Join us Thursday, October 11th at 8:45 PM ET for live commentary during the debate between vice presidential candidates Paul Ryan and Joe Biden.

Tweet questions during the debate to the live blog participants below:

• David Boaz, Executive Vice President (@David_Boaz)
• Daniel J. Mitchell, Senior Fellow (@DanielJMitchell)
• Daniel J. Ikenson, Director, Herbert A. Stiefel Center for Trade Policy Studies (@DIkenson)
• Malou Innocent, Foreign Policy Analyst (@MalouInnocent)
• Michael D. Tanner, Senior Fellow (@MTannerCato)
• Alex Nowrasteh, Immigration Policy Analyst (@AlexNowrasteh)
• Walter Olson, Senior Fellow (@WalterOlson)
• Neal McCluskey, Associate Director, Center for Educational Freedom (@NealMcCluskey)
• Michael Cannon, Director of Health Policy Studies (@MFCannon)

Follow the Twitter list of all live blog participants here. You can also join the conversation with the hashtag #VPDebate and by following @CatoInstitute and @CatoFP.

***UPDATE: Watch the full debate video here.***

I’ve narrated a video on why Keynesian economics is bad theory, I’ve also narrated a video specifically debunking Obama’s failed stimulus, and I’ve put together a post with data from the Minneapolis Fed showing how Reaganomics worked far better than Obamanomics.

But this video from the Center for Freedom and Prosperity Foundation does all that—and more—in only about six minutes.

By the way, for those who like gory details, a previous video in the CF&P Foundation’s Economics 101 series looked at how the so-called stimulus was a rat’s nest of waste and corruption.

Not that anybody should be surprised. Big government facilitates corruption in the same way that a dumpster attracts rats and cockroaches.

My concern is long-term trends. Politicians should be complying with Mitchell’s Golden Rule, which means reducing government spending as a share of GDP (to put it in terms that make economists feel warm and fuzzy, gov’t exp/​GDP should be decreasing).

What irks me about Obama is that he wants to increase the burden of government spending, which means the numerator in the equation is going in the wrong direction. And he wants class-warfare tax policy and more red tape, which makes it even harder for the denominator to move in the right direction.

And if that ratio continues to deteriorate, as both the BIS and OECD are predicting, then it’s just a matter of time before the United States becomes Greece.

Jay Greene has an excellent piece in the Wall Street Journal this week revealing that the teacher workforce has grown dramatically over the past forty years—and at enormous cost—without improving student achievement by the end of high school. And he rightly disparages President Obama for arguing that even more teachers would somehow do the trick. Even better, Greene notes that American education will not reverse its productivity collapse and become efficient until we allow it to benefit from the freedoms and incentives of the marketplace.

But then Jay cites Governor Romney’s goal of “voucherizing federal education funds so that parents can take those resources and use them to send their children to schools of their choice,” and he does so with apparent approbation. Even ignoring the fact that the Constitution does not empower Congress to run education programs, this is a very dangerous idea.

There has been no civilization in the history of humanity in which governments have paid for private schooling without ultimately controlling what was taught and who could teach, erecting barriers to entry and thereby crippling market forces.

For that reason, I recommended against a federal voucher program under the Bush administration. Since then, additional evidence has come to light. When I studied the regulatory impact of U.S. private school choice programs last year I found that even the small existing U.S. voucher programs do indeed impose a heavy and very statistically significant additional burden of regulation on participating private schools.

Perhaps a way will be found to enact and maintain minimally regulated voucher programs in the coming years. Until that time comes, it would be the height of folly to introduce a federal voucher program whose regulations would suffocate educational freedom from coast to coast.

In my statistical study of choice program regulation, I found that K‑12 tax credit programs do not impose a statistically significant extra burden of regulation on private schools. But even a national K‑12 tax credit program would be far too dangerous. By leaving education policy to the states and the people, we can see which programs flourish and which become sclerotic. We must encourage and learn from that policy diversity, not squelch it with federal programs or mandates.

A Wall Street Journal article by Arthur C. Brooks, president of the American Enterprise Institute, urges presidential candidate Mitt Romney to acknowledge two “simple facts” about income inequality. One is that “low-income Americans are struggling,” which is surely true by definition. The second is that “economic opportunity is declining.” The author scolds the Republican convention for being too cheerful about the facts, as though Romney never mentioned shrinking median income, or high poverty and unemployment.

That second “simple fact” (declining opportunity) is not simple and not a fact. When Mr. Brooks asserts that opportunity is declining, he means “mobility” supposedly declined before 2006 according to one source—a 12-page brief by Katharine Bradbury of the Boston Fed. But “mobility” is not at all the same as “opportunity,” because studies of this sort treat downward mobility the same as upward mobility. Bradbury is troubled by people making fewer big leaps from one fifth (quintile) to another, which Mr. Brooks likewise defines as declining opportunity; yet her data cannot distinguish ups from downs.

What is ostensibly being measured is the percentage of people in each fifth (quintile) of the income distribution who spend five or six years out of 10 in either the “same or adjacent” quintile. Bradbury compares three 10-year periods: 1976 to 1986, 1986 to 1996, and 1996 to 2006 and finds 27.4 percent remained in the poorest quintile during the earliest period and 25.9 percent in the most recent 10 years. Since that suggests increasing mobility for the poor, she switches to emphasizing how many remained in either the same “or adjacent” quintile. This permits Bradbury to argue that those in the poorest or richest quintiles “did not move very far.”

Switching to “adjacent” quintiles means anyone in the top or bottom quintile would have to leap all the way to the middle to be counted as having moved at all. Since those at the bottom or top can only move in one direction, Bradbury therefore finds (of course) that for “those in the poorest or richest quintile… mobility is quite low.” People in other quintiles can move either up or down, so their “mobility” appears higher by this peculiar definition, particularly during severe recessions.

It is unsurprising that there was greater movement (up and down) between adjacent income groups in 1976–86, since that period included nasty inflationary recessions in 1980–82, followed by four years of 4.8 percent economic growth. The 1986–96 period, by contrast, experienced a barely measurable slump in 1991, while 1996–2006 included the exhilarating tech boom of 1997–2000 and the perilous housing boom of 2004–2006. When the economy is rising steadily there is less risk of falling to a lower quintile, hence less movement (aka “mobility”). Since Brooks and Bradbury define income stability as “declining opportunity,” they would presumably define 1929–33 or 2008–2009 as periods of rising opportunity.

A more serious study of income mobility by Treasury economists Gerald Auten and Geoffery Gee in the June 2009 National Tax Journal found, “considerable income mobility in the U.S. economy over the 1987–1996 and 1996–2005 periods. Consistent with prior mobility studies, the data show that over half of taxpayers moved to a different income quintile and that roughly half of taxpayers who began in the bottom income quintile moved up to a higher income group by the end of each period. By contrast, those with the very highest incomes in the base year [the top 1 percent] were more likely to drop to a lower income group and the median real income of these taxpayers declined in each period. Economic growth resulted in rising incomes for most taxpayers over both time periods.” The largest percentage increases in real incomes were for those initially in the lowest income groups, while the most dramatic downward mobility was among those who had briefly occupied the top 1 percent. This evidence is consistent with my own work showing that rising income shares for the top 1 percent have been associated with falling poverty rates and vice-versa.

I blogged previously about Mitt Romney’s claim that ObamaCare creates “an unelected board that’s going to tell people ultimately what kind of treatments they can have.” President Obama conceded the point when he responded that the Independent Payment Advisory Board “basically identifies best practices and says, let’s use the purchasing power of Medicare and Medicaid to help to institutionalize all these good things that we do.” The president admitted the whole point of IPAB is to let a bunch of experts decide what practices are “best,” and to stop paying for what isn’t.

I am not aware of a single fact-checker who has grasped that basic point. Not PolitiFact, not the Associated Press, not FactCheck​.org, not The Washington Post’s Fact-Checker, not this Washington Post health reporter. The Los Angeles Times called Romney’s claim “erroneous” and writes:

This is a myth advanced repeatedly by critics of the Affordable Care Act and debunked consistently by independent fact-checkers…the panel is explicitly prohibited from cutting benefits for people on Medicare. And there is no provision in the law that empowers the advisory board to make any decisions about what treatments doctors may provide for their patients.

Jay Bhattacharya, a professor of medicine and economics at Stanford University, responds:

The media “fact check” business is incredibly tiresome given how pedantic and downright inaccurate it is, but I wanted to weigh in on this one before it hardens. The LA Times somehow thinks that the ACA (aka Obamacare) will have no effect on determining what care patients can get, and consequently dings Romney for saying it will. There isn’t a single honest health economist out there who agrees with the LA Times on this one.

Bhattacharya explains that IPAB will be able to influence care by cutting payments to providers. But that’s not the half of it. IPAB has the power to do exactly what the fact-checkers think it can’t: deny specific treatments to Medicare enrollees. It can even raise taxes and do other things the fact-checkers think it cannot.

I explain why the fact-checkers are wrong at this Cato Institute policy forum at noon on Thursday (October 11). Join us. Pre-register now at that link.

In the aftermath of Venezuela’s elections yesterday, Hugo Chávez’s win is being cited by predictable sources as legitimizing his regime. “The victory of President Chávez is a victory for democracy,” declared Bolivia’s populist president Evo Morales. The earnest participation of the opposition in the elections further bolsters the idea of Chávez’s legitimacy in the minds of some as do references to the notion that “the people have spoken.”

While opposition candidate Henrique Capriles recognized his loss, it would be a mistake to interpret the election result as an accurate reflection of public sentiment. That’s because Chávez rigged the election process so firmly against any challenger that it’s astounding the opposition did so well (it got about 45 percent of the vote). Ask yourself this: If the following occurred in your country—as did in Venezuela—would you consider the outcome acceptable? This is some of what the opposition faced in its campaign:

• The government disqualified leading opposition candidates on technicalities and through legal prosecution.
• Chávez used unlimited state resources to explicitly engage in his re-election campaign. For example, state television stations broadcast pro-Chávez propaganda, and government buildings display as much too.
• Capriles was limited to media appearances of three minutes per day, while Chávez appeared for hours at a time on all television stations as required by law.
• The voter registry included irregularities or was at least questionable. From 2003 to 2012 the number of voters registered increased from about 12 million to almost 19 million even though the population grew by only a few million during that time. 14 of 24 states in Venezuela have more registered voters than those eligible to vote. There are thousands of registered voters between the ages of 111 and 129.
• Voting ballots were printed in such a way that many people who thought they were voting for Capriles had their votes counted as being cast for a third candidate.
• Government spending increased by 30% over the past year; 8 million people are directly dependent in some way on government for their income or to receive handouts.
• Chávez closed the consulate in Miami, home to thousands of likely Capriles supporters, forcing them to vote at the consulate in New Orleans or become disenfranchised.
• The government intimidated voters, including government employees, by insinuating that their votes will not be secret.

This is an incomplete list. Add to that the fact that Chávez controls every institution of government—including the military, the congress, the supreme court, the national electoral council, the national oil monopoly, etc.—exercises control over most of the media (including much of the private press, whose rights he’s violated), and keeps the private sector on a tight leash through capital controls and other forms of economic repression. The abuse of power has been well documented by the Washington Post, Mary O’Grady at the Wall Street Journal, The Economist and other sources. (See here, here, here, here, here and here).

Venezuela stopped being a democracy long ago. That does not mean that the opposition’s campaign efforts were in vain. On the contrary, and in contrast to years past when it boycotted electoral politics, the opposition showed Venezuelans and the world the degree to which the regime would deploy dirty tricks, break the law, and otherwise undermine the election process—and still Chávez’s opponents achieved substantial support on election day.

So did Chávez win the elections? I don’t think so, but the point is we don’t really know since the contest was hardly fair. We can only really say that in every important way, Chávez heads an authoritarian regime. Let’s not let the election exercise fool us into thinking otherwise.

What do you do when your economy is suffocating under too many regulations, but strong opposition prevents you from far-reaching liberalization? The British finance minister George Osborne has had an interesting idea regarding Britain’s onerous labor market regulations. As he said to the Conservative Party conference in Birmingham earlier:

Today we set out proposals for a radical change to employment law. It’s a voluntary three way deal. You the company: give your employees shares in the business. You the employee: replace your old rights of unfair dismissal and redundancy with new rights of ownership. And what will the Government do? We’ll charge no capital gains tax at all on the profit you make on your shares. Zero percent capital gains tax for these new employee-owners. Get shares and become owners of the company you work for. Owners, workers, and the taxman, all in it together.

Seems like a potentially rewarding policy innovation. Much will depend on how many people and companies actually opt out of this particular component of the regulatory state, and what, if any, impact will that have on making the British labor market more efficient.