Tag Archives: United States government

Using the visualization.

Club for Growth scorecards

United States Capitol, July 2011

United States Capitol, July 2011

Organizations like Club for Growth produce scorecards of legislators. I’ve gathered results from Club for Growth for all years available and present them in an interactive visualization.

You may select which members to show. By clicking on a member’s name in the legend, their line will be highlighted from the others.

Scorecards such as these and others, including the ones that I’ve personally constructed, have caveats. For example, some members have not been in office very long. Issues in which you have an interest may not have been voted on during the member of interest’s tenure. Or, the vote may not have been a recorded vote, which is common. Also, the mere fact of a vote for or against a bill does not measure or account for leadership on the issue, or intensity of interest and involvement. I’ve not seen scorecards that incorporate work and votes in committees, which is an important part of legislating.

Using the visualization.

Using the visualization.

Further, the selection of votes to be included is an issue. Organizations that create scorecards generally have issues that are important to them, and may focus on a subset of issues to the exclusion of all others.

To use the visualization I created, click here to open it in a new window. A nearby illustration shows how to use it.

Alternative measures of unemployment in the United States, from Bureau of Labor Statistics

Alternative measures of unemployment

visualization-example

Besides the official unemployment rate that is the topic of news each month, the Bureau of Labor Statistics (part of the U.S. Department of Labor) tracks and publishes five other series. These are called alternative measures of labor underutilization.

BLS defines the six measures as follows, along with the seasonally adjusted value for February 2014:

  • U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force, 3.5%
  • U-2, job losers and persons who completed temporary jobs, as a percent of the civilian labor force, 3.5%
  • U-3, total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate), 6.7%
  • U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers, 7.2%
  • U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers, 8.1%
  • U-6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers, 12.6%

As the above definitions indicate, U-3 is the “official” or most often mentioned unemployment rate. Those who fit the profile of U-4, U-5, or U-6 are called “discouraged workers.” In particular, those in category U-6 are called “involuntary part-time workers.” The rate for this category, 12.6 percent, is 1.88 times the level of U-3, the official unemployment rate.

Alternative measures of unemployment in the United States, from Bureau of Labor Statistics

Alternative measures of unemployment in the United States, from Bureau of Labor Statistics

Kansas wind turbines

Special interests defend wind subsidies at taxpayer cost

man-digging-coinsThe spurious arguments made in support of the wind production tax credit shows just how difficult it is to replace cronyism with economic freedom. From October, 2012.

We often see criticism of politicians for sensing “which way the wind blows,” that is, shifting their policies to pander to the prevailing interests of important special interest groups. The associated negative connotation is that politicians do this without regard to whether these policies are wise and beneficial for everyone.

So when a Member of Congress takes a position that is literally going against the wind in the home district and state, we ought to take notice. Someone has some strong convictions.

This is the case with U.S. Representative Mike Pompeo, a Republican representing the Kansas fourth district (Wichita metropolitan area and surrounding counties.)

The issue is the production tax credit (PTC) paid to wind power companies. For each kilowatt-hour of electricity produced, the United States government pays 2.2 cents. Wind power advocates contend the PTC is necessary for wind to compete with other forms of electricity generation. Without the PTC, it is said that no new wind farms would be built.

Kansas wind turbinesThe PTC is an important issue in Kansas not only because of the many wind farms located there, but also because of wind power equipment manufacturers that have located in Kansas. An example is Siemens. That company, lured by millions in local incentives, built a plant in Hutchinson. Employment was around 400. But now the PTC is set to expire on December 31, and it’s uncertain whether Congress will extend the program. As a result, Siemens has laid off employees. Soon only 152 will be at work in Hutchinson, and similar reductions in employment have happened at other Siemens wind power equipment plants.

Rep. Pompeo is opposed to all tax credits for energy production, and has authored legislation to eliminate them. As the wind PTC is the largest energy tax credit program, Pompeo and others have written extensively of the market distortions and resultant economic harm caused by the PTC. A recent example is Puff, the Magic Drag on the Economy: Time to let the pernicious production tax credit for wind power blow away, which appeared in the Wall Street Journal.

The special interests that benefit from the PTC are striking back. An example comes from Dave Kerr, who as former president of the Hutchinson/Reno County Chamber of Commerce played a role in luring Siemens to Hutchinson. Kerr’s recent op-ed in the Hutchinson News is notable not only for its several attempts to deflect attention away from the true nature of the PTC, but for its personal attacks on Pompeo.

There’s no doubt that the Hutchinson economy was dealt a setback with the announcement of layoffs at the Siemens plant that manufactures wind power equipment. Considered in a vacuum, these jobs were good for Hutchinson. But we shouldn’t make our nation’s policy in a vacuum, that is, bowing to the needs of special interest groups — sensing “which way the wind blows.” When considering everything and everyone, the PTC paid to producers of power generated from wind is a bad policy. We ought to respect Pompeo for taking a principled stand on this issue, instead of pandering to the folks back home.

Kerr is right about one claim made in his op-ed: The PTC for wind power is not quite like the Solyndra debacle. Solyndra received a loan from the Federal Financing Bank, part of the Treasury Department. Had Solyndra been successful as a company, it would likely have paid back the government loan. This is not to say that these loans are a good thing, but there was the possibility that the money would have been repaid.

But with the PTC, taxpayers spend with nothing to show in return except for expensive electricity. And spend taxpayers do.

Kerr, in an attempt to distinguish the PTC from wasteful government spending programs, writes the PTC is “actually an income tax credit.” The use of the adverb “actually” is supposed to alert readers that they’re about to be told the truth. But truth is not forthcoming from Kerr — there’s no difference. Tax credits are government spending. They have the same economic effect as “regular” government spending. To the company that receives them, they can be used — just like cash — to pay their tax bill. Or, the company can sell them to others for cash, although usually at a discounted value.

From government’s perspective, tax credits reduce revenue by the amount of credits issued. Instead of receiving tax payments in cash, government receives payments in the form of tax credits — which are slips of paper it created at no cost and which have no value to government. Created, by the way, outside the usual appropriations process. That’s the beauty of tax credits for big-government spenders: Once the program is created, money is spent without the burden of passing legislation.

If we needed any more evidence that PTC payments are just like cash grants: As part of Obama’s ARRA stimulus bill, for tax years 2009 and 2010, there was in effect a temporary option to take the federal PTC as a cash grant. The paper PTC, ITC, or Cash Grant? An Analysis of the Choice Facing Renewable Power Projects in the United States explains.

Astonishingly, the wind PTC is so valuable that wind power companies actually pay customers to take their electricity. It’s called “negative pricing,” as explained in Negative Electricity Prices and the Production Tax Credit:

As a matter of both economics and public policy, no government production tax subsidy should ever be so large that it creates an incentive for a business to actually pay customers to take its product. Yet, the federal Production Tax Credit (“PTC”) for wind generation is doing just that with increasing frequency in electricity markets across the United States. In some “wind-rich” regions of the country, wind producers are paying grid operators to take their generation during periods of surplus supply. But wind producers more than make up the cost of the “negative price” payment, because they receive a $22/MWH federal production tax credit for every MWH generated.

In western Texas since 2008, wind power generators paid the electrical grid to take their electricity ten percent of the hours of each day.

Once we recognize that tax credits are the same as government spending, we can see the error in Kerr’s argument that if the PTC is ended, it is the same as “a tax increase on utilities, which, because they are regulated, will pass on to consumers.” Well, government passes along the cost of the PTC to taxpayers, illustrating that there really is no free lunch.

Kerr attacks Pompeo for failing to “crusade” against two subsidies that some oil companies receive: Intangible Drilling Costs and the Percentage Depletion Allowance. These programs are deductions, not credits. They do provide an economic benefit to the oil companies that can use them (“big oil” can’t use percentage depletion at all), but not to the extent that tax credits do.

Regarding these deductions, last year Pompeo introduced H. Res 267, titled “Expressing the sense of the House of Representatives that the United States should end all subsidies aimed at specific energy technologies or fuels.”

In the resolution, Pompeo recognized the difference between deductions and credits, the latter, as we’ve seen, being direct subsidies: “Whereas deductions and cost-recovery mechanisms available to all energy sectors are different than credits, loans and grants, and are therefore not taxpayer subsidies; [and] Whereas a deduction of costs and cost recovery with respect to timing is not a subsidy.”

Part of what the resolution calls for is to “begin tax simplification and reform by eliminating energy tax credits and deductions and reducing income tax rates.”

Kerr wants to deflect attention away from the cost and harm of the PTC. Haranguing Pompeo for failing to attack percentage depletion and IDC with the same fervor as tax credits is only an attempt to muddy the waters so we can’t see what’s happening right in front of us. It’s not, as Kerr alleges, “playing Clintonesque games of semantics with us.” As we’ve seen, Pompeo has called for the end of these two tax deductions.

If we want to criticize anyone for inconsistency, try this: Kerr criticizes Pompeo for ignoring the oil and gas deductions, “which creates a glut in natural gas that drives down the price to the lowest levels in a decade.” These low energy prices should be a blessing to our economy. Kerr, however, demands taxpayers pay to subsidize expensive wind power so that it can compete with inexpensive gas. In the end, the benefit of inexpensive gas is canceled. Who benefits from that, except for the wind power industry? The oil and gas targeted deductions also create market distortions, and therefore should be eliminated. But at least they work to reduce prices, not increase them.

By the way, Pompeo has been busy with legislation targeted at ending other harmful subsidies: H.R. 3090: EDA Elimination Act of 2011, H.R. 3994: Grant Return for Deficit Reduction Act, H.R. 3308: Energy Freedom and Economic Prosperity Act, and the above-mentioned resolution.

I did notice, however, that Pompeo hasn’t called for the end to the mohair subsidy. Will Kerr attack him for this oversight?

Finally, Kerr invokes the usual argument of government spenders: Cut the budget somewhere else. That’s what everyone says.

Creating entire industries that exist only by being propped up by government subsidy means that we all pay more to support special interest groups. A prosperous future is best built by relying on free enterprise and free markets in energy, not on programs motivated by the wants of politicians and special interests. Kerr’s attacks on Pompeo illustrate how difficult it is to replace cronyism with economic freedom.

We could use the shutdown as a teachable moment

The United States government is in the third day of a partial shutdown. It’s quite a coincidence that Chapter 9 of Henry Hazlitt’s book “Economics in One Lesson” talks about government employees right at the time we’re in a government shutdown.

Here, Amanda BillyRock illustrates this chapter of “Economics in One Lesson.” (Click here to view at YouTube.)

You know how on a day when it has snowed or there’s been an ice storm, you hear on the news that “only essential government employees should report to work today.” When I hear that, I’ve wondered “Why do we have non-essential government employees?”

EPA logo

Here’s something that’s a little shocking. I didn’t believe it when I first heard it. The news agency Reuters is reporting that the Environmental Protection Agency — the EPA — has decided that only seven percent of its employees are essential. The others are non-essential. So why do we have them, if they are not essential?

At the Department of Education, only five percent of the employees are considered to be essential and will work during the shutdown. How, I wonder, are we going to educate children during this time?

Do private sector companies have non-essential employees? Of course. But market competition provides a balancing force, a motivation to avoid waste. That’s not present as strongly in government, if at all.

I understand that we depend on government for so many things that during a shutdown — be it partial or whatever — people’s lives will be disrupted. We’re seeing news stories of people showing up at our great national parks, for example, and being turned away because the park is closed. The solution to these problems is to take these products and services away from government and let the private sector operate them.

That’s something that seems very foreign to a lot of people. Take the inspection of airplanes, for example. Right now people are saying that if government inspectors are not available to inspect airplanes, they’re going to crash. Well ask yourself this question. Does an airline strive to operate its airplanes safely only to satisfy government inspectors, or does it wish to protect the lives of its customers and employees, and safeguard its physical assets like the expensive airplanes?

Or consider a meatpacking plant. Does it endeavor to produce safe beef only because inspectors are watching, or because it is concerned for its customers and wants to avoid the terrible publicity and economic harm of a recall?

I’m not saying that beef and airplanes should not be inspected. But they shouldn’t be inspected by government. It’s very difficult to hold government accountable. When we see episodes where government breaks down, such as perhaps government inspectors who might not be doing a good job inspecting beef, the proposed solution is always more money for government. More money for more inspectors and bureaucrats. But, what if we had a private market for inspection services? If there was a failure of inspection, in other words, if a private inspection company was not being thorough, that would become known. The reputation of that company, which is its primary asset, would be harmed. No longer would we trust that company when it says the beef is safe. The company would likely fail, and someone else would provide these services. We can’t really do this with government.

Markets can provide a very strong form of regulation, if we let them work.

To some extent, this happened during the financial crises of 2008. The credit rating services were not owned by government, but they had a government-granted monopoly on providing credit rating services, and many say that their failure to produce accurate assessments of the risks of securities was pivotal in contributing to the collapse. Might it have been different if there was a free market for credit rating services? We don’t really know.

This government shutdown is an opportunity to realize what we really need government to do, what can be better done by the private sector, and maybe even what doesn’t need to be done at all.

Robosquirrel

It’s a tough battle, though. Last week Nancy Pelosi said there was nowhere to cut. How about this: $325,000 was spent on a robotic squirrel named “RoboSquirrel.” This National Science Foundation grant was used to create a realistic-looking robotic squirrel for the purpose of studying how a rattlesnake would react to it. Can’t we cut that? I’m sure Pelosi would say “what would the scientific researchers do if we didn’t fund this program?” As Hazlitt tells us, they’d do something else. Hopefully something else that the market — that is, you and I — value enough to buy it because we want it, not because government taxed us to pay for it. But we can’t see that right now, while we do see robosquirrel. The seen and unseen, again.

I don’t know. Maybe I shouldn’t be so harsh in my criticism. We did learn that a successful rattlesnake attack on a squirrel involves three steps. First, striking and hitting a prey animal, and that’s usually from only about 10 inches away. Then envenomating the prey animal, and the animal may attempt to escape. Then the rattlesnake must relocate the envenomated prey animal after it succumbs to the venom.

Envenomating. I’d never heard that word before. Maybe we really need to get government back to work after all.

Pompeo on Syria intervention

This morning U.S. Representative Mike Pompeo appeared on Fox News Network to talk about Syria. Video follows.


Also, KFDI reported this today:

Kansas Fourth District Representative Mike Pompeo has just returned from a week in the Middle East in which he met with national security figures from the United States and its allies.

Pompeo said there is a broad concensus that American foreign policy in the Middle East has been weak and feckless.

The congressman called for a strong response to the alleged use of chemical weapons by Syrian dictator Bashar Assad, who Pompeo called a war criminal.

“We’ve got to make sure that those who control Syria and big pockets of the Middle East are not beholden to the Ayatollahs in Iran and to Hezbollah and to Russia,” he said.

Pompeo said if the U.S. does nothing in response to Syrian actions, we will ultimately have risk to the American homeland.

“We don’t need 20,000 soldiers on the ground,” Pompeo said. “But we need an enormous effort to make sure that, in a post-Assad world, we do not have Iran in control.”

Pompeo said he hopes the president will do more than he has outlined so far, adding that a “shot across the bow” is not enough.

Pompeo on national security issues

On the Joseph Ashby Show today, U.S. Representative Mike Pompeo of Wichita explained his views on our national security programs.

U.S. Representative Mike Pompeo on the Joseph Ashby Show.

When the host drew an analogy between the National Security Agency’s collection of data and the Internal Revenue Service scandals, Pompeo said: “Had there been this kind of oversight of Lois Lerner, this would not have happened.” He went on to explain that oversight of IRS is all by one branch of government, the executive branch. Oversight of NSA is “radically different,” he said.

Pompeo also noted that while we should not minimize the importance of the IRS scandals, national security is a much weightier matter.

Interestingly, the perception of the breadth of data that’s being collected may be overstated. In a June 18 hearing of the House Permanent Select Committee on Intelligence, Pompeo asked these questions of the Director of the NSA (video follows):

Pompeo: Gen. Alexander, from the data under Section 215 that’s collected, can you figure out the location of the person who made a particular phone call?

General Keith Alexander, Director of the National Security Agency: Not beyond the area code.

Pompeo: Do you have any information about signal strength or tower direction? I’ve seen articles that talked about you having this information. I want to make sure for the record we’re got that right.

Alexander: We don’t have that in the database.

Pompeo: Systems are needed, and risk of abuse is low

Recently U.S. Representative Mike Pompeo of Wichita appeared on Stossel to defend the programs the National Security Agency uses to gather data on Americans and others. I wondered about these questions: If it’s true that the information leaked by Edward Snowden has harmed the security of the United States, how is it that this was able to happen? Aren’t there many thousands of people with knowledge and information similar to, or greater than, what Snowden had access to? Is the security of our country dependent on all of them keeping their secrets?

In a telephone conversation, Pompeo told me there are thousands of people who have access to classified material. Each one of these persons represents some risk.

How did the Snowden situation develop? We don’t yet know the answer, Pompeo said. It was a mistake, he said, for the NSA to permit Snowden to have access to, and be able to take from the facility, the breadth of information he has released. But Snowden did not leak actual intelligence data; only an informational presentation about the programs being used.

Snowden has harmed our security, and he may not be finished releasing information. Appearing on Stossel, Pompeo told the host that already Al-Qaeda is behaving differently. “They might well have suspected that some of this was going on. But they learned a couple things. They learned not only what was going on, but they’ve also learned the legal limits of these programs. Having shared that is very dangerous, and allows the enemy to have insights into the things we’re doing, to go catch the really bad guys — the terrorists who still want to kill us.”

Addressing privacy concerns, on Stossel Pompeo emphasized the “tremendous oversight” of intelligence services. Actual telephone calls are not being listened to. Further, the data that’s collected is not “mined” continuously, he said. It’s only for specific purposes, and then with FISA court approval, that the data is used.

An important distinction, Pompeo told me, is that it is data about telephone calls that is being collected, not the actual content of the calls. He emphasized the process and layers of oversight, by both agencies and courts. Even with a president and attorney general who have shown themselves not always worth of public trust, Pompeo says that the depth and scope of oversight gives him confidence that the risk of abuse is low.

Interestingly, the perception of the breadth of data that’s being collected may be overstated. In a June 18 hearing of the House Permanent Select Committee on Intelligence, Pompeo asked these questions of the Director of the NSA (video follows):

Pompeo: Gen. Alexander, from the data under Section 215 that’s collected, can you figure out the location of the person who made a particular phone call?

General Keith Alexander, Director of the National Security Agency: Not beyond the area code.

Pompeo: Do you have any information about signal strength or tower direction? I’ve seen articles that talked about you having this information. I want to make sure for the record we’re got that right.

Alexander: We don’t have that in the database.

Obama will need more economic growth

To pay for the Obama taxing and spending agenda, the country will need much more economic growth. Unfortunately, the rate of growth is slowing just when we need greater rates of growth.

It’s commonly thought that annual real (after-inflation) growth of three percent is required just to keep up with population. More than that is needed to restore the loss in middle-class income during Obama’s first term. But here’s what has happened to the rate of growth.

Gross Domestic Product, Real, Annual Change

The direction of change in economic growth is moving in the wrong direction, and it’s far below what is needed. Darkening the horizon are the planned increases in spending, in particular ObamaCare, will be a further drag on the economy. Other Obama policies are distinctly anti-growth. It’s difficult to have an optimistic outlook.

Stephen Moore and Arthur Laffer told the story last summer in the Wall Street Journal:

The first is how much government spending fell during President Bill Clinton’s eight years in office and how low it was when he left office. When he became president in 1992, government spending was 23.5% of GDP, and when he left in 2001 it was 19.5% of GDP. President Clinton, in conjunction with a solid Republican Congress, cut government spending by more than any other president in modern times, and oversaw one of the greatest periods of economic growth and prosperity in U.S. history.

Sadly for fiscal conservatives, the biggest surge in government spending came during the last two years of President George W. Bush’s eight years in office (2007-2008). A weakened Republican president dealing with a strident Democratic Congress, led by then-House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, resulted in an orgy of spending.

Mr. Bush and Republicans in Congress capitulated to and even promoted each and every government bailout and populist redistribution canard put before them. It’s a long list, starting with the 2003 trillion-dollar Medicare prescription drug benefit and culminating with the actions taken to stem the 2008 financial meltdown — the $700 billion Troubled Asset Relief Program, the bailout of insurance giant AIG and government-sponsored lenders Fannie Mae and Freddie Mac, the ill-advised 2008 $600-per-person tax rebate, the stimulus add-ons to 2007′s housing and farm bills, etc. The script had it that greedy right-wingers were the cause of our collapse, and deficit spending and easy money the answer.

The numbers are mind boggling. From the second quarter of 2007, i.e., the first full quarter of a Pelosi-Reid dominated Congress and a politically weakened President Bush, to the second quarter of 2009 when President Obama assumed office, government spending skyrocketed to 27.3% of GDP from 21.4%. It was the largest peacetime expansion of government spending in U.S. history.

Following is an interactive visualization of federal revenues, expenditures, and the deficit as a percentage of gross domestic product that illustrates these trends. Use the visualization below, or click here to open it in a new window.

Obama on debt ceiling, then and now

Not long ago Barack Obama said that needing to raise America’s debt limit “is a sign of leadership failure.” Now he wants the power to raise the debt ceiling on his own, without Congressional approval.

Senator Barack Obama, March 16, 2006 Congressional Record, page S2237:

Mr. OBAMA. Mr. President, I rise today to talk about America’s debt problem.

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans — a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies. But we are not doing that. Despite repeated efforts by Senators CONRAD and FEINGOLD, the Senate continues to reject a return to the commonsense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory spending and to tax cuts. The Senate had to abide by the commonsense budgeting principle of balancing expenses and revenues. Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending.

As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next 5 years. That is why I will once again cosponsor the Pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again.

Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 Presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just 5 years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours.

Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

I therefore intend to oppose the effort to increase America’s debt limit.

The Obama tax hike, compared to deficits

President Barack Obama is going to ask Congress for more tax revenue. But the president’s request, as large as it is, will do little to rein in our budgetary problem.

According to the Wall Street Journal: “President Barack Obama will begin budget negotiations with congressional leaders Friday by calling for $1.6 trillion in additional tax revenue over the next decade, far more than Republicans are likely to accept and double the $800 billion discussed in talks with GOP leaders during the summer of 2011.”

The stage is being set for a showdown, one that both sides will surely cast as determining the future viability of America. But placing these numbers in context shows us that we’re really arguing over nothing — when compared to the size of the problems facing the budget.

For context, the president’s most recent budget — which received zero votes when submitted to Congress — calls for cumulative deficits totaling an additional $6,684 billion from 2013 through 2022. Obama’s request for additional revenue of $1,600 billion over those years is 23.9 percent of that projected deficit. This is not what I’d call “solving the problem.”

Further, the president’s budget may be based on unrealistically optimistic projections. One of the most important variables, the rate of growth of gross domestic product, was assumed to be 3.0 percent in 2012. But through the first three quarters, GDP growth has been at the rate of 2.0 percent, and the recent trend has been for that rate to decrease, not improve.

The rich don’t have enough money

Even if President Barack Obama gets his way in upcoming tax negotiations, we’ll still be a long way from tackling the deficit.

The document General Explanations of the
Administration’s Fiscal Year 2013 Revenue Proposals, Table of Revenue Estimates
holds the details:

Obama Administration projection of increased tax revenue

If Obama is successful in his plan to increase taxes on upper-income taxpayers, it will bring in — according to this estimate by the Treasury Department — $56 billion in 2013. If additional tax expenditures are eliminated, revenue could increase by $83 billion. Both of these numbers are projected to rise in future years.

To place these numbers in context: In fiscal year 2012, which ended just one month ago, the federal government spent an estimated $3,500 billion. The largest tax revenue increase Obama hopes for is 2.4 percent of this.

Considering only the deficit from 2012, estimated at $1,100 billion, the $83 billion tax hike is 7.54 percent. But that’s only the deficit, which is the amount we borrow, not the amount we spend.

These tax increases are not going to solve our problems with the federal budget. That’s assuming that the tax hikes will not cause economic harm.

The federal budget is so out of balance compared to the size of the economy that even the wildest dreams of liberals won’t balance the budget. The Tax Foundation has calculated from IRS data that if government taxed 100 percent of the income earned by those who earn over $1 million, it would raise $709 billion. That’s not really close to last year’s deficit of $1,100 billion.

And then, why would these people work?

Economic growth is slowing

While the United States economy started to grow after the recent recession, the trend in growth is slowing.

During the 80s and 90s the federal government spent at around the level of 19 percent of GNP. Now the federal government spends at the rate of 25 percent of the economy. Add in state and local governments, and we’re at 36 percent.

This is not trickle-down government, it’s suffocating government, where government threatens to overwhelm the private sector. As government intervenes in more areas of the economy, as Obama’s bureaucrats extend their span of control over the economy (think General Motors), we have a certain process taking place. Charles Koch in September in Wall Street Journal observed: “Put simply, cronyism is remaking American business to be more like government. It is taking our most productive sectors and making them some of our least.”

This didn’t start when Barack Obama assumed office. The process was already in place. But it has accelerated under the current president. Not by accident, but by design.

Most people worry about deficits and debt. But do you think President Obama is truly concerned about huge deficits year after year, with many more predicted? These huge deficits are not a bug in the program. They’re a feature. The point of the deficits is to create a crisis that makes it necessary to raise taxes. Government grows again.

Yes, President Obama inherited a tough economy when he took office nearly four years ago. But, according to the official record-keepers, the recession ended in the summer of 2009. Does it feel like the recession is over?

Do you remember “Recovery Summer?”

Here’s a news report: “Vice President Joe Biden today will kick off the Obama administration’s Recovery Summer, a six-week-long push designed to highlight the jobs accompanying a surge in stimulus-funded projects.”

What year was that? 2010. Does it seem like we’re in recovery?

Now David Axelrod denies that there was such a claim.

George Will accurately diagnosed the problem two years ago: “We can’t tolerate any more of the Obama cure.”

Balanced budget requires government redesign

“If we were to eliminate the entirety of government with the exception of social programs and the interest on the debt, we still wouldn’t be able to balance the budget.”

This is the diagnosis of Antony Davies as he examines the components of federal spending and revenue.

“There are no specific cuts that will solve the problem,” he says. The problem is larger than any conceivable budget cuts can solve.

What do we do? Davies says: “Nothing less than a redesign of government will solve this problem, and that redesign should begin with the question: What is the proper role of government?”

Obama’s regulatory extremism

In the introduction to his book Democracy Denied, Phil Kerpen gives us a history lesson on the grab for executive power by presidents through the use of “signing statements.”

Elizabeth Drew made the case against Bush’s abuse of executive power in a lengthy New York Review of Books piece called “Power Grab.” She specifically highlighted Bush’s use of signing statements (a technique to object to elements of a law while signing it, and refusing to enforce those elements), the detention of foreign combatants at Guantanamo, and warrantless wiretaps. She concluded that Bush was a tyrant.

Kerpen explains how the view from the oval office can make one forget campaign promises:

Even the Bush practice that raised the most ire — the use of signing statements — was embraced by Obama just weeks after he took office, when he said: “it is a legitimate constitutional function, and one that promotes the value of transparency, to indicate when a bill that is presented for presidential signature includes provisions that are subject to well-founded constitutional objections.” Contrast that with what Obama had said about signing statements on the campaign trail: “This is part of the whole theory of George Bush that he can make laws as he is going along. I disagree with that. I taught the Constitution for 10 years. I believe in the Constitution and I will obey the Constitution of the United States. We are not going to use signing statements as a way of doing an end run around Congress.”

Not that Obama alone takes criticism for exercising presidential power contrary to the actions of Congress, as he describes the auto industry bailout in the last days of the presidency of George W. Bush. A bill didn’t make it through Congress, but Bush “repurposed” TARP funds — intended for banks — and used them for an auto bailout in the amount of $17.4 billion.

It is this use of executive power and agencies to bypass the will of people — as expressed through Congress — that is detailed in a book authored by Phil Kerpen and published at this time last year: Democracy Denied: How Obama is Ignoring You and Bypassing Congress to Radically Transform America — and How to Stop Him.

Kerpen’s website is philkerpen.com, and it features excerpts from the book along with a theatrical trailer.

Kerpen explains the problem by describing a solution: The Regulations from the Executive in Need of Scrutiny Act, or REINS Act. This proposed law would require any major regulatory action to be approved by Congress and receive the president’s signature. Kerpen writes: “We have regulators who are effectively writing and executing their own laws. The major policy decisions that affect every aspect of our economic lives are moving forward without consent of the people’s legitimately elected legislative branch.”

The problem is that often Congress passes generic laws and leaves it to regulatory agencies to write the rules that implement the law. By requiring Congressional and Presidential approval of major regulations, agencies will be accountable to the current Congress, and lawmakers will have a chance to ensure that actual regulations are consistent with the intent of enabling legislation.

Cap-and-trade energy legislation provides an example of Kerpen’s thesis, which is “how the Obama administration was disregarding Congress and the American people to accomplish its objectives through regulatory backdoors.” The legislation passed the House, but couldn’t pass the Senate. So what happened next? Kerpen explains Obama’s detour around Congress:

Just to show you how unfazed the Obama administration was by the political defeat of cap-and-trade, consider what’s on page 146 of Obama’s 2012 budget: “The administration continues to support greenhouse gas emissions reductions in the United States in the range of 17 percent below 2005 levels by 2020 and 83% percent by 2050.” Those just happen to be the same levels required by the failed Waxman-Markey cap-and-trade bill. Obama is telling the EPA to just pretend that the bill passed and regulate away.

In fact Obama’s EPA was already moving full steam ahead to implement a global warming regulatory scheme that could even be more costly than cap and trade — without the approval of the American people and without so much as a vote in Congress.

The remainder of the chapter details some of the ways EPA is accomplishing this backdoor regulation.

The Patient Protection and Affordable Care Act, otherwise known as ObamaCare, is another topic Kerpen covers where regulation is replacing lawmaking by Congress:

Nancy Pelosi was right in more ways then she realized when she infamously said “We have to pass the bill so that you can find out what is in it, away from the fog of the controversy.” Not only was the more than 2,000-page bill negotiated in secret and so densely complex that few humans could understand it, it also deferred most of the really difficult and important decisions to the regulators, including dozens of brand-new boards, committees, councils, and working groups. So even after ObamaCare had been passed there was no way to know what was really in it until the bureaucracy was assembled and began issuing regulations.

Kerpen describes the bill that passed as not “finished legislation,” and is now being interpreted by bureaucrats, the most powerful being HHS Secretary Kathleen Sebelius. Her office is now, according to Kerpen, “issuing a whole string of official guidelines and regulations that attempt to ‘correct’ the draft law, often by asserting things that the law doesn’t actually say.”

Other chapters describe regulation of the internet (net neutrality), card check, the Dodd-Frank financial regulations, and energy regulation. All of these represent the Obama administration either ignoring Congress or creating vast new powers for itself. The chart Kerpen created shows the plays being made.

Obama regulatory extremismKerpen’s chart of Obama regulatory extremism. Click for larger version.

What about regulatory reform? Obama’s doing that. In January he wrote in the Wall Street Journal: “We’re looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for — and reduce — the burdens regulations may place on small businesses.”

In a chapter titled “The Back Door to the Back Door: Phony Regulation Reform” Kerpen explains that this promise or regulatory reform by the president is a sham. Kerpen describes the executive order that implements regulatory review this way: “The new executive order is the regulatory parallel to the Obama administration’s strategy on federal spending, which is to spend at astonishing, record rates and rack up trillions of dollars in deficits while paying lip service to fiscal responsibility by establishing a fiscal commission.”

And in a gesture of true public service, Kerpen introduces us to Cass Sunstein, the man who is heading the Office of Information and Regulatory Affairs (OIRA), the agency that will be conducting the purported review of regulations. A quote from Sunstein: “In what sense is the money in our pockets and bank accounts fully ‘ours’? Did we earn it by our own autonomous efforts? Could we have inherited it without the assistance of probate courts? Do we save it without the support of bank regulators? Could we spend it if there were no public officials to coordinate the efforts and pool the resources of the community in which we live?”

Kerpen sums up Sunstein’s political philosophy of central planning:

The idea of Sunstein’s “nudge” philosophy is that the fatal conceit of central economic planning can somehow succeed if it is subtly hidden from view. Sunstein thinks that if he imposes regulations that steer our choices instead of outright forcing them, he can achieve desirable social objectives. … Given Suinstein’s views and the central role he will have in reshaping federal regulation to be “more effective,” we need to be deeply concerned that any changes that come out of the process may make regulation less apparent, but no less costly — and more effective at crushing genuine individual choice and responsibility and substituting the judgment (even if by a nudge instead of a shove) of a central planner.

The challenge, Kerpen writes in his conclusion to the book, “is to change the political calculus to elevate regulatory fights to the appropriate level in the public consciousness. We must make sure the American people understand that a disastrously bad idea becomes even worse when it’s implemented by backdoor, unaccountable, illegitimate means.”

Kerpen recommends passage of the REINS Act as a way to restore accountability over regulatory agencies to Congress. The two messages Congress needs, he writes, are: “You can delegate authority, but you can never delegate responsibility,” and “If you fail to stop out-of-control regulators, voters will hold you accountable.”

Kerr’s attacks on Pompeo’s energy policies fall short

We often see criticism of politicians for sensing “which way the wind blows,” that is, shifting their policies to pander to the prevailing interests of important special interest groups. The associated negative connotation is that politicians do this without regard to whether these policies are wise and beneficial for everyone.

So when a Member of Congress takes a position that is literally going against the wind in the home district and state, we ought to take notice. Someone has some strong convictions.

This is the case with U.S. Representative Mike Pompeo, a Republican representing the Kansas fourth district (Wichita metropolitan area and surrounding counties.)

The issue is the production tax credit (PTC) paid to wind power companies. For each kilowatt-hour of electricity produced, the United States government pays 2.2 cents. Wind power advocates contend the PTC is necessary for wind to compete with other forms of electricity generation. Without the PTC, it is said that no new wind farms would be built.

The PTC is an important issue in Kansas not only because of the many wind farms located there, but also because of wind power equipment manufacturers that have located in Kansas. An example is Siemens. That company, lured by millions in local incentives, built a plant in Hutchinson. Employment was around 400. But now the PTC is set to expire on December 31, and it’s uncertain whether Congress will extend the program. As a result, Siemens has laid off employees. Soon only 152 will be at work in Hutchinson, and similar reductions in employment have happened at other Siemens wind power equipment plants.

Rep. Pompeo is opposed to all tax credits for energy production, and has authored legislation to eliminate them. As the wind PTC is the largest energy tax credit program, Pompeo and others have written extensively of the market distortions and resultant economic harm caused by the PTC. A recent example is Puff, the Magic Drag on the Economy: Time to let the pernicious production tax credit for wind power blow away, which appeared in the Wall Street Journal.

The special interests that benefit from the PTC are striking back. An example comes from Dave Kerr, who as former president of the Hutchinson/Reno County Chamber of Commerce played a role in luring Siemens to Hutchinson. Kerr’s recent op-ed in the Hutchinson News is notable not only for its several attempts to deflect attention away from the true nature of the PTC, but for its personal attacks on Pompeo.

There’s no doubt that the Hutchinson economy was dealt a setback with the announcement of layoffs at the Siemens plant that manufactures wind power equipment. Considered in a vacuum, these jobs were good for Hutchinson. But we shouldn’t make our nation’s policy in a vacuum, that is, bowing to the needs of special interest groups — sensing “which way the wind blows.” When considering everything and everyone, the PTC paid to producers of power generated from wind is a bad policy. We ought to respect Pompeo for taking a principled stand on this issue, instead of pandering to the folks back home.

Kerr is right about one claim made in his op-ed: The PTC for wind power is not quite like the Solyndra debacle. Solyndra received a loan from the Federal Financing Bank, part of the Treasury Department. Had Solyndra been successful as a company, it would likely have paid back the government loan. This is not to say that these loans are a good thing, but there was the possibility that the money would have been repaid.

But with the PTC, taxpayers spend with nothing to show in return except for expensive electricity. And spend taxpayers do.

Kerr, in an attempt to distinguish the PTC from wasteful government spending programs, writes the PTC is “actually an income tax credit.” The use of the adverb “actually” is supposed to alert readers that they’re about to be told the truth. But truth is not forthcoming from Kerr — there’s no difference. Tax credits are government spending. They have the same economic effect as “regular” government spending. To the company that receives them, they can be used — just like cash — to pay their tax bill. Or, the company can sell them to others for cash, although usually at a discounted value.

From government’s perspective, tax credits reduce revenue by the amount of credits issued. Instead of receiving tax payments in cash, government receives payments in the form of tax credits — which are slips of paper it created at no cost and which have no value to government. Created, by the way, outside the usual appropriations process. That’s the beauty of tax credits for big-government spenders: Once the program is created, money is spent without the burden of passing legislation.

If we needed any more evidence that PTC payments are just like cash grants: As part of Obama’s ARRA stimulus bill, for tax years 2009 and 2010, there was in effect a temporary option to take the federal PTC as a cash grant. The paper PTC, ITC, or Cash Grant? An Analysis of the Choice Facing Renewable Power Projects in the United States explains.

Astonishingly, the wind PTC is so valuable that wind power companies actually pay customers to take their electricity. It’s called “negative pricing,” as explained in Negative Electricity Prices and the Production Tax Credit:

As a matter of both economics and public policy, no government production tax subsidy should ever be so large that it creates an incentive for a business to actually pay customers to take its product. Yet, the federal Production Tax Credit (“PTC”) for wind generation is doing just that with increasing frequency in electricity markets across the United States. In some “wind-rich” regions of the country, wind producers are paying grid operators to take their generation during periods of surplus supply. But wind producers more than make up the cost of the “negative price” payment, because they receive a $22/MWH federal production tax credit for every MWH generated.

In western Texas since 2008, wind power generators paid the electrical grid to take their electricity ten percent of the hours of each day.

Once we recognize that tax credits are the same as government spending, we can see the error in Kerr’s argument that if the PTC is ended, it is the same as “a tax increase on utilities, which, because they are regulated, will pass on to consumers.” Well, government passes along the cost of the PTC to taxpayers, illustrating that there really is no free lunch.

Kerr attacks Pompeo for failing to “crusade” against two subsidies that some oil companies receive: Intangible Drilling Costs and the Percentage Depletion Allowance. These programs are deductions, not credits. They do provide an economic benefit to the oil companies that can use them (“big oil” can’t use percentage depletion at all), but not to the extent that tax credits do.

Regarding these deductions, last year Pompeo introduced H. Res 267, titled “Expressing the sense of the House of Representatives that the United States should end all subsidies aimed at specific energy technologies or fuels.”

In the resolution, Pompeo recognized the difference between deductions and credits, the latter, as we’ve seen, being direct subsidies: “Whereas deductions and cost-recovery mechanisms available to all energy sectors are different than credits, loans and grants, and are therefore not taxpayer subsidies; [and] Whereas a deduction of costs and cost recovery with respect to timing is not a subsidy.”

Part of what the resolution calls for is to “begin tax simplification and reform by eliminating energy tax credits and deductions and reducing income tax rates.”

Kerr wants to deflect attention away from the cost and harm of the PTC. Haranguing Pompeo for failing to attack percentage depletion and IDC with the same fervor as tax credits is only an attempt to muddy the waters so we can’t see what’s happening right in front of us. It’s not, as Kerr alleges, “playing Clintonesque games of semantics with us.” As we’ve seen, Pompeo has called for the end of these two tax deductions.

If we want to criticize anyone for inconsistency, try this: Kerr criticizes Pompeo for ignoring the oil and gas deductions, “which creates a glut in natural gas that drives down the price to the lowest levels in a decade.” These low energy prices should be a blessing to our economy. Kerr, however, demands taxpayers pay to subsidize expensive wind power so that it can compete with inexpensive gas. In the end, the benefit of inexpensive gas is canceled. Who benefits from that, except for the wind power industry? The oil and gas targeted deductions also create market distortions, and therefore should be eliminated. But at least they work to reduce prices, not increase them.

By the way, Pompeo has been busy with legislation targeted at ending other harmful subsidies: H.R. 3090: EDA Elimination Act of 2011, H.R. 3994: Grant Return for Deficit Reduction Act, H.R. 3308: Energy Freedom and Economic Prosperity Act, and the above-mentioned resolution.

I did notice, however, that Pompeo hasn’t called for the end to the mohair subsidy. Will Kerr attack him for this oversight?

Finally, Kerr invokes the usual argument of government spenders: Cut the budget somewhere else. That’s what everyone says.

Creating entire industries that exist only by being propped up by government subsidy means that we all pay more to support special interest groups. A prosperous future is best built by relying on free enterprise and free markets in energy, not on programs motivated by the wants of politicians and special interests. Kerr’s attacks on Pompeo illustrate how difficult it is to replace cronyism with economic freedom.

Pompeo: Impending tax increases threaten economic growth and jobs

Following is an article from U.S. Representative Mike Pompeo, a Republican who represents the Kansas fourth district, which includes the Wichita metropolitan area.

This week the House of Representatives will vote to stop the largest tax hike in American history, which, absent legislative action, is set to occur on January 1, 2013. I hope the Senate and President Obama will join us. Last week’s report of the economy growing at an anemic 1.5 percent is further evidence that tax increases are not what our nation needs.

Don’t be fooled into thinking this impending tax hike is “on the other guy” or “only on the rich.” President Obama is demanding that federal taxes go up on nearly every single American and nearly every single business. Whether you make more or less than $250,000, whether you own a business or work at one, whether you are retired and receiving dividend income or whether you are a Kansas school teacher who is provided health care under your employer’s plan — your taxes will go up. It will even become far more expensive for many people to die, with a major increase in the estate tax taking effect. All of this will occur as a direct result of the President’s deep and open desire to raise taxes and spread the wealth.

This pending federal tax increase would be on top of several tax increases the Democrats have already given each of us. President Obama’s health care takeover increases taxes by $800 billion over the next ten years alone. More than a dozen of those tax increases — including the individual mandate — hit the middle class squarely. These increases violate his oft-repeated promise not to raise taxes on those making less than $200,000. They also lower incomes as the threat of tax increases has caused the economy to remain stagnant with unemployment above 8 percent for 41 consecutive months.

The anticipated economic consequence of such an enormous tax hike is so devastating that the media has coined the term “Taxmageddon” to describe it and suggested that a failure to stop it would be equivalent to driving our economic car off a “fiscal cliff.”

How big is the impending tax increase? In 2013, every taxpayer in Kansas will be charged with paying an additional $2,984 in federal income taxes. The increased tax payments of all the families in Kansas’ Fourth District put together totals a staggering $1 billion, $4.2 billion from all Kansans, and $494 billion nationwide. The tax increase would target Kansas families, low-income workers, and retirees — and it would be the largest tax hike our state has ever had to endure.

The President has it backwards. We don’t have a problem with too few taxes. Our problem, rather, is that we have too much federal spending. The federal government is already 20% bigger than when President Obama took over. We have more people on food stamps and more people drawing federal disability benefits than ever before in our nation’s history. A tax increase will just make these problems worse by further stunting economic growth.

I firmly believe that the first thing Congress must do to provide economic certainty is to stop the tax hike now. Until American families and job creators are certain their federal taxes will not be increased, we cannot get the economy back on track. This week I will vote in the House of Representatives to approve a bill that would provide that certainty by halting Taxmageddon in its tracks. If President Obama and Senate Democrats follow suit, the result will be relief and certainty for small businesses and families that would propel economic growth and create a job for every American who wants one.

Kerpen on Obama’s regulatory extremism

In the introduction to his book Democracy Denied, Phil Kerpen gives us a history lesson on a topic that doesn’t receive much discussion in public: the grab for executive power by presidents through the use of “signing statements.”

Elizabeth Drew made the case against Bush’s abuse of executive power in a lengthy New York Review of Books piece called “Power Grab.” She specifically highlighted Bush’s use of signing statements (a technique to object to elements of a law while signing it, and refusing to enforce those elements), the detention of foreign combatants at Guantanamo, and warrantless wiretaps. She concluded that Bush was a tyrant.

Kerpen explains how the view from the oval office can make one forget campaign promises:

Even the Bush practice that raised the most ire — the use of signing statements — was embraced by Obama just weeks after he took office, when he said: “it is a legitimate constitutional function, and one that promotes the value of transparency, to indicate when a bill that is presented for presidential signature includes provisions that are subject to well-founded constitutional objections.” Contrast that with what Obama had said about signing statements on the campaign trail: “This is part of the whole theory of George Bush that he can make laws as he is going along. I disagree with that. I taught the Constitution for 10 years. I believe in the Constitution and I will obey the Constitution of the United States. We are not going to use signing statements as a way of doing an end run around Congress.”

Not that Obama alone takes criticism for exercising presidential power contrary to the actions of Congress, as he describes the auto industry bailout in the last days of the presidency of George W. Bush. A bill didn’t make it through Congress, but Bush “repurposed” TARP funds — intended for banks — and used them for an auto bailout in the amount of $17.4 billion.

It is this use of executive power and agencies to bypass the will of people — as expressed through Congress — that is detailed in a book authored by Phil Kerpen and published this week: Democracy Denied: How Obama is Ignoring You and Bypassing Congress to Radically Transform America — and How to Stop Him.

Kerpen is Vice President for Policy at Americans for Prosperity, a national group that advocates for free markets and limited government at all levels. His website is philkerpen.com, and it features excerpts from the book along with a theatrical trailer.

Kerpen explains the problem by describing a solution: The Regulations from the Executive in Need of Scrutiny Act, or REINS Act. This proposed law would require any major regulatory action to be approved by Congress and receive the president’s signature. Kerpen writes: “We have regulators who are effectively writing and executing their own laws. The major policy decisions that affect every aspect of our economic lives are moving forward without consent of the people’s legitimately elected legislative branch.”

The problem is that often Congress passes generic laws and leaves it to regulatory agencies to write the rules that implement the law. By requiring Congressional and Presidential approval of major regulations, agencies will be accountable to the current Congress, and lawmakers will have a chance to ensure that actual regulations are consistent with the intent of enabling legislation.

Cap-and-trade energy legislation provides an example of Kerpen’s thesis, which is “how the Obama administration was disregarding Congress and the American people to accomplish its objectives through regulatory backdoors.” The legislation passed the House, but couldn’t pass the Senate. So what happened next? Kerpen explains Obama’s detour around Congress:

Just to show you how unfazed the Obama administration was by the political defeat of cap-and-trade, consider what’s on page 146 of Obama’s 2012 budget: “The administration continues to support greenhouse gas emissions reductions in the United States in the range of 17 percent below 2005 levels by 2020 and 83% percent by 2050.” Those just happen to be the same levels required by the failed Waxman-Markey cap-and-trade bill. Obama is telling the EPA to just pretend that the bill passed and regulate away.

In fact Obama’s EPA was already moving full steam ahead to implement a global warming regulatory scheme that could even be more costly than cap and trade — without the approval of the American people and without so much as a vote in Congress.

The remainder of the chapter details some of the ways EPA is accomplishing this backdoor regulation.

The Patient Protection and Affordable Care Act, otherwise known as ObamaCare, is another topic Kerpen covers where regulation is replacing lawmaking by Congress:

Nancy Pelosi was right in more ways then she realized when she infamously said “We have to pass the bill so that you can find out what is in it, away from the fog of the controversy.” Not only was the more than 2,000-page bill negotiated in secret and so densely complex that few humans could understand it, it also deferred most of the really difficult and important decisions to the regulators, including dozens of brand-new boards, committees, councils, and working groups. So even after ObamaCare had been passed there was no way to know what was really in it until the bureaucracy was assembled and began issuing regulations.

Kerpen describes the bill that passed as not “finished legislation,” and is now being interpreted by bureaucrats, the most powerful being HHS Secretary Kathleen Sebelius. Her office is now, according to Kerpen, “issuing a whole string of official guidelines and regulations that attempt to ‘correct’ the draft law, often by asserting things that the law doesn’t actually say.”

Other chapters describe regulation of the internet (net neutrality), card check, the Dodd-Frank financial regulations, and energy regulation. All of these represent the Obama administration either ignoring Congress or creating vast new powers for itself. The chart Kerpen created shows the plays being made.

Obama regulatory extremismKerpen’s chart of Obama regulatory extremism. Click for larger version.

What about regulatory reform? Obama’s doing that. In January he wrote in the Wall Street Journal: “We’re looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account for — and reduce — the burdens regulations may place on small businesses.”

In a chapter titled “The Back Door to the Back Door: Phony Regulation Reform” Kerpen explains that this promise or regulatory reform by the president is a sham. Kerpen describes the executive order that implements regulatory review this way: “The new executive order is the regulatory parallel to the Obama administration’s strategy on federal spending, which is to spend at astonishing, record rates and rack up trillions of dollars in deficits while paying lip service to fiscal responsibility by establishing a fiscal commission.”

And in a gesture of true public service, Kerpen introduces us to Cass Sunstein, the man who is heading the Office of Information and Regulatory Affairs (OIRA), the agency that will be conducting the purported review of regulations. A quote from Sunstein: “In what sense is the money in our pockets and bank accounts fully ‘ours’? Did we earn it by our own autonomous efforts? Could we have inherited it without the assistance of probate courts? Do we save it without the support of bank regulators? Could we spend it if there were no public officials to coordinate the efforts and pool the resources of the community in which we live?”

Kerpen sums up Sunstein’s political philosophy of central planning:

The idea of Sunstein’s “nudge” philosophy is that the fatal conceit of central economic planning can somehow succeed if it is subtly hidden from view. Sunstein thinks that if he imposes regulations that steer our choices instead of outright forcing them, he can achieve desirable social objectives. … Given Suinstein’s views and the central role he will have in reshaping federal regulation to be “more effective,” we need to be deeply concerned that any changes that come out of the process may make regulation less apparent, but no less costly — and more effective at crushing genuine individual choice and responsibility and substituting the judgment (even if by a nudge instead of a shove) of a central planner.

The challenge, Kerpen writes in his conclusion to the book, “is to change the political calculus to elevate regulatory fights to the appropriate level in the public consciousness. We must make sure the American people understand that a disastrously bad idea becomes even worse when it’s implemented by backdoor, unaccountable, illegitimate means.”

Kerpen recommends passage of the REINS Act as a way to restore accountability over regulatory agencies to Congress. The two messages Congress needs, he writes, are: “You can delegate authority, but you can never delegate responsibility,” and “If you fail to stop out-of-control regulators, voters will hold you accountable.”

U.S. receipts and expenditures

A recent op-ed by Sen. Bernie Sanders of Vermont in the Wall Street Journal (Why Americans Are So Angry: Republicans want the entire burden of deficit reduction to be carried by the elderly, the sick, children and working families), besides holding faulty reasoning in every paragraph, hold a few factual errors that deserve discussion.

Raise tax rates to raise revenue

For example, Sanders writes regarding the rich: “Their effective tax rate, in recent years, has been reduced to the lowest in modern history.” He’s arguing for tax increases on the rich as a way of balancing the budget. (Really, he just wants more money to spend. He’s not serious about closing the deficit.)

There are many like Sanders and President Barack Obama who call for raising taxes, especially on the rich, as a way to generate more revenue and balance the budget. But try as we might, raising tax rates won’t generate higher revenues (as a percentage of gross domestic product), due to Hauser’s law. W. Kurt Hauser explained in The Wall Street Journal: “Even amoebas learn by trial and error, but some economists and politicians do not. The Obama administration’s budget projections claim that raising taxes on the top 2% of taxpayers, those individuals earning more than $200,000 and couples earning $250,000 or more, will increase revenues to the U.S. Treasury. The empirical evidence suggests otherwise. None of the personal income tax or capital gains tax increases enacted in the post-World War II period has raised the projected tax revenues. Over the past six decades, tax revenues as a percentage of GDP have averaged just under 19% regardless of the top marginal personal income tax rate. The top marginal rate has been as high as 92% (1952-53) and as low as 28% (1988-90). This observation was first reported in an op-ed I wrote for this newspaper in March 1993. A wit later dubbed this ‘Hauser’s Law.’”

So tax rates may be low, or they may be high, but tax revenue, as a percent of GDP, remains nearly constant.

Hauser's LawHauser’s Law illustrated. No matter what the top marginal tax rate, taxes collected remain an almost constant percentage of GDP.

Tax revenue is down

Sanders also wrote “The sum of all the revenue collected by the Treasury today totals just 14.8% of our gross domestic product, the lowest in about 50 years.” Sanders is incorrect here. In 2010 receipts to the federal government as a percent of GDP was 16.73 percent, according to the Bureau of Economic Analysis. For the first quarter of 2011, the figure is 16.97 percent. These numbers are much higher than what Sanders claims. He didn’t mention where he got his figures.

From 1960 to 2010 — the 50 year period Sanders mentions — the average revenue collected was 18.32 percent of GDP. The current figure is lower than that, so Sanders is correct that current revenue collections are lower than recent history, and that may be what has Sanders worried.

A look back at the history of federal receipts and expenditures is useful. A chart is below.

While President Ronald Reagan was able to cut tax rates, he couldn’t control spending as easily, and that led to large deficits. As a percent of the economy, spending rose during his term, although by the time he left office it was at the same level of GDP as when he took office. The message of Reagan’s presidency is that it’s easier to cut taxes than to cut spending. But we must always be in favor of cutting taxes, and hope that politicians have the fortitude to cut spending to match.

It’s doctrinaire among liberals today to cite President Bill Clinton and his tax increase as the cause of the prosperity of the late 1990s and the accompanying budget surpluses for several years. But his tax increase was not the only thing going on in those years that contributed to a budget surplus. The peace dividend, as defense spending fell during his term, helped. Clinton had nothing to do with the end of Cold War; he was just lucky to be in place to benefit from its end.

If cutting spending relative to the size of the economy was Clinton’s goal — and I don’t think it really was — he was lucky to have a Republican Congress starting in 1995 to help him accomplish this goal. With a Democratically-controlled Congress, it’s unlikely that spending would have been restrained, and with that, no budget surplus. While many bemoan gridlock in Washington because nothing gets done, the gridlock of the Clinton years led to less spending — and that’s good.

We should also remember that in 1997 the capital gains tax rate fell from 28 percent to 20 percent. Capital gains taxes collected soared. That was a Republican initiative, and it contributed to increased tax revenue during the Clinton surplus years.

The Clinton years were good for controlling spending, starting in 1993 with spending at 22.56 percent of GDP, and exiting in 2000 with spending at 18.81 percent. As to the prosperity of the Clinton years, many seem to forget that much of it was based on a bubble that couldn’t be sustained — the dot-com bubble. While not as large as the housing bubble, it was prosperity that very suddenly evaporated.

Then President George W. Bush took office. In 2001 spending as a percent of GDP was 19.25 percent, and it rose slowly during his term, reaching 21.80 percent in 2008. Then it exploded to 24.75 percent in 2009 and slightly less in 2010. For the second quarter of 2011, the trend is upwards, as spending reached 25.50 percent of GDP.

From the end of World War II to the start of Reagan’s presidency, spending steadily rose, relative to the size of the economy. From Reagan to Clinton we did a good job reversing this trend. But starting with the second Bush, and rapidly accelerating with Obama, spending is rising off the chart. It will be difficult to reverse this trend, but we must. Even though tax revenue has declined, we must remember what Milton Friedman taught us: the true measure of the size of government is spending, as spending not paid for today is taxation put off to the future.

Federal receipts and expenditures as percentage of gross domestic productFederal receipts and expenditures as percentage of gross domestic product.

Pompeo: No debt ceiling hike without structural changes

In a press conference held yesterday, U.S. Representative Mike Pompeo, a Wichita Republican, said the country can’t risk continuing to spend at the present rate. There should be no agreement to raise the debt ceiling absent structural changes, he added.

He called for “real short term savings” in 2012 and spending limitations. He also said he supported an amendment to the Constitution requiring a balanced budget.

On federal spending, Pompeo said “I’ve been here six months now. If there’s one thing that’s become very clear, this town is a place that is addicted to spending.” He described the direction of spending as a “one-way ratchet,” saying the trend has accelerated in the last 24 months. The federal government should do what every state must do, which is to live on a balanced budget. The balanced budget amendment, Pompeo said, would require this.

He criticized President Barack Obama for his “class warfare argument” against the corporate jet industry. Pompeo said the airplanes built in Wichita are business tools used by businesses all over the world. Two-thirds are sold outside of North America, he added.

Pompeo characterized the president’s criticisms as a political statement. The tax provisions Obama criticizes have a cost of two to three billion dollars over ten years. Pompeo compared this to the current deficit for this year and for future years according to the president’s budget, which he said is $1.5 trillion each year.

Pompeo said he sent the president a letter (text of the letter is here) inviting him to Kansas to see our aircraft manufacturing industry, noting that many of the workers are union workers. He added that if the president continues to talk down the industry, “making it politically incorrect to fly in a Kansas-built airplane, we’ll sell fewer all over the world, and we’ll build fewer in America.”

On the possibility of Social Security checks not being sent if the debt ceiling is not raised, Pompeo said that there is money to pay the benefits, and the president has authority to pay. Obama is trying to scare seniors and Americans as a tactic to get the debt ceiling raised, he said.

On the failure of H.R. 2417: Better Use of Light Bulbs Act to pass, Pompeo said he hopes this measure will come back in a form that requires only a simple majority to pass. This bill, which would overturn legislation that essentially outlaws ordinary incandescent light bulbs, was brought to the floor under suspension of the rules, and therefore required a two-thirds majority to pass. The bill received a simple majority, but failed to reach the two-thirds level.

Kansas and Wichita quick takes: Friday June 24, 2011

RightOnline may not follow Netroots. The Netroots Nation conference, tired of having the free market-based RightOnline follow them each year, has maneuvered to block RightOnline from following them to Providence next year. Will it work? More at Netroots Nation Strives To Keep Right Online Away From Next Year’s Convention.

Ann McElhinney. Speaking at last week’s free market-based RightOnline conference in Minneapolis, filmmaker Ann McElhinney addressed the general session and spoke against CINOs: Conservatives In Name Only, which she defined as anyone who thinks we should subsidize industry, anyone who believes that humans control the weather, anyone who thinks we should not explore and exploit ANWR, anyone who thinks we should not be drilling for oil off our coasts, anyone who thinks it’s okay to terrorize schoolchildren that the world is about to end, anyone who is talking nonsense about fracking, anyone who is against exploiting the oil sands in Alberta — bringing oil from a country that doesn’t believe in stoning women, and anyone who believes we can power our incredible dream with wind or the sunshine. … She criticized those feminists who talk about solar panels and windmills, saying that across Africa and India there are women who “devote a lifetime to washing clothes … a complete waste of time when you could have a washing machine.” She said it is a human rights abuse to deprive a woman of a washing machine. … Video is at Ann McElhinney at 2011 RightOnline.

Presidential candidate white papers. Club For Growth is an organization that works to “promote public policies that encourage a high growth economy,” believing — as do I — that “prosperity and opportunity come through economic freedom.” To advance this end, it has created a “white paper” for most of the declared Republican presidential candidates, and it’s working on papers for the rest. The papers draw on a variety of sources for data, and seem to be balanced — and tough, too. They’re available by clicking on Club For Growth’s Presidential White Papers: How do the candidates rate as pro-growth economic conservatives.

Budget briefing book, volume one. Bankrupting America, “an educational project that explores the policies hindering economic opportunity and growth in America,” has released the first volume of its budget briefing book. It’s full of useful information: fact and figures, how much is spent on what, what does “debt ceiling” mean, what is the Ryan budget plan, etc. Volume one is available at Budget Briefing Book: Volume One, with further volumes to come. (sign up for an email notification, if you want.) I found the book easiest to read in full-screen mode.

Pompeo events. This Sunday (June 26) U.S. Representative Mike Pompeo, a Wichita Republican serving his first term, will hold a public forum at Tri-City Senior Center, 6100 N. Hydraulic in Park City. This event starts at 2:00 pm, and based on my past experience, will last one hour and maybe a little more. … On Tuesday, June 28, 2011, Representative Pompeo and Mrs. Pompeo, along with staff, will host an open house at his congressional district office in Wichita from 3:00 pm to 6:00 pm. The address is 7701 E. Kellogg, Suite 510. It’s the tall office building near the southwest corner of Kellogg and Rock Road.

Kansas tax competitive position slipped in 2011. Kansas Reporter: “Kansas current tax policies dropped one gauge of the state’s economic competiveness two spots this year, to 27th place among the nation’s 50 states, according to a new survey to be formally unveiled this week in Topeka. The latest reading marks the third time since the annual survey began four years ago, that Kansas has slipped in the rankings, which are compiled by researchers Arthur Laffer, Stephen Moore and Jonathan Williams for the Rich States Poor States rankings on behalf of the American Legislative Exchange Council, or ALEC, a group of 2,000 state legislators that generally advocates for free-market legislative approaches. Kansas’ economic competitiveness, as measured by a blend of 15 indicators of higher or lower tax burdens, was rated 25th best in the nation last year, down from 24 in 2009, but higher than 29th, which the researchers calculated the first year the three compiled their list.” … Jonathan Williams, one of the authors of Rich States, Poor States: The ALEC-Laffer Economic Competitiveness Index made a presentation in Wichita today. A report is forthcoming.

Redistricting in Kansas. Chapman Rackaway: “This week one of the most contentious processes in politics began in Kansas: redrawing the lines of our U.S. House, State House, State Senate, and State Board of Education districts. After each census, every state must redraw its legislative boundaries to ensure a roughly equal population.” It’s an important process. John Fund of the Wall Street Journal says redistricting is when politicians get to choose their voters. Rackaway believes it will be a struggle in Kansas: “The only certainty is that redistricting will be as contentious a fight in the 2012 legislative session as the budget has been for the last few years. Every constituent group will have a chance to be angered, because the process is a twisty one with numerous stops. The legislature is responsible for drawing and passing redistricting plans, and the Governor has the opportunity to veto.” Concluding, he writes: “Redistricting isn’t the most exciting thing to follow for most people, but the elections they influence are. The research clearly tells us that the best way to ensure safe or competitive legislative districts is to design them that way.” The full article is Insight Kansas: Drawing a Line.

The price system. A short video explains how prices work in free markets and how important is the information conveyed by prices. This is part one; I’m looking forward to part two. This video is from LearnLiberty.org, a project of Institute for Humane Studies, and many other informative videos are available.

Even quicker. Cantor Pulls Out of Biden-Led Budget, says Wall Street Journal: “House Majority Leader Eric Cantor Thursday said he was pulling out of the bipartisan budget talks headed by Vice President Joe Biden for now because the group has reached an impasse over taxes that only President Obama and Speaker John Boehner could resolve.” … Rasmussen: 51% now recognize most federal spending goes to defense, Medicare and Social Security. Knowledge is the first step. … CommonSense with Paul Jacob: “Taxpayers fund about half of all medical industry transactions, and governments regulate that as well as a huge chunk of the rest. No wonder medicine is in chaos.” … Michael Petrilli in EducationNext: “As if the teachers unions need another reason to hate charter schools, here’s one: The finding, from a new Fordham Institute report, that when given a chance to opt out of state pension systems, many charter schools take it. Furthermore, a fair number of these charters replace traditional pensions with nothing at all.”

Kansas and Wichita quick takes: Wednesday May 25, 2011

The failure of American schools. The Atlantic: “Who better to lead an educational revolution than Joel Klein, the prosecutor who took on the software giant Microsoft? But in his eight years as chancellor of New York City’s school system, the nation’s largest, Klein learned a few painful lessons of his own — about feckless politicians, recalcitrant unions, mediocre teachers, and other enduring obstacles to school reform.” Key takeway idea: “As a result, even when making a lifetime tenure commitment, under New York law you could not consider a teacher’s impact on student learning. That Kafkaesque outcome demonstrates precisely the way the system is run: for the adults. The school system doesn’t want to change, because it serves the needs of the adult stakeholders quite well, both politically and financially.” … Also: “Accountability, in most industries or professions, usually takes two forms. First and foremost, markets impose accountability: if people don’t choose the goods or services you’re offering, you go out of business. Second, high-performing companies develop internal accountability requirements keyed to market-based demands. Public education lacks both kinds of accountability. It is essentially a government-run monopoly. Whether a school does well or poorly, it will get the students it needs to stay in business, because most kids have no other choice. And that, in turn, creates no incentive for better performance, greater efficiency, or more innovation — all things as necessary in public education as they are in any other field.” … Overall, an eye-opening indictment of American public schools.

Professors to Koch Brothers: Take your green back. In The Wall Street Journal Donald Luskin takes a look at what should be a non-controversy: A gift by the Charles G. Koch Charitable Foundation to Florida State University to endow a program to study the foundations of prosperity, social progress, and human well-being — at the Stavros Center for the Advancement of Free Enterprise and Economic Education. (Sounds like a good match.) Writes Luskin: “Then there’s the donors. One of the donors, according to the two professors, is known for his ‘efforts to influence public policy, elections, taxes, environmental issues, unions, regulations, etc.’ Whom might they be referring to? Certainly not George Soros — there’s never an objection to that billionaire’s donations, which always tend toward the political left. No, it’s Charles and David Koch, owners of Koch Industries.” … Critics say the gift is an assault on academic freedom. Luskin counters: “The issue at FSU isn’t that the university has bargained away its academic freedom. The problem is that FSU has exercised its academic freedom in a way that the political left disapproves of. As [FSU College of Social Sciences] Mr. Rasmussen put it to the St. Petersburg Times: ‘If somebody says, ‘We’re willing to help support your students and faculty by giving you money, but we’d like you to read this book,’ that doesn’t strike me as a big sin. What is a big sin is saying that certain ideas cannot be discussed.”

History and legacy of Kansas populism. Recently Friends University Associate Professor of Political Science Russell Arben Fox delivered a lecture to the Wichita Pachyderm Club that was well-received by members. Now Fox has made his presentation available on his blog In Media Res. It’s titled The History and Legacy of Kansas Populism. Thank you to Professor Fox for this effort, and also to Pachyderm Club Vice President John Todd, who arranges the many excellent programs like this that are characteristic of the club.

Federal grants seen to raise future local spending. “Nothing is so permanent as a temporary government program.” — Nobel Laureate Milton Friedman (The Yale Book of Quotations, 2006) Is this true? Do federal grants cause state and/or local tax increases in the future after the government grant ends? Economists Russell S. Sobel and George R. Crowley examine the evidence and find the answer is yes. The conclusion to their research paper Do Intergovernmental Grants Create Ratchets in State and Local Taxes? Testing the Friedman-Sanford Hypothesis states: “Our results clearly demonstrate that grant funding to state and local governments results in higher own source revenue and taxes in the future to support the programs initiated with the federal grant monies. Our results are consistent with Friedman’s quote regarding the permanence of temporary government programs started through grant funding, as well as South Carolina Governor Mark Sanford’s reasoning for trying to deny some federal stimulus monies for his state due to the future tax implications. Most importantly, our results suggest that the recent large increase in federal grants to state and local governments that has occurred as part of the American Recovery and Reinvestment Act (ARRA) will have significant future tax implications at the state and local level as these governments raise revenue to continue these newly funded programs into the future. Federal grants to state and local governments have risen from $461 billion in 2008 to $654 billion in 2010. Based on our estimates, future state taxes will rise by between 33 and 42 cents for every dollar in federal grants states received today, while local revenues will rise by between 23 and 46 cents for every dollar in federal (or state) grants received today. Using our estimates, this increase of $200 billion in federal grants will eventually result in roughly $80 billion in future state and local tax and own source revenue increases. This suggests the true cost of fiscal stimulus is underestimated when the costs of future state and local tax increases are overlooked.” … An introduction to the paper is here.

Debt observed as sold. New U.S. Representative Tim Huelskamp, who represents the Kansas first district, recently observed the Bureau of Public Debt electronically sell debt obligations of the United States of America. In a press release, the Congressman said: “In a matter of minutes, I observed the United States sell $30.4 billion more in debt. The ease with which this transaction was done reminded me that it is just too simple for Washington to acquire, buy, sell and trade debt.” As to the upcoming decision as to whether to raise the ability of the U.S. to borrow: “As Congress considers yet another increase in the debt limit, the only responsible option that exists is to put America on a path to fiscal responsibility with clear limits on spending. Democrats say they want a debt limit increase that is ‘clean’ without any of the budget cuts we have proposed. Yet, they have offered no plan to eliminate annual trillion-dollar deficits. There is nothing ‘clean’ about increasing the limit without tackling the massive deficits and ever-increasing debt. … With nearly one-half of the nation’s debt held by foreign countries, including more than $1.1 trillion by China, our national security is threatened as well. Too many of our freedoms and liberties are threatened when Americans owe trillions of dollars to nations who put their interests before ours.”

Kansas and Wichita quick takes: Monday April 11, 2011

Social security entitlement. In today’s Wichita Eagle Opinion Line, this comment was left: “Please stop calling my Social Security an ‘entitlement.’ I paid into it all my working life, and I just want my money back.” Two points: The writer seems to believe that just because people pay into Social Security, they’re entitled to benefits as through there was a contract in place. But there is no contract. Social Security benefits are what Congress says they are, and Congress can make changes at any time. … Second, the writer wants his money back, as though the money was paid onto some sort of investment account and has been working there earning interest. Unfortunately, the Social Security trust fund money has been spent. There’s nothing for the writer to get back except the future taxes to be paid by future workers.

New York Times may be offended. “The New York Times is carrying out a vendetta against Charles and David Koch, two of the very few rich people who support conservative and libertarian causes. The Times is offended, apparently, that the Left does not quite have a monopoly on big money. The paper’s editorialists flat-out lied about the Koch brothers, and had to issue a retraction.” … Referring to author David Callahan and a recent op-ed: “What is most striking about Callahan’s piece is its rampant hypocrisy. He himself is an employee of a left-wing organization that prefers not to abide by the transparency standards that Callahan advocates.” From Powerline: The Times Vendetta Continues.

Kansas Legislature website. Kansas Reporter writes: “Most hurdles now behind legislative website update.” The major problems I experience now are reliability issues, where many times clicking on a document produces the dreaded “Error 500 Internal Server Error” message. … The cost of the work, plus a new system for preparing legislative text, is some $11 million.

General Electric tax bill. The Washington Post looks at the New York Times and its reporting on General Electric and its taxes: “Unfortunately, for all its good work, the article has created at least one major misperception: that GE paid no U.S. income taxes last year and is getting a $3.2 billion refund from the Treasury. … The company says it’s not getting any refund for 2010 — validating [accounting professor Ed] Outslay’s analysis. Its 2010 tax situation? ‘We expect to have a small U.S. income tax liability for 2010,’ said Gary Sheffer, GE’s chief spokesman. How big is small? GE declined to say. The number is unlikely to be disclosed unless GE goes public with it or is forced to do so. One reason the Times was ensnared — and that it took us a while to sort this out — is that the material is confusing. Outslay drew up 10 GE tax metrics for us and could have given us at least six more. None shows what GE’s U.S. income tax bill is for a given year.”

Sweet deal for big sugar. Senator Dick Lugar, writing in the Washington Times, explains the harm to U.S. consumers from a tariff that benefits a few: “The collapse of communism brought an end to many of the world’s command-and-control economic systems and central planning by government bureaucrats. But a notable exception is the United States government’s sugar program. A complicated system of marketing allotments, price supports, purchase guarantees, quotas and tariffs that only a Soviet apparatchik could love, the U.S. sugar program has actually lasted longer than the Soviet Union itself.” The idea is that by keeping prices high and insulating domestic sugar produces from the world market, jobs are saved. Counters Lugar: “But in 2006, the Commerce Department calculated that for every sugar-growing job saved by artificially high prices, three manufacturing jobs in the confectionery industry are lost. Overall, from 1997 to 2009, more than 111,000 jobs were lost in the sugar-using food sector, according to Commerce data.” This is always the case with protectionist trade tariffs: a small number of highly-visible jobs are saved, at the cost of great economic harm spread across the economy, harm that is difficult to see. Sugar protectionism is only one such example. President Bush’s tax hike and Obama’s tax increase on tires are other examples.

Williams on role of government. A short lecture by Walter E. WIlliams. “Almost every group in our country has come to feel that the government owes them a special privilege or favor.” Conservatives too, he says. Williams highlights the contradictions of conservatives, who “don’t have a moral leg to stand on,” he says. “They merely prove that it’s a matter of whose ox is being gored.” He quotes H.L. Mencken: “Government is a broker in pillage” and “Every election is an advance auction on the sale of stolen property.” Williams says not to blame the elected officials we send to Washington and local centers of government. They, he says, are doing precisely what we send them there to do: “Namely, to use the power of their office to confiscate the property of one American and bring it back to another American to whom it does not belong.” Politician who say they would not do this — of course, they do not speak so bluntly on the campaign trail — would not be elected.

Social Security trust fund: a problem in disguise

A situation that must be resolved soon first requires some understanding and an honest assessment of the facts: Social Security and its trust fund.

Over the years, the Social Security Administration has collected more in payroll taxes than it has needed to spend on benefits. (Last year that wasn’t the case.) The surplus represents the trust fund.

But there is disagreement as to the economic meaning of the trust fund. From a naive and uncritical accounting perspective, there seems to be no problem. SSA purchases a special series of bonds from the U.S. Treasury, and these bonds make up the investments of the trust fund. What could go wrong with holding government bonds?

To answer that question, we have to look at what the government did with the proceeds of selling the bonds. The answer is that government spent the money. There are no bills in a vault. There are no bank deposits. There is only the promise of the U.S. Government to repay the bonds when the SSA needs them. A recent publication by Veronique de Rugy and Jason J. Fichtner of the Mercatus Center (Can We Trust the Social Security Trust Funds?) explains:

However, the way the federal government accounts for the trust funds masks the true size of costs passing on to future generations. While bonds are real assets to the private market, future generations of taxpayers or borrowers will have to cover the future redemptions of bonds issued today because the federal government has used the money it has received from Social Security to pay for education, wars, and other items. In other words, the government has already spent the money it received in exchange for the IOUs. This is explained in the president’s 2011 federal budget: “The existence of large trust fund balances, therefore, does not, by itself, increase the government’s ability to pay benefits.” (emphasis added)

But not everyone believes or understands the meaning of having spent the money in the trust fund. The SSA itself seems to, at least a little bit. A document titled Trust Fund FAQs produced by the SSA states: “As stated above, money flowing into the trust funds is invested in U.S. Government securities. Because the government spends this borrowed cash, some people see the current increase in the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future.” So here we have the U.S. Government admitting that the money in the trust fund has been spent.

So is this a problem? No, says the SSA as it continues: “Far from being ‘worthless IOUs,’ the investments held by the trust funds are backed by the full faith and credit of the U.S. Government.” What the SSA doesn’t tell us here — and it’s not really its job to do so — is that the way these investments will be repaid is by one of three means: more taxes, less spending, or more borrowing.

It’s good to see the federal government at least starting to recognize the truth behind the trust fund, even if it can’t bring itself to recognize its implication. Most liberal — “progressive,” excuse me — organizations refuse to see the truth. An example is The Center for American Progress, which produced a 72-page report last December titled Building It Up, Not Tearing It Down: A Progressive Approach to Strengthening Social Security. The document mentions the trust fund many times and that the fund is invested in safe government bonds. Never does the report mention that these funds have already been spent on something other than Social Security benefits.

I can understand how CAP doesn’t want to mention this. The funds have been spent — under both Republican and Democratic administrations — to support the government spending programs that CAP supports. The fact that the spent funds in the trust fund will have to be paid back, possibly through higher taxes? High taxes and progressive taxation don’t bother CAP — that’s its platform.

Paul Krugman of the New York Times also doesn’t think the trust fund presents a problem: “The Social Security system won’t be in trouble: it will, in fact, still have a growing trust fund, because of the interest that the trust earns on its accumulated surplus. The only way Social Security gets in trouble is if Congress votes not to honor U.S. government bonds held by Social Security. That’s not going to happen.”

And how does Congress honor the bonds? More taxes, less spending, or more borrowing. Or some combination.

This is the future we face if we don’t recognize the problem and take steps to start reform now.

U.S. national debt clock

U.S. national debt clockU.S. national debt clock

A handy reference source for figures about U.S. debt and spending, as well as a place to spend a few moments watching the live numbers spin by, is U.S. national debt clock.

The large panel has live-updated numbers for national debt and spending, tax revenue, state and local revenue and debt, spending on large budget items, gross domestic product, and many other items. Explanations of the meaning of each item, as well as sources for each data item, are supplied.

One of the most ominous figures on the display is gross debt to GDP ratio, which is at about 93.5 percent. This means that our national debt is almost equal to one year’s output of the entire U.S. economy, meaning it would require everyone in the country to work 48 weeks to pay off the national debt.

Federalism strikes back

Writing in the Washington Times, Kansas’ own Greg Schneider, a professor of history at Emporia State University and Kansas Policy Institute senior fellow, explains that respect for the tenth amendment and state sovereignty is good for the country. He also calls for a reaffirmation of federalism, a system where power is shared between a central government and the states.

He also tackles the claim that criticism of President Barack Obama is racially motivated.

Federalism strikes back

10th Amendment resurgence should have come sooner

By Gregory L. Schneider

We’re seeing a re-emergence of constitutional principles and federalism across the country. It’s a major issue in the health care reform debate, as Tea Party activists and others have refocused attention on the long-dormant principle concerning the individual mandates to purchase insurance and excessive spending by the federal government.

The idea that powers not explicitly delegated in the federal Constitution “are reserved to the States respectively, or to the people,” as stated in the 10th Amendment, is a powerful one. Given the overreach of Washington and public disgust with politicians’ disregard for the people’s will, a healthy dose of state sovereignty and a reaffirmation of federalism is a good thing.

Continue reading at The Washington Times

President Obama’s job approval in Kansas

The job approval rating for President Obama in Kansas is on a downhill trend.

The following chart compiles Obama’s approval polls in Kansas since he took office. The surveys were conducted by SurveyUSA. Usually about 600 responses were collected, and the sampling error is 4 percent.

The question asked of respondents is: “Do you approve or disapprove of the job Barack Obama is doing as President?”

President Obama job approval in Kansas

Limits of government and rights of people to be addressed in Wichita

This Friday (May 7) Sarah McIntosh will address members and guests of the Wichita Pachyderm Club. Ms. McIntosh’s presentation, titled “Make No Law,” will discuss the constitutional powers and limits of the federal government, versus the rights of the people, with a particular focus on the interaction of rights and powers in the health care law and the upcoming right to bear arms Supreme Court case.

All are welcome to attend Pachyderm club meetings. The program costs $10, which includes a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive fifteen minutes early to get your lunch before the program starts.

The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). Park in the garage just across Broadway and use the sky walk to enter the Bank of America building. Bring your parking garage ticket to be stamped and your parking fee will be only $1.00. There is usually some metered and free street parking nearby.

Kobach explains Arizona illegal alien law

The following op-ed from the New York Times by Kansan Kris Kobach, who was involved in the forming of the law, explains the law and speaks to its critics.

On Friday, Gov. Jan Brewer of Arizona signed a law — SB 1070 — that prohibits the harboring of illegal aliens and makes it a state crime for an alien to commit certain federal immigration crimes. It also requires police officers who, in the course of a traffic stop or other law-enforcement action, come to a “reasonable suspicion” that a person is an illegal alien verify the person’s immigration status with the federal government.

Predictably, groups that favor relaxed enforcement of immigration laws, including the American Civil Liberties Union and the Mexican American Legal Defense and Education Fund, insist the law is unconstitutional. Less predictably, President Obama declared it “misguided” and said the Justice Department would take a look.

Presumably, the government lawyers who do so will actually read the law, something its critics don’t seem to have done. The arguments we’ve heard against it either misrepresent its text or are otherwise inaccurate. As someone who helped draft the statute, I will rebut the major criticisms individually:

Continue reading at the New York Times.

For one Kansan, hope springs eternal

Following is commentary and reporting from Patricia Houser, a former resident of Wichita now living in St. Paul, Kansas. She and her husband have five children and two grandchildren. She is active in her church and Boy Scouts of America, and is the Neosho County Republican Party Chair. She says her political activism began with the prolife movement in Wichita’s Summer of Mercy, and dedicates her time helping prolife candidates.

Lately, I have felt discouraged by the way our current government, on both the Federal and our State (Kansas) level, has displayed an “I don’t care what the people say, I will do what I want” attitude. I am convinced this behavior is not what our Founding Fathers mandated in our Constitution. They wrote “We the People” for a profound reason, the people are the government; elected officials merely serve and represent the will of the people. All elected officials and most bureaucrats have sworn an oath to uphold and obey our Constitution, yet it is obvious that many of these people do not honor the oath they swore to uphold and disregard it, pushing their own agenda instead. We have blindly trusted them to do what is best for us for too long, and unfortunately, they have betrayed us.

The Good News

Last Saturday I witnessed something which gave me hope. I attended the Kansas GOP State Committee Meeting. One of items on the agenda was the adoption of the state platform. The committee which wrote the proposed platform held seven town hall meetings around the state for local Republicans to give their input. The committee then put these ideals on paper.

These ideals acknowledge God as the source of our rights and privileges, call for fiscal responsibility, reduce government’s size and power, limit entitlements, and encourage Americans to retain the principles which have made us strong while developing innovative ideas to meet today’s challenges. The platform was offered for debate. No member of the assembly offered any criticism and it was passed with 111 yeas to only one nay vote.

Three minor resolutions were proposed. All three were passed. The most contentious moment of the meeting came over whether to spend the money to print the new platform as a supplemental insert to the GOP Handbook.

What a contrast to our legislatures. My heart was lifted by the near unanimous resolve of the members to honor God and the Founding Fathers’ vision for our country. I was proud to have been a part of this event.

Constitution class to be held in Wichita

Constitution and immigration law professor Kris Kobach will be teaching a free class on the history and relevance of the U.S. Constitution. Professor Kobach, a Constitutional law professor at UMKC Law School and former adviser to Attorney General John Ashcroft, is one of America’s top authorities on the Constitution. He will be teaching on the original meaning and understanding of the text and how it is coming under assault with the passage of the health care bill and the overall usurpation of power by an ever-expanding government.

The class will run three hours in length. The first two hours will be focused solely on the Constitution, and the last hour will be dedicated to taking any questions you might have.

The date for this free event is Saturday, April 24, 2010 from 9:00am to noon. The location is the Boston Recreation Center in Wichita, located at 6655 E. Zimmerly.

A map to the location is here. This event has a Facebook event page.

Situation in Iraq to be topic of talk

On Friday April 16 at the Wichita Pachyderm Club, Rodger Woods of Wichita will speak to members and guests. Woods recently returned from a tour of duty in Iraq, and will be speaking on the topic “Thoughts on the changes in Iraq.”

All are welcome to attend Pachyderm club meetings. The program costs $10, which includes a delicious buffet lunch including salad, soup, two main dishes, and ice tea and coffee. The meeting starts at noon, although it’s recommended to arrive fifteen minutes early to get your lunch before the program starts.

The Wichita Petroleum Club is on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions). Park in the garage just across Broadway and use the sky walk to enter the Bank of America building. Bring your parking garage ticket to be stamped and your parking fee will be only $1.00. There is usually some metered and free street parking nearby.

Obama not first with trillion dollar deficit

A Wall Street Journal column from last year highlights the lack of honesty in government accounting. The column speaks of fiscal year 2008. That period of time ended on September 30, 2008.

It has been widely noted that 2009 will have the first “trillion-dollar deficit” in American history. Actually it’s the second. In fiscal 2008, the national debt increased from $9 trillion to slightly over $10 trillion. Yet the budget deficit in the last fiscal year was officially reported as being $455 billion. How could the national debt have increased by considerably more than twice the “deficit”? Simple. Just call the money borrowed from the Social Security trust fund an “intragovernmental transfer” and exclude it from the calculation of the deficit.

Corporate managers have gone to jail for less book cooking than that.

More about the fictional Social Security trust fund is at Social security trust fund needed now.

Social security trust fund needed now

Almost overlooked in the news this week is the fact that Social Security will pay out more in benefits this year than it receives in contributions from payroll taxes. It had been thought that this milestone would not be reached until 2017 or later.

The New York Times article Social Security to See Payout Exceed Pay-In This Year reports on this. The news article doesn’t come right out and tell us not to worry, but it does report on the large balance in the Social Security trust fund. This balance, the article says, will be used to make up the difference between payroll tax contributions and benefits paid out.

The problem is that there really is no trust fund, at least not in any economically meaningful sense. The Times article does contain this: “Although Social Security is often said to have a ‘trust fund,’ the term really serves as an accounting device, to track the pay-as-you-go program’s revenue and outlays over time.” But the article doesn’t tell us the entire story behind this accounting device. We’ll have to look somewhere else for that.

An article from the Heritage Foundation (Misleading the Public: How the Social Security Trust Fund Really Works) explains the workings of the trust fund:

There is no cash in the Social Security trust fund, and there never has been any. The Social Security trust fund is merely an accounting device filled with IOUs that future taxpayers must repay. … Private-sector trust funds invest in real assets ranging from stocks and bonds to mortgages and other financial instruments. However, the Social Security trust funds are only “invested” in a special type of Treasury bond that can only be issued to and redeemed by the Social Security Administration. … In short, the Social Security trust fund is really only an accounting mechanism. The trust fund shows how much the government has borrowed from Social Security, but it does not provide any way to finance future benefits. The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs.” (emphasis added)

At the Cato Institute, a 1999 article Pointless Debate over Social Security Trust Fund also explains the truth behind the trust fund:

Starting in 2014, the situation will reverse. Social Security will no longer run a surplus but instead will run a deficit. Social Security will begin spending more on benefits than it is taking in through taxes. To continue to pay those benefits, it will have to start redeeming the bonds in the trust fund. But, as President Clinton’s own fiscal year 2000 budget admits, those bonds are not real economic assets. Rather, “they are claims on the Treasury that … will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures.” … There is no way to actually leave the Social Security surplus in Social Security. The surplus must be used to purchase bonds, the purchase of the bonds will generate revenue for the government, and that revenue must be spent. … Social Security taxes should be invested in real financial assets, not government promises to raise future taxes. (emphasis added)

In 2008 Allan C. Sloan wrote:

How can I say that, given Social Security’s $2.3 trillion (and growing) trust fund? It’s because the fund owns nothing but Treasury securities. Normally, of course, Treasury securities are the safest thing you can hold in a retirement account. But Social Security’s Treasuries won’t help cover the program’s cash shortfall, because Social Security is part of the federal government. Having one arm of the government (Social Security) own IOUs from another arm (the Treasury) doesn’t help the government as a whole cover its bills.

Here’s why the trust fund has no financial value. Say that Social Security calls the Treasury sometime in 2017 and says it needs to cash in $20 billion of securities to cover benefit checks. The only way for the Treasury to get that money is for the rest of the government to spend $20 billion less than it otherwise would (fat chance!), collect more in taxes (ditto), or borrow $20 billion more (which is what would happen). The spend-less, collect-more, and borrow-more options are exactly what they would be if there were no trust fund. Thus, the trust fund doesn’t make it any easier for the government to cover Social Security’s cash shortfalls than if there were no trust fund. (emphasis added)

As you can see by the dates mentioned in these articles from the past, the day of reckoning for Social Security arrived earlier than predicted.

Liberals dispute the true nature of the trust fund, contending that there really is money in the fund that can be used to pay benefits.

Why I’m not a great fan of the Constitution

One of the reasons that I’m not as much of a fan of the Constitution as some are is that the Constitution means what the courts, particularly the Supreme Court, say it means. The courts say the Constitution means some pretty crazy things, while at the same time, the idea of the Constitution limiting government has morphed into a tool for promoting the growth of government.

I quote at length from Murray N. Rothbard’s book For a New Liberty: The Libertarian Manifesto. Perhaps this will help explain why I am a libertarian and not a conservative.

First, from page 48. A constitution must be interpreted and enforced by men:

It is true that, in the United States, at least, we have a constitution that imposes strict limits on some powers of government. But, as we have discovered in the past century, no constitution can interpret or enforce itself; it must be interpreted by men. And if the ultimate power to interpret a constitution is given to the government’s own Supreme Court, then the inevitable tendency is for the Court to continue to place its imprimatur on ever-broader powers for its own government. Furthermore, the highly touted “checks and balances” and “separation of powers” in the American government are flimsy indeed, since in the final analysis all of these divisions are part of the same government and are governed by the same set of rulers.

Then from page 66. Instead of limiting government, courts use the Constitution to legitimize growing government:

Certainly, the most ambitious attempt in history to impose limits on the State was the Bill of Rights and other restrictive parts of the United States Constitution. Here, written limits on government became the fundamental law, to be interpreted by a judiciary supposedly independent of the other branches of government. All Americans are familiar with the process by which John C. Calhoun’s prophetic analysis has been vindicated; the State’s own monopoly judiciary has inexorably broadened the construction of State power over the last century and a half. But few have been as keen as liberal Professor Charles Black — who hails the process — in seeing that the State has been able to transform judicial review itself from a limiting device into a powerful instrument for gaining legitimacy for its actions in the minds of the public. If a judicial decree of “unconstitutional” is a mighty check on governmental power, so too a verdict of “constitutional” is an equally mighty weapon for fostering public acceptance of ever greater governmental power.

From page 69, the solution is given:

Thus, even in the United States, unique among governments in having a constitution, parts of which at least were meant to impose strict and solemn limits upon its actions, even here the Constitution has proved to be an instrument for ratifying the expansion of State power rather than the opposite. As Calhoun saw, any written limits that leave it to government to interpret its own powers are bound to be interpreted as sanctions for expanding and not binding those powers. In a profound sense, the idea of binding down power with the chains of a written constitution has proved to be a noble experiment that failed. The idea of a strictly limited government has proved to be utopian; some other, more radical means must be found to prevent the growth of the aggressive State. The libertarian system would meet this problem by scrapping the entire notion of creating a government — an institution with a coercive monopoly of force over a given territory — and then hoping to find ways to keep that government from expanding. The libertarian alternative is to abstain from such a monopoly government to begin with.

United States Government customer service: think twice

United States Postal Service: We CareUnited States Postal Service: We Care

For those who argue that we should turn over more activity — such as health care — to the federal government, take a close look at a government monopoly that’s been around for a long time.

The United States Postal Service has a monopoly on the delivery of first class mail. As an example of its level of service, consider my bank statement. When it hadn’t arrived by its usual time, I called the bank. The bank assured me it had been mailed.

Today the statement arrived in a plastic bag explaining that it had been damaged during processing. I can understand that happening once in a while. Machines are not perfect, and sometimes improving their reliability can be very expensive when compared to the benefit received.

So what was the delay caused by the malfunctioning machine? One day? Two or three days?

The piece was postmarked February 2. It arrived on February 22. The delay — realizing that mail delivery is not guaranteed — is around 18 days.

How does a piece of mail being damaged in a machine cause it to be delivered nearly three weeks late? And it’s not bulk or junk mail — my bank statement is first class mail.

It’s lack of competition. What motivation does the United States Postal Service have to do a better job?

Think about this as we consider moving activity from the private sector to government.

A related story from a friend of mine is Postal service?

The problem with Sarah Palin

Not everyone is enthusiastic about the rise in popularity of Sarah Palin. I didn’t vote for her when I had the chance, and nothing has happened since November 2008 that would lead me to change my mind.

Leslie Carbone, author of the recently-published Slaying Leviathan: The Moral Case for Tax Reform says it better than I can myself:

With the popular outrage sparked by the Bush bail-outs, I’ve become more hopeful about the future of economic freedom than I’d been in 20 years. And the tea parties and town-hall protests just buttressed my optimism.

I’m still optimistic, but the reflexive, relativistic, populism-as-the-new-elitism near-worship showered upon Gov. Palin by supposed conservatives and libertarians — people who profess to believe in economic freedom — tempers my optimism.

The full post is The Problem with Palin.

Spalding lecture examined liberty, progressivism

This Tuesday in Emporia, constitutional scholar Matthew Spalding
delivered a lecture titled “Liberty and the Constitution.” An important topic presented in this lecture is that modern American progressivism is in opposition to the principles of liberty as expressed in the founding of the United States.

Spalding said that the great theme of the American founding was self-governance. America is unique, he said, because we laid down ideas on paper in the form of our Constitution. Prior to this, politics had been based on who had the most power.

Private property and religious freedom were important aspects of the American founding. To the founders, property rights were deeply moral and philosophical. Property is not just land, but intellectual creations, too.

Religious liberty was an important theme of the American founding. Prior to this, there was no such thing as religious liberty, Spalding said. Your religion would be determined by the religion of your king. Sometimes other religions were tolerated, but as in England, it simply meant they “wouldn’t burn you.”

Rule of law is another important aspect of liberty. Man creates laws, and we are ruled by those laws. Because Americans valued law so much, we did something that no other country had done: we wrote it down in the form of a Constitution. Other counties had constitutions, but they were merely writings of history, not rules for how law should operate.

All men possessed the same rights, because of nature, because we are human beings. Rights do not come from governments, or kings, or courts. That, the American founders said, is self-evident.

After the Civil War, different world views arose. In particular, Germany in the late nineteenth center was the hotbed of technology and transformation of government.

When Americans went overseas to study Europe after the Civil War, we became aware of the radicalism of the French Revolution. It was anti-religious. Everything was to be torn down, even the calendar. That changed the European tradition, and new sets of ideas came into fashion.

These ideas that were imported into the United States included relativism (there is no self-evident truth) and historicism (all things change). These ideas are in opposition to the principles of the Constitution, and are the basis of modern progressivism, which holds these beliefs: There is nothing permanent. Everything changes. Rights are not grounded in the nature of human beings; instead rights evolve and change. Because rights change, government changes, too. When rights expand, so does government. With more rights, there is more for government to secure.

Germany had invented the administrative state, or the bureaucracy. Based on their belief in science, they invented new, scientific ways of organizing government. There were to be experts: people to run things.

In America, power and authority which the Constitution delegated to the legislature and executive was instead given to the bureaucracy. Congress created agencies.

There also arose the idea of a “living” Constitution. The founders’ Constitution was old and viewed by progressives as a barrier to progress. By interpreting it differently, it became a living document.

The culmination of progressivism was the Great Society on the 1960s. Congress passed huge, vague laws that gave authority to bureaucrats. “Congress passed a law: clean the water.” How to do that was left to bureaucrats.

The present wave of progressivism — like the others before — is based on an intellectual, moral, and cultural attack on the ideas of the American founding. Progressives believe the American founders were wrong. Limited government is a constraint, they say, and to make any progress, we must have more government.

Spalding said that if we were to read Woodrow Wilson’s speeches during the 1912 election and substitute the word “change” for “progress”, we’d see a similarity to the debate of today. Healthcare, he said, was proposed in the progressive platform of 1912, based on the German model of health insurance.

The argument of modern academics is that the growth of government is inevitable and good. Today, the progressive argument about government growing and expanding without limit, the question has never been settled by the American people. “The American people, as civil-minded as they are, still think they govern themselves, and they object when someone says they will govern for them.” That is good, Spalding said.

There are two grand choices we face today. One path is progressive liberalism, based on the French Revolution arguments that deny rights, liberties, and the Constitution. The goal of this path is to transform America into something different with a new form of government: bureaucratic and centralized, efficient and European.

The other path is to recover a form of constitutionalism. Spalding says that the immediate future — perhaps the next few years or decades — is the time to give serious consideration to this choice. The present path of government is unsustainable, and we must decide if there are to be limits on the size of government.

The current healthcare proposal that says we must buy insurance provides an example, he said. “If the commerce clause of the United States Constitution gives Congress the authority to regulate the doing of nothing, then government is truly unlimited.”

A question from the audience from someone who identified himself as a progressive said that progressives aren’t trying to make America like a European nation. It’s social Darwinism that upsets progressives, he said, citing the lack of child labor laws and robber barons as examples. Today, there are powers and corporations that are destructive, and progressives need to reclaim power and participation in government.

Spalding replied that social Darwinism (from the right), like progressivism (from the left), deny human nature. Both use the state to achieve their objectives, and that’s the problem. Neither believe in self government. Many modern ideologies, stemming from the French Revolution, reject the deeper philosophical ideas of the American founding.

The questioner asked “Equality, liberty, fraternity: this is a rejection of the human condition?” Spalding replied yes, the American and French Revolutions are deeply at odds with each other. “The fact that I would point to is the French Revolution did not lead to constitutional government. George Washington died in bed peacefully. The French Revolution lead to the guillotine.”

Matthew Spalding is the Director of the B. Kenneth Simon Center for American Studies at Heritage and is the author of We Still Hold These Truths: Rediscovering Our Principles, Reclaiming Our Future (ISI Books, 2009). He is also the editor of the Heritage Guide to the Constitution, an indispensable collection of essays on the founding document.

Emporia State University history professor Gregory L. Schneider created the Lectures on Liberty series last year. For more information, contact Dr. Schneider, gschneid@emporia.edu, 620-341-5565.

Two additional lectures have been scheduled for the 2010 season. Jonathan Bean, a professor of history at Southern Illinois University, will be speaking on liberty and race in American history on Feb. 23. Benjamin Powell, professor of economics from Suffolk University in Boston, will be speaking April 8 on the topic, “In Praise of Sweatshops.”

The Lectures on Liberty series is underwritten by the Fred C. and Mary R. Koch Foundation in Wichita.

‘Liberty and the Constitution’ lecture announced

On Tuesday, January 26, 2010 at 7:00 pm in the beautifully restored Granada Theater in Emporia, the Emporia State University Lectures on Liberty begins its second year with a lecture on “Liberty and the Constitution” by Matthew Spalding of the Heritage Foundation. Dr. Spalding is the Director of the B. Kenneth Simon Center for American Studies at Heritage and is the author of We Still Hold These Truths: Rediscovering Our Principles, Reclaiming Our Future (ISI Books, 2009). He is also the editor of the Heritage Guide to the Constitution, an indispensable collection of essays on the founding document. Dr. Spalding will be available after the lecture to sign his book which will be for sale in the lobby of the theater. Lectures are free and open to the public.

ESU historian Gregory L. Schneider created the Lectures on Liberty series last year. Speakers last year were: Burton Folsom (Hillsdale College) and Vincent Cannato (University of Massachusetts-Boston). Confirmed speakers this spring include Dr. Spalding, Jonathan Bean, a historian from Southern Illinois University who will be speaking on Race and Liberty, and Benjamin Powell, an economist at Suffolk University, who will be speaking on the subject In Praise of Sweatshops. The Lectures on Liberty series is intended to promote discussion and awareness of issues of liberty in American history and he economy and to raise awareness of the founder’s vision for the American republic.

The Lectures on Liberty is underwritten by the Fred C. and Mary R. Koch Foundation in Wichita.

For more information contact Greg Schneider at (620) 341-5565 or by e-mail at gschneid@emporia.edu.

The Granada Theater is at 807 Commercial Street in downtown Emporia. Google maps shows that from Central and Rock Road in Wichita, it’s a 84 mile drive that should take one hour and 22 minutes. Click here for the Google map with driving directions.