Tag Archives: economy

Bernie Sanders is wrong on open borders: they’d help boost the economy

Bernie Sanders has come out against open borders, claiming they are a “right-wing proposal” that “would make everyone in America poorer.” He argues that, while we have a “moral responsibility” to “work with the rest of the industrialized world to address the problems of international poverty… you don’t do that by making people in this country even poorer.”

But there is a vast amount of literature showing that open borders could be the single best policy to alleviate global poverty. The free movement of people would enrich individuals by allowing them to move to where their specific skills and talents are most economically efficient and personally beneficial. According to Michael Clemens at the Center for Global Development, open borders could lead to a one-time boost in world GDP of 50 to 150%.

Contra Senator Sanders, a Democratic candidate for president, open borders is a moral imperative for those who truly wish to help the world’s poor. If Sanders wishes to challenge mainstream economists on this fact, he must provide empirical evidence to back up his assertions. Otherwise, he deserves to be dismissed as just another politician, playing to domestic, nativist sentiments, rather than pursuing the economic policies that will benefit Americans and reduce global poverty.

Read the rest on the Guardian US here.

Go Figure, Bernie: America Beats Scandinavia in Take-Home Pay

Democratic presidential candidate Senator Bernie Sanders (I-VT) frequently pines for the United States to be more like the Scandinavian countries of Norway, Sweden, Finland, and Denmark. He cites the northern European nations’ lower levels of income inequality, when compared to the United States, as justification. But there is one problem: although income in these European countries may be more equal, workers get smaller paychecks.

On paper, workers in Scandinavia appear richer than their counterparts in America. But to compare accurately life in the two regions, we need to make a couple of adjustments. The first is taxes: according to OECD data analyzed by the Tax Foundation, the “tax wedge”—the difference between what it costs to employ a worker and what he sees in his paycheck—is much higher in Scandinavian countries than in the United States. After taking out taxes, we also need to adjust take-home pay by the country’s price level, since goods and services cost more in some countries than others.

Read the rest on Economics 21 here.

Puerto Rico Is Sinking In Debt: Why The Mainland Should Care

The island of Puerto Rico has been floating in a sea of debt for quite a while, but now it appears to be sinking. Facing $73 billion in debt, the U.S. territory’s governor, Democrat Alejandro Garcia Padilla, is warning that the island can’t continue making payments on its public debt, and reports suggest Puerto Rico may run out of cash in July. To say the island is in rough shape would be an understatement.

The island’s debt obligation is about four times the size Detroit’s was back in 2013, when the city filed for federal bankruptcy protection—the country’s largest municipal bankruptcy case ever. Puerto Rico’s debt is actually greater than the debt of all U.S. cities to have ever filed for bankruptcy protection combined. Puerto Rico’s debt amounts to over $20,000 per resident and it has amassed more municipal bond debt per capita than any other U.S. state.

Unlike Detroit, the Island of Enchantment can’t declare bankruptcy to absolve its debts. Federal bankruptcy code prevents the island (and states) from filing bankruptcy. Puerto Rico’s two options are that it can continue to work out deals with creditors to refinance its outstanding debts, or it could push Congress for a bailout — which seems unlikely to happen.

Read the rest on The Daily Caller here.

How the Feds Helped Bankrupt Puerto Rico

Puerto Rico is full crisis mode, as signaled by Governor Alejandro García Padilla warning that the island’s debts are “not payable.” This is partially the fault of the island’s own government. The commonwealth has piled up a debt much larger as a percentage of GDP than any other state.

All major parties are to blame for over-promising and overspending, and the Puerto Rican government deserves most of the responsibility for the situation it finds itself in. Nevertheless, it is not entirely their fault.

The US federal government has many laws that disproportionately, and often inadvertently, harm the island. Policies that have little impact on the mainland can have dire consequences in Puerto Rico, partially because it’s a territory rather than a state, and partially because of the particulars of the island’s economy. A recent report on the island by economist Anne Krueger and others contains many such instances.

Read the rest on the PanAm Post here.

Review – Disinherited: How Washington Is Betraying America’s Young

Government is shortchanging young people on everything from education and healthcare to employment and retirement, according to Manhattan Institute senior fellow Diana Furchtgott-Roth and policy analyst Jared Meyer, co-authors of the forthcoming book Disinherited: How Washington Is Betraying America’s Young.

“This betrayal is not intentional,” they begin. “In this book we lay out the scope of the problem and what will be necessary to solve it. Plainly stated, Washington is robbing America’s young. Our country is facing a crisis, and change is essential in order for young people to achieve the future they deserve.”

In retirement, Millennials will be at a dismal financial crossroads, relative to their parents and grandparents, according to the author pair.

“They can either pay substantially higher taxes than their parents do, while not receiving any more benefits, or they can pay the same rate as their elders and receive far fewer benefits,” the write. “Both outcomes are grossly unfair … If trends continue, workers could be paying a combined employer-employee payroll tax rate of 32 percent in 2050 just to cover Medicare and Social Security payments.”

The book also examines state pension and healthcare expenditures, which are massively underfunded in many states (in part due to unrealistic investment return assumptions and various accounting sleights of hand), leading the authors to wonder whether the bankruptcy of a state would require a federal bailout from future taxpayers, e.g. today’s young.

On education, Furchtgott-Roth and Meyer give evidence of the effectiveness of charter schools in states ranging from New York to Arizona and Louisiana, where the Obama administration’s Department of Justice (DOJ) sued to block school vouchers in the name of fighting desegregation. However, the pair points out, “Desegregation expert Christine Rossell looked at Louisiana’s voucher program and found that in most districts, voucher programs actually reduced racial imbalance. The DOJ has since withdrawn the suit, but the fact that it was filed at all on such spurious grounds underscores the extreme hostility of the federal government to state initiative to improve education.”

Disinherited takes a harsh stance against secondary school administrators who push students into four-year college degree programs, eventually leading them to be saddled with an average of $25,000 in debt that cannot be discharged in bankruptcy. Yet many of these degrees have little value in the marketplace, with the New York Federal Reserve estimating 44 percent of recent graduates work in jobs that do not require a bachelor’s degree. And Wells Fargo found that one-fourth of millennials do not think college was worth the cost.

Read the rest at Opportunity Lives…