Category: reason

The scale and scope of government spending expansion in the last year are unprecedented. Because Uncle Sam doesn’t have the money, lots of it went on the government’s credit card. The deficit and debt skyrocketed. But this is only the beginning. The Biden administration recently proposed a $6 trillion budget for fiscal 2022, two-thirds of which would be borrowed.

Obviously, the politicians pushing money out always make extravagant promises about the economic growth that will result from their generous use of other people’s money. A new study by George Mason University economist Garett Jones and myself dispels some of the magical thinking that goes on in this area.

In our paper published by the Mercatus Center at George Mason University, we review the most recent literature on the short-term effects of government spending, including recent findings on what economists call the “multiplier.”

The multiplier looks at the return we get in economic output when the government spends a dollar by directly hiring federal employees, paying contractors for public projects, and so forth. If the multiplier is above one, it means that government spending draws in the private sector and generates more private consumer spending, private investment, and exports to foreign countries. If the multiplier is below one, the government spending crowds out the private sector, hence reducing it all.

Economic textbooks traditionally claim that the government multiplier is high. In other words, they say that spending not only pays for itself but generates large increases in economic output. In recent years, Keynesian-leaning economists have had more modest expectations and have theorized a multiplier around 1.5 or two. However, reality is often different than theory.

The evidence presented in our paper suggests that government purchases probably reduce the size of the private sector as they increase the size of the government sector. On net, incomes grow, but privately produced incomes shrink.

According to the best available evidence, we find that “there are no realistic scenarios where the short-term benefit of stimulus is so large that the government spending pays for itself. In fact, even when government spending crowds in some private-sector activity, the positive impact is small, and much smaller than economic textbooks suggest.” If you understand how legislators make their decisions to spend money, based on politics rather than sound policy or economics, that finding shouldn’t surprise you.

We also find that the only case where the literature finds a multiplier above one requires some very specific conditions, such as a zero lower-bound interest rate. And even in that case, the multiplier is 1.4 at best. Arguably, we have those conditions today. That said, our colleague Scott Sumner offers a compelling argument that “this finding…is conditional on having an incompetent or passive monetary policy in place; that is, having a monetary policy not designed to hit a growth target in aggregate demand.”

A competent Federal Reserve would set its policy to achieve optimal growth of expected aggregate demand and attempt to neutralize the impact of fiscal stimulus through policies like quantitative easing. As for what it means today, if you think that the current monetary policy of the Federal Reserve is reasonably competent, then you actually shouldn’t expect the fiscal boost from all that spending to be large. In fact, it could be close to zero.

This is, of course, all before taking future taxes into account. When economists like Robert Barro and Charles Redlick have looked that the multiplier, they’ve found that once you account for the future taxes that will be required to pay for all that spending, the multiplier could be negative.

Finally, the COVID-19 recession was better described as a bad supply shock, where the pandemic unexpectedly affected the supply of goods and services, relative to demand. These poor conditions make a multiplier above one unlikely. Under circumstances where economies were closed by government officials and consumers were staying at home to mitigate the effects of COVID, government spending could not have stimulated the economy. As such, the hundreds of newspaper reports about COVID relief that called the spending “stimulus” were misleading.

On the flip side, reporters today should also be careful not to assume that government spending deserves all the credit for economic growth this year, since much of it will be the normal effect of the broad economy reopening. Many economists are worried that the extravagance of government spending may seriously backfire and lead to inflation.

COPYRIGHT 2021 CREATORS.COM

from Latest – Reason.com https://ift.tt/3grHP3H
via IFTTT

Even as rising vaccinations have evidently begun to tame the COVID-19 pandemic in the United States and other rich countries, the rest of the world is still afflicted with erratic and deadly surges of the coronavirus. Countries that do not have access to mass supplies of COVID-19 vaccines are evolving new variants of the virus that are more transmissible but that do not so far evade the protection of current versions of the vaccines. However, epidemics anywhere threaten immunization efforts everywhere. Billions of unvaccinated people is the perfect evolutionary environment in which to incubate even more dangerous variants that could restart the pandemic among those of us in America who are now protected by vaccines.

The Biden Administration has reportedly cut a deal to buy 500 million doses of the Pfizer-BioNTech COVID-19 vaccine to donate to poor countries around the world. The goal is to distribute 200 million by the end of the year followed by 300 million in the first half of next year. This is on top of the 80 million doses the U.S. government has pledged to deliver to poor countries by the end of June. COVAX, the nonprofit international vaccine consortium, aims to deliver 2 billion doses of COVID-19 vaccines to poor countries before the end of this year.

A recent analysis by the International Monetary Fund calculates spending $50 billion on manufacturing and distributing COVID-19 vaccines across the world would generate $9 trillion in global economic returns by 2025. Viruses blindly treat human bodies as open access commons suitable for their reproductive plunder. Using widespread vaccination to enclose the human health commons before more dangerous COVID-19 variants evolve is a worthy endeavor.

from Latest – Reason.com https://ift.tt/2TjfEf2
via IFTTT

“It took us four years just to identify the virus that caused AIDS in the ’80s,” says Steven Johnson. “Imagine COVID where it’s four years before we even know what is causing the outbreak. That’s what would have happened if we just shifted 20 years, 30 years earlier in terms of when this outbreak happened.”

Johnson is the author of the new book Extra Life: A Short History of Living Longer, which is also running as a series on PBS (watch online here). The rapid advance in vaccine technology, which is bringing an end to the COVID-19 pandemic, is best understood in the context of a series of innovations that more than doubled the life expectancy of the human race over the last 100 years. Extra Life explores how innovations in epidemiological statistics, artificial fertilizer, toilets, and sanitation systems, along with vaccines and other measures, have allowed billions of people to flourish until old age. By 2016, global life expectancy at birth had reached 72 years, according to the World Health Organization (WHO). 

Johnson was a founder of the pioneering website Feed in the 1990s and has authored a shelf full of books about human progress, including best-sellers such as The Ghost Map, which recounted how doctors and researchers ended the threat of cholera in 19th-century London, and Future Perfect, which argues that the modern networked world is far more resilient than previous iterations.

He talks with Nick Gillespie about how we managed to massively increase our lifespans in the 20th century, and whether we can do even better in the 21st. And they talk about performance of the World Health Organization, the Centers for Disease Control and Prevention, and the Food and Drug Administration when it comes to Covd-19 and how those agencies might rebuild trust and confidence in the post-pandemic world.

from Latest – Reason.com https://ift.tt/3zeyHYt
via IFTTT

Onree Norris was 78 years old when a swarm of police officers raided his Georgia home without warning in 2018, bombarding the place with two flash-bang grenades, careening through the front door with a battering ram, and placing Norris under arrest.

He was later released when cops with the Henry County Sheriff’s Office Special Response Team and the Flint Circuit Drug Task Force realized their suspect actually lived next door.

“Something went off like a bomb in my house,” Norris told local news in September of 2020.

The botched raid set off a legal odyssey that reached its denouement last month when a federal court confirmed that the cop at the center of the operation was entitled to qualified immunity. Norris will thus be barred from suing for the violation of his civil rights.

The legal doctrine of qualified immunity prohibits people from bringing civil suits against government officials if there is no court precedent explicitly deeming the misconduct in question unconstitutional. Qualified immunity has protected a cop who killed a man who had been sleeping in his car, four cops who assaulted a man they’d pulled over for broken tail lights, and two cops who allegedly stole $225,000 while executing a search warrant, all because the exact ways in which those situations played out hadn’t been addressed in prior court rulings.

When his case was first heard by the U.S. Court for the Northern District of Georgia, Atlanta Division, Norris conceded that such a precedent doesn’t exist for the bulk of the officers involved. But he pointed to two cases—Maryland v. Garrison and Hartsfield v. Lemacks—that should have informed Captain David Cody, who spearheaded the raid, that it was unconstitutional to barge into someone’s home without a warrant, destroy their property, and arrest an innocent person.

The lower court awarded Cody qualified immunity. Norris appealed.

“We must determine whether Capt. Cody’s actions during the raid—not commanding his team to stop heading towards Norris’s home and then following his team into Norris’s home—violated the law clearly established” in prior court precedents, wrote a unanimous panel for the U.S. Court of Appeals for the 11th Circuit. They concluded that Cody’s failures did not violate clearly established law.

The Court’s ruling is a crash course in the lopsided logic behind qualified immunity, which requires that the facts of any given case be reflected almost identically in a previous case should a victim of government abuse want the privilege of bringing their suit before a jury.

Norris furnished two precedents for consideration, both of which pertained to police executing searches on the wrong residences. But in the 11th Circuit’s reading, the facts strayed too far.

“Simply put, this case was not a situation envisioned by Garrison where Capt. Cody failed to engage ‘in reasonable efforts to avoid error’ or a situation like in Hartsfield where the officer did ‘nothing’ to avoid the mistake,” wrote the panel. “Rather, Capt. Cody and the other officers involved carefully planned a high-risk raid at what was thought to be a dangerous target house but made a mistake when faced with an unexpected circumstance—the residence not matching the description given.”

That “carefully planned” raid went awry when officers went to the correct address—which housed a suspected drug dealer, courtesy of a confidential informant—and it looked a bit different than expected. “When they arrived at the residence, it did not match the description from the Task Force briefing because the house had been abandoned and looked like a ‘storage out-building’ rather than a habitable residence, as the briefing explained,” the panel noted. “This mismatch led members of the Response Team to conclude that the house next door, Norris’s house, must be the actual target residence.”

Norris’s house, which was yellow, also did not match the target residence, which was described in briefing materials as “off-white.” That didn’t deter the officers. Agent Jermaine Hicks of the Flint Circuit Drug Task Force testified that while he told officers the search warrant had detailed information on the house, “he did not recall anyone reviewing [it] at the briefing nor any Response Team agent reviewing the warrant before the briefing.” For his part, Cody said he checked for a signature, verified it permitted no-knock entry, and confirmed the address, but declined to read it “all the way through.”

Thanks to Cody’s apparently unique style of carelessness, Norris will be unable to bring his case before a jury to ask for damages. Surmounting qualified immunity wouldn’t have given him a settlement; it would merely give him the right to argue his case in civil court.

Perhaps most outrageously, Norris provided the court with another precedent—Treat v. Lowe—that ruled similar conduct unconstitutional. But the 11th Circuit denied that the 2016 case had any bearing because the Court opted to leave it “unpublished.” In other words, Cody could not have known his behavior was wrong because the decision was not contained in a physical book of case law—even though it is publicly available online. Somewhat maddeningly, the 11th Circuit also declined to publish their opinion in Norris.

Qualified immunity has been a lightning rod in the political sphere over the last year as Congress continues to hash out how it should be reformed, if at all. The 11th Circuit provides a good case that it should be. In describing the nature of their approach to qualified immunity, the judges note that it only protects “all but the plainly incompetent or those who knowingly violate the law.” They drove home their point by citing Corbitt v. Vickers, a decision that gave qualified immunity to a cop who shot a 10-year-old boy while aiming at the family’s non-threatening dog.

One might argue that is plainly incompetent. The 11th Circuit apparently has a much lower bar.

from Latest – Reason.com https://ift.tt/3x3VXGO
via IFTTT

In an interview with MNSBC host Chuck Todd on Wednesday, White House coronavirus advisor Anthony Fauci fired back at his detractors—explicitly suggesting that the recent criticism he has received from Republicans constitutes an attack on science itself.

“If you are trying to get at me as a public health official and a scientist, you’re really attacking not only Dr. Anthony Fauci, you’re attacking science,” said Fauci, speaking in the third person. “Anybody who looks at what’s going on clearly sees that. You’d have to be asleep not to see that. That’s what’s going on. Science and the truth are being attacked.”

This statement was prompted by a question from Todd, who fretted that conservative critiques of Fauci were undermining the credibility of public health officials and could cause vaccine hesitancy. “Look at Russia,” said Todd. “They have a good vaccine and none of their citizens will take it because they don’t trust their own government.”

FAUCI: "If you are trying to get at me as a public health official and a scientist, you're really attacking not only Dr. Anthony Fauci, you are attacking science." pic.twitter.com/MwZSv2nxbL

— Townhall.com (@townhallcom) June 9, 2021

Russia’s government is authoritarian: President Vladimir Putin jails dissidents and has his opponents murdered. Citizens may not have good reason to distrust the Russian vaccine, but they have every reason not to trust their government.

This is true as well for American citizens: A healthy distrust of government should be considered a prerequisite for a free society. But more specifically, federal health bureaucrats’ handling of the pandemic has created legitimate cause for distrust, for skepticism, and for criticism. While the latest guidelines from the Centers for Disease Control and Prevention correctly permit vaccinated individuals to resume wide swaths of pre-pandemic behavior, the CDC previously sounded notes of extreme and excess caution, inadvertently creating the false impression that the vaccines are not very protective from COVID-19. (In reality, they are miraculously effective.) The federal government has also failed to make the AstraZeneca vaccine available, even though we already know it is safe and effective.

Government health officials should not be immune from criticism simply because they are doctors or scientists. Fauci works for the government and should be subject to the same scrutiny that journalists are supposed to apply to all members of government. What’s more, we know that Fauci has said things that are not true: he has admitted that he kept the truth about the proper herd immunity threshold from the public; he has admitted that he failed to recommend masking during the early days of the pandemic because he was worried that hospitals would run out of them.

“Science” is not synonymous with Fauci, or the CDC, or any lone source of authority. Scientific experts routinely disagree on various policies. Some epidemiologists continue to urge the public to practice a level of caution that seems unnecessary in light of the vaccines, while others think life can resume as normal. There are legitimate differences of opinion on which pandemic mitigation strategies—lockdowns, school closures, mask mandates—actually worked. Being pro-science does not mean parroting the talking points of the government’s chosen spokesperson. Robust debate and challenge are part of the scientific process.

That’s precisely what is happening now: Some people are asking questions about the government’s handling of the pandemic. Not all of these questions are good ones, and not everything Fauci has done or said was wrong. But asking questions is not a crime against science: It’s a vital aspect of democracy and a fundamental step in the scientific process.

from Latest – Reason.com https://ift.tt/3pJVMht
via IFTTT