventually, lower prices). And so, when political interference keeps prices from fluctuating freely, the result is inefficiency and waste...
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Why keep worrying about debt? Speculation versus reality (2/5/24)Over the years, I've offered many explanations about why the trajectory of the national debt is deeply troubling. At this point, though, my worry isn't rooted in a dogmatic adherence to the principles of a balanced budget. Nor does it come from my desire for a smaller government. Instead, I'm alarmed by politicians' unwillingness to look at the numbers and have a serious discussion about changing course...
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Embracing economic freedom: Lessons from Javier Milei's world economic forum address (1/26/24)In a thrilling address at the World Economic Forum, Javier Milei, President of Argentina, presented a robust defense of capitalism and a critical examination of all forms of collectivism. His speech, rich in historical context and economic analysis, offers some vital lessons that are particularly relevant for today's globalized economy. Sadly, these lessons have long been ignored by American politicians on the right and left, whether in Washington or on the campaign trail...
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Don't let interest costs derail your presidential plans (1/22/24)Remember when Republicans on the campaign trail would talk about how they would make sure to put the U.S. on a fiscally sane path? I miss that time. While a few of the current crop have paid lip service to the idea of constraining spending, no one seems to have a clear plan about how to do it...
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Populist politicians aren't so divided on economic issues (1/13/24)The political landscape is often portrayed as deeply polarized. The two sides, it is said, can't agree on anything. Even worse, if one side supports a position, that's reason enough for the other to oppose it. While this picture is largely true for cultural issues, the rise of populism on the right is making some of the two parties' economic policies remarkably similar. That's bad news for Americans...
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Three economic myths to put to rest this year (1/8/24)As a new year dawns, it's customary to reflect on the past and set resolutions for the future. This year, let's resolve to greet three widespread claims with healthy doses of skepticism. The first dubious claim is that income inequality in the United States has inexorably risen since the 1960s. ...
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Congress, here are two bipartisan gift ideas for our children (12/23/23)As the festive season approaches, with its twinkling lights and merry carols, the item topping my Christmas wish list is fiscal responsibility from Congress and the administration. If this sounds like an economist conflating policy with goodwill, remember this: In a world where holiday wishes usually lean toward "stuff" -- gadgets, games, and glittering jewels -- my wish would bring long-term prosperity, stability and cheer far beyond the fleeting joy of unwrapping presents...
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Congress needs new idea. Will it choose a good one? (12/19/23)With U.S. government revenues rising, 2023 might have been a good year to get America's post-COVID-19 finances on track, but the budget deficit is still growing. You can thank overspending for this. It's also the reason we've had to live with inflation, higher interest rates and the threat of massive future tax hikes for another year...
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What should happen when fuel-efficient vehicles take over? (12/9/23)The government has a dilemma: It's pushing hard for fuel-efficient vehicles, but gas taxes pay for roads. There's an obvious fix, but are Americans ready for it? Granted, tax credits, subsidies and government mandates aren't delivering the electric-vehicle sales surge the Biden administration promised. ...
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America, France and the free market (12/4/23)It's fashionable to claim that the free-market ideas of Nobel-laureate economist Milton Friedman have failed the country, and that it's time for new policies. Campaigning in 2020, Joe Biden declared that "Milton Friedman isn't running the show anymore." More recently, New York Times columnist David Leonhardt noted that people like Friedman promised that the free market "would bring prosperity for all. It has not."...
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A Thanksgiving economic lesson from American families (11/25/23)Most Americans meticulously plan their Thanksgiving meals and travel, sometimes budgeting months in advance to celebrate at a reasonable price tag. This prudent embodiment of both gratitude and restraint starkly contrasts with the approach of our politicians. It's an inconsistency that, especially this season, merits reflection...
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Here's one way to demand rational government (11/20/23)In a world where economic decisions are mostly driven by short-term goals and political pressures, the need for a long-term, evidence-based approach is more pressing than at any time in memory. Enter the Copenhagen Consensus — a beacon of analytical clarity conceived by Danish intellectual Bjorn Lomborg. It aims to reshape global discourse by prioritizing initiatives based on their cost-effectiveness. Imagine harnessing this model to direct fiscal policy!...
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Congress can redeem itself by calling for help (11/13/23)There's much talk today about the need for a fiscal commission. The House Budget Committee held a hearing about it a few weeks ago. Pundits are Substacking about whether using the approach to put federal finances on a sustainable path is a good or a bad idea. And according to a recent polling, voters support the idea of a commission...
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Responsible government isn't just for the tough times (11/6/23)Some policy experts who, over the last few decades, saw little need for serious fiscal austerity because the government could borrow at low interest rates are now changing their tune. Their argument is that with rates now rising and the government's interest payments set to become extremely expensive, it's time to adjust. While I suppose that's progress, they fail to see that the past calls for austerity were attempts to avoid precisely what's happening today...
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No populists in sight in the world of politics (10/27/23)In the grand ballroom of American politics, Democrats have long waltzed to the melody of progressivism while ridiculing Republicans' preference for outdated tax-cut tunes. Ironically, they don't want to pay for their style of big government with higher taxes on ordinary Americans, which their expansionary ambitions would require. Instead, they loudly proclaim that they want to tax the rich. It remains to be seen how true this is...
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Americans learned a financial-crisis lesson. Washington? No. (10/21/23)Congress and the Biden administration seem unaware that rising interest rates are about as "transitory" as they told us inflation would be -- meaning, likely to be around for quite a while. Why does this matter? Ask someone who's been enticed by a mortgage with a variable interest rate that starts low and then rises quickly when conditions change...
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The cult of 'Forever Low' interest rates had to end (10/14/23)Countless financial soothsayers and Wall Street wizards were once members of a curious cult. Their doctrine? The unshakable belief that interest rates had managed to find something resembling the fabled Fountain of Youth, leaving their numbers eternally low and never rising. The "Forever Low" brigade dismissed those of us who argued that high government debt was unsustainable and, partly because low repayment rates would not last forever, we should control spending...
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'Good government' is a two-way street (10/11/23)You've undoubtedly noticed how up-in-arms everyone becomes when the government is on the verge of shutting down. I've also noticed that the people who most loudly express their horror at the notion of a partial government closure seem totally comfortable with the fiscal wall we are barreling into. That wall is being built, brick by brick, by two political parties that are unwilling to end Washington's spending debauchery...
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Solving America's housing woes or making them worse? (10/2/23)America needs more housing. Pressure for reform is only growing as available homes get less and less affordable. Unfortunately, rather than addressing the root cause of high housing prices — an epidemic of local overregulation that prevents enough homes from being built — some legislators continue to flirt with social experiments that can harm both landlords and renters...
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Are ordinary Americans buying 'Bidenomics'? (9/25/23)As election season approaches, Democrats are touting the economic results of Biden administration policies aimed at improving the lives of working Americans and creating a more equitable economy. But ordinary Americans aren't feeling the so-called success of "Bidenomics"...
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The surprising, uplifting truth about inequality (9/18/23)Today's hyperpartisan and frequently negative news cycle ignores one significant and uplifting story: the precipitous decline of global inequality. It's a subject that deserves our attention, for it reveals the power of markets, trade and human ingenuity to lift up societies...
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China's economy is struggling. Still want to emulate it? (9/5/23)China's economy is struggling post-COVID-19. Growth is slower than expected, demographic trends are negative, youth unemployment is high, overbuilding has created a housing crisis and government indebtedness is ballooning. These are only a few of the symptoms ailing the country, and things could get worse. ...
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Politicians make a mockery out of 'emergency' spending (8/26/23)Remember how, mere months ago, the debt-ceiling deal struck between Democrats and Republicans to avoid a government shutdown was touted as "a historic first step toward shifting government back toward common sense and conservatism?" The hope was that the spending caps in the deal would actually constrain spending. Well, it took less than two months for politicians to start evading the caps with an old trick: emergency spending...
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Corporate mergers are under attack, but not on your behalf (8/21/23)Last month, the Department of Justice (DOJ) and Federal Trade Commission (FTC) published a draft of proposed new guidelines for mergers and acquisitions. Sounds like a problem reserved for people who sit in board rooms, right? Not exactly. Such rules will affect all of us...
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Let's talk about a radical budgetary change (8/14/23)Fitch Ratings just downgraded the U.S. government's credit rating due in part to Congress's erosion in governance. Indeed, year after year, we see the same political theater unfold: last-minute deals, deficits and, all too often, the passage of gigantic omnibus spending bills without proper scrutiny, along with repeated debt-ceiling fights and threats of shutdown...
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Should we blame the budget players or the game? (8/7/23)It's common knowledge among budget experts that the budget process is "broken." Anyone who regularly reads this column knows about debt limits, government shutdowns, out-of-control spending and borrowing — the list goes on. Well, part of the problem is that almost 50 years since the last budget process reform, it needs a serious update. However, when we do that, let's not miss the elephant in the room: Things would work much better if Congress agreed to follow its own rules...
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Asking the wrong question about industrial policy push (7/31/23)Proponents of the ongoing push for national industrial policy, whether they come from the left or the right, frequently argue that we need to promote certain sectors or technologies to create a manufacturing boom. This boom, we're told, is necessary to create more high-paying jobs. But I beg to differ. Industrial policy isn't and shouldn't be primarily about creating jobs. Its primary purpose, if it should exist at all, lies elsewhere...
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Progressives and populists vs. the credit card market (7/22/23)Central planning, never out of fashion on the left, is now more popular than ever on the right thanks to the GOP's populist takeover. This is why a recurring effort to intervene in the credit-card processing market is finding more support in the new Congress than it did in the previous one...
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'Bidenomics' is a marketing term (7/17/23)Politics is sometimes little more than marketing. As evidence, behold the sudden use of the term "Bidenomics" by Democrats to describe administration policies of the past few years. Indeed, what's being branded as "new" is nothing but the same old program of big spending, big regulations and big cronyism. The only difference is that it's on a much bigger scale...
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Three warnings about election season (7/8/23)Three warnings about election season As elections approach, sweeping generalizations have a certain allure that often energizes the frustrated and captivates the hopeful. However, it's essential that we as voters remember that things that seem too good to be true typically are. Here are a few warnings...
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Wanted: President who will address spending challenge (7/3/23)Election season is getting into gear, and that means politicians of all stripes making promises about what they'll do for the American people if elected or reelected. I'd like to hear promises to get government out of the way and allow entrepreneurship and market competition to spur genuine and sustainable economic growth, including in the energy and housing sectors...
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Confusing 'disinformation' with mainstream opinions (6/24/23)Disinformation, misinformation and fake news are real problems in a world that is now mainly online. However, this shouldn't blind us to the very real risk that comes from a government that aggressively polices information or becomes an arbitrator of the truth. It's simply too easy to use this power to silence political opponents or people who hold unpopular opinions. Caution on this front is more, not less, important now that America is so politically polarized...
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Railroads are safe, but Congress wants more (6/15/23)After many years of working in the policy world, I have concluded that politics is at most 10% about making the world better and safer. The rest is at least 45% theater and 45% catering to special interest groups. Further evidence for my assessment comes from the recent grandstanding in the U.S. Senate on rail safety...
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What to make of new projections of big government savings (6/10/23)We have a debt-ceiling deal. It's a relief for most people. This deal avoids a default and the need for the Department of the Treasury to make hard choices over which bills to pay. It gives Republicans the sense that a step was taken toward fiscal responsibility and gives Democrats the sense that they've made an unprecedented sacrifice. ...
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Resist political theater and look to 'that which is not seen' (6/5/23)Too many politicians are thespians. When there's a conflict — as there often is — between appearing to solve problems and actually helping to solve those problems, politicians can almost always be counted on to put appearance over substance. Unfortunately, politicians succumb to this bias even when their theatrics make real problems worse...
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Surprise: Debt conversation brings more pointless 'tax-the-rich' talk (5/30/23)Whenever we have a national conversation about government debt, Democrats invariably respond that spending is not the reason the debt is now nearly equal to our national GDP. The real cause of our indebtedness, they inform us, is that taxes aren't high enough and the rich don't pay their fair share. ...
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What is 'common good capitalism?' (5/22/23)"Common-good capitalism" is all the rage these days with national conservatives. But what exactly is it, you may ask? That's a good question. As far as I can tell, it's a lovely sounding name for imposing one's preferred economic and social policies on Americans while pretending to be "improving" capitalism. ...
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Why the debt ceiling continues to matter (5/15/23)The debt-ceiling standoff has people concerned about what will happen if the U.S. defaults on its debt. I certainly hope both sides will come together to avoid this outcome. But it is still worth reminding everyone how incredibly precarious the status quo is, and why something needs to change...
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Junk fees are just bureaucratic junk food (5/8/23)Any parent will tell you that forcing children to eat their spinach is no way to win a household popularity contest. Children don't care about the long-term benefits of eating healthy food when the alternative is the short-term thrill of sugary treats. Much to their children's chagrin, parents impose rules, like limiting the quantity of treats and making their receipt contingent upon finishing a healthy meal. Good behavior must be encouraged with appropriate incentives...
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What you need to know about the debt-ceiling debate (4/29/23)If you read news coverage about the brewing battle over raising the debt ceiling, you might think it's a fight between demons and angels. On one side, you have Republicans who are willing to risk a default on the government's debt unless they get spending cuts that will starve people. On the other side, you have Democrats who, guarding the interests of ordinary Americans, want a "clean" increase in the debt ceiling with no cuts in spending...
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One stat rarely tells the story (4/24/23)Government debt as a share of the U.S. economy is falling. This must mean the Biden administration and Congress are practicing fiscal responsibility, right? No, it doesn't. The main driver behind the reduction is inflation — inflation that politicians in Washington created with their irresponsible spending and refusal to engage in austerity after the COVID-19 crisis...
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The Fed has more than a 'credibility' problem (4/15/23)I have heard some people say that the Federal Reserve has a credibility problem. The agency missed the biggest inflation spike since the 1980s, was slow to start rolling back pandemic policies and failed to spot the risks that some banks, such as Silicon Valley Bank (SVB), were facing. Instead of instilling confidence and stability, the Fed's policy communication has at times been so unclear and confused that it has only served to exacerbate market volatility...
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Are more progressives coming around on regulation? (4/3/23)George McGovern, the Democratic Party's 1972 presidential nominee, was a liberal icon. During many years in political office, including as a U.S. senator from South Dakota, McGovern successfully championed loads of regulations, taxes and mandates in the name of the public good. But as a business owner, he was held back to the point of failure by the same sorts of burdens he had once earnestly promoted to achieve lofty goals...
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How banning Chinese products could backfire on US (3/25/23)The controversy over proposed state and federal bans of Chinese-produced apps has sparked debate about the wisdom of country-of-origin bans in general. On the surface, banning TikTok and other controversial products coming from China appears reasonable. But the deeper you dig, the less these ideas make sense...
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The president's budget reveals the real priority: Tax hikes (3/16/23)Budgets are about priorities. In the Biden administration's new budget, its apparent priorities are marred by problems. Here's the cheat-sheet version: Rather than containing explosive growth in spending, it would use a bunch of new taxes to wage class warfare...
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Welcome to the age of political capitalism (3/13/23)Welcome to our regime of political capitalism, where merit matters but political connections matter even more. In an unalloyed capitalist system, money flows to those who offer goods and services of value to consumers. In a political capitalism system, money flows to special-interest groups with friends in high places...
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The American way versus the politicians' way (3/4/23)Let's call it the "Biden way": When our president can't get his policies through Congress, he tries to impose them in other ways. Just look at his student loan forgiveness plan, which faced a stiff Supreme Court challenge this week, and his imposition of stricter "Buy American" provisions to the infrastructure-spending bill. Now, he wants to reshape corporate America by attaching the big string of "high-quality" child care to, of all things, semiconductor subsidies...
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A solution to the coming demographic challenge (2/25/23)Newspapers have been reporting on the demographic challenges in Asian nations like China, Japan and South Korea. Some expect China's population, for example, to be cut in half by 2100. If current trends continue, some of the same problems will sooner or later hit the United States, and they won't be fixed with family-style entitlement policies that cost huge amounts of money and distort the economy without increasing fertility...
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Failing to fix what's broken would be the real nightmare (2/21/23)President Joe Biden tweeted last week that he will be a "nightmare" for Republicans who dream of cutting Social Security and Medicare. With this statement, Biden showed that he's either shockingly ignorant about these two programs and any Republican reform efforts -- or lack thereof -- or just another politician who washes his hands of what happens when he's out of office and the programs hit upcoming obstacles...
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Here's why spending fights are getting more frequent (2/13/23)People are uneasy about the debt ceiling fight. Many think it's unhealthy and a sign of poor fiscal management, and they are right. However, they should get used to it. These budget fights will keep getting more frequent and more intense. That's because no one wants to talk about budget restraints. The truth is that existing spending commitments are rapidly shrinking the share of the budget that politicians have control over as their appetite for spending expands...
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Inconsistency: The most consistent thing about politics (2/7/23)Since Grover Cleveland was president, no one has accused the average politician of being principled or even consistent. Year after year, Republicans claim to care about fiscal prudence but, when in power, spend like Democrats. In their turn, Democrats insist that they want to engineer a transition to a green-energy economy, but their actions contradict this goal...
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Why would Republicans rule out Social Security and Medicare reform? (1/28/23)If you follow policy debates long enough, arguments you never thought you'd hear can become key components of the two parties' policy platforms. That's certainly the case when it comes to some Republicans and their new "never touch Social Security and Medicare" position...
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GOP must avoid repeating history with the budget (1/21/23)The long and tedious battle for House speaker ended with the GOP arguably more focused on fiscal responsibility and cutting spending. To accomplish this, Republicans are demanding spending cuts in exchange for raising the debt ceiling. Asking for some future fiscal discipline before allowing Uncle Sam to borrow yet more money is well worth it, but carelessly chosen goals could derail the whole enterprise...
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Belligerent spending -- a Congressional addiction (1/17/23)After 15 failed attempts, California Rep. Kevin McCarthy finally secured the House speakership. Many worry that the concessions McCarthy made to secure his victory -- especially commitments to restrain government spending -- make the upcoming prospect of raising the debt ceiling perilous. Indeed, some fear that Republicans will refuse to raise the limit if it isn't paired with restraints on spending...
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Congress has a fiscal road map — it just needs to use it (12/27/22)Dealing with high inflation and an increasingly shaky economy, Americans are forced to make tougher spending choices. With public debt at an all-time high, government should do the same. This feat isn't that hard now that the Congressional Budget Office (CBO) has released a series of budget options showing Congress how to do it...
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Don't be fooled: Workers still share in rising productivity (12/19/22)For some time now, legislators have been eager to jack up subsidies for workers, whether it's by raising the Earned Income Tax Credit (EITC), hiking the minimum wage or simply giving out cash benefits. Indeed, Democrats are hoping to achieve one of those goals — the EITC expansion — during the lame-duck session. ...
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December is no time to ignore Congress (12/10/22)Congress's lame-duck session is an ideal time for both parties to pass last-minute legislation while voters are busy Christmas shopping and before members who lost their reelection bids surrender their seats in January. Especially this year, real danger lurks in such legislation. Above all, there's the threat that Congress turns the expanded child tax credit into a new and very costly permanent entitlement. But other threats loom. I'll look at a few of them today...
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Will this year's lame-duck session bring back a bad idea? (12/5/22)Democrats have lost the House of Representatives and, along with it, the chance to pass more of their preferred policies in 2023. This makes the "lame duck" period before the January arrival of the new Congress their last opportunity to fully control Capitol Hill for a while. ...
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Giving thanks for low-skilled workers (11/28/22)On Thanksgiving we rightly give thanks. And let's be clear that, amid all the turmoil that consumes daily headlines, we Americans do indeed have a lot to be thankful for. We are still relatively free. We are also incredibly prosperous — a prosperity that would be impossible without uniquely talented and driven entrepreneurs and the courageous investors who back them. But this year I want to give special thanks to those workers we call "low-skilled."...
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Republicans need an economic growth agenda (11/19/22)After disappointing midterm election results for Republicans, many understandably pin blame on corrosive figures like former president Donald Trump. His losing record is impressive considering his cultlike persona appeal with MAGA voters. If Republicans finally learn to shed Trump and his ilk it will be a good thing. However, there's another looming issue for Republicans: their policy agenda (if this mishmash deserves such a name)...
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For food abundance, think bigger than another farm bill (11/12/22)Turkey prices are soaring this Thanksgiving, and that's just the tip of the iceberg. With food prices helping to drive inflation to a 40-year high, Americans are feeling the heat at grocery stores and during family dinners. It's in this context that Congress is about to consider yet another farm bill, a massive piece of legislation that allegedly is key to ending hunger in America with farm subsidies and food stamps. ...
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Incoming Republicans: Don't fight Dems, fight inflation (11/5/22)Republicans want to take over Congress and come Tuesday they might get their wish. Assuming they win both the House and Senate, they will face enormous challenges: a country still heading into a recession, inflation still high and rising, government deficits and debt as far as the eye can see, regulations strangling the production of energy and much more. For these reasons, I offer some suggestions of what a victorious GOP should do over the next two years...
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Will the 'experts' ever learn their lesson? (10/31/22)Debate now rages about whether the Federal Reserve should continue to raise interest rates to tame inflation or slow down these hikes and see what happens. This is not the first debate we've had recently about inflation and Fed actions. The lesson we should learn, and I fear we won't, is that government officials and those advising them from inside or outside the government don't know as much as they claim to about the interventions they design to control the economy...
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Think cooperation in the American economic system (10/21/22)I was recently reminded of a profound truth about the free market and the prices that sit at its center. Unfortunately, this truth is often overlooked by both critics of the market economy and by economists like myself. This simple truth is that the price system works thanks to and only because of a set of institutions that promote cooperation among us...
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A call for bipartisanship in 2023 (10/17/22)The upcoming midterm election has got me thinking about divided government. In normal times, the prospect of newly shared power in Washington might have me looking forward to the resulting slowdown of one party's hyperactive agenda. The Democrats who are in power are indeed pushing a fiscal and regulatory agenda that has become a serious risk to Americans' prosperity and freedom...
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Are deficits actually going down? (10/8/22)The president is annoyed. On Saturday, during a speech to the Congressional Black Caucus, he complained that "I'm so sick of Republicans saying we're the 'big spenders.' Give me a break. Give me a break." He all but said in one portion of the speech that he is spending a lot of money on special interests and yet "doing all of this while reducing the deficit -- last year, $350 billion, and this year by $1 trillion." It's magic...
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Don't blame me for 'pro-business' policies (10/3/22)During my many battles fighting against cronyism, I have often been accused of being hard on government while letting businesses off the hook. This accusation is weird. Defending the free market is quite different from a blanket defense of businesses. I am pro-business only insofar as I am pro-market — that is, I'm "pro"-allowing consumers to spend their money as they choose, and "anti"-special privileges given by government to any business...
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Most Americans value immigration. Most politicians don't. (9/26/22)At a time when the American economy could use more people, restrictions on immigration continue to trap a lot of unused talent in low-productivity countries. To unleash it, the United States could simply let these immigrants in and let them work. They'd become a productive part of the system that makes this country so wealthy. But politicians are getting in the way...
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Similar inflation challenges and stumbles in the UK (9/17/22)Shortly after taking over as the new U.K. prime minister, Liz Truss announced plans to fight inflation by capping household energy prices over the next two years. Blimey! Billed as the most free-market prime minister since Margaret Thatcher, Truss's first major move is a counterproductive scheme that will prolong the United Kindom's energy woes and increase its budget deficit. What could go wrong?...
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Championing opportunity is winning strategy for Dems (9/12/22)Today's political parties lack ideas. The Republicans define themselves as opponents of Democrats. Yet many of the GOP economic policy positions resemble, with minor variations, those of Democrats. Meanwhile, the Democrats repeat the same simplistic refrain: "solve" every problem with more money and stricter regulations. How dreary and unproductive...
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Taking from the working class, giving to the laptop class (9/6/22)If you had any doubts that those in power have dropped the pretense of fighting for the working class, you can dispense with them after the Biden administration's latest concessions to the laptop class. From student loan forgiveness to subsidies for people who drive pricey electric cars and profitable semiconductor company CEOs, this administration is working hard to shower its friends with handouts paid for by hardworking lower-wage Americans...
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Another week of industrial policy hype (8/20/22)Another week, another reminder that heavy-handed government industrial policy is in fashion. Nobel Prize-winning economist Michael Spence recently endorsed it as embodied in the newly passed "CHIPS+" legislation, an attempt to bolster America's semiconductor industry. The endorsement, like so many, rests not on evidence or economics, but on blind faith in Congress and the administration...
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The dwindling difference between our two parties on spending (8/13/22)For a few years, I have sounded the alarm that a growing wave of conservatives are working to make Republicans indistinguishable from Democrats on social spending. Some say that to win elections, Republicans need to pay more attention to families -- by which they mean dole out ever more money to families like the Democrats do. Exhibit A for this development is the newly reintroduced New Parents Act...
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Congressional meddling won't put more planes in the sky (8/8/22)Sens. Elizabeth Warren, D-Mass., and Alex Padilla, D-Calif., recently asked the Department of Transportation to fine airlines for delays and cancellations and prevent airline consolidation. The widespread delays and cancellations are indeed annoying, but the senators' demands won't help any more than Congress's last airline blunder did...
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What to expect from DC's industrial policy (7/30/22)Industrial policy is making a comeback. For those of you under the age of 50, this is just another term for corporate welfare -- a lovely name for the unlovely practice of a government granting subsidies, protective tariffs and other privileges to politically influential industries or companies. ...
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Antitrust craze would unplug technological progress (7/25/22)Always beware of the name given to a piece of legislation. It rarely describes accurately the likely impact of enacting a bill. In fact, statutes often do the opposite of what their names suggest. Take Sen. Amy Klobuchar's, D-Minn., proposed legislation named the American Innovation and Choice Online Act. ...
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Shed no tears for the floundering global tax cartel (7/18/22)Implementing a global tax cartel is hard. This lesson is being learned by the bureaucrats who dreamt up an effort to prevent businesses from taking advantage of the fact that some countries impose lower taxes than do other countries. A year after 130 jurisdictions agreed in principle to institute a global minimum tax rate of 15% on corporate profits and make it harder for companies to shift their tax liabilities from higher- to lower-taxing countries, the early result is a delay and buyers' remorse.. ...
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With spending and inflation, it's more of the same (7/12/22)The go-to policy for dealing with nearly every modern problem is more government spending. So it was just a matter of time before Democrats tried to revive the failed "Build Back Better" (BBB) program to address today's economic troubles. Of course, if they succeed, the result will be much the same as what we've experienced over the past 18 months: more debt and rising inflation...
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Who is the FDA's juul ban supposed to help? (7/2/22)There's something terrifying about a government so powerful that it can shut down your business overnight without even bothering to offer substantive arguments. Yet that's what Food and Drug Administration bureaucrats just did to the e-cigarette company Juul. While Juul got a stay of execution from a court, the company is one of the many victims of the FDA's counterproductive war on nicotine. Most of the other victims will be cigarette smokers...
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The inconvenient truth about COVID-19 relief scandals (6/25/22)Raise your hand if you're surprised that the trillions of dollars spent on COVID-19 relief gave way to billions of dollars in government waste, fraud and abuses. I'm not, but based on recent reporting, you might think this type of carelessness with taxpayers' money has never before happened. Sadly, such waste and fraud are normal byproducts of most government programs...
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Biden's budget deficit victory lap is unearned, unjustified (6/20/22)President Joe Biden is taking victory laps for last year's reduced budget deficit. No one would be happier than me to see this number fall in a significant way. But the decline has nothing to do with the president's policies, and it changes little about the dangers of our fiscal situation...
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Rash optimism on Social Security's solvency (6/11/22)Don't worry if you get confused reading accounts of the new Social Security Trustees Report. On one hand, you have some articles reporting that this document shows that Social Security will be insolvent in less than 15 years. Others prompt you to pop Champagne corks in celebration of Social Security's financial footing being so strong that we can supposedly increase benefits...
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Magical economic thinking from Biden will not work (6/4/22)President Joe Biden wants you to know he is serious about taming inflation and that he has a plan to do so. Unfortunately, his plan reveals that his administration is either in deep denial or doesn't understand the real cause of inflation. His proposal, therefore, is all but guaranteed to fail...
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Corporations' 'woke' signaling won't override profit (5/28/22)Many people on the Right fear "woke capitalism" and the idea that corporate executives will bend to pressure to advance a vision of the world that replaces their values with progressive ones. To those who are worried, I say, be grateful for the profit motive. To the progressives pushing for such practices, I say, be careful what you wish for...
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Spread the blame around for fed's lack of accountability (5/23/22)After presiding over the biggest Federal Reserve failure in 40 years and with inflation rating as the top concern among Americans, Jerome Powell's nomination to a second term as chairman was approved earlier this month by the Senate, 80 to 19. I know the usual arguments for ignoring the Fed's spectacular errors, even at a time when inflation is such an issue. ...
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Don't bend to calls for a global tax cartel (5/16/22)When all you have is a hammer, everything does indeed look like a nail. This is the best way to describe government officials' unoriginal and often destructive thinking. No matter the problem du jour, the answer is always more government spending. But more spending requires more tax revenue, which is not always easy to acquire in the modern global economy...
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Putting some WD-40 on the supply chain (5/9/22)Politicians, the Federal Reserve, and Fed and administration apologists like to claim the inflation we face is caused by supply constraints. This claim goes against the facts on the ground. According to the World Trade Organization, even though there was a collapse in trade at the beginning of the pandemic, trade in intermediate goods — critical inputs in finalized products — quickly recovered despite port and shipping bottlenecks. ...
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Will punishing the mouse end Florida cronyism? (5/2/22)Florida Gov. Ron DeSantis recently signed legislation that strips Walt Disney World of its independent, special district status after the company objected to the state's new law regarding discussion of sexual orientation or gender identity in classrooms. ...
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Will France move further toward authoritarianism? (4/23/22)On Sunday, French voters will decide on their next president. While most of the country and the rest of the world are united, for valid reasons, against populist Marine Le Pen, the truth of the matter is that voters have a choice between two shades of illiberalism: the aggressively populist one of Le Front National and its authoritarianism-light version represented by incumbent President Emmanuel Macron...
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Biden can't shield us from 'billionaire tax' fallout (4/18/22)One of the most important lessons in tax policy is that the person who is handed the bill and sends the check to the taxman isn't necessarily the person shouldering the entire cost — or even the bulk of the cost. A tax might first directly hit a few rich taxpayers, but it never remains confined there. Case in point: the logic and marketing of the novel "billionaire tax" introduced in the White House's fiscal year 2023 budget proposal...
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Want to further economic woes? Put in price controls (4/11/22)History has a way of repeating itself. Or maybe it's that people cling to defunct beliefs, stubbornly refusing to learn from experience. Such stubbornness is on display when pundits, legislators and President Joe Biden blame inflation on corporate "greed." The fix, they claim, is price controls. But such controls would only bring further economic calamity...
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Inflation: The result of sticker shock on gov't spending (4/4/22)Many people still blame today's inflation on snags in globe-spanning supply chains. The chief proposed solution is to dismantle decades of globalization and bring production home. Some are also pushing for measures to offset inflation, including robust child subsidies and tax rebates for gas and food...
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Joe Biden says he loves trains -- not so much (3/25/22)It's well known that Joe Biden -- who regularly rode the Amtrak train between Wilmington and Washington as a senator and to his 2021 presidential inauguration -- loves trains, always touting their environmental efficiency and value to the U.S. economy. Yet the Biden White House has been noticeably hostile to the variety of trains that play a far larger role in American life than the ones that carry passengers: trains that carry freight...
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Campus free-speech problems come down to culture (3/21/22)We've all heard stories about university administrators cracking down on free speech. But free expression is suffering even without these enablers, and that should worry us. In a recent New York Times Op-Ed, University of Virginia senior Emma Camp powerfully defended freedom of expression as she described her own practice of self-censoring while on campus. ...
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Will more defense spending translate to better security (3/11/22)The brutal invasion of Ukraine by Russia has renewed conservatives' calls for large increases of our defense budget. The extra money, we are told, would fund more weapons to better prepare us to respond to aggression in a world that looks increasingly dangerous. As compelling as these arguments can be in a stressful time, it's not quite so simple...
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To prepare for emergencies, keep fiscal order (3/4/22)The tragic events of the past week highlight the wisdom in maintaining a fiscally sound house, rather than a highly indebted government, before emergencies strike. Russia's barbaric invasion of Ukraine and the West's response will likely drive inflation even higher. ...
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Will a post-COVID-19 government be held accountable? (2/28/22)Someone recently asked me when Congress would hold hearings to ensure the accountability of government officials who faltered during the pandemic. After all, there is lots to be learned from mistakes made at the Centers for Disease Control and Prevention, Food and Drug Administration, Federal Reserve, and in the Trump and Biden administrations...
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Why inflation experts should embrace humility (2/23/22)As the greatest inflation spike of the last 50 years occurs, the utter failure of economists, their models and many pundits to foresee what was coming is worth highlighting. Of course, the biggest malfunction in the story was that of the Federal Reserve itself, which had a clear mandate to keep prices stable, and seems surprised by their lack of stability...
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To lift all boats, help Americans resume fulfilling work (2/14/22)Pushing back on recent pro-worker populism on the right, the American Enterprise Institute's Michael Strain writes "workers need a growth-and-participation agenda." The addition of the word "participation" to traditional pro-growth ideas is especially important today...
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Price controls always backfire; today is no different (2/7/22)With some pundits advocating for price controls to fight inflation, it suddenly feels like the 1970s again. This type of overbearing intervention has never worked as marketed, something President Richard Nixon discovered in 1973 when he lifted the wage and price controls he had implemented two years earlier...
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To pols: We don't need your help making good decisions (1/31/22)Does anyone truly believe that our government — which consistently creates monopoly privileges for companies with its own cronyism — can be trusted to ensure private markets remain competitive? Apparently so. Consider the resurgence of antitrust efforts against "Big Tech." If history is our guide, going after disfavored companies will result in less competition, not more, along with fewer choices and higher prices for you and me...
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Ex-Im is wasteful abroad — we don't need it at home (1/24/22)For years now, the U.S. Export-Import Bank — an under-the-radar agency that provides subsidized loans to foreign firms willing to buy American products — has tried to remain relevant. After a semi-hiatus alongside criticism for functioning as the "Bank of Boeing," Ex-Im convinced the Trump and Biden administrations it may be a tremendous weapon to fight Chinese influence. While it can do no such thing, Ex-Im is now moving on to something else: extending its domestic influence...
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How 'we' obscure the truth about policy (1/15/22)"The most dangerous pronoun discourse has nothing to do with gender identity. It's the undefined 'we' in public policy debates that's the problem." These are the words of Richard Morrison, a research fellow at the Competitive Enterprise Institute. Morrison identified "the fallacy of we," and I'm often guilty of committing it...
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A resolution for the Biden administration (1/10/22)The new year often feels like an opportunity to correct past mistakes — for example, improving one's diet or quitting smoking. This explains why 25% of Americans, and 40% of those younger than 30, make New Year's resolutions. Based on the latest poll from The Economist and YouGov, the Biden administration should adopt a New Year's resolution, too. In particular, it should reconsider its domestic policy agenda. Americans aren't buying it...
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A call to fight rising authoritarianism (1/3/22)At the beginning of a new year, it's traditional to make a resolution or two. I have no such list for myself or others, but I do have a wish. For 2022 and beyond, I wish all of us who still cherish liberal values will band together to oppose the worrisome rise of authoritarianism around the world...
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Three books for liberty-loving readers in 2022 (1/1/22)This time of year, dear readers, is when us writers curate lists. Some are about the best movies, top kitchen appliances or favorite new songs of 2021. This year, I'd like to recommend three books to read after the tumultuous events of 2021. My first is a new and important book by law professors Randy Barnett and Evan Bernick: "The Original Meaning of the Fourteenth Amendment." The 14th Amendment was ratified in 1868, and before it, no individuals of African descent -- including slaves and free persons -- could become U.S. ...
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Inflating the costs of government's fiscal irresponsibility (12/17/21)Inflation has reached its highest level in decades. While we're not yet in a situation like we had in the 1970s -- and we can hope that the Federal Reserve will regain control before it reaches that point -- there are still plenty of reasons to be upset that inflation is getting so out of hand...
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Government isn't required to build back better (12/13/21)Should we ignore the costs of the "Build Back Better" bill and simply focus on the benefits? Wouldn't that be nice? Unfortunately, the most constructive criticisms of the legislation reveal why the magical thinking behind this monstrously expensive spending package will not improve American society...
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The trade-offs of federally mandated paid leave (12/4/21)The nonsensical coverage of the debate over paid leave continues. Apparently, opposing a federal paid-leave program is the equivalent of being anti-family or pro-suffering, or so we're told. We rarely get information about the full consequences of such a policy...
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Giving is an American tradition; for that, I am thankful (11/27/21)Thanksgiving is a time for reflecting on all those things for which we are grateful. It seems particularly important now at the end of the second year featuring a pandemic and unprecedented restrictions. This past year also brought many abuses of government powers with long-lasting consequences. Americans' discontent is incredibly high, and some scholars worry that for the first time in over 150 years, we could be heading toward an epic slip downward...
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Pouring fuel on the spending fire (11/22/21)President Joe Biden has united the American people — in disapproving of his performance, with 70% of Americans disliking the direction the economy is going and over 6 in 10 blaming him for it. The impact of inflation on people's pocketbooks and concerns over the expanding role of government are important in explaining those low approval numbers. A good time to change course is now...
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Haste still makes waste, even for pundits (11/15/21)"The quality of the punditry is abysmal." That's the title of an excellent letter recently shared with me and submitted to the editor of the Washington Post by George Mason University economics professor Donald Boudreaux. Indeed, newspapers are full of questionable statements about child care costs, paid leave and other economic matters that make me question the extent to which reporters and pundits have educated themselves on the topics...
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Here comes the hypocritical global minimum tax (11/9/21)There is a certain irony to a group of rich countries pushing for policies that will disadvantage poorer countries. Yet this is exactly what the leaders of the world's biggest economies did by endorsing a global minimum tax rate of 15% on the profits of large businesses, a deal that has since gained momentum and pledges from leaders in 136 countries...
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Be wary of socialism's slippery slope (11/2/21)For years, progressives mocked anyone who warned that the Democratic Party's move leftward would produce government officials who might push actual socialist policies once in office. I'll admit that for a variety of reasons I never found this extreme version of the slippery-slope argument convincing. ...
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Fighting illiberalism in higher education (10/25/21)I consider my children to be extraordinarily lucky to be born and live in the United States. When I moved here from France in 1999, I believed that, while far from perfect, America still very much embraced the values held by its founders, especially a respect for pluralism and viewpoint diversity...
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Begging permission to buy and sell freely (10/18/21)The United States is known as the land of the free, but it has become a place where the government decides whom we are allowed to buy from and sell to. For instance, when denied the freedom to trade without paying an expensive import tax, many Americans will find themselves begging our trade overlords for an exemption. ...
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For some politicians, enough spending will never be enough (10/9/21)Back in 2005, I wrote that when it comes to spending, "Congressional Republicans Make French Socialists Look Like Ronald Reagan." Looking back now, from the perspective of fiscal prudence, those were the good old days. Yet, as irresponsible as Republicans have been with our finances since then, today's Democrats seem committed to making the spendaholic GOP look like Uncle Scrooge...
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Cronyism's critics continue to miss the point (10/2/21)How to best ensure substantial long-run economic growth should be a question on everyone's mind. Its benefits can't be overstated, and it's undeniable that the lack of growth is a root contributor to many seemingly disconnected economic and social problems. That's the central theme of a recent podcast discussion between The New York Times' Ezra Klein and George Mason University economist Tyler Cowen...
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Who's really at fault if the government defaults? (9/25/21)The battle over the federal debt ceiling that's currently being fought by government officials and legislators is yet another example of the political posturing that's so prevalent these days. On one side, you have Democrats, who believe that the debt ceiling should be increased automatically or removed altogether, no matter what level of debt Uncle Sam accumulates, and that it should be done with the support of Republicans. ...
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Spending gluttony is Washington's deadly sin (9/18/21)Democrats are ready to raise taxes. They want more revenue, in part to fund an out-of-this-world amount of new spending. Some simply want to soak the rich, as Rep. Alexandria Ocasio-Cortez, D-N.Y., plainly signaled at the Met Gala by wearing a white dress with "TAX THE RICH" scrawled across it in red paint. ...
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Immigration and the trillion-dollar lottery (9/11/21)Exactly 10 years ago, economist Michael Clemens published a paper in the prestigious Journal of Economic Perspectives called "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?" He urged fellow economists to consider a paradigm shift in their research about immigration. Though economists had mostly neglected the global economic losses caused by migration barriers, the existing estimates "should make economists' jaws hit their desks."...
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Extending the Danish-Hungarian empire (9/4/21)Ideologues at both political extremes, like Sen. Bernie Sanders, I-Vt, on the left and Fox News host Tucker Carlson on the right, have recently pointed to pet foreign countries as exemplars of what America should strive to be. Yet Sanders and Carlson are each misled by a superficial understanding of what these countries are really about...
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Welcoming immigrants is a good start (8/28/21)Incompetence, political weakness and fearmongering about foreigners in search of a new home has created a cruel immigration policy. But this structural cruelty pales in comparison to the comments made by some legislators who tout their opposition to welcoming Afghan refugees to our shores after many of these refugees put their lives on the line for two decades by helping American soldiers in that war-torn country...
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When government's foolish errands turn into fiascoes (8/20/21)Another government failure, another outrage. This time the scandal is brought on by the less-than-orderly withdrawal of U.S. troops from Afghanistan and the realization that 20 years of military presence in the country achieved nothing but death and chaos. Observing another instance of large-scale mismanagement, I can't help being surprised that anyone is still surprised...
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The United Federal Administrative Units of America? (8/14/21)Warnings that state and local governments faced a fiscal calamity were predictably plentiful when it became clear in early 2020 that COVID-19 would cause major social and economic disruptions. Predictable because it has become gospel that the solution to an economic downturn is to have the federal government suck money out of the private sector, redistribute it to state and local governments minus a cut for all three levels of bureaucracy and then spend the remainder -- often wastefully -- according to political desires and special-interest dreams.. ...
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Why spending matters in times of inflation and high debt (7/22/21)A lot of people don't care about the nation's growing debt. Some believe that low interest rates for the foreseeable future essentially means a free lunch for the government. Others believe that no matter what the cost of this debt, it is all worth it because of the purported higher returns on government spending. But there is an argument that may convince them otherwise: If inflation ever gets out of control, it's easier to deal with it in a lower-debt environment...
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The return of the tax gap hype (7/17/21)Every policy wonk will tell you that after you live in Washington long enough, you start seeing the same issues reemerge on a regular basis. Common ones are praise for the magical ability of government spending to help pay for itself during recessions and hand-wringing over the myth of middle-class stagnation. And when Uncle Sam's coffers are empty, everyone suddenly remembers the so-called tax gap -- the difference between the tax revenues Congress expects versus those it actually collects...
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Rediscovering the promise of the American founding (7/10/21)Declaring their independence from British rule 245 years ago, the American colonists held "these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness." They went on to announce, "That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.". ...
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Let's make a deal -- to abdicate responsibility (7/3/21)If you follow the news, you may be under the impression that nothing ever gets done in Congress and that Democrats and Republicans can't agree on any serious legislation. You aren't alone. Look at the inordinate praise the "bipartisan" infrastructure deal is getting. This widespread wonder highlights the mistaken belief that our awful hyperpartisan era brings about discord and gridlock in Washington. This common refrain is simply wrong...
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Infrastructure insanity (6/25/21)In the event that a group of U.S. senators cannot agree on committing enough money to a bipartisan infrastructure plan, Democrats are reportedly considering a $6 trillion plan of their own. It would probably be best described as a package full of progressive items wrapped in magical thinking paper...
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Demystifying the magical multiplier myth (6/11/21)The scale and scope of government spending expansion in the last year are unprecedented. Because Uncle Sam doesn't have the money, lots of it went on the government's credit card. The deficit and debt skyrocketed. But this is only the beginning. The Biden administration recently proposed a $6 trillion budget for fiscal 2022, two-thirds of which would be borrowed...
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Biden shoots for the stars with spending proposals (6/4/21)Some emergencies require an increase in government spending, but that comes with an understanding that the higher levels of spending are unusual and will not be sustained. Unfortunately, this understanding seems to be lost on the Biden administration. Exhibit A is his proposed $6 trillion budget for Fiscal Year 2022 and the accompanying huge budget deficits on the books for the next decade...
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Expanding the child tax credit ignores historical precedent (5/28/21)Marketing is everything in politics. It explains why a tax credit that benefits 90% of American families with kids -- some of them with income higher than $400,000 -- is marketed as an anti-poverty measure. But in politics, that marketing is often an illusion that hides the hard consequences of a preferred policy...
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Biden's permanent burden for a temporary problem (5/21/21)If you're a politician peddling big new government programs for which there is little need but hefty price tags, you need a clever marketing strategy. At the least, your sales pitch could use a decent sound bite. Such marketing is what the Biden administration with its friends in Congress and the media are doing when insisting that the drop in women's labor force participation during the pandemic requires implementing a policy of federal paid family leave...
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Uncle Sam's lack of leadership on debt cannot be ignored (5/14/21)I’m always amazed to hear people say the national debt doesn’t matter because interest rates are low. Yet, it’s a common refrain on the left and sometimes on the right. The next step in that line of thinking is that if accumulating debt is so cheap, we shouldn’t think twice about spending more today without offsetting it with additional taxes or spending cuts. That’s wrong...
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Biden's plan won't help infrastructure or the environment (5/7/21)The Biden administration has made the fight against climate change a central part of its $2 trillion infrastructure plan. This legislation, if it ever sees the light of day, would shovel more than $100 billion of subsidies toward boosting the market for electric vehicles, as well as updating the country's electric grid to make it allegedly more resilient to climate disasters...
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The FDA's slippery slope toward mandating raw broccoli for breakfast (4/30/21)If it doesn't look like avocado toast, you can't have it. That's the message I get loud and clear from Uncle Sam when I read story after story about the Food and Drug Administration's latest foray into stopping ordinary Americans from doing what ordinary Americans like to do...
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If all the world's a stage, COVID-19 is writing the script (4/23/21)The 9/11 attacks gave us the heightened security theater now on display in all U.S. airports. Day after day for the last two decades, Transportation Security Administration agents have patted down travelers from teens to the elderly, looking for weapons that nobody expects to find. While airplane cockpit doors are now locked to prevent hijackings, the pat-downs remain...
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Just because it's said by Joe doesn't make it so (4/16/21)While President Joe Biden's administration doesn't seem to need an excuse to spend money, two recurring arguments for his gigantic $2.3 trillion infrastructure proposal are that our roads and bridges are "crumbling" and that modernization would generate economic growth and jobs -- hence its name, the American Jobs Plan. But none of this clever marketing makes any of these claims true...
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Biden's crony anti-infrastructure plan (4/10/21)"A crony anti-infrastructure plan" is, sadly, the best description of the Biden administration's proposed $2.3 trillion infrastructure plan. It's insanely expensive and unnecessary, especially coming, as it does, on top of last year's fiscal insanity...
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History tells us that wealth taxes don't work (3/26/21)With Democrats now in control of the House, Senate and White House, many of the most significant policy battles of the next two years will be determined by intraparty fights within the Democratic Party's various factions. Although not a moderate in any meaningful sense, President Joe Biden has always positioned himself strategically at the center of his party. ...
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Biden stays the course on some Trump policies (3/22/21)Several of my friends have expressed relief now that Joe Biden is president and Donald Trump is gone. They no longer have to watch the news constantly, declaring they know "the country is now in good hands." There's no way to defend Trump's poor behavior and insulting style. Yet, there is more to a president than his decorum. And on at least three signature Trump policies for which he'll be remembered the most, often with dread, the similarities between Biden and Trump are unsettling...
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Pursuit of tyrannical policies and zero-risk societies (3/12/21)A lot has been said about the harm to people resulting from government lockdowns imposed in the name of fighting COVID-19. However, lockdowns aren't the only misguided policies that we've had and continue to endure because of this pandemic. In fact, we will suffer many tragic effects from the pandemic-induced changes long after lockdowns are lifted and the coronavirus is endemic...
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Earmarks expose self-serving politicians (3/5/21)A fight is brewing over bringing back earmarks -- provisions that are inserted into spending bills by individual members of Congress to send money to politically favored entities in their districts. There has been a moratorium on earmarks since 2011...
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Don't overlook minimum wage's negative effects (2/26/21)In his autobiography, "Up From the Projects," the late economist Walter Williams explained his move away from the belief that minimum wages help the poor. His change of heart on the topic began when one of his UCLA professors asked him whether he cared more about the intentions behind the minimum wage or its effects...
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Never let a good manufactured crisis go to waste (2/19/21)A seemingly effective way for politicians to justify our need for their services is to fabricate or exaggerate a problem, promise to fix said problem with a new program or lots of spending and then claim victory in the form of public acclaim and reelection...
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Romney's proposal redistributes wealth to families (2/12/21)Sen. Mitt Romney, R-Utah, recently introduced a universal child allowance in an effort to reform federal welfare programs. That goal is worthy, but his means would be counterproductive. For all intents and purposes, he's proposing a kid-centric version of entrepreneur and aspiring politician Andrew Yang's "basic income." According to Romney's summary of his own plan, "The Family Security Act would provide a monthly cash benefit for families, amounting to $350 a month for each young child, and $250 a month for each school-aged child.". ...
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It's Groundhog Day all over again in Washington (2/5/21)One of the recurring themes after the election of Joe Biden to the presidency has been that it would bring a radical change from Donald Trump's presidency. To be sure, these men have very different backgrounds and personalities. However, when it comes to public policy, in many areas, Biden is decisively following in Trump's footsteps...
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Will Democrats reform the criminal justice system? (1/29/21)Democrats now have the luxury of a unified government. Controlling the House of Representatives, the Senate and the White House gives them an opportunity to do many things they have claimed to care about but have complained about being blocked by Republicans. And so, this opportunity is also one for others to hold Democrats accountable if they don't actually do what they insist they wish to do...
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Joe Biden's Plan to build the United States of Italia (1/23/21)With his policy announcement about another COVID-19 relief bill, President Joe Biden declares loud and clear that he will not shy away from spending blowouts and fiscal irresponsibility. For the most part, his proposed plan is nothing more than a way to use the current crisis to deliver on Democrats' longtime dream to explode the size and scope of the federal government...
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Don't hate the political players; hate the political game (1/15/21)Many Americans are very upset that President-elect Joe Biden will replace President Donald Trump. For most of them, it's not that they will miss Trump's unconventional and often unacceptable behavior. Instead, it's that they fear that the size and scope of government will grow so fast that it will permanently change the country they love...
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Even governments can make New Year's resolutions (1/8/21)It's the beginning of a new year. It's almost the beginning of a new presidential administration, too. In theory, now is a perfect time for some resolutions: to start fresh, fix the mistakes of the past or do what we never got around to doing. In that spirit, I offer some advice to the Biden administration; Congress; and state and local governments...
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Tevi Troy's 'fight house' holds valuable lessons (12/30/20)President Donald Trump and President-elect Joe Biden are quite different from each other. It is obvious in their personalities and in their policy positions. So, we can reasonably assume that their White House management styles will also be radically different. One thing is for sure: No matter how the new administration is managed, there will be some internal conflict...
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Continuing education during COVID-19 (12/21/20)There's no doubt that the COVID-19 pandemic has disrupted childhood education. In many countries, kids have physically returned to school. In others, schools were never closed. Yet in the United States, many public schools have been closed since March, yielding disastrous results for millions of kids. While scientific data say it's safe to bring them back, incentives in the school systems are such that many kids continue to be locked up at home rather than receiving a proper education...
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Trump's experiment with protectionist trade policies (12/11/20)With President Donald Trump soon departing Washington, now is a great time to assess his protectionist trade policies. From tariffs to his hectic bullying of other governments to renegotiate trade agreements to his support for American export subsidies, the Trump years were more than infuriating on trade matters; they were destructive...
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Speaking up for voiceless victims of COVID-19 pandemic (12/4/20)Americans are well versed in the consequences for physical health from COVID-19. Newspapers brim daily with scary headlines alarming us of any risk that it might pose, no matter how minor or remote. But there are other nasty and less often discussed consequences brought on by this pandemic and by our collective reaction to it -- whether that's due to people locking themselves up at home out of fear of encountering others or government-ordered lockdowns...
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Giving thanks, maintaining perspective in a pandemic (11/27/20)Every Thanksgiving, we make a conscious effort to give thanks. This year, even in the midst of a pandemic, I'd encourage you to be genuinely grateful for everything you may take for granted. There is still so very much. Let's be thankful that we continue to do so much better on a global scale. ...
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Election day post-mortem: Voters eschew extremism (11/20/20)Contrary to most predictions, Election Day brought no blue wave. While former Vice President Joe Biden won the presidency, it looks like the Republicans will keep the Senate. Even more surprisingly, the Democrats appear to be on the verge of losing as many as 13 seats in the House of Representatives. If this proves to be the case, it would be the smallest House majority for any party since 1919...
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Biden's search for bipartisanship (and bloated budgets) (11/18/20)As he claimed victory in the race for the White House, Joe Biden declared that now is "a time to heal." Like Republican Jack Kemp before his vice presidential debate with Al Gore in 1996, Biden added: "Stop treating our opponents as our enemies. They are not our enemies. They're Americans."...
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Would both Trump and Biden bring more of the same? (11/6/20)Once again, Election Day in America has come and gone with some lingering questions as to when the results will be certified. In the run-up to the presidential contest, each side overflowed with hope about the many wonders its guy, once in power, might bring about. Unfortunately, for those of us who prefer smaller government -- for those of us who value individual liberty as an end in itself -- neither candidate really promised fiscal solvency or less government interference in our lives...
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Fool us once, shame on you; fool us forever, shame on us all (10/30/20)Why people continue to trust government officials is a mystery. Often disconnected from the problems at hand, their policies also often contradict their supporters' frequently expressed beliefs. While suffering from cost overruns and increasing budget deficits, these policies handsomely reward their cronies, too...
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Koch and Hooks inspire with their new book (10/23/20)Every year witnesses the publication of countless books. Some are interesting, and a few are inspiring. The forthcoming book by Charles Koch (business owner and philanthropist) and Brian Hooks (CEO of philanthropic community Stand Together), "Believe in People: Bottom-Up Solutions for a Top-Down World," is both interesting and inspiring...
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On the art of 'stimulus' spending with Trump and Pelosi (10/17/20)President Donald Trump is one of the worst negotiators I have ever seen. One day, he tells Speaker of the House Nancy Pelosi that the stimulus talks are over because she insisted on at least a $2 trillion deal and rejected the White House's offer of $1.6 trillion. The next day, without Pelosi lifting a finger, the president comes back with an offer of nearly $1.9 trillion. Maybe if Pelosi waits, she'll get her full $2 trillion after all...
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$75 Billion in Band-Aids won't cure ailing airlines (10/9/20)Regal Cinemas announced recently that it will temporarily close all 536 of its U.S. locations as the COVID-19 pandemic rages on and continues to keep customers away. This move will affect approximately 40,000 employees across the country. And yet, nobody in Congress is talking about a bailout for Regal...
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Export-Import Bank dogs taxpayers with Pemex (10/2/20)As the saying goes, "You can't teach an old dog new tricks." Nowhere is this truth more evident than in the recent behavior of the allegedly "reformed" Export-Import Bank of the United States. Reauthorized by Congress in December 2019 with the promise that it would suddenly change its ways and focus its fire power on fighting China, this export credit agency quickly returned to its tired routine of propping up its old and favorite customers, including -- very prominently -- Petroleos Mexicanos, or Pemex.. ...
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New CBO report projects delusional spending levels (9/25/20)America's national debt now stands at close to $27 trillion. According to a new report by the Congressional Budget Office, by the end of 2020, federal debt held by the public is projected to equal 98% of GDP -- and in the following year, this burden will grow to 104% of GDP. ...
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The export-import bank's China program lacks vision (9/21/20)Industrial policy that uses tariffs and subsidies to pick economic winners is once again in vogue among intellectuals. The rationale is to prevent China from “dominating” the global market with its subsidies while boosting American jobs and manufacturing. While I believe it’s unwise to mimic China’s policies to tamp down the danger of its authoritarianism, I’m amazed at cynics who support such policies but make no effort to adopt a serious strategic plan to achieve this goal...
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Airlines approach Congress with captain's hat in hand (9/11/20)As the saying goes, "When you find yourself in a hole, stop digging." This advice applies to the hole Congress leapt into by bailing out the airline industry back in March through the Coronavirus Aid, Relief and Economic Security Act. Now these companies want even more taxpayer money. The federal government should refuse another bailout...
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There's no such thing as a free tax holiday (9/4/20)A few weeks ago, President Donald Trump proposed a payroll tax holiday to Americans earning less than $100,000 per year. The gesture is better described as a deferral of the payroll tax burden until April 2021, and that has some people worried. They should be...
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Less government spending will boost economic growth (8/28/20)Intellectuals are supposed to speak truth to power. Unfortunately, some seem to be more interested in saying what everyone expects them to say, which only reinforces the status quo. Thankfully, a few scholars are resisting this trend, fighting for what is true rather than what is popular...
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New research confirms wealth tax's deleterious effects (8/21/20)Politicians are renowned for their shortsightedness. During the post-war period, for example, Republicans have very publicly opposed most tax increases. I like small government, so I'm good with that. Where I part ways with the Grand Old Party is with its failure to oppose big spending that's funded with debt, meaning future tax hikes...
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When puff the magic multiplier goes poof (8/14/20)When revenue shrinks by 1% of GDP and spending increases by 51% over 10 months, you get a $2.8 trillion deficit. That figure, according to the Congressional Budget Office, is significantly larger than the deficit Uncle Sam accumulated over the first 10 months of 2019. Yet, many in Congress demand that even more spending be enacted in the name of stimulating the economy...
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Assessing unemployment insurance and incentives (8/1/20)Earlier this year, the U.S. government passed the largest piece of stimulus legislation in our nation's history. The Coronavirus Aid, Relief and Economic Security Act included a very generous expansion of unemployment insurance benefits. The idea was to help people to keep paying their bills during the forced COVID-19 shutdowns. These benefits are expiring, and Congress is now fighting over whether to extend them as they are or to modify them...
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When mob mentality and moral suasion meet the markets (7/24/20)A wave of hasty firings is sweeping across the country, driven by demands from what some call the "cancel culture." The New York Times editorial page editor James Bennett ran an op-ed from Sen. Tom Cotton, R-Ark., that displeased the paper's readers and some colleagues, so he lost his job. ...
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Congress drops the ball on small business rescue (6/25/20)The Payroll Protection Program, or the PPP, is the crown jewel of the Coronavirus Aid, Relief and Economic Security Act's attempt to rescue small businesses from effects of the coronavirus pandemic. Unfortunately, the program has been a mess in its implementation and its results. This predictable failure is likely to distort and delay our economic recovery...