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Archive for January, 2014

I always find polls to be interesting. In my mind, one of the more fascinating things is when there is a large disjunction between individuals’ assessment of X (e.g., the environment, crime, education, the economy) as they experience it and their assessment of X as the nation experiences it. I often attribute the differences to the simple fact that the latter question is strongly influenced by the way in which X is portrayed by the media and political elites. One might be satisfied with the environment as one experiences it at home, for example, but the media provides heavy coverage of environmental catastrophes, oil and chemical spills, etc.

In the latest NBC/WSJ Poll (results here), 61 percent report being very/somewhat satisfied when asked to assess their “own financial situation today.” At the same time, when asked “how satisfied are you with the state of the U.S. economy today?,” only 28 percent say they are very/somewhat satisfied. 71 percent claim to be dissatisfied (37 percent somewhat dissatisfied, 34 percent very dissatisfied).

Another question: how well is the economy working for different types of people? Fully 81 percent believe it is working very/fairly well for the wealthy whereas only 22 percent believe it is working very/fairly well for the middle class. There is an obvious tension here, given that “middle class” is the modal category and a majority (71 percent) is very/somewhat satisfied with the economy as they experience it. Similar to the earlier example of the environment, one might hypothesize that the disjunction is a product of the way in which the economy is portrayed in the media and by political elites. (more…)

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In my last post, I said “total net social spending” included net public spending and mandatory private social spending. In fact, it includes voluntary private social expenditures as well. The U.S. has by far the highest voluntary social expenditures in the OECD, so if you subtract those out, the U.S. net public and mandatory private social spending figure is no longer second in the OECD (and thus almost certainly the world, as poorer countries have smaller welfare states), only just about average.

But what does voluntary private social spending include? One big component is employer-provided health insurance. It seems to me that should be included in the size of the U.S. welfare state, even if it is not directly provided by the government, because the government subsidizes it (through the tax code), and because that spending is a substitute for government spending in other countries. If we exclude it for the U.S., we are not comparing like with like, since several other countries provide health insurance mainly or exclusively through the state. Put another way, if the U.S. provides so much social welfare privately, the need for the government to provide it is less. The U.S. welfare state is average-sized in spite of the fact that the private welfare system is enormous.

Now, does that mean the U.S. spends vastly more on the poor than most other OECD countries? Not necessarily. The majority of social spending in the U.S. does not go to the poor – but neither does it anywhere else. The elderly soak up a huge portion of social spending in almost all advanced industrial societies. Indeed, one way to measure how redistributive the U.S. welfare state is is to subtract the “post tax and transfer” Gini ratio from the “pre tax and transfer” Gini ratio. Of course, this is a static measure that does not take into account possibilities for mobility from one income level to another, and the extent to which “poverty traps” can contribute to lost mobility. Still, it’s a suggestive measure.

Using data from World Development Indicators Standardized World Income Inequality Database, I find that the tax and transfer system in the U.S. shaves only 0.08 points off the Gini ratio, a standard measure of income inequality (“1” means most unequal, “0” perfectly equal). In most other countries, the number is much higher. In Sweden, it is 0.20. In Italy and Germany, is 0.21. Only Switzerland showed (slightly) less progressive redistribution.

So while the U.S. has one of the very largest welfare states in the rich world, it also has one of the least progressive welfare states in the rich world. By the standards of anti-inequality preferences, that’s a terrible record of inefficiency.

Updated with correct source for my data.

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The United States has long had a larger welfare state than most other Western democracies. Surprised? You may not be aware of the new research on “net social spending.”

Net social spending includes not just government expenditures on social programs, but also tax credits for social purposes and, as a debit, government taxation of social benefits. It turns out that many of the so-called “generous” European welfare states tax social benefits at a high rate. Meanwhile, the United States uses the tax code to help the poor, through the Earned Income Tax Credit. We should also include mandatory private social payments, which are not directly paid by the government.

Using the OECD data, I have plotted total net social expenditure over time for 26 rich countries (click the image to zoom in).

the united states has a bigger welfare state than most other democracies

As of 2009, the United States had the second largest welfare state in the world, at 28.8% of GDP. Only France, at 32.1%, had a bigger one. Moreover, while all advanced industrial societies show a growth in the welfare state from 2005 to 2009, due to economic conditions, the U.S. also had a big runup in welfare spending between 1999 and 2007. In 1995, U.S. net social spending stood at just 22.7% of GDP, although even that figure was higher than those for Denmark, Canada, Italy, Norway, Australia, Ireland, and South Korea. So far as we have data, the U.S. has always had a larger-than-average welfare state.

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Thomas Carsey and Geoffrey Layman in The Monkey Cage:

The Pew Research Center for the People and the Press reported on June 10, 2013 that the percentage of Democratic identifiers who found NSA surveillance programs acceptable increased from 37 percent in January 2006 to 64 percent in June 2013. In contrast, the percentage of Republican identifiers saying these programs were acceptable decreased from 75 percent to 52 percent over this same time period. We doubt these changes emerged from a large influx of anti-surveillance advocates into the GOP or of pro-surveillance supporters into Democratic ranks between 2006 and 2013. Rather, the shift likely occurred because we had a Republican president in 2006 and a Democratic president in 2013, and many people simply adjusted their views on NSA activities to fit with their prior partisan attachments.

It’s a good thing these people are deciding how my life will be run.

HT: Chris Andrew

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Making Sense of the Numbers

The early figures on the Affordable Care Act are raising some concerns for those who believed that it would address the problem of the uninsured. Christopher Weaver and Anna Wilde Matthews (Wall Street Journal) report:

Early signals suggest the majority of the 2.2 million people who sought to enroll in private insurance through new marketplaces through Dec. 28 were previously covered elsewhere, raising questions about how swiftly this part of the health overhaul will be able to make a significant dent in the number of uninsured.

A McKinsey & Co survey cited in the piece suggests that only 11 percent of those who purchased coverage under the Affordable Care Act between November and January were previously uninsured.  The numbers are somewhat better from other sources, but in each case a majority of those who purchased insurance were previously insured.

Granted, the first few months of the Affordable Care Act were particularly chaotic, and many of those who managed to navigate their way through the website suffered sticker shock (McKinsey found that affordability was cited by 52 percent of those who shopped for a plan but decided not to purchase one). But the numbers seem peculiar nonetheless. (more…)

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Today is the 40th anniversary of Roe v Wade. Reason held an interesting panel in 2013 (participants: Katherine Mangu-Ward, Ronald Bailey and Mollie Hemingway, with Nick Gillespie moderating) highlighting some of the core areas of debate among libertarians.

The question of abortion has continued to spark disagreements  involving core questions of when personhood (and thus rights begin), whether a woman’s property rights in her body trump the fetal right to life (if so, abortion is evicting a fetus or, in Murray Rothbard’s terms, ejecting an unwanted “parasite”) and the applicability of the non-aggression principle.

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We all agree that it’s wrong to put cats in microwaves. Animals’ welfare matters to us. (I don’t think Damon Linker has it right when he says our moral concern for animals is simply a natural “expansion of the sphere of human concern and empathy.” My concern for my fellow human beings dictates precisely nothing about how I should treat a cat. If I think I ought to treat a cat well, that conclusion must be based on some concern for the animal’s well-being. At the same time, I agree with Linker that animals do not have moral rights, because they lack the ability to understand moral claims themselves. There is a middle position between animal rights and no-intrinsic-value-for-animals: animals have intrinsic value in virtue of their ability to suffer and to form basic social ties.)

How much should animal welfare matter? If it’s wrong for me to microwave a cat because it gives me a thrill (let’s assume), is it OK for me to eat a pig because I like its taste? But eating a pig is not the same as killing a pig. Still, eating a pig delegates the killing to others, and is that wrong? I have posed essentially this question before, without coming to a particular answer. Since then, I have come across good reasons to believe that it is impossible not to delegate some amount of animal killing to others, but that still doesn’t mean we should throw up our hands and forget about the issue.

It’s impossible not to delegate some amount of animal killing to others because even vegetable farming involves some amount of animal killing. Eating grains means delegating the killing of rodents to granary operators. Packaged, washed greens available at the supermarket are grown with a surprising degree of animal killing (and ecological destruction). One philosopher has even argued that harm minimization principles suggest it is better to eat large mammals than lots of plants. If we should try to reduce the amount of animal suffering our eating practices cause, what follows?

While it’s difficult to come to any settled view of the matter, given the empirical controversies about precisely what does minimize harm, I believe I have found one area of clear ethical guidance, at least for North Americans. It is, as it were, a “moral free lunch.” If we are to be omnivorous, we should try, as much as possible, to (more…)

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