How exactly does this $53 trillion bill add up? First, there are the federal government's known liabilities that it is legally obliged to fulfill. These include publicly held debt, military and civilian pensions and retiree health benefits. As of September 30, 2007, these liabilities added up to $10.8 trillion.

 

Then there are various commitments and contingencies - i.e., contractual requirements that the government is expected to fulfill when, and if, specified conditions are met. These include federal insurance payouts, loan guarantees, and leases. As of September 30, 2007, they added up to $1.1 trillion.

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Freeland on Freedom

Yesterday, a post I wrote about government projects doing nothing to increase wealth ran over at Mises.org.  I received several emails on the article, and one question kept reoccurring; why can't government spending stimulate the economy more than private spending?

Some said it could because government spending offers and immediate injection whereas private individuals may save their money vs. spending it.  This is basically the argument made by economist John Maynard Keynes; that savings is a drain on the economy while spending is a boon. Governments love this argument, because it means they get to encourage more spending by taxing to get at our savings, borrowing money, printing money, or all three.  This idea overlooks a major part of economic progress - investment.  Productivity gains come when we learn to do the same thing with fewer resources.  However, there is almost always a substantial cost to trying and implementing new production methods long before the savings they bring are realized.  Where does the up-front money to pursue these innovations come from?  Savings.  Whether in a low-interest savings account or a high-interest high-risk stock, deferring our present consumption in attempts to get our principal plus interest in the future is a crucial element of economic progress.  Capital is the lifeblood of a growing economy, and capital is accumulated when people save.

Others made the argument that government projects would grow the economy because only government can undertake massive projects that have big societal benefits that lead to further wealth creation.  One email in particular made this argument and said that empirical data was needed to decide if this was true or if I was right that government projects do not grow the economy.  Being a proponent of Read More »

Great letter to the editor of the Boston Globe sent by George Mason University Econ. Dept. Chair Don Boudreaux (who also blogs at cafehayek.com):

Dear Editor:

 Derrick Jackson wants government to reduce income differences among Americans ("Politely declining to touch the income gap," August 19).  Forget that even poor Americans today generally have greater access to goods and services than did middle-income Americans of a generation ago.*  Instead ask: what kind of philosophy demands that government do what all decent parents teach their children not to do?

Who among us sends our children to school or to the playground with admonitions to begrudge classmates or playmates possessing nicer clothing or fancier toys?  Who among us counsels our youngsters to form schoolyard coalitions for forcibly confiscating expensive sneakers and video games from 'rich' kids for "redistribution" to poorer kids?  Who among us would not scold our children for such envy, and punish them severely if they participated in such thievery?

Children should avoid envy and learn to thrive by producing rather than by taking.  The same is true for adults.

A colleague and fellow SFE blogger sent me this article by Michael Knox Beran for the City Journal, titled, “Obama, Shaman”.  The article is fantastic, not because it is a critique of one candidate from one party, but because the insights are far broader and can be applied to nearly any political or cultural folk-heroes of today.  Beran draws upon strains of thought throughout ancient and classical literature and philosophy to highlight two very different worldviews.

America has a strong tradition of the worldview that sees man as fallible and existence as including pain and discomfort.  Indeed, this worldview sees any life without some form of pain being a life without cause and effect, without choice; a robotic reality that would really be no existence at all.

The other worldview, the author points out, has surfaced in various forms throughout history and is the impetus for movements that nearly always result in a great deal of concentrated power.  Since man need not be fallible, giving “the right person” unlimited power to do what is good for all is not viewed as dangerous, but rather necessary.  From Machiavelli to Saul Alinsky, strategists have created a playbook for an ascent to power by those believing pain can forever be alleviated if only they are given the absolute power to enact their reforms.  But the strategists only lay the plan; the philosophy that engendered the belief that such a plan could (or should) actually work came fi ... Read More »

So the BBC is using Detroit as an example to report on an “urban farming movement” that could “save crumbling inner cities around the world and tackle hunger.” A liberal website in Michigan characterizes this as a “wonderful example of how . . . people can come together to tackle serious challenges in our communities.” 

Can they really be that blind to what an abject admission of absolute and total failure this is?

From Mises.org - by Llewellyn H. Rockwell, Jr.

Sometimes the bad news is the good news. So it is with the report that retail sales are down by 0.1 percent in July, the sharpest drop in many months.

Why good news? It means that consumers are starting to cut back. They could be going into less debt. They might be saving more. They are being more careful about long-term plans pending short-term trends.

These are all preconditions for recovery. It's only bad news if one adopts the crude theory that economies are sustained by consumer spending. The truth is nearly the opposite. Consumer spending is the final payoff for the less-visible foundation of growth, which is real saving and investment — that is, making the choice for the future over the present. What declines in retail spending indicate is a coming to terms with reality.

I'll state again what everyone familiar with the Mises-Hayek business cycle knows: the downturn is a response to an artificially inflated economic structure. Loose credit, courtesy of the Federal Reserve, has been sucked into certain sectors and industries in a way that cannot be sustained. The response of selloffs and business failures represents an injection of reality into an unreal bubble.

Far from regretting the economic downturn, then, it is something that should cause us to breathe a sigh of relief. And by the way, this is not new knowledge. F.A. Hayek spelled all this out in his amazing writings between the wars, now recently collected and available for the first time in decades in a new book published by the Mises Institute: Prices and Production and Other Works. Read More »

Today's release from the Bureau of Labor Statistics shows that Michigan continues to lead the nation in unemployment. Its 8.5 percent unemployment rate was above far above the next highest state, Mississippi at 7.9 percent.  Mississippi has hit an unemployment spike--it's increased from 5.9 percent in April. The national average was 5.7 percent.

On the municipal side, Detroit has an unemployment rate of 17.7 percent, up from 12.9 percent in April. Grand Rapids has an unemployment rate of 9.7 percent.

The unemployment rate is comprised of the total number of people looking for work divided by the total number of people in the labor force. So while Michigan households have lost 41,321 jobs since May, it also had a proportional decrease in its labor force, leaving the unemployment rate unchanged.

On the establishment survey side of the release, Michigan has seen slight losses in employment over the month, 5,300 jobs, and is behind only Rhode Island, Florida, and Arizona for year-over-year job losses.

When Michael Moore settles his full frame in to watch a movie, he prefers chairs produced without union labor.  The big government promoting propagandist is well known for his support of unions (Let me make it clear: unions are just fine in a free-market, but currently they enjoy special status from government that shields them from competition and limits employee and employer choice), but until recently no one knew that he prefers to purchase from non-union producers.

Another Michigan blogger over at Michigan Taxes Too Much discovered the faux-pas after subjecting himself to a "hearing" in Traverse City at which Moore testified in favor of legislation that robs Michigan taxpayers and gives the money to movie-makers.  In addition to chiding locals for running up prices when film crews are in town (I'm not kidding), the filmmaker managed to bash foreign goods as well.  From the blog post:

"When he was selecting seating for the Traverse City State theater, he looked to Michigan. His first stop was a furniture provider (un-named) in G.R. which was flying the Chinese and American Flag out front. After pricing and evaluating the seating there, he discovered the seating was made in a factory in china, then brought there. He then went to Greystone International, and found they have a more comfortable seat...which was made with ALL parts from within a 30 mile radius of Grand Rapids. [...]The seats were $100 less. [...] This morning, I just had to know their secre ... Read More »

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Morehouse Less Government

I am looking forward to this film like few in recent memory.  Based on the short story Harrison Bergeron by Kurt Vonnegut, 2081 "depicts a dystopian future in which, thanks to the 212th Amendment to the Constitution and the unceasing vigilance of the United States Handicapper General, everyone is finally equal..."

You know it's bad when corpses can't even handle being (not being?) in Detroit. From today's WSJ: 

From 2002 through 2007, the remains of about 1,000 people have been disinterred and moved out of the city, according to permits stored in metal filing cabinets in the city's department of health. Looked at in another way, for about every 30 living human beings who leave Detroit, one dead human being follows.

The paper adds, "Although there is little information or statistical evidence regarding the phenomenon across the country, it is quite likely that Detroit and its surrounding communities lead the way, as it does in population loss among the living." Of course, some places make it more complicated for the dead to leave. For instance, in Chicago, they have to register to vote at their new address.

"Can you tell us where the nearest OTHER town is?

On WJR today, Hugh McDiarmid of the Michigan Environmental Council discussed slant-drilling with Russ Harding. In it, he made some pretty extreme claims against drilling, including that it woudl cause "visual pollution".

Visual pollution is a concept that applies to anything man-made that is esthetically unpleasant. It does not have an ecological impact, but perhaps a psychological one.

Here are the problems with the concept.

One: subjectivity of what is pollution. Since this is an esthetic issue, there is no objective criteria over what it is precisely. That pink home in your neighborhood? Never mind the lead paint, it’s pollution nonetheless. Never mind that the owner prefers the house the way it is, they’re just being an uncaring polluter.

Two: Having visual pollution as a policy criteria invites political gamesmanship. Don’t like that new ... Read More »

This is especially pertinent in light of the late school choice champion Milton Friedman's recent birthday celebration: 

The LA Times had a great commentary last week (stranger things have happened):

There are many things I want independence from -- incoming e-mail, the section of my wedding vows about monogamy, this bogus corporation I created to lower my taxes but now takes up all of my time, Sam Zell -- but foreign oil is not one of them. Foreign oil is my favorite kind of oil. It means other nations clog their beaches with ugly rigs, do dangerous work and suffer environmental disasters and I still get to cruise Sunset Boulevard in my yellow Mini Cooper convertible. Oil exploration is an industry America should look to expand right after alchemy research and pyramid building.

Yet Barack Obama and John McCain, in speeches and ads, have spent this week arguing about who is most serious about achieving independence from foreign energy. Both are willing to drill offshore even though that won't produce more gasoline until long after we all own electric cars. And both want to relieve gas prices by tapping the government's Strategic Petroleum Reserve, despite the fact that there's no emergency and higher prices are the only thing that has been effective at getting Americans to curb consumption of foreign oil. The only smart thing I heard was Obama's advice to fully inflate your tires, though he overlooked the fact that gas stations no longer have free air pumps, or even decent pay ones. I'm surprised he didn't tell us to save gas by not getting lost with the aid of free Amoco maps.

If the candidates wanted to be independent from all oil, ... Read More »

Last night my wife and I were watching another episode of Joss Whedon's Firefly. (By the way, this show is awesome.  Besides the coolness of a sci-fi western, it's full of anti-bureaucracy, pro-freedom themes.  It ran for less than one season on Fox in 2002, but you can watch it free in it's entirety at Hulu.com)  During a commercial we saw this ad.

Cute little kid faces somberly saying, "Tick" one after another led me to believe it was a public service announcement warning parents and children about Deer Ticks, which can be carriers of Lyme disease.  Seemed like a reasonable warning - I live in the country, so I have to check my son for Ticks after he's been in the tall grass.  But alas, this was not an insect removal reminder.  It was an ad for fightglobalwarming.com - reminiscent of and just as disturbing as LBJ's famous 1964 "Daisy" ad.

The ad seemed cheap and exploitative.  I guess guilt and fear were the feelings they were trying to inspire, but it just made me feel weird.  The old, "If you don't do this babies and puppies will die" line always raises suspicion.  When facts won’t do, cart out the children.

The creators of th ... Read More »

From my friend over at yourdailychum:

As the election heats up, 1 question remains: Which Star Wars character should you vote for?

All of those designs above can be put on assorted paraphernalia: tshirts, mugs, etc.  Me personally…..I’m voting for Vader if, for nothing else, you know he’ll stick to his guns…saber…whatever.  Point is, if the man says he’ll crush the opposition’s throats, you know he’s being quite literal, public opinion polls be damned.  Statesmen of principle are a rare thing these days.

Thanks to Geekologie for running this story.  Order some of the above designs on your product of choice at Star Wars Election ‘08.

Powerful article from kansascity.com.  This excerpt demonstrates the benefit to human life and prosperity of even a partially free country and economy like the U.S. over those with more government control:

U.S. athletes have indicated they will keep politics out of the Games, but they made a powerful statement by selecting Sudanese refugee Lopez Lomong as their flag bearer over more famous Olympians such as swimmers Michael Phelps and Dara Torres, or NBA star Kobe Bryant. Lomong, one of Sudan's Lost Boys, was separated from his parents at gunpoint when he was 6, and wound up in a refugee camp in Kenya, where he lived for 10 years before going to the United States in 2001 as part of a program to relocate lost youth from war-torn Sudan. Lomong became a U.S. citizen 13 months ago, and has tried to raise awareness to the atrocities taking place in Darfur.

"This is the most exciting day ever in my life," Lomong said, upon hearing of his selection. "The American flag means everything in my life - everything that describes me, coming from another country and going through all the stages that I have to become a U.S. citizen. This is another amazing step for me in celebrating being an American. Seeing my fellow Americans coming behind me (in the ceremony) and supporting me will be a great honor, the highest honor. I don't even have the words to describe how happy I am."

(HT: ML)

(Originally posted today on The Shotgun Blog)

Sometimes I feel like a dog who's handed a piece of fake bacon for rolling over.  Or maybe one of those porpoises who gets some frozen fish chunks for splashing tourists at Sea World.  Election time will do that.

These days, the pressure to "Vote or Die" is worse than the pressure to play Pogs was in junior high.  A recent TV commercial that interrupts my Family Guy episodes shows a wheelchair bound woman going out in the rain, getting on a bus, doing the limbo under a gate and entering a gymnasium with great difficulty; the music builds, she looks determined, and at the climax she casts a ballot.  The ad ends with some statement like, "be a hero today".  We have no idea what she voted for.  For all we know, she could've voted to forever outlaw the playing of Pogs, or the feeding of Porpoises.  No matter.  She voted, and that makes her a hero.

It's always struck me as odd to glorify the mere act of voting.  There is nothing objectively good about the act of casting a ballot in a popularity contest among politicians, or cramming your opinion on an issue into a little circle with a No. 2 pencil.  Life is good.  Liberty is good.  Lots of other things are good, objectively.  But voting can be good or bad, depending upon whether or not it is for or against good or bad things.  There is nothing inherently bad about not voting.

Yesterday was primary election day in Michigan, where I live.  Despite the fact that the majority of races were uncontested, and just a middle step befor ... Read More »

Mackinac Center founder and President Larry Reed - soon to be the president of the Foundation for Economic Education - spoke last month at the Liberty Summer Seminar in Orono, Ontario.

I had the privilege of being there, and even though it was not the first time I'd heard these stories, it still inspired me and at times got me choked up.  Larry shares personal stories about how he become so interested in liberty and of some of his many travels abroad to help clandestine freedom fighters behind the iron curtain and elsewhere.  Truly inspiring stuff.

A link to the MP3 audio is below, thanks to our friends at Bureaucrash

Click for audio of "40 Years Fighting for Freedom"

Here's a 5 minute condensed version of Reason's interview with Jason L. Riley of the Wall Street Journal on his new book, Let Them In: the case for open borders.  I highly recommend the full-length interview as well.