Benjamin Studebaker

Yet Another Attempt to Make the World a Better Place by Writing Things

Tag: VAT

Why Federal Stimulus is Always Too Small

We never seem to learn anything. The global economic crisis of 2008 should have taught us a lot about how governments cope with major economic shocks, but the level of analysis in 2020 has been abysmal. The Great Recession reduced US economic output by 4.2% and destroyed 8.7 million jobs. To counteract the loses, the federal government injected stimulus, first through the Bush administration’s Troubled Asset Relief Program (TARP), and then through the Obama administration’s American Recovery and Reinvestment Act. Combined, these two programs provided about $1.2 trillion. That’s about $285 billion per percentage of point of GDP. It wasn’t enough. The economy recovered very slowly, too slowly for the Obama administration to maintain public support. The Democrats lost the House decisively in 2010. Obama tried to get an additional $447 billion in 2011, but the Republicans had no interest in it. Instead, they pushed for deficit reduction. Obama tried to play nice with them, signing the Budget Control Act in August and making one last push for more stimulus in the Fall. They took his cookies. The second stimulus never happened. As the years went by, rural America continued to lose jobs, and grew more and more resentful, setting the stage for Donald Trump in 2016.

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Andrew Yang’s Basic Income is Stealth Welfare Reform

When I first heard Andrew Yang was running on a UBI platform, I thought he was running to popularise universal basic income as a policy option for the future. It has become increasingly clear, however, that Yang thinks he is a real presidential candidate and that his UBI is for now, not later. The thing is, UBI is traditionally marketed as a post-work policy. The point of UBI has always been to give every citizen a large enough basic income to give them a real choice about whether or not they take a job. This levels the playing field between employers and employees, forcing employers to offer people more substantial inducements to get them to work. But it’s increasingly clear that this is not what his UBI is for. Its purpose is more sinister–it is a vehicle for legitimating benefits cuts for the poorest and most vulnerable people in our society.

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The Third Republican Debate and the Tale of the Terrible Tax Plans

In the third republican presidential debate, the moderators gave the candidates a hard time over their tax plans, and the candidates responded by accusing the moderators of being biased. Said Ted Cruz:

The questions that have been asked so far in this debate illustrate why the American people don’t trust the media. This is not a cage match. And, you look at the questions — “Donald Trump, are you a comic-book villain?” “Ben Carson, can you do math?” “John Kasich, will you insult two people over here?” “Marco Rubio, why don’t you resign?” “Jeb Bush, why have your numbers fallen?” How about talking about the substantive issues the people care about? And Carl — Carl, I’m not finished yet. The contrast with the Democratic debate, where every fawning question from the media was, “Which of you is more handsome and wise?”

This was a clever move by Cruz–republican voters have been trained to believe that the media is out to get them, to suspect that whenever the republicans get asked tough questions that the journalists’ claims are exaggerated or even fabricated. He succeeded in distracting the viewing audience from the real story of the third debate–the deeply flawed tax plans laid out by the GOP candidates.

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