Sen. Rand Paul Proposes Serious Cuts
Freshman Sen. Rand Paul (R-KY) has raised the bar in Washington by releasing a bill that would make substantial, specific, and immediate cuts in federal spending. While policymakers on both sides of the aisle have largely paid lip service to stopping Washington’s record run of fiscal profligacy, Paul’s proposal makes good on his campaign promise to seriously tackle the federal government’s bloated budget.
Paul’s bill would target $500 billion in cuts for fiscal 2011 alone. While audacious by Washington standards, cutting federal spending by that amount would still leave us with a projected $1 trillion deficit this year. Nonetheless, the federal government’s scope would be dramatically curtailed, which would pay dividends in coming years as the economy is unshackled from numerous failed federal interventions.
A description of Paul’s proposed cuts can be viewed here, but some of the bolder ideas merit a comment or two.
First, Paul would eliminate most Department of Education spending, with the exception of higher education subsidies. He correctly notes that the federal government’s increased involvement in education has been “detrimental” and that “the mere existence of the Department of Education is an overreach of power by the federal government.”
Second, the Department of Energy, which is becoming a chief source of corporate welfare, would be zeroed out. Paul would eliminate subsidies for all energy industries — from fossil fuels to so-called “green” energies. He notes that the government’s interference in energy development should be ended and the free market allowed to “start taking the reins.”
Third, the Department of Housing and Urban Development — one of most visible examples of government failure — would be eliminated. Among the HUD programs that Paul singles out, it is his criticism of housing vouchers that deserves the most applause as they remain popular in some Republican and conservative quarters.
Paul deserves credit for proposing cuts at the Department of Defense, although the savings would be relatively small. However, his proposal would cut the Department of Homeland Security almost in half, and would zero out billions of dollars in foreign aid. The latter is well-timed given the situation in Egypt, a major recipient of U.S. foreign aid dollars.
Finally, Paul would chop a quarter of the Department of Health and Human Service’s budget, although he doesn’t take on Medicare or Medicaid. He is reportedly at work on separate legislation that would address Medicare and Social Security. Because Paul’s proposal is focused on immediate cuts, his decision to tackle the big mandatory spending programs separately shouldn’t be viewed as a cop out.
Thus far, the spending cut bar in Washington has been set pretty low. Policymakers from both parties and varying ideological backgrounds have been timid in spelling out precisely what they would cut. By getting specific, Paul has raised the bar, which will hopefully put pressure on others — in particular, the congressional Republican leadership — to move beyond a vague, myopic fixation on nondefense discretionary spending.
Why the Neo-Malthusian Worldview Fails the Reality Check
Why does the Neo-Malthusians’ dystopian worldview — that human and environmental well-being will suffer with increases in population, affluence and technological change — fail the reality check? Why has human well-being improved in the Age of Industrialization despite order-of-magnitude increases in the consumption of materials, fossil fuel energy and chemicals?
I offer some reasons in the last of a series of posts (1, 2, 3, 4) at MasterResource.
I note that although population, affluence and technology can create some problems for humanity and the planet, they are also the agents for solving those problems. In particular, human capital and greater affluence have helped the development and adoption of new and improved technologies, which empirical data show have reduced risks faster than the new risks that may have been created — hence the continual improvement in human well-being in the era of modern economic growth.
A corollary to this is that projections of future impacts spanning a few decades, but that do not account for technological change as a function of time and affluence, more likely than not will overestimate impacts, perhaps by orders of magnitude. In fact, this is one reason why many estimates of the future impacts of climate change are suspect, because most do not account for changes in adaptive capacity either due to secular technological change or increases in economic development.
Yogi Berra is supposed to have said, “It’s tough to make predictions, especially about the future.” Most analysts recognize this. They know that just because one can explain and hindcast the past, it does not guarantee that one can forecast the future. Neo-Malthusians, by contrast, cannot hindcast the past but are confident they can forecast the future.
Finally, had the solutions that Neo-Malthusians espouse been put into effect a couple of centuries ago, most of us alive today would be dead and those who were not would be living poorer, shorter, and unhealthier lives, constantly subject to the vagaries of nature, surviving from harvest to harvest, spending more of our time in darkness because lighting would be a luxury, and spending more of our days in the drudgery of menial tasks because, under their skewed application of the precautionary principle (see here, here and here), fossil fuel consumption would be severely curtailed, if not banned.
Nor would the rest of nature necessarily be better off. First, lower reliance on fossil fuels would mean greater demand for fuelwood, and the forests would be denuded. Second, less fossil fuels also means less fertilizer and pesticides and, therefore, lower agricultural productivity. To compensate for lost productivity, more habitat would need to be converted to agricultural uses. But habitat conversion (including deforestation) — not climate change — is already the greatest threat to biodiversity!
Read the whole post here.
Atomic Dreams
Last week I was on John Stossel’s (most excellent) new show on Fox Business News to discuss energy policy — in particular, popular myths that Republicans have about energy markets. One of the topics I touched upon was nuclear power. My argument was the same that I have offered in print: Nuclear power is a swell technology but, given the high construction costs associated with building nuclear reactors, it’s a technology that cannot compete in free markets without a massive amount of government support. If one believes in free markets, then one should look askance at such policies.
As expected, the atomic cult has taken offense.
Now, it is reasonable to argue that excessive regulatory oversight has driven up the cost of nuclear power and that a “better” regulatory regime would reduce costs. Perhaps. But I have yet to see any concrete accounting of exactly which regulations are “bad” along with associated price tags for the same. If anyone out there in Internet-land has access to a good, credible accounting like that, please, send it my way. But until I see something tangible, what we have here is assertion masquerading as fact.
Most of those who consider themselves “pro-nuke” are unaware of the fact that the current federal regulatory regime was thoroughly reformed in the late 1990s to comport with the industry’s model of what a “good” federal regulatory regime would look like. As Oliver Kingsley Jr., the President of Exelon Nuclear, put it in Senate testimony back in 2001:
The current regulatory environment has become more stable, timely, and predictable, and is an important contributor to improved performance of nuclear plants in the United States. This means that operators can focus more on achieving operational efficiencies and regulators can focus more on issues of safety significance. It is important to note that safety is being maintained and, in fact enhanced, as these benefits of regulatory reform are being realized. The Nuclear Regulatory Commission — and this Subcommittee — can claim a number of successes in their efforts to improve the nuclear regulatory environment. These include successful implementation of the NRC Reactor Oversight Process, the timely extension of operating licenses at Calvert Cliffs and Oconee, the establishment of a one-step licensing process for advanced reactors, the streamlining of the license transfer process, and the increased efficiency in processing licensing actions.
It’s certainly possible that the industry left some desirable reforms undone, but it seems relevant to me that the Nuclear Energy Institute — the trade association for the nuclear energy industry and a fervent supporter of all these government assistance programs — does not complain that they’re being unfairly hammered by costly red-tape.
For the most part, however, the push-back against the arguments I offered last week has little to do with this. It has to do with bias. According to a post by Rod Adams over at “Atomic Insights Blog,” I am guilty of ignoring subsidies doled-out to nuclear’s biggest competitor — natural gas — and because Cato gets money from Koch Industries, it’s clear that my convenient neglect of that matter is part of a corporate-funded attack on nuclear power. Indeed, Mr. Adams claims that he has unearthed a “smoking gun” with this observation.
Normally, I would ignore attacks like this. This particular post, however, offers the proverbial “teachable moment” that should not be allowed to go to waste.
Cherry Picking Climate Catastrophes: Response to Conor Clarke, Part II
Conor Clarke at The Atlantic blog, raised several issues with my study, “What to Do About Climate Change,” which Cato published last year.
One of Conor Clarke’s comments was that my analysis did not extend beyond the 21st century. He found this problematic because, as Conor put it, climate change would extend beyond 2100, and even if GDP is higher in 2100 with unfettered global warming than without, it’s not obvious that this GDP would continue to be higher “in the year 2200 or 2300 or 3758”. I addressed this portion of his argument in Part I of my response. Here I will address the second part of this argument, that “the possibility of ‘catastrophic’ climate change events — those with low probability but extremely high cost — becomes real after 2100.”
The examples of potentially catastrophic events that could be caused by anthropogenic greenhouse gas induced global warming (AGW) that have been offered to date (e.g., melting of the Greenland or West Antarctic Ice Sheets, or the shutdown of the thermohaline circulation) contain a few drops of plausibility submerged in oceans of speculation. There are no scientifically justified estimates of the probability of their occurrence by any given date. Nor are there scientifically justified estimates of the magnitude of damages such events might cause, not just in biophysical terms but also in socioeconomic terms. Therefore, to call these events “low probability” — as Mr. Clarke does — is a misnomer. They are more appropriately termed as plausible but highly speculative events.
Consider, for example, the potential collapse of the Greenland Ice Sheet (GIS). According to the IPCC’s WG I Summary for Policy Makers (p. 17), “If a negative surface mass balance were sustained for millennia, that would lead to virtually complete elimination of the Greenland Ice Sheet and a resulting contribution to sea level rise of about 7 m” (emphasis added). Presumably the same applies to the West Antarctic Ice Sheet.
But what is the probability that a negative surface mass balance can, in fact, be sustained for millennia, particularly after considering the amount of fossil fuels that can be economically extracted and the likelihood that other energy sources will not displace fossil fuels in the interim? [Remember we are told that peak oil is nigh, that renewables are almost competitive with fossil fuels, and that wind, solar and biofuels will soon pay for themselves.]
Second, for an event to be classified as a catastrophe, it should occur relatively quickly precluding efforts by man or nature to adapt or otherwise deal with it. But if it occurs over millennia, as the IPCC says, or even centuries, that gives humanity ample time to adjust, albeit at a socioeconomic cost. But it need not be prohibitively dangerous to life, limb or property if: (1) the total amount of sea level rise (SLR) and, perhaps more importantly, the rate of SLR can be predicted with some confidence, as seems likely in the next few decades considering the resources being expended on such research; (2) the rate of SLR is slow relative to how fast populations can strengthen coastal defenses and/or relocate; and (3) there are no insurmountable barriers to migration.
This would be true even had the so-called “tipping point” already been passed and ultimate disintegration of the ice sheet was inevitable, so long as it takes millennia for the disintegration to be realized. In other words, the issue isn’t just whether the tipping point is reached, rather it is how long does it actually take to tip over. Take, for example, if a hand grenade is tossed into a crowded room. Whether this results in tragedy — and the magnitude of that tragedy — depends upon how much time it takes for the grenade to go off, the reaction time of the occupants, and their ability to respond.
Global Taxes and More Foreign Aid
The U.K.-based Guardian reports that the United Nations and other international bureaucracies dealing with so-called climate change are scheming to impose global taxes. That’s not too surprising, but it is discouraging to read that the Obama Administration appears to be acquiescing to these attacks on U.S. fiscal sovereignty. The Administration also has indicated it wants to squander an additional $400 billion on foreign aid, adding injury to injury:
…rich countries will be asked to accept a compulsory levy on international flight tickets and shipping fuel to raise billions of dollars to help the world’s poorest countries adapt to combat climate change. The suggestions come at the start of the second week in the latest round of UN climate talks in Bonn, where 192 countries are starting to negotiate a global agreement to limit and then reduce greenhouse gas emissions. The issue of funding for adaptation is critical to success but the hardest to agree. …It has been proposed by the world’s 50 least developed countries. It could be matched by a compulsory surcharge on all international shipping fuel, said Connie Hedegaard, the Danish environment and energy minister who will host the final UN climate summit in December. …In Bonn last week, a separate Mexican proposal to raise billions of dollars was gaining ground. The idea, known as the “green fund” plan, would oblige all countries to pay amounts according to a formula reflecting the size of their economy, their greenhouse gas emissions and the country’s population. That could ensure that rich countries, which have the longest history of using of fossil fuels, pay the most to the fund. Recently, the proposal won praise from 17 major-economy countries meeting in Paris as a possible mechanism to help finance a UN pact. The US special envoy for climate change, Todd Stern, called it “highly constructive”. …Last week, a US negotiator, Jonathan Pershing, said that the US had budgeted $400m to help poor countries adapt to climate change as an interim measure. But that amount was dismissed as inadequate by Bernarditas Muller of the Philippines, who is the co-ordinator of the G77 and China group of countries.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
