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My intrepid Mercatus Center colleague, Veronique de Rugy, warns of the dangers lurking in Biden’s proposed budget. Two slices:

While this budget is dead on arrival in Congress, it’s worth reviewing some reasons why this is so. The president aspires to spend around $6.9 trillion next year, a 55 percent increase over pre-pandemic levels, and $10 trillion by 2033. While Biden hopes to raise an extra $4.7 trillion over 10 years in taxes, the debt would nevertheless grow over the next decade by $19 trillion as the debt-to-GDP ratio increases from 98 percent to 110 percent. All this debt in a high interest rate environment would have Uncle Sam fork over $10.2 trillion in interest payments alone over that time.


Even more concerning, the administration wants to impose an annual 25 percent minimum tax rate on the unrealized capital gains of individuals with income and assets exceeding $100 million. These gains aren’t income; they’re assets that have gone up in value on paper—something that might disappear overnight. More importantly for everyone else, this wealth tax would reduce the amount of capital invested in productive, job-generating projects—meaning economic growth, innovation, and wages would all decline.

The Cato Institute’s Chris Edwards surveys a century of U.S. federal-government spending: 1925-2025.

Effective Altruist Leaders Were Repeatedly Warned About Sam Bankman-Fried Years Before FTX Collapsed.” (HT Phil Magness)

Arnold Kling writes insightfully about deposit insurance and moral hazard.

Here’s the sound conclusion of Antony Davies’s latest piece at AIER:

Politicians don’t care whether oil companies are greedy, or altruistic, or neither. Politicians care about using oil companies as a smokescreen to hide from the voters’ wrath.

Reason‘s Eric Boehm explains what shouldn’t, but what nevertheless does, need explaining: Protective tariffs impose net costs on the people of the country whose government imposes such tariffs – and America isn’t exempt from this reality.

After investigating the consequences of both Trump’s Section 232 tariffs (the supposed “national security” levies against steel and aluminum) and his Section 301 tariffs (imposed against a wide range of items imported from China), the ITC reported that in both cases, domestic price increases matched the cost of the tariffs almost exactly. “The USITC estimated that prices increased by about 1 percent for each 1 percent increase in the tariffs,” the report states.

Here’s the abstract of a very interesting forthcoming paper co-authored by my GMU Econ colleague Vincent Geloso:

Can mild forms of labor coercion generate welfare effects as large as more extreme forms? Do these effects persist over time? To answer both questions, we use Quebec’s system of seigneurial tenure (in effect until 1854) that granted landlords market power in the establishment of factories, and restricted worker mobility. This created a mild form of labor coercion as landlords had incentives to reduce employment and wage rates. To measure these effects, we rely on the Constitutional Act of 1791 which stated that all new lands had to be settled under a different tenure system. Using a regression discontinuity design, we find that seigneurial tenure significantly depressed wages. The effect on wages is as large , or larger than, causal estimates of significantly more coercive labor regimes. We also find that by 1871, seventeen years after the institution’s abolition, these effects had fully dissipated, suggesting that persistence is not an issue.

Writing at National Review, Caroline Breashears reminds us that Adam Smith was first a teacher of English. A slice:

How do great writers achieve such effects? The student notes from Smith’s Lectures on Rhetoric and Belles Lettres offer some answers. First, language has beauty “when the sentiment of the speaker is expressed in a neat, clear, plain, and clever manner, and the passion or affection he is possessed of and intends, by sympathy, to communicate to his hearer, is plainly and cleverly hit off.” As in TMS [Smith’s 1759 book, The Theory of Moral Sentiments], sympathy is central.

Speaking of Adam Smith, GMU Econ alum Erik Matson explains the continuing relevance of Smith’s “liberal plan.” A slice:

Trade restrictions worked in tandem with schemes of empire. Such schemes cashed out in colonization efforts and government-sponsored trade companies, such as the East India Company and the Hudson Bay Company, aimed at wealth extraction in foreign corners of the world. Smith, along with his friend David Hume, dismantled the logic of mercantilist philosophy and illustrated the destructive effects of its recommended policies. “The Wealth of Nations” as a whole reads, as Smith described it in 1780, as “a very violent attack upon the whole commercial system of Great Britain.”

In place of extant British policy, Smith looked to bring about his liberal plan,” which targeted reforms in such policy areas as occupational choice, domestic trade and international trade. Smith favored, for example, abolishing the Elizabethan Statute of Artificers, which controlled entry into certain trades through long apprenticeship requirements (something not unlike present-day occupational licensing requirements for, say, barbers). He believed the market provides sufficient feedback on worker quality; moreover, he judged preventing individuals from trying their hand in trades of their choosing to be a “manifest encroachment upon the just liberty both of the workman, and of those who might be disposed to employ him.”

A top epidemiologist in Norway praises Sweden’s handling of covid.

Jay Bhattacharya tweets:

The most dangerous sources of misinformation lie in the hands of those with the power to censor and suppress accurate information.

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