Economics

by Mike Masnick


Filed Under:
economics, politics, taxes



When Every Practical Economic Idea Is Political Suicide, Something's Wrong With Politics

from the too-bad dept

Last week, Planet Money brought together five different economists, who represent a pretty broad spectrum of political ideologies in general, to see what policies there are that all of them (mostly) agree on -- and then noted why every single one of those policies is political suicide for a Presidential candidate. The list of economists is a fantastic one, including my Econ 101 Professor, Robert Frank (who I forever remember kindly for letting me take my first ever college final exam late, after I accidentally overslept, waking up in my dorm room an hour and a half after the exam began...). Also included is Russ Roberts, whose writings and thoughts on economics I follow closely. Then there's Dean Baker, whose work we've cited here a few times. Next up is Luigi Zignales, who I had the pleasure of meeting a couple months ago, and whose new book, A Capitalism for the People is on my shortlist of books I need to read this year. Finally, they have Katherine Baicker from Harvard, whose done really interesting work on health care economics -- a field that needs plenty of study.

So what policies did all five agree on? Here's the list (though you really should listen to the podcast to hear them all talk about the details)
One: Eliminate the mortgage tax deduction, which lets homeowners deduct the interest they pay on their mortgages. Gone. After all, big houses get bigger tax breaks, driving up prices for everyone. Why distort the housing market and subsidize people buying expensive houses?

Two: End the tax deduction companies get for providing health-care to employees. Neither employees nor employers pay taxes on workplace health insurance benefits. That encourages fancier insurance coverage, driving up usage and, therefore, health costs overall. Eliminating the deduction will drive up costs for people with workplace healthcare, but makes the health-care market fairer.

Three: Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that's good. Don't tax companies in an effort to tax rich people.

Four: Eliminate all income and payroll taxes. All of them. For everyone. Taxes discourage whatever you're taxing, but we like income, so why tax it? Payroll taxes discourage creating jobs. Not such a good idea. Instead, impose a consumption tax, designed to be progressive to protect lower-income households.

Five: Tax carbon emissions. Yes, that means higher gasoline prices. It's a kind of consumption tax, and can be structured to make sure it doesn't disproportionately harm lower-income Americans. More, it's taxing something that's bad, which gives people an incentive to stop polluting.

Six: Legalize marijuana. Stop spending so much trying to put pot users and dealers in jail — it costs a lot of money to catch them, prosecute them, and then put them up in jail. Criminalizing drugs also drives drug prices up, making gang leaders rich.
So there you go. Six proposals from five economists who represent a very wide spectrum of political views, which they all agree on. And nearly every one of those is political suicide (though, to be fair, Libertarian candidate -- and former beloved New Mexico Governor -- Gary Johnson's platform actually does include many of these).

The show suggests they're going to explore in future episodes why so many proposals that a large number of economists think make sense are simply politically unfeasible, and I look forward to that. But, a lot of these are situations where old policies effectively locked us in, and making changes would upset an awful lot of existing infrastructure and jobs, not to mention beneficiaries of those policies. And that's one of the reasons why we're always a bit worried about government leaping in to regulate areas where they don't fully understand what's going on. Those regulations can (and often do) lock us into a situation that is not easy to get out of -- even if getting out of it makes a lot of sense...

What's really unfortunate, of course, is that we can't even have reasonable discussions about most of the proposals above. Bringing up nearly any of them is considered a political non-starter, even though if people really understood the overall impact of them, they might agree that all are at least worthy of discussion.

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  1. icon
    AzureSky (profile), 26 Jul 2012 @ 7:34pm

    Re: Re: Re: Re: double standard

    I decided not to respond to the trollish post above yours AC, but I feel I should respond to your post.

    Those who have not had arthritis cant understand what its like, they dont want to, I wouldnt wish this on anybody, ever, its funny how according to the trollish post above I am an idiot....yet whenever I have had an IQ test its come out in the genius range.....

    just because you dont agree with somebodies opinion dosnt make them an idiot, despite what some would like to believe.

    I understand the haters point of view, I get that they where raised to think of themselves first and everybody else second, Hell I happen to have a few close friends who I grew up with who where raised in such families(always right wing funny enough), some of them have remained the "fuck social programs" types, but most have changed their tunes, a few thanks to watching me try and function and do my best to not go on the dole.....

    let me explain something for those reading this, All my problems started medically at 23, im now 32/33, Till the last 2 years I struggled very hard to not rely on the govt, but it finely got to the point where I was down more then I was up.

    during accute extreme flares (what happens without the expencive meds) I have a running cycle of aprox 90days between major flares, the problem is that a major flare can take 60+days to recover from, when I finely gave in was after I had been unable to even get to the toilet (couldnt get out of bed) for 2 weeks, and had not gotten any real sleep for a week....both of my knees where so swollen that i could neither straiten nor bend them(anybody whos messed up a knee knows what i mean)

    the doctor at the emergency room told me I should apply for disability, as had others but, he said that IF i could get proper treatment, at least there was a chance that i could get some normality back to my life.....

    so I applied for state medical and also got a doctor at seamar to help me get in to see a specialist via project access, the specialist gave me the diagnosis I had already come to myself, Psoriatic arthritis, he told me till i got some sort of medical coverage the best he could do was give me some nsaids(couldnt even prescribe pain pills, they arent allowed to do that, you have to see a pain doctor)

    well after getting his report and diagnosis I managed to get state medical.....

    after that it took a few months but they got me on a treatment plan that had humaria in it, since then things have been better, well till i got knocked off state medical due to a review issue....(they wanted a review every 60days, but I could only get in to see my primary care for a review every 90days...due to the fact that I was forced to use seamar clinic and the doctors there are overloaded)

    I got back on less then a month after being dropped thanks to the doctor getting the review in quickly, but it took 4 months to get my humaria back...in that time, i went from being able to function at around 30% of normal, to less then 5%.....so bad I started keeping a pee jug next to my bed because walking to the toilet in the middle of the night was risky...(one bad step and i endup ina wheel chair)

    when I got back on tho, I was at their highest tier rather then a middle tier, they are helping me get disability...but still....as I learned, without the dugs, i just cant function... the least of the symptoms of this is the fact that your body hurts all over, all the time, a dull ache, even on the medications, flareups are like somebody injected your joints with acid.....

    I wish I didnt have to rely on others...but....I do....some of whom like beta apparently would like to cut my throat...if that would make their lives better, they are welcome to come over and do it.....

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