Tuesday, May 1, 2012

Stuff You Didn't See on the News

Welcome to The Other National Debt -- The Cost of Regulation
Called "the best measure of the overall regulatory burden" by the Wall Street Journal, Ten Thousand Commandments is dedicated to informing citizens about the hidden tax of government regulation of the economy. Since 1993.

Just another week in the world of regulation:

Washington Examiner columnist Conn Carroll refutes President Barack Obama’s attempt to blame the nation’s ongoing economic problems on his predecessor. In a recent interview, Obama tried to portray the Bush administration as a ‘deregulator’  free-for-all. The reality, however, is that Democrats and Republicans are not that far apart in their shared failure to restrain the federal regulatory behemoth.

Love him or hate him, Bush did not preside over some great era of deregulation. Quite the opposite, in fact. During Bush’s term, money spent by regulatory agencies increased 44 percent, from $27 billion in 2001 to $44.9 billion in 2007. The number of people employed by federal regulatory agencies rose by 41 percent from 172,000 in 2001 to 244,000. And the Code of Federal Regulations grew by more than 4,500 pages.

According to the Small Business Administration, in 2000, the regulatory burden inflicted on businesses was $4,463 per employee. By 2008, that number had almost doubled to $8,086. Whatever caused the financial crisis, it wasn’t Bush-era deregulation.  Unfortunately, Bush wasn’t the first president to let regulatory agencies run wild, and Obama won’t be the last, as CEI’s Wayne Crews shows in his annual survey of the federal regulatory state, 10,000 Commandments. The 2012 edition is due out soon. (Spoiler alert: The growth of government continued unabated last year.)

Social Security (SS) and Medicare have unfunded liabilities of approximately $40 trillion dollars. In other words, if we are to make good on Social Security and Medicare promises while keeping tax rates at their current levels, we now should have amassed a $40 trillion trust account. Since this did not occur, major tax rate increases and/or cuts in benefits are coming. How did we get ourselves into this disastrous financial bind? The secret is in the political invention of “pay-as-you-go,” the ultimate “free lunch.” But with all free lunches, the bill eventually comes due. The story of pay-as-you-go and the arguments made in its behalf reveal a great deal about political motivation and why we get bad public policies.

Here is another of those head-scratchers, this one from Amartya Sen, about how neoclassical economics is partly responsible for the financial crisis because neoclassical economists hold that markets work “perfectly”: ……..

I’ve been around neoclassical economists since my undergraduate days and I can’t think of a single neoclassical economist who says that markets work “perfectly” and favoring “complete reliance on the markets.” David Friedman comes to mind, but even his arguments for anarchism are not based on the belief that markets are somehow “perfect,” but that they are less imperfect than regulation. The truth, of course, is that virtually all neoclassical economists favor a substantial amount of economic regulation — government production of law and order, government control of the monetary system, competition policy, and other government actions to combat purported market failures.

Statements like Sen’s make sense only as a rhetorical ploy to fool the reader. If the mainstream thinks, say, that government should control 25% of the economy, and you think government should control 75%, you describe the mainstream as “extremists” who believe in “no government,” thus making your position seem like a reasonable middle ground. Krugman of course employs the same rhetorical strategy. Sen is obviously too intelligent to mean what he says literally, so I can only assume mendacity. Am I missing something?

Just in case you missed it this past weekend, it has now been officially three years since the U.S. Senate acted to pass a budget for the United States federal government!

My Take – I threw this in to demonstrate the absurdity of these people.  They find it impossible to pass a budget as required by law, but their ability to promulgate new regulations at an avalanche pace is totally unabated.  RK

We were among the first to report that President Obama’s proposed budget would break the debt deal reached in the U.S. Congress last summer. Today, although the President’s proposed budget is officially dead, the leadership of the majority Democratic party in the U.S. Senate according to Powerlineblog is taking steps to make breaking that deal a reality:

….When it has suited their purposes, the Democrats have been champions of the Budget Control Act. Thus when House Republicans adopted a budget that would have spent less than the maximums under the BCA, Democrats alleged that the budget “violated” the Act. They thus turned the Budget Control Act on its head, pretending that the maximum spending levels agreed on in the Act—caps—were actually minimums.   Now, with no fanfare and no press coverage, the Democrats are attempting to negate—effectively, to repeal—the Budget Control Act by adopting spending bills that exceed its limits…..Here, under the pretense of “saving” local post offices that the government-supported enterprise is mandated by the U.S. Congress to operate unprofitably, as the U.S. postal service must also adhere to the prices for its services that are also dictated by the wannabe tycoons of the U.S. Congress, it is being claimed that only American taxpayers can keep the postal monopoly in business.


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