It all comes back to housing. Lower housing costs, give daycare support, and productivity will be boosted and fertility rates increased.
I'm a millennial in the northeast and people here wait to have kids until their mid 30s because daycare and housing is so expensive , so they want to feel financially secure before parenthood. It's a rational decision with bad implications for society.
Housing is literally a silver bullet for so many of the US' issues it's a bit weird it's only ever discussed at a local level. I believe other countries like Japan have national zoning laws and agencies to deal with those conflicts.
How about governments let people create housing instead of imposing onerous rules? It’s not just greed but also we’ll meaning policies that produce bad outcomes. Look at reality, not for some savior government to come in and fix it. That’ll only create more rules which the already rich can only afford to navigate.
Additionally, providing for women's rights for healthcare including abortion care will also help increase pregnancies (ironically). What we are seeing since Dobbs is a decrease even in states where abortion is not strictly limited or banned because women do not trust the government. One election swinging to the right and they can lose their rights to body autonomy and they will have less access to providers as they leave states where their jobs can put them in prison.
Pretty outlandish that women aren’t having children because they “don’t trust the government”.
Even more outlandish to claim that after the last 3 years, an obviously correct Supreme Court ruling is the issue causing a lack of trust in government.
The situation in Romania went as follows: Bad economy and worsening living conditions leads to a decline in births. Pass law banning abortions and contraceptives. Economy still bad, living conditions get worse, birth rate continues to decline. To say the policy led to a decline in births is asinine.
Nevermind, that Dobbs neither outlaws abortion nor contraceptives. Women are having less children for many reasons, but if you’re going to draw a comparison to Romania, surely it’s the connection between economic insecurity and low birth rates.
Come on - Dobbs wasn't about banning abortion federally sure but it was absolutely about allowing existing and upcoming state-level bans to take effect.
Dobbs was about overturning Roe, which was a piece of political activism masquerading as jurisprudence. Roe doesn't hold up legally, and so it was overturned. That's what the court ruled on.
You've said precisely nothing what I've said. Romania outlawed abortions, just like states that outlawed abortions *got their favored Supreme Court decision* to enact their pretextual bans (either ones already on the books or bans teed up in the legislative process to be passed after Dobbs). Romania = no abortions. Conservative states = no abortions.
The people in no-abortion states live in a state of economic precarity not unlike Ceaucescu's Romania. If we're going to litigate semantics, I will bolt down the meaning of "not unlike." I do not mean identically bad -- Romania was objectively bad as a government and standards of living were objectively worse under Ceaucescu. I do not mean comparatively bad -- there's a fallacy that if two things are stacked up against one another, the worse thing doesn't automatically make the other thing good. If you have to use the phrase "but at least" to make an argument, you're in an indefensible position to begin with.
Not unlike means different people in similar contexts will face similar circumstances and consequences. What happens to a poor American woman or a poor Romanian essentially forced to give birth? Choices that entail trading off miseries. Exit (emigration) and end up moving sideways or downward but not upward. Voice (demand political change), which will be futile. Isolation, avoid marriage and sex to prevent bringing a life into a world of immiseration. Or participation, just have the child and culturally perpetuate immiseration.
You very clearly implied that Romania's ban on abortion led directly to a decrease in the birth rate. That's disingenuous at best and more likely dishonest. Romania's birth rate declined due to economic insecurity.
Everything else you said is an emotional outburst about how you think the world should be. I am only pointing out that what you said happened didn't happen.
You're seriously saying that the pretzel-logicked Dobbs decision, with its "originalism" relying on a carefully cherry-picked version of history that ignores inconvenient facts, is "obviously correct"?
What inconvenient facts were ignored when the Supreme Court pointed out the obvious fact that the Constitution has no guarantee for a right to an abortion, and therefore it is a matter for each state to decide?
A _great deal_ of case law relies on interpretation and inference, not the literal text. For instance, the Constitution does not specifically lay out the "one man, one vote" concept, and prior to the 1960s, many offices were elected with very different numbers of constituents behind different seats. Eventually in the 1960s the Court declared that the Equal Protection clause of the 14th Amendment had to be interpreted to require at-least-roughly equal representation, and now that's taught as a basic democratic principle in high school civics classes.
Perhaps you _dislike_ the Roe v. Wade decision but it was carefully considered, and grounded in history. If you need a history lesson, Slate's Slow Burn season on the background and argumentation of the case is quite good. https://slate.com/podcasts/slow-burn/s7/roe-v-wade
The Dobbs decision on the other hand distorts and/or selectively-cites history, and tosses the principles of stare decisis and reliance interest out the window. The Court ruled the way they could as a pure power play, because they could. Other than Thomas they didn't even have the courage of their own convictions -- Thomas was the only one to admit that their argument would just as easily let them roll back civil rights protections for same-sex couples, protection of the privacy interest of heterosexual couples in using birth control, and so on.
I always kinda thought Anthony Kennedy's approach to some of these matters of privacy and family integrity, which drew on the Tenth Amendment reservation of powers "to the states respectively, _or to the people_," was in some ways more promising than the path the liberal wing has pursued, and I kind of wish one of the liberals had picked up where he left off in elaborating his arguments in actual opinions, to develop that concept into usable case law. (You can see that thread of his thinking in cases like Casey, Obergefell, and Lawrence. None of the liberals have ever really treated the issue the same way.)
1st, don't ever bring up Stare Desis unless you want to tear apart the Warren Court, who didn't give a flying fuck about precedent., The way leftists like you use Stare Decisis is to tie the hands of conservative jurists while letting the leftists run wild. Which you prove in your first paragraph:
"A _great deal_ of case law relies on interpretation and inference, not the literal text. For instance, the Constitution does not specifically lay out the "one man, one vote" concept, and prior to the 1960s, many offices were elected with very different numbers of constituents behind different seats. Eventually in the 1960s the Court declared that the Equal Protection clause of the 14th Amendment had to be interpreted to require at-least-roughly equal representation, and now that's taught as a basic democratic principle in high school civics classes."
Prior courts left wide latitude to the states on how to deal with these issues, even after the 14th amendment. Then the Warren Court magically discovered this right in the Constitution, just like they did with Roe. Sure, they came up with some post hoc legal justification for it, but the truth is that they decided what the proper moral ruling was according to their views and made up the reasoning after.
"Thomas was the only one to admit that their argument would just as easily let them roll back civil rights protections for same-sex couples, protection of the privacy interest of heterosexual couples in using birth control, and so on."
Thomas is correct here, and yes, the other justices do not have the courage of their convictions. And the privacy argument is such BS question begging. You do not have the right to privacy to commit a crime. You do the have the right to privately murder someone. The question is whether abortion or using birth control are criminal, questions which the Constitution clearly leaves to the states. Madison was very, very, clear on this: "The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite."
At none of those points was there a supermajority of D senators who would vote to codify roe... they couldn't even agree to get rid of the Hyde amendment under obama
That they didn’t agree on something doesn’t mean they couldn’t have. You don’t have to be a black-hearted cynic to see that Dem politicians benefit from having abortion always hanging in the balance to drive voter turnout. For example, look what happened in the midterm since Dobbs.
The notion that US politicians of any persuasion are making a sincere effort to enact the will of the people is fanciful at this point.
There's a deep problem within the Housing Theory of Everything.
Housing is the tug of war rope between one side that demands lower housing costs, and another side that demands value appreciation for their real estate.
Something's gotta give.
If you want affordable housing, you have to pick a time in history when housing represented a low x% of a person's budget. Whether you want a McMansion, farmstead, or a pied-a-terre in an amenity-rich neighborhood, the housing nut must be a low x%.
A lot of existing real estate value has to be destroyed, in other words existing homeowners' equity has to be sheared significantly, in order to do that.
The value appreciation is just paper gains. If your house increases in value but so does every other house in the market then that only has limited benefit to you. You won't be able to downsize and retire later in life, unless you want to move your entire life to a different state/country where life is cheaper.
In any case, in practical terms supply would not increase at an unparalleled rate. More likely than not housing would gradually adjust, even if unconstrained. Housing prices would increase at a lower rate and over time become more affordable, but they wouldn't get 'sheared' or 'destroyed'.
I do agree that NIMBYs fear for their housing value, and are perhaps banking on it for retirement, but we should take a step back and assess whether we want people to put most of their life savings into 1 asset or build a well diversified portfolio.
Realistically the best you can hope for is to prevent the cost of housing from rising too much. Which is both not as hard and feasible. YIMBY dreams of putting a significant dent in the cost of housing would stop getting blocked by zoning and start getting blocked by other bottlenecks quite quickly.
If homeowners want to keep the mortgage interest deduction, a similar benefit should be offered for tenants. A kind of rent stabilization via the tax code, like an earned income tax credit but based upon rent paid.
Here in Sweden we have a ton of rent controlled housing, nearly free day care, the most generous parental leave in the world and age of first birth is higher than the US. Having lived here (US born) for 10 years and two kids later, I'd say a lot of the delay in reproducing is actually just cultural. Even financially stable people (in fact, especially financially stable people!, poor people have kids younger) are delaying reproduction because there's a cultural sense that early/mid 20s is too young. No amount of affordable housing or welfare state systems for families can compete with that attitude, otherwise people would be having kids here in Scandinavia earlier but they do so *later*
It's a silver bullet for half the country. It's a blowtorch to a pile of money for the other half. Turns out that the productivity gains for the benefiting half far outweigh the costs to the losing half. But the fact remains there's some hugely divergent outcomes if you lower the cost of housing. Best you can hope for is to stop it from rising too much.
the thing with fertility is that the drop is caused not just by housing but also general opportunity costs and honestly I'm not sure how those could be fixed.
Maybe? It's not something I've read before but I'm not an expert.
What I imagine is more likely is that since Japan has a national zoning law and the cities are in charge of implementation then there are a lot fewer veto points by local residents. In the US you have neighborhood associations, multiple zoning boards, the ability to sue projects, etc. It doesn't seem like Japan has that based on my cursory reading. So even if you were a NIMBY your opinion matters far less.
Japan had declining real estate prices for decades meaning people didn't see land as a investment. It's much more likely that the lack of a populus looking to make oodles of money from squatting on land is the reason for less NIMBYs, than zoning.
There are places in the US like Minnesota and Texas that lack crazy zoning rules and while they have performed slightly better than other places, neither Texas or Minnesota have seem building enough to keep up with population change.
Is it a Texas and Minnesota problem, or is it a Triangle problem (Texas) or Twin Cities problem (Minnesota)?
Much of the credit we give toward those states is due to the heavy lifting of Dallas-Fort Worth, Houston-Galveston, Austin and San Antonio for Texas and Minneapolis-St. Paul for Minnesota.
They're big cities, and have jobs and resources to absorb outsiders.
It's hard to say what is happening if it's an area outside of those areas' orbits. Like St. Cloud is near enough to the Twin Cities to be an exurb, but Duluth and Mankato are not.
In Texas, San Marcos and New Braunfels are becoming exurbs of Austin and San Antonio and might become like Orange County, a suburb that grows wealthy by being between two much richer neighbors (Los Angeles and San Diego).
Because the amount of money you'd need to give would be sufficient to incentivise a lot of women to drop out of the workforce and become stay-at-home single mothers to a brood of welfare babies.
Can't find it at a cursory glance at the internet right now, but Romney (I know, he's terrible, but he was on the right track here) proposed a plan that required earned income to qualify, scaled with earnings in a way that didn't discourage taking on more hours or getting a promotion, and had a 30% bonus for married households.
How about we finally require the wealthy to pay their fair share of taxes including upping the income level for Soc Sec taxes? How about we let these immigrants work and also allow them to work towards citizenship. Every immigrant or refugee who is allowed to have a job also pays into Soc Sec. Why are low tax rates for the wealthy still allowed and the working class are the only ones considered for tax hikes?
Well, on one hand, I do think we should (and will) raise taxes on the rich.
On the other hand, it's a little unfair to say that we only consider the working class for tax hikes, since our taxes are more progressive than they used to be.
We need to raise taxes on the upper middle class too. That means me. I’m in the 24% marginal bracket, and I tank it should be 28%. The lower brackets should stay the same, but 24% -> 28%, 32% -> 35%, 35%% -> 40%, and 37% -> 48%. The hypothetical NYC family living paycheck to paycheck on $400K adjusted gross income will owe about $7800 more, assuming the standard deduction. No one likes to pay more taxes, but they will manage. I will happily pay more to support child tax credits, mass transit, and control the deficit.
There is a system of taxation, benefit distribution and health care payment that is simple, fair and sustainable and would allow the government to honor its commitments to all those that have paid into social security without austerity measures. It's called the Singular System and it's worthy of consideration. You can find a summary of it here: https://thesingularmovement.substack.com/p/the-singular-movement and it's worthy of consideration. Interested in hearing your feedback and starting a dialogue on how we address this country's economic challenges.
When you say they are more than they used to be, what is the time-frame? More progressive than under trump, obama, bush? If we're more progressive than the last administration, but only marginally is that sufficient, isn't the straightforward answer with a little spin to say it clearly isn't sufficient. If we went back to Eisenhower levels what would that mean?
I should have clarified that the fact the very wealthy have many loopholes and different ways of gaining their wealth without paying taxes on it. IMO, wealthy means making $1 Million or more a year. I also know that throughout our history, the upper bracket has been reduced unbelievably.
Every time someone suggests a higher top rate of tax, we have to go through "$250k per year isn't rich" discourse, some of these people just live on a different planet.
If you absolutely can't afford to (for the sake of argument) pay your 50% total tax burden, how the hell do you think people making less than $125k a year get by? Life is expensive for everyone, not just the rich. And in many parts it's so expensive because there's a big market of rich people who can afford it. When there are enough rich people around there's no market incentive to cater to the peasants.
I would assume you have marginal rates? The top rate kicks in for the income earned above that level. The problem is that the very wealthy don't earn 'income' which is why you should give the trickle down set what they want, stop taxing income at all, tax land and wealth
I would disagree slightly on that last point. For the most part rich people and poor people are not buying the same products. The fact that luxury goods exist for the 1% to splurge their money on doesn't stop various companies competing on price for the everyday essentials that normal people buy.
Sure. We live in an era where "stuff" is cheap as dirt. (It cracks me up whenever right-wing idiots complain about how poor people can afford flat-screen TVs. Flat-screen TVs are dirt cheap compared to the old CRTs of my youth!) But things like land and housing and daycare and health care are still incredibly expensive, at least in desirable areas where the jobs are.
I meant over the course of a year, where people could pay just rent, but have no money left over for anything else, my bad if I didn't make that clear enough.
In the past, we have solved issues of lower population, need for more workers with immigration. It's not like we have to go out looking for them. What our government needs to do is incentivize the creation of affordable workforce housing (not McMansions and luxury apartments) all over the country. HUD needs to get it together.
I agree with the proposals of @DawnHoenes as well - so my proposal is "in addition to" I posted in haste and should have probably included that. I also feel that we should have more gov. supported/subsidized childcare. Much like the parochial schools I attended, the first child there was an annual tuition rate but for all the siblings following there were reduced or scholarships as each child entered school age. I had a neighbor who had 13 children and I believe they only paid for one or two places tuition wise at the time. The mother did not work outside the home (how could she?-- pregnant for most of her adult life. but she would still do things to make extra money. She was active in the church, the school and community. Sometimes she would make a large batch of food for some local ethnic restaurant or local festival, take in mending, do alterations. The older kids watched over the younger ones when she did seasonal work.
It sounds Catholic so not exactly tithes but plenty of donations. But the key point with parochial schools, or private schools, or most charter schools, is that they get to pick who they educate. If you don't have to educate "problem" students you can save a lot of money. You just shuffle off all the special ed or disruptive or poor students to the public schools and skim the cream of the crop. You can even pay your teachers less and they'll still be willing to work for you because they don't have to deal with those problem students.
It is currently at the high-end of this range (19%+). It's much higher in Europe, but that's a different culture. There is no historical basis for believing that Americans will broadly tolerate a tax burden beyond this. Getting them to accept a 25% of GDP tax burden (for example) would be a titanic political change akin to the New Deal. Getting them to accept it without a correspondingly large new benefit (which is what you would need to do to use it for debt reduction) will never fly.
I broadly agree with you that tax rates should be far more progressive, both because of the marginal utility of wealth and the nasty political effects of the economic divergence of the few from the many over the last 50 years. But that's not going to solve our deficit problem.
Europeans have higher taxes because they demand more government services and a stronger social safety net.
What's really mind-blowing is that when accounting for standards of living and purchasing power, Americans and Europeans have about the same tax burdens! In America, the 20%ish rate is so low because we keep much of our social welfare spending off the public ledger. In other words, that 5%age point margin between U.S. and Europe is about the same money as religious and philanthropic spending as a percentage of GDP in the U.S.
The decline of religious observance in Europe dovetails with the increase in state capacity and social welfare spending. The state began providing many services (health, education, alms) that had previously been a religious concern. That money that had been going to the church was now going to the tax collector. When state-provided services were available, religious attendance correspondingly declined.
Religion and philanthropy in many ways trade off with state spending. If the U.S. accepts a 25% tax burden, religious attendance and philanthropic contributions will experience a corresponding decline. No one would be richer or poorer, and standards of living will remain the same.
Good ideas, but they are not enough to minimize the deficit. We need a VAT, taxation of net emissions of CO2 and higher personal income rates also reaching done below the "rich." More so if we could get rid of business income taxes entirely (except a away of taxing foreign owners) as well.
Not sure if you've seen the pattern of wealth concentration in this country. Are you not able to follow that pattern toward its likely conclusion in your mind?
You've made your disdain for politicians pretty clear in your contributions to this discussion. A disdain, which I' sure, is shared by many of us. So I'm surprised that you appear to "take your lead" on the CO2/climate change debate from these same politicians. The issue, to me, is not what the politicians dole out; it's what the scientists have to say, the evidence and data they bring forth, and their expert analyses of the phenomena driving this hugely complex, technical issue. I'm not sure capitalism is the informative source we want to turn to to get a sense of these issues, and certainly not the politicians.
I suggest you run the numbers and you’ll find that significant and historic increases in the effective tax rates of the “wealthy” - however defined - does not solve the fundamental problem.
I agree with you on immigration though, but that is a solution with a long time horizon.
How about we allow the middle and lower classes to earn money and spend it into the economy themselves, instead of funneling into a system that wastes most of it? Government doesn’t even live on what it takes in. No it wants wars and shiny new bureaucracies to micromanage the rest of us ‘for our own good.’ No thanks. Defund the government.
I think you do your point a disservice by making the current income tax situation sound less progressive than it is, and like it is getting less equitable rather than more so.
But yes, our immigration system is insanely wasteful
Perhaps everybody paying at least something. With credits, many people not only pay no taxes but receive a refund anyway. Hard to be invested in an economy if you never pay anything into it. Yes, tax rates on the wealthy are too low but so are taxes overall given the hurdles we must overcome. We can’t change the situation we are in by just going after the wealthy.
How about we finally require the poor to pair their fair share of taxes?
The US Federal Government spends $5.5 trillion a year and has 332 million people. It seems fair to me to say that anyone paying less than $16566 a year in tax is paying less than their fair share, and anyone paying more than that is paying more than their fair share.
Unfortunately the way the US is configured right now we have the vast majority of the population paying less than their fair share and a tiny fraction who pay far, far more. And you want to increase that inequality even further?
I may have more sympathy if I did not see C-Suite making over 100X their employees not including bonuses. Also, those people like Elon who don't even take a salary but live off expenses of their corporations or the dividends of their shares.
Have you considered the possibility that adding an additional person to the assembly line has less influence over the company's bottom line than the choice of CEO? It's a crazy idea, I know, but it just might be the case that having a 1% more effective CEO means having adding more value.
Excuse me, federal workers are in the social security system. Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987. Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
FERS is a retirement plan that provides benefits from three different sources: a Basic Benefit Plan, Social Security and the Thrift Savings Plan (TSP).
Don't we all benefit from not having countless poor? Are we as a country not better off when the elderly and our children aren't poor and can afford the basics?
So in truth, the employer does see a benefit, its just not the bottom-line only matters nonsense.
Oh boo hoo. There are weird historical reasons that government workers are exempt from social security, and I'd be fine with including them. But that's just a distraction from the main issue. What's the alternative to social security? Let seniors starve if they don't have enough savings or enough children? We've tried that, and it's cruel but effective in its way. If you want to run on that platform and be honest about its effects then go for it. You'll probably get a majority of the GOP vote, chanting "let them die" the whole time.
Money is a useful fiction. You're entirely right about that. What amazes me is the idea that the irreplaceable rich would just quit contributing their invaluable contributions if the tax rate reduced their status to merely being upper-upper-middle-class. At a certain point, money is just a way of keeping score. A monotonic redistribution of that money doesn't affect the score.
I, too, do not like "fair share" rhetoric if it implies that there is some share that is obviously fair. But I do think that people now paying the highest marginal rates will have to pay higher rates and those of us at not the highest marginal rates will too.
Capital gains being taxed at around the same rate as income tax would be a start. If we're talking about what's "fair", I think most people would agree that fair would be capital gains taxed higher than employment income tax since it is much less work per $ than most employment income.
Then we could talk about wealth tax.
Most arguments against these proposals aren't related to fairness.
You just completely failed to address his point, which is that long term capital gains tax caps at 20% (23.8% if you include Medicare) while income tax caps at 40-something.
But you'll probably just output another unrelated but vaguely on topic spiel.
Then you really should be ok with changing the deductions from Adjusted Gross Income. Let's eliminate abusive trusts, let's eliminate borrowing through rather bogus entities and eliminate any tax deduction for interest rates that come from that, let's eliminate huge amounts of LC passthroughs and the like as well as the favoritism toward real estate. Then the rich would have much higher taxable income, not higher tax rates.
"Fair share" is an inherently subjective judgement, obviously. Is my life really that different if I'm only making $500K annually rather than $1M? How many of the advantages of wealth are just positional, like being able to afford to live in more desirable locations and send your kids to schools with fewer undesirable people?
I'm an American capitalist who has no interest in turning this country into Venezuela, whose issues go well beyond debates about tax policy to say the least. Most of my net worth is in stonks, sure, but buying a share of a public company has at best very tenuous relations to funding reinvestment. I don't buy the whole idea of comparing the middle class to the middle class some numbers of years or centuries ago to say we have it better now. No shit, we're making computer games about dying of dysentery instead of actually dying of dysentery. The relevant comparison is between what we could be and what we are, not between what we once were and what we are. (Our lifespan is longer than that of chimpanzees, yay us!) Comparing the US to a bunch of other countries who started in completely different situations is a complete cop-out. And the idea that the US with its voracious appetite for drugs (or bananas or whatever) bears no responsibility for instability in Latin America is, shall we say, questionable.
Now look at total taxes on all income instead of just income taxes on wages (and interest). You'll see that the total tax rate dips down for the very highest earners.
while the top decile of earners paid the majority of income tax revenues (actually it's like 70%), they also took home 50% of the money for a tenth of the people... we're all just arguing about specifically how progressive we want the tax code to be, nobody is calling for a flat tax.
But where is a political consensus to do austerity remotely visible? Prior to Reagan a clear consensus to balance the budget existed. Since Reagan's great innovation- unfunded tax cuts, the Republican party has feasted on its positioning as the lower taxation party. Meanwhile, no one (excepting unelected pundits) appears willing to cut entitlements (SS, Medicare). The Dems always have a plethora of also unfunded ideas for their priorities. And then there is defense which as you mention probably will cost more not less going forward. It seems the deficits will continue to grow UNLESS taxes go up or entitlements get adjusted (i.e. cut versus status quo). Yet again neither "solution" appears remotely feasible.
I don't think we have an adult enough voting population for anything to be done as long as we can pretend we don't have to do anything. Republicans can only get elected by promising to reduce the deficit without touching entitlements, which is more or less impossible. Democrats can only get elected by promising to tax the rich to reduce the deficit, which is definitely impossible, unless you define rich down until the point that it would no longer be a winning issue. Actually, neither really have to even promise to reduce the deficit anymore.
The one thing that either party could do to significantly boost growth (although republicans would realistically have to be the ones to do it unless it was a "only nixon can go to China" type thing) would be to cut the administrative burden to the bone. We could do a lot if it didn't take ten years to get a ROD and if there weren't tons of "veto" points through any significant project. Not sure that would do anything but kick the can slightly further down the road though.
The problem is, administrative overhead in both private and public organizations is a relatively small fish in the relatively large pond of the gross overall budget.
You can only cut once, in the sense that any savings will dissipate and do not resolve structural fiscal issues like persistently high operating costs, asset burdens, mounting liabilities or solvency crises.
I'm not talking about G&A. I guess regulatory burden may be a better term than administrative burden. But I was specifically talking about the burden that stops so many productive projects from getting off the ground. I think reducing the ongoing resource drain from regulatory and compliance issues would probably also help, but I don't think significantly reducing that would cause a boom or anything like just letting people produce, innovate, and invest in physical capital again would.
Political consensus? Give it 3 years. Once the TCJA tax cuts expire, Fed rates have been 4%+ for 4 years, and we start finding out just how little infra we're actually getting (and how slowly we're getting it) for our hundreds of billions - suddenly you'll get a new political consensus. Oh and it will help that Donald Trump is gone.
But most federal spending is tied to inflation as well. You either have proportionate rises in the COLA for SS, or get rid or reduce those which is effectively cutting the benefit. Medicare payments would also likely go up, as would military spending for weapons and salaries, etc.
2. Simplify tax code, closing loopholes for wealthy.
3. Medicare for All (which cuts Medicaid, ACA, maybe Workman's Comp and Auto insurance medicals, plus hundreds of other healthcare programs at county, state, and federal levels. So many inefficiencies between private insurance, govt., pharma and medical care. Republicans should like that this actually reduces government.
4. Nos. 2 and 3 will free up a lot of workers that are needed for more important stuff like infrastructure, manufacturing, etc. This is what investors should be focused on instead of buying up housing and student loans to parasitize our citizens.
The problem is that there are way too many loopholes around what counts as income. Until you close those up you don't even know how much the richest people are making and you are just taxing wage earners more and more.
I suspect that to those who demand daddy government come in are poor enough to consider anyone modestly successful as rich. Taking from others isn’t a sustainable way forward. Increasing the pie is. To do that, there much be the opportunity to reap reward from your work. If government comes along and chops off the feet and heads of those who stick out, prosperity itself dies. No incentive to work hard and be creative = very little hard work and creativity remains. See the USSR for an extreme example: “we pretend to work, they pretend to pay us.”
I don't buy this narrative that people en masse would stop working if they found out there was a ceiling to wealth but I do agree that people thinking that taxing income would solve anything are too poor to understand how people make lots of money.
They are asking the government to tax doctors and engineers more and completely missing the people who they actually want to tax. Like Bob Iger is taking in his millions in a W-2, completely braindead.
We can't realistically do Medicare for All. It would be something that looked more like Medicaid for all. Which I am probably fine with at this point. I don't think we realistically would ever stop strangling supply enough or let people choose the level of healthcare they want enough to allow a market to function. But we'd need to immediately start reducing the restrictions on supply because a lot of older healthcare workers, particularly doctors, would retire or change careers before accepting pay that would be sustainable at medicaid rates.
Probably also be some one time costs for some sort of government program to provide DIP financing to keep healthcare systems working as they go through a bankruptcy to deal with all the debt that is now unaffordable at the new reimbursement rates.
Ideally probably allow some sort of "top off" of medicaid rates by consumers to buy better/faster care. This would be politically contentious but I think probably necessary to keep all the people that currently have timely access to care under the existing model from revolting. It might also keep more doctors accepting medicaid rates, even though it may make it somewhat harder for those that can't afford to "top off" rates to get timely care. Maybe limit providers from accepting top offs from more than 75% of their patients?
Pete Buttigieg had a 10 year transition plan which may be more realistic. As things stand now you're probably right however given a severe economic reset which Dalio and others are warning about coming down the tracks in the next few years--well, that sort of thing reorders priorities. That's how SS got started (and original Medicare in the 1960s because insurers dropped coverage on people as they got into their retirement years).
Close the loopholes and hover up and redistribute all the cash of the prosperous. What happens? No more prosperous, no more money to get. Everyone loses.
Indeed, (3) explodes the deficit, and no the "efficiencies" don't come close to making a difference. (Because you know the military and Amtrak are models of efficiency! Ah well nevertheless)
Wait you actually think this is coherent? Did you just skip 4th grade math, or you just didn't bother to look up the relevant estimates to what you're proposing?
Interesting that there isn't more of a push for skilled immigration as a solve for the replacement rate issues. Seems like "hey, I know you're scared of 'cultural changes' but these scary immigrants are going to pay your social security and Medicare" might even appeal the the MAGA crowd. And then after we deal with the broken skilled immigration system we will probably have better tools to deal with migration from the Northern Triangle...
Give it a few years for this deficit thing to become an issue. It will happen. Question is, will the Democrats be able to overcome The Groups that think immigration is supposed to only be about charity to the Third World? Based on how climate change is playing out, unclear.
That wasn't my point. If the there is something about the US that is important and valuable to you outside of its economy, large scale immigration will certainly change it to an unrecognizable form.
What happened to the US being a nation of immigrants? Do you know how many people in the US aren't native born? It's like 15% that's over 40M people. Those 5M visas aren't for permanent citizenship. Sure, some number of them will apply for permanent citizenship or overstay visas, but not all. And by the time they have kids or grandkids, those folks will be just as American as you or me.
Have you been in the military? Most of the immigrants I served with who were some of the most patriotic folks you'll find. I think you'll find, if you spend more time with immigrants, that the type of attitude that cause people to leave home and travel thousands of miles for opportunity is exactly the type of culture America was built on and that we want to continue to foster.
There's a big difference between being a nation of immigrants from the most advanced countries in the world and being a nation of immigrants drawn largely from the least advanced countries in the world.
"What happened to the US being a nation of immigrants? Do you know how many people in the US aren't native born? It's like 15% that's over 40M people."
Considering how there is almost nothing that 85-90% of Americans agree on today that is specific and meaningful, I don't consider that a good thing.
"Most of the immigrants I served with who were some of the most patriotic folks you'll find."
Again, Patriotic how? What sort of long, enduring American traditions do they adhere to? Grilling on NFL Sundays does not count.
If they don't object to it then how come it is so hard to get visas for skilled immigrants? Or put forward any sort of immigration policy that accounts for them? Do you base your position on any actual knowledge, or just vibes?
American voters are concerned with immigration. But they aren't concerned with H1B immigrants. Why would they be? You're being intentionally dense trying to equate the border crisis with H1B visas.
My question remains a simple one - Why hasn't Congress taken any action to allow for immigration that adds to our tax base and is a net positive for our economy? H1B visas are an obvious area that they've failed, but temporary/seasonal workers, semi-skilled manufacturing labor (especially in electronics), caregiving, etc. These are all fields where we can't fill the jobs with native Americans because the either can't or won't fill them. The fact that you're conflating the "situation at the border" with immigration is telling. Do you if Democrats put up a bill that 10X'd our border enforcement budget in exchange for 5M temporary visas for skilled and high-demand workers annually with a robust identification and tracking system it would have any time of day with the current Republicans in Congress?
No, because there shouldn’t be millions of immigrants coming into the country in a matter of months. That’s wildly unpopular.
You’re attempting to create some sort of strawman about congress and H1B but nobody cares. There is no right to immigrate. There’s no reason for them to be here at all except to keep labor costs low for the our corporate oligarchy.
You’re doing the thing that’s common among leftists nowadays and presuming you know what’s best and trying to reason backwards from it. Including labeling the people who don’t agree with you “bad”. People don’t want mass immigration. They want the government to do something to improve their lives for once.
Sure, but no one cares about that. You're drawing a false equivalence to obfuscate the issue. Voters care about the border crisis/sanctuary city issues, not H1B immigrants.
Rarely comment but can I suggest, if you don’t already, follow Lyn Alden regarding inflation
To Quote
In the 1940s, inflation was fiscal-driven and public debt was high. In the 1970s, inflation was mostly lending-driven and public debt was low. Currently, the Fed is using a 1970s-style playbook to deal with 1940s-style fiscal-driven inflation.
And
Today, the ratio of government debt to GDP has returned to 100 percent. And Lyn Alden points out that repression—keeping interest rates below the inflation rate—is likely to be the case now, just as it was in the 1940s. But there is an important difference.
"Aging means entitlements don’t pay for themselves anymore."
Financing consumption in "retirement" and heath insurance for older people with a tax on wages was never a sensible idea. Such thinks should be financed with a VAT that is adjusted from time to time to keep that component in rough fiscal balance; it should never have made net deficits in the rest of the budget easier or harder. [It is entirely consistent with expenditures passing non-negative NPV tests and, given expenditures, revenues large enough to minimize deficits.]
There is no big brained solution that allows for both an aging population/lower reproductive rate and a comfortably entitlement state for the elderly. Even importing immigrants merely kicks the can down the road as even they revert to the host country's replacement levels after a couple generations.
I was truly shocked when the Dems didn’t raise taxes on tech tycoons like Zuckerberg, who cooperated with censorship and spent $400 million turning out Dem voters for Biden.
The 6 pct budget deficit we are running at full employment must be a mirage, or a temporary setback, as are the three years of falling real wages.
I am certain that a trifecta (next time) will tax the tycoon donors that fund the party, will lead to booming real wages and balanced budgets.
Even when they had a pretty strong trifecta we learned that people making over $400k a year aren't rich. Until things get significantly worse, there is not going to be a winning political coalition that can raise taxes far enough down the income distribution to address our fiscal issues without significantly curbing spending.
I don't think just raising taxes is a good idea, but if that's the route we're going to take, I'd prefer we put in a realistic plan that could at least address the issue on a static basis if not dynamic rather than keep pretending that all we need to do is raise taxes on other people.
There are two ways to raise taxes -- raise the actual rate to be collected, or eliminate deductions/credits/incentives and expose taxpayers to more liability.
The latter means non-rich people will pay more. Exposing the rich to more tax liability is whack-a-mole -- one of the reasons why the American tax code is so mind-melting is because the provisions that enable chiseling by the rich only make sense when you have a lot of income or other wealth that can be advantaged to begin with. And you need to hire a CPA and/or a tax attorney just to ante up.
The U.S. sorta does this by imposing sales and other consumption taxes that are by their nature regressive.
You’ll find there will never ever be enough money. We already pay half of our incomes in taxes, yet the government runs record deficits. There will always be another war or imperial project. Do you see any of those billions in infrastructure money actually fixing anything? I’m in favor of using tax money for infrastructure but little of it actually reaches the ground. Billions and billions of wasted money, yours and mine, yet folks still want to give them more. Make them accountable for it first.
Actually alcohol kills a lot more people than guns (140,000 versus 49,000 per year, according to a quick google). Matthew Yglesias has argued (if I interpret him right) that maybe progressives should put more energy into alcohol taxation rather than a culture-war fight that's unlikely to make much of a dent in gun violence.
[Bobson enters Galaxy Brain Mode]. Ooh! ooh! How about a "pick your poison" policy? In your home state, you can have guns or alcohol but not both?
Which would you give up? You can live in a state where you can buy a gun and ammo like any good or service and have it treated as any market transaction. The caveat is, No Alcohol. Like dry as a desert. Not only will there no buying, selling, or production or consumption, citizens will also have a duty to be sober. There shall be no travel to or from states that serve alcohol, and visiting states or foreign countries where alcohol is served requires a tourist/work visa.
You can live in a state where you can buy alcohol and have it treated as a market transaction. Note, there is a social consensus that alcohol is an adult beverage so underage consumers will still not be able to buy, sell, produce or consume. However, guns will either be strictly prohibited; guns will never cease to never exist, but they can only be possessed by agents of the state. Otherwise, citizens can possess firearms but only if they receive the same training and are duty-bound under the same laws and conventions as military or law enforcement.
[Bobson exits Galaxy Brain Mode] Disclaimer: Everything between the []s is an intuition pump and not the sincere opinions of the writer or any person living or dead. This is not to be construed as a sincerely held opinion or advocacy. IOW, it's bullshit on its face and not to be treated seriously.
Higher alcohol taxes would probably reduce gun murders and suicides by more than a ban on assault rifles, or any of the other minor tweaks that seems to be the limit of what's politically feasible.
I would not be in favor of additional alcohol taxes (it's already taxed pretty heavily most places), but if there's not at least a similar tax on refined sugars, then it's just about puritanism and not good policy.
As a someone who never skips leg day, and also has a genetic predisposition to easily put on leg muscle mass, I would tag an amendment to you bill to allow a DEXA lean mass scan to be an acceptable substitute to BMI.
"MMT has no useful advice in this situation" is a reply without content
"child benefits don't seem to raise birth rates"
In countries where it is harder to make a living for yourself and your family, brth rates go down. Italy which is religious but where making a living is hard and welfare low and unequality between genders is high, birth rate is lower than in Sweden where the facts are the opposite. but in Sweden too birthrates are lower after 5 decades of austerity politics.
France and Sweden have the most generous family benefits in the OECD (around 3 percent of GDP), and their birthrates are significantly higher than in the rest of Europe, although still below replacement level. The Occam's razor explanation is that child benefits do work, but nobody is spending enough.
Other countries need to follow the example of Hungary (yeah, I know) and try targeting 5 percent of GDP. Luckily the US is in a better position than Europe to do this, since overall taxes and spending are lower.
We don't even have a value-added tax, which would be the obvious place to look for the money. It looks like a 10-15 percent VAT would pay for cash child benefits in the range to aim for.
In all likelihood, Hungary's natalism policy will backfire.
The Hungarian population peaked around 1980, under communism. It has declined ever since, not only through births falling below replacement and being below deaths but also because of emigration.
Young Hungarian adults light out to more prosperous parts of Europe, or North America, or Australia/New Zealand. This is why there isn't a leftwing resistance to Fidesz in the way that you had well-educated yet radical movements to imperialism, Nazism and communism. Also note that all of those movements were thoroughly crushed (note: I myself am a descendant of a family of '56ers, so know the history intimately).
Orban's going to impale himself on the horns of a dilemma with his natalism policy. The primary reason for low birthrates is economic, especially within Hungary. Parents-to-be have to struggle a lot, and in order for their kid to have a better life, they will have to emigrate. The problem is that if natalism fails to boost the population, Hungary's on the hook to pay for stuff parents would've done anyway independent of incentives.
The problem is also that if natalism succeeds and does boost the population, the underlying economic conditions are still poor and the consequent youth bulge will be a ticking time bomb.
Fidesz's natalist policies won't fix the underlying economic problems Hungary is facing: slack labor markets, high youth unemployment, high costs of living, high taxes (the VAT is the highest in Europe), Budapest being the primate city and dominating by population and economy (metropolitan Budapest has 3.3 million people; the next largest metropolitan area is Debrecen with 281,000 -- that's more than 10x the gap), and brain drain.
Sure, the government is making it really attractive to have a child -- or rather a Hungarian offspring born of Hungarian stock. The intent of the policy is to have demographic autarky and reverse population decline through breeding.
There's still a good practical reason why Hungarian parents-to-be are reluctant to have large families. They don't want their children to struggle as adults, or have to see their child off to a foreign land in order to have a future. Culturally, Hungarians are assimilationists. Throughout our history, whether because of economic difficulty or a culture that's had the boot of greater powers on its throat for much of its existence, Hungarians have had to maintain their culture while realizing the grass is greener on the other side. Hungarians extend patriotism not only to the mother culture, but to their adopted homelands as well. It's the kind of patriotism best seen from a rear-view mirror.
So, there's a not-small risk that Hungary's investment in youth will lead to their best and brightest becoming German, French, American, Canadian, etc. The ones who stay find that they'll struggle for work, with Budapestis competing with rest of Hungary for jobs in Budapest, or stay in the provinces and grow up to be bitter clingers.
"The Occam's razor explanation is that child benefits do work, but nobody is spending enough."
I would say that child benefits work to a point, but unless there is a corresponding pro-natalist culture they will have a defined ceiling below replacement. We would certainly increase the birthrate if we adopted Hungary's policy's. But, the cultural message to women is to first focus on education and career, then family. The problem with that is that it often puts women in a very time restricted period in which they can meet their husband and have children. If you focus on education and career first, you might not even start thinking about marriage until your late 20's, and then by the time you meet your spouse, get married, get pregnant, and have your first child you're already in your 30's. And that's just for the 1st child under ideal circumstances. If we really want to beef up birthrates women are going to have to start having children earlier.
I think the optimal design for child benefits is probably not paying an equal sum for every kid. The biggest hump in terms of career disruption, etc. is probably going from zero to one, so maybe there should be a lump-sum benefit for the first birth as well as ongoing monthly payments.
Can't find it at a cursory glance at the internet right now, but Romney (I know, he's terrible, but he was on the right track here) proposed a plan that required earned income to qualify, scaled with earnings in a way that didn't discourage taking on more hours or getting a promotion, and had a 30% bonus for married households.
You lump sum idea is interesting, haven't thought about it enough though.
It's also crazy that Obamacare required 100% coverage of preventing birth, but absolutely no requirements for procreation. It is 1 in the many lines of evidence that the left and Democrats hate traditional families, and love childless girlbosses (who are their most fervent supporters).
the thing with declining birth rates is that at this time it seems to be driven by
1: opportunity cost of a child
2: cost of housing
3: societal expectations
and the unfortunate reality is that until there is a significant increase in how much people value having children even compared to now birthrates will continue to be low.
We've seen across cultures and throughout time that when societies raise their standards of living, high birthrates fall to low and often below-replacement rates.
There are several factors that reduce birthrates. Offering better educational and career opportunities for girls allows alternatives to marriage and motherhood as occupation. (This doesn't abolish marriage and motherhood, but it does delay it to a point where women delay and bear children at a later age, allowing them to build wealth and be better providers for their children.) Availability of affordable entertainment. (What do you think young people are doing when they don't have much money to have a good time?) Availability of family planning goods and services.
When a government like that of the USA has the ability to create its own currency, it has the power to determine interest rates as it sees fit. This concept lies at the core of Stephanie Kelton's book, 'The Deficit Myth.' Kelton argues that governments with sovereign currencies, such as the U.S. federal government, have the capacity to control interest rates on their own debt issuance.
She explains that such governments do not need to rely on external lenders to finance their budget deficits because they can create their own currency. Consequently, the government can effectively set interest rates on its own debt issuance and use this power to achieve its economic goals, such as managing unemployment and fostering economic growth.
Fundamentally, Kelton emphasizes that the budget deficit itself is not the primary economic concern; rather, it's how these resources are used to promote societal welfare and economic stability. Her book challenges conventional wisdom regarding government finances and advocates for a different perspective on the government's role in the economy, rooted in modern monetary theory (MMT).
Addressing the issue of an aging population can be tackled through various means. To increase birth rates and counter the demographic challenge, the government may consider the following measures:
Increased Child Benefits:
Introducing or enhancing child benefits can provide financial support to families, making it more affordable to have children. This can encourage more couples to start families and thereby increase the number of young people in the population.
Enhanced Welfare for Ordinary Citizens:
Investing in a robust welfare system that includes education, healthcare, and social support can alleviate the economic burdens on families. When people feel they can afford to have children and that their children will receive quality education and healthcare, it can incentivize family formation.
Immigration
Implementing a balanced and responsible immigration policy can attract immigrants who can contribute to economic growth and the workforce. Immigrants can also fill labor gaps and bolster the economy.
Effective Integration:
Promoting efficient integration of immigrants can help them enter the job market more quickly and contribute to the economy. Immigrants can take on jobs at various skill levels and fill various professional roles, thereby creating more job opportunities for both immigrants and native citizens.
In summary, a combination of measures, including increased child benefits, a sustainable immigration policy, expanded welfare programs, and effective integration, can help mitigate the effects of an aging population and promote a healthy demographic development alongside economic growth. Collaborative efforts are crucial in creating a societal and economic environment where people feel empowered to build their families and contribute to a vibrant and dynamic nation.
This is what is known as cope. MMT has no useful advice in this situation; it's just the standard economic model "you can print money until you can't" with the first half of the sentence emphasized and nothing new for the second half.
And child benefits don't seem to raise birth rates; in fact, nothing seems to raise birth rates except making the population more religious.
However, this comment does seem to be AI-assisted unless you just write fast, so in that sense it's an impressive new kind of cope.
Disagree on the religious element. I think increased religiosity and increased birth rates are symptomatic of a third factor (reduced economic development, opportunity and thus worse family planning) rather than having a causal relationship themselves.
That said, yeah this comment is obviously AI generated.
In defense of the idea that religious communities can have higher fertility rates, I would point to Latter Day Saints, Orthodox Jews, and Muslims. Within the US these groups have significantly higher fertility rates than other Americans and at least in the case of Latter Day Saints are wealthier than the average American. In fact, these groups have above replacement level fertility and if we project out far into the future they would eventually become the majority of the population.
I was thinking of Israel, which also has higher fertility in its more religious groups and economic development in general. Though I don't know about the economic status of the higher fertility groups in particular.
I think that your metrics are not providing for birth control methods and abortion and sterilization especially relating to the Dobb's decision. Granted, most immigrant families have higher reproduction rates d/t a combination of cultural norms from state of origin and religion. However, this does not allow for the fertilization status of native population who mitigate that situation with contraceptives, decreased incidence of sexual intercourse, and abortion.
You can't actually explain why the monopoly supplier of dollars has to borrow back -- or tax back -- the dollars its created in the the first place in order to "finance" its spending.
You don't want to acknowledge that the only reason there's so much money out there for the US to "borrow" is because money is so grotesquely and absurdly maldistributed -- or that this grotesque maldistribution of money results in there being ever-fewer opportunities for productive investment, leading grotesquely hyper-rich people to park their money in Treasury debt, which gives then an absolutely secure free-lunch, or to pump their money into real free-lunch Ponzi schemes like crypto, NFTs, stocks or empty luxury apartment buildings and office towers.
You don't want to talk about how absurdly destabilizing all this accumulated imaginary "wealth" has become -- way more destabilizing than the federal "debt" -- which is really rich-people's savings -- or the federal "deficit" -- which is really the public sector's surplus.
You don't want to talk about how this grotesque maldistribution of dollars has lead to the creation $17 trillion dollars of consumer debt -- a precarious Everest of debt which is the only thing that keeps the the truly productive parts of the economy from collapsing entirely.
And you don't seem to give a shit about the fact that the people who are always most hurt by austerity are those who haven't got a pot to piss in in the first place. But I guess you're comfortable not giving a shit about them because they are too demoralized and exhausted to do anything other than steal from and fight with each other over the crumbs that the austerians drop in their begging bowls in the name of "fiscal responsibility."
> You can't actually explain why the monopoly supplier of dollars has to borrow back -- or tax back -- the dollars its created in the the first place in order to "finance" its spending.
Because people don't like it when there's inflation. They get really upset about it actually.
It's related to how people prefer high-unemployment economies to low-unemployment economies, as long as they're not the ones unemployed, because it makes services cheaper.
> or to pump their money into real free-lunch Ponzi schemes like crypto, NFTs, stocks or empty luxury apartment buildings and office towers.
There is no such thing as empty investment apartments. That's a NIMBY myth. The rest of those have exploded and aren't relevant anymore - it's not the 2010s. (Well, stocks are still relevant but I object to saying they're free lunches.)
Anyway, all those are real problems. The issue is that we don't know what the solution is and MMT doesn't provide one besides the standard economics answers of raising interest rates or taxes. (Actually, their answer that you should raise taxes is bad, because you can't do it. You try it, it won't happen.)
The constraint can be "too much already printed money" insofar as you don't have the political power to get that money moved to allocate those real resources more productively.
Especially since the US has several different layers of government, which can oppose each other, and only one of which owns the money printer.
But aren’t we a rich country? The richest ever to exist. How rich are we exactly? How much wealth does our country have? Are we taxing that wealth at all?
From there, how much of our country’s riches are held by a very few? How does that stat go 1% owns...?
Do we need new cellphones every year and other crap from Walmart or Amazon. Market consolidation(now basically market monopolies) along side super low taxes on the monopoly corps and wealthy, and dumb wars for profits are the true culprits. Perhaps we need to ask, does the market really meet the needs of people? We’re so rich we have homeless, so rich we have hungry families, so rich grandma skipped her meds again. Guess our people aren’t economically productive enough.
Austerity never works in the long run and always looks pretty convincingly foolish in hindsight. It’s a bad idea that never seems to die.
Rather, I see it as we need to continue to ask whether our money is going in the right places?
An ex. - Can we build a next century military without giving a blank check to military contractors that were privatized decades ago? Not too mention, so much now days is done by contractors instead of the government itself for every part of the government. Just putting tax dollars back into the undeserving fat cats.
Raising the retirement age so people just die before they get there is a broken social contract promise. The anti new deal/great society is so old hat. We continue as a country pulling the ladder up and out of the hands of young people so the rich can live lavishly.
In one breath, you say we should be a more egalitarian country, and in the other you’re like austerity for the masses. So which is it? Can it be both? How much does the average American have at retirement? I doubt it’s that much and may end up trying to survive on ss, medicare/Medicaid.
Don’t put the blame or responsibility of fiscal mismanagement on the reg folk. It’s because of mismanagement at the top.
Why would you say austerity never works in the long run when it worked just fine under Clinton?
It's one thing to say austerity can't fix a weak economy - but that's kind of the point, that you need to use these strong economic times to clean up the debts from the troubled times.
I have to disagree that it worked under clinton. We're in this mess as a country because Clinton tided himself and the dems to libertarian republican style economics, where now no republicans and too many dems can't even dream of raising taxes respectfully. FDR asked congress during ww2 for 100% tax rate after 250K. He only got 90% and that wasn't even the effective rate.
I'd start with Mark Blyth regarding the bad idea that is austerity.
hey I am agreeing about higher taxes! wouldn't pin that on Clinton though. at least he got elected. I was indeed sad that Obama didn't let the Bush tax cuts expire tough. :(
Yea, I should blame him more for the regulations changes. Still though I’d say that Clinton entire admin ushered in and legitimized neoliberalism that took tax cuts off the table for both parties.
well... I've had this discussion before and here's my pitch: from the time Nixon was elected in 1968 until Clinton won in 1992, the only Dem administration in there was Carter, who was widely considered a failure. I'm not saying Clinton was the guy YOU wanted, but he was the guy who could get elected - and even then just barely & thanks to Ross Perot making the election super weird!
Proper liberal Democrats were just not winning, so you got a neo-liberal Democrat. The alternate history where some liberal icon took office doesn't exist, because that wasn't the mood of the people that soon after Reagan. It's not about what's fair or ideal; it's just a matter of what was possible.
(Also Newt getting Congress should not be ignored re the policy agenda that happened in those years.)
Let me see if I understand: Democrat austerity good. Republican austerity bad. Democrat inflation good. Republican inflation bad. Democrat deficits good. Republican deficits bad. How'd I do?
It doesn't matter which party is in charge, either way we will spend our way into ruin, mostly because spending your way to ruin wins elections, even though the resulting inflation, currency debasement, and higher taxes do not win elections. But the author's bias is tiring. Rather than pay $10 a month for this Substack, I can just check out the DNC web site for free.
Idk we've managed to do okay in the postwar period - even recovered from a few hiccups here and there. If spending your way to ruin was such a good election strategy you'd think we'd be ruined by now. Instead of looking like the only bright spot in an increasingly economically troubled world.
Yes, un-ironically. Austerity sucks, but I would much rather not have austerity policies introduced by a party of deranged maniacs with zero principles beyond cruelty, corruption and bullying (post-Trump republicans).
You're going to get cruelty, corruption and bullying with either party. It just depends on your tribal views. Biden is every bit corrupt and a bully. Or at least he was when his brain was still fully functioning.
I am so excited for you to discover search engines and the World Wide Web. You can find almost any kind of information you want there, Doug. Good luck!
> whether the interest rate r is less than economic growth r
"economic growth g"?
> programs like Social Security and Medicare are like sustainable Ponzi schemes
But Ponzi schemes are unsustainable by definition. A Ponzi scheme in which the base of in-payers is growing is just called a Ponzi scheme. A scheme which can keep paying out over the long term without needing to grow its customer base is an investment. The fact that a Ponzi scheme hasn't yet collapsed doesn't mean we need to qualify it with adjectives.
What you're saying here is that these are and always have been just ordinary Ponzi schemes.
> The last 15 years pushed us to imagine what more the U.S. government could do if only it had the political will to open its purse-strings.
But that's happened, and now we know what was delivered with ultra-high money printing. Was it worth it? I don't think so. Remember that the "crises" that were used to justify huge deficits were themselves engineered by governments! The 2008 financial crisis was created by US policies towards home lending. COVID was created in a lab built by the French and at least partly funded by the US. Lockdowns were an unnecessarily extreme response created in bug filled models by corrupt academics, all of whom were being funded by deficit spending.
That's what we all got for years of deficits: ever more extreme swings of the pendulum trying to solve today's problems that were caused by yesterday's solutions. And now for our troubles, a bankrupt social security system.
We badly need "austerity", or as it's called when not being discussed by the left, sustainable government. What we don't need is arguments of the form "we've printed lots of money via roundabout means, so now interest rates are low, so now is the time to spend lots of money". This sort of obfuscation is beloved of technocrats because it hides what they're doing, and they especially love to present interest rates as if they are some sort of weather event that must be exploited for maximum benefit, like going outside on a sunny day. Versus the more mundane reality that outside of hyperinflation, they're controlled by the government itself.
I don't really want to get into the details of this argument, but I'm fairly confident that COVID wasn't man-made. A scenario along the lines of "COVID was brought into the Wuhan virus lab in the course of collecting bat virus samples, someone got sick, and that's how the epidemic started" is plausible, but "COVID was deliberately created by people" isn't (at least to me).
I'm talking about the pandemic. If those viruses had been left in their caves the pandemic would never have happened. Even so, the grants that funded the lab explicitly state they are going to tamper with bat viruses to make them more amenable to human infection. So both the virus and the pandemic were created, even if they used a natural virus as the starting point.
It's such a regulated space you can spin it however you want. Ultimately the moral hazard created by bailouts and the inability to hold money outside of banks is the root cause, everything else is downstream from that.
> COVID was created in a lab built by the French and at least partly funded by the US. Lockdowns were an unnecessarily extreme response created in bug filled models by corrupt academics, all of whom were being funded by deficit spending.
No, Covid was created in the same UFOs that killed JFK and melted the steel beams on 9/11.
Establishment liberal? No, I'm a mainstream conservative who believes that the coronavirus was created by Bill Gates using 5G Jewish space lasers to sap and impurify all of our precious bodily fluids.
That's why I believe that we shouldn't have any lockdowns or restrictions, because according to Scott Atlas my country should only have 5,000, I mean 50,000, I mean 500,000, excess deaths from Covid-19, I mean the Chinese virus. I have a perfect model, unlike those bug-filled models of those "qualified" academics who might be funded by *shock* the government rather than a bunch of billionaires with agendas.
Why does Social Security and Medicare have to be "paid for," but the F-35 and V-22 (and everything else at the DOD) don't? The US spends more on "defense" than the next X countries combined, but no one ever questions that budget going up and up and up.
Because we set up special tax regimes specifically for social security and Medicare. If we're gonna have special tax money for the set-aside purpose of funding these, it seems to me sensible to make sure the amounts levied are enough to pay for the benefits promised.
Whereas defense doesn't have a special tax like that - if you want to do it that way I'm not opposed just think it extra process for little benefit.
People question it all the time lol. They just seem to be bad at convincing American voters and politicians en masse that the US military budget should be slashed as deeply as they think it should be.
But let's not forget, they have had some success! Military expenditure as percentage of us federal revenue is only 20% - in the postwar period only the 90s briefly went lower than that.
I'm curious - what do you have in mind as an acceptable amount for the US to spend on it's military? Is it ok for 'X' to be more than 3, or should we aim to make sure we don't spend more than China+Russia+India? Should we take into account the fact that our personnel costs are necessarily much much higher than theirs, because of the far higher price of American labor and services, or not?
We get a horrible return on investment for our military spending. The entirety of NATO can't keep up with the Russian production of artillery shells. We now know the T-90 Russia tank is not substantially worse than the NATO counterparts, and Russia produces a lot more of them for a lot less. Ditto for just about every weapons system we've seen in action in Ukraine. The F-35 program has been a trillion dollar disaster. We should put a bunch of retired generals who serve on MIC boards and defense contractors behind bars and start over with our defense industry.
The X-factor is immigration. It’s the only way out of having to either cut spending or raise taxes. A pro-immigrant side of the debate will not just emerge but start gaining steam rapidly when we start confronting deficits - and, like with the IRA, it will come into conflict with “the groups” who want immigration to serve as a form of charity to citizens of underdeveloped countries.
It all comes back to housing. Lower housing costs, give daycare support, and productivity will be boosted and fertility rates increased.
I'm a millennial in the northeast and people here wait to have kids until their mid 30s because daycare and housing is so expensive , so they want to feel financially secure before parenthood. It's a rational decision with bad implications for society.
Housing is literally a silver bullet for so many of the US' issues it's a bit weird it's only ever discussed at a local level. I believe other countries like Japan have national zoning laws and agencies to deal with those conflicts.
Fire your silver bullet but, but we will need a lot of lead bullets, too. :)
How about governments let people create housing instead of imposing onerous rules? It’s not just greed but also we’ll meaning policies that produce bad outcomes. Look at reality, not for some savior government to come in and fix it. That’ll only create more rules which the already rich can only afford to navigate.
Additionally, providing for women's rights for healthcare including abortion care will also help increase pregnancies (ironically). What we are seeing since Dobbs is a decrease even in states where abortion is not strictly limited or banned because women do not trust the government. One election swinging to the right and they can lose their rights to body autonomy and they will have less access to providers as they leave states where their jobs can put them in prison.
Pretty outlandish that women aren’t having children because they “don’t trust the government”.
Even more outlandish to claim that after the last 3 years, an obviously correct Supreme Court ruling is the issue causing a lack of trust in government.
Not that outlandish, if you look beyond the U.S. to see what can happen when governments get natal policies wrong.
Ceaucescu had his own version of Dobbs in Romania. It ruined his Christmas.
The situation in Romania went as follows: Bad economy and worsening living conditions leads to a decline in births. Pass law banning abortions and contraceptives. Economy still bad, living conditions get worse, birth rate continues to decline. To say the policy led to a decline in births is asinine.
Nevermind, that Dobbs neither outlaws abortion nor contraceptives. Women are having less children for many reasons, but if you’re going to draw a comparison to Romania, surely it’s the connection between economic insecurity and low birth rates.
Come on - Dobbs wasn't about banning abortion federally sure but it was absolutely about allowing existing and upcoming state-level bans to take effect.
Dobbs was about overturning Roe, which was a piece of political activism masquerading as jurisprudence. Roe doesn't hold up legally, and so it was overturned. That's what the court ruled on.
It's not the court's job to enact laws.
Clean up your strawman.
You've said precisely nothing what I've said. Romania outlawed abortions, just like states that outlawed abortions *got their favored Supreme Court decision* to enact their pretextual bans (either ones already on the books or bans teed up in the legislative process to be passed after Dobbs). Romania = no abortions. Conservative states = no abortions.
The people in no-abortion states live in a state of economic precarity not unlike Ceaucescu's Romania. If we're going to litigate semantics, I will bolt down the meaning of "not unlike." I do not mean identically bad -- Romania was objectively bad as a government and standards of living were objectively worse under Ceaucescu. I do not mean comparatively bad -- there's a fallacy that if two things are stacked up against one another, the worse thing doesn't automatically make the other thing good. If you have to use the phrase "but at least" to make an argument, you're in an indefensible position to begin with.
Not unlike means different people in similar contexts will face similar circumstances and consequences. What happens to a poor American woman or a poor Romanian essentially forced to give birth? Choices that entail trading off miseries. Exit (emigration) and end up moving sideways or downward but not upward. Voice (demand political change), which will be futile. Isolation, avoid marriage and sex to prevent bringing a life into a world of immiseration. Or participation, just have the child and culturally perpetuate immiseration.
You very clearly implied that Romania's ban on abortion led directly to a decrease in the birth rate. That's disingenuous at best and more likely dishonest. Romania's birth rate declined due to economic insecurity.
Everything else you said is an emotional outburst about how you think the world should be. I am only pointing out that what you said happened didn't happen.
"an obviously correct Supreme Court ruling"
You're seriously saying that the pretzel-logicked Dobbs decision, with its "originalism" relying on a carefully cherry-picked version of history that ignores inconvenient facts, is "obviously correct"?
What inconvenient facts were ignored when the Supreme Court pointed out the obvious fact that the Constitution has no guarantee for a right to an abortion, and therefore it is a matter for each state to decide?
A _great deal_ of case law relies on interpretation and inference, not the literal text. For instance, the Constitution does not specifically lay out the "one man, one vote" concept, and prior to the 1960s, many offices were elected with very different numbers of constituents behind different seats. Eventually in the 1960s the Court declared that the Equal Protection clause of the 14th Amendment had to be interpreted to require at-least-roughly equal representation, and now that's taught as a basic democratic principle in high school civics classes.
Perhaps you _dislike_ the Roe v. Wade decision but it was carefully considered, and grounded in history. If you need a history lesson, Slate's Slow Burn season on the background and argumentation of the case is quite good. https://slate.com/podcasts/slow-burn/s7/roe-v-wade
The Dobbs decision on the other hand distorts and/or selectively-cites history, and tosses the principles of stare decisis and reliance interest out the window. The Court ruled the way they could as a pure power play, because they could. Other than Thomas they didn't even have the courage of their own convictions -- Thomas was the only one to admit that their argument would just as easily let them roll back civil rights protections for same-sex couples, protection of the privacy interest of heterosexual couples in using birth control, and so on.
I always kinda thought Anthony Kennedy's approach to some of these matters of privacy and family integrity, which drew on the Tenth Amendment reservation of powers "to the states respectively, _or to the people_," was in some ways more promising than the path the liberal wing has pursued, and I kind of wish one of the liberals had picked up where he left off in elaborating his arguments in actual opinions, to develop that concept into usable case law. (You can see that thread of his thinking in cases like Casey, Obergefell, and Lawrence. None of the liberals have ever really treated the issue the same way.)
1st, don't ever bring up Stare Desis unless you want to tear apart the Warren Court, who didn't give a flying fuck about precedent., The way leftists like you use Stare Decisis is to tie the hands of conservative jurists while letting the leftists run wild. Which you prove in your first paragraph:
"A _great deal_ of case law relies on interpretation and inference, not the literal text. For instance, the Constitution does not specifically lay out the "one man, one vote" concept, and prior to the 1960s, many offices were elected with very different numbers of constituents behind different seats. Eventually in the 1960s the Court declared that the Equal Protection clause of the 14th Amendment had to be interpreted to require at-least-roughly equal representation, and now that's taught as a basic democratic principle in high school civics classes."
Prior courts left wide latitude to the states on how to deal with these issues, even after the 14th amendment. Then the Warren Court magically discovered this right in the Constitution, just like they did with Roe. Sure, they came up with some post hoc legal justification for it, but the truth is that they decided what the proper moral ruling was according to their views and made up the reasoning after.
"Thomas was the only one to admit that their argument would just as easily let them roll back civil rights protections for same-sex couples, protection of the privacy interest of heterosexual couples in using birth control, and so on."
Thomas is correct here, and yes, the other justices do not have the courage of their convictions. And the privacy argument is such BS question begging. You do not have the right to privacy to commit a crime. You do the have the right to privately murder someone. The question is whether abortion or using birth control are criminal, questions which the Constitution clearly leaves to the states. Madison was very, very, clear on this: "The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite."
Yes, it’s obviously correct. Roe was political activism dressed up as a court ruling.
Abortion could’ve been legislated several times since Roe, notably during the Obama administration when Democrats held a supermajority.
At none of those points was there a supermajority of D senators who would vote to codify roe... they couldn't even agree to get rid of the Hyde amendment under obama
That they didn’t agree on something doesn’t mean they couldn’t have. You don’t have to be a black-hearted cynic to see that Dem politicians benefit from having abortion always hanging in the balance to drive voter turnout. For example, look what happened in the midterm since Dobbs.
The notion that US politicians of any persuasion are making a sincere effort to enact the will of the people is fanciful at this point.
There's a deep problem within the Housing Theory of Everything.
Housing is the tug of war rope between one side that demands lower housing costs, and another side that demands value appreciation for their real estate.
Something's gotta give.
If you want affordable housing, you have to pick a time in history when housing represented a low x% of a person's budget. Whether you want a McMansion, farmstead, or a pied-a-terre in an amenity-rich neighborhood, the housing nut must be a low x%.
A lot of existing real estate value has to be destroyed, in other words existing homeowners' equity has to be sheared significantly, in order to do that.
The value appreciation is just paper gains. If your house increases in value but so does every other house in the market then that only has limited benefit to you. You won't be able to downsize and retire later in life, unless you want to move your entire life to a different state/country where life is cheaper.
In any case, in practical terms supply would not increase at an unparalleled rate. More likely than not housing would gradually adjust, even if unconstrained. Housing prices would increase at a lower rate and over time become more affordable, but they wouldn't get 'sheared' or 'destroyed'.
I do agree that NIMBYs fear for their housing value, and are perhaps banking on it for retirement, but we should take a step back and assess whether we want people to put most of their life savings into 1 asset or build a well diversified portfolio.
An unrealized (paper) loss triggers the same psychic loss aversion as a material loss.
I'm old enough to remember a time when housing was "cheap." The Great Recession.
Realistically the best you can hope for is to prevent the cost of housing from rising too much. Which is both not as hard and feasible. YIMBY dreams of putting a significant dent in the cost of housing would stop getting blocked by zoning and start getting blocked by other bottlenecks quite quickly.
If homeowners want to keep the mortgage interest deduction, a similar benefit should be offered for tenants. A kind of rent stabilization via the tax code, like an earned income tax credit but based upon rent paid.
Here in Sweden we have a ton of rent controlled housing, nearly free day care, the most generous parental leave in the world and age of first birth is higher than the US. Having lived here (US born) for 10 years and two kids later, I'd say a lot of the delay in reproducing is actually just cultural. Even financially stable people (in fact, especially financially stable people!, poor people have kids younger) are delaying reproduction because there's a cultural sense that early/mid 20s is too young. No amount of affordable housing or welfare state systems for families can compete with that attitude, otherwise people would be having kids here in Scandinavia earlier but they do so *later*
It's a silver bullet for half the country. It's a blowtorch to a pile of money for the other half. Turns out that the productivity gains for the benefiting half far outweigh the costs to the losing half. But the fact remains there's some hugely divergent outcomes if you lower the cost of housing. Best you can hope for is to stop it from rising too much.
the thing with fertility is that the drop is caused not just by housing but also general opportunity costs and honestly I'm not sure how those could be fixed.
Doesn't Japan just have far less NIMBYism than the US because of its much lower violent crime rate?
Maybe? It's not something I've read before but I'm not an expert.
What I imagine is more likely is that since Japan has a national zoning law and the cities are in charge of implementation then there are a lot fewer veto points by local residents. In the US you have neighborhood associations, multiple zoning boards, the ability to sue projects, etc. It doesn't seem like Japan has that based on my cursory reading. So even if you were a NIMBY your opinion matters far less.
Good article about it for those curious:
http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html?m=1
Japan had declining real estate prices for decades meaning people didn't see land as a investment. It's much more likely that the lack of a populus looking to make oodles of money from squatting on land is the reason for less NIMBYs, than zoning.
There are places in the US like Minnesota and Texas that lack crazy zoning rules and while they have performed slightly better than other places, neither Texas or Minnesota have seem building enough to keep up with population change.
Is it a Texas and Minnesota problem, or is it a Triangle problem (Texas) or Twin Cities problem (Minnesota)?
Much of the credit we give toward those states is due to the heavy lifting of Dallas-Fort Worth, Houston-Galveston, Austin and San Antonio for Texas and Minneapolis-St. Paul for Minnesota.
They're big cities, and have jobs and resources to absorb outsiders.
It's hard to say what is happening if it's an area outside of those areas' orbits. Like St. Cloud is near enough to the Twin Cities to be an exurb, but Duluth and Mankato are not.
In Texas, San Marcos and New Braunfels are becoming exurbs of Austin and San Antonio and might become like Orange County, a suburb that grows wealthy by being between two much richer neighbors (Los Angeles and San Diego).
Aren't we saying the same thing?
Well-said
"give daycare support"
Why not give cash support to parents instead and let them choose how to prioritize labor and child raising?
Because the amount of money you'd need to give would be sufficient to incentivise a lot of women to drop out of the workforce and become stay-at-home single mothers to a brood of welfare babies.
Can't find it at a cursory glance at the internet right now, but Romney (I know, he's terrible, but he was on the right track here) proposed a plan that required earned income to qualify, scaled with earnings in a way that didn't discourage taking on more hours or getting a promotion, and had a 30% bonus for married households.
How about we finally require the wealthy to pay their fair share of taxes including upping the income level for Soc Sec taxes? How about we let these immigrants work and also allow them to work towards citizenship. Every immigrant or refugee who is allowed to have a job also pays into Soc Sec. Why are low tax rates for the wealthy still allowed and the working class are the only ones considered for tax hikes?
Well, on one hand, I do think we should (and will) raise taxes on the rich.
On the other hand, it's a little unfair to say that we only consider the working class for tax hikes, since our taxes are more progressive than they used to be.
We need to raise taxes on the upper middle class too. That means me. I’m in the 24% marginal bracket, and I tank it should be 28%. The lower brackets should stay the same, but 24% -> 28%, 32% -> 35%, 35%% -> 40%, and 37% -> 48%. The hypothetical NYC family living paycheck to paycheck on $400K adjusted gross income will owe about $7800 more, assuming the standard deduction. No one likes to pay more taxes, but they will manage. I will happily pay more to support child tax credits, mass transit, and control the deficit.
We also should tax all income, whether it is from capital gains, dividends, or wage income, the same.
We should not be preferentially treating one income type over another.
Agreed. Started to put that in my comment, but decided to stick to tax rates only.
There is a system of taxation, benefit distribution and health care payment that is simple, fair and sustainable and would allow the government to honor its commitments to all those that have paid into social security without austerity measures. It's called the Singular System and it's worthy of consideration. You can find a summary of it here: https://thesingularmovement.substack.com/p/the-singular-movement and it's worthy of consideration. Interested in hearing your feedback and starting a dialogue on how we address this country's economic challenges.
Broken link
When you say they are more than they used to be, what is the time-frame? More progressive than under trump, obama, bush? If we're more progressive than the last administration, but only marginally is that sufficient, isn't the straightforward answer with a little spin to say it clearly isn't sufficient. If we went back to Eisenhower levels what would that mean?
I should have clarified that the fact the very wealthy have many loopholes and different ways of gaining their wealth without paying taxes on it. IMO, wealthy means making $1 Million or more a year. I also know that throughout our history, the upper bracket has been reduced unbelievably.
Every time someone suggests a higher top rate of tax, we have to go through "$250k per year isn't rich" discourse, some of these people just live on a different planet.
If you absolutely can't afford to (for the sake of argument) pay your 50% total tax burden, how the hell do you think people making less than $125k a year get by? Life is expensive for everyone, not just the rich. And in many parts it's so expensive because there's a big market of rich people who can afford it. When there are enough rich people around there's no market incentive to cater to the peasants.
I would assume you have marginal rates? The top rate kicks in for the income earned above that level. The problem is that the very wealthy don't earn 'income' which is why you should give the trickle down set what they want, stop taxing income at all, tax land and wealth
I would disagree slightly on that last point. For the most part rich people and poor people are not buying the same products. The fact that luxury goods exist for the 1% to splurge their money on doesn't stop various companies competing on price for the everyday essentials that normal people buy.
Sure. We live in an era where "stuff" is cheap as dirt. (It cracks me up whenever right-wing idiots complain about how poor people can afford flat-screen TVs. Flat-screen TVs are dirt cheap compared to the old CRTs of my youth!) But things like land and housing and daycare and health care are still incredibly expensive, at least in desirable areas where the jobs are.
Yeah that's fair. I was thinking of things like food, but obviously it doesn't apply universally.
For sure, you could argue that NYC is another planet compared to many places in the US.
For sure, the rent for some tiny apartments is 3,000-4,000/month, like that's what some people make in a year.
There's not many people in the US making under 5k a year
Annualized my friend
Like if you made $30,000-40,000/yr, you could pay rent, but you couldn't buy food, or anything else.
Depends where. If you want to live somewhere with decent jobs, yeah.
I meant over the course of a year, where people could pay just rent, but have no money left over for anything else, my bad if I didn't make that clear enough.
In the past, we have solved issues of lower population, need for more workers with immigration. It's not like we have to go out looking for them. What our government needs to do is incentivize the creation of affordable workforce housing (not McMansions and luxury apartments) all over the country. HUD needs to get it together.
Yes, that too, but not "instead of"
I agree with the proposals of @DawnHoenes as well - so my proposal is "in addition to" I posted in haste and should have probably included that. I also feel that we should have more gov. supported/subsidized childcare. Much like the parochial schools I attended, the first child there was an annual tuition rate but for all the siblings following there were reduced or scholarships as each child entered school age. I had a neighbor who had 13 children and I believe they only paid for one or two places tuition wise at the time. The mother did not work outside the home (how could she?-- pregnant for most of her adult life. but she would still do things to make extra money. She was active in the church, the school and community. Sometimes she would make a large batch of food for some local ethnic restaurant or local festival, take in mending, do alterations. The older kids watched over the younger ones when she did seasonal work.
Probably subsidized by church tithes.
It sounds Catholic so not exactly tithes but plenty of donations. But the key point with parochial schools, or private schools, or most charter schools, is that they get to pick who they educate. If you don't have to educate "problem" students you can save a lot of money. You just shuffle off all the special ed or disruptive or poor students to the public schools and skim the cream of the crop. You can even pay your teachers less and they'll still be willing to work for you because they don't have to deal with those problem students.
Cabrini Green II!
There's just no way to stop school shootings in the US, the only developed country with this many school shootings.
This is a red herring. Tax revenue has remained in a very narrow range (15-20% of GDP) since 1950, regardless of party governance.
https://fred.stlouisfed.org/series/FYFRGDA188S
It is currently at the high-end of this range (19%+). It's much higher in Europe, but that's a different culture. There is no historical basis for believing that Americans will broadly tolerate a tax burden beyond this. Getting them to accept a 25% of GDP tax burden (for example) would be a titanic political change akin to the New Deal. Getting them to accept it without a correspondingly large new benefit (which is what you would need to do to use it for debt reduction) will never fly.
I broadly agree with you that tax rates should be far more progressive, both because of the marginal utility of wealth and the nasty political effects of the economic divergence of the few from the many over the last 50 years. But that's not going to solve our deficit problem.
Europeans have higher taxes because they demand more government services and a stronger social safety net.
What's really mind-blowing is that when accounting for standards of living and purchasing power, Americans and Europeans have about the same tax burdens! In America, the 20%ish rate is so low because we keep much of our social welfare spending off the public ledger. In other words, that 5%age point margin between U.S. and Europe is about the same money as religious and philanthropic spending as a percentage of GDP in the U.S.
The decline of religious observance in Europe dovetails with the increase in state capacity and social welfare spending. The state began providing many services (health, education, alms) that had previously been a religious concern. That money that had been going to the church was now going to the tax collector. When state-provided services were available, religious attendance correspondingly declined.
Religion and philanthropy in many ways trade off with state spending. If the U.S. accepts a 25% tax burden, religious attendance and philanthropic contributions will experience a corresponding decline. No one would be richer or poorer, and standards of living will remain the same.
I don't buy that American religious institutions are spending that money on social welfare.
Good ideas, but they are not enough to minimize the deficit. We need a VAT, taxation of net emissions of CO2 and higher personal income rates also reaching done below the "rich." More so if we could get rid of business income taxes entirely (except a away of taxing foreign owners) as well.
This is the dumbest thing I've ever read.
Not sure if you've seen the pattern of wealth concentration in this country. Are you not able to follow that pattern toward its likely conclusion in your mind?
You've made your disdain for politicians pretty clear in your contributions to this discussion. A disdain, which I' sure, is shared by many of us. So I'm surprised that you appear to "take your lead" on the CO2/climate change debate from these same politicians. The issue, to me, is not what the politicians dole out; it's what the scientists have to say, the evidence and data they bring forth, and their expert analyses of the phenomena driving this hugely complex, technical issue. I'm not sure capitalism is the informative source we want to turn to to get a sense of these issues, and certainly not the politicians.
What is a “fair share” exactly?
I suggest you run the numbers and you’ll find that significant and historic increases in the effective tax rates of the “wealthy” - however defined - does not solve the fundamental problem.
I agree with you on immigration though, but that is a solution with a long time horizon.
In short there aren’t any cheap or easy answers.
How about we allow the middle and lower classes to earn money and spend it into the economy themselves, instead of funneling into a system that wastes most of it? Government doesn’t even live on what it takes in. No it wants wars and shiny new bureaucracies to micromanage the rest of us ‘for our own good.’ No thanks. Defund the government.
I think you do your point a disservice by making the current income tax situation sound less progressive than it is, and like it is getting less equitable rather than more so.
But yes, our immigration system is insanely wasteful
Perhaps everybody paying at least something. With credits, many people not only pay no taxes but receive a refund anyway. Hard to be invested in an economy if you never pay anything into it. Yes, tax rates on the wealthy are too low but so are taxes overall given the hurdles we must overcome. We can’t change the situation we are in by just going after the wealthy.
How about we finally require the poor to pair their fair share of taxes?
The US Federal Government spends $5.5 trillion a year and has 332 million people. It seems fair to me to say that anyone paying less than $16566 a year in tax is paying less than their fair share, and anyone paying more than that is paying more than their fair share.
Unfortunately the way the US is configured right now we have the vast majority of the population paying less than their fair share and a tiny fraction who pay far, far more. And you want to increase that inequality even further?
I may have more sympathy if I did not see C-Suite making over 100X their employees not including bonuses. Also, those people like Elon who don't even take a salary but live off expenses of their corporations or the dividends of their shares.
Have you considered the possibility that adding an additional person to the assembly line has less influence over the company's bottom line than the choice of CEO? It's a crazy idea, I know, but it just might be the case that having a 1% more effective CEO means having adding more value.
The wealthy don't get wealthy from wages. You're only mentioning the top tier of wage earners. Your whole premise is fundamentally dishonest.
Agree. The truly wealthy won’t be touched because they’re the ones writing the tax code.
Excuse me, federal workers are in the social security system. Congress created the Federal Employees Retirement System (FERS) in 1986, and it became effective on January 1, 1987. Since that time, new Federal civilian employees who have retirement coverage are covered by FERS.
FERS is a retirement plan that provides benefits from three different sources: a Basic Benefit Plan, Social Security and the Thrift Savings Plan (TSP).
Don't we all benefit from not having countless poor? Are we as a country not better off when the elderly and our children aren't poor and can afford the basics?
So in truth, the employer does see a benefit, its just not the bottom-line only matters nonsense.
Oh boo hoo. There are weird historical reasons that government workers are exempt from social security, and I'd be fine with including them. But that's just a distraction from the main issue. What's the alternative to social security? Let seniors starve if they don't have enough savings or enough children? We've tried that, and it's cruel but effective in its way. If you want to run on that platform and be honest about its effects then go for it. You'll probably get a majority of the GOP vote, chanting "let them die" the whole time.
Money is a useful fiction. You're entirely right about that. What amazes me is the idea that the irreplaceable rich would just quit contributing their invaluable contributions if the tax rate reduced their status to merely being upper-upper-middle-class. At a certain point, money is just a way of keeping score. A monotonic redistribution of that money doesn't affect the score.
It is simple, those who are advocating for huge taxes are the one who pay little or no taxes themselves.
I, too, do not like "fair share" rhetoric if it implies that there is some share that is obviously fair. But I do think that people now paying the highest marginal rates will have to pay higher rates and those of us at not the highest marginal rates will too.
Capital gains being taxed at around the same rate as income tax would be a start. If we're talking about what's "fair", I think most people would agree that fair would be capital gains taxed higher than employment income tax since it is much less work per $ than most employment income.
Then we could talk about wealth tax.
Most arguments against these proposals aren't related to fairness.
You just completely failed to address his point, which is that long term capital gains tax caps at 20% (23.8% if you include Medicare) while income tax caps at 40-something.
But you'll probably just output another unrelated but vaguely on topic spiel.
Then you really should be ok with changing the deductions from Adjusted Gross Income. Let's eliminate abusive trusts, let's eliminate borrowing through rather bogus entities and eliminate any tax deduction for interest rates that come from that, let's eliminate huge amounts of LC passthroughs and the like as well as the favoritism toward real estate. Then the rich would have much higher taxable income, not higher tax rates.
"Fair share" is an inherently subjective judgement, obviously. Is my life really that different if I'm only making $500K annually rather than $1M? How many of the advantages of wealth are just positional, like being able to afford to live in more desirable locations and send your kids to schools with fewer undesirable people?
I'm an American capitalist who has no interest in turning this country into Venezuela, whose issues go well beyond debates about tax policy to say the least. Most of my net worth is in stonks, sure, but buying a share of a public company has at best very tenuous relations to funding reinvestment. I don't buy the whole idea of comparing the middle class to the middle class some numbers of years or centuries ago to say we have it better now. No shit, we're making computer games about dying of dysentery instead of actually dying of dysentery. The relevant comparison is between what we could be and what we are, not between what we once were and what we are. (Our lifespan is longer than that of chimpanzees, yay us!) Comparing the US to a bunch of other countries who started in completely different situations is a complete cop-out. And the idea that the US with its voracious appetite for drugs (or bananas or whatever) bears no responsibility for instability in Latin America is, shall we say, questionable.
"Wage earners" is doing a lot of work in that statement
Now look at total taxes on all income instead of just income taxes on wages (and interest). You'll see that the total tax rate dips down for the very highest earners.
So.....yay that billionaires pay a bigger tax rate than those making $50K/year?
The point is, there's no reason for the tax code to be regressive anywhere.
The fair share is the amount that would make them poor too.
while the top decile of earners paid the majority of income tax revenues (actually it's like 70%), they also took home 50% of the money for a tenth of the people... we're all just arguing about specifically how progressive we want the tax code to be, nobody is calling for a flat tax.
But where is a political consensus to do austerity remotely visible? Prior to Reagan a clear consensus to balance the budget existed. Since Reagan's great innovation- unfunded tax cuts, the Republican party has feasted on its positioning as the lower taxation party. Meanwhile, no one (excepting unelected pundits) appears willing to cut entitlements (SS, Medicare). The Dems always have a plethora of also unfunded ideas for their priorities. And then there is defense which as you mention probably will cost more not less going forward. It seems the deficits will continue to grow UNLESS taxes go up or entitlements get adjusted (i.e. cut versus status quo). Yet again neither "solution" appears remotely feasible.
You, I, and Noah have to start building that consensus. Cynicism is not a policy. :)
It not cynical it is a reality
What political motives do the Republicans have to abandon unfunded tax cuts? What party has hope of election on a platform of entitlement cuts?
I don't think we have an adult enough voting population for anything to be done as long as we can pretend we don't have to do anything. Republicans can only get elected by promising to reduce the deficit without touching entitlements, which is more or less impossible. Democrats can only get elected by promising to tax the rich to reduce the deficit, which is definitely impossible, unless you define rich down until the point that it would no longer be a winning issue. Actually, neither really have to even promise to reduce the deficit anymore.
The one thing that either party could do to significantly boost growth (although republicans would realistically have to be the ones to do it unless it was a "only nixon can go to China" type thing) would be to cut the administrative burden to the bone. We could do a lot if it didn't take ten years to get a ROD and if there weren't tons of "veto" points through any significant project. Not sure that would do anything but kick the can slightly further down the road though.
The problem is, administrative overhead in both private and public organizations is a relatively small fish in the relatively large pond of the gross overall budget.
You can only cut once, in the sense that any savings will dissipate and do not resolve structural fiscal issues like persistently high operating costs, asset burdens, mounting liabilities or solvency crises.
I'm not talking about G&A. I guess regulatory burden may be a better term than administrative burden. But I was specifically talking about the burden that stops so many productive projects from getting off the ground. I think reducing the ongoing resource drain from regulatory and compliance issues would probably also help, but I don't think significantly reducing that would cause a boom or anything like just letting people produce, innovate, and invest in physical capital again would.
I agree w everything u said😬
Political consensus? Give it 3 years. Once the TCJA tax cuts expire, Fed rates have been 4%+ for 4 years, and we start finding out just how little infra we're actually getting (and how slowly we're getting it) for our hundreds of billions - suddenly you'll get a new political consensus. Oh and it will help that Donald Trump is gone.
As the deadline approaches, I suspect all sorts of things will become politically feasible.
Would be nice if our federal legislature procrastinated less though...
But most federal spending is tied to inflation as well. You either have proportionate rises in the COLA for SS, or get rid or reduce those which is effectively cutting the benefit. Medicare payments would also likely go up, as would military spending for weapons and salaries, etc.
Noah addressed this in the post.
How is it cheating?
You sound like a chatbot lmao and I always think it's cringe when people accuse others if that haha
1. No more tax ceiling for Social Security
2. Simplify tax code, closing loopholes for wealthy.
3. Medicare for All (which cuts Medicaid, ACA, maybe Workman's Comp and Auto insurance medicals, plus hundreds of other healthcare programs at county, state, and federal levels. So many inefficiencies between private insurance, govt., pharma and medical care. Republicans should like that this actually reduces government.
4. Nos. 2 and 3 will free up a lot of workers that are needed for more important stuff like infrastructure, manufacturing, etc. This is what investors should be focused on instead of buying up housing and student loans to parasitize our citizens.
The problem is that there are way too many loopholes around what counts as income. Until you close those up you don't even know how much the richest people are making and you are just taxing wage earners more and more.
TLDR: The rich don't make "income"
I suspect that to those who demand daddy government come in are poor enough to consider anyone modestly successful as rich. Taking from others isn’t a sustainable way forward. Increasing the pie is. To do that, there much be the opportunity to reap reward from your work. If government comes along and chops off the feet and heads of those who stick out, prosperity itself dies. No incentive to work hard and be creative = very little hard work and creativity remains. See the USSR for an extreme example: “we pretend to work, they pretend to pay us.”
I don't buy this narrative that people en masse would stop working if they found out there was a ceiling to wealth but I do agree that people thinking that taxing income would solve anything are too poor to understand how people make lots of money.
They are asking the government to tax doctors and engineers more and completely missing the people who they actually want to tax. Like Bob Iger is taking in his millions in a W-2, completely braindead.
We can't realistically do Medicare for All. It would be something that looked more like Medicaid for all. Which I am probably fine with at this point. I don't think we realistically would ever stop strangling supply enough or let people choose the level of healthcare they want enough to allow a market to function. But we'd need to immediately start reducing the restrictions on supply because a lot of older healthcare workers, particularly doctors, would retire or change careers before accepting pay that would be sustainable at medicaid rates.
Probably also be some one time costs for some sort of government program to provide DIP financing to keep healthcare systems working as they go through a bankruptcy to deal with all the debt that is now unaffordable at the new reimbursement rates.
Ideally probably allow some sort of "top off" of medicaid rates by consumers to buy better/faster care. This would be politically contentious but I think probably necessary to keep all the people that currently have timely access to care under the existing model from revolting. It might also keep more doctors accepting medicaid rates, even though it may make it somewhat harder for those that can't afford to "top off" rates to get timely care. Maybe limit providers from accepting top offs from more than 75% of their patients?
Pete Buttigieg had a 10 year transition plan which may be more realistic. As things stand now you're probably right however given a severe economic reset which Dalio and others are warning about coming down the tracks in the next few years--well, that sort of thing reorders priorities. That's how SS got started (and original Medicare in the 1960s because insurers dropped coverage on people as they got into their retirement years).
Loopholes! That’s the ticket 😄
Even granting some fiscal cost reducing change to health insurance, 1,2, and 3 are not big enough to minimize deficits.
There is no getting around much more revenues that can be raised by closing "loopholes."
Close the loopholes and hover up and redistribute all the cash of the prosperous. What happens? No more prosperous, no more money to get. Everyone loses.
Indeed, (3) explodes the deficit, and no the "efficiencies" don't come close to making a difference. (Because you know the military and Amtrak are models of efficiency! Ah well nevertheless)
Yeah, it's frustrating that we're so in debt that it's hard to overcome. Probably need some larger reset button.
Also enact fed 15 my in wage and restore child tax credit among othervrhings
Wait you actually think this is coherent? Did you just skip 4th grade math, or you just didn't bother to look up the relevant estimates to what you're proposing?
Interesting that there isn't more of a push for skilled immigration as a solve for the replacement rate issues. Seems like "hey, I know you're scared of 'cultural changes' but these scary immigrants are going to pay your social security and Medicare" might even appeal the the MAGA crowd. And then after we deal with the broken skilled immigration system we will probably have better tools to deal with migration from the Northern Triangle...
“Skilled immigrants” are not what anyone objects to, and are not who is coming over the border in droves.
I don’t know how you people live in constant denial of reality.
Give it a few years for this deficit thing to become an issue. It will happen. Question is, will the Democrats be able to overcome The Groups that think immigration is supposed to only be about charity to the Third World? Based on how climate change is playing out, unclear.
At least it is surprising that the push is not coming from Democrats.
Is the United States anything more to you than an economic zone?
Of course. But we retain cultural dominance because we are the dominant economy and military.
That wasn't my point. If the there is something about the US that is important and valuable to you outside of its economy, large scale immigration will certainly change it to an unrecognizable form.
What happened to the US being a nation of immigrants? Do you know how many people in the US aren't native born? It's like 15% that's over 40M people. Those 5M visas aren't for permanent citizenship. Sure, some number of them will apply for permanent citizenship or overstay visas, but not all. And by the time they have kids or grandkids, those folks will be just as American as you or me.
Have you been in the military? Most of the immigrants I served with who were some of the most patriotic folks you'll find. I think you'll find, if you spend more time with immigrants, that the type of attitude that cause people to leave home and travel thousands of miles for opportunity is exactly the type of culture America was built on and that we want to continue to foster.
There's a big difference between being a nation of immigrants from the most advanced countries in the world and being a nation of immigrants drawn largely from the least advanced countries in the world.
"What happened to the US being a nation of immigrants? Do you know how many people in the US aren't native born? It's like 15% that's over 40M people."
Considering how there is almost nothing that 85-90% of Americans agree on today that is specific and meaningful, I don't consider that a good thing.
"Most of the immigrants I served with who were some of the most patriotic folks you'll find."
Again, Patriotic how? What sort of long, enduring American traditions do they adhere to? Grilling on NFL Sundays does not count.
I mean, putting yourself in harms way for your country seems pretty fucking patriotic to me.
“Skilled immigrants” are not what anyone objects to, and are not who is coming over the border in droves.
I don’t know how you people live in constant denial of reality.
If they don't object to it then how come it is so hard to get visas for skilled immigrants? Or put forward any sort of immigration policy that accounts for them? Do you base your position on any actual knowledge, or just vibes?
https://www.pewresearch.org/short-reads/2023/06/21/americans-remain-critical-of-governments-handling-of-situation-at-us-mexico-border/
American voters are concerned with immigration. But they aren't concerned with H1B immigrants. Why would they be? You're being intentionally dense trying to equate the border crisis with H1B visas.
My question remains a simple one - Why hasn't Congress taken any action to allow for immigration that adds to our tax base and is a net positive for our economy? H1B visas are an obvious area that they've failed, but temporary/seasonal workers, semi-skilled manufacturing labor (especially in electronics), caregiving, etc. These are all fields where we can't fill the jobs with native Americans because the either can't or won't fill them. The fact that you're conflating the "situation at the border" with immigration is telling. Do you if Democrats put up a bill that 10X'd our border enforcement budget in exchange for 5M temporary visas for skilled and high-demand workers annually with a robust identification and tracking system it would have any time of day with the current Republicans in Congress?
No, because there shouldn’t be millions of immigrants coming into the country in a matter of months. That’s wildly unpopular.
You’re attempting to create some sort of strawman about congress and H1B but nobody cares. There is no right to immigrate. There’s no reason for them to be here at all except to keep labor costs low for the our corporate oligarchy.
You’re doing the thing that’s common among leftists nowadays and presuming you know what’s best and trying to reason backwards from it. Including labeling the people who don’t agree with you “bad”. People don’t want mass immigration. They want the government to do something to improve their lives for once.
Sure, but no one cares about that. You're drawing a false equivalence to obfuscate the issue. Voters care about the border crisis/sanctuary city issues, not H1B immigrants.
Rarely comment but can I suggest, if you don’t already, follow Lyn Alden regarding inflation
To Quote
In the 1940s, inflation was fiscal-driven and public debt was high. In the 1970s, inflation was mostly lending-driven and public debt was low. Currently, the Fed is using a 1970s-style playbook to deal with 1940s-style fiscal-driven inflation.
And
Today, the ratio of government debt to GDP has returned to 100 percent. And Lyn Alden points out that repression—keeping interest rates below the inflation rate—is likely to be the case now, just as it was in the 1940s. But there is an important difference.
I tend to agree with the prognosis that true austerity won't happen due to:
1. rising populist tendencies, very difficult to control
2. the perception that the ultra-rich are to blame for everything (right or wrong)
3. US-China tensions mean that, like an AI pause, austerity just isn't super likely to happen
"Aging means entitlements don’t pay for themselves anymore."
Financing consumption in "retirement" and heath insurance for older people with a tax on wages was never a sensible idea. Such thinks should be financed with a VAT that is adjusted from time to time to keep that component in rough fiscal balance; it should never have made net deficits in the rest of the budget easier or harder. [It is entirely consistent with expenditures passing non-negative NPV tests and, given expenditures, revenues large enough to minimize deficits.]
There is no big brained solution that allows for both an aging population/lower reproductive rate and a comfortably entitlement state for the elderly. Even importing immigrants merely kicks the can down the road as even they revert to the host country's replacement levels after a couple generations.
This is why it's so important to get the Democratic trifecta back in 2024. Taxes are never, ever, ever increased without a trifecta.
I say start with super-high alcohol taxes and treating capital gains like earned income, but there are any number of other options.
(also getting rid of the income ceiling on Social Security taxes, as Dawn Hoenes suggests)
Better to replace the wage tax with a VAT.
Probably also true, but you need a lot more revenue overall
I was truly shocked when the Dems didn’t raise taxes on tech tycoons like Zuckerberg, who cooperated with censorship and spent $400 million turning out Dem voters for Biden.
The 6 pct budget deficit we are running at full employment must be a mirage, or a temporary setback, as are the three years of falling real wages.
I am certain that a trifecta (next time) will tax the tycoon donors that fund the party, will lead to booming real wages and balanced budgets.
While I admire your cynicism, let's not forget how weak of a trifecta it was haha
Even when they had a pretty strong trifecta we learned that people making over $400k a year aren't rich. Until things get significantly worse, there is not going to be a winning political coalition that can raise taxes far enough down the income distribution to address our fiscal issues without significantly curbing spending.
I don't think just raising taxes is a good idea, but if that's the route we're going to take, I'd prefer we put in a realistic plan that could at least address the issue on a static basis if not dynamic rather than keep pretending that all we need to do is raise taxes on other people.
There are two ways to raise taxes -- raise the actual rate to be collected, or eliminate deductions/credits/incentives and expose taxpayers to more liability.
The latter means non-rich people will pay more. Exposing the rich to more tax liability is whack-a-mole -- one of the reasons why the American tax code is so mind-melting is because the provisions that enable chiseling by the rich only make sense when you have a lot of income or other wealth that can be advantaged to begin with. And you need to hire a CPA and/or a tax attorney just to ante up.
The U.S. sorta does this by imposing sales and other consumption taxes that are by their nature regressive.
You’ll find there will never ever be enough money. We already pay half of our incomes in taxes, yet the government runs record deficits. There will always be another war or imperial project. Do you see any of those billions in infrastructure money actually fixing anything? I’m in favor of using tax money for infrastructure but little of it actually reaches the ground. Billions and billions of wasted money, yours and mine, yet folks still want to give them more. Make them accountable for it first.
No, we don't pay half our incomes in taxes, unless you're very rich and have a bad accountant.
But even if we did - what do you suggest? How do we achieve accountability?
Actually alcohol kills a lot more people than guns (140,000 versus 49,000 per year, according to a quick google). Matthew Yglesias has argued (if I interpret him right) that maybe progressives should put more energy into alcohol taxation rather than a culture-war fight that's unlikely to make much of a dent in gun violence.
[Bobson enters Galaxy Brain Mode]. Ooh! ooh! How about a "pick your poison" policy? In your home state, you can have guns or alcohol but not both?
Which would you give up? You can live in a state where you can buy a gun and ammo like any good or service and have it treated as any market transaction. The caveat is, No Alcohol. Like dry as a desert. Not only will there no buying, selling, or production or consumption, citizens will also have a duty to be sober. There shall be no travel to or from states that serve alcohol, and visiting states or foreign countries where alcohol is served requires a tourist/work visa.
You can live in a state where you can buy alcohol and have it treated as a market transaction. Note, there is a social consensus that alcohol is an adult beverage so underage consumers will still not be able to buy, sell, produce or consume. However, guns will either be strictly prohibited; guns will never cease to never exist, but they can only be possessed by agents of the state. Otherwise, citizens can possess firearms but only if they receive the same training and are duty-bound under the same laws and conventions as military or law enforcement.
[Bobson exits Galaxy Brain Mode] Disclaimer: Everything between the []s is an intuition pump and not the sincere opinions of the writer or any person living or dead. This is not to be construed as a sincerely held opinion or advocacy. IOW, it's bullshit on its face and not to be treated seriously.
Higher alcohol taxes would probably reduce gun murders and suicides by more than a ban on assault rifles, or any of the other minor tweaks that seems to be the limit of what's politically feasible.
I would not be in favor of additional alcohol taxes (it's already taxed pretty heavily most places), but if there's not at least a similar tax on refined sugars, then it's just about puritanism and not good policy.
As a someone who never skips leg day, and also has a genetic predisposition to easily put on leg muscle mass, I would tag an amendment to you bill to allow a DEXA lean mass scan to be an acceptable substitute to BMI.
"MMT has no useful advice in this situation" is a reply without content
"child benefits don't seem to raise birth rates"
In countries where it is harder to make a living for yourself and your family, brth rates go down. Italy which is religious but where making a living is hard and welfare low and unequality between genders is high, birth rate is lower than in Sweden where the facts are the opposite. but in Sweden too birthrates are lower after 5 decades of austerity politics.
I keep saying this in other comment sections but:
France and Sweden have the most generous family benefits in the OECD (around 3 percent of GDP), and their birthrates are significantly higher than in the rest of Europe, although still below replacement level. The Occam's razor explanation is that child benefits do work, but nobody is spending enough.
Other countries need to follow the example of Hungary (yeah, I know) and try targeting 5 percent of GDP. Luckily the US is in a better position than Europe to do this, since overall taxes and spending are lower.
We don't even have a value-added tax, which would be the obvious place to look for the money. It looks like a 10-15 percent VAT would pay for cash child benefits in the range to aim for.
In all likelihood, Hungary's natalism policy will backfire.
The Hungarian population peaked around 1980, under communism. It has declined ever since, not only through births falling below replacement and being below deaths but also because of emigration.
Young Hungarian adults light out to more prosperous parts of Europe, or North America, or Australia/New Zealand. This is why there isn't a leftwing resistance to Fidesz in the way that you had well-educated yet radical movements to imperialism, Nazism and communism. Also note that all of those movements were thoroughly crushed (note: I myself am a descendant of a family of '56ers, so know the history intimately).
Orban's going to impale himself on the horns of a dilemma with his natalism policy. The primary reason for low birthrates is economic, especially within Hungary. Parents-to-be have to struggle a lot, and in order for their kid to have a better life, they will have to emigrate. The problem is that if natalism fails to boost the population, Hungary's on the hook to pay for stuff parents would've done anyway independent of incentives.
The problem is also that if natalism succeeds and does boost the population, the underlying economic conditions are still poor and the consequent youth bulge will be a ticking time bomb.
Your explanation is more of their policy not being enough rather than backfiring.
Fidesz's natalist policies won't fix the underlying economic problems Hungary is facing: slack labor markets, high youth unemployment, high costs of living, high taxes (the VAT is the highest in Europe), Budapest being the primate city and dominating by population and economy (metropolitan Budapest has 3.3 million people; the next largest metropolitan area is Debrecen with 281,000 -- that's more than 10x the gap), and brain drain.
Sure, the government is making it really attractive to have a child -- or rather a Hungarian offspring born of Hungarian stock. The intent of the policy is to have demographic autarky and reverse population decline through breeding.
There's still a good practical reason why Hungarian parents-to-be are reluctant to have large families. They don't want their children to struggle as adults, or have to see their child off to a foreign land in order to have a future. Culturally, Hungarians are assimilationists. Throughout our history, whether because of economic difficulty or a culture that's had the boot of greater powers on its throat for much of its existence, Hungarians have had to maintain their culture while realizing the grass is greener on the other side. Hungarians extend patriotism not only to the mother culture, but to their adopted homelands as well. It's the kind of patriotism best seen from a rear-view mirror.
So, there's a not-small risk that Hungary's investment in youth will lead to their best and brightest becoming German, French, American, Canadian, etc. The ones who stay find that they'll struggle for work, with Budapestis competing with rest of Hungary for jobs in Budapest, or stay in the provinces and grow up to be bitter clingers.
"The Occam's razor explanation is that child benefits do work, but nobody is spending enough."
I would say that child benefits work to a point, but unless there is a corresponding pro-natalist culture they will have a defined ceiling below replacement. We would certainly increase the birthrate if we adopted Hungary's policy's. But, the cultural message to women is to first focus on education and career, then family. The problem with that is that it often puts women in a very time restricted period in which they can meet their husband and have children. If you focus on education and career first, you might not even start thinking about marriage until your late 20's, and then by the time you meet your spouse, get married, get pregnant, and have your first child you're already in your 30's. And that's just for the 1st child under ideal circumstances. If we really want to beef up birthrates women are going to have to start having children earlier.
I think the optimal design for child benefits is probably not paying an equal sum for every kid. The biggest hump in terms of career disruption, etc. is probably going from zero to one, so maybe there should be a lump-sum benefit for the first birth as well as ongoing monthly payments.
Can't find it at a cursory glance at the internet right now, but Romney (I know, he's terrible, but he was on the right track here) proposed a plan that required earned income to qualify, scaled with earnings in a way that didn't discourage taking on more hours or getting a promotion, and had a 30% bonus for married households.
You lump sum idea is interesting, haven't thought about it enough though.
It's also crazy that Obamacare required 100% coverage of preventing birth, but absolutely no requirements for procreation. It is 1 in the many lines of evidence that the left and Democrats hate traditional families, and love childless girlbosses (who are their most fervent supporters).
I like this although I am not a fan of VAT.
the thing with declining birth rates is that at this time it seems to be driven by
1: opportunity cost of a child
2: cost of housing
3: societal expectations
and the unfortunate reality is that until there is a significant increase in how much people value having children even compared to now birthrates will continue to be low.
It is not a question of value but that the state must give even the poor the means to give birth to and raise childrens
We've seen across cultures and throughout time that when societies raise their standards of living, high birthrates fall to low and often below-replacement rates.
There are several factors that reduce birthrates. Offering better educational and career opportunities for girls allows alternatives to marriage and motherhood as occupation. (This doesn't abolish marriage and motherhood, but it does delay it to a point where women delay and bear children at a later age, allowing them to build wealth and be better providers for their children.) Availability of affordable entertainment. (What do you think young people are doing when they don't have much money to have a good time?) Availability of family planning goods and services.
When a government like that of the USA has the ability to create its own currency, it has the power to determine interest rates as it sees fit. This concept lies at the core of Stephanie Kelton's book, 'The Deficit Myth.' Kelton argues that governments with sovereign currencies, such as the U.S. federal government, have the capacity to control interest rates on their own debt issuance.
She explains that such governments do not need to rely on external lenders to finance their budget deficits because they can create their own currency. Consequently, the government can effectively set interest rates on its own debt issuance and use this power to achieve its economic goals, such as managing unemployment and fostering economic growth.
Fundamentally, Kelton emphasizes that the budget deficit itself is not the primary economic concern; rather, it's how these resources are used to promote societal welfare and economic stability. Her book challenges conventional wisdom regarding government finances and advocates for a different perspective on the government's role in the economy, rooted in modern monetary theory (MMT).
Addressing the issue of an aging population can be tackled through various means. To increase birth rates and counter the demographic challenge, the government may consider the following measures:
Increased Child Benefits:
Introducing or enhancing child benefits can provide financial support to families, making it more affordable to have children. This can encourage more couples to start families and thereby increase the number of young people in the population.
Enhanced Welfare for Ordinary Citizens:
Investing in a robust welfare system that includes education, healthcare, and social support can alleviate the economic burdens on families. When people feel they can afford to have children and that their children will receive quality education and healthcare, it can incentivize family formation.
Immigration
Implementing a balanced and responsible immigration policy can attract immigrants who can contribute to economic growth and the workforce. Immigrants can also fill labor gaps and bolster the economy.
Effective Integration:
Promoting efficient integration of immigrants can help them enter the job market more quickly and contribute to the economy. Immigrants can take on jobs at various skill levels and fill various professional roles, thereby creating more job opportunities for both immigrants and native citizens.
In summary, a combination of measures, including increased child benefits, a sustainable immigration policy, expanded welfare programs, and effective integration, can help mitigate the effects of an aging population and promote a healthy demographic development alongside economic growth. Collaborative efforts are crucial in creating a societal and economic environment where people feel empowered to build their families and contribute to a vibrant and dynamic nation.
This is what is known as cope. MMT has no useful advice in this situation; it's just the standard economic model "you can print money until you can't" with the first half of the sentence emphasized and nothing new for the second half.
And child benefits don't seem to raise birth rates; in fact, nothing seems to raise birth rates except making the population more religious.
However, this comment does seem to be AI-assisted unless you just write fast, so in that sense it's an impressive new kind of cope.
Disagree on the religious element. I think increased religiosity and increased birth rates are symptomatic of a third factor (reduced economic development, opportunity and thus worse family planning) rather than having a causal relationship themselves.
That said, yeah this comment is obviously AI generated.
In defense of the idea that religious communities can have higher fertility rates, I would point to Latter Day Saints, Orthodox Jews, and Muslims. Within the US these groups have significantly higher fertility rates than other Americans and at least in the case of Latter Day Saints are wealthier than the average American. In fact, these groups have above replacement level fertility and if we project out far into the future they would eventually become the majority of the population.
I was thinking of Israel, which also has higher fertility in its more religious groups and economic development in general. Though I don't know about the economic status of the higher fertility groups in particular.
Is it correct to call it fertility rates vs. birth rates?
In terms of the debate it wouldn’t matter much because both are higher than among other less religious groups.
I think that your metrics are not providing for birth control methods and abortion and sterilization especially relating to the Dobb's decision. Granted, most immigrant families have higher reproduction rates d/t a combination of cultural norms from state of origin and religion. However, this does not allow for the fertilization status of native population who mitigate that situation with contraceptives, decreased incidence of sexual intercourse, and abortion.
And your reply is what's known as a dodge.
You can't actually explain why the monopoly supplier of dollars has to borrow back -- or tax back -- the dollars its created in the the first place in order to "finance" its spending.
You don't want to acknowledge that the only reason there's so much money out there for the US to "borrow" is because money is so grotesquely and absurdly maldistributed -- or that this grotesque maldistribution of money results in there being ever-fewer opportunities for productive investment, leading grotesquely hyper-rich people to park their money in Treasury debt, which gives then an absolutely secure free-lunch, or to pump their money into real free-lunch Ponzi schemes like crypto, NFTs, stocks or empty luxury apartment buildings and office towers.
You don't want to talk about how absurdly destabilizing all this accumulated imaginary "wealth" has become -- way more destabilizing than the federal "debt" -- which is really rich-people's savings -- or the federal "deficit" -- which is really the public sector's surplus.
You don't want to talk about how this grotesque maldistribution of dollars has lead to the creation $17 trillion dollars of consumer debt -- a precarious Everest of debt which is the only thing that keeps the the truly productive parts of the economy from collapsing entirely.
And you don't seem to give a shit about the fact that the people who are always most hurt by austerity are those who haven't got a pot to piss in in the first place. But I guess you're comfortable not giving a shit about them because they are too demoralized and exhausted to do anything other than steal from and fight with each other over the crumbs that the austerians drop in their begging bowls in the name of "fiscal responsibility."
Good luck with all that.
These earnest tax the rich types don’t understand this. Money has been essentially free for a certain class. It’s isn’t that there isn’t enough money.
> You can't actually explain why the monopoly supplier of dollars has to borrow back -- or tax back -- the dollars its created in the the first place in order to "finance" its spending.
Because people don't like it when there's inflation. They get really upset about it actually.
It's related to how people prefer high-unemployment economies to low-unemployment economies, as long as they're not the ones unemployed, because it makes services cheaper.
> or to pump their money into real free-lunch Ponzi schemes like crypto, NFTs, stocks or empty luxury apartment buildings and office towers.
There is no such thing as empty investment apartments. That's a NIMBY myth. The rest of those have exploded and aren't relevant anymore - it's not the 2010s. (Well, stocks are still relevant but I object to saying they're free lunches.)
Anyway, all those are real problems. The issue is that we don't know what the solution is and MMT doesn't provide one besides the standard economics answers of raising interest rates or taxes. (Actually, their answer that you should raise taxes is bad, because you can't do it. You try it, it won't happen.)
Haha. They like to ignore the “until you can’t part”
The constraint can be "too much already printed money" insofar as you don't have the political power to get that money moved to allocate those real resources more productively.
Especially since the US has several different layers of government, which can oppose each other, and only one of which owns the money printer.
But aren’t we a rich country? The richest ever to exist. How rich are we exactly? How much wealth does our country have? Are we taxing that wealth at all?
From there, how much of our country’s riches are held by a very few? How does that stat go 1% owns...?
Do we need new cellphones every year and other crap from Walmart or Amazon. Market consolidation(now basically market monopolies) along side super low taxes on the monopoly corps and wealthy, and dumb wars for profits are the true culprits. Perhaps we need to ask, does the market really meet the needs of people? We’re so rich we have homeless, so rich we have hungry families, so rich grandma skipped her meds again. Guess our people aren’t economically productive enough.
Austerity never works in the long run and always looks pretty convincingly foolish in hindsight. It’s a bad idea that never seems to die.
Rather, I see it as we need to continue to ask whether our money is going in the right places?
An ex. - Can we build a next century military without giving a blank check to military contractors that were privatized decades ago? Not too mention, so much now days is done by contractors instead of the government itself for every part of the government. Just putting tax dollars back into the undeserving fat cats.
Raising the retirement age so people just die before they get there is a broken social contract promise. The anti new deal/great society is so old hat. We continue as a country pulling the ladder up and out of the hands of young people so the rich can live lavishly.
In one breath, you say we should be a more egalitarian country, and in the other you’re like austerity for the masses. So which is it? Can it be both? How much does the average American have at retirement? I doubt it’s that much and may end up trying to survive on ss, medicare/Medicaid.
Don’t put the blame or responsibility of fiscal mismanagement on the reg folk. It’s because of mismanagement at the top.
Why would you say austerity never works in the long run when it worked just fine under Clinton?
It's one thing to say austerity can't fix a weak economy - but that's kind of the point, that you need to use these strong economic times to clean up the debts from the troubled times.
I have to disagree that it worked under clinton. We're in this mess as a country because Clinton tided himself and the dems to libertarian republican style economics, where now no republicans and too many dems can't even dream of raising taxes respectfully. FDR asked congress during ww2 for 100% tax rate after 250K. He only got 90% and that wasn't even the effective rate.
I'd start with Mark Blyth regarding the bad idea that is austerity.
hey I am agreeing about higher taxes! wouldn't pin that on Clinton though. at least he got elected. I was indeed sad that Obama didn't let the Bush tax cuts expire tough. :(
Yea, I should blame him more for the regulations changes. Still though I’d say that Clinton entire admin ushered in and legitimized neoliberalism that took tax cuts off the table for both parties.
well... I've had this discussion before and here's my pitch: from the time Nixon was elected in 1968 until Clinton won in 1992, the only Dem administration in there was Carter, who was widely considered a failure. I'm not saying Clinton was the guy YOU wanted, but he was the guy who could get elected - and even then just barely & thanks to Ross Perot making the election super weird!
Proper liberal Democrats were just not winning, so you got a neo-liberal Democrat. The alternate history where some liberal icon took office doesn't exist, because that wasn't the mood of the people that soon after Reagan. It's not about what's fair or ideal; it's just a matter of what was possible.
(Also Newt getting Congress should not be ignored re the policy agenda that happened in those years.)
Austerity?
https://fred.stlouisfed.org/series/FYONET/
Overall outlays continued to increase. Defense spending was an exception (a fleeting Cold War “peace” dividend )
https://fred.stlouisfed.org/series/FDEFX
Let me see if I understand: Democrat austerity good. Republican austerity bad. Democrat inflation good. Republican inflation bad. Democrat deficits good. Republican deficits bad. How'd I do?
Well it really depends on who is in the White House - if Trump had won the Freedom Caucus would have simply voted to increase the debt limit.
It doesn't matter which party is in charge, either way we will spend our way into ruin, mostly because spending your way to ruin wins elections, even though the resulting inflation, currency debasement, and higher taxes do not win elections. But the author's bias is tiring. Rather than pay $10 a month for this Substack, I can just check out the DNC web site for free.
Idk we've managed to do okay in the postwar period - even recovered from a few hiccups here and there. If spending your way to ruin was such a good election strategy you'd think we'd be ruined by now. Instead of looking like the only bright spot in an increasingly economically troubled world.
Perhaps deficits really do not matter and we can simply print as much as we want. People just need to learn to embrace inflation as a good thing.
Edit: better would have been “I suspect that....”
Yes, un-ironically. Austerity sucks, but I would much rather not have austerity policies introduced by a party of deranged maniacs with zero principles beyond cruelty, corruption and bullying (post-Trump republicans).
You're going to get cruelty, corruption and bullying with either party. It just depends on your tribal views. Biden is every bit corrupt and a bully. Or at least he was when his brain was still fully functioning.
[citation needed]
I am so excited for you to discover search engines and the World Wide Web. You can find almost any kind of information you want there, Doug. Good luck!
I could have disagreed in a less polite way...
> whether the interest rate r is less than economic growth r
"economic growth g"?
> programs like Social Security and Medicare are like sustainable Ponzi schemes
But Ponzi schemes are unsustainable by definition. A Ponzi scheme in which the base of in-payers is growing is just called a Ponzi scheme. A scheme which can keep paying out over the long term without needing to grow its customer base is an investment. The fact that a Ponzi scheme hasn't yet collapsed doesn't mean we need to qualify it with adjectives.
What you're saying here is that these are and always have been just ordinary Ponzi schemes.
> The last 15 years pushed us to imagine what more the U.S. government could do if only it had the political will to open its purse-strings.
But that's happened, and now we know what was delivered with ultra-high money printing. Was it worth it? I don't think so. Remember that the "crises" that were used to justify huge deficits were themselves engineered by governments! The 2008 financial crisis was created by US policies towards home lending. COVID was created in a lab built by the French and at least partly funded by the US. Lockdowns were an unnecessarily extreme response created in bug filled models by corrupt academics, all of whom were being funded by deficit spending.
That's what we all got for years of deficits: ever more extreme swings of the pendulum trying to solve today's problems that were caused by yesterday's solutions. And now for our troubles, a bankrupt social security system.
We badly need "austerity", or as it's called when not being discussed by the left, sustainable government. What we don't need is arguments of the form "we've printed lots of money via roundabout means, so now interest rates are low, so now is the time to spend lots of money". This sort of obfuscation is beloved of technocrats because it hides what they're doing, and they especially love to present interest rates as if they are some sort of weather event that must be exploited for maximum benefit, like going outside on a sunny day. Versus the more mundane reality that outside of hyperinflation, they're controlled by the government itself.
> COVID was created in a lab built by the French and at least partly funded by the US.
[citation needed]
I don't really want to get into the details of this argument, but I'm fairly confident that COVID wasn't man-made. A scenario along the lines of "COVID was brought into the Wuhan virus lab in the course of collecting bat virus samples, someone got sick, and that's how the epidemic started" is plausible, but "COVID was deliberately created by people" isn't (at least to me).
I'm talking about the pandemic. If those viruses had been left in their caves the pandemic would never have happened. Even so, the grants that funded the lab explicitly state they are going to tamper with bat viruses to make them more amenable to human infection. So both the virus and the pandemic were created, even if they used a natural virus as the starting point.
https://www.washingtonpost.com/world/asia_pacific/wuhan-lab-covid-china/2021/09/07/f293325c-fb11-11eb-911c-524bc8b68f17_story.html
https://www.vanityfair.com/news/2021/10/nih-admits-funding-risky-virus-research-in-wuhan
https://www.bbc.com/news/world-us-canada-64806903
This information is readily available if you just look for it.
The lab itself was designed by the French. It's in the first link I posted.
I believe the elimination of banking and investment regulations allowing some very questionable products and practices were also at fault.
It's such a regulated space you can spin it however you want. Ultimately the moral hazard created by bailouts and the inability to hold money outside of banks is the root cause, everything else is downstream from that.
> COVID was created in a lab built by the French and at least partly funded by the US. Lockdowns were an unnecessarily extreme response created in bug filled models by corrupt academics, all of whom were being funded by deficit spending.
No, Covid was created in the same UFOs that killed JFK and melted the steel beams on 9/11.
You establishment liberals really bend over backwards to hide the truth, don’t you?
https://www.washingtonpost.com/world/asia_pacific/wuhan-lab-covid-china/2021/09/07/f293325c-fb11-11eb-911c-524bc8b68f17_story.html
https://www.vanityfair.com/news/2021/10/nih-admits-funding-risky-virus-research-in-wuhan
https://www.bbc.com/news/world-us-canada-64806903
Establishment liberal? No, I'm a mainstream conservative who believes that the coronavirus was created by Bill Gates using 5G Jewish space lasers to sap and impurify all of our precious bodily fluids.
That's why I believe that we shouldn't have any lockdowns or restrictions, because according to Scott Atlas my country should only have 5,000, I mean 50,000, I mean 500,000, excess deaths from Covid-19, I mean the Chinese virus. I have a perfect model, unlike those bug-filled models of those "qualified" academics who might be funded by *shock* the government rather than a bunch of billionaires with agendas.
No one modeled Covid well. It still doesn't mean that lockdowns were justified or that the virus had a natural origin.
Oh, you ignored all of the evidence presented for you and deflected the conversation with a combination of ad hominems and strawmen. Very original.
Why does Social Security and Medicare have to be "paid for," but the F-35 and V-22 (and everything else at the DOD) don't? The US spends more on "defense" than the next X countries combined, but no one ever questions that budget going up and up and up.
PS: Uncap FICA!
Because we set up special tax regimes specifically for social security and Medicare. If we're gonna have special tax money for the set-aside purpose of funding these, it seems to me sensible to make sure the amounts levied are enough to pay for the benefits promised.
Whereas defense doesn't have a special tax like that - if you want to do it that way I'm not opposed just think it extra process for little benefit.
People question it all the time lol. They just seem to be bad at convincing American voters and politicians en masse that the US military budget should be slashed as deeply as they think it should be.
But let's not forget, they have had some success! Military expenditure as percentage of us federal revenue is only 20% - in the postwar period only the 90s briefly went lower than that.
I'm curious - what do you have in mind as an acceptable amount for the US to spend on it's military? Is it ok for 'X' to be more than 3, or should we aim to make sure we don't spend more than China+Russia+India? Should we take into account the fact that our personnel costs are necessarily much much higher than theirs, because of the far higher price of American labor and services, or not?
We get a horrible return on investment for our military spending. The entirety of NATO can't keep up with the Russian production of artillery shells. We now know the T-90 Russia tank is not substantially worse than the NATO counterparts, and Russia produces a lot more of them for a lot less. Ditto for just about every weapons system we've seen in action in Ukraine. The F-35 program has been a trillion dollar disaster. We should put a bunch of retired generals who serve on MIC boards and defense contractors behind bars and start over with our defense industry.
The X-factor is immigration. It’s the only way out of having to either cut spending or raise taxes. A pro-immigrant side of the debate will not just emerge but start gaining steam rapidly when we start confronting deficits - and, like with the IRA, it will come into conflict with “the groups” who want immigration to serve as a form of charity to citizens of underdeveloped countries.