Barry is a Senior Economist with the National Center for Policy Analysis, one of the most influential think tanks in America today.
The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, Social Security, welfare, criminal justice, education and environmental regulation.
NCPA Motto - Making Ideas Change the World - reflects the belief that ideas have enormous power to change the course of human events. The NCPA seeks to unleash the power of ideas for positive change by identifying, encouraging, and aggressively marketing the best scholarly research.
Daily Policy Digest
Provided courtesy of: http://www.ncpa.org/
Daily Policy Digest
- Do Bans on Plastic Grocery Bags Save Cities Money?
- 11 Dec 2013 07:00:58 CDT -
Consumers choose plastic bags far more often than paper or reusable bags to carry their purchases. Compared to paper and reusable bags, plastic bags are lightweight, strong, flexible and moisture resistant. In addition, they are easy to store and reusable for multiple purposes. Despite these characteristics and their popularity, a growing number of municipalities and some states are enacting laws aimed at reducing the use of plastic (and sometimes paper) grocery bags. The laws range from outright bans to taxes, says H. Sterling Burnett, a senior fellow at the National Center for Policy Analysis.
- Advocates have given a number of justifications for placing restrictions on consumers' use of carry-out plastic bags.
- These include concerns about the scarce resources used to create the bags, environmental harms when they are disposed of improperly, the visible blight of roadside litter, and the cost of disposing or recycling them.
- However, an examination of the bag bans and budgets for litter collection and waste disposal in San Francisco, San Jose, and the City and County of Los Angeles, Calif.; Washington, D.C.; and Brownsville and Austin, Texas, shows no evidence of a reduction in costs attributable to reduced use of plastic bags.
Consider the County of Los Angeles.
- A November 2010 Los Angeles County, Calif., ordinance outlawed retail use of thin-film polyethylene bags.
- Los Angeles County faced significant spending cuts during the 2010-2011 and 2011-2012 budget years of more than $175 million and $35 million, respectively.
- Budget cuts did not extend to solid waste collection or disposal.
- Spending for solid waste rose 30.17 percent from the budget year 2006-2007 to 2011-2012, and projected spending rose 5.9 percent from 2011-2012 to the adopted budget for 2012-2013.
In the cities that have adopted bag bans, fees or taxes, there is little evidence so far that banning or taxing plastic bags will reduce waste disposal costs and save money. Those who make this claim must provide evidence to back it up, but they have rarely attempted to do so, and when they have, the evidence has proven questionable at best.
Source: H. Sterling Burnett, "Do Bans on Plastic Grocery Bags Save Cities Money?" National Center for Policy Analysis, December 2013.
For more on Environment Issues:
- New Evidence Raises Doubts on Obama's Preschool for All
- 11 Dec 2013 07:00:57 CDT -
New evidence indicates that universal preschool is ineffective, says Russ Whitehurst, director of the Brown Center on Education Policy at the Brookings Institution.
President Obama announced a plan for Preschool for All in February, and legislation has now been introduced in the Senate and the House to create a federally-funded universal pre-kindergarten for four year olds. But much of the support for Preschool for All ignores the evidence that these types of programs are not effective.
- A new study by Vanderbilt University researchers took 3,000 four year olds whose parents had applied for the children to join Tennessee's Voluntary Pre-K Program (TN-VPK), a full-day pre-kindergarten program for children of low-income families.
- The TN-VPK standards are very high, have no more than a 10:1 child to adult ratio, and are in line with the standards proposed by President Obama.
The study compared the children who won the lottery and entered the TN-VPK program with those who did not gain admission. The researchers studied 1,100 children from both groups intensively. Cognitive skills were tested at the beginning and end of their pre-kindergarten, kindergarten and first grade years, as were several non-cognitive skills (such as the ability to work independently, or work well with others). Because pre-K education is justified in large part on its purported long-term benefits, those years following the pre-K program were important.
- The students in the TN-VPK program actually performed less well on cognitive tasks at the end of first grade than did non-participants.
- There were no statistically significant differences among TN-VPK participants and non-participants in teacher-rated social and emotional skills.
- There were mixed results when comparing routinely collected school records, but TN-VPK students were more likely to have gotten school-based special education services than non-participants.
The study is the first large-scale random trial of a state pre-kindergarten program, and its results indicate that these types of programs are not working to meaningfully impact the academic performance or social or emotional skills of children from low-income families.
Source: Grover J. Whitehurst, "New Evidence Raises Doubts on Obama's Preschool for All," Brookings Institution, November 20, 2013.
For more on Education Issues:
- Government-Financed Employment in the States
- 11 Dec 2013 07:00:56 CDT -
Only looking at outright public-sector employment fails to paint a full picture of how much state labor markets are relying on government spending, according to Keith Hall, a senior research fellow at the Mercatus Center, and Robert Greene, the project coordinator in the Regulatory Studies Program and Financial Markets Working Group at the Mercatus Center.
- In over half of the states, less than 2 percent of the labor market was employed in jobs funded by federal contract dollars; but in some states (Maryland, New Mexico and Virginia), that number was much higher.
- In those states, 7.7 percent to 10.7 percent of nonfarm payroll jobs were funded by federal contract dollars.
The study combined public-sector jobs with federal-contract funded jobs to determine how much each state's labor market actually relied on government spending.
- Government-financed jobs accounted for more than 25 percent of nonfarm payroll jobs in seven states (Alabama, Alaska, Maryland, Mississippi, New Mexico, Virginia and Wyoming).
- In six states, less than 16 percent of nonfarm payroll jobs were financed by the federal government (Delaware, Indiana, Nevada, Pennsylvania, Rhode Island and Wisconsin).
When public sector job markets and federal contract-funded job markets are large, private sector labor markets become smaller. The study found that private sector jobs ranged from less than 70 percent of a state's labor market (as is the case in New Mexico) to more than 85 percent (as in the case of Rhode Island).
The study compared the private sector labor market in each state between 2007 and 2012:
- Alaska, North Dakota and Texas saw the largest private sector growth over those five years.
- Alabama, Arizona, Florida, Idaho and Nevada experienced the biggest drop in private sector jobs during that time.
Source: Keith Hall and Robert Greene, "Government-Financed Employment and the Real Private Sector in the 50 States," Mercatus Center, November 25, 2013.
For more on Tax and Spending Issues:
- Is There a Strong Case for Increasing the Minimum Wage?
- 11 Dec 2013 07:00:55 CDT -
The case for increasing the minimum wage is not as strong as advocates portray it to be, says Scott Winship, the Walter B. Wriston Fellow at the Manhattan Institute.
Democrats have proposed increasing the minimum wage from $7.25 per hour to $10.10 per hour, on the grounds that such an increase would decrease economic inequality. But the evidence in favor of such an increase is inconsistent and often relies on weak or inaccurate evidence:
- Economist Arindrajit Dube argues that the federal minimum wage would be $10.60 today if it were at the same level as it was in 1968. However, that calculation uses a cost-of-living adjustment that overstates inflation and has been rejected by the Congressional Budget Office, the Bureau of Labor Statistics and the Census Bureau.
- Some point to the fact that the minimum wage has dropped to only 37 percent of the average hourly wage of nonsupervisory production workers (down from 46 percent in 1979 and 53 percent in 1968) as proof that the minimum wage needs to be raised. However, this fails to account for the fact that the number of minimum wage workers has fallen. Only 3 percent of workers made the minimum wage in 2011, compared to 8 percent of workers in 1979.
- Minimum wage workers in 1968 paid higher taxes than minimum wage workers pay today. This is a result of the Earned Income Tax Credit.
- Most of the workforce -- 70 percent -- is subject to state minimum wages that exceed the federal minimum wage. This was historically not the case.
- Lastly, many argue that low-wage workers are better educated today than in past times, pointing to the fact that the number of low-wage workers that have gone to college rose from 25 percent to 43 percent between 1979 and 2011. However, this trend took place across the board: the share of all workers attending college rose from 33 percent to 59 percent during that time.
An informed decision on increasing the minimum wage cannot be made without accurate information, writes Winship.
Source: Scott Winship, "How Solid is the Case for Raising the Minimum Wage?" Manhattan Institute, December 3, 2013.
For more on Economic Issues:
- A Global Wealth Tax?
- 11 Dec 2013 07:00:54 CDT -
A tax on wealth grows likelier by the day, says Romain Hatchuel, managing partner of asset management firm Square Advisors, LLC.
The International Monetary Fund (IMF) recently released a Fiscal Monitor report, which argues in favor of taxing the wealthy in order to generate revenue to deal with public debt. Already, economies across the developed world have increased their top tax rates, at an average of 8 percent. The United States recently saw the highest income tax bracket increase from 35 percent to 39.6 percent due to the expiration of the Bush tax cuts.
- The IMF calculates that raising top rates toward 70 percent in the United States would yield the most revenue -- around 1.25 percent of gross domestic product (GDP).
- They made this recommendation while admitting that their approach to maximize revenue does not take into account the well-being of earners or businesses.
- For the euro zone, the IMF suggests a 10 percent tax on households' net worth in order to bring public debt levels down to where they were before the financial crisis.
- Such a tax, Hatchuel writes, is not unheard of: in Cyprus earlier this year, individuals with bank accounts above 100,000 euros were taxed at 100 percent of their savings above that threshold.
Japan has a public debt ratio that is over twice what Cyrpus' was at default, so it should be particularly worried about these types of measures. Japan has yet to take aim directly at top earners, though it has begun to increase taxes on individuals.
Source: Romain Hatchuel "The Coming Global Wealth Tax," Wall Street Journal, December 3, 2013.
For more on Tax and Spending Issues:
- Banking Proposals in United States and Britain Threaten Growth
- 10 Dec 2013 07:00:53 CDT -
New banking proposals in both the United States and United Kingdom threaten global growth, say Louise Bennetts, associate director of financial regulatory studies at the Cato Institute, and Arthur Long, a partner in the New York office of the law firm of Gibson, Dunn, and Crutcher LLP.
The United States and the United Kingdom have proposed new banking plans, each with the goal of protecting the nations from the failure of global banking operations that operate within their borders. However, the proposals are ineffective and unlikely to prevent any future financial crisis. In fact, Bennetts and Long say that had these proposals been in place at the time of the financial crisis, the countries would have seen even worse outcomes.
- The "Foreign Banking Organization" proposal (FBO) in the United States would apply to foreign banking organizations that have a branch or own a U.S. bank or subsidiary in the United States. The FBO would apply portions of the Dodd-Frank law to those foreign banks.
- The United Kingdom has a "ring-fencing" plan which would have UK banks handle traditional banking activities (deposits, overdrafts, etc.) in separate subsidiaries, which would have independent boards and be required to meet higher capital requirements.
Both proposals will have adverse effects on credit availability, global capital flows and the world economy as a whole. Moreover, these types of large-scale restructuring rules are very expensive and time-consuming. If the programs fail, they are difficult to undo. It would be better to do nothing than to institute these new measures.
Source: Louise C. Bennetts and Arthur S. Long, "The New Autarky? How U.S. and UK Domestic and Foreign Banking Proposals Threaten Global Growth," Cato Institute, November 21, 2013.
For more on Economic Issues:
Health Policy Digest
Provided courtesy of: http://www.ncpa.org/
Consumer Driven Health Care
- Health Care Reform Tax Will Hurt Franchisees
- 04 Oct 2011 12:43:58 GMT - When the employer mandates go into effect in 2014, many franchised businesses will be motivated to reduce the number of locations and move workers from full-time to part-time status...
REAL CLEAR MARKETS
- Saving Jobs from Health Reform's Harmful Regulations
- 04 Oct 2011 12:43:58 GMT - If the rate of health care cost growth had not exceeded general inflation, a typical family would have had $545 more per month in spendable income instead of $95 -- a difference of $5,400 per year...
- Does Health Insurance and Seeing the Doctor Keep You Out of the Hospital?
- 04 Oct 2011 12:43:58 GMT - Gaining health insurance and using more primary care services leads to more hospitalizations as a result of physicians' discretionary decisions regarding aggressive and intensive treatment...
AMERICAN ENTERPRISE INSTITUTE
- The Case for Competition in Medicare
- 04 Oct 2011 12:43:58 GMT - A well-functioning marketplace would set in motion the forces needed to transform American medical care into a model of efficient patient-centered care...
- Potential Effect of Health Care Reform on Emergency Department Utilization Not Clear
- 04 Oct 2011 12:43:58 GMT - In 2010, 71 percent of emergency physicians said that they expected emergency department visits to increase due to the implementation of the Affordable Care Act...
NEW ENGLAND JOURNAL OF MEDICINE
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