Two months ago, Cato published a study by economist Benjamin Zycher, a senior fellow at the Pacific Research Institute, that showed that military spending contributes very little to GDP growth, and concludes that cuts would have very little long-term impact on GDP. On the contrary, Zycher estimates that cuts on the order of $100 billion a year would reduce costs in the wider economy by $135 billion per year. I wrote about that study when it was published here.
It's telling that the most quotable line from Mitt Romney's foreign policy speech Monday is a reheated zinger from Rudy Giuliani's 2008 Republican National Convention speech: "Hope is not a strategy."
I have a new piece up at ForeignPolicy.com this morning, commenting on the GOP’s apparent confusion about government spending and the effects that such spending has on others.
Let's try to put the ongoing debate over the future of Medicare into a little bit of context. Last year, Americans paid $274 billion in Medicare taxes and premiums. At the same time, the program paid out $564 billion in benefits. That amounts to a shortfall of roughly $290 billion. Looking into the future, even the most optimistic estimate by the program's trustees puts Medicare's future unfunded liabilities at more than $38.6 trillion. More realistic projections suggest the shortfall could easily top $90 trillion.
According to the Associated Press, Mitt Romney supports postponing the sequestration cuts scheduled for January 2, 2013 by at least one year:
On Sunday, Defense News published a good article by Kate Brannen that looks into Mitt Romney’s plans for military spending. This is not the first examination of Romney’s lofty campaign promise to spend at least four percent of GDP on the Pentagon’s base budget. Since October 2011, when I first crunched the numbers on his plan, others have followed with their own estimates.
The Obama campaign is trying to hang so-called “vulture” capitalism around Mitt Romney’s neck, but as two excellent opinion pieces explain, it’s the administration’s crony capitalism that’s the really disturbing story.
In a speech today, presumptive GOP presidential nominee Mitt Romney will lay out the foundations of his education platform. Based on an outline of his proposals released by Education Week this morning, Gov. Romney seems just a little less disinterested in the Constitution — and the 40-plus years of proven federal education failure – than the man he seeks to replace. And no, calling what you want federal “incentives” neither absolves them of being unacceptable federal intrusions, nor makes them any less coercive.