• Laurence J. Kotlikoff testifies before the House Committee on Ways and Means Social Security subcommittee on the state of the program. I don’t agree with all his conclusions, but I definitely agree that the program’s finances are in far worse shape than is commonly understood. “To pay its scheduled benefits in full through time, the Social Security system needs a 32 percent immediate and permanent increase in the future path of payroll tax revenues. Based on the current covered earnings ceiling, this represents a 4-cent-on-the-covered-dollar higher payroll tax starting today and continuing forever. . . . Social Security is in dire financial shape.” Kotlikoff was the first guest featured on my podcast The Debt Dialogues, which you can check out here.


  • “In short, if you must study charts in economics books in order to learn that you are intolerably destitute compared to some other people, then, in fact, you are not even remotely close to being destitute in any economically meaningful sense of the term.” Indeed.


  • There is much to disagree with in this column by David Brooks, but the first paragraph is profound and profoundly important: “Nearly every parent on earth operates on the assumption that character matters a lot to the life outcomes of their children. Nearly every government antipoverty program operates on the assumption that it doesn’t.” That’s true, but the solution isn’t for government to decide what moral qualities we should cultivate and then paternalistically seek to shape our characters — it’s to abandon the immoral welfare state.


  • The American Enterprise Institute has just released a new book on poverty, which you can download for free. I haven’t read the entire thing, but the quote that starts it off — from AEI president Arthur Brooks — tells you a lot of what you need to know about the outlook of the contributors: “Conservative leaders owe it to their followers and the vulnerable to articulate a positive social justice agenda for the right. It must be tangible, practical, and effective. And it must start with the following question: ‘What do the most vulnerable members of society need?’” I’d say a moral approach to these issues must start with the question: what rights do all members of society have? More to come on this.


  • You can dispute the premise of this Wall Street Journal op-ed — that the Federal Reserve’s monetary policy has been tight since late 2008 — but the larger point is compelling: an expansive monetary policy, such as we had during the mid 2000s, fosters inequality by pumping up assets prices, owned mainly by the wealthiest Americans. That’s important, not because inequality per se is a bad thing — on a free market, it’s something we should celebrate — but because it shows that at least part of the explanation for why “the rich have gotten richer” at a far faster rate than the rest of us in recent years is not because we’ve had too much capitalism, but because we’ve had too much statism. Yaron discussed this phenomenon briefly on a recent episode of The Debt Dialogues.