Tag Archives: Cato Institute

Bill Niskanen on Inequality

The late Bill Niskanen on inequality:

Rawls recognizes that individual well-being is dependent on more than income and wealth, but he does not acknowledge the implications of the fact that the other dimensions of well-being are not fungible. Consider the following example.

One young man is healthy and handsome, spends his days on the beach, has his pick of young women companions, and makes $10,000 a year by busing tables in the evening. Another young man is confined to a wheelchair, has congenital body odor, has never had an intimate relationship, and, with no other life, makes $100,000 a year as an expert computer programmer. In this case, who is worse off? Who should redistribute what to whom and how?

Leave a comment

Filed under Economics, Philosophy

Lefty Relics Gathering Dust

David Boaz writes at Cato @ Liberty:.

So the Associate Publisher of The Nation sends me an email asking me, “Have any lefty relics gathering dust in your closet?” They’re having a fundraising auction.

As it happens, I do have some lefty relics I’d like to get rid of. I have:

  • Keynesianism
  • Wilsonianisn
  • Nationalized health care
  • Government Motors
  • The idea that the Constitution grants “plenary” powers to the federal government
  • The War on Poverty
  • Racial preferences

And by the way, when National Review asks me for conservative relics, I’ll have a list for them, too.

Leave a comment

Filed under Miscellaneous

Colombian President Backs Drug Legalization

Juan Carlos Hidalgo of the Cato Institute reports:

One of the worse kept secrets in Latin America is that Colombian President Juan Manuel Santos believes in drug legalization. Back in the 1990s he co-signed an open letter to then UN Secretary General Kofi Annan calling for an end to the war on drugs. And, since assuming office last year, Santos has hinted on several occasions that a new approach is needed in drug policy.

Earlier this week, Santos finally came out supporting the legalization of soft drugs, such as marijuana. In an interview published by Metro World News, Santos said that he favors legalization “provided everyone does it at the same time.” However, Santos balked at the idea of being the first sitting president to propose this in an international forum, citing mostly political reasons: “I would be crucified if I took the first step,” he said.

Despite Santos’s lukewarm endorsement of drug legalization, he adds his voice to the growing number of Latin American leaders calling for ending prohibition.

Colombia legalizing drugs won’t solve the problem; the U.S. must do it. Santos says that everyone must do it at the same time, but leaders in Colombia and Mexico are willing. They are only waiting for the U.S..

They will be waiting a long time.

Leave a comment

Filed under Drug Wars, Latin America

“I’m not a number. I’m not a line item on a budget…

and I’m definitely not a push-over. But I am a voter.”

What exactly does the word “earn” mean? Dictionary.com offers the following:

Did these 50 million seniors from this AARP advertisement “earn” their Medicare and Social Security?

First, Medicare. Andrew Biggs crunched the numbers.

Let’s start with a typical person who was born in 1944, began work at age 21 in 1965, and in 2009 retired at age 65 and enrolled in Medicare. Over the course of his life he paid the Medicare tax out of his wages.

After adjusting for changes in tax rates, cost of living adjustments, interest rates, etc.:

This typical person paid around $64,971 in Medicare payroll taxes over his lifetime. Likewise, after netting out Medicare premiums, he’ll receive around $173,886 in lifetime Medicare benefits. The net? He can expect to receive around $108,915 more in benefits than he paid in taxes over his lifetime. (Emphasis mine.)

Second, Social Security. In 2001, the Cato Institute called social security the “boomers’ bargain” due to the low tax rates they paid during most of their working years.

Ever since we Gen-X/Yers began working, we’ve paid 12.4 percent of our earnings to Social Security — half taken through the “FICA” tax on our paycheck and half through the payroll tax. In the coming years, Congress likely will increase that rate to more than 17 percent to delay the 2038 catastrophe. [Bankruptcy of the Social Security trust fund.] What is more, the Medicare tax (which is now a mere 2.9 percent) will increase because that program faces an even worse crisis than Social Security.

In contrast, the Boomers will get a bargain. When they entered the workforce in the late 1960s, they paid only 6.5 percent of their earnings to Social Security and nothing to Medicare. For about half of their working years, the Boomers paid 10 percent or less to Social Security and less than 1.25 percent to Medicare. Only from 1990 on, when the Boomers had earned paychecks for a quarter-century, did they start paying 12.4 percent to Social Security and 2.9 percent to Medicare — the same percentage we Gen-X/Yers have paid our whole lives.

It’s worth noting that in 2001 the social security trust fun was expected to start running deficits in 2016. It ran its first deficit last year. In their 2011 Summary Reports, the Social Security and Medicare Boards of Trustees concluded:

Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.

The financial challenges facing Social Security and Medicare should be addressed soon. If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected can adequately prepare.

The problem is that seniors – most perfectly capable of working more and consuming less – vote. Thus, they’ve earned the benefits. The rest of us will have to pay.

1 Comment

Filed under Domestic Politics