What positive steps can we take? The energy that is now expended by well intentioned, freedom-seeking individuals on the destructive course of politics can be turned into powerful steps that will have a positive effect on the future. All are moral, right and just. None require aggressing. Consider the following...
The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
“It is difficult to make predictions, especially about the future,” says a proverb often attributed to Yogi Berra. Imagine the world of freedom, or lack of it. Who could foresee the technologies that make our lives so rewarding and convenient? The same technologies have us all under the government’s giant microscope. Thankfully, the brave have turned the microscope around.
In the months since Edward Snowden revealed the nature and extent of the spying that the National Security Agency (NSA) has been perpetrating upon Americans and foreigners, some of the NSA's most troublesome behavior has not been a part of the public debate.
National Treasury Union President Colleen M. Kelly recently described the 2014 IRS budget allocation as “woefully inadequate.” But the agency has not proven itself to be an efficient steward of taxpayer dollars. Here are ten ways the IRS lost the trust of the American people.
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The problem for NSA apologist is that when guys like Snowden disclose that the government conducts comprehensive surveillance in ways that would have made 1984’s O’Brien drool, it puts the entire progressive agenda in jeopardy.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the U.S. government is going to take their firearms.And, when I hear this crazy talk, I agree with […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
In times of war and national emergency, it’s sometimes necessary to sacrifice civil liberties to secure vital gains in public safety. In those cases, we may have to accept a loss of privacy or freedom rather than invite mass slaughter of Americans.The National Security Agency’s domestic phone records collection is not one of those.Never have […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
Image: ShutterstockBitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, […]
Do you trust your doctor? Most patients assume their doctor is working in their best medical interests whenever he or she orders a diagnostic test or recommends a particular treatment. Customers might wonder whether an unscrupulous auto mechanic is being truthful when he recommends a brake job or a new transmission. But most patients trust […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”As the inequality gap grows, there is an ideological battle unfolding in the West.On the one hand, there are those who think government can fix things. It must do more, tax more, […]
On Feb. 7 the United States will once again reach its statutory debt limit, meaning it cannot legally borrow any more money. Since the obvious option of cutting spending to match the amount of revenue that the government collects is off the table for some inexplicable reason, Congress will have to pass a new, higher […]
The New York Times published an interminable article on health care recently. Plenty of facts — how scrupulous are these journalists! — but the article displayed absolutely no comprehension of the basics of cause and effect. I was left wondering about the whole point.The article details how the health care system rewards specialists to an […]
Illegal immigrants will flood in! You will be stuck in security lines for hours! Children will go hungry! Planes will fall from the sky!
No, this isn’t a recap of the nightmare scenarios concocted by Y2K maniacs some 13 years ago. Instead, this is what the White House itself has said about puny and largely mythical cuts that will occur with the deadly plague known as “sequestration.”
It’s nothing short of a “devastating list of horribles” — something even worse than being subjected to another 40,000 “Harlem Shake” videos going viral on YouTube.
What’s funny (to me) is that most people could not care less. This is what The Associated Press reports, based on an analysis of Google search trends and polls: “You can only cry wolf so many times before people just stop paying attention.
The White House is determined to change that, using the automatic cuts to show us all how much we truly need the government to be as big as possible and how even the smallest cuts will wreak havoc on our lives.
Just how much of a myth is alive here? The Heritage Foundation sums it up. In the last 10 years, federal spending has gone from $2 trillion to $3.5 trillion. In the next 10, the budget will grow to $6 trillion. That’s a devastating cut as far as D.C. is concerned.
When a private business needs to cut expenses, managers try to make sure that the customer feels it as little as possible. Government does the opposite. It uses the occasion to make you and me as miserable as possible.
Within the Beltway, this is known as the Washington Monument Ploy. It’s the most popular attraction in the nation’s capital. The White House loves to close it up at the smallest excuse, leaving people who have traveled for days stuck in long lines. The goal is to impart this lesson: Pay your taxes and shut up, else we will take from you lots of things you love.
The thing ought to be sold to a restaurant franchise or maybe Walgreens or CVS so that we could get 24/7 service, as we do in the private sector. Instead, they will keep it as a way to continue the public blackmail of taxpayers. Everything government does is useful for that purpose.
To be fair, however, there’s more than malice at work here. Government does have a serious problem in dealing with any cutbacks, something the private sector doesn’t face. In a private business, you have metrics to know the most and least profitable lines of production. These data inform managers what is most important and what is least important. In this way, you can know how to cut in a manner that is least socially harmful.
This is the rational approach made possible by the balance sheet, the glorious invention of double-entry accounting, and the profit-and-loss system. These tools provide to business a kind of GPS for dealing with austerity. The people who pay are the managers, not the consumers.
For this reason, bankruptcies in the private sector can come as a surprise to people. One day you are happily shopping at Kmart, and the next day the thing is belly up, seemingly without warning. A closer look reveals years of austerity, but consumers didn’t really feel it. That’s the brilliance of the private sector at work. It makes the customer king as long as possible.
Government has a completely different approach. It’s no one’s fault. It’s just built into the system. Government gets its money by taking it from you and me. Then it spends it on what it wants. Its accounting system merely tries to keep up with the comings and goings, with no relationship between the two. The “consumers” of government’s goods and services are not really the payers of those goods and services. The payers may or may not get anything in return.
Why not just cut “waste and abuse”? Sounds reasonable. The trouble is that no one knows for sure what is waste from an economic point of view. As for abuse, that’s the whole system.
In other words, the whole system is set up on an arbitrary method of accounting. It doesn’t reveal what is socially desirable. It doesn’t reveal what, if anything, is actually profitable. In this system, in fact, there is nothing we can call profit or loss. It is just a system of take and give, nothing more. What makes it even more egregious is that the people who are taken from have no choice in the matter, so government has absolutely no incentive to cut anything, ever.
The system of sequestration — blunt cuts to anything and everything — is the most horrible and economically irrational system, except for every other system. In government, there is no rational way to cut the budget in a manner that makes any economic sense. This is because no one really knows what is or isn’t valuable. It is the complete opposite of the private sector in this respect.
Here’s the secret to understanding this problem. You know how systemwide socialism is a total mess, doesn’t work, creates economic chaos and poverty, disincentivizes production, and generally leads to massive stagnation, to heck with the population? Well, government bureaucracy is a smaller version of the same. And it fails for the same reason.
Mises, writing in his 1922 book Socialism, sums it up: “For all its officiousness, such a bureaucracy offers a classic example of human indolence. Nothing stirs when no external stimulus is present.”
Whatever else is wrong with sequestration, at least it is some external stimulus, some outside influence on the hallowed walls of control and stagnation.
My prediction is that no one will notice these cuts for a while. But after a week or two, government is going to get annoyed that no one cares that it suffered a tiny wound. Then things are going to get rough. The passport offices will cut back their hours. The customs lines are going to get long. School districts will not be getting their checks. TSA lines are going to lengthen. Payment processing will slow to a crawl.
These functions are tiny compared with the overall budget. What’s important is that they are things people rely on, and therefore, they will take the hit. It’s intimidation with the attempt to manipulate public opinion. They have all the power and you have none. That’s how they will get away with this.
Then the finger-pointing will begin. And guess who will bear the brunt? It will be the Republicans, not the Democrats. It will be Congress, not the White House. Public opinion will shift and people will start screaming. The budget cutters will get scared. They will back down. Taxes could be raised yet again, another blow right in the middle of the great economic stagnation.
Look for it. I hope I’m wrong, of course. We shall see.
It all comes down to this: There is no economically rational way to cut the budget of a bureaucracy. Lacking that, government will do what it does best, which is to make you suffer as much as possible.