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Politics and Economics
The US federal debt exploded last year. Between a battered economy and trillions in stimulus spending, it will take years to shrink the debt back to a manageable size. In the meantime, the Bold Centrist still wants to fix this country, focusing on six problem areas: healthcare, infrastructure, poverty, social mobility, housing, and threats to the biosphere. The challenge is how to fund the repair job without adding to the public debt or zapping economic growth.
That’s the problem on the micro-level: unhappy and struggling individuals and families. On the macro-level, we have a mismatch between worker skills and employer needs, which has led to chronic labor shortages - especially in the better-paying fields… These shortages not only hurt the company’s bottom line, they undermine labor productivity and economic growth. And the problem’s only going to get worse in the decades to come unless this country comes up with better ways to help people update their skills as needed to meet ever-changing employer demand.
Lifelong learning on a mass scale is in order.
The ASBI would mostly pay for itself through reduced spending on other government programs…An ASBI would not impact eligibility for some non-cash benefits such as housing and Medicaid, as well as any aid meant for children. However, ASBI recipients would have to pay somewhat more for their Medicaid premiums…. So how did I arrive at a cost of $2 a day in new taxes for the ASBI? Easy: tax increase of $216 billion divided by 328.3 million US residents = $658 = less than $2 a day/per Capita.
The advantage of the ASBI over Pell Grants and the Danish scheme is that it’s more flexible, less likely to impose economic hardship on recipients, and more likely to encourage skill building across adulthood. The ASBI wouldn’t force people to quit jobs to go to school and it would allow people to quit jobs to go to school.
The Stockton Economic Empowerment Demonstration, or SEED, was founded in early 2019 by the then-mayor of Stockton, a city of about 292,000 in California. SEED is midway through an experimental project to demonstrate the advantages of a guaranteed basic income. The project includes a “treatment” group of 125 individuals who will receive a guaranteed monthly stipend of $500 for two years, as well as a control group that does not receive the stipend. Of the 125 in the treatment group, 100 comprise the core research sample and 25 serve as a “politically purposive, or storytelling cohort, or who publicly spoke about their experience with SEED.” (Preliminary Analysis: SEED's First Year, March 2021).
Conservatives have accepted the right to a public education and emergency medical care. But they don’t seem to have registered the implications of these modern rights. They still seem to think governments must be timid, as if it were impossible to mix fiscal discipline with ambitious policy goals or protect individual liberty while expanding the scope of government. Well, it is possible. Hard but possible.
So… how do people of various political persuasions differ in their worldviews, especially in their understanding of what is likely to lead to what? One way they differ is in the appreciation of scarcity and the implications of scarcity. By scarcity, I mean limited resources to achieve goals and satisfy desires, resources such as time, money, labor, skill sets, materials, the goodwill of others, and so on. As for the implications of scarcity, I mean how the realization that you can’t have everything you want exactly when you want it forces people to find ways to stretch their resources and prioritize their goals.
Okay, that’s the original essay. What I would add now is that ideologues are also prone to magical thinking, as reflected in the attitude that power plus the right values and a correct political understanding are enough to achieve ambitious societal goals.
Per the above table, a $15 minimum wage wouldn’t be much higher than the median wage in several states. However since my median wage figures are from 2016 and the US median wage has been increasing around 2% a year, let’s bump up the state median wages by 10%. That would make the average median hourly wage $16.75 for the low-paying states and $24.28 for the high-paying states.
In 2020, 132.1 million wage and salary workers age 16 and older were employed in the US. Around 73.3 million were paid by the hour, of which 1.1 million workers were paid wages at or below the federal minimum of $7.25 per hour. This represents 1.5% of all hourly paid workers, a decline from 1.9% in 2019 and well below the 13.4% in 1979, when data on minimum wage workers were first collected on a regular basis.
Per the US Bureau of Labor Statistics, here are some characteristics of US workers earning hourly wages at or below the federal minimum wage in 2020…
So how is America doing in the infrastructure department? Somewhere between mediocre and poor, as the following tables make painfully clear…
The poll in question was a survey of 1,000 Trump voters conducted by The Suffolk University-USA Today between February 15 and February 19. Forty-six percent of respondents said they would abandon the GOP and join the Trump party if the former president created one. Just 27% said they would stay with the GOP, with the remainder undecided
If word get around, posts on social media may eventually impact one’s employability. A 2017 Harris Poll of more than 2,300 US human resource professionals found that 70% of employers used social media to screen job candidates and 37% specifically looked for what other people were posting about them. And employers weren't just looking at social media – 69% used online search engines such as Google, Yahoo and Bing to research candidates as well.
The timeline of online punishment is inherently uncertain. When does an individual have the right for the shaming to stop, and how is this even possible when the shaming is recorded on the internet? If the shaming does not stop, how can the shamed ever repair their reputations and relationships? Convicted criminals do their time and pay their dues - but there are no parallel concepts in the world of online shaming. Even if the online chatter subsides for a while, there’s no telling when it might come roaring back.
“And what we find in the archeology record is that wherever there is civilization, it starts with temples, or at least the record begins with temples. And the reason, I believe, we always start with temples is that humanity’s great trick, our evolutionary trick over the last half-million or so years, I’d say, is we evolved a psychology of sacredness; we evolved to be religious and that means if we circle around something, we then make that thing sacred and then we can trust each other…So what is sacred at a university? I mean, what do we circle around?” - Jonathan Haidt, How two incompatible sacred values are driving conflict and confusion in American universities. A talk given at SUNY New Paltz.
There would also be multiple levels of subsidized housing available for the formerly homeless - each level a bit more appealing than the one below but none so attractive as to disincentivize transitioning to unsubsidized housing for those who are able to afford market-rate rents on their own. What I’m proposing uses an incremental reward structure to nudge the initially resistant into permanent housing. And because the progression in housing quality requires just a bit more effort and money, the progression feels doable: a moderate challenge but within reach with effort and assistance. Here’s what the first few levels might look like: …
“…Humility, so that each of society’s competing factions might comprehend that it will not always hold power. Tolerance, so that the habitual reaction to a difference of opinion is the shrug rather than the bayonet. And forbearance, so that the immediate rush of victory can be subordinated to longer-term ambition. Little by little, we are losing all three…”
I’m going to assume an annual budget of $2 trillion (inflation-adjusted) of additional federal spending to tackle five problem areas: healthcare, poverty, social mobility, housing, and threats to the biosphere. Let’s start with healthcare. The challenge is to come up with a high-quality, affordable universal healthcare system that doesn’t eat up my budget. Easy - the The Urban Institute has done most of the work already…Per the Urban Institute’s analysis, just $108 Billion in additional revenue is needed for their proposed reform: a drop in the $2 trillion bucket. But even this reform option leaves a lot of waste in the US healthcare system.
With more stimulus spending on the way, the federal debt is going to grow a bit more before the long drift downward to a manageable size - a process that will take many years. In the meantime, the Bold Centrist has a major challenge: how to fund Big Ideas without adding to the public debt.
Of course, there’s no one-size-fits-all ideal tax system but here are a few tips. Tax systems should:
Provide a relatively stable revenue stream.
Generate enough revenue to meet policy goals without incurring excessive debt.
Be sufficiently predictable for taxpayers to make long-term spending and investment decisions.
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