A Win-Win Approach to Climate Change

Public policies to curtail climate change can be a win-win for everyone, including present and future generations, says Goodman Institute Senior Fellow Laurence Kotlikoff in the New York Times. A carbon tax is by far the most efficient way to reduce CO2 emissions, he says. But that should be more than offset by a tax cut for the current generation. Future generations will get the benefit of climate control but they will have to pay off the debt created by the current generation tax cuts. More.

Why Is Congress Declaring War on Seniors?

Progressives in Congress are planning to spend an additional $1,000 per enrollee on beneficiaries in traditional Medicare, but spend no additional money on Medicare Advantage enrollees. In economic terms, the flip side of a subsidy is a penalty. If you give a subsidy to people who make one choice, you are effectively imposing a cost on everyone who makes a different choice. In this case, the Democrats’ proposal does more than tilt the playing field. It makes seniors worse off whenever they switch from one system to the other.

Social Security Debt up $6.8T

The Social Security Trustees have released their annual report on the system’s finances. The news is awful. Social Security’s unfunded liability is an enormous $59.8 trillion. That’s over 2.5 times the size of the U.S. economy. Even more disturbing is the change since last year’s report. The system’s unfunded liability grew by $6.8 trillion. In other words, while Congress has been arguing over whether we can afford $3.5T in new spending, the debt we are leaving to our children grew by almost twice that amount without Congress lifting a finger.

But unlike the change in official debt, Social Security’s deficits are carefully kept off the books — for political, not economic reasons. Consequently, not a single media outlet we know of has reported these numbers. More

Savings and Gramm: How the Fed is Slowing Monetary Growth

The Federal Reserve is buying Treasury bills and mortgage-backed securities at a rate of $120 billion a month. This is apparently being done to support large borrowing by the federal government. At the same time, the Fed has pulled almost a trillion dollars of liquidity out of the financial system by “reverse-repo borrowing.” This has reduced bank reserves and private sector lending. Not surprisingly, the growth of the M2 money stock fell from around 25% in 2020 to around 10% on an annualized basis in the first six months of 2021. MORE

Kotlikoff: Government Debt is like a Ponzi Scheme

At the very time leftist politicians are proposing to finance their programs with mammoth deficit spending, leftist economists are giving them cover with the argument the country may never have to pay off the debt.

But Goodman Institute Senior Fellow and Boston University Economist, Professor Laurence Kotlikoff and his colleagues challenge this conclusion in two papers posted at the highly prestigious National Bureau of Economic Research Working Paper site. Deficits used to finance current consumption “are like Ponzi schemes,” they say.” More

Study: Inequality Greatly Exaggerated

Lifetime spending inequity is one-third of wealth inequality. The main reason: government taxes and transfers, which make the system far more “progressive than we are led to believe. In 2018, for example, the top 1 percent of taxpayers paid 40.1 percent of all federal income taxes. The top 10 percent paid 71.4 percent. The bottom half of the country paid less than 3 percent of all federal income taxes. More

Mark Cuban’s Health Plan

Forbes

Dallas Mavericks owner Mark Cuban has done some innovative thinking on how to reform the health care system. The Cuban plan is similar to an idea once proposed by Milton Friedman and also by Harvard economist Martin Feldstein. In a nutshell, people would be responsible for medical bills up to a certain percent of their income, and government would pay everything above that. In other words, people would pay ordinary bills out-of-pocket, and government would provide catastrophic coverage for the large bills. More.

Goodman: Conservatism Needs a Reset

William F. Buckley is best known for promoting a fusionist approach on the right – uniting traditionalists and classical liberals in a common cause — especially in National Review. Yet in the latest post at National Review, Buckley’s former debating partner, John C. Goodman says this approach is not working. Those who believe “We should stand athwart history yelling stop” have no appeal for the young, he says. “They generate none of the energy and enthusiasm needed for a successful political movement.”

Goodman says conservatives should focus instead on reforming institutions, liberating people and making the world a better place. “The classical liberals were reformers,” he says.” To be successful, modern conservatives must follow in their footsteps.”

Father of Health Savings Accounts Says We need One, Universal Account

Forbes

More than 80 million people have some kind of savings account targeted for health care. But the system needs reform:

·     By law, seniors cannot make deposits to an HSA

·     Almost no one with Obamacare insurance has an HSA

·     Among those who have an account, money cannot be used to pay the fees of “direct primary care” doctors – who are available by phone, email and Skype and as an alternative to emergency room care at nights and on weekends.

·     It is impossible to structure HSAs for diabetes and other chronic conditions

Writing in Forbes, John C. Goodman says there should be one, easy-to-use account available to everybody. Sen. Ben Sasse (R-NE) has introduced a plan to move in this direction.