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112. Lawless Policy: TARP as Congressional Failure
- Author:
- John Samples
- Publication Date:
- 02-2010
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- The U.S. Constitution vests all the “legislative powers” it grants in Congress. The Supreme Court allows Congress to delegate some authority to executive officials provided an “intelligible principle” guides such transfers. Congress quickly wrote and enacted the Emergency Economic Stabilization Act of 2008 in response to a financial crisis. The law authorized the secretary of the Treasury to spend up to $700 billion purchasing troubled mortgage assets or any financial instrument in order to attain 13 different goals. Most of these goals lacked any concrete meaning, and Congress did not establish any priorities among them. As a result, Congress lost control of the implementation of the law and unconstitutionally delegated its powers to the Treasury secretary. Congress also failed in the case of EESA to meet its constitutional obligations to deliberate, to check the other branches of government, or to be accountable to the American people. The implementation of EESA showed Congress to be largely irrelevant to policymaking by the Treasury secretary. These failures of Congress indicate that the current Supreme Court doctrine validating delegation of legislative powers should be revised to protect the rule of law and separation of powers.
- Topic:
- Economics, Monetary Policy, and Financial Crisis
- Political Geography:
- United States and America
113. Budgetary Savings from Military Restraint
- Author:
- Benjamin H. Friedman and Christopher Preble
- Publication Date:
- 09-2010
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- The United States needs a defense budget worthy of its name, one that protects Americans rather than wasting vast sums embroiling us in controversies remote from our interests. This paper outlines such a defense strategy and the substantial cuts in military spending that it allows. That strategy discourages the occupation of failing states and indefinite commitments to defend healthy ones. With fewer missions, the military can shrink its force structure—reducing personnel, the weapons and vehicles procured for them, and operational costs. The resulting force would be more elite, less strained, and far less expensive. By avoiding needless military conflict and protecting our prosperity, these changes would make Americans more secure.
- Topic:
- Defense Policy, Arms Control and Proliferation, and Debt
- Political Geography:
- United States and America
114. Role of the IMF in the Global Financial Crisis
- Author:
- Miranda Xafa
- Publication Date:
- 09-2010
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- More than two years on, the impact of the financial crisis that erupted in August 2007 is still being felt as the global economy emerges from the Great Recession. The crisis intensified dramatically after the bankruptcy of Lehman and the rescue of insurance giant AIG in September 2008, which narrowly avoided a near-simultaneous failure of multiple counterparties. The International Monetary Fund's early forecast of the severity of the resulting economic downturn (IMF 2008a) helped mobilize concerted official action to address quickly and forcefully these extraordinary economic and financial events by providing fiscal stimulus to sustain growth, as well as capital injections and guarantees to ease the credit crunch. Following the emergency summit of G20 leaders in Washington in November 2008, support packages for banks were put together in a hurry in the United States, Europe, and elsewhere to prevent the dis- orderly failure of systemically important institutions and to restore confidence in the financial system.
- Topic:
- Financial Crisis
- Political Geography:
- United States and Middle East
115. Crisis Prevention through Global Surveillance: A Task beyond the IMF
- Author:
- Swaminathan S. Anklesaria Aiyar
- Publication Date:
- 09-2010
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- In early 2008, the future of the International Monetary Fund was in doubt. The world was awash with dollars since the United States ran an enormous current account deficit, the mirror image of which was trade surpluses in most other countries. Hence, few countries had balance of payments problems, and the IMF had few borrowers. IMF income was insufficient to meet its costs, and so it retrenched hundreds of economists, and both its relevance and legitimacy were questioned. But that episode now looks like a temporary historical blip. After the collapse of Lehman Brothers—and the global financial system—in September 2008, the IMF was suddenly in more demand by governments than ever before to help finance stricken countries across continents. The G20 agreed to triple IMF resources to $750 billion, the four BRICs (Brazil, Russia, India, and China) agreed to subscribe to the IMF's first bond issue of $80 billion, and India has bought 200 tons of IMF gold. So an IMF role seems assured in future crises.
- Topic:
- International Monetary Fund
- Political Geography:
- United States and Tamil Nadu
116. Congress Should Account for the Excess Burden of Taxation
- Author:
- Christopher J. Conover
- Publication Date:
- 10-2010
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- A well-established principle of public finance holds that taxes impose costs on society beyond the amount of revenue government collects. Estimates vary depending on the type of tax, but the “marginal excess burden” of federal taxes most likely ranges from 14 to 52 cents per dollar of tax revenue, averaging about 44 cents for all federal taxes.
- Topic:
- Economics, Government, and Markets
- Political Geography:
- United States
117. Editor's Note
- Author:
- James A. Dorn
- Publication Date:
- 02-2010
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- This special issue of the Cato Journal was made possible by a generous grant from the Arthur N. Rupe Foundation . The question posed in this issue—Are Unions Good for America?—has both normative and positive aspects. Normatively, if one takes freedom as a fundamental principle, then compulsory unionism cannot be justified in a free society; it violates the rights of both workers and employers. Under current U.S. labor law, workers are often compelled to join unions and employers are compelled to negotiate “in good faith.” Public sector unions are even more onerous than private sector unions; they limit consumer choices and impose heavy tax burdens.
- Political Geography:
- United States and America
118. Unions, Economic Freedom, and Growth
- Author:
- Randall G. Holcombe and James D. Gwartney
- Publication Date:
- 02-2010
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- The freedom to enter into contracts and to direct the use of economic resources one owns are essential to the operation of a market economy. Allowing employees to form unions to bargain collectively over wages and employment conditions is consistent with economic freedom, and any government intervention preventing unionization would be a violation of economic freedom. Nevertheless, American labor law, especially since the 1930s, has altered the terms and conditions under which unions collectively bargain to heavily favor unions over the firms that hire union labor. Labor law has given unions the power to dictate to employees collective bargaining conditions, and has deprived employees of the right to bargain for themselves regarding their conditions of employment. While unions and economic freedom are conceptually compatible, labor law in the United States, and throughout the world, has restricted the freedom of contract between employees and employers.
- Topic:
- Economics
- Political Geography:
- United States and America
119. Public Sector Unions and the Rising Costs of Employee Compensation
- Author:
- Chris Edwards
- Publication Date:
- 02-2010
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Public sector compensation is becoming a high-profile policy issue. While private sector wages and benefits have stagnated during the recession, many governments continue to increase compensation for public sector workers. At the same time, there are growing concerns about huge underfunding in public sector retirement plans across the nation.
- Political Geography:
- United States
120. Unions and the Decline of U.S. Cities
- Author:
- Stephen J. K. Walters
- Publication Date:
- 02-2010
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- The usual suspects in the tragic demise of many of America's core cities are well known. For decades, scholars, politicians, and pundits have condemned the racism that led whites to flee diverse urban populations after World War II, sneered at Americans' vulgar affection for cars and expansive lawns, criticized policies that encouraged us to indulge these tastes, and blamed capitalist greed and unwhole- some technological change for the deindustrialization that has wrecked urban labor markets.
- Topic:
- War
- Political Geography:
- United States and America