American alliances are systems that transfer wealth from U.S. taxpayers and their debtors to citizens in wealthy allies. With Uncle Sam paying for those countries’ defense, their governments are free to use their own revenues for welfare programs or other domestic priorities. This is a sucker’s bet from an American perspective, but pretty great from the perspective of the citizen of a rich country who benefits from this largesse.
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.
The latest report by the Washington Post’s David Fahrenthold on Beltway tomfoolery tells of what happened when both Democrats and Republicans asked government workers and the public for suggestions on how to reduce government spending. Apparently neither party had much interest in the responses.
As if U.S. agriculture isn’t subsidized enough already. Sen. Charles Schumer (D-NY) visited a hops yard yesterday to raise the profile of, and inevitably seek federal support for, what he hopes will be New York’s first commercial hops yard. In the second subtitle of his press release, Senator Schumer sings the praises of NY’s “booming craft beer industry” and yet simultaneously makes the somewhat contradictory claim that the industry suffers from a lack of capital:
Some more from the new Canadian budget: It has some interesting charts (page 38) comparing U.S. and Canadian labor markets (or “labour” markets as the Canadians would say).
The new Canadian budget includes estimates of marginal effective corporate tax rates for major countries (page 149). These rates measure the tax load on new investments, such as a manufacturing company buying new machines and expanding a plant.
Canada’s federal government introduced a budget yesterday that includes new estimates of corporate tax revenues. I’ve discussed how Canada has cut its statutory corporate tax rate to a fraction of the U.S. rate, yet Canada raises more revenue. The new budget shows that the Canadian federal 15 percent tax raised 1.9 percent of GDP in revenue in 2012, while the U.S. federal tax at 35 percent raised just 1.6 percent, per CBO.
State and local politicians love federal money. Every federal dollar that a state or local politician can spend is a dollar that he or she doesn’t have to ask his or her voters to come up with through taxes or fees.
Transportation Secretary Ray LaHood recently said that “America is one big pothole.” President Obama, members of Congress, and pundits often claim that our infrastructure is “crumbling.” The Senate Budget Committee’s new spending plan, for example, uses that word no fewer than ten times in calling for a $100 billion infrastructure package. And in a report released yesterday, the American Society of Civil Engineers gives the nation a grade of D+ on its infrastructure.
It can be very frustrating to work at the Cato Institute and fight for small government.