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Archive for May, 2021

I first wrote about allowing markets for body parts back in 2009 and 2010.

Let’s revisit that issue today, starting with John Stossel’s case for legal organ sales in a video for Reason.

This should be a slam-dunk issue.

  • I want drugs to be legal, even though I personally disapprove of drug use.
  • I want prostitution to be legal, even though I’ve never swapped sex for money (no matter what women offer me).
  • I want gambling to be legal, even though I find that activity to be very boring.
  • I want alcohol to be legal, even though I generally find booze to be distasteful.

So it should go without saying that I want organ sales to be legal. Indeed, the case for legalizing organ sales is far stronger because I can’t think of a legitimate argument against a policy that creates no downsides for third parties and unambiguously benefits both sides (sick people and organ donors) of the transaction.

Professor Ilya Somin of George Mason University’s law school has been a long-time advocate of saving lives with organ sales.

Here’s some of what he wrote in 2019 for Reason.

Many Americans die every year because they need kidney transplants, but cannot find one in time, in large part due to federal laws banning organ sales. A recently published article finds that the number of such deaths is likely to be much greater than previous estimates indicate. It finds that over the 30 years between 1988 and 2017, an average of over 30,000 Americans have died each year, because the ban on organ sales prevented them from getting transplants in time. …even if the true figure is only, say, half as high, it still represents a vast amount of unnecessary suffering that could largely be prevented simply by allowing financial compensation for organ donors, thereby increasing the supply of available kidneys to the point where it can meet the demand.

Writing for the American Enterprise Institute, Sally Satel has a very personal interest in encouraging organ sales.

…there have never been enough kidneys, livers, hearts, and other organs. Kidneys, the organ most in need and most easily donated by the living, can be given by living friends and relatives and even the occasional “good Samaritan donor.” But, by law, they must be given for free, in the spirit of “altruism.”  Altruism is a beautiful sentiment, and I have personally benefited: two magnificent friends have donated kidneys to me; one in 2006 and then again in 2016.  Thousands others in the U.S., where I live, and elsewhere around the world, are not so lucky – they die waiting. …Compensating donors as a way to recruit people who would like to be rewarded for saving the life of another is long overdue. …Objections…ring hollow. The most common is that compensation “commodifies the body.” We already commodify the body, speaking strictly, every time there is a transplant: The doctors get paid to manipulate the body. So does the hospital. Why, then, object to enriching the donor — the sole individual in this entire scenario who gives the precious item in question and assumes all the risk?

In an article for CapX, Sam Dumitriu and Samuel Hammond make the case for pro-market reforms in the United Kingdom.

…increasing the number of living donors is becoming a major imperative for healthcare systems worldwide. For better or worse, altruism alone won’t fill the gap. Britain needs to change the law to give organ donors, particularly kidney donors, a financial incentive to donate. Rewards for donors are currently illegal… While the average time patients spend on the kidney waiting list has declined, it still routinely takes over three years before a match is found. In contrast, it’s clear from markets where financial rewards for donors are permitted that they are effective at increasing supply. …Kidney donors not only save lives and allow patients to come off dialysis, they also save the NHS money. According to the National Kidney Federation, each kidney transplant saves the NHS over £200,000 by reducing the need for expensive dialysis treatment. That’s significantly more than $40,000 price the Nobel Laureate Gary Becker and his co-author Julio Elias estimated would be necessary to eliminate the kidney shortage altogether.

In a column for the Federalist, Liz Wolfe makes the case that she should be allowed to help others by selling a kidney.

Four thousand dollars is my price, I think. … But I can’t do any of this because the government says it’s wrong. You know what else is wrong? Having 43,000 people die annually due to the current kidney shortage in our country. I’d love to help, but I don’t currently have a huge incentive to do so. …kidney-selling should be a person’s choice to make. …the naysayer might argue, isn’t autonomy undermined by desperation? Can consent truly take place if someone is debating between a set of imperfect options—selling an organ and profiting handsomely versus starving to death? …That would be more compelling if we didn’t already allow poor people to work in horribly dangerous industries for money. …Commercial fishing has a very high mortality rate and relatively low median wages. Roofers, garbage collectors (and recyclables collectors), construction workers, iron and steel workers, electricians, and truck drivers all have high mortality rates as well. Government does not intervene to protect these people from working in these industries… Either desperation undermines autonomy and invalidates consent or it doesn’t, but we should be more consistent. …Since we’re failing at pure altruism, maybe it’s time we turn to cold, hard cash as a better way to save lives.

In a column for the Foundation for Economic Education, Hans Bader looks specifically at kidney transplants.

Kidney failure shouldn’t be a death sentence. But for thousands of people, it is, thanks to federal laws banning organ sales. Those laws radically shrink the supply of kidneys and other organs that people desperately need to stay alive. …a recent study in the Journal of the American Society of Nephrology, titled “The Terrible Toll of the Kidney Shortage”…notes that the “106,000” people “who do not receive a transplant” due to the current kidney shortage “are fated to live an average of 5 years on dialysis therapy before dying prematurely.” …kidney donor Alexander Berger…predicted that allowing kidney donors to be compensated would save countless lives by giving people an incentive to donate their kidneys, resulting in a vast increase in kidney donations. …the taxpayers would save money, too. The government would be able to simply pay for kidney transplants for poor and elderly people…rather than paying for years and years of costly dialysis treatment through Medicare and Medicaid.

The bottom line is that paying donors would be good for sick people and good for taxpayers (Medicaid and Medicare are two of the most burdensome programs in the budget).

Sadly, politicians are standing in the way. But one potential seller has launched a court case.

John Bellocchio is suing the federal government to gain the freedom to sell his organs, as reported in the New York Post by Priscilla DeGregory.

A New Jersey man is suing the federal government for the right to sell his own organs — challenging a US law that bans the practice, new court papers show. John Bellocchio, 37, of Oakland filed the suit against United States Attorney General Merrick Garland in Manhattan federal court Thursday. He says in the suit that he struggled financially and looked into offloading some of his organs — perhaps a kidney — only to find out it’s illegal to make a buck on your body parts. Bellocchio, a career academic who now owns a business that helps connect people with service dogs, argues that the law contravenes his constitutional right to freedom of contract in determining what can be done with his own personal property — or, more specifically, his own body.

Christian Britschgi wrote about this legal challenge for Reason, but also made lots of strong arguments for why organ sales should be legal.

…the 1984 National Organ Transplant Act (NOTA)…makes it a crime for anyone to “acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce.” Violators of this ban face a maximum fine of $50,000 and up to five years in prison. That prohibition has left the 90,000 patients in need of a kidney on the national transplant list…it’s estimated that between 5,000 and 10,000 people die for want of a kidney transplant each year. Many more are left to undergo expensive, draining dialysis treatment. Medicare, which covers kidney patients of all ages, spent $81 billion on patients with chronic kidney disease in 2018. Medicare-related spending on patients with end-stage renal disease totaled $49.2 billion that same year.

As you probably figured out, most of the opposition to organ sales is from people who inexplicably feel squeamish or uncomfortable with the notion of using money to save lives.

But you know what’s even more important for life than a kidney? Food.

Yet that doesn’t stop us from utilizing private farms, private food processors, and private grocery stores in order to get lots of food at very cheap prices.

And even the limited intervention in this sector (farm subsidies and food stamps, for instance) have nothing to do with qualms about private provision of food.

So let’s be rational and humane by allowing markets for organ sales.

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As an economist, I strongly oppose the wealth tax (as well as other forms of double taxation) because it’s foolish to impose additional layers of tax that penalize saving and investment.

Especially since there’s such a strong relationship between investment and worker compensation.

The politicians may tell us they’re going to “soak the rich,” but the rest of us wind up getting wet.

That being said, there are also administrative reasons why wealth taxation is a fool’s game. One of them, which I mentioned as part of a recent tax debate, is the immense headache of trying to measure wealth every single year.

Yes, that’s not difficult if someone has assets such as stock in General Motors or Amazon. Bureaucrats from the IRS can simply go to a financial website and check the value for any given day.

But the value of many assets is very subjective (patents, royalties, art, heirlooms, etc), and that will create a never-ending source of conflict between taxpayers and the IRS if that awful levy is ever imposed.

Let’s look at a recent dispute involving another form of destructive double taxation. The New York Times has an interesting story about a costly dispute involving the death tax to be imposed on Michael Jackson’s family.

Michael Jackson died in 2009… But there was another matter that has taken more than seven years to litigate: Jackson’s tax bill with the Internal Revenue Service, in which the government and the estate held vastly different views about what Jackson’s name and likeness were worth when he died. The I.R.S. thought they were worth $161 million. …Judge Mark V. Holmes of United States Tax Court ruled that Jackson’s name and likeness were worth $4.2 million, rejecting many of the I.R.S.’s arguments. The decision will significantly lower the estate’s tax burden… In a statement, John Branca and John McClain, co-executors of the Jackson estate, called the decision “a huge, unambiguous victory for Michael Jackson’s children.”

I’m glad the kids won this battle.

Michael Jackson paid tax when he first earned his money. Those earnings shouldn’t be taxed again simply because he died.

But the point I want to focus on today is that a wealth tax would require these kinds of fights every single year.

Given all the lawyers and accountants this will require, that goes well beyond adding insult to injury. Lots of time and money will need to be spent in order to (hopefully) protect households from a confiscatory tax that should never exist.

P.S. The potential administrative nightmare of wealth taxation, along with Biden’s proposal to tax unrealized capital gains at death, help to explain why the White House is proposing to turbo-charge the IRS’s budget with an additional $80 billion.

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Like President Reagan, I believe in free trade rather than protectionism.

So you won’t be surprised that I agree with the message in this video

To elaborate, one of the big lessons of the Trump era is that he undermined his good policies – such as tax reform – by imposing higher taxes on global trade.

Sadly, he didn’t realize that a “trade deficit” is largely an irrelevant statistic. Indeed, it’s merely the flip side of having a capital surplus.

To state the obvious, it’s not a bad thing when foreigners decide they want to invest in the United States economy. Heck, it’s a good thing, a sign of economic strength.

Professor Douglas Irwin of Dartmouth made the same point, and many additional points, in a column for the Wall Street Journal late last year.

After four years, what have we learned? Many things, but especially that old economic truths still have value: Tariffs don’t reduce the trade deficit. …Economists have long pointed out that the trade deficit is driven by macroeconomic factors, particularly international capital flows. …The merchandise trade deficit was $864 billion in 2019, more than $100 billion higher than in 2016. …Tariffs are paid by consumers, destroy jobs and hurt the economy. Mr. Trump insisted that China would pay for the 15% to 25% duties that he imposed on $300 billion of its exports. In fact, the tariffs were passed on to American consumers, who paid more… Take steel. Higher prices might have saved some jobs in the steel industry, but..steel protection is a job-destroying policy. Economists at the Federal Reserve found that the steel and aluminum tariffs reduced overall employment in manufacturing by 75,000 workers.

But destroying jobs was just one negative effect of protectionism.

We also got more corruption, as the Wall Street Journal opined.

…it’s time to point out one unsightly effect of the Trump tariffs: expanding the D.C. swamp. …As Mr. Trump’s tariffs began to bite, Congress sent hundreds of letters to the USTR, supporting specific tariff exclusions. …Rep. Steny Hoyer signed a letter, “on behalf of the Congressional Fire Services Caucus,” asking for an exclusion on smoke alarms. North Carolina Senator Thom Tillis sought one for Honda’s lawn mower flywheels. For Sen. Sheldon Whitehouse, it was BedJet’s “ultra-thin adjustable bed ‘device.’” For Congressman Doug Collins, Home Depot’s light fixtures. For Sen. Patty Murray, empty coffee K-cup pods. Some of these exclusions were granted, and many weren’t. It’s difficult to know if lobbying by Congress made a difference… One substantial downside is more political interference in the economy. Pretty swampy.

We saw something very similar when President Obama was granting waivers for Obamacare. That was just one of the ways insiders got rich lobbying politicians for special treatment under government-run healthcare.

Let’s wrap this up.

Writing for the Wall Street Journal in March, Senator Pat Toomey and former Senator Phil Gramm conclude Trump’s protectionism was a failure.

In his first two years as president, Mr. Trump lifted regulatory burdens and pushed through a major tax cut, which triggered a broad-based rise in income and employment. He then turned to his protectionist agenda, which reduced economic growth and failed to deliver Michigan, Pennsylvania or Wisconsin in the 2020 election. Protectionism failed both as economic policy and political strategy. …As Mr. Trump found when he imposed tariffs on steel and aluminum, the resulting increase in jobs in those industries was small. …Jobs gained in the steel and aluminum industries after the tariffs were dwarfed by jobs lost in industries that use steel and aluminum in their manufacturing process, not to mention the jobs lost due to foreign trade retaliation. …Innovation, technological development and the capacity of a market economy to adapt to change provide our only sure path to job creation and prosperity. This is a lesson all politicians, but especially Republicans, need to learn from the economic and political failure of protectionism in the Trump era.

Amen.

Protectionism didn’t work. It didn’t create jobs, and it didn’t even buy votes.

Which is why I hope this meme is the lesson that people remember from the Trump years (also the message we should have learned from the Hoover years).

The bottom line is that “Tariff Man” hurt himself and hurt the economy.

P.S. Sadly, Biden has not reversed many of Trump’s protectionist policies. But that’s not a surprise given his support for statism.

P.P.S. Though I hold out some hope that Biden will utilize the World Trade Organization as a tool to expand trade, thus reversing one of Trump’s mistakes.

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My approach during the Trump years was very simple.

Other people, however, muted their views on policy because of their partisan or personal feelings about Trump.

I was very disappointed, for instance, that some Republicans abandoned (or at least downplayed) their support for free trade to accommodate Trump’s illiteracy on that issue.

But those people look like pillars of stability and principle compared to the folks who decided to completely switch their views.

Max Boot, for instance, is a former adviser on foreign policy to Republicans such as John McCain and Marco Rubio, who has decided that being anti-Trump means he should now act like a cheerleader for high taxes and big government.

Here’s some of what he wrote in a column for today’s Washington Post.

Republicans accuse President Biden of pursuing a radical agenda that will turn the United States into a failed socialist state. …It’s true that Biden is proposing a considerable amount of new spending… But those investments won’t turn us into North Korea, Cuba, Venezuela or the Soviet Union — all countries with government ownership of industry. …with proposals such as federally subsidized child care, elder care, family leave and pre-K education — financed with modest tax increases on corporations and wealthy individuals — Biden is merely moving us a bit closer to the kinds of government services that other wealthy, industrialized democracies already take for granted. …That’s far from radical. It’s simply sensible.

Part of the above excerpt makes sense. Biden is not proposing socialism, at least if we use the technical definition.

And he’s also correct that Biden isn’t trying to turn us into North Korea, Cuba, Venezuela, or the Soviet Union.

But he does think it’s good that Biden wants to copy Europe’s high-tax welfare states.

…by most indexes we are an embarrassing international laggard. …the United States spends nearly twice as much on health care as a percentage of gross domestic product than do other wealthy countries… The United States is also alone among OECD nations in not having universal paid family leave. …Our level of income inequality is now closer to that of developing countries in Africa and Latin American than to our European allies. …it’s possible to combine a vibrant free market with generous social welfare spending. In fact, that’s the right formula for a more satisfied and stable society. In the OECD quality-of-life rankings — which include everything from housing to work-life balance — the United States ranks an unimpressive 10th.

Mr. Boot seem to think that it’s bad news that the United States ranks 10th out of 37 nations in the OECD’s so-called Better Life Index.

I wonder if he understands, however, that this index has serious methodological flaws – such as countries getting better scores if they have bigger subsidies that encourage unemployment? Or countries getting better scores if they have high tax rates that discourage labor supply?

But the real problem is that Boot seems oblivious to most important data, which shows that Americans enjoy far more prosperity than Europeans.

And he could have learned that with a few more clicks on the OECD’s website. He could have found the data on average individual consumption and discovered the huge gap between U.S. prosperity and European mediocrity.

The obvious takeaway is that big government causes deadweight loss and hinders growth (as honest folks on the left have always acknowledged).

P.S. I can’t resist nit-picking four other points in Boot’s column.

  1. As show by this Chuck Asay cartoon, you don’t magically make government spending productive simply be calling it an “investment.”
  2. Like beauty, the interpretation of “modest” may be in the eye of the beholder, but it certainly seems like “massive” is a better description of Biden’s proposed tax hikes.
  3. It’s worth noting that Europe became a relatively prosperous part of the world before governments adopted punitive income taxes and created big welfare states.
  4. America’s excessive spending on health is caused by third-party payer, which is caused by excessive government intervention.

P.P.S. I’ve wondered whether the OECD (subsidized by American taxpayers!) deliberately used dodgy measures when compiling the Better Life Index in part because of a desire to make the U.S. look bad compared to the European welfare states that dominate the organization’s membership? That certainly seems to have been the case when the OECD put together a staggeringly dishonest measure of poverty that made the U.S. seem like it had more destitution than poor countries such as Greece, Portugal, and Turkey.

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There are all sorts of long-running battles in the economics profession, perhaps most notably the never-ending dispute about Keynesian economics.

Another contentious issues is the degree to which society should accept less growth in order to achieve more equality, with Arthur Okun – author of Equality and Efficiency: The Big Tradeoff – being the most famous advocate for prioritizing equity.

I don’t agree with Okun, but I applaud him for honesty. Unlike many modern politicians, as well as most international bureaucracies (and even the occasional journalist), he didn’t pretend that big government was a free lunch.

Let’s take a closer look at this issue in today’s column.

We’ll start by perusing a working paper, published by Spain’s central bank, that explores the optimal tax rate for that nation. The author, Dario Serrano-Puente, concludes that society will be better off if tax rates are increased.

Many modern governments implement a redistributive fiscal policy, where personal income is taxed at an increasingly higher rate, while transfers tend to target the poorest households.In Spain there is an intense debate about…so-called “fiscal justice”, which is putting on the table a tax rate increase for the high-income earners… once the theoretical framework is defined, a bunch of potential progressivity reforms are assessed… Then a Benthamite social planner, who takes into account all households in the economy by putting the same weight on each of them, discerns the optimal progressivity reform. The findings suggest that aggregate social welfare is maximized when the level of progressivity of the Spanish personal income tax is increased to some extent. More precisely,in the optimally reformed scenario (setting the optimal level of progressivity), welfare gains are equivalent to an average increase of 3.08% of consumption.

I have a fundamental problem with the notion of government acting as a “Benthamite social planner,” but I don’t want to address that issue today.

Instead, I want to applaud Senor Serrano-Puente because he openly acknowledges that higher tax rates and more redistribution will lead to less growth.

Here’s some of what he wrote about that tradeoff.

For each reformed economy evaluated in the progressivity gridτ={0.00, …,0.50}, the main macroeconomic aggregates are calculated. …the evolution of these magnitudes on progressivity is depicted in Figure 4. Broadly speaking, it is clear that aggregate capital and output are decreasing in progressivity in a (almost) linear pathway, with the drop in capital being more pronounced than in output. …aggregate consumption and aggregate labor are also decreasing in progressivity.

Here’s a look at the aforementioned Figure 4, and it is easy to see that the economy suffers as progressivity increases.

Kudos, again, to the author for acknowledging the tradeoff between equity and efficiency. But applauding the author for honesty is not the same as applauding the author’s judgement.

Simply stated, he is trying to justify a policy that will hurt poor people in the long run. That’s because even small differences in growth can have a big effect over time.

Let’s illustrate how this works with a chart showing the life-time earnings of a hypothetical low-income Spaniard.

  • The orange line shows how much money the workers gets if he starts with an extra 3.08 percent of income thanks to higher taxes and additional redistribution, but the economy grows 2.0 percent per year.
  • The blue line shows income for the same worker, which starts at a lower level because tax rates have not been increased to fund additional redistribution, but the economy grows 2.2 percent per year..

As you can see, that low-income worker is a net beneficiary of bigger government for about 10 years. But as time goes on, the worker would be far better off with smaller government and faster growth.

Different assumptions will lead to different results, of course. My goal is simply to help readers understand two things.

P.S. To illustrate the high cost of big government, let’s shift from hypothetical examples to real-world data. Most relevant, OECD data shows that the average low-income person in the United States is better off than the average middle-class person in Spain.

P.P.S. The study cited above considers what happens if Spanish politicians raise taxes on the rich. That would be a mistake, as illustrated by the chart, but let’s not forget that Spanish politicians also over-tax low-income people.

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President Biden has proposed a massive $2 trillion-plus infrastructure plan. Here are the two things everyone should understand.

  1. It will hurt growth because it will be financed with very harmful tax increases, most notably a big increase in the corporate tax rate that will undermine competitiveness.
  2. It will hurt growth because the new spending will divert resources from the productive sector of the economy, leading to inefficient allocation of labor and capital.

Actually, there’s another thing everyone should understand. As illustrated by this summary from the Washington Post, it’s not really an infrastructure plan. It’s a spend-money-on-anything-and-everything plan, presumably to reward various interest groups.

Though I guess we have to give the Biden Administration points for consistency. The President’s COVID relief plan from earlier this year had very little to do with the pandemic, so we shouldn’t be surprised to see that the infrastructure plan has very little to do with infrastructure.

The Wall Street Journal editorialized about this bait-and-switch scam.

Most Americans think of infrastructure as roads, highways, bridges and other traditional public works. That’s why it polls well… Yet this accounts for a mere $115 billion of Mr. Biden’s proposal. There’s another $25 billion for airports and $17 billion for ports and waterways that also fill a public purpose. The rest of the $620 billion earmarked for “transportation” are subsidies for green energy and payouts to unions for the jobs his climate regulation will kill. …The magnitude of spending is something to behold. There’s $85 billion for mass transit plus $80 billion for Amtrak, which is on top of the $70 billion that Congress appropriated for mass transit in three Covid spending bills. The money is essentially a bailout for unions… Then there’s $174 billion for electric vehicles, including money to build 500,000 charging stations and for consumer “incentives” on top of the current $7,500 federal tax credit to buy an EV. …Mr. Biden is also redefining infrastructure as social-justice policy and income redistribution. …His plan also includes $213 billion for affordable housing, $100 billion for retrofitting public schools, $25 billion for child-care facilities and $400 billion for increasing home-health care.

Michael Boskin, a professor at Stanford, is not optimistic that Biden’s plan will generate good results.

Joe Biden’s $2.3 trillion infrastructure plan would be many times larger than previous such bills, only about one-third of it would meet even a broad definition of “infrastructure.” …What could possibly go wrong? A lot. …federal spending would crowd out private and local government spending, with a substantial risk of boondoggles piling up along the way. …The Biden plan is rife with opportunities for earmarked pork-barrel projects (bridges to nowhere) and crony capitalist corporate welfare (next-generation Solyndras). Consider California High-Speed Rail, an infrastructure train wreck that will soon be begging for a bailout from the Biden administration. It originally used a grant from President Barack Obama’s 2009 “stimulus” package to pay, six years later, for a tiny initial rail line. Yet, because the project’s projected total San Francisco to Los Angeles cost has tripled to $100 billion.

And even if the plan was nothing but real infrastructure, that wouldn’t be a cause for optimism.

Kenneth Rogoff, a professor at Harvard, wrote late last year that governments have a terrible track record with cost overruns.

…perhaps the biggest obstacle to improving infrastructure in advanced economies is that any new project typically requires navigating difficult right-of-way issues, environmental concerns, and objections from apprehensive citizens… The “Big Dig” highway project in my hometown of Boston, Massachusetts was famously one of the most expensive infrastructure projects in US history. The scheme was originally projected to cost $2.6 billion, but the final tab swelled to more than $15 billion… The construction of New York City’s Second Avenue Subway was a similar experience, albeit on a slightly smaller scale. In Germany, the new Berlin Brandenburg Airport recently opened nine years behind schedule and at three times the initial estimated cost.

Amen. I wrote a column about the infamous Second Avenue Subway, and I’ve also repeatedly opined about how government projects always wind up costing much more than initial projections.

Let’s wrap up by looking at an economic analysis of Biden’s plan by the University of Pennsylvania’s Penn Wharton Budget Model.

The overall macroeconomic effects of enacting the AJP, including both its spending and tax provisions, are shown in Table 4. …After the AJP’s new spending ends in 2029, however, its tax increases persist—as a result, federal debt ends up 6.4 percent lower by 2050, relative to the current law baseline. Despite the decline in government debt, the investment-disincentivizing effects of the AJP’s business tax provisions decrease the capital stock by 3 percent in 2031 and 2050. The decline in capital makes workers less productive despite the increase in productivity due to more infrastructure, dragging hourly wages down by 0.7 percent in 2031 and 0.8 percent in 2050. Overall, GDP is 0.9 percent lower in 2031 and 0.8 percent lower in 2050.

Here’s Table 4, which I’ve augmented by circling the two most important statistics.

The immediate lesson from all of this is that Biden’s plan is a boondoggle waiting to happen (just as would have been the case with Trump).

The longer-term lesson is that we should get the federal government out of the business of infrastructure.

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I have three types of humor I periodically share.

  1. Libertarian Humor
  2. Gun Control Humor
  3. Socialism/Communism Humor

Today, we’re going to venture into “consolation humor.” At least that’s the best term I can think of for the following two memes, both of which show what happens when leftists suddenly grasp reality.

In our first example, a woman learns that envy actually is a negative personality trait.

Maybe she’ll also learn at some point that spending other people’s money isn’t compassion (another person needs to learn that lesson as well).

In our second example, a young woman is bereft after learning that there isn’t a magic money tree to finance never-ending goodies from government.

Maybe she should watch this video as part of her therapy?

P.S. This great cartoon from Chuck Asay shows what happens when people don’t learn about scarcity.

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Good fiscal policy means low tax rates and spending restraint.

And that’s a big reason why I’m a fan of Reaganomics.

Unlike other modern presidents (including other Republicans), Reagan successfully reduced the tax burden while also limiting the burden of government spending.

President Biden wants to take the opposite approach.

A few days ago, Dan Balz of the Washington Post provided some “news analysis” about Biden’s fiscal agenda. Some of what he wrote was accurate, noting that the president wants to increase spending by an additional $6 trillion over the next 10 years.

…the scope and implications of his domestic agenda have come sharply into focus. Together they represent the most dramatic shift in federal economic and social welfare policy since Ronald Reagan was elected 40 years ago. …The politics of redistribution, which are at the heart of what Biden is proposing, could test decades of assumptions that Democrats should be afraid of being tagged as the party of big government. …Together, the already approved coronavirus relief plan, the infrastructure proposal that was unveiled a few weeks ago and the newly proposed plan to invest in social welfare programs would total roughly $6 trillion.

But Mr. Balz then decided to be either sloppy or dishonest, writing that we’ve had decades of Reagan-style policies that have squeezed domestic spending and disproportionately lowered tax burden for rich people.

Reagan’s small-government philosophy resulted in a decades-long squeeze on the federal government, especially domestic spending, and on tax policies that mainly benefited the wealthiest Americans. …Government spending on social safety-net programs has been reduced compared with previous years.

Balz is wrong, wildly wrong.

You don’t have to take my word for it. Here’s a chart, taken from an October 2020 report by the Congressional Budget Office. As you can see, people in the lowest income quintile have been the biggest winners,, with their average tax rate dropping from about 10 percent to about 2 percent..

Here’s a chart showing marginal tax rates from a January 2019 CBO report. As you can see, Reagan lowered marginal tax rates for everyone, but Balz’s assertion that the rich got the lion’s share of the benefits is hard to justify considering that people in the bottom quintile now have negative marginal tax rates.

Balz’s mistakes on tax policy are significant.

But his biggest error (or worst dishonesty) occurred when he wrote about a “decades-long squeeze” on domestic spending and asserted that “spending on social safety-net programs has been reduced.”

A quick visit to the Office of Management and Budget’s Historical Tables is all that’s needed to debunk this nonsense. Here’s a chart, based on Table 8.2, showing the inflation-adjusted growth of entitlements and domestic discretionary programs.

Call me crazy, but I’m seeing a rapid increase in domestic spending after Reagan left office.

P.S. There’s a pattern of lazy/dishonest fiscal reporting at the Washington Post.

P.P.S. I also can’t resist noting that Balz wrote how Biden wants to “invest” in social welfare programs, as if there’s some sort of positive return from creating more dependency. Reminds me of this Chuck Asay cartoon from the Obama years.

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