America Shouldn’t Follow Europe’s Bad Example on Debt and Spending

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In Heritage Work

Euro currency.

Photo: Flickr/Dennis S. Hurd

“Europe’s socialist (or ‘social democratic’) welfare state is collapsing under the load of unsustainable debt,” write Heritage Foundation experts James Roberts and J.D. Foster.

The European Union’s monetary policy failures are infecting the continent’s economy from the inside out. These policies are increasingly unmanageable as national debt burdens grow and growth prospects diminish further.

To paraphrase an old saying: You can fool some of the credit markets all the time, and all the markets some of the time, but you cannot fool all the credit markets indefinitely. Continue Reading »

Member Story: Tim and Rebecca Kachuriak – Dallas, TX

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In Member Stories

Tim and Rebecca Kachuriak

Tim and Rebecca Kachuriak

When asked why he’s a conservative, Heritage Young President’s Club member Tim Kachuriak responds, “I suppose the default answer is because I was raised that way. But it’s definitely not the same answer for my bride.” 

Rebecca, Tim’s wife and a fellow Heritage Young President’s Club member, did not share the same conservative upbringing as her husband. 

“Funny back-story, I was raised liberal,” Rebecca says. She admits she voted for Al Gore in 2000. 

But despite differences in their ideological rearing, Tim and Rebecca have long held one fundamental belief in common: The sanctity of all human life. It is the pro-life cause that forms the core of their now shared conservative beliefs. After all, “without life,” Kachuriak explains, “all other issues are meaningless.” Continue Reading »

Is Pakistan a Friend or Foe to America?

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In Heritage Work

Pakistan flagReports that Pakistani officials have given the Chinese access to a downed U.S. helicopter should come as no surprise to anyone

The Heritage Foundation’s Lisa Curtis explains the writing on the wall:

Pakistan is neither an ally nor an enemy to the U.S.—rather, Pakistan has entirely different security objectives from the U.S. in Afghanistan and in fighting terrorists more broadly. The sooner U.S. policymakers come to grips with this reality, the better chance America has of achieving its objectives in the region.

The helicopter was left behind in Pakistan following the U.S. military’s raid on Osama bin Laden on May 2. And Pakistanis even hinted to the U.S. that they would share it with the Chinese, so reports that they have should really come as no shock.

It should, however, force the U.S. to reevaluate whether it should be sending large amounts of security aid to a country that is increasingly taking a defiant posture toward the U.S.

What do you think? How should the United States deal with Pakistan in the future?

A Bipartisan Blow to Obamacare

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In Heritage Work

Obamacare received a massive legal blow last Friday afternoon when a three-judge panel of the U.S. Eleventh Circuit Court of Appeals in Atlanta ruled that the law’s individual mandate is unconstitutional.

In its majority opinion, which Heritage Foundation legal expert Todd Gaziano describes as “thorough and rigorous” and its conclusion “crisp and precise,” the court argued:

[T]he individual mandate is breathtaking in its expansive scope… The government’s position amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life. This theory affords no limiting principles in which to confine Congress’s enumerated power….

Continue Reading »

Podcast: Mark Steyn on London Riots, Keynesian Culture, and His New Book

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In Other Work of Note

In this week’s Scribecast, Heritage’s Lachlan Markay interviews Mark Steyn on his new book, “After America,” the riots in London, and the culture created by Keynesian economics.

Steyn says:

Ordinary people, the first Americans, understood that civilization is a pact between the past, the present and the future. …Keynesianism took that and threw it in the toilet.

Listen to the full podcast.

Click here to subscribe to Scribecast, the weekly podcast of the Center for Media and Public Policy.

Free Enterprise Creates Jobs

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In Heritage Work

A report from the liberal Economic Policy Institute claims that the United States shed 879,820 jobs between 1993 and 2002 as a result of the North American Free Trade Agreement. But this simply isn’t true.

“Here are the facts,” writes Cyril Handal, a member of The Heritage Foundation’s Young Leaders Program:

From 1993 to 2002, the U.S. economy posted a net gain of 20 million jobs. More specifically, since NAFTA took effect, the labor market had a net increase of 26 million jobs. When critics assert that NAFTA reduced employment in the United States, there are 26 million arguments against that claim.

Arguments against trade are not supported by economic theory or even real-world data. If anything, given the dismal jobs reports of late, the United States could benefit from more reductions in government barriers to commerce. This would incentivize more productivity, specialization and efficiency.

Yet pending agreements to reduce these barriers with Colombia, Panama and South Korea remain on President Obama’s desk, rather than being presented to Congress as they should be.

Read all Heritage research on trade and economics.

What America’s Credit Downgrade Means

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In Heritage Work

New York Stock Exchange

Stocks have fallen at the New York Stock Exchange as a result of S&P's downgrade of federal debt. Photo: Flickr/Gerardo Diego Ontiveros

Over the weekend, the United States lost its “best in class” AAA credit rating. Reacting to the inadequate debt reduction measures in last week’s debt deal, ratings agency Standard & Poor’s downgraded America’s debt to AA+.

What does this mean? The Heritage Foundation’s JD Foster explains:

A credit rating downgrade will eventually mean higher interest rates on U.S. government debt. This may be hard to imagine given the recent drop in Treasury bond rates in response to events overseas. But higher future rates are certain, and that means that even more federal tax dollars must be dedicated to paying the interest on past government excesses. Higher interest rates and interest cost means greater deficit pressures, which can mean more debt, which can lead to higher interest rates. This is why it is termed a debt spiral.

Foster explains how it came to this: Continue Reading »

White House vs. Job Creation

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In Heritage Work

White House spokesman Jay Carney. Photo: White House.

“The White House does not create jobs,” the White House admits. Photo: White House.

“The White House does not create jobs,” White House spokesman Jay Carney admitted on Thursday. He’s absolutely right: The White House doesn’t create jobs, but its policies sure do kill them.

The Heritage Foundation’s Rory Cooper explains in today’s Morning Bell:

The government cannot create private-sector jobs, but it can strongly affect the conditions for job-creating economic growth. But instead, the Obama Administration has helped create the conditions to stifle job growth. This morning, the unemployment rate was 9.1 percent. The positive news was that the unemployment rate went down from 9.2%.

But that’s hardly the jobs boost we need, and nowhere is this more clear than in the markets, which yesterday experienced the biggest one-day drop in nearly three years. Heritage’s Ernest Istook explains that Thursday’s market dip is “just another symptom reminding us that Washington’s latest budget deal didn’t solve anything.” Continue Reading »

Video: Understanding Washington’s Role in Education

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In Heritage Work

“Our public schools are suffering from rising costs, red tape, and lots of ill-advised programs,” writes The Heritage Foundation’s Rebekah Sherman. “Every school has different needs, and one-size-fits-all education determined by a centralized bureaucracy does more harm than good.”

The federal role in our country’s education system has become too powerful and increasingly complex. That’s why Heritage created a video to help break through all of the intricacies and get to the heart of the issue.

In keeping with our tradition of federalism, our nation’s public schools have historically been under the jurisdiction of states, local leaders and parents. But this arrangement has been thwarted by increasingly centralized education standards. These federal mandates are too expensive, too bureaucratic and too inefficient to address the unique needs of individual schools and students.

It’s time for states, local leaders and parents to reassume their proper command of our children’s education.

What role do you think the federal government has in education?

U.S. Debt Now Exceeds Economic Output

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In Heritage Work

The federal debt now exceeds the economic output of the entire United States, thanks to the additional $238 billion the Treasury immediately borrowed after the debt ceiling was raised on August 2.

The Heritage Foundation’s Patrick Tyrrell explains in more detail:

Debt as of July 31 totaled $14.342 trillion. That was made up of $9.756 trillion held by the public and $4.587 trillion the U.S. government owes itself (intergovernmental borrowing, largely from the Social Security and Medicare trust funds to the general fund). GDP—the value of all of the goods and services produced in the United States—in 2010 was $14.5265 trillion. With the Treasury’s additional borrowings of $238 billion so far in August, the total of all debt outstanding has now increased to $14.5807. That’s $54.2 billion more than average 2010 U.S. GDP, the last year for which we have final estimates on GDP from the U.S. Department of Commerce.

As it stands, the federal government owes more in debt than we as a nation are producing over an entire year. And we have to pay it all back, plus interest!

Will Congress ever realize that its spending problem — and boy do they have one — cannot be cured by more spending?

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