Salutary Neglect

Anyone who has watched writer David Simon’s HBO television series The Wire is familiar with the term “Hamsterdam.” Hamsterdam refers to a section of Baltimore where the sale and consumption of drugs are legal on the show.

Hamsterdam came about because the drug trade on mainstream street corners became too disruptive to everyday citizens. People were murdered and taxpayers moved out of the city to the neighboring county to avoid violence and drug culture. As a result, a rogue cop created Hamsterdam, comprised of empty row houses where the drug trade is legal and regulated for violence.

Hamsterdam was incredibly successful. Street corners were peaceful. Crime decreased by 14 percent in the district. Groups that distributed clean needles and condoms set up in Hamsterdam and reached people in the shadowy underworld of the drug trade that were once unreachable. Narcotics Anonymous set up in Hamsterdam and saw an influx of members looking to stop drug use. Cops even started charging all mid-level dealers a tax in order to continue operating in Hamsterdam. They used this tax to buy a basketball hoop for the kids of Hamsterdam who were no longer needed to help dealers complete illegal deals.

Obviously this is a TV show, and it may not reflect what would happen if drugs were legalized, but it forces one to consider if drug prohibition does more harm than good. (more…)

Almost everything about the way we do taxes in this country is wrong. Taking for granted that it’s beneficial for our society to force people to pay money for collective services, the way we pay for those services can, and should, be done much better than it is now.

I don’t claim to have any answers to this issue, but I aim to point out a few problems in our current system and to encourage others to think outside of the box about ways that we — as a society — can make taxation more efficient. (more…)

Three years after its passing, the Patient Protection and Affordable Care Act — commonly referred to as Obamacare — is just as bad of a law as Republicans always thought it would be. When the bill passed, President Obama laid out three criteria that it would fill. First, if you like your insurance, you can keep it. Second, premiums will decrease by about $2,500 per family. Lastly, it won’t add a penny to the deficit.

Obamacare fails to keep all three promises. According to a study by the University of Chicago, over half of the individual insurance plans on the market right now don’t meet the standards for basic coverage that Obamacare sets.

This means that if you’re a young, single individual, you can’t buy an insurance plan that just covers catastrophic care. You need a plan with all the bells and whistles that Obamacare mandates; think of it as a car insurance policy that covers gasoline costs and routine maintenance. Single catastrophic care insurance buyers won’t get to keep their insurance, even if they like it. (more…)

Matt Mastricova’s article last week, “Time to wage war for minimum wage,” defends President Obama’s recent State of the Union proposal to raise minimum wage from $7.25 to $9 per hour by 2015. Mastricova cites studies from the University of California, Berkeley and the Center for Economic Policy and Research, which show that minimum wage increases have no impact on employment. He concludes that minimum wage increases can only be good, as they give higher wages to low-skilled workers. What Mastricova forgets is that the social sciences are not exact sciences.

Running a simple regression of unemployment on minimum wage reveals an R-Squared value of only 0.002. This means that only 0.2 percent of the variation in unemployment can be explained by variation in minimum wage. Put another way, there is an incredibly large subset of factors that have an impact on unemployment; the effect of minimum wage is negligible. Minimum wage didn’t change during the recession, yet we saw unemployment jump above 10 percent in late 2009. (more…)

With the quasi-resolution of the fiscal cliff comes new taxes for everyone. Some of Obamacare’s 19 taxes are starting to kick in. The payroll tax cut expired, and some new taxes on the wealthy, such as the expiration of the Bush Tax Cuts and an additional 0.9 percent payroll tax for high earners as part of Obamacare, were allowed to take place.

The increased tax burden on the wealthy, driven entirely by the wishes of Democratic lawmakers, brings to light the contrasting views that Democrats and Republicans have about the economy, especially considering that those tax increases hardly put a dent in the federal deficit.

Imagine that the economy is comprised of 10 bakeries, each making 10 pies a year for a total of 100 pies. Those pies represent gross domestic product, or all taxable income. If the pies were distributed like income in the U.S. economy, the top 20 percent would get 50 pies and the bottom 10 percent would get only one pie, according to the U.S. Census Bureau’s 2007 Economic Survey of income data. Democrats and Republicans agree that this is a problem, yet they have two very different ways to go about solving it.

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For those of you who don’t know, the U.S. is currently facing what the Congressional Budget Office has determined to be a 1.3 percent Gross Domestic Prouct (GDP) contraction for the first half of 2013 as a result of the so called “fiscal cliff,” a combination of tax increases and spending cuts designed to reduce the deficit.

This contraction would be the textbook definition of a recession (six months of negative GDP growth) and would do a number on our stagnating economy. Republicans and Democrats alike agree that we should avoid driving off the fiscal cliff so these negative effects are avoided, but disagree strongly on how to do it. Here is a three-step solution to avoiding the fiscal cliff and making government make sense. (more…)

After going through an atheist and an agnostic phase, I strongly believe in God. I don’t believe in a religious God, nor an anthropomorphic bearded white dude, but the kind of God who got bored one day, snapped his fingers, created the universe and then sat back with a piña colada to watch it unfold.

Religion is a deeply personal matter. Getting to the nexus of how you answer life’s mysteries is one of the most rewarding of life’s journeys. My beliefs have always come under fire in conversations I have with atheists, but these conversations, along with others’ stories of acceptance and rejection of religion, God, and spirituality, have all helped me reach my conclusions about a higher power. (more…)

If I were to ever get a tattoo, it’d say, “Eternal vigilance is the price of liberty.” Nothing better sums up, in my mind, how crucial it is to vote in not only this election, but in every election.

Those seven words are engraved upon the statue of a grim Roman warrior sitting outside the National Archives in Washington, D.C. His left hand clutches a sword, his right hand holds a helmet, and a lion’s pelt drapes over his arm — all to convey that power must be checked at every turn by a diligent and watchful public.

I contend that, at every turn, we have failed to check the powers we’ve granted government. Only about two-thirds of our voting-age population shows up to vote every four years, and even fewer people vote in the congressional elections held every two years, according to a George Mason University study — and it shows. (more…)