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Tag Archives: Incentives

What’s Wrong With Social Mobility

In and of itself, social mobility is far from ambiguously good. Imagine a society of 10 individuals ranked by income from the poorest, No. 1, to the richest, No. 10. Assume that a good government (the one you would prefer) jacks up the income of No. 3 to between that of No. 6 and No. 7, putting its favorite in the 6th income slot. No. 3 has now become No. 6; No. 4, No. 5, and No. 6 have all fallen down one slot. The government could increase social mobility more if,...

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New Evidence: The Expanded Child Tax Credit’s Disincentives

In my previous post, I described how budget gimmicks prevent politicians from having to explain whether or not the policies they push are pushing desirable social and financial objectives. Here is a good example. Two weeks ago, I wrote about the serious problem with Congress’s attempt to expand the child tax credit. Well, new evidence suggests that opponents of the programs are correct about its short and long term consequences, which go beyond its $1.6 trillion cost...

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Casey Mulligan Reads the Bill

Casey has gone and done it again and I learn something new about James Tobin. His solution was radical: he actually read the bills. Mulligan printed out the relevant section of one highly touted Medicare for All bill and carried it around so that he could disabuse fellow Trump administration officials who thought he exaggerated. One person who listened was Donald Trump. When Trump publicly claimed that Medicare for All would ban private insurance, CNN’s White House...

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Poverty Isn’t Just About Money: Expanding the Child Tax Credit

The Wall Street Journal’s editors have written another great editorial, this time on the expansion of the child tax credit into an UBI [Universal Basic Income] for children. Parents can now claim a maximum of $3,000 for those ages 6 to 17 and up and $3,600 for children under age 6, up from its previous $2,000 level. The expanded part of the credit begins to decrease as income rises above $75,000 for individuals, $112,500 for heads of household, and $150,000 for...

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Angry Bears

In a comment replying to MikeP about my post “Preach What You Practice,” September 20, 2021, I made the point that acting rationally often involves going along with something that doesn’t make sense because the penalties are substantial. I wrote: Something that helps me deal with government in these situations is to think of it as a big angry bear. That helps me not moralize too much and, instead, to just remember to focus on how to survive and thrive around the big...

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Elder’s Error?

Larry Elder, running today to replace Governor Gavin Newsom if Newsom is recalled, recently committed to appointing a Republican as a U.S. Senator if current Democratic Senator Dianne Feinstein resigns. That one statement, combined with the fact that Elder is the front-runner, will probably cinch the election for Newsom. Of millions of Democrats who might not have voted, a substantial fraction will have probably voted to prevent what they see as that awful outcome....

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Rent-Seeking in Slightly Different Words

We—we, economists and supporters of individual liberty—owe it to Mr. Trump to have reminded us how a powerful state and crony capitalism are dangerous. In fact, state power and cronyism are the two faces of the same Janus. A powerful state has a lot to give and much power to take, so that “capitalists” come to it for privileges (for example, subsidies or tariffs) or to avoid restrictions. Speaking of Mark Zuckerberg and other tech executives, Trump just declared on...

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MRI Pricing

Two weeks ago I posted about what I thought might be rational pricing for my MRI and I ended by saying “Stay tuned.” I don’t yet have the bill and so I can’t say more about that. But the story got more interesting. A few days after I posted, I went online with SimonMed, the local in-network (I think) MRI provider to set up an appointment. But it walked me through a whole lot of questions to which I didn’t know the answers. It was almost as if you had to be my doctor...

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Recounting Friedman on School Choice: Innuendo or History?

Since Milton Friedman’s passing in 2006, his legacy has drawn considerable fire for all the usual reasons of political expediency and ideology. Both have come into play recently with special force over his ideas in the area of school choice. In the highly polarized politics of the present, it was perhaps to be expected that the charge of racism would be added to the list of particulars. On August 16, Jon Hale – a professor of education history at the University of...

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Afghanistan and Incentives

Except for a few heroes or fanatics, nobody wants to be the last one to fight when his comrades (or perhaps foreign allies) have stopped shooting, abandoned their position, or surrendered. And every soldier knows that every one of his comrades is having the same thought about where his self-interest lies. So when they think the wind is about to turn, it has already turned and the whole battalion or army lays down its arms. This explains Afghanistan last week. The...

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