That’s what readers of this article on a Democratic proposal which would both increase Social Security benefits and phase in a 1.2 percentage point increase in Social Security taxes (on both workers and employers) over 25 years. The article tells readers:
“Someone making $50,000 now faces an employee-side Social Security payroll tax of $3,100 a year. Under the bill, that tax bill would rise to $3,125 in 2020, which Mr. Larson pitches as an extra 50 cents a week. The tax would continue rising until 2043, when it would hit $3,700. Employers would face the same tax increase. Economists generally think workers bear the cost of both sides of the tax.”
Assuming that workers do pay the employers’ side of the tax (generally a reasonable assumption) the full tax increase for this worker would be $1,200 a year. However, Social Security projects that real wages will rise at a rate averaging roughly 1.4 percent over this period. This means that if a typical worker got their share of this wage growth, then the worker earning $50,000 a year would be earning almost 38 percent more in 2043, or $69,000 a year in 2043. This projected pay increase of $19,000 a year is more than fifteen times as large as the tax increase being proposed by the Democrats.
It would have been useful to include this projected rise in wages in the piece. It is also worth noting that most workers have not been getting their share of wage growth, as it has instead gone to CEOs and other top executives, Wall Street types, and highly protected professionals, like doctors. The prospect of losing out on their share of wage growth will have far more impact on workers’ living standards than the Social Security tax being proposed by the Democrats.
That’s what readers of this article on a Democratic proposal which would both increase Social Security benefits and phase in a 1.2 percentage point increase in Social Security taxes (on both workers and employers) over 25 years. The article tells readers:
“Someone making $50,000 now faces an employee-side Social Security payroll tax of $3,100 a year. Under the bill, that tax bill would rise to $3,125 in 2020, which Mr. Larson pitches as an extra 50 cents a week. The tax would continue rising until 2043, when it would hit $3,700. Employers would face the same tax increase. Economists generally think workers bear the cost of both sides of the tax.”
Assuming that workers do pay the employers’ side of the tax (generally a reasonable assumption) the full tax increase for this worker would be $1,200 a year. However, Social Security projects that real wages will rise at a rate averaging roughly 1.4 percent over this period. This means that if a typical worker got their share of this wage growth, then the worker earning $50,000 a year would be earning almost 38 percent more in 2043, or $69,000 a year in 2043. This projected pay increase of $19,000 a year is more than fifteen times as large as the tax increase being proposed by the Democrats.
It would have been useful to include this projected rise in wages in the piece. It is also worth noting that most workers have not been getting their share of wage growth, as it has instead gone to CEOs and other top executives, Wall Street types, and highly protected professionals, like doctors. The prospect of losing out on their share of wage growth will have far more impact on workers’ living standards than the Social Security tax being proposed by the Democrats.
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“The idea of guaranteed income is gaining traction, from the presidential debate stage to Silicon Valley, where tech titans such as Mark Zuckerberg and Elon Musk have promoted it as a way to fend off a gloomy future in which automation and climate change eliminate millions of jobs.”
This came up as a throwaway line in an article about a trial program for a guaranteed basic income. The problem is that the type of job losses being described here are 180 percent opposite from each other.
Job loss from automation is ostensibly from too much productivity — we don’t need workers. (There is zero evidence for this story, but no one ever said that Mark Zuckerberg or Elon Musk had a clue about the economy.) Job loss attributed to addressing climate change is the result of too little productivity. The story (most get this wrong) is that there is plenty of work for people to do, such as retrofitting buildings and installing solar panels, but that with less energy use, the economy is less productive, and therefore these jobs pay less and workers don’t want to do them.
This is all very tangential to the article, but a serious paper should get these points right if it is going to print them.
“The idea of guaranteed income is gaining traction, from the presidential debate stage to Silicon Valley, where tech titans such as Mark Zuckerberg and Elon Musk have promoted it as a way to fend off a gloomy future in which automation and climate change eliminate millions of jobs.”
This came up as a throwaway line in an article about a trial program for a guaranteed basic income. The problem is that the type of job losses being described here are 180 percent opposite from each other.
Job loss from automation is ostensibly from too much productivity — we don’t need workers. (There is zero evidence for this story, but no one ever said that Mark Zuckerberg or Elon Musk had a clue about the economy.) Job loss attributed to addressing climate change is the result of too little productivity. The story (most get this wrong) is that there is plenty of work for people to do, such as retrofitting buildings and installing solar panels, but that with less energy use, the economy is less productive, and therefore these jobs pay less and workers don’t want to do them.
This is all very tangential to the article, but a serious paper should get these points right if it is going to print them.
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It’s probably too simple and obvious to be worth mentioning, but it seems none of the news coverage on the suits against opioid manufacturers says that the reason that companies like Purdue Pharma and Johnson & Johnson had so much incentive to push their drugs was that the government gave them patent monopolies that allowed them to sell their products for prices that were far above the free market level. While generic manufacturers also made money on opioids, the largest profits were made by the brand manufacturers, who also did the most pushing.
One of the unintended consequences of government-granted patent monopolies is that it gives companies an incentive to mislead physicians and the general public about the safety and effectiveness of their drugs. The costs from the resulting improper care can be enormous, as we showed in a short paper five years ago.
This should be a strong argument for alternatives to patent financed research, such as the $40 billion in direct public funding that now goes through the National Institutes of Health. Unfortunately, the idea of alternatives to patent-financed pharmaceutical research, which would allow all new drugs to sell at generic prices, saving close to $400 billion annually (1.8 percent of GDP), is too radical for U.S. politicians.
It’s probably too simple and obvious to be worth mentioning, but it seems none of the news coverage on the suits against opioid manufacturers says that the reason that companies like Purdue Pharma and Johnson & Johnson had so much incentive to push their drugs was that the government gave them patent monopolies that allowed them to sell their products for prices that were far above the free market level. While generic manufacturers also made money on opioids, the largest profits were made by the brand manufacturers, who also did the most pushing.
One of the unintended consequences of government-granted patent monopolies is that it gives companies an incentive to mislead physicians and the general public about the safety and effectiveness of their drugs. The costs from the resulting improper care can be enormous, as we showed in a short paper five years ago.
This should be a strong argument for alternatives to patent financed research, such as the $40 billion in direct public funding that now goes through the National Institutes of Health. Unfortunately, the idea of alternatives to patent-financed pharmaceutical research, which would allow all new drugs to sell at generic prices, saving close to $400 billion annually (1.8 percent of GDP), is too radical for U.S. politicians.
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The New York Times had a piece about a new law in China that reduced penalties for importing drugs that have not been approved by China’s regulatory agency. While it is not clear from the piece how far-reaching this change in the law will be in practice, the potential impact for both China and the world is enormous.
India has continued to be a massive supplier of generic drugs, both to its own people, but also to the rest of the world. Many drugs that are subject to patent protection in the United States are available at free market prices in India. The gap in prices is often more than 100 to 1. (India’s generics vary in quality, but their largest manufacturers are comparable in quality to U.S. manufacturers.)
The United States has been pushing for years to force India to narrow the scope of its generic industry, making its patent system closer to the U.S. system. While there is support for such a change in India, there is also massive opposition to a move that would hugely raise domestic drug prices and cripple one of its leading industries.
If China were to become a large-scale buyer of India’s generic drugs it would provide a large boost to the country’s industry and make it less likely it would give in to U.S. demands. This matters not only for the Chinese and Indian markets, but it raises the prospect where most of the world might be paying a few hundred dollars for drugs for which Pfizer and Merck are charging people in the United States and Europe hundreds of thousands of dollars.
That might not prove tenable in the long-run.
The New York Times had a piece about a new law in China that reduced penalties for importing drugs that have not been approved by China’s regulatory agency. While it is not clear from the piece how far-reaching this change in the law will be in practice, the potential impact for both China and the world is enormous.
India has continued to be a massive supplier of generic drugs, both to its own people, but also to the rest of the world. Many drugs that are subject to patent protection in the United States are available at free market prices in India. The gap in prices is often more than 100 to 1. (India’s generics vary in quality, but their largest manufacturers are comparable in quality to U.S. manufacturers.)
The United States has been pushing for years to force India to narrow the scope of its generic industry, making its patent system closer to the U.S. system. While there is support for such a change in India, there is also massive opposition to a move that would hugely raise domestic drug prices and cripple one of its leading industries.
If China were to become a large-scale buyer of India’s generic drugs it would provide a large boost to the country’s industry and make it less likely it would give in to U.S. demands. This matters not only for the Chinese and Indian markets, but it raises the prospect where most of the world might be paying a few hundred dollars for drugs for which Pfizer and Merck are charging people in the United States and Europe hundreds of thousands of dollars.
That might not prove tenable in the long-run.
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He again used his weekly Washington Post column to tell us this. Somehow, our budget deficits are supposed to be a “high-stakes gamble,” although he really has no explanation as to how or why.
The standard economics story on why deficits are supposed to be bad is that they lead to high interest rates, thereby crowding out investment and slowing growth. Alternatively, if the Fed is lax and offsets the impact of the deficit by printing money, then the deficits lead to high inflation.
Fans of data know that neither is the case at present. Long-term interest rates are extraordinarily low, with the 10-year Treasury bond rate hovering near 1.6 percent. It was close to 5.0 percent when we were running budget surpluses under Clinton. Inflation is also low, coming in consistently below the Fed’s 2.0 percent target.
So file this one in the “Robert Samuelson doesn’t like budget deficits” box, right next to the “Dean Baker doesn’t like chocolate ice cream box.” Perhaps it is of some passing interest, but not the sort of thing serious people need to worry about.
He again used his weekly Washington Post column to tell us this. Somehow, our budget deficits are supposed to be a “high-stakes gamble,” although he really has no explanation as to how or why.
The standard economics story on why deficits are supposed to be bad is that they lead to high interest rates, thereby crowding out investment and slowing growth. Alternatively, if the Fed is lax and offsets the impact of the deficit by printing money, then the deficits lead to high inflation.
Fans of data know that neither is the case at present. Long-term interest rates are extraordinarily low, with the 10-year Treasury bond rate hovering near 1.6 percent. It was close to 5.0 percent when we were running budget surpluses under Clinton. Inflation is also low, coming in consistently below the Fed’s 2.0 percent target.
So file this one in the “Robert Samuelson doesn’t like budget deficits” box, right next to the “Dean Baker doesn’t like chocolate ice cream box.” Perhaps it is of some passing interest, but not the sort of thing serious people need to worry about.
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Brazil has gotten a huge amount of bad press with the fires in the Amazon with the emphasis on the harm its development policies are doing to efforts to limit global warming. While the policies of Brazil’s right-wing president, Jair Bolsonaro, are disastrous, there is an important part of the story that is being left out of most discussions.
The reason that we are worried about global warming is that rich countries, most importantly the United States, have been spewing huge amounts of greenhouse gases into the atmosphere for well over a century while destroying the native forests on their lands. They also have paid to have forests in other countries destroyed in order to meet their resource needs.
This is the context in which the destruction of the Amazon is a worldwide problem of enormous proportions. (The Amazon is a treasure which should be preserved even if global warming was not a crisis, but that is a different matter.)
The blame Brazil story is one where a group of rich boys are sitting around in their mansion eating a huge plate of cookies. Meanwhile, they send the housekeeper from room to make the beds and clean up. After the housekeeper finishes, she sees the last cookie on the plate and begins to reach for it. The rich boys then all yell at her for being greedy for wanting to take the last cookie.
The rich countries’ lack of concern for the environment made it cheaper for them to develop. Now poorer countries, who are struggling to develop, are being told that they need to respect the environment for the good of the planet.
In fact, they do need to respect the environment, but we (the rich countries) have to pay them to do it. After all, it is a problem we created. That may not be a politically popular position here, but it is a politically serious one on a world basis and the only plausible way to limit global warming.
Brazil has gotten a huge amount of bad press with the fires in the Amazon with the emphasis on the harm its development policies are doing to efforts to limit global warming. While the policies of Brazil’s right-wing president, Jair Bolsonaro, are disastrous, there is an important part of the story that is being left out of most discussions.
The reason that we are worried about global warming is that rich countries, most importantly the United States, have been spewing huge amounts of greenhouse gases into the atmosphere for well over a century while destroying the native forests on their lands. They also have paid to have forests in other countries destroyed in order to meet their resource needs.
This is the context in which the destruction of the Amazon is a worldwide problem of enormous proportions. (The Amazon is a treasure which should be preserved even if global warming was not a crisis, but that is a different matter.)
The blame Brazil story is one where a group of rich boys are sitting around in their mansion eating a huge plate of cookies. Meanwhile, they send the housekeeper from room to make the beds and clean up. After the housekeeper finishes, she sees the last cookie on the plate and begins to reach for it. The rich boys then all yell at her for being greedy for wanting to take the last cookie.
The rich countries’ lack of concern for the environment made it cheaper for them to develop. Now poorer countries, who are struggling to develop, are being told that they need to respect the environment for the good of the planet.
In fact, they do need to respect the environment, but we (the rich countries) have to pay them to do it. After all, it is a problem we created. That may not be a politically popular position here, but it is a politically serious one on a world basis and the only plausible way to limit global warming.
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I know that reality often has little place in our political debates, but is there any way we can the New York Times and other news outlets to stop saying that the U.S. economy is the world’s largest? It happens not to be true.
According to the I.M.F., using purchasing power parity measures, which most economists view as the best measure, China passed the United States in 2015 and is now more than 25 percent larger. Maybe reporters and editors get a kick out of saying that the U.S. is the world’s largest economy, but since it happens not to be true, it would be good if they stopped saying it.
I know that reality often has little place in our political debates, but is there any way we can the New York Times and other news outlets to stop saying that the U.S. economy is the world’s largest? It happens not to be true.
According to the I.M.F., using purchasing power parity measures, which most economists view as the best measure, China passed the United States in 2015 and is now more than 25 percent larger. Maybe reporters and editors get a kick out of saying that the U.S. is the world’s largest economy, but since it happens not to be true, it would be good if they stopped saying it.
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