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Sen. Paul Appears on The Situation Room with Wolf Blitzer (Part 2)- July 30, 2013

July 30, 2013 in Politics & Elections

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Source: RAND PAUL

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Senator Paul Appears on Fox's Hannity- July 29, 2013

July 30, 2013 in Politics & Elections

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Source: RAND PAUL

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Why Capitalism Is Awesome

July 30, 2013 in Economics

Innovation, the media tells us, is inventing cures for cancer, solar panels, and social networking. But in the new issue of Cato Policy Report, Chris Berg argues that the true genius of the market economy isn’t that it produces prominent, highly publicized goods to inspire retail queues, or the medical breakthroughs that make the nightly news. No, the genius of capitalism, he says, is found in the tiny things — the things that nobody notices. Also in this issue, David Boaz discusses how distrust of government is in America’s DNA.

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Source: CATO HEADLINES

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The Last Days of the IRS

July 30, 2013 in Economics

By Richard W. Rahn

Richard W. Rahn

There has been much discussion about which banks and other financial institutions are “too big to fail.” In reality, no institution is too big to fail, including any private company or political entity, whether it is Detroit or the former Soviet Union. The more relevant question is, which institutions are “too big to succeed”? When asked about President Obama’s slew of recent troubles, former presidential adviser David Axelrod correctly noted that the U.S. government is too big to manage. It is not only true of the government as a whole, but also true of some of its parts, notably the Internal Revenue Service — which is in the processing of failing.

The IRS has an impossible job: manage and enforce the income tax plus a host of other activities, now including Obamacare. The problems begin with the fact that the tax code misdefines income. The IRS defines cash flow as income, but economists know that real income is the ability to consume. Cash flow resulting from inflation does not increase the ability to consume, yet the IRS often taxes it — and this is just one of many problems with the agency’s income definitions.

The income tax and the intrusive, abusive IRS are not necessary.”

The IRS taxes labor and capital multiple times, which creates enormous biases in the tax system favoring consumption over work, saving and its productive investment, and entrepreneurial risk-taking. Over time, such taxes eat away at productivity growth, resulting in lower economic growth, slow or negative job creation, and deteriorated living standards.

The high marginal income-tax rates that individuals and businesses face provide strong incentives for taxpayers to find both legal and illegal ways around the tax. To counter this erosion of the tax base, the IRS devises ever more invasive, costly and liberty-destroying rules. Also, members of Congress and the administration use the tax code to reward friends and punish enemies — by adding endless special-interest provisions — which in turn induce campaign contributions both from the grateful and the fearful. The result is an ever-growing tax code that no one understands — let alone fairly enforces. In 1913, the tax code consisted of 400 pages; by 1945 it had grown to 8,200 pages; by 1984, 26,300 pages; and today is estimated at more than 75,000 pages — despite periodic reforms. There is no politically doable tax reform shy of abolishing the income tax, which would reverse this process.

In a global economy, businesses and wealthy individuals can legally choose where to …read more

Source: OP-EDS

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FBI Issues Response to Sen. Paul’s Correspondence on Drones

July 29, 2013 in Politics & Elections

WASHINGTON, D.C. – Sen. Rand Paul today received further correspondence from the Federal Bureau of Investigation regarding his concern over the use of FBI surveillance drones on U.S. soil.
‘The FBI today responded to my questions on domestic use of surveillance drones by saying that they don’t necessarily need a warrant to deploy this technology. I disagree with this interpretation. However, given the fact that they did respond to my concerns over drone use on U.S. soil, I have decided to release my hold on the pending FBI director nominee,’ Sen. Paul said.
Text of the FBI response letter from today can be found HERE.
BACKGROUND
Sen. Paul initiated correspondence on June 20, with a letter to Director Robert Mueller that included questions regarding the FBI’s governance policy on using drones on American soil.
After receiving no response from Director Mueller for weeks, on July 9, Sen. Paul sent a second letter to Director Mueller requesting immediate action to address his questions.
Last week, the office of Congressional affairs at the FBI recently sent two responses, one classified and one unclassified, to answer Sen. Paul’s concerns. The content of the classified letter cannot be disclosed publicly, but a copy of the unclassified response can be found HERE.
The answers included in both letters were not sufficient to answering all of Sen. Paul’s questions, prompting him to send the following correspondence to the FBI on July 25.

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Source: RAND PAUL

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Do We Need New Climate Change Guidelines?

July 29, 2013 in Economics

By Jeffrey A. Miron

Jeffrey A. Miron

What, if anything, should the United States do about climate change?

One possibility, embodied in President Obama’s Climate Action Plan, is to double-down on current policies, which include fuel economy standards for motor vehicles, efficiency standards for household appliances, subsidies for “clean” energies like wind and solar, mandates for biofuels like ethanol and carbon pollution standards for power plants.

‘Ideal’ carbon tax

By raising prices for gasoline, coal and oil, an ideal carbon tax causes substitution of greener alternatives, thus reducing carbon emissions, according to the Cato Institute’s Jeffrey Miron. Higher fossil fuel prices also incentivize research on alternatives.

These policies tend to reduce carbon emissions, but they are blunt instruments for achieving that goal. Enhanced fuel or energy efficiency standards impact new purchases of cars and appliances but not existing stocks. Subsidies for clean energy require government to be a venture capitalist, despite abundant evidence that government does this badly. Bio-fuel mandates do not appear to reduce carbon emissions because they deplete carbon dioxide-consuming forests. Carbon pollution standards for power plants are difficult to monitor and enforce.

What, if anything, should the United States do about climate change?”

More broadly, “command and control” policies do not readily balance emissions reductions against the costs of achieving these reductions. Some reductions are easy to achieve, while others are difficult, so an ideal policy obtains the biggest reductions from sources that require the smallest costs. Complicated rules imposed by bureaucrats at multiple government agencies do not lend themselves to this balancing.

An alternative approach is to replace all these command-and-control policies with a revenue-neutral carbon tax. That is, eliminate the entire command-and-control apparatus; increase or impose new taxes on fossil fuels; and lower other tax rates so as to leave tax revenue unchanged.

A carbon tax is far simpler to enforce than command-and-control policies. It is straightforward to compute the extra carbon cost generated by the tax, so this can be balanced against the estimated benefits of reduced carbon emissions. In addition, a carbon tax raises revenue, which means the U.S. could lower other tax rates while holding total revenue constant.

The economics of how best to address climate change is therefore clear. Why, then, has the U.S. not adopted this approach?

One possibility is that the scientific case for costly global warming is not compelling, but I’ll leave that aside for now. A second possibility is recognition that even ideal carbon taxation makes …read more

Source: OP-EDS

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Chris Christie Does Bellyflop on NSA Spying

July 29, 2013 in Economics

By Gene Healy

Gene Healy

Rep. Justin Amash’s unsuccessful July 24 effort to defund the National Security Agency’s dragnet collection of Americans’ call records failed in a close vote, 205 to 217.

Thursday morning, New Jersey’s Chris Christie threw a punch at surveillance skeptics like the Michigan Republican: “This strain of libertarianism that’s going through both parties right now … I think is a very dangerous thought.” “These esoteric, intellectual debates” won’t mean anything when “the next attack” kills “thousands of Americans.” “I remember what we felt like on Sept. 12, 2001,” Christie declared.

My first thought was, “I take back everything nice I’ve ever said about him. Maybe he IS too obese to be president.”

Haven’t the arguments for unrestrained spying gotten any better over the last 11 years?”

My second was, haven’t the arguments for unrestrained spying gotten any better over the last 11 years? Talk to the “widows and orphans,” visualize a smoking crater, and write a blank check to the Security-Industrial Complex?

That, apparently, is the kind of debate over NSA spying that Christie’s pal, President Obama, “welcomes.” Just before the vote on the Amash amendment, the White House charged that “this blunt approach is not the product of an informed, open, or deliberative process.”

That took some chutzpah: The debate Obama allegedly welcomes is only taking place because a former NSA contractor revealed that the administration had been lying to the public about bulk data collection. During the July 24 debate, Rep. James Sensenbrenner, R-Wis., one of the PATRIOT Act’s principal authors, reaffirmed that it was never intended to make every American’s call records “relevant” to terrorism investigations.

Contra Christie, the implications of the administration’s sweeping legal theory aren’t particularly “esoteric.” Last Tuesday, Senator Ron Wyden, D-Ore., explained: “If you know who someone called, when they called, where they called from, and how long they talked, you lay bare the personal lives of law-abiding Americans to the scrutiny of government bureaucrats.”

There’s nothing in the administration’s interpretation of the PATRIOT Act that limits bulk collection to call records. It could be used to vacuum up “medical records, financial records, or credit card purchases,” Wyden said, or for databases of “gun owners or readers of books and magazines deemed subversive” — it makes “the government’s authority to collect information on law-abiding American citizens essentially limitless.”

“Collect it all” is the mentality driving NSA director Gen. Keith Alexander, according to a recent Washington Post …read more

Source: OP-EDS

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With Its Foreign Policy, The Obama Administration Is Turning Hypocrisy into an Art Form

July 29, 2013 in Economics

By Doug Bandow

Doug Bandow

The U.S. backed military regime in Cairo is killing more supporters of ousted President Mohamed Morsi. Yet Washington continues to proclaim its inability to see a coup, so America’s aid money still flows. The Obama administration is turning hypocrisy into an art form. Unfortunately, the rest of the world is not fooled.

The great foreign policy illusion in Washington is that the U.S. government controls international events. Thus, the administration proclaims that it must continue to hand $1.55 billion annually to the generals in Cairo to preserve its influence. Yet when did America last exercise influence in Egypt?

Washington has provided almost $75 billion in foreign “aid” over the years, most of it since the 1978 Camp David Accords between Egypt and Israel. The peace has been kept, but Egypt always had the most to lose from another war with Israel.

Beyond that, Cairo has consistently ignored American advice. Presidents Anwar Sadat and Hosni Mubarak were authoritarians who made no pretense of promoting democracy or protecting human rights. When the revolution upended Mubarak, the administration successively backed the dictator, urged a negotiated departure, and supported his overthrow. The Egyptian people demonstrated not the slightest interest in what Washington desired.

Washington officials are never content to just shut up and stay home.”

President Barak Obama and his aides counseled the new Egyptian leader, President Morsi, to be inclusive, but he arrogated power to himself while failing to reform the economy. Then the administration unsuccessfully warned military commander Gen. Abdel Fattah al-Sisi against staging a coup.

Since then Washington has urged the military ruler not to target the Muslim Brotherhood and risk driving it underground. He responded by shooting even more pro-Morsi demonstrators. “None of us can quite figure this out,” one administration official told the Wall Street Journal: “It seems so self-defeating.” Actually, it’s quite easy to understand: Gen. al-Sisi has taken Washington’s measure and sees no reason to pay the slightest attention to its wishes. American officials will do nothing other than wring their hands.

After all, they explain, if President Obama acknowledged the obvious, that a military coup had overthrown an elected government, and applied the law, which requires the cut off of U.S. aid, Gen. al-Sisi might ignore American advice. Oh, right.

It would have been better years ago had American officials simply shut up and done nothing. No money would have been wasted. Washington’s impotence would not have been demonstrated. The U.S. …read more

Source: OP-EDS

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Why No Applause for 138 Million Exiting Poverty?

July 28, 2013 in Economics

By Swaminathan S. Anklesaria Aiyar

Swaminathan S. Anklesaria Aiyar

When China reduced people in poverty by 220 million between 1978 and 2004, the world applauded this as the greatest poverty reduction in history. Amartya Sen, Joseph Stiglitz and all other poverty specialists cheered.

India has just reduced its number of poor from 407 million to 269 million, a fall of 138 million in seven years between 2004-05 and 2011-12. This is faster than China’s poverty reduction rate at a comparable stage of development, though for a much shorter period. Are the China-cheerers hailing India for doing even better?

No, many who hailed China are today rubbishing the Indian achievement as meaningless or statistically fudged. This includes the left, many NGOs and some TV anchors. The double standard is startling.

India has reduced its number of poor from 407 million to 269 million, a fall of 138 million, in seven years.”

The Tendulkar Committee determined India’s poverty definition. The Tendulkar poverty line in 2011-12 came to Rs 4,000 per rural and Rs 5,000 per urban family of five. Critics say this is ridiculously low. But it is roughly equal to the World Bank’s well-established poverty line of $1.25 per day in Purchasing Power Parity terms (which translates into around 50 cents/day in current dollars). This is used by over 100 countries, by the United Nations and many other international agencies. When the whole world uses this standard, why call it statistical fudge?

When China claimed to have lifted 220 million people out of poverty, guess what its poverty line was? Just $85 per year, or $0.24 per day! Whatever statistical adjustments you make for comparability, it was far lower than today’s Tendulkar line. Did today’s critics of the Tendulkar line castigate China for fudging? No, they sang China’s praises.

The World Bank actually has two lines — $1.25 denoting extreme poverty, and $2 denoting moderate poverty. India can also adopt two lines, the Tendulkar line for extreme poverty and a new Rangarajan line for moderate poverty, at around $2/day.

But this will in no way diminish the great achievement of slashing the number of those historically called poor — we can call them the “extreme poor”— by 138 million in seven years. Allowing for rising population in this period, the number saved from extreme poverty is even higher at 180 million.

Given our rising GDP and expectations, we can rename the Tendulkar line as our extreme poverty line. But …read more

Source: OP-EDS

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Plutocracy in Action

July 27, 2013 in Economics

By Joseph Salerno

Those who still believe the hogwash that the the United States is a two-party, representative democracy should ponder the following. On Wednesday, the amendment to the Defense Appropriations Act of 2014 proposed by libertarian-leaning Rep. Justin Amash (R-Michigan) was narrowly defeated in the House by a vote of 217-205. The amendment would have ended the authority for the unconstitutional, police-state metadata-phone call spy program carried out by the NSA whose existence was leaked by the heroic whistleblower Edward Snowden last month. Interestingly, the amendment had bipartisan support, with 99 Republicans and 111 Democrats voting for it. Its opponents included the leadership of both parties, as both House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-California) voted against it. This seeming paradox is easily unraveled if one follows the money. According to an analysis commissioned by Wired, over the past two years those representatives who opposed the amendment and supported the spy program received more than twice the amount of cash contributions from defense and intelligence firms (e.g., Lockheed Martin, Boeing, United Technologies, Honeywell International, etc.) as those who did not. On average, House members who voted to uphold the domestic spy program received an average of $41,635 whereas those who voted to revoke authority for the program averaged $18,765. By the way, the leaders of the two “opposing” parties in the House, Boehner and Pelosi received $131,000 and $47,000, respectively, from the defense-intelligence establishment.

This is just another reminder of the thesis of the great Italian sociologist and classical liberal Vilfredo Pareto (1848-1923) that every democracy is inevitably transformed into a “demogogic plutocracy” that is run by a ruling elite of “fox-like” politicians and their corporate capitalist cronies.

HT to Wolf von Laer.

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Source: MISES INSTITUTE