mattbruenig   22

The Mercatus Medicare-for-All Report in One Graph – People's Policy Project
But M4A advocates responded by drawing attention to the fact that total spending (red plus black) actually goes down in the Sanders M4A plan by $2 trillion. This has been a long-running argument for M4A: yes federal spending goes up a lot but that federal spending is merely replacing other spending (premiums, deductibles, copays) people are forced to do in our status quo system.
So one very generous way of describing the Mercatus’s report is to say that: Mercatus has concluded we can insure 30 million more people, virtually eliminate out-of-pocket expenses, and provide hearing, visual, and dental coverage for everyone — all for the same price we are currently paying for healthcare plus or minus 1 point of GDP. That is a no-brainer deal if I’ve ever heard one.
healthcare  BernieSanders  MattBruenig 
august 2018 by jbertsche
Fact-Checking the Fact-Checkers on Medicare-for-All – People's Policy Project
You can tell that this was their goal by looking at how the Mercatus paper was written, and specifically how its abstract was written. The first sentence contains the claim that many journalists put as their headline and lede: M4A will “increase federal budget commitments by approximately $32.6 trillion” between 2022 and 2031. The rest of the abstract and indeed the rest of the text of the paper omits the more important fact that their estimate states that overall health expenditures would fall by $2 trillion over that period.
The abstract fails to mention that, although provider payment rates for the privately insured will go down, provider payment rates for the uninsured and those on Medicaid will go up.
As noted by Vox’s Dylan Scott, the really important takeaway of the Mercatus report is not whether Sanders’ plan saves precisely $2 trillion, but rather that the report confirms that the general Medicare-for-All idea is clearly doable. If you play around with the utilization rates, the provider rates, the coverage areas, and the actuarial value variables, you can generate estimates that range from modest savings to modest spending increases, meaning that a national health insurer that covers everyone in the country is clearly in reach, if we want it.
healthcare  MattBruenig 
august 2018 by jbertsche
Identifying Socialist Institutions and Socialist Countries – People's Policy Project
My argument is that the Nordic countries, Norway in particular, have put together very effective socialist institutions. I use that phrase to refer to institutions that facilitate the collective, democratic ownership of capital. In Nordic countries, those institutions are (1) a general government sector that provides public services like education and child care, (2) a portfolio of state-owned enterprises, and (3) social wealth funds that own other capital assets.
socialism  MattBruenig 
august 2018 by jbertsche
That’s Just Capitalism
An economy that distributes the national income based solely on the marginal productivity of each unit of capital and labor is an economy that will still feature massive levels of inequality and poverty. This is so for three reasons:

Around half of the population neither works nor owns a considerable amount of capital. Their true factor income is around $0.
There are considerable productivity differences between different kinds of jobs, and so wage differences would also remain very high even in the absence of rent.
Capital is distributed extremely unevenly and so capital payments would remain very unequal even without rents.
No amount of increasing competition, trimming intellectual property rights, or lowering barriers to entry would solve these problems. More specifically, eradicating rent-seeking would not solve these problems because these problems are not caused by rents. Instead, we need a big welfare state to fix problem one, strong (“rent-seeking”) labor organizations to fix problem two, and the redistribution and socialization of capital to fix problem three
labor  socialism  inequality  ***  state  economics  mattbruenig 
february 2018 by gpe
Single Payer Myths: Understanding Labor Turnover
Consider the case of reducing income inequality in the country. No matter how you go about doing it, changing the distribution of income so that less income goes to the rich and more income goes to the middle and poor will lead to significant layoffs. Sectors that cater to the consumption desires of affluent people — housekeeping, yacht building, and SoulCycle instructing — will shed jobs when the rich have less money to pump into them. On the other end of things, sectors that meet the consumption desires of lower and middle class people will see more money flow into them, which will create jobs.

The net result of this kind of reform is a reallocation of workers out of rich-consumption sectors and into nonrich-consumption sectors. We don’t usually talk about reducing income inequality like this, but this is really the primary purpose of it.
labor  welfare  MattBruenig  jobs 
september 2017 by jbertsche
One thing red state voters don’t like about Obamacare is that it sucks – Medium
“After the election, there was a spate of reporting about why lower class people in red states who benefited from Obamacare voted for Donald Trump. It turns out there are many reasons for this. But one reason that popped up in most of the stories was that the voters had completely legitimate grievances about how badly Obamacare is designed.”
Obamacare  Medicaid  MattBruenig 
february 2017 by cbearden
Why more education won't end poverty, in one chart - Vox
"The United States has made great strides over the past few decades in increasing the educational attainment of its populations. Millennials are the best-educated generation in American history and the baby boomers were themselves much better-educated than the "greatest generation." This means that the share of high school dropouts has greatly declined and the share of college graduates in the population has sharply increased.

One consequence of this is that we have massively improved the educational credentials of people living below the poverty line, as shown by this great chart from Matt Bruenig of the progressive think tank Demos:


"During this time, the overall poverty rate has risen by 1.1 percentage points. This ought to cast some doubt on the idea that further increases in educational attainment are going to cure poverty over time.

Bruenig offers some thoughts on why the education cure hasn't worked, but I think he overcomplicates it somewhat.

The key point I would make is that the poverty rate facing people who have full-time jobs is actually pretty low:


People face various kinds of barriers — the macroeconomic situation, economic conditions in the town where they live, certain kinds of disability, family responsibilities, substance abuse problems, etc. — that make it hard for them to get a full-time job.

To reduce poverty, you either need to address those barriers or you need to just hand over some money. More schooling has certain kinds of real benefits to society, but it hasn't moved the needle on poverty historically, and there's no reason to think it will in the future."
education  poverty  us  policy  matthewyglesias  mattbruenig  2015 
december 2015 by robertogreco
Why Have Property At All? | MattBruenig | Politics
"In asking these questions, I certainly know of some answers people can give. But all of these answers pose severe problems to libertarians. You can say property is good because it’s solid for human flourishing and that kind of thing, but this is precisely the argument, say, social democrats make about the welfare state and they have really good evidence to support themselves on that. You can say it’s necessary so that people may be able to get what they produce (a kind of “sweat of the brow” argument), but this naturally falls apart with complex capitalist development where huge portions of the national output flows each year to landowners (who don’t deserve it), capitalists (who arguably don’t deserve it, at least under strict labor-desert), and to people more generally from accumulated technology/knowledge that nobody alive made and therefore nobody really deserves the output from.

The strong move for libertarians here is to actually go back to the origination of the term “libertarian,” which had to do with anarchist communists. The anarchist communists so loved liberty that when they realized property infringed it, they said to do away with property. These propertarians who masquerade as lovers of liberty, however, just walk themselves into increasingly weird logical circles and corners trying to salvage an inherently anti-libertarian institution with exaggerated hand waving."
capitalism  property  universalbasicincome  libertarianism  2015  mattbruenig  mattzwolinski  anarchocommunism  anarchism  anarchy  ubi 
august 2015 by robertogreco
The Actual Way to Beat Poverty | Demos
"Nicholas Kristof and Sheryl WuDunn have a piece in the New York Times titled "The Way to Beat Poverty." They note that the toxic stress that bombards poor children, especially very young ones, causes extreme developmental problems and propose funding home visits to teach techniques to lessen the stress, among other things. The implication, thought not quite spelled out, is that this will reduce poverty in a couple of decades by increasing the future market incomes of currently-poor children.

As far as "beating poverty" articles go, this is among the more innocuous, but I want to use it here to illuminate a point I have been meaning to make for some time.

Poverty ≠ Low Market Income

Commentators in America never actually talk about how to reduce the number of impoverished people in this country. Instead, they talk about how to reduce the number of people with low market incomes. But these are not the same thing.

Poverty is a lack of disposable income, not a lack of market income. Increasing market incomes can increase disposable incomes. But increasing non-market incomes can also increase disposable incomes. Yet, if you throw out "how do we fight poverty?" in a group of pundits, to a person, they start yammering about ways to increase market incomes.

I am convinced most of these commentators do this, not because they have some reasoned out preference for the market income channel, but because that is the only thing that even occurs to them. The cultural ideology is so strong on this point that the question "how do we fight poverty?" is immediately translated to "how do we fight low market incomes?" in the heads of those who hear it. This is a convenient translation insofar as it greatly narrows the domain of anti-poverty policy discussion, but it's more convenient for some than others.

The Case of Disability

Even noting the heavy doses of ideology that pundits are captured by, the immediate turn to market incomes in every discussion of poverty is a bit odd. On some base level, surely everyone realizes that poverty and low market incomes are not the same thing and that non-market incomes are, at least in some cases, the best way to beat poverty.

For example, 58.8% of disabled people are in poverty at the market distribution of income. How exactly do you "beat" this poverty? Home visits teaching stress-coping skills? A life coach hectoring about getting a job? Training? Education? Running advertisements for IUDs on Facebook (an actual Brookings' anti-poverty proposal)?

Some of these might help a bit, but they should strike you as absurd because they are all ultimately about increasing market incomes, and that is not possible for many disabled people. So what do you do instead? You give them non-market incomes. In 2012, non-market incomes reduced the disabled poverty rate from 58.8% to 22.9%, a decline of 35.9 percentage points or 61.1%.

Cutting Poverty More Generally

The case of disability might seem like a narrow one, but it's not for two reasons.

First, 53% of all (officially) impoverished people are either children, elderly, or disabled (what I call the "CED block"). We don't expect people in the CED block to increase their market incomes and we actually outlaw it in the case of most children. Thus, the majority of poor people are in the same position as the seriously disabled: they cannot increase their own market incomes. For the disabled and elderly, we have constructed (inadequate) non-market income channels to address this fact: Old-Age Social Security, SSDI, SSI, Medicare, and Medicaid. For children, we haven't done nearly as much, but it's common elsewhere in the world to erect a child allowance program, which we could easily use to cut child poverty in half in the US.

Second, the case of disability shows the promise of non-market solutions even if most people are not disabled. Providing non-market incomes to disabled people dramatically reduces their likelihood of impoverishment, and the same would be true of non-disabled people as well. The countries with the lowest poverty rates in the world get that way through transfer programs, not especially good market income distributions. In 2011, four of the five countries with the lowest poverty rates in the world utilized the transfer-heavy Nordic Welfare State Model.

In some ways, the immediate ideology-driven translation of "how do we beat poverty?" into "how do we beat low market incomes?" is understandable. After all, the untranslated first question is so trivially easy to answer that there isn't much to say: reduce the disposable incomes of the non-poor in order to increase the disposable incomes of the poor."
mattbruenig  2014  poverty  wealth  us  policy  transfers  disability  economics  politics  income  inequality  disabilities 
september 2014 by robertogreco
Michelle Rhee’s real legacy: Here’s what’s most shameful about her reign -
"Instead, would-be reformers like Michelle Rhee totally abandon advocating for poverty reduction in favor of flavorless, politically neutral policies that don’t offend big donors. Generally, the refusal to recognize the role poverty plays in diminishing educational attainment forms three themes. In the first, reformers claim that people who chalk up low educational attainment to poverty are just excuse-making. This is, of course, manifestly absurd: Someone who says educational outcomes are harmed by poverty is not making an excuse out of poverty; they are identifying it as the (or a) cause. To argue such explanations are really excuses is as absurd as saying that Michelle Rhee is using “bad schools” as an excuse for low educational attainment. In other words, the “excuse” gambit is both false and nonsensical."

"What we know of all the empirical data recording child poverty rates and their changes is that the best, easiest and most efficient way to cut child poverty is through transfer programs. We could cut child poverty in half tomorrow – that’s a 50 percent reduction in poor children — if we wanted to, for little more than 1 percent of the GDP. All it would take is a child allowance, similar to many programs already extant in a slew of countries. Better yet for all the ed-reforming data lovers, we can actually track the rate at which transfers reduce child poverty – and they do so very, very well.

Yet from Michelle Rhee and her celebrated class of reformer compatriots, there’s no word on reducing child poverty head-on. The failure to endorse direct child poverty reduction, even after recognizing it as a serious contributor to educational problems, is either a function of Rhee’s own conservative politics or her abject pandering to her rich, corporate donor base. It’s popular to mock those who remark that education reform is “corporate,” but the organizations emblematic of ed reform are, in fact, funded by extremely wealthy people and corporations – like Wal-Mart. With backers like that in her corner, Rhee can’t ever push child poverty reduction sincerely because it generally means policies that make such donors less rich in order to make poor students less poor.

And this is the ultimate failing of this whole education reform business, really. Through extraordinary amounts of money and carefully collected social, political and cultural capital, they are the most preeminent movement for helping poor children in this country. All national conversations about child poverty happen fully within their court, according to their terms.

Yet, because they are led by people who are either ideologically, or out of convenience due to donors’ preferences, against policies that would dramatically cut child poverty, they are limited in what they can actually accomplish. Despite their rhetoric, (poor) students are never actually placed first, but always second behind the distributive political preferences of the rich. Rhee and those who follow in her wake will drill on trying to squeeze out some marginal gains here and there through school reform, all while ignoring and minimizing powerful, tested solutions so as to make sure people don’t aim at child poverty itself. When you absolutely dominate the national discourse on how best to help poor children, as Rhee and her cohorts have for so long, such a posture is extremely shameful and damaging."
michellerhee  education  policy  us  mattbruenig  via:audreywatters  povery  studentsfirst  children  gdp  walmart  inequality  politics  childpoverty  society  power  charitableindustrialcomplex  philanthropy  philanthropicindustrialcomplex  capitalism  control 
august 2014 by robertogreco
Capitalism Whack-A-Mole | MattBruenig | Politics
"There is no general framework of morality or justice that supports laissez-faire capitalism. This is a problem of course for those who wish to argue on behalf of it. When you talk to such people, a familiar argumentative pattern emerges that I have come to call Capitalism Whack-A-Mole.

Someone playing Capitalism Whack-A-Mole moves seamlessly between three different — and mutually incompatible — frameworks of justification. Those frameworks are desert (each person should get what they produce with their labor), voluntarism (each person should get whatever they come about through voluntary, non-coercive means), and utility (the economic system should be created to maximize well-being). This Capitalism Whack-A-Mole does not need a starting point, but, in my experience, either desert or voluntarism comes first, with utility the back up when the argument turns really bad.

Here is a simulation of one such argument."
capitalism  2014  mattbruenig  inequality  voluntarism  utility  desert  taxes  libertarianism 
august 2014 by robertogreco
Free college narratives | MattBruenig | Politics
"Supposing college was free, what would the social narrative about the recipients of it be? I have seen two basic approaches:

1. It is a right. I owe nothing.

Under this narrative, recipients of free college are due free college as a matter of right. To deprive them of it is to oppress them. When they receive the free college, it is not a privilege, a bonus, an excess; rather, they are simply getting what already belongs to them.

This is the way the student movement in the U.S. has gone. The students are the downtrodden and the oppressed because they are required to finance large parts of their college education. It is common now to even see them included in lists of oppressed people alongside people of color, women, and the poor.

The problem with this narrative is two-fold. First, on the merits, it is very implausible to include college students in the ranks of the oppressed. If you line up a list of identities and their opposite — black/white, man/woman, poor/rich, straight/gay, student/non-student — the thing that stands out about student is that, all else equal, it is the better identity to be. The college wage premium still stands at around $1 million, making it hard to really contemplate students as an especially oppressed category of people.

Second, and more important for my point here, it establishes the future economic elite of the country as not really owing others anything. They don’t owe others for their free college because it was theirs to begin with as a matter of right. I am generally fine with these kinds of statements, but not when they are being made about and by the future economic elite of the country. A narrative that paints them as just getting what they are due with respect to free college misses a huge and important opportunity to describe them as indebted to the rest of society for paying for their college.

2. It is a privilege. I owe everything.

Under this narrative, free college is described as a generous gratuity from the rest of society, especially those who never get to go. In order to allow you to study and not work for many years, the rest of society — including those workers who are your age but do not get to attend — puts aside some of the national product just for you.

The amount put aside comes to you, not as some hyper-individualist right, but as a humbling gift. Working class people who never get to use the colleges toil for you while you study. Accordingly, you are deeply indebted to them for that gift. Without it, you would not have been able to get your degree and all of the market benefits it generally comes with.

The benefit of this narrative is that it allows society, and working-class people in particular, to make totally legitimate claims on the future market incomes of the college-degreed. Under the first narrative, it is very easy for the college-degreed — who go on to be management and grab up all the other spots in the top of the economic hierarchy — to say that they don’t owe anybody anything. The free college certainly doesn’t bind them to anyone else: it was theirs as a matter of right, not some gratuity from society that they should reciprocate.

But under this second narrative, you don’t have that. A rich college-degreed person who looks back and says they don’t owe anyone anything and shouldn’t have their market income taxed at high rates to fund social benefits and such is being ridiculous. The only reason they have those high market incomes is because of the college everyone else toiled to provide for them. People gave up part of the national product to allow them to acquire the skills, abilities, and credentials precisely so that they could occupy those lucrative spots. Accordingly, you owe them for supporting you in such a generous way. That income is not exclusively yours: it was gotten through a concerted social effort to finance your education, something most people don’t get.

The fact that the free college people in the US almost exclusively gravitate towards the first narrative is very troubling to me. We already have a problem of people at the top of the economic hierarchy acting like they are owed the big chunk of the national income that some hypothetical set of market institutions would deliver to them. Put another way: the top of our society is already in the grips of a bad dose of entitlement mentality. Free college as a right only entrenches that mentality further, while free college as a gratuitous privilege from those who toil helps to undermine it.

The only way free college (as opposed to debt-financed college) is of much use to the majority of poor and working class people who do not attend it is if it can help ensure that the market income gains that flow to college graduates are spread around. But the rights-based narrative that animates the current free college movement makes that much harder to justify."
mattbruenig  2014  colleges  universities  highered  highereducation  privilege  interdependence  philosophy  libertarianism  meritocracy  inequality  entitlement  indeptedness  economics  hierarchy  class  perspective  income  individualism  hyperindividualism  society 
july 2014 by robertogreco
Elevated Child Poverty: A Capitalist Problem | Demos
"The way capitalist market institutions distribute the national income is hostile to child-rearing. This is so for at least two reasons.

First, adding a child to your family increases the amount of income your family needs, including the amount it needs to be above poverty. But capitalist institutions do not respond to this need by distributing more income to families as they add more children, which is what sensible child-friendly and family-friendly distributive institutions would do.

Second, capitalist institutions distribute the least amount of money to workers who are at the normal age of child-having. Left to their devices, then, capitalist institutions will always have child poverty rates that are much higher than the overall poverty rate.

Indeed, we see that in the US. In 2012, the official child poverty rate was 21.8 percent, while the overall poverty rate was 15 percent. This is a child-to-overall poverty ratio of 1.45, which indicates that children are 45 percent more likely to be in poverty than the population in general.

I've written about these basic anti-family problems with market distributive institutions before. [ ] Since then, I've tried to think of clever ways to illustrate my point with data. I am still working on that for the first point. Here, I attempt to illustrate the second point that capitalist income life-cycles feed elevated child poverty rates.

Life-Cycle Effect

The life-cycle effect argument is pretty straightforward and obvious once you consider it. People have children when they are young. People receive the lowest amount of market income when they are young. Their incomes then go up later on in life when they receive promotions and raises and whatnot.

I figured that, if this was true, it would also mean that the youngest children have the highest child poverty rates and the oldest have the lowest child poverty rates. This is because (given parenting norms surrounding child spacing and such) the parents of older children are, on average, older as well, meaning they are deeper into their income life-cycle. All else equal, a family with a 15-year-old child in it has had more years to receive promotions and raises than a family with a newborn (obviously sometimes these families overlap, but not typically).

Using the latest 5-year American Community Survey (5% population sample), I calculated the poverty rate for every age from 0 to 17. This was the result: [graph]

As you can see, the rates move exactly as you'd expect. At age 0, 25.5 percent of children are in poverty. So, one in four children are born into poverty. At age 1, it inches up a little to 25.8%. I suspect it ticks slightly up instead of down for reasons related to determining the poverty status of a family in the prior 12 months when their kid is less than 12 months old. From there it's down, down, down as the the parents and kids get older and older. At age 15, the child poverty rate bottoms out at 18.2%. At age 16 and 17, you see upticks again, which is likely because 16 is the age at which the Census will categorize you as an adult if you move out, meaning your poverty status will be determined by your own income and not the income of your parents.

So from age 1 to age 15, child poverty rates fall a whopping 30%. This is because of income life-cycles, which are an artifact of the way market institutions distribute income.

Some takeaways:

1. Blaming parents for the anti-family consequences of capitalist distributive institutions doesn't make much sense. When child poverty rates fall 30 percent over the life cycle, that's an income distribution problem. Moreover, the 30 percent figure can mislead. It's not as if the remaining 70 percent who are impoverished at age 15 were also impoverished at age 0. People move in and out of poverty a lot. Half of all adults will spend at least one year in it.

2. This is utterly crazy from a child development viewpoint. Child poverty in general is, but this particular pattern of it especially. We distribute the least amount of income to people right when their kids are at their crucial development stage. If you are going to throw some kids into poverty, you'd much rather it be the older ones than the younger ones. Capitalist institutions do the reverse.

3. Child benefit programs, like the child tax credit and personal exemption, that pay more benefits to those with higher incomes are similarly crazy. In addition to just broadly giving more benefits to richer families than poorer families, they also end up giving more money to families with older children than younger children for these life-cycle reasons. Yet, younger children are in more need of the money (because they are much more likely to be poor) and it is more important for child development reasons that younger children have it. One way to fix this issue is to have a universal child allowance where families with children aged 0-5 get more benefits than those with children aged 5-17.

4. This is not just about poverty. The fact is that all parents, even those not in poverty, are going to face a similar life-cycle income issue wherein they have the lowest incomes when their kids are young and highest when they are old. This is also bad and counter to everything we know about child development. This makes the case again for a universal child allowance, perhaps with a higher benefit level for young children than old children.

5. The only solution is non-market income supplements of some sort. You are not going to be able to get capitalist firms to pay entry-level workers (aka parents of young children) more money. Nor are you going to force them to pay parents more than single workers. No amount of coaxing or manipulating the market will eliminate the Child Poverty Premium as I think I will begin calling it.


In closing, I thought it might be useful to compare the child-to-overall poverty ratios globally using disposable income (so income that includes child benefits and the like). Here are the best 5:

1. Finland - 0.53
2. Denmark - 0.62
3. Korea - 0.64
4. Norway - 0.68
5. Sweden - 0.68

As you can see, it's the usual suspects plus Korea. In Finland, children are about half as likely to be poor as the overall population. This is because it has a robust network of family benefits. Same with the other usual suspects."
poverty  childpoverty  2014  mattbruenig  capitalism  economics  childdevelopment  us  finland  denmark  korea  norway  sweden 
june 2014 by robertogreco
How Higher Ed Contributes to Inequality? | MattBruenig | Politics
"What’s surprising to me about the higher education and inequality stuff is just how weak the arguments for it actually are. The idea that increasing college completion will reduce inequality is so pervasive that, for a long time, I worried that I was missing something extremely obvious and that one day I’d find myself very embarrassed because of it. But as time has gone on, I have become increasingly convinced that this is just one of those bits of cultural ideology that people repeat because they hear it said so often without anybody ever contesting it."
education  highereducation  inequality  highered  mattbruenig  2014  policy  politics  income  darkmatter  culture  society  ideology  poverty 
june 2014 by robertogreco
America’s demented welfare mentality: How we choose to inflict misery — while protecting the rich -
"The U.S. welfare state has been a smashing success over the last four decades. Income transfer programs reduced impoverishment by 1.2 billion people-years between 1967 and 2012. In fact, due to the increasingly unequal distribution of market income, our nation’s welfare state is the sole reason the national poverty rate fell over that period. However, this overall success has coincided with one very negative development: The neediest in our country have seen their aid systematically stripped away.

According to a new study by Robert Moffitt, aid to the poorest single-parent families in this country dropped 35 percent between 1983 and 2004. During that period, reforms substantially cut assistance to those with incomes below 50 percent of the poverty line, while expanding it to those between 50 percent and 100 percent of the poverty line and to those between 100 percent and 200 percent of the poverty line. As a result, these days “a family of four earning $11,925 a year likely [gets] less aid than a same-sized family earning $47,700.”

The maldistribution of welfare spending is even worse than Moffitt’s study suggests, though. His study focuses only on 15 programs that people tend to think of as welfare programs. But these 15 programs do not include any of the major tax expenditures that direct obscene amounts of money toward the rich.

In 2014, for instance, the tax expenditure budget includes $248 billion in subsidies for homeowners, approximately 73 percent of which flow to the richest fifth of families and none of which flow to the poorest fifth of families. Another $176 billion is spent on retirement subsidies, with 66 percent of that money flowing to the richest fifth and 2 percent flowing to the poorest fifth. Overall, more than half of the entire tax expenditure budget goes to the richest fifth, while the poorest fifth receives just 8 percent of it and no other fifth receives more than 18 percent.

The small size and bizarre design of our welfare state has created a horrific spectacle of child poverty that has no equal in the developed world. This spectacle is often blamed on single mothers, the people whom we’ve systematically stripped aid away from over the last 30 years. But the U.S. does not have an especially high percentage of children growing up in single-mother families, and has around the same percentage of single mothers as the countries with the lowest childhood poverty rates in the world.

While we have directed relatively little and dramatically declining amounts of aid to the neediest single-mother families in our country, low-poverty countries like Finland, Norway and Sweden have done exactly the opposite. In 2000, transfer programs in this country cut relative child poverty among these families down from 65 percent to 55 percent. In Finland, Norway and Sweden, such programs cut child poverty among single-mother families down from an average of 53 percent to an average of 11 percent. It is because of these kinds of transfers, not just to single-mother families but to all families, that the average child poverty rate in these three countries stood at 3 percent, while the child poverty rate in the U.S. stood at 22 percent.

The cuts we have made to the incomes of the poorest in our society have been unnecessary, cruel and unconscionable. The good news is that we don’t have to continue along like this. There are very simple policies that could be implemented that would usher in dramatic effects.

For example, we could replace the child tax credit and the personal tax exemption for children with a child allowance program, something many other countries already have in place. Under such a program, every family would receive a monthly check for each of their children. At a $300/month benefit level, such a program would cut official child poverty by 42 percent and pull 4.7 million adults out of poverty as well. Those not pulled out of poverty by such a program would still see dramatically increased incomes from it.

This is just one example of such a program, but there are many others as well. What’s important here is just to note that the misery suffered by those on the bottom of our society is something we choose to inflict. We chose to dramatically reduce the incomes of those at the bottom over the last three decades and we continue to choose to deprive them of income every year that we keep our constructed system the way that it is, rather than changing it. We can choose to distribute our national income differently and more humanely and we should."
mattbruenig  poverty  us  policy  inequality  taxes  2014  incometransfers  welfarestate  children  society 
may 2014 by robertogreco
The Welfare State for Rich Homeowners | Demos
"I don't know who started it, but everyone has been talking about homes lately, and whether they are a good investment. I chimed in at The Week yesterday, noting that most analyses claiming home ownership is a categorically bad investment fail to account for the value of a home's imputed rent, which should normally comprise the majority of the financial returns people get from home ownership. In the piece, I also talk about our large federal welfare programs for home owners and the way in which they make investing in a home even more likely to pay off. Here, I put numbers to those homeowner welfare programs and provide a simple idea for improving them.

The Numbers

According to the Treasury, in 2014, we will spend $248 billion on the four major tax expenditures for home owners: [graph]

The mortgage interest tax expenditure is the biggest at $101.47 billion. Capital gains tax exclusions come in second at $75.5 billion. Imputed rent exclusions cost $45.9 billion. Property tax deductions cost $25.2 billion. For comparison purposes, the SNAP program in 2013 cost just $80 billion, and provided income assistance to 47 million poor people.

Who do these tax expenditures go to? According to the CBO, almost all of them go to the rich: [graph]

Around 73 percent of the mortgage interest tax expenditures flow to the richest fifth of families. Around 18 percent flow to the next richest fifth of families. Negligible amounts flow to everyone else, with the poorest fifth getting approximately none of them. The CBO tax expenditure report does not estimate the distribution of the other three main home owner tax expenditures. But they should all be at least as lopsided as the mortgage interest tax deduction, and are very likely more lopsided for a number of reasons I won't go into here.

If we take the low estimate of the distribution of these tax expenditures provided by the mortgage interest tax deduction figures, we find that the richest fifth of families will receive $181 billion in home owning subsidies this year. That is 2.25x more money than food stamp recipients received last year.

A Better Way

Needless to say, this is a pretty ridiculous way to spend $248 billion to help people afford housing. If one were cynical about these things, one might even think that this is nothing but a giveaway to rich people.

There are a long list of better ways to spend $248 billion on housing assistance. One better way would be to give it out universally so that everyone received the same amount of housing assistance. With a current population around 318 million, that would mean a housing assistance check of $780 per person. Thus for a family of four, that would be equal to $3,120 in housing assistance each year. Home owners could spend this money on their mortgages and renters (which is what most low-income people are) could spend it on their apartments rents.

This won't ever happen, of course. Subsidies for rich families are untouchable for obvious political reasons, so much so that they aren't even on the political radar (meanwhile, food stamps, which is a much smaller program, seems to be suffering budget cuts and extreme scrutiny every few months). But we could do this if we wanted to. And it would be a huge improvement."
mattbruenig  2014  taxes  housing  inequality  policy  government  wealth 
may 2014 by robertogreco
CBO: Obamacare Will Increase Voluntary Leisure | Demos
[See also this follow-up post that deals with conservative reactions:
And this: ]

"The CBO released its budget outlook today. In it, they estimate that Obamacare will lead to more voluntary leisure:
CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024 almost entirely because workers will choose to supply less labor given the new taxes and other incentives they will face and the financial benefits some will receive. Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation (wages, salaries, and fringe benefits) and the impact on the overall economy will be proportionally smaller than the reduction in hours worked.

So in essence, business demand for labor is not projected to decline, but the willingness of workers to supply it is projected to shrink slightly. So it is not the story conservatives have been telling about employers hiring less because of regulations and costs and whatever. Instead, it is that some workers (low-wage workers in particular according to the CBO) will withhold their labor because, with expanded access to health insurance, they don't need to work as much.
This is awesome.
The U.S. has some of the highest numbers of hours worked in the OECD."
obamacare  leisure  time  economics  work  2014  labor  mattbruenig 
february 2014 by robertogreco
A Spectre Is Haunting Alaska—the Spectre of Communism | Demos
"In 1976, Republican Governor Jay Hammond started Alaska's sovereign wealth fund (SWF), which has come to be called the Alaska Permanent Fund. The way it works is Alaska has a big pile of money that it uses to buy up the means of production (sometimes called stocks and bonds). Those investments yield returns and revenue for the state. Right now, Alaska plows that revenue into its universal basic income (UBI) program, which is called the Permanent Fund Dividend. The way it works is the state sends a check to every single Alaskan each year. Last year, it was $900, but in better years, it has been as high as $2000. For a family of four, that's a $3,600 and $8,000 income boost respectively.

The Alaska communist story gets more interesting than that though. The way Alaska builds the principal of the fund is in line with another of Myerson's proposals: take back the land. You see, the oil wealth in Alaska happened to reside underneath public land. Instead of doing the red-blooded American thing and just giving all of that natural wealth that nobody creates away to oil companies, Alaska held on to its ownership and collects royalties from the oil. Those royalties are plowed into its SWF. So what you have in Alaska is a state that is leveraging publicly-owned natural resources to build a SWF that pays out a UBI. Or as conservatives on twitter call it: a communist hellscape.

How has communist Alaska fared you may be asking? Well, they have a 10 percent poverty rate, which is 33 percent lower than the nation as a whole. It has the second lowest level of income inequality in the country. It must be pretty cool to live there because half of the shows on TV are about it. It does not appear to be on the verge of collapse any time soon. And there are no, as far as we know, gulags or forced labor camps yet. So all in all, I'd say its adventures in communism have been pretty successful."
universalbasicincome  communism  economics  alaska  2014  jessemeyerson  mattbruenig  income  poverty  inequality  us  policy  ubi 
january 2014 by robertogreco

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