Asymptosis: always approaching

You’re forever hearing Republicans and conservatives saying that they want to put decision-making–political power–in the hands of states and localities. This post by Arnold Kling is a good example out of thousands. The reasoning is not crazy (though it is contestable): Wisdom of the crowds. More people trying different policies results in succesful policies winning,…

Perhaps with very good reason, free-marketeers believe that catastrophic health coverage produces the best market efficiencies. People pay for everyday health care out of their own pockets, which gets them to shop for services and ask what the cost is, pushing costs down. They have an inexpensive insurance plan with a high deductible to cover…

Dick Cheney famously said, “Reagan proved that deficits don’t matter.” I’ve argued elsewhere that this was a political, not an economic statement. People love to complain puritanically about debts and deficits, but they vote for politicians who promise to cut their taxes. Hence the 30-year hegemony of Reaganomics. But do deficits mattter (economically)? In particular,…

Since you didn’t do anything, why should we think that you’ll do anything this time? Here’s the cost of doing nothing: In case tea-partiers are finding the arithmetic troubling, if we’d adopted the Clinton plan we’d currently be saving close to half a trillion dollars a year. If we’d adopted Nixon’s plan, we’d be saving…

A comment by flipspiceland on a previous post, about Democratic senators and “out of control” spending, got me curious about our spending numbers compared to other large, prosperous countries. Short story: our governments (fed, state, local) are incredibly frugal compared to the rest of the world. This even with a defense budget that’s larger than…

Responding to a U.K. tax on bank bonuses: “This is extreme victimisation,” said one senior investment banker. “A lot of people have been working their tails off, never seeing their families to try and fix the problems of the past and now they are being discriminated against. It just makes me want to quit the…

I pointed out recently that: From 2003 to 2008, the value of global over-the counter derivatives increased 300%–by a factor of four, while U.S. fixed capital (read: productive assets) increased by only 25%. Profits (or so-called profits) for U.S. financial companies have gone up 258% since Q4 2008, while profits for nonfinancials have gone up…

Douglas Holtz-Eakin was Chief Economist for the Council of Economic Advisers from 2001-2002. He was Director of the Congressional Budget Office from 2003-2005. He was John McCain’s chief economic advisor during the presidential campaign. In the WSJ, he says Obama “should call on Congress to pass a comprehensive reform of our income and payroll tax…