Dan Mitchell comments and expands on Thomas Sowell’s latest column. Both are well worth reading.
I just had to include this passage from Sowell:
“Poverty” once had some concrete meaning — not enough food to eat or not enough clothing or shelter to protect you from the elements, for example. Today it means whatever the government bureaucrats, who set up the statistical criteria, choose to make it mean. And they have every incentive to define poverty in a way that includes enough people to justify welfare state spending. Most Americans with incomes below the official poverty level have air-conditioning, television, own a motor vehicle and, far from being hungry, are more likely than other Americans to be overweight. But an arbitrary definition of words and numbers gives them access to the taxpayers’ money.
I didn’t realize Australia had private social security accounts and it appears to work well for them. Thanks to Dan Mitchell for this excellent post.
I like this line (emphasis added):
This system, which was made universal by the Labor Party beginning in the 1980s, has turned every Australian worker into a capitalist and generated private wealth of nearly 100 percent of GDP.
That’s what I’d call properly aligned incentives. It seems like a good way to turn a Ponzi scheme into a wealth-producer.
Update: Here’s the Wikipedia article that contains more information about Australia’s pension program.
I was digging through some of my recent drafts and found this one, which I thought I had posted.
Here’s an outstanding post from Dan Mitchell on his blog International Liberty, E.J. Dionne Forgets that America Is a Constitutional Republic.
In it, Mitchell asks of Dionne:
Did he not learn about separation of powers in school, and that the courts are supposed to protect us against tyranny of the majority emanating from the legislature?
I remember covering the separation of powers in my 9th grade government class. I didn’t gain a good understanding of why that was important then. I’m not sure if it was just such an abstract concept for me to grasp as a 9th grader that took freedom for granted or if the teacher didn’t do a good job of teaching it.
What about you? Did you know that the Constitution was intentionally designed to separate powers of government help protect us from tyranny in various forms, like government tyranny and the tyranny of the majority?
Later Mitchell writes:
I have no idea of the Supreme Court will make the right decision, but I am overwhelmingly confident that the Founding Fathers didn’t envision mandated health insurance as a function of the federal government.
I’m fairly certain that not every Justice will agree on this case. It will be interesting to see why they disagree.
When you have 20 to 25 minutes to spare, I recommend brushing up on government spending with Dan Mitchell’s four-part video series from his blog post Fiscal Policy Tutorial.
Each video is 5 to 6 minutes long, so it’s easy to watch or listen to in pieces. Even if you are of the left leaning persuasion, I believe you will find Mitchell is fair in his presentation. In the second video, for example, he admits that some government spending has benefits.
Also, I must say that I have never heard of the Rahn curve (see video 4). That curve posits that government spending, up to a certain point, does benefit the economy in terms of growth, but at some points starts to hurt economic growth primarily based on the problems discussed in the second video. I will readily admit that the Laffer curve in video 4 is drawn with a strong right bias.
In this election season, watching these videos is worth your time.