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Posts Tagged ‘federalism’

Greetings from Montreux, Switzerland, on the shores of Lake Geneva. There aren’t many places where palm trees are framed by snow-capped mountains. Heck, even I managed to take a decent photo.

But let’s shift back to the world of public policy. Every time I’m in Switzerland, my admiration for the country increases. Here are five ways Switzerland is better than the United States.

1. The burden of government spending is lower in Switzerland. According to OECD, the public sector consumes only 33.1 percent of economic output in Switzerland, compared to 41.1 percent of GDP in the United States.

2. Switzerland has genuine federalism, with the national government responsible for only about one-third of government spending. The United States used to be like that, but now more than two-thirds of government spending comes from Washington.

3. Because of a belief that individuals have a right to control information about their personal affairs, Switzerland has a strong human rights policy that protects financial privacy. In the United States, the government can look at your bank account and does not even need a search warrant.

4. Switzerland has a positive form of multiculturalism with people living together peacefully notwithstanding different languages and different religions. In the United States, by contrast, the government causes strife and resentment with a system of racial spoils.

5. Gun ownership is pervasive in Switzerland, and the Swiss people value this freedom. Moreover, how can one not admire a nation where all able-bodied males have fully automatic rifles in their homes? To be sure, the United States is very good by world standards in protecting this freedom, so the  Swiss don’t really have an advantage on this issue, but it’s still worth mentioning.

Notwithstanding my admiration for Switzerland, there are five reasons why I don’t plan on expatriating.

1. I’m not rich and don’t particularly see how I will get rich anytime soon. Switzerland is not a cheap place to live.

2. It would be very time-consuming and expensive to go to Georgia Bulldog games, and I doubt the games would be on TV.

3. Speaking of sports, the Swiss share the disturbing European propensity to follow soccer.

4. It’s not warm enough.

5. Even though it’s considered a bit uncouth among some libertarians, I do have certain patriotic impulses. I’m not about to surrender my nation to the plundering thieves from Washington.

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Republicans have been spouting lots of good rhetoric, but what really matters is shrinking the burden of government. One very attractive option is federalism. There are things that perhaps should be done by government, but there is absolutely no reason why they require a remote, expensive, one-size-fits-all, redistributionist, unconstitutional bureaucracy in Washington.

Writing for Real Clear Markets, Diana Furchtgott-Roth of the Hudson Institute uses highway funding as an example of how we can get much better results if Washington butts out and lets states make their own decisions. She doesn’t take this argument to its logical conclusion and urge the dismantling of the Department of Transportation, but I’ll unabashedly take that extra step. Don’t just shut it down. Bury it in a lead-lined coffin, cover it with six feet of concrete, and then add a foot of salt to make sure it doesn’t somehow spring back to life.

By ceasing to authorize expenditures from the Highway Trust Fund, and ending the 18-cent federal gasoline tax, Congress could let the trust fund expire and turn highway spending authority back to the states-along with the ability to levy the fuel tax for their own coffers. Such devolution of responsibility to states would release them from expensive federal laws and regulations associated with current highway spending, such as environmental laws that add years to project construction (remember “shovel-ready” road projects?). Nor would states be bound by Davis-Bacon prevailing-wage requirements and Project Labor Agreements, which require the use of costly union labor on construction projects. …Removing federal restrictions would expand states’ opportunities to raise revenue by imposing highway tolls, which could ease traffic congestion by varying prices depending on when traffic is heavy or light. Such toll roads in southern California have eased congestion and raised revenue for the state.  Each state would be able to fund and build the roads it wants, using a combination of taxes, bond issues, tolls, and public-private partnerships.

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The United States, Canada, and Switzerland are the only developed nations that have some degree of genuine federalism (Germany and Australia don’t count by my standards), and Switzerland is the only country where the central government is smaller than the local/regional governments. This is one of the reasons why Switzerland is so admirable, as partly explained in this Center for Freedom and Prosperity article on the Swiss tax system.

But perhaps other nations are learning from Switzerland’s success. The United Kingdom is devolving some power to Scotland, as reported by the Irish Times. This is just a small step, and it’s unclear how it will work since Scotland leans left and is heavily subsidized by England. But the value of federalism is that jurisdictions compete with each other and cross-regional subsidies are reduced. So if Scotland wants to use its new powers to make the wrong choices, at least only the Scottish people will suffer.

Scotland is to get substantial new powers to set its own income tax rates and win new rights to borrow money in phase two of the devolution of greater autonomy to the Scottish parliament.

The measures were described by Scottish secretary Michael Moore as the most significant transfer of financial power out of London since the formation of the UK more than 300 years ago, making Holyrood more accountable to voters.

…The proposals form the centrepiece of a new Scotland Bill drafted by the UK government, which will allow the Scottish government to increase or cut income tax rates by up to 50 per cent for basic rate taxpayers, and by 20 per cent at the highest rate.

The measures also go further than expected by offering the Scottish government much greater borrowing powers, and more quickly, than originally recommended by a cross-party commission on devolution chaired by Kenneth Calman.

…In addition, Holyrood will be allowed to introduce new, Scotland-only taxes, with Westminster’s approval, and have control over stamp duty and landfill tax. In all, the powers will give Holyrood control over about £12 billion or 35 per cent of its current spending: its block grant from the treasury, worth £29 billion a year, will be cut by an equal amount.

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Michelle Obama has a column in the Washington Post about the supposed wonders of giving schools a bigger role in the feeding of children. My first reaction is to roll my eyes. I understand that every First Lady picks a pet cause. I just wish they found causes that didn’t involve bigger government. My second reaction is that there should be zero federal government involvement in education, much less micro-managing menus in local schools. My third reaction is that parents should be in charge of the feeding of children. And my final reaction is that if the nanny-state nitwits in Washington really want to deal with childhood obesity, they should outlaw video games, computers, and TVs. I suspect those are the main culprits causing chubbier kids. But please don’t share this blog post with any politicians. They might actually propose such a law. As this excerpt indicates, the First Lady already is pushing a bad idea, so we don’t want to give the crowd in Washington any ideas to make the bill even worse.

The Child Nutrition Bill working its way through Congress has support from both Democrats and Republicans. This groundbreaking legislation will bring fundamental change to schools and improve the food options available to our children.

…the bill will make it easier for the tens of millions of children who participate in the National School Lunch Program and the School Breakfast Program — and many others who are eligible but not enrolled — to get the nutritious meals they need to do their best. It will set higher nutritional standards for school meals by requiring more fruits, vegetables and whole grains while reducing fat and salt. It will offer rewards to schools that meet those standards. And it will help eliminate junk food from vending machines and a la carte lines — a major step that is supported by parents, health-experts, and many in the food and beverage industry.

…That’s why it is so important that Congress pass this bill as soon as possible. We owe it to the children who aren’t reaching their potential because they’re not getting the nutrition they need during the day. We owe it to the parents who are working to keep their families healthy and looking for a little support along the way. We owe it to the schools that are trying to make progress but don’t have the resources they need. And we owe it to our country — because our prosperity depends on the health and vitality of the next generation.

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