Tuesday, December 27, 2011

Andrew Cohen Proposes Licensing Parents

I am against licensing parents but the his post is interesting because it makes it clear that there is a stronger argument for licensing parting which we do not license than professions that we do license.   



I it is better to give everyone a license to be a  parenting  and then have rules that if broken result in loss of license.  That is everyone has a right to be a parent but that right can taken away in a case of abuse which is the system that we have.   I think the same for professional licensing but in professional licensing their might a case for a very easy test 
(that any college grad could pass with a few weeks of study) up front.   


BTW related I think that anyone should be allowed to buy most medicines without a prescription but that one should have to pass a simple test and commit to taking the full regime to get an antibiotic. 

Tyler Cowen on Better Verses smaller Government

He writes:
The world is changing more rapidly, so automatic pilot isn’t good enough any more.  “Good governance” and most of all adaptability have become more important.  This will benefit the Nordic countries, the UK, Germany, Switzerland, Canada, and Singapore.  It is mostly bad for India, Russia, and the Mediterranean countries, plus other countries with lots of corruption.  It remains to be seen which category the United States and China will fall into
It seems to me that our Government is even more wrong than it is big and that it could deliver more and yet be much smaller if it were not so wrong. For example SS exists to prevent low life time earners from running out of money in their old age, but SS pays out more to high earners than to low earners. Other examples: the lack of sensible spending controls on medicare, the bloated military budgets and how about the war on drugs. I do not see how anyone can propose giving more money to the Government until they end the war on drugs and address the other problems that I listed. 

Tuesday, November 22, 2011

Scott Sumner has Another Post Debating the Efficacy of Fiscal Stimulus


To me it is a moot point because even if it works even taking the advocates numbers the cost is way too high per job saved/created. It is clearly better to use monetary stimulus combined with a wage subsidy. 

This seems especially true in the current downturn because the lower skilled workers are so much more likely to be out of work. For the people at the bottom of skill levels a wage subsidy is a much cheaper way to create jobs than a stimulus which is likely to have quite a bit of crowding out.  Even Allen Blinder an advocate of the first stimulus has said as much.  


Ads:
http://www.schedulebase.com/
http://www.abs-usa.com/

High School Should not Just Prepare Adolescents for College

Edububble excerpts:
High school, in short, should not just prepare adolescents for college and careers, but for successful lives as adults. And far from backing off modern notions of success, this approach actually embodies new understandings of what really helps people succeed: not just reading and math, but deeper life skills that aren’t reflected on exit exams or college applications.
I have been saying something like that for years.
Why is it that people complain endlessly about US children not do well on PISA and similar test but we seldom talk about what knowledge or skills would help them live better lives and what are the most efficient ways to get that knowledge and those skills to people.

Ads:
http://www.schedulebase.com/
http://www.abs-usa.com/

Saturday, November 19, 2011

If the OWS People were Serious People

If the OWS protesters were serious people the would carry signs that say things like:


One percent per year expense on a mutual funds is over 20% of the expected real gain! And you do not even beat the indexes!  And you must have paid of congress because 401ks legally require us to use mutual funds!


Or


We know from Benford's Law that you are scamming us.


Or


Goldman Sachs runs the US Treasury, is it any surprise that it biased in their favor?


Or

The Federal Reserve system cannot function well in a sharp contraction.  We need free banking.


Ads:
http://www.schedulebase.com/
http://www.abs-usa.com/

Tuesday, November 15, 2011

Tyler Cowen Outlines a Way to Solve Italy's Debt Problems


My comments:  

Unlike the Germans, Italians do not obey laws just because they are laws democratically enacted.  This has good and bad effects.  One result is that makes it difficult to collect any  tax, let alone a wealth tax.   So I think that Italy may have to default in some way.  

But Italians should not disrepair.  The biggest negative result from a partial default would be that it would make it difficult for the Italian government to borrow, but IMHO the benefits of being able to borrow are overrated.
To me the 2 benefits of borrowing are:

1. To move some of your consumption earlier in you life when it is more enjoyable. 
2. It enables businesses with good ideas to grow faster. 

A balanced budget amendment results in the same thing a government that cannot borrow.  Also borrowing is not a great idea if you like Italy have rapidly falling population. 

If I was an Italian citizen (or Greek) I would vote for default. I would say the government is debt not me. 

Tuesday, October 25, 2011

Free Banking

For a free banking system to work well the bankers need to know their business, they need to be greedy but not completely immoral and nobody needs to understand the monetary system.  For the current system to work well the bankers need to be free of  greedy and highly moral, and the median voter needs to understand the monetary system and the government regulators need to diligent.  

Cigarettes the Drug war and Transfer of Learning

Aaron Carroll over at the incidental economist blog has a good post on the costs of alcohol consumption.  

In 2006, the economic costs of excessive drinking in the US were $223 billion. That’s about $1.90 per drink. Another way of looking at this is that the cost was almost $750 per person in the US.
Almost three quarters of that sum is from lost productivity. An addition 11% is due to healthcare costs and 9% is due to criminal justice costs.
Underage drinking cost $27 billion. Binge drinking cost more than $170 billion. Drinking during pregnancy cost more than $5 billion. Alcohol-attributable crime cost more than $73 billion.
The cost to the government was more than $94 billion, or about $0.80 per alcoholic drink.
It is funny that Democrats are on a holy crusade against smoking (there is now a big black market in cigarettes) but they do not touch alcohol due to our experience with prohibition. Worse yet, both Democrats and republicans are on a holy crusade against recreational use of drugs. I guess that is proof that knowledge in one area is not transferable to other areas:

Here are links to Bryan Caplan on that subject:  

http://econlog.econlib.org/archives/2010/10/take_notice_of.html
http://econlog.econlib.org/archives/2011/01/the_case_agains_5.html

ads:

www.schdulebase.com
www.abs-usa.com

Thursday, October 13, 2011

A Progressive Consumption Tax

You tax experts out there, would this work?

Many economists have called for a consumption tax to replace the income tax. Invested money that is never spent promotes economic growth and has been compared to indiscriminate charity.

The problem is that it is difficulty to make a consumption tax that is simple and progressive. One way to achieve this goal would be to allow a person to put as much money as they want, pre-tax, into an IRA. Then allow people to take as much as they want out of their IRA at any time but pay taxes on all of the withdrawals.

You would tax income not put in an IRA plus any withdrawals from the IRA at a progressive rate. You could also allow people to buy cars and homes in their IRA and rent them at market rates.  The result would be a progressive consumption tax.

You would also want to end the Corporate profits tax.

Ads:

abs-usa.com
schedulebase.com

Eric Falkenstein's and Research Shows that People Pay to take Risk

I have been impressed by Eric Falkenstein's videos. In them he makes a case that because people are trying to out perform or to get rich quick, they drive the price of riskier stocks up so hat there is a cost to taking on high risk rather than a return. That is that higher risk stocks produce lower long term yields than lower risk stocks. This would explain a lot including why people buy the state lotteries and why they like large lottery pots. The implications are that investors should buy the safest stocks that they can find and hold long term.  Low debt, high profit margin, low volitility and low beta boring enterprises like LOW,MCD, PG, KO, PEP, utilities etc. fit the description. .


There are now low volatility and low Beta ETFs to serve people who want to invest this way.  


I highly recommend his videos.  They are free and that just shows that you low risk is free and to take more risk you have to pay.  


Ads:
http://www.schedulebase.com/
http://www.abs-usa.com/

Monday, October 10, 2011

Can Fiscal Stimulus Work

Scott Sumner has a post on fiscal stimulus he questions the value of it as I do.
Scott questions if based on empirical evidence.  I question it theoretically, how is it supposed to work.    


My problem with understanding how fiscal policy could work is that you are taking just as much money out of the economy by selling t-bills as you are putting in.

Now, I heard one plausible argument for fiscal stimulus. It said that said if Gov announces say a big 10 year road building project a road construction company might borrow money to buy equipment and hire people and that borrowing would be monetarily expansive. I do not think that at any reasonable level could be enough to jump start the economy nor do I see it as good, maybe in the future there will be less borrowing/debt. That IMHO would be a good thing so if monetary policy can get the economy going with less debt that would be doubly good IMHO. Also the gov must at some point pay back the money that it borrows.
It seems to me that monetary policy is far better.

Thursday, October 6, 2011

Great Quote from the Very Quotable Bryan Caplan

Great quote from the very quotable Bryan Caplan here.

"The public is wrong.  Indeed, the public is delusional.  It's crazy to tax everyone to provide "free" pensions and health care for everyone.  And it's logically impossible for benefits to permanently grow faster than GDP."   Bryan Caplan

Ads:

Friday, September 30, 2011

The President's Latest Stimulus Proposal

From a NY Times Editorial:
According to Mr. Zandi, President Obama’s $450 billion jobs plan could add 1.9 million jobs in 2012 and cut the unemployment rate by a percentage point. With interest rates so low, the government could easily pay for a bigger program.

Wow that is $459 billion / 1.9 million = 241,578.95 per job! One would hope that would make Mark Zandi against this stimulus plan but not so. He is for the plan.  Now I admit that you do get some stuff for the money not just jobs, they are not digging holes and filling them in. I also admit that this is a great time to get ahead on building and fixing roads and bridges and some of the proposed stimulus is in tax cuts which is almost free.   All tolled thought, $241,578.95 per job is still seems like a very expansive way to create jobs but since the median voter seems to demand jobs programs we should find cheaper ways to do it.

Perhaps this simplest way would be to replace the minimum wage with some kind of wage subsidy.  The recipient would get the bast wage that he can find and the Government would pitch in enough to get the recipients income up to some acceptable level.  We are already paying those who are still eligible to collect unemployment so we might as well pay them to work rather than paying them to not work!

Ads:
www.schedulebase.com

www.abs-usa.com

Monday, September 26, 2011

Warren Buffett's Article on Taxation has Spawned Some Good blog posts on Taxation

Warren Buffett's article about  taxation and tax rates has spawned some very good blog posts on the subject of  taxation and who pays for what.  


Here is a good post on the subject by John Goodman. In it he proposes a progressive consumption tax.  There are things that we could do short of that.  For example  I wonder why we have a cap on how much a person can put in an IRA.  Why not tax income when it comes out of the IRA to be consumed, rather than when it is earned.  Investment helps us all in the longer term so why tax it?  


Also it would seem to me simpler and better to tax a husbands and wive's income separately and let them divide the exemptions optimally.  This would eliminate the marriage penalty making conservatives happy and would encourage more women to work in the taxed part of the economy making Democrats happy. 


Of course I would also eliminate most deductions to simplify.  


Ads:
www.schedulebase.com
www.abs-usa.com

Friday, September 23, 2011

Why Eliminating the Deficit is Technically Easy but Still Politically Impossible

Why Eliminating the Deficit is Easy but Impossible


Below I address the big federal government expenditures and tell how they could easily be reduced without much causing much pain.  


Social Security


Social Security is one of the biggest areas of federal spending. If we are looking to reduce federal government spending Social Security is a good place to start. The first fact that stands out with Social Security is that it is a rob Peter to pay Peter program.  What I mean is that it takes money from all of us to give to all of us.  In fact it takes more money from the higher earners and gives more money to the higher earners but, if you ask people why Social security exists they will tell you that it exists so that no one will be destitute in retirement.  And make no mistake about it in a rob Peter to pay Peter program, if you are middle class you pay the full amount for yourself plus the  cost of inefficiency and dead weight losses.  


Here are some excerpts from the Social Security web site:


The maximum benefit depends on the age a worker chooses to retire.  For example, for a worker retiring at age 66 in 2011, the amount is $2,366.  This figure is based on earnings at the maximum taxable amount for every year after age 21.

The average monthly Social Security benefit for a retired worker was about $1,177 at the beginning of 2011.  This amount changes monthly based upon the total amount of all benefits paid and the total number of people receiving benefits.
BTW I learned some thing from doing this research, I learned that there is no minimum Social Security benefit so it does not even cover some of the neediest people at all.  


So if we want to keep people from becoming destitute in retirement but want to be more efficient and not discourage work and saving, what can be done with Social Security to save money?  Means testing the benefit in retirement is out because that would discourage saving. What you could do is select an amount below the average benefit and give that to everyone. So how about we give everyone on the program $800/month that would reduce spending on the program by of over 32 percent.

The big obstacle to this sensible change is that people are fooled into thinking that they are getting something for nothing from SS, and old people vote.

Schooling/Education


Schooling is another big Government expenditure and though most of the spending is at the state level a big reduction at the state level would allow the federal government to remit less to the states and localities.


The average cost per student per year is now up to $13,00.  I pay $4,000 per year to send my son to private school.  If you ask why the Government runs the schools a common answer is because otherwise people would not be able to afford to send their children to school.  but lets face it if you earn median income or better you are probably paying the full $13,000 through taxes.   I like to ask women if the state would pay you $10,000 each to educate your children would you home school them.  The simple money saving solution is to start to charge families based on income for each child that they have in government schools.  Poor people would use government schools for free and as income goes up the charge would go up more slowly as to not make it better to make less.  At some point above the median income people would pay the full $13,000 per child.  this would push people to find cheaper ways to educate their children.   Of course this is politically impossible now because the median voter being rationally ignorant thinks that school is free paid for by the rich.  




The big problem here is that people are fooled into thinking that they are getting something for nothing but I assure you that you cannot subsidize everyone and you cannot subsidize the middle class they pay every penny.  On top of that the system is so inefficient that we can all be better if we just focus on subsidizing the poor rather that trying to subsidize everyone.  



Medicare 
Recently there was a big press story about changes in Medicare leading to "death panels" but it there is strong evidence that at least half of all healthcare spending is for care that net out negative on the harm verses benefit scale.  The Rand Health Insurance is one big piece of evidence and differences by area on spending show the same results that is places the spend half as much per medicare patient often get better results that areas that spend more.  Further no one is saying that you cannot opt for aggressive expensive care just that medicare should refuse to pay for it if it does not net about positive among the population.  We evidently do to much medical and so medicare needs to have panels that decide what it will cover in what circumstances.  This can easily knock medicare expenses down a third and still there would be waste.  


Also between Medicare medicaid and plans for government employees government currently spends more that half of the money that is spent on medical care in this country.  It therefore has considerable market power and so can more affect in market prices than it does.  It could simple negotiate lower prices.  Most of the difference in spending between the USA and Canada is due to higher prices not less care.  


Licensing is an issue that also needs to addressed.  It is currently to difficult and long a poses to become an MD, PA, NP, RN and LPN.  The evidence is that this does not improve quality does push up prices.  One piece of evidence is that PA, NP and midwives get as good outcomes as MDs.  Generally with a reasonable range of qualifications it is not better people that improve outcomes but better systems.  


Making it easier to become a provider would make for more competition and make it cheaper get care. 


The big problems here are that people think that they are getting something for nothing and old people vote.  People are also convinced that Doctor quality drive outcomes and that schooling it a very accurate way to screen for better doctors.    


Defense


In reality we won the wars in Iraq ans Afghanistan within weeks of the invasions and those invasion are a good deterrent against allowing the establishment of Al Queda again in those countries.   We could save considerable money by admitting victory in those countries and leaving them to work out their own salvation with fear an trembling.  


Also we still have bases in Germany and Japan long after the end of the cold war.  


The USA spends about what the rest of word combined spends on defense.  We spend more 2x what number 2 China spends and there stuff is not as good as ours and much of there spending is wasted on foot soldiers nor does China look like a threat to us but like an ally.  



We could easily cut military spending in half without compromising security.  


Other Smaller Areas to Cut:


Energy has been an area of interest t me since my college days when I majored in resource economic believe me when I say that the Department of energy has accomplished nothing and should be completely eliminated.   The same goes for the Department of education.  




Why it cannot be done until a sever crisis hits:



The median voter thinks:


  1. That corporations pay the corporate tax
  2. That Warren buffet is under taxed 
  3. That schools are free to him
  4. That SS is not a welfare program.  

Related Issues for Other Posts:



Medicaid puts huge marginal taxes on the poor.  Better huge deductibles that vary with income.  



The corporate tax is paid by the people, either the stock holders, employees or consumers.  


It is very hard to really tax the rich.  


Hidden taxes everywhere don't be fooled if you are middle-class you pay every penny for every program/benefit that you receive from Government and then some.  


Why we should just have a consumption tax.  It hard to tax the rich.  How to make a consumption tax progressive and keep wives in the in taxed labor force.  


Kevin Outterson at The Incidental Economist Blog Made the Kind of Post that Gets Me Going


Kevin Outterson at The Incidental Economist blog made the kind of post that gets me going in high gear.  He wrote:
 Japan – better outcomes with older people at half the cost
Don’t let anyone assert (without data) that the aging US population is to blame for our high health care costs. Look at Japan. Despite one of the oldest population in the OECD and health expenditures half the US amount, Japan enjoys much longer longevity.
It is not clear that Japan has better out comes see here:
1. Asians live longer here too.
2. Japan has a much lower accident rate than the USA.
3. Japan has a much lower homicide rate than the USA.
4. Japan has a much lower multiple birth rate that the USA
If you assume that all ethnic groups are equally health then we don’t have to go to Japan for an example we can adopt the the care level to that of Hispanics here in the USA and that will improve our longevity. I think it would not help, though it could be true that too much health care is killing whites.  Hispanics have less access to health care than even black Americans.  

Ads:
http://www.schedulebase.com/
http://www.abs-usa.com/

The Macro Resilience Blog Post on Snap Back

The macro resilience blog has a post that uses a term "snap back" a term that I had never seen used in this context but it seems like a great way to describe the problem.


"The problem in a credit economy is not so much excess savings but as Borio and Disyatat put it, excess elasticity. "
...
"If our financial system is a rubber band, the long arc of monetary system evolution from a metallic standard to a credit economy via the Bretton Woods regime has been largely a process of increasing the elasticity of this rubber band (excepting the period of financial repression post-WW2 when the trend reversed temporarily). Snap-backs are inevitable – the question is simply whether the snap-backs are “normal” or catastrophic."




This "snap back" is the problem that I think competitive currency issuing can solve.  In a system with bank's currency backed only in bank assets in the face of deflation banks would have an incentive to issue more currency to by up assets.  This would slow the appreciation of currency (deflation) and slow the fall in asset prices.  Further more if currency is not Government issued it might not out compete stocks and other investment so badly when people are scared.


Ads:

http://www.schedulebase.com/
http://www.abs-usa.com/

Wednesday, September 21, 2011

Productivety

This is an interesting article The Greater Recession: America Suffers from a Crisis of Productivity with interesting graphs


His energy costs are off because he measures the cost of energy inputs but we do not buy energy we buy mobility, cool, warmth, TV viewing time etc. and those cheap new manufactured goods deliver more of those output per energy input BTU.
Also housing is on the mend recently. prices are falling. That leaves medical care and schooling/credentials which is what we really buy (education apart from schooling/credentials has gotten much, much cheaper since the internet). Medical care is a strange good but if you just look at output that is health life expectancy we are doing much better than in 1970. I think that schooling/credentials on the verge of big positive change. I think that we need a separation between education and grading/testing.
So I am very optimistic.

Friday, September 16, 2011

Very Informative Post on Infant Mortality

There is a very informative post on infant mortality on The Incidental Economist blog.  It talks about the racial differences in infant mortality.  Excerpt:

Personally, I think there is some genetic component–at every gestational age, black babies are smaller than babies of other ethnicities (the distribution is still normal, but it’s shifted to lower weights–that’s why any discussion of racial disparities in low birthweight needs to adjust for this), but, at any gestational age, their survival is better (a black baby born at 31 weeks has better survival than a white baby, but, because there are more 31 week deliveries, overall mortality is higher in blacks), and there are differences in the distribution of pelvic shapes (black women are more likely to have a narrower pelvic outlet.    



Tuesday, September 13, 2011

Cost per Job of Gov. Created/Saved Jobs


From John Goodman's Blog:
A lot of news outlets carried Mark Zandi’s prediction:
“The president’s plan would provide a meaningful boost to the economy and job market in 2012,” Zandi concluded. “I expect the plan to add 2 percentage points to real GDP growth and 1.9 million payroll jobs, and reduce unemployment by a percentage point.”
I entered these numbers into a spreadsheet along with the cost of each program (based on WSJ) of $175b, $70b, and $140b respectively.  You can then calculate how much it costs (in lost revenue or greater expenditures) to create a job.  The numbers are sobering: $233k per job for the payroll tax cuts and $350k per job for the infrastructure spending.  And these jobs would only be around for the duration of the new stimulus package!

 I am afraid that it is a political reality that we must have jobs programs (the median voter votes for them) so we must find a cheaper way for Government to encourage job creation. I say we try to get the politicians, to replace the minimum wage with a wage subsidy and see of that works. We are already paying many of the unemployed.

Friday, September 9, 2011

SS is NOT a Ponzi Scheme but that does not Mean it is not Fraudulent

SS is NOT a Ponzi scheme but it is a welfare program disguised as an insurance annuity.  All welfare programs work the way that it works.  That is, all such programs pay for current welfare out current income.  Even charities work that way so that is not the fraud..  The fraud is that it is structured in a way to fool people into thinking that it is insurance/retirement annuity like what some insurance companies offer.  It was supposedly setup the way it is to make it politically difficult to end.   But the disguise makes it make a much costly welfare program that it should be and the disguise is meant to fool people and so it is  a bit of a fraud.   It is welfare program that distributes most of it funds to people who do not need the money.

SS as a welfare program should not pay out more to those who made more in their working years.  As a welfare/insurance program if everyone got the same minimal amount in retirement, and we can debate what the amount should be,  the tax could be lowered allowing individuals more control of their own money and retirement.  That would make most everyone better off.  It should also be funded through general revenue not some special tax.

Tuesday, September 6, 2011

A Theory of Our Current Long Lasting Unemployment

It has been 3 years since the financial crisis and yet unemployment is still over 9%.  So why?  Well, from my admittedly narrow perspective the internet and China eliminated certain jobs faster than jobs could be added in other areas. For example due to the internet our company was able to reduce marketing staff.  We found that marketing staff made very little difference because buying Google search terms was the only thing that significantly effected sales.  


The way I see it the 2001 downturn corresponded with the fall in the need for certain worker due to the internet even while mechanization and China's fast growing economy eliminated many manufacturing jobs. Greenspan pushed interest rates down low enough that housing absorbed enough workers to mask the situation. Now that the housing bubble has burst we need some deep changes. There is as always plenty of work to be done but it takes time for new services to evolve and be accepted.

Monday, August 22, 2011

Taxing Warren Buffet


Interestingly, if the goal of taxation to transfer consumption from one person to another, it would be impossible to at any acceptable rate to tax Warren Buffet.  You would need to tax him enough to cause him to lower his consumption. Very unlikely. Saving and investing money that you will never spend is like indiscriminate charity.

By the same logic corporations cannot pay taxes. The corporate profits taxes fall on the shareholders, employees and the customers of the corporation in portions that depending on how competitive the markets are.

NOTE: That does not mean that I am for completely eliminating  the Corporate profits tax because it might be good that people who work for, own or buy things from Corporation should pay a little more tax for the limited liability as a sort of as insurance premium.  The corporate tax favors partnerships which are liable for more of their damages than are corporations but a few percentage points should be enough for that.  Of course it would make more sense to charge more for that insurance to riskier businesses like banks and deep water petroleum drilling companies and companies with high debt than to low debt companies in safe businesses.

Thursday, May 12, 2011

The Politicians are Very Smart, the Voters are Smart so Why...

3. Used car prices are rising so much that many models are selling for more today than a year ago.

Thinking about the destruction of all those used cars in the cash for clunkers program. The politicians are smart but use that smarts to gain and keep office, the voters are smart but rationally ignorant. Everyone is smart but the outcome is very stupid.

Friday, April 29, 2011

Science and Specialization


The toasting problem isn’t difficult: don’t burn the toast; don’t electrocute the user; don’t start a fire.  The bread itself is hardly an active protagonist.  It doesn’t deliberately try to outwit you, as a team of investment bankers might; it doesn’t try to murder you, terrorise your country, and discredit everything you stand for…The toasting problem is laughably simple compared to the problem of transforming a poor country such as Bangladesh into the kind of economy where toasters are manufactured with ease and every household can afford one, along with the bread to put into it.

My comment: 


One implication is that greater specialization makes innovation much harder — hardly anyone has a good grasp of the whole 

Could this be something that was/is made worse by signaling squeezing out education in schools? The principles of the science are simple, though not always intuitive, and an intelligent person could absorb there principles across all sciences pretty quickly but in order for sciences to be difficult enough to signal high intelligence we go in great depth in a single area describing the principles in depth with difficult math that almost no one needs to know. This leaves little time for a broad approach. If one takes a broad but shallow approach in school, say by taking all low level classes, he will not have signaled enough intelligence to move on in the sciences.

Tuesday, April 12, 2011

Means Testing Social Security and Medicare

Great post by Caplan riffing on a post by Posner about means testing Social Security and medicare.  My take is a little different on Social Security, I think that we should eliminate the SS tax give everyone over 65 the same amount as a welfare payment.  This would make the program more an insurance plan than a retirement plan.  It would be insurance against out living your savings and not having children that are willing and able to help you. It would reduce the burden on the young, who tend to be less wealthy than the elderly, and eliminate the burden on the working poor.

Friday, April 1, 2011

Reason to Reform SS

Lately some Democrat pundits have started to call for reform of SS in order to reassure future beneficiaries about the program. I think that the fact that republicans are scaring people about SS is not sufficient reason to mess with it but I do think there is at least one good reason to mess with it.

The only reason to address SS now is that it would allow us to lower the SS tax (FICA). The way I see it SS is a pay as you go welfare program and so as long as it is not in the red now there is no problem with it except that young people trying to start families are over taxed to give more to rich and middle class people over 65.

Wednesday, February 16, 2011

WIll Healthcare Per Capita Spending Continue to Increase

People seem to take it as a given that per capita health care spending will continue to grow for a long time and eventually break the bank. I am not convinced that it will continue to increase faster than inflation. There is not that much cutting (surgery), one of biggest expensive items, that can be done that is not already being done. Researchers have lately been finding that some surgeries do not help with survivability, this could lead to less surgery. On one of the other big spending items, cancer treatments, new ways of controlling cancers are likely to less expensive and more effective than the current methods. It is my impression that the rate of new drugs coming to the market has slowed and the existing drugs will go off patent this should produce some savings. My conclusion, I think that medicine as a percent of GDP may peak in 10 or 15 years at a lower point that most projections predict.

Monday, January 31, 2011

Population Pessimists are Wrong

The population pessimists have reared their heads again in regards countries.  For different reason they have pointed to the populations  high Mexico, China and Egypt and Malthusian traps.  As always the population pessimists are wrong. 

It is almost impossible for a country to be over populated if the world is not over populated.  A lot of people can live on a little piece of land.  Food production is what takes land and food can be imported. Julian Simon was right and still is. 

Tuesday, January 4, 2011

If the Health Insurance Mandate Holds Up in Courts Can We Privatise Schooling

If the health insurance mandate holds up in the courts, it might mean that Government can charge people directly  for the schooling of their children and still require they be schooled or educated*.

The Government schools could start charging the rich and middle class directly to send their children to public schools?  This could save a lot of money for tax payers.

One of the stronger arguments for Government schools has been that it you are to require it you will need to pay for it.  People hate unfunded mandates.

A win for Obamacare would mean that Government can mandate individuals to spend on things without funding. 

NOTE: Obviously Government could subsidize the poor.

*My state actually has educational requirements for home schoolers in place of school attendance.  They actually requires annual evaluations of the children being home school and they must show that they have learned something.