Thanks for reading and responding, Mr. Niskanen! For the record, The Century Foundation was endowed by the progressive Republican businessman Edward Filene in 1919. He often said that it was in the self-interest of corporate leaders to be 'liberal.' He wrote in 1923: "“I do not know of a better word for describing the sort of business man who, broadly speaking, is the opposite of a reactionary, the sort of business man who faces fresh problems with a fresh mind, who is more interested in creating a better order of things, who realizes that a private business is a public trust, and who has greater reverence for scientific method than for the traditions and majority opinion of his class.”

I'll reply after folks have a chance to digest your comments. And I'll focus particularly on the connection between public choice theory (one of your areas of expertise) and the Bush administration's failures in public management, best exemplified by its destruction of FEMA. The chapter on Social Security privatization, which you apparently didn't get to, unfortunately, is also worth further exploration.

Best, Greg

Cato and I have been critical of almost every major policy initiative by the current Bush administration.

Look at these rascals all attempting to distance themselves from Bush after two disastrous terms. The way they'd tell it, no conservatives wanted his reelection.

Somehow Bush got elected, twice, and somehow the Republican congress marched in lock step, and somehow conservative pundits have been shilling for his policies on FOX News. It's a complete mystery how all this happened, considering no conservatives actually supported him.

Pretty soon they'll be claiming the 2000 and 2004 elections were stolen, by Democrats, for Bush!

At the risk of stating the perfectly obvious, the purpose of cutting tax rates today is to cut taxes. Prior to the early 1980s tax rates were truly confiscatory and hampered growth, but Bill Clinton's terms showed that even moderate tax increases in the current range (up to about 40%) have no meaningful impact on growth. And we all know this, because the economy did just splendidly after Clinton's tax increases. In this day, at these rates, the purpose of tax cuts is tax cuts (although certainly Reagan's tax cuts truly did serve to rescue the economy from 70-90% marginal income tax rates).

My second point has to do with the rhetorical trickery deployed by Mr. Niskanen, which is little more than the rote regurgitation of the rightwing elevator speech we've all heard a million times. Mr. Niskanen, as required by conservative house rules, restricts his argument carefully to income tax rates alone, excluding sales taxes (which are regressive), payroll taxes (both employer-paid and employee-paid, which are regressive), and government user fees (such as national park entrance fees, toll road fees, etc., which are - care go guess? - regressive).

Basically this shell game works by taking all taxes and then removing from the conversation all the regressive ones and restricting the argument only to the progressive ones. Step two is to strip away all the context and "forget" to acknowledge that the rich pay the vast majority of income taxes because the rich make the vast majority of the income. Thus what is in fact a signal of inequality gets spun as a sign of how unfair we are to the wealthy! To uncareful readers this kind of argument is actually pursuasive. Despite the trickery on display here, the sheer chutzpah earns my respect.

And don't even get me started on the 15% capital gains tax, which I'm certain Mr. Niskanen feels should be cut to, say, zero percent. All for the greater good of the economy, of course! Of course - just a public policy intellectual doing his darnedest to come up with good policy prescriptions. The fact that all these proposals redistribute wealth upward - that just incidentally puts tens of millions of dollars into the pockets of rightwing (conservative and "libertarian") think-tank financiers. Just a coincidence, that.

are we really going to pretend that the Bush Admin didn't try to privatize Social Security, or, that Cato was "critical" of this "major policy initiative"?

If we assume that the extreme tax cuts for the ultra rich were designed to increase economic growth then they were both unnecessary and were very badly written.

Why is there a need in our economy with all its banking and financial techniques designed to aggregate large sums of money from small pockets of savings to give tax money to already wealthy individuals to invest? What is it that stock markets, mutual funds, 401(k)'s and the myriad other forms of financial aggregation fail to do that the ultra-wealthy individuals who have uniquely benefited from the Bush tax cuts can somehow do better? The tax cuts were and remain quite unnecessary.

The problem of inadequate economic growth in the U.S. has not been a shortage of capital. It has been a shortage of innovative organizations and people.

So even if somehow wealthy individuals are more productive investors than the financial institutions are, they are motivated to invest where the return on investment is greatest, and that has been outside the United States for the last six or so years. Essentially the tax cuts have been designed so that ultra-wealthy Americans can invest more in China and thus increase the outsourcing of jobs.

It is much more rewarding to investors to take their great wealth, added to by the tax cuts, and invest it in nations that subsidize students so that the cost of labor is a lot lower. An exception to that is investors who buy a monopoly from the government (telecoms, toll roads, private prisons, etc.) and gouge labor to increase profits or like Brent Wilkes bribe government officials to give them government contracts. With the exception of MicroSoft (a natural monopoly) that is how investors make money inside the U.S.

HB1 visas have the same effect of eliminating the cost of training American labor and holding down labor training costs. If an investor goes to where they get the greatest ROI, then it isn't going to be inside the U.S. That makes the Bush tax cuts designed to increase world economic growth and maintain a world-wide oligarchy of wealth at the expense of the American labor force.

This becomes even more true when the America schools and students are starved for public funding here and businesses that invest in higher-level training for their employees are penalized by having to compete with other firms who don't invest in advanced training but rather hire HB1 immigrants or outsource the work to countries who DO invest in the education of their workforce. This is why American Engineers of all types find that their careers peak out at age 40 when their employers hire only new grads with the latest training.

Had the tax cuts lowered rates from the 90% range to something more reasonable, they might have had some value. As it is, they are simply destructive to the American economy and especially to the American labor force.

Thus the attempt to assume the tax cuts were designed to increase economic growth fails. The tax cuts were instead a power redistribution technique for political use inside America. Nothing else.

But I rarely question Libertarians or CATO Institute people. Libertarianism is a farce and quasi-religion, not a real body of useful ideas.For the most part its adherents ignore government, power in both government and business organizations, and imperfect markets. The occasional useful idea from CATO was either stolen from someone who thinks or was stumbled on accidentally and has not yet been totally mangled by Libertarianism. (**cough** Ron Paul and MD and crackpot, not an economist **cough**)

In fact, the upper half of the income distribution pays about 96 percent of federal income tax revenues after all the tax rate cuts.

This is a remarkably dishonest claim. Right-wingers love it because the federal income tax is about the only broadly applied, progressive tax anywhere in the United States. (That and the estate tax, another perennial right-wing target.)

What about payroll taxes? These are actively regressive; they only apply on income earned below a certain cut-off figure. What about regressive state and local sales taxes? Local property taxes?

Even state income taxes are often highly regressive in application.

Ronald Reagan cut federal income taxes for the wealthy. Meanwhile, his Greenspan Commission dramatically raised payroll taxes on the poor and middle class. Yet the right-wing still remembers Reagan as the great tax cutter. That is a good indication of what they truly care about.

This comment makes absolutely no sense:

The second reason [Why Right Wing Ideas Keep Failing] is that the only policies evaluated in the book were proposed by the right; because the left has not made any broadly appealing policy proposals for over 30 years.

First of all, it's patently false. Even self-identified conservatives support liberal public policy:

. . . 30+ years of public opinion research from the General Social Survey (GSS) shows overwhelming conservative opposition to cutting any of America’s core social spending functions. That’s right. Taken as a whole, a substantial majority of self-identified conservatives favor maintaining or expanding spending on Social Security, health care, education, the environment, urban problems . . . even aid to blacks.

Furthermore, liberal Democrats are far more effective at managing the economy than are conservative Republicans.

Whatever problems the left has in US politics, they are not the result of unappealing or ineffective policy ideas.

It's a "distraction" to give the historical background of an organization and then deconstruct thier ideology point by point? Absurd.

I have been thinking for some time about those who advocate a return to the time of the constitution's creation and that its interpretation should be literal. I would like to ask how would this look today.
Has anyone in your origination produced a scenario?

Second, during the early period of the country there were slaves, indentured servants, and debtor prisons so to some extent there was an understanding that the words may not have been literal, and that what is being complained about today is the society and the words evolving towards an interpretation or practice that brings reality to the words and their intent.

As with the first question is there a list of changes to our laws and today's practices through the various levels of governments from federal down to the town level that would be changed?

Third, in this early period there was the availability to gain satisfaction from someone who the individual thought had offended them. This was dueling at best and down right killing at worst. If an outsider was in you local area the fight may not have had to be fair at all.

It seems to me that the growing of the living breathing intent of the constitution has made life a lot safer to visit other states and areas of the country. When you take away the environmental laws and a parents child dies of cancer from tainted water will there be dueling, a form of individual justice called revenge?

This is just one example of the environment that made up for the lacked of enlightenment. Would we regress, but not have an option for justice for crimes that would no longer be recognized?

Not wanting to go point by point but just to hit the top I would like to raise the issue you brought up about In fact, the upper half of the income distribution pays about 96 percent of federal income tax revenues after all the tax rate cuts.

I would add that the Heritage Foundation report by Daniel Mitchell, states that the top 1 percent of income earners account for about 35 percent of personal federal income tax collected, and the top 25 percent of the income distribution pays almost 83 percent.

I read that as a small number collect most of the money. I seem to remember in the early 1900 a lot of discussion about a lack of money in circulation and the problems this caused. Is this not a similar problem but with few a citizens controlling disposable cash not the government as it was back then?

In the united state it has been my observation that besides using politics to get the rights to provide monopoly business opportunities and receive highly profitable contracts political influence is the general practice. Politics is used also to not pay the influential costs and have the public taxpayer pay it. Until the true costs are taken care of by those reaping Citizen Subsidized Expense Relief the discussion of high taxes on this "free ride" should be taken off the table as a distraction!

Your statement that I have been personally critical of the TABOR-like state tax limits. fails to state the total story.

Your words:
My favorite rule to reduce these biases would be a constitutional amendment
requiring that total federal spending in any fiscal year not exceed
110 percent of total federal receipts in the second prior fiscal
year without the approval of a supermajority, say 60 percent, of the
total members of each house of Congress or in any year in which a
declaration of war is in effect. The 110 percent rule would lead to a
small http://www.cato.org/pubs/journal/cj26n3/cj26n3-8.pdf

You will get to see the result of this in Florida. The Florida Republican Governor called on the Republican Legislature to cut the property taxes. He also had the Florida State Insurance Company provide cheaper insurance to the residential and commercial property owners in the state. The state legislation also has cut and limited future growth of property taxes to the change in personal income.

Remember Florida does not have personal income taxes. The citizens will stand behind the fund. One hurricane and that is the end of the financial stability of the state and the citizens.

Also Jeb Bush left us another gift. He appointed some of his cronies to an every 20-year tax commission with the power to put items on the ballot in the 2008 election.

The Republicans are putting a School Voucher amendment on the ballot remember Florida has one of the hardest testing programs that every child has to pass to graduate. The test was intended to fail schools so that the voucher program would grow, but the Supreme Court struck vouchers down, but it will be proposed again as a constitution change. It will be a get out the vote operation for the Christian Right’s vote.

What a State! What a Country!

-----------------------------------------------
Today, are we searching for I deals or Ideals?
-Thinking

"In fact, the upper half of the income distribution pays about 96 percent of federal income tax revenues after all the tax rate cuts".

We're back to the 'lucky ducky' argument. Great.

Can't wait for Grover to weigh in.

Great point.
Since Anrig stands accused of addressing only those points supporting his argument, it is good that the same ruler be applied to Cato.

The top 50% income earners earn 84% of the income. Why shouldn't they pay 96% of the taxes?

"The Iraq war is the first war in which the ground combat lasted for more than a few days that was initiated by a Republican president in more than a century."

It's true, until the Iraq invasion Republicans had built their entire (and entirely undeserved) reputation for being "strong on defense" on two things; 1) their willingness to bust the bank with completely unaccountable handouts to the defense industry, 2) a strategy of brief, no-risk military action used exclusively for show and domestic political advantage -- and only against pathetically over-matched 3rd world countries.

As in past Republican wars, the Iraq war was undertaken not because the administration believed Iraq was a dangerous threat, but because they knew it wasn't. They knew defeating Saddam would be easy. What they didn't know, and didn't plan for, was how hard, after his defeat, it would be to establish control over and security within the country. Wanting and expecting another PR war of only a "few days" they put more planning into their "Mission Accomplished" event at home than than did into providing for the security and well being of the people of Iraq.

The tendency to only see the glorious advantages to themselves, and never recognize the painful disadvantages caused to others, by their policies and actions is a major reason for conservative failures -- they are incapable of comprehending consequences or anticipating blow-back.

I mean, it really does make me wonder whether that has more to do with where your money comes from. Would some funding sources dry up if you called for impeachment?

"You tell me where a man gits his corn-pone, and I'll tell you what his 'pinions is."

--Mark Twain

There is a basic concept clash between the viewpoint represented here, and that of progressive/liberal positions. Economic conservatives want to view health care as a commodity, like others to the extent possible. Therefore, forcing choices is exactly what is wanted.

Also, if a commodity, the price will level off as demand finds its level. Unnecessary procedures will not be done, necessary procedures will get shopped around for bargains. Nice theory.

Economists must know the term "inelastic demand". Drug addicts exhibit this, pretty much ignoring prices---note how little effect tobacco prices have on smoking rates, not zero but very small. Obviously some price is simply unattainable, so it's not a sharply defined process.

Health care is an inelastic demand, for most people most of the time. While some people that are very old and in pain find death a welcome release, it's not a popular choice in typical situations. So here's the problem: As new techniques are found, more can be done, at any stage of life, to improve health. More money can be spent, and therefore is spent.

When an individual knows that a certain kind of disease can be treated, he will want his treated. If the difference between treatment and death is only money, he will get a little irked to see others recover while he dies.

It would be easy to hold costs, by letting folks die early. We ask ourselves, as a society, if we want to live in that kind of country. Most here would rather accept sharing the (temporarily) rising costs.

Techniques that are cutting-edge (sorry) are an art, not a science. They must be performed by educated practitioners, using professional equipment (not available at Wal-Mart). As time goes by, what is now expensive will become cheap, at the same time it becomes seen as being necessary as sanitation.

Transplants, or other tissue/organ replacement, would have been impossible for most of history, a daring experiment recently, and wholly expected, soon. In the meantime, it's expensive. What should we do?

I'm OK with helping others. If you're not, say so and spare us the theories.