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What economists DO agree on (1 Viewer)

Maurile Tremblay

Maurile Tremblay

Administrator
Staff member
From Mankiw's blog:

1. A ceiling on rents reduces the quantity and quality of housing available. (93%)

2. Tariffs and import quotas usually reduce general economic welfare. (93%)

3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)

5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)

6. The United States should eliminate agricultural subsidies. (85%)

7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)

8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)

9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)

10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)

11. A large federal budget deficit has an adverse effect on the economy. (83%)

12. A minimum wage increases unemployment among young and unskilled workers. (79%)

13. The government should restructure the welfare system along the lines of a "negative income tax." (79%)

14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

 
Homer J Simpson said:
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
Interesting. Who'da thunk it?
Click to expand...
That's an interesting one. I'd kind of expect it to be higher than 90% agreement since payroll and income taxes are an extremely obvious cause of some amount structural unemployment. So tax cuts in those areas should reduce unemployment pretty reliably.Maybe the 10% who didn't agree took issue with the word "significant"?

 
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Homer J Simpson said:
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
Interesting. Who'da thunk it?
Click to expand...
Everyone who ever took Macro Economics 101 :goodposting: However in 1982 when I went through this ordeal the general idea was that fiscal policy took at least 18 months to make a difference, which meant it generally started to help after the typical economic downturn had fixed itself. I don't know if that is still the general consensus or not?
 
Bottomfeeder Sports said:
Homer J Simpson said:
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
Interesting. Who'da thunk it?
Click to expand...
Everyone who ever took Macro Economics 101 :goodposting: However in 1982 when I went through this ordeal the general idea was that fiscal policy took at least 18 months to make a difference, which meant it generally started to help after the typical economic downturn had fixed itself. I don't know if that is still the general consensus or not?
Click to expand...
What's humorous about this agreement is we are hastily creating a situation for the not so distant future where higher taxes and lower spending are going to be very necessary. :goodposting:
 
Homer J Simpson said:
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
Interesting. Who'da thunk it?
Click to expand...
Obviously you are pointing to the stimulus package and making a comment. "Tax cut and/or government expenditure increase" is an extremely inclusive way of expressing that question. If you seperate the tax cut and government expeniture increase and re-ask the question, I am sure the % that would agree would greatly decrease. This is a statement that both Classical and Keynesian economists can agree on. Further, you may want to notice # 11. A large federal budget deficit has an adverse effect on the economy. (83%) And then view not only the stimulus but that that is on top of normal budget deficit and on top of TARP and on top of a dozen or so 'under the radar' expenditures like the guarantee of billions of assets for Bank of America and Citigroup. And we are already looking ahead at spending more.

You may also want to look at the case of Japan and it's lost decade. The Japanese government made massive 'stimulus' spending packages on roads and the like and yet, Japan still lingered in a prolonged recession. Krugman and other Keynesian economist argue that this is because they did not do more/faster or missed another important policy like re-capitalizing the banking system but yet there does not seem to be any shining examples historically of fiscal spending being an effective tool against a depression. Or review most economists views of the Great Depression and fiscal spending being unimpressively weak in terms of making an impact- such as Obama's own senior economist, Romer. Instead of saying "This is how you do it" Keynesian economists are left defending why it did not work (or suggesting that by doing so they insulated the economy against further decline- extremely hard to prove) in the numerous cases of it being tried and failing.

 
Chaos Commish said:
Bottomfeeder Sports said:
Homer J Simpson said:
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
Interesting. Who'da thunk it?
Click to expand...
Everyone who ever took Macro Economics 101 :goodposting: However in 1982 when I went through this ordeal the general idea was that fiscal policy took at least 18 months to make a difference, which meant it generally started to help after the typical economic downturn had fixed itself. I don't know if that is still the general consensus or not?
Click to expand...
What's humorous about this agreement is we are hastily creating a situation for the not so distant future where higher taxes and lower spending are going to be very necessary. :goodposting:
Click to expand...
2040 (before this mess)!
 
Chaos Commish said:
Bottomfeeder Sports said:
Homer J Simpson said:
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
Interesting. Who'da thunk it?
Click to expand...
Everyone who ever took Macro Economics 101 :shrug: However in 1982 when I went through this ordeal the general idea was that fiscal policy took at least 18 months to make a difference, which meant it generally started to help after the typical economic downturn had fixed itself. I don't know if that is still the general consensus or not?
Click to expand...
What's humorous about this agreement is we are hastily creating a situation for the not so distant future where higher taxes and lower spending are going to be very necessary. :confused:
Click to expand...
In the name of emergency, we are laying a huge burden on our future, by making the stimulus far larger than it needs to be, and including all kinds of pet projects. The impact of the fiscal stimulus, such as it is, will start to do its work in a year or two.As soon as the economy starts to recover, however, two things will happen. The government will increase taxes, and the Fed will tighten the money supply. Then the economy will go in the tank again. In 1933 the unemployment rate was 24.9%. After massive government intervention, it went down to 14.3% in 1937. Then the economy went in the tank again (after six years of FDR), and it went back up to 19.0%.

Get ready for a long hard ride.

 
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I'm shocked that people are reading this and pointing to ways that it proves what they already thought, or poking holes in it by explaining that what they already thought is true.

 
As I look down that list, one thing occurs to me above everthing else: unions are the enemy.

It's unions that push for protectionism, tarriffs, that attack outsourcing. It's unions that force wages that don't represent the marketplace. It's unions that demand minimum wage as a means of increasing their own wages. And it's the politicians that unions support that always push for populist measures like rent control.

There was a time in this country when unions were a necessary good protection for workers. But now they have become a stranglehold over all of us.

 
timschochet said:
As I look down that list, one thing occurs to me above everthing else: unions are the enemy.It's unions that push for protectionism, tarriffs, that attack outsourcing. It's unions that force wages that don't represent the marketplace. It's unions that demand minimum wage as a means of increasing their own wages. And it's the politicians that unions support that always push for populist measures like rent control. There was a time in this country when unions were a necessary good protection for workers. But now they have become a stranglehold over all of us.
Click to expand...
:lmao:
 
Homer J Simpson said:
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
Interesting. Who'da thunk it?
Click to expand...
Unfortunately this one butts right up against this one:
11. A large federal budget deficit has an adverse effect on the economy. (83%)
Click to expand...
And don't forget that most of the spending in the latest package is definitely not designed to be stimulative.
 
Maurile Tremblay said:
Maurile Tremblay said:
1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
Click to expand...
Chadstroma said:
Now if they could just get the politicians to agree as well.
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New York City passes tougher rent controls.
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New York is a place unto itself. I actually agree with the tougher rent controls here but not in other cities where development is less restricted and new housing and land is more accessible. Many of these tenants could not affford to live in New York City otherwise, especially Manhattan. And many of these tenants are part of the service economy that supports the people who can afford to live here. Without some type of affordable housing, you end up with a city of the very poor and the very rich. The rents here are already the highest in the country, even with the real estate meltdown, yet salaries are not keeping pace. And since it's so expensive to make improvements and there is limited housing supply, many landlords would just charge higher rents without improving the quality of the housing. They're already doing this today. And the quantity of the housing can't be increased easily either due to restrictive policies and lack of available space. There really are not any easy answers but the only people in NYC who continue to resist rent controls are the lobbyists for the landlords and the real estate agents. I think one good way to increase available housing would be to get rid of most of the real estate agents. I'm half joking but there must be at least 50,000 of them living in the city and most of them are useless. That would certainly lower prices too.

 
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The United States should not restrict employers from outsourcing work to foreign countries. (90%)

Why not off shore all jobs. The economy would realy take off then.

 
Axisofevil said:
Why not off shore all jobs. The economy would realy take off then.
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Foreigners aren't that stupid. If we have them do work for us, they're going to demand that we also do work for them in return.(If we could trick them into doing a bunch of work for us without demanding our services in return, that would be awesome; but reality doesn't work that way.)

 
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timschochet said:
As I look down that list, one thing occurs to me above everthing else: unions are the enemy.It's unions that push for protectionism, tarriffs, that attack outsourcing. It's unions that force wages that don't represent the marketplace. It's unions that demand minimum wage as a means of increasing their own wages. And it's the politicians that unions support that always push for populist measures like rent control. There was a time in this country when unions were a necessary good protection for workers. But now they have become a stranglehold over all of us.
Click to expand...
:goodposting: I have nothing nice to say about today's unions.
 
Sand said:
Homer J Simpson said:
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
Interesting. Who'da thunk it?
Click to expand...
Unfortunately this one butts right up against this one:
11. A large federal budget deficit has an adverse effect on the economy. (83%)
Click to expand...
And don't forget that most of the spending in the latest package is definitely not designed to be stimulative.
Click to expand...
These two statements aren't mutually exclusive. Fiscal policy can be helpful reaching full employment, but that's a short run issue; the economy reaches full employment all by itself if you give it time. On the other hand, the national debt is more of a long run problem.
 
IvanKaramazov said:
Sand said:
Homer J Simpson said:
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
Interesting. Who'da thunk it?
Click to expand...
Unfortunately this one butts right up against this one:
11. A large federal budget deficit has an adverse effect on the economy. (83%)
Click to expand...
And don't forget that most of the spending in the latest package is definitely not designed to be stimulative.
Click to expand...
These two statements aren't mutually exclusive. Fiscal policy can be helpful reaching full employment, but that's a short run issue; the economy reaches full employment all by itself if you give it time. On the other hand, the national debt is more of a long run problem.
Click to expand...
To the extent that you believe in the role of government to reduce the impact of job loss and recession, then it is actually economically responsible to run deficits during such time as the government ramps up its efforts to cushion the fall. The key is that the government should on the other hand run surpluses during times of plenty to pay down the debt. Our long term problems arise out of our failures to do the latter over the recent decades.
 
T Bell said:
To the extent that you believe in the role of government to reduce the impact of job loss and recession, then it is actually economically responsible to run deficits during such time as the government ramps up its efforts to cushion the fall. The key is that the government should on the other hand run surpluses during times of plenty to pay down the debt. Our long term problems arise out of our failures to do the latter over the recent decades.
Click to expand...
:goodposting: You guys remember the last surplus that the US had? It was in 2000 and there was a big election where one candidate wanted to save some of that surplus and improve the long term balance sheet of the federal gov't as well as the balance sheet for the large entitlement programs (SS, etc.) The other candidate wanted to return the money to the people who earned it. That's fine... and possibly a small tax cut was warranted, but not to the level that was cut (assuming you subscribe to the theory that T Bell espoused above).It's difficult to sell this fiscally prudent policy to the people. They are big proponents of both tax cuts and bailouts. They care little for the long term health of the economy, and care much more about their own (very) short term outlook. Hell, most people don't adequately save for their own retirement, so why would they be willing to save for their children's retirement? The nature of the collective psyche and culture in the US doesn't lend itself to prudence. We are not a people of caution and savings... we are not a people of measured and thoughtful action. We are a people that want it bigger, better, faster, and now. That serves us well in some cases (like entrepreneurship, which is still exceptional in the US) but not so well when it comes to things like soft diplomacy, fiscal prudence, and personal responsibility (let alone responsibility to the greater good of the people as a whole).Furthermore, politicians have an even shorter horizon to watch out for... their upcoming re-election campaign, which is at most 6 years off. Why be prudent now when it could cost you your job next year? It's a structural defect of the representative democracy that the US has.However, there are countries that employ the policy outlined above... and they too are adversely affected by this economic downturn. It's not like they are immune because they were prudent in the past. Yet, they have the capital reserves to undertake an outlay like this to truly stimulate the economy while not sacrificing their economic future.
 
Maurile Tremblay said:
Axisofevil said:
Why not off shore all jobs. The economy would realy take off then.
Click to expand...
Foreigners aren't that stupid. If we have them do work for us, they're going to demand that we also do work for them in return.(If we could trick them into doing a bunch of work for us without demanding our services in return, that would be awesome; but reality doesn't work that way.)
Click to expand...
I don't follow you here.To your first statement, people/companies get work done where they find the best ratio of cost/quality, or at least the best acceptable ratio. How much work the US outsources to other countries is not the barometer other countries use to outsource work to us. If our quality/cost is better than they can find elsewhere, they will outsource work here. If not, they won't.

And to your second statement, why would it be awesome if all US work went to other countries with none of it coming back? It might be great for business owners, but I don't see how it is awesome for average working fellow.

 
kutta said:
Maurile Tremblay said:
Axisofevil said:
Why not off shore all jobs. The economy would realy take off then.
Click to expand...
Foreigners aren't that stupid. If we have them do work for us, they're going to demand that we also do work for them in return.(If we could trick them into doing a bunch of work for us without demanding our services in return, that would be awesome; but reality doesn't work that way.)
Click to expand...
I don't follow you here.To your first statement, people/companies get work done where they find the best ratio of cost/quality, or at least the best acceptable ratio. How much work the US outsources to other countries is not the barometer other countries use to outsource work to us. If our quality/cost is better than they can find elsewhere, they will outsource work here. If not, they won't.
Click to expand...
With some short-term exceptions, imports = exports. The international currency market makes sure of that. Things can get complicated when you have 50+ countries all doing business with each other. But the simple way to think about it is -- any particular dollar that is spent by Americans buying imports will necessarily ultimately be spent in America by foreigners buying our exports. That's what U.S. Dollars are good for, after all -- being spent in America. There's no such thing as foreigners sending us all their goods but not asking us to send them ours in return -- although if things could work like that, it would be awesome (see below).(The short-term exception to imports = exports involves investment. Some dollars sent overseas, instead of being immediately spent in America, are instead invested in America. Foreigners buy U.S. bonds, etc. This is not a bad thing. During the perceived "credit crunch" going on right now, it's the best thing ever.)

And to your second statement, why would it be awesome if all US work went to other countries with none of it coming back? It might be great for business owners, but I don't see how it is awesome for average working fellow.
Click to expand...
Because doing work is a cost, not a benefit. The stuff that the work produces is the benefit.If this isn't obvious on the scale of the U.S. and Mexico, think about it in terms of yourself and your neighbor. Let's say that you are a standup comic and your neighbor is a gardener. Initially, you agree to tell him 12 jokes if he will trim 12 of your hedges. Fair enough.

Would you be upset, however, if he no longer wanted you to keep coming up with new jokes to tell but kept trimming your hedges anyway? I.e., he would be doing work for you, but you wouldn't be doing work for him. You'd be "unemployed" by him. Is that good for you or bad for you?

It's obviously good for you because work is a cost. You're still getting the benefit of the trimmed hedges but you're avoiding the cost of writing and telling jokes.

It's the same on a national scale. If other countries agreed to keep supplying Americans with goods and services while declining to ask for any goods or services from us in return, that would be great for Americans. It would be all benefit, no costs.

(To think of doing work as a benefit rather than a cost is to succumb to the "make-work bias" -- see this thread.)

 
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Maurile Tremblay said:
Let's say that you are a standup comic and your neighbor is a gardener. Initially, you agree to tell him 12 jokes if he will trim 12 of your hedges. Fair enough.

Would you be upset, however, if he no longer wanted you to keep coming up with new jokes to tell but kept trimming your hedges anyway?
Click to expand...
Mildly offended, but not upset.
 
Maurile Tremblay said:
kutta said:
Maurile Tremblay said:
Axisofevil said:
Why not off shore all jobs. The economy would realy take off then.
Click to expand...
Foreigners aren't that stupid. If we have them do work for us, they're going to demand that we also do work for them in return.(If we could trick them into doing a bunch of work for us without demanding our services in return, that would be awesome; but reality doesn't work that way.)
Click to expand...
I don't follow you here.To your first statement, people/companies get work done where they find the best ratio of cost/quality, or at least the best acceptable ratio. How much work the US outsources to other countries is not the barometer other countries use to outsource work to us. If our quality/cost is better than they can find elsewhere, they will outsource work here. If not, they won't.
Click to expand...
With some short-term exceptions, imports = exports. The international currency market makes sure of that. Things can get complicated when you have 50+ countries all doing business with each other. But the simple way to think about it is -- any particular dollar that is spent by Americans buying imports will necessarily ultimately be spent in America by foreigners buying our exports. That's what U.S. Dollars are good for, after all -- being spent in America. There's no such thing as foreigners sending us all their goods but not asking us to send them ours in return -- although if things could work like that, it would be awesome (see below).(The short-term exception to imports = exports involves investment. Some dollars sent overseas, instead of being immediately spent in America, are instead invested in America. Foreigners buy U.S. bonds, etc. This is not a bad thing. During the perceived "credit crunch" going on right now, it's the best thing ever.)

And to your second statement, why would it be awesome if all US work went to other countries with none of it coming back? It might be great for business owners, but I don't see how it is awesome for average working fellow.
Click to expand...
Because doing work is a cost, not a benefit. The stuff that the work produces is the benefit.If this isn't obvious on the scale of the U.S. and Mexico, think about it in terms of yourself and your neighbor. Let's say that you are a standup comic and your neighbor is a gardener. Initially, you agree to tell him 12 jokes if he will trim 12 of your hedges. Fair enough.

Would you be upset, however, if he no longer wanted you to keep coming up with new jokes to tell but kept trimming your hedges anyway? I.e., he would be doing work for you, but you wouldn't be doing work for him. You'd be "unemployed" by him. Is that good for you or bad for you?

It's obviously good for you because work is a cost. You're still getting the benefit of the trimmed hedges but you're avoiding the cost of writing and telling jokes.

It's the same on a national scale. If other countries agreed to keep supplying Americans with goods and services while declining to ask for any goods or services from us in return, that would be great for Americans. It would be all benefit, no costs.

(To think of doing work as a benefit rather than a cost is to succumb to the "make-work bias" -- see this thread.)
Click to expand...
I'm still not buying this. But I have not had time to really read the link you posted, but I'm getting there.My initial thought is that if we change your example around a little bit, it would seem to fit the "outsourcing" model a little better. If my neighbor is a gardener and I am a stand-up comic. We make your agreement. But then I realize I can send my lawn and bushes over to India, have them cut and trimmed over there, then sent back to me at a lower cost of having my neighbor do it. I tell my neighbor that I am going to do that instead of having him do my lawn. Now he has nothing to offer me in exchange for my jokes, so I have to either tell him my jokes for free, or start telling my jokes to Indian folks because they now have my money for doing my lawn.

The end result is my neighbor has no job and no money because he can't work, and the Indian dudes have the money, so I must sell my goods and services to them.

Again, I'll read your link more thoroughly and come back in here, but it's not making sense in my little pea brain right now.

 
The issue with outsourcing is that we're trading, on the macro level as a nation, jobs and income for cheaper retail services that create comfort/entertainment more than they create wealth or economic power.

On the manufacturing side, we're losing our expertise as a manufacturing nation to other countries.

These are very troubling trends.

 
T Bell said:
The issue with outsourcing is that we're trading, on the macro level as a nation, jobs and income for cheaper retail services that create comfort/entertainment more than they create wealth or economic power. On the manufacturing side, we're losing our expertise as a manufacturing nation to other countries. These are very troubling trends.
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:lmao: the thing for me on outsourcing, is the TYPE of jobs, I am good with staple manufacturing, and rudimentary call centers and publishing centers.the Intellectual capital that ends up being given away to establish the "long term" savings that US has enjoyed for the last 20+years, has been pretty much all dried up. the world economy is a closed environment, will the US lead? or will it be a major participant in the normalizing of the world life quality?unfortunately in our life time, i don't think we'll see both. just the US averaging down. Unless we stop giving away our food surplus.
 
Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
ROFL! I stopped right here.The only question is why its only 90%. This statement is so diluted that everyone should answer yes.

Are you a big government liberal that wants the government to spend more? The answer is yes.

Are you a fiscal conservative that wants to cut taxes instead? The answer is still yes.

That's what you get with that and/or qualifier...

And to top it off, for those few that disagree with BOTH, we'll add in a third option. Do you believe fiscal policy has a "significant" stimulative impact.

If you think it is a negative impact, the answer is yes.

If you think it is a positive impact, the answer is still yes.

And of course we haven't clearly defined what "significant" means, either.

I stopped reading after that gibberish.

 
'Zot said:
'Maurile Tremblay said:
From Mankiw's blog:

4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
Click to expand...
ROFL! I stopped right here.The only question is why its only 90%. This statement is so diluted that everyone should answer yes.

Are you a big government liberal that wants the government to spend more? The answer is yes.

Are you a fiscal conservative that wants to cut taxes instead? The answer is still yes.

That's what you get with that and/or qualifier...

And to top it off, for those few that disagree with BOTH, we'll add in a third option. Do you believe fiscal policy has a "significant" stimulative impact.

If you think it is a negative impact, the answer is yes.

If you think it is a positive impact, the answer is still yes.

And of course we haven't clearly defined what "significant" means, either.

I stopped reading after that gibberish.
Click to expand...
Why only 90% instead of 100%? Some economists buy in to Ricardian equivalence, at least to some extent.
 
Update: economists still agree on a bunch of stuff.

The IGM Economic Experts Panel is a panel of 41 highly regarded economists from all political stripes. For the last several months, they've been polled on public policy matters related to economics. A number of issues garnered nearly universal agreement. Among them:

1. Permanently raising the federal marginal tax rate on ordinary income by 1 percentage point for those in the top (i.e., currently 35%) tax bracket would increase federal tax revenue over the next 10 years.

2. The cumulative budget shortfalls in the US over the next 10 years cannot be reduced by (at least) half purely by increasing the federal marginal tax rate on ordinary income for those in the top tax bracket.

3. Freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment.

4. The 2008 bank bailout lowered the 2010 unemployment rate.

5. So did the 2009 stimulus.

6. Gas prices are driven primarily by market factors, not by government policies.

7. Looser licensing restrictions for nurses and physicians assistants would be good for patients, because the additional safety risks would be small compared to the reduction in fees and waiting time.

8. Rent controls in New York and San Francisco have had no positive impact on the amount and quality of affordable rental housing.

9. Congestion pricing (e.g. charging higher tolls at rush hour) makes people on average better off.

10. If you want to reduce carbon emissions, carbon taxes are better than fuel efficiency standards.

11. There are consequential distortions created by the tax preference that favors obtaining health insurance through employers.

12. Returning to a gold standard would not help price stability or employment outcomes.

13. Legalizing and taxing "soft drugs" like marijuana would be preferable to prohibiting them.

 
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'Time Kibitzer said:
I think we can also add Marijuana should be legalized.
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Yeah, that one was also covered by the IGM panel. I'll add it to the list above.There was near unanimity that the Netherlands' restrictions on "soft drugs" combined with a moderate tax aimed at deterring their consumption would have lower social costs than continuing to prohibit use of those drugs as in the US. (Only one panelist out of 41 disagreed, and he listed his confidence level as a 3 out of 10.)

 
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'Maurile Tremblay said:
'Time Kibitzer said:
I think we can also add Marijuana should be legalized.
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Yeah, that one was also covered by the IGM panel.There was near unanimity that the Netherlands' restrictions on "soft drugs" combined with a moderate tax aimed at deterring their consumption would have lower social costs than continuing to prohibit use of those drugs as in the US. (Only one panelist out of 41 disagreed, and he listed his confidence level as a 3 out of 10.)
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Let's get it done 'Merica.
 
'Maurile Tremblay said:
Update: economists still agree on a bunch of stuff.

The IGM Economic Experts Panel is a panel of 41 highly regarded economists from all political stripes. For the last several months, they've been polled on public policy matters related to economics. A number of issues garnered nearly universal agreement. Among them:

1. Permanently raising the federal marginal tax rate on ordinary income by 1 percentage point for those in the top (i.e., currently 35%) tax bracket would increase federal tax revenue over the next 10 years.

2. The cumulative budget shortfalls in the US over the next 10 years cannot be reduced by (at least) half purely by increasing the federal marginal tax rate on ordinary income for those in the top tax bracket.

3. Freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment.

4. The 2008 bank bailout lowered the 2010 unemployment rate.

5. So did the 2009 stimulus.

6. Gas prices are driven primarily by market factors, not by government policies.

7. Looser licensing restrictions for nurses and physicians assistants would be good for patients, because the additional safety risks would be small compared to the reduction in fees and waiting time.

8. Rent controls in New York and San Francisco have had no positive impact on the amount and quality of affordable rental housing.

9. Congestion pricing (e.g. charging higher tolls at rush hour) makes people on average better off.

10. If you want to reduce carbon emissions, carbon taxes are better than fuel efficiency standards.

11. There are consequential distortions created by the tax preference that favors obtaining health insurance through employers.

12. Returning to a gold standard would not help price stability or employment outcomes.

13. Legalizing and taxing "soft drugs" like marijuana would be preferable to prohibiting them.
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These things make way too much sense for them to have an impact on policy.
 
The problem with our democracy is that when times are good, the legislators seemingly cannot help themselves and tend to squander money. All kinds of reasons are given; "a nation as great as ours cannot let the poor go without TV, or we must pay teachers more money, or 'invest (meaning spend)' on great new technologies, or the future of our children, or more 'bread and circus'"or a hundred other reasons. When times are good is the time not to increase spending, and to raise taxes slightly to pay down debt. Then when times are bad, the options of spending more and cutting taxes are viable, because they do not add to unsustainable debt.

But if you ask a liberal: "When is it a good time for the government to spend less?", he will be speechless. And if you ask a conservative: "When is it a good time to raise taxes", he will be speechless.

 
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'DiStefano said:
The problem with our democracy is that when times are good, the legislators seemingly cannot help themselves and tend to squander money. All kinds of reasons are given; "a nation as great as ours cannot let the poor go without TV, or we must pay teachers more money, or 'invest (meaning spend)' on great new technologies, or the future of our children, or more 'bread and circus'"or a hundred other reasons. When times are good is the time not to increase spending, and to raise taxes slightly to pay down debt. Then when times are bad, the options of spending more and cutting taxes are viable, because they do not add to unsustainable debt.But if you ask a liberal: "When is it a good time for the government to spend less?", he will be speechless. And if you ask a conservative: "When is it a good time to raise taxes", he will be speechless.
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That's why taxes must be raised (for everybody) and spending must be cut across the board. Except neither is going to happen soon, because it's political suicide.
 
'dickey moe said:
'Maurile Tremblay said:
From Mankiw's blog:

11. A large federal budget deficit has an adverse effect on the economy. (83%)
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And the other 17% of economists are Paul Krugman.
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Well as long as: 1) the government spending is efficient enough that the economy continues to grow sufficiently and

2) some entity (China or whoever) is always willing to lend the USA money

then the USA could hypothetically run a deficit every year for the rest of time and the economy would be alright. So there is some credence to that 17%. Although neither of those assumptions would seem to be obviously true of happening in the future, so I'd agree with the 83%.

 
'dickey moe said:
'Maurile Tremblay said:
From Mankiw's blog:

11. A large federal budget deficit has an adverse effect on the economy. (83%)
Click to expand...
And the other 17% of economists are Paul Krugman.
Click to expand...
I don't know whether Krugman would be in the 17%, but I would be.I'd say that profligate government spending has an adverse effect on the economy, and budget deficits are highly correlated with government spending . . . but if there were some way to run up large budget deficits without profligate government spending (say, by having a zero percent tax rate for a few years), I don't think it would hurt the economy. If anything, it would help the economy in the short run and then hurt the economy down the road a bit (when our debts become due); but the overall cumulative effect would probably be similar to having a balanced budget the whole time with the same amount of government spending.

I think the bank account-ATM machine analogy is on point here. Think of the tax base as the government's bank account, and think of tax revenues as walking-around money that the government has withdrawn from the ATM.

Profligate spending will hurt our financial position, but it doesn't really matter that much whether our purchases are paid for with cash we've withdrawn from the ATM, or are paid for with a credit card so that we don't have to withdraw that much cash from the ATM yet. It's essentially the same thing. (Yes, we pay interest on our credit card debt; but we also earn interest on the money in our checking account. Capital grows when it is left in the private sector to be taxed later instead of being taxed now.) What makes a certain purchase smart or stupid is independent of how we pay for it. The problem is that a lot of our purchases are stupid, but that's a separate issue. None of our stupid purchases would become non-stupid just because we've made sufficiently large ATM withdrawals to pay for them (thus balancing the budget).

 
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'Maurile Tremblay said:
'dickey moe said:
'Maurile Tremblay said:
From Mankiw's blog:

11. A large federal budget deficit has an adverse effect on the economy. (83%)
Click to expand...
And the other 17% of economists are Paul Krugman.
Click to expand...
I don't know whether Krugman would be in the 17%, but I would be.I'd say that profligate government spending has an adverse effect on the economy, and budget deficits are highly correlated with government spending . . . but if there were some way to run up large budget deficits without profligate government spending (say, by having a zero percent tax rate for a few years), I don't think it would hurt the economy. If anything, it would help the economy in the short run and then hurt the economy down the road a bit (when our debts become due); but the overall cumulative effect would probably be similar to having a balanced budget the whole time with the same amount of government spending.

I think the bank account-ATM machine analogy is on point here. Think of the tax base as the government's bank account, and think of tax revenues as walking-around money that the government has withdrawn from the ATM.

Profligate spending will hurt our financial position, but it doesn't really matter that much whether our purchases are paid with cash we've withdrawn from the ATM, or are paid with a credit card so that we don't have to withdraw that much cash from the ATM yet. It's essentially the same thing. (Yes, we pay interest on our credit card debt; but we also earn interest on the money in our checking account. Capital grows when it is left in the private sector to be taxed later instead of being taxed now.) What makes a certain purchase smart or stupid is independent of how we pay for it. The problem is that a lot of our purchases are stupid, but that's a separate problem. None of our stupid purchases would become non-stupid just because we made sufficiently large ATM withdrawals to pay for them (thus balancing the budget).
Click to expand...
I agree with most of this post, except the omnipresent implication in conservative thinking that the measure of success for government policy should be overall economic growth.
 
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