Arnold Kling on Governments Failure to Efficiently Help the Poor

Arnold Kling posts about the fact that Governments programs are more targeted at the middle class than the poor and that these programs, that are let's face it are just a transfer from middle class people to themselves, are pushing the deficit ever higher.

My comments:

The irony is that in the end even the middle class do not benefit, they just think that they do. Take schooling, I sent my children to a private school that costs half what my county spends per student (the education may be slightly worse but you cannot tell that by me), so if we were all charged directly for each child that we send to the Government schools we would be better off, but try convincing people that charging them is better than them "getting it for free".

Even SS which is a simple transfer may not be so utility maximizing or even neutral.  SS has changed our culture such that more older Americans live on their own than otherwise.  So a simple transfer from children to their retired parents must reduce utility.  I think the same is true for medicare and low deductible insurance in general. When we have medicare or low deductible insurance we use more care than we otherwise would and if we are middle class or rich surely most of us (i.e. those of us without exceptionally high life time medical spending) of us pay the full costs either way.

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

Study Finds Evidence that more Income does not Improve Health.

The incidental economist highlights a study that finds evidence that more income does not improve health.

Conclusions: These findings suggest that the ability to improve short-term health outcomes through public transfer payments may be limited. However, the lifetime effects on the health of people with higher incomes would still be a valuable avenue for future research.


Some may not be surprised by this but studies have consistently shown that people with higher income live longer on average.  This study is evidence that though health correlates with income, income is not causal. It is evidence that that poor health causes lower income or something else is causing low income and poor health. We need a good test that will show  which is the cause because for example poor impulse control could cause both bad heath and low income. Highly talented athletes could be a place to look. Athletics does not require a lot on impulse control.

It is my observation that a large amount of money can be destructive to some people’s health e.g. it allows some people to drink all day and drug all night and drive very fast care very fast.

BTW the is a section Of Glasgow Scotland where male life expectancy is below 55 years. Those people might be drinking themselves to death. Giving them free stuff (including free health care) might just speed up the process.

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. 

Scott Sumner has Another Post Debating the Efficacy of Fiscal Stimulus

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/

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/