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Reason Foundation

Reason Alert: Outrage in Bell, California

Plus for-profit schools taking government money and health care costs keep rising

July 30, 2010

Bell Protests Turn Into a Tax Revolt
Bell City Manager Robert Rizzo was collecting nearly $800,000 a year, making him the highest-paid government manager in the country. Rizzo, along with Bell's police chief and assistant city manager  resigned last week after taxpayers discovered the three of them were taking home salaries totaling $1.6 million a year. attended a Bell City Council  meeting this week to talk with angry taxpayers as other Bell officials offered to take pay cuts to ease the anger over their outrageous salaries.
Reason's Adrian Moore Discusses Bell's Salaries on Fox's Varney and Co. Reason's Tim Cavanaugh Discusses Bell's Government Spending on Fox Business

Health Care Costs Keep Rising
"Here's the problem: Health care costs-and thus Medicare costs-are growing faster than GDP. Between 1998 and 2008, the rate of the program's growth outpaced GDP by about 2.8 percent. That may not seem like much, but as long as that trend continues, it means that, every year, all else being equal, Medicare eats up a larger share of the budget. In the short term, that's worrying. In the long term, it's a huge problem. Somehow, all that excess growth will either have to be contained or paid for. That leaves policymakers with three basic options: Raise taxes, borrow more, or cut costs...Given the dire reports of growing federal debt-the CBO expects the country's debt-to-GDP ratio to hit 90 percent within a decade-borrowing isn't much of an option. Tax hikes, meanwhile, are political poison, especially given the president's promise not to raise taxes on families making less than $250,000 a year. And even if more of the public was open to tax hikes, hikes wouldn't actually solve the problem, because offsetting the ever-growing costs of Medicare would require ever-growing taxes to match. In other words, the government can't tax its way out of the fiscal hole it dug. So cutting health care cost growth is the only option. Except that ObamaCare just doesn't contain costs. Not according to the Congressional Budget Office. Not according to Medicare's chief actuary. Not according to the International Monetary Fund." - Reason magazine's Peter Suderman

For-Profit Schools Got Fat On Federal Education Money
Reason magazine's Katherine Mangu-Ward finds "the five largest for-profit institutions received 77 percent of their revenues straight from the federal student aid program-and that doesn't even include sideways education funding like veterans' benefits or federal job training money. Beating that kind of addiction to government money is tough, maybe impossible. A steady flow of federal education money is so irresistible that schools of all types will make all manner of concessions to federal oversight just to guarantee next fall's fix." Will Michelle Rhee Fix D.C.'s Notoriously Dysfunctional School System?

Where Do Libertarians Belong? The Debate Continues
Brink Lindsey, Jonah Goldberg and Matt Kibbe came to Reason's DC office to continue their debate about where libertarians should align politically. Watch the discussion here. Read the Reason magazine cover story here.

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