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Recent Policy Studies
Natural Resources, Energy, Environment, & ScienceBy Eric Heidenreich, Capital Research CenterOrganization Trends, 01/14/2009
The Stockholm Environment Institute is on the front lines in the latest stage of the climate wars. Just as the Greenpeace vandals argued that they were acting to save private property in Britain, groups like SEI claim we must bankrupt the economy to save it—and the planet. With its ties to foreign governments and NGOs, its government and foundation grants, and its contracts to produce global warming plans for states, cities, and county water boards and irrigation agencies, SEI is well-placed to influence environmental and economic policymakers.
Information TechnologyBy Sean Higgins, Capital Research CenterFoundation Watch, 01/14/2009
From 1949 through 1987, broadcasters were subject to a federal rule called the Fairness Doctrine. The rule obliged broadcasters to offer rebuttal time to just about anyone who took issue with a political position or other controversial viewpoint broadcast on the station. In theory, the Doctrine furthered the cause of free speech by giving everyone a chance to have access to the airwaves. No viewpoint would be stifled and debate would flourish, at least in theory. In practice, the opposite happened. Airing anything remotely controversial meant that stations could find themselves bullied into giving airtime to people no matter how daft their opinions or obnoxious their agendas might be.
Retirement/Social SecurityBy Stephen F. Cardone, James D. Agresti, Just Facts FoundationIssues, 01/14/2009
This page contains comprehensive and scholarly details about the topic of Social Security.
Health CareBy Robert B. Helms, American Enterprise InstituteOn the Issues, 01/14/2009
What we all seem to want from health reform is a better system that will provide us with higher quality care and greater economic value. To achieve this kind of reform will require us to end the open-ended payment systems we now have and replace them with systems that reward quality and value. The longer we wait to start, the more difficult this kind of change will be.
Foreign Policy/International AffairsBy Dan Blumenthal, American Enterprise InstitutePapers and Studies, 01/14/2009
The new administration confronts an unusually long and daunting list of pressing foreign policy problems: ongoing conflicts in Afghanistan and Iraq, the continuing threat of global terrorism, a brewing crisis in Pakistan, unresolved nuclear standoffs with Iran and North Korea, Russia's new aggressiveness toward its neighbors, and the lingering aftereffects of a global financial meltdown. As important as they undoubtedly are, all of the issues listed above are being played out against the backdrop of something even bigger: a massive, rapid shift in the distribution of global wealth and power toward Asia. The purpose of this report is to put forward an American strategy for Asia. The emphasis of this report will be on the concrete and practical. We intend not only to identify goals, but also to specify the steps that a new president should take over the next four to eight years to bring them closer to realization.
Monetary Policy/Financial RegulationBy Congressional Oversight Panel, Congressional Oversight PanelReport, 01/14/2009
Treasury should provide an analysis of the origins of the credit crisis and the factors that exacerbated it. Only then will Congress be able to determine the appropriate legislative responses. Treasury should set forth the metrics by which success of the TARP in meeting the Congressional goals will be judged. The Panel believes that, to date, Treasury’s actions to minimize avoidable foreclosures have not met Congress’ expectations. An upcoming Panel report will make recommendations on the best ways to stem such foreclosures. Treasury should explain its basis for determining that all healthy banks are eligible to receive TARP funds, irrespective of whether they are in the lending business or are otherwise systemically significant.
The Constitution/Civil LibertiesBy Gary J. Schmitt, American Enterprise InstituteNational Security Outlook, 01/14/2009
Since the 1970s there has been a good deal of confusion about the appropriate division of powers under the Constitution when it comes to foreign and defense affairs. The Bush White House has been right in principle to push back against the idea that Congress is either its equal in this policy area or that it has the power to define exactly how a president may exercise his authorities. But could it have been more adroit in how it went about making that case? Almost certainly. The cost has been new laws and new Supreme Court decisions that, instead of upholding precedents and authorities friendly to the exercise of presidential power, have begun to curtail them.
Retirement/Social SecurityBy Andrew G. Biggs, American Enterprise InstituteRetirement Policy Outlook, 01/14/2009
The significant variation in replacement rates, even among households with similar earnings, undermines Social Security's effectiveness as social insurance against low lifetime earnings. Low-earning households cannot rely on receiving a relatively generous Social Security benefit, while a significant number of high earning households will receive generous benefits that they neither need nor expect. Adjusted for uncertainty regarding retirement benefits, Social Security's progressivity may be significantly lower than a cursory view of the benefit formula might imply. While incremental reforms within the existing Social Security benefit formula could improve the targeting of its progressivity, a relatively simple combination of a flat dollar benefit paid to all retirees plus a personal account paying benefits proportionate to earnings could replicate the average progressivity in Social Security while improving the targeting of redistribution, thus improving the social insurance value of the Social Security program.
Health CareBy Byron Schlomach, Goldwater InstitutePolicy Report, 01/14/2009
Health care prices keep rising. Consumers face complicated choices, ranging from which insurance plan to buy to which specialist is most likely to help. Health consumers are only now able to choose a convenient clinic in a large department store. A lot of information about health care is available, but the most important from an economic perspective— price—is almost nonexistent. Despite its high spending per capita, the United States has fewer physicians, on average, than other OECD nations have. But health care innovation is still high in the United States, and we should fight to keep this strength of our “system.”
The Constitution/Civil LibertiesBy Independent Women’s Forum, Independent Women's ForumReport, 01/12/2009
Now more than ever, programs focusing on tolerance and understanding will be critical to the success of freedom of speech, freedom of religion, and the separation of religion and state. Women traditionally play the facilitator and mediator in family disputes, and this role can be expanded to the tribal, ethnic, religious, local, provincial, and political arenas. Programs that train Iraqi women in tolerance and understanding, mediation, and conflict resolution should be harnessed to counteract the ethnic and religious divisions increasingly and successfully agitated and inflamed by al-Qaeda and sectarian divisions.These efforts will help stabilize Iraqi society as it struggles to establish a secure and democratic Iraq.
Information TechnologyBy Andrea Siwek , Progress & Freedom FoundationProgress on Point, 01/12/2009
Copyright industries are experimenting with production and distribution innovations with the intent of staying connected with consumers. The various distributors are giving consumers a wide variety of platforms to enjoy traditional media as well as new media based on the consumers preference. The digitization of copyright products is meant to increase convenience for consumers by giving them more control over how, when and where they enjoy these works. The bundling of these products is also verifying that copyright industries are striving to please consumers.
Economic GrowthBy Stephen J. Entin, Institute for Research on the Economics of TaxationCongressional Advisory, 01/12/2009
The government should focus on removing tax and regulatory barriers to economic output, and on cutting spending to reduce the tax burden on the private sector. It should not try to resolve the current crisis by expanding its share of the economy and its control over production and resources.
Budget & TaxationBy J. Scott Moody, Wendy P. Warcholik, Yankee Institute for Public PolicyReport, 01/12/2009
Connecticut state government needs spending reform to reign in the individual income tax (hereafter “income tax”) that has grown by monstrous proportions. The current spending cap has proven ineffectual for such a task and should be replaced with a “Taxpayer Bill of Rights” which will set real speed limits on state spending. This analysis estimates that within a little more than two decades—under a Taxpayer Bill of Rights—the income tax would be eliminated entirely. This elimination would be achieved by systematically decreasing the top marginal tax rate, currently 5 percent, based on the yearly budget surplus. The lower top marginal tax rate maximizes the economic benefits of lower taxes thus leading to a higher quality of life for all residents. However, time is short as Connecticut’s debt bomb comes closer and closer to its day of reckoning. Only by expanding the economy, via eliminating the income tax, will the state be able to bear this debt burden without resorting to more draconian measures.
Budget & TaxationBy Paul Guppy, Jason Mercier, Washington Policy CenterPolicy Note, 01/12/2009
When lawmakers come to Olympia in January they will be tasked with solving a projected $5 billion budget deficit. Thankfully there are several common sense reforms that policymakers can adopt to change the budget status quo and help put the state on the path toward sustainable budgeting. Adopting these reforms will help promote efficiency, improve the quality of services to the public and resolve the constant sense of crisis that pervades the state’s public finances.
Regulation & DeregulationBy Eli Lehrer, Washington Policy CenterPolicy Brief, 01/12/2009
Without insurance modern life would not be possible. People buy personal property and casualty insurance policies to protect themselves and to take risks they otherwise would not take. Government regulates insurance at the state level and does so through rate, form and solvency regulation. Some degree of government regulation is necessary for the proper functioning of insurance, but too much regulation stifles creativity, increases cost and impedes risk transfer. The most effective role for public officials is to adopt policies that protect consumers against fraud, encourage competition and allow insurers to remain solvent, while leaving pricing, product design and the accurate assessment of risk to the marketplace.
The Washington Policy Center Education Reform Plan: Eight Practical Ways to Reverse the Decline of Public SchoolsBy Liv Finne, Washington Policy CenterPolicy Brief, 01/12/2009
Allowing parents to choose among public schools is the only effective way to provide principals with the parental involvement they need to create “no excuses” schools; schools where the education of children is placed above every other consideration. A principal who finds parents are not choosing his public school knows he is doing something wrong and must change. When the principal sees parents are again choosing his school, he will know he is on the right track. Only principals are close enough to students and teachers to insure that effective learning is actually taking place. Olympia cannot educate each child from afar through ever-increasing programs, initiatives and regulations. Only principals know the needs of their students and can tailor instructional programs to meet their needs. Lawmakers should give qualified principals the authority they need to manage and improve local schools. Putting principals in charge is the key to providing the one element the research shows is essential to student learning: placing an effective teacher in every classroom.
Regulation & DeregulationBy Brandon Houskeeper, Washington Policy CenterPolicy Note, 01/12/2009
There is no argument that trace elements of pharmaceuticals are showing up in the environment. Unfortunately there is no consensus or data that helps to pinpoint the source. Despite the lack of data that clearly identifies improper disposal of unused or unwanted drugs as the contaminant to our waterways, policymakers have been quick to act by proposing take-back programs that may or may not have any effect at resolving a perceived problem.
Budget & TaxationBy Arthur B. Laffer, Texas Public Policy FoundationThinking Economically, 01/11/2009
For good or ill, many people reduce the entire pro-growth worldview of supply-side economics down to the “Laffer Curve,” which graphically depicts the tradeoff between tax rates versus the total tax revenues actually collected by the government.
Budget & TaxationBy Talmadge Heflin, James Quintero, Texas Public Policy FoundationReport, 01/11/2009
Texas is a national leader in job creation, gross state product, low unemployment rate and foreign direct investment. Will the 81st Legislature preserve these successes by writing a responsible budget that promotes economic growth?
Natural Resources, Energy, Environment, & ScienceBy Drew Thornley, Kathleen Hartnett White, Texas Public Policy FoundationPolicy Brief, 01/11/2009
New observational evidence from NASA Satellite Research Project contradicts reigning global warming science. Empirical data indicate a minimal role of manmade CO2 emissions in climate dynamics.
EducationBy Rick O’Donnell, Texas Public Policy FoundationPolicy Perspective, 01/11/2009
Traditional liberal arts programs are disappearing from higher education in America. The curriculum of most large American universities is a mish-mash of courses that reflect the research interests of the faculty, rather than a program designed to teach students to read, write, or think critically.
EducationBy Rick O’Donnell, Texas Public Policy FoundationPolicy Perspective, 01/11/2009
The key to preparing the next generation of Texans for more productive and meaningful lives is not to pour billions of additional dollars into higher education research, but to return our colleges and universities to their original mission—teaching students.
Economic and Political ThoughtBy Arthur B. Laffer, Texas Public Policy FoundationThinking Economically, 01/11/2009
The theoretical case for market failure can be tied to the benchmark ideal of “perfect competition.” As we’ve seen, this standard is both unrealistic and a poor guide for public policy. The real-world market is far from perfect, but in a free market, free individuals constantly innovate in order to better serve their customers, i.e. all of us. Even when free markets are easily shown to be suboptimal, one cannot presume that a government solution is optimal. There’s oft en a slip twixt the cup and the lip, and, in practice, government frequently doesn’t perform up to the standards of theory.
Transportation/InfrastructureBy George Shifflett, Justin Owen, Beacon Center of TennesseePolicy Brief, 01/11/2009
To achieve actual reductions in red light running and related accidents, Tennessee cities should look to states such as Texas and Virginia, where red light cameras are being disassembled, and yellow light durations extended. A simple one-second increase in yellow light duration has proven to be a far safer alternative to red light cameras. If cities really wish to increase the safety of their citizens, they should utilize this simpler and more cost-effective option. Lawmakers must realize the importance of constitutional safeguards and critically reevaluate the supposed benefits of red light camera systems. If the General Assembly and municipal governments are serious about the safety of Tennesseans, they should work to guarantee safety, not reduce it. If our state’s legislative bodies continue to tread on citizens’ rights, then it becomes imperative that state and federal courts breathe life into the Constitution. A properly engaged judiciary is one that takes people’s rights seriously and bucks the trend of legislative deference. Government policy should never serve to the detriment of the citizenry just to make a quick buck.
Regulation & DeregulationBy David Stokes , Show-Me InstituteCase Study, 01/11/2009
The licensing of occupations in Missouri could be could be costing consumers more for some services. Although a nationwide survey by the Reason Foundation last year listed Missouri as the state with the fewest statewide occupational licensing requirements, many occupations are still subject to unnecessary restrictions on who may enter the profession. This drives up prices and can, in many cases, spur business owners to locate elsewhere. This case study focuses in particular on massage therapists. It compares the prices of massage therapy in Missouri, which licenses therapists statewide, and Kansas, which doesn’t. It looks at price comparisons in the metropolitan Kansas City market and compares Springfield to Wichita. The study documents how massage therapist licensing in Missouri leads to higher costs for consumers in Springfield, and leads to more businesses locating in on the Kansas side of the state line in Kansas City.
Transportation/InfrastructureBy Kenneth A. Small, Show-Me InstitutePolicy Study, 01/11/2009
The public sector’s use of private firms to provide highway infrastructure can expand the range of funding sources available for timely investments, because of the fiscal and political constraints on governments and the desire to avoid economic distortions resulting from high tax rates. There are sources of private funds whose desire for long-term stability and ability to diversify over project-specific risks make road investments a good idea for them as well. Furthermore, private firms can usually react more quickly to opportunities than can the public sector, and thus can expedite the process of coping with a backlog of needed infrastructure improvements.
Budget & TaxationBy Richard C. Dreyfuss, Show-Me InstitutePolicy Study, 01/11/2009
Missouri policymakers have adopted a number of logical plan-design provisions that should be the basis for continuing to manage employee benefit liabilities at current, affordable and predictable levels in both the short and the longterm. Missouri should be acknowledged in its attempt to achieve comprehensive reform within its statewide pension system involving approximately 120 defined benefit pension plans. However, special emphasis must be given to more precisely quantifying the long-term required contributions to pension plans and, in particular, retiree medical plans. Given the recent significant market declines, and acknowledging that markets are known to work in cycles, one cannot assume that future superior investment performance will be achieved and will be sufficient to mitigate financial pressures on the public pension system. This is a significant risk to plan members and taxpayers. Moreover, the only viable option in effectively managing retiree medical liabilities is through plan design, as financial engineering or just considering it “an accounting nuance” will lead to a significant liability transfer onto the next generation of employees and taxpayers.
EducationBy Jim Stergios, Jamie Gass, Pioneer Institute for Public Policy ResearchPolicy Brief, 01/11/2009
The purpose of Pioneer’s policy brief is to spell out the successful standards-based reforms that have made Massachusetts the highest performing K-12 state in the country, and to suggest how the BESE and the 21st Century Skills Task Force can strengthen the state’s nationally recognized curriculum frameworks, student assessments, educator licensure regulations, and teacher subject area tests. Clearly, the maintenance of Massachusetts’ and the United States’ economic leadership in the 21st century and readying the next generation of students to be informed participants in civic life will require stronger, not weaker, academic preparation.
Transportation/InfrastructureBy John B. Miller, Pioneer Institute for Public Policy ResearchWhite Paper, 01/11/2009
If our perspective were limited to the last few years, the infrastructure sector seems to be in an incredible state of flux. But, from the perspective of more than two centuries of experience, the U.S. infrastructure industry and the public procurement market it generates are simply going through another cycle. There have been many such cycles since 1789. Throughout these cycles, previous generations have contributed technologies and equipment as infrastructure networks have been entirely replaced and upgraded – the barge, the train, the car, the plane, the radio, the phone, the computer, and the Internet.
Transportation/InfrastructureBy John B. Miller, Pioneer Institute for Public Policy ResearchWhite Paper, 01/11/2009
As the Commonwealth considers the addition of public-private partnerships as a mechanism for quickening the pace and increasing the level of investment in infrastructure renewal, several lessons can be learned from the case studies.
Health CareBy Adam Frey, Pacific Research InstituteHealth Policy Prescriptions, 01/11/2009
While the Jindal-Levine plan contains flaws, overall it is a step in the right direction. The plan correctly acknowledges key concepts of health policy reform such as accountability, consumer choice, cost efficiency, marketplace competition, and transparency. Government run health care is inherently flawed, so any attempt to reform a system such as Medicaid is naturally going to be difficult. This is important to remember as the Obama administration, backed by a Democratic House and Senate, seeks to expand the role of government in our health care.
Economic GrowthBy Lawrence J. McQuillan, Robert P. Murphy, Pacific Research InstituteReport, 01/11/2009
Freedom lovers have long tried to win converts—and especially voters—by appealing to first principles of classical liberalism embraced by the Founding Fathers: above all, the inalienable right of an individual to chart the course of his own life. This approach has had limited success, because most Americans do not feel unfree. Instead of selling the freedom steak, perhaps a better approach would be to sell the freedom sizzle: all the secondary benefits that flow from greater economic freedom. Economic freedom is the right of individuals to pursue their interests through voluntary exchanges of private property under the rule of law. This freedom forms the foundation of market economies. The premise of this report is simple: Most Americans do not realize what the restrictions on their economic freedom are costing them. Americans would likely demand more economic freedom, and be willing to pay a higher price to achieve it, if they knew about the benefits that would flow to them in return.
Budget & TaxationBy Geoffrey Lawrence, Patrick R. Gibbons, Nevada Policy Research InstitutePolicy Study, 01/09/2009
Nevada state government is now experiencing the doldrums from long-misguided policy measures. These overly casual approaches to governance have left taxpayers unnecessarily exposed to the possibility of tax increases at a time when they are least able to afford them. It is time for state policymakers to abandon the idea of increasing taxes to continue funding these failed policy measures. Rather, they should undertake the more difficult task of implementing meaningful structural reforms that will safeguard Nevada’s taxpayers from crises similar to the current budget shortfall in the future. To do so, policymakers would need to enact sweeping reforms that transform how state government conducts its business. These reforms should force government to operate more in the way that private enterprise operates. Reforms should expose state government agencies and their workers to market forces and incentives.
Budget & TaxationBy George W. Liebmann, Gabriel J. Michael, Maryland Public Policy InstituteReport, 01/09/2009
Maryland’s state and local pension and retirement benefits plans are in for some hard times ahead. Facing budget shortfalls, governments are underfunding their retirement plans, while at the same time expanding the benefit promises to public employees. This unsustainable financing places both taxpayers and public employees at risk. Today, the Maryland State Retirement and Pension System suffers from an unfunded deficit of over $11 billion. The State’s unfunded liabilities for non-pension retirement benefits (such as retirees’ health care) are estimated to range anywhere from $8 billion to $15 billion. Many county and local government entities face similarly severe deficits. Those liabilities will constrain state and local budgets in the decades ahead.
Budget & TaxationBy J. Scott Moody, Wendy P. Warcholik, Maryland Public Policy InstituteMaryland Policy Report, 01/09/2009
Overall, policymakers should be most concerned with Maryland’s state compensation ratio, which was four times higher than the national average in 2006—11.1 percent versus 2.8 percent nationally. More specifically, Maryland’s high benefit ratio of 55.6 percent is of particular concern. This high benefit ratio is a significant contributing factor to Maryland’s unfunded retirement actuarial liability. In 2006, state pensions had a $7.6 billion liability while other post-employment benefits (primarily health care) have a $14.5 billion liability. The most taxpayer-friendly option for policymakers is to reduce the overly generous level of promised state government retiree health benefits. Doing so would not only save taxpayers money today, but would also save money in the future via lower unfunded actuarial liabilities.
EducationBy Stephen Bowen, Maine Heritage Policy CenterIssue Brief, 01/09/2009
While the nation’s colleges work hard to encourage civic “engagement” and “involvement” among their students, less of an effort is being made to provide students with the actual skills and knowledge needed for effective citizenship. As important as it may be for students to volunteer in their communities and be otherwise active in civic life, citizenship in the 21st century requires a deep understanding of the political, economic, and historical forces that shape our world. Instead of maintaining the status quo or empanelling more task forces, Maine’s lawmakers should ensure our college students acquire the civic skills and knowledge they need by demanding that our public colleges provide it.
EducationBy Tarren Bragdon, Stephen Bowen, Maine Heritage Policy CenterFiscal Sanity, 01/09/2009
Cost-per-degree varies widely from college to college and from campus to campus. Counterintuitively, the larger schools of the state’s university system had higher per-degree costs than the smaller campuses, suggesting that they have higher non-degree-related spending.
Budget & Taxation
Where the Money Is: The Top 40 Fastest-Growing General Fund Programs in Maine Government, FY 2000-FY 2009By Stephen Bowen, Maine Heritage Policy CenterFiscal Sanity, 01/09/2009
These Top 40 programs have such a high degree of responsibility for overall General Fund budget growth, that had they simply grown at the same 26 percent rate that was the average for all state programs in the 10-year History of Appropriations by Program report, spending for the 2008-2009 biennial would have been $753 million less than it is budgeted to be, which would largely solve the budget crisis now confronting policymakers in Augusta.
Natural Resources, Energy, Environment, & ScienceBy Eli Lehrer, John Locke FoundationPolicy Report, 01/09/2009
The North Carolina Beach Plan poses risks that are severe and could well result in significant fiscal problems for all—or almost all—North Carolina residents. In the long run, the state should move toward policies that stabilize the Beach Plan and then reduce its size significantly. In the long run, North Carolina should look to turn the Beach Plan into a true residual market that provides insurance only for people unable to find any private company to sell them insurance.
Elections, Transparency, & AccountabilityBy Daren Bakst, John Locke FoundationSpotlight, 01/09/2009
Real reform of the state’s regressive annexation law does not mean getting rid of annexation generally or even city-initiated annexation. However, it should mean getting rid of the practice of forced annexation that allows municipalities to unilaterally force individuals in unincorporated areas to live within the municipalities.
Budget & TaxationBy Daren Bakst, John Locke FoundationSpotlight, 01/09/2009
The recent election campaign featured constant talk about changing how business is done in Raleigh. In 2009, the new legislature can show that the campaign statements were more than mere rhetoric by changing the climate of government greed. North Carolinians elect legislators to represent their best interests, not to serve their own self-interests. The ten examples listed in this paper should be a source of embarrassment for past legislatures. There is no reason why the new legislature has to share in this embarrassment—government greed can and should be replaced by a commitment to unselfish service to constituents.
EducationBy Terry Stoops, John Locke FoundationSpotlight, 01/09/2009
For occupations that do not require a two- or four-year degree, policymakers often argue that the public and private sectors must devote considerable resources to community college courses, induction programs, and job-training initiatives. Their implicit argument is that these “investments” are required because primary and secondary schools fail to provide high school graduates with the knowledge and skills necessary to be successful in the workforce. This report focuses on improving K-12 schools. While a strong K-12 school system would not eliminate the need for additional education and training, it would substantially reduce public and private resources required to train North Carolina’s future workforce.
Information TechnologyBy Michael Sanera, Katie Bethune, John Locke FoundationRegional Brief, 01/09/2009
The City of Wilson’s $28 million investment in a fiber-optic cable system for Internet, phone and television could be obsolete even before it is paid for, leaving city taxpayers and electric utility users to pay the balance on the 25-year bonds.
Budget & TaxationBy Joseph Coletti, John Locke FoundationSpotlight, 01/09/2009
As with previous budget crises facing the state of North Carolina, the shortfall in FY 2009 and the projected shortfall for FY 2010 are as much the result of rampant spending as of lower than expected revenue. Revenue volatility is a long-standing problem in North Carolina given the state’s tax structure. The General Assembly has consistently failed to budget accordingly, instead creating a spend-and-tax roller coaster. Rather than set aside money in good times, legislators have created new programs and taken on additional debt to finance capital projects, both of which reduce flexibility for future budget writers.
Elections, Transparency, & AccountabilityBy Benjamin DeGrow, Independence InstituteIssue Backgrounder, 01/09/2009
Amendment 49 on the November 2008 Colorado ballot proposes to limit government payroll deductions to specified items. The amendment effectively prohibits the collection and transfer of funds to private non-charitable groups that lobby government officials and fund campaigns – including such groups as political parties, professional associations, and labor unions. Current Colorado law allows government payroll systems to administer and deliver money to these groups.
EducationBy Paul Mueller, Independence InstituteIssue Backgrounder, 01/09/2009
The author analyzes performance data from the School Accountability Reports for all 86 rural Colorado school districts, and compared them to demographic factors traditionally associated with lower achievement. Two school districts – Sargent and La Veta – are cited as examples of “beating the odds” with effective instruction despite a high-poverty or high-minority student population.
EducationBy Robert Maranto, Gary Ritter, Sandra Stotsky, Independence InstituteIssue Paper, 01/09/2009
Barack Obama aspires to be an education president, but what kind of education president will he be? As a candidate, Obama has taken conflicting positions. Both the anti-reform National Education Association and the reformist Democrats for Education Reform claim him as their own. An analysis of candidate Obama’s education platform reveals elements of the Good, the Bad, and the Ugly.
WelfareBy Linda Gorman, Independence InstituteIssue Paper, 01/09/2009
This issue paper shows that Kids Count In Colorado!, a report distributed by the Colorado Children’s Campaign, likely overstates the rise in child poverty in Colorado.
Budget & TaxationBy Michael Mannino, Independence InstituteIssue Paper, 01/09/2009
To improve understanding of public K-12 retirement compensation, this Issue Paper provides historical estimates using a substantial sample of retiree characteristics and salary histories. Deferred retirement compensation from a hybrid defined benefit plan is defined as the difference between an employee’s estimated retirement account balance and the greater pension value she expects to receive. When accounting for K-12 employee compensation, large amounts of deferred compensation should be included. For the 846 Denver Public Schools retirees in the sample, average lump sum deferred compensation is $627,570.
Budget & TaxationBy Kate Campaigne, Illinois Policy InstitutePolicy Brief, 01/09/2009
Last year, 402 active tax increment financing districts collected more than $892 million tax dollars from hard-working, tax-burdened and financially strapped Chicagoans. On top of this, so far 15 new TIF districts (11 suburban, 4 in Chicago) have been planned in 2008. Yet very few people have a clear understanding of what TIFs are and information about them is difficult to find. The public deserves to know more about how their money is being spent. Quite simply, TIFs need transparency.
Budget & TaxationBy Byron Schlomach, Goldwater InstitutePolicy Brief, 01/09/2009
Arizona is in the midst of a budget crisis. The state government is on track to overspend its current revenues by an unprecedented $1.2 billion in the current fiscal year. Although a more than 13 percent spending/revenue gap should be considered a critical issue worthy of immediate attention, the last budget was adopted even as there were clear signs that revenues could not keep up. This means that when the legislature meets in January 2009, it will have to take immediate action to avoid a financial catastrophe. Tax increases are not an option and should not be on the table for discussion. Taxes reduce economic activity, punishing productivity, innovation, and hard work. Government spending often discourages exactly the same activity by rewarding constituencies and projects that often fail to make significant contributions to the citizenry’s standard of living.
What Can a Health Savings Account Do for You?: The Tax, Savings and Health Spending Advantages of HSAsBy Roy Ramthun, Matthew Hisrich, Kansas Policy InstitutePolicy Papers, 01/09/2009
A Health Savings Account, or HSA, is a financial account that allows individuals and families to save funds for day-to-day health care expenses while holding a catastrophic insurance policy for more costly care. While first introduced in January 2004, the Internal Revenue Service continues to release clarifying notices to help employers and individuals make the best use of the options available to them through HSAs. This policy brief offers a discussion of the advantages of HSAs relative to Individual Retirement Accounts (IRAs) and other savings options. As well, the brief includes an overview of the latest three notices – 2008-51, 2008-52, and 2008-59 – all released in recent months. The guidance includes such topics as: the ability to rollover funds from an IRA into an HSA; the “testing period” for such rollovers; rules for individual and family eligibility; rules for contribution eligibility; rules for tax reporting; rules for HSA account transactions; rules for Medicare beneficiaries; penalties for misuse. Those seeking to better understand how HSAs function and whether an HSA is right for them should be able to review the information contained in this policy brief and quickly gain a far greater sense of the workings of this important health care tool.
Health CareBy Gregory L. Schneider, Kansas Policy InstitutePolicy Papers, 01/09/2009
The recent election results signify major changes at the federal level when it comes to health care reform. It is probable that the introduction of a single-payer system will be proposed during the Obama administration. Such proposals, however, should not prevent Kansas policymakers from moving forward with policy reforms that will improve the lives of Kansans. This policy brief offers legislators a guide for reforms at the state level. There are six recommended reforms explained in detail, including: 1. Help Individuals on Medicaid secure private insurance 2. Focus on costs 3. Reduce insurance mandates 4. Do not use tobacco taxes to fund health care reforms 5. Focus on long-term care reforms 6. Encourage price transparency These six recommendations will lead to greater price transparency, lower costs, and more control for consumers in how their health care dollars are spent.
Budget & TaxationBy Amber Gunn , Freedom FoundationPolicy Highligter, 01/09/2009
A budget timeout is a good idea both intuitively and practically. More time for public input can only improve the quality of legislation by promoting informed and rigorous debate. It is also a way to bring sunshine into the legislative process. Legislators need time to learn what they are voting for or against, and the public, media and watch dog groups also deserve time to review the budget and raise red flags on questionable priorities before hearings or votes are held. This is especially true at a time when solving our state’s fiscal problems means tough decisions will have to be made this session.
Budget & TaxationBy E.J. McMahon, Empire Center for New York State PolicySpecial Report, 01/09/2009
Obama’s individual income tax changes will achieve a significant additional redistribution of income, roughly from the highest-earning 5 percent of tax filers to the other 95 percent (including millions who already pay little or no income tax), while doing much less to boost economic incentives. Because the Empire State is home to such a large concentration of successful and wealthy investors and business owners, its entire economy benefits when federal policy tax policy is focused on economic growth and wealth creation. By the same token, the net flow of federal revenue out of New York invariably increases under a policy geared to income redistribution—even when low- and middle-income New Yorkers are among the numerous direct beneficiaries of income shifts.
EducationBy Commonwealth Foundation for Public Policy Alternatives, Commonwealth Foundation for Public Policy AlternativesPolicy Brief, 01/09/2009
Even though the current higher education model was developed with the best of intentions, it’s now clear this model needs to be reformed. Pennsylvania has devoted significant state resources to colleges and universities, only to watch tuition skyrocket and accountability for both schools and students plummet. Universities have changed in fundamental ways and are really no longer state institutions in practice, yet they still receive generous public funding. The time has arrived for Pennsylvania policymakers to seriously reconsider how its higher education is organized and how it operates. The mantra from higher education officials that more state appropriations will solve their problems should be rejected. Instead, higher education should be fundamentally reformed in a way that focuses on students rather than institutions while ensuring that both students and taxpayers are well served.
Economic and Political ThoughtBy Joseph R. Fornieri, Center of the American Experiment01/09/2009
G.K. Chesterton once referred to America as “a nation with the soul of a church.” The greatest preacher of that church and of its political faith is Abraham Lincoln. As patriotic citizens, it is our duty to perpetuate the political faith for which he was martyred and to ponder his sermons to discover the true meaning and promise of America.
Health CareBy Peter J. Nelson, Center of the American ExperimentTranscript, 01/09/2009
Every so often you hear of these surveys, and they’re talked about regularly in the Canadian press, about how the majority of Canadians are happy with their health care. Yet those surveys are skewed, because, at any one time, most people are healthy. I think most Canadians are happy that they are not consciously paying out money for premiums (although they are paying covertly through the nose with their taxes).
Budget & Taxation
A Proposal to Eliminate Ohio’s Personal Income Tax: A Ten Year Plan to Grow Economic Freedom in the StateBy Eric N. Fisher, Buckeye Institute for Public Policy SolutionsPolicy Report, 01/09/2009
Ohio continued to lose revenue and people as its economy stagnates. The state income tax is an important barrier to future economic growth since its high rates discourage investment and wealth creation. Indeed, an analysis of state income tax rates and economic growth revealed that Ohio’s income tax shaves 0.6 percent off its annual growth rate in population and 0.35 percent of the state’s per capita economic growth rate. Over the course of a decade, eliminating the state income tax could boost population by 6 percent and economic activity by 3.5 percent. Eliminating the state income tax is more practical than many may think. Given the rise in economic growth, existing planned reductions in the income tax rate and the phasing in of the Commercial Activity Tax, the state could phase out the state income tax without reducing overall state government revenue.
EducationBy Brian Gottlob, Buckeye Institute for Public Policy SolutionsPolicy Study, 01/09/2009
Educating children is not the same as directly funding school systems. A child-centered school finance policy that supports the choices of parents can create higher-quality schools and more equality in the educational opportunities available to children. The only way to ensure that all children have the same educational opportunities and equal resources to obtain them and at the same time create powerful incentives to improve school performance, is to adopt a student-centered school funding system.
National SecurityBy James Jay Carafano, The Heritage FoundationWebMemo, 01/09/2009
The United States should resolve to help make the world a better place with initiatives that keep Americans safe, free, and prosperous in the coming year. Here is a short list of commitments Washington can offer.
National SecurityBy Baker Spring, The Heritage FoundationWebMemo, 01/09/2009
On December 12, the Congressional Commission on the Strategic Posture of the United States released its interim report. If the tentative and general recommendations in the report can be translated into this alternative strategic policy, then a strategic posture that is broadly supported in Congress should result.
Foreign Policy/International AffairsBy James Phillips, The Heritage FoundationWebMemo, 01/09/2009
It is important that the current crisis in Gaza be resolved in a manner that undercuts the capacity of Hamas to continue its cynical and destructive policies.
Foreign Policy/International AffairsBy Lisa Curtis, Nicholas Hamisevicz, The Heritage FoundationWebMemo, 01/09/2009
Bangladeshis went to the polls on December 29 in record numbers and elected the secular Awami League party headed by former Prime Minister Sheikh Hasina Wajed. Yet, successful elections are only the first step in achieving a functional democratic process.
Foreign Policy/International AffairsBy Bruce Klingner, Walter Lohman, The Heritage FoundationSpecial Report, 01/09/2009
President-elect Obama, you have stated the need for an aggressive policy toward North Korea and recognize the threat that it poses. But while denuclearization is critical, the measures used to achieve it are just as critical. You must pursue a policy that does not reward blatant disobedience and disregard for agreed-to measures and that does not compromise on something that is so fundamental to U.S. security. Specifically, you should abide by strict negotiation standards and not reward North Korea when it breaks them. Additionally, you should deepen ties with South Korea, our key ally on the peninsula. The KORUS agreement will bolster this critically important alliance and continue to build the strategic relationship that is crucial to protecting U.S. security interests and ensuring continued U.S. influence in the region.
Economic GrowthBy James Sherk, The Heritage FoundationBackgrounder, 01/09/2009
U.S. unemployment has risen sharply over the past 18 months to 6.7 percent. Unemployment is rising because employers are creating fewer jobs. Workers entering the labor force have fewer job opportunities and now take more time to find work. Congress should enact policies that promote job creation, such as adopting President-elect Obama’s proposal to eliminate the capital gains tax on start-up companies.
Crime, Justice & the LawBy Hans A. von Spakovsky, Andrew M. Grossman, The Heritage FoundationSpecial Report, 01/09/2009
President-elect Obama, you argued forcefully as a candidate that we need a regulatory and business landscape in which businesses, entrepreneurs, and investors can thrive and consumers are protected. You vowed to take action to make America’s civil justice system work for all Americans.
National SecurityBy James Jay Carafano, The Heritage FoundationWebMemo, 01/09/2009
The new Administration has opportunity to introduce a “game changer” in the current Middle East conflict by helping speed the fielding of prototype directed-energy defenses that can devalue the threat of terrorist missile and artillery arsenals.
Economic GrowthBy Nicola Moore, The Heritage FoundationWebMemo, 01/09/2009
The first order of business for the President-elect and the new Congress is to get the American economy back on track. To that end, Democratic and Republican leaders are busily crafting an economic stimulus bill that will likely spend anywhere between $700 billion and $1 trillion. But this unprecedented action could do more harm than good if it is not well crafted.
Foreign Policy/International AffairsBy Sally McNamara, The Heritage FoundationSpecial Report, 01/09/2009
President-elect Obama, during the presidential election campaign, you highlighted NATO as a valuable global partnership, and you have repeatedly made statements in support of NATO enlargement. You have called on Europe to commit more troops and resources to the NATO mission in Afghanistan and have also stated repeatedly that Georgia should receive NATO’s Membership Action Plan. Your recent appointment of former NATO commander General James Jones as your national security adviser brings his considerable commitment to the Alliance to your security team.
The Constitution/Civil LibertiesBy Andrew M. Grossman, The Heritage FoundationSpecial Report, 01/09/2009
President-elect Obama, you have been a strong and eloquent defender of property rights and the rule of law, recognizing that they undergird Americans’ freedoms and protect us from unjust government actions. These protections may be most important to those of modest means, who are the disproportionate victims of government takings of property. As explained by the NAACP and other civil rights leaders, the poor are also affected more profoundly by takings that upset their communities and ways of life.
Foreign Policy/International AffairsBy James Phillips, The Heritage FoundationWebMemo, 01/09/2009
International efforts to resolve the Gazan crisis should be aimed at shaping a postwar situation that restricts the ability of Hamas to threaten Israel or hold Palestinians hostage to its extremist Islamist goals.
The Constitution/Civil LibertiesBy Hans A. von Spakovsky, The Heritage FoundationWebMemo, 01/09/2009
Senator Roland Burris has no choice but to immediately assert his right to be seated and to file suit if the Senate continues to unlawfully refuse to seat him. Preservation of the rule of law and of the Constitution requires no less.
LaborBy James Sherk, The Heritage FoundationWebMemo, 01/09/2009
Early in its first session, the new 111th Congress will likely debate legislation that would require employers to provide their employees with at least seven days of paid sick leave a year. Though intended to help employees, this proposal would reduce many workers’ pay.
Economic GrowthBy J.D. Foster, William W. Beach, The Heritage FoundationWebMemo, 01/09/2009
The new Administration and new Congress are developing a stimulus program to soften the recession and accelerate the recovery. Given the high level of economic pain, policymakers need to pursue stimulus policies that work.
Health CareBy Robert E. Moffit, The Heritage FoundationWebMemo, 01/09/2009
The United States Senate will soon render its advice and consent to the nomination of former Senator Tom Daschle (D-S.D.) as the new secretary of the United States Department of Health and Human Services. We propose that Senators ask Daschle these questions.
LaborBy Andrew M. Grossman, The Heritage FoundationLegal Memorandum, 01/09/2009
Congressional leaders have said that they will fast-track the Lilly Ledbetter Fair Pay Act, a bill that would allow pay discrimination lawsuits to proceed years or even decades after alleged discrimination took place. Proponents say that the legislation is necessary to overturn a Supreme Court decision that misconstrued the law and impaired statutory protections against discrimination, but the Court's decision reflected both longstanding precedent and Congress's intentions at the time the law was passed.
Budget & TaxationBy Brian M. Riedl, The Heritage FoundationWebMemo, 01/09/2009
The Congressional Budget Office recently released its annual 10-year budget baseline. A realistic baseline shows that historic spending increases are projected to drive the budget deficit to $1,220 trillion in 2009 and $1,477 billion by 2019—even before any additional economic “stimulus” bills are enacted.
EducationBy Matthew Ladner, Dan Lips, The Heritage FoundationBackgrounder, 01/09/2009
Like previous federal education initiatives, No Child Left Behind (NCLB), which increased federal authority over schools, has failed to deliver meaningful improvement in America's public education. NCLB’s requirement for universal proficiency has created a perverse incentive for states to lower standards in order to avoid federal sanctions. Florida's experience over the past decade shows that state-level education reforms can deliver meaningful improvement.
Foreign Policy/International AffairsBy Ariel Cohen, Owen Graham, The Heritage FoundationWebMemo, 01/09/2009
On January 1, 2009, Russia’s state monopoly OAO Gazprom began reducing gas supplies to Ukraine. Moscow and Kiev had failed to negotiate the price for natural gas, and the initial reduction affected six additional countries: Czech Republic, Turkey, Poland, Hungary, Romania, and Bulgaria. Motives for the Russian action include sending a signal to Europe that Ukraine should not be integrated into the Euro-Atlantic zone, but remain within the Russian sphere of influence.
Foreign Policy/International AffairsBy Sally McNamara, The Heritage FoundationWebMemo, 01/09/2009
Europe’s over-reliance on Russian energy is a fundamental strategic weakness. In the event that Europe continues to increase its dependence on Moscow, it will once again find itself literally left out in the cold.
LaborBy James Sherk, The Heritage FoundationWebMemo, 01/09/2009
The United States Senate will soon render its advice and consent to the nomination of Representative Hilda Solis (D-Calif.) as the new secretary of the United States Department of Labor. Before confirming Solis as labor secretary, Senators should consider these questions.
Regulation & DeregulationBy Henry N. Butler, Larry E. Ribstein, Cato InstituteRegulation, 01/09/2009
All proposals to federalize insurance regulation — whether through mandatory or optional federal laws — create opportunities for abuse at the hands of the federal government. Monopoly national regulation of the insurance industry should be viewed with skepticism by both industry and consumers. Insurance carriers could be subject to rent extraction by the federal regulator, while consumers should be concerned about industry capture of the centralized regulatory agency. This article proposes a state-based regime that both protects insurers from the worst effects of multiple regulators and creates a real opportunity for jurisdictional competition and experimentation. Given its strong potential benefits, state competition, under our single-license approach, should be tried before a single federal regulator. If the large multi-state insurers prevail in their push for optional federal chartering, the legislation should be supplemented with our single-license solution.
Regulation & DeregulationBy Stephen M. Bainbridge, Cato InstituteRegulation, 01/09/2009
If the separation of ownership and control is a problem in search of a solution, encouraging institutional investors to take an active corporate governance role simply moves the problem back a step — it does not solve it. Yet, it is not at all clear that the separation of ownership and control is a pathology requiring treatment. As we have seen, the system of corporate governance is designed to function largely without shareholder input and, despite the bad press corporate capitalism has gotten in recent years, the system works pretty well
Economic GrowthBy James Bessen, Michael J. Meurer, Cato InstituteRegulation, 01/09/2009
The historical evidence, the cross-country evidence, the evidence from economic experiments, and estimates of the net benefits of patents all point to a marked difference between the economic importance of general property rights and the economic importance of patents or intellectual property rights more generally. With the cross-country studies in particular, the quality of general property rights institutions has a substantial direct effect on economic growth. Using the same methodology and in the same studies, intellectual property rights have at best only a weak and indirect effect on economic growth.
Regulation & DeregulationBy Jonathan H. Adler, Cato InstituteRegulation, 01/09/2009
Climate change presents many challenges, but it also presents opportunities. In the case of water, the need to prepare for the impact of climatic warming creates an opportunity to improve on existing institutions. In particular, the threat of climate change could provide the long-needed impetus to shift away from centralized political management of water resources, toward market-based institutions. Such a shift holds the potential to increase the efficiency and environmental soundness of water use in the United States. So as the world warms, policymakers should warm to water markets.
Monetary Policy/Financial RegulationBy Dwight M. Jaffee, Cato InstituteRegulation, 01/09/2009
This article has provided a framework and a specific proposal for the reregulation of Fannie Mae and Freddie Mac in the aftermath of the subprime mortgage crisis and their conservatorship. This proposal would end the mortgage giants as we know them, reassembling the components of the two GSEs into an equitable and efficient structure. Fannie and Freddie’s MBS issue/guarantee business would be transferred to a government agency, where it would support the middle-income mortgage market in the United States in parallel with the longstanding and successful FHA and Ginnie Mae programs for lower-income mortgages. The retained mortgage portfolios would be spun off to the GSEs’ shareholders, thereby respecting the shareholders’ ownership rights. This plan appears superior to other possible solutions, including a public utility model and covered bonds.
Monetary Policy/Financial RegulationBy Craig Pirrong, Cato InstituteRegulation, 01/09/2009
It is said that fools rush in where angels fear to tread. There is clearly a rush among regulators in the United States and Europe to create a clearinghouse for credit derivatives. Their arguments supporting this creation do not address salient issues relating to the pricing of default risk, how the accuracy of such prices may depend on the natures of the instruments in question or the firms that trade them, or whether a ccp addresses the underlying source of systemic risk. As a result, there is room for considerable concern that this regulatory “fix” may be something that requires a further “fix” in the future. And given that systemic crises seem to be the way that we identify what needs to be fixed, the cost of finding that out may be expensive indeed.
Natural Resources, Energy, Environment, & ScienceBy Patrick J. Michaels, Robert C. Balling, Jr., Cato InstituteBook, 01/09/2009
An in-depth look at consistent, solid science on the other side of the gloom-and-doom global warming story that is rarely reported and pushed aside: that global warming is likely to be modest, and there is no apocalypse on the horizon.
Regulation & DeregulationBy Jerry Brito, Veronique de Rugy, Mercatus CenterPolicy Primer, 01/08/2009
Midnight regulations are problematic. In particular, if we accept that regulatory review is beneficial, then midnight regulations raise serious concerns. All things being equal, including the relatively fixed review staff at OIRA, a sudden increase in regulations going through the review process during the midnight period leads to a diminished review process and weakened oversight. Until now, the most common solutions to the midnight regulations problem have suggested steps that an incoming president can take to undo his predecessor’s last-minute actions. Our solution tries to mitigate the negative effects of midnight regulations by changing the incentives on the outgoing administration. We suggest that the best way to address this particular problem is to place a cap on the number of economically significant regulations OIRA can be expected to review during a given period.
Economic GrowthBy Eileen Norcross, Frederic Sautet, Mercatus CenterMercatus on Policy, 01/08/2009
If history is any guide, deficit spending on a grand scale doesn’t work. Unemployment remained above 20 percent for the duration of the Great Depression in spite of an active job creation policy. While there are key differences between the 1930s and today, temptation is running high to re-experiment with this model by creating jobs to prop up “aggregate” demand. Expansionist monetary policy and bad lenient housing policies have created artificially inflated prices and over investments in many sectors of the economy. This boom will end when overblown prices can fall. There is no way around it. The coming price adjustment is akin to a patient needing surgery: it will be a difficult time, but it is necessary to recover good health. Policy makers should help this process by putting their fiscal houses in order and removing barriers to resource allocation: reduce taxes, insist on fiscal prudence on the federal level, and encourage it on the state and local level by cutting, rather than increasing, public spending.
Regulation & DeregulationBy Scott Farrow, et al. , Mercatus CenterReport, 01/08/2009
The United States needs a new regulatory framework that will better address the changed nature of the economy. Regulation that may have been appropriate in 1970 is simply inadequate in the 2000s and beyond. A population and workforce that is older, more experienced, more educated, and has much better and faster access to information is better equipped to confront and handle risks. Whereas before, observers worried about a “race to the bottom,” today’s consumers engage in a “race to the top;” their incomes and access to information lead them to demand products that are safer and cleaner.
Transportation/InfrastructureBy Sam Staley, Adrian Moore, Reason FoundationBook, 01/08/2009
Traffic congestion is a growing problem, and unless policy makers and transportation officials make some dramatic changes, it will rise to unacceptable levels by 2030. Sam Staley and Adrian Moore explain the inefficient systems and politics that cause this escalating epidemic, presenting commonsense, high-tech solutions that will ease congestion and its troubling consequences. The book considers transportation policy through the intersection of four crucial and timely elements: global, economic, and cultural competitiveness; urban development trends; demographics; and transportation engineering and design. It sets goals for congestion reduction, outlines performance standards that increase transparency, calls for the redesign of the regional transportation network, and describes sufficient investment in technology.
Health CareBy Devon M. Herrick, National Center for Policy AnalysisPolicy Report, 01/08/2009
In health care markets where patients pay directly for all or most of their care, providers almost always compete on the basis of price and quality. And because they are not trapped in a system that pays for predetermined tasks at predetermined rates, providers are free to repackage and re-price their services—just like vendors in other markets. It is primarily in these direct-pay markets that entrepreneurs are creating many innovative services to solve the very problems about which critics of the health care system complain. In fact, these solutions are usually a necessary part of the entrepreneurs’ business models.
Monetary Policy/Financial RegulationBy James A. Dorn, Cato InstituteCato Journal, 01/08/2009
The global financial crisis that began in the U.S. housing market is not a failure of market liberalism, but of market socialism. Prior to central banks, the international gold standard worked spontaneously to bring about a balance between the demand for and supply of money. That system was not perfect, but it did help generate sound money, limit the size of government, and expand trade. In theory, central banks can control the supply of paper money and prevent inflation, but will they have the political will to do so? Without effective constraints on central bank discretion, there is no guarantee that fiscal pressures will not lead to an abuse of the monetary authority’s power.
WelfareBy Michael J. New, Cato InstituteCato Journal, 01/08/2009
Much of the scholarship analyzing fluctuations in welfare caseloads focuses on such factors as the strength of the economy and the generosity of welfare benefits. However, with the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996, states obtained significantly more control over welfare policy. Despite this shift, there has been relatively little academic research on the role of state policy variation in welfare caseload fluctuations. This article provides solid evidence that strength of state sanctioning policies, which give caseworkers the ability to restrict the benefits of welfare recipients, has played a very significant role in recent welfare caseload declines. A comprehensive regression analysis of welfare caseloads from all 50 states from every year from 1996 to 2002, finds that strong state sanctioning policies are highly correlated with both large welfare caseload declines and low caseload levels.
Regulation & DeregulationBy Wayne R. Dunham, Cato InstituteCato Journal, 01/08/2009
In this article, I examine the impact of the efforts of regulators in ancient Athens to reduce the retail price of grain by reducing its wholesale price. Unlike the standard example of a wholesale price control, the regulator in Athens did not establish a direct price control on the wholesale price but rather allowed the grain merchants to collude when purchasing grain from emporoi. The effect was the same as a direct wholesale price control. The reduction in wholesale price led to a reduction in the quantity supplied and a higher, not lower, retail price clearing the market.
EducationBy James VanderHoff, Cato InstituteCato Journal, 01/08/2009
This article finds that parents choose charter schools based on academic effectiveness and endorsement of academic goals. It thus supports a basic tenet for the belief that school choice will improve public school academic effectiveness. The New Jersey data illustrate that charter schools are not equally effective (as measured by student test scores), equally preferred (as measured by waiting lists), or equally funded. The analysis indicates that a 10 percent increase in a charter school’s test scores will increase the number of students on its wait list by at least 63 percent. The characteristics of students and schools, both regular and charters, do not generally affect the size of the wait list.
Budget & TaxationBy Swaminathan S. Anklesaria Aiyar, Cato InstituteCato Journal, 01/08/2009
The literature on small states suggests several ways in which they can tackle some of their inherent disadvantages. Many of these approaches require no aid at all. Others have the potential to use existing aid flows more effectively. The future development agenda should, therefore, abandon the traditional focus on increasing aid. Rather, it should focus on ways to reduce such aid, which is already excessive.
Budget & TaxationBy Dean Stansel, David T. Mitchell, Cato InstituteCato Journal, 01/08/2009
The past two recessions have led to substantial fiscal crises for state governments. The current slowdown in economic growth is creating similar problems in many states. There has been much debate about the cause of those crises. While other factors undoubtedly also played a role, our results suggest that rapid spending increases during the preceding expansionary years played a substantial role in worsening the fiscal crises faced by states during the 2001 recession. In addition, like previous research on the 1990-91 recession, our results indicate that the mere presence of a rainy day fund did not reduce fiscal stress in the 2001 recession. It is the characteristics of that RDF that matter. These results have important implications for fiscal policy choices during expansionary years. States that restrain spending growth are likely to face less severe fiscal crises when the business cycle turns downward than those that allow spending growth to rapidly increase.
The Constitution/Civil LibertiesBy Sarah Glassman, Michael Head, Paul Bachman, David G. Tuerck, Grassroot Institute of HawaiiStudies, 01/08/2009
Since the end of the monarchy, land ownership in Hawaii has been hotly debated. With the introduction of the Akaka Bill in 2000, land rights have moved to the forefront of policy discussion in Hawaii. The bill attempts to solve land issues through a separate sovereign entity, but will create more problems than it solves. The uncertainty surrounding the outcome of the negotiations between the state and the new Hawaiian entity and a possible surge in litigation filings would hurt business confidence and investment. The new entity would be free from state and local taxes, regulations and legal restrictions that would create a competitive advantage that would shift economic activity away from the businesses left under the jurisdiction of Hawaii. As a result, Hawaii would suffer declines in state revenue collections and require tax increases to fill the gap. As a result, citizens of Hawaii would suffer lower living standards.
Economic and Political ThoughtBy J. R. Clark, Dwight R. Lee, Cato InstituteCato Journal, 01/08/2009
Large amounts of information or knowledge, which could be used to improve the lives of billions of people by improving economic decisions, are being systematically suppressed and destroyed by government censorship that is supported enthusiastically by many who claim to be outraged by government censorship of any type. Few people recognize some of the most harmful forms of government censorship as being censorship. And since they don’t recognize it for what it is, many erroneously see censorship as the most effective and least costly way for government to achieve social objectives that almost everyone claims to support, such as protecting the environment, reducing waste, ensuring an adequate food supply, reducing our dependence on foreign oil, improving education, creating better jobs, and expanding the availability of high-quality health care.
Economic GrowthBy Abdoul’ Ganiou Mijiyawa, Cato InstituteCato Journal, 01/08/2009
“Good” institutions have positive effects on private investment and thus induce an increase in total factor productivity, which in turn is necessary for sustained economic growth.
Monetary Policy/Financial RegulationBy David Beckworth, Cato InstituteCato Journal, 01/08/2009
Deflation is generally considered to be inconsistent with macroeconomic stability. Any sustained decline in the price level is widely believed to be associated with weak to negative economic growth, a lower bound of zero on the policy interest rate, and an increase in financial disintermediation. However, a number of recent studies examining both historical, cross-country experience with deflation and more recent developments find that these concerns are not necessarily associated with deflation. They show that the deflationary experiences that shape the modern economic psyche, the Great Depression in the 1930s and Japan in the 1990s, are not truly representative of all deflation outcomes. These studies contend that a broader, historical perspective reveals a more nuanced view of deflation, one that requires taking seriously the possibility of both a malign deflation, a deflation originating from a collapse in aggregate demand, and a benign deflation, a deflation originating from an increase in aggregate supply.
Budget & TaxationBy Alan D. Viard, Robert Carroll, Scott Ganz, American Enterprise InstituteTax Policy Outlook, 01/08/2009
Good tax policy should be pro-growth, simple, and fair. An income tax, unlike a consumption tax, penalizes saving, which undermines economic growth and introduces complexity. An income tax is often thought to be fairer than a consumption tax, however, because it taxes saving, which is disproportionately done by higher-income individuals. In reality, however, a consumption tax can be designed to be as progressive as the current income tax. The Bradford X tax offers an attractive, if little-known, form of progressive consumption taxation.
International Trade/FinanceBy Claude Barfield, American Enterprise InstituteThe American, 01/08/2009
As the global financial and economic crisis has deepened, trade officials have increasingly warned against a new wave of protectionism, fearing that governments will move to shield their industrial and service sectors from increased competition. Thus far, there is little evidence of a large upsurge in traditional border tariff protection. There is, however, one ominous sign of protectionism in an area that is mostly outside the scope of World Trade Organization trade rules: foreign direct investment. The leading advocate of investment protectionism is French President Nicolas Sarkozy, who has proposed the creation of a $25 billion sovereign wealth fund to shield French companies from foreign “predators.”
Health CareBy Richard Tren, Kimberly Hess, Roger Bate, Jasson Urbach, Donald Roberts, Africa Fighting MalariaPaper, 01/08/2009
Insecticides are a vital component of disease control. To a great extent the modern insectborne disease burden of hundreds of millions of human infections results from failures to use the chemicals we characterize as public health insecticides (PHIs). The modern arsenal of PHIs is antiquated and limited to just 12 insecticides, most belonging to just one class of insecticides (pyrethroids). The process of becoming antiquated occurs as a result of failure to invest in research and development of new PHIs. In reality, both the failure to make safe and effective use of PHIs and the failure to develop new and more effective PHIs are due to environmental opposition, limited valuable markets, considerable regulatory hurdles and weak public health advocacy; conditions which prevail even now. Indeed, even as disease control spending by aid agencies increases by orders of magnitude, disease rates may increase as investment in insecticides is neglected. United Nations agencies such as the World Health Organization (WHO), donor nations, the private sector, and research foundations should urgently prioritize investment in the search for new PHIs, as well as support advocacy efforts to promote the use of safe and effective man-made chemicals in disease control programs.
Budget & TaxationBy Alan Viard, American Enterprise InstituteArticle, 01/08/2009
Congress has recently considered taxing the carried interest of private equity fund managers at ordinary rates rather than at the 15 percent rate that currently applies to a portion of this income. The proposed change is intended to promote neutrality between the labor compensation of fund managers and other types of labor income. The case for reform, though, is less compelling than initial appearances suggest. The proper treatment of carried interest raises difficult second-best questions.
Budget & TaxationBy Alex Brill, American Enterprise InstituteArticle, 01/08/2009
The U.S. corporate tax system, with its high statutory tax rate, imposes harmful distortions and may be set at a point above its revenue-maximizing level. A dramatic reduction in the corporate tax rate would improve efficiency and global competitiveness. Depending on the magnitude of the reduction and other accompanying tax changes, the change could be revenue neutral.
Information TechnologyBy Robert Hahn, American Enterprise InstituteThe American, 01/08/2009
The Internet Freedom Preservation Act does not focus on classic antitrust concerns. It would, by contrast, ask the FCC to report on the merits of restricting prices that Internet providers could charge to distribute various sorts of content—in particular, limiting the networks’ discretion to practice what economists call price discrimination. Yet, price discrimination has proved the key to increasing efficiency in industries like airlines in which huge investments must be recouped from a variety of sources with varying willingness (and ability) to pay.