Friday, April 9, 2010

Welcome to the Committee Committee

Here's another one from the I-wish-I-could-make-this-up file. Ohio Democrats think the state has too many boards and commissions (and I can't help but agree). The obvious solution is to make a new commission to study the problem. Except there already is a nine-member commission doing exactly that:
Ohio House Democrats say the state has too many boards and commissions and could save money by eliminating or combining about 100 of them.

Lawmakers who proposed a bill to prune some panels on Thursday say many are no longer necessary or duplicate work done elsewhere in state government. Their targets include the Foreign Language Advisory Council, Ski Tramway Board, Ohio Beekeepers Task Force and the Task Force to Eliminate Health Services Duplication.
But some Republicans say the Democrats' effort itself is overlapping work already being done by a nine-member committee. It has been hearing testimony from scores of state boards and commissions and plans to recommend cutting some later this year.

Thursday, April 8, 2010

A Huge Insurance Company with an Army

I wish I was clever enough to make this stuff up. Paul Krugman today said the U.S. federal government is really just "a huge insurance company with an army." And yes, he thinks that's a good thing.
The basic picture of the federal government you should have in mind is that it’s essentially a huge insurance company with an army; Social Security, Medicare, Medicaid — all of which spend the great bulk of their funds on making payments, not on administration — plus defense are the big items.
I mean honestly, a huge insurance company with an army? What could go wrong with that?

Friday, March 26, 2010

Lies and Damn Lies

One of my pet peeves is when people, especially those in the media, play loose with statistics just to make a point. For example: today's front page story in the Metro. A Chinese Canadian's life was saved by a stem cell donation, all well and good. But the real moral of the story is how it's hard for Chinese Canadians to find compatible donors.
It’s a “miracle” he found two matches in three months, Chu said, because the Chinese population is dramatically underrepresented on the national stem cell donor database, OneMatch. [...] Chinese donors make up only 2 per cent of those registered on OneMatch, compared to 82 per cent of registered Caucasian donors.
And therein lies the problem. The Chinese are "dramatically underrepresented" because only 2% of registered donors are Chinese. Meanwhile, an astonishing 82% of registered donors are Caucasians! What a travesty!

To merit the claim that the Chinese are "dramatically underrepresented," you need to have some context.
“For (Chinese Canadians) to represent such a small piece of the pie, that’s just embarrassing, considering how many Chinese people there are in Vancouver.” Chu added the under representation is likely due to old world values.
Does anyone else see the problem in comparing Chinese representation in the national stem cell donor database to the Chinese population of one of the most Chinese cities in North America?

According to Canada's 2006 Census, 83.8% of the population are "non-visible-minority" (Canadianese for Caucasian), and 3.7% of the population are Chinese. Compare that to their representation in the donor database, and both groups come up short about 1.7-1.8%. That would be within the margin of error of any random selection of Canadians.

In other words: The statistic is meaningless, with just a little bit of context. Don't get me wrong, I'm glad the guy lived. But he can rest easy knowing he doesn't need any scapegoats like "old world values" to explain his nonexistant "dramatic underrepresentation."

Thursday, March 4, 2010

Repeal the Individual Health Insurance Tax

The number of uninsured in the United States is estimated by the Census to be around 47 million people. Many of them are only uninsured because they lost their job, and their health insurance was tied to that job. When someone gets sick, they're more likely to lose their job but are in much greater need of health insurance. It's remarkable that so many Americans take that risk of losing their insurance right when they need it the most. Even so, about 93% of Americans who have private health insurance have that insurance through their employer. Now why would they do that when it's such a risk?

It's actually pretty straightforward. Back in the 50s, the federal government began giving Americans a tax break for purchasing health insurance through their employer. Any income you spend on employer-based health insurance is exempt from the income tax. However, if you want to purchase an insurance plan not provided by your employer, you have to pay the full tax on that income. Depending on your tax bracket, for most people that's a 20-25% penalty fee just for wanting to buy insurance that won't disappear if you lose your job.

The solution? Just extend the tax break. If you spend any portion of your income on health care or health insurance, you are refunded all tax paid on that income.

How much of a difference would that make? For one thing, the tens of millions of people who are uninsured simply because they're between jobs would be able to afford insurance in the interim. That could be as much as one-third to one-half of the uninsured at any given time. It's not a silver bullet solution, but I think it's as close as you can get on an issue this complex. This one tiny change could cover at least a third of the uninsured. I think it's a great place to start.

So what would it cost? The biggest cost would be to the government in lost tax revenue, but even that is not very much. There's about 12 million Americans currently paying this tax. The average annual premium for one-person non-employer insurance is about $3,000, and the average marginal tax rate in the US is about 22%. [Sources: insurance, taxes] That works out to about $8 billion in tax revenue that the government would be giving up with this policy, or $26 per American. That's pocketchange to a government that's running deficits hundreds of times this amount.

So why isn't it being considered? Well, I don't know. Maybe someone reading this can provide a counterargument? It's worth noting that the only play this has gotten in the Democrats' plan has been suggestions to eliminate the tax break entirely, and tax the entire country on their health plans (but that's only to pay for the trillion-plus cost of the rest of the program). That would be much more devastating to the average American, although it would eliminate the incentive for employer-based insurance.

Monday, February 8, 2010

Centrally Planning Decentralization

Yesterday, Arnold Kling offered a suggestion for how to return America to federalism. He doesn't explain why he likes federalism so much, so I'm assuming he likes federalism for the same reasons most people do: increased government accountability, greater local autonomy, smaller jurisdictions acting as policy test tubes, etc. Underlying all of these reasons, and usually the desire for federalism itself, is a belief in the efficiency of decentralization. Locals are better informed about local issues and have more at stake than some far-away central government, and so are more likely to make the right decisions for the local population. I'm sympathetic to this line of thinking myself, but I have a few issues with Kling's plan.

1. Turn any area of 500,000 or more people within an area of 100 square miles or less into a city-state. City-states would be autonomous, other than their participation in the United States as a whole. […] Each city-state should be governed by a single elected individual, whose powers are limited by a Constitution, but who rules until death, resignation, or loss of a recall election. […]
2. Next, we want to create county-states. These would cover larger areas than city-states, and they would be governed the way states are today, with elected legislatures and governors. […] If there are many small counties adjacent to one another but not near a large county, then merge the small counties together. […]
First, this strikes me as an excessively centrally-planned approach to making things less centrally planned. Kling knows exactly how many people a city-state should have over how wide of an area, and if that means forcefully breaking up cities like New York or LA, so be it. Moreover, he knows exactly how they should be governed, with a one-size-fits-all constitution for all of his new city-states. Each is to be governed by a single individual, with no legislature. He has a very specific vision for this new government that allows no diversity of opinion and very few checks and balances.

Second, much of the plan seems simply arbitrary. (To be fair, he introduces the post as a pre-Superbowl "daydream sort of post.") Some current states and cities are "ridiculously large" while some are too small to warrant equal footing. County-states have more flexibility, and are allowed legislatures and further decentralized governments within the county-state. But that only stresses the arbitrariness of the dividing line between city-states and county-states. The ideal size for a city-state, according to Kling, is a population of 500,000 over 100 square miles, or a density of 5,000 people per square mile. (Interestingly, Kling apparently grew up in St. Louis, Missouri, a city which then had a little more than 500,000 and now has a little less than 500,000, with a density fairly close to 5,000 people per square mile.) Cities like Columbus are too spread out to be city-states, he says, while cities like New York or so huge they should be split up into as many pieces as necessary to make them fit his ideal city size. But it's just a number pulled out of thin air. The same is true for the governance structure. Why should the governor of a city-state be necessarily elected to a life term with no legislature in his/her way, while the governor of a county-state has to deal with a legislature? Not only is his approach excessively centrally-planned, it seems as if it's randomly planned.

For all I know, maybe New York would be better off split into multiple independent cities. Maybe Montana and Idaho would be better off merged into a single state. Maybe some cities would be better off without city councils. But shouldn't those be decisions made by the people who live there? Shouldn't they be allowed to decide for themselves how their governments are structured? What works for New York may not work for LA or Seattle or anywhere else for that matter. That's the advantage to federalism in the first place-- the efficiency of decentralization. Locals use local knowledge to make the best decisions for the local population.

As it stands, it's extremely difficult for specific jurisdictions to change their boundaries. Maybe the solution is to relax those constraints. If two jurisdictions want to alter their boundaries, let them. Make it easier for jurisdictions to change on their own, when they want, in the ways they want, and over time we'll see organic movements towards optimality. No one has to arbitrarily decide for the entire country what the local optima are. The local jurisdictions will do that on their own.