Arnold Kling  

Masonomists in the Media

Reply to Robert Waldmann... The Power of Love...

Ever wondered what Russ Roberts would do as President? He writes,

I am recommending the elimination of the payroll tax...

--Eliminating all corporate welfare. Corporate welfare rewards those corporations that excel at lobbying rather than serving their customers. Eliminating it will save $100 billion annually.
--Implementing spending reductions in all departments of 10%, saving over $250 billion. Such cuts in a federal budget heading toward $3 trillion are hardly draconian. They merely return spending to the level of a year or two ago.
--Making small across-the-board increases in the income tax rate, yielding $350 billion.

Meanwhile, Tyler Cowen writes

to the extent that the real problem is fear, this militates in favour of placebo policies. By that I mean initiatives which appear bold and have great symbolic value, but which don't necessarily cost us very much.

I don't think there are any policies, symbolic or substantive, that can restore confidence. That is, I don't think there is any way to induce firms to invest using any source of funds apart from profits. We need to slog our way back to recovery by restoring profits, which can lead to business expansion.

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COMMENTS (1 to date)
Isaac K. writes:

Just pointing out a problem:
Reducing the budget of all federal agencies by 10% is a poor way of saving money - a slash and burn process to everything will have many disastrous public effects.
The public aren't libertarians who seek non-government, they are individuals and collectives, selfish and altruistic, bootleggers and baptists, who all want the same thing: social welfare.
(1) DOT is already suffering and vastly underfunded when they took a hit in toll revenues following oil spikes. People want government to pay for roads, whether they COULD be privately funded or not.
DOT is going to be bankrupt long before (2) Social Security, which people who 'need' welfare and people who see it as morally imperative desire -- the Disability Determination process is one of our most important workloads, and most underfunded. Claimants can wait years before they begin to receive disability. Similarly, (3) Medicare and Medicade budget slashing would never pass, and cutting (4) medical research through HHS that REDUCES the costs of healthcare wouldn't fly either.

When you start sparing programs that are already underfunded, you basically end up with very little left -- possibly DoD -- to be cut.
Just the ones I enumerated are major players in the budget, depending on how you look at it (total cost vs. administrative expenses, esp. with Soc. Sec. and Medicare)

And I didn't even mention cutting funding to public schools...

Long story short, someone running on that platform would never get elected, and even if he did, would never get his legislation passed unless some rather dire circumstances occurred.

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