Lessons from Venezuela, Part I

After a long period finalizing a book manuscript, I now have time to return to this blog. I developed this forum to discuss issues in the interface between economics and reality - a place where a surprising number of economists have never set their foot - and I have been yearning to get back to writing here again... 

Economics - and its less-recognized brother called "political economy" - can help us a great deal in making the world a better place. The problem is that most of modern economics is too quantitative to give people a chance to see its applicability. I want to use this blog to highlight the older, more useful side of economics. 

Ending Endless U.S. Budget Deficits

My latest peer-review article is published in Journal of Governance and Regulation, Vol. 5, Issue 4. Its title is: "Balancing the Budget: Can the Swiss Debt Brake End Endless U.S. Deficits?" Here is the abstract:

The United States is the world’s leading issuer of treasury bonds, and according to current forecasts there is no end in sight to annual budget deficits. Evidence strongly suggests that persistent deficits are closely associated with depressed growth, raising the possibility that a permanent end to U.S. deficits would permanently increase the country’s economic growth. However, with nearly a half-century long, almost unbroken line of deficits it is unlikely that Congress will rise to the occasion and end borrowing on its own. Suggesting that the United States needs budget-balancing regulations, possibly at the constitutional level, this paper explores two types of balanced-budget measures: deficit-elimination and debt-capping.

Click this link for the full article: 

http://virtusinterpress.org/BALANCING-THE-BUDGET-CAN-THE-SWISS.html

Trump Is Right on Obamacare Reform

After his convincing election win, President-Elect Trump has already begun talking about policy reforms. First on his agenda is Obamacare, which he wants to remove and replace with a more market-oriented model. This is promising; as I explained in 2007, and again in 2009, interstate competition on the health insurance market is a very good way to let market forces reduce the cost of health insurance while increasing quality and choice for insurance buyers.

Single-Payer Health Care in Colorado?

This article consists of two blogs I wrote elsewhere last year about the proposal for a single-payer health care system in Colorado. I am republishing them for the convenience of my friends in Colorado. 

Please read this article keeping in mind that the texts were written one year ago.

PART 1

Regardless of whether one wants more entitlement programs, or would like to do away with the welfare state entirely, one cannot escape economic realities. Opponents of the welfare state tend to ignore the enormous economic instability that would follow if they got their will and could shut down tax-paid entitlement programs overnight.

Should Welfare Really Pay Living Wage?

Three years ago Michael Tanner and Charles Hughes at the Cato Institute published an excellent update of a 1995 study of the actual value of welfare in America. Tanner and Hughes went to great length to explain how a person could live on the many welfare programs that the federal government and the states offer for people who are defined as living in deprivation one way or the other.

Among their findings (p. 3):