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Julian Morris Discusses European Bailout Fever on Fox Business

Tue, 24 Jul 2012 00:00:00 EDT

Reason Foundation’s Vice President of Research Julian Morris appeared on Cavuto to discuss increasing market turmoil in Europe and America and how bailouts and spending doesn't heal an economic crisis caused by bailouts and spending. Air Date: July 23, 2012.

Approximately 6.37 minutes.

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Public-Private Partnerships in Puerto Rico

Mon, 09 Jul 2012 13:25:00 EDT

"At the end of the day, we are benefiting from savings," explains David Alvarez, executive director of the Puerto Rico Public-Private Partnerships (PPP) Authority. "The government is not dedicating more resources to (infrastructure) and the taxpayers are receiving value."

Although vital public projects such as schools, roads, and airports have traditionally been the domain of the government, Alvarez tells ReasonTV "it's important that we incorporate private investment into the infrastructure." He add that PPP projects add nothing to the public debt and are completed faster and more efficiently than traditional government-administered ventures.

Runs about 2.56 minutes.

Produced by Anthony L. Fisher, camera by Joshua Swain and Anthony L. Fisher. Interview by Len Gilroy.

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James V. DeLong on Ending "Big SIS" (The Special Interest State)

Tue, 03 Jul 2012 00:00:00 EDT

"Obamacare is not, as one judge says, a national solution to a problem," argues James V. DeLong. "It's 2,000 pages...of special-interest-written law."

As such, it exemplifies what DeLong, a long-time Washington insider who has worked for many think tanks and government agencies, denounces as "Big SIS" or the "special-interest state." In his scathing - and utterly convincing - new book, Ending Big SIS and Renewing the American Republic, Reason Contributing Editor DeLong traces how "the political system creates economic advantages for special interests and then demands that part of the profits be fed back into the political system, where they are used to enhance the power of the political incumbents."

Whether the topic is defense spending, agricultural subsidies, health care, or the financial sector, DeLong documents the pervasive rot at the core of Washington's way of doing business - and provides ideas for cutting Big SIS down to size.

For more information on the book and DeLong, go to here. For his Reason archive, go to here.

About 6 minutes. Produced by Joshua Swain. Interview by Nick Gillespie. Camera by Meredith Bragg, Jim Epstein, and Swain.

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Follow Reason on Twitter and follow Gillespie.

Adam Summers Talks Food Stamp Ads on Pajamas Media

Mon, 02 Jul 2012 00:00:00 EDT

New radio ads suggest that the government's food stamp program is a great way to lose weight and get in shape. Adam Summers discusses with PJ Media's Bryan Preston.

Air Date: July 2, 2012.

Approximately 10 minutes.

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Washington's Parasitic Economy with The Weekly Standard's Andrew Ferguson

Fri, 22 Jun 2012 00:00:00 EDT

Washington, D.C. "is basically a parasitic economy," says author and Weekly Standard Senior Editor Andrew Ferguson. "It sucks up the money from the rest of the country and puts people to work here."

In a recent Time magazine article titled "Bubble on the Potomac," Ferguson argues that D.C.-area residents are growing ever richer at the expense of the rest of the country, which has created a cultural disconnect that results in bad laws.

Ferguson sat down with ReasonTV Correspondent Kennedy to discuss his article, and the various ways in which D.C.'s riches are hurting the nation.

Ferguson is also the author of Crazy U: One Dad's Crash Course in Getting His Kid Into College and Land of Lincoln: Adventures in Abe's America. For more on those books and the author, visit http://www.andrewfergusonbooks.com/ .

Approximately 4:50 minutes.

Camera by Jim Epstein, Meredith Bragg and Joshua Swain. Produced by Bragg.

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In 2011 Reason's Nick Gillespie interviewed Ferguson and his son, Gillam, about Crazy U.

Obesity in America: To Win, We Have to Lose Government

Wed, 06 Jun 2012 00:00:00 EDT

Can the government make you lose weight? Officials sure think so.

In May 2012, an HBO documentary and a Washington conference, both named "The Weight of the Nation," made the case for government intervention in your workout, your workplace and your kid's lunchbox. They argue that lack of individual willpower is not to blame for obesity, and that it will take a serious government overhaul to shrink waistlines on a national scale.

"It's an access issue. We live in an obesogenic environment," says Dr. Lisa Santora, chief medical officer of Southern California's Beach Cities Health District. President Obama agrees. He has already bundled $15 billion in with his healthcare reform bill, and we've seen government programs intervening in nutrition time and time again.

So far, the programs haven't worked out too well.

"The reasearch shows that we haven't been very good at trying to, through government, control obesity," says Cal Poly economics professor Michael Marlow. He says that even when the government realizes that their solutions don't work, they will only try more aggressive regulations that will further impend on your freedom to choose whatever you want on the menu.

Produced by Tracy Oppenheimer. Shot by Paul Detrick, Sharif Matar and Oppenheimer.

About 5.40 minutes.

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Matt Welch Discusses Another European Bank Bailout on Fox Business

Wed, 30 May 2012 00:00:00 EDT

Reason Editor in Chief, Matt Welch appeared on Fox Business to discuss the another bank bailout in the works for Europeans and whether the EU will be prepared for a Greek exit. Air date: May 20, 2012.

Approximately 2.46 minutes.

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Tim Cavanaugh Talks California Budget Mess on Fox 11

Tue, 15 May 2012 00:00:00 EDT

Tim Cavanaugh, Managing Editor of Reason.com, talks to FOX 11 Los Angeles about California's increased spending despite proposed cuts. Air date: May 14, 2011.

Approximately 2 minutes.

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Anthony Randazzo Discusses France and Greece Austerity with Alyona

Thu, 10 May 2012 00:00:00 EDT

Reason Foundation Director of Economic Research Anthony Randazzo discusses game changing election in France and Greece and what it can mean for austerity and the European economy on the Alyona Show. Air Date: May 7, 2012.

Approximately 11 minutes.

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Mike Riggs Discusses the Reversing Trends of Immigration and Austerity w/ Thom Hartmann

Fri, 27 Apr 2012 00:00:00 EDT

Reason Associate Editor Mike Riggs joined the Heritage Foundation's Lachlan Markay with RT's Thom Hartmann to discuss how slowing and even reversing immigration trends from Latin America will effect how the GOP will strategize during the November election. The panel also discusses whether austerity and cutting spending have lead European nations into another recession. Airdate: April 25, 2012.

19.25 minutes.

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Nick Gillespie on California's Unlearned Budget Lesson, the GSA & the Secret Service Scandals

Fri, 20 Apr 2012 00:00:00 EDT

"[Secret Service] were trying to get the prositutes to take less money, that's a rarity in government" says Nick Gillespie on The Willis Report.

Gillespie also discusses Califronia's budget problems through its broke colleges and high-speed rail delusions, the GSA and Secret Service scandal.

Approximately 6.44 minutes.

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Matt Welch Discusses the GSA Scandal & the Widespread Abuse of Taxpayer Money on Fox Business

Tue, 17 Apr 2012 00:00:00 EDT

Reason Editor in Chief Matt Welch appeared on Fox Business to discuss the latest developments in the GSA scandal, which uncovered bribes, kickbacks, and reckless behavior in the department that manages federal funds, and the widespread mentality of wasting taxpayer money. Air Date: April 13, 2012.

About 3 minutes.

For more Welch on GSA, click here.

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D.C. Escalator Nightmare

Thu, 12 Apr 2012 20:00:00 EDT

How is Washington, D.C. supposed to run the world when it can't even fix its own escalators?

Strap on some steel-toed safety shoes—you're gonna need them—as Reason.tv correspondent Kennedy investigates D.C.'s dismal and dangerous subway system.

Metro, the sprawling 106-mile rapid transit system that serves 3.4 million D.C.-area residents, is notorious for a lot of things, but nothing so much as the squeaky disrepair of its 588 escalators. On any given day, about one out of eight moving stairs are out of service. Yet Metro's escalator and elevator maintenance division has a $22.5 million operating budget and 214 staffers, which works out to about one employee for every four escalators and elevators systemwide.

The grim history of Metro escalators runs like an endlessly circulating chain of horror stories. In 2002, an escalator at Brookland Station set a record by breaking down 147 times over the course of one year. Poorly maintained escalators have led to broken arms, lost digits, massive pileups, and multiple deaths. In 1991, for example, a 25-year-old student from California lost the top of his right foot on an escalator because a drugged-up schizophrenic station manager at Dupont Station refused to walk 10 feet to hit the emergency shut-off switch, though he did give vague instructions to a noncompliant homeless man to do it for him. The same year, a 15-year-old Michigan girl saw her pinkie toe snipped by an escalator at Smithsonian Station.

When heading home from the 2010 "Rally to Restore Sanity and/or Fear," some demonstrators boarded an escalator at L'Enfant Station that suddenly started running as fast as a roller coaster, landing four passengers in the hospital. In 1985, a three-year-old girl was strangled to death by an escalator at the Minnesota Avenue Station and four years later, a 40-year-old woman was killed when her clothing became entangled in an escalator at Rhode Island Avenue. The advent of side brushes and better automatic shut-off sensors have reduced accidents on Metro escalators, but more units today are routinely out of service.

Why are Metro's escalators so bad? The problem stems partly from a decision made 20 years ago. In 1992, Metro got rid of the private contractors that repaired and maintained the system and started hiring and training its own escalator mechanics. The rationale was that government employees would do a better job for less money.

Partway through a planned eight-month-long maintenance project that many riders assume will take far longer, the wisdom of that decision remains an open question. Reason.tv would have loved to talk with WMATA, the government agency that runs the Metro, but it ignored our requests for an interview.

Approximately 3.30 minutes.

Written and produced by Jim Epstein.

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This video premiered on Fox Business' Stossel show on Thursday, April 12. For more information on the show, go here. To read host John Stossel's weekly column, go here.

Why Democrat vs. Republican is the Wrong Way to Look at the 2012 Election: Nick Gillespie and Matt Welch at Reason Weekend

Thu, 12 Apr 2012 08:00:00 EDT

"We had a non-Obama president recently, his name was George W. Bush, it wasn't all puppy dogs and rainbows," says Reason's Matt Welch. "Being Republican is not enough to counter Obama. Mitt Romney is not offering an alternative to Obama," adds Reason.tv's Nick Gillespie.

From Newt Gingrich's inexplicable campaign chatter about a taxpayer-subsidized colony on the moon to Mitt Romney's refusal to discuss any specific spending cuts he would implement as president, Republicans continue to offer no real substantive alternative to President Obama's spendthrift economic policies.

Welch and Gillespie, the co-authors of "The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong with America," hosted the discussion "Why Democrat vs. Republican is the Wrong Way to Look at the 2012 Election" at Reason Weekend, the annual donor event held by Reason Foundation (the nonprofit that publishes this website).

Runs about 30.41 minutes.

Produced by Anthony L. Fisher, shot by Josh Swain and Fisher.

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Lisa Snell Discusses the Failure of the Eduational Program "Head Start" with John Stossel

Tue, 10 Apr 2012 00:00:00 EDT

Reason Foundation's director of education and child welfare Lisa Snell appeared on Stossel's "No They Can't" special to discusses ineffectiveness and heavy tax burden of Head Start, the federal program that promotes school readiness. Air Date: April 2, 2012.

Approximately 3.05 minutes.

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Peter Schiff - The Fed Unspun: The Other Side of the Story

Wed, 04 Apr 2012 00:00:00 EDT

"Ben Bernake fancies himself as a student of the Great Depression," says renowned investment broker, global strategist, author, and Austrian economist Peter Schiff, "but... if he were my student he would have gotten an F."

During a lecture entitled "The Fed Unspun: The Other Side of the Story", Schiff responded to Bernake’s recent four-part college lecture series, rebutting many of the Federal Reserve Chairman's claims about the cause of the housing crisis, the role of the Federal Reserve, the value of the gold standard, and more.

Cosponsored by the FreedomWorks Foundation and hosted at Reason Foundation’s DC office on March 29, 2012, the lecture was followed by a lively Q&A with the assembled audience, including students who attended Bernanke’s George Washington University lectures.

Shot by Meredith Bragg and Jim Epstein. Edited by Swain. Additional help from Anthony Fisher.

Approximately 1 hour and 26 minutes long.

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Student Loans Burdening Seniors and Preschoolers?! Lisa Snell Discusses the Education Monopoly on Fox Business

Wed, 04 Apr 2012 00:00:00 EDT

Reason Foundation's director of education and child welfare Lisa Snell appeared on Fox Business to discusses how giving parents control over their child's education fund and introducing competition among schools would bring prices down and quality up. Air Date: April 2, 2012.

Approximately 4.44 minutes.

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The Truth about Public Servants: Adrian Moore at Reason Weekend 2012

Sat, 31 Mar 2012 01:00:00 EDT

"The problem [with government workers] really is the unions," says Adrian Moore, who is Reason Foundation's vice president for policy. "These are organizations whose mission is to oppose the taxpayers and get a better deal for their members. That's their mission."

At Reason Weekend, the annual donor event held by Reason Foundation (the nonprofit that publishes this website), Moore challenged the misperception that public-sector workers are underpaid. In fact, government workers do better than their private sector counterparts in terms of wages, benefits, pensions, and job stability. And the size of the government workforce expands, Moore argued, whether the economy is up or down, a phenomenon he calls "fair weather Keynesianism."

Approximately 33 minutes. Filmed by Joshua Swain and Anthony Fisher. Edited by Jim Epstein.

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Adrian Moore Discusses California's Raising Tuition Rates on Fox Business

Fri, 16 Mar 2012 00:00:00 EDT

Reason Vice President of Research Adrian Moore appeared on Fox Business to discuss California's skyrocketing tuitions for public colleges and how government subsides have only made things worse. Air date: March 16, 2012.

Approximately 3.20 minutes.

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Remy: Cough Drops-The Mandate (featuring Sandra Fluke)

Fri, 09 Mar 2012 00:00:00 EST

Remy crashes Sandra Fluke's Congressional testimony to demand a mandate for his cough drop addiction.

"Remy: Cough Drops-The Mandate" is one of a series of collaborations between Remy and Reason.tv. To watch Remy's other videos, go to youtube.com/goremy.

Approximately 1:50 minutes. Lyrics by Remy. Video shot and produced by Meredith Bragg.

More from Reason on Sandra Fluke and the cost of contraception:

Make the Pill Cheaper by Making it Over the Counter

Sandra Fluke's Protection Racket

It's Like Totally Different When a Liberal Blowhard Guy Calls a Conservative Woman a Twat!

Download the mp3 and HD versions at below, and subscribe to Reason.tv's YouTube channel.

Lyrics:
Yeah and listen up peeps, you better check the deal
We got another mandate we gone straight reveal
And if you don't listen up, we be walking out
Yeah you know cough drops what we talking about

Take a look at this graph, you gonna holler with fear
Cough drops costing me a hundred dollars a year
I'm talking Halls, Ludens, to keep me alive
It's like a dog-fighting ring, I need Vicks to survive

It's preventative medicine, suppressing my cough? Word.
I need a vote from each of you--oh, that's kind of awkward
Cough drops are so tasty--how is it allowed?
Yeah, this guy knows what I'm talking about.

Cherry, honey lemon, or the mentho-lytus
Directly to my house's where I suggest you ship this
They come in all kinds of colors and flavors galore
Even sheep sk--wait, I think this one's yours

I appreciate the testimony, very profound
We need to verify this policy is morally sound
And there's one reasonable way to see if it should be allowed
And it's to probe you internally, can somebody get me a towel?

My apologies for the gentleman across the aisle
He doesn't understand mandates, he hasn't been here a while
I see no reason we shouldn't pass your request
Just let me double check, yep, it passes our test

This is not about "men's health," this is not a prescription
Mandate Men's Health, 12 month subscription
Your party has no respect for individual rights
Now come on up here, I'd like to check your insides

Well I guess it's safe to say this has kind of devolved
Maybe it's not the best idea to have these people involved
So I think I'm gonna bounce, put this one on the shelf
Hit up the drug store--get some cough drops myself.

Governor Luis Fortuno on How Puerto Rico Avoided Becoming "America's Greece"

Thu, 08 Mar 2012 00:00:00 EST

"Things were so bad that I had to fly up to New York to meet with ratings agencies before being sworn in, to avoid a guaranteed downgrade to 'junk' status," says Puerto Rico's governor Luis Fortuño. "We should have been America's Greece."

Fortuño spoke at Reason Weekend 2012, Reason Foundation's annual donor event, which took place in San Juan, Puerto Rico. He discussed the importance of making bold, quick cuts to government, his plans to incentivize capital investment in Puerto Rico, and his desire to see Puerto Rico be admitted as the 51st state in the union.

About 25 minutes. Filmed by Joshua Swain and Anthony Fisher. Edited by Zach Weissmueller.

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Why is the Economy Growing So Slowly?

Tue, 28 Feb 2012 10:15:00 EST

"Considering that we had this big Tea Party movement in 2010, there has been very little talk about actually cutting spending," says American Enterprise Institute's James Pethokoukis, "except that Mitt Romney doesn't want a lunar colony."

Pethokoukis is a former Reuters columnist and widely read blogger, who covers economics, politics, and fiscal policy. He sat down with Reason.tv's Nick Gillespie to talk about tax reform, cutting spending, and why slow growth is the biggest problem facing the U.S. economy.

Approximately 6 minutes.

Shot by Joshua Swain and Meredith Bragg; edited by Jim Epstein.

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FDR, The New Deal and The Expansion of Federal Power with Authors Burton and Anita Folsom

Fri, 03 Feb 2012 00:00:00 EST

During his first presidential press conference, Barack Obama defended federal economic intervention, stating "there are several who have suggested that FDR was wrong to intervene back in the New Deal. They are fighting battles that I thought were resolved a pretty long time ago." "We were just amazed to hear him say that," says historian Anita Folsom. While this "idea is taught in colleges all over the country, we have to come to the realization that these big government ideas do not lead to prosperity."

In his 2008 book, New Deal or Raw Deal: How FDR's Economic Legacy Has Damaged America, historian Burton Folsom took on the idea that the New Deal "worked." Now he's collaborated on a new book with his wife Anita, FDR Goes to War: How Expanded Executive Power, Spiraling National Debt, and Restricted Civil Liberties Shaped Wartime America, which tackles the idea that Roosevelt was a great wartime leader. During the war, the book argues, Roosevelt Administration stomped on civil liberties, fixed prices throughout the economy, ballooned the national debt, and brought the top income tax rate up to 94%.

The Folsoms see Roosevelt's big government approach as instrumental in shaping the modern word. From ObamaCare to the Community Reinvestment Act, they draw a direct line from FDR's actions to the worst public policies of today, along with the general view that "government programs are the solution to economic and political problems."

Bert and Anita Folsom sat down with Reason.tv's Nick Gillespie to discuss their new book and the enduring myths of FDR's presidency.

About 9:30 minutes. Shot by Meredith Bragg, Jim Epstein and Joshua Swain and edited by Bragg.

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Anthony Randazzo Talks Insider Trading Laws and Bernanke's "Do No Harm" on Freedom Watch

Fri, 03 Feb 2012 00:00:00 EST

Reason's Director of Economic Research Anthony Randazzo joined Freedom Watch to discuss the effectiveness of insider trading laws and Ben Bernanke's most recent statement to Congress regarding monetary policy. Air Date: February 3, 2011.

Approximately 7 minutes.

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Why Geezers Are Occupy Wall Street's True Enemies

Mon, 30 Jan 2012 18:00:00 EST

"When you look at government policies, there's a massive transfer of wealth from the young and relatively poor members of society toward the old and relatively members of society," says Veronique de Rugy, a Reason magazine columnist and economist at the Mercatus Center at George Mason University.

In 1970, de Rugy notes, transfers from the young to the old took up about 20 percent of the federal budget. In a few years, that figure will break the 50 percent barrier as the population ages and Social Security and Medicare ramp up. Those programs are paid for by payroll taxes that suck up around 15 percent of every dollar most workers will ever make.

Yet the #Occupy movement spends most of its energy railing against "the 1 Percent" richest Americans, whose wealth is not gained at the expense of the "99 Percent." Rather, it comes from providing goods and services that people want to consume.

As transfer payments to elderly Americans - irrespective of wealth or need - increase in absolute and relative terms, de Rugy argues that we should scrap entitlements and replace them instead with a "social safety net" that helps poor Americans of whatever age. "There's absolutely no reason to continue paying for lots of people who have accumulated wealth their entire lives," de Rugy tells Reason's Nick Gillespie.

About 3.40 minutes. Shot by Meredith Bragg and Joshua Swain and edited by Swain.

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Veronique de Rugy Talks So-Called Spending Cuts on Stossel

Mon, 30 Jan 2012 00:00:00 EST

Reason columnist Veronique de Rugy joined Stossel to discuss Obama's unsustainable spending and what a two trillion dollar cut actually means for America. Air Date: January 26, 2011.

Approximately 5.30 minutes.

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Matt Welch Discusses the Buffett Rule and His Favorite Beatles Songs on Varney & Co.

Thu, 26 Jan 2012 00:00:00 EST

Reason magazine Editor in Chief, Matt Welch appeared on Varney & Co. to discuss Warren Buffett's confusion between income tax and capital gains tax and why debt is not a revenue problem but a spending problem. Welch also reveals his favorite Beatles' songs. Air date: January 26, 2012.

Approximately 2.34 minutes.

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Will More Taxpayer Money Solve the Debt Crisis? Anthony Randazzo on Freedom Watch

Wed, 25 Jan 2012 00:00:00 EST

Reason's Director of Economic Research Anthony Randazzo joined a panel on Freedom Watch to discuss a recent shift in policy as the Treasure Department begins to resist funding the ECB to bailout European debt. The panel also discuss the politics behind the debt ceiling in America. Air Date: January 25, 2011.

Approximately 6.27 minutes.

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Peter Suderman Discusses GM, Toyota, & Crony Capitalism on Freedom Watch

Mon, 23 Jan 2012 00:00:00 EST

Associate Editor Peter Suderman appeared on Freedom Watch with Judge Napolitano to challenge the government's bragging rights over how GM outpaced Toyota. Suderman believes the comparison is unfair due to subsidies and the tragic earthquake. Airdate January 15, 2012.

Aproximately 7 minutes.

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Ranking Economic Freedom with The Heritage Foundation's James Roberts

Wed, 18 Jan 2012 00:00:00 EST

"Economic Freedom peaked about seven or eight years ago in the U.S. and has been dropping since then," claims James Roberts, Heritage Foundation Research Fellow and co-author of the 2012 Index of Economic Freedom.

For over a decade the Heritage Foundation has been ranking countries based on a number of indices, including open markets, regulatory efficiency, and the size and scope of government. Due primarily to costly regulations and rapid government expansion, the tenth-place United States’ declined in the rankings for the fourth straight year, behind Hong Kong (#1), Australia (#3), Switzerland (#5), Canada (#6) and Ireland (#9). Even Maruritius, a small island off the coast of Africa, was seen as a more economically free.

Roberts sat down with Reason’s Matt Welch to discuss the Index, the state of free enterprise in the world, and the decline of economic freedom in Europe and North America.

About 6:30 minutes. Shot by Meredith Bragg and Joshua Swain and edited by Bragg.

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3 Reasons Conservatives Should Cut Defense Spending Now!

Tue, 10 Jan 2012 12:00:00 EST

The Congressional Budget Office projects that if we keep spending the way we have been, federal debt held by the public will grow from around 60 percent of GDP to a whopping 82 percent of GDP over the next decade, with no end in sight. That’s the sort of borrowing that can ruin a country's economy.

Conservative Republicans are happy to talk about cutting spending on the poor, education, and cowboy poetry readings, but they insist that spending on defense and homeland security be increased.

Given that spending on defense and homeland security accounts for a whopping 20 percent of the government’s budget, that’s a non-starter. As with every other legitimate function of government, we need to squeeze spending down to the lowest level possible that still gets the job done.

Here are three reasons conservatives – and all other red-blooded Americans – should cut defense spending now.

1. War is Over! Didn’t we just win – or at least end – the war in Iraq? And aren’t we winding down in Afghanistan? After World War II, Vietnam, and the end of the Cold War, military spending got cut, as it should have been.

More to the point, spending on the military and homeland security grew by 90 percent in inflation-adjusted dollars since 2000. If al Qaeda and most international terrorists groups have been largely vanquished, we should not just be bringing the troops home, but dollars too.

Unless, that is, conservatives want to seriously argue that nearly doubling outlays for the past decade haven’t yielded results that would allow us to dial down defense spending.

2. What price safety? The United States already accounts for about 45 percent of the planet’s military outlays – more than the next 14 countries combined. Most of those countries are our allies as well, so we should be able to stay safe while reducing our military spending.

It’s a conservative truism that government programs, even ones that are sanctioned by the constitution, tend to be bloated, inefficient, and incompetent. Surely that same logic applies to the Pentagon and the Department of Homeland Security. In fact, Republican Reps. John Mica and Paul Broun marked the 10th anniversary of the Transportation Security Administration with a report that concluded that after spending $56 billion in security measures, flying is no safer now than it was before the 9/11 attacks.

If conservatives can’t find wasteful spending and useless programs in defense and homeland security to cut, they’ve got bigger problems than terrorists to deal with.

3. Attacking the Military-Industrial Complex is a Republican Virtue – And Good Politics. It was a Republican president – the war hero Dwight Eisenhower – who sounded the alarm about the military-industrial complex’s insidious ability to grow and grow like a cancer on the American body politic. And right now, it’s Democrats such as Defense Secretary Leon Panentta leading the cry for a blank check despite admitting that there are tons of duplicative programs in his department.

In his proposed 2011 budget, President Barack Obama actually calls for bigger spending on defense and homeland security than the Republicans do. Obama’s recent announcement that he may trim some planned increases over the next decade doesn’t change that.

Americans are rightly tired not just of dubious, inconclusive wars that have led to the death of thousands of Americans and hundreds of thousands of others. A growing number of us are tired of out-of-control spending by a Washington elite that is totally out of touch with everyday Americans.

If conservatives want to push forward on reducing spending on Medicaid and other domestic programs, they should show that they take their own limited government philosophy seriously by pushing for defense cuts between now and the 2012 elections.

About 3 minutes long. Scroll down for downloadable versions of all our videos and subscribe to our YouTube channel to receive automatic notifications when new material goes live.

Nick Gillespie is editor in chief of Reason.com and Reason.tv, and the co-author of The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong with America. Follow him on Twitter: @nickgillespie.

Meredith Bragg is a producer at Reason.tv, a 2010 finalist for digital National Magazine Award for his video work, and an active musician and performer.

Why Obama's Stimulus Failed: A Case Study of Silver Spring, Maryland

Thu, 08 Dec 2011 10:30:00 EST

High, persistent unemployment and a sluggish economy underscore what all but the most-dedicated supporters of Barack Obama know to be true: The president's 2009 stimulus program was a massively expensive bust.

Understanding why the stimulus failed is an important step in understanding how the government can—and cannot—goose economic recovery. To get a better sense of how and where the stimulus went wrong, Reason.tv focused on Silver Spring, Maryland, a suburb of Washington, D.C., that's home to a large number of government contractors and other recipients of money earmarked for the sorts of "shovel ready" projects that were going to bring the economy back to life.

President Obama's top economic advisor Larry Summers laid out ground rules for how stimulus dollars should be spent: The funds must be "targeted" at resources idled by the recession, the interventions must be "temporary," and they needed to "timely," or injected quickly into the economy.

None of that turned out to be true. "Even if you were to believe that government spending can trigger economic growth," says Veronique de Rugy, Reason columnist and senior research fellow at the Mercatus Center, "the money is never spent in a way that's consistent with the conditions laid out by the Keynesians for it to be efficient."

Reason.tv identified four basic ways in which the stimulus was doomed almost before it was put into operation.

Government Contracts: More of the Same

According to proponents, an effective stimulus program must put idle resources back to work. A particularly bad way to go about this is to give money to big government contractors to do more of what they're already doing.

Yet that's what happened in downtown Silver Spring, where $138 million dollars in stimulus grants and contracts went to 46 organizations. Just three firms took home a majority of the money. These three firms—Synergy Enterprises, Senior Service America, and Social & Scientific Systems—were major government contractors before the stimulus was signed. In fact, these firms received a combined $71 million in stimulus funds. Over that same period, they got $702 million in other government contracts, according to USASpending.gov.

So the stimulus money was like icing on the cake. Take Palladian Partners, a communications firm in Silver Spring that's received $97.5 million dollars in government contracts over the past 12 years. The National Insitutes of Health (NIH), which is Palladian's biggest client, tacked $363,760 stimulus dollars on to an existing contract, and then followed it with two more awards totaling $431,333. Palladian was to spend the money collecting and disseminating information about how the NIH was spending stimulus money.

Palladian was well paid for its work, but with the project 80 percent complete, its main activities have included building a website, and publishing 29 short articles for the site. The stimulus grant went to hire two new employees, neither of whom was unemployed before coming to Palladian. That's no way to jumpstart the economy.

Infrastructure: Money for Nothing

President Obama said the stimulus bill would put nearly 400,000 people back to work rebuilding America. But over the next two-and-a-half years, the U.S. construction industry shed about 900,000 jobs or 14 percent of the building workforce.

In Maryland, the "specialty trades," a subset of the construction industry that handles big infrastructure projects, has lost 8 percent of its total, which amounts to 8,000 jobs. Maryland's Department of Transportation says stimulus money for transit projects has steadily paid the salaries of only about 600 construction workers since the middle of 2009.

Why didn't Maryland's $771 million stimulus dollars for transit infrastructure have a bigger impact on the state's economy?

Partly because Gov. Martin O'Malley cut infrastructure spending more than enough to offset any gains from the stimulus. Maryland’s Transportation Trust Fund generally pays for highway repairs by collecting a special gas tax and other user fees. After the stimulus money was available, Governor O’Malley raided the trust fund by diverting $861 million over the next three years to help balance the state's budget, according to information provided by Maryland's Department of Legislative Services. After you account for the $771 million in stimulus money, state funding for transit infrastructure saw a net decrease of $90 million. That sort of scenario played out in all sorts of ways in all sorts of states: Stimulus dollars were used to cover general expenses rather than to increase overall spending.

The Green Jobs Fiasco

The stimulus bill set aside $500 million for a program to train and recruit people for the new green economy. The program promised to place 80,000 people in so-called green jobs. The grant period is more than half over, and the program has placed only 8,000 people in jobs, according to a report by the Department of Labor's Inspector General.

In downtown Silver Spring, a union-backed organization called the International Transportation Learning Center got $5 million in stimulus dollars partly to recruit thousands of new workers and train them in new "green job" skills. But because transit workers already face low unemployment and low turnover and the new jobs weren't materializing, the group is instead using the entire grant to teach new skills to workers who already have jobs.

"The spirit of the stimulus shouldn't be to get people who already have jobs to get more money to do the same thing, just bigger," says de Rugy. Under stimulus theory, she says, "government spending should be going to places where unemployment is very high, going to people who are poached from unemployment lines."

Weatherizing Homes: Not So Shovel Ready

According to the Keynesian theory that undergirds it, stimulus spending must be spent quickly to be effective. By Barack Obama's own testimony, one of the most "shovel-ready" stimulus programs was supposed to be a $5 billion program to weatherize 590,000 homes around the country.

But the weatherization program started off as a slow-moving, dismal failure. According to a February 2010 report by the Department of Energy's Inspector General, only 8 percent of the weatherization money had been tapped in the program's first year.

In Silver Spring, Gov. O'Malley held a press conference at the home of Sonja and Richard Lowery in June 2009. It was the first home in Maryland to get weatherized with stimulus money. The program was underway. And then it nearly ground to a halt. In the first year, Maryland weatherized only 279 homes, or 4 percent of its goal.

The main holdup was a concession to organized labor that the "prevailing wage" rules apply to programs funded by stimulus dollars. That meant weatherization workers had to earn at least the average wage in their area for the particular work they were hired to do. Before workers could be paid, Maryland (and every other state) spent months conducting surveys to determine average wages and benefits for workers weatherizing homes in every county.

Today Maryland is racing to spend the remainder of its weatherization money before it’s forced to forfeit what’s left in early 2012.

"The main lesson of the stimulus is that creating jobs is a very complex process," says de Rugy, "and certainly it can't be directed by a top down institution that pretty much fails at everything it does."

Written and produced by Jim Epstein, who also narrates.

Approximately 8 minutes.

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17 Miles in Just 78 Minutes! Light Rail vs. Reality in LA

Tue, 06 Dec 2011 10:00:00 EST

Everyone loves light rail - especially if they don't actually have to rely on it for actual transportation or pay the full cost of what it takes to schlep a rider from Point A to Point B.

To get a better handle on what folks love about commuter rail, Reason.tv sent comedian Watt Smith for a train ride from Los Angeles International Airport to Burbank. During the 17-mile, 78-minute (!) journey, Watt chatted with fellow riders to find out if commuter rail is indeed better than driving or taking the bus.

And to help separate transportation myths from road realities, we've provided facts via pop-up windows that explain just how appearances can be deceiving when it comes to questions about the true costs and efficiency of rail transit versus other modes of transportation.

All of our information is taken from official sources provided by Los Angeles's Metro here and here.

About 5 minutes. Produced by Sharif Matar and Zach Weissmueller. Research by Tim Cavanaugh.

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Judge Andrew Napolitano: Why Taxation is Theft, Abortion is Murder, & It's Dangerous to Be Right When the Gov't Is Wrong

Tue, 22 Nov 2011 11:00:00 EST

"I'll say this plainly, I've said it before - Taxation is theft. It presumes the government has a higher claim on our property than we do," says Judge Andrew Napolitano, the host of Fox Business' Freedom Watch and the author of the new book, It Is Dangerous to Be Right When the Government Is Wrong: The Case for Personal Freedom.

Reason's Nick Gillespie sat down with the outspoken libertarian commentator to discuss topics ranging from abortion (the judge is fiercely pro-life) to Occupy Wall Street (he welcomes the protest against corporatism) to Rep. Ron Paul ("the Barry Goldwater" of our moment) to the role of religion in the quest for freedom.

About 25 minutes. Camera by Jim Epstein and Joshua Swain; edited by Swain.

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For previous Reason interviews with Judge Napolitano and to read his Reason archive, go here.

Nick Gillespie Explains Why Spending Cuts are All Talk on Freedom Watch

Tue, 22 Nov 2011 00:00:00 EST

Reason.tv editor in chief Nick Gillespie appeared on Freedom Watch to discuss how proposed spending cuts are all hype, as federal spending is only on the rise. Air Date: November 21, 2011.

About 5.30 minutes.

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Why We Should Fear Bathtubs More Than Terrorists: Authors John Mueller and Mark G. Stewart on Security Spending

Mon, 21 Nov 2011 00:00:00 EST

The federal government has spent over $80 billion on aviation security in the past 10 years. Yet "your chance of dying in a bathtub is about one in a million, and from terrorism is about one in 3.5 million," says Ohio State political scientist John Mueller.

Mueller and his co-author Mark G. Stewart argue in their new book, "Terror, Security, and Money: Balancing the Risks, Benefits, and Costs of Homeland Security ," that cost-benefit analysis needs to be applied to security expenditures. The authors calculate for current spending levels to be cost-effective, the U.S. government would "have to prevent four Time Square-type attacks every single day." So why are we spending so much for so little added safety?

Mueller and Stewart sat down with Reason.tv's Nick Gillespie to discuss the overestimating of risk from terrorism and zero-cost solutions to prevent another 9/11 attack.

Mueller is Woody Hayes chair of national security studies at the Mershon Center for International Security Studies at Ohio State; he's also a senior fellow at the Cato Institute. Mark G. Stewart is director of the Center for Infrastructure Performance and Reliability at the University of Newcastle in Australia.

About 7 minutes.

Shot by Jim Epstein and Joshua Swain, and edited by Meredith Bragg.

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Peter Suderman Talks Budget Cut Truths on Freedom Watch

Thu, 10 Nov 2011 00:00:00 EST

Reason Associate Editor Peter Suderman appeared on Freedom Watch to discuss misconceptions about budget cuts and why the Department of Defense's funding will remain untouched. Air date: November 4, 2011.

Approximately 3 minutes.

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Peter Schiff Challenges "Phony" Growth Based on Spending on After the Bell

Tue, 01 Nov 2011 00:00:00 EDT

On Fox Business Network's After the Bell, Peter Schiff challenges recent economic growth saying it's based on how "spending money we don't have" instead on actual savings and investment. Schiff also discusses his time talking with the Occupiers on Wall Street. Air Date: October 28, 2011.

5.30 minutes.

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Nick Gillespie Addresses Occupy Wall Street's Call for Student Loan Bailouts on Freedom Watch

Wed, 26 Oct 2011 00:00:00 EDT

Reason.tv editor in chief Nick Gillespie appeared on Freedom Watch, to discuss why the government should not be bailing out student loans despite Occupy Wall Street protesters' whims and an increasing default rate. Air Date: October 25, 2011.

Approximately 5 minutes.

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Nick Gillespie Talks Honest Budget Act on CNN's Out Front

Mon, 24 Oct 2011 00:00:00 EDT

Reason.tv editor in chief Nick Gillespie appeared on CNN's Out Front with Erin Burnett to discuss Congress' newest proposal for a balanced budget agreement, and why the numbers don't quite add up. Air Date: October 21, 2011.

Approximately 4 minutes.

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Lee Doren - Author of "Please Enroll Responsibly" and How the World Works

Thu, 13 Oct 2011 00:00:00 EDT

Lee Doren is a former think tanker who now runs the YouTube channel How the World Works. He’s also taken to digital self-publishing; his first ebook, Please Enroll Responsibly: Avoiding Indoctrination at College, was released in August.

Doren has described the book as a “helmet for higher education,” and says he was inspired to write it by emails from parents and students asking him how to deal with an overtly progressive college faculty.

Doren also describes the creation of How the World Works, which he started in 2008. Since then, his series of two-minute videos about his political and economic beliefs has garnered 36,000 subscribers and invitations to speak to a variety of web and broadcast news outlets.

Interview by Reason's Nick Gillespie Shot and edited by Joshua Swain.

About 4.14 minutes long.

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Remy's Occupy Wall Street Protest Song

Tue, 11 Oct 2011 10:00:00 EDT

As the Occupy Wall Street movement spreads like a, well, financial contagion through global markets, intergalactic Internet sensation Remy and Reason.tv give the movement its anthem.

Written and performed by Remy and produced by Meredith Bragg.

About 2.45 minutes. Go to http://reason.tv for downloadable versions. Subscribe to our YouTube channel to get automatic updates when new material goes live.

For Reason's coverage of Occupy Wall Street, including video coverage from lower Manhattan, go here.

Follow Reason on Twitter.

For more Remy & Reason.tv vids, go here.

For even more Remy, go to his YouTube channel.

Lyrics to the "Occupy Wall Street Protest Song"

Come gather round people
come and join your hands
we're taking Wall Street
and we're making demands
and we're heeding the call
and we're crying for help
only 1% of us have wealth

but first we need posters
we need to make signs
but to do so it seems
that we need some supplies

We need poster board
I can't make it myself
but it's 10 cents a sheet
at the store it's on sale
an example of economies of scale
it's so evil

They're saying that freedom
has done little to stop
Corporations from keeping
the wealth at the top
But at what point in history
would a kid and a king
both have clean water to drink?

George Washington was
the richest man of his age
But he lost all his teeth
at a very young age
Because they didn't have Scope
and they all crapped in trays
we're not wealthy?

now there's fountains on streets
from which clean water pours
Four dollar generics
at all big box stores
a sultan and student
both have iPhone 4s
it's not fair

Come gather young people
come on everyone
and I'll tell you a tale
of a fortunate son

He's born in a country
and given vaccine
and rendered immune
to all kinds of disease
the Kardashians are on
all his TVs
it's not perfect

Banks don't need bailouts
on that we agree
so let's start up a group
and let's take to the streets
because if we do that then
you know what that means
we're racist.
[End]

Peter Suderman Talks Mitt Romney's Latest Promise on Freedom Watch

Fri, 07 Oct 2011 00:00:00 EDT

Reason.com Associate Editor Peter Suderman appeared on Freedom Watch to discuss former Massachusetts Governor Mitt Romney's latest promise not to cut Medicare, ever. Air date: October 6, 2011.

Approximately 4 minutes.

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How Housing Policy and Public Pensions are Bankrupting America: Anthony Randazzo and Adam Summers at FreedomFest

Tue, 27 Sep 2011 17:00:00 EDT

"The day that facts start winning in Washington is the day I don't have to do my job," says Reason Foundation's director of economic research Anthony Randazzo. Randazzo and policy analyst Adam Summers spoke at a panel at FreedomFest 2011 called "Shooting Elephants: Government Pensions & Fannie Mae & Freddie Mac."

At the heart of the current economic crisis is a housing meltdown that Randazzo says was underwritten by misguided government policies designed to increase home ownership rates. When you look at the data, he argues, there's little reason to believe that owning makes more sense than renting from a variety of perspectives. Yet the government's push to create an "ownership society" ended up first inflating an unsustainable market.

Summers focuses on the role that public pensions play in state and local budget shortfalls. Routinely based on "wishful thinking rather than what is reasonably foreseeable," Summers says public-sector wages and benefits need to brought into line with the private sector and that states such as Utah are providing a workable model of reform.

Shot by Jim Epstein and Zach Weissmueller and edited by Joshua Swain.

About 44 minutes long.

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Held every July in Las Vegas, FreedomFest is an annual gathering of about 2,000 free-market and libertarian enthusiasts. This year's speakers included Reason's Nick Gillespie and Matt Welch, Sen. Rand Paul, Judge Andrew Napolitano, and scores of others. Reason.tv conducted interviews with more than two dozen speakers, which we'll be releasing over the next several weeks. Our growing playlist can be watched online here.

Adrian Moore Talks Robo-Signing Scandal on Freedom Watch

Tue, 27 Sep 2011 00:00:00 EDT

Reason Vice President of Research Adrian Moore appeared on Freedom Watch to discuss the latest robo-signing revelation and the ever-increasing IMF bailout fund. Air date: September 26, 2011.

Approximately 8 minutes.

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The Failure of Crapitalism: Q&A with Barron's Economic Columnist Gene Epstein

Fri, 23 Sep 2011 12:00:00 EDT

At FreedomFest 2011, Reason's Nick Gillespie sat down with Barron's columnist Gene Epstein to talk about his book Econospinning and "the failure of crapitalism."

Held each July in Las Vegas, FreedomFest is attended by around 2,000 libertarians and advocates of limited government. Reason.tv spoke with over two dozen speakers and attendees and will be releasing interviews over the coming weeks. For an ever-growing playlist, go here now.

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Freedom Friend Founder Talks Pop Culture and Women at FreedomFest 2011

Thu, 22 Sep 2011 00:00:00 EDT

Michelle Lieberman is the founder of Freedom Friend. She is trying to promote the ideas of freedom to young women like herself.

About 5 minutes. Shot by Zach Weissmueller and Jim Epstein and edited by Sharif Matar.

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Nick Gillespie Talks Unemployment and Stimulus on Freedom Watch

Wed, 21 Sep 2011 00:00:00 EDT

Reason.tv editor in chief Nick Gillespie appeared on Freedom Watch, to discuss unemployment and what the federal government should be doing, or not doing, to promote job growth. Air Date: September 17, 2011.

Approximately 5:12 minutes.

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Reactions to Obama's Jobs Speech 9/8/2011 or, "Two Girls One Job"

Fri, 09 Sep 2011 09:00:00 EDT

As President Barack Obama took to the pre-prime-time airwaves to announce his $450 billion jobs program, Reason.tv captured the candid reactions of viewers from all over the Internet.

About 2 minutes. Produced by Paul Detrick. Edited by Sharif Matar.

For more info, and actual ideas that might generate jobs, go here.

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Go to Reason.tv for downloadable versions of all our videos.

Veronique de Rugy Talks About Obama's Economy Speech On Freedom Watch

Wed, 07 Sep 2011 00:00:00 EDT

Reason columnist and Mercatus Center economist Veronique de Rugy appeared on Freedom Watch to discuss a public works bank and president Obama's speech about the economy on Thursday. Airdate 9/2/2011.

Approximately 4 minutes.

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Emily Ekins Says Americans Want Spending Cuts on Freedom Watch

Wed, 07 Sep 2011 00:00:00 EDT

Emily Ekins, Reason's polling director, talks about the new Reason Rupe Public Opinion Survey on Freedom Watch.

Ekins explains that Americans primarily want to cut spending, not raise revenue, to deal with the debt crisis.

The Reason-Rupe survey is online here and here (pdf).

About 3.30 minutes.

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Anthony Randazzo Discusses Congress and the Fed's Blame Game on the Alyona Show

Mon, 29 Aug 2011 00:00:00 EDT

Reason Foundation's Director of Economic Research Anthony Randazzo discusses Ben Bernanke accusing Congress for a poor fisical policy and the plans for the foreclosured houses the government bought on The Alyona Show.

Approx. 10 minutes.

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Peter Suderman Discusses a Possible QE3 and Congress's Lowest Approval Ratings on Freedom Watch

Thu, 11 Aug 2011 00:00:00 EDT

Reason Associate Editor Peter Suderman appeared on Freedom Watch to discuss the recent call for stimulus in the form of QE3 and what the lowest approval ratings for Congress mean for Obama and 2012 elections. Air date: 8/10/2011.

Approximately 7.42 minutes.

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Adrian Moore Discusses the S&P Downgrade and London Riots on Freedom Watch

Wed, 10 Aug 2011 00:00:00 EDT

Reason Vice President of Research Adrian Moore appeared on Freedom Watch to discuss Congress planing to investigate S&P's decision to downgrade America's credit and whether the London riots are a sign for worse to come. Air date: August 9, 2011.

Approximately 7 minutes.

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Anthony Randazzo Discusses the S&P Downgrade on the Alyona Show

Tue, 09 Aug 2011 00:00:00 EDT

Reason's Director of Economic Research Anthony Randazzo appeared on The Alyona Show to discuss S&P downgraded the U.S. to AA+ and Moody's statement that if the Washington gridlock continues they will also downgrade. Air Date: August 8, 2011.

Approximately 11.04 minutes.

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Busting Congestion in Chicago (or Any other City)

Wed, 03 Aug 2011 07:00:00 EDT

America's Second City is now first in traffic congestion.

Recently, the Texas Transportation Institute named Chicago the nation's most congested city, booting perennial congestion king Los Angeles from the dreaded top slot.

And if you think gridlock is bad now, just wait. Turns out Chicago's official 25-year transportation plan will spend billions, but traffic congestion will get even worse.

Everyone knows that gridlock leads to wasted time and increased stress, but the effects of degraded mobility are worse than most people realize. Traffic congestion deprives job-seekers of opportunities, robs businesses of customers, and hastens the exodus of residents from the central city to the suburbs.

And although mounting gridlock may seem like the unavoidable result of increased population and strained budgets, the experience of nations from France to Australia proves otherwise. Reason Foundation draws on what's worked worldwide and recommends a three-part plan:

1. Expand roads with underground tunnels and elevated structures.
2. Use pricing to keep traffic flowing.
3. Pay for new projects with private-sector financing instead of taxes.

That plan can help Chicago or any other city bust congestion and boost economic growth.

Approximately 4.30 minutes

Written and produced by Ted Balaker. Field producer: Paul Detrick, Camera: Jim Epstein and Alex Manning.

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Anthony Randazzo Discusses the Markets Reaction to the Debt Deal on The Alyona Show

Wed, 03 Aug 2011 00:00:00 EDT

Director of Economic Research at Reason Foundation Anthony Randazzo appeared on The Alyona Show to discuss how the debt deal has not easied uncertianity in the markets and how government can do little to change the economy. Air Date: May 10, 2011.

Approximately 8.48 minutes.

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What We Saw at the Save Our Schools Rally in Washington D.C.

Sat, 30 Jul 2011 20:00:00 EDT

On July 30th, 2011, teachers, parents and advocates such as actor Matt Damon, author Jonathan Kozol, and historian Diane Ravitch gathered for the Save Our Schools Rally outside the White House.

The purpose of the event: "To put the public back in public schools."

Reason.tv was on hand to talk tenure, the role of money in education, and whether parents should have the right to choose where their kids go to school.

Approximately 6 minutes.

Produced, shot and edited by Jim Epstein. Hosted by Michelle Fields. Additional editing by Joshua Swain; production assistance from Kyle Blaine.

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Remy: Raise The Debt Ceiling Rap

Sat, 30 Jul 2011 00:00:00 EDT

We may not be able to address our current debt ceiling woes, but we can at least put them to a good beat.

"Raise the Debt Ceiling" is the third of a series of collaborations between Remy and Reason.tv. To watch Remy's other videos, go to http:youtube.com/goremy

Visit the links below for more Reason coverage on the debt, deficit and government spending:
Five Facts About the Debt
The Facts About the Debt Ceiling
Reason.com Topics: Government Spending

Music and lyrics by Remy. Video shot and produced by Meredith Bragg.

Download the mp3 and HD versions at http://reason.tv, the video channel for Reason magazine and http://reason.com

Veronique de Rugy: The Facts About Spending Cuts, the Debt, and the GDP

Fri, 29 Jul 2011 00:00:00 EDT

Editor's Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Raising the debt limit might put off a downgrade disaster in August, but that still isn’t enough—as Standard & Poor’s recent warning made clear. Perhaps the most important shot not heard around the world was S&P’s other admonition: Namely, that the U.S. bond rating will be downgraded in three months, if not sooner, unless we do something about government spending. Beyond raising the debt limit, S&P laid out clear criteria for avoiding a downgrade: 1) reduce the debt by about $4 trillion; 2) agree to a credible plan within three months; and 3) guarantee that this newfound fiscal discipline will actually stick.

If S&P isn’t bluffing, then lawmakers should get serious about reducing the debt-to-GDP ratio, and they should do it quickly. But how do we achieve such a task?

Myth 1: You cannot reduce the deficit to an appropriate level without also raising taxes.

Fact 1: Spending cuts are the most effective way to reduce the debt-to-GDP ratio.

We are not the first nation to struggle with a dangerous debt-to-GDP ratio, and thankfully, the academic world has already produced great insights into what can be done to reduce this ratio without hurting the economy.

Take the work of Harvard’s Alberto Alesina and Silvia Ardagna. They examined 107 efforts to reduce the debt in 21 OECD nations between 1970–2007. Their findings suggest that tax cuts are more expansionary than spending increases in the cases of a fiscal stimulus. Also, they found that spending cuts are a more effective way to reduce the debt-to-GDP ratio:

For fiscal adjustments we show that spending cuts are much more effective than tax increases in stabilizing the debt and avoiding economic downturns. In fact, we uncover several episodes in which spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions. We also investigate which components of taxes and spending affect the economy more in these large episodes and we try to uncover channels running through private consumption and/or investment.

As you can see in this chart, in cases of successful fiscal adjustments—defined by the cumulative reduction in debt-to-GDP ratio three years after fiscal adjustment greater than 4.5 percentage points—spending as a share of GDP fell by about 2 percentage points while revenue also fell by half a percentage point (left bars). On the other hand, unsuccessful fiscal adjustment packages—cumulative increases in debt-to-GDP ratio—were made of smaller spending reductions (only 0.8 percentage-point reduction) and large revenue increases (right bars).

The IMF found similar results and reports that fiscal adjustment on the requisite scale of what we need today is actually not unprecedented:

During the past three decades, there were 14 episodes in advanced economies and 26 in emerging economies when individual countries adjusted their structural primary balance by more than 7 percentage points of GDP. Several economies were also able to sustain large primary surpluses for five or more years afterwards, though the record is more mixed in this regard.

For those who are not ideologically inclined toward austerity measures, it is key to remember that this research is consistent with the work of former Obama Council of Economic Advisers chairman Christina Romer and her economist husband, David Romer, which shows that increasing taxes by 1 percent of GDP for deficit-reduction purposes leads to a 3 percent reduction in GDP. In fact, Alesina and Ardagna discuss the work of Romer and Romer starting on page five of their paper.

Myth 2: Lawmakers facing economic catastrophe forget about politics and adopt measures that address genuine fiscal issues.

Fact 2: Politicians rarely put politics aside. Historically, four out of five fiscal adjustments were primarily comprised of tax increases—and were unsuccessful.

Following and building on Alesina and Ardagna’s work, a new paper by Andrew Biggs, Kevin Hassett, and Matthew Jensen of the American Enterprise Institute studies fiscal adjustments covering over 100 instances in which countries took steps to address their budget gaps. Their results are consistent with those of the Harvard economists; expenditure cuts outweigh revenue increases in successful consolidations. Moreover, their work shows that even in a time of crisis (or especially in a time of crisis), lawmakers tend to adopt policies for the sake of politics. Countries in fiscal trouble generally got there through years of catering to interest groups and pro-spending constituencies (on both sides of the political aisle), and their fiscal adjustments tend to make too many of the same mistakes.

As a result, failed fiscal consolidations are the rule rather than the exception. Indeed, 80 percent of the fiscal adjustments Biggs, Hassett, and Jensen studied were failures. The United States cannot afford to follow this pattern.

Myth 3: We have had higher debt-to-GDP ratios before so we shouldn’t worry now.

Fact 3: We should worry. The debt-to-GDP ratio actually underestimates the size of the government’s real liabilities.

As government debt and deficits have swollen, we often look to the past for guidance. From that point of view, history appears to be reassuring, since several advanced countries have had debt-to-GDP ratios much higher than the one we have now. The United States after World War II had a public debt/GDP ratio of roughly 110 percent, while Britain’s was 250 percent. In fact, the UK’s national debt has averaged almost 100 percent of GDP since its creation in 1693. France's public debt was about 280 percent of GDP at the end of World War II. And yet neither of these countries defaulted. So why should we worry?

Two main reasons: First, while our debt is big now, it’s only going to get bigger in the coming years. This year, the debt held by the public is $9.7 trillion, which is roughly 69 percent of GDP. According to the Congressional Budget Office, it will reach 200 percent in 2037--if the economy doesn’t collapse first (which it likely will). These projections aren’t surprising considering that the president’s budget doubles the debt held by the public from $9 trillion today to $18 trillion in 2021.

Second, the debt-to-GDP ratio actually underestimates the scale of our debt problem. Here is why:

1. Intragovernmental debt. This $4.6 trillion of debt is money that the federal government owes to its various trust funds. In other words, it’s a liability to the government but an asset to the trust funds, so in accounting term it’s zeroed out. However, over time the programs will redeem the IOUs as they need the money to fund benefits. As that happens, the intragovernmental debt decreases but debt held by the public increases. Eventually, this $4.6 trillion will be converted into public debt.

2. Unaccounted liabilities. There exists a broad range of liabilities that are debt, yet are not captured in the debt-to-GDP ratio. To take one example, the Financial Statement of the United States values the government’s civil-service pension liabilities (that is, the contractual claims on government accumulated to date by civil servants) at $5.7 trillion. That amount is not captured by the debt-to-GDP ratio. A share of this $5.7 trillion will be paid for by IOUs included in the intragovernmental debt, which we know will be converted into public debt. In addition, the unfunded share of this liability will have to be paid for with more debt, which isn’t accounted for in the debt/GDP metric. The Financial Statement of the United States shows another $1.5 trillion of such liabilities, including payments due to government-sponsored enterprises.

3. Unfunded liabilities. There is a balance of $39 trillion in unfunded liabilities over 75 years for programs such as Social Security and Medicare.

While we can’t add all these numbers up because it would be the equivalent of comparing oranges to apples (some of these numbers represent the net present value of beneficiaries’ future claims on the government), considering them in context still helps to illustrate why the debt-to-GDP ratio underestimates how much present and future debt has been accumulated over the years. Hopefully, this also helps illustrate why the current debt-ceiling debate shouldn’t just focus on Treasury’s ability to pay our bills today, but must focus on our overall debt problem.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Remy Munasifi Talks about "Raise The Debt Ceiling Rap" on CNN's News Room

Thu, 28 Jul 2011 00:00:00 EDT

Remy Munasifi talked with CNN's News Room about creating the "Raise The Debt Ceiling Rap" and it's rise in popularity. Airdate: July 27, 2011.

Approximately 2.55 minutes.

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Peter Suderman on Discusses Fake Budget Cuts on Freedom Watch

Wed, 27 Jul 2011 00:00:00 EDT

Reason Associate Editor Peter Suderman appeared on Freedom Watch to discuss the how the government has pretended to cut spending by including non-existent war spending and excluding entitlement obligations. Air date: 7/26/2011.

Approximately 4.51 minutes.

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Anthony Randazzo Discusses the Consequences of the Debate Crisis on The Alyona Show

Tue, 26 Jul 2011 00:00:00 EDT

Reason Foundation's Director of Economic Research Anthony Randazzo discusses the Federal Reserve's loans to corporations and banks, a falling U.S. dollar, and the possibility of America loosing its credit rating on RT's The Alyona Show. Airdate July 25, 2011.

Approximately 9.10 minutes.

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Damon Root Discusses Myths Surrounding Unions and the Great Depression on Stossel

Tue, 26 Jul 2011 00:00:00 EDT

Reason Associate Editor Damon Root discusses on Stossel how many "truths" about unions and the Great Depression are in fact myths, including the ideas of Hoover as a small-government zealot and unions helping minorities. Airdate July 21, 2011.

Approximately 9.07 minutes.

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Veronique de Rugy Discusses the Threat of America Losing its Credit Rating on Freedom Watch

Fri, 22 Jul 2011 00:00:00 EDT

Reason columnist and Mercatus Center economist Veronique de Rugy appeared on Freedom Watch to discuss S&P's plan to downgrade America's AAA credit rating if there is no long-term deficit reduction package and whether this is avoidable. Airdate 7/21/2011.

Approximately 3.29 minutes.

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Peter Suderman Dicusses the Differences Between State and Federal Budgets on Freedom Watch

Wed, 20 Jul 2011 00:00:00 EDT

Reason Associate Editor Peter Suderman appeared on Freedom Watch to discuss differences between the state' and federal budget requirements and government employee retention rates. Air date: 7/19/2011.

Run time approximately 6.01 minutes.

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Veronique de Rugy: Tells the Facts about the Debt Ceiling

Tue, 19 Jul 2011 00:00:00 EDT

Editor’s Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Myth 1: If a deal is not reached by August 2, the U.S. will default on its debt.

Fact 1: The Treasury Department can prioritize payments in order to avoid a default.

The Treasury Department is due to pay off $30 billion in maturing short-term debt. But we also know that the Treasury has the ability to prioritize its payments and pay that particular $30 billion out of the $172 billion it collects in tax revenue. As the Bipartisan Policy Center has calculated, after paying $30 billion in interest payments in August, Treasury could, if it ceased all other functions (see page 13 of this document), also pay for Social Security, Medicare, unemployment benefits, and payments to defense contractors. Technically speaking, there is no need to default in the absence of a debt ceiling agreement.

This is not an ideal solution and it entails some significant risks (mainly timing difficulties), but it could be done if necessary.

In addition, the Treasury could sell some of its assets in order to pay the bills. That’s an expensive option at this point, since it would probably mean selling them at a low price, but these are not normal times and a fire sale beats a default.

Myth 2: If the debt ceiling isn’t raised the government won't be able to pay Social Security benefits.

Fact 2: There are approximately $2.6 trillion dollars in the Social Security Trust Fund. Those assets can be used to pay benefits. Furthermore, there is already trillions of dollars of interagency debt that counts toward the $14.29 trillion debt limit. Treasury Secretary Timothy Geithner could convert that interagency debt into publicly-held debt, preventing not only a technical default but also preventing any delay in government payments.

President Barack Obama has suggested that if the Treasury prioritized payments in order to prevent default on the debt, it might do so on the backs of seniors by not sending out their Social Security checks. This is a particularly troubling rhetorical move by the White House. As the president and his advisers know, there are ways for the government to pay these benefits—messy ways, yes, but still viable—in the absence of a debt-ceiling agreement. That’s what the president should be saying rather than trying to scare seniors.

According to a Bipartisan Policy Center report, incoming revenue on August 3 will amount to $12 billion. At the same time, the government is scheduled to spend some $32 billion—most of it in the form of Social Security checks. How do we make up the difference?

First, remember how Social Security works. Starting now, the difference between payroll-tax revenue and Social Security benefits is made up by redeeming the IOUs in the Social Security Trust Fund. In order to pay back this IOU, Treasury has to borrow the money, which increases the debt held by the public by the same amount. In other words, if Treasury were to redeem the needed Social Security bonds and issue new marketable Treasury bonds to make good on them, it would be a one-for-one swap.

There is a potential glitch, however, having to do with whether Treasury has the authority to use payroll tax money to pay benefits rather than to “invest.” According to Washington Post “Fact Checker” Glenn Kessler, the Treasury has done it before:

There is a technical wrinkle involving the fact that payroll taxes that are collected are supposed to be immediately turned into Treasury securities, but there could be ways around that, such as putting the monies in a noninterest bearing account, as during the 1985 debt crisis. “Although some of the Secretary’s actions appear in retrospect to have been in violation of the requirements of the Social Security Act, we cannot say that the Secretary acted unreasonably given the extraordinary situation in which he was operating,” the General Accounting Office later concluded....

Still, during the 1996 debt limit crisis, Treasury Secretary Robert Rubin announced that Treasury did not have sufficient funds to pay Social Security benefits. Congress rushed to pass a special law that said the Social Security benefits did not count against the debt limit. Was this designed to pressure the Republican-led Congress, or had even a shrewd operator like Rubin run out of options? However, Congress later that year passed a law, 121-104, that codified Treasury’s authority to use Social Security trust funds to pay benefits and administration expenses in the event a debt ceiling is reached, which could give the administration the authority they need in the current crisis.

The Congressional Research Service has also explored this question in a series of reports this year. The answer is unfortunately inconclusive and buried in a footnote: “Under normal procedures Treasury pays Social Security benefits from the General Fund and offsets this by redeeming an equivalent amount of the trust funds’ holdings of government debt. In order to pay Social Security benefits, and depending on the government’s cash position at the time, Treasury may need to issue new public debt to raise the cash needed to pay benefits. Treasury may be unable to issue new public debt, however, because of the debt limit. Social Security benefit payments may be delayed or jeopardized if the Treasury does not have enough cash on hand to pay benefits.”

Myth 3: The Treasury cannot use the Social Security Trust Fund to delay a default past August 2.

Fact 3: While the Treasury cannot use money from the Social Security Trust Fund, it can “disinvest” from other trust funds to pay for benefits.

Treasury can “disinvest” from some of its trust funds. Here’s how it works according to the legislative director of the National Active and Retired Federal Employees.

Each day, the U.S. Treasury takes in several billion dollars for federal trust funds. For Social Security, these dollars come in the form of employer and employee payroll taxes. Federal employee and Postal Service contributions to the CSRDF [Civil Service Retirement and Disability Fund] also inject cash into the Treasury. Usually, this cash is immediately invested in nonmarketable government securities—to remain available to finance future benefits. But if a debt limit breach appears imminent, the Treasury Department could “underinvest” this revenue as it arrives. The trust funds would be given a temporary IOU that does not count against the debt ceiling, and the withholdings would be used to pay off the government’s cash obligations until an increase in the debt ceiling could be settled.

The Treasury Department could also make cash available from the trust fund by “disinvesting” some of the money used to buy government bonds. Under this approach, bonds held on behalf of trust funds would be converted to cash earlier than normally needed. Like the “underinvestment” option, cash from this transaction would be used to pay federal obligations on a temporary basis.

The disinvesting approach is a temporary accounting device that would help maintain the Treasury’s cash flow.

According to the Government Accountability Office, the use of “disinvestment” to pay for benefits has been used during a previous debt-ceiling crisis:

In the past, Treasury has taken a number of extraordinary actions such as temporarily disinvesting securities held as part of federal employees’ retirement plans to meet the government’s obligations as they came due without exceeding the debt limit, until the debt limit was raised.

In fact, it happened during the last big debt-ceiling crisis in 1995-1996. According to the GAO, Treasury managed to remain technically under the debt ceiling and incurred about $138.9 billion in additional debt that normally would have been subject to the ceiling by disinvesting $46 billion in Civil Service fund securities in November 1995 and February 1996. The Treasury also suspended the investment of $14 billion in fund receipts in December 1995 and exchanged about $8.6 billion in Civil Service fund securities for Federal Financing Bank securities.

These actions, of course, are nothing more than short-term budget gimmicks. But they would allow the U.S. to avoid defaulting on the debt. Once these options are exhausted, however, there will be nothing left to do but raise the debt ceiling or dramatically cut government spending.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Katherine Mangu-Ward Discusses the Debt-Ceiling Debate on Freedom Watch

Tue, 19 Jul 2011 00:00:00 EDT

Reason Senior Editor Katherine Mangu-Ward appeared on Freedom Watch to discuss whether the debt-ceiling debate is more a deterrence for the economy's recovery rather than a safe guard against rampant government spending as Moody’s recently suggested. Airdate: July 18, 2011.

Approximately 7.19 minutes.

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Tim Cavanaugh Talks Carmageddon on LA's KTLA Morning News

Mon, 18 Jul 2011 15:12:00 EDT

Reason columnist and Hit & Run contributor Tim Cavanaugh appeared on Los Angeles' KTLA to discuss media and politician hype surrounding Carmageddon. Air Date: July 16, 2011.

Approximately 3:35 minutes.

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Carmageddon or Lameageddon? Billion Dollar Project Isn't Apocalyptic After All

Mon, 18 Jul 2011 09:00:00 EDT

Did you hear about Carmageddon? It turns out the apocalyptic shutdown of the nation's busiest freeway, the 405, wasn't apocalyptic at all.

Media hyped the billion dollar construction project for weeks, claiming it could "back up traffic as much as 64 miles," and politicians blunted told constituents, "Stay the hell away from the 405." But none of the predictions about a Carmageddon came true.

Instead we found politicians ready to sing the praises of the newly added carpool lane and teardown of the Mulholland Bridge (Including an exclusive interview with Mayor of Los Angeles, Antonio Villaraigosa). We also found Angelenos skeptical that the project would actually alleviate traffic.

Written and Produced by Paul Detrick.

About 3:30 minutes.

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3 Reasons Why The Debt-Ceiling Debate is Full of Malarkey

Fri, 15 Jul 2011 10:00:00 EDT

All anybody in Washington can talk about these days is the debt limit or debt ceiling – the total amount of money the federal government is authorized to borrow at any given time. After a decade in which spending increased by more than 60 percent in inflation-adjusted dollars and the debt limit was raised no fewer than 10 times, the government is about to max out its $14.3 trillion credit line, leading to fears that Washington is going to default on its bonds, stop cutting Social Security checks, and destroy the economy more than it already has.

But the current debate over the debt ceiling is full of malarkey for at least three reasons.

1. August 2 is a phony deadline. Treasury Secretary Timothy Geithner has pushed back the drop-dead date when the U.S. finally reaches its limit a bunch of times already: March 31, April 15, May 31 were all cited as deadlines before August 2 was inked in as Armageddon. But this time, he means it, man, really.

2. Reaching the debt ceiling is NOT the same as defaulting on our debt – which would indeed be catastrophic.

Think about it: You can max out your credit cards but as long as you keep paying the minimum amount due each month, your creditors don’t go crazy. Interest on the debt is a small fraction of total outlays and the government has a series of tools – from using cash on hand to selling assets to scrimping on nonessential payments – to make sure interest payments are made and seniors aren’t put on an all cat-food diet.

3. Legislating-by-Panic is no way to run a country. The reason we’re in this mess is because government can’t stop spending. And the government can’t even pass a budget on a year’s notice. But we’re expecting them to come up with a good plan for the country’s borrowing in a couple of weeks? Trying to force through an expansion of the country’s credit line by promising cuts in spending down the road is exactly why we’re in this situation to begin with.

It makes far more sense to do something like sell some TARP assets -- the government is sitting on $320 billion in outstanding direct loans and equities investments -- to cover interest payments through the end of the fiscal year than to force Congress and the president to come up with a budget that cuts spending -- and borrowing -- for real, next year, not is some distant future.

For more information, check out Nick Gillespie's 5 Uncomfortable Facts About the Wonderful, Horrible Debt-Limit Debate and Mercatus Center's Jason J. Fichtner & Veronique de Rugy's The Debt Ceiling: What is at Stake.

About 2.35 minutes.

Produced by Nick Gillespie and Meredith Bragg, edited by Joshua Swain.

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Rep. Jeff Flake (R-Ariz.)

Thu, 14 Jul 2011 00:00:00 EDT

Rep. Jeff Flake (R-Arizona) has represented the Diamondback State's sixth congressional district since 2001, cutting a pro-immigration, pro-trade, limited-government, anti-spending path that contrasts sharply with the mainstream of the Republican Party.

Flake's campaign against "earmarking," or larding up bills with giveaways for legislators' home districts, brought national attention to this issue and inspired some important rule changes. He has been a lonely voice in the House calling for an end to the U.S.-imposed travel ban on Cuba . And in a state that has shocked much of the country with its intolerance toward both documented and undocumented immigrants, Flake has consistently argued for reducing obstacles to legal immigration and establishing more effective guest worker programs.

Now Flake has his eye on the Senate seat being vacated next year by the retiring Republican Jon Kyl. While there's plenty of competition for his House job, Flake is so far alone in the race for Arizona's junior Senate seat.

A former head of the Goldwater Institute and practicing Mormon, Flake is a leading voice for freer markets and more personal freedom within the Republican Party.

Late in June, Flake sat down with Reason Senior Editor Tim Cavanaugh to discuss these matters and more.

Approximately 28 minutes

Shot by Zach Weissmueuller, Paul Detrick and Alex Manning. Edited by Meredith Bragg.

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Anthony Randazzo Discusses what the Possiblity of QE3 Means on The Alyona Show

Thu, 14 Jul 2011 00:00:00 EDT

Reason Foundation's Director of Economic Research Anthony Randazzo appeared on Russia Today’s The Alyona Show to discuss FED Chairman Ben Bernanke's proposing more monetary stimulus through QE3. Air Date: June 13, 2011.

Approximately 7.35 minutes.

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Adam Summers Discusses California's High Speed Rail on Los Angeles' KABC-TV

Wed, 13 Jul 2011 00:00:00 EDT

Reason Policy Analyst Adam Summers debunks the myths that California's High Speed Rail Project was approved by voters, will be built in budget, and pay for itself on Los Angeles' KABC-TV. Airdate: June 12, 2011.

Approximately 5.52 minutes.

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Economist Murat Yulek on Greek Debt, Turkish Growth, & U.S. Budget Woes

Mon, 11 Jul 2011 00:00:00 EDT

How bad is the Greek debt crisis? How will the U.S.'s inability to get its fiscal house in order impact rising countries such as Turkey? Economist Murat Yülek hails from Turkey and is a former Georgetown University professor and finance company CEO, who's worked with the International Monetary Fund, the World Bank, and the Islamic Development Bank.

In early July, Yülek sat down with Reason Foundation's Director of Economic Research Anthony Randazzo to discuss how the Greek and American situations may just make it harder for countries such as Turkey to fully liberalize their economies.

Approximately 5.08 minutes.

Shot by Joshua Swain and Jack Gillespie. Edited by Swain.

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Anthony Randazzo Discusses Government Shutdowns and Tax Hikes with Judge Napolitano

Fri, 08 Jul 2011 00:00:00 EDT

Director of Economic Research Reason Foundation Anthony Randazzo appeared on Freedom Watch to discuss Minnesota's government shutdown, Obama's debt ceiling deal, and potential tax hikes and cutting tax breaks. Airdate: July 6, 2011.

Approximately 9.27 minutes.

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Veronique de Rugy: The Facts About Stimulus Spending

Fri, 08 Jul 2011 00:00:00 EDT

Editor’s Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Myth 1: Stimulus spending can jump start the economy and fix unemployment.

Fact 1: Recent experience suggests stimulus spending won’t help.

There’s no question President Barack Obama inherited a lousy economy. Yet even many prominent Democrats, including Senate Majority Whip Dick Durbin and Democratic National Committee chair Debbie Wasserman Schultz, now acknowledge that after two and a half years in office, the president owns the economy. Unfortunately for him, things still aren’t looking so so good. That’s why the president called on Congress last week to pass a series of spending measures that he said would boost the economy, including additional infrastructure spending and an extension of the payroll tax cut for another year.

With this in mind, I thought it would be interesting to update my chart on the level of stimulus spending and unemployment rates since 2009.

The chart is based on the most recent data from the Bureau of Labor Statistics and the Center for Data Analysis. As you can see, the administration’s promise that the American Recovery and Reinvestment Act (ARRA) would keep unemployment rates from reaching 8.8 percent and would create some 3 million jobs—90 percent of them in the private sector—did not materialize.

The unemployment rate started at 7.6 percent when President Obama took office and peaked at 10.2 percent in October 2009. Since the enactment of the stimulus bill in February 2009, the unemployment rate has not approached pre-ARRA levels, even though $382 billion has been made available by government departments and agencies (on top of tax credits and other tax-related items). In fact, unemployment recently edged up, from 9 percent in April to 9.1 percent in May.

Based on this data, it is hard to make the case that doing more of the same will help. Yet that is precisely what New York Times columnist Paul Krugman think we should do. In his view, these dire results are due to a stimulus that was too small. It’s difficult to imagine what level of stimulus spending would be large enough for Krugman. What I do know is that we have spent $666 billion to date, yet unemployment remains above 9 percent. And under even the rosiest of assumptions, which claim 2.4 million jobs created, each of those jobs cost $278,000 (see here).

Myth 2: Additional infrastructure spending is an effective way to stimulate the economy and create jobs.

Fact 2: In theory, infrastructure spending injects more money into the economy than other types of government spending. In reality, however, politicians rarely include infrastructure spending in stimulus bills. Instead, they spend money on items like transfers and tax cuts. Only 3 percent of the last stimulus went to infrastructure.

Economists on both sides of the aisles argue that one reason why the stimulus failed is that it wasn’t designed properly. Stanford University’s John Taylor, for instance, has argued that although much money was spent, very little stimulus money was spent in the form of actual government purchase. In a paper with he co-authored with John Cogan, Taylor finds that, out of the total $682 billion package, federal infrastructure spending was just $0.9 billion in 2009 and $1.5 billion through the first half of 2010—or less than four-tenths of 1 percent.

Taylor and Cogan also noted that most of the money generated by tax cuts was saved, not spent, and that the money that went to state governments was spent to reduce the states’ reliance on borrowing and on other “non-purchase” items, such as transfer payments, subsidies, and interest payments. In other words, the additional money that went to states and taxpayers didn’t change a thing. Taylor claims that a better-designed stimulus would have probably been more effective.

But experience tells us that the next stimulus won’t be any better. As the chart above shows, only 3 percent of the last stimulus went to infrastructure spending. Why? Because such programs are not political winners. For one thing, they take too long to produce results. Therefore they always take a back seat to politically-popular tax credits and transfers to the states.

Furthermore, while it may be true that additional infrastructure spending would have proved more effective than the current stimulus, that doesn’t change the fact that once the stimulus money goes away, the jobs and increased demand also disappear, and the government is left holding the debt.

Myth 3: Tax rebates will stimulate the economy.

Fact 3: The evidence says they don’t. First, people usually save the extra money. Second, even if tax rebates did increase consumption, companies don’t hire employees or build new plants because of a one-time boost.

This chart shows how personal disposable income jumped thanks to the 2008 tax rebate, the tax credits in the stimulus, and the 2010 payroll tax cut. It also shows that personal consumption did not increase noticeably as a result of these government actions. In fact, formal statistical work by Joel Slemrod, a professor of tax policy at the University of Michigan, has shown that rebates generally produce no statistically significant increase in consumption. Basically, tax credits and rebates produce greater savings, not greater consumption.

The theory that tax rebates and payroll tax cuts will result in an increase in consumption suffers from several serious problems. First, it assumes people don’t realize that the extra cash flow is temporary and that businesses don’t realize that the new consumption won’t last. Tax rebates, for example, assume that if people get extra money to increase their consumption, businesses will then expand production and hire more workers. But this is not true. Even if producers notice an upward blip in sales after the rebate checks go out, they will know it's temporary. Companies won't hire more employees or build new factories in response to a temporary increase in sales. Those who are foolish enough to do so will go out of business.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Matt Welch Discusses the Healthcare Mandate Burden on States and Tim Giethner with Judge Napolitano

Thu, 07 Jul 2011 00:00:00 EDT

Reason Editor in Chief Matt Welch appeared on Freedom Watch to discuss how some states are having trouble meeting the federal government's new healthcare laws and whether Tim Giethner will leave after a budget agreement in Congress. Air Date: July 6, 2011.

Approximately 7 minutes.

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Anthony Randazzo Discusses Greece Riots, US Debt and China's Growing Economy on The Alyona Show

Tue, 05 Jul 2011 00:00:00 EDT

Reason Foundation's Director of Economic Research Anthony Randazzo discusses Greece's ongoing debt problems on Europe's economy, whether China will become the major lender in the world, and likely scenarios to U.S.'s unresolved budget crisis on Russia Today's "The Alyona Show". Airdate: June 28, 2011.

About 10 minutes.

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Shikha Dalmia Discusses The Aftermath of the General Motors Bailout with the Subcommitte on Regulatory Affairs

Mon, 27 Jun 2011 00:00:00 EDT

Reason Foundation's senior policy analyst Shikha Dalmia testifies at the "Lasting Implications of the General Motors Bailout," held by the Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending. The hearing examined the aftermath of U.S. taxpayers' bailout of General Motors and sought to learn lessons about the lasting implications and unintended consequences of the federal government's intervention into business operations.

Hear Shikha Dalmia at the 20.45 minute mark.

Air Date: June 22, 2011.

Approximately 38.06 minutes

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Veronique de Rugy: The Facts about Transportation Spending

Fri, 17 Jun 2011 00:00:00 EDT

Editor's Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

The United States spends about $160 billion annually on highways, with about one-fourth of that total coming from the federal government. Federal highway spending is funded mainly through gas and other fuel taxes that are paid into the Highway Trust Fund. In recent years, however, the amount of money Congress has spent out of the general fund has exceeded the dedicated trust funds set aside for highway spending.

Myth 1: Highways and roads pay for themselves thanks to gasoline taxes and other charges to motorists.

Fact 1: They don’t. Gas taxes and other highway user fees pay less today than ever before.

In 1957 about 67 percent of highway funds came from user fees. Forty years later the revenue from user fees has shrunk to just 50 percent of total highway funds. Indeed, user fee revenue as a share of total highway-related funds is now at its lowest point since the Interstate Highway System was created.

And the difference is now made up by taxes and fees not directly related to highway use. These include revenue generated by sales and property taxes, general fund appropriations, investment income, and various bond issues.

This growing proportion of non-user revenue reveals a profound shift in the nature of highway funding, and has consequently led to increasing debate about the future of America’s highways. This discussion has also been fueled by the approaching expiration date this September for an important Highway Trust Fund law.

Which means that now is the time to think outside of the box and to consider privatizing America’s highways.

Myth 2: Proceeds from the federal gas tax are used to build and maintain the interstate highway system.

Fact 2: That was the promise made to taxpayers in 1956. Today, however, at least 25 percent of federal gas tax funds are diverted to non-highway uses including maintaining sidewalks, funding bike paths, and creating scenic trails.

Fuel tax revenues are now insufficient to maintain the current level of highway spending. As the Congressional Budget Office noted in its discussion of the weaknesses of the fuel tax system: It does not account for the costs of congestion, it is a fixed cost per gallon (meaning it does not adjust with inflation), and it provides insufficient revenues to pay for the costs that users impose on the system. Moreover, it is clear that the diversion of gas tax funds to non-highway projects is the biggest cause of the underfunding problem.

As Reason Foundation Director of Transportation Policy Robert Poole has explained:

The federal HTF was invented in 1956, promising motorists and truckers that all proceeds from a new federal gas tax would be spent on building the interstate system. They aren't. Congress has expanded federal highway spending beyond interstates to include all types of roadways. And since 1982, a portion of "highway user taxes" have been diverted to urban transit (non highway use). Today, the federal role in transportation includes maintaining sidewalks, funding bike paths, and creating scenic trails.

Poole estimates that some 25 percent of the gas tax goes to non-highway use. As the Federal Highway Administration’s “Highway Authorizations” table indicates, Congress allocates highway money to truck parking facilities, safety incentives to prevent operation of motor vehicles by intoxicated persons, grants for anti-racial profiling programs, magnetic levitation trains, and dozens of other non-road activities. The main diversion is to rail and public transit, which leads us to the next myth.

Myth 3: Increased spending on public transit will boost ridership. Therefore we need to transfer highway dollars to transit programs and increase state and local taxes to fund transit agencies.

Fact 3: There is no visible relation between transit funding and transit ridership. Despite huge increases in public transit funding over the past two decades, ridership has barely increased.

Despite huge increases in transit funding over the past two decades, ridership has remained constant. Using American Public Transportation Administration (APTA) data, the chart above reveals that ridership has barely changed as funding has drastically increased—especially if you control for the increasing number of transit systems, and the level of population growth over time.

Although transit funding in 1995 was eight times more than it was in 1978 (17.4 billion and 2.2 billion respectively), the total increase in ridership was only about 2 percent. Total ridership in 1978 (7.8 billion trips) was actually more than ridership in 1995 (7.7 billion trips)—the only difference was in the amount of funding. Between 1989 and 1996 ridership fell by 11 percent; again, this was while funding increased by 42 percent.

These funding increases have included federal, state, and local taxpayer assistance to transit. Moreover, about a quarter of these subsidies come directly from highway user fees. Cato Institute Senior Fellow Randal O’Toole claims that “because transit produces less than 5 percent of urban transport, while autos produce more than 90 percent, it is safe to say that most of the taxes supporting transit are subsidies from auto users to transit riders.”

The reasons for the shortcomings in transit ridership have less to do with the amount of available funds than with the fact that rail lines are expensive to build, maintain, and operate, and the fact that most transit systems have at some point been forced to significantly raise fares and/or curtail services, often leading to the loss of transit riders.

According to O’Toole, “Thanks in part to the high cost of rails, transit systems in Atlanta, Baltimore, Buffalo, Chicago, Cleveland, Philadelphia, Pittsburgh, St. Louis, and the San Francisco Bay Area carried fewer riders in 2005 than two decades before. Los Angeles lost 17 percent of its bus riders when it began building rail transit.” The fact that transit workers are generally members of public sector unions hasn’t helped either.

None of this means that transit agencies will never be able to attract new riders. But it does mean that simply throwing more money at transit isn’t the answer.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Veronique de Rugy: The Facts about the Alternative Minimum Tax

Fri, 10 Jun 2011 00:00:00 EDT

Editor's Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Myth 1: The Alternative Minimum Tax targets millionaires.

Fact 1: While the Alternative Minimum Tax was originally created to target millionaires, today it falls most heavily on non-millionaires.

The Alternative Minimum Tax (AMT) was created in 1969 to prevent 155 wealthy taxpayers from using deductions and credits to avoid paying any federal income taxes.

Here’s how it works. Taxpayers who are subject to the AMT must calculate their tax liability twice, once under regular income tax rules and again under AMT rules. If liability under the AMT proves higher, taxpayers pay the difference as an add-on to the regular tax. The difference paid is their AMT.

However, mainly due to the failure to index the AMT for inflation in 1981 when the regular income tax was indexed, the reach of the AMT has expanded over time to hit middle-income people it was never intended to tax. As a result, the AMT impacts a growing share of the population. According to the Congressional Budget Office, last tax season 4.5 million taxpayers were affected by the alternative minimum tax, an increase of over 4 million taxpayers since 1970.

Until 2000, less than 1 percent of taxpayers paid the AMT in any given year; by 2008, 3 percent of taxpayers were subject to the AMT. And its costs go far beyond increased tax liabilities.

This chart shows the composition of taxpayers affected by the Alternative Minimum Tax in 2009 by adjusted gross income (AGI), using data from the 2010 CBO Brief, “The Individual Alternative Minimum Tax.”

As you can see, the AMT hits far more than the highest-income individuals. In fact, only 10 percent of AMT revenue came from taxpayers making above $500,000 and only a fraction of those people are millionaires.

Also, the majority of AMT revenue came from taxpayers in the $200,000-$500,000 (in 2009 dollars) income range while some 5 percent of taxpayers making less than $100,000 were liable for the AMT as well.

As we see, 23 percent of taxpayers with income between $100,000 and $200,000 have AMT liability.

This evidence stands in sharp contradiction with the original purpose of the AMT, which was to prevent 155 millionaires from using deductions and credits to avoid paying any federal income tax.

Myth 2: The AMT is family friendly.

Fact 2: Households with three or more children are four times more likely to pay the AMT than households with zero children.

The AMT disallows certain tax breaks, especially state and local tax deductions and the personal exemption. As a result, the AMT hits some taxpayers harder than others. Married couples with children and taxpayers in high-tax states are disproportionately hit by the AMT.

This chart compares AMT liability among taxpayers based on the number of children in their households in 2010, using data from the Tax Policy Center’s “Characteristics of AMT Taxpayers.” The number of children is defined as the number of exemptions taken for children living at home. As the numbers show, an increase in the number of children in a household was accompanied by an increase in the AMT liability. Thus 8.6 percent of households with three or more children had liability under the AMT. Essentially, if you have three or more children you pay over four times the amount of people who have no children.

Myth 3: The Republicans are the only party strongly opposed to the AMT.

Fact 3: While Republicans would be happy to repeal the AMT, Democrats are also opposed to it. That’s because almost 50 percent of AMT revenue comes from four Democratic strongholds: California, Massachusetts, New Jersey, and New York.

The AMT hits some taxpayers harder than others, especially those who would otherwise claim large deductions for their state and local taxes.

This chart illustrates the proportion of AMT payers in various states using data from the Tax Policy Center (“Alternative Minimum Tax by State, Tax Year 2008”). Nearly 48 percent of the total revenue from the AMT is collected from just four states--California, Massachusetts, New Jersey, and New York--amounting to one-twelfth of all states. The remaining 52 percent is shared by the rest of the country.

Nearly half of all states pay less than 0.7 percent of total AMT revenues each, but in California taxpayers who paid the AMT made up 22 percent of total AMT revenues, while 15.5 percent of AMT revenues came from New York, 7 percent from New Jersey, and 3.5 percent from Massachusetts. The bottom line is that the AMT hits people in some states harder than others.

This is why Democrats such as Rep. Charles Rangel (D-N.Y.), are so upset about the AMT. The tax hits liberal states the hardest.

In addition, taxpayers also have to deal with what’s called the “real bracket phenomenon.” Bracket creep occurs when people experience an increase in wages, salary, or other income that moves them from one tax bracket to the next highest bracket. For instance, because the AMT isn’t indexed for inflation, growth in nominal income tends to raise the AMT liability more than regular income tax liability. This phenomenon is especially pernicious in places with a high cost of living like New York City, where some employers offer generous salaries to offset sky-high rents and other city-related costs. Since the inflation index used to set the brackets does not appropriately take these localized costs into account, the more people earn to make up for the high cost of living, the more likely they are to be hit by the AMT.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Three Reasons Not to Fund Art With Taxes

Wed, 08 Jun 2011 08:00:00 EDT

A few weeks back, Hollywood movie stars and groups such as the Creative Coalition stormed Washington, D.C. to lobby for increased taxpayer funding of the arts. Most memorably, Oscar-winning actor Kevin Spacey told Hardball's Chris Matthew that Abraham Lincoln was a huge theater fan who "understood that he needed the arts to replenish his soul." (Not surprisingly, Spacey didn't mention where Lincoln was assassinated or the profession of his killer).

But funding the arts with taxapayer dollars is a bad idea for at least three reasons.

1. Publicly financed art is easily censored art. Last December, the National Portrait Gallery almost immediately pulled a four-minute video called "A Fire in My Belly" after complaints from the Catholic League and politicians such as Rep. Eric Cantor (R-Va.) and House Speaker John Boehner (R-Ohio), who objected to images of ants crawling over a crucifix. It's hard to imagine a private museum so quickly and cravenly pulling an offending piece. But when the taxpayer is footing the bill, the most easily aggrieved among us yields a thug's veto. Indeed, in February, scandalized Rep. Anthony Weiner (D-NY) even called for getting rid of a 1922 statue in New York City due to what he says is its sexist portrayal of women.

2. We're broke. Advocates of public funding for the arts routinely argue that the budget of groups such as the National Endowment for the Arts comes to just pennies per citizen and the cost of just one Pentagon bomber is comparatively huge. But government at every level is flat broke, so it's all money we don't have. Defense spending, which has jacked up by over 70 percent in inflation-adjusted dollars since 2001, should be cut drastically. But that doesn't mean smaller items should get a pass or that taxpayers should pony up for another season of Dr. Who reruns on PBS.

3. It's unnecessary. NEA head Rocco Landesman has defended grants to groups such as the San Francisco Mime Troupe on the grounds that it is a world-famous outfit that has contributed mightily to the stage. Which is another way of saying it should have little to no trouble finding private patrons to help it out. Americans give around $13 billion a year in private donations to the arts. That's a lot of money and if it's not enough to fund every request, groups such as the San Francisco Mime Troupe will just have to figure out how to better work the crowd.

About 2.45 minutes.

Produced by Meredith Bragg and Nick Gillespie, who also hosts.

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Veronique de Rugy: The Facts about the Government's Medicare Cost Projections

Fri, 03 Jun 2011 00:00:00 EDT

Editor’s Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Myth: The government’s cost projections are reliable.

Fact: They are not. No matter what governmental body does the scoring, it is almost invariably unreliable.

In 1967 long-run forecasts estimated that Medicare would cost about $12 billion by 1990. In reality, it cost more than $98 billion that year. Today it costs $500 billion.

When it comes to the federal government, massive cost overruns are the rule, not the exception. The $800 billion cost of the war in Iraq dwarfs the $50-60 billion that Mitch Daniels, then director of the Office of Management and Budget, predicted at the outset. In light of these numbers it’s interesting to remember that Larry Lindsey, President George W. Bush’s economic advisor, was fired for projecting that the war could cost between 1 and 2 percent of GDP back in 2002 (roughly between $100 and $200 billion).

Strangely, lawmakers seem to never expect these extra costs even when the excesses take place under their own noses. The Capitol Hill Visitor Center, an ambitious three-floor underground facility, originally scheduled to open at the end of 2005, was delayed until 2008. The price tag exploded from an original estimate of $265 million in 2000 to a final cost of $621 million.

At the heart of the problem is the massive amount of budget gimmicks, the abuse of rosy scenarios, the emergency spending loopholes, and a lack of fiscal discipline by lawmakers who just can’t stop spending the taxpayers’ money.

This chart compares Congressional Budget Office long-term projections of the debt held by the public from 2010 with long-term projections calculated in 2007. In 2007, the CBO projected that the debt held by the public would surpass 60 percent in 2023. Note that this long-term projection incorporated policy changes that were deemed likely at the time. Using the same methodology last year, the CBO projected that the debt will exceed 60 percent of GDP by the end of 2010. In the three years between projections, the debt milestone has accelerated by 13 years. This unforeseen acceleration is worth careful consideration; as the government consumes more credit, less will be available to the private sector.

In other words, even even short-term economic projections are frequently unreliable—especially when the projections are done by the government.

The above chart shows what a more realistic path for Medicare spending may look like. It compares the long-term projections of Medicare costs under the current law (the 2011 Trustees Report) with the Centers for Medicare and Medicaid Services’ Office of the Actuary’s alternative projections (2011 Trustees Report Alternative). The latter projections were released as a “best estimate” of future Medicare expenditures to address the “likely understatement of current-law projections.”

These projections primarily differ in their assumptions about the plausibility of drastic payment-rate cuts. If such cuts do not materialize, Medicare will cost tens of billions more each year than current law projects.

Furthermore, under the Patient Protection and Affordable Care Act, physician payments are tied to a sustainable growth rate mechanism (SGR), which adjusts repayment rates in order to cap physician-related spending. Since 2001, physicians have been scheduled to receive at least a 5 percent reimbursement cut each year under SGR; and this cut has been overridden by Congress every year except 2002.

In 2012, physician payments are scheduled to decrease by 29.4 percent—an update which is extremely unlikely to occur. So while the Board of Trustees is legally bound to incorporate these cost savings into its projections, the Office of the Actuary has formed a more realistic baseline which incorporates increasing physician repayments into the total cost of Medicare.

Under the current-law baseline, Medicare spending is projected to grow from 3.99 percent of GDP in 2020 to 6.25 percent of GDP in 2080; under the alternative scenario, Medicare spending is projected to grow from 4.31 percent of GDP in 2020 to 10.36 percent of GDP in 2080. In nominal terms, this is a cost underestimation of $2.7 trillion dollars by the year 2080.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Adrian Moore, Len Gilroy, Tim Cavanaugh & Anthony Randazzo: On Privatization & Government Reform

Wed, 25 May 2011 00:00:00 EDT

Is a Privatization Revolution coming?

At Reason Weekend 2011, Reason Foundation's annual donor event, Adrian Moore opens the panel discussion with the history and success of Sandy Springs, GA, and how privatization on every level of government is increasing. Leonard Gilroy describes his work aiding debt burdened state and local governments to privatize services. Tim Cavanaugh talks about the legal hurdles of reducing public worker pensions and what states can do to reform. And tackling the economic policies at the federal level in Washington DC, Anthony Randazzo explains his work in ending Freddie Mac and Fannie Mae.

About 57 minutes. Filmed by Alex Manning and Paul Detrick; edited by Joshua Swain.

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Matt Welch Talks Public Research Funding on Freedom Watch

Wed, 18 May 2011 06:00:00 EDT

Reason Magazine Editor in Chief Matt Welch appeared on Freedom Watch With Judge Napolitano to talk about public research funding.

Air Date: May 17, 2011.

Approximately 8:30 minutes

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Bob Poole and Adrian Moore: Why Highways Beat High-Speed Rail

Fri, 13 May 2011 15:00:00 EDT

What are the best ways to get America moving in terms of transportation?

At Reason Weekend 2011, Reason Foundation's annual donor event, Adrian Moore and Robert Poole spoke about the right ways to create a 21st-century transportation policy. Moore takes heavily documented aim at high-speel rail projects as tax-funded boondoggles that will certainly fail to hit ridership goals. Poole argues that pie-in-the-sky projects such as high-speed rail divert limited federal funds from much-needed infrastructure improvement and fail to tap into private capital funds that could help expand the nation's transportation network.

About 45 minutes. Filmed by Alex Manning and Paul Detrick; edited by Joshua Swain.

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Nick Gillespie Talks Selling Off the Post Office on Varney & Co.

Wed, 11 May 2011 09:30:00 EDT

Reason.tv's Editor-in-Chief Nick Gillespie joined Stuart Varney on Fox Business Network's Varney & Co. to discuss selling off the U.S. Postal Service. Airdate: May 11, 2011.

Approximately 4:45 minutes.

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Anthony Randazzo Discusses if the GOP is Serious on Cutting Spending with Judge Napolitano

Wed, 11 May 2011 00:00:00 EDT

Director of Economic Research at Reason Foundation Anthony Randazzo appeared on Judge Napolitano's Freedom Watch to discuss if the GOP is serious about cutting spending and the debt or whether these are empty promises to keep Tea Party support. Air Date: May 9, 2011.

Approximately 5 minutes.

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Anthony Randazzo Discusses the Debt Ceiling on The Alyona Show

Wed, 11 May 2011 00:00:00 EDT

Director of Economic Research at Reason Foundation Anthony Randazzo appeared on Russia Today's The Alyona Show with co-director of the Center for Economic and Policy Research Dean Baker to discuss the postponed debt ceiling debate and how the politics may not cure the debt. Air Date: May 10, 2011.

Approximately 9 minutes.

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Nick Gillespie Discusses a Divided America on CNN's In The Arena

Wed, 11 May 2011 00:00:00 EDT

Reason.tv's Editor-in-Chief Nick Gillespie joined The Nation's Katrina vanden Heuvel on CNN's In the Arena with Eliot Spitzer to discuss how divided both Washington and Americans are by ideology today and whether there still is common ground. Airdate: May 11, 2011.

Approximately 7.35 minutes.

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Anthony Randazzo Discusses the Debt Debate on Freedom Watch with Judge Napolitano

Wed, 11 May 2011 00:00:00 EDT

Director of Economic Research at Reason Foundation Anthony Randazzo appeared on Judge Napolitano's Freedom Watch to discuss the White House's push to increase the debt ceiling and the politics of cutting the debt. Air Date: April 29, 2011.

Approximately 8.09 minutes.

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Matt Welch Discusses Poll Results from the Reason-Rupe Survey on Freedom Watch

Mon, 09 May 2011 00:00:00 EDT

Reason Magazine editor in chief Matt Welch appeared on Judge Napolitano's Freedom Watch to discuss poll results from the new Reason-Rupe Survey measuring the public's view on reducing the debt and cutting spending and what effect this will have on the next election. Air Date: May 6, 2011.

Approximately 3.28 minutes.

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Veronique de Rugy Tells the Truth about Taxes on Bloomberg

Fri, 22 Apr 2011 00:00:00 EDT

Editor’s Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Myth 1: The wealthy aren’t paying their fair share.

Fact 1: The wealthy disproportionately fund the United States federal government.

As you can see, the top earning 1 percent of Americans (or 1.4 million returns making more than $380,000) paid 38 percent of federal personal income taxes. However, they made only 20 percent of income. The top 5 percent of income earners pay almost 60 percent of income taxes and make almost 35 percent of all personal income. The Americans at the lower half of the income spectrum (or 70 million returns) paid 2.7 percent of the total. This chart also shows that roughly half of taxpayers pay for almost all of the federal personal income taxes.

It means that the income tax in America is extremely progressive.

This week, E.J. Dionne's Washington Post column quoted writer David Cay Johnston: "The effective rate for the top 400 taxpayers has gone from 30 cents on the dollar in 1993 to 22 cents at the end of the Clinton years to 16.6 cents under Bush. So their effective rate has gone down more than 40 percent.”

In fact, the top 400 aren't a static group. There's lots of income mobility in and out of the "top 400" every year, and most of their income is due to highly fluctuating capital gains (which is taxed lower than ordinary income). IRS data for the top 400 over a 15-year period show that 72 percent of them appeared only once. A little more than 12 percent appeared twice and a little over 15 percent appear three times or more. Trying to fine tune tax policy to attack the "top 400" will only tax different people tomorrow than are there today.

Myth 2: Top earners in the United States are millionaires.

Fact 2: Only 2% of the top 10% of earners are millionaires.

When Americans think of the top earners in the United States, they often overstate the earnings of those with the highest reported earnings. The top 10 percent of United States tax returns report $114,000 in earnings, the top 5 percent of households report $169,000 in earnings, and the top 1 percent report $380,000.

Furthermore, these earnings should be taken in their geographic context. This chart shows what a worker would need to earn in each of 5 different cities in order to maintain the same standard of living as a person living in DC making $250,000.

As we can see, it takes roughly $170K in Kansas or Georgia to have the standard of living of someone making a $250,000 in Washington DC. However, to have that standard of living in New York, you need almost $400,000.

Myth 3: All Americans pay income taxes.

Fact 3: An estimated 45% of Americans will pay no federal income taxes this year.

According to the Tax Policy Center, this tax season, an estimated 45 percent of tax units will pay no federal income taxes. In 2009, federal non-income taxpayers were distributed throughout the earnings spectrum, with 26.3 percent of tax returns reporting less than $10,000 paying no income tax, 29.1 percent of those making between $10,000 and $20,000 paying no income tax; the remaining 44.6 percent of Americans not paying income taxes were distributed throughout all cash income levels.

Myth 4: The key to our deficit problems rests in our ability to increasing the top marginal tax rates leads to increased tax revenues

Fact 4: From 1930 to 2010, tax revenue collection in the United States has never topped 20.9 percent, averaging 16.5 percent of GDP over these 80 years - despite drastic fluctuations in the rate of taxes on the wealthiest Americans.

This chart shows the historical path of federal taxation as a percentage of GDP using the earliest records available from the Office of Management and Budget and top marginal tax rate data from the Tax Policy Center. In red, the historical path of the highest marginal income tax rates (right axis), in green, historical federal revenues as percentages of GDP (left axis). From 1930 to 2010, tax revenue collection in the United States has never topped 20.9 percent of GDP, averaging 16.5 percent of GDP over these 80 years.

This comes despite the drastic historical fluctuation in the rate of taxes on the wealthiest Americans.

During the time period examined above, the rate of income taxation on the highest earning Americans has fluctuated drastically, from 25 percent of income in 1930 to 92 percent of income in the early 1950’s. Despite these vast differences in these top marginal rates, the total percentage of GDP the federal government has collected in revenue has changed little.

The bottom line is that any claim that the revenue problems could be solved by raising revenue as a percentage of the economy above 19 percent is unrealistic. Also, raising the top marginal rates has never proven to generate sustainable increase in revenue.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

47 Ways to Say "IRS" ... What do those initials really stand for?

Thu, 14 Apr 2011 09:00:00 EDT

The "Internal Revenue Service" is such a bland name for an agency that stirs so much passion.

With Tax Day just around the corner, the time is right to consider what the initials "IRS" really stand for.

WARNING: Immature Subject Matter. Viewer discretion is advised.

Approximately 1.40 minutes

Produced by Ted Balaker. Written by Balaker, Meredith Bragg, Tim Cavanaugh, Paul Feine, Nick Gillespie, Hawk Jensen, Damon Root, Peter Suderman, Josh Swain, Zach Weissmueller, and Matt Welch

Related videos:

44 Ways to Say TSA

Why Aren't the Rich Paying 50% in Taxes?

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Sandy Springs, Georgia: The City that Outsourced Everything

Tue, 12 Apr 2011 09:00:00 EDT

While cities across the country are cutting services, raising taxes and contemplating bankruptcy, something extraordinary is happening in a suburban community just north of Atlanta, Georgia.

Since incorporating in 2005, Sandy Springs has improved its services, invested tens of millions of dollars in infrastructure and kept taxes flat. And get this: Sandy Springs has no long-term liabilities.

This is the story of Sandy Springs, Georgia—the city that outsourced everything.

Approximately 8 minutes.

Produced by Paul Feine and Alex Manning.

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Matt Welch Discusses Averting Government Shutdown on Freedom Watch

Tue, 12 Apr 2011 00:00:00 EDT

Reason Magazine editor in chief Matt Welch appeared on Judge Napolitano's Freedom Watch to discuss the government avoiding shut down and what the next moves are for Obama and the Republican House. Air Date: April 11, 2011.

Approximately 7.40 minutes.

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Nick Gillespie, Veronique de Rugy Talk Budget Battles on Stossel

Fri, 08 Apr 2011 11:00:00 EDT

Reason's Nick Gillespie and Mercatus Center economist (and Reason columnist) Veronique de Rugy talk budget battles with John Stossel on Fox Business Network.

Gillespie and de Rugy argue that while Barack Obama's proposed budget for 2012 is not worth discussing, Rep. Paul Ryan's widely discussed GOP plan doesn't cut outlays enough either. More importantly, says Gillespie, a country as rich and yet as broke as ours needs a fundamental rethink of entitlement spending for the middle class and well-off.

Read de Rugy & Gillespie on Ryan's plan at Reason.com.

Air date: Thursday, April 7, 2011.

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Why Aren't the Rich Paying 50 Percent in Income Taxes?

Fri, 08 Apr 2011 10:00:00 EDT

Tax Day (April 18) is fast approaching, which means anxiety and night sweats for about 99 percent of us.

And bitching and moaning by those at the top of the income pyramid about how they aren't forced to pay even more in taxes. (The top 1 percent of filers pay about 40 percent of income taxes).

Secretary of State and cattle-futures queen Hillary Clinton, super-investor Warren Buffett, and best-selling author Stephen King have all recently carped about how rich folks like them should be paying more in taxes. King recently told a Florida rally, "As a rich person, I'm paying 28 percent in taxes. What I want to ask you is, why am I not paying 50?"

But when it comes to the country's balance sheet, the U.S. doesn't have a revenue problem or a tax-rate problem. We've got a spending problem. Since 1950, revenue from all sources has averaged around 18 percent of Gross Domestic Product, despite top tax rates that have fluctuated from over 90 percent to the high 20-percent range. Regardless of all efforts to jack up revenue (or reduce it), that's what the government can expect to work with.

Yet spending has averaged about 20 percent of GDP - and is currently at a whopping 25 percent of GDP, a figure not seen since World War II. President Obama's budget plan forecasts spending at 23 percent of GDP over the next decade while Rep. Paul Ryan's GOP plan calls for 20.5 percent. There's your deficit right there, folks.

But King, Clinton, and Buffett - and you, too - can always pay more to retire federal debt held by the public. Just go to Treasury Direct and make a voluntary donation to reduce the national debt held by the public. So far in calender 2011, Treasury has pulled in an $125,000! Which means there's only about $8.99 trillion to go.

Written and produced by Meredith Bragg and Nick Gillespie. About 2 minutes.

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Final Countdown to Government Shutdown!

Fri, 08 Apr 2011 00:00:00 EDT

The following video contains shocking scenes of the dire consequences of a federal government shutdown.

Viewer discretion is advised.

Produced by Meredith Bragg and Nick Gillespie. Written by Gillespie. Subscribe to our YouTube Channel to receive automatic notifications when new material goes live.

Veronique de Rugy on Bloomberg Discusses The Truth About Spending Cuts

Fri, 08 Apr 2011 00:00:00 EDT

Editor’s Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Myth 1: Spending cuts will derail the economy.

Fact 1: The academic literature shows that successful cases of fiscal adjustment relied overwhelmingly on spending cuts, not tax increases.

While the political debate heats up over the short-term effects of spending cuts, there is a wide academic consensus that spending cuts are a major factor for achieving lasting debt reduction. In particular, empirical studies have shown that fiscal consolidations based upon spending cuts have been more effective than tax-based consolidations.

This chart consolidates data from five peer-reviewed studies examining the ratio of spending cuts to revenue measures in successful fiscal consolidations. It illustrates that the average successful fiscal consolidation was comprised of 80 percent spending cuts and 20 percent revenue measures.

An independent analysis performed by the American Enterprise Institute economists Andrew Biggs, Kevin Hassett, and Matthew Jensen confirms the literature’s finding that fiscal consolidations that reduce ratios of debt to GDP tend to be based upon reduced government outlays rather than increased tax revenues. This result holds whether fiscal consolidations are defined in terms of improvements in the cyclically-adjusted primary budget deficit or in terms of pre-meditated policy changes designed to improve the budget balance.

Biggs, Hassett, and Jensen reviewed the extensive existing literature on fiscal consolidations. They also conducted their own data analysis to study that question. They used a large data set covering over 20 Organization for Economic Co-Operation and Development countries and spanning nearly four decades to isolate over 100 instances where countries took steps to address their budget gaps. Some of these fiscal consolidations were spending-based while others relied more on taxes. Here is what they found:

Our findings are striking: countries that addressed their budget shortfalls through reduced spending were far more likely to reduce their debt than countries whose budget-balancing strategies depended upon higher taxes.

The typical unsuccessful fiscal consolidation consisted of 53 percent tax increases and 47 percent spending cuts. By contrast, the typical successful fiscal consolidation consisted of 85 percent spending cuts. These results are consistent with a large body of peer-reviewed research.

These findings are also consistent with the research of Harvard’s Alberto Alesina and Silvia Ardagna (here is another paper by Alesina on the issue).

The debate, of course, is far from settled. Yet as Biggs explained in his March 30, 2011 testimony before the House Ways and Means Committee:

[The debate] is not about whether spending-based fiscal consolidations are more likely to succeed than tax-based consolidations. Even using the IMF study’s methods, spending-based consolidations are more likely to reduce deficits and debt than tax-based consolidations.

Second, the IMF study does not dispute that spending-based fiscal consolidations generate superior short-term economic outcomes than tax-based consolidations.

In other words, the least we can say about fiscal consolidations comprised primarily of spending cuts is that they shrink both deficits and the debt. In that context it is worth pointing to the work of former Obama administration Council of Economic Advisers Chair Christina Romer and her economist husband David Romer, which shows that increasing taxes by 1 percent of GDP for deficit-reduction purposes leads to a 3 percent reduction in GDP.

Myth 2: We can’t balance the budget without raising taxes.

Fact 2: We can balance the budget simply by holding spending constant.

Fiscal balance can be achieved by holding spending constant, and by driving it toward its historical equilibrium.

In Reason magazine’s March issue, Nick Gillespie and I proposed a 10-year balanced budget plan that would systematically reduce the projected growth in outlays (spending that hasn’t occurred yet and hasn’t even been appropriated) so that it equals the 19 percent of GDP that the Congressional Budget Office projects the federal government will raise as revenue if the current tax system is left unchanged. Effectively, under this plan, spending is frozen at its current levels and allowed to grow only for inflation. See the chart below.

In other words, we can balance the budget over the next decade without raising taxes if we ratchet down spending from its current level of 25 percent of GDP to 19 percent -- a figure that would still leave spending well above the 18.2 percent of GDP that President Bill Clinton spent in his last year in office, a time when no one was complaining about a skin-flint federal government.

Another solution would be for Congress and the president to agree to reduce 1 percent from the federal budget each year until balance is reached. As my Mercatus Center colleague Jason Fichtner explains in this paper, the 1 percent reduction would be a real cut in spending, not just a reduction in the rate of growth of government. Once a balanced budget is reached, then spending could again be allowed to grow, but at rates consistent with the growth in the overall economy so that relative fiscal balance is maintained. A 1 percent reduction in spending does not necessarily mean a 1 percent cut across the board. Under this plan, Congress could still set priorities.

As Gillespie and I explained earlier this week in our piece assessing Rep. Paul Ryan’s (R-Wisc.) Path To Prosperity plan,

if cuts such as these are not possible, it would be better to give up any pretense that we will ever restore the barest semblance of sanity to the federal budget and get on with fiddling as Rome burns. If we're going to continue hosting a party whose bill is unpayable, we might as well enjoy ourselves.

Myth 3: Paul Ryan’s plan will dramatically cut spending.

Fact 3: Ryan’s plan reduces spending between FY2011 and FY2012. After that it reduces the growth of spending. But overall spending grows by $1.1 trillion over 10 years under Ryan’s plan.

At first glance, House Budget Chairman Paul Ryan’s FY2012 Budget Resolution is a step in the right direction. With a determined moniker, “The Path to Prosperity,” the Republican roadmap is oriented on spending cuts, debt reduction, and credible revenue expectations.

The plan is not too surprising to those of us who have followed Ryan’s previous budget crusades. It concentrates on cutting government spending--reforming two of our three largest autopilot programs, Medicare and Medicaid--while recognizing that attempts at raising tax revenue will not support economic growth or fix our spending problem.

The new plan realistically projects that tax revenue as a percentage of the economy will grow as a result of economic growth and not from tax rate hikes. Under Ryan’s plan tax revenue will consume 17.1 percent of the wealth created by American families, a number that is more in line with the government’s abilities to collect money. This is a serious improvement over the Deficit Commission’s plan, which called for reducing the deficit by raising tax revenue to an unprecedented 21 percent of GDP--an approach that is little more than wishful thinking on the part of its authors.

However, a look at the data shows that while the Ryan plan will cut spending the first year, it then proceeds to slow down the rate of spending. In nominal terms, spending increases from $3.6 trillion in 2011 to $4.7 trillion in 2021. That equates to a $1.1 trillion increase over that period.

Of course, you wouldn’t know that anything about those spending increases under the Ryan plan if you only read the recent headlines wailing about "the end of progressive government."

All things considered, Ryan’s proposal is a definite improvement over the Deficit Commission’s plan to increase spending by $1.6 trillion over 10 years and it’s also a big improvement over the president’s budget which increases spending by $1.9 trillion over the same period.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Veronique de Rugy Discusses the Truth About Deficits and the Debt

Fri, 01 Apr 2011 00:00:00 EDT

Editor’s Note: Reason columnist and Mercatus Center economist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Myth 1: Debt and deficits are a disease that can only be cured by raising taxes.

Fact 1: Debt and deficits are only a symptom. The disease is overspending. And tax increases are no cure. Besides, even if we could balance the budget by raising taxes it wouldn’t stay balanced so long as programs like Social Security, Medicare, and Medicaid remain unreformed.

Polls reveal that debt and deficits have become defining issues in American politics. While these issues are indeed important and the American people are justifiably concerned about the level of debt our nation is racking up, they are only symptoms of the real problem: overspending. America is living beyond its means and is projected to continue doing so into the foreseeable future.

The above chart compares tax revenues and government spending as a percentage of GDP from 1930 to the year 2084, using Congressional Budget Office (CBO) projections for the years 2011 to 2084.

As you can see, in the past, tax revenues have averaged 15.9 percent of GDP. During recent years, revenue collection has slightly increased, averaging 18.5 percent of GDP during the 1990s, and averaging 17.5 percent of GDP during the first decade of the new millennium. Notably, the federal government has never been able to collect 21 percent of GDP in tax revenues. It defies reality to think that it will be able to do so now. That’s why the CBO estimates that revenues will remain fixed at 19.3 percent of GDP into the future.

Yet the CBO anticipates that from 2012 through 2021, the federal government will spend, on average, 23.3 percent of GDP—a higher level of spending as a percentage of GDP than the government has ever been able to collect.

Myth 2: There is no relationship between high interest rates and deficits. And even if there was, interest rates remain at all-time lows.

Fact 2: That may have been true once, but the data now shows that investors anticipate an increase in both interest rates and deficits.

For the last 20 years, economists have looked for evidence that deficits lead to higher interest rates. In 1993, for instance, North Carolina State University economist John Seater surveyed the literature on deficits and interest rates and concluded that the evidence is “inconsistent with the traditional view that government debt is positively related to interest rates.” But George Mason University economist Arnold Kling argues that economists haven’t seen a correlation between budget deficits and interest rates because foreign investment in U.S. assets has increased over the years, dulling the impact of fiscal policy. The real question is what happens if that investment slows or stops.

Moreover, deficits have reached a level that economists haven’t really studied before. Current circumstances remind Kling of “a guy jumping out of a building from the 10th floor, passing the third floor, and saying, ‘It’s all fine so far.’” Deficits do not matter up to a certain level. But at what level do we hit the ground with a resounding splat?

Here is what we do know: To get deficits under control the federal government could cut spending, increase taxes, or do some combination of both. Neither of these policies is popular; hence the temptation to print money (or “monetize the debt”) to pay the bills. The resulting inflation would reduce the value of each dollar, and it would introduce high levels of uncertainty into the economy. Imagine what it would be like to try to calculate the net present value of your investment in an environment where you can’t predict what your dollars will be worth tomorrow. Such circumstances mean less innovation and less entrepreneurship, and therefore less economic growth and more hardship.

The Federal Reserve may be reluctant to take the inflationary route. But investors know that other central banks have done so in the past and that such a scenario could happen again. In exchange for extending more loans to a federal government that has become a riskier borrower, lenders will ask for an inflation premium.

As the chart below illustrates, a look at the yield curve signals that investors are indeed expecting inflation and an increases in rates.

The yield curve for U.S. Treasury securities, which reflects the functional knowledge of investors, provides a revealing look at investor expectations about the interest rates. In finance, the yield curve depicts the relationship between interest rates and the time to maturity of the debt. Normally, these curves slope slightly upward, reflecting investor tradeoffs between increased returns and time to maturity. However, when investors are concerned about inflation or economic uncertainty, the normally gently sloping curve can become much steeper, as investors turn away from holding securities long-term and thus drive yields higher.

Even now, the steepness of the yield curve for U.S. Treasury securities shows that investors expect interest rates and inflation to become higher in the future. Such expectations can lead investors to sell longer-term Treasury securities due to the predictable fact that when interest rates increase, bonds with longer maturities perform worse. In turn, that depresses the prices of those bonds and drives their yields higher.

Interestingly, in February China joined PIMCO (one of the world’s largest bond companies) in selling long-term U.S. Treasury bonds.

Understanding the relationship between maturity and interest rates sheds light on this behavior. Since 2007, China has been systematically transitioning its U.S. debt holdings to short-term debt. In June 2009, the most recent month for which data is available, China’s holdings of U.S. debt were 12 percent of its total holdings, up from 3 percent in June of 2008.

In future years, after more research about the current period has been done, economists may conclude that deficits did lead to higher interest rates.

Myth 3: Debt and deficits may be a problem, but we don’t have to fix it now.

Fact 3: Debt and deficits are having an immediate negative impact on the economy.

Even in the absence of a crisis, the effects of persistent deficits remain substantial. As the government borrows, some people delay spending and investment in anticipation of future tax increases. Others will not invest in the economy or start new businesses as government borrowing consumes a greater portion of the available capital. All of this hurts the economy. Economists use the term “crowding out” to refer to this contraction in economic activity that follows from deficit-financed spending.

The chart above uses data from two CBO papers forecasting the effect on GDP per capita that crowding out may have and contrasting that with commonly-used CBO projections. The red line, which uses data from a presentation to the Fiscal Commission in June 2010, shows per capita GDP growth simply shrinking around the year 2022 due to crowding out. The blue line shows another projection of the impact of crowding out that starts shrinking GDP per capita in 2034. The contrast with the black line, which uses data generally referenced by scholars and government officials, is striking.

In other words, regardless of whether CBO’s original or updated predictions materialize, it is very likely that the people of the United States will feel the negative impacts of high debt and deficits driven by overspending. Our country risks getting caught in a downward, potentially unmanageable spiral.

The chart above shows the scale of the spending cuts that would be required to close the fiscal gap, or to stop the debt from growing as a percentage of GDP, through 2035. These estimates are conservative; they do not incorporate the feedback effects of increasing debt and deficits on the economy. Nonetheless, the longer we wait the more dramatic the required cuts will be.

If action is taken this year, lawmakers could close the fiscal gap through 2035 by reducing primary spending by 4.8 percent of GDP; if this action is delayed another 4 years, primary spending would have to be reduced by 5.7 percent of GDP. If lawmakers wait until 2020, the necessary cuts would grow to 7.9 percent of GDP. In other words, legislative inaction equals billions of dollars in additional spending cuts.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Anthony Randazzo Discusses the Politics of Budget Cuts on Freedom Watch

Wed, 30 Mar 2011 00:00:00 EDT

Director of Economic Research at Reason Foundation Anthony Randazzo appeared on Judge Napolitano's Freedom Watch talks about the politics of budget cut negotiations and whether the IRS has started an inappropriate new campaign of targeting the wealthy with tax audits. Air date: March 23, 2011.

Approximately 7 minutes.

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Matt Welch Talks Obamacare PR on Freedom Watch

Mon, 21 Mar 2011 12:00:00 EDT

Reason Magazine Editor in Chief Matt Welch appeared on Freedom Watch With Judge Napolitano to discuss new PR tactics by the Obama administration to rally support for Obamacare.

Air Date: March 18, 2011.

Approximately 8 minutes

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Nick Gillespie Discusses Government Redundancy with Jeff Flake on Stossel

Fri, 18 Mar 2011 00:00:00 EDT

Reason.tv editor in chief Nick Gillespie joined Jeff Flake (R-AZ) on Stossel to discuss the irony of the federal government not knowing the cost of a program that teaches financial literacy and how we could prioritize what government should be doing. Airdate: March 17, 2011.

Approximately 8.14 minutes.

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The Tea Party Goes to Washington: Rand Paul on the intellectual bankruptcy of both major parties

Wed, 16 Mar 2011 11:00:00 EDT

Rand Paul (R-Ky.) took an unusual path to his seat in the United States Senate: Though his father, the libertarian Rep. Ron Paul (R-Texas) has spent decades in office, Rand Paul had never previously held public office before winning in 2010. Throughout his campaign, Paul fils identified more with the Tea Party than with the Republican Party, and he ran against the hand-picked candidate of one of the most powerful Republicans in America, Sen. Mitch McConnell (R-Ky.). After trouncing both his primary challenger and the Democratic nominee, Paul did not mention the GOP once in his victory speech last November, saying instead, "Tonight, there's a Tea Party tidal wave."

Since entering office, the freshman senator has quickly proven himself to be the most interesting and radical voice on Capitol Hill, proposing immediate budget cuts 500 percent steeper than anything else Republicans have contemplated, speaking eloquently against the PATRIOT Act and runaway defense spending, and going bonkers against nanny-state regulations in the home. He's even taken on the sainted 19th-century Kentucky statesman Henry Clay ("the Great Compromiser") in a speech that caused McConnell to leave the room. And this all happened just in Paul's first two months in office.

Now the freshman senator has a new book out, The Tea Party Goes to Washington, that discusses his political journey, the intellectual bankruptcy of both major parties, and the urgency of our clear and present fiscal crisis. Reason's Matt Welch and Nick Gillespie interviewed Sen. Paul in his temporary Senate office in March 2011.

Interview produced by Meredith Bragg with Josh Swain and Austin Bragg.

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End the Fed: Filmmaker Tad Lumpkin Animates the Financial Crisis

Fri, 11 Mar 2011 12:00:00 EST

"Any time you give unlimited capacity to print money, then the government's going to grow," says filmmaker Tad Lumpkin.

Lumpkin created the animated feature The American Dream, which is available on YouTube, to explain U.S. monetary policy and its consequences in a way that would be accessible to a mass audience. Although some in the media, and at the Federal Reserve, blame a lack of regulation for the financial crisis, Lumpkin argues that the Fed itself is the primary cause for the collapse of the housing sector.

Lumpkin sat down with Reason.tv's Tim Cavanaugh to discuss the folly of central banking, why Ron Paul is an important political force, and why it's time to end the Fed.

Shot by Zach Weissmueller, Hawk Jensen, and Alex Manning. Edited by Weissmueller.

Approximately 9:40 minutes.

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Veronique de Rugy on the Truth About the State Pension Crisis on Bloomberg

Fri, 11 Mar 2011 00:00:00 EST

Editor’s Note: Reason columnist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Myth 1: Unfunded state pensions do not represent an immediate threat and are therefore not in crisis.

Fact 1: In the best case scenario, some state pension funds will run out as soon as 2017. And the longer the states wait to fully fund their pensions, the more drastic the financial consequences will be.

The fact that state pensions only represent a small share of state budgets doesn’t mean that they aren’t in crisis. Take the case of New Jersey. According to Joshua Rauh, professor of finance at Northwestern University, under the best case scenario, New Jersey’s pension funds (there are 5 of them) are scheduled to run out as soon as 2017. Once those state pension plans run out of money, pension payments will have to come out of the state’s general fund revenues—that is, out of the pockets of state taxpayers.

Furthermore, there is reason to believe these estimates are too conservative. When private-sector accounting methods are used to show the true market value of state pension liabilities, the situation becomes even more critical than it initially appears.

According to Andrew Biggs of the American Enterprise Institute and my Mercatus Center colleague Eileen Norcross, the state of New Jersey reports that its pension systems are underfunded by $44.7 billion. Yet when those pension plan liabilities are calculated in a manner consistent with private-sector accounting requirements—methods that economists almost universally agree to be more appropriate—New Jersey's unfunded benefit obligation rises to $173.9 billion.

In other words, New Jersey has made a $173 billion promise without any idea of how it will pay for it. I would say that’s a crisis.

Plus, this is serious money. As Biggs and Norcross note,

This amount is equivalent to 44 percent of the state's current GDP and 328 percent of its current explicit government debt. This calculation applies a discount rate of 3.5 percent (the yield on Treasury bonds with a maturity of 15 years) to reflect the nearly risk‐free nature of accrued benefits for workers. It is estimated if state pension assets average a return of 8 percent, New Jersey will run out of funds to meet its pension obligations in 2019. If asset returns are lower than 8 percent, they will run out of funds sooner.

This has real implications. State actuaries estimate that under certain assumptions, New Jersey’s pension plans will run out of enough assets to make benefit payments beginning in 2013.

The irony is that New Jersey, like other states, has put itself in a financial binder even before the pension crisis really hits. That says a lot about the state’s future ability to address the problem.

Myth 2: State debt accurately reflects state liabilities. And state default is not a concern because the federal government will bail the states out before they reach that point.

Fact 2: Many government pension liabilities are kept off the books, so most states and cities underestimate their actual debt.

Consider Connecticut. Bonds are only a small part of its total debt. Like many other states, Connecticut also owes to its pensions and retiree health care funds, which are not clearly disclosed, and which will cost even more in the long run.

Northwestern's Joshua Rauh and Robert Novy-Marx, an assistant professor of finance at the University of Rochester, have added Connecticut’s unfunded liability to the state’s debt. As you can see in the chart above, the state’s reported debt is roughly $23 billion. The official estimated value of its unfunded pension liabilities is $48.4 billion. That’s $71.4 billion. On top of that amount we should add another $28.2 billion in underestimated liabilities due to poor accounting standards. Now you have a total state debt of almost $100 billion.

Would the federal government really have the ability to bail out 50 states whose individual debt often exceeds $100 billion? That would cost roughly $5 trillion. And while all of that money wouldn’t be paid out at once, it is still unrealistic for the states to count on a federal bailout.

Myth 3: State and local workers are not overpaid. And even if they are, changing their compensation won’t make a difference.

Fact 3: While this is a complex issue, the total compensation package for state workers does tend to exceed that of their private-sector counterparts.

Take the case of Ohio.

The Buckeye Institute for Policy Solutions has an interesting report out called “The Grand Bargain is Dead.” As we see in this example from Ohio, compensation costs for state and local employees begins at a higher level than that of their private-sector counterparts and continues to diverge throughout the employees’ careers. According to the Buckeye Institute, for 26 careers in state and local government paying around the median wage rate, government employees were consistently and significantly paid above the corresponding private-sector wage rate.

Ohio has an on-the-book $8 billion budget gap. The data shows that in the Buckeye state, where almost one new public-sector job was added to the economy for each private-sector job from 1990 to 2010, realigning state worker compensation packages to match those of their private-sector peers would save taxpayers over $2.1 billion in the next two years (or 28 percent of this year’s $8 billion deficit).

It is true that comparing compensation is a tricky business. While taking a closer look at the differences between public and private-sector employees explains some of the compensation differential, it is not great enough to explain the difference in wages between comparable public and private employees.

This chart from The New York Times shows that there are 12 percent more white-collar workers in local government than there are in private employment and 19 percent more white-collar workers at the state level. Some argue that this is the reason for the difference in compensation. It’s the diplomas stupid! Maybe, but all the diplomas in the world can’t explain the 221 percent difference in lifetime employment costs witnessed by workers in Ohio.

Myth 4: The financial crisis, which caused a depreciation of pension assets, is the real culprit behind pension underfunding.

Fact 4: While the recession dealt a severe blow to state pensions, the problem of pension underfunding dates back to the early 2000s. Many states had already failed to cover the cost of promised benefits even before they felt the full weight of the Great Recession.

The problem started long before the recession. A 2010 Pew study called “The Trillion Dollar Gap,” found that in 2000, slightly more than half of the states had fully funded pension systems. By 2006, that number had shrunk to six states. By 2008, only four states—Florida, New York, Washington and Wisconsin—could make that claim. The chart above, taken from the Pew study, illustrates this point.

Here’s the bottom line: We can argue endlessly over when the pension plans will run out of cash, or what the true value of the unfunded liabilities is. We can even debate what the true meaning of being broke. But there is one issue where there is no room for debate. Once the pension plans run out of money, the payments will have to come out of general funds, meaning out of the pockets of taxpayers. If the states want to avoid this, they must push through reforms as soon as possible. A good first step would be to switch to accounting methods that show the true market value of their liabilities. Once those methods are in place, lawmakers should consider moving away from defined benefit pensions.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Approximately 6.47 minutes.

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Cutting Government Spending: An Interview with Puerto Rico Governor Luis Fortuno

Tue, 08 Mar 2011 00:00:00 EST

Since coming into power in 2009, Gov. Luis Fortuño (R-Puerto Rico) has cut government spending by 20 percent, lowered taxes and raised the territory’s bond status to its highest rating in 35 years – all during a punishing economic climate.

Gov. Fortuño sat down with Reason Magazine Editor in Chief Matt Welch to discuss Puerto Rico’s turnaround, federal immigration policy, the drug war, education reform, his support of statehood and a possible future in mainland politics.

Interview by Matt Welch. Shot by Jim Epstein and Meredith Bragg. Edited by Bragg.

Approximately 29 minutes.

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Are We Broke Yet? Michael Moore Says No, Reality Begs to Differ

Mon, 07 Mar 2011 13:00:00 EST

"The nation is not broke, my friends," opines guerilla filmmaker and amateur accountant Michael Moore. "Wisconsin is not broke. Saying that the country is broke is repeating a Big Lie."

Relax, America, it turns out that all that talk about local, state, and federal government being broke is just total B.S. or, as The New York Times puts it, "obfuscating nonsense...a scare tactic employed for political ends."

Moore is a bit skimpy on evidence, simply asserting that all we need to do to make things right is to shake down rich people who "have diverted...wealth into a deep well that sits on their well-guarded estates." The Times' case isn't much more compelling. "A country with a deficit is not necessarily any more 'broke' than a family with a mortgage or a college loan," says the paper of record. "And states have to balance their budgets."

OK, but what should you call a family or a country that about 20 percent of GDP for each of the past 60 years while raising on less than 18 percent of GDP each year? And that is facing a massive balloon payment (let's call it entitlement spending on Medicare and Social Security) in the not-too-distant future? And has to keep borrowing money just to pay today's bills? And has no chance of increasing its take-home pay to cover its expenses?

It's a pretty safe bet that most of us would call that family or country broke. Or something along those lines.

Here are federal deficit projections from President Barack Obama's own proposed 2012 budget. He predicts that the red ink will continue to flow for as long he may be in office.

And what about the states? It's true that states have to balance their budgets each year by law. But that doesn't mean they don't spend more than they take in. Wisconsin alone is looking at a shortfall of $1.8 billion in the next year. Here's what the Center on Budget and Policy Priorities says about the mismatch between spending and revenue: "2012 is shaping up as states’ most difficult budget year on record. Thus far some 45 states and the District of Columbia are projecting budget shortfalls totaling $125 billion for fiscal year 2012." Here's a picture that suggests broke is a pretty good description of state finances:

Then there's local government. The National League of Cities is estimating that aggregate revenue shortfalls between 2010 and 2012 will end up totaling somewhere between $56 billion and $83 billion.

As President Obama put it plainly in his State of the Union Address just a few weeks ago, "We have to confront the fact that our government spends more than it takes in. That is not sustainable."

So call us broke or call us flush with cash. Whatever. Unless you think our elected officials are like Charlie Sheen - able to cure our problems simply willing it - our fiscal reality isn't going to get better by pretending that we're not in deep trouble.

Maybe acknowledging that you've got a problem really is the first step to fixing it. If that's the case, we've still got a ways to go before we even start doing the hard work of cutting out of control spending at every level of government.

In the meantime, read "The 19 Percent: How to balance the budget without raising taxes," "Failed States: After a long spending binge, governors go begging for a handout. It won't be their last," and "How to Save Cleveland: Turning around America's dying cities is difficult, improbable, and necessary."

"Are we broke yet?" is written and produced by Meredith Bragg and Nick Gillespie. About 1.30 minutes long. Go to Reason.tv for downloadable versions of our videos and subscribe to our YouTube channel to receive automatic notifications when new material goes live.

Matt Welch Discusses Boehner's Attack on Social Security and Medicare on Freedom Watch

Mon, 07 Mar 2011 00:00:00 EST

Reason Magazine Editor in Chief Matt Welch discusses if Boehner's will take on Social Security and Medicare next fiscal year and the continuous government intervention in the banking industry on Freedom Watch With Judge Napolitano. Air Date: March 4, 2011.

Approximately 8 minutes

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Collective Bargaining and the Bottom Line

Thu, 03 Mar 2011 15:00:00 EST

Faced with an $8 billion budget deficit, Ohio Gov. John Kasich (R) is on the verge of signing a bill that would prevent state employees from using collective bargaining to negotiate their health and pension benefits. Wisconsin Gov. Scott Walker (R) has pushed a similar bill, which has drawn national attention, spawned weeks of protests, and sent Democratic lawmakers fleeing the state as a way to stall its passage.

Two other GOP governors facing major budget crises - New Jersey's Chris Christie and Michigan's Rick Snyder - have made it clear that they don't see restricting bargaining rights as the key to more austerity. Texas, North Carolina, and Louisiana face major budget deficits, and in those states public employees don't have collective bargaining rights.

To what extent is collective bargaining to blame for out-of-control state spending? Is clamping down on the ability of public-employee unions to negotiate an important tactic for closing what may grow to a combined $125 billion gap in state budgets next fiscal year?

Reason.tv's Nick Gillespie sat down with the Heritage Foundation's James Sherk to talk about what collective bargaining means to the bottom line of states.

Approximately 5.30 minutes. Camera by Jim Epstein and Joshua Swain, and edited by Epstein.

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Tim Cavanaugh Discusses the Wisconsin's Crisis with MSNBC's Dylan Ratigan

Tue, 01 Mar 2011 00:00:00 EST

Reason columnist Tim Cavanaugh debates the blame of Wisconsin's budget crisis should rest on government bank bailouts and public union pensions and discusses how federal spending on infrastructure does not boost the economy on MSNBC's The Dylan Ratigan Show.

Air Date: February 28, 2011.

Approximately 8.30 minutes

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Veronique de Rugy Debunks Obama's Budget Proposal on Bloomberg

Thu, 24 Feb 2011 00:00:00 EST

Last week the White House unveiled President Barack Obama’s Fiscal Year 2012 Budget Request. According to Budget Director Jack Lew, the administration has come up with a plan for a “sustainable” deficit. In her weekly appearance on Bloomberg TV, Reason columnist Veronique de Rugy explains the truth about Obama’ s budget by separating economic fact from economic myth.

Myth 1: Under President Barack Obama’s 2012 budget, we will “live within our means”.

Fact 1: Debt and spending will continue to grow and deficits will continue to persist under the president’s Fiscal Year 2012 Budget Request.

Myth 2: The president’s budget reduces 2012 discretionary spending by 5 percent. This will bring domestic discretionary spending to the lowest level since Dwight Eisenhower was president.

Fact 2: Domestic discretionary spending has been decreasing steadily as a proportion of total spending due the growth of mandatory entitlement spending. Moreover, many of the “cuts” in the president’s budget are actually just budgetary gimmicks.

Myth 3: The president’s budget accurately reflects economic and politic reality.

Fact 3: The president’s budget incorporates unrealistic assumptions about both the U.S. economy and the implications of the president’s policy choices. Our fiscal situation is far more dire than the president’s budget lets on.

Myth 4: Budget cuts proposed by Republicans will eviscerate the American middle class.

Fact 4: The Republican cuts may be bigger than the president’s cuts but they still barely scratch the surface of our overspending problem.

For additional information, see de Rugy’s article “The Truth About Obama’s 2012 Budget.”

Nick Gillespie Appears on Varney & Company

Sat, 19 Feb 2011 09:00:00 EST

Reason.tv editor in chief Nick Gillespie appeared as a panelist on Fox Business Network's Varney & Company discussing everything from the public employee protests in Wisconsin to new tablet tech gadgets. Air Date: February 17, 2011.

Approximately 40 minutes.

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Nick Gillespie Debates Cutting Government Spending on Parker Spitzer

Thu, 17 Feb 2011 00:00:00 EST

Reason.tv editor in chief Nick Gillespie debates editor of The Nation Katrina vanden Heuvel about how to reduce the federal deficit and what exactly needs to be cut on CNN's Parker Spitzer. Air Date: February 16, 2011.

About 12 minutes.

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3 Reasons This Budget (and the GOP Response) Won't Win the Future

Tue, 15 Feb 2011 00:00:00 EST

President Barack Obama's proposed budget for 2012 outlines $3.7 trillion in spending during the next fiscal year and $8 trillion in new debt over the next decade. All without even a notion of how to pay for any of it.

What could possibly go wrong? Or right?

3 Reasons Obama's Budget (and the GOP Response) Won't Fix Anything is written and produced by Meredith Bragg, Austin Bragg, and Nick Gillespie, who also hosts. Approx 2 minutes.

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This video is based on this piece for AOL News by Veronique de Rugy and Nick Gillespie, reprinted below.

Opinion: This Is No Way to Win the Future

In his State of the Union address delivered just a few weeks ago, President Barack Obama pushed the banal conceit of "winning the future." To great partisan applause, the president channeled the reality show "Survivor" (slogan: "Outwit, Outplay, Outlast") and proclaimed that the United States needs to "out-innovate, out-educate and out-build the rest of the world."

With the release of his budget proposal for fiscal year 2012, we now know exactly what the president meant: We need to out-spend the world.

Sure, the United States government is already wracked with debt -- to the tune of about $9 trillion or 62 percent of gross domestic product -- and government spending is at or near post-World War II highs, about 25 percent of GDP using 2010 numbers. Obama's bold plan is to spend yet more without any ability to cover such new largess.

Far from winning the future, Obama has decided to punt on first down. Instead of dealing with federal spending that has ballooned by more than 60 percent in constant 2010 dollars over the past decade -- spending pushed by Republicans and Democrats alike -- the president has decided to stick with a status quo that is leading us to fiscal ruin.

In the broadest outlines, Obama proposes spending $3.7 trillion in 2012 (about the same as this year). Over the course of the coming decade, he claims that his spending plan would trim the deficit by about $1.1 trillion, with about two-thirds of theoretical savings coming from spending less than expected (such as a five-year freeze on non-security-related discretionary spending) and one-third from tax increases (on high-income earners).

Another way of putting this is that the president's plan for the next decade does nothing to balance spending and revenue; over 10 years, it adds about $8 trillion to the national debt.

The key reality here is that outlays keep growing from $3.5 trillion in FY 2010 to $5.7 trillion in FY 2021. If all goes according to plan, in 2021, debt held by the public will equal a whopping 77 percent of GDP. Of course, to that debt you have to add the money that the federal government has borrowed to various trust funds, like Social Security and Medicare, and also the trillions of dollars in unfunded promises made to the American people.

But there's absolutely no reason to believe that scenario. When he submitted his first budget, for fiscal year 2010 (ironically titled "A New Era of Fiscal Responsibility"), Obama promised that he would cut the deficit to $912 billion in 2011 and to $581 billion by 2012. The reality in just that short window of time is totally different.

Obama's original estimates were way off for the same reason his current scenario can't be trusted: He grounds most deficit reduction in the fantasy world of increased revenues.

Indeed, the president decrees that revenue will increase by $1.6 trillion over the next decade. Theoretically, this will come from two basic sources: ending the Bush tax rates on high-income earners and from an economy that the president believes will increase in real terms by 3.6 percent in 2012 and 4.4 percent in 2013. Those estimates are far sunnier than most private and governmental projections.

While rosy scenarios are great to project higher revenue, they are also useful on the spending side. Higher growth rates allow the president to foresee a reduction in unemployment from its current 9.3 percent to 8.6 percent next year. That means less unemployment benefits to pay out and it explains half of the projected reduction in spending from 2011 to 2012.

Yet even if the president's growth and revenues do materialize, we're still in deep trouble. We are still left with a $1.1 trillion deficit in 2012 and with a cumulative $7.2 trillion deficit over 10 years. That's $7.2 trillion that the federal government will have to borrow in the best-case scenario. And that explains why the debt held by the public is set to double in the next 10 years from $9 trillion in 2010 to over $18 trillion in 2020.

Nothing in Obama's budget addresses the nation's short- and long-term budget problems. He simply isn't serious about addressing the spending overload that is piling up debt at greater and greater velocity, and he has shown no interest in even discussing serious entitlement reform.

Sadly, there's little reason to believe that the Republican response will be any more substantive. Prior to the election, GOP leaders released their Pledge to America, which was both vague and uninspired, showing only the slimmest difference in spending than the president. Since winning a majority in the House of Representatives, Speaker John Boehner, R-Ohio, has allowed that, as he said on "Meet the Press" on Sunday, "We're broke."

Yet neither he nor his fellow Republicans have laid out any way of addressing the shortfall, either by seriously cutting spending or by raising taxes. Instead, House Republicans continue to dilly-dally whether to cut a measly $100 billion for the remainder of fiscal year 2011.

This is no way to fix a bipartisan budget mess that was many years in the making. Worse still, it looks as if it will get much worse before either Democrats or Republicans are moved to real action.

Veronique de Rugy Discusses Farm Subsidies on Bloomberg TV

Fri, 11 Feb 2011 00:00:00 EST

According to some U.S. policy makers, there is a global food crisis that can only be solved through massive government subsidies to farmers and other agricultural producers. In her weekly appearance on Bloomberg TV, Reason columnist Veronique de Rugy explains the truth about the so-called food crisis by separating economic fact from economic myth.

Myth 1: Because of the financial meltdown, and its repercussions on aid, the scale of hunger that we see now is unprecedented; more people face starvation related to disasters than ever before.

Fact 1: In fact, while unacceptably high, starvation deaths per year have been declining for the past 60 or 70 years. Better publicity, grain market integration, and work by aid agencies have decreased human deaths during each food crisis since the late 1950’s.

Myth 2: Congress says farm subsidies insure a food supply for the US and for the World.

Fact 2: U.S. farm subsidies have exacerbated the balloon in world food prices. In fact, economists have found that abolishing domestic subsidies would actually lower world prices for these crops.

Myth 3: Farm subsidies are necessary to bolster farmers' incomes in order to alleviate poverty in the United States.

Fact 3: That rationale made some sense in the 1930s but it doesn’t today. Despite the fact that farm households are doing as well or better than other households, farm households are still targeted for billions of dollars in government payments.

For additional information, see de Rugy’ s article "Is There a Global Food Crisis?"

Approximately 4.05 minutes.

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Michael Moynihan Discusses Government Shutdown and Social Programs on Freedom Watch

Fri, 04 Feb 2011 00:00:00 EST

Reason Senior Editor Michael Moynihan on Judge Napolitano's Freedom Watch discusses America's love/hate relationship with government spending and were entitlements and overspending has gotten us. Airdate: February 3, 2011.

Approximately 8.32 minutes.

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Veronique de Rugy on the Truth About the Debt Ceiling

Wed, 02 Feb 2011 00:00:00 EST

The statutory debt limit, or debt ceiling, was designed to control congressional spending by limiting the amount of debt the federal government could accumulate. Clearly, it has not fulfilled its legislative purpose. In the last 10 years, Congress has increased the debt limit 10 times, raising the limit twice annually in 2008 and 2009. In her weekly appearance on Bloomberg TV, Reason columnist Veronique de Rugy explains the truth about the debt ceiling by separating economic fact from economic myth.

Myth 1: Failure to increase the debt ceiling is insanity. Unless we increase the debt ceiling, the U.S. government will default on its debt.

Fact 1: The federal government has other options. If the debt ceiling is not increased, the Treasury Department can make interest and debt payment its first priority to avoid a default. Then it can essentially put the government on a stringent pay-as-you-go basis.

Myth 2: These are extraordinary times. We have to increase the debt ceiling now and we will cut spending later.

Fact 2: In the last 10 years, Congress has raised the debt ceiling 10 times, sometimes twice in the same year. Congress has raised the debt ceiling 98 times since 1940. The government has lost its ability to monitor its spending. Having to raise the debt ceiling again is only a sign that Congress keeps failing to do what is necessary to get the nation’s finances in order.

Myth 3: Democrats are the big spenders and are the party of debt. We know this because they want to increase the debt ceiling while Republicans oppose the increase.

Fact 3: Historically, the party in power always wants to increase spending. As a result, lawmakers in power--regardless of party affiliation--overwhelmingly vote to increase the debt limit.

For additional information, see de Rugy’s article “The Truth About the Debt Limit.” http://reason.com/archives/2011/02/03/the-truth-about-the-debt-ceili

Approximately 6.30 minutes.

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Nick Gillespie Discusses Obamacare and Corporate Welfare with Judge Napolitano

Thu, 13 Jan 2011 00:00:00 EST

Reason.tv editor-in-chief Nick Gillespie appeared on Jude Napolitano's Freedom Watch to discuss the continual corporate exemptions to the health care reform's mandates and whether Obama's relationship with Wall Street means he's pro-market or pro-big business. Air Date: January 7, 2010.

Approximately 9 minutes.

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Grading the Governors in 2010

Mon, 10 Jan 2011 00:00:00 EST

How would you grade your governor?

Chris Edwards, the CATO Institute’s director of tax policy studies, has analyzed and graded the fiscal records of 45 state governors. The only A Students: S.C.’s Mark Sanford (R), La.’s Bobby Jindal (R), Minn.’s Tim Pawlenty (R), W.Va.’s Joe Manchin (D). Otherwise there were 15 B’s, 8 C’s, 11 D’s and 7 F’s.

CATO has been releasing its Fiscal Policy Report Card for over the past 20 years, tracking state and local budget’s ballooning from the 1990’s to the 2000’s and an increase of A’s and F’s as governors struggle to find the best way to recover from years of overspending and mismanagement.

Approximately 9.30 minutes.

Shot by Jim Epstein and Meredith Bragg. Edited by Bragg.

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Nick Gillespie Discusses the GOP and the Debt Ceiling with Judge Napolitano

Fri, 07 Jan 2011 00:00:00 EST

Reason.tv editor-in-chief Nick Gillespie appeared on Jude Napolitano's Freedom Watch to discuss whether the new Congress will keep it's promises to the Tea Party and cut spending or will the GOP continue to resort to big government for solutions. Air Date: January 6, 2010.

Approximately 3.32 minutes.

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Slashing Spending in Post-Soviet Slovakia

Thu, 06 Jan 2011 00:00:00 EST

Since the end of communism in 1989, Slovakia has experienced rapid economic growth by privatizing industries and liberating its markets, allowing its citizens to enjoy the same standard of living as their Western European neighbors. However, government spending is still out of control.

Richard Durana, director of the Slovakia Institute for Economic and Social Studies and the project The Price of the State, sat down with Reason.tv to explain how his group is working to educate Slovaks that many services currently provided by the government could be delivered more efficiently by the private sector.

Approximately 5.03 minutes.

Interviewed by June Arunga. Camera by Jim Epstein and Josh Swain. Editing by Swain.

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Countdown to Disappointment: Don't expect the new Congress to cut spending

Tue, 04 Jan 2011 10:00:00 EST

Is it too soon to declare the new Congress a failure?

Ever since their midterm election triumph, Republicans have talked tough about cutting spending. Here’s hoping they make good on those promises, but they spouted the same tough talk after their 1994 election triumph and look what happened.

Back then the GOP revolutionaries targeted more than 200 programs for complete and utter elimination. They scored some minor victories (adios helium fund!), but a decade into their “revolution” (and after they gained a Republican president) inflation-adjusted spending on the combined budgets of the 101 largest programs slated for elimination actually increased by 27 percent. And since then total federal spending has continued to soar, so why should we take Republicans seriously this time?

The countdown to disappointment starts now.

Approximately 82 seconds.

Written and produced by Ted Balaker. Music by Ambient Teknology (Magnatune Records).

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Porkers of the Month for December 2010: Sens. Lisa Murkowski and James Inhofe!

Tue, 21 Dec 2010 14:24:00 EST

Reason.tv presents Citizen's Against Government Waste’s Porkers of the Month for December 2010:

Sens. Lisa Murkowski (R-Alaska) and James Inhofe (R-Okla.)!

After a lopsided election with a strong emphasis on fiscal responsibility, Senate Republicans agreed on a two year moratorium on earmarks. These two refused to go along with the plan, which isn't terribly surprising when you look at their earmark history.

Congratulations Lisa and James, you are Citizen's Against Government Waste's Porkers of the Month for November, 2010!

"Porker of the Month" is written and produced by Austin Bragg. Approximately 1 minute.

For more info on Citizens Against Government Waste and the Porker of The Month, visit cagw.org.

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Budget Chef Presents: How to Balance the Budget W/O Raising Taxes!

Tue, 14 Dec 2010 11:00:00 EST

Using just a big piece of pork, a large knife, and a small knife, the budget chef shows how to balance the federal budget by 2020.

As a special treat, he does it without raising taxes from the current Bush-era rates!

It seems like a complicated preparation at first, but it's so simple that almost any elected official should be able to pull it off like a pro!

Domestic and foreign investors will love this, and it will also help create a stable environment conducive to long-term, sustainable economic growth.

Between 2011 and 2020, the Congressional Budget Office estimates that total federal outlays - for defense, agriculture subsidies, Medicare, Social Security, you name it - will total a whopping $42.1 trillion (in 2010 dollars). To bring outlays down to revenue, we need to cut a total of $1.3 trillion in total expenditures over the next 10 years.

That sounds like a really tall order until you realize that it cutting just 3.6 percent a year for each of the next 10 years. To put it in dollar terms, it means cutting about $130 billion a year from budgets that will average over $4 trillion.

That's not so hard now, is it? By making small, systematic cuts to a federal budget that is larded up with more fat than an Ponderosa buffet, we can balance the budget without even nicking essential services.

"Budget Chef" is written and produced by Jim Epstein, Josh Swain, Meredith Bragg, and Nick Gillespie (who also hosts). Approximately 2 minutes. Scroll down for downloadable versions and subscribe to Reason.tv's YouTube channel to get automatic notifications when new material goes live.

This video is based on "How to Balance the Budget Without Raising Taxes," by Nick Gillespie and Reason economics columnist Veronique de Rugy of the Mercatus Center. Read that December 5, 2010 piece for detailed breakdowns of spending amounts.

Nick Gillespie Discusses Obama's Tax Cut Deals on CNN's Parker Spitzer

Fri, 10 Dec 2010 00:00:00 EST

Editor in chief of Reason.tv and Reason.com Nick Gillespie debates Mother Jones' David Corn about Obama's recent tax cut deal how the adminstration's role in the economy has made recovery all the more difficult on CNN's Parker Spitzer. Air date: December 9, 2010.

Approximately 6.08 minutes.

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Veronique de Rugy Joins Parker Spitzer to Discuss Obama's Tax Cut Deal

Thu, 09 Dec 2010 00:00:00 EST

Reason monthly columnist and Mercatus Center economist Veronique de Rugy appeared on CNN's Parker Spitzer to discuss Obama's deal on tax cuts and how his presidency is continuing Bush-era policies. Airdate: December 8, 2010.

Approximately 8.23 minutes.

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Matthew Elliot on Britain's Burgeoning Tax Revolt

Thu, 09 Dec 2010 00:00:00 EST

Americans have more of a penchant for tax revolts than the British, but that may be changing. After thirty years of unchallenged tax increases, The Taxpayers’ Alliance formed in 2004 to advocate for lower taxes across the United Kingdom.

Co-founder and Chief Executive of The Taxpayers’ Alliance Matthew Elliott sat down with Reason.tv to discuss the rising frustration with taxes in Britain and how TPA grew from a small group that met in coffee shops to a national media player.

Approximately 5.43 minutes.

Interviewed by June Arunga. Camera by Jim Epstein and Josh Swain. Editing by Swain.

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Anthony Randazzo Discusses Bernake Controlling Inflation on Russia Today

Tue, 07 Dec 2010 00:00:00 EST

Reason Foundation Director of Economic Research Anthony Randazzo appears on Russia Today's The Alyona Show to take issue with Ben Bernake's confidence that the FED can control inflation while continuing quantitative easing. Airdate: December 6, 2010.

Approximately 7.48 minutes.

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Taking Politics Out of Transportation: Economist Bruce Benson on Private Roads

Fri, 03 Dec 2010 10:00:00 EST

Americans are accustomed to government provided roads, but "a private road system is going to get you from here to there more efficiently, and with less congestion," says Bruce Benson, a professor of economics at Florida State University.

Reason.tv sat down with Benson during the Libertopia festival in Hollywood, California to discuss the limitless possibilities of private road construction.

Drawing on his research on private alternatives to pubic provision of services such as road construction and law enforcement, Benson points to America's long history of roads that were privately built by communities that wanted to connect into a system of trade. Benson predicts a return of privately built roads as our congested public infrastructure continues to degrade.

Approximately 6.5 minutes.

Interviewed by Zach Weissmueller. Camera and Editing by Hawk Jensen; animation by Austin Bragg.

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Adrian Moore Discusses GM's IPO and the Proposed Federal Sales Tax

Thu, 18 Nov 2010 00:00:00 EST

The Reason Foundation's Adrian Moore appeared on Freedom Watch to discuss the fallout from the General Motors bailout and a propoposed 6.5% value-added tax aimed at deficit reduction. Air date: November 17, 2010.

About 11 minutes.

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The Long-Term Meaning of the Mid-Term Elections

Tue, 16 Nov 2010 12:00:00 EST

Just how libertarian is the Tea Party? Do GOP gains in the midterm elections mean voters like Republicans or are angry at Obama? Are any of the newly elected pols serious about cutting spending?

On November 11, 2010, Reason's Matt Welch and Nick Gillespie, authors of next year's The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong With America, led a freewheeling discussion with The Winston Group's Kristen Soltis and the Institute for Humane Studies' David Kirby about whether we've just witnessed the first act of a Republican revolution, a speed bump on the road back to Democratic power, or the beginning of something truly strange and new in American politics.

Approximately 47.44 minutes.

Shot and edited by Jim Epstein, Meredith Bragg, and Josh Swain.

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Veronique de Rugy Discusses California's Deficit on Varney & Co.

Fri, 12 Nov 2010 13:50:00 EST

Reason monthly columnist Veronique de Rugy, an economist at the Mercatus Center, appeared on Varney & Co. to discuss California's growing deficits and whether this will lead to a federal bailout of the Golden State. Airdate: November 12, 2010.

Approximately 4.36 minutes.

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Adrian Moore discusses California pension reform on Fox Business' Varney & Co.

Fri, 05 Nov 2010 12:00:00 EDT

Adrian Moore, Vice President of Research at the Reason Foundation, discusses pension reform in California after the mid-term elections on Fox Business' Varney & Co. Air date: November 5, 2010.

Approximately 4:00 minutes.

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The Madness of Barack Obama or, How Can a GOP Landslide "Return" Us to Failed Policies of the Past if They've Never Really Left?

Mon, 01 Nov 2010 09:00:00 EDT

President Obama says, "The definition of madness is doing the same thing over and over and expecting different results." He's on the campaign trail warning voters about "returning to the very same policies that failed us during the last decade."

If he's talking about bailouts, ineffective stimulus packages, and massive government spending, then we won't be returning to them because we've never left in the first place. The continuities between George W. Bush and Barack Obama and their parties are far more disturbing than the differences.

Approximately 55 seconds.

Written and produced by Ted Balaker. Music by Ambient Teknology (Magnatune Records).

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Nick Gillespie Discusses the Mid-Term Elections Impact on the Economy with Judge Napolitano

Mon, 01 Nov 2010 00:00:00 EDT

Reason.tv's Nick Gillespie appeared on Judge Napolitano's Freedom Watch to discuss how the Tea Party put more fiscally responsible canidates on the ballot than the GOP ever could -- and why Vice-President Joe Biden just doesn't get it. Air Date: Oct. 30, 2010.

Approximately 8.23 minutes.

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Nick Gillespie Discusses the Relationship Between Government and Economy on Varney & Co.

Wed, 27 Oct 2010 00:00:00 EDT

Reason.tv's Editor in Chief, Nick Gillespie discusses how government hasn't helped in the economy's recovery on Fox Business' Varney & Co. Air date: October 27, 2010.

Approximately 6.31 minutes.

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Porker of The Month for October 2010: Debbie Wasserman Schultz!

Mon, 25 Oct 2010 14:40:00 EDT

Reason.tv presents Citizen's Against Government Waste’s Porker of the Month for October 2010: Rep. Debbie Wasserman Schultz!

What do you do when you and your friends in Congress go on a taxpayer funded spending binge, only to see massive unemployment and a floundering economy?

Just say something that sounds good and has zero credibility.

Rep. Debbie Wasserman Schultz (D-Fla.) is CAGW’s October 2010 Porker of the Month for exaggerating the effect of the failed stimulus program, exaggerating jobs numbers, and lying to the American people about the true economic picture.

Congratulations, Debbie!

"Porker of the Month" is written and produced by Austin Bragg. Approximately 1.2 minutes.

For more info on Citizens Against Government Waste and the Porker of The Month, visit cagw.org .

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The Big Government Conspiracy: Q&A with Steve Malanga of the Manhattan Institute

Mon, 25 Oct 2010 00:00:00 EDT

Today’s Tea Party movement germinated from local taxpayer groups focused on issues like school spending and property taxes, says Steve Malanga, a senior fellow at the Manhattan Institute and author of the new book, Shakedown: The Continuing Conspiracy Against the American Taxpayer.

Malanga’s work focuses on how national trends often grow out of local ones. In his last book, The New New Left, he looked at how a coalition of public-sector unions and government-backed social activists came to control the machinery of local governments. In Shakedown, he shows how this group continued its march all the way to the White House.

Reason.tv’s June Arunga sat down with Malanga to talk about how this coalition has pushed government at all levels to the brink of bankruptcy and what reforms are needed to combat its vast influence.

Approximately seven minutes. Shot by Jim Epstein and Meredith Bragg. Edited by Josh Swain.

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Tim Cavanaugh Discusses the Pension Reform in California on Varney & Co.

Mon, 18 Oct 2010 00:00:00 EDT

Reason columnist and Hit & Run contributor, Tim Cavanaugh, appeared on Fox Business's Varney & Co. to discuss California's recently passed budget and how public-sector unions continue to block meaningful pension reform.

Approximately 3.47 minutes.

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Boondoggle in the Motor City: Detroit's Train to Nowhere

Wed, 13 Oct 2010 11:00:00 EDT

Detroit has become a place Hollywood directors come for great wreckage shots. One quarter of the city's 140 square miles are deserted. Detroit public school students boast the nation’s worst reading scores, the products of a corruption-ridden school system that recently flirted with bankruptcy. Detroit bested Baltimore in 2009 to take the dreaded “murder capital” title. It may also be the worst place in the country to have a heart attack: prepare to wait half an hour for an ambulance.

In a town lacking essential services, what do local leaders and federal politicians have in mind for helping the city? What's needed to hoist Detroit back to its 1950 heyday, when it was America's fourth largest city, with more than double its current population?

Why, light rail, of course!

The Motor City is moving ahead with a plan to build a 9.3-mile light rail line that will run from downtown Detroit to the edge of the suburbs. It’ll cost an estimated $500 million. Three-quarters of the bill will be paid by federal taxpayers, with the rest picked up by a consortium of foundations and businesses.

If built, the project will end up on the Mackinac Center's list of government-subsidized white elephants touted as “crucial to Detroit’s comeback,” its “rebirth,” and pivotal to “turning things around." In reality, it’ll just be another train to nowhere, much like Detroit’s existing light rail line, the unfortunately named "People Mover,” which operates at 2.5% of capacity.

For more on Detroit’s light rail folly, check out Reason Foundation’s Adrian Moore and Shikha Dalmia's rebuttal to PBS’s recent documentary, “Beyond the Motor City,” which laid out the case that light rail can, yes, "revive" Detroit.

Produced by Jim Epstein. Approximately 5.45 minutes.

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Obama vs. Reagan: Ray Griggs on His New Film, 'I Want Your Money'

Tue, 12 Oct 2010 12:00:00 EDT

"It's beyond what you can think of as bankruptcy," says documentary filmmaker Ray Griggs of the current state of U.S. debt. "In our world, you go bankrupt. In the government world, they just keep writing checks."

 In his new documentary, I Want Your Money , which opens nationwide in more than 400 theaters on October 15, Griggs examines the fiscal crisis the U.S. faces today by comparing two iconic presidents—Barack Obama and Ronald Reagan—and their views on the proper role of government.  

Griggs talked with Reason.tv’s Ted Balaker about our nation’s mounting debt, his controversial iPhone app, Bobble Rep , and the difficulties he faced making a conservative documentary in Hollywood.  

Run time approximately 7:30 minutes.

Interview by Ted Balaker. Shot by Alex Manning, Paul Detrick, and Zach Weissmueller. Edited by Weissmueller.

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Nick Gillespie Talks "Fringe Candidates" on CNN's Parker Spitzer

Tue, 12 Oct 2010 00:00:00 EDT

Reason.tv's Nick Gillespie appeared on CNN's newest talk show, "Parker Spitzer," to discuss the emergence of so-called "fringe candidates" in the Republican Party. He also talked about voter anger directed at government spending, the irrelevance of Karl Rove in today's politics and Obama's lack of economic vision. Air date: Oct. 11, 2010.

Approximately nine minutes.

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Tim Cavanaugh Discusses "Creative Accounting," the CA Budget, and Gov. Schwarzenegger's Legacy on Fox 11

Mon, 11 Oct 2010 11:00:00 EDT

Tim Cavanaugh, Reason columnist and Hit & Run contributor, discusses the California budget, passed 100 days late and featuring questionable remedies to the deficit. He also talks about Gov. Schwarzenegger's unlikely legacy--pension reform, which may save the state in the long term. He appeared on FOX 11 Los Angeles. Air date: Oct. 5, 2010 on KTTV.

Approximately three minutes.

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Tim Cavanaugh Talks Borrowing to Balance the Budget on Fox 11

Thu, 07 Oct 2010 11:00:00 EDT

Tim Cavanaugh, Reason columnist and Hit & Run contributor, discusses the details of the new California budget, which may rely heavily on borrowing despite the wishes of the voters. He appeared on FOX 11 Los Angeles. Air date: Oct. 6, 2010 on KTTV.

Approximately 2:39.

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Tim Cavanaugh Talks Budget Fight On Fox 11 LA KTTV

Wed, 06 Oct 2010 12:00:00 EDT

Tim Cavanaugh, Reason columnist and Hit & Run contributor, discusses the recent battles between Republicans and Democrats trying to pass the California budget. He appeared on FOX 11 Los Angeles. Air date: Oct. 5, 2010 on KTTV.

Approximately 4:08.

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Adrian Moore Discusses All Things California on Varney & Co.

Fri, 01 Oct 2010 00:00:00 EDT

Adrian Moore, Vice President of Research at the Reason Foundation, discusses California's pension problems, the upcoming governer election, and a possible bailout for the Golden State on Fox Business' Varney & Co. Air date: October 1, 2010.

Approximately 4.25 minutes.

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3D Fiscal House of Horrors!

Thu, 30 Sep 2010 06:30:00 EDT

As the United States grapples with the grisliest economic downturn in decades, many politicians seem strangely unable or unwilling to stop their zombified shuffling toward a full-blown fiscal FUBAR.

President Barack Obama pushes for yet more stimulus spending and the Republican leadership pledges to stay mum on the prospect for serious spending entitlement reform until at least election day.

Given the decade-long spending binge that started under George W. Bush and a Republican Congress and has accelerated under Obama and the Democrats, America's balance sheet hasn't been this scary since World War II.

The only way to tell this story is in 3D: Debts, Deficits, and Despair!

Spending has reached has record highs. So have deficits and national debt. And public-sector compensation at all levels continues to rise like the living dead at the witching hour. The worst part? If current trends continue, we ain't seen nothing yet!

The following videos lay out in gory detail just how heart-stopping the situation is. So watch the warning video first, check your pulse, and continue on - if you dare!

To experience the full horror, subscribe to Reason magazine now and receive our special 3D November issue, which includes a pair 3D glasses and, more important, practical plans to cut spending now.

These videos are best viewed in high-definition. Immediately after clicking play, click on the 360p button on the lower-right hand corner of each video and select 720p for the best resolution.

A Warning from Sen. Mike Gravel (D-Alaska)

Out of a sense of common decency - and a court order - former Alaska senator, I Like Mike star, and recidivist presidential candidate Mike Gravel warns viewers prone to seizures, high blood pressure, and politically induced rage to exit their browsers now. If you do choose to continue and feel your head about to explode at any time, he counsels, don't be afraid to scream with everything you've got. The life you save may be your own. And your country's.

I Spend on Your Grave!

How did the federal budget become more terrifying than Rahm Emmanuel in a locker-room shower? It's not complicated. Since World War II, government revenues have averaged about 18 percent of Gross Domestic Product. Government expenditures, alas, have rarely kept close to that number (this year alone, it will be close to 26 percent of GDP). The result is as predictable and grisly as a curvaceous college co-ed entering the last house on the lane: red ink that threaten to drown us all.

Night of The Living Debt

What's spookier than Sen. Harry Reid guest-starring in The Vagina Monologues? The balance sheet from hell better known as the national debt. In 2009, the federal deficit was $1.4 trillion, or over 12 percent of GDP and the highest level since World War II. The federal debt, which is made up of all the annual deficits plus interest on borrowed money, is around 45 percent of GDP and is projected to be 90 percent of GDP by 2020. Which means the government will be sucking more money out of your pocket and the larger economy to pay for bailing out GM and Citigroup today.

Attack of The Killer Compensation

Here's a tale more fear-inducing than Michelle Obama at a fat farm. Chew on this: In more than eight of 10 occupations, federal workers make more in straight salary than their private sector counterparts. A federal janitor makes $6,000 more than his private-sector counterpart and a federal nurse makes $11,000 than her counterpart. And federal workers on average get four times more in benefits such as health care and retirement. At the state and local level, public-sector workers take home more than their private-sector equivalents, too (Michigan public-sector workers, for instance, take home 47 percent more in total compensation than their private-sector analogues). The result of such taxpayer-funded largess? An economic living death on the installment plan!

The End?

Is this the end of the American experiment? Certainly, the trend lines are as difficult to change as they are unsustainable. Yet the situation can be reversed. Reason's November issue - also in 3D! - contains true tales of budgetary restraint and right-sizing.

Subscribe to Reason now and read how the U.S., New Zealand, and Canada all cut spending quickly and effectively. Read how to spin off the government-sponsored money-sucks Fannie Mae and Freddie Mac. And read Reason staffers' recommendations for slashing ineffective, redundant, or wasteful government programs.

For a taste of the issue, read Reason Editor in Chief Matt Welch's essay, appropriately titled "Scary Monsters." And for copies of the charts presented in the videos above, go here now.

Reason.tv's 3D Fiscal House of Horrors is written and produced by Meredith Bragg, Austin Bragg, and Nick Gillespie.

Club For Growth's Chris Chocola: Cutting Spending is a Team Sport

Thu, 16 Sep 2010 11:00:00 EDT

If Republicans take control of the House of Representatives in November, Chris Chocola of the Club for Growth worries they'll "go Washington" like they have in the past. Chocola's D.C.-based group is working to change the "gene pool of Congress" by funding candidates who want to cut spending, lower taxes, and promote free markets.

A two-term GOP congressman from Indiana (2003-7), Chocola used to worry that "people weren't interested in good government" or the nitty-gritty of public policy. But the rise of the Tea Party. widespread anti-incumbent fervor, and candidates such as Marco Rubio, Rand Paul, and Sharron Angle, give him hope that serious change is not only possible but probable. The next two elections, he says, are "an inflection point," whose results may well determine whether the U.S. economy recovers anytime soon.

Chocola talked with Reason.tv 's Nick Gillespie about the midterm elections, whether the Republicans are ready to cut spending, and if his kids needle him about losing his seat in Congress.

Approximately seven minutes. Shot by Jim Epstein and Meredith Bragg. Edited by Josh Swain and Epstein.

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What We Saw at the 9/12 Tea Party Rally in DC

Sun, 12 Sep 2010 00:00:00 EDT

On September 12, 2010 in Washington, D.C., FreedomWorks sponsored its second annual 9/12 rally, based on the theme of "Remember in November." Among the speakers were FreedomWorks' Dick Armey and Matt Kibbe (go here for Reason.tv's interview with them about their best-selling Give Us Liberty: A Tea Party Manifesto); former New Mexico Gov. Gary Johnson (go here for an interview about his Our America initiative); "Tito the Builder," a Colombian immigrant and contractor who is an outspoken defender of free enterprise; Deneen Borelli of Project 21 and Tom Borelli of the Free Enterprise Project; and new media impresario Andrew Breitbart of Big Government.

This year's event drew a smaller but arguably more intense crowd than last year's demonstration. Attendees' attitudes toward President Barack Obama and the Democratic Congress were sharply negative and sometimes strayed from the Tea Party's traditionally narrow focus on curbing federal spending to issues such as illegal immigration and race relations. Yet there was no mistaking the main thrust of the day's event, which was, as Matt Kibbe stressed, that "November 3 is even more important than November 2." As Andrew Breitbart put it, "The beauty of the Tea Party movement is watching it hold Republicans accountable...These people are not going to stop holding their government and elected officials accountable, especially those that claim to represent their values."

Approximately 5.30 minutes. Shot and edited by Dan Hayes and Jim Epstein. Interviews by Michael C. Moynihan and Nick Gillespie.

Watch Reason.tv's coverage of last year's 9/12 rally here and Glenn Beck's August 28, 2010 "Restoring Honor" rally here.

Give Us Liberty? Q&A with Dick Armey & Matt Kibbe of FreedomWorks

Thu, 02 Sep 2010 10:26:00 EDT

Sen. Lisa Murkowski (R-Alaska) is the latest victim of the Tea Party insurgency that's trying to take over the Republican Party. Tea Party favorite Joe Miller defeated Murkowski in The North Star State's primary by hammering away at (among other things) her support for TARP and lack of zeal for overturning Obamacare.

Miller joins a new breed of anti-spending candidates such as Maine's Paul LePage, Kentucky’s Rand Paul, Florida's Marco Rubio, and South Carolina's Nikki Haley, who promise to bring a new passion for shrinking government to D.C. and state capitals.

Here’s how Freedom Works' Dick Armey and Matt Kibbe sum up what the Tea Party stands for in their new book, Give us Liberty: A Tea Party Manifesto: "It doesn’t take a lot of words to say that we just want to be free. Free to lead our lives as we please, so long as we don’t infringe on the same freedom of others."

Armey and Kibbe say that the Tea Party coheres around spending and that other issues are not central to its mission. Perhaps. Joe Miller is also pro-life, pro border fence, and wants to outlaw the use of embryonic stem cells in medical research. Maine gubernatorial hopeful LePage believes the “traditional definition of marriage should be preserved.” Haley, who will probably be South Carolina's next governor, has campaigned on tough enforcement against illegal immigrants. And the closest thing to a Tea Party spokesperson is Sarah Palin, the former “Bridge to Nowhere” supporter who oversaw a 16 percent increase in spending during her time as governor of Alaska.

Can this coalition stay together, stick to its anti-spending message, and actually change American politics? Or will it be co-opted by the very party upon which it seeks to perform a "hostile takeover?"

Reason.tv’s Nick Gillespie sat down with Armey and Kibbe to discuss these issues and more.

The interview was shot by Jim Epstein and Meredith Bragg, and edited by Epstein and Joshua Swain.

Approximately 9.30 minutes

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Tim Cavanaugh Discusses the Upcoming Election in California on Varney & Co.

Mon, 30 Aug 2010 03:00:00 EDT

Tim Cavanaugh, Reason columnist and Hit & Run contributor, discusses Meg Whitman's (R) lead on opponent Jerry Brown (D) in California's gubernatorial race between on Fox Business' Varney & Co. Air date: August 30, 2010.

Approximately 3:13 minutes.

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Matt Welch Discusses Baseball and Bailouts on Russia Today

Mon, 30 Aug 2010 00:00:00 EDT

Reason Editor in Chief Matt Welch discusses corporate welfare for lying billionaire baseball owners on The Alyona Show. Air date: August 27, 2010.

Length: 5.58 minutes.

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If You Think Your State is Broke Now, Just Wait Til the Pension Bomb Explodes!

Fri, 27 Aug 2010 08:27:00 EDT

Unless you've been pulling a Rip Van Winkle for the past few years, you know that your state is more busted than Larry Craig in an airport toilet. The only possible exception is the state of Denial, and it closed its borders to new arrivals sometime in late 2008.

One of the main drivers of this sorry state of affairs is the massive disparity between public-sector and private-sector compensation, especially when it comes to benefits such as pensions. Various studies have found anywhere between a 70 percent and a 34 percent differential in total compensation, with public-sector employees getting not just more pay and benefits but near-absolute job security and early retirement. Consider California:

A bipartisan bill...passed virtually without debate unleashed the odious “3 percent at 50” retirement plan in 1999. Under this plan, at age 50 many categories of public employees are eligible for 3 percent of their final year’s pay multiplied by the number of years they’ve worked. So if a police officer starts working at age 20, he can retire at 50 with 90 percent of his final salary until he dies, and then his spouse receives that money for the rest of her life. Even during the economic crisis, “3 percent at 50” and the forces behind it have only become more entrenched.
In the midst of California’s 2008–09 fiscal meltdown, with the impact of deluxe public pensions making daily headlines, the city of Fullerton nevertheless sought to retroactively increase the defined-benefit retirement plan for its city employees by a jaw-dropping 25 percent. What’s more, the Fullerton City Council negotiated the increase in closed session, outside public view.

Porker of The Month for August 2010: Rep. Hal Rogers!

Tue, 24 Aug 2010 12:00:00 EDT

Reason.tv presents Citizens Against Government Waste's Porker of the Month for August 2010: Rep. Hal Rogers (R-KY)!

Conservation or nepotism? Since 2007 Rogers has been promoting a bill which would provide federal grants to overseas wildlife protection for lions and cheetahs. Surprise! Rogers' daughter is the grants administrator for the Namibia-based Cheetah Conservation Fund, and has been since—you guessed it—2007.

Congratulations, Hal!

"Porker of the Month" is written and produced by Austin Bragg. Approximately 1.2 minutes.

For more info on Citizens Against Government Waste and the Porker of The Month, go here.

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Adrian Moore Discusses California on Varney & Co.

Thu, 19 Aug 2010 05:00:00 EDT

Adrian Moore, Vice President of Research at the Reason Foundation, discusses exorbitant loans made in Bell, CA on Fox Business' Varney & Co. Air date: August 18, 2010.

Approximately 4:40 minutes.

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Adrian Moore Discusses Exorbitant Government Pay in California on Varney & Co.

Tue, 10 Aug 2010 00:00:00 EDT

Adrian Moore, Vice President of Research at the Reason Foundation, discusses the outlandish pay and pensions of some officials in municipalities across California on Fox Business' Varney & Co. Air date: August 10, 2010.

Approximately 4.11 minutes.

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Adrian Moore Discusses California's Overturn of Prop 8 and more on Varney & Co.

Thu, 05 Aug 2010 00:00:00 EDT

Adrian Moore, Vice President of Research at the Reason Foundation, discusses the potential economic consequences of the overturn of Prop. 8, the case for full disclosure of city official salaries and unsustainable retirement costs in Los Angeles on Fox Business' Varney & Co. Air date: August 5, 2010.

Approximately 3.10 minutes.

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Adrian Moore Discusses The Ripple Effect from Bell, CA on Varney & Co.

Thu, 29 Jul 2010 00:00:00 EDT

Adrian Moore, Vice President of Research at the Reason Foundation, discusses the high pay and pensions of the Bell, California public officials and how it will impact the future hiring of government officials on Fox Business' Varney & Co. Air date: July 29, 2010.

Approximately 3.10 minutes.

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Porker of The Month (July 2010): Rep. Marcy Kaptur!

Thu, 22 Jul 2010 14:30:00 EDT

Reason.tv presents Citizens Against Government Waste's Porker of the Month for July 2010: Rep. Marcy Kaptur (D-OH)!

Back in March, the House Appropriations Committee banned members of Congress from awarding earmarks to for-profit companies.

Kaptur publicly praised the new ban, but privately she taught corporations (including one of her biggest campaign contributors) how to get around it, thus ensuring that their steady diet of taxpayer-supplied pork would continue.

Way to go, Rep. Kaptur!

"Porker of the Month" is written and produced by Austin Bragg. Approximately 1.2 minutes.

For more info on Citizens Against Government Waste and the Porker of The Month, go here.

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Leonard Gilroy on Fox 5 NY Debates Privatizing Parks

Thu, 22 Jul 2010 00:00:00 EDT

Leonard Gilroy, Director of Government Reform at the Reason Foundation, discusses how privatization of public parks could help New York's budget crisis on Fox 5 New York. Air date: July 6, 2010.

Approximately 7.34 minutes.

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Adrian Moore Appears on Varney & Co. to Discuss City Officials High Salaries

Wed, 21 Jul 2010 00:00:00 EDT

Adrian Moore, Vice President of Research at the Reason Foundation, discusses how exorbitant salaries for city officials impacted the budget of Bell, California, on Fox Business' Varney & Co. Air date: July 21, 2010.

Approximately 3.45 minutes.

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Steven Greenhut on Public Employee Paychecks, Perks and Plunder

Tue, 20 Jul 2010 10:54:00 EDT

Steven Greenhut, Editor in Chief of CalWatchdog.com and author of the new book, Plunder! How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation sat down with Reason.tv's Ted Balaker to discuss the widening gap between public and private sector employment.

Approximately 9 minutes. Shot by Alex Manning and Paul Detrick. Edited by Austin Bragg.

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Adrian Moore Discuss California's Vote on Pensions on Varney & Co.

Mon, 12 Jul 2010 00:00:00 EDT

Adrian Moore, Vice President of Research at the Reason Foundation, discusses California's pension costs and the upcoming public vote to roll them back on Fox Business' Varney & Co. Air date: July 12, 2010.

Approximately 2.29 minutes.

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3 Reasons The New Financial Regs Won't Fix Anything

Fri, 02 Jul 2010 11:20:00 EDT

The financial reform bill currently working its way toward President Barack Obama's desk for signing is being touted as the biggest overhaul of the banking and investment sectors since the Great Depression.

But the new regs won't be any more effective than the ones they replace in fixing anything or preventing the next major panic for at least three reasons.

1. New Watchdog, Old Tricks

They create a new watchdog consumer agency designed to protect consumers from their own supposed stupidity. You'll now be facing fewer choices when it comes to getting credit cards, loans, and doing other basic financial transactions.

2. Never Too Big To Fail

They replace "Too Big to Fail" with... "Too Big to Fail." One of the reasons why major financial institutions played Russian Roulette with the economy was because they were betting they would get bailed out. Which is precisely what happened. The new rules codify the idea that the government will make sure certain institutions can never fail. And if you think the big boys won't game that system, then you don't understand how well Citigroup, Goldman Sachs, et al have come through the current meltdown.

3. Housing Bubble Trouble

The financial crisis was set into motion by government policies that encouraged people to buy homes they couldn't afford at prices that were unsustainable. Between desperate attempts to keep people in houses and to keep interest rates below an effective rate of zero, the government continues to pour more money down the same rathole.

Markets work best when the risk and reward incentives are clear cut. When investors know they really can lose it all, they act responsibly with their money. If regulators think they can create a system that cushions us from bad decisions and doesn't encourage bad behavior, it's a delusion we'll all be paying for for a very long time.

Approximately 2 minutes. Produced by Meredith Bragg and Nick Gillespie, who also hosts.

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Pension Tsunami's Jack Dean on the Growing Wave of Public Pension Debt

Tue, 29 Jun 2010 10:00:00 EDT

At his website PensionTsunami, Jack Dean and his staff chronicle the ever-growing wave of public pension debt. "The whole idea of the pension was to provide public servants with a decent retirement," says Dean. "It wasn't to make them wealthy, to allow them to retire younger and with more money and be able to go off and play golf while the rest of us supported them."

Reason.tv's Ted Balaker spoke with Dean about a fiscal mess so large that even prominent liberals like former California Assembly Speaker Willie Brown are sounding the alarm.

Interview shot by Alex Manning and Paul Detrick. Edited by Manning. Approximately 9.47 minutes.

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Louisiana Commissioner of Administration Angele Davis on Streamlining Government

Fri, 25 Jun 2010 09:00:00 EDT

Angele Davis was a guest at Reason Weekend in New Orleans where she sat down with Reason’s Len Gilroy to talk about her efforts to streamline the Louisiana state government.

“We are focused on creative and sustainable solutions that will basically look for opportunities to realign our government’s size,” says Davis, Commissioner of Administration for the state of Louisiana.

Davis is also the chief financial advisor to Governor Bobby Jindal and serves on the Commission on Streamlining Government. With the goal of reducing the size of the state government and making it more more accountable, transparent and efficient, the commission has made over 200 recommendations to governor Jindal, many of which are now being implemented.

Reason Weekend is an annual conference held by Reason Foundation, the nonprofit that publishes Reason.tv. This year's event took place in New Orleans from April 15-18.

Approximately 30 minutes.

Shot by Dan Hayes. Edited by Paul Detrick.

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Former U.S. Comptroller General David Walker on The Federal Fiscal Crisis

Thu, 24 Jun 2010 14:00:00 EDT

David Walker, president and CEO of the Peter G.Peterson Foundation and former U.S. Comptroller General of the United States, sat down with Reason.tv Editor in Chief Nick Gillespie to discuss the deteriorating financial condition of the federal government and what needs to be done to put the country on a more prudent and sustainable path.

Approximately 10 minutes. Shot by Dan Hayes and Alex Manning. Edited by Josh Swain.

This discussion was part of Reason Weekend, an annual conference held by Reason Foundation, the nonprofit that publishes Reason.tv. This year's event took place in New Orleans from April 15-18 in New Orleans.

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Porker of The Month (June 2010): Sen. Richard Shelby, Who Made Pigs Fly in Outer Space!

Tue, 22 Jun 2010 10:00:00 EDT

Reason.tv presents Citizens Against Government Waste's Porker of the Month for June 2010. CAGW makes this award to a politician or special interest who takes pork-barrel spending to new heights.

This month's winner is Sen. Richard Shelby (R-Ala.)!

The Constellation Program was intended to modernize NASA and replace the aging Space Shuttle, but has been plagued by cost overruns and blown deadlines. President Obama and NASA have proposed canceling the unsustainable program—turning instead to the emerging private space industry to oversee launches.

In response, Sen. Richard Shelby (R-Ala.) co-sponsored a measure protecting Constellation, which was attached to an emergency war funding bill. Such a measure ensures millions of taxpayer dollars will continue being funneled to politically connected NASA contractors.

Contractors like Alabama's own Radiance Technologies, which—wouldn't you know it—just happens to be one of Shelby's biggest campaign contributors.

Congratulations Sen. Shelby, you are the Porker of the Month for June 2010!

For more info on Citizens Against Government Waste and the Porker of The Month, go here.

Written, produced, and narrated by Austin Bragg. Co-produced by Ted Balaker and Hawk Jensen. Approximately 1.15 minutes.

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Matt Welch Discusses California's Budget on Fox Business

Fri, 11 Jun 2010 07:43:00 EDT

On Fox Business' Varney & Co., Reason Editor in Chief Matt Welch discusses the budget woes of the Golden State on May, 20 2010.

About 3 minutes.

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Adrian Moore Discusses Growing State and Federal Debts on Varney & Co.

Wed, 09 Jun 2010 16:25:00 EDT

Adrian Moore, Vice President of Research at the Reason Foundation, discusses how growing concerns with state and federal debt are changing the course of elections on Fox Business' Varney & Co. Air date: June 9, 2010.

Approximately 2.09 minutes.

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Matt Welch Discusses the GOP Senate Race in California on Varney & Co.

Wed, 09 Jun 2010 07:00:00 EDT

On Fox Business' Varney & Co., Reason Editor in Chief Matt Welch discussed the upcoming race for the Republican Nomination for California's Sentate seat on June, 8 2010.

Did he get his calls right?

About 3 minutes.

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Overdose Director Martin Borgs on the Next Financial Disaster

Tue, 08 Jun 2010 13:30:00 EDT

In his new film Overdose: The Next Financial Crisis, Swedish director Martin Borgs, using Cato scholar Johan Norberg's book Financial Fiasco as a road map, warns of the "greatest economic crisis of our age—the one that awaits us."

Borgs sat down with Reason.tv's Michael C. Moynihan before the film's Washington premiere to discuss how we got into the current mess and what Overdose prescribes to prevent future calamities.

Approx. 9 minutes.

Shot by Dan Hayes and Meredith Bragg; edited by Bragg.

Madam-Turned-Pol Kristin Davis: Can NY Stand a Governor Who's Convicted Before Taking Office?

Mon, 07 Jun 2010 10:00:00 EDT

Kristin Davis rose to notoriety as the madam who provided New York Attorney General and Gov. Eliot Spitzer with the escorts that led to his demise. Davis ended up going to jail for providing a business populated by and for consenting adults. Spitzer's penalty? Possibly getting a show on CNN.

Now Davis herself is running the Empire State's top slot in Albany, on a platform this is simple and straightforward in libertarian sanity: She wants to legalize (and tax) marijuana and prostitution. For a state as deep in the red as New York, that's no joke. She has also proposed liberalizing gaming laws and called for gambling casinos in the Catskills.

I built a multi-million dollar escort service from scratch before pleading guilty to promoting prostitution. Prostitution in New York is estimated to be a $5 Billion a year business. Legalization and a reasonable tax rate could bring $ 1Billion in new revenues to New York State each year. Legalizing Marijuana would reap another $2 Billion a year. Then New York could balance the budget and still cut property and income taxes.

Additionally, she wants to legalize gay marriage because the state shouldn't discriminate and highlight the inequities of a criminal justice system that treats the politically powerless far worse than the politically powerful. Read more here.

Davis' official campaign site is here.

Davis has enlisted the aid of legendary political operative Roger Stone for a campaign which has no chance of knocking off presumptive gubernatorial shoe-in Andrew Cuomo. But her run gives voice to a series of issues that deserve to be heard now more than ever. And her run gives form to a vision of smart governance and policy that is not simply provocative but utterly persuasive.

Reason.tv's Nick Gillespie sat down with Davis to talk about her platform, the hypocrisy of elected officials, and her coming web-based reality show, Madam Governor, which will document her campaign.

Shot by Dan Hayes, Meredith Bragg and Josh Swain; edited by Swain. Approximately 5 minutes.

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Adrian Moore on Varney & Co. Discussing California's Budget Crisis

Sun, 06 Jun 2010 09:43:00 EDT

Adrian Moore, vice president of research at the Reason Foundation, discusses the Golden State's deficit fiasco and its effect on California's upcoming election with Varney & Co. on the Fox Business Network on May 12, 2010.

Approximately 3.11 minutes.

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Mickey Kaus on How Unions Killed the Democrats, Immigration, New Media, & Bringing the Velvet Underground to Beverly Hills High

Fri, 04 Jun 2010 08:00:00 EDT

The Kaus family was deeply intertwined with California politics and culture long before journalist/blogger Mickey Kaus started his longshot bid to unseat Sen. Barbara Boxer in the 2010 Democratic primary.

Mickey’s father, the Viennese-born Otto Kaus, was a well-respected jurist who sat on the California Supreme Court from 1981 to 1985. His brother Stephen is a prominent Bay Area civil-litigation attorney and a commentator for The Huffington Post. Mickey’s maternal grandmother, Dorothy Huttenback, was a musical prodigy who headed up the Los Angeles Music Guild for three decades, and Dorothy’s son Robert served as chancellor of the University of California at Santa Barbara. Both sides of the family were part of the historic wave of German-speaking Jews who fled the Nazis for Southern California in and around the 1930s, injecting a distinctive, semi-alienated yet intensely patriotic intellectual style to the Golden State’s civic conversation.

Mickey Kaus’ position within the national public policy discussion has always been that of a tweak-your-own-side contrarian. He was part of the group of writers at the left-of-center Washington Monthly in the 1980s who hatched what they called “neoliberalism”—a qualified rejection of interest-group politics and Keynesian economics in favor of policies intended to harness rather than oppose market forces. That frame led him to The End of Equality, a seminal 1992 book that stressed opportunities over outcomes and took on the liberal sacred cow of welfare. Kaus certainly hadn’t abandoned the liberal fold—among other things, the book called for a federal jobs program, universal health coverage, and compulsory national service—but he wasn’t an ordinary Democrat either.

By the end of the 1990s Kaus’ name was synonymous with political blogging. He had launched one of the first and most influential journalist blogs, Kausfiles, which for most of its lifespan has been published by Slate. In 2005 he helped kick-start the video debate site Bloggingheads.tv with his friend and frequent sparring partner Robert Wright. There and elsewhere, Kaus has distanced himself from his own Democratic Party on unionism, health care reform, public sector pensions, and especially immigration.

In 2010 Kaus decided to put his money where his mouth is and run against Boxer, the powerful three-term senator, as a way to advance the discussion about modern Democratic priorities. Needless to say, Kaus has no chance of unseating Boxer in the California primary coming on June 8. Yet his insights on new media, unions, and politics more broadly are well worth hearing. And his story about bringing the Velvet Underground to perform at Beverly Hills High in the '60s is not to be missed.

Reason.tv Editor Nick Gillespie spoke with Kaus in May, just after Arizona passed a controversial law about checking the immigration status of anyone who comes into contact with law enforcement.

Look for a version of this exchange in the August/September print edition of Reason.

Anthony Randazzo on RT's Alyona Show Talks about the Euro's Troubles

Tue, 01 Jun 2010 08:10:00 EDT

Reason Foundation's Director of Economic Research Anthony Randazzo discusses the rising pressures on the Euro from the Greek debt crisis and more on Russia Today's "The Alyona Show" on May 7, 2010.

Approximately 5 minutes.

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Adrian Moore on C-SPAN Discussing Economic Instablity of U.S. and Europe

Tue, 01 Jun 2010 00:00:00 EDT

On May 10, 2010, Vice President of Research at Reason Foundation Adrian Moore appeared on C-SPAN's Washington Journal to talk about California and Greece's deficit and economic instablity.

Approximately 44 minutes.

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Adrian Moore Discuss California's Proposed Tax Hike on Varney & Co.

Tue, 25 May 2010 12:20:00 EDT

On May 25, 2010, Adrian Moore, Vice President of Research at the Reason Foundation, discusses the newly proposed tax hike in California on Varney & Co.

Approximately 3.19 minutes.

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"The Cartel" Director Bob Bowdon on Education Reform

Tue, 25 May 2010 09:00:00 EDT

Bob Bowdon's new film The Cartel amply documents that waste and fraud in public education. Now playing in select cities, the documentary provokes outrage and action to fix a system that fails precisely the low-income students who most need the benefits of a strong education.

Go here for info and background on The Cartel and Bowdon, who also hosts the PBS show Two-Way Street and appears in videos for The Onion.

Reason.tv's Nick Gillespie talked with Bowdon recently in Washington, D.C. Shot by Dan Hayes and Meredith Bragg, who also edited the piece. Approximately 7 minutes. Scroll down for downloadable versions and subscribe to Reason.tv's YouTube channel to receive automatic notification when new material goes live.

Adrian Moore Discusses Greece and California's Budget Woes on Fox Business' Varney & Co.

Tue, 11 May 2010 16:00:00 EDT

Adrian Moore, vice president of research at the Reason Foundation, discusses the economic collapse in Greece and how it may be similar to the deficit problems in California with Varney & Co. on the Fox Business Network on May 5, 2010.

Approximately 4 minutes.

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Is The Tea Party Movement Racist?

Wed, 05 May 2010 14:00:00 EDT

Yesterday, the Washington Post reported that the Tea Party movement is "struggling to overcome accusations of racism," some of which has been perpetuated in its editorial pages. Yesterday's New York Times, home to the most obsessively anti-Tea Party editorial page in America, was stunned to discover that "at least 32 African-Americans are running for Congress this year as Republicans, the biggest surge since Reconstruction, according to party officials."

Previously, The Times reported that Tea Partiers are, on average, people with a high levels of education and higher than average incomes. So it would seem that they aren't, as some editorialists and pundits contend, simply a gang of subliterate militia men or, as actress Janeane Garofalo recently told MSNBC's Keith Olbermann, a subsection of the white power movement.

Wandering the recent Tax Day tea party in Washington DC with Reason.tv's Meredith Bragg, we saw some stupid signs--though none that could be considered offensive or racist. We talked to some people that claimed President Obama was both a Czarist and Bolshevik. We spoke to a former star of Saturday Night Live who has previously claimed that president might, in fact, be the anti-Christ. Or a communist. Or both. There were those who fretted that the United States were morphing into a Stalinist state. And there were countless protesters concerned that the Obama administration was spending recklessly, interested in auditing the Federal Reserve, and seething about the General Motors bailout.

So did we find that the Tea Party was motivated by race, by the fact that we now have a black president? Did it seem as if their stated concerns about health care reform and a ballooning national debt simply a smokescreen, designed to concealing a racist agenda? Here is what we found.

Produced by Michael C. Moynihan and Meredith Bragg. Edited by Meredith Bragg. Approximately 2 mins.

Glenn Beck Cites Reason Magazine on Rising Public Employee Wages

Thu, 22 Apr 2010 08:45:00 EDT

On February 19, 2010, Glenn Beck cited Reason Magazine's February 2010's cover story Class War by Steven Greenhut on the ballooning cost of pensions and wages for public empolyees.

Approximately 5.22 minutes.

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Taxes: The Price We Pay For Civilization

Wed, 14 Apr 2010 06:30:00 EDT

"Taxes are the price we pay for a civilized society," said legendary Supreme Court Justice Oliver Wendell Holmes, Jr.

As students of Buck v. Bell could tell you, Holmes had a habit of being monstrously wrong, but if he's right about taxes and civilization, it's certainly worth asking whether we're getting what we pay for.

Approximately 1.06 minutes. Written and produced by Meredith Bragg and Nick Gillespie.

For iPod, HD, and audio versions, scroll down.

To watch on YouTube, go here.

Adrian Moore on CNN's America Mornings Talks About the New High Speed Rail

Tue, 13 Apr 2010 07:00:00 EDT

On March 18, 2010, Vice President of Research at Reason Foundation, Adrian Moore, talked with Casey Wian on CNN American Morning of the hidden high costs of the newly purposed high speed rail.

Approximately 3.14 minutes.

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More Taxes or More Jobs? California Shows We Can't Have Both

Mon, 12 Apr 2010 06:30:00 EDT

It's hard to find a politician who isn't eager to "do something" about high unemployment. Turns out California has found one way to save and create certain kinds of jobs—spend like mad and raise taxes.

That job-creation strategy has worked quite well for government-sector workers. Problem is the statewide unemployment rate is still among the highest in the nation, and many private-sector employers are heading to states like Texas, where taxes are lower and regulations are lighter.

"I would love to have companies calling me saying, 'We'd like to move to California, can you help us with that relocation?' I get none of those calls," says business relocation coach Joe Vranich. "The calls I do get are, 'Hello, we want to move out of California, can you help us do that?'"

Vranich says there's no one reason why businesses leave. He calls it "death by a thousand cuts," where job creators get fed up with everything from high taxes to traffic gridlock and legal hassles.

Take Rick and Jack Newcombe, the father-son team that runs Creators Syndicate. A long legal battle with the city of Los Angeles might end up being their company's final cut. The Newcombes say the city arbitrarily stuck the company into a higher tax category and officials are applying the hike retroactively. City officials are demanding $400,000 in back taxes, but Rick Newcombe calls the whole episode "legalized theft," adding that a tax penalty of that size would force the company to lay off 10 employees.

It's ironic that such drama unfolds in a city where Mayor Antonio Villaraigosa is always doing something—transit projects! green jobs!— he hopes will stimulate the economy. And steep statewide unemployment persists long after Gov. Arnold Schwarzenegger eagerly accepted billions in federal stimulus funds. In fact, the Bush-Obama scatter shot of bailouts, stimuli, and rescue plans has fallen well short of proponents' promises.

Want to create and save jobs? Maybe it's time for politicians to stop doing so much and start undoing some of their worst blunders.

"More Taxes or More Jobs?" is written and produced by Ted Balaker, who also hosts. Camera-Animation: Hawk Jensen; Associate Producer: Paul Detrick; Additional Photography: Alex Manning.

Approximately seven minutes. Scroll down for downloadable iPod, HD and audio versions of this and all our videos.

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Is California Too Big to Fail? Q&A with The FlashReport's Jon Fleischman

Thu, 08 Apr 2010 07:00:00 EDT

Is California "too big to fail" or is a Golden State bankruptcy in the cards?

Reason'tv's Ted Balaker sat down with Jon Fleischman, founder and publisher of the FlashReport, to talk about California's ongoing fiscal meltdown, and how, after a barrage of bipartisan tax hikes and spending sprees, California's political class has yet to learn its lesson.

Shot by Hawk Jensen and Paul Detrick. Edited by Alex Manning.

About 9 minutes long. Scroll down for iPod, HD, and audio versions of this video.

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3 Reasons Why Public Sector Employees Are Killing the Economy

Wed, 31 Mar 2010 07:00:00 EDT

As unemployment stubbornly sticks near 10 percent and any sort of economic recovery seems a long way off, think about this: The one part of the economy that's going gangbusters is government work.

Indeed, since the Great Recession started in December 2007, over 8 million jobs have been lost in the private sector while the public sector has added at least 100,000 positions. It's time to recognize that public-sector employment is killing the economy for at least three reasons:

1. They cost too much. As USA Today recently noted, federal employees make on average almost $8,000 more than their private-sector counterparts. When you add in benefits, the gap spreads to about $30,000. State and local government workers make around the same as private-sector counterparts, but their health and retirement packages mean they make significantly more in the end.

2. We can't fire them. The private sector has shed positions in response to slackening demand and the economic downturn. That sort of adjustment is painful but necessary, as it allows the economy to adjust to changing circumstances and workers and employers to move into new activities. Because it is guaranteed certain amounts of tax revenue and has a non-market mind-set, the public sector is largely insulated from such forces and keeps or even adds workers despite changed conditions. The result? We keep paying for things that we don't use, need, or want.

3. They create a permanent lobby for expanded government and higher taxes. Look at California, where teacher unions have spent over $211 million dollars on elections in the past decade. One result is that 40 percent of California's budget must be spent on education, regardless of the number and needs of students. Over the last 10 years, taxpayer contributions to public-sector pension funds has increased by 2000 percent! Such sort of tax-based gladhanding is just getting started. For the first time in history, the number of public-sector union employees is greater than those in the private sector, so expect to see even more lobbying for the sorts of mandatory raises and permanent job security that most of us can only dream of.

Because the public sector gets its pay and benefits from tax dollars and public debt, every thing it gets means there's less for the rest of us to save, invest, or pay workers with. With the federal government and most states already neck-deep in red ink, it's time to cut public-sector pay and payrolls and return more money to the private sector. That will help spur the sort of investment and innovation that will get the economy moving and end the recession far faster than paying more and more money to government workers.

"3 Reasons Public-Sector Employees Are Killing The Economy" is produced by Meredith Bragg and Nick Gillespie, who also hosts. Approximately 3 minutes. Scroll down for iPod, HD, and audio versions.

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Adrian Moore Discusses California's Budget Woes on Varney & Co.

Tue, 23 Mar 2010 19:00:00 EDT

On March 19, 2010, Reason's Adrian Moore discussed California's budget problems on Fox Business' Varney & Co.

Approximately 3 minutes.

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Why The Stimulus Isn't Working

Mon, 22 Mar 2010 06:30:00 EDT

It's been a year since Congress passed a stimulus bill that will eventually dole out $787 billion in taxpayer money to lucky recipients across the country.

In California, stimulus money has been used to pay the salaries of cops, provide rental assistance to residents of Santa Monica, and subsidize homeowners who weatherize their homes. Were those good investments?

The University of California at Irvine was awarded $42 million in stimulus money to fund different research projects and, in one case, $2 million to "stimulate student interest in mathematics and computer science." Was that a good use of scarce public dollars?

To learn more, Reason.tv's Paul Feine spoke with UC-Irvine economist Richard McKenzie who, a year ago, predicted that the stimulus package wouldn't work.

McKenzie is the author of Why Popcorn Costs So Much at the Movies: And other Pricing Puzzles.

Shot by Paul Feine and Alex Manning; edited by Paul Feine.

Approximately 7.30 minutes.

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And check out Reason Saves Cleveland With Drew Carey: How to fix the "Mistake on The Lake" and other once-great American cities, an original six-part documentary series.

Reason Foundation's Adrian Moore on Fox Business Discussing California Education Funding

Fri, 12 Mar 2010 14:51:00 EST

On March 8, 2010, Adrian Moore, vice president of research at Reason Foundation, appeared on Fox Business with Stuart Varney to comment on California's education funding.

Approximately 5 minutes.

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And come back to Reason.tv March 15 through 19 to watch the original documentary series Reason Saves Cleveland With Drew Carey.

Len Gilroy Discusses Privatization of Public Works on CNBC's Power Lunch

Thu, 11 Mar 2010 16:22:00 EST

On March 11, 2010, Reason Foundation 's Director of Government Reform, Leonard Gilroy appeared on CNBC's Power Lunch to discuss the option of privatizing public works for cash-strapped cities.

Approximately 2 minutes.

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Adrian Moore on Fox Business Channel Talking State Pensions

Tue, 09 Mar 2010 17:00:00 EST

On March 3, 2010, Adrian Moore , vice president of research at Reason Foundation , appeared on Fox Business with Stuart Varney to comment on California's prison guard pensions and the large issue of the Golden State's buget shortfalls.

Approximately 3.40 minutes.

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Pork Party House

Tue, 09 Mar 2010 07:30:00 EST

First Rep. Charlie Rangel (D-N.Y.) surrenders his chairmanship of the Ways and Means Committee amid an ethics investigation. Now Speaker Nancy Pelosi (D-Calif.) proposes an idea that she hopes will help her make good on her promise to help lead "the most ethical Congress in history"—a party-wide ban on earmarks. Will it happen? Don't bet on it. Reason.tv's "Pork Party House" helps explain why neither party can resist the pull of pork.

If you're a politician, lobbyist, or insider and you're in the mood to party, check out a Washington D.C. mansion called the Sewall-Belmont House. Party with senators and celebrities at thousand-dollar-a-plate fundraisers! You might even get to ride a mechanical bull! The Sewall-Belmont House hosts so many A-list events, you might be surprised to find out that your tax dollars help fund this hotspot for Washington insiders. "Over the last 10 years, the Sewall-Belmont House has gotten over $3.4 million in earmarks," says Leslie Paige of Citizens Against Government Waste.

Reporters often highlight the most ridiculous examples, but politicians have learned how to make their pork projects sound uncontroversial, even appealing. Just say your project will help children, senior citizens, or—if you really want to slip under the radar—direct taxpayer dough to a museum.

"Museums are one of the biggies because they sound so good," says Paige. Sen. Mary Landrieu (D-La.) used that angle to direct a million-dollar earmark to the Sewall-Belmont House (after the Senator received an award from the Sewall-Belmont House). Turns out Landrieu was just getting warmed up, because her recent $300 million "Louisiana Purchase" shot her into the ranks of pork legends.

It wasn't supposed to be like this, laments Rep. Jeff Flake (R-Ariz.), one of Congress's few legitimate pork busters. Flake tells Reason.tv that despite pork-laden scandals that stuck some members behind bars—remember Rep. Randy "Duke" Cunningham (R-Calif.)?—and promises from Barack Obama to reform earmarks, spending on pork continues to swell in the giant pork party house called the U.S. Congress.

"Pork Party House" is written and produced by Ted Balaker. Producer: Hawk Jensen; Host: Nick Gillespie; Field Producer: Dan Hayes; Associate Producer: Paul Detrick; Additional Camera: Meredith Bragg; Production Assistant: Josh Swain; Music: "Get What You Want?" by Beight (Magnatune Records).

Approximately six-and-a-half minutes. Scroll down for embed code and downloadable versions.

3 Reasons Why Obama's High-Speed Rail Will Go Nowhere Fast

Thu, 04 Mar 2010 08:00:00 EST

President Barack Obama has pledged $8 billion in tax dollars to build a national network of high-speed rail—trains that can carry passengers at speeds in excess of 150 MPH.

But the Supertrain fantasy was a mistake back in the 1970s, when it gave rise to one of the most expensive—and rotten—TV shows in history. And it's just as much of a wreck in the 21st century for at least three reasons:

1. The lowball costs. CNN estimates that delivering on the plan could cost well over $500 billion and take decades to build, all while failing to cover much of the country at all. Internationally, only two high-speed rail lines have recouped their capital costs and all depend on huge subsidies to stay in operation.
2. The supposed benefits. "We're gonna be taking cars off of congested highways and reducing carbon emissions," says Vice President Joe Biden, an ardent rail booster. But most traffic jams are urban, not inter-city, so high-speed rail between metro areas will have no effect on your daily commute. And when construction costs are factored in, high-speed rail "may yield only marginal net greenhouse gas reductions," say UC-Berkeley researchers.
3. The delusional Amtrak example. Obama and Biden look to Amtrak as precedent, but since its founding in 1971, the nation's passenger rail system has sucked up almost $35 billion in subsidies and, says The Washington Post's Robert J. Samuelson, "a typical trip is subsidized by about $50." About 140 million Americans shlep to work every day, while Amtrak carries just 78,000 passengers. There's no reason to think that high-speed rail will pump up those numbers, though there's every reason to believe its costs will grow and grow.

"Supertrain 2010" was written and produced by Meredith Bragg and Nick Gillespie, who also hosts. Approximately 3 minutes.

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Obama's Doublethink Doubletalk (State of the Union Remix)

Tue, 02 Feb 2010 09:00:00 EST

George Orwell defined doublethink as "the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them.

When it comes to war, spending, and more, President Barack Obama's 2010 State of the Union address showed that doublethink is alive and well in Washington, D.C.

Approximately two minutes. Written and produced by Paul Feine.

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Obama's Surprising Jobs Program Success

Thu, 28 Jan 2010 13:00:00 EST

During his first State of the Union address President Obama highlighted the jobs created during his first year in office. And it is clear that the president's policies are putting Americans back to work--especially bankruptcy attorneys, repo men, and government workers.

Written and produced by Ted Balaker. Director of Photography: Alex Manning; Associate Producer: Paul Detrick.

Approximately 40 seconds.

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Virginia is for (Liquor) Lovers!

Tue, 26 Jan 2010 12:00:00 EST

Bob McDonnell is a self-professed pinot grigio and white zinfandel drinker.

He's also the new Republican governor of Virginia and is taking aim at the commonwealth's oppressive and inefficient state-owned liquor monopoly. More than a dozen states still completely control the sales and distribution of all distilled spirits.

The result? Higher payrolls for state governments (state-workers are public-sector employees after all) and rotten selection and service for customers (state-sanctioned monopolies tend to diminish the shopping experience).

Despite a reputation as a social conservative, McDonnell thinks that state-run liquor stores are a bad idea from both pragmatic and philosophical perspectives. Given budget crises, says McDonnell, "we can't just do things the same old way.... Certainly there's nothing I gleaned from the [Virginia] constitution that would have me think it's better or required to have the government controlling distilled spirits."

States such as West Virginia and Iowa have gained millions of dollars in new tax and license revenues by privatizing liquor sales, says Reason Foundation policy analyst Len Gilroy. And they've also cut government expenditures by millions of dollars as well.

Will Virginia join them? McDonnell invited Reason.tv to come back in a year and check in with him. Sure thing, Mr. Governor. We'll bring the questions. You can bring the white zinfandel.

Approximately 4.30 minutes. Written and produced by Meredith Bragg and Nick Gillespie, who also hosts. Additional footage: Dan Hayes.

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For more Reason.tv videos on prohibition and alchohol policy, go here.

Anthony Randazzo on Russia Today December 3, 2009

Fri, 11 Dec 2009 07:00:00 EST

Reason Foundation policy analyst Anthony Randazzo discusses President Barack Obama's "Jobs Summit" and plans to combat unemployment on Russia Today.

Original airdate: December 3, 2009. To watch this video at Reason.tv's YouTube channel, go here.

Anthony Randazzo: Why California Should Sell Its White Elephants

Fri, 30 Oct 2009 10:00:00 EDT

On July 23, 2009, Reason Foundation policy analyst Anthony Randazzo appeared on KTVU in the Bay Area to discuss how California would benefit from selling off unneeded real estate assets, including San Quentin prison and a beach house used by MTV. For an article on the segment, go here.

Budget Deficits For Dummies: Or How I Learned to Stop Worrying and Love $1.4 Trillion

Tue, 20 Oct 2009 10:00:00 EDT

The U.S. budget deficit for fiscal year 2009, which ended in September, was a record-shattering $1.4 trillion, equal to about 10 percent of Gross Domestic Product. In case you're wondering, the previous record had been set in...2008.

$1.4 trillion dollars is a lot of money and it's hard to get your mind around that figure. One way to appreciate the sum is to think of it in terms of all the things that you could buy with that dough. The budget deficit, for instance, would pay for more than 1.2 billion nights at Rep. Charles Rangel's vacation condo in the Dominican Republic. And that's just for starters.

Don't worry if you have trouble doing the math, because you'll get another chance next year. The Obama administration has just released its estimate for the fiscal year 2010 budget deficit. The number? Another $1.4 trillion.

Approximately 1.30 seconds. Written and produced by Meredith Bragg and Nick Gillespie.

What Do You Get When You Cross Ronald Reagan and Woody Harrelson?

Mon, 17 Aug 2009 13:00:00 EDT

Recently, Reason.tv's Ted Balaker sat down with California State assemblyman and U.S. Senate candidate Chuck DeVore.

While the Republican is aiming to Democratic incumbent Sen. Barbara Boxer, Devore discusses bipartisan state and federal spending sprees. California remains mired in permanent fiscal crisis because the state spends "every last penny and then some," say DeVore, while noting "the unprecedented increases in state spending under Gov. Arnold Schwarzenegger."

The novelist and former soldier addresses the historic Bush-era spending binge, but says the "big thing is the order of magnitude shift" under President Obama. "So instead of a multi-billion dollar program, now we're on to trillions."

Other topics include: ObamaCare, foreign policy, California's lax welfare-to-work rules, why the tea party movement is here to stay, and what it's like being a pro-hemp politician in conservative Orange County, California.

Producer is Ted Balaker, director of photography is Alex Manning, field producer is Hawk Jensen, and associate producer is Paul Detrick.

Approximately 8.30 minutes. Scroll down for downloable versions and embed code.

The Case Against College Entitlements

Tue, 14 Jul 2009 11:00:00 EDT

President Barack Obama has declared that his administration aims to make college affordable to everyone by greatly expanding government aid to middle class families. The Washington Post says that Obama's higher education proposals, which include creating a brand new Pell Grant entitlement, "could transform the financial aid landscape for millions of students while expanding federal authority to a degree that even Democrats concede is controversial."

But what if President Obama has it backwards? What if America is sending too many people to college?

A recent study found that "Nationally, four-year colleges graduated an average of just 53% of entering students within six years." If 40 percent of students who enter college drop out before graduation and over 50 percent of students take six years to graduate, perhaps Obama is focusing on the wrong issue.

Reason.tv's Michael C. Moynihan sat down with Rep. Paul Ryan (R-Wis.) and the American Enterprise Institute's Charles Murray, author of the recent book Real Education, to analyze how Obama's higher-education plans will impact the economic and cultural future of the United States.

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For a YouTube version of this video, go here.

"The Case Against College Entitlements" was produced by Michael C. Moynihan and Meredith Bragg. Approximately 5 minutes long.

Turning Japanese

Tue, 23 Jun 2009 09:00:00 EDT

It wasn't that long ago that everyone in America believed that Japan would soon overtake the United States as the dominant economic force on the planet. When the Japanese stock market rallied to historic heights in late 1989 and Japanese investors even bought Rockefeller Center in New York, it all seemed like a done deal.

But then...the Nikkei Index tanked, the nation's economy collapsed, the government responded with an ever-changing mix of tax hike and tax cuts, stimulus spending on infrastructure, massive bailouts of businesses, and more. None of it worked and Japan entered what's been called its "Lost Decade," a seemingly endless period of economic stagnation.

What are the lessons for the U.S. from Japan's experience? Reason Foundation policy analyst Anthony Randazzo is the co-author of the recent study "Avoiding an American Lost Decade: Lessons from Japan's bubble and recession" and a July 2009 cover story for Reason magazine, "Turning Japanese: Japan's post-bubble policies produced a 'lost decade.' So why is President Obama emulating them?"

As Randazzo explains, both the causes of and official responses to Japan's bubble and economic slump eerily anticipate exactly what the U.S. government is doing. Worse still, the Obama administration and Congress seem dead-set against the sorts of policies—across-the-board taxes on personal and business income, reductions in long-term and unsustainable government debt, and allowing damaged firms to go bankrupt—that would help revivify the American economy.

Is America on the verge of its own lost decade? Sadly, the government seems to be doing everything it can to make that happen.

Approximately 3.30 minutes long. Produced by Dan Hayes and Nick Gillespie; graphics by Meredith Bragg.

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128 Days Later: It Can Always Get Worse

Wed, 27 May 2009 11:00:00 EDT

For all the talk about President Barack Obama's historic first 100 days in office, too little attention has been paid to what could happen next...

Now, from the horror masters behind The Auto Bailout, The Stimulus Package, and White House Poetry Night comes a story of true terror...

128 Days Later: It Can Always Get Worse.

Written and produced by Meredith Bragg, with Nick Gillespie. From a concept suggested by Katie Hooks and Jeff Winkler.

To embed this video on your site and subscribe to Reason.tv&'s YouTube channel, go here.

Privatization in the Age of Obama: Reason Foundation's Adrian Moore and Len Gilroy

Tue, 19 May 2009 12:00:00 EDT

As President Barack Obama and the federal government goes hog wild in terms of economic intervention, state and local governments are running record deficits despite massive increases in revenue over the past decade.

At the same time, many government units are moving ahead with large- and small-scale privatization programs to cut costs and improve services. During Reason Weekend, the annual event held by the nonprofit that publishes this website, Reason Foundation analysts Adrian Moore and Len Gilroy gave a detailed overview of trends in privatization and the massive benefits privatization holds for government and taxpayers alike.

Approximately 35 minutes.

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For more information on the policy work of Reason Foundation, go to Reason.org.

Shot by Roger M. Richards; edited by Meredith Bragg.

Hasta La Vista, Arnold!

Thu, 14 May 2009 08:00:00 EDT

He was the perfect political superhero, sent to rescue California from spend-happy politicians at just the right time. And yet Arnold Schwarzenegger’s reign as governor has turned into a disaster flick that could spell catastrophe for the Golden State—and the whole nation.

In 2003's historic recall election, the former Mr. Olympia pummeled dozens of candidates—from incumbent Gray Davis to former child actor Gary Coleman to porn star Mary Carey—on the road to Sacramento. He promised to abolish the odious car tax hike implemented by Davis. And to balance the budget, cut taxes and spending, and make California more business-friendly.

"He promised to stop the crazy deficit spending, cut up the credit cards, live within our means. And he did exactly the opposite. Schwarzenegger increased spending faster than we saw under Gray Davis," says Rep. Tom McClintock (R-Calif.), who was a state senator—and one of Arnold's challengers—six years ago.

Now the Golden State faces yet another spending-induced catastrophe. California could simply go broke by July. Sacramento reacted to the latest crisis by passing a massive tax increase in February, squeezing another $1,100 from the average family. Even the dreaded car tax, the issue that catapulted Arnold to office, is back.

How could it all have gone so horribly wrong, especially after it looked so wonderfully right? Well, it turns out there's a force in California politics that's much more powerful than the Governator: a culture of spending pushed by public-employee unions, money-grubbing corporate-welfare cases, and more.

Sadly, California and Schwarzenegger are hardly alone in spending well beyond their means. As many as 40 states face whopping deficits that are only going to get worse as the recession continues.

If country-wide trends do start in California, Rep. McClintock worries about what's in store for our nation. "As high taxes, high borrowing and high spending destroy California’s economy, Californians are moving to those 49 other states. If we allow the same policies to destroy our country where are we going to go?"

"Hasta La Vista, Arnold" is written and produced by Ted Balaker. Director of Photography is Alex Manning and Associate Producer is Paul Detrick.

Jeffrey Miron on The Financial Crisis And The Case for Doing Nothing

Mon, 27 Apr 2009 13:00:00 EDT

During Reason Weekend, the annual event held by the nonprofit that publishes this website, Harvard economist and Reason contributor Jeffrey A. Miron argued that last year's bailout was a mistake and that any stimulus spending should consist of reductions in taxes, not increases in expenditures.

Miron is a senior lecturer and director of undergraduated studies at Harvard. Educated at Swarthmore and M.I.T., he has held positions at the University of Michigan and Boston University and he has written widely on the "economics of libertarianism," including a controversial and widely discussed cost-benefit analysis of the war on drugs that concluded prohibition's costs far outweigh any possible benefits.

Go here for podcast version.

Approximately 30 minutes. Shot and edited by Roger Richards.

Michael C. Moynihan talks Government Growth on the Glenn Beck Show

Tue, 14 Apr 2009 00:00:00 EDT

Michael C. Moynihan talks government growth and progresivism on the Glenn Beck Show.

Air Date: 4/14/2009

About 4:40 minutes.

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John Stossel: The Reason.tv Interview

Tue, 03 Feb 2009 18:00:00 EST

Double Update: Set your Tivos to stun! John Stossel's 20/20 special, Bullshit in America, will air on Friday, ~~March 6~~ March 13 (the date is tentative; please consult your local listings). Based on six segments from Reason.tv and featuring Drew Carey, Stossel will take a long (and libertarian) look at immigration reform, medical marijuana, eminent domain abuse, and much more.

John Stossel is the best-known libertarian in the news media. As the co-anchor of the long-running and immensely popular ABC News program 20/20, auteur of a continuing series of specials on topics ranging from corporate welfare to educational waste to laws criminalizing consensual adult behavior, and author of best-selling books such as Myths, Lies, and Downright Stupidity, Stossel brings a consistent message of liberty to millions of viewers on a weekly basis.

It wasn’t always this way. Born in 1947, Stossel started out as a standard-issue consumer reporter, working in Oregon and New York before joining the staff of Good Morning America and, later, 20/20. He did scare stories about everything from pharmaceutical rip-offs to exploding coffee pots. Then, in the 1980s, he encountered reason, which radically changed his thinking about the benefits of laissez faire in economics and personal lifestyles.

"It was a revelation," he writes in his 2004 memoir, Give Me a Break. "Here were writers who analyzed the benefits of free markets that I witnessed as a reporter. They called themselves libertarians, and their slogan was ‘Free Minds and Free Markets.’ I wasn’t exactly sure what that meant, but what they wrote sure made sense."

Reason.tv caught up with Stossel in January in Los Angeles, where the newsman was filming a special episode of 20/20 based on six Reason.tv documentaries featuring Drew Carey. Among the topics: the desirability of open borders, the need to reform the nation’s drug laws, and the case against universal preschool. Ted Balaker, a Reason.tv producer, talked with Stossel about bailout mania, his hopes for the Obama years, and his attempt to educate a generation of school kids with a video series called Stossel in the Classroom.

For an edited transcript of this interview, go here.

For an audio podcast, go here.

Earmarks

Tue, 29 Jul 2008 04:00:00 EDT

Taxpayers are shelling out over $17 billion for more than 11,000 Congressional earmarks in FY 2008. One such project is a $1.6 million earmark in this year’s defense spending bill. The money is going to the Search for Extra-Terrestrial Intelligence (SETI), a program that searches for evidence of life elsewhere in the universe.

That alien pork project is just one example of how elected officials use earmarks to funnel federal tax dollars back to powerful interests in their districts. While politicians and a few of their most well-connected constituents benefit from earmarks, the costs fall on individual taxpayers. Since 1991, Americans have paid over $271 billion for pork projects.

In this new Reason.tv video, Senator Tom Coburn (R-Okla) - who is known as the Senate's "Dr. No" for his aggressive opposition to earmarks - explains how taxpayers are being fleeced by Washington's insatiable appetite for pork.

The Wall

Wed, 28 May 2008 05:00:00 EDT

At a time when pundits and politicians of all stripes endorse securing the border between the United States and Mexico, reason.tv travels south to see what's really going on—and what the human and monetary costs are of amping up border patrols.

Building a wall along the border with Mexico is a great idea—if America wants to be like China and the former East Germany. In the 13th episode of reason.tv's acclaimed and controversial Drew Carey Project, our host suggests there are better ways to ensure American security while also promoting free trade with our neighbor to the South.

"One way out of this mess would be to simply allow peaceful workers to enter our country through legal ports of entry," says Carey. "If we did that we could stimulate our economy, bring a huge underground labor market out into the open and we could put unscrupulous smugglers out of business. More importantly, we'd free up border patrol resources that could be used to fight criminals and terrorism."

Watch previous Drew Carey Project episodes here.

Aliens Stole My PSA Money

jsullum@reason.com (Jacob Sullum) — Tue, 18 Dec 2007 18:24:00 EST

Students for Sensible Drug Policy reports that the omnibus spending bill the House has approved and the Senate is considering cuts funding for the federal government's obnoxious anti-drug ads by 40 percent, allocating half of what the Bush administration requested. (Congress had to get the money for projects like the Charles B. Rangel Center for Public Service somewhere.) Here SSDP briefly reviews two decades of anti-drug propaganda and questions Slate writer Seth Stephenson's judgment that the latest batch of TV spots is "very possibly the most effective, and least offensive, anti-marijuana campaign ever created."

Myths, Lies, and Downright Stupidity - The Party!

Sat, 06 Oct 2007 14:06:00 EDT

From the archives: Check out the LA Press Club/Reason shindig for John Stossel's book, Myths, Lies, and Downright Stupidity.