• Immigration

    The Externalities of Immigration

    Sometimes immigration critics will make a watered-down version of the prudential argument.  Instead of claiming that an increase in immigration will destroy the country outright, they object that immigrants inflict unnecessarily painful costs on their host nation.  These costs can be roughly divided into two categories – welfare costs and crime costs.

    If our nation cannot afford to give immigrants access to welfare, then the solution is simple.  We should stop giving immigrants access to welfare.  It does immigrants no favor to deny them both welfare and their right to immigrate.

    The evidence that immigrants commit more crimes seems shaky to me.  But even if it were true, it would not follow that America should restrict immigration.  Immigrant groups historically cluster together in the same neighborhoods.  Immigrants will bear the brunt of their own supposed costs in crime.  Although we may weep for them, if we shut our eyes to the suffering they would have experienced in their native country, we are only shedding crocodile tears.  It is best to let them make their own choice between living in a high-crime neighborhood in the US and a possibly higher-crime one in their home country.

    I haven’t put too much effort into rebutting the externality argument for two reasons.  First, many of the stronger “externality” arguments are variations on the “prudential” arguments discussed before.  Second, I find it difficult to care.  The mere suspicion of externalities is not a justification for denying central human rights.  We could not legitimately throw poor Americans in prison just because we hoped this would reduce crime or the burden on the welfare state.  Nor could we deport them to Mexico.  Nor should we be able to deport poor Mexican immigrants.

  • Health Care

    Health Care Policy Essay

    The following is an essay I wrote for the Charles G Koch Summer Fellow Program.

    Public Policy Essay *
    Write a 500-word essay on a major issue of public policy. Your essay should address the significance of your chosen issue, the problems with the current policies, and your public policy approach to dealing with it. Please adhere to the word limit.

    Reforming America’s health insurance system – and protecting it from the wrong sort of reforms – is critical for the preservation of our welfare and freedom.  The modern health care apparatus is a crowning achievement of our era and has played a central role in our historically unparalleled standard of living.  Today, health expenditures compose as much as 17% of US GDP.  But this strength rests on an unsteady foundation.

    The health care industry suffers from man-made maladies –government-induced incentives and regulations have warped the market and prohibited it from delivering its desired equilibrium.  Employer-provided health care benefits are excluded from income tax liability, a subsidy that has atrophied the individual health insurance market.  This system restricts Americans to the narrow set of options chosen by their employer – prohibiting many from selecting plans that truly match their preferences.  Because so many purchase their insurance through employers, employees who are laid off simultaneously lose health insurance – compounding the miseries of the most desperate Americans.

    At the same time, the states have slowly ratcheted down the number of options available to consumers.  Insurers are required to include increasing number of procedures in their plans, even for those individuals who do not wish to buy them.  Limits on deductibles and co-pays have been widely adopted in a misguided effort to “protect” consumers.  “Community rating” rules force the young and healthy to subsidize the old and sick through redistributive premium prices.  These regulations ensure that most do not get what they want, many pay more than they have to, and some simply decide that they would be better off without insurance.

    A few simple reforms could remedy these problems.  Individual states, or the federal government through its interstate commerce power, could permit Americans to buy insurance policies licensed under any states’ regulatory regime.  This would free Americans from the specific requirements of their state of residence; the states would be forced to compete to deliver a “market equilibrium” bundle of regulations that best fit the needs of consumers and insurers.

    The federal government could spur competition in the individual health insurance market by extending income tax exclusion to individual health policies.  If Americans were allowed to use pre-tax health savings accounts to pay insurance premiums, they would no longer pay a tax penalty on insurance plans purchased outside their employer’s offerings.

    Other proposals seek to “fix” health insurance through tighter government controls.  These reforms aim at turning the risk-insurance market into something resembling a privatized welfare system in which all must participate.  These reforms purport to “reduce costs”, but they can do so only by arbitrarily prohibiting Americans from seeking certain types of medical attention.  Invidiously, those who would bear the redistributive costs of care would be rewarded for their “charity” with the loss of their freedom to make insurance decisions.  In the long run, this rationing would reduce rewards to innovation, slowing the technological progress that has made health care so powerful today.  We must not institute reforms of this nature.

  • Americans for Tax Reform,  Health Care

    “Trust Me” is Not a Cost-Cutting Reform

    This post was originally written for Americans for Tax Reform’s Blog, where I am an Associate (intern).

    This weekend, the CBO shot down another hollow Obama administration “savings” proposal.  Obama’s budget director Peter Orszag endorsed an Independent Medicare Advisory Council (IMAC), which would have transferred some authority to the executive to reduce Medicare expenses (probably by reducing payments to doctors).

    Savings might not be realized at all because the proposal specifies a process without specific goals for savings or a “fall-back” plan for ensuring spending reductions if the combination of annual IMAC recommendations and Presidential approval does not produce hoped-for savings.

    To translate for the CBO: “Trust me” is not a savings proposal.  IMAC is a vague promise to figure out, at some unspecified date in the future, some unspecified way of generating an unspecified amount of savings.  Congress and Obama might as well just admit that they don’t want to deal with the hard, important stuff now.  To be nice, CBO scored the proposal for just $2 billion in savings over the next ten years.

    Democrat policy cheerleaders like Ezra Klein have complained that Americans aren’t paying enough attention to supposed-cost control measures.  There’s a good reason Americans aren’t impressed.  The cost-cutting reforms just aren’t serious and the draft health care bills prove it.  The Democratic “reform” proposals are larded with massive subsidies that cost hundreds of billions of dollars a year.  Why?  Because if they smother the health care industry with money they can make costs look like they are decreasing – for a while.

    If Democrats believed their proposals actually cut costs, they wouldn’t need the subsidies.  Alternatively, if they were confident that measures like IMAC actually produced budgetary savings, they could make subsidies floating and dependent on CBO measurements of actually attained savings.  Until the subsidies go away or are linked to attained savings, it is reasonable to assume that Democrats don’t take their own reforms seriously.  With the stakes this high, “trust me” is not an option.