Sight-writing

I'm not bad at writing, it just takes too long. I can write good writing, but it typically takes me years, and I'm never quite satisfied. So, I've decided to try something I learned in music: sight-reading. When we play the piano, we either play from memory, (or perhaps, we play a song we already have learned through cues on the page) or we play from sight. Singing is the same--I can either remember the song, or learn what each note means, and simply sing well as I go. I've decided to try to improve my sight-writing--that is, my quality of writing off the bat. I'll won't limit my revisions, but I think this blog will give me more freedom to write what comes, and then look back on it later. For example, I've written a piece on taxes. It's not a very good piece. It's quite poor. It's not condensed enough, for one thing--I should be able to say the same in half the words. It's also not as gripping, or as direct as I'd like it to be. So I'll post what I have, and then rewrite it and post the improved edition later.
Posterity will get to see me become a better writer.

Begin Article:

Three cheers for impending doom.

I don't know of anyone who thought it was ever a good idea to spend more than we earned--economics just proves that it's stupid. If the US were a small country, we'd be living in a 5 story house, with 8 TV's, and 6 cars. Worse yet, whenever the family council gets together, they vote on whether to buy a piano or a swimming pool. While monstrously in debt, we fiscally restrain ourselves, and buy only the piano. Well done, family! Only 50 grand to add to the debt! That's way better than last week!

In all seriousness, within 20 years, the baby-boomers will retire. They will then ask for the social security, medicare, and other entitlements that they have been promised--our bills will be due; and there will be weeping, and wailing and gnashing of teeth.

Except, perhaps, by a few. The congressional budget office will probably be too busy saying "I told you so," (which they have, repeatedly) and some economics professors will shake their heads with wry smiles--the smiles that creep onto their faces when you ask them why you did so poorly on your exam. They start smiling after you start your next sentence with "well, I haven't studied very much." Yes. Those smiles. The "I-saw-it-coming" smiles.

Dr. N. Gregory Mankiw will be smiling a wry smile, that's for sure. In 1998, he wrote, "For the next couple of decades, things look pretty good. An approximately balanced budget (and even some small surpluses) together with normal economic growth will reduce the U.S. government debt….

"After that, however, all hell breaks loose. The [congressional budget office] projects that… government spending will take off, leading to budget deficits …. Worse yet, the debt will still be rising, with no end in sight."

So what's wrong with a little debt? Well, let's be more careful—what's wrong with exponentially increasing debt? A few things.

I don't much care for entitlements. I don't like the fact that the government is paying for my parents—that's my responsibility; but I also think that my parents, who have been promised social security, medicare, etc., deserve to receive what they've been promised. We owe them.

We could always borrow more. In a world without credit scores, it'd be like getting as many credit cards as you want. Once one is maxed out, you simply pay that bill with another card. You'd have to keep getting an exponential number of cards, (and you'd never pay it off) but in theory, it wouldn't hurt you unless the chickens came home to roost. Which they would.

Then there's crowding out. Imagine if the bank and the government both offer you a percentage of your savings, if you invest with them. The government needs the money, so they offer you a lot—and you buy the government bond. The money goes to Medicare. If it had gone to a bank, it would have been spent on a loan to someone looking to build a house, a company, or something of economic value. Instead of investing in capital—which increases our future GDP—we spend it now, while we have it, and receive a worse future economy.

But wait! We could always raise taxes! That's another option! We could just up our taxes, just enough to cover our costs—22%!

We could also cut the number of services that will be rendered. Sadly, since voters elect politicians, and many stand to lose a great deal in entitlements if they aren't protected, chances are good that politicians will increase, not decrease entitlement spending.

Another possibility: we could suddenly have a huge increase in productivity, paying for the future. This is assuming ceteris paribus—congress doesn't spend that extra money, there aren't additional wars, politicians don't build bridges to nowhere, and our productivity increases enough to pay off this debt (which, incidentally, will be over 200% of GDP, by CBO estimates.) In other words, we can hope that daddy's job will give him a promotion that will bring a check home that is 5 or 6 times what he currently makes. I'm not holding my breath.

Impending doom is good stuff.

How about some real solutions:

1. Increase the retirement age.

While this isn't exactly politically correct—at all—the fact remains that people are living longer, and it costs more to do it. When social security began, we were living a decade less. This meant that we paid for a decade less of medicare bills. If people went to work longer, and needed less time as collectors of benefits, this would reduce the weight of the burden. After all, retirement wasn't meant to be the last 30 years of one's life, wherein they do what they want; it was originally the point in life when one cannot work any longer. We've grown a bit too comfortable.

2. Reform the tax code.

I'm not talking about cutting marginal rates, or the "Bush tax cuts." I'm talking about a fundamental tax reform. For instance, all anti-growth taxes go—including dividend taxes, corporate taxes, and capital gains taxes, making investing in our future economy worth the wile. Also, a flat tax of 20% for everyone—including the poor—would do wonders.

3. Tax the poor? Are you crazy?

Yes, I am. I also think that everyone needs to feel that they have a stake in this country. Second, I don't want poor people earning less on purpose because it protects them from a worse tax bracket. Our tax system needs to push people up, not pull them down. Progressive taxes encourage people to be poor, which is the last thing we need.

I can hear you saying "But 20% taxes? Isn't that… well… a lot for the poorest in the county? How will they get out of their slums?" Instead of tax breaks for the poor (which incentivize low earnings) give tax breaks to those who give 5 hours of community service a month, who give up smoking and drinking, who gain an education, and who take certified career placement classes. Here's some intuition behind my thinking: imagine a health insurance agency which has a no-smoking policy—wouldn't their costs be lower? Now, imagine that the government does the same thing. Saints be praised for positive incentives for positive externalities.

4. Lower the gates, and let 'em in. Some of them.

If we're praying for a productivity explosion, we might as well do something to help it. Many of us don't like illegal immigration—that's a topic for another day; but we should be the first to welcome any PhD into our country, right away. In fact, we should subsidize their coming here with a 3-year, no-tax policy, that after three years begins to increase slowly. We could create a place that has a critical mass of educated people—maybe even enough to create the technology that will reduce health care costs, or increase our productivity.

5. Have kids.

Our biggest enemy in this is demographics—let me give a simplification. When social security started, 10 people would pay for the social security of one person, for a few years, before they passed away. Now, as the baby-boomers retire, 2 people are going to pay an increased cost burden, for several years. If 3 people were paying for that same cost, it'd be less out of your pocket.

6. Spend less, and spend it wisely.

Congress has to get a hold on things. They need to stop spending, and earmarks are barely a drop in the bucket. Of course, while everyone hates congress, no one hates their congressman. I suggest a new strategy: if things in congress don't change, someone begins an anti-incumbent party. Just to shake things up.

Impending doom can be rough sometimes, but wouldn't it be cool if we could fix education, health care, taxes, and maybe free trade, all while congress is flailing about? Maybe if we don't tell them we fixed things, they won't be able to screw them up.