Where Do Your Tax Dollars Go?

This chart, from the Center for Budget and Policy Priorities (via Economix), illustrates where your (collective) tax dollars go:

Do Economists Agree on Anything? Yes!

Several years ago, Greg Mankiw posted on a column by Robert Whaples in which he “surveys PhD members of the American Economic Association and finds substantial agreement on a wide range of policy issues” from free trade to educational vouchers.

The information below shows his findings:

• 87.5 percent agree that “the U.S. should eliminate remaining tariffs and other barriers to trade.”
• 85.2 percent agree that “the U.S. should eliminate agricultural subsidies.”
• 85.3 percent agree that “the gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged.”
• 77.2 percent agree that “the best way to deal with Social Security’s long-term funding gap is to increase the normal retirement age.”
• 67.1 percent agree that “parents should be given educational vouchers which can be used at government-run or privately-run schools.”
• 65.0 percent agree that “the U.S. should increase energy taxes.”

And, finally, the topic that generates the most consensus:

• 90.1 percent disagree with the position that “the U.S. should restrict employers from outsourcing work to foreign countries.

Click here to view the original article.

Click here to view the data.

Government can fix health care, like everything else

HT: Carpe Diem

Milton Friedman: ‘Speaking the Truth about Social Security Reform’

In 1999 Milton Friedman wrote a social security reform briefing on behalf of the Cato Institute. It is as relevant today as it was then. In his executive summery, Friedman wrote,

As support grows for transforming Social Security from a pay-as-you-go defined benefit program to a system of individually owned, privately invested accounts, critics of privatization have warned that making the transition to such a new system would impose substantial new costs on today’s young workers. However, given a proper understanding of Social Security’s current unfunded liabilities–variously estimated at from $4 trillion to $11 trillion–there are no real transition costs to privatizing Social Security, merely the explicit recognition of current implicit debt.

A privatized Social Security system should not be mandatory. The fraction of a person’s income that it is reasonable for him or her to set aside for retirement depends on that person’s circumstances and values. It makes no more sense to specify a minimum fraction for all people than to mandate a minimum fraction of income that must be spent on housing or transportation. Our general presumption is that individuals can best judge for themselves how to use their resources. The ongoing discussion about privatizing Social Security would benefit from paying more attention to fundamentals, rather than dwelling simply on nuts and bolts of privatization.

The two page report can be read in its entirety here.