You are browsing the archive for 2013 September 05.

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Mises Daily: The Three Types of Austerity

September 5, 2013 in Economics

By Mises Updates

austerity

This week in Mises Daily: Frank Hollenbeck discusses how only only “austerity” plans that free the private sector at the expense of the government sector will actually bring more prosperity:

Notably, the Merkel form of austerity has led to an increase, not a decrease, in the relative size of the public sector. For example, the Greek public sector, while getting smaller, has nonetheless been contracting at a slower rate than the private sector. Since the first bailout, Greece lost at least 500,000 private sector jobs but shed far fewer public sector jobs. For years, the Greek government has been pledging to cut 500,000 public sector jobs, and in recent months, the Greek government has finally pledged to begin laying off public sector workers over the next two years. A total of 12,500 civil servants, including teachers and police, face reassignment or the axe by the end of the year, with a further 15,000 facing the same options next year. Not only is this too little, too late, but it is also only a pledge.

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Source: MISES INSTITUTE

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The Costs of War in Syria

September 5, 2013 in Economics

By Ryan McMaken

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As Rothbard pointed out, war and militarism are socialism writ large, and not surprisingly, war is very expensive to the taxpayers, and especially to those who are the targets of military intervention.

There is presently a debate in Congress and in the media about how expensive the war in Syria will be. In the American policy debate The expenses are only calculated in estimated monetary terms, and so we know that the debate will of course ignore  all damage done to the Syrians themselves and to global markets, which are always damaged and stunted by wars.

Nevertheless, even the very tame and limited argument over the costs to the U.S. treasury will be based mostly on conjecture and dishonest assessments of the true cost.

We might get some glimpses of some of the honest estimates as the debate rages between the bureaucrats and the politicians, although even those are still nothing more than estimates.  The bureaucrats (i.e. the Pentagon) will use the drive to war in Syria as an opportunity to demand that more taxpayer money flow into their coffers. We have seen this already with former Defense Secretary Leon Panetta’s claim that the tiny cuts imposed by sequestration “are weakening the United States’ ability to respond effectively to a major crisis in the world.”  It will be in the Defense Department’s interest to high-ball the costs of the war.

Nevertheless, even the Defense’ Department’s claims of costs for the Syria war will likely be well below the true cost by the time the public hears them, for the Department will be restrained by the Obama Administration’s competing interest to make the war appear as cheap as possible. Fearing resistance from some taxpayers, the Administration will naturally wish to have the war appear cheap, easy, and no big deal, as regards to cost.

Indeed, John Kerry was claiming yesterday that unnamed “Arab countries” have offered to pay for the war. This claim by the Obama Administration should be seen as being on more or less the same levels as the Bush Administration’s claim in 2003 that the Iraq war and the reconstruction of the country would be paid out of Iraqi oil revenues.

Those who remember the debate of Iraq War costs a decade ago will also recall the Bush Administration’s outrage over General Eric Shinseki’s (correct) estimate that hundreds of thousands of troops would be necessary to restore peace to Iraq in …read more

Source: MISES INSTITUTE

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TIME Op-Ed: Why I’m Voting No on Syria

September 5, 2013 in Politics & Elections

I supported the decision to go to war with Afghanistan after our nation was attacked on 9/11. Colin Powell wrote in his autobiography: ‘War should be the politics of last resort. And when we go to war, we should have a purpose that our people understand and support.’ I believe that he had it right. America should only go to war to win.
War should occur only when America is attacked, when it is threatened or when American interests are attacked or threatened. I don’t think the situation in Syria passes that test. Even the State Department argues that ‘there’s no military solution here that’s good for the Syrian people, and that the best path forward is a political solution.’
The U.S. should not fight a war to save face. I will not vote to send young men and women to sacrifice life and limb for stalemate. I will not vote to send our nation’s best and brightest to fight for anything less than victory. If American interests are at stake, then our goal should not be stalemate.
If American interests are at stake, then it is incumbent upon those advocating for military action to convince Congress and the American people of that threat. Too often, the debate begins and ends with an assertion that our national interest is at stake without any evidence of that assertion. The burden of proof lies with those who wish to engage in war.
Read the entire op-ed I penned for TIME Here.
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Source: RAND PAUL

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Nevada Lacks Transparency with Per-Pupil Spending

September 5, 2013 in Economics

By Jason Bedrick

Jason Bedrick

As little Johnny and Susie return to school, it’s a good time to ask if they’re getting enough bang for your buck. Do you favor increasing, decreasing or maintaining the level of funding for your local public schools? Does your answer depend on how much those schools are currently spending? Do you know how much that is?

Hint: it’s more than you think, and Nevada’s Department of Education is keeping you in the dark.

In Nevada, the total annual cost per pupil is $9,870 on average, according to the most recent data from the National Center for Education Statistics (2009-10). However, according to the Nevada Department of Education (NDE), the average per pupil cost was just $8,515 that year.

When government agencies provide incomplete or misleading data, they deprive taxpayers of the ability to make informed decisions.”

Why the discrepancy? Despite referring to “total per pupil expenditures,” the NDE actually only publishes operating per pupil expenditures, omitting some big-ticket items like paying off debt for school buildings.

That’s one reason Nevada earned an F-minus for financial transparency in a new report from the Cato Institute, “Cracking the Books,” which examines the spending data that all 50 state education departments make available to the public on their websites. The report reveals that very few state education departments provide complete and timely financial data that is understandable to the general public, and Nevada is the fourth worst in the nation; right behind Alaska, Hawaii, and Iowa.

A business that acquired a loan from a bank while understating its expenses would be in serious trouble, yet state education departments like Nevada’s routinely understate the costs of public schools. It’s no wonder that a recent survey by Harvard University found that the public’s average estimate of the annual cost per student in public schools nationwide was less than half what is actually spent.

Numerous states fail to report other key financial data as well. The NDE website fails to provide any data regarding total expenditures, capital expenditures, average salaries, employee benefits, or pensions.

By contrast, New Mexico’s Department of Education earned the report’s only solid A. It provides complete, timely, and accessible spending data, and other states should emulate it.

Financial transparency is essential for sound decision-making. The Harvard survey also examined how misconceptions about education spending affect support for spending levels. The researchers randomly divided survey respondents into two groups. They asked the first group …read more

Source: OP-EDS