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On March 25, 1999, neatly concealed in an obscure and seemingly minor "Procedure Revision," the U.S. Postal Service announced its intent to execute Postal Bulletin 21994. In an alleged attempt to combat mail fraud, the Postal Service required that by June 24, 1999, all commercial mail-receiving agencies (CMRAs) that offer rental of private mailboxes should have collected from their customers confidential information that the Postal Service itself is not allowed to collect. Furthermore, starting as early as October 24, 1999, the USPS will deliver mail only to the private boxes addressed in a particular format that will be unfamiliar to many senders.
Those new requirements violate the privacy regulations that cover the Postal Service. The USPS plans to make available to the public confidential information about any private box holder who uses the box for business with the public. However, access to such information could actually facilitate criminal activity. Moreover, the Postal Service also plans to apply these new regulations to executive suites.
In addition, because it is impossible for box holders to know everyone who might have their private box address on file, many otherwise deliverable pieces of mail will be returned to the sender, marked "address unknown." Finally, the new regulations will foist enormous costs on some 1.5 million to 2.5 million private mailbox holders, which include many of the country's smallest businesses. CMRAs will also incur expenses, not only of compliance with and notification to box holders of the new regulations but also of lost business. A conservative estimate of the direct costs alone of the new regulations could approach $1 billion.
District of Columbia mayor Anthony Williams has convinced Major League Baseball to move the Montreal Expos to D.C. in exchange for the city's building a new ballpark. Williams has claimed that the new stadium will create thousands of jobs and spur economic development in a depressed area of the city.
Williams also claims that this can be accomplished without tax dollars from D.C. residents. Yet the proposed plan to pay for the stadium relies on some kind of tax increase that will likely be felt by D.C. residents.
Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city's economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.
A baseball team in D.C. might produce intangible benefits. Rooting for the team might provide satisfaction to many local baseball fans. That is hardly a reason for the city government to subsidize the team. D.C. policymakers should not be mesmerized by faulty impact studies that claim that a baseball team and a new stadium can be an engine of economic growth.
International Studies Program of the Andrew Young School of Policy Studies;
In the United Kingdom and many other European countries, every child receives a cash benefit. Eligibility for the benefit, as well as the benefit amount, is determined without regard to the parents' income or asset holdings or marital status. As automated data systems become more sophisticated and unique identifiers (e.g., the social security number in the United States) become more prevalent, universal benefits could be as easy to distribute as voter registration or library cards.
Working Paper Number 04-42.
Economic Opportunity Institute;
Over 3 budget years from 2009 to 2011, Washington State has grappled with a $12 billion shortfall between the projected need for public services and state revenues -- which have plunged because of the recession. Federal stimulus money and the rainy day fund made up some of the difference, and the state raised $918 million with tighter standards and new taxes. Still, Washington's legislature has cut $5.2 billion, impacting schools, childcare centers, health clinics, assisted living facilities, families, and individuals across the state.
Despite continued population growth, inflation, and increased needs caused by the recession, Washington's 2-year General Fund budget for 2009-11 is barely above the 2005-07 level and $2.7 billion below the amount originally budgeted for 2007-09 -- an 8% drop.
Hand counts of significant numbers of ballots were conducted in Washington State and
Nevada after the 2004 General Election. Estimated costs of a 2% audit of federal contests
are based primarily on the costs of those recent, extensive hand counts.
As we approach the 2008 general election, the structure of elections in the United States -- once reliant on local representatives accountable to the public -- has become almost wholly dependent on large corporations, which are not accountable to the public. Most local officials charged with running elections are now unable to administer elections without the equipment, services, and trade-secret software of a small number of corporations. If the vendors withdrew their support for elections now, our election structure would collapse. Case studies presented in this report give examples of the pervasive control voting system vendors now have over election administration in almost every state, and the consequences some jurisdictions are already experiencing.
However, some states and localities are recognizing the threat that vendor-dependency poses to elections. They are using ingenuity and determination to begin reversing the direction. This report examines the situation, how we got here, and steps we can take to limit corporate control of our elections in 2008 and reduce it even further in the future.
A spreading Islamic insurgency engulfs the amorphous and ungoverned border between Afghanistan and Pakistan. After initial victories by the United States and the Northern Alliance in autumn 2001, hundreds of Taliban and al Qaeda fighters fled Afghanistan to seek refuge across the border in Pakistan's rugged northwest. Since 2007, the number of ambushes, militant offensives, and targeted assassinations has risen sharply across Afghanistan, while suicide bombers and pro-Taliban insurgents sweep through settled areas of Pakistan at an alarming pace. For better and for worse, Pakistan will remain the fulcrum of U.S. policy in the region -- its leaders continue to provide vital counterterrorism cooperation and have received close to $20 billion in assistance from the United States, yet elements associated with its national intelligence agency, Inter-Services Intelligence, covertly assist militant proxy groups destabilizing the region.
Instead of "surging" into this volatile region, the United States must focus on limiting cross-border movement along the Afghanistan-Pakistan frontier and supporting local Pakistani security forces with a small number of U.S. Special Forces personnel. To improve fighting capabilities and enhance cooperation, Washington and Islamabad must increase the number of Pakistani officers trained through the U.S. Department of Defense International Military Education and Training program. In addition, U.S. aid to Pakistan must be monitored more closely to ensure Pakistan's military does not divert U.S. assistance to the purchase of weapons systems that can be used against its chief rival, India. Most important, U.S. policymakers must stop embracing a single Pakistani leader or backing a single political party, as they unwisely did with Pervez Musharraf and the late Benazir Bhutto.
America's actions are not passively accepted by the majority of Pakistan's population, and officials in Islamabad cannot afford to be perceived as putting America's interests above those of their own people. Because the long-term success of this nuclear-armed Muslim-majority country depends on the public's repudiation of extremism, and our continued presence in Afghanistan is adding more fuel to violent religious radicalism, our mission in the region, as well as our tactics, our objectives, and our interests, must all be reexamined.
Pressing questions about the merits of market accountability in K-12 education have spawned a large scholarly literature. Unfortunately, much of that literature is of limited relevance, and some of it is misleading. The studies most widely cited in the United States used intense scrutiny of a few small-scale, restriction-laden U.S. programs -- and a handful of larger but still restriction-laden foreign school choice expansions -- to assert general conclusions about the effects of "choice," "competition," and "markets." The most intensely studied programs lack most or all of the key elements of market systems, including profit, price change, market entry, and product differentiation -- factors that are normally central to any discussion of market effects. In essence, researchers have drawn conclusions about apples by studying lemons.
To address the need for credible evidence on the effects of genuine education markets, economists should look to simulation models, indirect evidence such as outcomes in similar industries, and school systems abroad that enjoy varying degrees of market accountability.
American Human Development Project;
Residents of 29 countries live longer lives, on average, than Americans -- while spending up to eight times less on their health. A new report by American Human Development Project ranks the 50 states and Washington, D.C. against 80 countries in the world on life expectancy at birth, infant death rates, and annual per person spending on health care. The results powerfully demonstrate how better care and reining in costs are not incompatible.
There are frequent complaints that U.S. income inequality has increased in recent decades. Estimates of rising inequality that are widely cited in the media are often based on federal income tax return data. Those data appear to show that the share of U.S. income going to the top 1 percent (those people with the highest incomes) has increased substantially since the 1970s.
However, there have been large changes in U.S. tax rules over time that have made a dramatic difference on what is reported as income on individual tax returns. Tax changes induced thousands of businesses to switch from filing under the corporate tax system to filing under the individual tax system. Corporate executives switched from accepting stock options taxed as capital gains to nonqualified stock options taxed as salaries. The huge growth in tax-favored savings plans, such as 401(k)s, has resulted in billions of dollars of investment income disappearing from tax returns. Meanwhile, studies of inequality that are based on tax return data usually exclude transfer payments, which results in exaggerating the shares of income received by those at the top by ignoring growing amounts of income at the bottom.
Measurements of inequality have also been affected by large reductions in income tax rates, particularly in 1986. Estimates by many economists indicate that the reported income of highincome taxpayers is very responsive to tax rates. When top tax rates on wages or capital gains fall, reported incomes rise, and a larger fraction of the incomes of those at the top show up on tax returns. International comparisons show that reported income shares of those at the top have risen the most where top tax rates have been cut the most (the United States, the United Kingdom, and India) and have risen the least where top tax rates have remained very high (France and Japan).
In sum, studies based on tax return data provide highly misleading comparisons of changes to the U.S. income distribution because of dramatic changes in tax rules and tax reporting in recent decades. Aside from stock option windfalls during the late-1990s stock-market boom, there is little evidence of a significant or sustained increase in the inequality of U.S. incomes, wages, consumption, or wealth over the past 20 years.
The federal government spent $92 billion in direct and indirect subsidies to businesses and private- sector corporate entities -- expenditures commonly referred to as "corporate welfare" -- in fiscal year 2006. The definition of business subsidies used in this report is broader than that used by the Department of Commerce's Bureau of Economic Analysis, which recently put the costs of direct business subsidies at $57 billion in 2005. For the purposes of this study, "corporate welfare" is defined as any federal spending program that provides payments or unique benefits and advantages to specific companies or industries. Supporters of corporate welfare programs often justify them as remedying some sort of market failure. Often the market failures on which the programs are predicated are either overblown or don't exist. Yet the federal government continues to subsidize some of the biggest companies in America. Boeing, Xerox, IBM, Motorola, Dow Chemical, General Electric, and others have received millions in taxpayer-funded benefits through programs like the Advanced Technology Program and the Export-Import Bank. In addition, the federal crop subsidy programs continue to fund the wealthiest farmers. Because the corporate welfare state transcends any specific agency -- and therefore any specific congressional committee -- one way to reform or terminate those programs would be through a corporate welfare reform commission (CWRC). That commission could function like the successful military base closure commission. The CWRC would compose a list of corporate welfare programs to eliminate and then present that list to Congress, which would be required to hold an up-or-down vote on the commission's proposal.
International Studies Program of the Andrew Young School of Policy Studies;
Existing evidence suggests that U.S. Government budget receipts forecasts are unbiased and efficient. Our study is an attempt to examine the veracity of these findings. The time series framework employed in this study is distinguished from previous work in three ways. First, we build a model that explicitly admits serial correlation in the residuals by allowing for autoregressive, moving-average, serial correlation. Second, we employ the nonparametric Monte-Carlo bootstrap to free ourselves from reliance on asymptotic distribution theory which is suspect given the short data series available for this study. Third, we control for errors in the macroeconomic and financial assumptions used to produce the U.S. Government's budget forecasts. We find that the U.S. Government's annual, one-year ahead, budget receipts forecasts for fiscal years 1963 through 2003 are biased and inefficient. In addition, we find that these forecasts exhibit serial correlation in their errors and thus do not efficiently exploit all available information. Finally, we find evidence that is consistent with strategic bias that may reflect the political goals of the Administration in power. Working Paper 07-22