EconLog Archive
Income Distribution
Poverty and Social Pressure
Jane Galt writes, Most of us reading this blog, after all, went to college and/or got nice steady jobs because we had enormous social and familial pressure on us to do so. How many of us were strong enough to overcome our environment, drop out of high school, and sell drugs? I jest, of course, .. MORE
Tax Reform
Single Tax Rate
Alan Reynolds argues that many problems with tax systems go away if you use a single tax rate. First, a single tax rate makes it much easier to integrate business and individual taxes. Income originating in business (and used to pay interest and dividends to investors) can be taxed at the business source, rather than .. MORE
Economic Education
Hurricanes and Broken Windows
Walter E. Williams writes, Why are Florida’s hurricanes a “plus”? It’s simple. According to St. Petersburg Times reporter Joni James, “Construction creates thousands of jobs, insurance provides for billions in consumer purchases, and new facilities built to higher standards might help offset future storm-related losses.” …Bastiat wrote a parable about this that has become known .. MORE
Tax Reform
Tax Reform
Bruce Bartlett writes, A federal VAT is the best way to raise net new revenue to pay for tax reform and deficit reduction at the same time. Thinking along similar lines, I write What I propose is that we adopt a value-added tax (VAT), also known as a consumption tax, in addition to the other .. MORE
Regulation and Subsidies
Affordable Housing Oxymorons
Here is an elementary example of presumably well-intended regulation without thinking through the consequences. Edward P. Stringham and Benjamin Powell write Under most inclusionary ordinances, builders must sell 10 to 25 percent of the homes to very low, low, or moderate income households. The most obvious result is revenue from building goes down. We conducted .. MORE
Economics of Health Care
Explaining Pharmaceutical Regulation
David Masten has a brilliant way of explaining the impact of regulation on the pharmaceutical industry. He imagines a world in which computers are regulated like pharmaceuticals. – the Electronics and Computers Administration would have just approved the Intel i486 for prescription use, and just approved the Apple ][ for over the counter sale. – .. MORE
Social Security
Debating Forced Saving
Tyler Cowen writes, First, how much can our government force people to save in the first place? You can make them lock up funds in an account, but they can respond by borrowing more on their credit cards, taking out a bigger mortgage, and in general investing less in their future. The net increase in .. MORE
Social Security
Prescott on Social Security
2004 Nobel Laureate Edward Prescott does not care for paternalism. let’s begin by dismissing the notion that individual savings plans are somehow dangerous to U.S. citizens. Some politicians have vilified the idea of giving investment freedom to citizens, arguing that those citizens will be exposed to risks inherent in the market. But this is political .. MORE
Regulation and Subsidies
Reputation Systems and Brands
Alex Tabarrok links to a story about the decline in the importance of brands, by James Surowiecki, who writes The single biggest explanation for fragile brands is the swelling strength of the consumer. We’ve seen a pronounced jump in the amount of information available about goods and services. It’s not just bellwethers like Consumers Union .. MORE
Fiscal Policy
Taxes and Social Security
Laurence J. Kotlikoff proposes to replace the payroll tax with a sales tax. replacing the payroll tax with a sales tax is the same as (a) eliminating the payroll tax ceiling, (b) taxing wealth at the payroll tax rate, and (c) taking advantage of the expanded tax base to lower the payroll tax rate. Next, .. MORE
International Macroeconomics
Debating Outsourcing
The link may only work for a day, but Tyler Cowen and John Irons go at it on the online WSJ over outcourcing. I think that Tyler supplies all of the highlights: Outsourcing resembles technical progress in its economics; in both cases, we procure something more cheaply, whether it is produced by machine or by .. MORE
Social Security
Debating Social Security
It’s Tyler Cowen vs. John Irons at the Wall Street Journal on line. (WARNING: the WSJ to override the article with a new article, which means that the link will not take you to the social security debate) [Cowen:] Social Security has two parts conceptually: a welfare system for old people, plus a regime of .. MORE
Cost-benefit Analysis
Stadium Obstruction
Henry Aaron (the economist, not the former baseball star) writes, The proposed deal imposes huge costs on the District and gives virtually all of the financial gains to the team. The city will bear the burden for years to come, while enjoying little real financial benefit from baseball’s presence here. …Numerous studies have shown that .. MORE
Politics and Economics
Exit Polls
As a teacher of high school statistics, I found the controversy over exit polling to be somewhat amusing. Exit polling is necessarily stratified. You have to plan ahead of time which precincts to sample and how many voters in each precinct to sample. This plan produces a stratified sample by definition. To use an exit .. MORE
Politics and Economics
Second Term Policies
Marginal Revolution offers advice for economic policy for the second term of President Bush. 7. Take in more immigrants, but demand higher levels of skills and education. At the very least, take in any revenue-positive immigrant. 8. Abolish the Department of Education. 9. Abolish the Department of Energy. Many of the suggestions would appear to .. MORE
Economic Growth
Growth and Economic Literacy
Bryan Caplan writes, studying the public’s beliefs about economics…income growth seems to increase economic literacy, even though income level does not. In other words, poor people whose income is rising—like recent immigrants—have more than the average amount of economic sense; rich people whose income is falling—like the Kennedy family—have less. Caplan goes on to argue .. MORE
Social Security
Social Security Privatization
UPDATE: I thought this was more recent, but it’s an older column that Winterspeak pointed to. Still worth reading. Jeffrey A. Miron and Kevin M. Murphy write, privatization has no effect on the solvency of the Trust Fund; it reduces inflow to the Trust Fund to the same degree it reduces outflow from the Trust .. MORE
Politics and Economics
Disappointing Election Year?
That’s my perception. I picture voters under 40 as having less allegiance to top-down economics and top-down moral legislation. I would think that the trend would be libertarian. …Instead, during the debates, it seems to me that we witnessed libertarian “anti-gravity,” with the candidates competing to appeal to traditionalist-minded voters at the expense of libertarians. .. MORE
Economic Growth
Nanotechnology and the Economy
Ronald Bailey reports, Nanotechnology would make it possible for 100 billion people to live sustainably at a modern American standard of living, while indoor agriculture using high-efficiency inflatable ten-pound diamond greenhouses would help restore the world’s ecology. The ultimate limit to economic growth seems to be heat pollution, the waste energy radiated away from nanotech .. MORE
Economics of Health Care
Cost of Health Care Regulation
Christopher J. Conover has attempted to estimate the total cost imposed by legal and regulatory distortions of health care, by synthesizing previous studies of individual issues. The analysis suggests that the total cost of health services regulation exceeds $339.2 billion. This figure takes into account regulation of health facilities, health professionals, health insurance, drugs and .. MORE
Fiscal Policy
Economists’ Voice on Fiscal Policy
The second issue of The Economist’s Voice has appeared, and it looks more interesting than the first. Several articles discuss fiscal policy. William G. Gale and Peter R. Orszag write, Looking beyond the next decade, the budget outlook grows steadily worse. The costs associated with retirement and health programs mount. Over the next 75 years, .. MORE