DOES FEDERAL SPENDING WORK?
Using standard statistical analyses that introduce variables to control for business-cycle fluctuations, wars and inflation, we found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in—and a little bit more. We also looked at different time periods (e.g., 1947-2009 vs. 1959-2009), different financial data (fiscal year federal budget data, as well as calendar year National Income and Product Account data from the Bureau of Economic Analysis), different lag structures (e.g., relating taxes one year to spending change the following year to allow for the time it takes bureaucracies to spend money), different control variables, etc. The alternative models produce different estimates of the tax-spend relationship—between $1.05 and $1.81. But no matter how we configured the data and no matter what variables we examined, higher tax collections never resulted in less spending. - Steven Moore
WHY LIBERALS ARE SAD PEOPLE
Utopians will always be less happy than those who know that suffering is inherent to human existence. The utopian compares America to utopia and finds it terribly wanting. The conservative compares America to every other civilization that has ever existed and walks around wondering how he got so lucky as to be born or naturalized an American. - Dennis Prager
THE AIRPORT SECURITY ANSWER
What do the Israeli airport-security people do that American airport-security people do not do? They profile. They question some individuals for more than half an hour, open up all their luggage, and spread the contents on the counter — and they let others go through with scarcely a word. And it works…Will America be undermined from within by an administration obsessed with political correctness and intoxicated with the adolescent thrill of exercising its new-found powers? Stay tuned. - Thomas Sowell
RACISM AND SEXISM HYPOCRISY
The highlight of the news video is, of course, the portion featuring a black female student who tells us that we still need diversity centers because of the persistence of racism and sexism. But she made the statement while wearing big black sorority letters emblazoned on her blouse. In other words, while lecturing us on the persistence of racism and sexism she was touting her membership in an organization that limits its membership to blacks and women. The hypocrisy of asking the public to fund “solutions” to the “problems” she is exacerbating is simply staggering. - Mike Adams
THE KEYNESIAN LIE
policymakers are committing what economist Friedrich Hayek called the “fatal conceit” in micromanaging the economic cycle. Hayek hated policy intervention of any kind…Hayek was associated with the Austrian school, which argued that the private sector should be left free to carry out the task of any readjustment in a downturn. Faith in the market’s purging power served the U.S. well in the 19th century, when the economy emerged stronger after each recession, but was taken too far in the policy mix of tight money and high taxes that led to the Great Depression and the rise of the Keynesians. Keynes would probably never have supported big government deficits during boom times, such as those that led to our current debt crisis. Likewise, Friedman would probably not have backed the new Fed use of monetary policy as a tool to engineer expansion rather than merely cushion the pain in a downturn. The systematic perversion of Keynes’s and Friedman’s thought is now resulting in a fall in their fortunes, leaving Hayek triumphant, once again. -Ruchir Sharma
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