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1. The National Flood Insurance Program: Solving Congress’s Samaritan’s Dilemma

Author:
Peter Van Doren
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Who should pay for the damages caused by natural disaster? The American ethos has long called on personal responsibility and private charity, rather than broad public aid, to secure people’s welfare. Although public emergency services play a vital role during and immediately after a catastrophe, this ethos looks to private insurance and disaster‐​oriented organizations, such as the Red Cross, to be the main modes of recovery from a flood or storm, as well as prior care in siting and constructing buildings to blunt the effects of wind and rain.
Topic:
Government, Natural Disasters, Public Policy, and Insurance
Political Geography:
North America and United States of America

2. When Is Tinkering with Safety Net Programs Harmful to Beneficiaries?

Author:
Jeffrey Clemens and Michael J. Wither
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The U.S. safety net has many moving parts. Redistributive transfers are made in cash and in kind, often come through regulation, and are implemented by multiple levels of government. Arrangements related to health care and health insurance are particularly complicated, as low‐​income households must navigate eligibility for free care, Medicaid, subsidized coverage, and employer‐​provided coverage.
Topic:
Government, Economic Policy, Labor Market, and Safety Net
Political Geography:
North America and United States of America

3. Slippery Fish: Enforcing Regulation under Subversive Adaptation

Author:
Andres Gonzalez-Lira
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Correcting market failures and improving economic efficiency often require curbing undesirable behaviors of market agents who act to maximize their private benefits. Examples include actions that affect ecosystems, such as deforestation, pollution, and overexploitation of natural resources; actions that affect community health, such as drunk driving and open defecation; or actions that undermine government performance, such as corruption and tax evasion. Enacting and enforcing regulations is the most direct strategy to deter such behaviors. Implementing this strategy requires strong institutions to enforce laws, plus sophisticated policing to track agents’ reactions to enforcement so that rules are robust enough to curb the undesirable behavior even when regulated agents try to game the new system.
Topic:
Environment, Government, Markets, Regulation, and Adaptation
Political Geography:
Global Focus

4. Jawboning against Speech: How Government Bullying Shapes the Rules of Social Media

Author:
Will Duffield
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Over the past two decades, social media has drastically reduced the cost of speaking, allowing users the world over to publish with the push of a button. This amazing capability is limited by the fact that speakers do not own the platforms they increasingly rely on. If access to the platforms is withdrawn, speakers lose the reach that social media grants. In America, government censorship is limited by the First Amendment. Nevertheless, seizing upon the relationship between platforms and speakers, government officials increasingly demand that platforms refrain from publishing disfavored speech. They threaten platforms with punitive legislation, antitrust investigations, and prosecution. Government officials can use informal pressure — bullying, threatening, and cajoling — to sway the decisions of private platforms and limit the publication of disfavored speech. The use of this informal pressure, known as jawboning, is growing. Left unchecked, it threatens to become normalized as an extraconstitutional method of speech regulation. While courts have censured jawboning in other contexts, existing judicial remedies struggle to address social media jawboning. Amid the opacity and scale of social media moderation, government influence is difficult to detect or prevent. Ultimately, congressional rulemaking and the people’s selection of liberal, temperate officials remain the only reliable checks on this novel threat to free speech.
Topic:
Government, Regulation, Social Media, Censorship, and Free Speech
Political Geography:
Global Focus and United States of America

5. How Misaligned Incentives Hinder Foster Care Adoption

Author:
Isabella M. Pesavento
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Adoption, particularly adoption out of foster care, has not been well studied within the field of economics. Researchers may avoid this topic because the adoption market greatly deviates from a typical market, and the system and data collection are highly fragmented, with relatively little federal coordination. Rubin et al. (2007) and Thornberry et al. (1999) show that instability in foster care placements produces negative welfare outcomes, and Hansen (2006), Barth et al. (2006), and Zill (2011) demonstrate that adoption out of foster care is socially and financially beneficial. Yet, children waiting to be adopted out of foster care are in excess supply, which has been exacerbated in recent years. I hypothesize that this is, in part, due to misaligned incentives of government officials and the contracted foster care agencies. I show that earnings are prioritized over ensuring permanent child placement, which hinders the potential for adoption, and government oversight fails to correct such iniquities because of career interests.
Topic:
Economics, Government, Markets, Children, Incentives, Foster Care, and Adoption
Political Geography:
North America and United States of America

6. A Reckoning Looms for America’s 50‐​Year Financial Surveillance System

Author:
Michael J. Casey
Publication Date:
06-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
For all the upheaval of 2020, it’s perhaps not surprising that the 50‐​year anniversary of a major piece of financial legislation came and went with little fanfare. But the 1970 U.S. Bank Secrecy Act (BSA) deserves much scrutiny.1 In mandating that financial institutions maintain customer identity records and report illicit activity to government agencies, the BSA was a landmark statute by any measure. It paved the way to an ever‐​expanding system of international surveillance that’s a cornerstone of U.S. economic power.
Topic:
Economics, Government, Finance, and Surveillance
Political Geography:
North America and United States of America

7. Questioning Industrial Policy: Why Government Manufacturing Plans Are Ineffective and Unnecessary

Author:
Scott Lincicome and Huan Zhu
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
In the wake of the COVID-19 pandemic and rising U.S.-China tensions, American policymakers have again embraced “industrial policy.” Both President Biden and his predecessor, as well as legislators from both parties, have advocated a range of federal support for American manufacturers to fix perceived weaknesses in the U.S. economy and to counter China’s growing economic clout. These and other industrial policy advocates, however, routinely leave unanswered important questions about U.S. industrial policy’s efficacy and necessity: What is “Industrial Policy”? Advocates of “industrial policy” often fail to define the term, thus permitting them to ignore past failures and embrace false successes while preventing a legitimate assessment of industrial policies’ costs and benefits. Yet U.S. industrial policy’s history of debate and implementation establishes several requisite elements – elements that reveal most “industrial policy successes” not to be “industrial policy” at all. What are the common obstacles to effective U.S. industrial policy? Several obstacles have prevented U.S. industrial policies from generating better outcomes than the market. This includes legislators’ and bureaucrats’ inability to “pick winners” and efficiently allocate public resources (Hayek’s “Knowledge Problem”); factors inherent in the U.S. political system (Public Choice Theory); lack of discipline regarding scope, duration, and budgetary costs; interaction with other government policies that distort the market at issue; and substantial unseen costs. What “problem” will industrial policy solve? The most common problems purportedly solved by industrial policy proposals are less serious than advocates claim or unfixable via industrial policy. This includes allegations of widespread U.S. “deindustrialization” and a broader decline in American innovation; the disappearance of “good jobs”; the erosion of middle‐​class living standards; and the destruction of American communities. Do other countries’ industrial policies demand U.S. industrial policy? The experiences of other countries generally cannot justify U.S. industrial policy because countries have different economic and political systems. Regardless, industrial policy successes abroad – for example, in Japan, Korea and Taiwan – are exaggerated. Also, China’s economic growth and industrial policies do not justify similar U.S. policies, considering the market‐​based reasons for China’s rise, the Chinese policies’ immense costs, and the systemic challenges that could derail China’s future growth and geopolitical influence. These answers argue strongly against a new U.S. embrace of industrial policy. The United States undoubtedly faces economic and geopolitical challenges, including ones related to China, but the solution lies not in copying China’s top‐​down economic planning. Reality, in fact, argues much the opposite.
Topic:
Government, Industrial Policy, Manufacturing, and COVID-19
Political Geography:
China, Asia, North America, and United States of America

8. China: Rise or Demise?

Author:
John Mueller
Publication Date:
05-2021
Content Type:
Commentary and Analysis
Institution:
The Cato Institute
Abstract:
China, even if it rises, does not present much of a security threat to the United States. Policymakers increasingly view China’s rapidly growing wealth as a threat. China currently ranks second, or perhaps even first, in the world in gross domestic product (although 78th in per capita GDP), and the fear is that China will acquire military prowess commensurate with its wealth and feel impelled to carry out undesirable military adventures. However, even if it continues to rise, China does not present much of a security threat to the United States. China does not harbor Hitler‐​style ambitions of extensive conquest, and the Chinese government depends on the world economy for development and the consequent acquiescence of the Chinese people. Armed conflict would be extremely—even overwhelmingly—costly to the country and, in particular, to the regime in charge. Indeed, there is a danger of making China into a threat by treating it as such and by engaging in so‐​called balancing efforts against it. Rather than rising to anything that could be conceived to be “dominance,” China could decline into substantial economic stagnation. It faces many problems, including endemic (and perhaps intractable) corruption, environmental devastation, slowing growth, a rapidly aging population, enormous overproduction, increasing debt, and restive minorities in its west and in Hong Kong. At a time when it should be liberalizing its economy, Xi Jinping’s China increasingly restricts speech and privileges control by the antiquated and kleptocratic Communist Party over economic growth. And entrenched elites are well placed to block reform. That said, China’s standard of living is now the highest in its history, and it’s very easy to envision conditions that are a great deal worse than life under a stable, if increasingly authoritarian, kleptocracy. As a result, the Chinese people may be willing to ride with, and ride out, economic stagnation should that come about—although this might be accompanied by increasing dismay and disgruntlement. In either case—rise or demise—there is little the United States or other countries can or should do to affect China’s economically foolish authoritarian drive except to issue declarations of disapproval and to deal more warily. As former ambassador Chas Freeman puts it, “There is no military answer to a grand strategy built on a non‐​violent expansion of commerce and navigation.” And Chinese leaders have plenty of problems to consume their attention. They scarcely need war or foreign military adventurism to enhance the mix. The problem is not so much that China is a threat but that it is deeply insecure. Policies of threat, balance, sanction, boycott, and critique are more likely to reinforce that condition than change it. The alternative is to wait, and to profit from China’s economic size to the degree possible, until someday China feels secure enough to reform itself.
Topic:
Government, GDP, Geopolitics, and Economic Growth
Political Geography:
China, Asia, and United States of America

9. The Potential for Constitutional Devolution in South Africa

Author:
Martin van Staden
Publication Date:
10-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The African National Congress (ANC) today rules South Africa, formally a federation, as though it were a unitary state. There has been increasing agitation in recent years for the secession of the Western Cape province, which since South Africa ended apartheid in 1994 has never returned a majority vote in favor of the ANC.
Topic:
Government, Constitution, Disputes, and African National Congress (ANC)
Political Geography:
Africa and South Africa

10. A Brief History of U.S. Immigration Policy from the Colonial Period to the Present Day

Author:
Andrew M. Baxter and Alex Nowrasteh
Publication Date:
08-2021
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
More than 86 million people have legally immigrated to the United States between 1783 and 2019. The legal regime under which they immigrated has changed radically over that time; the politics surrounding those changes have remained contentious, and past immigration policies inform the current political debate. Conflicting visions and piecemeal legislation have left the United States with an archaic and barely coherent immigration system with outdated policy objectives that is primarily controlled by the executive branch of government. We review the history of U.S. immigration policy, including the legal controversies that empowered Congress with its immigration plenary power and the historical policy decisions that still guide the U.S. immigration system, in order to contextualize the current political debate over immigration at the beginning of the Biden administration.
Topic:
Government, History, Immigration, and Immigration Policy
Political Geography:
North America and United States of America

11. Industrial Policy Implementation: Empirical Evidence from China’s Shipbuilding Industry

Author:
Panle Barwick, Myrto Kalouptsidi, and Nahim Bin Zahur
Publication Date:
08-2021
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Industrial policy has been widely used in developed and developing countries. Examples include the United States and Europe after World War II; Japan in the 1950s and 1960s; South Korea and Taiwan in the 1960s and 1970s; and Brazil, China, India, and other developing countries more recently. Industrial policies are now back in the spotlight in developed countries, such as Europe and the United States. Designing and implementing industrial policies is a complicated task. Governments seeking to promote the growth of selected sectors have a wide range of policy tools at their disposal, including subsidies on output, provisioning loans at below‐​market interest rates, preferential tax policies, tariff and nontariff barriers, and so on. They must also choose the timing of policy interventions and whether to target selected firms within an industry.
Topic:
Government, Industrial Policy, Economic Policy, and Shipbuilding
Political Geography:
China and Asia

12. The Intended and Unintended Consequences of Disposable Bag Regulation

Author:
Tatiana Homonoff, Lee-Sien Kao, Javiera Selman, and Christina Seybolt
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Many recent government and corporate policies aimed at reducing a variety of negative externalities include regulations that ban the provision of externality‐​generating products. However, these policies often ban only a narrow subset of products associated with the underlying externality. For example, the U.S. Department of Justice banned bump stocks, which assist in rapid‐​fire shooting, after a Las Vegas mass shooting rather than placing stricter regulations on all assault weapons. Similarly, Starbucks recently banned the distribution of plastic straws at its stores to reduce environmental waste, and New York City attempted to pass a restaurant ban on sugar‐​sweetened beverages over 16 ounces to curb obesity.
Topic:
Environment, Government, Regulation, and Corporations
Political Geography:
Global Focus

13. An Analysis of the PBOC’s New Mobile Payment Regulation

Author:
Andrew Liu
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In 2016 alone, China saw $9 trillion in mobile payments—in contrast to a comparably small $112 billion of mobile payments in the United States (Abkowitz 2018). The use of mobile payment systems such as Alipay and WeChat Pay are widespread in China, with users ranging from beggars to lenders to criminals. Previously, the mobile payments landscape was largely untouched and unregulated by the Chinese government because of its relative insignificance in the Chinese economy. However, with the explosive growth in mobile payment transactions, the People’s Bank of China (PBOC) implemented a new mobile payment regulation on June 30, 2018. Most notably, the government will require all mobile payments to be cleared through the PBOC, and hence, all mobile payment transactions will begin to touch the hands of the Chinese Communist Party (CCP) (Hersey 2017). The PBOC’s stated reasoning for implementing this regulation is to curb money laundering and fraud. While those are valid concerns, it is unlikely that there are not additional motivations for the new regulation. In this article, I analyze the effects this new regulation has had and will likely have on the various mobile payment system stakeholders, competitors, and users, and also uncover what underlying motives the PBOC has in implementing the regulation.
Topic:
Government, Regulation, Economy, Banks, and Chinese Communist Party (CCP)
Political Geography:
China and Asia

14. Subnational Economic Freedom and Performance in the United States and Canada

Author:
Daniel L. Bennett
Publication Date:
01-2016
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
During his illustrious career spanning more than half a century, Richard Vedder has tirelessly advocated for limited government and free enterprise. Much of his scholarship has focused on examining how fiscal and labor market policies consistent with the principles of economic freedom are associated with economic and social benefits such as stronger economic performance (Vedder 1981, 1990), lower unemployment (Vedder and Gallaway 1996, 1997), and poverty alleviation (Vedder and Gallaway 2002). Vedder has also examined the impact of government policy on income inequality (Vedder 2006; Vedder and Gallaway 1986, 1999; Vedder, Gallaway, and Sollars 1988), an area that he and I have collaborated to study (Bennett and Vedder 2013, 2015). Thus, Vedder’s scholarship has contributed to our understanding of the impact that economic freedom exerts on economic outcomes.
Topic:
Government, Income Inequality, Economy, and Free Trade
Political Geography:
Canada, North America, and United States of America

15. Income Inequality: Piketty and the Neo-Marxist Revival

Author:
Thomas H. Mayor
Publication Date:
02-2015
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Karl Marx formulated his ideas in the middle of the 19th century when much of Europe, particularly England, was well along in what is often referred to as the Industrial Revolution. The central Marxist idea was that those who had wealth would reap the benefit of this revolution and become ever more wealthy while those who lived from their labor alone would be relegated to a bare subsistence. In his view, capital accumulation and increases in productivity do not benefit those who work for a living. Allegedly, those who own the means of production (wealth) and supposedly perform no work, receive all the benefits.
Topic:
Government
Political Geography:
Europe and England

16. Welfare Economics and Second-Best Theory: Filling Imaginary Economic Boxes

Author:
Richard E. Wagner
Publication Date:
02-2015
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Since the beginnings of the efforts of economist to give their discipline scientific grounding, economists have thought their theoretical efforts had relevance for addressing significant public issues. While the classical economists generally supported what Adam Smith described as the “system of natural liberty,” those economists also weighed in on numerous issues of public discussion. The tenor and substance of those efforts is set forth wonderfully by Lion Robbins (1952) and Warren Samuels (1966). While the analytical default setting of those economists was to support the system of natural liberty, they also recognized the value of sound public policy in supporting that stem. The classical economists thought that there could be publicly beneficial activities that the system. The classical economists thought that there could be publicly beneficial activities that the system of natural liberty would be unlikely to do well in providing. They also thought that there were activities provided through commercial transactions that could wreak significant effects on bystanders to those transactions. The amount of education acquired within a society was one such candidate (West 1965), with the care of the poor being another (Himmelfarb 1983). IN such matters as these, the classical economists engaged in strenuous debate and discussion that served as a forerunner to the development of welfare economics during the 20th century.
Topic:
Government

17. The Rule of Nobody: Saving America from Dead Laws and Broken Government

Author:
Philip K. Howard
Publication Date:
02-2015
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Phillip Howard is a lawyer nationally known for his best-selling books and extensive commentary on the dysfunctions of the American legal and political systems and the adverse effects those dysfunctions have on individual behavior and the overall workings of society.
Topic:
Government
Political Geography:
America

18. Falling Behind? Boom, Bust, and the Global Race for Scientific Talent

Author:
Michael Teitelbaum
Publication Date:
02-2015
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In Washington, doomsday prophets tend to be effective motivational speakers. They successfully persuade the electorate that their cause is worthy and prompt Congress to take action. In his book Falling Behind? Boom, Bust, and the Global Race for Scientific Talent, Michael Teitelbaum takes on a particular brand of doomsday prophet: those who see impending shortages in the science and engineering workforce. Teitelbaum walks his readers through five postwar cycles of boom and bust in the science and engineering workforce, which eh argues have been driven to a large extend by political machinations set in motion by labor shortage claims (claims that have been almost universally rejected by economists studying the issue). The institutions that currently shape the science and engineering workforce are largely the product of policy responses to these booms and busts. As a result, Falling Behind? Is more than just a work of policy history. It is also a cogent analysis of contemporary R funding mechanisms, high-skill immigration policies, and PhD program structures.
Topic:
Government
Political Geography:
Washington and Soviet Union

19. Saving Congress from Itself: Emancipating the States Empowering Their People

Author:
James L. Buckley
Publication Date:
02-2015
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
“The United States faces two major problems today,” writes James L. Buckley: “runaway spending that threatens to bankrupt us and a Congress that appears unable to deal with long-term problems of any consequence.” Contributing significantly to both, he argues, are the more than 1,100 federal grants-in-aid programs Congress has enacted—federal grants to state and local governments, constituting 17 percent of the federal budget, the third-largest spending category after entitlements and defense, with costs that have risen from $24.1 billion in 1970 to $640.8 billion in fiscal 2015. His “modest proposal”? Do away with them entirely, thereby saving Congress from itself while emancipating the states and empowering their people. If that sounds like a program for revising constitutional federalism, it is.
Topic:
Government
Political Geography:
United States

20. Boom Towns: Restoring the Urban American Dream

Author:
Stephen J. K. Walters
Publication Date:
02-2015
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The image of a boom town is commonly used to describe exceptional conditions through which a village suddenly becomes a city. Often such conditions are the discovery of mineral deposits that attracts industry and commerce. While in their booming condition, such towns are oases of societal flourishing relative to their preceding state. In Boom Towns, Stephen J.K. Walters, a professor of economics at Loyola University in Baltimore, explains that cities in general have the capacity perpetually to b forms of boom towns. Cities can serve as magnets to attract people and capital, thus promoting the human flourishing that has always been associated with cities at their best. It is different if cities are at their worst, as Walters explains in brining Jane Jacobs's Death and Life of Great American Cities into explanatory ambit. There are no natural obstacles to cities occupying the foreground of societal flourishing. There are obstacles to be sure, but these are man-made. Being man-made, they can also be overcome through human action, at least in principle even if doing so in practice might be difficult.
Topic:
Government
Political Geography:
America

21. Is the Government Buying Science or Support? A Framework Analysis of Federal Funding-induced Biases

Author:
Patrick J. Michaels and David E. Wojick
Publication Date:
04-2015
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The purpose of this report is to provide a framework for doing research on the problem of bias in science, especially bias induced by Federal funding of research. In recent years the issue of bias in science has come under increasing scrutiny, including within the scientific community. Much of this scrutiny is focused on the potential for bias induced by the commercial funding of research. However, relatively little attention has been given to the potential role of Federal funding in fostering bias. The research question is clear: does biased funding skew research in a preferred direction, one that supports an agency mission, policy or paradigm? Federal agencies spend many billion dollars a year on scientific research. Most of this is directly tied to the funding agency mission and existing policies. The issue is whether these financial ties lead to bias in favor of the existing policies, as well as to promoting new policies. Is the government buying science or support?
Topic:
Government

22. Fatalistically Flawed: A Review Essay on Fragile

Author:
George Selgin
Publication Date:
03-2015
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Not long ago a colleague of mine, who works regularly with legislators, attended a conference at which the lunch speaker, a famous economist, began by telling everyone why governments regulate financial institutions. The reasons the economist gave consisted of various (supposed) financial-market failures. Said the colleague to me later: “I just wanted to stand up and shout, 'That's got nothing to do with it!'” I relate this because some readers may otherwise fail to appreciate the importance of a work whose chief revelation is that financial legislation — and consequently the general structure of financial systems — are shaped by politics. My colleague didn't need to be told, but others, including many economists, evidently do. In Fragile by Design: The Political Origins of Banking Crises Scarce Credit, Charles Calomiris and Stephen Haber tell them. Banking arrangements, they argue, are “not a passive response to some efficiency criterion but rather the product of political deals that determine which laws are passed” (pp. 13 and 38). What's more, the laws such deals give rise to are, more often than not, detrimental to bank safety and soundness. In few words, banking instability has its roots, not in any fragility inherent to commercial banking, but in deals struck between governments and various interest groups. Fragile by Design is at once an alternative interpretation of the history of banking and a contribution to the debate on the causes of the recent crisis. Though other reviewers have tended to focus their attention on the latter contribution, many of Fragile by Design's most important insights, as well as many of its more serious flaws, are independent of its take on the subprime crisis. It is to those insights and flaws that I wish to draw attention
Topic:
Government

23. Forecast Bias of Government Agencies

Author:
Robert Krol
Publication Date:
03-2014
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Forecasts of future economic activity underlie any budget revenue projection. However, the forecasters in a government agency may face incentives or pressures that introduce forecast bias. For example, agency forecasters may be rewarded for a rosy growth forecast that allows politicians to avoid politically costly program cuts or tax increases. Similarly they may be penalized for underforecasting economic growth. Where a reward system is asymmetric, it would make sense to observe biased forecasts.
Topic:
Government
Political Geography:
California

24. The Explicit Costs of Government Deposit Insurance

Author:
Thomas L. Hogan and William J. Luther
Publication Date:
03-2014
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The Diamond-Dybvig (DD) model is often cited as a theoretical justification for government deposit insurance. In the model, rational agents find it in their interest to withdraw their bank deposits if they suspect other depositors plan to do likewise. When a sufficient number of agents are expected to liquidate their accounts, a bank run ensues. Guaranteeing deposits through a system of government administered deposit insurance removes the temptation to run on the bank and thereby precludes the need to ever use the deposit insurance.
Topic:
Government

25. Free Market Revolution: How Ayn Rand's Ideas Can End Big Government

Author:
Trevor Burrus
Publication Date:
03-2014
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In Free Market Revolution: How Ayn Rand's Ideas Can End Big Government, Yaron Brook, executive director of the Ayn Rand Institute (ARI), and Don Watkins, a fellow at ARI, give a full-throated and spirited defense of Rand's arguments for freedom, self-actualization, and the just society. The book is a clear explanation of objectivism that weaves in timely and accurate policy discussions, such as the chapter on health care, that buttress the overall point.
Topic:
Government
Political Geography:
New York

26. Operation Twist-the-Truth: How the Federal Reserve Misrepresents Its History and Performance

Author:
George Selgin
Publication Date:
07-2014
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
For a private-sector firm, success can mean only one thing: that the firm has turned a profit. No such firm can hope to succeed, or even to survive, merely by declaring that it has been profitable. A government agency, on the other hand, can succeed in either of two ways. It can actually accomplish its mission. Or it can simply declare that it has done so, and get the public to believe it.
Topic:
Government
Political Geography:
United States

27. The Troubling Suppression of Competition from Alternative Monies: The Cases of the Liberty Dollar and E-gold

Author:
Lawrence H. White
Publication Date:
07-2014
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Proposals abound for reforming monetary policy by instituting a less-discretionary or nondiscretionary system ("rules") for a fiat-money- issuing central bank to follow. The Federal Reserve's Open Market Committee could be given a single mandate or more generally an explicit loss function to minimize (e.g., the Taylor Rule). The FOMC could be replaced by a computer that prescribes the monetary base as a function of observed macroeconomic variables (e.g., the McCallum Rule). The role of determining the fiat monetary base could be stripped from the FOMC and moved to a prediction market (as proposed by Scott Sumner or Kevin Dowd). Alternative proposals call for commodity money regimes. The dollar could be redefined in terms of gold or a broader commodity bundle, with redeemability for Federal Reserve liabilities being reinstated. Or all Federal Reserve liabilities could actually be redeemed and retired, en route to a fully privatized gold or commodity-bundle standard (White 2012). All of these approaches assume that there will continue to be a single monetary regime in the economy, so that the way to institute an alternative is to transform the dominant regime.
Topic:
Government
Political Geography:
United States

28. The Conduct of Monetary Policy

Author:
Kevin Warsh
Publication Date:
10-2013
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The Federal Reserve's independence is essential to the conduct of monetary policy. But while the Fed is independent within government, it is not independent of government. The grant of authority to the Fed comes from Congress, to which the Fed is ultimately accountable. In my view, the Fed was granted significant powers by Congress, but those powers were not unlimited. The grant of authority was constrained. So by my measure, the Fed is a powerful institution, but a bounded one.
Topic:
Government

29. What's Wrong with the Fed? What Would Restore Independence?

Author:
Allan H. Meltzer
Publication Date:
10-2013
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
On September 1, 1948, Allan Sproul, president of the Federal Reserve Bank of New York, commented on Fed independence: I don't suppose that anyone would still argue that the central banking system should be independent of the Government of the country. The control which such a system exercises, over the volume and value of money is a right of Government and is exercised on behalf of Government, with powers delegated by the Government. But there is a distinction between independence from Government and independence from political influence in a narrower sense. The powers of the central banking system should not be a pawn of any group or faction or party, or even any particular administration, subject to political pressures and its own passing fiscal necessities [Letter to Robert R. Bowie, in Meltzer 2003: 738].
Topic:
Government
Political Geography:
New York

30. Federal Reserve Independence: Reality or Myth?

Author:
Gerald P. O'Driscoll Jr. and Thomas F. Cargill
Publication Date:
10-2013
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The Federal Reserve was founded in 1913 during the Wilson administration to end banking panics and depressions, and was part of the Progressive agenda for a more activist role of government (see Kolko 1963). By the 50th anniversary, the conventional wisdom was that the Fed's performance was overall satisfactory, especially after the Treasury-Federal Reserve Accord of 1951 that permitted independent monetary policy. While the decision to double reserve requirements in 1937 was judged a policy error, the Federal Reserve was not held responsible for the Great Depression.
Topic:
Government

31. Lessons from the European Crisis

Author:
Jurgen Stark
Publication Date:
10-2013
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It was one of the author's predictions in 1998 that the euro zone would end up teaching us more about economics compared to what economics could teach us about the euro zone. While many of the author's predictions of that year did not hold, including the forecast that the euro would challenge the dollar as the world's foremost reserve currency, this particular prediction ultimately turned out to be correct. A monetary union is a hybrid between a fixed exchange rate system and a unitary state, one that is fully captured neither with closed-economy macro models nor classical international macro models of fixed exchange rates.
Topic:
Government
Political Geography:
Europe

32. Fixing Mortgage Finance: What to Do with the Federal Housing Administration?

Author:
Mark A. Calabria
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
While Fannie Mae, Freddie Mac, and private subprime lenders have deservedly garnered the bulk of attention and blame for the mortgage crisis, other federal programs also distort our mortgage market and put taxpayers at risk of having to finance massive financial bailouts. The most prominent of these risky agencies is the Federal Housing Administration (FHA).
Topic:
Debt, Economics, Government, and Financial Crisis
Political Geography:
United States

33. Renewing Federalism by Reforming Article V: Defects in the Constitutional Amendment Process and a Reform Proposal

Author:
Michael B. Rappaport
Publication Date:
01-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The constitutional amendment procedure of Article V is defective because the national convention amendment method does not work. Because no amendment can be enacted without Congress's approval, limitations on the federal government that Congress opposes are virtually impossible to pass. This defect may have prevented the enactment of several constitutional amendments that would have constrained Congress, such as amendments establishing a balanced budget limitation, a line-item veto, or congressional term limits. The increasingly nationalist character of our constitutional charter may not be the result of modern values or circumstances, but an artifact of a distorted amendment procedure. Article V should be reformed to allow two-thirds of the state legislatures to propose a constitutional amendment which would then be ratified or rejected by the states, acting through state conventions or state ballot measures. Such a return of power to the states would militate against our overly centralized government by helping to restore the federalist character of our Constitution. Moreover, a strategy exists that would allow this reform to be enacted.
Topic:
Civil Society, Government, Law Enforcement, and Law
Political Geography:
United States

34. Fiscal and Generational Imbalances and Generational Accounts: A 2012 Update

Author:
Jagadeesh Gokhale
Publication Date:
11-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Official federal budget accounts are constructed exclusively in terms of current cash flows – receipts from taxes and fees and outlays on purchases and transfers. But cash-flows do not reveal economically relevant information about who benefits and who loses from government policies. Cash flows also do not reveal how changes in government's policies redistribute resources within and across generations, including reducing the tax burden on today's generations and increasing it on future ones. Because most government transact ions are targeted by age and gender, the federal government can bring about large resource transfers across generations. Intergenerational resource transfers will grow larger as the composition of budget receipts and expenditures changes with relatively faster growth of age-and-gender-related social insurance program. Intergenerational redistributions across generations through federal government operations could substantially affect different generations' economic expectations and choices and exert powerful long-term effects on economic outcomes.
Topic:
Economics, Government, Health, Human Welfare, Markets, and Monetary Policy
Political Geography:
United States

35. The Misuse of Top 1 Percent Income Shares as a Measure of Inequality

Author:
Alan Reynolds
Publication Date:
10-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
This paper confirms recent studies which find little or no sustained increase in the inequality of disposable income for the U.S. population as a whole over the past 20 years, even though estimates of the top 1 percent's share of pretax, pretransfer (market) income spiked upward in 1986-88, 1997-2000 and 2003-2007.
Topic:
Economics, Government, Markets, and Social Stratification
Political Geography:
United States

36. The Independent Payment Advisory Board: PPACA's Anti-Constitutional and Authoritarian Super-Legislature

Author:
Michael F. Cannon and Diane Cohen
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
When a member of Congress introduces legislation, the Constitution requires that legislative proposal to secure the approval of the House of Representatives, the Senate, and the president (unless Congress overrides a presidential veto) before it can become law. In all cases, either chamber of Congress may block it.
Topic:
Government, Politics, Governance, and Law
Political Geography:
United States

37. The Great Streetcar Conspiracy

Author:
Randal O'Toole
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Streetcars are the latest urban planning fad, stimulated partly by the Obama administration's preference for funding transportation projects that promote "livability" (meaning living without automobiles) rather than mobility or cost-effective transportation. Toward that end, the administration wants to eliminate cost-effectiveness requirements for federal transportation grants, instead allowing non-cost-effective grants for projects promoting so-called livability. In anticipation of this change, numerous cities are preparing to apply for federal funds to build streetcar lines.
Topic:
Economics, Environment, Government, Political Economy, and Infrastructure
Political Geography:
United States

38. Competition in Currency: The Potential for Private Money

Author:
Thomas L. Hogan
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Privately issued money can benefit consumers in many ways, particularly in the areas of value stability and product variety. Decentralized currency production can benefit consumers by reducing inflation and increasing economic stability. Unlike a central bank, competing private banks must attract customers by providing innovative products, restricting the quantity of notes issued, and limiting the riskiness of their investing activities. Although the Federal Reserve currently has a de facto monopoly on the provision of currency in the United States, this was not always the case. Throughout most of U.S. history, private banks issued their own banknotes as currency. This practice continues today in a few countries and could be reinstituted in the United States with minimal changes to the banking system.
Topic:
Economics, Government, Markets, and Monetary Policy
Political Geography:
United States

39. If You Love Something, Set It Free A Case for Defunding Public Broadcasting

Author:
Trevor Burrus
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Public broadcasting has been in critics' crosshairs since its creation in 1967. Assailed from all sides with allegations of bias, charges of political influence, and threats to defund their operations, public broadcasters have responded with everything from outright denial to personnel changes, but never have they squarely faced the fundamental problem: government-funded media companies are inherently problematic and impossible to reconcile with either the First Amendment or a government of constitutionally limited powers.
Topic:
Government, Communications, Mass Media, and Law
Political Geography:
United States

40. Questioning Homeownership as a Public Policy Goal

Author:
Morris A. Davis
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
For decades U.S. housing policy has focused on promoting homeownership. In this study, I show that the set of policies designed to further homeownership has been ineffective and expensive and that homeownership as a public policy goal is not well supported.
Topic:
Economics, Government, Markets, and Urbanization
Political Geography:
United States

41. Ending Congestion by Refinancing Highways

Author:
Randal O'Toole
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Although gasoline taxes have long been the main source of funding for building, maintaining, and operating America's network of highways, roads, and streets, the tax is at best an imperfect user fee. As such, Congress and the states should take action to transition from gas taxes to more efficient vehicle-mile fees.
Topic:
Economics, Government, Communications, and Infrastructure
Political Geography:
United States

42. The American Welfare State: How We Spend Nearly $1 Trillion a Year Fighting Poverty—And Fail

Author:
Michael Tanner
Publication Date:
04-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
News that the poverty rate has risen to 15.1 percent of Americans, the highest level in nearly a decade, has set off a predictable round of calls for increased government spending on social welfare programs. Yet this year the federal government will spend more than $668 billion on at least 126 different programs to fight poverty. And that does not even begin to count welfare spending by state and local governments, which adds $284 billion to that figure. In total, the United States spends nearly $1 trillion every year to fight poverty. That amounts to $20,610 for every poor person in America, or $61,830 per poor family of three.
Topic:
Economics, Government, and Poverty
Political Geography:
United States and America

43. What Made the Financial Crisis Systemic?

Author:
Patric H. Hendershott and Kevin Villani
Publication Date:
03-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The current narrative regarding the 2008 systemic financial system collapse is that numerous seemingly unrelated events occurred in unregulated or underregulated markets, requiring widespread bailouts of actors across the financial spectrum, from mortgage borrowers to investors in money market funds. The Financial Crisis Inquiry Commission, created by the U.S. Congress to investigate the causes of the crisis, promotes this politically convenient narrative, and the 2010 Dodd-Frank Act operationalizes it by completing the progressive extension of federal protection and regulation of banking and finance that began in the 1930s so that it now covers virtually all financial activities, including hedge funds and proprietary trading. The Dodd-Frank Act further charges the newly created Financial Stability Oversight Council, made up of politicians, bureaucrats, and university professors, with preventing a subsequent systemic crisis.
Topic:
Economics, Government, Markets, Global Recession, and Financial Crisis
Political Geography:
United States

44. The New Monetary Economics Revisited

Author:
David Cronin
Publication Date:
10-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
This article revisits the key conceptual aspects of the New Monetary Economics (NME) by examining the idea of “monetary separation” and objections raised against it. So long as a dominant role for base money in exchange exists, using it to provide the unit of account remains advantageous and is likely to outweigh any mooted benefits of separation. Recent quantitative analysis, however, shows the transaction demand for government base money to be falling, a development that can be expected to continue in the years ahead. The passage of time thus seems to be weakening the principal basis on which monetary separation has been criticized—namely, the superiority of base money in payments. That development fits into the history of money told by Austrian economists, which emphasises payment practices evolving over time in response to technological improvements and market forces.
Topic:
Government
Political Geography:
Europe, Germany, Cyprus, and Luxembourg

45. Starving the Beast Revisited

Author:
Masoud Moghaddam
Publication Date:
10-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The determinants of government budget deficits have been studied extensively, especially during the years in which the discrepancy between federal income taxes and expenditures has widened. In that respect, it is of interest to explore the causal relationship between government revenues and expenditures. If the direction of causation is from taxes to spending, then enjoying tax cuts without cutting expenditures necessitates starving the beast, as suggested by Milton Friedman (1978) and confirmed by a number of studies including Garcia and Henin (1999), and Chang, Liu, and Caudill (2002). On the other hand, if a tax cut is perceived by rational agents to be a cut in the cost of public goods, then spending would increase. In that case, taxes and spending are inversely related. Support for that relationship—the so-called fiscal illusion hypothesis—is provided by Wagner (1976), Niskanen (1978, 2002, 2006), and more recently by New (2009) and Young (2009). There are also a few studies in which no significant causal relation between tax and spend variables has been reported (e.g., Baghestani and McNown (1994).
Topic:
Government

46. The Scope of Government in a Free Society

Author:
James A. Dorn
Publication Date:
10-2012
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The purpose of this article is to delineate the legitimate functions of government in a free society. This exercise differs from determining the “optimal” size of government, which economists have estimated at 15 to 30 percent of gross domestic product. James Madison, the chief architect of the U.S. Constitution, was not primarily looking for an engine of economic growth; he was seeking an institutional design to limit the powers of government and protect individual rights. People would then be free to pursue their happiness and, in the process, create wealth.
Topic:
Government
Political Geography:
United States

47. The Case for Gridlock

Author:
Marcus E. Ethridge
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
In the wake of the 2010 elections, President Obama declared that voters did not give a mandate to gridlock. His statement reflects over a century of Progressive hostility to the inefficient and slow system of government created by the American Framers. Convinced that the government created by the Constitution frustrates their goals, Progressives have long sought ways around its checks and balances. Perhaps the most important of their methods is delegating power to administrative agencies, an arrangement that greatly transformed U.S. government during and after the New Deal. For generations, Progressives have supported the false premise that administrative action in the hands of experts will realize the public interest more effectively than the constitutional system and its multiple vetoes over policy changes. The political effect of empowering the administrative state has been quite different: it fosters policies that reflect the interests of those with well organized power. A large and growing body of evidence makes it clear that the public interest is most secure when governmental institutions are inefficient decisionmakers. An arrangement that brings diverse interests into a complex, sluggish decisionmaking process is generally unattractive to special interests. Gridlock also neutralizes some political benefits that producer groups and other well-heeled interests inherently enjoy. By fostering gridlock, the U.S. Constitution increases the likelihood that policies will reflect broad, unorganized interests instead of the interests of narrow, organized groups.
Topic:
Democratization, Government, Politics, Power Politics, and Governance
Political Geography:
United States and America

48. The Ideological Origins of American Federalism

Author:
Ilya Somin
Publication Date:
12-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
As has often been the case in American history, federalism is once again a major focus of political debate. Numerous recent political conflicts focus at least in part on the constitutional balance of power between the states and the central government. The lawsuits challenging the recently passed Obama health care plan, the federal bailout of state governments during the current economic crisis, and the conflicts over social issues such as medical marijuana and assisted suicide are just a few of the more prominent examples.
Topic:
Government
Political Geography:
America

49. The Economics of Microfinance

Author:
Bryan Barnett
Publication Date:
12-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It is one of the sad facts of recent human history that the economic prosperity enjoyed by so many remains unknown to most of the rest. The causes of poverty have long been debated and much has been spent in the effort to ameliorate it. Reliable estimates suggest as much as $2.3 trillion has been spent over the last several decades, most of it in the form of sponsored aid programs conceived and pursued by governments and large foundations in developed countries. Despite this investment, however, poverty remains widespread and has worsened in many places, especially in Africa. These basic facts now fuel a vigorous debate over the scale and ultimate value of traditional aid programs and a search for more effective solutions.
Topic:
Government
Political Geography:
Africa

50. Fannie, Freddie, and the Subprime Mortgage Market

Author:
Mark A. Calabria
Publication Date:
03-2011
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The recent financial crisis was characterized by losses in nearly every type of investment vehicle. Yet no product has attracted as much attention as the subprime mortgage.
Topic:
Economics, Government, Markets, and Financial Crisis
Political Geography:
United States

51. Estimating ObamaCare's Effect on State Medicaid Expenditure Growth

Author:
Jagadeesh Gokhale
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Unless repeal attempts succeed, the Patient Protection and Affordable Care Act of 2010 (ObamaCare) promises to increase state government obligations on account of Medicaid by expanding Medicaid eligibility and introducing an individual health insurance mandate for all US citizens and legal permanent residents. Once ObamaCare becomes fully effective in 2014, the cost of newly eligible Medicaid enrollees will be almost fully covered by the federal government through 2019, with federal financial support expected to be extended thereafter. But ObamaCare provides states with zero additional federal financial support for new enrollees among those eligible for Medicaid under the old laws. That makes increased state Medicaid costs from higher enrollments by "old-eligibles" virtually certain as they enroll into Medicaid to comply with the mandate to purchase health insurance. This study estimates and compares potential increases in Medicaid costs from ObamaCare for the five most populous states: California, Florida, Illinois, New York, and Texas.
Topic:
Government, Health, Markets, and Health Care Policy
Political Geography:
United States, New York, California, and Florida

52. The Virtues of Free Markets

Author:
Mark A. Zupan
Publication Date:
06-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Free markets have many virtues. Arguably, the most recognized is the expansion of individual choice—and thus freedom—through mutually beneficial exchange (see Bauer's definition of economic development in Dorn 2002: 356). This proposition is at the heart of the enduring impact of Adam Smith's Wealth of Nations ([1776] 1937) which aptly spells out the benefits of the Invisible Hand for citizens and societies.
Topic:
Government

53. The Impact of Ohio's EdChoice on Traditional Public School Performance

Author:
Matthew Carr
Publication Date:
06-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Over the course of the last 35 years, traditional public school student achievement in the United States has been stagnant, despite myriad reform efforts and a doubling in total expenditures on K–12 education (Ravitch 2000, Hanushek 1986, Greene 2005). The ramifications of this academic achievement plateau on human capital development and thus the country's global economic standing are of paramount importance (Heckman and Masterov 2007). Thus, one of the most important public policy questions that government and society faces is how to improve the academic performance and quality of the nation's public education system.
Topic:
Government
Political Geography:
United States

54. Honest Money

Author:
Jerry L. Jordan
Publication Date:
09-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
This article addresses some of the recent proposals for the conduct of monetary policies in the post-bubble environment. Advocacy of higher inflation targets is analyzed, and the challenge of maintaining monetary discipline in the face of massive fiscal deficits and mounting government debts is presented. Proposals for reforms of monetary arrangements must be based on consensus regarding the objectives of such reforms. The article concludes with some suggestions for near- and intermediate-term changes to present arrangements, as well as ideas for longer-term reforms.
Topic:
Government and Reform
Political Geography:
Canada

55. Robust Political Economy: Classical Liberalism and the Future of Public Policy

Author:
Richard L. Gordon
Publication Date:
09-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Pennington undertakes a needed effort to provide a systematic, analytic critique of recent efforts to discredit what he terms “classical liberal economics.” His is effectively the standard but hard-to-sell proposition that prescient impartial counselors—Plato's philosopher kings—have failed to emerge from the development of modern knowledge. In particular, Pennington makes good use of Hayek's radical contrast between the competitive testing of concepts in a spontaneous market order and the construction of solutions by government monopolies. As Pennington's conclusions nicely summarize, skepticism of limited government is high and fostered by those who are seeking rents from intervention. Thus, ideas that committed libertarians see as obviously absurd need systematic debunking for a broader audience. Pennington, therefore, pretends that he is treating serious arguments and confronts them respectfully.
Topic:
Government and Political Economy
Political Geography:
United States

56. Social Security's Financial Outlook and Reforms: An Independent Evaluation

Author:
Jagadeesh Gokhale
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Social Security is often described as a "foundational" element of the nation's social safety net. Almost all Americans are directly affected by the program and many millions primarily depend on its benefits for supporting themselves during retirement. But the program's financial condition has worsened considerably since the last recession, which began in 2007. In that year, the Social Security trustees estimated that the program's trust fund would be exhausted by 2042. The trustees' annual report for 2011 brings the trust fund exhaustion date forward to 2038. Indeed, the programs revenues fell short of its benefit expenditures in 2010 and it appears unlikely that significant surpluses will emerge again under the program's current rules. If the program's finances continue to worsen at this rate, it won't be long before the debate on reforming the program assumes an urgency and intensity similar to that during 1982-83, when imminent insolvency forced lawmakers to implement payroll tax increases and scale back its benefits.
Topic:
Economics, Government, and Human Welfare
Political Geography:
America and Ethiopia

57. Unions, the Rule of Law, and Political Rent Seeking

Author:
Armand Thieblot
Publication Date:
02-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Under the Obama administration, the influence and involvement of trade unions in government policy decisions has surged to unprecedented levels. Some of the more egregious examples include the proposed Employee Free Choice Act, which abolishes the secret ballot among workers deciding on union representation and imposes forced interest arbitration of contract disputes; the selective protection of union healthcare benefits from proposed “reform” legislation; the awarding of assets seized from major automotive companies to the United Automobile Workers; and the involvement of union personnel, especially members of the Service Employees International Union, in electioneering efforts and counter-demonstrations on behalf of the Democratic party. That all of this has occurred within less than a year is especially troublesome. What makes it more so is the well-established pattern, on the part of unions, to disregard and disrespect the rule of law.
Topic:
Government

58. They Spend WHAT? The Real Cost of Public Schools

Author:
Adam B. Schaeffer
Publication Date:
03-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Although public schools are usually the biggest item in state and local budgets, spending figures provided by public school officials and reported in the media often leave out major costs of education and thus understate what is actually spent.
Topic:
Economics, Education, Government, and Monetary Policy

59. Defining Success: The Case against Rail Transit

Author:
Randal O'Toole
Publication Date:
03-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Over the past four decades, American cities have spent close to $100 billion constructing rail transit systems, and many billions more operating those systems. The agencies that spend taxpayer dollars building these lines almost invariably call them successful even when they go an average of 40 percent over budget and, in many cases, carry an insignificant number of riders. The people who rarely or never ride these lines but still have to pay for them should ask, “How do you define success?"
Topic:
Government, Markets, and Infrastructure
Political Geography:
America

60. The Case for Auditing the Fed Is Obvious

Author:
Arnold Kling
Publication Date:
04-2010
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Recently, the Federal Reserve has significantly altered the procedures and goals that it had followed for decades. It has more than doubled its balance sheet, paid interest to banks on reserves held as deposits with the Fed, made decisions about which institutions to prop up and which should be allowed to fail, invested in assets that expose taxpayers to large losses, and raised questions about how it will avoid inflation despite an unprecedented increase in the monetary base.
Topic:
Economics, Government, Political Economy, Politics, and Financial Crisis
Political Geography:
United States

61. The Massachusetts Health Plan: Much Pain, Little Gain

Author:
Michael F. Cannon and Aaron Yelowitz
Publication Date:
01-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
In 2006, Massachusetts enacted a sweeping health insurance law that mirrors the legislation currently before Congress. After signing the measure, Gov. Mitt Romney (R) wrote, "Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced." But did the legislation achieve these goals? And what other effects has it had? This paper is the first to use Current Population Survey data for 2008 to evaluate the Massachusetts law, and the first to examine its effects on the accuracy of the CPS's uninsured estimates, self-reported health, the extent of "crowd-out" of private insurance for both children and adults, and in-migration of new Massachusetts residents.
Topic:
Government, Health, and Privatization
Political Geography:
United States

62. Obama's Prescription for Low-Wage Workers: High Implicit Taxes, Higher Premiums

Author:
Michael F. Cannon
Publication Date:
01-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
House and Senate Democrats have produced health care legislation whose mandates, subsidies, tax penalties, and health insurance regulations would penalize work and reward Americans who refuse to purchase health insurance. As a result, the legislation could trap many Americans in low-wage jobs and cause even higher health-insurance premiums, government spending, and taxes than are envisioned in the legislation.
Topic:
Government, Health, and Privatization
Political Geography:
United States and America

63. A Constant Unit of Account

Author:
Richard W. Rahn
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Over the past several decades, I have been a professional economist, government advisor, financial regulator, and have also engaged in international business. After this variety of experience, I am now more than ever convinced that Hayek was absolutely correct in how the government monopoly of the issuance of money leads to a never-ending cycle of economic crises. A decade ago, I was hopeful that the ability of private parties to create their own digital currency might be our salvation, and that led me to write a book, The End of Money and the Struggle for Financial Privacy (Rahn 1999). At the time, Milton Friedman told me that I was much too optimistic about how long it would take. Friedman was right, as usual, and we still seem decades away from this ideal.
Topic:
Government

64. Congress Should Account for the Excess Burden of Taxation

Author:
Christopher J. Conover
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
A well-established principle of public finance holds that taxes impose costs on society beyond the amount of revenue government collects. Estimates vary depending on the type of tax, but the “marginal excess burden” of federal taxes most likely ranges from 14 to 52 cents per dollar of tax revenue, averaging about 44 cents for all federal taxes.
Topic:
Economics, Government, and Markets
Political Geography:
United States

65. Fiscal Policy Report Card on America's Governors: 2010

Author:
Chris Edwards
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
State governments have had to make tough budget choices in recent years. Tax revenues have stagnated as a result of the poor economy, and that has prompted governors to take a variety of fiscal actions to close large budget gaps. Some governors have cut spending to balance their budgets, while others have pursued large tax increases.
Topic:
Economics, Government, Markets, and Monetary Policy
Political Geography:
America

66. Has the Fed Been a Failure?

Author:
George A. Selgin, Lawrence H. White, and William D. Lastrapes
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
As the one-hundredth anniversary of the 1913 Federal Reserve Act approaches, we assess whether the nation's experiment with the Federal Reserve has been a success or a failure. Drawing on a wide range of recent empirical research, we find the following: (1) The Fed's full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed's establishment. (2) While the Fed's performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I. (3) Some proposed alternative arrangements might plausibly do better than the Fed as presently constituted. We conclude that the need for a systematic exploration of alternatives to the established monetary system is as pressing today as it was a century ago.
Topic:
Civil Society, Government, and Markets
Political Geography:
United States

67. Do Vouchers and Tax Credits Increase Private School Regulation?

Author:
Andrew J. Coulson
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
School voucher and education tax credit programs have proliferated in the United States over the past two decades. Advocates have argued that they will enable families to become active consumers in a free and competitive education marketplace, but some fear that these programs may in fact bring with them a heavy regulatory burden that could stifle market forces. Until now, there has been no systematic, empirical investigation of that concern. The present paper aims to shed light on the issue by quantifying the regulations imposed on private schools both within and outside school choice programs, and then analyzing them with descriptive statistics and regression analyses. The results are tested for robustness to alternative ways of quantifying private school regulation, and to alternative regression models, and the question of causality is addressed. The study concludes that vouchers, but not tax credits, impose a substantial and statistically significant additional regulatory burden on participating private schools.
Topic:
Education, Government, and Markets
Political Geography:
United States

68. A Better Way to Generate and Use Comparative-Effectiveness Research

Author:
Michael F. Cannon
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
President Barack Obama, former U.S. Senate majority leader Tom Daschle, and others propose a new government agency that would evaluate the relative effectiveness of medical treatments. The need for “comparative-effectiveness research” is great. Evidence suggests Americans spend $700 billion annually on medical care that provides no value. Yet patients, providers, and purchasers typically lack the necessary information to distinguish between high- and low-value services.
Topic:
Economics, Government, Health, and Privatization
Political Geography:
United States

69. Bright Lines and Bailouts: To Bail or Not To Bail, That Is the Question

Author:
Vern McKinley and Gary Gegenheimer
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
A financial-institution bailout involves government intervention through a transaction or forbearance targeted to a financial institution or group of financial institutions. The action is preemptive as the financial institution does not fail and go out of business, but remains a going concern, benefiting creditors, shareholders, or counterparties. In the absence of a bailout, the financial institution would either be forced to go through receivership or bankruptcy in the prescribed legal form, or have its role in financial intermediation disrupted.
Topic:
Economics, Government, Political Economy, and Privatization
Political Geography:
United States

70. Obamacare to Come: Seven Bad Ideas for Health Care Reform

Author:
Michael Tanner
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
President Obama has made it clear that reforming the American health care system will be one of his top priorities. In response, congressional leaders have promised to introduce legislation by this summer, and they hope for an initial vote in the Senate before the Labor Day recess.
Topic:
Government and Health
Political Geography:
United States

71. Can Latin America Prosper by Reducing the Size of Government?

Author:
Radhames Lizardo and André V. Mollick
Publication Date:
08-2009
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
This article examines the effect of government consumption on economic growth in 23 Latin American countries over the years 1974–2003. Employing the Armey Curve, we show that the typical Latin American government is spending beyond the optimal point. Using panel data and a fixed effects (FE) model, we find that increases in government consumption lead to unambiguous decreases in economic growth.
Topic:
Government
Political Geography:
China and Latin America

72. U.S. Energy Policy and the Presumption of Market Failure

Author:
Peter Z. Grossman
Publication Date:
08-2009
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Over the last 35 years, the U.S. government has embarked on several major projects to spur the commercial development of energy technologies intended to substitute for conventional energy resources, especially fossil fuels. Those efforts began with the 1973 energy crisis when President Nixon became the first U.S. leader to announce a plan for energy autarky. Presidents Ford and Carter followed Nixon's “Project Independence” with similar pledges. But beginning with Ford's 1975 energy act, plans for energy independence were tied directly to the development of new, alternative energy technologies. Under President Carter in particular, the federal government embarked on highly publicized, heavily funded efforts at developing new technologies with specific timetables for commercial entry and, in a few cases, a timetable for mass market substitution. Current mandates for ethanol and other biofuels fit this latter objective.
Topic:
Government
Political Geography:
United States

73. Halfway to Where? Answering the Key Questions of Health Care Reform

Author:
Michael Tanner
Publication Date:
09-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Although neither the House nor the Senate passed a health care bill by President Obama's August deadline, various pieces of legislation have made it through committee, and they provide a concrete basis for analyzing what the proposed health care reform would and would not do. Looking at the various bills that are moving on Capitol Hill, we can determine the following: Contrary to the Obama administration's repeated assurances, millions of Americans who are happy with their current health insurance will not be able to keep it. As many as 89.5 million people may be dumped into a government-run plan. Some Americans may find themselves forced into a new insurance plan that no longer includes their current doctor. Americans will pay more than $820 billion in additional taxes over the next 10 years, and could see their insurance premiums rise as much as 95 percent. The current health care bills will increase the budget deficit by at least $239 billion over the next 10 years, and far more in the years beyond that. If the new health care entitlement were subject to the same 75-year actuarial standards as Social Security or Medicare, its unfunded liabilities would exceed $9.2 trillion. While the bills contain no direct provisions for rationing care, they nonetheless increase the likelihood of government rationing and interference with how doctors practice medicine. Contrary to assertions of some opponents, the bills contain no provision for euthanasia or mandatory end-of-life counseling. The bills' provisions on abortion coverage are far murkier.
Topic:
Government, Health, Human Welfare, and Markets
Political Geography:
United States and America

74. Would a Stricter Fed Policy and Financial Regulation Have Averted the Financial Crisis?

Author:
Jagadeesh Gokhale and Peter Van Doren
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Many commentators have argued that if the Federal Reserve had followed a stricter monetary policy earlier this decade when the housing bubble was forming, and if Congress had not deregulated banking but had imposed tighter financial standards, the housing boom and bust—and the subsequent financial crisis and recession—would have been averted. In this paper, we investigate those claims and dispute them. We are skeptical that economists can detect bubbles in real time through technical means with any degree of unanimity. Even if they could, we doubt the Fed would have altered its policy in the early 21st century, and we suspect that political leaders would have exerted considerable pressure to maintain that policy. Concerning regulation, we find that the banking reform of the late 1990s had little effect on the housing boom and bust, and that the many reform ideas currently proposed would have done little or nothing to avert the crisis.
Topic:
Economics, Government, Markets, and Financial Crisis
Political Geography:
United States

75. High-Speed Rail Is Not "Interstate 2.0"

Author:
Randal O'Toole
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The administration has likened President Obama's high-speed rail plan to President Eisenhower's Interstate Highway System. Yet there are crucial differences between interstate highways and high-speed rail. First, before Congress approved the Interstate Highway System, it had a good idea how much it would cost. In contrast, Congress approved $8 billion for high-speed rail without knowing the total cost, which is likely to be at least $90 billion.
Topic:
Energy Policy, Government, and Infrastructure
Political Geography:
United States

76. All the President's Mandates: Compulsory Health Insurance Is a Government Takeover

Author:
Michael F. Cannon
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The most hazardous health reform measure before Congress is not the so-called "public option," but proposals to make health insurance compulsory via an individual or employer mandate. Compulsory health insurance could require nearly 100 million Americans to switch to a more expensive health plan and would therefore violate President Barack Obama's pledge to let people keep their current health insurance. In particular, the legislation before Congress could eliminate many or all health savings account plans. Making health insurance compulsory would also spark an unnecessary fight over abortion and would enable government to ration care to those with private health insurance.
Topic:
Government, Health, and Markets
Political Geography:
United States and America

77. U.S. Energy Policy and the Presumption of Market Failure

Author:
Peter Z. Grossman
Publication Date:
10-2009
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Over the last 35 years, the U.S. government has embarked on several major projects to spur the commercial development of energy technologies intended to substitute for conventional energy resources, especially fossil fuels. Those efforts began with the 1973 energy crisis when President Nixon became the first U.S. leader to announce a plan for energy autarky. Presidents Ford and Carter followed Nixon's “Project Independence” with similar pledges. But beginning with Ford's 1975 energy act, plans for energy independence were tied directly to the development of new, alternative energy technologies. Under President Carter in particular, the federal government embarked on highly publicized, heavily funded efforts at developing new technologies with specific timetables for commercial entry and, in a few cases, a timetable for mass market substitution. Current mandates for ethanol and other biofuels fit this latter objective.
Topic:
Government
Political Geography:
United States

78. The Libertarian Illusion: Ideology, Public Policy, and the Assault on the Common Good

Author:
Jason Kuznicki
Publication Date:
10-2009
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It is daunting to review a book claiming that everything you believe is wrong. Fortunately, William Hudson's The Libertarian Illusion also attacks many things that neither I nor very many other libertarians believe. This gives courage for the rest.
Topic:
Government
Political Geography:
California

79. A Matter of Trust: Why Congress Should Turn Federal Lands into Fiduciary Trusts

Author:
Randal O'Toole
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The Forest Service, Bureau of Land Management, National Park Service, and Fish and Wildlife Service collectivelymanagewell over a quarter of the land in theUnited States.Although everyone agrees that the landsandresourcesmanagedbytheseagencies are exceedingly valuable, the lands collectively cost taxpayers around $7 billion per year.
Topic:
Agriculture, Civil Society, Environment, Government, and Privatization

80. Electronic Employment Eligibility Verification: Franz Kafka's Solution to Illegal Immigration

Author:
Jim Harper
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
In last summer's debate over immigration reform, Congress treated a national electronic employment eligibility verification (EEV) system as a matter of near consensus. Intended to strengthen internal enforcement of the immigration laws, electronic EEV is an Internet-based employee vetting system that the federal government would require every employer to use.
Topic:
Economics, Government, and Politics
Political Geography:
United States

81. The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World

Author:
Michael Tanner
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Critics of the U.S. health care system frequently point to other countries as models for reform. They point out that many countries spend far less on health care than the United States yet seem to enjoy better health outcomes. The United States should follow the lead of those countries, the critics say, and adopt a government- run, national health care system.
Topic:
Government and Health
Political Geography:
United States and Europe

82. Roadmap to Gridlock: The Failure of Long-Range Metropolitan Transportation Planning

Author:
Randal O'Toole
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Federal law requires metropolitan planning organizations in urban areas of more than 50,000 people to write long-range (20- to 30- year) metropolitan transportation plans and to revise or update those plans every 4 to 5 years. A review of plans for more than 75 of the nation's largest metropolitan areas reveals that virtually all of them fail to follow standard planning methods. As a result, taxpayers and travelers have little assurance that the plans make effective use of available resources to reduce congestion, maximize mobility, and provide safe transportation facilities.
Topic:
Civil Society, Development, and Government
Political Geography:
United States

83. The Fiscal Impact of a Large-Scale Education Tax Credit Program

Author:
Andrew J. Coulson
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
In this paper we estimate the budgetary impact of the Cato Institute's Public Education Tax Credit model legislation on five states and presents a generalized spreadsheet tool (“the Fiscal Impact Calculator”) that can estimate the program's effect on any other state for which the necessary input data are supplied. It is estimated that, in its first 10 years of operation, savings from the PETC program would range from $1.1 billion for South Carolina to $15.9 billion for Texas. Illinois, Wisconsin, and New York are estimated to enjoy 10-year savings within that range.
Topic:
Education and Government
Political Geography:
United States and New York

84. Markets vs. Monopolies in Education: A Global Review of the Evidence

Author:
Andrew J. Coulson
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Would large-scale, free-market reforms improve educational outcomes forAmerican children?That question cannot be answered by looking at domestic evidence alone. Though innumerable “school choice” programs have been implemented around theUnited States, none has created a truly free and competitive education marketplace. Existing programs are too small, too restriction laden, or both. To understand how genuine market forces affect school performance, wemust cast a wider net, surveying education systems from all over the globe. The present paper undertakes such a review, assessing the results of 25 years of international research comparing market and government provision of education, and explaining why these international experiences are relevant to theUnited States.
Topic:
Education and Government
Political Geography:
United States

85. Medical Licensing: An Obstacle to Affordable, Quality Care

Author:
Shirley Svorny
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
In the United States, the authority to regulate medical professionals lies with the states. To practice within a state, clinicians must obtain a license from that state's government. State statutes dictate standards for licensing and disciplining medical professionals. They also list tasks clinicians are allowed to perform. One view is that state licensing of medical professionals assures quality. In contrast, I argue here that licensure not only fails to protect consumers from incompetent physicians, but, by raising barriers to entry, makes health care more expensive and less accessible. Institutional oversight and a sophisticated network of private accrediting and certification organizations, all motivated by the need to protect reputations and avoid legal liability, offer whatever consumer protections exist today. Consumers would benefit were states to eliminate professional licensing in medicine and leave education, credentialing, and scope-of-practice decisions entirely to the private sector and the courts. If eliminating licensing is politically infeasible, some preliminary steps might be generally acceptable. States could increase workforce mobility by recognizing licenses issued by other states. For mid-level clinicians, eliminating education requirements beyond an initial degree would allow employers and consumers to select the appropriate level of expertise. At the very least, state legislators should be alert to the self-interest of medical professional organizations that may lie behind the licensing proposals brought to the legislature for approval.
Topic:
Government and Health
Political Geography:
United States

86. Fiscal Policy Report Card on America's Governors: 2008

Author:
Chris Edwards
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Revenue poured into state governments as the U.S. economy expanded between 2003 and 2007, prompting the nation's governors to expand state budgets and offer the occasional tax cut. But now that the economy has slowed and revenue growth is down, governors are taking various actions to close rising budget deficits.
Topic:
Government
Political Geography:
United States

87. The Durable Internet: Preserving Network Neutrality without Regulation

Author:
Timothy B. Lee
Publication Date:
11-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
An important reason for the Internet's remarkable growth over the last quarter century is the “end-to-end” principle that networks should confine themselves to transmitting generic packets without worrying about their contents. Not only has this made deployment of Internet infrastructure cheap and efficient, but it has created fertile ground for entrepreneurship. On a network that respects the end-to-end principle, prior approval from network owners is not needed to launch new applications, services, or content.
Topic:
Government and Science and Technology
Political Geography:
United States

88. The Case against Government Intervention in Energy Markets

Author:
Richard L. Gordon
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Many politicians and pundits are panicked over the existing state of the oil and gasoline markets. Disregarding past experience, these parties advocate massive intervention in those markets, which would only serve to repeat and extend previous errors. These interventionists propose solutions to nonexistent problems.
Topic:
Energy Policy, Government, and Markets
Political Geography:
United States

89. How Did We Get into This Financial Mess?

Author:
Lawrence H. White
Publication Date:
11-2008
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
As policymakers confront the ongoing U.S. financial crisis, it is important to take a step back and understand its origins. Those who fault "deregulation," "unfettered capitalism," or "greed" would do well to look instead at flawed institutions and misguided policies. The expansion in risky mortgages to under qualified borrowers was encouraged by the federal government. The growth of "creative" nonprime lending followed Congress's strengthening of the Community Reinvestment Act, the Federal Housing Administration's loosening of down-payment standards, and the Department of Housing and Urban Development's pressuring lenders to extend mortgages to borrowers who previously would not have qualified.
Topic:
Economics and Government
Political Geography:
United States

90. Is the Gold Standard Still the Gold Standard among Monetary Systems?

Author:
Lawrence H. White
Publication Date:
02-2008
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Critics have raised a number of theoretical and historical objections to the gold standard. Some have called the gold standard a “crazy” idea. The gold standard is not a flawless monetary system. Neither is the fiat money alternative. In light of historical evidence about the comparative magnitude of these flaws, however, the gold standard is a policy option that deserves serious consideration.
Topic:
Economics and Government
Political Geography:
United States

91. Executive Pay: Regulation vs. Market Competition

Author:
Ira T. Kay and Steven Van Putten
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The economic slowdown and the active political season are generating calls for imposing new regulations on executive pay. The presidential candidates of the two major parties have lashed out at what they perceive to be excessive pay for certain executives or for corporate executives in general.
Topic:
Economics, Government, and Markets

92. Markets vs. Monopolies in Education: A Global Review of the Evidence

Author:
Andrew J. Coulson
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Would large-scale, free-market reforms improve educational outcomes for American children? That question cannot be answered by looking at domestic evidence alone. Though innumerable “school choice” programs have been implemented around the United States, none has created a truly free and competitive education marketplace. Existing programs are too small, too restriction laden, or both. To understand how genuine market forces affect school performance, we must cast a wider net, surveying education systems from all over the globe. The present paper undertakes such a review, assessing the results of 25 years of international research comparing market and government provision of education, and explaining why these international experiences are relevant to the United States.
Topic:
Economics, Education, Government, and Markets
Political Geography:
United States

93. A Fork in the Road: Obama, McCain, and Health Care

Author:
Michael Tanner
Publication Date:
07-2008
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Healthcare reform will be one of the top issues of the 2008 presidential election. In the face of widespread public demand for changes in the U.S. health care system, both Barack Obama and John McCain have offered detailed proposals for reform.
Topic:
Government, Health, and Politics
Political Geography:
United States

94. Asset Bubbles and Their Consequences

Author:
Gerald P. O'Driscoll Jr.
Publication Date:
05-2008
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
In the past, the federal government has introduced moral hazard in the banking system through deposit insurance. Banks underpriced risk because of the federal guarantee that backed deposits. After banking crises in the 1980s and 1990s, deposit insurance was put on a sound basis and that source of moral hazard was mitigated. In its place, monetary policy has become a source of moral hazard. In acting to counter the economic effects of declining asset prices, the Federal Reserve has come to be viewed as underwriting risky investments. Policy pronouncements by senior Fed officials have reinforced that perception. These actions and pronouncements are mutually reinforcing and destructive to the operation of financial markets. The current financial crisis began in the subprime housing market and then spread throughout credit markets. The new Fed policy fueled the housing boom. Refusing to accept responsibility for the housing bubble, the Fed's recent actions will likely fuel a new asset bubble. The cumulative effects of recent monetary policy undermine the case for free markets.
Topic:
Economics, Government, and Markets
Political Geography:
United States

95. FASB: Making Financial Statements Mysterious

Author:
T.J. Rodgers
Publication Date:
08-2008
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Since the passage of the Sarbanes-Oxley Act in 2002, the Financial Accounting Standards Board has passed rules that it promises will make corporate accounting more transparent. In fact, its revised Generally Accepted Accounting Principles have made it difficult for investors — or even CEOs — to understand a company's financial report.
Topic:
Economics, Government, and Markets
Political Geography:
United States

96. Freddie Mac and Fannie Mae: An Exit Strategy for the Taxpayer

Author:
Arnold Kling
Publication Date:
09-2008
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The Fannie Mae-Freddie Mac crisis may have been the most avoidable financial crisis in history. Economists have long complained that the risks posed by the government-sponsored enterprises were large relative to any social benefits.
Topic:
Economics, Government, and Financial Crisis
Political Geography:
United States

97. Rails Won't Save America

Author:
Randal O'Toole
Publication Date:
10-2008
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Rising gas prices and concerns about greenhouse gases have stimulated calls to build more rail transit lines in urban areas, increase subsidies to Amtrak, and construct a large-scale intercity high-speed rail system. These megaprojects will cost hundreds of billions of dollars, but they won't save energy or significantly reduce greenhouse gas emissions.
Topic:
Development, Economics, and Government
Political Geography:
United States

98. Does Barack Obama Support Socialized Medicine?

Author:
Michael F. Cannon
Publication Date:
10-2008
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Democratic presidential nominee Sen. Barack Obama (IL) has proposed an ambitious plan to restructure America's health care sector. Rather than engage in a detailed critique of Obama's health care plan, many critics prefer to label it "socialized medicine." Is that a fair description of the Obama plan and similar plans? Over the past year, prominent media outlets and respectable think tanks have investigated that question and come to a unanimous answer: no.
Topic:
Economics, Government, Health, and Markets
Political Geography:
United States

99. Can Corruption Ever Improve an Economy?

Author:
Douglas A. Houston
Publication Date:
09-2007
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Many in the world of developmental economics believe that corruption, the circumvention of the rule of law for private gain, leads to nothing but woe for any nation's economy, under any circumstances. Transparency International makes the elimination of corruption their mission, and many large multinational firms today echo that goal by building ethical codes that prohibit employees from engaging in practices deemed corrupt, regardless of local attitudes and customs toward the practices. The World Bank makes curbing corruption a linchpin in their campaign to improve governance. Reasons given for blanket condemnation of corrupt behavior are often utilitarian: Corruption is expected to increase the economic costs of doing business by undermining the laws of the land; this, in turn, reduces productive activities and investments, with negative consequences unfolding for human development and economic growth.
Topic:
Corruption, Economics, and Government

100. What Can the United States Learn from the Nordic Model?

Author:
Daniel Mitchell
Publication Date:
11-2007
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Some policymakers in the United States and Europe argue that it is possible to enjoy economic growth and also have a large welfare state. These advocates for bigger government claim that the so- called Nordic Model offers the best of both worlds. This claim does not withstand scrutiny. Economic performance in Nordic nations is lagging, and excessive government is the most likely explanation. The public sector in Sweden, Denmark, Norway, Finland, and Iceland consumes, on average, more than 48 percent of economic output. Total government outlays in the United States, by contrast, are less than 37 percent of gross domes- tic product. Revenue comparisons are even more striking. Tax receipts average more than 45 per- cent of GDP in Nordic nations, a full 20 percent- age points higher than the aggregate tax burden in the United States.
Topic:
Economics and Government
Political Geography:
United States and Europe