Do Doctors Practice Defensive Medicine?

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Tort reform that limits medical malpractice (“med mal”) suits can affect healthcare spending in a couple of different ways. However, on theoretical grounds, it is not clear whether tort reform will reduce healthcare spending. New research from Myungho Paik, Bernard Black and David A. Hyman revisits the impact of tort reform and med mal risk on healthcare spending. They find that there is no evidence that adoption of damage caps reduces either Part A or Part B Medicare spending, and in fact, there is some evidence that specific caps lead to higher Part B spending.

Universal Preschool Doesn’t Make the Grade

Calls for universal preschool programs have become commonplace, reinforced by President Obama’s 2013 call for “high-quality preschool for all.” But any program that could cost state and federal taxpayers $50 billion per year warrants a closer look at the evidence on its effectiveness. 

In a new study, David J. Armor, Professor Emeritus of Public Policy at George Mason University, finds the touted benefits of preschool still remain unproven.

In The Evidence on Universal Preschool: Are Benefits Worth the Cost?, Armor reviews the existing research on preschool programs, including those designated “high quality,” as well as the more traditional programs like Head Start. Armor argues the most rigorous studies show the academic benefits of preschool programs are virtually non-existent by the time the children enter elementary school.

Armor contends when preschool programs are studied with randomized designs, as was done in a study of the federal Head Start program, they show no lasting results. Students in Head Start saw immediate gains in reading and math skills during the preschool years, but these effects were modest and short-lived. By the time the kindergarten year was over, the positive gains of Head Start students had disappeared.

The studies of preschool initiatives that do show benefits use a flawed methodology, according to Armor. These studies compare students who were enrolled in pre-K the previous year to children who are just starting preschool. Any difference between the two groups is assumed to be the result of pre-K. However, these types of studies fail to account for students in the kindergarten group that may have dropped out of pre-K during the previous year, thereby biasing results upwards. Moreover, they do not assess whether the knowledge gain from pre-K continues on throughout grade school.

“As election-year rhetoric reaches a fever-pitch in its promotion of preschool for all, there should be clear, definitive, and inarguable benefits from preschool education,” said Armor. “With estimates of providing all four-year olds with a preschool education topping out at a staggering $50 billion per year, adopting policies like universal preschooleducation could be an expensive wager on programs that so far have not been shown to have lasting benefits.”

Read the study…

In memory of Leonard Liggio, 1933-2014….
Leonard Liggio was an important pillar in the modern libertarian movement, someone who connected modern libertarian ideas with their historical antecedents, and who will be greatly missed. In this newly released video, Cato Senior Fellow and Director of Cato University Tom G. Palmer remembers Liggio’s impact on ideas and libertarianism.

(image via libertarianismdotorg)

In memory of Leonard Liggio, 1933-2014….

Leonard Liggio was an important pillar in the modern libertarian movement, someone who connected modern libertarian ideas with their historical antecedents, and who will be greatly missed. In this newly released video, Cato Senior Fellow and Director of Cato University Tom G. Palmer remembers Liggio’s impact on ideas and libertarianism.

(image via libertarianismdotorg)

The Financial Crisis: Why the Conventional Wisdom Has It All Wrong

Don’t believe for a moment those economic theorists who tell us the reason for our slow growth, economic malaise, and continued high unemployment is due to the uniqueness of a financially led economic recession. In the new issue of Cato Journal, Richard Kovacevich, Chairman Emeritus of Wells Fargo, outlines the political decisions and regulations that have contributed to the crisis and sluggish recovery.  Also in this issue, 2012 Friedman Prize winner Mao Yushi looks at the tragic legacy of China’s Great Famine, and 2014 Friedman Prize winner Leszek Balcerowicz discusses the main problems and proposed solutions with respect to the euro.

32nd Annual Monetary Conference - Alternatives to Central Banking: Toward Free-Market Money

Thursday, November 6, 2014
9:00 a.m. — 6:15 p.m.

When the Federal Reserve was created in 1913, its powers were limited and the U.S. was on the gold standard. Today the Fed has virtually unlimited power and the dollar has no backing. Leading scholars and advocates for fundamental monetary reform will discuss the case for sound money and the reforms needed to realize it.

Global Economic Freedom Dips

The foundations of economic freedom are personal choice, voluntary exchange, and open markets. As Adam Smith, Milton Friedman, and Friedrich Hayek have stressed, freedom of exchange and market coordination provide the fuel for economic progress. Without exchange and entrepreneurial activity coordinated through markets, modern living standards would be impossible.

Potentially advantageous exchanges do not always occur. Their realization is dependent on the presence of sound money, rule of law, and security of property rights, among other factors. 

The annual Economic Freedom of the World – copublished by the Cato Institute, Canada’s Fraser Institute, and more than 70 think tanks around the world – seeks to measure the consistency of the institutions and policies of various countries with voluntary exchange and the other dimensions of economic freedom.

In the 2014 Economic Freedom of the World report, global economic freedom decreased slightly. Hong Kong retained the highest rating for economic freedom, followed by Singapore, New Zealand, Switzerland, Mauritius, the United Arab Emirates, Canada, Australia, Jordan, Chile, and Finland. The United States, long considered the standard bearer for economic freedom among large industrial nations, has fallen precipitously from second in 2000 to 8th in 2005 to 12th in this year’s report.

Read the report….

Win a FREE iPad Mini from the Cato Institute

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Sign up in the month of October to receive any of Cato’s free emails, and you’ll automatically become eligible to win a free, brand new iPad Mini – 7.9” screen, 16 GB hard drive, Wi-Fi, iSight camera, and much more. A winner will be selected at random on October 31 from the email addresses of all who have signed up.

It’s a win – win. You’ll be able to start receiving emails on upcoming Cato events, links to Cato’s newest research reports, multimedia products, podcasts, special book and ebook offers, and more, while being in line to receive a free iPad Mini. Sign up now.

Sometimes policy is the scariest ghoul of all….

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Boo! Forget zombies & vampires. What’s scarier than bad government policy? When the government passes laws and regulations that affect every aspect of our daily lives, it’s no shock that some pretty horrible negative consequences tend to follow. 

What scares you? Is it something as simple as having your favorite cheese banned? Maybe you’re worried your family doctor will be forced to drop you as a patient? Or do no-knock raids and worrying about police throwing grenades into your kid’s crib frighten you most?

Let us know on Instagram and you could WIN Cato swag & more!

Here’s how to enter:

  1. Follow the @catoinstitute on Instagram.
  2. Upload a photo representing the policy that scares you the most.
  3. Use the caption to explain what policy scares you and why.
  4. Include the hashtag #ScaryPolicy so we can find your entry.

We’ll be announcing the winners on Halloween, so get Instagraming!

Cato Grades the Governors on Fiscal Responsibility

With the economy on an upswing, states are balancing their budgets in the short run, but major budget challenges loom ahead. In the 12th biennial fiscal report card, Cato’s Nicole Kaeding and Chris Edwards assign grades of “A” to “F” to governors based on their efforts since 2012 to restrain government and cut taxes and spending.

In Fiscal Policy Report Card on America’s Governors: 2014, Kaeding and Edwards award an “A” grade to Governors Sam Brownback of Kansas, Paul LePage of Maine, Pat McCrory of North Carolina, and Mike Pence of Indiana.

California’s Governor Jerry Brown scored an “F,” with his tax increases and profligate spending, earning him the position of worst governor in America on this year’s report card.

Other governors earning an “F” were Mark Dayton of Minnesota, John Hickenlooper of Colorado, Jay Inslee of Washington, John Kitzhaber of Oregon, Jack Markell of Delaware, Deval Patrick of Massachusetts, and Pat Quinn of Illinois.

This year’s top-scores were awarded to governors who have pursued fiscal reforms to make their states more competitive:

·        Sam Brownback of Kansas approved a plan in 2012 replacing three individual income tax rates with two and cutting the top rate from 6.45 to 4.9 percent. The reform also increased the standard deduction and reduced taxes on small businesses. Brownback cut income tax rates further in 2013.

·        Paul LePage of Maine signed major income tax cuts in 2011, and is pushing for further tax reforms. State spending has been roughly flat in recent years, and LePage has trimmed spending on welfare, health care, and other programs.

·        Pat McCrory of North Carolina signed a bill replacing individual income tax rates of 6.0, 7.0 and 7.75 percent with a single rate of 5.75 percent. He also cut the corporate tax rate from 6.9 to 5.0 percent and repealed the estate tax.

·        Mike Pence of Indiana has been frugal on spending and a champion tax cutter. He signed bills to cut individual income tax rates five percent and repeal the inheritance tax. He also approved a corporate income tax rate cut and a major reduction in property taxes on businesses.

Lower taxes and less government spending allows the economy to flourish,” said Kaeding. “That means more jobs, more opportunities, and more freedom for individuals to pursue their passions. The highest-rated governors are pursuing this path, helping to secure economic prosperity for their states.”

“Global competition is making it imperative that states improve their investment climates, and the strongest economic growth is achieved with low and neutral taxation that treats all industries equally,” said Edwards. “In this report, the ‘A’ governors have pursued broad-based tax reforms such as income tax rate reductions.”

By examining fiscal policy throughout the states, Kaeding and Edwards discover the U.S. is in the midst of the best tax-cutting run since the late-1990s. The biennial fiscal policy report card looks at data from every state and awards an objective grade based on two spending variables (per capita and actual change in spending), one revenue variable (dollar value of tax changes), and four tax variables (changes in the personal and corporate income tax rate, general sales tax rate, and cigarette tax rate). Governors who have cut taxes and spending the most receive the highest grades, while those who have increased taxes and spending the most receive the lowest grades.

How does your state’s governor rank?

Medical Marijuana Does NOT Mean Increased Teen Marijuana Use

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Given its overall popularity with the general public, it could be viewed as surprising that approximately half of the states still have not legalized medical marijuana. Opponents of medical marijuana, however, have employed a number of arguments, several of which focus on marijuana use by teenagers.  New research from D. Mark Anderson, Benjamin Hansen and Daniel I. Rees examines the relationship between medical marijuana laws and marijuana consumption among high school students.  Their results suggest that the legalization of medical marijuana is not accompanied by increases in marijuana use among high school students.