Parking Shortages vs. Coke

Most cities require that new businesses provide a certain amount of free parking for both customers and employees. Residential developers are also required to create a minimum amount of parking for new homes. This is not a free market approach which is probably preferable.

Yglesias: "if I proposed dealing with the ensuring shortages by saying that anyone who wants to build a new building needs to also provide millions of dollars worth of Diet Coke to people in the neighborhood, people would look at me as if I were insane. Creating the Diet Coke shortages is not a favor to anyone—neither fans nor haters of Diet Coke benefit—and the regulatory mandate is an absurd subsidy to Diet Coke drinkers with no conceivable policy justification."

gas taxes and roads

Do Roads Pay for Themselves?

no road pays for itself in gas taxes and fees. For example, in Houston, the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes. That gives a tax gap ratio of .16, which means that the real gas tax rate people would need to pay on this segment of road to completely pay for it would be $2.22 per gallon.

This is just one example, but there is not one road in Texas that pays for itself based on the tax system of today. Some roads pay for about half their true cost, but most roads we have analyzed pay for considerably less.

To conclude, in the SH 99 example, since the traffic volume for that road doesn't generate enough fuel tax revenue to pay for it, revenues from other parts of the state must be used to build and maintain this corridor segment. The same is true across the state, meaning that, as revealed by the tax gap analysis, overall revenues are not sufficient to meet the state’s transportation needs.

defense spending globally

Matthew Yglesias » Home Page: "Cato’s Will Wilkinson and Joseph Heath from the University of Toronto agree that America’s massive defense spending is, in effect, subsidizing the national defense of other countries and both agree that it’s perverse that American conservatives like this. As they say, the right would be none-too-keen on the idea of the United States paying for Italians’ health care, so why should they like paying for Italians’ defense?"

If the US cut defense spending, would Italy or Canada increase their defense spending?
Which is worse, spending tax dollars on a bridge to nowhere or spending money on extra nuclear weapons that are not needed for deterrence?

Homework: United States federal budget - Wikipedia

Why does this the above chart show an increasing trend?
              What are four reasons?
What does the government mostly spend money on?
Find two different graphics (pie charts are good) that show what percent of government spending goes to what ends. What percent of government expenditures go towards the military and what percent goes towards foreign aid?

Sachs vs Easterly

Sachs argues for more taxation and social programs and Easterly argues against them.

Is greater immigration a reason the US has fewer social programs than Europe?

Class Mobility Myth Has Impact On Policies

Is the European welfare state the product of a mythology of a rigid class structure?

Ezra Klein : [Russell] Shorto... [thinks that in] the Netherlands.... [T]here's "a cultural tendency not to stand out or excel...the very antithesis of the American ideal of upward mobility." But... Americans are in the odd position of fervently believing in upward mobility while not actually having very much of it. Eruopeans, conversely, don't really believe in economic mobility but have plenty of it.... Brookings... examined the relative mobility in other Nordic countries. And the United States doesn't come out that well.... The United States believes itself to be uncommonly meritocratic. But compared to European countries who don't believe themselves very meritocratic, it actually exhibits less income mobility....

If you believe that your country is extremely mobile, you're likely to believe the results of the economic competition are relatively fair. As such, you won't want to slap the rich with particularly high tax rates and you won't be terribly concerned about spreading economic opportunity. After all, anyone can make it! On the other hand, if you don't believe your country is terribly mobile, then you're less likely to believe economic outcomes are fair. And if you don't believe the outcomes are fair, you're likely to tax the winners relatively heavily and plow those profits into things like universal health care and free college. Policies, in other words, that spread opportunity more widely and thus make your society more mobile. Put like that, it sort of makes sense. If you believe your society is already economically mobile, you don't spend a lot of time trying to solve the problem of insufficient economic mobility. if you don't believe that, then you implement policies meant to increase mobility. What's odd is that the public perceptions in Europe and America don't seem to be changing much in response to actual outcomes.

Is Socialism vs. Capitalism a False Dichotomy?

Going Dutch, by Russel Shorto, NY Times Magazine:

... For 18 months now I’ve been playing the part of the American in Holland, alternately settling into or bristling against the European way of life. ... For the first few months I was haunted by a number: 52... For it represents the rate at which the income I earn ... is to be taxed. To be plain: more than half of my modest haul ... was to be swallowed by the Dutch welfare state. ... I am politically left of center in most ways, but from the time 52 entered my brain, I felt a chorus of voices rise up within my soul, none of which I knew I had internalized, each a ghostly simulacrum of a right-wing, supply-side icon: Ronald Reagan, Jack Kemp...
And yet as the months rolled along, I found the defiant anger softening... I have found myself not only giving the Dutch system a personal test drive but also wondering whether some form of it could be adopted by my country. ...

I spent my initial months in Amsterdam under the impression that I was living in a quasi-socialistic system, built upon ideas that originated in the brains of Marx and Engels. This was one of the puzzling features of the Netherlands. It is and has long been a highly capitalistic country ... and yet it has what I had been led to believe was a vast, socialistic welfare state. How can these polar-opposite value systems coexist? ...
The Dam is ... a reminder ... of its ceaseless battle with water. And that battle turns out to be the key to understanding the Netherlands’ blend of free market and social welfare. The Low Countries never developed a fully feudal system of aristocratic landowners and serfs. Rather, sailors, merchants and farmers bought shares in trading ships and in cooperatives to protect the land from the sea, a development that led to the creation of one of the world’s first stock markets and helped fuel the Dutch golden age. Today the country remains among the most free-market-oriented in Europe.
At the same time, water also played a part in the development of the welfare system. ... Everyone had to deal with water. ... But in most cases your land lies in the middle of the country, so where are you going to pump it? To someone else’s land. And then they have to do the same thing, and their neighbor does, too. So what you see in the records are these extraordinarily complicated deals. All of this had to be done together.” ...
There is another historical base to the Dutch social-welfare system, which curiously has been overlooked by American conservatives... It is rooted in religion. “These were deeply religious people, who had a real commitment to looking after the poor,” Mak said... “They built orphanages and hospitals. The churches had a system of relief, which eventually was taken over by the state. So Americans should get over ‘socialism.’ This system developed not after Karl Marx, but after Martin Luther and Francis of Assisi.” ...
The Dutch are free-marketers, but they also have a keen sense of fairness. As Hoogervorst noted, “The average Dutch person finds it completely unacceptable that people with more money would get better health care.” ...
Decent housing is another area where the Dutch are in broad agreement. ... Social housing differs from much of the public housing in the United States in that the government does not own or manage the properties. Rather, each is owned by an independent real estate cooperative. The system is not-for-profit, but it pays for itself. ...
This points up something that seems to be overlooked when Americans dismiss European-style social-welfare systems: they are not necessarily state-run or state-financed. Rather, these societies have chosen to combine the various entities that play a role in social well-being — individuals, corporations, government, nongovernmental entities like unions and churches — in different ways, in an effort to balance individual freedom and overall social security.
So here is a little epiphany I had... Maybe we Americans have set up a false dichotomy...: the old left-wing idea of vast and direct government control of social welfare, and the right-wing determination to dismantle any advances toward it, privatize the system and leave people to their own devices. In Europe, meanwhile, the postwar cradle-to-grave idea of a welfare state gave way in the past few decades to some quite sophisticated mixing of public and private. ...

How Different Are the Dutch and Americans?

Russell Shorto via kevin drum:

One downside of a collectivist society, of which the Dutch themselves complain, is that people tend to become slaves to consensus and conformity. .... “If you tell a Dutch person you’re going to raise his taxes by 500 euros and that it will go to help the poor, he’ll say O.K.,” he said. “But if you say he’s going to get a 500-euro tax cut, with the idea that he will give it to the poor, he won’t do it. The Dutch don’t do such things on their own. They believe they should be handled by the system. To an American, that’s a lack of individual initiative.”

 Of course we could say the same thing about Americans.  If you ask an American if we should raise our taxes by $50 to help our soldiers fight the war in Iraq, he'll say 'sure', but if you say he is going to get a $50 tax cut, he won't give it all to our soldiers.  Why is there so little individual initiative in supporting our troops?  And given that the American government gives so much less to the poor, why do individual Americans not give much more? 

Top US Marginal Tax Rate Graphing Assignment

Go to Wikipedia's Income tax in the United States page and create a graph for the top income tax rate table in Excel. It should look something like this graph. We will vote on which is the best and we will publish it on Wikipedia.