By Arnold Kling
many economically-puzzling regulations and policy inclinations tend to make everyone act like high status folks act, regardless of how appropriate that is for their situation.
I think that describes the drive for universal health insurance and universal college education. High-status people want to spend their surplus income on comprehensive health care coverage and prestige education. Other people might prefer to spend their surplus income on leisure. In my talk/dance, I used Neal Stephenson’s The Diamond Age to describe this phenomenon. Stephenson’s science fiction future includes “Vickies,” who work hard according to Victorian values and accumulate wealth, and “thetes,” who have lower status but everything they need.
3. The Maryland Journal. Most of my friends, who are Democrats, assume that since there is no Republican Party to speak of here that the state must be well run. The truth about our fiscal prospects would surprise them.
4. Speaking of fiscal prospects, John Taylor explains the budget debate.
perhaps the biggest difference is that the House Budget brings outlays as a share of GDP back close to 2007 levels as a share of GDP, thereby removing the large spending increase of the years 2008-2009-2010, while the Administration budget effectively locks in that increase.
Somehow, we could ratchet up spending by hundreds of billions at the drop of a hat. Reducing spending by less than $100 billion becomes Armageddon.
The left blogosphere assures us that domestic discretionary spending is restrained, Social Security is not a problem, Obamacare has taken care of health care “cost inflation,”* and the deficit is mostly cyclical. All of this fails to explain the basic outlook for outlays relative to GDP.
*Keep in mind, of course, that most of the increase in health care spending is not pure cost inflation. A lot of it reflects increased utilization of medical services, especially those that require high-tech equipment and specialists.