The Road to Freedom (27 page)

30
Scott Shane, “Small Businesses, Big Regulatory Problem,”
The American
, January 20, 2011,
http://www.american.com/archive/2011/january/small-business-big-regulatory-burden

31
Susan Dudley and Melinda Warren, “Fiscal Stalemate Reflected in Regulators' Budget: An Analysis of the U.S. Budget for Fiscal Years 2011 and 2012,”
The George Washington University
and
Washington University in St. Louis
, May 2011,
http://wc.wustl.edu/files/wc/2012_Regulators_Budget_2_1.pdf

32
As of 2 December 2011. The current debt estimate comes from
http://www.brillig.com/debt_clock/

33
Author's calculation using Congressional Budget Office 2001 Long-Term Budget Outlook Alternative Fiscal Scenario,
http://www.cbo.gov/doc.cfm?index=12212

34
Ana Lucia Iturriza, International Institute of Social Studies of Erasmus University Rotterdam,
http://www.iss.nl/fileadmin/ASSETS/iss/Documents/Scholas/An_Exercise_in_Worldmaking_2005-2006.pdf

35
A. Bergh and M. Henrekson, “Government Size and Growth: A Survey and Interpretation of Evidence,”
Journal of Economic Surveys
. (June 2011), doi: 10.1111/j.1467-6419.2011.00697.x.

36
For a sample of the literature, see Y. Algan, , P. Cahuc, and A. Zylberberg, “Public Employment and Labor Market Preferences.”
Economic Policy
, (2002): 1–65. T. Conley, and B. Dupor, “The American Recovery and Reinvestment Act: Public Sector Jobs Saved, Private Sector Jobs Forestalled.” May 2011.
http://web.econ.ohio-state.edu/dupor/arra10_may11.pdf
; J.Malley, and T. Moutos, “Government Employment and Unemployment: With One Hand Giveth, The Other Taketh,” University of Glasgow, Working Paper Series no. 9709, May 1998.

37
“National Economic Accounts: Gross Domestic Product,”
Bureau of Economic Analysis
, data,
http://www.bea.gov/national/index.htm#gdp
.

38
The trendline is calculated using a simple OLS regression.

CHAPTER SIX

1
Thomas Jefferson, First Inaugural Address, March 4, 1801, The Avalon Project at Yale School,
http://avalon.law.yale.edu/19th_century/jefinau1.asp
.

2
“Now, there are some who question the scale of our ambitions. . . . What the cynics fail to understand is that the ground has shifted beneath them, that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works—whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.” Barack Obama, Inaugural address, January 21, 2009,
http://www.whitehouse.gov/blog/inaugural-address/

3
See
http://www.washingtonpost.com/politics/president-obamas-economic-speech-in-osawatomie-kans/2011/12/06/gIQAVhe6ZO_print.html

4
Fox News Opinion Dynamics Poll, February 19, 2009,
http://www.foxnews.com/projects/pdf/021909_FNCPoll.pdf

5
“2011 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” May 13, 2011,
https://www.cms.gov/ReportsTrustFunds/downloads/tr2011.pdf

6
Figure reflects total expenditures on Medicaid, Food and Nutrition Assistance, Supplemental Security Income, and Family and Other Support Assistance. Office of Management and Budget Historical Tables, “Table 8.5—Outlays for mandatory and related programs: 1962–2016,”
http://www.whitehouse.gov/omb/budget/Historicals

7
Adam Smith,
An Inquiry into the Nature and Causes of the Wealth of Nations
, ed. Sálvio M. Soares (MetaLibri, 2007), v.1.0s.

8
Data for November 2011, “2011 Monthly Medallion ‘Non-Accessible' Sales—Average Prices & Number of Transfers,” New York City Taxi & Limousine Commission,
http://www.nyc.gov/html/tlc/downloads/pdf/avg_med_price_2k11_november.pdf

9
Melissa Kearney, “State Lotteries and Consumer Behavior,” NBER Working Paper 9330, November 2002

10
Ibid.

11
Ronald H. Coase, “The Problem of Social Cost,”
Journal of Law and Economics
3, no. 1 (1960): 1–44.

12
Raquel Girvin, “Aircraft noise-abatement and mitigation strategies,”
Journal of Air Transport Management
15 (2009): 14–22.

13
Scott Cohn, “CNBC's Top States for Business 2010—And the Winner Is Texas,”
cnbc.com
, July 13, 2010,
http://www.cnbc.com/id/37642856/CNBC_s_Top_States_For_Business_2010_And_The_Winner_Is_Texas

14
Bureau of Labor Statistics employment data,
http://data.bls.gov/cgi-bin/surveymost?sm+48

15
Mavis Amundson, “Local professor notes Hunthausen's influence,”
West Seattle Herald
, January 11, 1984.

16
Office of Management and Budget, Historical Tables,
Budget of the United States Government, Fiscal Year 2012
, “Table 3.1—Outlays by Superfunction and Function: 1940-2016,”
http://www.whitehouse.gov/omb/budget/Historicals

17
Economists also note that public goods are “nonrivalrous,” meaning that one person's use does not crowd out another's. For example, the keyboard I am using right now is rivalrous in that my using it means you can't. In contrast, my protection by the army right now does not lessen yours.

18
George A. Akerlof, “The Market for ‘Lemons': Quality Uncertainty and the Market Mechanism,”
Quarterly Journal of Economics
84, no. 3 (1970): 488–500.

19
See
http://www.washingtonpost.com/politics/president-obamas-economic-speech-in-osawatomie-kans/2011/12/06/gIQAVhe6ZO_print.html
.

20
Michael Barone, “Federal Expansion the Real Issue in Debt Ceiling Debate,”
Washington Examiner
, July 17, 2011.

21
The government is involved, however, if you get a tax deduction for your contribution.

22
Alex Pollock, “Lots of Regulatory Expansion but Little Reform,”
AEI Regulation Outlook
, June 2010,
http://www.aei.org/docLib/04-RegO-2010-g.pdf

23
Economists have proved that social capital makes people more prosperous, too. See Anil Rupasingha, Stephan J. Goetz, and David Freshwater, “Social Capital and Economic Growth: A County-Level Analysis,”
Journal of Agricultural and Applied Economics
32, no. 3 (2000): 565–572.

24
In general, monopoly is the area least mitigated by social capital. But even there, trust and social cohesion make people less likely to want to behave in a predatory way with competitors and consumers.

25
See
http://www.hks.harvard.edu/saguaro/communitysurvey/results_matrix.html

26
This wasn't always so. As Charles Murray points out in his 2012 book
Coming Apart
, dense urban areas in the past frequently had very high levels of social capital. Charles Murray,
Coming Apart: The State of White America, 1960–2010
. New York: Crown Forum, (2012).

27
Alexis de Tocqueville,
Democracy in America
, ed. J. P. Maier, trans. George Lawrence (Anchor Books, 1969).

28
Murray also uses this example in his book
Coming Apart
.

29
Edward C. Banfield,
The Moral Basis of a Backward Society
(Free Press, 1958).

30
See Arthur C. Brooks, “Is There a Dark Side to Government Support for Nonprofits?”
Public Administration Review
60, no. 3 (2000): 211–218; B. Duncan, “Modeling charitable contributions of time and money,”
Journal of Public Economics
72, no. 2 (1999): 213–242.

31
James Andreoni and A. Abigail Payne, “Is crowding out due entirely to fundraising? Evidence from a panel of charities,”
Journal of Public Economics
95 (2011): 334–343.

32
See, in particular, Peter L. Berger and Richard John Neuhaus,
To Empower People: from State to Civil Society
, 20th anniversary ed. (American Enterprise Institute Press, 1996).

33
Pope Pius XI, “Quadragesimo Anno,” Papal Encyclical,
http://www.vatican.va/holy_father/pius_xi/encyclicals/documents/hf_p-xi_enc_19310515 _quadragesimo-anno_en.html
.

CHAPTER SEVEN

1
CNN Opinion Research Corporation poll, June 3–7, 2011,
http://i2.cdn.turner.com/cnn/2011/images/06/08/june.8.pdf

2
There is overlap in these solutions across issues, because the same policy (for example, repealing Dodd-Frank, or reforming our tax code) can have positive effects on more than one issue. I leave aside energy, health care, and terrorism only because they require much more specialized information and background than I can practically bring to bear in this chapter.

3
Friedman, Benjamin M. (Fall 2005). “The Moral Case for Growth”
The International Economy
, pp. 40–45.
http://www.economics.harvard.edu/faculty/friedman/files/The%20Moral%20Case%20for%20Growth.pdf

4
Bureau of Economic Analysis National Economic Accounts,
http://www.bea.gov/national/
.

5
Author's calculation using Congressional Budget Office 2001 Long-Term Budget Outlook Alternative Fiscal Scenario,
http://www.cbo.gov/doc.cfm?index=12212

6
A common rule of thumb in finance, 72 divided by a growth rate gives the approximate number of periods before an investment doubles. In this case, 72 divided by 1 is 72.

7
The 2005 President's Advisory Panel on Federal Tax Reform shows that a complete shift to consumption taxation “could increase national income by up to 2.3 percent over the [10 year] budget window, by up to 4.5 percent over 20 years, and by up to six percent over the long run.” See the President's Advisory Panel on Federal Tax Reform, “Simple, Fair, and Pro-Growth: Proposals to Fix America's Tax System,” November 2005, 149, 190,
http://www.taxpolicycenter.org/taxtopics/upload/tax-panel-2.pdf

8
Peter J. Wallison, “Dodd-Frank's Threat to Financial Stability,”
Wall Street Journal
, March 25, 2011,
http://online.wsj.com/article/SB10001424052748703858404576214193957527406.html

9
William Easterly and Sergio Reblo, “Fiscal Policy and Economic Growth: An Empirical Investigation,” NBER Working Paper #4499, October 1993; A. Bergh and M. Henrekson, “Government Size and Growth: A Survey and Interpretation of Evidence,”
Journal of Economic Surveys
, June 2011, doi: 10.1111/j.1467-6419.2011.00697.x. The two economists reviewed the considerable research on government spending and economic growth, and found that there was a near-consensus in the literature that higher government spending correlates with slower growth.

10
Gary Becker, Steven J.Davis, and Kevin Murphy, “Uncertainty and the Slow Recovery,”
Wall Street Journal
, January 4, 2010.
http://online.wsj.com/arti-cle/SB10001424052748703278604574624711732528426.html

11
Scott R. Baker, Nicholas Bloom, and Steven Davis, “Measuring Economic Policy Uncertainty,” September 12, 2011,
http://www.stanford.edu/~nbloom/PolicyUncertainty.pdf
. The researchers use an empirical model that looks at Google-media data, the number of expiring tax measures, and the level of disagreement among forecasters over future federal government spending and future CPI levels to measure policy uncertainty and calculate its impact on jobs and growth.

12
See Madeline Zavodny, “Immigration and American Jobs,” 2011.
http://www.aei.org/paper/society-and-culture/immigration/immigration-and-american-jobs/

13
Bureau of Labor Statistics Employment Situation Summary,
http://www.bls.gov/news.release/empsit.nr0.htm

14
Ibid.

15
Ibid.

16
Ibid.

17
Ibid.

18
“More Signs That a Generation of Young Americans (18-29) Have Been Left Adrift by Joblessness as Anemic Jobs Numbers Are Released.” Generation Opportunity, August 5, 2011.
http://generationopportunity.org/press/more-signs-that-a-generation-of-young-americans-18-29-have-been-left-adrift-by-joblessness-as-anemic-jobs-numbers-are-released-generation-opportunity-statement/

19
See Christina Romer and Jared Bernstein, “The Job Impact of the American Recovery and Reinvestment Plan,” January 9, 2009,
http://www.politico.com/pdf/PPM116_obamadoc.pdf

20
Peter Wallison, “Repeal the Democrat's Complex and Expensive Legislation,”
theatlantic.com
, July 19, 2011,
http://www.theatlantic.com/business/archive/2011/07/repeal-the-democrats-complex-and-expensive-legislation/242143/

21
See the following Congressional testimony by economist Douglas Holtz-Eakin:
http://waysandmeans.house.gov/UploadedFiles/HoltzEakin_Testimony_1_5.pdf