Reason Alert - April 24, 2009 - When Do Deficits Matter? - Banks Want to Pay Back Bailout Loans, But Treasury Won't Let Them - President Obama Signs National Service Bill - Your Address Determines the Quality of Education You Receive - Violence in Mexico Is Caused by Prohibition, Not Firearms - New at Reason
*When Do Deficits Matter?*<http://sol.sparklist.com/t/4581436/28259383/77325/0/> Reason magazine columnist Veronique de Rugy writes, "This is by far the highest share of the economy that deficits have taken up since World War II. It is well over twice the record set by Ronald Reagan in the 1980s. Yet we don’t see Democrats denouncing the deficit explosion on the network news, like they did two decades ago. The Democrats aren’t the only ones who have reversed their opinions about deficits. Republicans were relatively comfortable with Reagan’s unbalanced budgets. And when President George W. Bush turned a massive surplus into a series of giant deficits, few in the GOP objected. During the administration’s internal debates over proposed tax cuts in 2002, Vice President Dick Cheney reportedly told Treasury Secretary Paul O’Neill that 'Reagan proved deficits don’t matter.'...Economic debates aside, deficits certainly do matter if you care about shrinking the size of the state. Budget gaps are a kind of Ponzi scheme. Any year the federal government spends more money than it collects in tax revenue, we have a budget deficit. That means the citizens through their taxes authorize politicians to spend a certain amount yet the government spends more. The plan is to pay this additional spending back with future taxes, just as Bernard Madoff figured he’d pay off early investors with dollars from pigeons he conned down the road. As with any Ponzi scheme, there will inevitably come a time when the con is exposed, along with all the participants’ losses. John Maynard Keynes, the 20th century’s preeminent defender of deficit spending, famously quipped, 'In the long run, we are all dead.' Keynes did not give much guidance, though, on how we would pay for the funeral." *Banks Want to Pay Back Bailout Loans, But Treasury Won't Let Them*<http://sol.sparklist.com/t/4581436/28259383/77326/0/> Reason magazine's Katherine Mangu-Ward writes, "Everyone knows that you should read the fine print before taking out a loan, whether it's $100 from a payday lender or $100 million in bailout loans from the federal government. You'd think that no one would know this better than bankers themselves...Bankers who jumped at the bailout money now seem surprised to discover that the fine print gave the government the right to buy stock in the bank at a specified price for up to 10 years, essentially retaining an ownership stake for that period. If someone showed up at my door and offered me an enormous sum of money on the condition that I take it right now! hurry! hurry! hurry! and sign here! I'd be a little suspicious. Doubly so if that person introduced himself with that age-old phrase 'I'm from the government, and I'm here to help.' Banks were led to believe the warrants provision was minor, and wouldn't be a problem when the time came to negotiate repayment terms. But if there's anything this financial crisis should have taught us, it is to be skeptical of lenders who casually promise that paying back enormous loans won't be any problem at all (ask anyone with an adjustable-rate mortgage). Of course some banks didn't jump, they were pushed." Anthony Randazzo: It's Complicated to Get Out of TARP<http://sol.sparklist.com/t/4581436/28259383/77327/0/> Nick Gillespie: We've Got All This Stimulus Money, Now We Need More Money To Track How We're Spending It<http://sol.sparklist.com/t/4581436/28259383/77328/0/> Audio: Listen to Gillespie Discuss Stimulus Spending on the Brian Wilson Show <http://sol.sparklist.com/t/4581436/28259383/77329/0/> <http://sol.sparklist.com/t/4581436/28259383/77329/0/> *President Obama Signs National Service Bill*<http://sol.sparklist.com/t/4581436/28259383/77330/0/> As seen in today's *Wall Street Journal*<http://sol.sparklist.com/t/4581436/28259383/77331/0/>, Reason.com's Nick Gillespie examines the national service bill signed by President Obama and concludes<http://sol.sparklist.com/t/4581436/28259383/77330/0/>: "First, public or national service is profoundly un-American as a historical concept and comes always and everywhere slathered in the stink of trench warfare and rhetorical [nonsense]. This is especially true when it is paid service even as those participating and spending your tax dollars luxuriate in the silky-smooth language of altruism. Which, last time I checked, was supposed to be free. Jesus rendered unto Caesar; he didn't ask for a block grant from Pontius Pilate in return. That Obama pushes national service and voluntarism even as he works to limit tax breaks for charitable giving that drives all sorts of philanthropy is a classic screw-you, my-way-or-the-highway move. Second, AmeriCorps is a program with a long and distinguished history of sucking even by government standards. It effectively comes in second to the standard-issue DMV bureau, with its director in 2003 dubbing it 'another cumbersome, unpredictable government bureaucracy.'" *Your Address Determines the Quality of Education You Receive*<http://sol.sparklist.com/t/4581436/28259383/77332/0/> Sarah and James Parker attend Sidwell Friends School, with President Obama's daughters, thanks to vouchers from the D.C. Opportunity Scholarship program. But unless Congress reverses course on the voucher program, the Parkers could be forced back to the District's failing public schools. "Like Malia and Sasha, they are siblings. Unlike Malia and Sasha, they don't live in 1600 Pennsylvania Avenue. And without the voucher program, their destiny, like those of 1,700 or so others, will be sealed by their current address." - Reason Foundation's Shikha Dalmia on the demise of the DC voucher program. Dalmia: Obama Fails Kids in DC<http://sol.sparklist.com/t/4581436/28259383/77333/0/> Video: Watch Matt Welch Discuss Voucher Program on DC's News Channel 8<http://sol.sparklist.com/t/4581436/28259383/77334/0/> <http://sol.sparklist.com/t/4581436/28259383/77334/0/> *Violence in Mexico Is Caused by Prohibition, Not Firearms*<http://sol.sparklist.com/t/4581436/28259383/77335/0/> Reason magazine's Jacob Sullum writes, "Obama is right that the U.S. is largely responsible for the carnage in Mexico, which claimed more than 6,000 lives last year. But the problem is neither the drugs Americans buy nor the guns they sell; it's the war on drugs our government insists the rest of the world help it fight. Instead of acknowledging the failure of drug control, the Obama administration is using it as an excuse for an equally vain attempt at gun control." Charlie Lynch's Sentencing Delayed Again<http://sol.sparklist.com/t/4581436/28259383/77348/0/> *New at Reason* How Would Cap-And-Trade Affect Transportation?<http://sol.sparklist.com/t/4581436/28259383/77337/0/> Bill would micro-manage everything on the assumption that Congress “just knows” Robert Poole Will High-Speed Rail End Air Travel of Less Than 500 Miles?<http://sol.sparklist.com/t/4581436/28259383/77338/0/> The idea unravels once you start looking into the details Robert Poole Chicago's Midway Airport Privatization Deal Collapses<http://sol.sparklist.com/t/4581436/28259383/77339/0/> What's next for airport privatization? Robert Poole Chicago Keeps $126 Million from Canceled Midway Airport Privatization<http://sol.sparklist.com/t/4581436/28259383/77340/0/> No different than the earnest money prospective homebuyers put in escrow Leonard Gilroy Government vs. Bedbugs, Part 2<http://sol.sparklist.com/t/4581436/28259383/77341/0/> Government is the bigger pest Adam Summers Obama and the Pundits <http://sol.sparklist.com/t/4581436/28259383/77342/0/> Wrong on the handshake, wrong about Chavez Michael C. Moynihan Yielding to Ideology Over Science<http://sol.sparklist.com/t/4581436/28259383/77343/0/> Why don't environmentalists celebrate modern farming on Earth Day? Ronald Bailey Can We Replace DHS Secretary Napolitano with Fox News Legal Expert Napolitano? <http://sol.sparklist.com/t/4581436/28259383/77344/0/> A new war on "evil-doers" who hire undocumented workers? Nick Gillespie Getting California Back on Track<http://sol.sparklist.com/t/4581436/28259383/77345/0/> Rip up the government's credit cards, institute a spending limit, and prioritize programs based on effectiveness Adam Summers Video: The State of Cyberspace and Intellectual Property<http://sol.sparklist.com/t/4581436/28259383/77346/0/> Cyberlaw theorist David Post's new book just might blow your mind Interview with Nick Gillespie Port Privatization Trend Growing<http://sol.sparklist.com/t/4581436/28259383/77347/0/> More ports looking to public-private partnerships to fund improvements and expansion Shirley Ybarra *Media Contact*: Chris Mitchell Director of Communications Reason Foundation, Reason magazine, Reason.tv (310) 367-6109 [email protected] If you were forwarded this email and you would like to receive updates on the latest Reason Foundation research, commentary and events, please click here: http://www.reason.org/reasonalert.shtml<http://sol.sparklist.com/t/4581436/28259383/75032/0/> --- You are currently subscribed to reasonalert as: [email protected]. 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