Tyler Cowen dubs the paradox of choice — the idea that people become unhappy when given too many choices — “one of the most overrated and incorrectly cited results in the social sciences.” He cites Tim Harford’s recent piece in FT describing research on the subject:
Is more choice better? Ten years ago the answer seemed obvious: Yes. Now the conventional wisdom is the opposite: lots of choice makes people less likely to choose anything, and less happy when they do choose.
The most famous supporting evidence is an experiment conducted by two psychologists, Mark Lepper and Sheena Iyengar. They set up a jam-tasting stall in a posh supermarket in California. Sometimes they offered six varieties of jam, at other times 24; jam tasters were then offered a voucher to buy jam at a discount.
The bigger display attracted more customers but very few of them actually bought jam. The display that offered less choice made many more sales – in fact, only 3 per cent of jam tasters at the 24-flavour stand used their discount voucher, versus 30 per cent at the six-flavour stand. This is an astonishingly strong effect – and utterly counter to mainstream economic theory.
[...]
But a more fundamental objection to the “choice is bad” thesis is that the psychological effect may not actually exist at all. It is hard to find much evidence that retailers are ferociously simplifying their offerings in an effort to boost sales. Starbucks boasts about its “87,000 drink combinations”; supermarkets are packed with options. This suggests that “choice demotivates” is not a universal human truth, but an effect that emerges under special circumstances.
Benjamin Scheibehenne, a psychologist at the University of Basel, was thinking along these lines when he decided (with Peter Todd and, later, Rainer Greifeneder) to design a range of experiments to figure out when choice demotivates, and when it does not.
But a curious thing happened almost immediately. They began by trying to replicate some classic experiments – such as the jam study, and a similar one with luxury chocolates. They couldn’t find any sign of the “choice is bad” effect. Neither the original Lepper-Iyengar experiments nor the new study appears to be at fault: the results are just different and we don’t know why.
When I saw that question at Kevin Drum’s place, the likely answer struck me as rather obvious. Apparently, Kevin though so, too, since he came up with the same answer:
Perhaps the paradox of choice used to be true in simpler times, but the internet and the rest of modern life have taught us to revel in choice, rather than being intimidated by it. In a related vein, maybe it’s a generational thing. Maybe choice dazzles me more than it does a 20-something who grew up with 87 cell phone plans, 300 cable channels, and 1,000 Facebook friends.
Even aside from technology, we’re used to more choices. Yes, we’ve gone from 3 TV channels to hundreds but also from 3 or 4 car manufacturers to a dozen, an almost infinite variety of coffees, ethnic restaurants, and many other things over the course of the past few years.
Kevin’s also right, I think, that our familiarity with the product in question matters. It’s a bit of a chore to chose between seventeen brands of strawberry jam, for instance, but not all that complicated. On the other hand, choosing a cell phone and accompanying plan — and being obligated for two years to live with that choice or pay heavy penalties — can be rather intimidating.
It also occurs to me that the original experiment may just demonstrate that people aren’t interested enough in jam to spend a lot of time comparison shopping. So, unless they’ve run out and really need some more, they may bypass a giant display whereas choosing between, say, strawberry, grape, and cherry and then between Smuckers, Polander, and store brand makes impulse purchases more inviting.
Back when the stimulus bill was passed, I have to say that I was opposed to it. When the White House claimed it was working, I pretty much scoffed. So I have to admit that I was taken aback to read this article, which indicates that professional economic forecasters support the claim that the stimulus has made the economy better off than it would have been otherwise.
The legislation, a variety of economists say, is helping an economy in free fall a year ago to grow again and shed fewer jobs than it otherwise would. Mr. Obama’s promise to “save or create” about 3.5 million jobs by the end of 2010 is roughly on track, though far more jobs are being saved than created, especially among states and cities using their money to avoid cutting teachers, police officers and other workers.
“It was worth doing — it’s made a difference,” said Nigel Gault, chief economist at IHS Global Insight, a financial forecasting and analysis group based in Lexington, Mass.
Mr. Gault added: “I don’t think it’s right to look at it by saying, ‘Well, the economy is still doing extremely badly, therefore the stimulus didn’t work.’ I’m afraid the answer is, yes, we did badly but we would have done even worse without the stimulus.”
Here are some charts from three major economic forecasters:
I admit that I am a little flabbergasted by this. As both Matthew Yglesias and Brad Delong point out, these are companies who have every incentive to do accurate forecasting for “people who are trying to exploit macroeconomic information in order to make money.”
I haven’t had an opportunity to review the data underlying the charts or analysis, so I don’t know how much of this I agree with. That said, I thought the data presented here so far was important enough to call attention to.
Last night, shortly after getting our 10 month old to sleep, I laughed at the opener to Esquire’s “How to Entertain Kids of Any Age This Holiday Season” featurette.
The premise:
Suddenly, children are all over the house. Somehow, for a couple hours, you’re in charge of keeping them occupied. But, with the right activities, turns out it’s not all that hard.
The advice:
Ages 0-1: You will not be responsible.
Indeed.
The remainder of the piece is useful, if less amusing. Except this one:
Ages 5-7: Stand in front of the garage and let them try to hit you with tennis balls.
I’m not sure that’s a good idea. But funny all the same.
The L.A. Times has a fascinating article about the difficulties in accounting for estimated costs in a troop surge in Afghanistan.
The calculations so far have produced a sweeping range. The Pentagon publicly estimates it will cost $500,000 a year for every additional service member sent to the war zone. Obama’s budget experts size it up at twice that much.
[...]
The Office of Management and Budget says adding 40,000 troops would cost about $40 billion a year, or $1 million each. White House officials included in their estimate everything they consider necessary to wage war, including troop housing and equipment.
[...]
The Pentagon arrived at its much lower estimate by dividing its war funding request by the number of troops throughout the region: 68,000 in Afghanistan and up to 95,000 in supporting roles elsewhere, such as on nearby ships or in surrounding countries.
The Pentagon cost includes higher combat wages, extra aircraft hours and other operations and maintenance costs, but omits such items as new weapons purchases — one-time costs that vary by year — and support equipment like spy satellites and anti-roadside-bomb technology.
The Pentagon also does not try to estimate costs of new bases for additional soldiers.
But in a memo early this month, obtained by The Times’ Washington bureau, the Pentagon’s own comptroller produced an estimate that broke with the customary Defense formula and did include construction and equipment.
That memo said the yearly cost of a 40,000-troop increase would be $30 billion to $35 billion — at least $750,000 a person. An increase of 20,000 would cost $20 billion to $25 billion annually, it said — a per-soldier cost equal to or greater than the White House estimate.
Keep in mind that these are per year figures, and most discussiosn of troop escalations involve deployments for longer than that–possibly much longer.
As for which figures to go with, I have to say that I’m going to be inclined to go with the OMB on this. Indeed, I’d be perfectly willing to bet that the OMB is underestimating the costs, and the Pentagon almost definitely is. The appropriations required for combat have, in my experience, often exceeded the initial estimates. After all, who can forget this famous estimate?
Q: Mr. Secretary, on Iraq, how much money do you think the Department of Defense would need to pay for a war with Iraq?
Rumsfeld: Well, the Office of Management and Budget, has come up come up with a number that’s something under $50 billion for the cost. How much of that would be the U.S. burden, and how much would be other countries, is an open question. I think the way to put it into perspective is that the estimates as to what September 11th cost the United States of America ranges high up into the hundreds of billions of dollars. Now, another event in the United States that was like September 11th, and which cost thousands of lives, but one that involved a — for example, a biological weapon, would be — have a cost in human life, as well as in billions, hundreds of billions of dollars, that would be vastly greater.
As a refresher:
The cost of the Iraq War to date: over $700 billion.
The number of biological weapons that were found in Iraq: zero.
To think that you can be one minute marrying one of Charlie’s Angels and then a few years later dying alone in Ft. Lauderdale while doing cruise ship acts.
People have taken faster, deeper dives, of course. But, yes, not the life he’d have imagined in 1978.
Naturally, I’m reminded of the lyrics of “Every Mother’s Son,” one of Lynyrd Skynyrd’s lesser classics.
Well I’ve been ridin’ a winning horse for a long, long time
Sometimes I wonder is this the end of the line
No one should take advantage of who they are
No man has got it made
If he thinks he does, he’s wrong
(chorus)
Every mother’s son better hear what I say
Every mother’s son will rise and fall someday
I’ve seen it happen so many times, so many times before
Some man got so much money he doesn’t worry no more
Or he’s got such a pretty woman that’ll treat him fine
Well my friend has been a fool
It happens every time
(chorus)
I’m not tryin’ to preach to no one, to no one at all
I’ve seen so many of my good friends just rise to fall
‘Cause they got so much money or a woman so fine
Well my friends have all been fools, it happens every time
Laura Sjoberg informs us that she is working to form a Lesbian, Gay, Bisexual, Transgendered, Queer, and Allies Caucus of the International Studies Association (the premier organization of academic IR scholars) in order to:
A. To promote fair and equal treatment of members of the Lesbian, Gay, Transgendered, Bisexual, and Queer and Allies (hereafter LGBTQA) community in the International Studies Association (hereafter ISA) and in the profession of international studies, in areas including but not limited to graduate school admission, financial assistance in schools, employment, tenure, and promotion.
B. To combat discrimination against and provide support for LGBTQA faculty, student, and professional members of the International Studies Association.
C. To encourage the application of the skills of scholars and students of international studies to combat discrimination on the basis of sexual orientation.
D. To promote the recruitment of new members to the Caucus specifically and ISA generally.
Leaving aside that the last of the four goals amounts to a self-licking ice cream cone (not that there’s anything wrong with that) how needed are these? Is there really rampant discrimination on the basis of sex in the academy these days? Homosexuality is mainstream in our broader society at this point, much less the relatively liberal halls of academe.
Do LGTBQ types face discrimination in financial aid or grad school admissions? If so, how? That is, how would the bureaucratic offices who make these decisions even know that the people were LGTBQ? (One presumes, irrespective of the answer, that Allies are safe in this regard.)
I suppose that a man showing up for a job interview wearing lipstick and a dress might still be poorly received in many departments across the land. But so might a man showing up with a mustache or blue jeans or a too-nice suit.
Beyond this, what has any of this to do with ISA? It was “was founded in 1959 to promote research and education in international affairs.” Its current purpose is still along those lines:
I. Provide opportunities for communications among educators, researchers, and practitioners in order to continually share intellectual interests and meet the challenges of a changing global environment
II. Develop contacts among specialists from all parts of the world in order to facilitate scientific and cultural change
III. Provide channels of communication between academics and policy makers to promote a successful link between the production of knowledge and its utilization
IV. Improve the teaching and dissemination of ideas, concepts, methods, and information in the field of International Studies
Rather than hijacking a purely scholarly organization with grievance issues, why not form a caucus within, say, the American Association of University Professors?
One possible explanation: Sjobert is also chair of ISA’s Feminist Theory and Gender Studies section. In April, she expressed concern that some LGTBQ members of ISA might chose not to attend the 2010 annual meeting in New Orleans on the grounds that “there is a substantial risk of a lack of equal protection of the laws in the most dire possible situations, including but not limited to critical medical emergencies.” Apparently, this concern was not heeded and the meeting’s still on.
But, if LGTBQ activism can already take place (albeit, not successfully in this case) within the context of an existing organized section, why the need for a caucus?
Paul Krugman has taken some rather interesting stances on the fiscal situation here in the U.S. First up is a piece entitled Fiscal Train Wreck from March 2003,
With war looming, it’s time to be prepared. So last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I’m terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits.
[…]
Last week the Congressional Budget Office marked down its estimates yet again. Just two years ago, you may remember, the C.B.O. was projecting a 10-year surplus of $5.6 trillion. Now it projects a 10-year deficit of $1.8 trillion.
And that’s way too optimistic. The Congressional Budget Office operates under ground rules that force it to wear rose-colored lenses. If you take into account ? as the C.B.O. cannot ? the effects of likely changes in the alternative minimum tax, include realistic estimates of future spending and allow for the cost of war and reconstruction, it’s clear that the 10-year deficit will be at least $3 trillion.
[…]
That may sound alarmist: right now the deficit, while huge in absolute terms, is only 2 ? make that 3, O.K., maybe 4 ? percent of G.D.P. But that misses the point. “Think of the federal government as a gigantic insurance company (with a sideline business in national defense and homeland security), which does its accounting on a cash basis, only counting premiums and payouts as they go in and out the door. An insurance company with cash accounting . . . is an accident waiting to happen.” So says the Treasury under secretary Peter Fisher; his point is that because of the future liabilities of Social Security and Medicare, the true budget picture is much worse than the conventional deficit numbers suggest.
What does he say today (well at least in August 2009)? Well, lets take a look,
I respect Jim Hamilton a lot, so I take his criticism seriously — and he raises questions that others raise too about my relatively sanguine assessment of the debt situation. Yet I think that he and others are quite wrong, on several counts.
[…]
But let’s take a slightly later start date: in 1950, federal debt in the hands of the public was 80 percent of GDP, which is in the ballpark of what we’re looking at for 2019. By 1960 it was down to 46 percent — and I haven’t heard that anyone considered America a debt-crippled nation when JFK took office.
So how was that possible? Was it through drastic cuts in defense spending? On the contrary: we’re talking about the height of the Cold War (with a hot war in Korea along the way), and federal spending actually rose as a share of GDP. So yes, it wasn’t entitlement programs, but it wasn’t exactly discretionary either.
How, then, did America pay down its debt? Actually, it didn’t: federal debt rose from $219 billion in 1950 to $237 billion in 1960. But the economy grew, so the ratio of debt to GDP fell, and everything worked out fiscally.
[…]
Jim gets scary numbers about the debt burden by assuming that we’ll have to pay off the debt in 10 years. But why would we have to do that? Again, the lesson of the 1950s — or, if you like, the lesson of Belgium and Italy, which brought their debt-GDP ratios down from early 90s levels — is that you need to stabilize debt, not pay it off; economic growth will do the rest. In fact, I’d argue, all you really need to do is stabilize debt in real terms.
Note that in 2003 Krugman was just fine looking at the 10 year budget predictions. Now, why that’s silly we just need to alter our perspective. And the new post mentions nothing about Social Security and Medicare whose fiscal/actuarial position has not changed appreciably since 2003.
Now some might argue, and indeed in the comments to other posts people have argued, that during the fat years you trim the deficits or best of all run surpluses and in the lean years run the deficits. Sure, that is a some what simplified version of Keynesian fiscal stimulus. My response is lets make a list of the two situations,
View from 2003:
The economy was in recovery.
The fiscal outlook was a $1.8 trillion deficit.
Social Security and Medicare were in serious actuarial imbalance (tens of trillions of dollars).
View from 2009:
The economy is in recession.
The fiscal outlook is $9 trillion deficit.
Social Security and Medicare were in serious actuarial imbalance (tens of trillions of dollars).
The view in 2003 terrified Krugman, so much so that he took personal action regarding his own finances. Switch to 2009 and, meh guys like Prof. Hamilton are just being alarmists. The view from 2009 is pretty much worse than it was in 2003, and it seems to me that yes, if one was worried about the fiscal outlook in 2003, then in 2009 it is even more worrisome. I agree with James Hamilton,
If the government tries to double taxes on people like me, it’s in real political trouble. If it doesn’t try to double taxes on people like me, it’s in real solvency trouble.
It looks like we may have a problem here.
Thanks to Scrivner.net for the links, and their article is also well worth reading. And yes, I know that this stuff is rather old, but…well Krugman is basically saying the samethings today he did in August, “No worries, we’ll grow our way out of it.”
I was reading this Megan McArdle post about the federal government restricting bonuses to AIG employees. As I was reading, I came across this sentence:
To wit: the traders at AIG are threatening to walk if Ken Feinberg pays them what he says he’s going to pay them, particularly if the company tries too hard to withhold the retention bonuses they were promised in order to stay on board and clean up the mess.
One of the common criticisms about the federal government intervening in the payment of bonuses to employees of bailed-out firms is that if those employees don’t get those bonuses, they’ll leave and go elsewhere.
I have a question about this, and I mean this with all sincerity: where will they go to work? Is there a lot of demand for trading jobs right now? I would think that from the general state of the economy, the answers to the above questions are pretty much “nowhere” and “no.” But I can’t find any data one way or the other.
If there isn’t much demand for traders at the moment, then is retention of those traders that big of a concern? After all, if there’s not much demand, there’s probably people who would take any job, even with income restrictions, because $500,000 a year is a lot better than $0 a year.
Does anybody out there know the state of the job market for traders right now?
It appears that the Republican National Committee is working on a set of principles that Republican candidates have to adhere to in order to receive funding and support from the RNC. There are ten principles listed, and the candidates have to adhere to at least seven of these principles “as identified by the voting record, public statements and/or signed questionnaire of the candidate.” If they do not, then the candidate “shall not be eligible for financial support and endorsement by the Republican National Committee”.
On the face of it, this doesn’t really seem to be too unreasonable. After all, a political party should have a set of core issues, and too much deviation does beg the question as to whether the party should support that candidate. So far, not a big deal.
However, something that interests me is that of the 10 principles that have to be adhered to receive funding, pretty much all of them could be opposed by a principled conservative, and many of them have been opposed by prominent Republican officeholders and candidates. Here’s a rundown:
(1) We support smaller government, smaller national debt, lower deficits and lower taxes by opposing bills like Obama’s “stimulus” bill;
Taking this construction literally, it appears that any increase in spending would have to be opposed for perfect adherence–or, at the very least, any bill that increases spending in one area would have to cut another. So a Republican politician who wants to, say, increase defense spending would violate this principle unless he also supports an equal or greater spending reduction somewhere else. What if a bill doesn’t allow that?
(2) We support market-based health care reform and oppose Obama-style government run healthcare;
Well, Obama-style “government run” health care is not, in fact, government run and it is very similar to the health reform plan in Massachusetts, which was adopted and supported by Mitt Romney, who is probably the current frontrunner for 2012 GOP Presidential nomination. Additionally, I would also say that strict adherence to the letter of this principle would mean that GOP candidates would have to oppose Medicare and Medicaid–which is fine if that’s how they want to run, but it’s probably not an election winner. Furthermore, many prominent conservative intellectuals, notably Friedrich Hayek, have offered support for government-provided health insurance. Is Hayek too liberal for the modern GOP?
(3) We support market-based energy reforms by opposing cap and trade legislation;
Technincally, cap and trade is a market-based reform, as it creates a market for carbon emissions. Structurally, it’s similar to the Clean Air Act of 1990, which set up an emissions trading program for sulfur dioxide. The Act was signed by then-President Bush, co-sponsored by several Republicans, and passed with a vote of 89-10 in the Senate and 401-25 in the House. Why was it okay for Republicans then, but not now?
Additionally, both John McCain and Sarah Palin announced their support for a cap and trade program during the 2008 elections (although Palin has since come out against it).
(4) We support workers’ right to secret ballot by opposing card check;
And if someone, as a conservative, opposes this government intrusion into contractual relations among individual workers, a union, and their employer on the principle that such individuals should set their own rules?
(5) We support legal immigration and assimilation into American society by opposing amnesty for illegal immigrants;
Amnesty is a policy that used to have large amounts of Republican and conservative support. President Reagan, for example, signed amnesty legislation in 1986. George W. Bush and John McCain both supported a path to legalization that was often derided as “amnesty.” Again, why is this a central issue when clearly there is a disagreement among prominent Republicans as to whether this is optimal policy?
(6) We support victory in Iraq and Afghanistan by supporting military-recommended troop surges;
This just doesn’t make sense. Last time I checked, nobody in the military was requesting more troops in Iraq. And there is a division in the Pentagon over whether more troops should be supplied to Afghanistan. More to the point, there is a large strain of conservative foreign policy thinking that opposes interventionism and nation-building. Are those thinkers now no longer considered Republican?
7) We support containment of Iran and North Korea, particularly effective action to eliminate their nuclear weapons threat;
This is rather simplistic. What is meant by “containment”? Additionally, if the State Department is able to, say, negotiate an end to Iranian or North Korean nuclear programs based on an end to sanctions, would a Republican who supported such negotiations be violatiing this rule because that wouldn’t be “containment”? Or adhering to it because the negotiations are “effective.” This is frustratingly vague.
(8) We support retention of the Defense of Marriage Act;
And so a conservative politician, such as the late Barry Goldwater, who believes that DOMA violates federalism and state control over marriage policy, would be determined to not adhere to this principle.
(9) We support protecting the lives of vulnerable persons by opposing health care rationing and denial of health care and government funding of abortion; and
Again, this is frustratingly vague. Does opposing “rationing” mean no government-imposed cost controls, even though programs such as Medicare or through selection of federal employee’s health insurance programs? If a conservative politician opposes a bill that would mandate coverage for people with a pre-existing condition, is he supporting the “denial of health care”?
10) We support the right to keep and bear arms by opposing government restrictions on gun ownership;
Once again, this is frustratingly vague. How stringently do we define “government restriction on gun ownership”? Does that mean a politician who supports laws that prevent convicted felons or the mentally ill from owning firearms, he violates this rule? Does a politician who supports laws preventing the ownership of fully-automatic machine guns violate this rule? Once again, those don’t seem like election winners or something that a majority of Republicans would support.
* * *
Like I said, I think that the RNC is completely within its rights to decide what candidates it wants to endorse and finance. But if the resolution above is passed as it is, it will almost certainly lead to more heated confrontations between the various wings of the Republican Party and make it much less effective. As someone who wants a strong, multi-party political system, this makes me really uneasy. Although I do support a lot of Democratic Party policies at the moment, I don’t support all of them and would much prefer that voters have an opportunity to vote for a strong alternative in elections.
But if the Republican Party continues to splinter over these types of issues and give in to a particular minority of Republican opinion, it’s only going to serve to alienate more moderates from the GOP and further strengthen the Democrats’ hold on power for a long time to come. That’s not a healthy outcome for our Republic.
Dan Drezner and Megan McArdle are among those recommending Saturday Night Live’s opening sketch parodying a joint press conference with President Obama and Chinese President Hu.
Drezner quips that the sketch manages to convey the nature of the relationship much more succinctly than his own 40-page academic treatise.
Note that, although it appears that President Hu has the power because he is repeatedly berating Obama, the content of the skit suggests otherwise. Hu’s repeated complaints that the United States is, er, “doing sex” to him demonstrates the very limited leverage China has over U.S. policy.
While $800 billion is indeed a lot of money, it’s not as large a chunk of U.S. public debt as widely imagined. But it’s enough to virtually assure that China will keep lending us more money.
As an aside, I’m bemused that SNL has managed to get away with having a white guy playing Obama for this long, much less having a white guy playing Hu and a white woman affecting the broken English of a Chinese translator.
Ed Driscoll, Jonathan Adler and Glenn Reynolds take the New York Times and other mainstream outlets to task for their decision to not republish the stolen emails from climate scientists on the grounds that they were illegally obtained and written with the expectation of being kept private. After all, these outlets famously publish illegally obtained classified national security information at the drop of a hat.
While that’s a pretty persuasive critique on its face, the comparison is ultimately false.
In the case of the East Anglia listservs, the victims are private individuals. By contrast, the Pentagon Papers and various intelligence leaks published during the Bush era were owned by the United States Government and arguably kept secret partly to shield elected leaders from political fallout. Nor were the latter “stolen” in the same sense as the former. Rather, people authorized to receive the information shared it with reporters who are under no obligation to protect classified secrets.
What would be interesting is to see how the NYT and others handle illegally obtained documents from people with whom they don’t politically agree. Have they republished similarly stolen emails that were harmful to, say, tobacco companies or investment bankers?
If so, then were have a much better case for hypocrisy.
In a front piece story in today’s NYT, Edmund Andrews warns that the bill is about to come due on the massive borrowing the federal government has engaged in.
Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.
[...]
With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.
In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.
[...]
Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode. The competing demands could deepen political battles over the size and role of the government, the trade-offs between taxes and spending, the choices between helping older generations versus younger ones, and the bottom-line questions about who should ultimately shoulder the burden.
[...]
The problem, many analysts say, is that record government deficits have arrived just as the long-feared explosion begins in spending on benefits under Medicare and Social Security. The nation’s oldest baby boomers are approaching 65, setting off what experts have warned for years will be a fiscal nightmare for the government. “What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”
Emphases mine.
This sounds ominous and unsustainable. But Paul Krugman, recent winner of the Nobel Prize in economics, say these fears are overblown.
As Dean says, the numbers don’t fit the scare story — a decade from now interest payments will reach a level not seen since … 1992. And the market seems unworried, since long-term rates remain low.
The “Dean” is question is Dean Baker of The American Prospect. He sarcastically titles his post, “In Just a Decade the U.S. Interest Burden Could Be as High as It Was in 1992!!!!!!!”
There is no evidence presented in this article that the rise in interest rates will place the U.S. government in a situation where it will be unable to pay its bills and no one cited in this article makes such a claim.
The article is also completely unbalanced in not presenting the views of any economist who could put the deficit/debt issue in perspective for readers.
Krugman makes the same charge but, oddly, neither of them bother to actually present a counterargument.
Andrews argues that most of the debt is in short-term loans whose price will go up as there becomes more competition for money. He makes what strikes me as a plausible case that higher interest rates, growth in entitlement spending, and a smaller tax base will make servicing the debt very, very difficult. Countervailing factors could offset this but neither Krugman nor Baker tell us what they might be.
It’s true that we had gloom and doom forecasts during the 1992 recession. But we only solved those through the dual magic of the dotcom bubble and the post-Cold War defense drawdown. It’s not likely that those events will repeat themselves.
Photo by Flickr user kandyjaxx under Creative Commons license.
YOU’RE A sensible, principled conservative. You want America to be a land of boundless opportunity and freedom, where people are treated as individuals and judged on their merits. You reject the divisive identity politics of the left – what matters most about any of us, you would insist, is not race or class or ethnic origins: it is personal character and achievement. There are few things about contemporary politics you deplore more than the demonizing or scapegoating of entire groups (“white males,’’ “the rich,’’ “the Christian right,’’ “gun owners’’), as though every member of the group is interchangeable and indistinguishable, wholly defined by a single disparaging label.
True.
But let someone mention “illegal immigrants,’’ and your principles fly out the window.
No, not me.
So when Governor Deval Patrick recommends allowing young illegal immigrants – residents of Massachusetts who have graduated from high school – to attend a public college and pay in-state tuition, you flip out. This is outrageous, you protest. It rewards people who broke the rules. It’s unfair to the taxpayers who subsidize public higher education. Why should an illegal immigrant get a valuable tuition break that Massachusetts wouldn’t give to a kid from Maine or New Hampshire?
You vigorously agree with Charlie Baker, a Republican candidate for governor. “If you’re illegally here, you’re illegally here,’’ Baker said last week. “The notion that we should treat illegal immigrants with the same benefits and opportunities that legal immigrants and legal citizens have doesn’t make any sense to me.’’
It is dispiriting to see Baker, a man of considerable intellectual heft, stoop to such shallow sloganeering. It is even more dispiriting to see conservatives assail immigrants instead of the insane immigration system that gave most of them no legal way to enter the United States. On the whole, illegal immigrants are just the sort of newcomers Americans should embrace: self-motivated risk-takers, strivers determined to improve themselves, hard-working men and women willing to take the meanest jobs if it will give them a shot at building their own American dream. Why would we want to punish them? Why would we want to punish their kids?
But these aren’t mutually exclusive. I simultaneously agree with Jacoby that our immigration system is broken, that accepting and assimilating more of them is on the whole a good thing, and that it makes sense to educate assimilated immigrants and yet believe that we ought to enforce our laws. The fact that we can’t or won’t enforce our immigration policy is a good reason to change it — not a reason to pretend the laws don’t exist.
Jacoby cherry picks a particularly hard case:
A couple from Brazil, seeking a better life for themselves and their 2-month-old daughter, enter the United States unlawfully. They settle in Massachusetts, where 18 years later the girl graduates from a public high school, as assimilated and acculturated an American as her classmates in every respect – except that they are US citizens, and she, by virtue of a decision made when she was a baby, is not. Her classmates can attend the University of Massachusetts, paying $9,704 a year in tuition, the price tag for Massachusetts residents. She can attend only if she pays the out-of-state rate of $22,157; if that’s more than she can afford, she’s out of luck.
This has to be unrepresentative. What percentage of illegal immigrant children of college age have been residents of the state for eighteen years?
On the other hand, Jacoby has a point about irrationality among conservatives on the issue.
An unsigned piece at Stop the ACLU retorts, “what Jeff is missing is that the people looking for a better life entered the country illegally. Why should we excuse that behavior? We shouldn’t embrace that behavior just so they can build the American dream.” Jacoby doesn’t “miss” that; he argues that the system essentially doesn’t allow these people a legal means of immigration and that millions of them are already here.
Still, the reaction is understandable: These people are here illegally. Granted, in most cases, it was their parents who broke our laws, merely bringing their kids along for the ride. And some percentage of the kids are for all intents and purposes Americans, having grown up here and having no memories of “home.”
But it does seem perverse to reward their parents for flouting the law. Those who are trying to get in legally are waiting years and foregoing this opportunity for their children, after all. Openly declaring a policy that “once here, you’re here” both makes those who play by the rules suckers and ensures fewer will play by the rules.
Clifton B of Another Black Conservative argues that we can’t afford it. “What Jeff Jacoby (like so many in Washington) has forgotten is that America is $12 trillion dollars in the hole. Half of every dollar we spend is borrowed money. Money that must be paid back by a generation that is too young to vote their objections or accept the responsibility. Sure it would be nice not to punish the children of illegal immigrants for the parents’ lawbreaking. However the stark reality is that for us to be generous the way Jacoby suggests, requires us to be cruel to our very own children by robbing their futures to pay for our current mistakes.” A similar argument is made at 24Ahead.
That just doesn’t make sense. Either the in-state rate is a worthwhile investment in the future of Massachusetts residents or it isn’t. Adding in a relative handful of students isn’t going to break the bank.
The latter goes on to make a more compelling argument:
[C]ollege resources and discounts are a finite resource: just like in a game of musical chairs, there are only so many to go around. Any illegal alien who gets a “chair” (education slot or discount) means that a U.S. citizen will have to “stand” (not be able to go to college or not be able to afford it). If any of “400-600 additional students” that Mass can admit are illegal aliens, that means that U.S. citizens could have gotten those slots/discounts but lost out. Mass voters are in effect valuing foreign citizens higher than their fellow U.S. citizens, turning their back on U.S. citizens in order to help foreign citizens.
The problem with that, though, is that there’s no such thing as “citizenship” at the state level — only residency. It’s arguable than an 18-year Massachusetts resident with illegal immigrant parents are more entitled to in-state resident tuition rates than her cohorts who are American citizens whose parents moved to Massachusetts two years ago and have hardly paid anything into the state treasury.
But, surely, it makes no sense to declare a policy that those who are here in violation of our laws should be able to bring that fact to the attention of the government and thereby be rewarded.
Correction: I originally misread Jacoby’s example as saying the parents in question had subsequently attained US citizenship. I’ve rewritten two paragraphs that referenced that erroneous fact, as they confuse the issue needlessly.
In addition to uncertain healthcare services, economic disadvantages, and finding a place to call home, veterans certainly do not need any more challenges. Unfortunately, the wounds of war can be less obvious than those that we can see. Psychological disorders and sicknesses caused by toxic exposure can be the most damaging aspects of war that veterans bring home. Toxin exposure in particular is of particular concern as previous exposure to asbestos among veterans is causing incidence of the aggressive cancer mesothelioma to rise among former members of the armed services. We must not leave those who risked their lives for our nation in the cold. Our veterans have never questioned the right or wrong of war when it mattered most. They simply did as they were trained. We must now show the same unwavering determination, in all ways we are able, by affording those opportunities to which they are entitled, including financial, medical and emotional support to all veterans.
Is more choice better? Ten years ago the answer seemed obvious: Yes. Now the conventional wisdom is the opposite: lots of choice makes people less likely to choose anything, and less happy when they do choose.
