Spending

The death of Baseline Budgeting?

I didn’t put it in my “14 Fixes for our Messed up Country” list, since I thought it was long enough, but one of the things I really think needs to be reformed is the utterly insane institution of “baseline budgeting,” aka “Washington accounting,” aka “DC moonbattery.”

Apparently, though, according to CNS News (no, that’s not a typo) baseline budgeting might be on the ropes:

The House approved a potentially sweeping budget reform Friday that would force federal agencies to justify an annual increase, as opposed to getting an automatic increase under current budget law.

“What we are about to do could be the most responsible financial thing this Congress has done, this House has done in the whole last year,” Rep. Louie Gohmert (R-Texas) said before the vote. “It could be $1.4 trillion in cuts over the next 10 years and all we’re doing is just stopping the automatic increase.”

The Baseline Reform Act of 2012 passed the House by a near party-line vote of 235-177. However, the bill will likely have a difficult time passing the Democrat-controlled Senate.

Under current federal budget law, the amount of money a federal agency will automatically get for the next year is based on the current year’s amount, plus inflation, which is the “baseline” for the next budget year.

Read that last paragraph again, and then ask yourself: where, outside of the federal government, does that sort of accounting work? Do you ever give yourself a budget equal to last year plus inflation automatically? I don’t even think Warren Buffet, as wealthy as he is, does that, nor Mitt Romney. Probably not even Trump, but who really knows what the Donald does.

Ronald Paul Assails GOP Establishment

It’s not often that the media give Ronald Paul (R-Texas) a chance to speak.

There were reasons, why I didn’t watch the second GOP debate on Sunday.

Ronald Paul cleared the field on Saturday, he was the last man standing! After some initial tampering with his microphone, and pitch, he opened his arguments by restating his offensive tactic on “big-government Republican”, Rick Santorum. The only two real Tea Party contenders: Ronald Paul and Rick Perry, were left to languish on stage for the better part of 15 minutes, until allowed to join the discussion.

Mitt Romney was busy arguing how many jobs were, lost and gained under his CEO leisure. Newt Gingrich quoted the New York Times. Paul smoothly stepped back, blocked Santorum’s smugness by raining down: “he voted to raise the debt [ceiling] five times.”

Rick Santorum let loose liberal counter-attacks, naming sources “leftist”, and calling Mitt Romney class-consciously dangerous. In so doing, Santorum looked less Republican, more like a blue-state lawyer from the Northeast. Neither Paul nor Romney delved deep into his attacks, mostly picking up on their own strengths. Santorum was a negative force, not a positivist in this debate, Saturday night January 7th.

When Ronald Paul raised his hand for a response, the slick Stephonopilis retorted back to Paul (his senior by quite a few years): “we’ll stay with the subject, don’t you worry.” Brilliance in public debate rarely comes to the fore, especially on television. Paul showed it by counterstriking first Santorum, then defecting the attack from Rick Perry, onto Santorum and Newt Gingrich.

Jon Huntsman decided not to attack. Mitt Romney largely left the debate unscathed. Only because Ronald Paul made no concerted effort to attack the former Massachusetts blue-state Governor. It was easy for Paul to slice-down the cryptic schizophrenity of Gingrich, whose attempted slur of Ronald Paul on “style”, many see as hearnestness.

14 Fixes For Our Messed Up Country

Everyone seems to be proposing fixes for our country lately, whether it’s amendments to repeal the First Amendment or ban gays or whatever. I have a few ideas of my own that I think will go a long ways towards restoring some sanity in government and fixing what’s wrong with our society. Some of these will require constitutional amendments, and I don’t expect the entire list to actually get enacted unless magic somehow returns to the world and we resurrect Barry Goldwater, F.A. Hayek, and George Washington all at once.

I originally drafted a list of some 23 ideas, but I figured that it would be way too long for a blog post, so I shortened it to 14, a baker’s dozen. None of these are simple or light fixes, they are not tweaking around the edges to ensure a marginally better outcome. Judging from the situation our government and economy is in, from the horrific hard place our civil liberties are wedged behind, and the unmanageable mess that is Washington, I don’t think that “moderate” or “conservative” changes will do anything. We cannot pussyfoot around the issue; we need radical alterations to how our government works if we’re going to get us out of this morass. Again, most of these may never pass, but that’s to be expected.

Certainly, if you wish to hear my entire list, let me know and I’ll write it up, but for now, here are my 14 ideas for fixing our country:

1. Establish Approval Voting

I’ve already talked about this idea at length here, so I will not bore you again. In this post, all I will say is that I believe if we are to get anything done—and I do mean anything—we need to systematically reform how people actually get into office. That’s the foundation upon which any democracy stands, and when you’re up to your eyeballs in tar, the only way to get that fixed is to drain the swamp and start at the beginning.

Lies, Damned Lies, and Unemployment Statistics

Before Democrats, the Obama Administration, liberals, and progressives start crowing about the updated unemployment figures—which the Bureau of Labor Statistics say is now down to 8.6%—there’s something you should know about the why it is down—and it’s not pretty.

The BLS divides up the unemployment numbers into six figures, U-1 through U-6. U-3 is the “official” number, the one that’s always toted on the primetime news channels. U-6, however, is the real unemployment figure, which counts marginally attached workers (those that have stopped looking for work for the time being) and underemployed workers (those working part time but want full time work), among others. And the worst part is?

Even that is rosy compared to the “real truth.”

The truth comes in near the middle of the Bureau’s press release:

In November, the number of job losers and persons who completed temporary jobs declined by 432,000 to 7.6 million. The number of long-term unemployed (those jobless for 27 weeks and over) was little changed at 5.7 million and accounted for 43.0 percent of the unemployed. (See tables A-11 and A-12.)

The civilian labor force participation rate declined by 0.2 percentage point to 64.0 percent. The employment-population ratio, at 58.5 percent, changed little.(See table A-1.)

Emphasis mine.

Rick Perry’s New Groove (Maybe)

Rick Perry, looking to get back on top of the GOP primary, has unveiled a new reform plan that will “uproot, tear down and rebuild Washington, D.C. and our federal institutions,” as he puts it:

Blasting the congressional “creatures of Washington” for being overpaid and detached from the struggles of the people outside the Beltway, Texas Gov. and GOP presidential hopeful Rick Perry vowed Tuesday to eliminate federal agencies, set term limits for federal judges and push for a part-time Congress where both members’ pay and office budgets are sliced in half.

The three-term governor, speaking on a campaign swing in Bettendorf, Iowa, said he would lead by example by cutting his salary as president until the federal budget is balanced, and said that lawmakers who use information to profit from stock trades should go to jail — in what appeared to be a clear reference to recent news reports alleging insider trading involving House Minority Leader Nancy Pelosi.

“I do not believe Washington needs a new coat of paint, it needs a complete overhaul,” Mr. Perry said, according to prepared remarks. “We need to uproot, tear down and rebuild Washington, D.C. and our federal institutions.”

I’m reading his actual plan right here, and I have to say, there are some good ideas here, and one very bad one.

Crony Capitalism Is Phony Capitalism

That little gem is from a new page on Facebook, called “Crony Capitalism is Phony Capitalism.” Now, you may be wondering why I posted this. I mean yes, it’s kinda cute (c’mon, this is the postmodern 21st century, zombies and Cthulhu are automatically cute), short, pithy, and expresses a libertarian message, even if it generalizes it. A lot. But a 30-second video from a Facebook page? Really?

The reason I did so is because I feel this is the Number #1 message we need to be getting out there (well, that and how feeling up women at airports is just wrong.) Back in college, when I argued about government intervention in the marketplace, “corporatism” and “crony capitalism” were just not mentioned. It was an important discovery for me when I found these terms, because previously I had been just trying to defend capitalism, no adjectives. It was difficult, because everyone associated large businesses ripping them off with the capitalist system, and they just could not understand how government so heavily involved itself in the market, but that system was not what we libertarians were espousing. Oh, how useful these new terms were! How sharp were their blades in cutting away the web of lies! How deep were their inkwells in writing the new papers blogs on liberty and the free market!

R.I.P. William Niskanen (1933-2011)

It is with heavy hearts that United Liberty mourns the passing of political economist William Niskanen, former Chairman Emeritus of the Cato Institute in Washington, DC, and former acting chairman of President Ronald Reagan’s Council of Economic Advisors. He suffered a massive stroke at his home on Tuesday evening, October 25, 2011 while still recovering from heart surgery in September, and passed away yesterday in a Washington hospital.

“He was a giant of Public Choice,” said American University professor Laura Langbein, a long-time friend of Niskanen’s, in an email. “Bill spent a lot of his life pointing out, in an article published in the Journal of Law and Economics in 1975 and in later books, that, contrary to what he first wrote in [Bureaucracy and Representative Government (1971)], bureaus DON’T maximize budgets.  Rather, bureaucrats (individual government employees) maximize a mix of output and slack. This is a far more generalizable model. Bill had a great mind, and he was a nice guy. He also had a fine sense of humor.”

Many other economists also lauded Niskanen’s commitment to scholarship, as noted by Cato:

Niskanen was granted a Professional Achievement Award by the University of Chicago Alumni Association in 2005, sharing the stage with fellow recipient David Broder, the late longtime Washington Post columnist, and philosopher Richard Rorty. The announcement of the award described Niskanen as “the embodiment of what the University of Chicago stands for in terms of scholarship, professionalism, integrity, and dedication.”

“Let’s Flatten This Joint”

One suspects that the above title might be the new slogan for the Republican Party, with the joint being the Internal Revenue Service’s buildings. Why? Because now Gov. Perry has unveiled a flat tax plan:

 

The code that Perry is proposing would feature a 20% personal income and corporate tax, the elimination of Social Security and capital gains taxes, and the preservation of popular deductions for mortgage interest and charitable giving. Under the “cut, balance, and grow” plan, tax loopholes for corporations would be phased out while the standard exemption for those earning $500,000 or less would be increased to $12,500.

His economic team believes that those changes, combined with deep spending cuts and entitlement reforms including a gradual increase in the retirement age, will encourage so much growth and save families and corporations so much in compliance costs that the budget could be balanced by 2020.

One thing I am glad Perry’s team admits is that the tax, by itself, will not fix our problems. They say “combined with deep spending cuts and entitlement reforms”. That is what we need to fix our problems; however, if we need to have a discussion about tax policy first to get there, then so be it.

Top of the POPS?

Everyone else has already said my thoughts on this OWS silliness. There is only one small part of it I want to comment on, brought to my attention by George Scoville:

With much of the nation’s attention on Occupy Wall Street and the protests that have sprung up around the country, one group taking notice is landlords responsible for the spaces where the protests happen, The New York Observer reports.

Some would like police assistance in moving the protestors out, as the Wall Street Journal noted, while others want to use the event to change the rules so that owners are given more leeway.

Privately owned public spaces, or POPS, are part of New York’s incentive zoning program, under which buildings are granted additional floor area or related waivers in exchange for providing these spaces. Zucotti Park in Manhattan is one such location.

Brookfield Properties, which owns Zucotti Park, pointed out that the plaza there hasn’t been power washed since the day before the protests began, nearly four weeks ago, the Observer reported.

The Real Estate Board of New York’s president, Stephen Spinola, told The Observer that his trade association may consider asking the Department of City Planning for new rules on the city’s POPS, perhaps allowing the private owners to close the spaces at a set time, which, he claims, would add to security and allow maintenance.

Not washed? Ewww.

Guess who else thinks Social Security is a Ponzi scheme?

The bruhaha over Rick Perry’s comments that Social Security is a Ponzi scheme have taken a backseat to the remembrance of 9/11 and the Redskins’ first win in about 90 years, but let’s fan the flames a bit. Thanks to the erudite Don Boudreaux over at Cafe Hayek, it has come to my attention that a highly visible economist at one of the nation’s largest papers agrees with Gov. Perry’s assertion:

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

And yes, you’ve probably guessed it: it’s Paul Krugman. And yes, you’ve probably guessed it, but the above emphasis is mine.

The essay was written in the December 1996/January 1997 edition of the Boston Review, as a response to Richard Freeman’s suggestions on fixing inequality. I profess to not having read Freeman’s work entirely, though mostly it was more of the same “we need to take the wealth from the top 20% and give it to the bottom 20%” nonsense.


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