The left cannot claim to have all the bad economic ideas. They have the worst as we see in Venezuela but they do not have exclusive rights to such ideas. There are lots of ideas out there and some of them are good but to get them noticed folks often make extreme claims. Thus, good ideas get dismissed because they are not quite as good as the claims suggest.
Our example of a bad idea comes from Cesar Conda at NRO. He says:
President Trump should propose exactly what President Barack Obama did in 2011: a temporary reduction in the Social Security portion of the payroll tax from 6.2 percent to 4.2 percent.
Cesar Conda is:
a former Bush-Cheney White House domestic-policy adviser and senior aide to three Republican U.S. senators, is founding principal of Navigators Global.
He is writing at NRO. It is not unreasonable to take him seriously. We shouldn’t. Part of his argument is economic growth and we are fans of the growth fairy. Economic growth is critically important and we believe that governments can influence the growth fairy. But the way to get the growth fairy on your side is through long-term policies. Countries with policies that support economic freedom like enforcing the rule of law, having low corruption, low regulation, low taxes, and free trade are highly likely to be visited by the growth fairy. Going in the opposite direction then the more likely the growth fairy won’t visit.
The best you can hope for with Cesar’s idea is to move growth around. It was one of many bad ideas from the 44th president. It is worse now given the deficit and the near insolvency of Social Security.
Sean Maskai Flynn at Market Watch has two really good ideas for improving health care and reducing or limiting the costs. They are good ideas because they are long-term and make healthcare more of a marketplace than it currently is. First, we need transparent health care prices:
The first policy—price tags—is a necessary prerequisite for competition and efficiency. Under our current system, it’s nearly impossible for people with health insurance to find out in advance what anything covered by their insurance will end up costing. Patients have no way to comparison shop for procedures covered by insurance, and providers are under little pressure to lower costs.
Absolutely. And second we need health savings accounts (HSA) that revert to the owner or can be extended into future years. We don’t agree with Sean that the employer needs to “gift” them and he is surely wrong that it is a gift. Any such payment is surely part of compensation rather than a gift. We are not sure of how such a payment would be treated by the IRS. The tax treatment of HSA need to be part of the solution. We think the important points are high HSA limits and the opportunity to move amounts among years.
The second policy—deductible security—pairs an insurance policy that has an annual deductible with a health savings account (HSA) that the policy’s sponsor funds each year with an amount equal to the annual deductible.
The details are important but the problem is that the headline says these two changes would reduce health care costs by 75 percent. Nope. The text says they will provide $2.4 trillion [yup, trillion] per year in savings. Since health care spending in 2017 was $3.5 trillion this gets another Nope. Still, transparent prices and HSA with high limits and methods to move amount into other years or revert to the owners are great ideas. Temporary tax changes are not. Realistic claims are another good idea.