CEI Daily Update
Issues in the News
The federal budget deficit drops to $205 billion for the fiscal year ending in September.
The U.S. government has conclusively ended its recent short-lived string of budgetary surpluses—the first since 1969. But if their regaining and maintaining a genuine surplus remains a priority, policy makers must control regulatory costs. Consider: the Congressional Budget Office projects no surplus over the coming decade until a speculative $170 billion in 2012. Regulatory costs of more than $1.14 trillion clearly dwarf that amount. Moreover, regulations and taxes can substitute for one another; a new government program requires increasing spending—or imposing new rules and regulations.
The New York subway suffers a blackout amid high summer demand for power.
Let's begin with New York and the subway blackout. As befits a high density world city, New York relies on rail transportation. Almost all high-frequency rail service in New York City, furthermore, operates under the Metropolitan Transit Authority. Likewise, only one company — heavily regulated Consolidated Edison — supplies and delivers power for the subway. And MTA, itself, relies on the New York City Police for security on the entire subway system. It doesn't need to be that way. London has at least five different companies providing high frequency rail service and Tokyo has over a dozen.
A federal appeals court reviews a class action lawsuit against tobacco companies over marketing of light cigarettes.
Up to 30 million smokers will be able to sue based on allegations that the tobacco companies exaggerated the health benefits of smoking ‘light’ rather than regular cigarettes. Many smokers compensate for the reduced nicotine in light cigarettes by inhaling more deeply or smoking more cigarettes. That offsets much of the health benefits of light cigarettes. The tobacco giants apparently suspected as much but didn’t tell the public.
Blog feature: For more news and analysis, updated throughout the day, visit CEI’s blog, Open Market.
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