Friday Facts: July 29th, 2011

It’s Friday!

– “The effect of the people’s agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go; with the result that they may all have to make a journey which most of them do not want at all.” – F.A. Hayek
– “We have a system that increasingly taxes work and subsidizes nonwork.” – Milton Friedman
– With the media spotlight on the efforts to grow Georgia’s public universities amid state budget woes, serious questions should be raised about the cost of a postsecondary degree to taxpayers and students. Nate Johnson of the American Enterprise Institute offers five rules of the road for policy-makers interested in spending higher education dollars more strategically: Not all certificates and degrees cost the same or produce the same benefits; look to private universities to determine growth areas that don’t require subsidies; explore economies of scale; don’t confuse enrollments with degrees, and remember that past performance may not indicate future results.  Read the Georgia Public Policy Foundation’s study on higher education in Georgia at
– The free Web tutoring service Khan Academy has gotten much well-deserved attention, including an article in Wired magazine. But not everyone is embracing this out-of-the-box approach. The article notes that Khan’s programmer, Ben Kamens, has heard from teachers who’ve seen Khan Academy presentations and loved the idea but wondered whether they could modify it “to stop students from becoming this advanced.” The Cato Institute’s Andrew Coulson points out: “This attitude is a natural outgrowth of our decision to operate education as a monopoly. In a competitive marketplace, educators have incentives to serve each individual child to the best of their ability, because each child can easily be enrolled elsewhere if they fail to do so.”
– Georgia should create Ultra High Performance Schools for exceptionally gifted students, Foundation editor Mike Klein writes in The Forum, the Foundation’s blog. “We cannot afford to lose even one smart kid who feels unchallenged by his or her education,” Klein warns. The article also discusses why Georgia should increase its emphasis on education alternatives for students who will not pursue higher education. Read more and join The Forum discussion at


– Making the case for federalism I: “First, this is not a political fight between Republicans and Democrats; it is a fight against 50-year trends toward statism. Second, it is a moral fight, not an economic one. Third, this is not a fight that anyone can win in the 15 months from now to the presidential election. It will take hard work for at least a decade.” – Arthur C. Brooks, President of the American Enterprise Institute

Arthur Brooks frames the importance of the fiscal debate in Washington perfectly in his quote above from this week’s Wall Street Journal op-ed. We lose the debate if it is simply about fiscal austerity. We win the debate if it is about the principles and moral arguments that caused our Founding Fathers to risk their lives and made our country the greatest in the world. He eviscerates arguments that the deficit was caused by anything other than a dramatic growth of government spending, citing the following facts: “The Bureau of Economic Analysis tells us that total government spending at all levels has risen to 37% of gross domestic product today from 27% in 1960 – and is set to reach 50% by 2038. The Tax Foundation reports that between 1986 and 2008, the share of federal income taxes paid by the top 5% of earners has risen to 59% from 43%. Between 1986 and 2009, the percentage of Americans who pay zero or negative federal income taxes has increased to 51% from 18.5%. And all this is accompanied by an increase in our national debt to 100% of GDP today from 42% in 1980.” Our freedom will be lost if we allow our government to take 50 percent of all that we produce. I encourage you to read the article in its entirety at this link:

– Making the case for federalism II: The federal regulatory burden is growing, the Heritage Foundation reports. In the first half of Fiscal Year 2011, 15 major regulations were issued, with annual costs exceeding $5.8 billion and one-time implementation costs nearing $6.5 billion. From January 2009 to mid-FY2011 the administration imposed 75 new major regulations, with annual costs of $38 billion, and just six major deregulatory actions, with reported savings of $1.5 billion. Read more at

– Making the case for federalism III: For the facts about the debt debacle, go to the Foundation’s summary at

Health care
– Bill coming due: 
Government – aka American taxpayers – will foot the bill for half of all the nation’s health care costs by 2020, the Centers for Medicare and Medicaid Services reports. That’s up from 44 percent just two years ago, and reflects both the rising cost of health care and the fact that millions more people will access it under Obamacare. Total health care spending is expected to nearly double to $4.6 trillion in 2020, from $2.6 trillion in 2010. Meanwhile, the share for private business spending is expected to decline from 20 percent to 18 percent. Source: Health Affairs
– And in related nationalized health news: Hip replacements, cataract surgery and tonsil removal are among “non-urgent” operations now being rationed in a bid to cut costs at Britain’s National Health Service by $32 billion. Procedures in gastroenterology, gynecology, dermatology and orthopedics are being considered for rationing. In some areas, some patients are being referred for homeopathic treatments instead of conventional treatment. One patient complained he had to “wait 30 weeks for a hip operation instead of the standard 18,” The Independent newspaper reports.

Foundation in the news
– Watch WSB-TV’s “Atlanta Forward: A Channel 2 Action News Special” 7 p.m. on Sunday as I discuss the Foundation’s views on three issues that are critical to metropolitan Atlanta: water, transportation and education.

– Public transportation has to change to remain viable, according to a new Heritage Foundation analysis. For decades, transit’s principal problem has been insufficient cost control rather than insufficient revenues. Over the past 25 years, transit’s operating costs have risen approximately $15 billion (on a passenger mile basis). Had transit agencies kept costs within inflation – as most businesses do – transit would have been able to provide 40 percent more service in 2009. With government unable to provide more subsidies, a much better solution is for transit systems to use competitive contracting to reduce costs and improve the quality of service. Read more here:

 Taxes and Spending
– What a difference a tax makes: Fort Myers, Fla., and Savannah, Ga., are both coastal areas. In 1980, Savannah’s population was slightly larger, but now Fort Myers’s population is nearly 80 percent higher. Employment has grown more than twice as fast in Fort Myers and real personal income has grown nearly three times faster. What’s the difference? Savannah residents have faced a tax burden nearly 10 percent higher. Over the past three decades, metro areas with higher taxes have tended to show slower growth in population, jobs and income, according to a new Cato Institute study. Read more at

–  September 1: “Celebration of Service and Sacrifice:” Ten years after the terrorist attacks of September 11, 2001, changed America forever, Navy Seal and award-winning author Eric Greitens discusses how Georgia can lead the nation in programs and services for our military families. Register at for the luncheon event, on Thursday, Sept. 1, from 11:30 a.m. – 1:00 p.m. at the Cobb Galleria Centre. This is part of a long-term project with the Foundation, Ross Mason and the Healthcare Institute for Neuro-Recovery and Innovation (HINRI) to encourage health care innovation in Georgia.
– September 30: 
The Foundation’s second annual Legislative Policy Briefing is scheduled for Friday, Sept. 30, at the Cobb Energy Centre. Last year, more than 250 people attended to hear nearly three dozen experts discuss Georgia public policy. Topics this year include education, transportation, tax reform, criminal justice and health care.Details to follow.
– October 24: 
Invitations will soon be mailed soon for the Foundation’s 20th anniversary celebration and Freedom Award dinner, scheduled for the evening of Monday, Oct.24 at the Renaissance Waverly Atlanta. Speakers include Georgia Governor Nathan Deal and U.S. Senator Johnny Isakson of Georgia. Details to follow.

– Visit to read the Foundation’s latest commentary, “Lessons from Georgia’s Education Scandal,” by William Smith.

Have a great weekend.

Kelly McCutchen

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