Friday, July 31, 2015

More Excerpts From "Why the Federal Government Fails" By Chris Edwards of Cato

Click here to read the full paper.

Click here to read the intro.
""Each added dollar of federal income taxes creates roughly 50 cents in deadweight losses. So a $10 billion federal project would cost the private sector $10 billion directly plus another $5 billion in deadweight losses."

"The cost to the economy of each additional tax dollar is about $1.40 to $1.50. Now that tax dollar . . . is put into a bucket. Some of it leaks out in overhead, waste, and so on. In a well-managed program, the government may spend 80 or 90 cents of that dollar on achieving its goals. Inefficient programs would be much lower, $.30 or $.40 on the dollar."
""So a new program might cost the private economy $1.50, but produce benefits of, say, $0.50, for a 3-to-1 ratio. Economist Edgar Browning came to similar conclusions. Browning is an expert on the effects of taxes and government spending, and he summarized his research in the 2008 book, Stealing from Each Other."

"Looking at the federal government overall, he roughly estimated that “it costs taxpayers $3 to provide a benefit worth $1 to recipients.”"

"the government’s excessive size reduces average U.S. incomes by roughly 25 percent."

"Economist Vito Tanzi examined that question for a sample of high-income countries using the United Nation’s human development index (HDI). He found “no identifiable relationship between levels of public spending and HDI."

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