Reducing the income-tax deductibility of charitable gifts is a less distortionary way to raise new revenue than raising the same amount of revenue through a proportional increase in all marginal tax rates.
A bitcoin's value derives solely from the belief that others will want to use it for trade, which implies that its purchasing power is likely to fluctuate over time to a degree that will limit its usefulness.
Countries that let their debt loads get high risk losing control of their own fiscal sustainability, through an adverse feedback loop in which doubts by lenders lead to higher government bond rates, which in turn make debt problems more severe.
Refusing to liberalize trade unless partner countries adopt new labor or environmental rules is a bad policy, because even if the new standards would reduce distortions on some dimensions, such a policy involves threatening to maintain large distortions in the form of restricted trade.
Using government funds to guarantee preschool education for four-year olds would yield a much lower social return than the ones achieved by the most highly touted targeted preschool initiatives.
This week’s IGM Economic Experts Panel statements:
A: Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment.
B: The distortionary costs of raising the federal minimum wage to $9 per hour and indexing it to inflation are sufficiently small compared with the benefits to low-skilled workers who can find employment that this would be a desirable policy.
As Bill Ackman, Dan Loeb and Carl Icahn do battle over Herbalife Ltd., it is impossible to predict which hedge-fund manager has bet correctly and will “win.” I do know exactly who the losers will be: hedge-fund investors as a group. Read article>
The average US citizen would be better off if a larger number of highly educated foreign workers were legally allowed to immigrate to the US each year.
