Justia columnist, George Washington law professor, and economist Neil Buchanan comments on the Romney/Ryan proposal to cut seniors’ benefits. (Although the Republicans are now backpedalling on the proposal, Buchanan points out that such cuts must be the very essence of their strategy, for they refuse to raise taxes, including taxes on the rich.) Buchanan contends that such cuts will harm not just the elderly, but also their children and grandchildren, because the harm to one generation will inevitably harm the others that follow. With younger people being forced to heavily subsidize and support their parents and grandparents, due to the cuts, Buchanan predicts that more families will then need to worry about their finances. Moreover, Buchanan adds, the brunt will fall not only on elders’ families, but also on our regional and national economies as well.
Justia columnist, George Washington law professor, and economist Neil Buchanan comments on VP candidate Paul Ryan’s record. Buchanan argues that, while Ryan is being presented as a numbers maven, in fact Ryan is merely an ideologue with no experience in economics or in budgeting. Buchanan also argues that Romney would have been far wiser to opt for a running mate without so many positions that Romney now must repudiate. Buchanan charges that Ryan, rather than “running the numbers” simply makes them up—as, for example, Ezra Klein’s recent analysis, regarding Ryan’s long-term budget projections, shows. Buchanan also charges that Ryan uses mere assumptions—and unrealistic ones—when facts are needed, as with Ryan’s tax plan. Disagreeing even with Romney’s own economic advisers, Ryan, Buchanan notes, offers ideas and plans that any competent economist would reject. Although the media loves a debate, Buchanan urges them to admit that in this instance, only one side is on track, whereas Ryan is grievously off-base.
Justia columnist, George Washington law professor, and economist Neil Buchanan argues that, in the wake of the Supreme Court’s Affordable Care Act (ACA) decision, states should not opt out of the ACA’s Medicaid expansion, as they are allowed to do, and as many Republican governors have suggested that they will do. Buchanan argues—providing many specifics—that the states can easily afford the Medicaid expansion, especially as the states are being offered a generous deal by Congress; and that the federal government can afford it too. Overall, Buchanan concludes that the case for states’ opting for the expansion is overwhelmingly strong. In addition to being the right thing to do with respect to health care for states’ poor and near-poor citizens, he contends, choosing the Medicaid expansion proves to be fiscally responsible as well.
Justia columnist, George Washington law professor, and economist Neil Buchanan comments on New York Mayor Michael Bloomberg’s controversial size restrictions on soda servings, suggesting that Bloomberg’s critics’ points are misplaced. Buchanan argues that the size restrictions are much akin to a common sales tax, and points out the equivalence of taxes, restrictions, and lawsuits in remedying public harms. Moreover, he contends that the broad liberty objection that many have voiced in the face of Bloomberg’s proposal is flimsy, when carefully considered. And finally, Buchanan takes on the paternalism objection, as well—noting that marketing has distorted people’s choices substantially, and pointing out that we are in the midst of an obesity crisis, and that some government intervention may be warranted given the extreme nature of the problem, especially with respect to children's health.
Justia columnist, George Washington law professor, and economist Neil Buchanan takes aim at the arguments that the dissenting justices made regarding the Affordable Care Act (ACA), and, more specifically, regarding the taxing power. Those taxing power arguments, Buchanan contends, proved to be a dangerous red herring. Buchanan makes his case to that effect by using some ingenious hypotheticals; he argues that it is perfectly logical to deem a certain measure a tax for some purposes, but not for others. It is substance, he says, rather than form, that ultimately matters. Moreover, Buchanan notes, a tax by its nature need not be motivated by the government’s aim to raise money, although the ACA will, indeed, raise some money. Often, Buchanan points out, taxes are meant not to raise money but to incentivize or penalize certain behaviors. Ultimately, Buchanan notes that it is of no import, legally, that the ACA is not characterized as a tax; the key is that it, in part, operates as a tax.
George Washington law professor and economist Neil Buchanan argues that the current debate about Social Security is dangerously misleading in several ways. Buchanan faults both parties for using inaccurate rhetoric: President Obama, he says, must stop acting as if Social Security is in peril, and both the President and Congress must stop using Social Security as a bargaining chip in negotiations with Republicans. In turn, and most importantly, Buchanan argues, Republicans must stop misrepresenting Social Security’s current financial situation as being dire, when that really is not the case. The best approach now, he argues, is to leave Social Security alone and focus on improving the economy. Buchanan also calls for an end to misleading estimates regarding in what year Social Security will be “bankrupt,” as they only scare and mislead the public. Finally, too, he warns that calls to “Act now to save Social Security” are often plans to weaken Social Security, in disguise.
Justia columnist, George Washington law professor, and economist Neil Buchanan takes on the arguments of those who have advocated for austerity as a solution for America’s and other countries’ still-struggling economies. First, Buchanan rebuts, in detail, the claim that government spending cuts will revitalize the economy by getting the government out of the way of the private sector. Then, he counters the argument that the reason austerity did not work was that it was never truly adopted in Ireland, the U.K., the U.S. or elsewhere. The only good news relating to austerity measures, Buchanan says, is that we have not yet seen governments “doubling down” on austerity by advocating even greater degrees of austerity, after the first austerity programs have failed to improve their economic situation—which would, he notes, be truly disastrous as well as inhumane.
With the huge JPMorgan Chase trading loss receiving much coverage in the news lately, Justia columnist and Cornell law professor Michael Dorf argues that the loss is evidence that conservatives’ laissez-faire approach to the market is untenable. Dorf begins by explaining how the JPMorgan Chase loss occurred and why some think a regulation called the Volcker Rule would have preempted the loss, had it been in effect, while others disagree. (That rule, Dorf notes, forbids banks from using depositor funds for speculative priority trading—in other words, for making their own bets—but also has an important exception.) Dorf also opines that the result of this year’s presidential election may well affect the Volcker Rule, with a possible future President Obama welcoming the Rule, and a possible future President Romney junking it, as he has suggested he will do. Dorf also expresses concern about the possible results if Romney is elected and the Rule and related regulations do not go into effect.
Justia columnist, George Washington law professor, and economist Neil Buchanan continues his series of columns commenting on what a Mitt Romney presidency would look like from an economic point of view. In this column, the second in the series, Buchanan considers what the roles of the House and Senate would be in setting economic policy in a possible Romney presidency; describes the role that House Budget Committee Chair Paul Ryan, of Wisconsin, would be likely to play; and postulates that, in a Romney presidency, America would see the imposition of austerity measures similar to those that we are now seeing in Europe, as well as the diminution of much of the federal government, with potentially disastrous consequences. Overall, Buchanan argues that a Romney presidency would only make America's current economic predicament much, much worse.
Justia columnist, George Washington law professor, and economist Neil Buchanan takes strong issue with several arguments that have often been made by Republicans in the run-up to this year’s presidential election. Specifically, Buchanan counters arguments that taxpayers should not help pay for others’ college educations—and perhaps not their K-12 educations, either. He also takes on the two mutually contradictory arguments that (1) college is a waste of time and money, and (2) college education is the only force driving economic inequality. As to the first argument, Buchanan points out that education is a key indicator of economic progress, and that as we stagnate in our population’s educational achievement, other countries eagerly seek out more college education for their own people. As to the second argument, Buchanan argues that it can be rebutted by basic statistics, and that, even if it were true, the logical response would be to broaden American educational attainment.
Justia columnist, George Washington law professor, and economist Neil Buchanan contends that a current assumption that lies beneath many Republican (and sometimes also Democratic) speeches and positions—the assumption that tax cuts are always good—lacks compelling empirical support. Buchanan focuses on the costs of cutting taxes, and takes economists, as a group, to task for not conveying more persuasively to the public that these costs do exist. While politicians tout tax-cut benefits, Buchanan argues, economists ought to underline tax-cut losses, too—such as the losses of essential government programs that, due to tax cuts, are closed or underfunded. He also points to recent commentary, based on empirical studies, from prominent economists Christina Romer, Uwe Reinhardt, and Paul Krugman, pointing out how surprisingly little taxes affect the economy.
George Washington law professor and economist Neil Buchanan comments on the state of the economics profession today, linking it to the frustration many Americans feel when economists seem unable to come up with a clear set of prescriptions as to how the economy can be improved. Buchanan traces the root of the problem to the way in which economists are now trained, and the expectations placed upon PhD candidates. Ideally, Buchanan says, economists would be trained to study important and interesting real-world issues. Instead, he observes, they are not asked to actually try to understand the economy, but rather to master certain technical skills and to gain a command of topics in advanced mathematics that have limited, if any, direct real-world applications. Buchanan notes that some excellent economists do learn to grapple with real-world problems, but he observes that they do so more by happenstance, than as a result of their training. He traces the roots of this longstanding situation, and predicts that it will only change if and when the incentives presented to economics PhD candidates change.
Justia columnist, economist, and George Washington law professor Neil Buchanan comments on the controversy regarding the “Buffett Rule,” Warren Buffett’s observation that he surely should not pay a lesser percentage of his income in taxes than his secretary does. This rule—and the principle behind it—proved to be especially relevant this week, Buchanan notes, when presidential candidate Mitt Romney released some of his tax returns. Buchanan explains how wealthy Americans typically receive special tax treatment, and argues that it is not true that—as some claim—this treatment is necessary to induce the wealthy to invest. He also lauds the Buffett Rule as a key step toward reaching our ultimate goals as a nation, and ensuring the fair treatment of all Americans, regardless of income.
Justia columnist and Cornell law professor Sherry Colb comments on New York Governor Andrew Cuomo's proposed amendment to the New York State Constitution, which would legalize casino gambling. Even Cuomo’s father, former New York Governor Mario Cuomo, opposes the measure. But is he correct to do so? Colb notes the common argument that casino gambling is, in effect, a regressive tax—that is, one that disproportionately burdens less affluent people. However, she argues that for many people—putting gambling addicts aside—gambling is simply another form of entertainment. And for someone with a modest income, Colb points out, many forms of entertainment—for instance, going to the movies—could also be seen as effectively imposing a regressive tax on those who are of modest means, but still opt to participate. She also contends that since many bans on enjoyable activities have, over history, been based on religious motivations, it is worth looking skeptically at such bans when they still exist today. A key question needs to be asked, Colb says: Is a gambling ban like New York’s meant to protect would-be gamblers’ pocketbooks (a permissible objective), or to save their souls (an impermissible objective)? Colb also notes that those who are addicted to an activity are likely to avail themselves of illegal alternatives, rather than abiding by a ban—rendering a ban potentially futile, and regulation a wiser choice.
Justia columnist, George Washington law professor, and economist Neil Buchanan takes strong issue with the claim that “contractionary” policies—such as budget cuts, and tax increases imposed on the non-wealthy—can help the American economy. To the contrary, Buchanan contends that such policies will only shrink the economy, and that the right approach to improving America’s economy is to use government spending and tax cuts aimed at the non-wealthy, who are very likely to spend the extra money that tax cuts free up and thus give a strong boost to the economy. And yet, Buchanan points out, all we have seen from Congress, over the past year, has been a series of contractionary approaches. Buchanan examines the case for invoking “expansionary austerity” in America now, and finds it sorely lacking when tested against the relevant evidence—as found in the recent and past experiences of America and of other nations. He concludes, based on this evidence, that “expansionary austerity” is simply a pipe dream.
Justia columnist, George Washington law professor, and economist Neil Buchanan takes very strong issue with the claim, often made by conservatives now, that the rich pay more than their share of taxes. In particular, Buchanan rebuts the common claim that Social Security and Medicare taxes—the taxes that fall most heavily on lower- and middle-income Americans—are somehow not really taxes at all. Buchanan points out that the overall federal tax code is only mildly progressive, and that state and local taxes are regressive, falling more heavily on the poor. And overall, he notes, rich and poor alike pay roughly the same percentage of their incomes in taxes each year—reflecting, rather than reversing, income inequality. Finally, Buchanan notes that conservatives take issue with calling Social Security and Medicare payments taxes, because benefits will be paid out down the line, but he presents several strong arguments showing that their contention is misleading.
Justia columnist, George Washington law professor, and economist Neil Buchanan comments on the “Occupy Wall Street” protests. He argues that this new movement should be taken seriously, not just dismissed as a passing fancy. Accordingly, he focuses on the substance of the protesters’ complaints, finding many of their points well-founded—particularly, their points about the inequality of economic and, relatedly, political and media power in the United States. Buchanan argues that such inequalities are damaging not just to the have-nots, but also to society as a whole: Greater degrees of inequality, according to the IMF, lead to slower economic growth. Buchanan also argues that protesters are right to the extent that they are calling for re-regulation of the financial markets. And he cautions that if the “Occupy Wall Street” protesters fairly modest and reasonable proposals for re-regulation and greater social equality are ignored now, the next protest movement we see, along these lines, may be much more dangerous and troubling.
Justia columnist, George Washington law professor, and economist Neil Buchanan comments on recent Republican proposals based on the idea that tax cuts for the rich will help curb the recession. Buchanan argues that there is no support, in either economic theory, or in empirical evidence, to conclude that America’s current tax rates are hurting the economy, or that reducing tax rates for businesses and the wealthy will improve the economy and/or reduce unemployment. All such cuts would do, Buchanan contends, is make the rich richer—while also imperiling vital public services.
Justia columnist, George Washington law professor, and economist Neil Buchanan offers a detailed response to an argument that has been in the news frequently: Billionaire investor Warren Buffett has contended that those with annual incomes above one million dollars should pay significantly more in income tax, and that those with annual incomes above ten million dollars per year should pay even more than that. Many commentators, Buchanan points out, have responded to Buffett’s argument by pointing out that Buffett is free to give away his own riches to the government, if he so chooses—for instance, by foregoing tax exemptions that he would be entitled to claim. But Buchanan offers a set of strong responses to this argument, suggesting that the debate should properly focus on Buffett’s proposal, and not on Buffett himself.
Justia columnist and Cornell law professor Michael Dorf notes that many Americans have expressed disappointment in President Obama’s recent speeches. But, of course, it’s easy to criticize, and much harder to detail what the President actually should be saying. That’s exactly what Dorf does in this column—even going so far as to offer his own hypothetical stump speech for President Obama to deliver—a speech addressing tough issues like tax cuts; how, exactly, to put Americans back to work; and one key policy and legal point that Republicans and Democrats alike ought to agree upon.