“a review of the literature about the impact of government spending on growth reveals that, generally, such spending crowds out the private sector. This dispels the hope that more spending will produce economic wonders.
Deficit spending will eventually result in higher taxes for future generations. That’s a profoundly unfair burden. Debt is also expansive in and of itself, as interest payments on an enormous amount of debt—even when interest rates are low—will result in a larger and expanding deficit. According to Brian Riedl at the Manhattan Institute, Congressional Budget Office data reveal that by 2049, “Interest payments on the national debt would be the federal government’s largest annual expenditure, consuming 42% of all projected tax revenues.”
Eventually, growing debt will also slow economic growth. Lower growth means fewer innovations, lower wage growth, and higher unemployment. It’s all-around bad news. Finally, higher debt could result in a debt crisis. These are good enough reasons for me to want to restrict the size of government and impose fiscal prudence.”
“Interestingly, recent concerns over inflation have highlighted one additional reason why higher debt is problematic. You see, when it comes to inflation, people’s expectations about the price trajectory in the next few years are what really matters. So, it matters less than we think that the current inflationary forces are likely transitory. If people believe that inflation is here to stay, they will try to protect themselves from it today, and we will indeed have inflation today.
Under that scenario, to get inflation under control, the Federal Reserve will have to raise interest rates. And this is where your debt levels matter. Higher interest rates result in a large increase in overall interest payments fairly quickly, as so much of our debt needs to be rolled over on a short-term basis. A sudden increase in interest rates would slow down the recovery, too, which hurts lower-income Americans.
If the Fed were immune to political pressures, this reality might not matter. However, we can expect that political pressure to be enormous. No administration would be happy to see a large increase in interest payments suddenly show up on its balance sheet followed by a large increase in the size of the deficit, especially if that administration is already planning to spend a larger amount of money in the first place. This pressure only grows under an administration that will resist any rate change that could hurt growth. The Fed may also be slow to act because it has made addressing inequality one of its priorities.”
“Do I know what expectations are and how long inflation will stick around? I don’t. But in truth, no one really does. That’s part of the point. In that context, fiscal prudence now is the best course of action, because with so much political pressure in the worst-case scenario, there will be fewer opportunities when the Fed must actually raise interest rates.”
“North Korean leader Kim Jong Un is rewiring his nation’s government to operate less like a dictator’s playground and more like an organization that can handle multiple crises at once.
According to reports this week from CNN, Reuters, and other media outlets, Kim appointed a de facto second-in-command back in January to help lead the country’s ruling Workers’ Party of Korea. As “first secretary,” a title Kim himself held from 2012 to 2016 (he assumed the grander role of “general secretary” in January 2021), this as-yet-unknown person will serve as the despot’s “representative” to the WPK.
Experts were quick to say this person won’t actually be North Korea’s second-in-command. It’s at best a kind of executive secretary role, someone who has the authority to handle day-to-day party operations but not the power to make key decisions without the boss’s say-so.
“It means no change to [Kim’s] status as the supreme leader of North Korea, but it will mean a change in his leadership style,” said Rachel Minyoung Lee, a Seoul-based fellow at the Stimson Center think tank in Washington, DC. In fact, “Kim technically always has had a ‘second-in-command’ in every party, state, and military institution,” she added.
The new and unprecedented role, then, isn’t really about some already prominent North Korean official gaining more authority. Rather, it’s Kim’s latest reform to ensure his regime can handle all affairs of state without his consistent, direct input.
“It should suggest to us that Kim is doing things internally,” said Ken Gause, director of the adversary analytics program at the CNA, a Virginia-based think tank. “He’s changing this regime and making it a more normalized organization.””
“Facebook is indeed a powerful and influential company, but these people all need a reality check. The social media site does not wield nearly as much power as actual governments. Facebook doesn’t drop bombs on its enemies or send troops to bust down their doors and kill them. Facebook can’t put people in jail, or confiscate their money, or forbid them from gathering in groups, or force children as young as three to wear masks while they play sports outside. The only thing Facebook can do is stop people from posting on Facebook.”
“To make good choices, people must have a fairly solid sense of what the consequences of those choices will be. But an ever-greater sphere of American life is subject to political risk. A lack of clarity about consequences can lead even people who want to do the right thing down dubious paths.
For more than a decade, there has been a move away from generating lasting policy through conventional means and toward short-term wins through any mechanism available. This is reflected in everything from the disintegration of the congressional budgeting process to the increase in the use of executive orders to the vestigial involvement of the legislative branch in decisions about treaties and warmaking.
All of this would be less likely to do damage under a government more constrained in its size and scope, since you cannot generate political uncertainty in areas where politics have no place. But as a starting point, a political culture that takes more seriously the costs of uncertainty and that values the rule of law would be an improvement.”
“In all the coronavirus coverage, one issue that rarely makes the headlines is the correlation between body weight and the severity of COVID-19’s effects. And one angle that virtually never makes the headlines is how the government funds the unhealthy foods that increase obesity rates, thereby increasing our susceptibility to such diseases.
Last month the Centers for Disease Control and Prevention (CDC) released a study showing that nearly 80 percent of those hospitalized with COVID-19 were overweight or obese. After age, body weight is the second greatest predictor of COVID-related hospitalization and death. Almost three quarters of all Americans ages 20 and up are overweight, and close to half of that group is considered obese.”
“Not only is the U. S. government not making any efforts to reduce the obesity epidemic, it is actively subsidizing food that contributes to the problem. The U.S. Department of Agriculture recommends that people fill half their plate with fruits and vegetables, yet the vast majority of its food subsidies—$170 billion from 1995 to 2010—go toward the major ingredients of junk food, such as corn, wheat, rice, soy, and milk.”
“We have the power to make real changes in the way we eat and move. The government could help that process by taking its thumb off the scale and ceasing to subsidize these foods.”
“The National Flood Insurance Program (NFIP) run by the Federal Emergency Management Agency (FEMA) is $20.5 billion in the hole, even after Congress canceled $16 billion in debt in 2017. This financial shortfall is largely because the program does not charge nearly enough in premiums to pay for the flood damage on the properties it insures. For decades, taxpayer bailouts of the NFIP have enabled people to live and build in flood-prone areas instead of bearing the risks themselves.
In order to address this problem, the NFIP has been working on its new Risk Rating 2.0 initiative, with the aim of charging premiums that more accurately reflect the unique flooding risks of individual properties. The agency had planned to release its updated rates later this year.
Not so fast, says Senate Majority Leader Chuck Schumer (D–N.Y.). The senator’s office recently informed FEMA that adjusted premiums could have a “severe impact” on homeowners, and urged Congress and the Biden administration to work together toward “affordable protection” for flood-prone communities.”
“lots of beachfront dwellers in New York (and elsewhere) have been “unfairly” taking advantage of taxpayers. A recent study by the nonprofit research group First Street Foundation calculates that the average estimated annual loss for each of the 4.3 million properties most at risk of flooding is $4,419, whereas NFIP premiums average $981. In other words, their flood insurance premiums would have to increase 4.5 times over their current rates to fairly cover the flooding risks to these properties.”
“as a result of “direct government provision of subsidized insurance, private markets no longer generate price signals regarding the cost of living in severe-weather regions.” Suppressing the true cost of insurance encourages “private parties to (rationally) assume excessive risk, and dump the cost of living in the path of storms on others. Indeed, much of the development of storm-stricken coastal areas is due to insurance subsidies, and would likely not have happened at the same magnitude otherwise.””
“this problem of an overcomplicated system that makes it hard for people to access benefits isn’t limited to the stimulus checks. For many government benefits, lots of people who are eligible don’t get it — often because they have no idea how to sign up.”
“the federal government needs to make its assistance programs simpler and more accessible. Some headway was actually made on this issue in the recent stimulus plan — Biden’s child allowance converted the existing child tax credit into a near-universal benefit sent to eligible recipients every month, making the program both more generous and accessible. But that’s a one-year fix, and there’s much more work to be done on this front.”
“it’s not enough to pass programs that help them in principle; the government actually has to build the infrastructure to get that help into their hands.
For example, the IRS was made responsible for sending out the stimulus checks and publicizing eligibility, but it doesn’t have a budget for public outreach or marketing. It could easily have been given one along with the responsibility of sending the checks out.”
“Some policy thinkers favor giving every American a federal bank account, which would simultaneously solve the problem of underbanking — where poor people, who aren’t profitable for the banking system to seek out as customers, struggle with access to basic financial services — and the problem of sending out stimulus checks and benefits. In principle, the government could respond to recessions, pandemics, and disasters of every kind by just dropping some money in our Fed Accounts.”
“just one of 34 currently active national emergencies—each coming with its own special powers that the president can use until he decides to stop. The longest-running was invoked by President Jimmy Carter in response to the Iran hostage crisis (which ended in 1981, though the “emergency” never did). Other emergencies authorized by Presidents Bill Clinton, George W. Bush, Barack Obama, and Donald Trump are still humming along too, many with no obvious end in sight.
Congress can respond to presidential emergency declarations by disapproving of them after the fact, which it occasionally does.”
“But doing so requires a supermajority of both chambers and, generally, Congress can’t be persuaded to get off its collective duff.”
“Under a bill the two senators reintroduced..all presidential emergency declarations would expire after 72 hours unless Congress votes to allow them to continue.”
“the bill is undermined by the fact that Paul and Wyden propose to exempt some presidential powers, such as those granted by the International Emergency Economic Powers Act (IEEPA), which allows presidents to impose sanctions on foreign officials and businesses deemed a threat to American national security. The powers granted by the IEEPA form the basis of many of the 34 ongoing national emergencies”
“What’s irritating, though, is that many of the best free market ideas for helping working families have not been tried.
What would happen if we actually stopped providing tax incentives for employer-sponsored health insurance? Or if we allowed people to pick less expensive insurance plans that didn’t cover chiropractic bills and dermatology visits but did provide the kind of coverage they were most likely to use and would most likely cause them financial strain if they didn’t have? The annual savings for the average family from this type of policy change would likely surpass any child allowance.
What if we had occupational licensing reforms and allowed people to run small businesses out of their home without fear that the local health department will shut them down? These would give families another path to upward mobility.
What if we stopped making childcare more expensive through government regulations, such as demanding that daycare workers have unnecessary masters degrees and mandating child-to- staff ratios instead of just allowing parents to decide whom they trust with their children?
What if we changed zoning rules so that families could rent out extra rooms in their homes or allowed extended families to more easily live together? What if zoning rules didn’t keep residential properties so far away from commercial properties, in turn requiring that children be driven everywhere?
What if—and here is an idea whose resonance has become even more apparent in recent months—we had real school choice? What if parents didn’t have to worry about buying a more expensive home in order to get their children access to a better school district? Or what if we allowed them to choose a charter school or private school when the public schools in their neighborhood didn’t perform (or even open in person)?
What if instead of continuing to subsidize the bloated higher education industry, we simply offered flexible vouchers to low-income students, letting them spend the money in a way that would allow them to quickly and efficiently gain the job skills they wanted?”