Dollar follies: Beltway econ IOI.

• Author: MacDonald, Sam
• Position: Citings - Brief Article

WHEN IS A dollar not a dollar? When it costs you $1.40, according to a new study released by the Joint Economic Committee (JEC). If you don't buy that number, try listening to Senate Majority Leader Tom Daschle (D-S.D.). He says a dollar is really worth $2.15.

"Hidden Costs of Government Spending," a report released in December by JEC Chairman Jim Saxton (R-N.J.), offers a frightening throwback to freshman economics. It explores in full detail the concept of "deadweight loss," which measures the "hidden" cost of government spending by taking taxation's effect on prices into account. You can link to the lesson at www.house.gov/jec, or skip the gory details and read it here: Every extra dollar of government spending costs the economy $1.40. According to the study, that's because of expensive red tape and the efficiency lost in robbing Peter to pay Paul.

Saxton's report was only one shot in the long battle over how much to...