Posted: 16 Sep 2015 12:06 AM PDT
Posted: 15 Sep 2015 02:36 PM PDT
This was in links a day or two ago, but it's worth highlighting:
Collecting Taxes Is Government Work, Editorial, NY Times: Buried in the Senate-passed version of the big highway bill is a provision that would require the Treasury secretary to use private debt collectors to collect unpaid back taxes.
The provision, added to the bill by Republican leaders, is ostensibly intended to help pay for highways. But it's a bad idea that should be kept out of the House version of the bill and out of any final compromise version.
Private tax collection was tried in the 1990s and in the 2000s. Both times it lost money. It increases the cost of handling complaints and appeals at the Internal Revenue Service, and it is far less efficient than simply increasing the collection budget of the I.R.S.
Worse, it fosters taxpayer abuse. The debts involved are ones that the I.R.S. has not been able to collect, in part because the taxpayers are too hard-pressed to pay up. A private company is probably not going to have better luck unless it uses abusive tactics.
And yet, private tax collection is an idea that keeps resurfacing. Why? One reason is that it would be a cash cow for the four companies likely to win tax-collection contracts...
Senator Chuck Schumer, Democrat of New York, has argued in the past that using federal money to pay private companies for tax collection would create jobs at those companies. But it would be better to increase the I.R.S. budget to create middle-class public-sector jobs in professional tax collection than to throw money at low-paying private-sector contractors who cannot do the job as well. ...I've posted this before (in 2006) (I left out his two other examples of the Bush administration trying to take us "back to the 16th century"):
Back to a bad old future:
Tax Farmers, Mercenaries and Viceroys, by Paul Krugman, A Monarchy Commentary, NY Times: Yesterday The New York Times reported that the Internal Revenue Service would outsource collection of unpaid back taxes to private debt collectors, who would receive a share of the proceeds.
Posted: 15 Sep 2015 11:11 AM PDT
Via Austin Frakt at The Incidental Economist (I shortened the summaries):
Market Power: Recent NBER publications by Laurence Baker, M. Kate Bundorf, and Daniel Kessler:
Posted: 15 Sep 2015 10:51 AM PDT
Keynesianism Explained: Attacks on Keynesians in general, and on me in particular, rely heavily on an army of straw men — on knocking down claims about what people like me have predicted or asserted that have nothing to do with what we've actually said. But maybe we (or at least I) have been remiss, failing to offer a simple explanation of what it's all about. I don't mean the models; I mean the policy implications.
So here's an attempt at a quick summary, followed by a sampling of typical bogus claims.
I would summarize the Keynesian view in terms of four points:
1. Economies sometimes produce much less than they could, and employ many fewer workers than they should, because there just isn't enough spending. Such episodes can happen for a variety of reasons; the question is how to respond.2. There are normally forces that tend to push the economy back toward full employment. But they work slowly; a hands-off policy toward depressed economies means accepting a long, unnecessary period of pain.3. It is often possible to drastically shorten this period of pain and greatly reduce the human and financial losses by "printing money", using the central bank's power of currency creation to push interest rates down.4. Sometimes, however, monetary policy loses its effectiveness, especially when rates are close to zero. In that case temporary deficit spending can provide a useful boost. And conversely, fiscal austerity in a depressed economy imposes large economic losses.
Is this a complicated, convoluted doctrine? ...
But strange things happen in the minds of critics. Again and again we see the following bogus claims about what Keynesians believe:
B1: Any economic recovery, no matter how slow and how delayed, proves Keynesian economics wrong. See  above for why that's illiterate.B2: Keynesians believe that printing money solves all problems. See : printing money can solve one specific problem, an economy operating far below capacity. Nobody said that it can conjure up higher productivity, or cure the common cold.B3: Keynesians always favor deficit spending, under all conditions. See : The case for fiscal stimulus is quite restrictive, requiring both a depressed economy and severe limits to monetary policy. That just happens to be the world we've been living in lately.
I have no illusions that saying this obvious stuff will stop the usual suspects from engaging in the usual bogosity. But maybe this will help others respond when they do.I would add:
5. Keynesian are not opposed to supply-side, growth enhancing policy. They types of taxes that are imposed matters, entrepreneurial activity should be encouraged, and so on. But these arguments should not be used as cover for redistribution of income to the wealthy through tax cuts and other means, or as a means of arguing for cuts to important social service programs. Not should they be used only to support tax cuts. Infrastructure spending is important for growth, an educated, healthy workforce is more productive, etc., etc. Economic growth is about much more than tax cuts for wealthy political donors.On the other side, I would have added a point to B3:
B3a: Keynesians do not favor large government. They believe that deficits should be used to stimulate the economy in severe recessions (when monetary policy alone is not enough), but they also believe that the deficits should be paid for during good times (shave the peaks to fill the troughs and stabilize the path of GDP and employment). We haven't been very good at the pay for it during good times part, but Democrats can hardly be blamed for that (see tax cuts for the wealthy for openers).Anything else, e.g. perhaps something like "Keynesians do not believe that helping people in need undermines their desire to work"?
Posted: 15 Sep 2015 09:57 AM PDT
Tim Duy at Bloomberg:
Why the Fed Is Likely to Stand Pat This Week: What a week it might have been?