Bruno Behrend

Bruno Behrend, J.D., is a founding director of American Transparency and a former radio host. In 2008, Behrend coauthored Illinois Deserves Better - The Ironclad Case for an Illinois Constitutional Convention, the release of which coincided with a campaign to pass a referendum calling for a Constitutional Convention in Illinois. Mr. Behrend has served as an advisor to groups seeking to rewrite the legislative article of the Illinois Constitution and as Field Director for FreedomWorks (www.FreedomWorks.com) inIllinois. In 2009, he was policy director for a gubernatorial candidate in the Illinois primary election. Mr. Behrend is a graduate of University of Illinois (1983) with a degree in finance and a graduate of IIT-Kent College of Law (1990), and is licensed to practice law in the state of Illinois.

A Request from my son the Marine

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My son made it back from his first tour in Afghanistan two days ago.  He will probably have to go back at least once.  This is from his  Facebook posting.

“Lindsay Lohan, 24, is all over the news because she’s a celebrity drug addict. While Justin Allen 23, Brett Linley 29, Matthew Weikert 29, Justus Bartett 27, Dave Santos 21, Chase Stanley 21, Jesse Reed 26, Matthew Johnson 21, Zachary Fisher 24, Brandon King 23, Christopher Goeke 23, Sheldon Tate 27, they are all Marines who gave their lives this week, no media mention. Honor THEM by reposting…”

Done.

Addressing SEIU/AFSCME talking points

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Public Unions are taking well-deserved heat for their pension greed. If you look at all the pension articles, the comments are full of reasonable sounding folks trotting out the argument that the really bad examples of abusive pensions are “outliers.” They then tell you that the average benefit is “only $20,000/year.” It’s best to address this calmly, reasonably, and accurately. Here’s how.

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Sweden – the newest Red State

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America, even with Republicans in the House and possibly Senate, runs the risk of becoming the model sclerotic empire, wasting away while other states move toward more freedom. Canada and Sweden, nations we conservatives and libertarians used to scoff at as silly, are starting to beat the US on measures of freedom and competitiveness.
Sweden is one country to watch. First, it does socialism about as well as any state could. (of course, this is easier when your nation is small, homogeneous, and free of the burdens of world leadership). Next, unlike the US, Sweden is moving in the right direction, toward that conservative (in the true meaning of the word) ideal of a 3rd way, where the welfare state, to the extent it exists, is individualized.

Sweden’s Quiet Revolution
Without much fanfare, the Scandinavian country has been moving away from socialism.

There is something about Sweden that provokes a mix of envy, horror, and bewilderment among American observers. Liberals have traditionally celebrated its cradle-to-grave safety net, while conservatives have disparaged its high taxes and centralized health-care regime. Yet both groups have generally agreed that Swedish-style socialism is a far cry from rough-and-tumble U.S. capitalism.

In fact, contemporary Sweden is much less socialist than many Americans realize. Since the early 1990s, when it suffered a painful financial crisis, the Scandinavian country has deregulated key industries (such as airlines, telecommunications, and electricity), lowered its overall tax burden, established universal school vouchers, partially privatized its pension system, abolished certain government monopolies, sold a number of state-owned enterprises (including the parent company of Absolut vodka), and trimmed public spending. Several years ago, it eliminated gift and inheritance taxes. The World Economic Forum now ranks Sweden as the second-most competitive economy on earth, behind only Switzerland. According to the 2010 Index of Economic Freedom (compiled by the Wall Street Journal and the Heritage Foundation), Sweden offers greater business freedom, trade freedom, monetary freedom, investment freedom, financial freedom, freedom from corruption, and property-rights protection than does the United States.

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Bolstered by prudent economic stewardship and a relatively conservative financial sector, Sweden entered the global recession on a sound footing. While it endured a nasty spike in unemployment, its export-driven recovery has been so vigorous that the central bank is now concerned about inflation risks. In the second quarter of 2010, Sweden posted a 4.6 percent annual growth rate, prompting the Wall Street Journal to hail it as “the biggest success story in post-recession Europe.” It currently has the lowest deficit-to-GDP ratio in the entire European Union. Before the election, Swedish finance minister Anders Borg announced plans to privatize another $14 billion worth of state assets. “If we get a surplus in place,” Reinfeldt told a Reuters interviewer, “we will deliver on tax cuts for 6.1 million workers and pensioners.” (The total Swedish population is roughly 9.4 million.)

To be sure, Sweden won’t look like Hong Kong or Singapore anytime soon. It still has a lavish welfare state, and its aggregate tax burden is still quite heavy. The top marginal income-tax rate is 57 percent in Sweden, compared with 35 percent (for now) in America. On the other hand, a 2008 OECD study found that household taxes are substantially more progressive in the U.S. than they are in Sweden, even after we control for America’s higher level of income inequality. Sweden has a much lower average statutory corporate-tax rate than the U.S., and also a much lower effective corporate-tax rate on new capital investments (according to University of Calgary economists Duanjie Chen and Jack Mintz). Its tax structure is made even more regressive by a 25 percent value-added tax on consumption of most goods and services.

Which brings us to a common misconception about the Swedish system — that it takes from the rich and gives to the poor. Actually, says Lund University economist Andreas Bergh, “the majority of the taxes you pay are given back to you during your life cycle.” Thus, “if you pay more when you work, you will also get more when you retire.” Even upper-class Swedes enjoy bountiful government largesse.

Another popular myth would have us believe that Sweden’s wealth was somehow created or facilitated by social democracy. In reality, “Sweden’s prosperity is the result of well-functioning capitalist institutions,” says Bergh, author of the new Swedish-language book The Capitalist Welfare State. As Cato Institute scholar Johan Norberg explained in a 2006 National Interest essay, the relative “success” of the country’s social-democratic model “was built on the legacy of an earlier model: the period of economic growth and development preceding the adoption of the socialist system.”

When will we stop spending?

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The graph below compares American spending against other OECD countries. It comes from an article in the left-leaning American Prospect that basically argues that our spending isn’t really a problem.

OECD Spending
OECD Spending

A Million Here, a Million There ?
Why federal spending never goes down, and why that’s not a problem.

Politicians can fulminate all they want about the $2 million earmark or the silly sounding $150,000 research project. But the truth is that government spending is going to continue to rise, because neither Democrats nor Republicans really want government to get smaller — at least not badly enough to cut it in a meaningful way. It can rise at a slower or faster rate, depending on the decisions we make (the biggest source of future spending is Medicare and Medicaid, a problem the Affordable Care Act begins to tackle). But no matter who wins the election this year, or in 2012, or in any other year, it’s going to keep growing.

First, the comment that ObamaCare is going to “tackle” spending is absurd. Its tax and spending structure will move America way up on that graph. Next, the fact is that spending does matter for all kinds of reasons, particularly for a nation that doesn’t want to go down the path of sclerotic Europe.

No one knows if the Tea Party/Patriot movement is going to succeed in curtailing spending. I get the feeling that they just might. If the Republicans don’t curtail the rate of spending in some meaningful way, the loose network of activists will coalesce into a party.

For how long, and what level of success such a party has is an open question.

The answer need not be cutting spending below the previous year, but merely curtailing spending growth to a manageable number. Raise the retirement age, combine and means test Medicaid and Medicare, and outlaw public unionism at the state level.

Those 3 things alone will cure the spending problems. Get political power, and ram them through.