Planet Money's Fake Presidential Candidate:

[Skjellyfetti]

Obviously there are going to be items that everyone probably disagrees with. I certainly don't agree with everything. But, I could definitely get behind a candidate with a concrete plan like this:

[youtube]http://www.youtube.com/watch?v=1VtnjRdfo1Y[/youtube]

We assembled five prominent economists from across the political spectrum. We gave them a simple task: Identify major economic policies they could all stand behind.
They did. They gave us five tax proposals — plus one change to the criminal code — based on good economics.

And in the process, they gave us an economic platform that would surely sink any candidate that supported it.

We decided to bring him to life anyway. Here you have him: A political candidate who could potentially fix the economy, but would never win an election.



Get rid of the mortgage tax deduction.
The mortgage tax deduction lets homeowners deduct interest they pay on their mortgage. Gone. After all, big houses get bigger tax breaks, driving up prices for everyone. Why distort the housing market and subsidize people buying expensive homes?

End the tax deduction companies get for providing health insurance to employees.
Neither employees nor employers pay taxes on workplace health-insurance benefits. That encourages fancier insurance coverage, driving up usage and, therefore, health spending overall. The deduction costs the government an estimated $184.46 billion per year.

Eliminate the corporate income tax.
Get rid of it. Completely. If companies reinvest the money into their businesses, that's good. Don't tax companies in an effort to tax rich people. Just tax rich people.

Shift from income tax to consumption tax.
Taxes discourage whatever you're taxing, but we like income, so why tax it? Payroll taxes discrouage creating jobs. Not such a good idea. Instead, impose a consumption tax, desgined to be progressive to protect lower-income households.

Tax carbon emmisions.
Yes, that means higher gasoline prices. It's a kind of consumption tax, and can be structured to make sure it doesn't disproportionately harm lower-income Americans. More, it's taxing something that's bad, which gives people an incentive to stop polluting.

Legalize marijuana.
Stop spending so much trying to put pot users and dealers in jail - it costs a lot of money to catch them, prosecutre them, and them put them in jail. Criminilizing drugs also drives drug prices up, making gang leaders rich.

http://www.npr.org/2012/10/17/163104599 ... -candidate" onclick="window.open(this.href);return false;

And, Planet Money is a great podcast if y'all aren't familiar you should listen to a few episodes.

[89Hen]

Obviously there are going to be items that everyone probably disagrees with. I certainly don't agree with everything. But, I could definitely get behind a candidate with a concrete plan like this:

Get rid of the mortgage tax deduction.
The mortgage tax deduction lets homeowners deduct interest they pay on their mortgage. Gone. After all, big houses get bigger tax breaks, driving up prices for everyone. Why distort the housing market and subsidize people buying expensive homes?

This one item alone would not only make it tough to get elected, it would throw the country into complete chaos and would make the current housing dilemna of foreclosures looks like childs play. Anyone who suggests this as a viable issue is a .

[CAA Flagship]

Get rid of the mortgage tax deduction.
The mortgage tax deduction lets homeowners deduct interest they pay on their mortgage. Gone. After all, big houses get bigger tax breaks, driving up prices for everyone. Why distort the housing market and subsidize people buying expensive homes?

Take away the incentive of investing in a home, and you will drive up the cost of rental units. Guess who gets the shaft on that deal.
Plus, one of the biggest engines in the economy is homebuilding. Again, take away the incentive and the economy sputters.
Who are these economists?

Edit: Dammit. 89 beat me to it.

[Skjellyfetti]

Who are these economists?

Dean Baker
Center for Economic and Policy Research
http://www.cepr.net/biographies/dean-baker/" onclick="window.open(this.href);return false;

Katherine Baicker
Professor of Health Economics
https://www.hsph.harvard.edu/faculty/katherine-baicker/" onclick="window.open(this.href);return false;

Robert H. Frank
Professor of Economics
http://www.johnson.cornell.edu/Faculty- ... px?id=rhf3" onclick="window.open(this.href);return false;

Russell D. Roberts
Professor of Economics
http://economics.gmu.edu/people/rrobert2" onclick="window.open(this.href);return false;

Luigi Zingales
Professor of Entrepreneurship and Finance
http://www.chicagobooth.edu/faculty/bio ... 2826023936" onclick="window.open(this.href);return false;

[CAA Flagship]

Who are these economists?

Dean Baker
Center for Economic and Policy Research
http://www.cepr.net/biographies/dean-baker/" onclick="window.open(this.href);return false;

Katherine Baicker
Professor of Health Economics
https://www.hsph.harvard.edu/faculty/katherine-baicker/" onclick="window.open(this.href);return false;

Robert H. Frank
Professor of Economics
http://www.johnson.cornell.edu/Faculty- ... px?id=rhf3" onclick="window.open(this.href);return false;

Russell D. Roberts
Professor of Economics
http://economics.gmu.edu/people/rrobert2" onclick="window.open(this.href);return false;

Luigi Zingales
Professor of Entrepreneurship and Finance
http://www.chicagobooth.edu/faculty/bio ... 2826023936" onclick="window.open(this.href);return false;

Academia.

[Grizalltheway]

Dean Baker
Center for Economic and Policy Research
http://www.cepr.net/biographies/dean-baker/" onclick="window.open(this.href);return false;

Katherine Baicker
Professor of Health Economics
https://www.hsph.harvard.edu/faculty/katherine-baicker/" onclick="window.open(this.href);return false;

Robert H. Frank
Professor of Economics
http://www.johnson.cornell.edu/Faculty- ... px?id=rhf3" onclick="window.open(this.href);return false;

Russell D. Roberts
Professor of Economics
http://economics.gmu.edu/people/rrobert2" onclick="window.open(this.href);return false;

Luigi Zingales
Professor of Entrepreneurship and Finance
http://www.chicagobooth.edu/faculty/bio ... 2826023936" onclick="window.open(this.href);return false;

Academia.

Would you expect economists working for banks to have anything close to an objective take on this?

[CAA Flagship]

Would you expect economists working for banks to have anything close to an objective opinion on this?

Private industry economists help companies make business decisions. They can't afford to make mistakes.

[Chizzang]

Would you expect economists working for banks to have anything close to an objective opinion on this?

There is no such thing as an objective opinion when it comes to money



and getting rid of the Mortgage deduction is the stupidest thing I've ever heard

[Skjellyfetti]

and getting rid of the Mortgage deduction is the stupidest thing I've ever heard

Lots of people support it. I don't expect folks like 89Hen and blueballs to support it, because it would hurt their industry. I mean lives.

Republicans took support for the mortgage rate deduction out of their platform this year. (Doesn't mean they support eliminating it... but, a step in that direction)
Eliminating the mortgage tax deduction was part of George Romney's platform.
A bipartisan panel recommended it this summer.

Interesting read on issue:
http://www.bloomberg.com/news/2012-08-3 ... break.html" onclick="window.open(this.href);return false;


I'm not saying that it is a politically tenable position. But, that's kinda the point of the "fake" presidential candidate. Unpopular issues that would fix the economy.

[Grizalltheway]

Would you expect economists working for banks to have anything close to an objective opinion on this?

Private industry economists help companies make business decisions. They can't afford to make mistakes.

Yeah, and obviously they would never endorse a measure that would have a negative impact on their business. I honestly don't have an opinion one way or another on this issue, but the fact that academic economists think it's a good idea doesn't necessarily mean it's a bad one.

[CAA Flagship]

Private industry economists help companies make business decisions. They can't afford to make mistakes.

Yeah, and obviously they would never endorse a measure that would have a negative impact on their business. I honestly don't have an opinion one way or another on this issue, but the fact that academic economists think it's a good idea doesn't necessarily mean it's a bad one.

OK fine. I would like to hear more of the argument than the obvious bias towards people with bigger mortgages.

But academic economists have no consequences of being wrong other than their reputation. Kind of like some football prognosticator on TV or radio. Is anyone really keeping track of the success rate?

[CitadelGrad]

Eliminating the mortgage deduction would have made sense before the bubble was created and eventually burst. In fact, it probably would have prevented the bubble from becoming as large as it was, idiotic government policy notwithstanding.

Right now, it would increase the foreclosure rates to levels I don't even want to think about.

Timing is everything in financial markets and this is not the time to eliminate that deduction. There will be a time for it though.

[Chizzang]

The idea that our Federal Government "needs more tax revenue" is what's killing us...
Our Federal System takes in plenty of tax revenue to run fabulously

we do not have a federal revenue issue

[Skjellyfetti]

The idea that our Federal Government "needs more tax revenue" is what's killing us...
Our Federal System takes in plenty of tax revenue to run fabulously

we do not have a federal revenue issue

Way more tax deductions than increases. Only increase would be on carbon emissions. There would obviously be a tax on marijuana as well.. but, would be a new tax.

Like I said, everyone's going to disagree with elements of it. And I disagree with parts as well. That's why I think it's an interesting proposal... and thought it would be some good fodder for discussion.

[Chizzang]

The idea that our Federal Government "needs more tax revenue" is what's killing us...
Our Federal System takes in plenty of tax revenue to run fabulously

we do not have a federal revenue issue

Way more tax deductions than increases. Only increase would be on carbon emissions. There would obviously be a tax on marijuana as well.. but, would be a new tax.

Like I said, everyone's going to disagree with elements of it. And I disagree with parts as well. That's why I think it's an interesting proposal... and thought it would be some good fodder for discussion.

okay...
But my point was that we don't need to change one thing about our Federal income taxes
All it does is serve to dilute the primary issue - elevated spending and PORK

We need to focus 100% on Federal Spending
Not Federal revenue

We've got it ALL BACKWARDS when we start discussing taxation - it confuses the issue and gives the politicians an easy point of argument and draws our attention AWAY from the actual problem

The problem is distinctly NOT Taxes, that's a lark

The real problem is we have a Federal Government that does not respect the Money that it draws from it's citizens. Nor does it look to control or monitor itself in this regard - it simply argues (and creates an ongoing argument) about where and how to get more...

Which is distinctly NOT the point or the problem

[kalm]

Would you expect economists working for banks to have anything close to an objective opinion on this?

There is no such thing as an objective opinion when it comes to money



and getting rid of the Mortgage deduction is the stupidest thing I've ever heard

Wait a minute...I thought libertarians and conks were against government picking winners and losers???

[CAA Flagship]

The idea that our Federal Government "needs more tax revenue" is what's killing us...
Our Federal System takes in plenty of tax revenue to run fabulously

we do not have a federal revenue issue

Way more tax deductions than increases. Only increase would be on carbon emissions. There would obviously be a tax on marijuana as well.. but, would be a new tax.

Like I said, everyone's going to disagree with elements of it. And I disagree with parts as well. That's why I think it's an interesting proposal... and thought it would be some good fodder for discussion.

But looking at that list, I targeted the item that will hurt jobs the most. There should be no more important concern than jobs. This is where Obama (aka Pelosi, Reid, et al) went wrong in pushing the health care issue right out of the chute. So many companies point to the unknown impact of Obamacare as one of the major factors keeping them from operating "normally". They are sitting on bundles of cash to be used if and when it kicks in. (Clearly there are many other policy items that companies fear as well from this administration that also factor in)
Think about how many employees contribute to the construction of a house. The number is staggering. Other than the ones who construct it, there are tons of manufacturers for each material or item that goes into it such as wood, drywall, piping, doors, windows, appliances, electric switches, carpeting, etc.
You just can't mess with homebuilding if you want the economy to be healthy.

[CitadelGrad]

There is no such thing as an objective opinion when it comes to money



and getting rid of the Mortgage deduction is the stupidest thing I've ever heard

Wait a minute...I thought libertarians and conks were against government picking winners and losers???

We are, but we also recognize that it was government picking winners and losers that led to the housing bubble. It was an egregious mistake that will take many years to correct. There is no point in compounding the error with elimination of the mortgage deduction -- at this time. As I pointed out in a previous post, it's a matter of timing. The deduction should be eliminated, but not now. The damage would be enormous.

[kalm]

Wait a minute...I thought libertarians and conks were against government picking winners and losers???

We are, but we also recognize that it was government picking winners and losers that led to the housing bubble. It was an egregious mistake that will take many years to correct. There is no point in compounding the error with elimination of the mortgage deduction -- at this time. As I pointed out in a previous post, it's a matter of timing. The deduction should be eliminated, but not now. The damage would be enormous.

I know...I just like picking on Chizzy. I pretty much fully agree with your thoughts on this.

BTW, speaking of taxation, one of my all time favorite conk economists lights some Fox News hairs on fire:

Conservative economist Ben Stein on Thursday seemed to know that he had wandered off message when he joked that the hosts of Fox & Friends might murder him for saying that it was not possible to balance the budget without raising taxes.

“I hate to say this on Fox — and I hope I’ll be allowed to leave here alive — but I don’t think there is anyway we can cut spending enough to make a meaningful difference,” Stein told the three shocked co-hosts. “We going to have to raise taxes on very rich people, people with incomes of like say, 2, 3 million a year and up, and then slowly move it down.”

“You do not think Washington just has a spending problem?” Steve Doocy wondered.

“I do not think they just have a spending problem,” Stein explained. “I think they also have a too-low taxes problem. And while all due respect to Fox, whom I love like brothers and sisters, the taxes are too low.”

The economist noted that even more revenue could have been brought in during President George W. Bush’s presidency if taxes had not been cut.

“The evidence is that there is no connection between the level of taxation and the level of economic activity,” he pointed out. “The biggest growth we’ve ever had in this country was roughly 1941 to roughly 1973, that was the best years we ever had and those were years of much, much higher taxes than we have now, during war time and during peace time. So, the economy can grow very fast, even with much higher taxes. And we’re going to have to do something.”

“Taxes were like 70, 80 percent!” Doocy exclaimed.

“I know,” Stein agreed. “And yet, we were very prosperous, we were extremely prosperous. I mean, the highest rate was in the 90s during parts of the 50s and, yet, we were very prosperous.”

Raw Story (http://s.tt/1qoZW" onclick="window.open(this.href);return false;)
http://www.rawstory.com/rs/2012/10/18/b ... e-too-low/" onclick="window.open(this.href);return false;

Their were some smart people in the Nixon administration.

[CAA Flagship]

Wait a minute...I thought libertarians and conks were against government picking winners and losers???

We are, but we also recognize that it was government picking winners and losers that led to the housing bubble. It was an egregious mistake that will take many years to correct. There is no point in compounding the error with elimination of the mortgage deduction -- at this time. As I pointed out in a previous post, it's a matter of timing. The deduction should be eliminated, but not now. The damage would be enormous.

So you don't think there would be a negative impact to other non-mortgage related housing that would be harmful to many people for the sake of higher federal revenues? Mortgage interest deductions help people afford purchasing a house instead of renting. This keeps lease rates "competitive" with that factored in. Take it out and lease rates are sure to rise because renters will be less enticed. I don't know the exact economic makeup of renters, but I would guess that most rent because they can't afford to buy. So who gets hurt here in the name of additional federal revenue.
Now, if you say that the deduction should be tweeked, that is a different story. This could probably be done in such a way to increase federal revenue and not impact lease rates.

[Grizalltheway]

We are, but we also recognize that it was government picking winners and losers that led to the housing bubble. It was an egregious mistake that will take many years to correct. There is no point in compounding the error with elimination of the mortgage deduction -- at this time. As I pointed out in a previous post, it's a matter of timing. The deduction should be eliminated, but not now. The damage would be enormous.

I know...I just like picking on Chizzy. I pretty much fully agree with your thoughts on this.

BTW, speaking of taxation, one of my all time favorite conk economists lights some Fox News hairs on fire:

Conservative economist Ben Stein on Thursday seemed to know that he had wandered off message when he joked that the hosts of Fox & Friends might murder him for saying that it was not possible to balance the budget without raising taxes.

“I hate to say this on Fox — and I hope I’ll be allowed to leave here alive — but I don’t think there is anyway we can cut spending enough to make a meaningful difference,” Stein told the three shocked co-hosts. “We going to have to raise taxes on very rich people, people with incomes of like say, 2, 3 million a year and up, and then slowly move it down.”

“You do not think Washington just has a spending problem?” Steve Doocy wondered.

“I do not think they just have a spending problem,” Stein explained. “I think they also have a too-low taxes problem. And while all due respect to Fox, whom I love like brothers and sisters, the taxes are too low.”

The economist noted that even more revenue could have been brought in during President George W. Bush’s presidency if taxes had not been cut.

“The evidence is that there is no connection between the level of taxation and the level of economic activity,” he pointed out. “The biggest growth we’ve ever had in this country was roughly 1941 to roughly 1973, that was the best years we ever had and those were years of much, much higher taxes than we have now, during war time and during peace time. So, the economy can grow very fast, even with much higher taxes. And we’re going to have to do something.”

“Taxes were like 70, 80 percent!” Doocy exclaimed.

“I know,” Stein agreed. “And yet, we were very prosperous, we were extremely prosperous. I mean, the highest rate was in the 90s during parts of the 50s and, yet, we were very prosperous.”

Raw Story (http://s.tt/1qoZW" onclick="window.open(this.href);return false;)
http://www.rawstory.com/rs/2012/10/18/b ... e-too-low/" onclick="window.open(this.href);return false;

Their were some smart people in the Nixon administration.

I like what Stein has to say on this, but I don't think he's taking into account the fierce international competition US companies face these days. The time period he mentioned really isn't comparable in those terms.

[AZGrizFan]

Academia.

Would you expect economists working for banks to have anything close to an objective take on this?

AT least THOSE economists would have a fucking clue as to the implications of what they were proposing.

[AZGrizFan]

and getting rid of the Mortgage deduction is the stupidest thing I've ever heard

Lots of people support it. I don't expect folks like 89Hen and blueballs to support it, because it would hurt their industry. I mean lives.

Republicans took support for the mortgage rate deduction out of their platform this year. (Doesn't mean they support eliminating it... but, a step in that direction)
Eliminating the mortgage tax deduction was part of George Romney's platform.
A bipartisan panel recommended it this summer.

Interesting read on issue:
http://www.bloomberg.com/news/2012-08-3 ... break.html" onclick="window.open(this.href);return false;


I'm not saying that it is a politically tenable position. But, that's kinda the point of the "fake" presidential candidate. Unpopular issues that would fix the economy.

In a vaccuum. Sure. But the ancillary effects of these actions would cause such a tidal wave of negative effects this country could well fall into a depression.

[kalm]

I know...I just like picking on Chizzy. I pretty much fully agree with your thoughts on this.

BTW, speaking of taxation, one of my all time favorite conk economists lights some Fox News hairs on fire:





Raw Story (http://s.tt/1qoZW" onclick="window.open(this.href);return false;)
http://www.rawstory.com/rs/2012/10/18/b ... e-too-low/" onclick="window.open(this.href);return false;

Their were some smart people in the Nixon administration.

I like what Stein has to say on this, but I don't think he's taking into account the fierce international competition US companies face these days. The time period he mentioned really isn't comparable in those terms.

Sure....but the points being 1) there might be some middle ground between a 91% top marginal rate and a 35% rate. There might also be some room between a 40% effective corporate tax rate and whatever the fuck the pittance is that certain industries now pay after deductions, and 2) higher tax rates don't neccessarily inhibit growth.

[CAA Flagship]

Sure....but the points being 1) there might be some middle ground between a 91% top marginal rate and a 35% rate. There might also be some room between a 40% effective corporate tax rate and whatever the fuck the pittance is that certain industries now pay after deductions, and 2) higher tax rates don't neccessarily inhibit growth.