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America’s Great Depression Quote of the Week: How to Reduce Deficits

March 12, 2013 in Economics

By John P. Cochran

From the Introduction to the Fourth Edition (1982) of America’s Great Depression

While deficits are often inflationary and always pernicious, curing them by raising taxes is equivalent to curing an illness by shooting the patient. In the first place, politically higher taxes will simply give the government more money to spend, so that expenditures and therefore deficits are likely to rise still further. Cutting taxes, on the other hand, puts great political pressure on Congress and the administration to follow suit by cutting spending.

And:

 Deficits, then, should be eliminated, but only by cutting government spending. If taxes and government spending are both slashed, then the salutary result will be to lower the parasitic burden of government taxes and spending upon the productive activities of the private sector.

No “balance” of revenue enhancements combined with reductions in the rate of growth of spending, no ten year plan to bring budget balance in 10 years based on only mild reductions in the rate of spending increases and expected revenue enhnacements for higher growth rates. No revenue neutral tax “reform”. Real cuts in spending made believable by cuts in tax rates actually intended to shrink, not grow government revenues.  Government austerity or economy is the path to private sector prosperity.

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Source: MISES INSTITUTE

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Fan Favorites from Seasons 24 & 25

March 12, 2013 in History

March 12, 2013 2:44 p.m.

Last week we asked our fans on Facebook and Twitter what has been your favorite AMERICAN EXPERIENCE film over the past two seasons. You gave us a great response, and we would like to share the results. Many of the films are streaming for free on our website, so if you have not had the chance to see some of the films listed below, you never know — you may soon have a new favorite!

The top three films that received the most votes were:

1. The Abolitionists

Radicals. Agitators. Troublemakers. Liberators. Called by many names, the abolitionists tore the nation apart in order to make a more perfect union. Men and women, black and white, Northerners and Southerners, poor and wealthy, these passionate antislavery activists fought body and soul in the most important civil rights crusade in American history. What began as a pacifist movement fueled by persuasion and prayer became a fiery and furious struggle that forever changed the nation.

Bringing to life the intertwined stories of Frederick Douglass, William Lloyd Garrison, Angelina Grimké, Harriet Beecher Stowe and John Brown, The Abolitionists takes place during some of the most violent and contentious decades in American history, amid white-hot religious passions that set souls on fire, and bitter debates over the meaning of the Constitution and the nature of race.

Learn more on the website: http://www.pbs.org/wgbh/americanexperience/films/abolitionists/
Watch videos from Part 1, Part 2, and Part 3.

2. Death and the Civil War

From acclaimed filmmaker Ric Burns, Death and the Civil War examines the many ways the staggering death tolls of the Civil War permanently altered the character of the republic, and the psyche of the American people. The work of contending with death on an unprecedented scale propelled extraordinary changes in the inner and outer life of Americans – posing challenges for which there were no ready answers when the war began – challenges that called forth remarkable and eventually heroic efforts as Americans worked to improvise new solutions, new institutions, new ways of coping with …read more
Source: AMERICAN EXPERIENCE

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Rand Paul vs. the 'Forever War'

March 12, 2013 in Economics

By Gene Healy

Gene Healy

The cruelest thing about politics is that it occasionally gets your hopes up. Sometimes, just when you’ve almost concluded that the best D.C. has to offer is ringside seats at the latest legislative catastrophe, you get an unexpected outbreak of political courage and common sense.

So it was a cruel trick Sen. Rand Paul, R-Ky., played last Wednesday with his 13-hour filibuster of CIA director nominee John Brennan. For a not-so-brief moment, it seemed possible to restore “normalcy” and bring an end to endless war.

The immediate subject of Paul’s marathon session — whether the administration could legally execute an American citizen on American soil via flying kill-bot — is, admittedly, an unlikely scenario. Still, I had to laugh when, amid the filibuster, I saw a blog post from the Obamaphilic Center for American Progress, breathlessly warning that the “Number of Radical Anti-Government Groups ‘Reached an All-Time High’ in 2012.” Homeland Security isn’t serious enough about fighting “patriot” groups, who fear federal policies “aimed at taking away American freedoms.” So send in the drones, already!

Sen. Paul has done Republicans — and the Republic — a great service by reminding us that there’s nothing conservative about perpetual war.”

But Paul devoted considerable time to a more pressing issue: the increasingly tenuous legal authority for our ever-expanding war on terror. More than a decade after Sept. 11, the legal basis for that war is the Authorization for the Use of Military Force that Congress passed on Sept. 14, 2001, empowering the president to go after those responsible for that atrocity and anyone who “harbored” them.

As Paul noted, “they take that authorization of use of force to mean pretty much anything.” We need a serious debate, he said, about “whether that use or authorization of force is open-ended, forever.”

Indeed, on the morning of Paul’s filibuster, the Washington Post’s front page blared: “Administration debates stretching 9/11 law to go after new al-Qaeda offshoots.” Actually, they’ve already stretched it beyond recognition.

As Paul pointed out Wednesday, counterterror mission creep has led to “war in Yemen, Somalia, Mali. It is a war in unlimited places” against increasingly marginal groups that didn’t exist on Sept. 11. In Mali, the Post reported, “unarmed U.S. Reapers scour the deserts … to search for so-called patterns of life — communications and movements deemed by the U.S. to be telltale signs of militant activity.” The targeting information we’ve …read more
Source: OP-EDS

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Soda Ban Ruling a Devastating Defeat for Mayor Bloomberg

March 12, 2013 in Economics

By Walter Olson

Walter Olson

For all the public irritation over New York City Mayor Michael Bloomberg’s high-handed attempt to ban large-size sugary drinks, most New Yorkers were expecting it to pass into effect Tuesday as planned. Although opponents had gone to court in an effort to block the measure, the press had not paid much attention to their challenge.

Judge Tingling struck down the soda ban in a sweeping opinion that does everything but hand Mayor Poppins his umbrella and carpetbag.”

Public health activists were already pursuing plans to use the ban as an entering wedge to get laws passed in other cities and states restricting food and beverage choices. “I think you’re not going to see a lot of push back here,” predicted Bloomberg himself.

And then they were struck by a sudden Tingling. Judge Milton Tingling of the state trial-level court in Manhattan, that is.

On Monday, Judge Tingling struck down the soda ban in a sweeping opinion that does everything but hand Mayor Poppins his umbrella and carpetbag. This wasn’t just a temporary restraining order putting the regulation on hold for a few weeks. The judge struck down the ban permanently both on the merits (“fraught with arbitrary and capricious consequences”) and as overstepping the rightful legal powers of the New York City Department of Health — meaning that the board cannot go back and reissue the regulations on its own authority even if it should develop a better factual basis for them.

  • Arbitrary and capricious. The ban would have covered some but not other food establishments, some but not other highly sweet or fattening drinks (the “latte exception”), and the health department had resorted to “suspect grounds” in distinguishing the two. “The simple reading of the rule leads to the earlier acknowledged uneven enforcement even within a particular city block, much less the city as a whole … the loopholes in this rule effectively defeat the stated purpose of the rule,” wrote the judge.
  • Beyond the agency’s powers. Lawyers for the Department of Health claimed that it was an agency with broad power to issue edicts and decrees protecting public health, and pointed to old cases in which courts had upheld its power to act on its own. Judge Tingling slapped down this dangerous claim. Just because an agency may possess sweeping emergency powers — to quarantine innocent persons during a raging epidemic, for example — does not mean it can assert similar powers in situations that are …read more
    Source: OP-EDS
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David Gordon’s Slides for Human Action: Austrian Sociology, Lecture 1

March 12, 2013 in Economics

By Daniel J. Sanchez

If you find these slides intriguing, sign up for the course, which starts tonight!

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Source: MISES INSTITUTE

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Pop Goes the Nanny State

March 12, 2013 in Economics

In his ruling striking down New York’s soda ban, state Supreme Court Judge Milton Tingling issued a forceful rebuke against efforts to legislate healthier lifestyles, says Cato scholar Walter Olson: “Judge Tingling struck down the soda ban in a sweeping opinion that does everything but hand Mayor Poppins his umbrella and carpetbag. …The implications are significant, since Bloomberg is hardly alone in his efforts to bypass fractious legislators and make law instead by executive edict.”

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Source: CATO HEADLINES

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There Are No Demand or Expenditure Problems. There are Only Pricing Problems

March 12, 2013 in Economics

By Daniel J. Sanchez

This is according to Austrian economist G.P. Manish, paraphrasing the great economist W.H. Hutt, as he explains Keynesianism and Austrian Business Cycle Theory in an excellent interview with Tom Woods.

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Source: MISES INSTITUTE

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Sequestration Myth

March 12, 2013 in Economics

By Richard W. Rahn

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Richard W. Rahn

The head of the Obama White House National Economic Council, Gene Sperling, who is a lawyer, has been claiming that “all economists” agree that sequestration will cost 750,000 jobs. I am an economist with a doctorate from Columbia University, and I don’t agree. The fact is that most classical and Austrian school economists also don’t agree (including many Nobel laureates), because they understand that U.S. government spending is well above the optimum for economic growth and job creation, which means that less government spending will create more jobs, not fewer.

It is true that sequestration and a reduced growth rate of government spending can cost a few jobs in the government sector, but this will be more than made up by the additional job growth in the private sector. Back in 2009, the folks in the Obama administration and their Keynesian allies in the economics profession told us that a big increase in government spending, which is what they obtained (more than 25 percent in real inflation-adjusted terms), would result in big job growth with less than 6 percent unemployment and more than 4 percent real economic growth by now.

The notion that reduced federal spending will cost jobs is nonsense.”

Instead, as shown in the accompanying table, the number of people employed in the private sector is still about 3 million less than it was six years ago, and economic growth has been running at about 2 percent since the end of the recession in 2009. The number of federal government employees is a little higher than it was in 2007, and the number of state and local government employees is slightly lower. Federal government employment peaked in 2010, in part, because it was bolstered by the temporary hiring of census workers.

The key figure is federal spending as a percentage of gross domestic product. The more the government spends, the less remains for the private sector. As the public sector grows as a percentage of GDP, then, the private sector and private jobs shrink as a percentage of GDP. Since 2010, the federal government share of GDP has been declining at a very slow rate, and private-sector jobs have been increasing at a slow rate. Sequestration will result in a small, continuing drop in the federal sector. Hence, private-sector jobs should continue to increase at a modest rate.

The Republicans should use the continuing resolution and the budget cap to force a further slowdown in the growth of government, and …read more
Source: OP-EDS