How free is your state?

Check out this site from the Mercatus Center at George Mason University, which gives rankings and assessments of the level of “freedom” in each state in the union.   According to these findings, New Hampshire (“Live free or die!”) is the state with the most freedoms, while New York is the most oppressive.  See

Now what is interesting is the way the study factors in both “economic freedom”  (low taxes, minimal government regulations on business, limited government, etc.) and also “personal freedom.”  This category includes both things conservatives like, such as openness to homeschooling and minimal gun control, but it also puts a premium on gay marriage and lax drug law enforcement.   Nevada scores big (at #6) because of its legalized gambling and because it allows localities to legalize prostitution.

Freedom in the 50 States | Mercatus.

Today conservatives tend to want economic freedom but decry this version of “personal freedom.”   While liberals demand this version of “personal freedom” while decrying “economic freedom.”

My prediction:  The new political and cultural consensus will demand both, with libertarianism reigning supreme.   Right now, this kind of libertarianism is opposed by both the left and the right, but for different reasons.  But I suspect a realignment may be in the future.  It’s already happening among some in the Republican elite.

So if you are a “freedom loving American” opposing government intrusions into the economy, how can you also oppose “personal freedoms” such as the liberty to use drugs and go to prostitutes?

Conversely, if you are a liberal who believes that gays should have the freedom to marry and that women should have the freedom to get an abortion, on what grounds would you deny a business owner the freedom to make money without government interference?

Or are you willing to accept libertarianism if it would give you whichever kind of freedom you find most important, even at the cost of the kind that you do not approve of?

HT:  Jackie

Is ending a bad program a tax increase?

Senator Tom Coburn, who represents my natal state of Oklahoma, is probably the biggest deficit hawk in Congress.  He’s a deficit eagle, as fiscally responsible and economically conservative as they come.  But he’s taking flack from conservative activist Grover Norquist and others for violating the no new taxes pledge that most Republican lawmakers have taken.  Why?  Because Sen. Coburn is spearheading an effort to drop ethanol subsidies, which include a tax credit for that industry.

Most conservatives consider the ethanol subsidies to be a huge waste of money, an outdated concession to environmentalists, though farmers like that industry because it buys up so much of the corn crop, sending prices sky-high.  It sends the price for other commodities sky high too, since many farmers are cutting back the production of wheat and other crops in order to plant more corn, which cuts the supply of those other commodities.  But liberals also consider them a waste of money, a payoff to big corporations.  And there is a consensus that the subsidies cause actual harm to poor countries, since turning food into fuel and the consequent high food prices means more hunger for the poorest of the poor.  And even environmentalists now oppose the ethanol option, since it burns more fossil fuels to produce it–all of those tractors in cornfields–than it replaces.  And in this time of economic travail and crippling federal deficits, the subsidies are costing taxpayers $6 billion per year.

So why not kill the beast?  Because part of the subsidy is in the form of a tax credit, so repealing it would be a tax increase, and 95% of Republican lawmakers have promised not to vote for a tax increase.

See Coburn prompts Senate vote on ethanol subsidies – The Washington Post.

Once again, in politics as in religion,  we see the spirit of legalism, which violates the spirit of the law in order to keep the letter.

Can common sense be restored to our government?  Can this country even be governed in today’s political climate?

Tim Pawlenty’s economic plan

GOP presidential candidate Tim Pawlenty, the former governor of Minnesota, laid out an ambitious and unusually specific plan to get the economy going again:

“Growing at 5 percent a year rather than the current level of 1.8 percent would net us millions of new jobs, trillions of dollars in new wealth, put us on a path to saving our entitlement programs,” Pawlenty said in his first detailed speech on economic policy since he formally declared his White House ambitions a little over two weeks ago.

The economy averaged 4.9 percent growth between 1983 and 1987, and grew at a 4.7 percent rate between 1996 and 1999. A sustained annual growth of 5 percent for a decade would be unprecedented in modern times. . . .

Pawlenty said such growth eventually would translate to $3.8 trillion in new tax revenue that would reduce the deficit by 40 percent.

Pawlenty’s plan also would simplify individual tax rates to just three options and cut taxes on business by more than half. His cuts go further than House Republicans’ recent proposal, which the Tax Policy Center said would cost about $2.9 trillion over the next decade. . . .

In a speech heavy on specifics, Pawlenty proposed a three-tier income tax system:

• The estimated 45 percent of U.S. households that did not pay income taxes in 2010 would see no change in their tax rates.

• Individuals would pay 10 percent tax on the first $50,000 of income. Couples earning $100,000 would also pay that rate.

• “Everything above that would be taxed at 25 percent,” Pawlenty said.

He said he wants to cut business taxes from the current rate from 35 percent to 15 percent, and he called for dismantling vast pieces of the government.

“We can start by applying what I call the Google Test,” he said. “If you can find a service or a good on Google or the Internet then the federal government probably doesn’t need to be doing that good or service. The post office, the government printing office, Amtrak, Fannie Mae and Freddie Mac were all built for a different time in our country and a different chapter in our economy when the private sector did not adequately provide those services. That’s no longer the case.”

via Pawlenty’s economic plan aims for 5 pct. growth – Yahoo! News.

Democrats are savaging the plan, calling it “ridiculous.”  But what do you think?

30% of health plans to be dropped under Obamacare

Another reason the new national health care bill will have a hard time working:

Once provisions of the Affordable Care Act start to kick in during 2014, at least three of every 10 employers will probably stop offering health coverage, a survey released Monday shows.

While only 7% of employees will be forced to switch to subsidized-exchange programs, at least 30% of companies say they will “definitely or probably” stop offering employer-sponsored coverage, according to the study published in McKinsey Quarterly.

The survey of 1,300 employers says those who are keenly aware of the health-reform measure probably are more likely to consider an alternative to employer-sponsored plans, with 50% to 60% in this group expected to make a change. It also found that for some, it makes more sense to switch.

“At least 30% of employers would gain economically from dropping coverage, even if they completely compensated employees for the change through other benefit offerings or higher salaries,” the study says.

It goes on to add: “Contrary to what employers assume, more than 85% of employees would remain at their jobs even if their employers stopped offering [employer-sponsored insurance], although about 60% would expect increased compensation.”

via Firms to cut health plans as reform starts: survey – MarketWatch.

So if that happens, the Democrats will have no choice but to nationalize the whole thing, if they can.  Or would it be worth it to be paid more money and buy one’s own health insurance, especially if the government makes it cheap?

China dumping U.S. treasuries

What if everyone stops lending the U.S. government money?

China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.

Treasury bills are securities that mature in one year or less that are sold by the U.S. Treasury Department to fund the nation’s debt.

Mainland Chinese holdings of U.S. Treasury bills are reported in column 9 of the Treasury report linked here.

Until October, the Chinese were generally making up for their decreasing holdings in Treasury bills by increasing their holdings of longer-term U.S. Treasury securities. Thus, until October, China’s overall holdings of U.S. debt continued to increase.

Since October, however, China has also started to divest from longer-term U.S. Treasury securities. Thus, as reported by the Treasury Department, China’s ownership of the U.S. national debt has decreased in each of the last five months on record, including November, December, January, February and March.

via China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills | CNSnews.com.

India companies hiring Americans for call centers

Free market economics has a way of evening things out.  A country with low labor costs can attract lots of employers, who bid up the price of labor.  And as that country prospers, it may start looking for cheaper labor in countries that have high unemployment.  Some of that appears to be happening, as call center companies in India are opening up operations in the United States:

India’s outsourcing giants — faced with rising wages at home — have looked for growth opportunities in the United States. But with Washington crimping visas for visiting Indian workers, some companies such as Aegis are slowly hiring workers in North America, where their largest corporate customers are based. In this evolution, outsourcing has come home.

Capuana, a manager for Aegis in New York, motivates this U.S. office with dress-down days and the prospect that workers could, one day, earn a stint training call center workers in Goa, India. One of his tasks is to staff 176 cubicles, where workers make or take calls for customers of prescription drug plans or Medicare contracts and enter and verify information. The pay runs $12 to $14 an hour, with bonus checks of up to $730 a month.

“Our recruitment model is simple,” says Capuana, who played Division III college football, wears rosary beads on his wrist and has a picture of Jesus above his desk. “I don’t care if you come from Park Avenue or the park bench. If you can do the job, we want you.”

Aegis, a subsidiary of India’s Essar Group, an energy, telecom and metals conglomerate, says it’s pioneering the next generation of outsourcing: putting the work close to its global customers. Its executives call the practice “near-sourcing,” “diverse shoring” and, sometimes, “cross-shoring.”

Madhu Vuppuluri, chief executive and dealmaker for the Americas division of Essar Group, remembers watching outsourcing grow in India in the late 1990s and early 2000s and thinking that the decline of U.S. call centers was overdone. He persuaded the billionaire Ruia brothers, Essar’s Indian owners, to let him make a counterintuitive bet: In 2000, he bid on the bankrupt assets of Telequestion, a 500-person call center in Arlington, Tex., for $2.5 million.

That led to other acquisitions in the United States and abroad. Today, Aegis employs 50,000 of Essar’s 70,000 employees on several continents. About 5,000 people work at nine U.S. call centers. Aegis, which is on the hunt for more acquisitions, has said it aims to triple its U.S. head count, to more than 15,000.

via As Indian companies grow in the U.S., outsourcing comes home – The Washington Post.


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