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When the former Soviet Union collapsed almost 25 years ago, most global strategic forecasters assumed that the U.S. would adapt pragmatically to her new status of sole world superpower. Instead she has pursued a variety of misguided nation-building adventures and has largely shrunk from her primary responsibility of neutralizing the ambitions of petty dictators around the world. From this perspective, America’s multi-generational expenditures on military personnel and equipment has become more of a stealth economic stimulus program rather than an insurance policy for global stability. The…

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Many researchers interested in extreme poverty (i.e., people living on less than $1.25 per day) are in agreement about the best way to help the world’s poorest people: Giving the poor cash is better than almost every other alternative. Yet, the World Bank, International Monetary Fund, and countless aid organizations have instead invested billions of dollars in corrupt leaders and bad development ideas.
Researchers interested in disaster relief after tornadoes, hurricanes, and tsunamis have also reached a similar conclusion: People suffering in the aftermath of a natural disaster prefer cash…

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Big Government: The Congressional Budget Office warns of a terrifying, unprecedented level of national debt in the coming decade. That fits nicely with Democrats’ objectives, but not with our nation’s founding principles.
Andrew Jackson, who in 1835 succeeded in paying off the national debt, was famous for considering debt slavery. The current fiscal path the U.S. is on does indeed lead to slavery, but the slave masters of the future will be well-heeled politicians and federal bureaucrats, not plantation owners.
The CBO’s new budget projections contain an eerie warning that we are on path…

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Tax season is over for all but the greatest procrastinators among us. Two-thirds of taxpayers are celebrating their forthcoming refunds while tens of millions of others have grudgingly written a check to the IRS. Either way, this is the time of year when Americans are most acutely aware of the federal income tax system and all its flaws. Our tax code is extraordinarily difficult to navigate and it sometimes seems that it’s more concerned with advancing social and industrial policy goals than raising the money needed to fund government. The plethora of preferential deductions and credits that…

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By Tax Day, April 15, Americans have spent an average of 27 hours filling out their tax returns. Tax collections are at a record high. The government’s numerous encounters with the debt ceiling and a potential default have placed fiscal policy front and center in this year’s midterm elections.Running on a platform of lower taxes, a new crop of candidates is challenging established politicians. A case in point is attorney Grant Lally, running against Representative Steve Israel, the chairman of the Democratic Congressional Campaign Committee, the campaign arm of the Democratic House…

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With the deadline for filing taxes upon us, the only talk of taxes in Washington is approving a bundle of “tax extenders.” These extenders represent an billion package of special “temporary” tax provisions that sunset every few years and require a new vote to re-instate them. While there are a few provisions that benefit individuals, by and large, these extenders represent the work of corporate lobbyists who have carved out benefits in the arcane U.S. tax code. Rather than simply renewing these particular provisions, Congress should turn its attention toward revamping the entire code,…

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For more than 200 years, politicians have tried to spark economic growth through government subsidies. Almost all of them have been expensive and demoralizing disasters. The Heritage Foundation recently estimated that most major corporations have taken federal aid, and that this spending has cost taxpayers $3,000 per second of every day since the year 2000.
One of us (Burton Folsom) has just finished the first historical study of government subsidies. The book, entitled Uncle Sam Can’t Count, is published by HarperCollins and is available April 15. It starts with George Washington’s failed…

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If you know someone among the long-term unemployed - a category that includes workers who have been jobless at least six months, but in many cases much longer - you understand what a frustrating and demoralizing experience it is, especially for mid-career professionals and managers in their 40s and beyond. There’s a drill. You polish your resume; you work your network; you apply for openings; you wait. All the while, you try to maintain your enthusiasm and self-esteem. In a society that worships the work ethic and treats jobs as an indicator of social status, being without one is crushing for…

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As I tried to make clear in a recent piece on inequality and poverty, the argument for making incomes more equal in general is not supported by a compelling economic argument. Reducing poverty, however, does make good economic sense. Poverty imposes huge costs on the people who are poor, and it’s also hard on the rest of us when the poor resort to crime and other socially destructive behaviors.
The root sources of poverty and the tools needed to help people escape poverty are, despite our 50 year War on Poverty and $18 trillion in spending, not very well understood. At the broadest level, our…

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The economic book of the moment is Capital in the Twenty-First Century by Thomas Piketty. In this book, economics professor Piketty blames the increase in wealth and income inequality on the fact that returns to capital are capturing a growing share of national income in many countries around the world. That may be true, but the fact does not justify his prescriptions to redistribute wealth by taxing it. In fact, his suggestions will simply make the world poorer and slow down the economic growth we all need to continue capitalism’s ability to lift millions around the world out of poverty.The…

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Will somebody please explain to me how rising inflation is somehow going to extricate us from the tepid economic recovery? I don’t get it.
It used to be hypothesized that low inflation was the key to high economic growth. For everybody in the economy, low inflation was a tax cut. Conversely, rapidly rising prices were thought to penalize the economy by placing a tax-hike effect on investors, businesses, and families. It was this logic that spurred Paul Volcker (especially) and then Alan Greenspan to labor mightily in the 1980s and 1990s to bring inflation down.
The Fed’s favorite inflation…

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I don’t want to spend too much time on HFT here, particularly since Michael Lewis has brought so much warranted attention at, I assume, far greater detail and entertainment. I do, however, think there is an aspect of this modern “evolution” that highlights a growing disparity and the retracement toward soft type of what can only be described as feudalism. Maybe there is inevitability in the transformation of technology, particularly as it relates to “markets” and information, but that should not necessarily constitute an entirely new order.
There has existed a practice going back to Chicago…

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Since Keynes no longer has much credibility as a leftist prop, liberals are in a communal feeding frenzy over Thomas Piketty’s “Capital in the Twenty-First Century.” The book claims to offer progressives the proof they need to legitimize their socialist ideology that income redistribution and collective justice is moral.Harold Meyerson’s review in the Washington Post is one example. So before the grave of Adam Smith is further desecrated by economic lunacy, let’s dissect the false rhetoric, piece by demagogic piece.”Capitalism itself enriches the few at the expense of the many.”Incorrect….

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The Peter G. Peterson foundation recently funded a study by Eric Toder of the Tax Policy Center and Alan Viard of he American Enterprise Institute on corporate tax reform. They conclude that congressional proposals now being debated fall short of solving the complex problems of worldwide taxes. They suggest that we either reach an international agreement on how to allocate income among countries, or abolish the tax and raise the revenue directly from the shareholders.
The notion that we may negotiate an international solution as to where a tax obligation is incurred, assumes that nations will…

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Although financial optimists are heralding the recent sale of $3.5 billion of bonds by the Commonwealth of Puerto Rico as the end of the financial crisis for the island and its inhabitants, a closer look demonstrates that the bond sale may, at best, be a small bandage on a large and hemorrhaging wound. Because of the uniqueness of Puerto Rico’s status as a Commonwealth of United States, a financial default by Puerto Rico will be catastrophic in that it will almost mandate a bailout by the U.S. Government which will ultimately be borne by U.S. taxpayers.
What most financial experts may not…

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