In “The Use of Knowledge in Society,” economist F.A. Hayek described how markets take into account an array of local knowledge that governments do not possess. It is “knowledge of the particular circumstances of time and place,” which enters into everyday exchanges, but central authorities cannot access it. That’s because it “never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.” This sort of knowledge is tacit and subjective, so “by its nature cannot enter into statistics and therefore cannot be conveyed to any central authority in statistical form.”
The U.S. Congress hoards real estate like proud pack rats. For example, the Department of Defense has 562,000 facilities that cover 24.7 million acres—an area about the size of Virginia.
ObamaCare gives states the option to expand Medicaid to cover all individuals below 138 percent of the federal poverty level, which is approximately $33,500 a year for a family of four. To encourage states to expand, the federal government agreed to fund 100 percent of expenditures for the newly-eligible participants until 2016, and then slowly decrease the match to 90 percent in 2020 and into the future.
In recent decades, the Democratic Party has moved far to the left on economic policy. I have discussed the leftward shift on tax policy, which was illustrated once again by President Obama’s generally awful proposals in his new budge
The Department of Energy (DOE) is admitting that it failed. Last week, it announced that it will stop development of FutureGen 2.0, a federally-financed, coal-fired power plant in Illinois. FutureGen, and its successor FutureGen 2.0, wasted millions of tax dollars, and was beset with multiple delays and cost overruns.
President Obama proposed an expansive spending plan for highways, transit, and other infrastructure in his 2016 budget. Here are some of the problems with the president’s approach:
One of the largest and fastest growing items in President Obama’s new budget is often overlooked. Net interest expenses will skyrocket over the next decade, growing by 250 percent.
President Obama’s budget would raise taxes to fund a $478 billion infrastructure spending plan for highways, transit, and other items. The budget (on page 26) cites an International Monetary Fund study that “highlights the importance of choosing high-efficiency infrastructure projects based on rigorous benefit-cost analysis.”
The president released his budget request this morning. As expected, his plan is heavy on new spending and new taxes, and very light on structural reforms.
On Monday, the White House will release President Obama’s budget proposal for Fiscal Year 2016. The president is expected to reemphasize his previous fiscal approach of higher spending coupled with higher taxes, while completely ignoring the country’s long-term fiscal problems.