The new tax bill does nothing to help beleagured service providers in NM. Read it and weep.
Continue reading “GRT pyramiding: rhetoric versus reality”
GRT pyramiding: rhetoric versus reality
It’s the Spending, Stupid!
We now have suffered from 3 sessions of out of control spending. Here is a quick “back of the envelope” calculation of Big Bill’s spending problem. Adjusted for population growth and inflation, at the current rate of increase real spending will have increased by almost $400 million (in 2005 dollars) by the end of his first term. Contrast that with the increase during two terms for Governor Johnson: $360 million (in 2005 dollars). Our governor has managed to squander the opportunity to provide the needed tax relief that will lead NM to prosperity.
Some Perspective on Gasoline Prices
Check out this great post by Michael Munger at Division of Labour. He describes how gas prices have behaved over time in real (inflation adjusted) terms.
Another way to look gasoline prices is to ask: how much gasoline will an hour of my labor purchase? In 1981 the average New Mexican could obtain 5.2 gallons of gasoline for one hour of labor. This year she could obtain 7.4 gallons of gasoline for one hour of labor, 42% more than in 1981(nominal price data from DOE, nominal wage data from BEA).
We never like it when the price of gasoline, or anything else, rises. The average New Mexican would be much happier being able to purchase 10 gallons of gasoline for one hour of labor, as was the case less than one year ago. But let’s put the price of gasoline in perspective; this is not the end of civilization as we know it.
BTW, government itself is responsible for keeping gasoline prices higher than necessary.
Choice Victory in Arizona
According to Chuck Muth:
In Arizona, folks who donate money to a scholarship program allowing kids to attend schools other than the government mis-run re-education camps are allowed a tax credit for such donations. The ACLU, naturally, sued to kill off this school choice program, maintaining that it was a violation of the religion provision in the First Amendment.
Yesterday, Federal District Court Judge Earl Carroll tossed out the ACLU lawsuit. The program was defended in court by the libertarian Institute for Justice.
In defense of Bourbon Street
My colleague at George Mason, Bill Butterfield, (an excellent blogger, incidentally) recently wrote about a conversation we had while strolling down Bourbon Street in the Big Easy.
Bill writes:
“My problem with libertarians is that they overly discount meddlesome preferences. They claim they have none, which is the source of their sense of moral superiority. But meddlesome preferences are preferences just the same, everyone has them and they must be included in any attempt to maximize utility from a policy perspective.”
I would not claim that libertarians are without meddlesome preferences. I, for instance, would love to meddle in a lot of the decisions of others (for example, Fox should not be allowed to cancel “Arrested Development”!).
That said, the libertarian perspective is that we should honor individual rights (more precisely, “negative rights”). To do so, the rest of us are obliged to refrain from certain activities—including meddling.
A few examples: You have a right to life. I, therefore, am obliged not to kill you. You also possess a right to property, so I shouldn’t be allowed to take your iPod.
Though I may have a “meddlesome preference” for invading your rights and taking your property, I have a stronger preference for having my own rights respected and keeping my own property. Being a member of a liberal (libertarian) society, means that I agree to forfeit my right to act on my meddlesome preferences in exchange for living in a society in which no one else is permitted to act on their meddlesome preferences. For most of us, I think the trade-off is well worth it (the rest, of course, are free to join restrictive religious groups or even secular communes).
The economist in me would point out that well-defined, exchangeable rights in property provide entrepreneurs an incentive to take account of the preferences of others. Most people–even libertarians–want to live in neighborhoods without strip clubs. The home developer who appreciates this will make a profit. The developer who sells a unit to Larry Flint’s Strip Club in the middle of a residential neighborhood will not become a wealthy man.
I would much prefer to live in a system based on personal rights which restrain the meddlesome preferences of my fellows than in a system ruled by the meddlesome whims of the median voter.
Why not lease a BMW X-5 SUV for each Belen–Albuquerque commuter?
From P.J. O’ROURKE: “There are just two problems with mass transit. Nobody uses it, and it costs like hell.”
There is the huge up-front cost. Also, and “less obviously, there’s all the money spent locally keeping local mass transit systems operating.” For example, the Hiawatha Line in Minneapolis is estimated to cost $19 for each ride. At that rate “commuting to work will cost $8,550 a year. If the commuter is earning minimum wage, this leaves about $1,000 a year for food, shelter and clothing. Or, if the city picks up the tab, it could have leased a BMW X-5 SUV for the commuter at about the same price.”
Since the state taxpayers would be picking up the tab for Belen-Albuquerque train riders, let’s do something really cool and lease them BMW’s instead.
Education Freedom and Pre-K
Thoughts of Micha Gisser on the pre-K debate:
When it suits the political ambitions of the voucher enemies, they will find all the reasons in the world to justify allocating state money to Pre-K as legally “kosher.” They not only support private participation in the Pre-K project, they also justify participation of faith-based preschools. In fact, Dan Pearlman, legal counsel for the state Children, Youth and Families Department, said “faith-based preschools could receive state money if they agree not to use religious programming for the 2 and 1/2 hours the state was footing the bill.” I oppose the Pre-K Bill, but its flip side, if it passes, is that it creates a precedent for passing a voucher bill that will include private and religious schools.
We’ve lost our heritage
FAMOUS LAST WORDS
“If Congress can employ money indefinitely to the general welfare, and are the sole and supreme judges of the general welfare, they may take the care of religion into their own hands; they may appoint teachers in every State, county and parish and pay them out of their public treasury; they may take into their own hands the education of children, establishing in like manner schools throughout the Union; they may assume the provision of the poor; they may undertake the regulation of all roads other than post-roads; in short, every thing, from the highest object of state legislation down to the most minute object of police, would be thrown under the power of Congress…. Were the power of Congress to be established in the latitude contended for, it would subvert the very foundations, and transmute the very nature of the limited Government established by the people of America.”
– James Madison
Thanks to Mickey Barnett for the pointer.
Rigors of Academic Life
Our own Matt Mitchell has been seen finding first hand empirical evidence of the benefits of economic freedom.
How does he get away with it?
You may have heard that our former friends at the Cato Institute (just kidding, Ed) have gushed over Big Bill’s tax cutting and spending restraint. According to Cato’s report card for the governors, “Bill Richardson is, bar none, the best new Democratic governor in the nation–for that matter, he is one of the best new governors of any party.”
But Cato is wrong. The Guv is a net tax increaser and his spending has far exceeded the rate of inflation plus population growth. How did they get it wrong?
On the spending side they used bad data (National Association of State Budget Officers). If you would like to see the truth look here. And the general fund budget is going to grow as least another 6.7% in Fiscal Year 2006. Some spending restraint!
On the tax side they completely missed the stealth increase in the gross receipts tax rate. They also missed other tax and fee increases.
Why is our tax and spend governor getting a free pass from the media and now from one of the best think tanks on the planet?