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Of Particular Note

Scoring Immigration Reform Correctly

The Senate this week will turn its attention to the bipartisan "Gang of Eight" immigration reform bill. Recent criticism of the plan has focused on the potential costs to American taxpayers. But Cato scholar Alex Nowrasteh argues that any credible analysis must employ "dynamic fiscal scoring," which more accurately measures the total impact of legislation on the economy. "Using dynamic scoring to predict the effects of legislation is as relevant for immigration reform as it is for tax cuts," says Nowrasteh. "Any analysis that doesn't must be judged as lacking."

"Heritage's Flawed Immigration Analysis," by Alex Nowrasteh
"How to Make Guest Worker Visas Work," by Alex Nowrasteh
"Poor Immigrants Use Public Benefits at a Lower Rate than Poor Native-Born Citizens," by Leighton Ku and Brian Bruen

What's Wrong with Internet Sales Tax

The Senate has passed a bill, known as the Marketplace Fairness Act, that would require large Internet retailers to collect sales taxes on all purchases for the state and local governments of the buyers. The bill now moves to the House, where the GOP is divided on the issue. Cato scholar Daniel J. Mitchell argues that this legislation is bad news for tax policy and bad news for privacy.

"What's Wrong with Internet Sales Tax," by Daniel J. Mitchell
"More Internet Sales Taxes — and Your Privacy Compromised," by Jim Harper
"Internet Taxation: Should States Be Allowed to Tax outside Their Borders?," Cato Event Video

The Real Impact of Government Spending

We read news stories almost every day that simply assume that government spending is good for the economy. Any defense or nondefense spending restraint will hurt economic growth, it is supposed. But is this really the case? Cato scholar Chris Edwards argues that, while government spending certainly helps the government-dependent parts of the U.S. economy, its impact on the private economy is clearly negative.

"Government Spending Up, Private GDP Down," by Chris Edwards
"Why in the World Are We All Keynesians Again? The Flimsy Case for Stimulus Spending," by Andrew T. Young
"Should U.S. Fiscal Policy Address Slow Growth or the Debt? A Nondilemma," by Jeffrey A. Miron

Should We Be OK with Expanding Background Checks?

The Senate recently blocked a compromise measure that would have compelled unlicensed sellers at gun shows and online gun sellers to conduct background checks. Senator Joe Manchin has indicated that he plans on reintroducing the legislation. While Cato scholars have generally questioned the usefulness of background checks, in the New York Times, Cato chairman Robert A. Levy makes the case that the background checks are a "reasonable" price to pay for the elements of the legislation more favorable to gun rights proponents.

"Further Thoughts on Sensible Gun Legislation," by Robert A. Levy
"Gun Debate Won't End until There Is Respect on Both Sides," by Trevor Burrus
"Schumer-Toomey Gun Bill Deserves a Committee Hearing," by David B. Kopel

Your Tax Dollars at Work: Subsidizing the Security of Wealthy Allies

Subsidizing the Security of Wealthy Allies
How much does the United States spend on the military relative to our allies? A lot. A new information-packed short Cato video puts this comparison in perspective. The data, pulled from the Cato infographic from last week, shows how we are subsidizing the security of wealthy allies who can and should defend themselves to a far greater extent than they do. Instead, we provide for their security while they spend their money on just about everything else (especially their bloated welfare states). This is no way for your tax dollars to work.

The Case against the Constitutional Amendments Seeking to Overturn Citizens United

Concerns about the putative political and electoral consequences of the Citizens United decision have fostered several proposals to amend the Constitution. Most simply propose giving Congress unchecked new power over spending on political speech, power that will be certainly abused. In a new paper, Cato scholar John Samples argues that the public purposes cited for restricting political spending and speech are not persuasive and do not justify the breadth of power granted under these amendments. "Americans should defend — not amend away — the freedom of speech recognized by the First Amendment," says Samples.

"Move to Defend: The Case against the Constitutional Amendments Seeking to Overturn Citizens United," by John Samples

Commentary

Privatize Almost Everything By Richard W. Rahn. Washington Times. April 30, 2013. As a mental challenge, try to think of all of the governmental activities — federal, state and local — that could be privatized. Now, go a step further. Suppose you were required to develop a plan to privatize, or make self-supporting through user fees, nearly every activity of government. Could you or a group of your friends do it? Try it. I expect your success will surprise you.

Syria: The Only Red Line Should be to Stay Out By Doug Bandow. Forbes. April 29, 2013. The Syrian civil war lurches on, adding new casualties every day. The campaign to push the U.S. into the Syrian civil war also marches on, threatening to add American casualties to the human toll. Possible use of chemical weapons by the Syrian government is another reason to stay out, not to get in.

Has RTD's FasTracks Been Worth It? No By Randal O'Toole and Brian T. Schwartz. Denver Post. April 28, 2013. With great fanfare, RTD opened its West Rail Line for business on Friday. This light-rail line was a boondoggle when it was first planned in 1997. It's even worse today. Last year, RTD expected the project to cost $709 million. Surely officials will brag about being "under budget," as the final actual cost was $707 million. But in 1997, RTD estimated a total cost of just $250 million, or about $350 million in today's dollars. So the line actually cost more than twice the original projections.

Immigrant Myth: Fewer Use Government Services By Alex Nowrasteh. Chattanooga Times Free Press. April 27, 2013. A common conservative refrain is that immigrants, once they enter the U.S., "immediately begin to depend on government welfare," as Sen. Jeff Sessions of Alabama recently put it. That's simply not true, according to a Cato Institute study by Professor Leighton Ku and lecturer Brian Bruen, both of George Washington University's health policy department.

A Libertarian Case for Expanding Gun Background Checks By Robert A. Levy. The New York Times. April 26, 2013. Last week, senators blocked a compromise measure that would have compelled unlicensed sellers at gun shows and online gun sellers to conduct background checks, despite polls that showed that 90 percent of the public supported the idea.

Smoking Stupidity By Patrick Basham and John Luik. New York Post. April 25, 2013. Mayor Bloomberg wants to raise to 21 the age for buying cigarettes in New York City, in hopes a higher minimum age discourages young people from smoking. He'd have done better to look at what we know about how and why youngsters start smoking in the first place.

Conspicuous Frugality: Is Cheap the New Cool? By Dalibor Rohac. The Umlaut. April 24, 2013. Economists from Thorstein Veblen to Richard Layard or Robert Frank have worried about the implications of status-seeking behavior. If one's utility depends, say, on his earnings or consumption relative to his peers, then earning more or consuming more imposes a negative externality on other people. Hence, the argument goes, a progressive tax on income, or a tax on luxury consumption, can enhance welfare because it discourages wasteful status seeking. How compelling is this story in what appears to be an increasingly post-materialist society?

Should Federal Funding Come with Political Stipulation? By Ilya Shapiro. The Blaze. April 23, 2013. On Monday, the Supreme Court heard arguments in Agency for International Development v. Alliance for Open Society International, a case that will determine just how much the federal government can demand of organizations that receive federal funding. Can it require them to advocate a political position unrelated to the funds they receive?

Hapless, Disorganized, and Irrational By John Mueller and Mark G. Stewart. Slate. April 22, 2013. Between Sept. 12, 2001, and last Monday, some 52 cases came to light in which the United States itself has been, or apparently has been, targeted for terrorism by Islamist extremists, whether based in the United States or abroad.

Manna from Heaven, or a New Recession? By Swaminathan S. Anklesaria Aiyar. Times of India. April 21, 2013. The price of gold, oil and many other commodities crashed last week. The stock markets zoomed and economists smiled, suddenly seeing positive consequences in three areas — inflation, the trade deficit and the fiscal deficit.

Property Rights and Lake Cd'A By Randal O'Toole. CDAPress.com. April 20, 2013. The basic principle of property rights is that people should be able to do what they want with their land so long as they don't directly harm others. Unfortunately, this idea has been steadily eroded by the Supreme Court.

Tax Havens Should Be Emulated, Not Persecuted By Daniel J. Mitchell. The Hill. April 19, 2013. When the financial crisis hit, politicians from high-tax nations didn't let the crisis go to waste. Acting through the G-20, they launched an attack on so-called tax havens, asserting that "hot money" from the offshore world somehow had caused the banking system to become unstable.

The Cyprus 'Bail-In' Exposes 'Too Big To Fail' as All Too Timid By Louise C. Bennetts. Forbes.com. April 18, 2013. The Cyprus bank "bailout" drama contains one major positive for U.S. observers: finally someone has found the courage to execute a credible solution to large bank failure that is not backstopped by taxpayers. It also contains a warning: uncoordinated ad hoc measures don't work well in a crisis. This should serve as a call to action for creating a workable bankruptcy procedure for U.S. megabanks.

Why Not Teacher Evaluations by Students? By Nat Hentoff. Cato.org. April 17, 2013. As clashes continue between teachers' unions and local and state legislatures concerning evaluations of teachers to determine if they are to stay employed, I don't hear either side reacting to what students feel about how they are being taught. This includes the students themselves. Such evaluations could and should ask students what they think being in school is going to mean for their futures. Teachers have their missions. But what are these students' missions beyond college degrees?

From Stagnation to Prosperity to Stagnation By Richard W. Rahn. Washington Times. April 16, 2013. The great tragedy of our time is that so few know economic history; thus we have been doomed to repeat the mistakes of a generation ago, and millions suffer. By the late 1970s, many viewed Britain and the United States as in terminal decline. The United Kingdom had been rotting for decades. The empire had been lost, and Britain began to look more and more like a Third World country as incomes stagnated and inflation soared. Then, along came a remarkable lady, Margaret Thatcher, who said "no" to the status quo and through incredible toughness, ability and just plain smarts turned around Britain.

America Needs an Alternative Maximum Tax By John H. Cochrane. The Wall Street Journal. April 15, 2013. They keep coming back, like the villains of a good zombie movie, chanting "more taxes, more taxes." Long ago, Congress passed the alternative minimum tax, or AMT — a simple flat rate to ensure that in an insanely complex tax code, no one escapes paying something. Now we need an alternative maximum tax as a simple, rough-and-ready way to limit the tax zombies' economic damage. Call it the AMaxT.

Is the U.S. Souring on Maliki's Government? By Ted Galen Carpenter. Gulan Media. April 14, 2013. It is no secret that Washington has been uneasy for some time about the behavior of Iraqi Prime Minister Nouri al-Maliki's government. Domestically, the regime's harsh treatment of political opponents, its pervasive corruption, and its inability (or unwillingness) to resolve differences with the Kurdish regional government (KRG) have all generated concern among U.S. officials. The Obama administration is perhaps even more disturbed by Baghdad's actions on the foreign policy front — especially the continued resistance to Western policy initiatives regarding both Iran and Syria.

Lies of ObamaCare By Michael D. Tanner. New York Post. April 13, 2013. We've now reached the third anniversary of the Patient Protection and Affordable Care Act, a k a ObamaCare. The Obama administration celebrated this important milestone by announcing that it was postponing part of the law that was designed to reduce costs for small businesses. Oops. This was hardly the first ObamaCare promise to fall by the wayside. Indeed, the entire first three years of the new health-care law have been one long story of unfulfilled expectations.

Tax Havens Allow Economic Vitality By Daniel J. Mitchell. The New York Times (Online). April 11, 2013. From an economic perspective, tax havens are very valuable because they discourage anti-growth tax policy. Simply stated, it is very difficult for governments to impose and enforce confiscatory tax rates when investors and entrepreneurs can shift their economic activity to jurisdictions with better tax policy. Particularly if those nations have strong policies on financial privacy, thus making it difficult for uncompetitive high-tax nations to track and tax flight capital.

Baltic Solutions for the Adriatic By Dalibor Rohac. Financial Times. April 10, 2013. Slovenia, once celebrated as the poster boy of central and eastern Europe, is now widely perceived as yet another sick man of the eurozone. With bond yields close to those of Portugal and a Moody's downgrade for one of the country's largest banks, rumors of an imminent bailout abound — though vehemently denied by Alenka Bratušek, Slovenia's prime minister.

A Primer for Understanding Obama's Budget By William Poole. The Wall Street Journal. April 9, 2013. President Obama will release his overdue budget on Wednesday. It will doubtless project a reduction in the federal budget deficit—a projection that journalists, commentators and policy makers should ignore. To do otherwise is to be complicit in fraud. Strong statement? Not really.

Turn the North Korean Problem over to North Korea's Neighbors By Doug Bandow. Forbes. April 8, 2013. America once was a normal country. Then Washington wouldn't have been involved in the Korean Peninsula. And North Korea wouldn't have bothered to threaten the U.S. with death and destruction. But today the U.S. finds itself entangled in the bitter rivalry between the two Koreas. And the target of Pyongyang's abundant invective.

Maryland Moves to Ban 'Cyberbullying' By Walter Olson. Huffington Post. April 5, 2013. While the enactment of Gov. Martin O'Malley's sweeping gun control package has gotten more coverage, the Maryland House and Senate have also just passed a bill directed at banning "cyberbullying." [Capital Gazette, WJZ] The bill would, among other things, prohibit the use of electronic means (including cellphones, Facebook, and online forums) to intentionally "harass, or inflict serious emotional distress" on a minor. Violations could be punished by up to a year's imprisonment.

More Dollars to the IMF a Bad Idea By Dalibor Rohac. Washington Times. April 4, 2013. Pressure is mounting on the United States to ratify the reform of the International Monetary Fund, which the Obama administration unsuccessfully submitted for congressional approval last month. Congress should think twice before passing the reform — importantly because its thrust consists of doubling the amount the United States will owe the IMF — also known as the "quota."

Countries That Cut Debt, Taxes and Spending Are Thriving By Alan Reynolds. Investor's Business Daily. April 3, 2013. Several European countries, including Cyprus, have been mired in economic stagnation or decline for five years or more. Yet other countries in Asia and Latin America have flourished. What are the weakest economies doing wrong? What are the strongest doing right?

Why U.S. Can't Deliver Women's Rights to Afghanistan By Malou Innocent. CNN.com. April 2, 2013. During his recent unannounced visit to Afghanistan, U.S. Secretary of State John Kerry met with prominent female entrepreneurs and the captain of the women's soccer team to discuss the hard-won progress of Afghan women and their uncertain future. Like his predecessor, Secretary Kerry has admirably pledged to prioritize women's rights in his foreign policy agenda. But the underpinnings of this pledge — the entrenchment of women's rights across Afghanistan — are beyond the ability of the United States to uphold. It is time to stop making promises we cannot keep.

Budget Problems Continue in Washington By Tad DeHaven. TownHall.com. April 1, 2013. The President on Tuesday signed the continuing resolution that funds the government through September and (gasp) keeps the sequester cuts intact. Now that it appears sequestration isn't going away (and yet the earth continues to spin merrily on its axis), the focus should be on how this small step might be extended.

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Policy Studies

Move to Defend: The Case against the Constitutional Amendments Seeking to Overturn Citizens United By John Samples. Policy Analysis. April 23, 2013. Three years ago the U.S. Supreme Court decided the case of Citizens United v. Federal Election Commission. It found that Congress lacked the power to prohibit independent spending on electoral speech by corporations. A later lower-court decision, SpeechNow v. Federal Election Commission, applied Citizens United to such spending and related fundraising by individuals. Concerns about the putative political and electoral consequences of the Citizens United decision have fostered several proposals to amend the Constitution. Most simply propose giving Congress unchecked new power over spending on political speech, power that will be certainly abused. The old and new public purposes cited for restricting political spending and speech (preventing corruption, restoring equality, and others) are not persuasive in general and do not justify the breadth of power granted under these amendments.

John Samples is director of the Center for Representative Government at the Cato Institute and the author of The Fallacy of Campaign Finance Reform (University of Chicago Press, 2006), and The Struggle to Limit Government (Cato Institute, 2010).

Regulatory Protectionism: A Hidden Threat to Free Trade By K. William Watson and Sallie James. Policy Analysis No. 723. April 9, 2013. Despite the impressive success of trade liberalization, domestic industries continue to find ways to use the power of government to protect themselves from foreign competition. The practice of using domestic environmental or consumer safety regulation as a way to disguise protectionist policy has become a serious and growing problem in the United States. This regulatory protectionism harms the U.S. economy and violates our trade obligations.

K. William Watson and Sallie James are trade policy analysts at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies.

[ More Studies ]

Cato Unbound

May 2013: Conservative-Libertarian Fusionism: The State of the Debate

Throughout the twentieth century, American libertarians have been drawn again and again to identify with the political right, a tendency known as fusionism. Many factors have contributed to this, including opposition to the New Deal and Great Society, opposition to communism abroad, and similar approaches to issues like gun control and taxes.

Yet a broader view shows a more complicated picture: Libertarians' 19th-century roots are clearly on the left; most of the important 20th-century libertarian activists were aloof from the Republican Party; and quite a few issues separate libertarians from the political right. Not all of these center on drugs, either. Libertarians are notably more anti-interventionist in foreign policy. They commonly favor easier immigration. And they are skeptical of state-orchestrated projects to create a virtuous citizenry, whether on the Christian model or any other. (It's not entirely unfair to mention that many of us have been influenced by Ayn Rand. As a result, we are skeptical about God and government alike.)

In recent years, the libertarian-conservative alliance has felt a good deal of strain. The last Republican administration was absolutely no one's idea of libertarian government, and the conversations about how to fix the GOP after its electoral defeat haven't always been so encouraging either.

Still, many on the right are quite open to libertarian ideas, including Senator Rand Paul of Kentucky and Represenative Justin Amash of Michigan. A new, more libertarian-leaning Republican Party could breathe new life into fusionism. Or not. We stand at a crossroads.

To discuss the present and future of fusionism, we've invited at team of young activists of varying viewpoints. Our lead essayist is Jacqueline Otto, who write for the American Enterprise Institute's Values and Capitalism project. Joining her will be Jeremy Kolassa of United Liberty, Jordan Ballor of the Acton Institute, and Clark Ruper of Students for Liberty.

The Blog: Read today's Cato@Liberty posts

Podcasts
(Subscribe on iTunes, )

Tooth Whitening and Honest Competition
Angela C. Erickson, April 30, 2013

Tax Revenues from Legal Marijuana Overstated
Jeffrey A. Miron, April 29, 2013

Examining the Push for War in Syria
Christopher A. Preble, April 26, 2013

Rand Paul v. Marco Rubio on Foreign Policy
Christopher A. Preble, April 25, 2013

Dangerous Precedents of Drone Warfare
Steve I. Vladeck, April 22, 2013

Twenty Years after the Siege at Waco
Tim Lynch, April 19, 2013

Coolidge as Budget Hawk
Amity Shlaes, April 18, 2013

Risk Assessment and the Bombing in Boston
John Mueller, April 17, 2013

Chavismo without Chavez
Juan Carlos Hidalgo, April 16, 2013

College Students and Student Debt
Neal McCluskey, April 15, 2013

Cass Sunstein: What a Nudge
Walter Olson, April 12, 2013

North Korea's Well-Practiced Provocations
Doug Bandow, April 11, 2013

Dodd-Frank: "Unquestionably" Unconstitutional
Rep. Scott Garrett, April 10, 2013

Scholarship and the Immigration Debate
Alex Nowrasteh, April 9, 2013

What Went Wrong in Afghanistan?
Gian P. Gentile, April 8, 2013

Reforming Social Security Disability Insurance
Jagadeesh Gokhale, April 5, 2013

Hillary's SuperPACs
John Samples, April 4, 2013

Fannie Profits, POTUS Asks Banks for Easy Mortgage Credit
Mark A. Calabria, April 3, 2013

A SCOTUS Victory for Both Sides over Gay Marriage?
Trevor Burrus, April 2, 2013

Does HHS Secretary Sebelius Understand Insurance?
Megan McArdle, April 1, 2013

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Cato Videos
(Subscribe on iTunes, )

The Impact of Cartel Behavior on Global Oil Prices and the Challenge to Free Markets
April 30, 2013

Subsidizing the Security of Wealthy Allies
April 30, 2013

The Boston Marathon Bombings
April 19, 2013

Juche Strong: A Dialogue on the Posturing and Propaganda of North Korea
April 18, 2013

Law, Politics, and Same-Sex Marriage (Part II)
April 17, 2013

Law, Politics, and Same-Sex Marriage (Part I)
April 16, 2013

How Will a Culture of Permanent War Impact America's Future?
April 15, 2013

The Questionable Constitutionality of Dodd-Frank
April 12, 2013

The Great Deformation: The Corruption of Capitalism in America
April 11, 2013

Doug Bandow debates Amb. John Bolton over North Korea on FOX
April 10, 2013

The War in Afghanistan: What Went Wrong?
April 9, 2013

Sallie James discusses sugar subsidies on FBN's Stossel
April 8, 2013

John A. Allison discusses the Cato Institute at CPAC 2013
April 5, 2013

John A. Allison discusses Peter Wallison's Book Bad History, Worse Policy
April 4, 2013

Strategy, Not Math: The Emerging Consensus on National Security in an Era of Austerity
April 3, 2013

The European Crisis Continues: No Solution on the Horizon (Václav Klaus Part II)
April 2, 2013

The European Crisis Continues: No Solution on the Horizon (Václav Klaus Part I)
April 1, 2013

[ More Cato Videos ]

Testimony & Legal Briefs

"Brandt v. United States" By Ilya Shapiro. Legal Briefs. April 24, 2013.

"United States v. Kebodeaux" By Trevor Burrus, Ilya Somin and Ilya Shapiro. Legal Briefs. April 4, 2013.

"Agency for International Development v. Alliance for Open Society International" By Ilya Shapiro. Legal Briefs. April 3, 2013.

"Arkansas Game & Fish Commission v. United States" By Ilya Shapiro and Trevor Burrus. Legal Briefs. April 1, 2013.

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