Review of The Debt Trap: How Student Loans Became a National Catastrophe, by Josh Mitchell (New York: Simon & Schuster, 2021) 261 pp.
Spending Plan, The $3.5 Trillion Mistake!
Inequality is almost universally condemned by the intellectual elite. But most of the rest of the world doesn’t think inequality is such a bad thing. According to polling by Gallup, there are 138 million people in the world today who would like to immigrate to the United States. Most of these people are poor. They tend to live in egalitarian surroundings – they and their neighbors are all equally poor. (The country with the highest percentage of would-be immigrants is Liberia.) Yet they want to come to a country with a great deal of inequality, knowing they would start out at the bottom of the income ladder.
What does the average economist know about environmental science? Probably no more than any other reasonably educated person. Yet economists have three talents that are sorely missing from most discussions of environmental policy – particularly policies related to climate change. They understand (1) the scientific method, (2) cost-benefit analysis and (3) how costs and benefits affecting different generations can be evaluated over time.
Joe Biden says that corporations aren’t paying their fair share of taxes. He also says his plan to raise corporate taxes won’t harm anyone who makes less than $400,000 a year. Virtually all economists know these statements are false. Yet, John Goodman thinks there has ever been a time in recent history when there has been such a large gap between what economists know and what politicians say.
The Goodman Institute is doing work not done by any other organization – especially in the areas of tax, health care and entitlement policy. Without our work the nation might not have obtained tax reform. Now we need to defend it. The Trump administration used many of our ideas to deregulate the health care system – often by executive order. And we have developed a unique set of policy ideas for three groups of people who are critical in elections: seniors, women and people with pre-existing conditions.
Because of lower taxes and higher wages, the average Georgia household will enjoy more than $39,000 in economic benefits over their lifetime thanks to the 2017 federal tax cuts. That’s the conclusion of a Goodman Institute study by Boston University professor Laurence Kotlikoff. An earlier study by Kotlikoff and economists at the Federal Reserve Bank of Atlanta, also partly funded by the Goodman Institute, estimated the gain at $22,676 because of personal income tax cuts. The new study adds the impact of lower corporate taxes.
The COVID-19 pandemic. The Great Recession. The dot-com bust. The early ’90s recession. Every decade or so a disaster hits the United States and reminds us that many American families live one calamity away from financial ruin.
One of the intellectual architects of the 2017 tax cut legislation says the Joe Biden proposal to reimpose higher tax rates will be harmful to the economy and to working families. Earlier studies by Boston University professor Lawrence Kotlikoff and his colleagues found that “the United states had one for the highest corporate tax rates in the world.” As a result of lowering the top corporate rate from 35% to 21%, the US became competitive and more than $1 trillion has been repatriated by US firms. In a new study, Kotlikoff finds that the Biden proposal to undo half the cut in the corporate income tax rate will lower wages and cost jobs.
Like other economic estimates of the Biden economic plan, the Kotlikoff analysis finds that the impact on 80 percent of the population is a small, positive number, averaging only a few hundred dollars a year.