Raise Taxes, Don't Cut Spending or Benefits

Raise taxes first and only.  There is no need for spending or benefit cuts to meet a $4B deficit reduction target, according to Robert Reich in recent post.

Jobs not deficits ought to be the concern today anyway, according to virtually all economists.  The jobs problem could easily be solved by sufficient deficit spending.  As Paul Krugman said this week, we need a greater deficit next year, not a lesser one.  A turn to austerity would make things worse, especially austerity in spending.  Tax increases on the wealthy right now would not harm this top heavy economy...in fact, they would help, as in 1993, by changing investment incentives away from cashing out and useless speculation, as described by James Galbraith in Predator State.  And absolutely no question, tax increases on the wealthy to fund a better society is greater total social optimality since the marginal utility of income deceases with greater wealth.  Brad DeLong praised the study that proposed a maximum 71% rate to achieve best compliance--which ought to be the only concern on taxing economic rents and the very wealthy.  Economists who use Pareto Optimality show libertarian bias.

The Numbers of Doom

Bill McKibben wrote this article in mid July after the Rio conference.

Global Warming's Terrifying New Math

Here's my quick synopsis, by the numbers

2 degrees Celsius (3.6 degrees F)

Many nations have agreed to this 2 degree maximum temperature rise target.  Many scientists belive the target should be 1 degree or less to prevent devastating climate changes.  The rise that has occurred from all fossil fuel burning to date is 0.8 degrees.  If we stopped burning carbon today, existing carbon would probably cause the rise to increase to 1.6 degrees.

565 Gigatons

This is how much CO2 could be added into the atmosphere to remain below the 2 degree target.  Before we use this much, we must be transitioned to an all renewable energy system if we want to avoid catastrophic changes.

2795 Gigatons

This is how much CO2 would be produced by burning all of the fossil fuel reserves that have been identified, oil, oil shales, natural gas, and coal.

The Rationality of Voting

Wow, some of my favorite econobloggers have been thinking seriously about voting and why people do it.  Well I'd never heard of him before, but Rajiv Sethi has an excellent analysis:


http://rajivsethi.blogspot.com/2012/11/the-rationality-of-voting.html

I'm going to add Rajiv to my blogroll, he's excellent.  Basically his analysis gets to the feelings of voters.  Voters feel elation not only if their side wins, but if their side wins by a big margin, and most people do indeed have an ability to contribute to the bigness of the winning margin if their side wins, as well as whether their side wins.

In contrast, the conventional economic analysis (Rajiv has many links) is that voting is pointless for everyone except the single individual that casts the deciding vote.  Since most voters do not cast a deciding vote, by that criterion voting is pointless for nearly everyone because the probability of changing an electoral decision is very very small,* even people in swing-states, though it's slightly less likely to be pointless for them.  I agree with Rajiv that this conventional economic analysis of voting is wrong.

(*John Quiggin, an Australian economist, has determined that the probability of casting a deciding vote may be much larger than many economists have claimed, especially for candidates other than The President.)

Rajiv says that he registered to vote within minutes of receiving his naturalization certificate.  Regardless of how strictly rational of an activity voting is, many people do indeed take it very seriously, enduring long lines and other hardships.  Noam Chomsky has pointed out that many people in history have fought very long and hard to get voting rights.

The very first commenter on Rajiv's post is JW Mason, who makes a somewhat different argument similar to one I have often made.  Mason says that one does not really vote as an individual, but as the member of one or more groups, and voting is an activity which is part of and affirms group identity.  These groups are large enough to be electorally decisive, and have interests that are broad enough to be generally affected by the election outcome.

Mason also makes another interesting observation which some people I know might not agree with:

"The whole language of choices, interests, reason, etc., doesn't refer to anything in material reality.  There is no sense in which billions of neurons in a single human body "really do" constitute a moral agent but some trillions distributed across various human bodies do not."

That's an interesting view, which I think I agree with, but I can also see some counterarguments which wouldn't be easily dismissed.