Saturday, August 25, 2018

No, Health Care for All Would Not Turn Us into a Venezuela

In a recent editorial for the Wall Street Journal, James Freeman plays the red scare card against Bernie Sanders’ Medicare for All (M4A) plan, which he compares to the policies of “Venezuela’s Nicol├ís Maduro, whose mania for wealth redistribution has brought a country to its knees.”

Freeman gets the causation backwards. Venezuela is not in crisis because Maduro has been too generous with socialist goodies like health care. Quite the opposite. The Lancet reports that from 2010 to 2014, Maduro slashed health care spending by a third — and then stopped the publication of official statistics. Since then things have only gotten worse. Collapse of the health care system is one of the major reasons Venezuelans are fleeing their country by the tens of thousands every day.

But enough of Venezuela. Freeman misses the point about Sanders’ health care plan in more important ways, as well.

It is true that M4A would be expensive. Freeman relies on a study by Charles Blahous for the Mercatus Center, which estimates that M4A would cost taxpayers $32.6 trillion over ten years, even after positing substantial savings in total national health care spending. A more detailed study by Jodi Liu for RAND (of which Blahous appears not to have been aware when he wrote his Mercatus paper) comes in a significantly lower. It estimates that a baseline version of M4A would add about $1.8 trillion a year to net federal healthcare spending without cost savings and $1.7 trillion a year with. (Those numbers assume that current revenue sources for health care remain in place but do not include any proposed new revenue sources.) A trillion here, a trillion there — either way, it’s real money.

Wednesday, August 15, 2018

The EPA's SAFE Vehicle Rule Poses a False Choice. We Can Have Safe Vehicles AND Clean Air.

The EPA has released a proposed rule that would freeze corporate average fuel economy (CAFE) standards at 37 miles per gallon, rather than allowing them to rise to the Obama administration’s target of 54 MPG, as currently scheduled. The administration’s  proposal has the cute name of Safer and Affordable Fuel-Efficient Vehicles Rule, or “SAFE Vehicle Rule,” for short.

The proposed rule has been widely panned by environmentalists, and rightly so. However, the critics of the rule are wrong simply to defend the existing CAFE standards. The EPA’s analysis of the flaws of those standards is justified. But neither the EPA nor its critics are reaching the right conclusion, which is that we should repeal CAFE standards and replace them with a carbon tax — one tough enough to reduce carbon emissions by as much, or more, without the unintended consequences.

Tuesday, August 14, 2018

Is That Government Best Which Regulates Least?

In a recent post, I questioned Henry David Thoreau’s aphorism, “That government is best which governs least.” The data, it seems, show something different. Countries with small governments, as measured by the share of expenditures and taxes in GDP, tend actually to be somewhat less free and prosperous than those with larger governments. The quality of government, as measured by things like rule of law, independent judges, and integrity of government officials turns out to matter much more than the size of government. I concluded that Thoreau’s aphorism should be revised to read, “That government is best which governs well.

In response, several readers questioned whether the size of government, as measured by spending, was the right measure of “governs least.” Excessive regulation, they pointed out, may do more damage than spending and taxes. Maybe what we should say is, “That government is best which regulates least.”

Niskanen Center’s Will Wilkinson puts it this way:
Whether a country’s market economy is free — open, competitive, and relatively unmolested by government — is more a question of regulation than a question of taxation and redistribution. . .
If we want to encourage freedom and prosperity, we should pay more attention to easing the grip of the regulatory state.
The point is a good one — worth putting to the same kind of statistical test used in the previous post. Here we go:

Thursday, August 2, 2018

More on Work Requirements: A Response to AEI

An op-ed by Angela Rachidi and Robert Doar in Real Clear Policy, reprinted on the American Enterprise Institute’s blog, challenges some points I made about the effects of work requirements in my commentary on the topic last week. Rachidi and Doar’s critique focuses on the interpretation of data from the National Evaluation of Welfare to Work Strategies (NEWWS), which analyzed the results of 11 controlled experiments conducted around the country in the 1990s. Each experiment compared the experience of a group of welfare recipients who were subject to work requirements with a control group who did not face work requirements.

Rachidi and Doar point out that some of the programs were “jobs-first” programs that placed a primary emphasis on job placement, while others were “education-first” programs that emphasized human capital development before job placement. They claim that only the jobs-first variants are relevant to today’s debate over work requirements for noncash welfare such as SNAP, Medicaid, and housing assistance. Linking specifically to my commentary, they maintain that critics:
incorrectly cite the results from the education-focused programs, which were found to be largely ineffective compared to jobs-first programs, to suggest that work requirements would not be effective today in SNAP or Medicaid. The education-first programs are largely irrelevant to today’s discussion of extending work requirements to other safety-net programs — no one proposes that recipients be required to go to college in order to receive SNAP or Medicaid.

Wednesday, August 1, 2018

Does the Government That Governs Least Really Govern Best? A Quick Look at the Data.

Libertarians are fond of quoting Henry David Thoreau’s aphorism, “That government is best which governs least.” Thoreau was evidently paraphrasing his contemporary John O’Sullivan, but no matter who first said it, the quotation has become an axiom of those who love freedom. But is it true?

Let’s treat this aphorism as a hypothesis and test it against the data. To know what data we want, we first need to decide just what we mean by “best government” and “least government.”

“Best government” could mean one of three things: 
  1. It could mean the government that produces the best results in terms of human prosperity –  not just high GDP, but good health; access to food, clean water, shelter and education; safe communities; clean environment; and so on. To measure those things, we will use the Legatum Prosperity Index (LPI). 
  2. “Best government” could instead mean the government that allows the greatest degree of human freedom, including freedom of speech and religion, freedom in personal relationships, personal safety and security, security of property rights, freedom to trade, and so on. To measure those things, we will use the Human Freedom Index (HFI) from the Cato Institute. 
  3. Rather than a results-based measure, we could define “best government” in a procedural sense – a government that adheres to rule of law, maintains fair and impartial criminal justice, and is free from corruption. We can compile such a measure by extracting and combining relevant indicators from the LPI and HFI to construct a Quality of Government Index (QGOV).