Dean Baker writes (The post is unsigned, so it might not be Baker),
we get Brooks telling us:
“The government should reduce its generosity to people who are not working but increase its support for people who are. That means reducing health benefits for the affluent elderly.”
There are two questions that come up here. First what is the definition of “affluent” and second what counts as “generosity.”
In case you didn’t know, Baker does not heart Brooks. My own views align with neither Baker nor Brooks.
1. Brooks supports more government spending on infrastructure, as does Baker. I do not.
2. On the redistribution issue, my perspective differs somewhat from Brooks. My concern is that we have too many uncoordinated means-tested programs, making marginal tax rates too high for the able-to-work poor. As you know, I prefer something more along the lines of a small universal basic income provided at the Federal level, with additional specific needs addressed through programs from states, local governments, and charities.
As for health benefits, I am not for taking away Medicare from the elderly today, but I am for scaling back promises to people tomorrow. Note that Baker claims that today’s beneficiaries have paid for their benefits. I call baloney sandwich. What they paid for were their parents’ benefits, and what they paid into the system was not sufficient to pay for the benefits they are now receiving. If it were true that they had paid for their benefits, the system would be solvent.
3. Brooks endorses the reform conservative Room-to-Grow idea of showering middle-class families with tax credits. I see that as political posturing. If I could be in charge of tax reform, we would get rid of credits and deductions, and we also would move away from taxing income and instead toward taxing consumption. Note, however, that tax reform is not one of my top three priorities.
4. Brooks wants us to open the immigration door wide for high-skilled immigrants, while presumably trying to keep it relatively closed for low-skilled immigrants. If it were up to me, the door would be wide open for people who are grateful for the chance to live in America and are eager to assimilate, and otherwise my feelings about opening the door would be more ambivalent. But I also would not make immigration reform a top priority.
5. Brooks wants more spending on education. I take the null hypothesis seriously.
“The government should reduce its generosity to people who are not working but increase its support for people who are. That means reducing health benefits for the affluent elderly.”
I hope this is not the best (or only) example of Brooks’ “fiscal justice.” The elderly’s “not working” is the least problematic of the problem of “of benefits for non-working.” What does he have to say about able-bodied (in my book, by a circa 19io’s definition) adults who are not working?
Brooks wants more spending on education. I take the null hypothesis seriously.
I think that if the null hypothesis is correct and I think it is, it would be prudent to reduce spending to about 1/2 or 1/3 of what it is today. I think that would take spending back to what it was in the mid 1960s which was the point where increasing spending stopped producing better results. Maybe you go for 1/2 rather than 1/3 because we are accustomed to more comfort today than in 1960.
The answer to poverty remains economic growth, not redistribution. So I agree with your #2 (reform of subsidy programs) but consider it something of a sideshow.
Economic growth is stalled by regulation and dirigisme which enriches incumbents and cronies and preserves them against competition. The system is exacerbated by Turchinesque overproduction of elites and a feedback loop driven by rent seeking. The more government manages the economy the more people strive to get into and live off government–rinse and repeat. But government is profoundly wasteful and more prey to monopolists’ sclerosis than any private firm. Regulation now costs the economy more than taxes, so deregulation is more important than reducing tax rates.
As for education spending, it should obviously be reduced, not increased, and the first step should be to eliminate all government backing for college loans. The second step is to zero-out all Federal spending on (pre)K-12 except for military brats and so-forth, though the Federal government might usefully continue to conduct NAEP and a few other statistical programs.
A great deal of the increased spending on education is in special education and non-teaching staff. Were the government to centralize the education of the basically non-educable (organically retarded, autistic, mentally ill, etc), many of these costs would disappear. Unfortunately, that would require a change in federal law, which has stuck states with an unfunded mandate for decades.
Some of it is spent because we’re keeping more kids in school until 18–which is probably a good idea, null hypothesis or not.
“the door would be wide open for people who are grateful for the chance to live in America and are eager to assimilate, and otherwise my feelings about opening the door would be more ambivalent”
Then you should keep them ambivalent, because most immigrants these days are not interested in assimilating. Be it Asian, African, or South American, immigration is a method of getting what’s good in the US.