Dan Mitchell on Education, Equality, Big Government and World Wide Economics

Editor's Note: Dan Mitchell allowed me to publish his work some years ago, and for the most part, I've done so happily, though there were pieces I just couldn't in good conscience publish. Dan is a prolific writer, well sourced and knowledgeable, but we don't always agree.  Since I've been taking time away from P&D, his articles are piling up and I decided to get all the articles sent to me posted as links today. Much of what he writes about is in line with my thinking, but, since he's a libertarian, much of what he writes isn't in my line of thinking. So why do I post his work? Because most of it is worthwhile, and the same rationale applies to the articles I'm posting today.  RK

The IMF, Special Drawing Rights, and Expanding the Burden of Government 

December 2, 2021 by Dan Mitchell

At the risk of understatement, I’m not a fan of the International Monetary Fund. My main objection is that the bureaucracy’s various policies – especially bailouts – make it easier for irresponsible politicians to expand the burden of government spending and increase deficits and debt.  Needless to say, that approach doesn’t work. The best evidence is that many governments wind up in a never-ending cycle of tax-spend-debt-crisis-bailout, followed by further rounds of tax-spend-debt-crisis-bailout.

Moreover, the net effect of these policies is to divert capital from the economy’s productive sector. So it’s the economic equivalent of a lose-lose policy.  When criticizing the IMF, I usually focus on how the bureaucrats relentlessly urge higher taxes. Indeed, I often complain about how the bailouts are provided only if countries agree to raise taxes (another lose-lose situation).........To Read More....

The Best President in Recent History

December 5, 2021 by Dan Mitchell

Since I view Ronald Reagan as an honorary libertarian, I was very happy back in 2013 to see that he won a landslide victory over Barack Obama in a hypothetical poll. This meant that voters either were old enough to personally experience the benefits of Reaganomics, or they managed to learn some history (in spite of a biased education establishment).  Well, now I have another reason to be happy. According to a new poll shared by Paul Bedard of the Washington Examiner, nearly 70 percent of respondents have a favorable impression of Reagan, easily the best result for all recent presidents..........To Read More....

The Size of Government and State Capacity

December 8, 2021 by Dan Mitchell

If we want more prosperity, what’s the ideal size of government? Anarcho-capitalists would say it shouldn’t exist at all, while some hard-core leftists want something like North Korea, where the state is everything. The rest of us want something between those extremes, but that still leaves plenty of room for disagreement.

I think limited government is the recipe for economic dynamism, which is why I’m a big fan of the  U.S. Constitution, which was designed to limit the powers of Washington. Others believe that government should be bigger, in some cases much bigger, with international bureaucracies often advocating this view.

There are even some libertarians who believe that more government spending can lead to economic growth by boosting “state capacity.” What is state capacity, in case you’re wondering? It’s the notion that the private economy is more likely to flourish if government is sufficiently large that it can competently fulfill certain functions. Writing for Econlib, Professor Bryan Caplan explains one of the problems with the literature on state capacity.........To Read More.....

The Economics of Tax-Financed Spending vs. Debt-Financed Spending

December 6, 2021 by Dan Mitchell

Regarding fiscal policy, almost everyone’s attention is focused on Biden’s growth-sapping plan to increase the burden of taxes and spending. People are right to be concerned. If the President’s plan is approved, the already-grim fiscal outlook for United States will get even worse. This battle will be decided in next 12 months, hopefully with a defeat for Biden’s dependency agenda.

Regardless of how that fight is resolved, though, we’re eventually going to get to a point where sensible people are back in charge. And when that happens, we’ll have to figure out how to restore the nation’s finances. That requires figuring out the appropriate goal. Here are two options:

• Keeping taxes low.
• Controlling debt.

These are both worthy objectives.  But, as a logic teacher might say, they are necessary but not sufficient conditions...........To Read More....  

Foreign Aid, Corruption, and Big Government

December 7, 2021 by Dan Mitchell

Given my libertarian sensibilities, I would probably object to foreign aid programs even if they worked.  But I don’t have to deal with that potential quandary because we have ample evidence that you don’t get prosperity by giving money to politicians in poor countries.  Indeed, such policies arguably exacerbate poverty by enabling bad policies such as a bigger burden of government spending.

And when government gets bigger, that creates more opportunities for corruption (the same problem exists in developed nations). Yet the crowd in Washington seem willfully blind to these problems.

For instance, in a column for today’s Washington Post, Treasury Secretary Janet Yellen and USAID Administrator Samantha Powers opine on the topic of global corruption and never even acknowledge that more government enables more corruption.........To Read More....

 Counter-Tweet of the Year: Crushing the Inequality Narrative

December 9, 2021 by Dan Mitchell

I have a four-part series (here, here, here, and here) that explains why it’s much better to focus on fighting poverty rather than fretting about inequality. I also think that our friends on the left who fixate on inequality are mostly motivated by an ideological desire for bigger government (or an ideological desire to hurt the rich).

Helping the less fortunate seems to be – at best – a secondary concern for them.

But let’s not worry about deciphering their real motives and instead look at why their approach is misguided.

Here’s a tweet from Gabriel Zucman, who (along with Thomas Piketty) is one of the most widely cited crusaders for class-warfare policy.

He is upset that the richest people in the world earn a lot more than the poorest people, and he obviously wants people to view these numbers as scandalous (and, with a reference to colonialism, maybe even subliminally racist).........To Read More.....

Educational Choice, the Supreme Court, and a Level Playing Field for Religious Schools

December 10, 2021 by Dan Mitchell

The case for school choice is very straightforward.

• Monopoly government school systems cost a lot of money and do a bad job. The interests of the education bureaucracy rank higher than the educational needs of kids. Poor families are especially disadvantaged.
• School choice puts parents in charge. Lots of evidence, including from overseas, shows choice improves educational outcomes. And private schools cost less, so taxpayers also win.

The good news is that there was a lot of pro-choice reform in 2021.West Virginia adopted a statewide system that is based on parental choice. And many other states expanded choice-based programs. But 2022 may be a good year as well. That’s because the Supreme Court is considering whether to strike down state laws that restrict choice by discriminating against religious schools. Michael Bindas of the Institute for Justice and Walter Womack of the Southern Christian Leadership Conference make the case for a level playing field in a column for the New York Times............To Read More....