Gridlock

A few years ago, Drew Carey of Reason.tv put together this excellent video about traffic in Los Angelas. After addressing the horrible traffic issues that L.A. residents battle every day, he suggested some solutions that have already succeeded in major cities around the world at reducing traffic problems. All of these examples were created by private companies. Often, all a city has to do to solve its biggest problems is reduce the limitations that are keeping private companies from solving them.

The Social Security Ponzi Scheme

The Cato Institute published a Policy Analysis paper by Michael D. Tanner in November, which compared social security to a ponzi scheme:

like a Ponzi scheme, Social Security does not actually save or invest any of a participant's payments. When a worker pays taxes into the system, that money is used to pay current beneficiaries. Therefore, participants receive payments, not from returns on their own investments, but directly from inflows from subsequent participants.

A highlight from the paper is a graph comparing return on capital to return on labor. Over the last 40 years, capital has outperformed labor consistently with only one exception (c.a. 1982).

Budget? We Don't Need No Stinking Budget!

For the second time since the beginning of the 112th Congress, a temporary “stop-gap” budget has been passed, leaving a full budget for another day. Senator Rand Paul has introduced a bill that would prevent a shutdown of the federal government. According to Sen. Paul “My proposal seeks to alleviate the worries of people who rely on important services, and fill the gap created by non-passage of spending bills, while forcing Congress to deal with the unsustainable spending. In my bill, we keep obligations made to our military personnel, seniors, children, and federal workers maintain an adequate level of pay, but Members of Congress and the President do not get paid unless they actually work out a resolution.”

In my opinion the proposal by Senator Paul fails to go far enough. One of the positive features of the bill is the provision that neither the President nor members of Congress are to be paid for the period of time in which there is no budget. However, the bill still allows the federal government to continue collecting and spending tax money.

Writing about the possibility of a government “shutdown” Tom Knapp writes, “every time this thing comes up, the Democrats run the table. They raise the roof over 'draconian' cuts in government spending. They say the Republicans want to take away the geezers' Social Security checks. They say it's personal petulance (remember the 'this is all about Newt Gingrich feeling left out on Air Force One' meme in 1995?).
The Democrats get away with it because Republicans bend over backward trying to 'look reasonable' and 'craft compromises' and end up playing the losing end of the blame game -- so much so this time around that their starting proposal for budget cuts came to less than 1/25th of the projected deficit. Not 1/25th of the spending, 1/25th of the over-spending... That's not draconian, it's the punch line to a bad joke.”

One commenter (screenname "AngelaTC") on Knapp's blog writes, “their idea of a government shut down is different than mine. For example, they'll shut the National Parks down instead of just walking away from them. And if it threatens to go on for much more than a week, they'll be sure to start making sure to slash benefits to the mundanes instead of sending Homeland Security on an extended vacation.”

If the Congress were sincere about wanting to prevent a shutdown of the federal government – though I doubt they are – they would remain in session without recess until a full budget is passed. Maybe then, they would be able to come to a “compromise” on what agencies of the federal government need to be abolished and/or privatized.