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Investors Finally Fear the Inflation Precipice - Robert P. Murphy - Mises Daily: "It is true that Bernanke could reverse course before things are too late, as far as the purchasing power of the dollar is concerned. But this would entail devastating pain to the banking sector, since the Fed would have to reverse the policies that bailed out the overleveraged titans in the first place. If Bernanke has to choose between saving rich bankers or the dollar, I am confident he will choose the former."
"By the same token, there are all sorts of scenarios where the natural 'unwinding' of the Fed's extraordinary policies won't work as planned. In particular, if even official CPI inflation starts creeping above 4 and 5 percent on an annual basis, while unemployment remains above (say) 8 percent, then it will become apparent that Bernanke's 'exit strategy' leads into a brick wall."
"in the 2nd quarter of 2009, the Fed's absorption of Treasury debt amounted to 48 percent of the new debt issued in that period. And ZeroHedge posted the following chart showing that the Fed is currently the world's largest single holder of Treasury securities, surpassing China:"
Friday, February 11, 2011
Cutting Spending to Revive Federalism | Chris Edwards | Cato Institute: Commentary
Cutting Spending to Revive Federalism | Chris Edwards | Cato Institute: Commentary: "• Every dollar of federal aid sent to the states is taken from federal taxpayers who live in the 50 states. Sending all that money to Washington and back again creates a huge administrative burden in tracking the funding flows and dealing with all the regulations attached to each of 1,122 programs.
• Federal aid reduces state policy innovation because it comes with top-down rules that mandate conformity. State governments can't be 'laboratories of democracy' if they operate under one-size-fits-all rules from Congress.
• Aid programs spur overspending by every level of government, since politicians can appease special interests with the spending while imposing part of the funding costs on other levels of government. State politicians over-expand Medicaid, for example, because the feds kick in more than $1 for every $2 in new benefits.
• Liberals imagine that federal experts can rationally distribute aid to the neediest local activities. The reality is that politics determines the activities and congressional districts that receive the most aid. Even if politics were taken out of it, the federal government does not have the knowledge to efficiently allocate local funding across a diverse nation of 308 million people.
• The huge scope of the aid system means that federal politicians spend much of their time on local issues. Rather than focusing on national defense, they are busy fixing potholes in their districts. Pres. Calvin Coolidge was prescient in warning that state aid was 'encumbering the national government beyond its wisdom to comprehend, or its ability to administer' its proper roles.
• The three levels of government would work better if they resembled a tidy layer cake with separate functions, rather than a marble cake with jumbled lines of responsibility. The failure of our marble-cake government was evident in the disastrous lead-up to, and aftermath of, Hurricane Katrina."
• Federal aid reduces state policy innovation because it comes with top-down rules that mandate conformity. State governments can't be 'laboratories of democracy' if they operate under one-size-fits-all rules from Congress.
• Aid programs spur overspending by every level of government, since politicians can appease special interests with the spending while imposing part of the funding costs on other levels of government. State politicians over-expand Medicaid, for example, because the feds kick in more than $1 for every $2 in new benefits.
• Liberals imagine that federal experts can rationally distribute aid to the neediest local activities. The reality is that politics determines the activities and congressional districts that receive the most aid. Even if politics were taken out of it, the federal government does not have the knowledge to efficiently allocate local funding across a diverse nation of 308 million people.
• The huge scope of the aid system means that federal politicians spend much of their time on local issues. Rather than focusing on national defense, they are busy fixing potholes in their districts. Pres. Calvin Coolidge was prescient in warning that state aid was 'encumbering the national government beyond its wisdom to comprehend, or its ability to administer' its proper roles.
• The three levels of government would work better if they resembled a tidy layer cake with separate functions, rather than a marble cake with jumbled lines of responsibility. The failure of our marble-cake government was evident in the disastrous lead-up to, and aftermath of, Hurricane Katrina."
Woman Loses Home to Foreclosure for Being Unable to Pay Attorney Fees - FoxNews.com
Woman Loses Home to Foreclosure for Being Unable to Pay Attorney Fees - FoxNews.com: "someone lost a house that she owned outright for less than a $1,000 in legal fees"
Wednesday, February 09, 2011
Rand Paul Is Right about Israel | Benjamin H. Friedman | Cato Institute: Commentary
Rand Paul Is Right about Israel | Benjamin H. Friedman | Cato Institute: Commentary: "Being pro-Israel does not require arming it with our tax dollars forever. Israel can now defend itself and then some."
Republicans Are Weak on Farm Subsidies | Michael D. Tanner | Cato Institute: Commentary
Republicans Are Weak on Farm Subsidies | Michael D. Tanner | Cato Institute: Commentary: "The level of hypocrisy is breathtaking. For example, conservatives rightly denounced government subsidies to business when the auto industry was at issue. Why, then, are subsidies a good idea when directed to, say, Archer Daniels Midland?"
"And it is hard to see how anyone can claim to be a fiscal conservative while supporting $15 – 35 billion per year in government spending that largely goes to a group of people with incomes above the national average. Farm income for 2010 exceeded $92.5 billion. That's a 34 percent increase from 2009, and — even if you subtract payments from the government — 28.8 percent above the previous ten-year average. While conservatives often mythologize small farms, most farm subsidies go to large and corporate farms. In fact, the largest 10 percent of recipients receive 73 percent of all subsidy payments."
"It is always easier to cut the other guy's subsidy. And some of the most deeply 'red' states are among the biggest collectors of federal largess. In 2010, solidly Republican states such as Alaska, Kansas, North Dakota, South Dakota, and Virginia were among the largest recipients of per capita federal spending. That means any serious attempt to cut federal spending is going to require Republicans to take on their own constituencies."
"And it is hard to see how anyone can claim to be a fiscal conservative while supporting $15 – 35 billion per year in government spending that largely goes to a group of people with incomes above the national average. Farm income for 2010 exceeded $92.5 billion. That's a 34 percent increase from 2009, and — even if you subtract payments from the government — 28.8 percent above the previous ten-year average. While conservatives often mythologize small farms, most farm subsidies go to large and corporate farms. In fact, the largest 10 percent of recipients receive 73 percent of all subsidy payments."
"It is always easier to cut the other guy's subsidy. And some of the most deeply 'red' states are among the biggest collectors of federal largess. In 2010, solidly Republican states such as Alaska, Kansas, North Dakota, South Dakota, and Virginia were among the largest recipients of per capita federal spending. That means any serious attempt to cut federal spending is going to require Republicans to take on their own constituencies."
Obama on Auto-Defrosting Refrigerators - Jeffrey A. Tucker - Mises Daily
Obama on Auto-Defrosting Refrigerators - Jeffrey A. Tucker - Mises Daily: "All evidence suggest that the truth is precisely the opposite of what Obama claimed. Frost-free freezers came about in the normal market way. A company found a way to package it as a luxury good available in some markets. Another company saw the advance and emulated it, offering it to still other markets (though the process was likely slowed by the government regulation called the patent). Other companies saw the potential for solving a monstrous household problem and began making them more cheaply and more efficiently, as the target market gradually went from luxury to mainstream. Over time, the improved product was ubiquitous."
Tuesday, February 08, 2011
It's Time to End Amtrak Funding | Randal O'Toole | Cato Institute: Commentary
It's Time to End Amtrak Funding | Randal O'Toole | Cato Institute: Commentary: "Train travel has declined for good reason: Trains are slower than flying, less convenient than driving, and far more expensive than either.
Per passenger mile, Amtrak fares average twice as much as airfares or the cost of intercity driving."
"The round-trip subsidy to each New York-to-Orlando train passenger is close to $500." "Taxpayer subsidies to someone driving or flying between New York City and Florida are less than $25 round trip."
"Amtrak's diesels use as much energy and emit as much pollution as cars in intercity travel."
Per passenger mile, Amtrak fares average twice as much as airfares or the cost of intercity driving."
"The round-trip subsidy to each New York-to-Orlando train passenger is close to $500." "Taxpayer subsidies to someone driving or flying between New York City and Florida are less than $25 round trip."
"Amtrak's diesels use as much energy and emit as much pollution as cars in intercity travel."
Destructive Economic Myths | Richard W. Rahn | Cato Institute: Commentary
Destructive Economic Myths | Richard W. Rahn | Cato Institute: Commentary: "If the debt ceiling is not raised, government officials will have a choice to default on the interest payments (less than 10 percent of the government's total income) or cut spending. Sen. Pat Toomey, Pennsylvania Republican, has introduced the Full Faith and Credit Act (S.163), which would require the Treasury to make interest payments on U.S. government debt its first priority if the debt ceiling is not raised. This legislation would require the federal government to reduce spending on other activities and/or sell assets, as any business or family would need to do when faced with a similar problem."
"Spending would only have to be reduced to roughly the 2006 level to avoid an ongoing deficit."
"If government spending could bring about full employment, the socialist countries would have been great successes rather than basket cases. Remember, the money government spends on "creating" jobs comes from either taxing or borrowing — both of which take money and jobs out of the more productive private sector — thus reducing the total number of jobs."
"Spending would only have to be reduced to roughly the 2006 level to avoid an ongoing deficit."
"If government spending could bring about full employment, the socialist countries would have been great successes rather than basket cases. Remember, the money government spends on "creating" jobs comes from either taxing or borrowing — both of which take money and jobs out of the more productive private sector — thus reducing the total number of jobs."
Monday, February 07, 2011
U.S. seeks veto powers over new domain names | Privacy Inc. - CNET News
U.S. seeks veto powers over new domain names | Privacy Inc. - CNET News: "The Obama administration is quietly seeking the power for it and other governments to veto future top-level domain names, a move that raises questions about free expression, national sovereignty, and the role of states in shaping the future of the Internet."
House Republicans slash agencies, nick themselves - FoxNews.com
House Republicans slash agencies, nick themselves - FoxNews.com: "When Democrats took over Congress in 2007, they inherited a $3.8 billion budget for Congress. That includes money for members' and leadership offices, House and Senate committees, and support agencies such as the Capitol Police and the Congressional Budget Office, which crunches numbers for lawmakers as they consider legislation.
Since then, that budget has risen to $4.7 billion, a 23 percent increase over four years."
Since then, that budget has risen to $4.7 billion, a 23 percent increase over four years."
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