EconLog

Ideas for the Democrats, 2002-11-08

In the wake of the Republicans' electoral success, all that Paul Krugman can think of is his political economy of income distribution. He sees hope "If the Democratic Party takes a clear stand for the middle class and against the plutocracy."

In contrast, Ted Halstead offers these specifics.

push for a temporary cut in the payroll tax, financed by redirecting the president's tax cut... enabling all Americans to divert part of their payroll taxes into personal retirement accounts, with matching sums provided by the government on a progressive basis...embracing school choice on the condition that it is paired with national equalization of funding on a per-pupil basis...mandatory [health] insurance for all Americans--just as we now have mandatory car insurance--with the understanding that government those who cannot afford to shoulder the full burden...

Each of Halstead's ideas would tend to help people at the bottom of the economic ladder. Each of his ideas has some merit from the standpoint of economic efficiency. Whether they are suited to the Democratic Party is less clear.

Discussion Question. Which constituencies would be energized by Halstead's program, and which constituencies would be energized against it?