Policy recommendation for the candidates
February 17, 2008
I am an economist by formation and at heart if not by trade and I am appalled by the terrible quality of the economic policy recommendations from essentially all candidates from both parties.
The time has come for a new paradigm where we ditch ideology in favor of focusing on how best to achieve the socio economic outcomes we seek. With the economic tools now at our disposal there need not be a tradeoff between efficiency and equality. We can preserve incentives and opportunities for growth while providing equality of opportunity and help for the needy – in essentially all domains including health care and education.
Two specific gripes: taxation and health care. Taxes are a means for the government to collect funds to spend in line with its policy objectives. Taxes should not be used as a policy tool. It is much more effective to create specific policies to help the needy than to burden the tax code with exemptions and deductions.
With regards to health care there are a number of ways to reach the outcomes both parties claim they seek. For instance, individuals could have to buy market provided mandatory health care insurance, focusing on preventive care and catastrophic care paid directly by the individual for those who can afford it with partial or full payments by the government for those who cannot afford it.
And so this is my recommendation for the candidates: ditch populism for effectiveness because leadership is not telling people what you think they want to hear, but telling them what is right!