Trump is the Rare Honest Politician about US Debt

Trump is the Rare Honest Politician about US Debt

12/06/2018Tho Bishop

Once again Donald Trump’s presidency has done a great job of highlighting the hypocrisy and delusion of the beltway bubble.

A recent story from the Daily Beast reports that Trump is frustrating advisers with his apathy towards the current trillion dollar deficits coming out of Washington. 

Since the 2016 presidential campaign, Donald Trump’s aides and advisers have tried to convince him of the importance of tackling the national debt.

Sources close to the president say he has repeatedly shrugged it off, implying that he doesn’t have to worry about the money owed to America’s creditors—currently about $21 trillion—because he won’t be around to shoulder the blame when it becomes even more untenable.

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the national debt in the not-too-distant future. In response, Trump noted that the data suggested the debt would reach a critical mass only after his possible second term in office.

“Yeah, but I won’t be here,” the president bluntly said, according to a source who was in the room when Trump made this comment during discussions on the debt.

Trump’s lack of concern for the debt should hardly be surprising. As a candidate, he boasted about his desire to preserve various entitlement programs while simultaneously promising significant increases in military spending – a promise he has delivered on. Left unsaid in the report is that the goal of at least some of Trump’s advisors was undoubtedly to encourage the president to embrace some form of tax increase. We know, for example, that Treasury Secretary Steve Mnuchin has encouraged Trump to embrace a VAT tax in the past, a policy that would be particularly damaging to America’s low and middle class. 

What’s all the more comical, however, is the resulting jeering from DC pundits and political enemies acting as if Trump’s view on the debt is some radical new threat to American stability. On the contrast, all Trump is doing is being honest about the views held by almost everyone that has served in Washington the past several decades. While politicians from both parties love to give lip service to “fiscal responsibility”, the closest thing we’ve come to meaningful action on budgetary restraint was the budget sequestration of 2013. Of course those cuts to future spending increases (not to be confused with actual spending cuts) came into place simply because of the inaction of federal legislators and faced instant bipartisan condemnation.

This isn’t the first time that Trump’s truth telling over the debt has thrown opposing politicians and pundits into a tizzy. On the campaign trail, Trump was accused of threatening financial Armageddon when he suggested that America could default on its debt. What should be obvious to anyone who has paid even passive attention to American politics is that US default is inevitable. The only question is what form will it take.

One of the greatest myths in DC is that America has never defaulted on its debt, something repeated not long ago by Fed Chair Jerome Powell in a Congressional hearing. Of course this is simply absurd.

As James Grant and other financial historians have explained, the federal government has defaulted numerous times in its history, the most recent of which occurred when Richard Nixon closed the gold window.  In that case, the out of control spending, led by the Vietnam war and LBJ’s Great Society, led the US to default on its obligations to foreign governments, repaying their loans with dollars valued at far less than the $35 per ounce they were promised.

This form of monetary default may be the future of the dollar, an outcome that Ron Paul has long warned us about

Another option, one that Murray Rothbard advlocated, is simple debt repudiation. As he wrote in 1992, when US debt was a quaint $4 trillion:

I propose, then, a seemingly drastic but actually far less destructive way of paying off the public debt at a single blow: outright debt repudiation. Consider this question: why should the poor, battered citizens of Russia or Poland or the other ex-Communist countries be bound by the debts contracted by their former Communist masters? In the Communist situation, the injustice is clear: that citizens struggling for freedom and for a free-market economy should be taxed to pay for debts contracted by the monstrous former ruling class. But this injustice only differs by degree from "normal" public debt. For, conversely, why should the Communist government of the Soviet Union have been bound by debts contracted by the Czarist government they hated and overthrew? And why should we, struggling American citizens of today, be bound by debts created by a past ruling elite who contracted these debts at our expense? One of the cogent arguments against paying blacks "reparations" for past slavery is that we, the living, were not slaveholders. Similarly, we the living did not contract for either the past or the present debts incurred by the politicians and bureaucrats in Washington.

Rothbard goes on to suggest that a more traditional debt restructuring – similar to what Trump touched on during his campaign  –  could also be an option if outright repudiation was considered to be “too draconian.”

The government is an organization, so why not liquidate the assets of that organization and pay the creditors (the government bondholders) a pro-rata share of those assets? This solution would cost the taxpayer nothing....The United States government should be forced to disgorge its assets, sell them at auction, and then pay off the creditors accordingly....This combination of repudiation and privatization would go a long way to reducing the tax burden, establishing fiscal soundness, and desocializing the United States.  

Peter Klein has also written on the absurd hyperventilating in the beltway when such an idea is ever suggested:

[T]he idea that the US can never restructure or even repudiate the national debt — that US Treasuries must always be treated as a unique and magical “risk-free” investment — is wildly speculative at best, preposterous at worst. Every other borrowing entity — individuals, business firms, and governments — has the option of renegotiating interest payments and even defaulting on loans. It is hardly an extraordinary event, even for sovereign borrowing — that’s why lenders charge a risk premium beyond the return they require to compensate for time preference.

There is lots of evidence on private, corporate, and sovereign defaults, and the results are hardly catastrophic. Depending on the circumstances, the benefits of reducing debt can exceed the costs of harming the borrower’s reputation and thus increasing the costs of future borrowing. Anyone who has been through a personal or corporate bankruptcy knows this.

At the end of the day Trump’s views on dismissal of US debt illustrate is another example of short-sighted economic thinking. It’s absurd, however, to treat this as some radical change from his more “dignified” and “respectable” predecessors. Instead, just like his views on tariffsmonetary policy, and defense spending, Trump’s real sin is simply being a continuation of the status quo on these issues

The difference is that Trump says out loud the part politicians are supposed to keep quiet.

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Study Shows Government Social Programs Create Dependence, Idleness

When I write about Social Security, I normally focus on the program’s huge fiscal imbalance ($44 trillion and climbing).

But it’s not just a fiscal crisis. Social Security is also an increasingly bad deal for workers. Especially minorities with lower average lifespans. When compared to what they would get from a private retirement system, people are paying in too much and getting out too little.

There’s also another major problem with the program.

Academic experts have quantified how older workers are lured out of the labor force when they get money from the government. And since economic output is a function of the quality and quantity of labor and capital, this means we’re sacrificing wealth and reducing prosperity.

Here are some excerpts from a study by Professors Daniel Fetter and Lee Lockwood.

Many of the most important government programs, including Social Security and Medicare, transfer resources to older people… Standard economic theory predicts that such programs reduce late-life labor supply and that the implicit taxation reduces the ex-post value of the programs to recipients. Understanding the size and nature of such effects on labor supply and welfare is an increasingly important issue, as demographic trends have increased both the potential labor supply of the elderly and its aggregate importance, while simultaneously increasing the need for reforms to government old-age support programs. …We address these questions by investigating Old Age Assistance (OAA), a means-tested program introduced in the 1930s alongside Social Security that later became the Supplemental Security Income (SSI) program.

Here are charts illustrating how people are retiring earlier in part because of government payments.

Feb-11-19-Fetter-Figure-1.jpg

And here are some calculations from the study.

Our estimates indicate that OAA significantly reduced labor force participation among older individuals. The basic patterns that we explore in the data are evident in Figure 2, which plots male labor force participation by age, separately for states with above- and belowmedian OAA payments per person 65 and older. Up to age 65, the age pattern of labor force participation was extremely similar in states with larger and smaller OAA programs. At age 65, however, there was a sharp divergence in labor force participation between states with larger OAA programs relative to those with smaller programs, and this divergence continued at older ages. Our regression results, which isolate variation in OAA program size due to state policy differences, imply that OAA can explain more than half of the large 1930–40 drop in labor force participation of men aged 65–74. …Our results suggest that Social Security had the potential to drive at least half—and likely more—of the mid-century decline in late-life labor supply for men. …Taken as a whole, our results suggest that government old-age support programs can have large effects on labor supply, through both their transfer and taxation components.

This chart captures how old-age payments in various states were associated with varying degrees of labor force participation.

Feb-11-19-Fetter-Figure-2.jpg

By the way, I’m not sharing this information because it’s bad for people to retire at some point.

I’m merely establishing that there’s academic support for the common-sense observation that people are more likely to leave the labor force when there’s an alternative source of income (though it’s worth noting that there should be a sensible and sustainable system for providing that retirement income).

Moreover, people are likely to stop working when government systems give them money before age 65.

Three academics, Andres Erosa, Luisa Fuster, and Gueorgui Kambourov, have a study quantifying this problem in European nations.

There are substantial differences in labor supply and in the design of tax and transfer programs across countries. The cross-country differences in labor supply increase dramatically late in the life cycle…while differences in employment rates among eight European countries are in the order of 15 percentage points for the 50-54 age group, they increase to 35 percentage points for the 55-59 age group and to more than 50 percentage points for the 60-64 age group. In this paper we quantitatively assess the role of social security, disability insurance, and taxation for understanding differences in labor supply late in the life cycle (age 50+) across European countries and the United States. … The social security, disability insurance, and taxation systems in the United States and European countries in the study are modelled in great detail.

Here’s a sampling of their results.

The main findings are that the model accounts fairly well for how labor supply decreases late in the life cycle for most countries. The model matches remarkably well the large decline in the aggregate labor supply after age 50 in Spain, Italy, and the Netherlands. The results support the view that government policies can go a long way towards accounting for the low labor supply late in the life cycle for these European countries relative to the United States, with social security rules accounting for the bulk of these effects… relative to the United States, the hours worked by men aged 60-64 is…49% in the Netherlands, 66% in Spain, 44% in Italy, and 29% in France. …government policies can go a long way towards accounting for labor supply differences across countries. Social security rules account for the bulk of cross country differences in labor supply late in the life cycle (with its contribution varying from 50% to 100%), but other policies also matter. In accounting for the low labor supply relative to the US at ages 60 to 64, taxes matter importantly in the Netherlands (6%), Italy (6%), and France (5%); disability insurance policies are important for the Netherlands (7%) and Spain (10%).

And here’s one of their charts comparing hours worked at various ages in Switzerland, Spain, France, and the United States.

Feb-11-19-Erosa-Fuster-Kambourov.jpg
The good news is that we don’t push people out of the labor force as much as the French and the Spanish.

The bad news is that we’re not as good as Switzerland (probably in part because the Swiss have a retirement system based on private saving, so they have the ideal combination of good work incentives and comfortable retirement).

But it shouldn’t matter whether other countries have good systems or bad systems. What does matter is that America’s demographic profile is changing. We’re living longer and having fewer children and our system of entitlements is a mess.

We should be reforming these programs, both for fiscal reasons and economic reasons.

P.S. It’s not just Social Security. Other programs also lure people out of the job market and into government dependency, with Obamacare being an especially harmful example.

Originally published at International Liberty
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AOC's Green New Deal Is Absolutely Absurd, but That's the Washington Status Quo

02/08/2019Tho Bishop

This week Alexandria Ocasio-Cortez released a preliminary summary of her grand vision for a Green New Deal. Prior to its unveiling, the youngest rising star of the Democratic Party had already managed to get the support of leading members of Congress, including all of the party’s current leading Presidential candidates. Unfortunately for Ms. Ocasio-Cortez, the document was met with widespread ridicule for advocating policies such as building high-speed rail to Hawaii, eliminating combustible engines, and guaranteed government jobs – even for those “unwilling to work.”

Like FDR’s New Deal, the proposal would be a total disaster for the US economy. Also, like its spiritual predecessor, it’s a great illustration of what F.A. Hayek warned of his classical work the Road to Serfdom: a grand utopian plan for a military-like mobilization of the entire US economy, the inevitable result of which is economic ruin and loss of liberty.

The most refreshing part of the Green New Deal’s proposals though is how honest and transparent the document is – a rarity for Washington. The proposal makes its own comparisons to military plans, stating its objective is “to mobilize every aspect of American society at a scale not seen since World War 2” and remarking at the government’s past success of outperforming expectations when it comes to the manufacturing of war machines. It doesn’t try to downplay the revolutionary vision outlined in the brief, nor even try to act as if this is some sort of policy that will pay for itself, instead it explicitly advocates for it to be financed through the monetary magic of the Federal Reserve.

It is in her honesty in which Ms. Ocasio-Cortez’s true weakness as a politician lies.

After all, the very same class of political pundits and politicians – on both the left and right – that have decided it is safe to laugh at the freshman Congresswoman’s proposal are almost all guilty of promoting and supporting plans that are similarly absurd.

For example, AOC’s embrace of the idea that “we’ll just pay for it!” – a crudely articulated version of Modern Monetary Theory which has gained its own following in recent years  –  is certainly deserving of ridicule. Is it, however, all that more outrageous than the idea of negative interest rate or the massive expansion of central bank balance sheets that “serious” central bankers have embraced around the world?

Similarly, the sheer hubris of thinking that Washington central planners – in just 10 years – can re-arrange the entire US economy in a way to eliminate all carbon emissions is something so insane that it shouldn’t be seriously discussed in civilized society.  Yet is it really all that more delusional than the idea that the US military could transform the entire Middle East into a bastion of neoliberalism, a view passionately defended by a number of “serious” pundits and policymakers who continue to get paid for their opinion?

Yes, anyone with a basic grasp of economics can recognize the amazing fallacies that exist within the idea of guaranteeing everyone, everywhere a job, food, healthcare, and housing – totally regardless of merit. Yet the current operations of the US government actively dismiss the well-understood consequences of prohibition, government subsidies, unfunded social programs, and arbitrary insurance mandates.

So yes, Rep.  Alexandria Ocasio-Cortez is guilty of promoting stupid policy she doesn’t fully understand, the consequences of which will have very negative consequences for Americans of all types. She is deserving of public ridicule and in a better world would be soundly voted out for her severe ignorance.

She should not, however, be treated as a beltway outlier.

 Her complete ignorance of economics simply means she fits in perfectly with the rest of Washington and most legislators around the world. 

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Why It's Important to "Preach to the Converted"

02/08/2019Ryan McMaken

An an editor of publications with a distinct ideological bent, I sometimes hear that it's important to strive to avoid "preaching to the choir" or "preaching to the converted."

It's difficult to generalize what is meant when this phrase is used. Some users of the phrase think it's a waste of time for any group to discuss important topics among the members. Why discuss laissez-faire economics (or any topic) with other people who already agree?

Some have even argued that the very existence of publications devoted to a specific limited ideological point of view are dangerous because they encourage more in-group discussion at the expense of outside engagement.

More generally, though, the use of the phrase "preaching to the converted" is used to devalue the practice of encouraging frequent discussion of ideas and scholarship within in a certain group. The phrase instead suggests it is better to focus most — if not all — communications outward for the purposes of converting outsiders.

There's a lot of gray area here, and moderates on the issue likely hold a wide variety of opinions as to just how much discussion ought to be with outsiders. Some may think its fine to develop ideas internally, and to engage in only occasional outward "missionary" efforts. Depending on the nature of the organization, some may even think it's fine to focus nearly all energies on in-group teaching and scholarship so that in-group members can then go to other organizations which specialize in outward communications, but do little in terms of internal debate and idea development.

In practice, most ideological groups do both internal idea development and education, and outward communication.

Both activities are important, and many people understand this.

Some observers, nevertheless have a tendency to excessively emphasize the importance of not "preaching to the converted" and this is often due to three incorrect assumptions:

  1. It is believed that people in the converted already have a sufficient understanding of the topic at hand.
  2. It is assumed that the converted will never leave the group in question.
  3. It is believed that the converted won't interact with people outside their group in other contexts.

To illustrate these points, it may be helpful to speak of them in the context for which the term was originally invented: religious evangelization.

This isn't to suggest that laissez-faire views of political economy are anything like a religion. They're not. These views do not constitute a "way of life" or any sort of all-encompassing theory of the cosmos or the human person.

Nevertheless, a religious group can serve as an instructive analogy for a closer look at spreading a certain ideological viewpoint.

The "Choir" Is Often Full of Poorly Educated and Casual Believers

Let's begin by looking at "the converted" or the congregation in any religious group.

Anyone who has experience within any sizable group of Christians — for example — knows that there is a wide variety of knowledge levels and engagement levels within the group.

Some of them are well-read, enthusiastic, orthodox, and attend every single group event. Others are less sure of the group's core beliefs. Some only attend services occasionally. Some self-identify as Christians, but have barely read any of the group's most important documents.

And yet, all of these people call themselves "Christians." Clearly, it would be a mistake to then conclude that no one in this group requires additional discussion, instruction, or reading. In fact, most would benefit from being shown new ways of looking at things, or new readings with which they had not been familiar before. The clergy and teaching staff would also benefit from being asked difficult questions and being asked to elaborate on ideas already discussed. Useful information doesn't just flow one way. Without this, the "converted" cannot be expected to communicate their ideas to others, or even to themselves. Moreover, because old people die and new people are born, new people may be coming into the group as other people are dying off.

Some of the Converted May Be Headed Out the Door

This brings us to the second problem of assuming too much about the converted. It is often assumed that those who are converted will stay that way. This, of course, is a bad assumption in both ideological movement and in religious groups. People fall away from religious groups frequently. The same is true of any number of ideological groups, whether they be based on laissez-faire economics,  on Marxism, or on veganism.

Thus, one of the most important functions of "preaching to the converted" is to address the questions of those who perceive inconsistencies in the ideas, or to better explain hard-to-understand aspects of a certain group of ideas. One of the most important things to avoid is the idea that every question already has pat answers that are self-evidently true to everyone. This is rarely the case, of course, so even among the converted, additional discussion and investigation is usually warranted.

The Converted Are Part of Other Groups

And finally, it is important to remember that "the converted" — unless they're part of a despotic cult — interact with numerous other groups of people in daily life, whether through family, professional work, or community groups. If these people are to be expected to spread certain ideas effectively, they must have a competent grasp of them. And there must be some place or publication or organization that can help them obtain this grasp of things.

In other words, if the converted are to share their ideas with others, their primary concern should be understanding these ideas well in the first place.

Leonard Read regularly made this point, noting:

it is only in self-improvement that one can have any influence whatsoever on the improvement of others. This point may never come clear unless we know why so few of us feel any need for self-improvement while so many of us possess an overpowering itch to improve others. Why do we spend so much more time looking down than up?

This was perhaps Read's version of "doctor, heal thyself." It's a good thing to want to go out and improve the world. But it's important to also have the means of improving one's self first. Being a member of "the choir" or "the converted" is often a helpful first step.

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Crony Capitalism in Scientific Research

02/07/2019Hunter Lewis

My wife and I read a quirky newsletter you won’t find online called the Belly of the Beast. It is the source of this startling but then again not surprising information: Academic researchers publish 2-3 million papers a year, most of it funded by governments. Most of the results of the this research are published in copyright protected journals owned by private companies, especially the giant German company Elsevier, companies that together are thought to earn over $25 billion. To read the research, you need to subscribe, and some of the journals charge as much as $5,000-10,000 a year for the subscription. Individual articles may be purchased separately, but there are stiff fees for them such as $40 each. Academic libraries often use public funding to pay the subscription or article prices.

There are some other peer reviewed "open access" journals, but researchers may have to pay a stiff fee to be put up on line by them, for example $3,000, and they are generally less "prestigious" than the print publications. A documentary film on this subject may be found at paywallthemovie.com . The film teases that you will have to pay $39.95 to see it, but you won’t actually have to do so. By the way, the government giving away billions for research and then allowing private publishers to skim billions from it is far from the whole story. If government funded research at a university results in a patentable invention, such as a drug, the university is granted all the rights to the patent. The university then sells or licenses the patent to a drug company. The government, having doled out so-called public funds, does not share in any of the profits.

Why is government perfectly happy with these arrangements? Because government is working hand in glove with the private interests directly profiting from the arrangements. Politicians benefit through campaign contributions, donations to their captive non-profits, and future jobs. Bureaucrats receive trips or other benefits or the prospect of future, remunerative jobs from the same private interests.

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Spitznagel on Fed Policy, Hedge Funds and Insuring Market Risk

02/06/2019Mark Spitznagel

Universa Investments Chief Investment Officer Mark Spitznagel sits down with Bloomberg's Erik Schatzker to discuss the next market crash, the size of the hedge fund industry and worries around hedging market risk.

Watch it here. 

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Jeff Deist on Crosstalk

02/06/2019The Editors

Jeff Deist joined CrossTalk yesterday to discuss the influence of neoconservatives like John Bolton on Trump's foreign policy. Things get heated with another guest when Jeff questions the dubious "War on Terror," the enormous US military budget, and whether Trump's actions regarding endless Middle East wars matches his rhetoric.

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New York is America's Least Free State, Which is the Most Libertarian?

wrote a couple of days ago about America’s best and worst cities for pro-market policy, and I noted that there are several rankings of economic liberty for states and nations.

But what if you want to know the place with the most overall freedom? In other words, what is the most libertarian place to live based on both economic liberty and personal liberty?

If you don’t mind a bit of travel, the answer is New Zealand.

For those who prefer to stay in the United States, Will Ruger and Jason Sorens periodically crunch numbers to calculate Freedom in the 50 States.

Their previous edition had New Hampshire in first place, so let’s take a look at the newest version.

This 2018 edition of Freedom in the 50 States presents a completely revised and updated ranking of the American states on the basis of how their policies promote freedom in the fiscal, regulatory, and personal realms. …More than 230 policy variables and their sources are now available to the public on a new website for the study. …the 2018 edition provides annual data on economic and personal freedom and their components back to 2000. …Freedom in the 50 States is an essential desk reference for anyone interested in state policy and in advancing a better understanding of a free society.

The publication is loaded with data, as you’ll see from the following charts.

To put all this data in context, the report separately calculates fiscal freedom, regulatory freedom, and personal freedom.

We’ll start with the fiscal section, which includes variables about taxes and spending, as well as other measures such as debt and government employment.

For those interested, the report has plenty of analysis and explanation about the variables that are used and the weights that are assigned.

Feb-5-19-Fiscal-weights.jpg

Most of us, though, simply want to see which states get good scores and which ones get bad scores.

Feb-5-19-Fiscal.jpg

I’m not surprised to see that zero-income-tax states – led by Florida – are at the top. And I’m also not surprised that flat-tax states – led by Pennsylvania – also are well represented.

I assume nobody is surprised to see New York in last place.

Now let’s shift to regulatory policy and see where the burden of red is most onerous.

This part of the ranking covers a range of issues, most notably controls on land use and restrictions on the use of markets in health care.

But there are other important variables, including the extent and burden of occupational licensing.

Feb-5-19-Reg-Weights.jpg

Indeed, before getting to the overall rankings for regulation, I want to share those scores because it is so galling and upsetting that politicians impose barriers that limit the freedom of people to earn income.

Colorado deserves hearty applause for being at the top, edging out Idaho by a narrow margin. And even though Vermont was near the bottom of the fiscal rankings, it merits a mention for being good on the issue of occupational licensing.

Feb-5-19-Occupation-Licensing.jpg

California deserves hearty condemnation for being in last place. And I’m not surprised to see states like Illinois and New Jersey near the bottom.

I’m very disappointed, however, that Texas and Florida have such a dismal record.

But let’s not fixate on just one of the variables. If we look at the rankings for all regulatory issues, Kansas is in first place, followed by Nebraska and Idaho.

Feb-5-19-Regulation.jpg

The worst states (hardly a surprise) are New York, New Jersey, and California.

Now let’s combine fiscal policy and regulatory policy and see the report’s ranking for overall economic freedom.

Florida is in first place by a comfortable margin, followed by three other zero-income-tax states (though the absence of a state income tax does not guarantee a good score, as you can see from the poor performance of Alaska, Wyoming, and Washington).

Feb-5-19-Economic-Freedom.jpg

New York wins the Booby Prize by a large margin.

Hawaii and California also stand out in a bad way.

The above table tells us which state enjoys the most economic liberty, but that doesn’t tell us where to live if you want the maximum amount of overall freedom.

To identify the nation’s most libertarian state, we also need to look at rankings for personal liberty.

Feb-5-19-Personal-Weights.jpg

This means, in part, whether people are harassed and persecuted for victimless crimes, but it also includes measures of educational freedom and gun rights.

Speaking of which, I can’t resist sharing the data on which states most respect the 2nd Amendment.

Kansas gets the best score, followed by Vermont(!), Arizona, Idaho, and Mississippi.

Feb-5-19-Gun-Freedom.jpg
 

Hawaii is the worst state by a significant margin and we (again) find California near the bottom.

Another issue which is near and dear to my heart is asset forfeiture.

I am nauseated and disgusted that governments are allowed to steal property from people who have not been convicted of any wrongdoing.

So let’s applaud New Mexico, Nebraska, and New Hampshire for putting limits on this awful practice.

Feb-5-19-Asset-Forfeiture.jpg

And let’s heap unending score on Rhode Island for having the nation’s worst track record on this issue.

But what happens when we combine all issue relating to personal freedom?

Well, that’s exactly what the authors did, which means we get a comprehensive ranking for personal freedom. I’m not surprised that Nevada, Colorado, and New Hampshire are in the top 5, but I’m surprised to see that Maine leads the pack.

Feb-5-19-Personal-Freedom.jpg

Likewise, I guess I’m not too surprised that Texas and other bible-belt states are socially conservative.

But Hawaii next to last?!?

In any event, the report combines economic freedom and personal freedom and tells us which state could be considered the most libertarian.

And the winner is the Sunshine State of Florida, followed by New Hampshire, Indiana, Colorado, and Nevada. I’m surprised that Florida does so well, though some of the other high-scoring states make sense (especially when I look at data on who reads these columns).

Feb-5-19-Overall-Freedom.jpg

By contrast, the most dirigiste state is New York. That doesn’t surprise me, and I’m also not shocked by some of the other bottom dwellers.

I’m tempted to end here since we’ve already surveyed so much information.

But there’s one final chart which hopefully should be very fascinating.

We just looked at the data on how states currently rank for overall liberty.

This final selection tells us which ones have been moving in the right direction and wrong direction since the turn of the century.

Kudos to Oklahoma for adopting a lot of good reform. Same for New Mexico. And it’s also interesting to see that several states from the Great Lakes region boosted their scores (with Illinois being a laggard, of course).

Feb-5-19-Freedom-Change.jpg

Vermont has the dismal distinction of having moved the fastest in the wrong direction (No wonder it’s the Moocher State).

Hawaii also deserves an unfavorable mention, while the deterioration of New Jersey and New York is hardly a surprise.

Originally published at International Liberty
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Talking about "Affordable Housing" on the Tom Woods Show

02/05/2019Ryan McMaken

Tom and I talked about how governments make housing less affordable, and how the best way to make housing more affordable is to build more. But both government planners and private owners will often join forces to prevent new housing from being built. Thus, the most commons "solution" ends up being schemes to subsidize housing.

 

Ep. 1334 The Government's War on Affordable Housing

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The Myth of Swedish Socialism with Per Bylund

02/01/2019Mises Institute

In a new interview with Pete Raymond, Sweden-born economist Per Bylund describes the Swedish economic system and takes a closer look at the claims of those who say Sweden is an example that ‘socialism’ can work in practice.

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The Reforms that Venezuela Needs Right Now

02/01/2019Rafael Acevedo

Venezuela's government is in a state of upheaval. Foreign nations are lining up to support either the regime of Nicolás Maduro — who claims to be the legitimately elected president — or that of Juan Guaidó, who the opposition claims is now the constitutionally mandated interim president.

The current situation has been brought on by nearly twenty years of Chavismo, a hard-left socialist ideology, which has left the Venezuelan economy in ruins.

Understandably, many Venezuelans are now hoping for a political change. and many believe no real change can be had until the current regime is gone.

But no matter who is president a week — or a year, or five years — from now, prosperity can only be regained by enormous reforms to the Venezuelan political and economic systems.

Venezuelans must act now to demand these changes, because bringing in new politicians won't be enough to turn the nation around:

  1. Open the road to monetary freedom, eliminating all legal tender laws and the nation's central-bank supported system of fractional-reserve banks. Allow Venezuelans to adopt whatever medium of exchange they wish. Even dollarization ought to be on the table.
  2. Open the country to International Trade: eliminate all tariffs, taxes, and trade barriers. All of them.
  3. Privatize Everything! All state-owned companies and assets, following Econintech's proposal.
  4. Decentralize the Government: Grant total administrative and budgetary autonomy to Venezuela's twenty-three states . Decentralization is a key to minimizing the damage an abuse central government can do.
  5. Lower taxes drastically, and decentralize tax collection and administration to the state level. All new taxes must be approved by referendum.
  6. Allow private Venezuelans to access and accept both humanitarian and security assistance from foreign organizations.
  7. Guarantee the right to self-defense: demobilize all the armed groups, purge the prisons, implement widespread private gun ownership, and auction to the public all weapons confiscated by the state.

Should Venezuela finally move toward real reform, Venezuela could reclaim its position as one of the most prosperous nations in Latin America. At times like this, Venezuelans can look at former communist countries — such as Poland — that applied radical free-market reforms and now are moving toward a far more prosperous future.

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