Silent-but-eloquent: the case for economic freedom

July 5, 2011

Here’s a neat video from one of the evil Koch brothers (1) laying out fact after fact arguing that countries with greater levels of economic freedom, defined as small government, the rule of law, free trade, and the protection of property rights, regularly and vastly outperform statist regimes:

No, your computer’s sound isn’t messed up; it’s a silent movie. Scratch that. It turns out the mute had somehow been activated on this computer. This really is a “talkie.”

I think this video cuts to the heart of those policies that create prosperity — and the jobs that go with it.

Remember that in 2012.

via Dan Mitchell, who has another related video on his site

Footnote:

(1) The latest entry in the Left-Liberal demonology. Remember, gentlemanly elderly billionaires who want less government intrusion into our lives so we can all be free to prosper are EVIL!!! because… well, because.

Edit: Fixed some erroneous information and adjusted accordingly.

(Crossposted at Sister Toldjah)

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Restraining Leviathan III: when the IRS goes wild

April 24, 2011

Here’s a question, the answer to which may just be a hearty “WTF?” Why does the IRS want to turn US banks into deputy tax collectors for foreign governments?

Under a proposed regulation, the Internal Revenue Service would order banks to report interest on deposits from foreign investors, not to the US government, but to the home government of the depositor.

What’s the problem, you ask? There are five, but I’ll list two here:

  1. Foreign depositors have put trillions of dollars in US banks because of the very fact that we don’t report interest payments to their governments. Yes, it’s tax avoidance on their part, but the moneys deposited here help grow our economy through loans and investment capital. If this regulation is enacted, foreign depositors will have every reason to move their fortunes elsewhere, to places like Hong Kong or the Caymans, which don’t threaten to rat them out to their governments. That loss would be a tremendous blow to our already ailing economy and banking sector.
  2. Even worse, this regulation overturns established US law. Congress mandated this safe-harbor for foreign deposits 90 years ago in recognition of the benefits an inflow of capital would bring, and that law has been reaffirmed by our democratically elected legislators at least twice since then. Yet now a bureaucratic agency want to undue laws enacted by the legislature through simple fiat.

WTF, indeed.

Dan Mitchell of the Cato Institute has produced a video that goes into these and three other reasons why this regulation shows the IRS is Stuck On Stupid:

This proposed regulation and the harm it will do have attracted the attention of Congress, who’ve reacted in bipartisan opposition to this dumb idea. For example, Senator Rubio said in a letter to President Obama:

At a time when unemployment remains high and economic growth is lagging, forcing banks to report interest paid to nonresident aliens would encourage the flight of capital overseas to jurisdictions without onerous reporting requirements, place unnecessary burdens on the American economy, put our financial system at a fundamental competitive disadvantage, and would restrict access to capital when our economy can least afford it. …I respectfully ask that Regulation 146097-09 be permanently withdrawn from consideration. This regulation would have a highly detrimental effect on our economy at a time when pro-growth measures are sorely needed.

You can read more reactions to this bureaucratic usurpation at Mitchell’s International Liberty, though I have no doubt the statists in the Congressional Progressive Caucus think it’s just peachy.

LINKS: Other posts on Leviathan government.

(Crossposted at Sister Toldjah)


Four reasons why big government is bad government

February 8, 2011

Via Dan Mitchell, here’s another video from the Center for Freedom and Prosperity. This one explains why the growth of government is harmful to a nation’s prosperity:

Check out Mitchell’s post for some related interesting videos.

BTW: A message was making its way around Twitter last night; by “retweeting” it, one asks Speaker Boehner to post a live debt clock (like this one) in the House chamber. I like it.

(Crossposted at Sister Toldjah)


Why a flat tax is a good idea

January 31, 2011

I believe I’ve posted this before, but, since tax season is fast approaching with all its wrangling over this rule and that deduction, I thought it worthwhile to offer again. In it, the Cato Institute’s Dan Mitchell explains how a flat tax would work and why it would be better for the country than the current Byzantine system we have:

And, speaking of those Mitchell mentions who benefit from the current tax code, I’m sure the tax-prep industry would just hate this.

via International Liberty

(Crossposted at Sister Toldjah)


Want to save Social Security? Privatize it.

January 16, 2011

Everyone who hasn’t been hiding under a rock knows that the two main pillars of our social welfare system, Medicare and Social Security, are in big trouble and threaten to wreck the nation’s finances. With regard to Social Security, Dan Mitchell suggests the way to save the program is to let everyone have private accounts:

Mitchell mentions several countries that have had success privatizing their social pension system. Chile is just one example of a country where privatization has worked wonders. Isn’t it time we took a hard look at doing the same thing, instead of just demagoguing the issue?

RELATED: Jimmy Bise at The Sundries Shack says “We’ll fix Social Security Over Their Dead Bodies.” Take no prisoners.

(Crossposted at Sister Toldjah)


Why Keynesian economics is wrong

November 30, 2010

Progressive economics (and, sadly, the economics of some otherwise sensible Republicans) is based on the idea that, in an economic downturn, one relies on government spending to increase domestic consumption in order to stimulate the economy. Sadly, as the history of the 1930s, 1970s and, now, the early 21st century shows, that really doesn’t work. In this video from the Center for Freedom and Prosperity, the AEI’s Hiwa Alaghebandian explains how Keynesian economics, and thus the entire economic policy of the Obama administration, has it all backwards:

As her former internship supervisor, Dan Mitchell, writes:

The main insight of the mini-documentary is that Gross Domestic Product (GDP) only measures how national output is allocated between consumption, investment, and government. That’s useful information in many ways, but if we want more output, we should focus on Gross Domestic Income (GDI), which measures how national income is earned.

Focusing on GDI hopefully would lead lawmakers to consider ways of boosting employee compensation, corporate profits, small business income, and other components of national income. Focusing on GDP, by contrast, is misguided since any effort to boost consumption generally leads to less investment. This is why Keynesian policies only redistribute national income, but don’t boost overall output.

The analysis in this video also helps explain why Obama’s so-called stimulus was a flop. The White House genuinely seemed to think a bigger burden of government spending was going to create jobs, but the real-world numbers show higher joblessness.

The basic idea is that increased income leads to increased consumption, not the other way around. One would think this would be common sense, but that apparently assumes a level of economic literacy all too uncommon amongst our policy-makers.

LINKS: MEP Daniel Hannan sums it up in 11 words.

Via International Liberty

(Crossposted at Sister Toldjah)


An easy way to balance the budget without tax increases

October 5, 2010

The current deficit of the United States -the difference between the federal government’s expenditures and its revenues- is roughly 1.3 trillion dollars, according to the Department of Commerce. That’s how much the government has to borrow in order to finance crucial services, such as Barbara Boxer’s research trips. Members of the Statist Democratic Party tell us that the only way to close this deficit is to raise taxes, whether through higher levies on “the rich” (the definition of which is rather broad) or some form of a value-added tax on top of everything else, or a combination of both.

Dan Mitchell of the Cato Institute calls “bull” on this. In this short video, he shows how one could easily balance the budget by doing something almost unheard of in Washington: showing some restraint.

In earlier years, even the minimal method Dan recommends would have been almost unthinkable, let alone eliminate whole departments of the government. But, if the elections next month and in 2012 turn out to be the true populist, anti-establishment wave that it seems to be building into, we may yet see some restraint at least in Washington’s wastrel ways.

(Crossposted at Sister Toldjah)