You are browsing the archive for 2013 November 27.

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Mises Explains The Santa Claus Principle

November 27, 2013 in Economics

By Mises Updates

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Beginning on Sunday, December 1, Thomas DiLorenzo will be teaching “Santa Claus Economics: An Austrian Analysis of the Welfare State” at Mises Academy. This four-week online lecture course will cover the origins, effects, and myths of the welfare state. Readings include works by Murray Rothbard, Ludwig von Mises, Robert Higgs, George Reisman, Charles Murray, Ludwig Erhard, and Per Bylund, among others.

The Exhaustion of the Reserve Fund

From Human Action, Chapter XXXVI

by Ludwig von Mises

The idea underlying all interventionist policies is that the higher income and wealth of the more affluent part of the population is a fund which can be freely used for the improvement of the conditions of the less prosperous. The essence of the interventionist policy is to take from one group to give to another. It is confiscation and distribution. Every measure is ultimately justified by declaring that it is fair to curb the rich for the benefit of the poor.

In the field of public finance progressive taxation of incomes and estates is the most characteristic manifestation of this doctrine. Tax the rich and spend the revenue for the improvement of the condition of the poor, is the principle of contemporary budgets. In the field of industrial relations shortening the hours of work, raising wages, and a thousand other measures are recommended under the assumption that they favor the employee and burden the employer. Every issue of government and community affairs is dealt with exclusively from the point of view of this principle.

An illustrative example is provided by the methods applied in the operation of nationalized and municipalized enterprises. These enterprises very often result in financial failure; their accounts regularly show losses burdening the state or the city treasury. It is of no use to investigate whether the deficits are due to the notorious inefficiency of the public conduct of business enterprises or, at least partly, to the inadequacy of the prices at which the commodities or services are sold to the customers. What matters more is the fact that the taxpayers must cover these deficits. The interventionists fully approve of this arrangement. They passionately reject the two other possible solutions: selling the enterprises to private entrepreneurs or raising the prices charged to the customers to such a height that no further deficit remains. The first of these proposals is in their eyes manifestly reactionary because the inevitable trend of history is toward more and more socialization. The …read more

Source: MISES INSTITUTE

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Daniel McAdams Examines the Prospects for Peace on Iran

November 27, 2013 in Economics

By Ryan McMaken

Daniel McAdams, executive director of the Ron Paul Institute, and author of this piece on the Libya War at Mises Daily, injects some sound analysis into the debate at RT TV.

…read more

Source: MISES INSTITUTE

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Bitcoin over $1000

November 27, 2013 in Economics

By Mark Thornton

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I was interviewed today on RT TV about Bitcoin and the reasons it has soared in price to over $1000 per Bitcoin. It is both greater acceptance by vendors and governments as well as the world wide currency war and worry of war in the Middle East, especially in Iran which is in a hyperinflation that is driving the price higher.

The Mises Institute can take donations in Bitcoin and you can also make purchases in our bookstore with Bitcoin.

…read more

Source: MISES INSTITUTE

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Save the Sequester

November 27, 2013 in Economics

By Michael D. Tanner

Michael D. Tanner

Don’t look now, but we are just 16 days away from the December 13 deadline for House and Senate budget negotiators to reach an agreement on a 2014 budget and avoid another potential government shutdown.

Okay, December 13 is less a deadline than a suggestion. The current continuing resolution (CR), the product of October’s government shutdown, doesn’t actually expire until January 15, giving Congress an additional month to come to an agreement. But the December 13 date is still important, because the House is scheduled to recess from the 13th until January 7, with the Senate getting back one day earlier, leaving little time for the expected last-minute maneuvering.

So far, the negotiations appear to be dominated by what won’t be considered. House Budget Committee chairman Paul Ryan had suggested a willingness to trade some loosening of the sequester’s short-term spending caps in exchange for long-term entitlement reforms. But Senate Majority Leader Harry Reid rejected that idea out of hand, calling it “a stupid trade.” Reid says he is not interested in taking up Medicare reform at this time, and he claims there is no need for Social Security reform. “The program is not about to go broke,” Reid says, “so take it easy on Social Security.”

Republicans, of course, are not willing to accept additional tax increases on top of the $620 billion included in last December’s fiscal-cliff deal and the more than $1 trillion included in Obamacare over the next ten years, although rumors persist that the GOP may accept some other revenue increases, such as a hike in airport security fees. More disappointingly, House Speaker John Boehner has reportedly rejected any cuts in agricultural subsidies as part of any budget deal.

In the absence of a larger agreement, House Republicans may push for another short-term CR, funding the government probably through April 15. If that CR holds spending to levels agreed to under the sequester, that would be a small but valuable step forward, reducing government discretionary spending by $21 billion from the funding level in 2013. Nondefense discretionary spending would remain largely untouched, and could actually increase slightly, from $468 billion to $469 billion, while defense spending would be cut from $518 billion to $498 billion, roughly the level of defense spending in 2008, not including spending for overseas operations such as the wars in Iraq and Afghanistan.

But as December 13 gets closer, expect to hear howls of anguish — and …read more

Source: OP-EDS

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Only Some of Our Young Are Now Independent Americans

November 27, 2013 in Economics

By Nat Hentoff

Nat Hentoff

I often worry about today’s young growing up in a country where everybody is liable to be under secret government surveillance, with nearly all of these Americans never having violated any law. How much expectation of individual constitutional liberty can these young citizens have?

But now I am somewhat heartened by the results of a recent (reliable) poll by Quinnipiac University described in a Nov. 18 lead editorial in the New York Post:

“In 2008 and 2012, millennials — voters between ages 18 and 30 — came out in a big way for Barack Obama.”

But now, “something’s changed. The poll has young voters disapproving of the president by a 54 percent to 36 percent margin … Only 43 percent of the under-30s say the president is honest and trustworthy. By contrast, a majority — 51 percent — say he’s not.”

Moreover, “60 percent of young voters disapprove of the way the president’s handling the economy. Fifty-six percent disapprove of Obama’s handling of health care. Fifty-three percent disapprove of his handling of foreign policy” (“Young voters turn against President Obama,” New York Post, Nov. 18).

But — and it’s a very big “but” — the millennials were not asked if they approved of Obama’s handling of the Constitution. I wonder how many of them, along with our other students, were actually taught American history. Do these young people even know that if some of the states had not pressured the federal government to add the first 10 amendments — the Bill of Rights — they would not have ratified the Constitution?

So I’m still worried about what kind of America there will be as the current and future millennials take over. To get a more specific idea, I would like to see Quinnipiac (or other major polls) ask them what they think about the worst official attack on Americans’ most fundamental freedoms in our nation’s history, which is included in the National Defense Authorization Act (NDAA) for Fiscal Year 2012, signed into law by President Obama late in 2011.

These young Americans would, of course, have to be told by the pollsters precisely what is in Section 1021 of this law, which our Supreme Court has so far shown no inclination to review.

I advise pollsters and any American reading this column to get to the core of Section 1021, as revealed by Pulitzer Prize-winning writer Chris Hedges, a former New York Times reporter who is …read more

Source: OP-EDS

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Thanksgiving Travels Don't Have to be a Hassle

November 27, 2013 in Economics

By Chris Edwards

Chris Edwards

To join their families for Thanksgiving this week, millions of Americans will face the drudgery of airline travel. Airports are crowded, flights are often delayed, and many travelers will get stuck in long security lines. It may get worse: a new study by the U.S. Travel Association (USTA) says that American aviation may be flying into a storm of “chronic congestion, delays, and frustration.”

The problem is that our airports, security screening, and air traffic control are run by the government — an institution not known for good customer service or making efficient investments to meet market demands. The solution is to privatize all these activities, which is the successful reform approach taken by Canada and many European countries.

Want transportation to be efficient? Don’t leave it in the hands of government.”

U.S. airport screening is run by the unionized Transportation Security Administration, which has a reputation for intrusive pat downs and inept management. Former TSA chief Kip Hawley called the agency “hopelessly bureaucratic.” And studies have found that TSA security performance is no better, and possibly worse, than private-sector screening, which is allowed at only a handful of U.S. airports.

The TSA has a penchant for wasting money on useless activities, leaving it less to spend on things that benefit travelers, such as more screening stations. For example, a new Government Accountability Office report finds that TSA spends $200 million a year on a program to spot terrorists by their suspicious behavior — yet the program simply does not work.

Congress should move responsibility for screening to the airports, and allow them to contract out to expert security firms. Private firms would be able to flexibly adjust their workforces to reduce congestion, and they would end low-value procedures that wasted passenger time.

Government control of airports is another barrier to aviation efficiency. The USTA says that “Congress is not stepping up to modernize airports,” and it also restricts airports from raising fees to fund their own improvements. If airports were privatized — as they have been in many other nations — they could access funding from customer charges, advertising, debt and equity to invest in new facilities to meet rising demands.

By contrast, federal funding for “airport improvements is provided in a highly politicized manner with little regard for return on investment,” notes a new report by the prestigious Eno Center for Transportation. Government …read more

Source: OP-EDS