. . . But Obama Generally Comprehends Terrorism
My difference with the President on releasing photos of Abu Ghraib notwithstanding, he exhibits an understanding of terrorism and how to counter it — an understanding that was not on display at the other end of Pennsylvania Avenue this week or at the American Enterprise Institute today.
Here’s a portion of President Obama’s speech today showing that he knows how overreaction to terrorism (such as resorting to torture) plays into the terrorism strategy:
As commander-in-chief, I see the intelligence, I bear responsibility for keeping this country safe, and I reject the assertion that these are the most effective means of interrogation. What’s more, they undermine the rule of law. They alienate us in the world. They serve as a recruitment tool for terrorists, and increase the will of our enemies to fight us, while decreasing the will of others to work with America. They risk the lives of our troops by making it less likely that others will surrender to them in battle, and more likely that Americans will be mistreated if they are captured. In short, they did not advance our war and counter-terrorism efforts – they undermined them, and that is why I ended them once and for all.
AEI Tax Forum
Photo by Peter Holden Photography for AEI
I was a panelist at an American Enterprise Institute forum today discussing the proliferation of federal tax credits, particularly for low-income families.
AEI scholars Kevin Hassett, Larry Lindsey, and Aparna Mathur have a draft paper that looks at the idea of consolidating current individual credits into one supercredit. The idea would be to simplify the system and reduce the economic distortions created by these credits, which are valued at about $170 billion in 2009.
My observations included:
- Obama’s Make Work Pay credit is valued at about $60 billion per year, much of which is ”refundable.” (That means it is partly a spending increase not a tax cut). Coincidentally, Obama’s proposed tax hikes for higher-income individuals are also about $60 billion per year. So Obama is damaging the economy with “Make Work Not Pay” tax increases at the top in order to fund dubious work incentives at the bottom. It makes no economic sense.
- The AEI scholars provide interesting calculations about how we could make the $170 billion of redistribution in these credits simpler. That’s fine as far as it goes, but I’d like to end the redistribution altogether. Let’s provide a large basic exemption in the tax code for folks at the bottom, but we don’t need any complex credits. Instead, let’s repeal federal policies that damage the budgets of struggling families at the bottom, such as import barriers that raise the price of clothing and federal milk cartels that raise the price of dairy products.
- Here’s my compromise redistribution plan. Let’s chop the $170 billion in tax credits in half and use the extra funds to cut the corporate income tax rate. With a purely static calculation, that would allow cutting the corporate rate from 35% to 25%. Assuming some behaviorial feedbacks, the $85 billion in credit savings would easily allow us to reduce the corporate rate to 20% or so.
- What do corporate taxes have to do with the workers who currently get all these tax credits? As Hassett and Mathur explained in a 2006 paper, corporate tax cuts would increase investment, improve productivity, and that in turn would raise wages of average American workers. We don’t need President Obama’s fancy new Make Work Pay credits. Instead, we need to cut the corporate tax rate to make the economy boom and raise worker’s wages and incomes in the private marketplace.
A Ditch, Not a Summit
When President Obama opened today’s summit on health care reform at the White House, he said:
In this effort, every voice has to be heard. Every idea must be considered.
Of course, he spoke those words to a room that contained not a single advocate of free-market health care reform.
- No one from the American Enterprise Institute (ranked the #5 think tank in the world for health policy)
- No one from the Cato Institute (ranked #7)
- No one from the National Center for Policy Analysis (ranked #10)
- No one from the Manhattan Institute
- No one from the Pacific Research Institute
- No one from the Galen Institute
- No one from the Heritage Foundation
- The list goes on…
Obama did, however, invite people from left-wing think tanks, including avowed advocates of socialized medicine. That makes Obama’s pledge of openness a farce, and today’s event a charade.
Or as my colleague Wayne Crews puts it: it’s a ditch, not a summit.
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