Co-authored with Veronique de Rugy

A value-added tax, a soda tax, a gas tax, banning earmarks, freezing a portion of federal spending at “pre-stimulus” levels – there’s no shortage of ideas being thrown out to fix the country’s disastrous balance sheet, which threatens not just near-term economic recovery but the possibility of long-term growth. Like last week’s report from the president’s Commission on Fiscal Responsibility and Reform, most of the current plans to fix the country’s finances rely more on increases in revenues than on cuts in spending. In part due to its heavy reliance on revenue hikes, the commission, charged with balancing the budget by 2020, failed to win enough votes of its own members to present its recommendations to Congress.

Which raises the question: Can America really reduce its debt and deficit without raising taxes to job-killing rates or cutting essential services to developing-world levels? The answer is not simply yes, it’s that we have to.

Raising government revenue – taxes – substantially is not only bad policy, it has proven difficult and ultimately unsustainable for any length of time in the past 60 years. Since 1950, annual government revenue, as a percentage of Gross Domestic Product (GDP), has averaged just below 18 percent despite every attempt to jack it up or tamp it down. Our post-World War II experience shows that if the government is going to live within its means, it can’t spend much more than 18 percent of GDP. Period.

Which is one reason to be happy that the debt commission’s recommendations won’t be presented to Congress anytime soon. The report assumes revenue equal to 21 percent of GDP and struggles to get spending to “below 22% and eventually to 21%” of GDP. That’s a recipe for disaster that would guarantee deficits and red ink.

Similarly, former Sens. Bill Bradley, John Danforth, and Gary Hart, working with the Committee for a Responsible Budget, have offered up a plan to balance the budget by 2020 that relies on revenue hitting 20.8 percent of GDP, a level that hasn’t been achieved once in the past 60 years. Republicans have not advanced any realistic near-term plans. Rep. Paul Ryan’s (R-Wisc.) Roadmap to the American Future does not balance the budget until 2063. The pre-election GOP’s Pledge to America is worthless since it fails to provide specifics (and to the extent it does, it is no good).

The current situation is a bipartisan disaster that requires immediate action. Since Bill Clinton left the White House in 2001, total federal spending has increased by a massive 60 percent in inflation-adjusted 2010 dollars. In fiscal year 2010, which ended September 30, the federal government spent $3.6 trillion, or 25 percent of Gross Domestic Product. That’s the most spending, in terms of percentage of GDP, since 1946. Likewise, last year’s $1.5 trillion deficit, as a percentage of GDP, was the largest deficit since 1945.

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They’ve targeted bottled water and the selling of all kinds of pets, er, “animal companions.” And now, with the soda scold who’s yanking sugary beverages from vending machines, the City by the Bay pulls off the first-ever Nanny of the Month trifecta!

Presenting Reason.tv’s Nanny of the Month for July 2010: San Francisco Mayor Gavin Newsom!

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Cameras are everywhere today: In convenience stores, at intersections, the workplace, your computer, your cellphone, ATM machines. There’s even been a camera in news anchor Katie Couric.

Yet there’s one place cameras have never been allowed: The U.S. Supreme Court. Just what are Supreme Court justices hiding beneath their robes that they continue to say no to cameras in their courtroom?

For decades the White House and Congress have opened their public business to television cameras, but the judicial branch has remained staunchly against the practice. As C-SPAN’s Brian Lamb tells Reason.tv, the justices have rebuffed every attempt to videotape the oral arguments phase of Supreme Court proceedings. On this, an often-divided court remains unanimous, even if the arguments offered up Justices Scalia, Breyer, Thomas, Kennedy, and others remain even weaker than the majority’s logic in their awful Kelo decision, which legitimated eminent domain abuse.

Both Sonia Sotomayor and Elena Kagan have spoken in favor of cameras in the Supreme Court. Can a new batch of justices, more attune to the benefits of transparency, finally change things for the better?

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The Empire State has a long list of sad-sack governors, ranging from the current one, the previous one, the one before that (who served three too many terms, and Nelson Rockefeller, who jacked up spending and passed draconian drug laws before eventually expiring in the arms of a woman not his wife (who was unironically named Happy).

Kristin Davis, who ran the escort service that provided former Gov. Eliot Spitzer with call girls and served time (while Spitzer remained free to purchase all the black socks he wanted), is running for governor on what some have called a “pot and pussy platform.” She wants to legalize marijuana and prostitution and collect tax revenue from them; she wants to open casinos in the state’s great vacation areas; she wants to legalize gay marriage and address a legal system that nets the poor and unconnected and leaves the big fish to swim free.

Besides running prostitutes, what qualifications does she possess for the top job in Albany (as if that isn’t enough)? She was valedictorian of her high school and worked at a hedge fund, which pretty much makes her more qualified than Andrew Cuomo and whoever the Republican candidate is. But judge for yourself in this, the best campaign video so far this year (in a non-Basil Marceaux category).

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LeBron James has decided to move to Florida and play for the Miami Heat rather than bear another season with the Cavaliers.

Everybody is piling on: How could a dude with a tattoo of the word loyalty on his chest abandon “the mistake on the lake?”

But LeBron is only doing what more than half of Cleveland’s population has done over the in the last 60 years: Getting the hell out of the place.

He didn’t leave because of money, though some analyses show that he can take home more in pay in Florida despite a lower salary. Ohio used to be one of the lowest-tax states in the country. Now it’s one of the highest.

That’s what Clevelanders should be outraged about. Their economy has enough to deal with already without being put in a full court press by high taxes.

Cleveland needs to get rid of its savior complex. LeBron James could never have saved Cleveland–no single sports star or entrepreneur or bailout can–but there are definite, proven steps that any city can take to improve
life for its citizens.

Reason.tv highlighted a whole host of possible steps in our series “Reason Saves Cleveland” available at www.reason.tv.

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Before hurricane Katrina ravaged the city in 2005, New Orleans had one of the worst performing public school districts in the nation. Katrina forced nearly a million people to leave their homes and caused almost $100 billion in damages. To an already failing public school system, the storm seemed to provide the final deathblow. But then something amazing happened. In the wake of Katrina, education reformers decided to seize the opportunity and start fresh with a system based on choice.

Today, New Orleans has the most market-based school system in the US. 60% of New Orleans students currently attend charter schools, test scores are up, and talented and passionate educators from around the country are flocking to New Orleans to be a part of the education revolution. It’s too early to tell if the New Orleans experiment in school choice will succeed over the long term, but for the first time in decades people are optimistic about the future of New Orleans schools.

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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.

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Whether it’s Arizona’s controversial new law or President Obama’s decision to send additional national guard troops to the US/Mexico border, immigration remains one of the most contentious issues in contemporary politics. As the battle over “comprehensive” reform heats up, everyone has an opinion.

As the Fourth of July approaches, Reason.tv caught up with immigrants to learn why they moved to a country that defines itself as a multicultural melting pot.

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To the American mind there may be nothing more quintessentially Swedish than the leggy, blond supermodel.

But there’s another Swedish model that inspires almost as much admiration—the Swedish economic model. With a generous welfare state and high living standards, Sweden seems to prove that socialism works. Much of the hope that swept Barack Obama into the White House rests on the belief that America could reach new heights under a regime of enlightened progressivism, that we could be more like the Swedes.

Not so fast, warns Stockholm University sociologist Charlotta Stern: “If an American told me that the US should be more like Sweden I would say I don’t think it’s possible.” The United States can centralize its health care system and pass other laws that mimic Sweden’s welfare state polices, says Stern, but it’s impossible to replicate a culture that allows those policies to operate about as smoothly as possible. Swedish bureaucracies inspire trust, but their American counterparts (DMV, TSA, IRS) inspire punch lines, if not outrage.

But America could emulate some of the Swedish policies that don’t require extensive bureaucracies. Take school vouchers. Teachers unions in America regard the idea as free-market radicalism, but families in Sweden enjoy universal school choice. Sweden adopted its famously progressive policies during the 1970s, but after years of sluggish economic growth the land of ABBA altered its course in the 1990s, adopting a host of free-market reforms, from deregulation to tax cuts.

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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.

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President Barack Obama made news on The Today Show when he talked about kicking some ass over the BP oil spill in the Gulf of Mexico.

If he is interested in punishing those responsible for what is shaping up as one of the worst environmental disasters in U.S. history, he should think about giving himself a boot.

While BP is ultimately responsible for the spill (and for cleaning it up), the federal government is a major player in the problem for at least three reasons:

1. It owns the property on which the oil well is located.

2. It regulates offshore drilling. And

3. In order to protect small players in the drilling industry, it capped economic damages from this sort of spill at just $75 million, a way-too-low cap that encourages risky behavior.

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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.

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The Gulf of Mexico continues to gush oil just as a whaling controversy threatens to land Australia and Japan in international court for killing protected species. Meanwhile, another less-publicized but arguably more cataclysmic oceanic disaster continues to worsen.

Overfishing threatens to destroy most of the world’s fisheries within a matter of decades. But while it’s proven difficult to save the gulf or save the whales, we know how to save the fish: Stop treating the ocean like a public bathroom, says Christopher Costello, a professor of natural resource economics at UC Santa Barbara.

Director Louis Psihoyos and his team of filmmakers embarked on an elaborate sting operation to expose Japan’s illegal dolphin hunters. The result is a documentary called The Cove, which took home the Oscar for best documentary. And days after the Academy Awards Psihoyos was back stirring things up.

Using the same cameras that were used to expose illegal dolphin hunters, Psihoyos and his team busted The Hump, a Santa Monica, California restaurant that had secretly been serving sushi made from the endangered sei whale.

“Everything in the ocean from the great whales to dolphins to plankton is being jeopardized,” Psihoyos tells Reason.tv. “We’re raping and harvesting the ocean unsustainably.”

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Is she right? It depends on what you consider fair. Using 2006 data, The New York Times found that the richest 20 percent of households were paying 26 percent of their income to the federal government in the form of income, payroll, corporate, and excise taxes. The average for all familes? 21 percent.

And there’s this: “In 2006, the top quintile of households earned 55.7 percent of pretax income and paid 69.3 percent of federal taxes, while the top 1 percent of households earned 18.8 percent of income and paid 28.3 percent of taxes.”

Paying in a lot more than you get out? That doesn’t seem fair.

The rich are different than you and me; they’ve got more money. And they pay more federal taxes, both in absolute and percentage terms.

Politicians are different too. they rarely say what they really mean. Perhaps what Secretary Clinton means is that the rich can always pay more than they’re already paying.

That would explain why she and the president are lobbying to let the Bush tax cuts expire at the end of the year, a policy that would raise all sorts of taxes on all sorts of people.

Which doesn’t sound all that fair either.

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Post updated with author’s note.

Author’s Note: This article includes three images that clearly denigrate Islam and the Prophet Mohammed. So there is absolutely no question about the provenance of these images, I would like to direct all readers to Wikipedia’s authoritative write-up on the matter. These images were included in a dossier that aggrieved imams living in Denmark took with them to the Middle East specifically to stoke outrage at a dozen cartoons published in September 2005 in the Danish newspaper Jyllands-Posten. The images include an amateurish doodle identifying Mohammed as a pedophile, a dog humping a prostrate praying Muslim (with the caption, “This is why Muslim pray five times a day”), and a photocopy of a French comedian in a pig-squealing contest (with the phony caption, “Here is the real image of Mohammed”). It is nothing less than amazing that holy men decrying the desecration of their religion would create such foul images, but there you have it. It is as if the pope created “Piss Christ” and then passed it off as the work of critics of Catholicism. The images below may indeed give offense, not just to Muslims but also to people of all faiths and even atheists. If they do, remember who created and distributed

******

The deadline for submitting work to Reason’s Everybody Draw Mohammed contest has passed; winners will be announced at Reason.com on Thursday, May 20.

All that remains is anticipation, both of the artwork that will be displayed and the possible threats of violence that will likely follow. Or should that be “the likely threats of possible violence”?

Before the calendar page turns to Thursday, it’s worth meditating on the whys and wherefores of the contest, which was inspired by a jihadist death threat against the creators of South Park and was originally suggested by Seattle artist Molly Norris. Soon after asking everyone to draw the Prophet in solidarity with the arguably millions of people repressed by threats of theologically justified violence, Norris herself went into ideological hiding, suggesting instead that everyone draw another target of South Park satire: former Vice President Al Gore.

While Gore, who likes to credit himself with understanding the architectonics of cyberspace (if not creating them) and who way back when convened Congressional hearings to discuss the dread menace of satanic heavy metal lyrics (via con diablo, Ronnie James Dio!), is certainly worthy of the sort of ongoing abuse that only a fully distributed Internets can deliver, the obvious reason that Norris changed her target is real and potential violence.

Who can blame her? People have been killed for representing Mohammed in ways that displeased Islamic terrorists. People have been punched and kicked and forced into hiding. No wonder, then, that Norris, like Galileo in front of a Catholic tribunal, apologized to ”everyone of the Muslim faith who has or will be offended” by her drawing (visible at the right). This conditionally unconditional language is the language of the forced penitent, of the prisoner in a totalitarian world, of the sad sack on the Catherine Wheel who will say anything, will confess anything to get off the rack. We all understand exactly why such language is being used: The threat of violence.

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In The Capitalist Welfare State, Lund University economist Andreas Bergh explains how Sweden has managed to increase economic productivity despite its large public sector.

Bergh says that despite popular mythology, Sweden is not a socialist success story but instead owes its economic growth to the lowered tax rates and deregulation of the early 1990s, which allowed innovation and investment to flourish. Bergh also discusses how Sweden’s national voucher program revitalized the country’s educational system and warns that Americans who are hoping to emulate Swedish success by growing the public sector are learning the wrong lessons from Sweden.

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It’s not surprising that so many parents are so worried about autism. After all, the disorder strikes about one out of every 115 kids, its prevalence seems to be growing, and its cause or causes remain mysterious.

A 1998 article published in the British medical journal The Lancet generated enormous impact by proposing a link between autism and childhood vaccines.  Since then, celebrity activists like Jenny McCarthy have argued that common shots like the measles, mumps, and rubellla vaccine (MMR) trigger autism. Countless media stories have covered the alleged link.

Some parents take to the streets to protest the federal government’s vaccine policy and thousands more take the issue to court. Many others, like Kelly Green, who runs AutismHwy and is the mother of an autistic child, feel overwhelmed by the information flooding in from both sides of the debate. Jim Moody, of the think tank Safe Minds, blames the federal government for not being honest about the threat and failing to provide reliable information on the matter. But researchers like UC Santa Barbara’s Lynn Koegel say the evidence is overwhelming that vaccines do not cause autism.

Recently, the debate took another turn when The Lancet retracted the 1998 article that did so much to spark the controversy. Will the retraction finally allay parents’ worries or will some continue to resist vaccinations?

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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.

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The video sharing site YouTube.com recently started blocking access to countless parodies of the 2004 German movie Downfall, a critically acclaimed film that chronicles Adolf Hitler’s final days in a Berlin bunker.

The parodies take off from a powerful monologue by the great actor Bruno Ganz and the original joke version had Hitler being banned from XBox Live for bad behavior. Other examples feature Hitler trying to score Miley Cyrus concert tickets, counseling Conan O’Brien after losing a late-night slot to Jay Leno, and much more.

It’s understandable why Downfall’s production company, Constantin Film, might be upset that such a serious movie is being burlesqued, but pushing YouTube to ban the parodies is a terrible idea for at least three reasons:

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General Motors CEO Ed Whitacre has bragged in TV commercials and newspaper columns that GM has paid back its bailout “in full and ahead of schedule.”

As with the Pontiac Aztek, an ugly exterior masks an ever darker problem: Whitacre is being fanciful to the point of deceit. GM received $50 billion in TARP funds (never mind that TARP was only supposed to cover financial institutions). About $7 billion of that came in the form of a straight-up, low-interest loan. And about $13 billion came in the form of an escrow account.

So how has GM, which lost $38 billion in 2007 even as it sold 9.4 million cars, paid back its debt? It took money from the escrow account to pay back the $6.7 billion loan.

Do you remember when you were a kid and your parents gave you $20 to buy them a Christmas present? You bought them something worth $3 and pocketed the rest? That’s what GM has just done.

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