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Tuesday, July 31, 2018

Is America's Capital Stock Bound for Decline?

We often hear from left-leaning economists and pundits that government deficits do not cause problems in the economy. On the contrary, deficits are actually good because they stimulate the economy when it would otherwise stagnate. 

Critics point to the waste and inefficiencies that plague government spending. Austrian economists also make the point that government forces a perverted allocation of capital by gobbling up resources that would otherwise be used in the private sector. These arguments are used to dismiss Keynesian economics, from which pro-deficit arguments emanate. 

I am not going to delve into the theoretical arguments, as I have already provided a libertarian defense of Keynesian economics (see part 1, part 2 and part 3). Instead, this article takes a dispassionate approach to the structural questions that related to the allocation of capital between government and the private sector. 

Sunday, July 29, 2018

The Thin Line between Liberty and Tyranny

when it comes to other people who happen to be different from the establishment, Republicans seem to be downright mean and nasty. We are constantly reminded of the meanness of Republicans over and over again. One recent example is evident in the xenophobic remarks of the Republican presidential candidate, Donald Trump, who recently referred to Mexican and other immigrants as rapists and murderers.
Fast forward three years, to Hillary Clinton's remarks about Supreme Court Justice nominee Judge Kavanaugh:

Saturday, July 28, 2018

U.S. Growth: Good But Not 4.1 Percent

The big news this week was that the U.S. economy grew by 4.1 percent in the second quarter. This sounds like an impressive reaction by the economy to President Trump's tax reform and deregulation policy.

There is just one problem: this number is not the relevant growth number to watch for. The 4.1-percent growth rate accounts for the economy's expansion from Q1 this year to Q2; what really matters is how fast the economy is growing year to year. Only by measuring growth over one year, between the same quarters, can we get a real picture of how the economy is doing.

Friday, July 27, 2018

U.S. States in Fiscal Crisis

As I explained in the first installment of "Fiscal Crisis in America" for the Center for Freedom and Prosperity, we are now at a point where a Greek-style budget meltdown here in the United States cannot be ruled out. The focus of my analysis is primarily on the federal government and its chronic deficits and structural bias in favor of entitlement spending. However, a sizable portion of our welfare state is funded and operated by our states; since the welfare state is the root cause of our structural budget problems, consequently our state governments are running chronic deficits as well.

Reports Fox Business:

Sunday, July 22, 2018

A Fiscal Crisis in America, Part 1

Is a Greek-style fiscal crisis possible in America? Yes, and not only possible - probable. I explain why in my latest Prosperitas report for the Center for Freedom and Prosperity:

Disclaimer: I do not get paid by the Center, for either writing or fundraising.

Saturday, July 21, 2018

Central Economic Planning Comes to Denver

Central economic planning is not just a theory. It is a practice that has been imposed on billions of people all over the world. The most notorious examples from the 20th century are the Soviet Union and China, though there were many others who attempted the same system. However, central economic planning is not confined to communist dictatorships; the founders of the Swedish welfare state were very clear about their ambitions to develop a full-fledged central economic planning system.

Wednesday, July 11, 2018

Socialism vs. Private Property, Part 2

As I explained in the first part, the line between private ownership of property and confiscation of property is a free society's last line of defense against totalitarianism. The consequences of property socialization obviously include the destruction of economic incentives, leading to the eventual destruction of prosperity.

Wednesday, July 4, 2018

Socialism vs. Private Property, Part 1

Regardless of whether America's young "democratic" socialists realize it or not, the line between socialism and its "democratic" prefix goes through private property. So long as socialists respect private property they can aspire to call themselves "democratic"; respect for private property is a necessary but not a sufficient condition for a democratic society. When socialists do not respect private property, they have lost the last connection to democratic principles.