Tag Archives: liberty

The House that Uncle Sam Built

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Steve Horwitz and Peter Boettke have recently completed The Great Recession of 2008, a short and simple study of the most recent recession.  The following is a short analogy that appears at the beginning of the piece:

 The man who parties like there is no tomorrow puts his body through an “up” and a “down” course that looks a lot like the business cycle. At the party, the man freely imbibes. He has a great time before stumbling home at 2:00 a.m., where he crashes on the sofa.  A few hours later, he awakens in the grip of the dreaded hangover. He then has a choice to make: get a short-term lift from another drink or sober up. If he chooses the latter and endures a few hours of discomfort, he can recover. In any event, no one would say the hangover is when the harm is done; the harm was done the night before and the hangover is the evidence.

Government Forecasting

Posted on by razma766
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Here is a letter I recently sent to the Midland Daily News:

Joe Weir, in his recent letter, offers an extensive analysis of the health care bill recently passed by congress (“Understanding health care reform,” May 16).  Amongst all the cost savings and benefits, he cites the following projection: “The legislation will reduce the deficit by over $100 billion over the next ten years and by about $1 trillion over the second decade.”

The following are four examples of government’s ability to forecast government health care costs in the past:

1.       When Medicare was created in the 1960s, the long-range forecasts estimated that the program would cost about $12 billion by 1990. It ended up actually costing $110 billion that year, or nine times more than expected
 
2.       When Medicaid was created in 1965, it was supposed to be a very small program with annual expenditures of about $1 billion. It now costs federal taxpayers $280 billion per year.
 
3.       Medicaid’s disproportionate share hospital (DSH) program was created in 1987 to subsidize hospitals with large numbers of uninsured patients. The program was supposed to cost $1 billion in 1992, but actually cost $17 billion.
 
4.       The Medicare Catastrophic Coverage of 1988 was repealed after less than two years, in part because some provisions were already projected to cost six times more than originally forecast.*
 
The examples above do not prove that the $100 billion dollar deficit reduction projection is inaccurate.  They should, however, make one skeptical of government’s ability to accurately forecast the costs of the most recent health care reform.
 
Kurt Bouwhuis
 
 
* Daniel J. Mitchell, Will Federal Health Legislation Cause the Deficit to Soar? (Tax and Budget Bulletin 2009)

Intentions still don’t equal outcomes

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Here is a letter I recently sent to the Midland Daily News:

Anthony Johnson, in his recent letter, writes of his family’s inability to pay for a checkup at the doctor (“Dire need for health care reform,” May 6).  After describing his family’s situation, he urges readers to spread the word in support of the most recent health care reform.

There are several people who, by no fault of their own, find themselves in similar difficult situations.  As individuals living in American civil society, we have continuously attempted to alleviate the suffering of fellow citizens in their respective times of need. 

In Anthony Johnson’s case, the debate is not between providing aid and not providing aid, but rather, choosing the most effective method of providing aid to his family.  Health care reform is one option.  Another option seldom discussed is reducing the number of costly government interventions in the health care industry that have unintentionally undermined the voluntary efforts of charity hospitals and other charity organizations.

Regardless of where you stand on this issue, it is important to note that people on all sides of the argument have every intention of helping the poor.  The disagreements arise over the projected outcomes from various public policies.  Unfortunately for those stuck in difficult situations, several fellow Americans continue to equate intentions with outcomes.

Kurt Bouwhuis

How Immigration Crackdowns Backfire

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The following is an excerpt from an article at Reason that discusses immigration in Arizona:

The state has an estimated 460,000 illegal immigrants. But contrary to myth, they have not brought an epidemic of murder and mayhem with them. Surprise of surprises, the state has gotten safer.

Over the last decade, the violent crime rate has dropped by 19 percent, while property crime is down by 20 percent. Crime has also declined in the rest of the country, but not as fast as in Arizona.

Convenience is costly

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Here is a letter I recently sent to the Midland Daily News:

Jeanne Berube was recently “in disbelief when a local shipping store was going to charge [her] shopping friend $10.40 for an $8.80 book of twenty stamps” (“Buyer beware,” April 26).

Local convenience stores sell a gallon of milk for $2.99, while large grocery chains sell the same gallon of milk for $1.99. A 20oz Coke may cost $1.25 in some vending machines and $1.75 in others. Higher prices for identical products are not cause for concern, but rather, a direct reflection of the costs of convenience.

Kurt Bouwhuis

10 Reasons Not to Abolish Slavery

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This outstanding article was provided by FEE.  Click here for entire article.

At one time, countless people found one or more of the following reasons adequate grounds on which  to oppose the abolition of slavery. Yet in retrospect, these reasons seem shabby—more rationalizations than reasons.

Today these reasons or very similar ones are used by opponents of a different form of abolitionism: the proposal that government as we know it—monopolistic, individually nonconsensual rule by an armed group that demands obedience and payment of taxes—be abolished. I leave it as an exercise for the reader to decide whether the following reasons are more compelling in this regard than they were in regard to the proposed abolition of slavery.

1. Slavery is natural.

2. Slavery has always existed.

3. Every society on earth has slavery.

4. The slaves are not capable of taking care of themselves.

5. Without masters, the slaves will die off.

6. Where the common people are free, they are even worse off than slaves.

7. Getting rid of slavery would occasion great bloodshed and other evils.

8. Without slavery the former slaves would run amuck, stealing, raping, killing, and generally causing mayhem.

9. Trying to get rid of slavery is foolishly utopian and impractical; only a fuzzy-headed dreamer would advance such a cockamamie proposal. Serious people cannot afford to waste their time considering such farfetched ideas.

10. Forget abolition. A far better plan is to keep the slaves sufficiently well fed, clothed, housed, and occasionally entertained and to take their minds off their exploitation by encouraging them to focus on the better life that awaits them in the hereafter. We cannot expect fairness or justice in this life, but all of us, including the slaves, can aspire to a life of ease and joy in Paradise.

No More Taxes! Wait a minute…

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“What a relief. Now that April 15 is out of the way, my tax rate is back to zero for another year.

At least that’s the way the President of the United States seems to have it figured—your tax burden, according to him, is measured by what you’re paying right this moment as opposed to what you’re obligated to pay in the future.

That’s the only possible interpretation of his statement last night that Tea Partiers (and others) should be thanking him for cutting taxes. The reality is that President Obama, like President Bush before him, has rather dramatically raised government spending and therefore has raised your taxes. To say otherwise is like saying you got your new swimming pool for free because you put it on your credit card.

Once the money is spent, the bill must eventually come due—and there’s nobody around to foot that bill except the taxpayers. We are locked into higher current spending and therefore locked into higher future taxes. The president hasn’t lowered taxes; he’s raised and then deferred them. To say otherwise is—let’s be blunt—a flat-out lie.” – Steve Landsburg

Originally from Cafe Hayek

Intentions do not equal outcomes

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Here is a letter I recently sent to the Midland Daily news:

Colin Mealey, in his recent letter, offers a good analysis of the recent health care situation in America (“Join the Private Sector?,” April 15). The following two recommendations in the concluding paragraph, however, would likely worsen the situation: “…instead of totally revamping the system, why not just put a cap on how much health insurance can cost? Another idea, if the government thinks they can take over something as complex as healthcare, let them set up their own system and join the private sector for a little while.”

The first suggestion, to impose a price cap, would only result in shortages. Shortages always occur when a maximum price, also known as a price ceiling, is placed below the market price. For instance, if health insurance is generally provided for $800 a month and a maximum price of $600 a month is set, fewer suppliers will be willing to supply it and more demanders will be willing to purchase it.

The second suggestion, which would allow the government to “compete” against private companies, would result in lower prices for health insurance and increased taxes (whether it is in the form of a tax, debt, or inflation). Businesses, unlike governments, must serve consumers to exist. If a business does not serve enough customers to profit, it must file for bankruptcy or dissolve. Governments, on the other hand, have the ability to tax, or, put another way, have the ability to earn income regardless of the outcomes generated. This unique capability would conceivably allow the government to set health insurance prices below market prices by subsidizing its losses with taxes until all businesses were out of the market.

Kurt Bouwhuis

“The Tea Party Guys”

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Here is a letter I recently sent to the Midland Daily News:

Bruce Harris, in his recent letter, draws parallels between the “modern Tea Party guys” and the “original Tea Party guys” (“Tea Party history,” April 12).

First, he claims that “[the Tea Party activists] were driven to act by respectable merchant Bostonians whose tea smuggling income (dodging earlier excises) was about to die at the hands of the East India Company, which could undercut their rates.” Merchants smuggled tea because the British Parliament had made it illegal for the colonists to purchase tea from any source other than Great Britain. Additionally, the East India Company was only able to “undercut rates” because of government subsidies that were funded by increased taxes on the colonies. The Boston Tea Party was a revolt against government oppression and taxation, not a revolt to help smugglers (who wouldn’t even exist in the absence of the East India Company’s government monopoly).

Bruce’s second and final claim is that “after the Tea Party, the British put an embargo on the city, depriving the citizens of any tea, except that smuggled at exorbitant rates.” This analysis is akin to claiming that the American Revolutionary War resulted in an increase in the price of ammunition. Although the price of ammunition may have increased during the American Revolutionary War, the war itself was about American independence, not fluctuations in the price of ammunition.

Kurt Bouwhuis

Loyalty to a cause, not a country

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Here is a letter I recently sent to the Midland Daily News:

Joe Manelis, in reference to the Tea Party’s dislike of further government intervention in health care, claims that “this ultra right wing of the Republican party appears to be on a course that is both dangerous and UNAMERICAN” (“Loyalty to country, not a cause,” April 11).

Nonsense.

If the Tea Party movement is both dangerous and UNAMERICAN, then so is the United States Declaration of Independence, which contains the following passage: “But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

Kurt Bouwhuis

Robinhood Ethics

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This is one of his best – Hot off the press!

I reckon that I’m insufficiently ‘progressive.’

Don
http://www.cafehayek.com/
………………………………….

10 March 2010

Sen. Bernard Sanders (I-VT)
Capitol Hill
Washington, DC  20500

Dear Mr. Sanders:

You accuse Wall Street Journal editorialists of being hypocritical in supporting tax cuts while simultaneously opposing what you call your “modest proposal” to give “a $250 one-time payment [to] seniors struggling to cope with spiraling health-care costs” (Letters, March 10).

I’m tempted to make the consequentialist point that tax cuts are economically justified because they lower artificial obstacles to those who engage in productive activities and, thus, make nearly everyone, rich and poor, wealthier over time.

But I’d rather emphasize an ethical point, namely, taking from Peter that which belongs to Peter is not remotely comparable to giving to Paul that which belongs to Peter.  So it’s not at all hypocritical to oppose robbing Peter while also opposing the forcible transfer of some of Peter’s wealth to Paul.  Instead, it’s called consistency.  And in this case it’s also ethical.

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

San Francisco 1905: Before the Regulators

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Cross Posted from the Mises Blog: San Francisco 1905: Before the Regulators — Mises Economics Blog http://blog.mises.org/?p=011744#ixzz0haiJbdAk