WSJ.com - Medicare As We've Known It Isn't an Option

I agree with the analysis in this article, but I think it misses the larger fact that the average senior gets about 3 times more benefits from Medicare than they contributed.  This fact alone should show that Medicare is unsustainable and must be fixed.  We can help the poor without bankrupting this country, but that requires ending the notion that health care is something we all are “entitled” to from the government.

 

WSJ.com - Opinion: Medicare As We've Known It Isn't an Option

 

The Democratic Party is urging Americans to choose Medicare as we've always known it rather than a new plan by Rep. Paul Ryan (R., Wis.) that would enroll seniors in private health insurance beginning in 2022. This choice is a hoax: Medicare as we've always known it is already gone. It was eviscerated by President Obama's health law. The 2012 election could turn on this falsehood.

The truth is that the Obama health law reduces future funding for Medicare by $575 billion over the next 10 years and spends the money on other programs, including a vast expansion of Medicaid.

The fact is that Mr. Obama's law raids Medicare. Mr. Ryan's plan, on the other hand, stops the Medicare heist and puts the funds "saved" in this decade toward health care for another generation of retirees.

So what can retiring Americans count on in 2022 and after? The Obama health law leaves that up to an unelected board of presidential appointees called the Independent Payment Advisory Board, a cost-cutting panel.

The board is a radical departure from Medicare as we've known it. Congress cedes nearly all control of Medicare spending to the board on the rationale that budgeting decisions should be shielded from outraged seniors and political pressures. On April 13, the president reiterated that the board would decide what care is "unnecessary" for seniors. Even the CBO cautioned that as the nation's debt crisis worsens, benefits will be put on the board's chopping block.

 

 

 

WSJ.com - The Gas Price Freakout

WSJ.com - Opinion: The Gas Price Freakout

 

Mr. Obama usually begins his gas price narrative, now a campaign trail staple, by explaining that there aren't easy solutions. That's true—there's not a lot the political class can do to change gas prices in the short run—but then the President goes on to mention that there happens to be one easy solution: raising taxes on the oil and gas industry. This is also his stock answer on the budget deficit, world hunger and everything else. The junk economic theory is that increasing the U.S. costs of investor-owned oil producers—which together hold a mere 6% of world reserves—is supposed to lower the price of a global commodity.

The liberal drive to tax Big Oil is rooted in an ideological commitment to higher energy prices, not consumer relief.

Rising gas prices are stealing the gains of middle-income voters, so this is an important debate to have. Too bad Mr. Obama's Washington can't seem to escape the energy incoherence—phantom speculators, easy villains—of his predecessors.

 

 

 

WSJ.com - When Big Government Goes to College

 

WSJ.com - Opinion: When Big Government Goes to College

 

The more the feds try to lower the cost, the worse the problem becomes.

"Right now the incentives for our colleges and universities are all wrong.  It's wrong for colleges, who have no incentive to keep down costs. It's wrong for students, whose needs are ill-served by loans and grants that go directly to the school. And it's wrong for taxpayers, whose dollars are making education more expensive without expanding opportunity for those who most need it."

Translation: If you are a mom or dad with college-age kids and you think the system is rigged against you, you're right.

A good start would be a new structure for college financing that promoted genuine opportunity without feeding the inflation it is supposed to solve. President Obama, alas, seems wed to the same government-heavy approach he had for health care. Indeed, the "reform" he signed last spring—restructuring federal grants and loans—will likely fuel rising costs as schools absorb that money, spend it on their own priorities, and continue to raise tuition at rates that outstrip the Consumer Price Index.

That's unfortunate because with a little imagination and the right incentives, the possibilities are endless.

 

 

 

WSJ.com - The Other Medicare Cutters

 

WSJ.com - Opinion: The Other Medicare Cutters

 

The debate over Paul Ryan's Medicare reform ideas has largely been healthy, even amid the liberal distortions. But why has there been so little scrutiny of President Obama's new Medicare proposal? Anyone worrying about more individual choice and responsibility in health care might be interested to learn that the alternative is turning every one of these decisions over to a 15-member central committee.

It sounds absurd, but there the President was last week, gravely conceding Mr. Ryan's analysis of Medicare's balance sheet and then claiming that the solution is to give a lot more political power to an unelected board to control health costs. Democrats believe this board will play doctor and actuary and allocate health resources better than markets, so allow us to fill in some of the details of this government-planned future.

***

Messrs. Ryan and Obama agree that Medicare spending must decline, and significantly. The difference is that Mr. Ryan would let seniors decide which private Medicare-financed insurance policies to buy based on their own needs, while Mr. Obama wants Americans to accept the commands of 15 political appointees who will never stand for election.

 

 

 

 

WSJ.com - The 30-Cent Tax Premium

A double dose of tax articles today – but don’t start to expect it J

 

WSJ.com - Opinion: The 30-Cent Tax Premium

 

Taxpayers must spend significantly more than $1 in order to provide $1 of income-tax revenue to the federal government.

To start with, individuals and businesses must pay the government the $1 in revenue plus the costs of their own time spent filing and complying with the tax code; plus the tax collection costs of the IRS; plus the tax compliance outlays that individuals and businesses pay to help them file their taxes.

In a study published last week by the Laffer Center, my col leagues Wayne Winegarden, John Childs and I estimate that these costs alone are a staggering $431 billion annually. This is a cost markup of 30 cents on every dollar paid in taxes. And this is not even a complete accounting of the costs of tax complexity.

Like taxes themselves, tax-compliance costs change people's behavior. Taxpayers, whether individuals or businesses, respond to taxes and tax-compliance costs by changing the composition of their income, the location of their income, the timing of their income, and the volume of their income.

Citizens should be able to comply with the tax code without having to spend absurd amounts of money to do so. The fact that there is such a large compliance markup in our tax s ystem indicates that the tax system has gone awry. All of these hours could have been used for something a lot more productive than just making sure our taxes are filed and paid correctly.

 

 

 

 

WSJ.com - Where the Tax Money Is

Happy Tax Day!  A lot of numbers in this article, but the point is we cannot solve our deficit problems by taxing “the rich.”  We either limit the spending on entitlements, or we significantly raise taxes on the middle class.

WSJ.com - Opinion: Where the Tax Money Is

 

The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class—because that's where the big money is.

Mr. Obama's game has always been to pretend not to increase taxes for middle class voters while looking for sneaky ways to do it.

Mr. Obama's speech was disgraceful for its demagoguery but also because it contained nothing remotely commensurate to the scale of the problem. If the President had come out for a large tax on the middle class, like a VAT, then at least the country could have debated the choice of paying for the government we have or modernizing it a la Mr. Ryan so it is affordable.

Instead the President will continue targeting the middle class for tax increases to pay for an entitlement state on autopilot, while claiming he only wants to tax the rich.

 

 

 

WSJ.com - We've Become a Nation of Takers, Not Makers

WSJ.com - Opinion: We've Become a Nation of Takers, Not Makers

 

More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?

The employment trends described here are explained in part by hugely beneficial productivity improvements in such traditional industries as farming, manufacturing, financial services and telecommunications. These produce far more output per worker than in the past. The typical farmer, for example, is today at least three times more productive than in 1950.

Where are the productivity gains in government? Consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student. That is what economists call negative productivity.

Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many services—fire fighting, public transportation, garbage collection, administrative functions, even prison operations—through competitive contracting to private providers. But unions have blocked many of those efforts. Public employees maintain that they are underpaid relative to equally qualified private-sector workers, yet they are deathly afraid of competitive bidding for government services.

 

 

WSJ.com - Is It Immoral To Cut The Budget?

[Regarding a full-page ad published by a progressive evangelical Christian group that recasts the budget battle as a morality play.]

WSJ.com - Opinion: Is It Immoral To Cut The Budget?

 

"We the People" constituted ourselves for the several reasons set forth in our Constitution's Preamble, but chief among those—the reason we fought for our independence—was to "secure the Blessings of Liberty to ourselves and our Posterity." Yet nowhere today is that liberty more in jeopardy than in a federal budget that reduces us all, in so many ways, to government dependents.

Our tax system sucks the substance and spirit of entrepreneurs and workers alike, filters that substance through Washington, then sends it back through countless federal programs that instruct us in minute detail about how to use the government's beneficence. Manufacturing, housing, education, health care, transportation, energy, recreation—is there anything today over which the federal government does not have control? A federal judge held recently that Congress can regulate the "mental act" of deciding not to buy health insurance.

The budget battle is thus replete with moral implications far more basic than Sojourners and Catholics for Choice seem to imagine. They ask, implicitly, how "we" should spend "our" money, as though we were one big family quarreling over our collective assets. We're not. We're a constitutional republic, populated by discrete individuals, each with our own interests. Their question socializes us and our wherewithal. The Framers' Constitution freed us to make our own individual choices.

The ads' signers imagine that the Good Samaritan parable instructs us to attend to the afflicted through the coercive government programs of the modern welfare state. It does not. The Good Samaritan is virtuous not because he helps the fallen through the force of law but because he does so voluntarily, which he can do only if he has the right to freely choose the good, or not.

Americans are a generous people. They will help the less fortunate if left free to do so. What they resent is being forced to do good—and in ways that are not only inefficient but impose massive debts upon their children. That's not the way free people help the young and less fortunate.

And it's not as if we were bereft of a plan for determining our priorities as a nation. Our Constitution does that quite nicely. It authorizes a focused but limited public sector, enabling a vast private sector of liberty. But early 20th-century Progressives— politicians and intellectuals alike—­deliberately shifted that balance. Today the federal government exercises vast powers never granted to it, restricting liberties never surrendered. It's all reflected in the federal budget, the redistributive elements of which speak to nothing so much as theft—and that's immoral.

 

 

 

 

WSJ.com - Medicare for a New Century

WSJ.com - Opinion: Medicare for a New Century

 

Liberals seem delighted that Paul Ryan and the GOP have decided to charge the fixed bayonets of Medicare reform, denouncing the new House budget as a crime against seniors, humanity, and so on. Republicans are taking a huge political risk, but they are now setting the reform agenda, and their honesty may even oblige a national debate about the future of an entitlement state that can't survive in its current form.

Mr. Ryan's core insight is that Medicare needs to be modernized if it is to survive. The federal insurance program for the elderly has barely changed since 1965, several health-care revolutions and trillions of misspent tax dollars ago. The GOP plan—known as premium support—would rationalize Medicare's burden on taxpayers, while introducing market competition to control costs.

As Democrats build their re-election bids around Mediscare demagoguery, they're pretending that the choice is between "privatization" and a free lunch. Mr. Ryan has done a service in exposing this illusion. Nothing will sooner finish off "Medicare as we know it" than to continue its present march into insolvency.

The reality that Mr. Ryan has recognized is that Medicare can't be fixed with nips and tucks. Premium support is easily as important an advance as the shift from defined-benefit pensions to 401(k)s, and the transition could be as smooth.

 

 

 

 

WSJ.com - After the Welfare State

WSJ.com - Opinion: After the Welfare State

 

That crashing sound you hear? It's the sound of welfare states in collapse. From Albany to Athens, all but the dimmest observers now recognize that the model we've been following has run aground—morally, socially and fiscally. Less clear is what's going to replace it.

Today, House Budget Committee Chairman Paul Ryan gives a hint at the possibilities. Over the next few weeks, the Beltway will consume itself defending or defenestrating his numbers and projections. Yet Mr. Ryan's budget is less about dollars and cents than the assumption behind them: that the best way to help Americans is to increase their access to the market rather than try to shield them from it.

Alas, bringing the middle classes into government programs has been a key aim of the social democratic state. We all know that has helped raise the financial costs to levels we can no longer afford. The moral and social price of expanding government, however, has been even more costly.

Ironically, in their obsession with government, American liberals continue to overlook their greatest strength: their ability to set goals for our society. Whether it be increasing access to good housing, a dignified retirement, or a decent education for every child, liberals have won most of the arguments.

What conservatives like Mr. Ryan and Mr. Levin offer here is a better "how"—a road map that lets us balance our care for fellow citizens without wrecking the economy, ruining families, or giving birth to more soulless bureaucracies.

Liberals tend to oppose even these improvements. Sadly, they've become wed to the welfare state's most debilitating premise—that the sole provider for some of the most important goods and services must be the most inefficient institution in American life: the government.

 

 

 

WSJ.com - Why I Won't Vote to Raise the Debt Limit

WSJ.com - Opinion: Why I Won't Vote to Raise the Debt Limit

By MARCO RUBIO

 

Our generation's greatest challenge is an economy that isn't growing, alongside a national debt that is. If we fail to confront this, our children will be the first Americans ever to inherit a country worse off than the one their parents were given.

Current federal policies make it harder for job creators to start and grow businesses. Taxes on individuals are complicated and set to rise in less than two years. Corporate taxes will soon be the highest in the industrialized world. Federal agencies torment job creators with an endless string of rules and regulations.

On top of all this, we have an unsustainable national debt. Leaders of both parties have grown our government for decades by spending money we didn't have. To pay for it, they borrowed $4 billion a day, leaving us with today's $14 trillion debt.

In a few weeks, we will once again reach our legal limit for borrowing, the so-called debt ceiling. The president and others want to raise this limit. They say it is the mature, responsible thing to do.

In fact, it's nothing more than putting off the tough decisions until after the next election. We cannot afford to continue waiting.

I will vote to defeat an increase in the debt limit unless it is the last one we ever authorize and is accompanied by a plan for fundamental tax reform, an overhaul of our regulatory structure, a cut to discretionary spending, a balanced-budget amendment, and reforms to save Social Security, Medicare and Medicaid.

Finally, instead of simply raising the debt limit, we should reassure job creators by setting a firm statutory cap on our public debt-to-GDP ratio. A comprehensive plan would wind down our debt to sustainable levels of approximately 60% within a decade and no more than half of the economy shortly thereafter. If Congress fails to meet these debt targets, automatic across-the-board spending reductions should be triggered to close the gap. These public debt caps could go in tandem with a Constitutional balanced budget amendment.

 

 

WSJ.com - How Washington Ruined Your Washing Machine

WSJ.com - Opinion: How Washington Ruined Your Washing Machine

It might not have been the most stylish, but for decades the top-loading laundry machine was the most affordable and dependable. Now it's ruined—and Americans have politics to thank.

In 1996, top-loaders were pretty much the only type of washer around, and they were uniformly high quality. When Consumer Reports tested 18 models, 13 were "excellent" and five were "very good." By 2007, though, not one was excellent and seven out of 21 were "fair" or "poor." This month came the death knell: Consumer Reports simply dismissed all conventional top-loaders as "often mediocre or worse."

How's that for progress?

The culprit is the federal government's obsession with energy efficiency. Efficiency standards for washing machines aren't as well-known as those for light bulbs, which will effectively prohibit 100-watt incandescent bulbs next year. Nor are they the butt of jokes as low-flow toilets are. But in their quiet destruction of a highly affordable, perfectly satisfactory appliance, washer standards demonstrate the harmfulness of the ever-growing body of efficiency mandates.

When the Department of Energy began raising the standard, it promised that "consumers will have the same range of clothes washers as they have today," and cleaning ability wouldn't be changed. That's not how it turned out.

In 2007, after the more stringent rules had kicked in, Consumer Reports noted that some top-loaders were leaving its test swatches "nearly as dirty as they were before washing." "For the first time in years," CR said, "we can't call any washer a Best Buy."

WSJ.com - The Unhappy Paradox of Santa-Statism

WSJ.com - Opinion: The Unhappy Paradox of Santa-Statism

 

The real problem [with budget cutting] is that cutting almost anything is impossible when what passes for governing philosophy is little more than a bromide such as, "The government should do nice things for people."

The president is hardly alone in this Santa-Statism. And to be sure, polls about the government doing generic good things for people elicit positive responses, even in these times of antigovernment fervor.

So it might seem like a winner for a politician to lard up every policy and speech with government kindness. But this leads to a terrible paradox for policy makers. While Americans favor "nice things" in theory, the resulting government—a kind of adlibocracy, if you will—ends up looking wasteful at best and predatory at worst.

The "doing good" philosophy cannot accommodate difficult but necessary budget decisions. It will always devolve into a drunken spending binge largely directed toward rewarding political friends like public-sector unions (witness the current mayhem in Wisconsin), engaging in social engineering (see the new health-care mandates), socializing losses (emergency loans and grants to failing businesses), and doling out pork (look almost anywhere in the stimulus).

So citizens say they want government to help them, politicians oblige, but citizens loathe the result. How do we cut this Gordian Knot? The solution is a real philosophy that outlines what the government should do—and, just as importantly, not do.

What is that governing philosophy? Here is an answer from the great economist and Nobel laureate Friedrich Hayek: As regards the economy, the government should provide a minimum basic standard of living for citizens, and address market failures in cases where government action can do so cost effectively. That's all.

 

 

 

 

 

 

WSJ.com - Public Unions Get Too 'Friendly'

WSJ.com - Opinion: Public Unions Get Too 'Friendly'

 

In what might be called an expression of the new spirit of transparency that is sweeping the globe, two documentaries came out in 2010, "The Lottery" and "Waiting for Superman." Both were made by and featured people who are largely liberal in their sympathies, and both said the same brave thing: The single biggest impediment to better schools in our country is the teachers unions, which look to their own interests and not those of the kids.

In both films, as in real life, the problem is the unions themselves, not individual teachers. They present teachers who are heroic, who are creative and idealistic. But they too, in the films, are victims of union rules.

Unions have been respected in America forever, and public-employee unions have reaped that respect. There are two great reasons for this. One is that unions always stood for the little guy. The other is that Americans like balance. We have management over here and the union over here, they'll talk and find balance, it'll turn out fine.

But with the public-employee unions, the balance has been off for decades. And when they lost their balance they fell off their pedestal.

When union leaders negotiate with a politician, they're negotiating with someone they can hire and fire. Public unions have numbers and money, and politicians need both. When governors negotiate with unions, it's not collective bargaining, it's more like collusion. Someone said last week the taxpayers aren't at the table. The taxpayers aren't even in the room.

 

 

 

 

WSJ.com - The Truth About U.S. Manufacturing

WSJ.com - Opinion: The Truth About U.S. Manufacturing

 

Is American manufacturing dead? You might think so reading most of the nation's editorial pages or watching the endless laments in the news that "nothing is made in America anymore," and that our manufacturing jobs have vanished to China, Mexico and South Korea.

Yet the empirical evidence tells a different story—of a thriving and growing U.S. manufacturing sector, and a country that remains by far the world's largest manufacturer.

In every year since 2004, manufacturing output has exceeded $2 trillion (in constant 2005 dollars), twice the output produced in America's factories in the early 1970s.

The truth is that America still makes a lot of stuff, and we're making more of it than ever before. We're merely able to do it with a fraction of the workers needed in the past.

Critics view the production of more with less as a net negative—fewer auto plant jobs mean fewer paychecks, they reason. Yet technological improvement is one of the main ingredients of economic growth. It means increasing wages and a higher standard of living for workers and consumers. Displaced workers learn new skill sets, and a new generation of workers finds its skills are put to more productive use.

 

 

 

WSJ.com - Let's Begin Obama's 'Conversation' on Entitlements

WSJ.com - Opinion: Let's Begin Obama's 'Conversation' on Entitlements

 

Nobody should be surprised that public-sector workers in Wisconsin and elsewhere are fighting to preserve every penny of their promised benefits.

Nobody should be surprised that state governors—and it doesn't matter which party—are trying to trim those privileges and benefits.

This fight was penciled in long ago, when politicians and union leaders made the strategic decision to negotiate benefits without negotiating for the funding to make good on them. The mock shock and horror is all the more laughable given that events in Wisconsin are a perfect microcosm of the battle that every sentient American knows, and has known for a generation, awaits Medicare and Social Security.

Medicare is the real killer. An average couple retiring last year can look forward to consuming Medicare benefits with a present value of $343,000, having paid Medicare taxes with a present value of $109,000.

Moving toward a system of real savings, in which payroll taxes would flow into some version of personal accounts controlled by the worker, would bring a big improvement to incentives. We could expect a sizeable growth dividend to help finance the transition.

By "finance the transition," of course, we mean today's workers having to reach into their own pockets twice, paying for their own retirement while also making up for the saving their parents and grandparents didn't do. When people talk about generational injustice, this is what they mean.

 

 

 

WSJ.com - Goldman Sachsonomics

I’ve been hearing this argument – that reducing federal spending will reduce jobs.  This article shows a simple refutation of that line of thought. 

 

WSJ.com - Opinion: Goldman Sachsonomics

 

Washington's spending fight heats up next week as Democrats try to derail House Republican attempts to shave $61 billion from the federal budget. Believe it or not, their favorite argument seems to be that cutting government spending reduces economic growth. Seriously.

Chris Van Hollen, the budget leader for House Democrats, declared on CBS's "Face the Nation" last Sunday that the GOP budget cuts—a 2% reduction out of $3.6 trillion in fiscal 2011 spending—would cost 800,000 jobs.  This is nothing more than the old Keynesian "multiplier" back for another political run.

As our readers k now, this notion assumes that government spending is free to the economy, and that all government expenditures have only stimulative benefits. It also assumes that there are no economic costs to deficit spending, although such spending must be financed by borrowing or higher taxes. Thus if the federal budget were to increase by, say, $1 trillion, then we could magically lower the unemployment rate to 5% or 6%. It's plug and play economics: Plug in spending and multiplier numbers and, presto, you get the job creation or destruction numbers you need for a political talking point.

House Republicans are finally acknowledging that there is no Keynesian tooth fairy, that our $3.6 trillion government with its $1.6 trillion deficit has got to get smaller and start paying its bills, and the time to start doing so is now.

 

 

 

WSJ.com - The Showdown Over Public Union Power

WSJ.com - Opinion: The Showdown Over Public Union Power

 

Government workers have taken to the streets in Madison, Wis., to battle a series of reforms proposed by Gov. Scott Walker that include allowing workers to opt out of paying dues to unions. Everywhere that this "opt out" idea has been proposed, unions have battled it vigorously because the money they collect from dues is at the heart of their power.

Unions use that money not only to run their daily operations but to wage political campaigns in state capitals and city halls. Indeed, public-sector unions especially have become the nation's most aggressive advocates for higher taxes and spending. They sponsor tax-raising ballot initiatives and pay for advertising and lobbying campaigns to pressure politicians into voting for them. And they mount multimillion dollar campaigns to defeat efforts by governors and taxpayer groups to roll back taxes.

Unlike businesses and industry groups that are also big [campaign] givers but tend to split their donations between the parties, some 95% of government workers' donations has gone to the Democratic Party, whose members are far more likely to favor raising taxes and boosting spending than are members of the Republican Party.

 

 

 

WSJ.com - Athens in Mad Town

WSJ.com - Opinion: Athens in Mad Town

 

For Americans who don't think the welfare state riots of France or Greece can happen here, we recommend a look at the union and Democratic Party spectacle now unfolding in Wisconsin. Over the past few days, thousands have swarmed the state capital and airwaves to intimidate lawmakers and disrupt Governor Scott Walker's plan to level the playing field between taxpayers and government unions.

Mr. Walker's very modest proposal would take away the ability of most government employees to collectively bargain for benefits. The bill would also require union members to contribute 5.8% of salary toward their pensions and chip in 12.6% of the cost of their health insurance premiums.

If those numbers don't sound outrageous, you probably work in the private economy. The comparable nationwide employee health-care contribution is 20% for private industry. The average employee contribution from take-home pay for retirement was 7.5% in 2009.

Unions are treating these reforms as Armageddon because they've owned the Wisconsin legislature for years and the changes would reduce their dominance.

Public unions have a monopoly position that gives them undue bargaining power. Their campaign cash—collected via mandatory dues—also helps to elect the politicians who are then supposed to represent taxpayers in negotiations with those same unions. The unions sit, in effect, on both sides of the bargaining table.

 

 

 

Why are you booing the first guy who came in here and told you the truth?"

I loved this anecdote about Chris Christie, Governor of New Jersey:

 

He introduced pension and benefit reforms on a Tuesday in September, and that Friday he went to the state firefighters convention in Wildwood. It was 2 p.m., and "I think you know what they had for lunch." Mr. Christie had proposed raising their retirement age, eliminating the cost-of-living adjustment, increasing employee pension contributions, and rolling back a 9% pay increase approved years before "by a Republican governor and a Republican Legislature."

As Mr. Christie recounted it: "You can imagine how that was received by 7,500 firefighters. As I walked into the room and was introduced. I was booed lustily. I made my way up to the stage, they booed some more. . . . So I said, 'Come on, you can do better than that,' and they did!"

He crumpled up his prepared remarks and threw them on the floor. He told them, "Here's the deal: I understand you're angry, and I understand you're frustrated, and I understand you feel deceived and betrayed." And, he said, they were right: "For 20 years, governors have come into this room and lied to you, promised you benefits that they had no way of paying for, making promises they knew they couldn't keep, and just hoping that they wouldn't be the man or women left holding the bag. I understand why you feel angry and betrayed and deceived by those people. Here's what I don't understand. Why are you booing the first guy who came in here and told you the truth?"

He told them there was no political advantage in being truthful: "The way we used to think about politics and, unfortunately, the way I fear they're thinking about politics still in Washington" involves "the old playbook [which] says, "lie, deceive, obfuscate and make it to the next election." He'd seen a study that said New Jersey's pensions may go bankrupt by 2020. A friend told him not to worry, he won't be governor then. "That's the way politics has been practiced in our country for too long. . . . So I said to those firefighters, 'You may hate me now, but 15 years from now, when you have a pension to collect because of what I did, you'll be looking for my address on the Internet so you can send me a thank-you note.'"

 

WSJ.com - Opinion: Where the Leaders Are

 

 

 

WSJ.com - Reaganomics: What We Learned

WSJ.com - Opinion: Reaganomics: What We Learned

 

For 16 years prior to Ronald Reagan's presidency, the U.S. economy was in a tailspin—a result of bipartisan ignorance that resulted in tax increases, dollar devaluations, wage and price controls, minimum-wage hikes, misguided spending, pandering to unions, protectionist measures and other policy mistakes.

What the Reagan Revolution did was to move America toward lower, flatter tax rates, sound money, freer trade and less regulation. The key to Reaganomics was to change people's behavior with respect to working, investing and producing.

The results of the Reagan era? From December 1982 to June 1990, Reaganomics created over 21 million jobs—more jobs than have been added since.  The stock market went through the roof. From July 1982 through August 2000, the S&P 500 stock price index grew at an average annual real rate of over 12%.

The true lesson to be learned from the Reagan presidency is that good economics isn't Republican or Democrat, right-wing or left-wing, liberal or conservative. It's simply good economics.

 

 

 

 

 

WSJ.com - How to Tax the Rich

I found these ideas amusing and intriguing. 

 

WSJ.com - How to Tax the Rich

 

Try giving them perks and privileges (an extra vote?) in return, says 'Dilbert' creator Scott Adams.

 

If we accept that the rich can be taxed at a different rate than everyone else, we can also imagine that there could be other differences in how the rich are taxed. That's the part we can tinker with, and that's where the bad version comes in. In a minute, I'll float some bad ideas about how the rich can feel good while the rest of society is rifling through their pockets.

I can think of five benefits that the country could offer to the rich in return for higher taxes: time , gratitude, incentives, shared pain and power.

 

 

 

WSJ.com - 'It Makes No Sense'

I’ve long advocated that students who graduate from our universities should be able to stay and work in the U.S.  We want the best and brightest from abroad to stay and help build our country and our economy.

 

WSJ.com - Opinion: 'It Makes No Sense'

 

President Obama didn't have much to say about immigration reform in his State of the Union address last week, which is surprising given his focus on "winning the future." But what the President did say was well put and well timed.

"Others come here from abroad to study in our colleges and universities," said Mr. Obama. "But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense."

Employers hire skilled foreign nat ionals based on merit, not because they can pay them less. Immigrants are also some 30% more likely than non-immigrants to start businesses.

Winning the future is that much more difficult if our laws limit U.S. access to foreign-born human capital. The new Congress has a chance to help the U.S. economy by working with the White House to make it easier for the world's young and talented to stay in America after they've earned their Ph.Ds.

 

 

 

 

 

WSJ.com - The State Against Blacks

WSJ.com - Opinion: The State Against Blacks

'The welfare state has done to black Americans what slavery couldn't do. . . . And that is to destroy the black family.'

 

 

WSJ.com - The Great Misallocators

WSJ.com - Opinion: The Great Misallocators

 

Step back for a minute from the day to day policy fights and consider how an economy can grow faster. One way is to get people to work harder or longer. The government can contribute here with policies that reward work and investment, such as lower taxes.

A second route to faster growth is innovation, which means inventions or new processes that increase productivity.

The third way is through the more efficient use of capital, both human and monetary. These resources are scarce in any economy, and growth will be fastest if they are allowed to find their highest return. If resources are allocated to less productive uses or create asset bubbles due to bad policy, then overall growth will be slower than it should be.

Government "investments"—Mr. Obama's favorite word last night—are by definition made for political purposes, rather than for their highest potential return. They are allocated by politics rather than by prices.

The path back to faster growth, more jobs and a more competitive U.S. economy does not travel through more political mediation. Nor does it lie in endlessly easy Fed policy in a misguided attempt to refloat the housing bubble or revive the financial boom. A better economy requires policies that reward work and innovation, while letting capital flow to the companies and individuals with the best ideas.