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Video: Why Are Living Standards So Different In Chile and Venezuela?
Occasionally, the Internet gives you a gem. This video is the second in a planned series about how economic freedom results in better conditions for everyone. Episode 2 compares 10 countries with the most economic freedom and 10 with the least.
Compared to countries with more regulation and more economic paternalism, countries with greater economic freedom have the following bright points. Freer nations sport populations with 20 more years in life expectancy and the poorest 10% earn eight times more than those in more closed economies.
The United States has enjoyed great success as an economically free nation. However with more government intervention in our economic affairs, the US is falling in economic freedom and the consequences were perfectly illustrated in the video. Imagine a fishing boat (representing private enterprise) cruising in the ocean when a large wave (representing government regulation and spending) approaches. Private businesses must climb the wave to avoid sinking and that climb slows their progress. We’re seeing the mountains of paperwork and compliance costs washing over small and large businesses. What are we going to do about it?
We can start with cutting spending -- the heart of our financial disarray. NTUF maintains a spreadsheet of all scored savings proposals. This is just the start of what we can cut and how we can do things differently. Next, figure out long-term entitlement reform of Social Security, Medicare, Medicaid, federal retirement systems, and state and local pensions. The video displayed a 1000% of the private economy worth of promised obligations US governments have made. And it is just going to get worse. Third, regulations are cutting down progress. It’s about time the US advances to the 21st century with simplified and realistic regulations. If the US continues on the path of more regulation, more spending, and less economic freedom, entrepreneurship will fall and we will no longer be the economic superpower.
You can check out the first Economic Freedom video here.
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Reid Loses, Taxpayers Win, Senate Dems to Try Again
“It’s very clear that private sector jobs have been doing fine,” Majority Leader Harry Reid said on the Senate floor earlier this week. “It’s the public sector jobs where we’ve lost huge numbers, and that’s what this legislation is all about.”
The legislation Sen. Reid was referring to was a $35 billion piece of President Obama’s larger American Jobs Act. Obama’s larger plan – a mishmash of temporary tax relief, reheated spending ideas, and permanent tax hikes – went down in flames in the Democrat-held Senate. Rather than pull back and focus on areas of bipartisan agreement, Democrats decided to try and advance the plan piecemeal.
In a move that was clearly aimed at shoring up their base, the package included $35 billion in grants to create or retain various public sector jobs such as teachers and police officers. The underlying premise of the bill, hinted at by Sen. Reid’s comments above, is that the recession is wreaking havoc on state budgets, forcing them to layoff public sector workers.
But as we found out in the last week, that’s simply not the case. “Overall state spending continued to climb right through the recession,” writes John Merline for Investor’s Business Daily after examining reports by the National Association of State Budget Officers’ annual reports. Indeed, he finds that state outlays in 2010 were almost 10 percent higher than in 2008 and general fund spending is projected to climb 5.2 percent in 2011. Total state outlays in 2010 were almost 10 percent higher than in 2008.
In other words, this is less a plan about jobs than about politics. Or as National Review labeled it, “No Bureaucrat Left Behind.”
Unsurprisingly, the bill was defeated with bipartisan opposition last night, with three members of the Senate Democratic Caucus – Sens. Mark Pryor (D-AR), Joe Liberman (I-CT), and Ben Nelson (D-NE) – joined with Republicans to block debate on the package.
“I don’t think you increase taxes for new spending,” said Sen. Nelson in explaining why he voted against the ill-conceived bill. Senator Pryor added, “I’m not sure federal taxpayers should be paying for teachers and first responders. That’s traditionally a state and local matter.”
NTU applauds those who voted down the bill. The bipartisan opposition should have been the latest signal to President Obama and Senate Democrats to move away from the current tax-and-spend approach to jobs legislation.
Sadly, it doesn’t appear they got the message. Early reports indicate that Senate Democrats will announce a new bill today to create a national infrastructure bank combined with a 0.7 percent surtax on those who earn more than $1 million. As NTU has argued before, if immediate job creation is the priority, an infrastructure bank is the wrong way to go. Between the time necessary to set up and staff an entirely new bureaucracy and then receive and choose viable loan applications, we’re talking months, if not years, of lag time.
If the Senate is truly concerned about job creation, we encourage them to look at the numerous proposals that have been already been passed by the House. These include bills to eliminate the burdensome regulations preventing businesses from expanding, increase domestic energy exploration, and to reduce the unsustainable spending and borrowing that has eroded economic confidence.
No matter what Sen. Reid may say, the private sector is not doing “just fine,” and Senate Democrats’ current tack will do nothing to improve that.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Even though it is still October, the fall election season is upon us. This Saturday, Louisiana kicks off a month of elections that will close on November 19th. In addition to the slate of candidates for local and state offices, voters in the Pelican State will also decide on five amendments to their constitution this weekend. As we do each year, NTU tracks these ballot measures in our General Election Ballot Guide in order to give taxpayers a better idea of what they are being asked to vote on.
The one measure with cause for concern is Amendment 1. From our ballot guide;
“Amendment 1 on the statewide ballot would redirect future tobacco settlement funds from the Millennium Fund to the Taylor Opportunity Program for Students (TOPS) scholarship. Additionally, the proposed amendment would permanently extend and place in the constitution a $.04 per pack cigarette tax set to expire next year.”
Generally speaking, state constitutions should be used to limit what kinds of taxation are allowed, and to set limits on the level of taxation. Rarely is the constitution used to set the specific rate. This measure would make it substantially more difficult for voters or the state legislature to reduce their tax burden in the future.
Furthermore, the Millennium Fund is Louisiana’s account to handle Tobacco Master Settlement Agreement (MSA) funds. The primary purpose of the MSA is to offset state Medicaid expenditures related to tobacco use. Amendment 1 would stop using future tobacco settlement payments for health care expenditures and redirect them to a wholly unrelated program. This gets away from the fundamental purpose of the MSA and taxpayers should be wary.
Fortunately, the remaining measures on the ballot are commendable efforts in fiscal responsibility. Amendment 2 would use one-time monies generated by natural resource development to start paying down the billions of dollars in unfunded state pension liabilities. Louisiana has roughly $9.5 billion in legacy obligations from its pre-1988 employee retirement plans. This amendment is an honest effort to meet those obligations without raising taxes. Amendment 3 creates a lockbox around the Patient Compensation Fund, so the legislature cannot raid it at will. Amendment 4, while somewhat confusing, simply sets some useful guidelines for refilling the state’s budget stabilization fund. The last measure is a technical correction.
As we say at the top of our guide, these off-year elections can too often be forgotten amidst the noise of the 2012 Presidential race, or even a classic SEC showdown. Bayou State taxpayers need to be on the lookout and hopefully NTU’s 2011 Ballot Guide can help.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Historic Cuts? Try a Record Year for Spending
If you’ve spent time listening to liberals and progressives over the past year you were no doubt inundated with the message that Washington can’t afford to keep cutting. If we cut any more spending, we’ll not only endanger the recovery, but we’ll put millions of Americans who rely on the government at risk…or so the argument goes.
In March for instance, Senate Democratic Whip Dick Durbin declared during the budget debate that “to go any further [than $10 billion in cuts] is to push more kids out of school, to stifle innovation which small businesses and large alike need to create more jobs, and it stops the investment in infrastructure which kills good paying jobs.”
He’s not alone. It’s a line that has been tweaked and recycled by liberal politicians in nearly every budget debate Washington has faced this year.
The trouble is there haven’t been any cuts. At least in the way that average Americans would define them.
As the Wall Street Journal reports,
Maybe it's a sign of the tumultuous times, but the federal government recently wrapped up its biggest spending year, and its second biggest annual budget deficit, and almost nobody noticed.
The Congressional Budget Office recently finished tallying the revenue and spending figures for fiscal 2011, which ended September 30, and no wonder no one in Washington is crowing. The political class might have its political pretense blown. This is said to be a new age of fiscal austerity, yet the government had its best year ever, spending a cool $3.6 trillion. That beat the $3.52 trillion posted in 2009, when the feds famously began their attempt to spend America back to prosperity.
What happened to all of those horrifying spending cuts? Good question. CBO says that overall outlays rose 4.2% from 2010 (1.8% adjusted for timing shifts), when spending fell slightly from 2009. Defense spending rose only 1.2% on a calendar-adjusted basis, and Medicaid only 0.9%, but Medicare spending rose 3.9% and interest payments by 16.7%.
The bigger point: Government austerity is a myth.
So next time you hear a politician say “we can’t afford to keep cutting,” subtly ask him when we started.0 Comments | Post a Comment | Sign up for NTU Action Alerts
45 Senators Vote in Disapproval of $500 Debt Ceiling Increase
While half of America was still trying to figure out how President Obama was going to pay for the $450 billion in additional stimulus he had just proposed, and the other half just giving up the idea and basking in the return of pro-football, the Democrat-led Senate effectively hiked the nation’s debt limit by $500 billion.
Given the public uproar over the debt limit how did such an important vote slide right under America’s collective nose? Clever timing on the part of Senate Majority Leader Harry Reid played a large part. While most eyes and ears were still tuned to coverage of the President’s speech, the Senate returned to its chamber to vote to begin debate on a resolution of disapproval.
Despite the lack of billing it received and the complicated, highly-technical nature of the vote, it nevertheless has a clear and significant impact on taxpayers. Under the debt-ceiling agreement reached last month, the Obama Administration received an immediate $400 billion increase to the debt ceiling. The White House would obtain another $500 billion increase unless the House and Senate approved resolutions of disapproval.
Approving disapprovals is enough to make anyone’s head spin, but here what you really need to know – the vote provided a clear picture of which senators are trying to put an end to deficit spending.
As Senate Minority Leader Mitch McConnell said in anticipation of the vote,
“Now, after the President’s speech tonight calling for more stimulus spending, the Senate will vote on his request for an additional $500 billion increase in the debt ceiling. So senators will have an opportunity to vote for or against this type of approach right away.”
So who seized the opportunity? In a 45 to 52 vote, every Republican, with the exception of Scott Brown (R-MA), voted to proceed to debate on the resolution of disapproval. They were also joined by Ben Nelson (D-NE) who broke from his party to support Republicans in their stance against the ever-rising tide of deficit spending that threatens to engulf America.
Our members of Congress should be doing everything they can to change the culture of excessive spending and borrowing in Washington. Although they were ultimately unsuccessful in stopping a $500 billion increase in the debt limit, yesterday’s vote shows that a significant number of senators will continue to stand up for Americans who deserve a future free from the burdens of government debt. And if President Obama’s costly new stimulus plan is any indication, we’re going to need more senators to take that stand.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The Thing About Expediency and an Infrastructure Bank
In yesterday’s speech before a joint session of Congress, President Obama called for new spending to help get the economy going again and to get Americans back to work. Putting aside the debate on how to truly fix the economy and how much of the fixing ought to be legislated by government, let’s take a look at one of the items the President offered as part of his overall solution: a national infrastructure bank. As he said:
"And we’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it would do for the economy."
Such a bank is no new concept. Besides inclusion in the President’s proposed FY 2011 budget, four pieces of legislation have been introduced in the 111th and 112th Congresses to establish government borrowing entities for transportation, water, and energy projects. While a bill introduced by Congresswoman Rosa DeLauro (CT-3) would create a wholly-owned government bank is worth noting, the President specifically mentioned a “Massachusetts Democrat”-supported bill, likely the BUILD Act, sponsored by Senator John Kerry (MA). BUILD would authorize $10 billion in new borrowing authority for infrastructure ventures, with a $2 billion real cost to taxpayers in start up expenses and loan guarantees. BUILD was highlighted in the July 26th edition of the Taxpayer’s Tab. According to information provided by the White House, the bank under the President’s proposal would cost $10 billion over an undefined period of time. One would hope everyone will have a better idea of the timetable once the bill is released to the public. However, it appears, the President’s new infrastructure bank proposed would require a greater infusion of federal dollars than the plans supported by any member of Congress, be it Democrat or Republican-controlled.
More to the President’s point, he touted the immediate need for the provisions he outlined in his American Jobs Act, saying “right now” seven times in the address. Yet the establishment of a new bureaucracy to exclusively funnel public and private dollars into projects creating and improving roads and dams is no easy task. There are several steps to follow. Once the government is authorized to create the bank (no small feat in the current political environment), personnel would have to be hired and offices set up, rules would be drafted, and money would have to be allocated and transferred to dedicated accounts. THEN planning and loan applications would have to be submitted and approved or denied with appropriate time tables of conducting further administrative actions, contracting of construction and design companies, and buying of building and support materials and machinery. Rather than “right now,” “near future” would be more accurate timetable under the best of circumstances.
It would be foolhardy for Americans -- employed or otherwise -- to assume infrastructure jobs would be immediately available. Massive construction projects take years to plan, let alone implement, start, and finish. The jobs that would come would be turned out just as slowly. As Obama joked about the first “stimulus,” “shovel-ready was not as shovel-ready as we expected.”1 Comments | Post a Comment | Sign up for NTU Action Alerts
Congress Chips in On National Debt
RollCall has an article today on Members of Congress who are giving back a portion of their Congressional pay or other income to help pay down the national debt. One wonders when the article highlighting Warren Buffet's chip-in will appear.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Cantor Right to Ask for Offset of Disaster Relief
Budgeting, first and foremost, is about establishing priorities. Prioritization - a central tenet of any sound financial plan - derives from an understanding that resources are not infinite. Unfortunately, many in Washington can’t seem to grasp that fact, a situation that has become all too clear in the recent battles over deficit spending.
The misunderstanding has come to a head recently over disaster-related spending. House Majority Leader (R-VA) has been vocal in his position that any supplemental spending to address a string of national disasters that have recently swept across the U.S. be “offset with appropriate savings or cost-cutting elsewhere” in the budget. Liberals have bristled at the idea, spouting off well-worn talking points about conservatives are putting concerns over the deficit ahead of the tragedy of communities ravaged by natural disaster.
Such extreme talk is fundamentally misconstruing Rep. Cantor’s position.
“Of course when something like this happens, there is an appropriate federal role,” Cantor has said. “Surely we can find the money to meet our priorities.”
Aiding victims of natural disasters is surely a priority, a position echoed by White House spokesman Tim Carney in his response to Cantor. “The principle [is] that when we’re having a natural disaster and an emergency situation . . . our priority has to be responding to the disaster and helping those regions and states recover,” Carney said.
Establishing a system of priorities, a necessity if we are to successfully escape our enormous deficits, doesn’t work if everything remains at the top of the list. As Republican Study Committee Chair Jim Jordan (R-OH) said recently, “I would be happy to join Eric or any other colleague to find other areas in the budget were we can cut lower-priority spending to offset the additional emergency spending that is needed today.”
Of course this whole political scrum could be avoided if Washington realistically budgeted for emergencies. Every year the Federal Emergency Management Agency receives money to help alleviate the damage caused by weather-related disasters. And every year the amount is inadequate to deal with the inevitable emergencies that spring up.
But pretending as if there will be no natural disasters only causes taxpayers more pain. When problems do spring up FEMA’s coffers get low, the politics get tough, and the President requests emergency supplemental funding that adds to our already unsustainable deficit.
America can no longer afford such make-believe. Our fiscal woes demand that Washington actually take steps to plan ahead and budget for natural disasters. If only we would plan ahead, and budget accordingly, we could avoid the political back-and-forth and get down to helping those in need.
Providing relief to victims of natural disasters and spending taxpayer money responsively are not mutually exclusive concepts. Resolving the two simply takes an ability to prioritize coupled with a realistic eye toward the future.0 Comments | Post a Comment | Sign up for NTU Action Alerts