Free Republic

WASHINGTON - Almost everyone agrees that America's income tax is too complex. Considering this, you might expect that simplifying the income tax would be a slam dunk. Sure enough, the various presidential candidates have proposed sweeping overhauls. But any agreement is mostly rhetorical. The odds that the next president, whoever it be, will engineer genuine tax simplification are negligible. On this Tax Day, it's worth pondering why. Make no mistake: I think we'd be better off with a simpler system. By this, I mean a system with a broader tax base and lower rates. I'd eliminate most tax preferences and...

Is there such a thing as "global warming pragmatism?" Robert J. Samuelson, who writes on economics for the Washington Post, thinks so -- and he's just flat wrong. Samuelson seeks to bridge differences over a polarized and contentious issue: "man-made" global warming. Problem is, Samuelson's bridge is plenty of girders, cables, concrete, and asphalt short of making it to the other shore. Samuelson is much taken with the work of an MIT economist, Robert Pindyck. Pindyck, according to Samuelson is a difference-splitter. Can't say that global warming is overstated, but can't say it's understated. When in doubt, tax -- carbon...

If leadership is the capacity to take people where they need to go -- whether or not they realize it or want it -- then we've had almost no leadership in these weeks of frustrating and maddening debate over the budget and debt ceiling. There's been an unspoken consensus among President Obama, congressional Democrats and Republicans not to discuss the central issue underlying the standoff. We've heard lots about "compromise" or its absence. We've had dueling budgets with differing mixes of spending cuts and tax increases. But we've heard almost nothing of the main problem that makes the budget so...

What we are witnessing in Wisconsin and elsewhere is the death knell of Big Labor. Once upon a time, most Americans could identify the head of the AFL-CIO. He was George Meany, the cigar-chomping ex-plumber who ran the union federation from 1955 to 1979. He was one of the nation's great power brokers, much quoted and wooed by presidents. It's doubtful that as many Americans can name Meany's present successor. (Answer: Richard Trumka, ex-head of the mine workers' union.) The American labor movement has been in eclipse for decades, but public- sector unions were one of its few remaining bastions....

Somehow, it has become fashionable to think that high-speed trains connecting major cities will help “save the planet.” They won’t. They’re a perfect example of wasteful spending masquerading as a respectable social cause. They would further burden already-overburdened governments and drain dollars from worthier programs—schools, defense, research. Let’s suppose that the Obama administration gets its wish to build high-speed rail systems in 13 urban corridors. The administration has already committed $10.5 billion, and that’s just a token down payment. California wants about $19 billion for an 800-mile track from Anaheim to San Francisco. Constructing all 13 corridors could easily approach...

... Since the 1960s, waves of "reform" haven't produced meaningful achievement gains. The most reliable tests are given by the National Assessment of Educational Progress (NAEP). The reading and math tests, graded on a 0-500 scale, measure 9-year-olds, 13-year-olds and 17-year-olds. In 1971, the initial year for the reading test, the average score for 17-year-olds was 285; in 2008, the average score was 286. The math test started in 1973, when 17-year-olds averaged 304; in 2008, the average was 306. To be sure, some improvements have occurred in elementary schools. But what good are they if they're erased by high...

Abstract In this essay, I argue that neither non-economist bloggers, nor economists who portray economics —especially macroeconomic policy— as a simple enterprise with clear conclusions, are likely to contibute any insight to discussion of economics and, as a result, should be ignored by an open-minded lay public. The following is a letter to open-minded consumers of the economics blogosphere. In the wake of the recent financial crisis, bloggers seem unable to resist commentating routinely about economic events. It may always have been thus, but in recent times, the manifold dimensions of the financial crisis and associated recession have given fillip...

I'm surprised to see Greg Mankiw endorsing Robert Samuelson's column about measuring poverty (or at least pointing to it without comment as though he endorses it). Apparently Samuelson is worried that the new measurements might cause us to give more help to the poor. I guess in his view, the poor are getting all the help they need, but that's not how I see it.Dean Baker responds to Samuelson: Robert Samuelson's Cellphone Standard of Living, by Dean Baker: Robert Samuelson invokes the cellphone standard of living in his column today which complains about the Obama administration's adoption of a...

You might think that Europe's economic turmoil would inject a note of urgency into America's budget debate. After all, high government deficits and debt are the roots of Europe's problems, and these same problems afflict the United States. But no. Most Americans, starting with the nation's political leaders, dismiss what's happening in Europe as a continental drama with little relevance to them. What Americans resolutely avoid is a realistic debate about the desirable role of government. How big should it be? Should it favor the old or the young? Will social spending crowd out defense spending? Will larger government dampen...

When historians recount the momentous events of recent weeks, they will note a curious coincidence. On March 15, Moody's Investors Service -- the bond rating agency -- published a paper warning that the exploding U.S. government debt could cause a downgrade of Treasury bonds. Just six days later, the House of Representatives passed President Obama's health-care legislation costing $900 billion or so over a decade and worsening an already-bleak budget outlook. Should the United States someday suffer a budget crisis, it will be hard not to conclude that Obama and his allies sowed the seeds, because they ignored conspicuous warnings....

The question that President Obama ought to be asking — that we all should be asking — is this: How big a government do we want? Without anyone much noticing, our national government is on the verge of a permanent expansion that would endure long after the present economic crisis has (presumably) passed and that would exceed anything ever experienced in peacetime. This expansion may not be good for us, but we are not contemplating the adverse consequences or how we might minimize them. We face an unprecedented collision between Americans' desire for more government services and their almost equal...

Raised in an individualistic culture, Americans dislike the concept of the "welfare state" and do not use the term. But make no mistake, the United States has a welfare state, and its future is precarious. The true significance of General Motors' bankruptcy lies more with this welfare state than with the battered condition of American capitalism. Broadly speaking, the U.S. welfare system divides into two parts -- the private, run by firms; and the public, provided by government. Both are besieged: private companies by competitive pressures; government by rising debt and taxes. GM exemplified the large corporation as private welfare...

When the trustees of Social Security and Medicare recently reported on the economic outlook for these programs, the news coverage was universally glum. The recession had made everything worse. Social Security, Medicare face insolvency sooner, headlined The Wall Street Journal. Actually, these reports were good news. Better would have been Social Security, Medicare risk bankruptcy in 2010. It's increasingly obvious that Congress and the president (regardless of which party is in power) will deal with the political stink bomb of an aging society only if forced. And the most plausible means of compulsion would be for Social Security and Medicare...

WASHINGTON -- Just how much government debt does a president have to endorse before he's labeled "irresponsible"? Well, apparently much more than the massive amounts envisioned by President Obama. The final version of his 2010 budget, released last week, is a case study in political expediency and economic gambling. Let's see. From 2010 to 2019, Obama projects annual deficits totaling $7.1 trillion; that's atop the $1.8 trillion deficit for 2009. By 2019, the ratio of publicly held federal debt to gross domestic product (GDP, or the economy) would reach 70 percent, up from 41 percent in 2008. That would be...

Listen to President Obama, and the status quo seems a cesspool. Pervasive "loopholes" engineered by "well-connected lobbyists" allow U.S. multinationals to skirt American taxes and outsource jobs to low-tax countries. Myth: Aided by those overpaid lobbyists, American multinationals are taxed lightly -- less so than their foreign counterparts. Reality: Just the opposite. Most countries don't tax the foreign profits of their multinational firms at all. Myth: When U.S. multinationals invest abroad, they destroy American jobs. Reality: Not so. Myth: Plugging overseas corporate tax loopholes will dramatically improve the budget outlook as multinationals pay their "fair" share. Reality: Dream on.

President Obama has made no secret of his vision for America's 21st-century economy. We will lead the world in "green" technologies to stop global warming. Advancing medical breakthroughs will improve our well-being, control health spending and enable us to expand insurance coverage. These investments in energy and health care, as well as education, will revive the economy and create millions of... --snip-- What defines the "post-material economy" is a growing willingness to sacrifice money income for psychic income -- "feeling good." Some people may gladly pay higher energy prices if they think they're "saving the planet" from global warming. Some...

Few things are more appealing in politics than something for nothing. As Congress begins considering anti-global-warming legislation, environmentalists hold out precisely that tantalizing prospect: We can conquer global warming at virtually no cost. Here's a typical claim, from the Environmental Defense Fund (EDF): For about a dime a day [per person], we can solve climate change, invest in a clean energy future, and save billions in imported oil." This sounds too good to be true, because it is. About four-fifths of the world's and America's energy comes from fossil fuels -- oil, coal, natural gas -- which are also the...

Inflation-racked countries scorn all the self-abnegating rituals that make capitalism work. They want their guns and their butter and they want them now. So they print money to pay for them. By contrast, low-inflation countries are committed to an ethos of scrimping and toiling that yields long-term rewards. In “The Great Inflation and Its Aftermath,” Samuel­son studies the transformation of the United States from the first kind of country to the second. The villain in Samuelson’s morality tale is a group of intellectuals who came into fashion during World War II, then came into power with the Kennedy administration. John...

Robert J. Samuelson, an economics columnist for Newsweek and The Washington Post, says historians have not understood the significance of the “Great Inflation” that raged through the economy in the late 1970s and early ’80s. It was, he argues in “The Great Inflation and Its Aftermath,” one of those watershed moments in American history, not at the level of the Civil War or the Great Depression, to be sure, but perhaps the major turning point of the postwar era. In 1976 the Consumer Price Index rose by 4.9 percent; over the next few years it climbed steadily until it reached...

We in the news business often enlist in moral crusades. Global warming is among the latest. Unfortunately, self-righteous indignation can undermine good journalism. Last week's NEWSWEEK cover story on global warming is a sobering reminder. It's an object lesson of how viewing the world as "good guys vs. bad guys" can lead to a vast oversimplification of a messy story. Global warming has clearly occurred; the hard question is what to do about it. If you missed NEWSWEEK's story, here's the gist. A "well-coordinated, well-funded campaign by contrarian scientists, free-market think tanks and industry has created a paralyzing fog of...