Larry Kotlikoff’s Commentaries
Don’t Borrow for College
18-year-olds face these odds when they borrow for college. Two in 5 will enter the hallowed halls of academia only to drop out. The majority will have borrowed for the privilege. As for college graduates, over two-thirds will leave in debt.
Why You Should Convert to a Roth IRA
If you are in the market and worried sick, maybe it’s time to trade your sleepless nights for paying off a tax liability that you’re going to face one way or the others, but doesn’t require paying additional taxes based on unreal income.
Is BofA Defrauding Small Business?
Imagine you’re a small business owner at the outset of Covid and learn that you can keep your workers employed and stay in business thanks to the Payroll Protection Plan enacted by Congress. Further imagine your bank is the Bank of America…. Some ten months later, when everyone else is receiving forgiveness on their PPP loans, you start contacting the Bank of America for confirmation that your loan has been forgiven. What you get is months of stonewalling ultimately followed by a declaration that your PPP loan never qualified for forgiveness.
Social Security Debt up $6.8T
The Social Security Trustees have released their annual report on the system’s finances. The news is awful. Social Security’s unfunded liability is an enormous $59.8 trillion. That’s over 2.5 times the size of the U.S. economy. Even more disturbing is the change since last year’s report. The system’s unfunded liability grew by $6.8 trillion. In other words, while Congress has been arguing over whether we can afford $3.5T in new spending, the debt we are leaving to our children grew by almost twice that amount without Congress lifting a finger.
But unlike the change in official debt, Social Security’s deficits are carefully kept off the books — for political, not economic reasons. Consequently, not a single media outlet we know of has reported these numbers
It’s time to rapid home-test every American every day
Victory over COVID-19 doesn’t mean eliminating it. That’s impossible given its global spread and mutation. Victory means suppressing it in the same way we have suppressed measles.
Kotlikoff: Why is the FDA Harming our Kids?
Larry Kotlikoff says the FDA is foot dragging on approving vaccines for children, without any defensible reason. FDA-sanctioned adult vaccine trials began in March 2020. Given the crisis, safer and riskier adult-trial phases were run in parallel, with adolescent trials soon thereafter. But the FDA pushed a conservative approach for children, ostensibly to protect them. So pediatric trials were delayed until March 2021 — a full year beyond the start of adult trials. This delay has threatened every American child with long-term morbidity and even mortality.
When Customer Service Becomes Consumer Fraud
Reasonable customer service is part and parcel of what one is purchasing from our increasingly small number of mammoth retail companies. But Laurence Kotlikoff writes, “Every so often I focus on what seems, from personal experience, to represent “customer support” bordering on consumer fraud.” Examples: AJ Madison, Anthropologie, and Apple.
Kotlikoff: Government Debt is like a Ponzi Scheme
At the very time leftist politicians are proposing to finance their programs with mammoth deficit spending, leftist economists are giving them cover with the argument the country may never have to pay off the debt.
But Goodman Institute Senior Fellow and Boston University Economist, Professor Laurence Kotlikoff and his colleagues challenge this conclusion in two papers posted at the highly prestigious National Bureau of Economic Research Working Paper site. Deficits used to finance current consumption “are like Ponzi schemes,” they say.”
Study: Inequality Greatly Exaggerated
Lifetime spending inequity is one-third of wealth inequality. The main reason: government taxes and transfers, which make the system far more “progressive than we are led to believe. In 2018, for example, the top 1 percent of taxpayers paid 40.1 percent of all federal income taxes. The top 10 percent paid 71.4 percent. The bottom half of the country paid less than 3 percent of all federal income taxes.
How to Reform Obamacare
John Goodman was the first person to note that health plans would respond to Obamacare incentives by imposing high deductibles (three times what is normal for employer plans) and narrow networks (as bad or worse than under Medicaid). Along with Boston University economist Laurence Kotlikoff, he has now proposed simple, straightforward reforms to both problems in an editorial published in the Hill.