December 5, 2013
In response to our Obamacare episode, listeners J. Squires and Sid Jones asked about the issue of whether the government actually has the right to force people to buy healthcare – one more skeptical and one surprised it was even an issue. This aspect is not trivial. But rather than focus on the philosophical issues regarding the law we decided to focus more on the economic logic and effects. That being said, here are a few important points:
- The individual mandate was held up in a Supreme Court decision as a “tax.”
- Under this idea, any raised healthcare cost (after subsidies) could be seen as the equivalent of taxing certain groups and redistributing this money to others.
- We commonly tax individuals and give the revenue to others. This by no means justifies the law, but it also means this process isn’t totally different than anything we already do.
- We’re generally raising the tax from healthy individuals to give the revenue to unhealthier ones. This could produce a “moral hazard” effect where people are incentivized not to take care of themselves. This also isn’t totally different than other redistribution policies from productive citizens to less productive citizens – unemployment insurance, for example.
- Since it has been upheld as a tax, President Obama has violated his promise not to raise taxes on the middle class.
December 5, 2013
Our potentially most exciting podcast episode is up, discussing the basic theories and effects of Obamacare. CHECK IT OUT.
December 5, 2013
Old blog readers know we’ve discussed this issue before, but I figured it helpful to reframe the general issues of this debate and cross-post something from our Facebook page.
There’s substantial data out there showing both positive and negative effects of higher minimum wages. Here are some things to think about:
-Outside of issues regarding whether the government has a right to set a price floor for wages, the debate usually comes down to its effect on higher wages vs lowered employment.
-Just like in our sweatshop episode, the answer can depend on this: how many workers is it ok to displace in order to improve the lives of the still-employed?
-Most studies show the effect of modest increases in the minimum wage. Any employment effects may be minimal at this point because the resulting wage is close to the market level anyway. Also, these modest increases won’t effectively get these workers out of poverty.
-Adjusting the minimum wage upward to a “living wage” will have much more adverse effects on employment. Expanding the Earned Income Tax Credit has shown to be a lot more effective in helping out these workers, and with fewer effects on employment.
-Increasing the price of labor will make capital relatively cheaper. Rather than hiring workers in the future, will companies instead invest more on replacing them with machines?
-Overall, I think people are emotionally drawn to the minimum wage as a way to redistribute wealth from managers/supervisors/CEOs to the guys on the bottom. Regardless of intentions, mandating a minimum wage doesn’t do this without perverse effects.
Inspired by this NPR Morning Edition segment today.
October 28, 2013
Should we pay those college athletes? Our seventh episode has been posted (or click here if you aren’t using iTunes). Be sure to check in to our Facebook page – that’s where we do most of our link sharing and graph posting.
October 1, 2013
The political atmosphere surrounding climate change is often excruciating to bear; scientists keep offering dire warnings but politicians can’t seem to agree on what to do, if anything. Governments can try tactics like capping total emissions, investing in alternative fuels, or mandating specific fuel efficiencies. But none of these has seemed to work thus far. Economic theory suggests we can shift the behaviors of consumers and firms to account for the negative effects of carbon by making its use more expensive. Would this “carbon tax” be any more politically feasible than the other alternatives? Will it be too much of a burden? Can we trust the government to implement it? Find out the dirt on carbon taxes and how it stacks up against other efforts to battle climate change.
To listen to the podcast, you can:
1. Click here: https://itunes.apple.com/us/podcast/upset-patterns/id675935423
2. Search Upset Patterns in the iPhone Podcasts app or iTunes music store
3. Subscribe to this RSS feed: http://upsetpatterns.podbean.com/feed/
September 15, 2013
Posted by W. Jerome under Uncategorized
| Tags: Economics
Leave a Comment
Almost four years later, this is still a pretty accurate depiction of the overarching debate in macroeconomics.