Prominent presidential candidates are advancing proposals that frankly horrify me. Should we dismember big tech firms? Or just give every American adult $1000 a month? Rather than critique these awful ideas, I’d rather ponder the Dog that Did Not Bark – moderate, common-sense proposals that no major candidate is likely to advocate. Just a few that have been on my mind lately…
1. Stop REAL ID before it inconveniences tens of millions of American travelers. Also, order the TSA to stop asking to see your boarding pass twice just to board a plane.
2. Let students fulfill their foreign language requirement with a computer language. For both high school graduation and public college admission.
3. Charge higher interest rates on student loans for borrowers who are unlikely to successfully finish their degree. And tell the borrowers why you’re doing this!
4. When someone applies for a building permit, don’t say Yes or No. Name a price – and make it public.
5. The same goes for health and safety regulation. Don’t tell firms how to avoid harm. Charge them for the harms they cause. If the downside risk is catastrophic, make them buy insurance or post a bond.
6. While we’re at it, why not sell foreigners portable work visas, with an upcharge for dependents?
7. Electronic road pricing!
8. Means-test Social Security and Medicare.
9. Identify the clearest annual waste of $100B in the federal budget. Advocate the immediate abolition of this waste, with all savings going toward deficit reduction, not new programs.
10. Loudly and graciously thank taxpayers for their service.
Yes, I know that some of these proposals aren’t even in the hands of the federal government, but the same applies to a great deal of what presidential candidates say. And on reflection, it’s hardly crazy for candidates to make such proposals. The bully pulpit aside, they can use federal funding to reward state and local governments that move in welcome directions.
So why are all of these planks likely to remain political orphans? Half are doomed by demagoguery, and the rest by apathy. Most people hate ideas like #5, #7, and #8; and if they don’t feel the hate spontaneously, any halfway skilled politician can readily kindle it. In stark contrast, #1 and #2 are probably already popular. But they fail to inspire passion, so they’re stillborn.
READER COMMENTS
John Hall
Mar 19 2019 at 12:32pm
Wouldn’t means-testing social security lead to a spike in marginal tax rates where it falls out?
Matthias Goergens
Mar 20 2019 at 6:12am
Depends on the exact shape of the phasing out.
But instead of talking about universal basic income, and social security and Medicare, we should talk about unifying taxation and welfare systems.
Both of them need to assess your means, and a disconnect can lead to vastly higher effective marginal tax rates (especially on poor people). So let’s reduce the redundancy.
In practice that might look like a basic income (or refundable negative income tax credit), and a carefully calibrated tax system.
robc
Mar 19 2019 at 12:43pm
Social Security is “means tested” in its initital calculation:
90% of first $926 of AIME (average indexed monthly earnings)
32% between $926 and $5583
15% above $5583
Assuming 90% as the “baseline”, SS is already being taxed up to 75% in the top bracket.
robc
Mar 19 2019 at 12:46pm
#3 has a simpler and better solution. End government guarantees of student loans.
Then let the banks decide on interest rate rules and etc.
Floccina
Mar 19 2019 at 1:46pm
Step one on Social Security is to give all retirees 225/week. It is very badly structured as it is.
Mike
Mar 19 2019 at 8:04pm
most unpopular yet financial sensible proposal: give the IRS the resources they need to recover the $200-400 billion lost every year to tax avoidance.
WalterCo
Mar 20 2019 at 2:18pm
Tax avoidance is perfectly legal and ethically sound. There is nothing to recover.
Michael Sandifer
Mar 19 2019 at 10:42pm
What’s so bad about a UBI, especially if it replaces public housing, food stamps, etc.?
robc
Mar 20 2019 at 8:43am
If it replaced ALL transfer payments, it might not be so bad. But it won’t, because politics doesnt work that way.
I have developed a general rule that when a policy is directly discussed as a bad idea in Kipling’s Gods of the Copybook Headings, it is a bad idea.
Michael Sandifer
Mar 19 2019 at 10:50pm
For that matter, I like the idea of breaking up tech monopolies. I don’t think it’s good for competition to have companies like Alphabet, Facebook, and Microsoft buying up smaller competitors and potential competitors. Why should tech firms have over $100 billion in cash and equivalents on their balance sheets? Sounds like they don’t have enough innovative ideas to invest, so they wait to gobble up competitors.
Mark Z
Mar 20 2019 at 2:01am
Since when is having lots of money justification for anti-trust action?
Mark Z
Mar 20 2019 at 2:07am
Also, in what respect are the big tech companies monopolies? Google isn’t, nor is Amazon; nor are the social media companies. They are in an extremely competitive business: the entertainment business. FB bought out instagram in order to stay competitive because Instagram is slowly replacing it. And notice that most of these companies sell their main products for free? This is not evidence of an industry lacking competition; it’s an extraordinary competitive industry. I think much handwringing over putative tech monopolies is more about finding an excuse to kneecap companies one doesn’t like for entirely orthogonal reasons.
Michael Sandifer
Mar 20 2019 at 2:37pm
If Google isn’t a monopoly in search, and Facebook isn’t a monopoly in personal social networking, I don’t know what a monopoly is.
Amazon may be said to be a monopoly seller of E-books, but that monopoly doesn’t concern me, because they lower prices and are innovating. They don’t have the cash hoards of firms like Alphabet
The harm that comes from the Google search monopoly is that advertising rates in search could be lower with more competition. With respect to Facebook, more choices for social media could provide more options for users seeking better privacy protection, less fake news, and lower advertising rates.
Thomas Sewell
Mar 20 2019 at 9:49pm
As far as I can tell based on publicly available information, Google has a 77% market share in search and Facebook has dropped from 76% a year ago to 66% (down to 52% in the U.S.).
I’d expect a monopoly to control the whole market they’re in and to effectively prevent competition somehow, so I don’t see how those can be considered monopolies.
The thing about these free-to-end-user online companies is that it’s extremely easy for someone to switch from one to another. As a result, they must maintain their market position constantly via improving their offerings, otherwise they risk becoming the next Myspace or Yahoo as people quickly migrate their online attention span to someone else. That’s why they try to buy anyone who seems to be doing things better than they are, or who is appealing to a different niche than they already have. It’s because they are so afraid of all their potential competition, not because they are true monopolies and thus don’t need to worry about anyone competing with them.
Phil H
Mar 20 2019 at 2:46am
I’m in agreement with Mark Z for once. Antitrust requires evidence of harm, and there just isn’t much evidence at the moment. I think most talk about breaking up tech giants is a cynical ploy to win headlines.
Matthias Goergens
Mar 20 2019 at 6:14am
Barriers to entry would be a problem. Constantly buying up smaller competitors just incentives more people to start smaller competitors.
Michael Sandifer
Mar 20 2019 at 5:58pm
What good does incenting more startups do for the economy when they’re bought up by monopolies?
Richard Wallace
Mar 20 2019 at 8:09am
I am curious as to why UBI is an “absolutely horrible idea.” The idea has a superficial appeal, and I am a UBI skeptic, but I am curious about Bryan Caplan’s reasoning. Can anyone point me to a source?
Frank Clarke
Mar 20 2019 at 10:38am
…or you could just turn Article I, section 8 into a punch-list and tell every government employee “if you can’t find yor job somewhere in this list… you’re fired!” Just that alone would reduce federal expenditures by about 90%.
JdL
Mar 20 2019 at 5:38pm
4. When someone applies for a building permit, don’t say Yes or No. Name a price – and make it public.
Why should should a property owner have to pay anybody anything before building on his own land?
MIchael Pettengill
Mar 20 2019 at 6:04pm
Because libertarian and conservative economists have provided GOP politicians overwhelming slogans, sound bites, as well as “reasoned” arguments why they are liberty destroying, job destroying, wealth destroying.
For every economist who supports each point, there are three arguing againsst them advising GOP politicians.
By the way, Social Security and Medicare are means tested in the same way Milton Friedman means tested his negative income tax, just not as visibly.
Even Bernie is either fooled or lying, given Medicare is not single payer and charges the patient lots of money multiple ways which get paid by welfare if the patient hasn’t the means. Ie, it only pays 80% of some medical costs; premiums for Part B increasing with income; nothing for drugs unless you buy a Part D plan which has premiums and out of pocket costs based on means.
And health care is an example of how economists prevent “common sense” solutions. Obama picked a framework for health care from conservative economists who laid it out early 90s, and got adopted in Switzerland, and by Gov Mitt Romney, with many amendments added based on arguments by conservative economists, only to have conservative economists fight it with basically the argument that
Ie, only healthy people get to buy insurance, while unhealthy people pay entirely out of pocket, and given age is like a disease, everyone is unhealthy and their insurance can be cancelled at almost any time. Ie, buying a policy for $100 a month when 22 is a policy that must be cancelled so 22 year olds are not subsidizing 23 year olds, and certainly not 60 years olds.
Tyler R Vinton
Mar 31 2019 at 5:21pm
#10 is my favorite!
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