There’s an internal contradiction in the way that Keynesian-oriented economists and policymakers address the federal budget situation. I’ve noticed it over and over. A passage in a Washington Post op-ed today by Mohamed El-Erian of Pimco captures it perfectly:
First-class mail is the USPS’s most profitable product. Thus, the large – and permanent – drop in first-class mail volume has the USPS facing red ink as far as the eye can see. The U.S. Postal Service’s inspector general recently reported its findings from focus group discussions held with high-volume first-class mailers and mail service providers. The feedback is quite telling:
According to Sen. Jim Inhofe (R-OK): President Obama’s “trip to Afghanistan is an attempt to shore up his national security credentials, because he has spent the past three years gutting our military.”
The postal reform bill passed in the Senate last week is further evidence that politicians shouldn’t be entrusted with running a hotdog stand, let alone the nation’s mail. The U.S. Postal Service is supposed to operate like a business, but congressional micromanagement makes that impossible. Nevertheless, 62 senators voted for an eye-glazing 191-page bill that would keep Congress’s hand placed firmly around the USPS’s neck.
The Sunday New York Times described Apple’s successful efforts to reduce its U.S. and California corporate tax burdens. The article hints that the situation is a moral outrage, and it includes sob stories of governments that are supposedly hurting because they don’t raise enough tax revenues from businesses.
Sometimes I wish politicians were more like good parents. I know that doesn’t sound very libertarian — the last thing we want is for politicians to become humanity’s moms and dads — but there’s at least one thing good parents do that most politicians constantly avoid: saying “no.”
With the City of Detroit heading toward bankruptcy, The Hill reports that Mayor Dave Bing has signed a $330,000 contract with a Washington lobbying firm to help the city grab more money from federal taxpayers. At the same time, Rep. Hansen Clarke (D-MI) wants up to a $1 billion in “emergency aid” (i.e., bailout) for Detroit from Uncle Sam.
Andrew Sullivan cited an op-ed of mine last week regarding the complexity of the tax code.