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 HillMore

The Case for I Bonds

Forbes

Right now, the interest rate adjusted for inflation on government securities is negative. Today’s yields on TIPS (Treasury Inflation Protected Securities) are minus 1.81 percent out five years and minus 0.21 percent out 30 years But Series I Saving Bonds issued by the US Treasury are offering a real rate of interest of zero fixed for 30 years. You can invest up to $10,000. You don’t receive interest until you cash in the bonds. And you don’t have to ay taxes on inflation-generated returns. More

A Smarter and Fairer Student Loan Fix

A far better, fairer and simpler student-loan reform is available. It lets students, as well as their parents, borrow at the government’s long-term Treasury bond rate. The current rate is 1.85 per cent. College students face a 2.75 per cent borrowing rate, graduate and professional students face a 4.30 per cent rate, and parents, who borrow to help finance their children’s education, face a 5.30 per cent rate. Hence, this proposal, which would permit federal and private loans to be refinanced federally at the prevailing 30-year rate, would substantially lower the cost of borrowing for higher education. More

Joe Biden’s Tax Plan

Forbes

The long-run loss to the US capital stock is roughly 6 percent and the long-run decline in output is roughly 2 percent. We predict a roughly 2 percentage-point reduction in wages of US workers, with a larger reduction in the wages of high-skilled workers. Changes of this magnitude could significantly offset the micro gains to low-wage and middle-wage workers of Biden’s fiscal reforms. More

Kotlikoff and Mina on Home Testing for Covid

Writing in the Wall Street Journal, Goodman Institute Senior Fellow Lawrence Kotlikoff and Harvard epidemiologist Michael Mina say the new point of care test developed by Abbott Labs is the right test at the right time.

Here is the disappointment. To conform with government regulations, this test has to be administered in the presence of a medical professional (such as a nurse). That means its value will be limited to schools, large companies, hospitals, etc. It won’t be useful for people who most need to be tested. We don’t insist on having a nurse present when a woman conducts her own pregnancy test. How is a Covid test any different?

What we really need are 150 million tests a day. In the home. MORE

Kotlikoff: We Are Not Saving Enough

On net, the U.S. is saving just 2.2 percent of our national income. By contrast, the nation’s saving rate was 7.6 percent in the 1980s, 10.3 percent in the 1970s, and 13.0 percent in the 1960s.

The main reason: government policies that take an ever-larger share of resources from young and give them to the old.

Unless baby boomers change their saving habits substantially and relatively quickly, they may experience much higher rates of poverty in their old age than what the current elderly are experiencing. More

BofA Behaving Badly – Again

Forbes

Back in April, I wrote about Bank of America’s horrible handling of Payroll Protection Loans…. I received one email after another written by business owners who experienced the same nightmare. I then wrote a column, copying some of these emails, and calling on BofA President, Brian Monyihan, to listen to the truly awful manner in which he and his colleagues were treating his customers, many, like me, who had been customers for decades. More

A Manhattan Project for Covid

Forbes

Same-day, time-stamped cell-phone pictures … of negative test — tests, which were approved and supplied to everyone for free by Uncle Sam — would be required to enter the workplace, fly on an airplane plane, frequent a restaurant, enter a store, or attend a school, college, or university. If home tests weren’t perfectly precise, you’d likely need to show several days of negative test results. These requirements would be established by market players, not by government decree. More

Corporate Tax Reform that Pays for Itself

Republican tax reform could have been better. An ideal reform, originally proposed by Paul Ryan would have produced a of 20.5 percent increase in the nation’s capital stock and a 6.8 percent increase in GDP. Wages would have increased by 6.3 percent for high-income workers and by 7.5 percent for low-income workers. The reasons: a highly elastic global supply of capital, which moves across borders at the first sign of a tax advantage and the inefficiency of the U.S. corporate income tax, which, as of 2014, our year of calibration, had a very high marginal, but very low average tax rate. More

Kotlikoff in the NYT: A Cheap, Simple Way to Control Covid

Paper-strip tests are inexpensive and easy enough to make that Americans could test themselves every day. You would simply spit into a tube of saline solution and insert a small piece of paper embedded with a strip of protein. If you are infected with enough of the virus, the strip will change color within 15 minutes….  The price per person would be from $1 to $5 a day. The Food and Drug Administration should encourage their development and then fast track approval. More