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Regulation: Killing Opportunity

February 12, 2015 Comments off

Regulation: Killing Opportunity
Source: Heritage Foundation

During its first five years, the Obama Administration aggressively exploited regulation to get its way. Issuing 157 new major rules at a cost to Americans approaching $73 billion annually, this Administration is very likely the most regulatory in U.S. history. And there are many more regulations to come; agencies have identified 120 additional major rules they intend to work on, including dozens linked to the Dodd–Frank financial regulation law and Obamacare. Of particular concern is that the Federal Communications Commission has launched yet another attempt to regulate Internet traffic. Congress—which shares much of the blame for enabling this flood of red tape—must stem it.

Trade Adjustment Assistance: Let the Ineffective and Wasteful “Job-Training” Program Expire

February 8, 2015 Comments off

Trade Adjustment Assistance: Let the Ineffective and Wasteful “Job-Training” Program Expire
Source: Heritage Foundation

Members of Congress should be wary of reauthorizing the ineffective and wasteful Trade Adjustment Assistance (TAA) program. Trade Adjustment Assistance should be considered on its own merits and not linked to legislative proposals, such as Trade Promotion Authority (TPA). Similarly, TPA should be evaluated independently based on its merits and not tied to unrelated legislation like TAA.

Under TAA, workers who lose their jobs due to foreign trade are eligible for job training, relocation allowances, and income maintenance while they attempt to shift into new occupations. Absent congressional action, the entire TAA program will expire on December 31, 2014.

TAA provides very expensive benefits for a small fraction of laid-off workers. Furthermore, program evaluations have found that this spending does not actually help this small fraction of workers. A recent federal evaluation found that TAA hurts its beneficiaries’ job prospects. This finding should not be surprising: scientifically rigorous evaluations of federal job-training programs consistently find these programs to be highly ineffective.

Moreover, the Obama Administration has used very loose eligibility standards for TAA benefits. The Administration awarded TAA benefits to both Solyndra and Hostess employees—two companies whose failures had little to do with foreign trade. Congress should not waste $1 billion on a program that does not help—and may hurt—unemployed workers.

Have We Got it All Wrong? Forecasting Mobile Data Use and Spectrum Exhaust

February 5, 2015 Comments off

Have We Got it All Wrong? Forecasting Mobile Data Use and Spectrum Exhaust
Source: Heritage Foundation

In this PERSPECTIVE, I have provided some fundamental economic analysis on the issue of spectrum exhaust. Despite claims to the contrary, my analysis demonstrates that the Commission’s focus on getting more spectrum for mobile broadband is justified, even accounting for some alleged disparities between the forecast and the actual levels of mobile data traffic. Over-estimates of mobile data demand, where they appear, can, in part, be explained by supply-side responses to spectrum shortages, including offloading and a reduction in the availability of unlimited data plans. Indeed, higher prices can always be used to ration scarce capacity, but higher prices are the problem and not the solution to spectrum shortages. Remedial measures like offloading and price hikes, while perhaps curbing mobile data traffic, are not an excuse to slow down spectrum repurposing, but rather a call for both Congress and the Commission to get busy on spectrum policy.

2015 Index of Economic Freedom

February 2, 2015 Comments off

2015 Index of Economic Freedom
Source: Heritage Foundation

For over twenty years the Index has delivered thoughtful analysis in a clear, friendly, and straight-forward format. With new resources for users and a website tailored for research and education, the Index of Economic Freedom is poised to help readers track over two decades of the advancement in economic freedom, prosperity, and opportunity and promote these ideas in their homes, schools, and communities.

The Index covers 10 freedoms – from property rights to entrepreneurship – in 186 countries.

How Tax Reform Would Help American Families

January 7, 2015 Comments off

How Tax Reform Would Help American Families
Source: Heritage Foundation

There is widespread support for tax reform, yet Congress and the President have failed to take serious action. Tax reform is one of the most pressing policy improvements that Congress needs to make because the current tax system stifles opportunity for American families. However, American families likely do not know the full extent of the damage the tax system inflicts upon them. This lack of knowledge explains why they do not put more pressure on their representatives to pass tax reform. Those in favor of tax reform need to show families how a properly structured consumption tax would greatly improve their lives. If families knew how much tax reform would benefit them, they would demand more strongly that Washington act.

Four Conservative Tax Plans with Equivalent Economic Results

January 5, 2015 Comments off

Four Conservative Tax Plans with Equivalent Economic Results
Source: Heritage Foundation

The four leading conservative tax reform plans are the Hall–Rabushka flat tax, the new flat tax, a national sales tax, and a business transfer tax. Each is a consumption tax with an equivalent tax base. Except for secondary design choices and the choice of which taxes to replace, each would apply the same tax rate to raise a given amount of tax revenue. They would also have the same economic effects. The choice among them, therefore, rests on non-economic grounds.

Federal Spending by the Numbers, 2014: Government Spending Trends in Graphics, Tables, and Key Points (Including 51 Examples of Government Waste)

December 19, 2014 Comments off

Federal Spending by the Numbers, 2014: Government Spending Trends in Graphics, Tables, and Key Points (Including 51 Examples of Government Waste)
Source: Heritage Foundation

In 2014, federal spending reached $3.5 trillion and the deficit was $486 billion. Compared with trillion-dollar deficits following the Great Recession, this presents a small and temporary improvement in the nation’s fiscal situation. However, this minor improvement does not mean that government can stop cutting back on spending. As the figures and graphics in this report show, that would be the wrong conclusion to draw.

The national debt will still reach nearly $18 trillion this year and it already exceeds 100 percent of gross domestic product (GDP). Publicly held debt (that is, debt borrowed in credit markets, excluding Social Security’s trust fund), is alarmingly high at three-quarters of GDP. Without further spending reforms, rising debt threatens to impede growth, harm Americans’ economic opportunities, and even threaten the nation’s security.

Deficits fell in 2014 because President Obama and Congress raised taxes on all working Americans, the economy saw some improvement which helped to bring in more revenue, extended unemployment benefits were allowed to expire, and spending cuts from sequestration and spending caps under the Budget Control Act of 2011 took effect.

Congress should not take this short-term and modest deficit improvement as a signal to grow complacent about reining in exploding spending. Existing spending cuts and tax increases will not prevent deficits from rising next year, and before the end of the decade exceeding $1 trillion again. Driving this is federal spending, which is projected to grow by 66 percent by 2024.

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