Some 75 new Republican members of Congress got there by promising to stop the federal government’s massive overspending. And as Chris Edwards noted, there have been a number of lists of budget cuts proposed recently.

Saturday Night Live did a sketch back in 2007 that might be useful to Tea Partiers and new members of Congress. It’s about a self-help plan called “Don’t Buy Stuff You Cannot Afford.” Since the federal government is running deficits well over a trillion dollars a year, I’d say this plan would be good advice:

Hat tip to Jonathan Witt at the Acton Institute’s PowerBlog, who points out that if this were a perfect analogy, the book author would be more agitated because “the couple has been spending the author’s money using a credit card he had idiotically loaned them a few years before.”

To make his coming visit to India meaningful, President Obama needs to combat the impression that India fares better with Republican presidents than Democratic ones, because the latter are instinctively more protectionist. In his quest for economic recovery, he has bashed US corporations that outsource jobs to places like India, forbidden companies getting government rescue funds from outsourcing work, and has now enacted higher visa fees for visiting IT professionals which seem designed to hit Indian companies quite specifically. This may be designed to win votes in the Congressional elections, but will not win hearts and minds in India. President Obama needs to state categorically that he will not follow the Great Depression formula of trying to combat unemployment with protectionism.

A better way to create US jobs will be to relax labyrinthine export licensing rules for exports of dual-technology equipment and technology (which can be used for both civilian and defense purposes). India also needs to do its bit by shedding its reputation as world champion in anti-dumping actions (206 in the five years to 2009).

We’ve been spending too much time on elections, so let’s get back to pointing out inane, foolish, and destructive government policies. Our latest example comes from the United Kingdom, where politicians are pushing airline ticket taxes to punitive levels and harming the tourism industry. But the real lesson from this story is that it is very dangerous to give politicians a new revenue source.

The airline ticket tax was first imposed by a (supposedly) Conservative Party government in 1994 at a maximum rate of 10 pounds. During the Blair/​Brown Labor Party reign, the tax was boosted to a maximum rate of 50 pounds. Now, the new government, led by ostensible Conservative David Cameron, is pushing the maximum tax up to 75 pounds (more than $120) per ticket.

Here’s an excerpt from the story in the Telegraph.

Families are avoiding holidays in Egypt and the Caribbean because of the high cost of air taxes — even before the hike in passenger duty that comes into place on Monday.

…The duty, which is paid by all travellers on leaving Britain and added automatically to the price when a ticket is booked, is to increase by 50 per cent to some destinations. It is the second significant rise in two years, and figures show that previous hikes have already influenced people’s choice of holiday destinations.

…Bob Atkinson, travel expert at Trav​el​su​per​mar​ket​.com, said: “Families looking to book for this winter and summer next year will be faced with tax rises of up to 54 per cent on their family holidays. This tax rise is completely out of line with inflation and bears no relation to the original purpose of the tax.”

…The tax was introduced in 1994 at the rate of £10 on long-haul flights, but increased by the previous Government, which said it was a necessary “green measure”.

…The increases mean a family of four flying to the Caribbean will pay £300 in duty compared with the old rate of £200 or £160 last year. Willie Walsh, the chief executive of British Airways, has branded the higher taxes a “disaster”. Earlier this month, he called the duty a “disgrace”.

No wonder families are choosing not to travel. But, more important, imagine what American politicians will do if they ever succeed in imposing a value-added tax. The rate initially will be low (just as the original income tax had a top rate of just 7 percent), but nobody should delude themselves into thinking the rate won’t quickly climb as greedy politicians get hooked on a new form of revenue to feed their spending addictions.

The Fed’s planned purchases of $600 billion of long-term Treasury bonds were targeted for domestic problems, but are having international consequences. The expansion of the Fed’s balance sheet drives down the foreign-exchange value of the U.S. dollar, and (same thing) forces other currencies to appreciate in value.

Emerging markets with high short-term interest rates will attract “hot money” flows. These flows are not stable sources of funding, and disrupt the small capital markets in these countries. Long-term, the appreciation of their currencies harms their competitiveness in global goods’ markets.

Brazil has already imposed capital controls and other emerging markets may follow. The Chinese in particular have reacted sharply. According to a Reuters dispatch, Xia Bin, adviser to China’s central bank, said another financial crisis is “inevitable.” He added that China will act in its own interests.

In short, the Fed’s actions have undone whatever good came out of the G20 meetings. Any hope for cooperation on currency values and financial stability is out the window. There are potential spillovers in other areas of global cooperation.

Currency wars, like other wars, have unintended consequences and collateral damage. Some countries will predictably react by imposing capital controls. Moves to curb imports can follow. Monetary protectionism leads to trade protectionism.

However it might like matters to be, the Fed cannot simply act domestically. It has reached the useful limits of further easing.

NPR found two Republicans who caution House Republicans that their efforts to investigate ObamaCare could “backfire.”

But all those hearings could also have the opposite effect — giving the administration a chance to make its case in favor of the law, a case that often got drowned out during the election campaign.

“The next round of this, while there will continue to be the broad sloganeering on both sides, will presumably get a little bit more into the detail,” says Martin Corry, a health care lobbyist and former official at the Department of Health and Human Services during the Bush administration. “So if you’re a family with a 22-year-old still in college, you may not want to see that provision [that lets grown children stay on their parents’ health plans] repealed.”

… Former Republican Sen. Dave Durenberger of Minnesota says he thinks the Democratic-led Senate could try to dampen the House repeal efforts by holding a series of hearings of its own.

Let me see if I understand. If House Republicans hold hearings, it will be a boon to ObamaCare. Even though House and Senate Democrats stoutly refused to hold such hearings. If House Republicans hold hearings, sloganeering will give way to detail. And if House Republicans hold hearings, ObamaCare supporters will finally be able to get their message out — something they were unable to do while they controlled both chambers of Congress and the executive branch.

While it’s been obvious for years, Bernanke showed his rationale for more easing in today’s Washington Post. He believes we are in danger of too little inflation. While common sense might imply that price stability means neither inflation nor deflation, in Bernanke’s book, anything below the Fed’s target of 2 percent is bad.

First of all, there really needs to be a public debate over the Fed’s 2% target. After all, a 2% rate of inflation over, say, 30 years erodes almost half of one’s wealth. How that can seriously be viewed as “price stability” is beyond me. While a 2% rate of inflation is not going to bring the economy to a halt, it is still a massive theft of wealth over the long haul.

Bernanke has also expressed the fear that “low and falling” inflation could lead to deflation, which would raise the real value of debt, which could lead to additional defaults. But what Bernanke doesn’t seem to get is that inflation isn’t falling. Let’s go to the data.

The graph below is simply the consumer price index (CPI) over the last year. Does it appear to be falling? Of course not. In fact, the trend is one that is rising.

Now CPI includes lots of things, some of which are temporary trends. The Fed has a nasty habit of excluding those items it doesn’t like. But let’s take a look at something that matter to the typical family: food.

In the next chart, we can see that the trend in food costs over the last year has been upward, not down. Contrary to Mr. Bernanke’s worries, most families worry about putting food on the table, which has been getting more expensive, not less.

Another trend worth examining is the cost to producers, best measured via the producer price index (PPI). As one can see from the next chart, that has been heading up as well.

The point to all of this is that we aren’t seeing this deflation that Bernanke constantly worries about and we aren’t headed in that direction either. And the worse part is that we’ve been here before. In the earlier part of the decade, then–Fed Governor Bernanke urged Greenspan to fight any chance of deflation by cutting rates to what were then all-time lows. The result was a housing bubble. Thanks again Ben. 

Now this might all be worth the cost if it reduced unemployment. But it won’t. The traditional way Fed policy brings down unemployment is by increasing bank lending, but banks are already sitting on a trillion in reserves. Inflation, in and of itself, does not create jobs.

Over the last couple days I’ve been arguing that the time might be ripe to start pushing the case in Congress to get Washington out of education. Educationally, fiscally, and constitutionally it is the right thing to do, and the negatives of being smeared as “anti-education” or “anti-child” could be countered by very powerful voter sentiments against big, wasteful government.

Well, it seems new Tea Party-type Congress members might get a chance to use education to prove their bona fides very early. In his post-pummeling presser yesterday, President Obama mentioned education as one area in which he could see bipartisan accomplishments being made, and several articles today — including on Politico and in The Washington Post — suggest that education might indeed be a Kumbaya issue.

That could be right, because presumptive House Speaker John Boehner (R‑OH) was a lead force behind the No Child Left Behind Act, and the Obama administration has made a lot of noise (if just the opposite in terms of concrete action) about taking on teachers unions and fighting for charter schools. In other words, there seems to be some bipartisan convergence on education, with Republicans now favorable toward federal control and Dems willing to at least talk critically about mega-potent unions. That NCLB is far passed due for reauthorization only bolsters education’s chance of being used as a fence-mender.

That said, there are a lot of obstacles in the way of this happening, with the ideological fissures among congressional Republicans likely to be one of the biggest, as well as divisions among Democrats. But if the leadership in both parties see education as a place where they can all hold hands, the time to make the unapologetic, uncompromising case for getting Washington out of our schools will definitely be upon us.