In a new study, economists Atif Mian and Amir Sufi find that the government’s “cash for clunkers” program “had no long run effect on auto purchases.”
Downsizing Blog
More Corruption at Amtrak
A joint report issued by Republicans on the Senate Finance and House Oversight and Government Reform committees finds that Amtrak’s management interfered with investigations by its inspector general and effectively forced his resignation in 2009.
Boehner’s Weak Call for Cuts
In conjunction with a proposal to leave the Bush tax cuts in place for two additional years, Republican House Minority Leader John Boehner also called for reducing non-security discretionary spending to 2008 levels. Unfortunately, this category represents a relatively small portion of the overall federal budget, and would only be about $100 billion less than what the president wants to spend.
Federal Subsidies = Higher State Taxes
A new study from economists Russell Sobel and George Crowley finds that federal subsidies to the states results in higher future state taxes. Specifically, the authors find that future state taxes increase by between 33 and 42 cents for every dollar the states receive in federal subsidies. A similar effect was found for federal and state aid to local governments.
Why Not Private Infrastructure?
In a speech to union supporters in Wisconsin, President Obama announced his intention to take the country $50 billion deeper into debt in order to finance more public infrastructure projects. The president defended his abysmal economic record by claiming that he has had to take on “powerful interests who had been dominating the agenda in Washington for too long.”
Postal Union Wants More
The finances of the U.S. Postal Service are deeply in the red. The agency faces a permanently reduced demand for its services and its labor accounts for almost 80 percent of its costs. Thus it is not a good time for postal employees to get an increase in wages and benefits, right?
HUD Getting Defensive
The administration underestimated the magnitude of the economic imbalances that spawned the recession, and overestimated the government’s ability to quickly right the ship. Despite the Obama administration’s massive economic interventions, unemployment remains high and the economy is still sluggish. The administration has been defending itself by claiming that its actions prevented a worse recession or even a depression.
Federal Flood Insurance Folly
The National Flood Insurance Program was created in 1968 to allow flood-prone communities to purchase insurance protection from the government. Overseen by the Federal Emergency Management Agency, the program was supposed to alleviate the need for emergency federal aid. Instead, communities still receive emergency aid in addition to insurance payments.
Business Subsidies in Alaska
Alaska’s Juneau Empire recently examined the state’s Manufacturing Extension Partnership and found that its claims of success aren’t backed by reality. MEPs are a nationwide network of centers that provide technical and managerial assistance to small and medium-sized firms. Federal funds from the Department of Commerce pay for one-third of the costs of MEP centers, with the balance of costs being paid by state and local governments and the private sector.
MMS Captured by Industry
Regulatory “capture” occurs when a government entity tasked with protecting the public’s interest instead protects the industry is it supposed to regulate. The latest example is the Interior Department’s Minerals Management Service. The MMS was created in 1982 to regulate the oil and gas industry and collect royalties on the resources extracted from federally leased land and waters.