Republicans in Washington are not doing much to differentiate themselves from the Obama Administration on the issue of reducing government spending and putting America on a sound fiscal footing. The most recent example, as detailed by Tim Carney in the Examiner, involves the Export-Import Bank, a prototypical example of corporate welfare.

Rather than consistently opposing Solyndra-like programs of taxpayer-funding of corporations, the GOP leadership decided to increase the program’s size by 40%. Sure, many of the rank and file conservatives opposed House Leadership and voted against the bill, but all New Mexico House members (including Pearce) went along with the added corporate welfare.

Sure, Obama is a bad President that has expanded the federal government to unprecedented levels, but why are Republicans helping him?

While far-afield from our usual efforts in New Mexico, the recent European elections have direct relevance to our current situation here in America. Why? The media have played up the “fact,” much like they did here, that spending was being “slashed” and that people are upset about it.

The reality, as Veronique de Rugy points out, is that spending in Europe has continued to grow. Does that sound familiar (remember the so-called “Supercommittee” and its alleged cuts).

In Europe, taxes were raised, but spending wasn’t cut. Thankfully, conservatives here like Grover Norquist aren’t going to fall for that one. Also, it just shows how pathetic politicians are when it comes to actually cutting spending. They just can’t bring themselves to do it.

The easiest way to get Europe and America back on a pro-growth trajectory is to massively deregulate our economies. Unfortunately, the political will to do that seems limited as well.

Our friends at the Institute for Justice have produced a new report on occupational licensing. This is something that Milton Friedman often criticized as an unfair effort by incumbents in a particular profession to raise their own pay by reducing competition.

According to this chart, New Mexico licenses approximately half (52) of what IJ calls “low-income occupations.” This is somewhat above average in terms of over-regulation. These are not doctors and lawyers, rather, many of the professions are as simple as being an interior designer, hairdresser, or some other profession that cannot harm anyone even if performed poorly.

Look for more from the Rio Grande Foundation on the issue of unnecessary government regulation in the near future. Also, there is a great video on the issue below:

The issue of children bullying other children has become a cause celebre in current political discourse. And, it is a real problem. But there is another group out there that is bullying students and preventing them from achieving success in their educational pursuits. Check out this brief TV ad now running in New Mexico for more:

Generally, the Rio Grande Foundation focuses on state and local policy issues. Nonetheless, given New Mexico’s status as one of, if not the, most reliant states on federal spending within its borders, the perilous condition of the federal budget must be of concern to all New Mexicans.

Particularly in this political season, the tendency is for the media and politicians to ignore what then- chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, called, “The biggest threat we have to our national security is our debt.” After all, no one running for office wants to be seen as taking government benefits away from people.

To make a dire, but complicated budget situation easier to understand, imagine a pie chart divided up into four approximately equal parts. They are: military, Social Security, Medicare/Medicaid, and everything else. About 25 percent of that “everything else” is not spent on actual programs; rather it is spent on interest payments on the national debt.

Unfortunately, the amount of spending done on these programs far exceeds tax revenues collected. This year, we are overspending by $1.3 trillion or so or more than 36 percent of the federal budget each year. That $1.3 trillion must be borrowed, thus adding to the burden on future generations). Total federal spending has doubled since the end of the Clinton Administration (from $1.8 trillion back in 2000 to $3.7 trillion this year).

Tax rates can be raised and lowered, but they cannot solve the problem. For starters, if the federal government simply confiscated all of the wealth of anyone in the country who earns $250,000 or more annually, we’d have about enough to bridge the deficit for one year. But, taking that wealth is a one-time operation. What do you do beyond that?

The reality is that spending must be the focal point of any serious discussion about New Mexico’s fiscal future. And, while eliminating or dramatically scaling back the Departments of Education, Energy, Commerce, Housing, and others is laudable, getting rid of them comes nowhere close to closing the gap between what the government takes in and what it spends on an annual basis.

If America is going to get back on track, we must go after the proverbial “big fish” in the federal budget: Social Security, Medicare, Medicaid, and the military.

The thing about New Mexico in this discussion is that it is in line to be disproportionately impacted. We have major federal installations under the Departments of Energy and Defense. We also have among the poorest populations in the nation which makes us heavily-reliant on Medicaid (New Mexico currently receives a 3-1 match from Washington for each dollar it spends on Medicaid).

Politically-speaking, Rep. Paul Ryan is among the only serious voices in Washington when it comes to reducing out-of-control entitlement spending. He does this by giving states more control over and responsibility for Medicaid spending (no longer can the program be expanded to take advantage of a generous match) and giving seniors greater control over decisions regarding their Medicare spending.

Ryan’s plan is not perfect, but it is the only serious one before Congress. Ryan makes what I believe are a few mistakes. He fails to make any reforms to a broken Social Security system that will continue to shortchange younger workers, he fails to address military spending (combined, that is 50 percent of the budget off the table), and he unnecessarily intermingles the tax reform issue with spending and entitlement reform issues, thus opening himself to attacks from the left.

But, as they say, “in the land of the blind, the one-eyed man is king.” And, Washington, DC is certainly blind when it comes to tackling crucial budgetary issues. With entitlements alone set to consume all federal tax revenues by 2050, the time for serious action is now.

Despite our reliance on the federal government, New Mexicans would be wise to accept an ounce of prevention now because the “cure” for fiscal incontinence will not be pretty.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

The New York Times recently reported on tax avoidance schemes undertaken by Apple, the world’s most profitable company. The left (including the President) hates profits and wants people and businesses to pay higher taxes. Of course, Apple didn’t get to be so profitable by unnecessarily paying taxes that its competitors are smart enough to avoid.

The fact is that businesses, unlike some individuals, have the money and wisdom to hire tax planners to reduce their tax bills. Is this a bad thing? No, tax competition insures that governments cannot get too out of control in terms of their tax and regulatory policies. Should the rest of us be concerned? Well, I for one would rather have resources stay in the private sector than in the coffers of inefficient governments. Sure, it may not be “fair” that businesses and the wealthy can legally avoid heavy tax burdens. Next time the government asks for more taxes, it is worth realizing that some of the very people targeted for higher taxes will simply flee or find a loophole to avoid the tax. That is why they are wealthy and successful in the first place.

Jonah Goldberg Luncheon Event – “The Tyranny of Cliches“

Jonah Goldberg’s previous book “Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning,” reached number 1 on the New York Times bestseller list.

He is coming to Albuquerque to discuss his new book, “The Tyranny of Clichés: How Liberals Cheat in the War of Ideas“.

You can join him for a lunch discussion of his book and what will surely be an erudite and informed discussion of the state of the American political situation.

We are hosting a luncheon at the Marriott Pyramid in Albuquerque on Wednesday, June 20. Lunch will last from noon to approximately 1:00PM. Individual tickets are available now for $40 per person.

Jonah Goldberg’s nationally-syndicated column appears regularly in scores of newspapers across the United States, including the Albuquerque Journal. He is also a columnist for the Los Angeles Times, a member of the board of contributors to USA Today, a contributor to Fox News, a contributing editor to National Review, and the founding editor of National Review Online. He was named by the Atlantic magazine as one of the top 50 political commentators in America. In 2011 he was named the Robert J. Novak Journalist of the Year at the Conservative Political Action Conference (CPAC).

He has written on politics, media, and culture for a wide variety of publications and has appeared on numerous television and radio programs. Prior to joining National Review, he was a founding producer for Think Tank with Ben Wattenberg on PBS and wrote and produced several other PBS documentaries.

Reserve your seat now by sending a check for $40 per attendee and the names of any attendees to:

Rio Grande Foundation
Attention: Jonah Goldberg Event
PO Box 40336
Albuquerque, NM  87196

Online payment will be available soon. Check back at www.riograndefoundation.org for details.

A lot has been happening on the issue of government employee pensions, mostly in so-called “blue” states that seem to have the worst pension problems (Rhode Island, New York, and now even Illinois seems to be getting on the reform bandwagon).

Simply put, New Mexico, at least historically, has been a deep blue state. While not as bad as these states, we have serious pension problems that need to be addressed.

HT: Rob Nikolewski

As the world celebrates Earth Day, it is time to separate real environmentalism from the fake variety. If there is one rule to follow in this regard, it’s this: if an idea is trendy, it probably isn’t good for the planet.

As environmentalism has become trendy, politicians and businesses have learned that appearing green can lead to profit and political gain. Increasingly, science takes a back seat to policies that make people feel good or appear environmentally friendly.

I write about the rise of trendy environmentalism in my book “Eco-Fads.” I outline the ways people often substitute feel-good approaches for the difficult work of following the science and economic to protection the environment.

In New Mexico, two examples stand out.

The push by school districts to require schools be built to “green” building standards is often more about image than results. Politicians push systems like Leadership in Energy and Environmental Design (LEED) supposedly to make buildings more energy efficient. The results, however, often fall far short of the promises.

Santa Fe school officials built a LEED-certified school in an effort to save energy. To their credit, officials did something that few others do – they audited the actual energy performance of their building. As a result, district officials say they won’t build another “green” building. Why?

First, to meet the LEED standards, the district spent money on design features that do little to save energy. For example, the district created parking spots to charge electric cars even though there are few electrics on the road. It cost the district money but didn’t yield environmental benefit.

Second, many green schools use more energy than other schools. In Santa Fe, the LEED-certified school actually spends more on energy than average schools in the district. This is not unusual.
Many “green” buildings across the country end up using more energy than traditionally built schools in the same district.

One of the reasons “green” schools fare so poorly is building managers already know how to save energy and they have pursued these savings before it was politically popular. That is likely the case in Santa Fe. Like many school districts, Santa Fe’s schools were green before we knew it.

When Governor Richardson was in office, he signed an executive order requiring many state buildings to meet these same, failed standards. Given the fiscal challenges facing New Mexico, rescinding that order would be one way to cut state costs.

That’s not the only eco-fad in New Mexico.

Ten New Mexico cities joined the U.S. Conference of Mayors Climate Protection Agreement in 2005-6. City leaders pledged to reduce carbon emissions to seven percent below 1990 levels by 2012. When officials signed on, they sent out press releases touting their commitment to reducing the risk of climate change.

The deadline is now approaching, so how are these cities doing? The answer is: not well. New Mexico’s emissions as a whole were nearly 10 percent above 1990 levels in 2009 and the state would have to reduce emissions by nearly 20 percent between 2010 and 2012 to meet the promised target.

The results in individual communities could be different, certainly, but will officials in any of the ten cities want to find out? Probably not.

This has been the case elsewhere in the country. Seattle, whose mayor started the Climate Protection Agreement in 2005, recently admitted that it would not meet the goal, dismissed the pledge as “political.” A recent study finds this is the rule. Looking at California cities with climate plans, the study found that “climate plans are largely rhetorical.”

How then can New Mexico, and other states, take meaningful steps to help the environment? The simple truth is technology created by the free market is the most powerful force for conservation – doing more with less – the concept at the center of environmental sustainability. The Toyota Prius, the symbol of environmental consciousness, was created by a business seeking a profit, not by politicians trying to burnish their environmental image. Politicians often jump on the bandwagon of new technologies like the hybrid, but they are followers, not leaders.

The Land of Enchantment rightly enjoys a reputation for natural beauty and resource riches.. By embracing the creative free market forces that encourage all of us to do more with less, we can put New Mexico back on the path to sound, science-based environmental policy.

Todd Myers is the author of the landmark book “Eco-Fads: How the Rise of Trendy Environmentalism is Harming the Environment,” and an adjunct scholar with the Rio Grande Foundation.

With tax revenues on the wane, New Mexico’s second-largest city is hungry for revenue. Unfortunately, Las Cruces is in a tough spot. Without a Right to Work law, with an income tax, and without oil and gas to prop it up, why in the world would someone live and work in Las Cruces rather than El Paso (which has Right to Work and no income tax)?

Rather than doing whatever it can within the context of New Mexico’s government policies to make itself friendly to businesses and citizens alike, the folks running the City would rather enact draconian measures such as shutting off water and sewer service for photo ticket nonpayment. Critics have repeatedly argued that red light cameras are mere revenue generators and have nothing to do with safety.

In these difficult economic times, the City of Las Cruces, rather than having empathy for someone who may not have the money to pay for a red light ticket, is using its monopoly powers to exact revenge and turn up the pressure on alleged scofflaws.

This use of system-wide power is an excellent argument against red light cameras, but also why governments should not own and operate water and sewer systems themselves.

Journalist and author John Stossel recently spoke at a Rio Grande Foundation event in Albuquerque. Footage of his talk can be found below:

John Stossel’s presentation in Albuquerque: April 25, 2012 from Paul Gessing on Vimeo.

His slides are available here.

The Rio Grande Foundation is passing this information along to potentially-interested parties. The position is NOT with the Foundation:

Citizen Media is looking for a commentator/blogger about New Mexico
politics, policy and people.

The right person is a self-starter with sharp research, analytical and
writing skills who would work as an independent contractor, starting
May 2012. The Website will be provided. An ability to scout the
political landscape, track relevant news (particularly video-based)
and write with authority and credibility is essential. Compensation is
negotiable.

To see a current approach by Citizen Media in Colorado, visit
http://www.whosaidyousaid.com

Anyone interested, please send an inquiry and published writing
samples to whosaidyousaid@gmail.com.

A gaffe is often described as when a politician or bureaucrat lets his/her guard down and tells the truth. The video below is a fascinating example of that as this man who is ultimately hired at the expense of US taxpayers (New Mexico is in his region of authority), discusses the true philosophy of the Obama Administration when it comes to the oil and gas industries.

The Albuquerque Journal editorial board beat me to it with this excellent editorial on Intel’s struggles to hire from New Mexico’s all-too-shallow talent pool. This is not the first mention of the lack of necessary talent in our fair state. In fact, Jerry Pacheco of the Journal had another article recently in which manufacturers looking to do business in the state are unable to find enough skilled employees.

The Journal rightly notes in the editorial that education is a big problem, but if I have a quibble with the article it is that they don’t focus on ALL aspects of New Mexico’s education system. After all, before students go on to PhD’s and Masters’ in high-tech fields, they need a basic understanding of math and science (not to mention reading). With New Mexico failing nearly half its K-12 students and even the skill sets of graduates up for debate, it is no wonder that Intel and other businesses do not locate here. Why in the world would Intel expand here when they can’t find enough workers as it is?

Of course, as I wrote just yesterday, there are some who think platitudes and pledges to reform are enough and then there are real reformers which include but are by no means limited to Gov. Martinez and the Rio Grande Foundation.

A: When it is a Memorial!

One would think that this would be obvious, but apparently the folks at the Latino Education Task Force who complained in today’s Albuquerque Journal about the Governor’s reforms (which would all be actual laws) are going the wrong direction. So, what “reform” did the Coalition come up with? A House Memorial that will “gather input from school districts, the PED, and community leaders to develop a ‘comprehensive plan’ to eliminate the achievement gap.”

Well, if it was THAT easy, why didn’t we form such a commission years or even decades before? Of course, the unspoken truth is that the school districts in particular have been among the biggest obstacles to education reform. They have quite a bit at stake in the status quo, so they might not be real keen on reforms like those that succeeded in Florida or will likely succeed in Louisiana.

The rest of the column is mere happy-talk and pablum, designed to say the right words without actually meaning anything or taking a particular stand. Kind of like the “reforms” they are proposing.

One of the biggest issues I have with my friends on the left is that they seem to not understand the benefits of work. And I mean any and all work. In many instances, those on the left would rather people have no jobs at all and rely on the state rather than have a low-wage job that, while not paying much, offers them the opportunity to learn, be responsible, and better appreciate the value of money.

The rise of the welfare state is one manifestation of the left’s disdain for work, the arbitrary imposition of minimum wage laws is another, but so is their hatred of Wal Mart. So, I was interested in this article in which a young man who has obviously gone on to bigger and better things, got his start working at Wal Mart. And, what did he think about the job? He said, “Overall, I spent about two years at Walmart. It was a great experience that I wouldn’t trade for anything.”

Obviously, this attitude about work and his willingness to learn, helped him excel in life and led him to where he is today. And he’s not alone. I did not work at Wal Mart, but I did work at Kmart and I learned a lot. I was blessed to be given the opportunity to work in a wide variety of roles from shoes to the garden center to hardware and electronics, not to mention checkout and carts. It was a great experience.

Even better than that was my time as a golf caddie (to this day the job I’ve held for longer than any other in my life 11 years). Simply put, that job was one of the most important experiences of my life helped teach me that if you don’t work, you don’t get paid (and we got paid in cash, so I appreciated not having taxes taken out), customer service, communicating, and I got to learn the game of golf, get exercise, and be outside all summer long.

Unfortunately, rules and regulations thought up by some well-intentioned lawmakers and bureaucrats make it harder for young people to work and learn the value of a hard day’s work. It is, ironically, the young people who are missing out when politicians intervene to “protect” them.

I’m suspicious of superstitions, like astrology or the belief that “green jobs will fix the environment and the economy.” I understand the appeal of such beliefs. People crave simple answers and want to believe that some higher power determines our fates.

The most socially destructive superstition of all is the intuitively appealing belief that problems are best solved by government.

Opinion polls suggest that Americans are dissatisfied with government. Yet whenever another crisis hits, the natural human instinct is to say, “Why doesn’t the government do something?”

And politicians appear to be problem-solvers. We believe them when they say, “Yes, we can!”

In 2008, when Barack Obama’s supporters shouted, “Yes, we can!” they expressed faith in the power of government to solve problems. Some acted as if Obama were a magical politician whose election would end poverty and inequality and bring us to “the moment when the rise of the oceans began to slow and our planet began to heal.”

At least now people have come to understand that presidents — including this president — can’t perform miracles.

People vastly overestimate the ability of central planners to improve on the independent action of diverse individuals. What I’ve learned watching regulators is that they almost always make things worse. If regulators did nothing, the self-correcting mechanisms of the market would mitigate most problems with more finesse. And less cost.

But people don’t get that. People instinctively say, “There ought to be a law.”

If Americans keep voting for politicians who want to spend more money and pass more laws, the result will not be a country with fewer problems but a country that is governed by piecemeal socialism. We can debate the meaning of the word “socialism,” but there’s no doubt that we’d be less prosperous and less free.

Economists tend to focus on the “prosperous” part of that statement. But the “free” part, which sounds vague, is just as important. Individuals and their freedom matter. Objecting to restrictions on individual choice is not just an arbitrary cultural attitude, it’s a moral objection. If control over our own lives is diminished — if we cannot tell the mob, or even just our neighbors, to leave us alone — something changes in our character.

Every time we call for the government to fix some problem, we accelerate the growth of government. If we do not change the way we think, we will end up socialists by default, even if no one calls us that.

Pity us poor humans. Our brains really weren’t designed to do economic reasoning any more than they were designed to do particle physics. We evolved to hunt, seek mates, and keep track of our allies and enemies. Your ancestors must have been pretty good at those activities, or you would not be alive to read this.

Those evolved skills still govern human activities (modernized versions include game-playing, dating, gossiping). We’re hardwired to smash foes, turn on the charisma and form political coalitions. We’re not wired to reason out how impersonal market forces solve problems. But it’s mostly those impersonal forces — say, the pursuit of profit by some pharmaceutical company — that give us better lives.

Learning to think in economic terms — and to resist the pro-central-planning impulse — is our only hope of rescuing America from a diminished future.

No one can be trusted to manage the economy. I began by criticizing Obama, but Republicans may be little better. Both parties share the fatal conceit of believing that their grandiose plans will solve America’s problems. They won’t.

But cheer up: Saying that government is not the way to solve problems is not saying that humanity cannot solve its problems. What I’ve finally learned is this: Despite the obstacles created by governments, voluntary networks of private individuals — through voluntary exchange — solve all sorts of challenges.

John Stossel is host of “Stossel” on the Fox Business Network. His most recent book is “No They Can’t: Why Government Fails, but Individuals Succeed.” To find out more about John Stossel, visit his site at johnstossel.com. Stossel will be speaking at a dinner event hosted by the Rio Grande Foundation on Wednesday, April, 25 at the Marriott Pyramid Hotel. More information is available at www.riograndefoundation.org or by phone at 505-264-6090.

This week saw the passage of some of the most sweeping education reforms in the United States. Louisiana, led by Gov. Bobby Jindal, pushed through reforms including:

Curtailing teacher tenure protection; tying instructors’ compensation and superintendents’ job security to student performance; shifting hiring and firing power from school boards to superintendents; creation of new paths to open independent public charter schools; and establishing a statewide program that uses the public-school financing formula to pay private-school tuition for certain low-income students.

Predictably, the unions stand in opposition and are hoping to recall Gov. Jindal. Whatever does eventually happen, I believe that Louisiana — a state that has struggled with educational performance like New Mexico — will see increased educational outcomes over the next 10 years. So, while New Mexico Democrats are playing defense against Florida’s reforms (Model 1.0) if you will, Louisiana is moving ahead with Model 2.0. If New Mexico’s education system were a computer, it would be DOS.

I recently wrote a brief defense of ALEC. A former colleague of mine over at the National Taxpayers Union has written a somewhat lengthier and more detailed defense of ALEC.

For example, did you know that ALEC’s main competition, the National Conference of State Legislators receives more than $10 million from taxpayers of the various states annually (this includes $137,000 from New Mexico taxpayers)? Worse, NCSL uses some of that money to front as an “objective, good-government organization” to lobby on behalf of bigger government.

A lot of economics is based on empirical data. High taxes on productive activity are bad, the rule of law is good. New Mexico usually doesn’t perform well on these measures of “business friendliness,” but I believe that such tools are only useful to an extent. Sometimes, the key to business friendliness is simply having a business-friendly attitude. Unfortunately, measuring this across state lines is next to impossible, but we can get snapshots of the problem.

Take the case of PNM and its effort to close costly and under-utilized pay centers. The situation arose a few months ago when PNM asked the Public Regulation Commission (PRC) for permission to close the center which cost them $500,000 annually. A compromise was reached to allow in-person payments at various Western Union centers. The situation recently made the news once again as hearings have been set before the PRC.

The fact is that myriad ways exist for people to pay their PNM bills. Mail, online, pre-paid, automatically… but that is apparently not enough for some, including PRC member Ben Hall. His statement on the issue was telling in terms of New Mexicans’ negative attitude toward business and encapsulates why businesses tend to steer clear of the “Land of Enchantment.” Said Commissioner Hall of the potential closings, “Those buildings have been around forever — all my life — people are so used to them.”

Well….so what? ATM’s weren’t around 50 years ago. How many companies have come and gone over the last 50 years? Why in the world should PNM have to waste money (ultimately causing the rates they charge customers to go upward) just for the sake of nostalgia? Times change and business needs to be allowed to change. In a free market, there are vastly more winners than losers in this process. It may be a relatively minor issue in the grand scheme of things, but for heaven’s sake, let PNM close these obsolete payment centers!

I gave the folks over at Voices for Children a hard time in a recent posting. But that doesn’t mean that left and right can’t agree on many economic policies.

For starters, take this report by the liberal “Good Jobs First.” It outlines the problem of taxpayer “subsidies” for businesses in various states. In New Mexico, they specifically criticize the “High Wage Jobs Tax Credit” which the group says reduced tax revenues by $4.6 million in 2010.

While conservative may quibble with the term “subsidy” as this credit represents revenues forgone as opposed to outright taxpayer financial support for a given industry (like the film incentive program), there is no doubt that it and other tax credits offered by the state are sub-optimal tax policy. To that end, they could and should be eliminated as part of any comprehensive or even significant tax reform in New Mexico.

If I were “Good Jobs First,” I’d focus first and foremost on the far more costly film incentive outlay ($50 million annually as opposed to $4.6 million) but conservatives can and should join principled liberals in their opposition to these targeted tax credits.

According to the latest version of the “Rich States, Poor States” report (put out by the ever-so-controversial ALEC), Gov. Martinez’s modest tax reforms enacted during the last legislative session, resulted in New Mexico rising 4 places in the “Economic Outlook” index. New Mexico went from 39 in last year’s to 35 in this edition.

The full report is definitely worth the read as it covers a wide array of economic policy issues that drive or restrain economic growth along with some real-world examples. Jonathan Williams, one of the co-authors of the report, was in Albuquerque last year discussing the report and what policies lead to economic prosperity.

By the way, according to the latest version, Utah has the best economic outlook and New York the worst.

Voices for Children had an opinion piece in today’s Albuquerque Journal echoing Obama’s claims that the “rich” don’t pay enough taxes. He also repeats the canard that the federal government is somehow “integral” to the success of private sector businesses.

First, let’s tackle the tax burden issue which is really all about payroll taxes. The federal government stops collecting payroll taxes after the 106,800th dollar of earned income. That seems unfair, right? Why would Congress do such a thing to hurt low income Americans? Well, according to the Congressional Research Service, “[H]aving different bases for contributions and benefits would weaken the traditional link between the taxes workers pay into the system and the benefits they receive.” In other words, if it is supposed to be “social insurance,” Social Security can’t be welfare at the same time.

Of course, Social Security and Medicare ARE welfare and have been for some time, but that doesn’t mean raising the cap on payroll tax collections so the wealthy pay even more taxes is a good idea. Rather, it is time to “means test” the programs so the wealthy receive less. After all, is it really fair that Mr. Buffett’s secretary is being taxed to provide his Social Security and Medicare?

Then there are all the “essentials” that Bradley and liberals love to bring up whenever federal spending cuts are on the table: roads, research, air traffic control, the weather service, and courts. As the chart below points out, all of these services combined represent a tiny fraction (less than 5% at most) of the federal budget. Many of these “services” could be done more effectively by the free market if the feds got out of the way, but if we are going to have a serious discussion about the budget, people need to understand that it is Social Security, Medicare, Medicaid, and defense that eat up a bulk of the federal budget (and, yes, the chart has a separate category for “welfare,” but that does not obviate the reality that an overwhelming majority of Social Security and Medicare are welfare by different names.

And here I thought Republicans were obsessed with Ronald Reagan! The reality is that President Obama is obsessed with America’s 40th President, because he thinks (misguidedly) that he can win points with voters who may have forgotten Reagan’s record on taxes. Check out both the video and the text of his recent comments.

Obama seems to think that he is either following in Reagan’s footsteps or that Reagan was on net a tax hiker. Nothing could be further from the truth. Reagan dropped the top marginal tax rate dramatically as the chart below illustrates (see 1981-1989 for those with short memories):

Reagan DID in fact attempt to close some loopholes with his 1986 reforms, but unlike Obama, he was a net tax-cutter, not tax hiker. That is not to say that there are not plenty of loopholes in the tax code. There are and some, like the mortgage deduction and the tax advantages for businesses that purchase health care for their employees.

The simple fact is that spending is the problem, not taxation.