Recent Policy Studies

• Budget & Taxation
  

  We Are the 98 Percent

  By Cliff Asness, American Enterprise Institute
  
  The American, 01/09/2013
  

  One wonders if President Obama would have won the election if he had warned voters that “to pay for Obamacare, stimulus spending, increased regulatory oversight, and the rest of the big government wish list I believe important, we need to raise the level and share of taxes paid by the middle class”? One also wonders why more progressive pundits were not as clear about their goals and the necessities pre-election as they are starting to be now.

  
  
  
• Regulation & Deregulation
  

  Redefining the Poverty Debate – Why a War on Markets Is No Substitute for a War on Poverty

  By Kristian Niemietz, Institute of Economic Affairs
  
  Book, 01/09/2013
  

  In the past intellectual movements promoting free trade in particular and a free economy more generally were regarded as having a pro-poor agenda. The current poverty lobby, however, is focused entirely on government benefits as the solution to poverty and very rarely addresses government interventions that raise living costs. Overall, a market-oriented anti-poverty policy could lead families to be up to £750 a month better off. There would also be scope for substantial decreases in taxation on the less well off because of substantial savings in benefits such as housing benefit.?

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Future fo the Commons: Beyond Market Failure and Government Regulation

  By Elinor Ostrom, et al., Institute of Economic Affairs
  
  Book, 01/09/2013
  

  Traditional economic models of how to manage environmental problems relating to renewable natural resources, such as fisheries, have tended to recommend either government regulation or privatisation and the explicit definition of property rights. These traditional models ignore the practical reality of natural resource management. Many communities are able to spontaneously develop their own approaches to managing such common-pool resources.

  
  
  
• Foreign Policy/International Affairs
  

  China, America, and the Pivot to Asia

  By Justin Logan, Cato Institute
  
  Policy Analysis, 01/09/2013
  

  America ought to pivot home. The new U.S. administration should revisit formal and informal U.S. security commitments in Asia with a clear eye trained on what it would actually be willing to fight a war with China over, and just how likely those scenarios are. American policymakers should work to lessen and ultimately remove the forward-deployed U.S. military presence in the region, helping establish more powerful national militaries in like-minded states. The new administration should encourage Asian nations to work together on security issues without the United States leading the way.

  
  
  
• Regulation & Deregulation
  

  A Rational Response to the Privacy ‘Crisis’

  By Larry Downes, Cato Institute
  
  Policy Analysis, 01/09/2013
  

  What passes today as a “debate” over privacy lacks agreed-upon terms of reference, rational arguments, or concrete goals. Though the stars are aligning for a market in privacy products and services, those who believe that rapidly evolving information technologies are eroding privacy regularly pitch their arguments in the direction of lawmakers, pushing for unspecified new rules that would cast a pall over innovation. These calls for ill-considered new laws threaten the remarkable economic conditions that have fueled the Internet revolution up until now.

  
  
  
• Budget & Taxation
  

  Should U.S. Fiscal Policy Address Slow Growth or the Debt? A Nondilemma

  By Jeffrey A. Miron, Cato Institute
  
  Policy Analysis, 01/09/2013
  

  The United States faces two economic challenges: slow growth and an ever-increasing ratio of debt to GDP. Many policymakers believe they face a dilemma because the policy solutions to the two problems are opposite. To address the slow recovery, standard—Keynesian—economics suggests further fiscal stimulus in the form of lower taxes or higher spending. But that recommendation runs head-first into the economy’s second crucial challenge, the long-run fiscal imbalance. Yet policymakers are wrong to see this as a dilemma. The Keynesian model does not evaluate government expenditure using the standard microeconomic concepts of economic efficiency (cost-benefit analysis); rather, it assumes that all expenditure is beneficial. Some government purchases, however, are not a productive use of resources, and transfer payments distort economic incentives and thus can reduce economic output. In contrast, broad-based tax cuts, especially those that lower marginal tax rates, enhance economic growth.

  
  
  
• International Trade/Finance
  

  China’s Global Investment Rises: The U.S. Should Focus on Competition

  By Derek Scissors, The Heritage Foundation
  
  Backgrounder, 01/09/2013
  

  In 2012, Chinese outbound investment set new records both in the U.S. and around the world. North America has jumped to the forefront of Chinese business activity, but this development is likely to be temporary: The pattern over time is for Chinese enterprises to move as a group from region to region. Energy and metals draw the most money. The outlook for Chinese investment in 2013 and beyond is positive, but setbacks will continue to occur, due in part to foreign suspicion of state firms. The U.S. in particular should formulate policy to ensure competition, with the Chinese firms that come here, in the Chinese market itself, and around the world through the Trans-Pacific Partnership and other agreements that liberalize market access.

  
  
  
• Budget & Taxation
  

  Fiscal Cliff Deal: Tax Increase Spoils Permanent Victory for Most Taxpayers

  By Curtis S. Dubay, The Heritage Foundation
  
  Issue Brief, 01/09/2013
  

  President Obama has said repeatedly that he wants a “balanced plan” to reduce deficits and debt, supposedly meaning a mix of higher taxes and spending reductions. The fiscal cliff deal delivered the tax increase portion but not the spending cuts. In the rapidly approaching debates on raising the debt limit, replacing the delayed sequester spending cuts, and the continuing resolution to fund the federal government for the rest of the 2013 fiscal year, Congress must demand that spending be cut to deliver on the other side of President Obama’s promised balanced approach.

  
  
  
• Foreign Policy/International Affairs
  

  Hagel, Kerry, and Brennan Senate Confirmation Hearings: U.S. Policy on Europe

  By Nile Gardiner, Luke Coffey and Theodore R. Bromund, The Heritage Foundation
  
  Issue Brief, 01/09/2013
  

  The forthcoming confirmation hearings are an important opportunity for the Senate to pose key questions about the direction of American foreign policy under President Obama in his second term. After the first four years of the Obama presidency, the U.S. has grown weaker while the world has become even more dangerous. The transatlantic alliance needs stronger leadership from Washington and a firm commitment from the Administration that it will advance ties with America’s key allies in Europe while supporting economic freedom and national sovereignty across the Atlantic.

  
  
  
• Budget & Taxation
  

  Effective Marginal Tax Rates for Low-Income Workers Are High

  By Salim Furth, The Heritage Foundation
  
  Issue Brief, 01/09/2013
  

  While much focus in the past two years has been on the top end of the income scale—the “Buffett Rule,” the “1 percent”—the effects of taxation and government benefits are severe among the bottom 1 percent as well. With marginal effective tax rates exceeding 60 percent in many cases, the tax and benefit structure actively discourages earned success.

  
  
  
• Budget & Taxation
  

  A Housing Market Free from Fannie Mae and Freddie Mac: The Economic Effects of Eliminating the Housing Government Sponsored Enterprises

  By John L. Ligon, William W. Beach, The Heritage Foundation
  
  Special Report, 01/09/2013
  

  Fannie Mae and Freddie Mac distort the U.S. housing and mortgage market at substantial risk to households and U.S. taxpayers. Defaults on loans through Fannie Mae and Freddie Mac have already cost the U.S. taxpayers $154 billion and could cost taxpayers an additional $363 billion. This report estimates the economic impact of eliminating Fannie Mae and Freddie Mac from the U.S. mortgage market. Elimination of Fannie Mae and Freddie Mac and the mortgage interest rate subsidy that these mortgage institutions generate would have minimal impact on the U.S. economy. Congress needs to recognize that this institutional model has failed and should be eliminated to protect U.S. taxpayers and the U.S. Treasury.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Carbon Tax Would Raise Unemployment, Not Revenue

  By David W. Kreutzer, Nicolas Loris, The Heritage Foundation
  
  Issue Brief, 01/09/2013
  

  The economic, environmental, and political realities surrounding a carbon tax are clear indications that this is bad policy. Recently, two bipartisan resolutions publicly denounced the possibility of a carbon tax, highlighting the crushing economic and minimal environmental effects of the tax. One resolution, sponsored concurrently by Senator David Vitter (R-LA) and Representative Mike Pompeo (R-KS), and a second by Representative David McKinley (R-WV) and co-sponsored by five other Republicans and three Democrats expressed their disapproval of the idea. Whether the American economy is booming or heading off a fiscal cliff, the right time for a carbon tax is never.

  
  
  
• Budget & Taxation
  

  U.S. Government Increases National Debt—and Keeps 128 Million People on Government Programs

  By Patrick Tyrrell, William W. Beach, The Heritage Foundation
  
  Backgrounder, 01/09/2013
  

  Between 1988 and 2011, the amount of the U.S. population that receives assistance from the federal government grew by 62 percent. That means that more than 41 percent of the U.S. population is enrolled in at least one federal assistance program. To make matters worse, per capita expenditures on recipients are rising as well. In 2010, over 70 percent of all federal spending went to dependence-creating programs. That growth is unsustainable, as baby boomers are now retiring every day and their entitlements cost more each year. The publicly held federal debt will exceed 100 percent of GDP in 2024. Such a high level of debt always hurts an economy—and the people who live in it. The time for Congress to reform dependence-creating government programs is now.

  
  
  
• International Trade/Finance
  

  Unleashing the Market in the India–U.S. Economic Relationship, Part 1

  By Laveesh Bhandari, et al., The Heritage Foundation
  
  Special Report, 01/09/2013
  

  India will soon have the largest population of any country in the world. It therefore has the potential, with extensive and difficult reforms, to become the world's most important free market—a position currently held by the United States. It follows directly that the economic relationship between India and the U.S., if allowed to flourish, can greatly benefit the citizens of both. The Heritage Foundation has initiated a multi-part project—Unleashing the Market in the India-U.S. Economic Relationship—intended to enhance India-U.S. economic relations. The project will demonstrate that free and open markets are the best way to enhance India-U.S. economic relations. To advance Indian prosperity and perpetuate American prosperity, the first order of business is for the two private sectors to do more together.

  
  
  
• Elections, Transparency, & Accountability
  

  Latin America and the Caribbean: A Wish List for 2013

  By James M. Roberts, Ray Walser, The Heritage Foundation
  
  Issue Brief, 01/09/2013
  

  Washington cannot design a one-size-fits-all policy for this hemisphere: The aging “Summit of the Americas” process that was keyed to achieving a hemispheric FTA has run out of gas. Creation of a new forum or coalition mechanism for America’s best friends in the region (such as Chile, Colombia, and Panama) along with other nations seemingly predisposed to working constructively with the U.S. (such as Brazil, Peru, and perhaps even a post-Kirchner Argentina) can develop a positive action agenda to tackle thorny problems in areas of trade, drug policy, energy, and citizen security. Overriding the tire-spinning of the past four years requires the U.S. to adopt an active strategy that defends American national interests and advances democratic values in the Americas while promoting economic opportunity for all and defending the security of the Western Hemisphere.

  
  
  
• Economic Growth
  

  Heritage Employment Report: In December Out with the Old, In with the Same Thing

  By Rea S. Hederman Jr., James Sherk, The Heritage Foundation
  
  Issue Brief, 01/09/2013
  

  The December employment report from the Bureau of Labor Statistics shows that 2012 ended with an unemployment rate of 7.8 percent and 155,000 new jobs. The labor market has not had an adequate recovery and has made little progress from 2011 to 2012. Many American workers will experience permanent lower lifetime earnings as a result of the poor economic recovery, which has been hampered by bad public policy decisions. This month’s report was simply average, and the longed-for labor market recovery must again wait.

  
  
  
• National Security
  

  Bait and Switch on Nuclear Modernization Must Stop

  By Michaela Bendikova, Baker Spring, The Heritage Foundation
  
  Backgrounder, 01/09/2013
  

  President Obama's 2013 budget requests for the National Nuclear Security Administration (NNSA) reveal his nuclear weapons policy priorities. The NNSA budget includes funding in its Nuclear Activities accounts that does not advance U.S. nuclear weapons modernization. Some of these activities even fund U.S. nuclear disarmament. It is essential that Congress distinguish between the two activities and force the U.S. Department of Energy to provide an honest account of costs of nuclear weapons modernization. U.S. nuclear weapons modernization constitutes an essential element of deterring adversaries and assuring allies.

  
  
  
• Budget & Taxation
  

  Hurricane Sandy Relief Bill: Starting the New Year with Bloated Deficit Spending

  By Patrick Louis Knudsen, Matt A. Mayer, The Heritage Foundation
  
  Issue Brief, 01/09/2013
  

  Under today’s extraordinary fiscal challenges, Congress cannot afford to continue exploiting every loophole to avoid spending control. The 113th Congress can take an important step in that direction by applying real discipline to any federal assistance for Hurricane Sandy victims. Lawmakers should take the time to identify funds truly needed for assisting Hurricane Sandy’s victims and offset that spending with reductions elsewhere. Any other funding, if truly necessary, should be subjected to the regular budget process—a practice that Congress has neglected for far too long.

  
  
  
• Budget & Taxation
  

  A New, Extra-Extraordinary Debt-Ceiling Tool

  By J.D. Foster, The Heritage Foundation
  
  Issue Brief, 01/09/2013
  

  The federal government has once again hit its statutory debt limit. For the next few weeks, Washington will be funding its budget shortfalls through the Treasury Department’s traditional “extraordinary” measures. This confirms the bad news that government continues to overspend to the tune of over a trillion dollars per year. The good news is that hitting the debt limit creates yet another opportunity for President Obama to lead and Congress to act to control federal spending. The traditional extraordinary measures will not last long, so Treasury may need a new, unconventional, last-ditch budget tool—prioritizing spending so outflows match inflows—and Congress may need to act quickly to make it all legal. The Full Faith and Credit Act introduced by Senator Pat Toomey (R–PA) in the last Congress would be a good place to start.

  
  
  
• Elections, Transparency, & Accountability
  

  Putin Goes to Church

  By Cathy Young, Reason Foundation
  
  Reason, 01/03/2013
  

  If the full-bore prosecution of the Pussy Riot trio was intended to rally the religious around government, or to drive a wedge between the secular and religious parts of the opposition, the move failed. In the end, the controversy may well hurt both the Russian Orthodox Church and the church-state alliance. While few Russians approved of the feminists’ stunt in the cathedral, opinions were sharply split on the prison sentence. In one poll, one-third felt it was too harsh, about as many saw it as appropriate; 15 percent found it too lenient, and 10 percent said there should have been no prosecution. Many were critical of the church’s response to the incident, which included calling for hate crime charges and penalties severe enough to deter future miscreants. On the eve of the trial, only one in five Russians agreed this stance was justified.

  
  
  
• Regulation & Deregulation
  

  A Process for Cleaning Up Federal Regulations: Insights from BRAC and the Dutch Administrative Burden Reduction Programme

  By Joshua Hall, Michael Williams, Mercatus Center
  
  Paper, 01/03/2013
  

  This paper suggests a process to identify, evaluate, and eliminate inefficient regulations. Employing lessons from two successful government reform programs—the Base Realignment and Closure (BRAC) program in the United States and the Administrative Burden Reduction Programme in the Netherlands—the proposed framework would identify the regulatory costs associated with a historical piece of legislation and create a target for reduction in regulatory costs. An independent commission would then evaluate the benefits associated with each regulation and the package of regulations as a whole before sending it for congressional and presidential approval.

  
  
  
• Elections, Transparency, & Accountability
  

  Impartiality, Political Participation, and Federal Budget Process Reform

  By Timothy P. Roth, Adam C. Smith, Mercatus Center
  
  Paper, 01/03/2013
  

  The collapse of the federal budget process and the decline in trust in government threaten the stability of the self-governing republic that we inherited from our nation’s founders. Informed by their moral and political philosophy, we suggest an approach to reforming the budget process aimed at reclaiming that institutional trust. We argue that budget process reform must be animated by two related ideas: First, that post-constitutional statutory law must be impartial, and second, that both citizens and their elected representatives have a right to participate in, and to influence, the political process.

  
  
  
• Welfare
  

  What I Learned in the Poverty War

  By Peter Cove, Manhattan Institute
  
  City Journal, 01/03/2013
  

  My experience with long-term welfare clients has led me to propose a radical solution: that we abolish all cash welfare, as well as food and housing assistance—except for the elderly and the physically and mentally disabled—in order to move from a dependency culture to one of work-first. This recommendation may sound impractical at a time of high unemployment. But the work-first principle can easily be implemented even in a down economy, as America Works proved by getting jobs for more than 500 ex-convicts in Detroit—a local economy with 14 percent unemployment—in the past two years. After all, despite the economic downturn, more than 3 million jobs per year go unfilled in the United States.

  
  
  
• Elections, Transparency, & Accountability
  

  The Children of Hannibal

  By Michael J. Totten, Manhattan Institute
  
  City Journal, 01/03/2013
  

  The fact remains that Tunisia, while politically liberal in some ways, has no actual experience with working democracy. “My feeling is that Tunisia will cross five years of uncertainty,” says Ounais. “But the trend is toward a strong Arab democratic society. Within five years, I think we will stabilize with a new legislative assembly and create a new tradition of democratic rule in the country. We are the ones who are creating this pattern of Arab politics. We are the first.” Will Ounais be proved right? Will the Arab Spring succeed in its extraordinary birthplace? Years are likely to pass before we’ll know for sure, but if Tunisia becomes a stable democracy—and if it becomes a model for others—we should, at least in part, thank Carthage and Rome.

  
  
  
• Budget & Taxation
  

  Fiscal Cliff Deal Moves Nation Closer to Bankruptcy

  By e21: Economic Policies for the 21st Century, e21: Economic Policies for the 21st Century
  
  Commentary, 01/03/2013
  

  The nation’s political establishment has ridiculed the fiscal cliff deal for its failure to make the tough decisions. But what tough decisions are possible when one party to a negotiation doesn’t think they need to be made? Speaker Boehner has repeatedly cited the President Obama’s refusal to countenance spending cuts as the reason talks on a “grand bargain” kept breaking down. The President offers token programmatic changes that would do nothing to alter the long run debt trajectory in exchange for tax increases on the most volatile, least reliable segment of the income base. The President wants both to spend too much and then collect far too little in taxes to pay for it.

  
  
  
• Information Technology
  

  Granting Licensed Spectrum Flexibility: How to Spur Economic Growth and Innovation in America

  By Harold Furchtgott-Roth, Hudson Institute
  
  Briefing Paper, 01/03/2013
  

  The Federal Communications Commission should adopt rules to allow practically all spectrum to be allocated flexibly in response to market conditions and to allow licensees to use their spectrum flexibly. This approach is consistent with the direction of FCC decisions to allow greater spectrum flexibility. Greater spectrum flexibility to licensees is economically superior to the FCC’s recent proposals for broadcast spectrum auctions. Greater spectrum flexibility would foster greater innovation in American spectrum markets and spectrum transactions as well as stimulate innovation in wireless service and product markets. The overall economic value of flexibility is likely orders of magnitude greater than the $15 billion in auction receipts over ten years projected from broadcast spectrum auctions.

  
  
  
• Health Care
  

  Social and Economic Impact Review on Neglected Tropical Diseases

  By Jeremiah Norris, et al., Hudson Institute
  
  Briefing Paper, 01/03/2013
  

  While neglected tropical diseases (NTDs) do not pose an immediate threat to mortality, the disability associated with these diseases is extremely burdensome. They disproportionally affect the world’s poor, decreasing quality of life, worker productivity, and agricultural outputs. The inescapable conclusion is that NTDs are a serious detriment to economic development in many developing nations.

  
  
  
• Foreign Policy/International Affairs
  

  Information-Based Arms Control and Sino-American Trust

  By Christopher A. Ford, Hudson Institute
  
  Briefing Paper, 01/03/2013
  

  Everyone acknowledges that our two countries have important common interests, that they are economically interdependent, and that they need to cooperate on many critical issues. But there is also an increasing understanding that the Sino-American relationship has significant competitive aspects – not least in the political and security arenas – and that this competition is sharpening. We Americans, in other words, seem to be beginning to catch up to the endemic suspicion that has been apparent for so many years, in the PRC, in looking at us.

  
  
  
• Elections, Transparency, & Accountability
  

  The Art of Protest in 2012

  By Camille Pecastaing, Hoover Institution
  
  Defining Ideas, 01/03/2013
  

  Islamists in power only have themselves to blame for failing to reach out to the skeptics, to give them hope and ask for patience, to meet them halfway over a constitutional deal. But the riotous reaction to the new order can have tragic consequences in a time when the region needs Western help. The Middle East is, in so many ways, a normal place, where the concerns of daily life are food, children, jobs, and housing. But its politics are defined by violence, oscillating between the oppressive shroud of autocracy and the riotous vandalism of the street. The case for violence has yet to be made because, looking at the history of past decades, violence is nothing more than a fetishism that has accomplished very little. It has, however, tarnished the image of the region, deterred foreign investment, prevented economic recovery and weakened the institutionalization of democratic debate.

  
  
  
• Budget & Taxation
  

  Advantages of Low Capital Gains Tax Rates

  By Chris Edwards, Cato Institute
  
  Tax & Budget Bulletin, 01/03/2013
  

  The top federal capital gains tax rate is scheduled to increase from 15 percent to 23.8 percent next year. Some policymakers think that a reduced rate for capital gains is an unjustified tax preference. However, capital gains are different than ordinary income and have been subject to special low rates since 1922.1 Nearly every country has reduced tax rates on individual long-term capital gains, with some countries imposing no tax at all. This bulletin describes why policymakers should keep capital gains taxes low, and it presents data on capital gains tax rates for the 34 nations in the Organization for Economic Cooperation and Development.

  
  
  
• Labor
  

  Voluntary Union Representation: States Should Let Workers Choose Their Representatives

  By James Sherk, The Heritage Foundation
  
  Issue Brief, 01/03/2013
  

  Many states require government employees to accept union representation as a condition of employment. This gives unions significant control over the government’s workforce. Unions have used this power to inflate government compensation at the expense of other services and to the detriment of taxpayers. Exclusive representation also forces workers into one-size-fits-all contracts that ignore individual needs while leaving unions unaccountable. State legislatures should replace exclusive representation with voluntary representation. The government should allow its employees to choose anyone to represent them—their union, another union, or themselves. This would solve the problems that collective bargaining creates for government, while permitting a collective voice for workers who want it and forcing the union to be accountable to its members.

  
  
  
• National Security
  

  54th Terror Plot Against the U.S.: Qazi Brothers’ Plot to Attack New York

  By Jessica Zuckerman, The Heritage Foundation
  
  Issue Brief, 01/03/2013
  

  In late November, brothers Raees Alam Qazi and Sheheryar Alam Qazi were arrested and charged with conspiring to detonate a weapon of mass destruction and to provide material support to terrorists. Until recently, details on the alleged plot were sparse. In a detention hearing on December 18, however, it was revealed that the men sought to avenge the deaths of those killed in drone strikes in Afghanistan by blowing up a New York City landmark. This most recent plot signifies the 54th thwarted terrorist plot against the United States since 9/11 and serves as a reminder of the need to remain vigilant against the continued threat of violent extremism within the United States.

  
  
  
• Budget & Taxation
  

  How to Reduce the Debt Burden for Future Generations

  By Steve Conover, American Enterprise Institute
  
  The American, 01/03/2013
  

  The Left and Right have stark differences about the best ways to achieve the growth rates we need, if we are to reduce the burden and the growing risk of our federal debt. If we make the mistake of focusing our attention on the magnitude of the debt — as seemingly scary as that number is — we’ll be ignoring the only way to turn that debt into a non-problem: robust growth.

  
  
  
• Health Care
  

  Beyond Defeat or Defiance

  By Thomas P. Miller, American Enterprise Institute
  
  The American, 01/03/2013
  

  Last week, the state of Utah essentially presented this sort of challenge to federal officials, in insisting that its own implemented version of health exchanges should be declared fully compliant with the Affordable Care Act’s statutory requirements. If other states similarly decide to say what they are for, and not just what they are against, they can force federal officials to come out of the shadows and try to defend their unworkable and unpopular regulatory overreaches or return to the negotiating table with states and their constituents as equal partners. Then, the lumbering ACA train to expanded health insurance access won’t grind to a halt or derail in a wreck, but instead could travel down a safer and more sustainable set of tracks.

  
  
  
• Monetary Policy/Financial Regulation
  

  Sound Money vs. Stable Money

  By Kenneth Gould, American Enterprise Institute
  
  The American, 01/03/2013
  

  The stable money policy has not fulfilled its promises anywhere it has been implemented. Not only has “stability” been replaced with “constant inflation,” but the stable money doctrine’s claimed benefits are now open to question as the crises it was supposed to prevent are occurring with great frequency, long duration, and severe consequences.

  
  
  
• Regulation & Deregulation
  

  Prescription for Trouble

  By Tom Coburn, Scott Gottlieb, American Enterprise Institute
  
  The American, 01/03/2013
  

  Some of the most widely abused drugs, including OxyContin, have been re-engineered in tamper-resistant formulations and introduced in place of their original versions. Rates of abuse have fallen sharply as a consequence. But the Food and Drug Administration may let the older, riskier versions back onto the market in the form of cheap generic drugs — reigniting the original problems. Ample evidence shows that criminal use will simply shift to the generic drugs, since these older pills are easier to abuse. It will undermine efforts undertaken by industry and policymakers to design the new tamper-resistant drugs as a way to combat the problem.

  
  
  
• Education
  

  A Student Debt Cure Worse Than the Disease

  By Andrew Kelly, American Enterprise Institute
  
  The American, 01/03/2013
  

  Observers have warned that the so-called “student loan bubble” will have dire consequences for borrowers and taxpayers. But the federal government has traditionally been sheltered from much of that risk. Student loans are not dischargeable in bankruptcy, and the feds have significant powers to get their money back — from hiring collection agencies to garnishing wages. To be sure, student loan defaults are not costless: collection costs and delayed repayments represent losses. Even after an accurate accounting of these costs, the loan program still shows up as a surplus in the federal budget. In fact, taxpayers may have more reason to be concerned about the government’s response to high levels of student debt than the debt itself. Put simply, the student loan surplus may not last long if the recent expansion of Income-Based Repayment takes root.

  
  
  
• Health Care
  

  Saving Medicare: A Market Cure for an Ailing Program

  By Joseph Antos, American Enterprise Institute
  
  Book, 01/03/2013
  

  “Premium support” is on everyone’s lips, but more often as a badge of fidelity to a political party than as part of a serious discussion about Medicare’s impending crisis and what to do about it. Members of the Democratic Party typically say premium support means vouchers and “ending Medicare as we know it.” Members of the Republican Party typically say premium support gives seniors choices, promotes competition, and saves Medicare from dismantlement. Political debate does not often permit a careful discussion of Medicare’s problems and potential solutions. This volume seeks to remedy that limitation of election-year discourse and provide a guide to sustainable long-term Medicare reform.

  
  
  
• Labor
  

  The Declining Importance of Race and Gender in the Labor Market: The Role of Employment Discrimination Policies

  By June O'Neill, David M. O'Neill, American Enterprise Institute
  
  Book, 01/03/2013
  

  Conventional wisdom regarding the scope of employment discrimination is badly misguided. The wage gaps invoked to support new antidiscrimination policies can be largely attributed to differences in work-related skills—not labor-market discrimination. Moreover, analysis of historical data reveals that race- and gender-based wage differentials have declined over the years, mainly due to the individual initiatives of women and minorities that increased their productivity and narrowed skill gaps. Notably, the black-white wage gap declined as much between 1940 and 1960—a period with almost no federal antidiscrimination policies—as it did between 1960 and 1980, an era marked by the passage of the Civil Rights Act and the expansion of federal policies.