Often, all economists agree that we all agree. We just can’t agree about what it is that we all agree on. Now comes the remarkable IGM Economic Experts Panel to shed some light.
The experts in question are a small galaxy of economic stars, some plausible candidates for the Nobel Prize, and all highly regarded throughout the profession. Their political affiliations range from left to right to center to “I hate politics”. There are 41 of them altogether. And for several months now, they’ve been polled about important matters of theory and policy.
The very first survey, going back to last September, asked for responses to the following statement:
All else equal, the Fed’s new plan to increase the maturity of its Treasury holdings will boost expected real GDP growth for calendar year 2012 by at least one percentage point.
Exactly 0% of the experts checked “agree” or “strongly agree”. 33% were uncertain and 7% had no opinion. (One refreshing thing about these polls is that the respondent’s have apparently felt free to respond “no opinion” on matters where they are not well informed. Nobody, after all, can be an expert on everything.) When a statement is endorsed by exactly 0% of 41 distinguished experts from across the political spectrum, you can be pretty sure that statement is false.
This first question, though, strikes me relatively uninteresting, since it refers to a specific policy at a specific moment in time. Let’s move on to the next question, which has a bit more staying power:
All else equal, permanently raising the federal marginal tax rate on ordinary income by 1 percentage point for those in the top (i.e., currently 35%) tax bracket would increase federal tax revenue over the next 10 years.
Here exactly 0% either disagreed or strongly disagreed, with 2% (that is, one expert out of 41) uncertain. I think you can be pretty sure this statement is true.
Here’s the followup question:
The cumulative budget shortfalls in the US over the next 10 years can be reduced by half (or more) purely by increasing the federal marginal tax rate on ordinary income for those in the top tax bracket.
Here 0% strongly agreed, 2% agreed, and 20% were uncertain.
Peruse the IGM site, and you’ll find a remarkable degree of consensus. Freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment. The 2008 bank bailout lowered the 2010 unemployment rate. So did the 2009 stimulus. Gas prices are driven primarily by market factors, not by government policies (so stop blaming Obama!). Looser licensing restrictions for nurses and physicians assistants would be good for patients, because the additional safety risks would be small compared to the reduction in fees and waiting time. Rent controls in New York and San Francisco have had no positive impact on the amount and quality of affordable rental housing. Congestion pricing (e.g. charging higher tolls at rush hour) makes people on average better off. And if you want to reduce carbon emissions, carbon taxes are better than fuel efficiency standards.
All of the above statements garnered near-universal agreement among the experts who responded. (Or in some cases, their negations garnered near-universal disagreement.) There’s some good news here for Democrats, who will be glad to hear that the stimulus worked (though that’s not the same thing, of course, as saying that it was worth the cost) and some good news for Republicans, who will be glad to hear that we can’t balance the budget by raising taxes at the top end (though that’s not the same thing, of course, as saying that those taxes should not be raised). But mostly there’s good news for all of us — the good news is that economists actually know something, and we can make the world a richer and happier place if only we start paying attention.
It is indeed good to know that the science of economics actually exists and a proper scientific debate is actually possible.
But economic policy is actually somewhere halfway between economics and politics. I believe the questions here were specifically formulated as to provoke as little political debate as possible – when asked about their own answer in a more applied context, say when discussing a policy proposal, a respondent can easily say “Yes, but the question din’t mention the costs” or “Yes, it does not solve the entire problem, but it is still the best way to start dealing with it”, just as professor Landsburg mentioned. Or easier still they can always say – “But for all its shortcomings it promotes more equal distribution of wealth, which is immensely beneficial.”
So as soon as those economists move from the specific questions of theory to some real life questions of policy they are back to their political trenches before you know it.
I agree with Dimitry in some respects, but we need a clear answer to the basic questions before we get to the politics, and these clear answers should inform the politics.
On raising taxes for the top band. Politicians may argue that raising the top band by 1% would actually reduce Govt. income. We can now say that is almost certainly not true, and address the real questions of the effects of such a raise. Is greater equality worth a small decrease in overall wealth? That is a more difficult question not bound only by economics.
On short-selling, there was agreement that banning this gives prices on average further from their fundamental values. Point made, but do those occasions where this does not apply cause disproportionate amount of harm? A different question, and the one politicians should address.
Some questions probably do not req
I agree with Dimitry in some respects, but we need a clear answer to the basic questions before we get to the politics, and these clear answers should inform the politics.
On raising taxes for the top band. Politicians may argue that raising the top band by 1% would actually reduce Govt. income. We can now say that is almost certainly not true, and address the real questions of the effects of such a raise. Is greater equality worth a small decrease in overall wealth? That is a more difficult question not bound only by economics.
On short-selling, there was agreement that banning this gives prices on average further from their fundamental values. Point made, but do those occasions where this does not apply cause disproportionate amount of harm? A different question, and the one politicians should address.
Some questions probably do not req
uire an economic expert – “there are other factors than the USA inflastion risk that affect the current dollar price of gold”
On education funded by vouchers there is little agreement. There is strongly disagree with a confidence of 7 and strongly agree with a confidence of 10. Methinks soemone is overconfident.
Harold:
“On raising taxes for the top band. Politicians may argue that raising the top band by 1% would actually reduce Govt. income. We can now say that is almost certainly not true, and address the real questions of the effects of such a raise. Is greater equality worth a small decrease in overall wealth? That is a more difficult question not bound only by economics.”
A good point. However, to be any confident in making such forecasts one should really know the exact shape of the Laffer curve in the US very precisely. The surveyed experts apparently know it, and so do the dissenting politicians you mentioned.
I however do not, and so I am both not sure what I would say and also surprised by such degree of unanimity.
The only evidence that affects my opinion on this is that a top bracket income tax increase in the UK from 40% to 50% (which is not by 1%, but is still in the same general area) is being reverted now by the same guys who insisted on it. And that is apparently not for lack of public support for squeezing the rich in today’s UK politics.
Steve –
I was disappointed that they didn’t ask more pointed questions such as the one you imply: “was the stimulus worth the cost?” or a more precise version such as, “did the stimulus increase consumption and investment?”
A few questions about Europe’s woes & policies would be great as well. For instance, “Would GDP in 2012 (or 2020) be higher in Greece if it had never joined the Eurozone?”
Obviously, they’re being very careful not to overwhelm their panel and to phrase questions in answerable ways.
I have to agree with Dmitry. It is very hard to maintain a scientific approach to the questions, that are not measurable.
I´m from Canada and I know how hard the economical and political debate can be, since we are being threatened by our household debt and overpriced real estate market. I recommend you to check More Regulation in the Mortgage Market.
It is easier to answer the question about the past, but it is much more difficult to answer the question about the current problem. What is the value of the expert if he is unable to bring solutions that can solve any problem?
Salim Furth:
I was disappointed that they didn’t ask more pointed questions such as the one you imply: “was the stimulus worth the cost?” or a more precise version such as, “did the stimulus increase consumption and investment?”
Note that anyone can submit a proposed question.
The question I would like to see, I think, would be more along the lines of: “What discount rate do you need to assume to make the stimulus worth its cost?”
Hmmm- first question I looked at:
“Laws that limit the resale of tickets for entertainment and sports events make potential audience members for those events worse off on average.”
3 Princeton Professors — 1 Strongly Disagree, 1 Disagree, 1 uncertain
Comment provided by the “disagree”:
“Without controls, scalpers may buy up all tickets and sell them at high prices. High income people gain, but low income people lose.”
Bryan Caplan should use this as more evidence of education signaling.
And Steve, perhaps you stated this, “the good news is that economists actually know something” a little too early. Evidentally economists at certain Ivy League schools know very little.
Even if economists reach a consensus on some macroeconomic issues, I’m not sure that means we should believe them. The last financial crisis should tell us that much.
For example, everyone agrees that increasing aggregate demand during a recession will decrease unemployment, but does that imply the stimulus did? Maybe, taking a pointer from Daniel Kahneman, they answered the easier question, “Does raising aggregate demand during periods of high unemployment cause a a decrease in unemployment?” rather than “Did the stimulus decrease unemployment?”
I know Scott Sumner would answer yes to the first and no to the second, because its not clear what monetary policy would have done in the absence of fiscal stimulus.
Does it follow from the fact that economists agree on some things that economists “actually know something”?
Prof. Landsburg:
Shouldn’t you have said:
Republicans, who will be glad to hear that we can’t balance the budget purely by raising taxes at the top end (though that’s not the same thing, of course, as saying that those taxes should not be raised)
I’m assuming this was based on the question:
The cumulative budget shortfalls in the US over the next 10 years can be reduced by half (or more) purely by increasing the federal marginal tax rate on ordinary income for those in the top tax bracket.
I thought the most interesting respondent was Anil Kashyap–and not just for his jokes about the gold standard, ‘go see a dentist’.
In the Fannie Mae/Freddie Mac question there was a lot of agnosticism about whether or not the benefits of government sponsorship mostly went to the GSEs themselves (i.e. their shareholders) and not to lower interest rates. Kashyap pointed to Greenspan testimony from 2004 to the effect that that question had strong support in the affirmative.
@justin “Even if economists reach a consensus on some macroeconomic issues, I’m not sure that means we should believe them”
They are far more likely correct than anyone/group of people in the world.
So if you care to believe something about these issues, (as policy makers NEED to), might as well be them.
@miko: I think justin’s point was along the lines of “Even if priests reach a consensus on god, I’m not sure that means we should believe them.” Which is a fair point!
@Ken B
Ah… that is a fair point
Although, if “priests” of all religions of the world sincerely reached a consensus on god… i might reconsider my atheism a bit…
Gas prices are driven primarily by market factors, not by government policies (so stop blaming Obama!).
“Make the enemy live up to its own book of rules.”
As long as politicians, particularly on the left (like Obama), continue to claim that the rise and fall of prices are due to political control, why not continue to use that against them? If you’re going to claim that you can raise the tides or write policies that influence them, then you should be hounded and laughed at every time the tide goes out.
But economic policy is actually somewhere halfway between economics and politics.
Good economic policy isn’t. I hear this “halfway” argument constantly. One person claims X and another claims Y, then someone else (trying to sound wise) says the truth is somewhere in the middle. Of course on further inspection, if you see that claim X is just a shot in the dark, whereas claim Y is based on sound research and logic, the person that said “the truth is somewhere in the middle” is a dupe or a fool.
While claim Y could be wrong for a number of reasons, claim X shouldn’t be taken seriously at all.
@miko: Not me. I’m keepin’ the unfaith.
@Ken: There must be some misunderstanding. It was not an argument, merely an observation. At least clearly not the “argument” you are disputing. So if I said that Germany is roughly halfway between Russia and Ireland, would you oppose that statement on the same grounds, without even looking at the map?
You may well know examples of economic policy that is pure economics or pure politics (though I only can imagine examples of the latter) and sure you may consider those particular examples “good”. But does this really affect my observation?
All that said I sure do not side with the “halfway” approach you are talking about which is something quite different from what I said.
@ Dmitry:
Where I would disagree with you is that I think that economic policy is almost all political.
When the media report on (other) scientific consensus, they make sure that they convey what the consensus is and where there is an outlier. E.g. “The scientific consensus is X, however a small number of scientists think Y”
When reporting on Economics, the media reports:
“Democrats say X will help the economy, but Republicans say Y will hurt the economy”.
When is the last time you heard a report like the following that would suggest the that economic policy is between economics and politics:
“The consensus among economists is that free movement of labor is a vital component of free trade, however Democrats and Republicans disagree.”
Dmitry,
I wasn’t arguing with you. If you noticed, I highlighted the word “good”. You didn’t, so pretty much by defintion we were talking about two different things. If you thought I was being stand offish or argumentative about your argument, I will try to be more clear in the future.
But if you want me to argue with you, fine, I think Will A is more correct. When we talk about economic policy as it is actually implemented, then economic policy will be more, if not completely, politically driven, regardless of economic knowledge of what consitutes good or bad economic policy. It will not be at some halfway point.
Politicians enact policies to serve their interests (getting reelected, lining their own pockets, power grabs, etc.), not the electorate’s or for the good of those involved in the larger economy. If an economic policy is passed that is actually good economic policy, I think this is most likely purely incidental to the true aim of policitical self interest.
Prof. Landsburg,
How, in your opinion, do the views presented in The Armchair Economist (or what you have written elsewhere) stack up to what the panel agrees on? Is there any area where your writing might be considered an outlier or contrarian as compared with “standard” economic thought?
Will A: “When the media report on (other) scientific consensus, they make sure that they convey what the consensus is and where there is an outlier. E.g. “The scientific consensus is X, however a small number of scientists think Y””
If only that were the case. Generally the media exagerates the minority view to create the illusion of an argument to sell copy. Rarely are these matters reported well. MMR vaccination is a good case study.
The priest issue is interesting, and we can use this as an illustration of how to listen to experts. Christian theologans study the bible. If all christian theologans agreed on say, the nature of the Trinity, then we should probably agree that the bible should be interpreted that way. We must respect their area of expertise. Their area of study is not actually in proving the existence of god, just how to interpret the texts. So if I were to become a christian, I should follow their teachings on mattters of scripture.
Economists are experts in economics. Where there is unanimity, I should follow their teachings in matters of economics.
This does not mean they are definitely right, just that the answer they provide is the best we can get at the moment, and it is foolish not to use the best answer we have.
I thought a little more about the cases where high confidence was expressed where there was no agreement generally. I suggest this could be used to construct a “reliabiliy index”. Where individual economist’s confidence was roughly in proportion to general level of agreement, then we can have reasonable confidence in them. Where they express strong confidence about issues for which there is no concensus, it is likely that ideology is clouding their judgement, and we should be suspicious.
I appreciated their answers, many of the “uncertain” responses are quite wise.
There is one question where it’s clear a lot of respondents haven’t carefully studied the evidence. It’s the school voucher question. It is perfectly fine to be agnostic about the long-run effects of vouchers or the efficacy of vouchers on some students. But a lot of the respondents argue that the students who remain in public schools will be worse off than they otherwise would have been.
I disagree with that argument on a theoretical level: The students left behind should have smaller classes, which evidence suggests weakly improves performance, and exit gives power to voice. The argument that all the “good” parents will leave is irrelevant; when they were there, they couldn’t do a thing. (Imagine walking into the DMV and yelling, “I’m not going to stand for these wait times and bad services any more! I’m taking my business elsewhere!” Enjoy the chorus of laughter.) If the responsible parents had no effect on school policy before, there shouldn’t be much of a change.
But that’s all beside the point. There is a large literature on school vouchers, across many countries and population types. Some of the studies distribute vouchers randomly to students, which should eliminate IQ/ability effects, and other studies simply mark the change in performance after the introduction of a voucher program, which should tell us about the performance of public school students in districts with school competition. I am not aware of a single study that found negative effects for any students in any school. There are lots of studies that show no effect of vouchers, and many that show a positive effect only for the worst-off students, so perhaps agnosticism is warranted. But that agnosticism should be between whether vouchers have no effect or a weakly positive effect, not whether they have positive or negative effects. The “left-behind students are worse off” argument is pure speculation with, to my knowledge, zero empirical support. In fact, of the studies that specifically examined public school performance in the long run under competition have found it increasing, not decreasing. See, e.g., Hoxby 2002, Greene 2001, Greene and Winters 2004, Figlio and Rouse 2005, West and Peterson 2006. One study, Greene and Winters 2006, found no positive effect on public schools, but it certainly didn’t find a negative effect.
Will A and Ken: When I said “halfway” I did not mean literal equidistance – I meant that both forces are usually at play. Sorry if my wording caused confusion. It is certainly the case that often pure politics dominates. But even if politicians have their way they still can not completely ignore economics – even in North Korea.
Ken: “But if you want me to argue with you…” :) I just had a feeling that you misunderstood what I had said – glad to know it was not the case.
@ Harold:
I don’t see how priests can be equated with economists.
I believe that economists use the scientific method in trying to arrive at what is correct. Where there is a difference of opinion, this highlights an area where knowledge is less certain than where there is consensus.
I think it would be correct to equate priests with physicists who say, “Tiny strings running through everything must exist because it just makes so much sense” or “There must be one single force that everything derives from because it just must be the case that everything derives from one single force”.
These might be strawmen questions, but I’ll ask them anyway.
Do you find consensus among Chemists more convincing than consensus among Economists?
If you do, what is it with the way economists employ the scientific method that leads to Chemists consensus being more convincing?
Or do also equate consensus among chemists with consensus among priests?
Will a: I was responding to a comment above to the effect that if priests reach a consensus on god it does not mean we should all believe in god. I was attempting to point out the false analogy – the priests expertise is in scritpure, not knowledge. I find consensus among chemists as convincing as concensus among economists. I also find consensus among priests just as convincing. The key is in interpreting what that consensus means. The priests consensus means that if I accept the basis of their philosophy – i.e. the truth of the scriptures, then I should accept their concensus. The chemist annd economist consensus means that if i accept their philosophy – i.e. the scientific method, I should accept their concensus. As it happens, I do not accept the basis of the priests philosophy, so I am entitled to reject their conclusions.
I just had a feeling that you misunderstood what I had said
… because it couldn’t have possibly been that you misunderstood me >:)
@Swimmy – If the responsible parents had no effect on school policy before, there shouldn’t be much of a change
You forget that the students who leave take their money with them, ultimately diminishing the capacity of the school to provide educational services. Since schools have fixed costs and not just marginal costs, this (theoretically) hurts the students who remain.
You seem familiar with the literature on the subject. Have any articles specifically addressed the question of what happens to those students in lousy schools who don’t have or don’t use the vouchers when their classmates do?
Steve:
But mostly there’s good news for all of us — the good news is that economists actually know something, and we can make the world a richer and happier place if only we start paying attention.
——-
Is that really the right conclusion? A different interpretation would be “economists share a number of beliefs”
(I do happen to agree with them, but still).
A poll in 2006 would have likely yielded consensus on some issues relating to financial market efficiency that might not exist today.
Ken, I sure could have misunderstood you and most probably did, if you indeed meant in your first comment what you explained in your second one.
On priests vs. economists: Imperfect analogies can be discussed ad infinitum, but to have any hope of reaching some conclusion one should try to improve them.
A priest consensus on existence of God is not like economists’ consensus on anything, it is more like a Marxist consensus on the teachings of Marx. I would believe that the correct comparison would be scholars of economics vs. scholars of religion (both of whom may have other scientific interests as well). Most people who study economics can freely call themselves economists, while many leading students of religion would not become priest even if they were offered to do so.
So the equivalent of consensus among leading economists would be a consensus among leading scholars of religion (some buddist monks, some catholic priests, some philosophy professors, some rabbis, the likes of Richard Dawkins, some shia Ayatollahs etc.).
There are few examples of such consensus, but there are some. For example nowadays the consensus seems to be that Jesus Christ actually existed as a person – Christians believe he was the God, Muslims that he was the penultimate prophet, Jews – a sectarian leader, atheists – just a private individual, but the mainstream thinking is that he at least existed.
The existence of God, let alone any particulars of that existence, is however very far from being an area of consensus among scholars of religion.
@Mike H: I’m sorry I wasn’t clear. The slew of studies I mentioned at the end of my post address student performance in public schools after a voucher program was introduced. This does not mean all of the students who remained in public schools didn’t use vouchers–probably some percent used vouchers to transfer from one public school to another. It’s possible that the result then comes from ability bias + public school transfer (the smart kids transfer to better public schools and their education gains outweigh the education losses in the worse schools), but I doubt it. A few other studies found that a program in Florida which rated public schools A+ to F improved the performance of students in the worst schools, because any student attending a school that got two Fs in a four-year period became eligible for vouchers. Since this result focused entirely on F-rated school improvement, I think it’s safe to say voucher programs improve the educational outcomes even of students who don’t take the voucher. (A court ruled against the Florida program in 2006, alas.)
The mechanism you mentioned, less funding for bad schools under a voucher program, is probably the reason for the improvement. When faced with the threat of direct financial punishment, the worst schools shape up.
Will A:
“These might be strawmen questions, but I’ll ask them anyway.”
Never stopped you before!
“Do you find consensus among Chemists more convincing than consensus among Economists?”
Yes.
“If you do, what is it with the way economists employ the scientific method that leads to Chemists consensus being more convincing?”
Experiments.
Swimmey: I disagree with your theoretical point that the “left behind” should not do worse. Class sizes will not necessarily be smaller, and fewer students means less money. This is likely to result in larger classes. Parents can be a significant resource to a school, and can influence policy. Students can be also. A study in S. Africa (I think) found little correlation between socio-economic status (SES) and educational outcome at an individual level, but good correlation on a school level. They concluded that the more able students are a considerable resource for schools. (Sorry – can’t find the ref now.) Skimming off the most able students and most involved parents could be a considerable loss to a school, and result in significant reduction in attainment for those remaining. So theoretical point is not valid as there are mechanisms which could theoretically lower outcomes. I also recognise that you said thi swas not the main point.
Your comments on the economists views suggests that they should have chosen “No Opinion” rather than “uncertain” if they were not familiar with the literature. That they chose “uncertain” indicates that they believed they were sufficiently informed to have an opinion. I am not familiar with the literature, but could it be a bit more ambiguous than you say? In the studies you mention, did all students get offered voucers?
S. Africa???
Back in the USA what actually happened in places where students could vote with their feet (Milwaukee, Arizona) the public schools responded to the competition by improving themselves. They even started advertising that on the radio.
I’m unaware of even a single study finding any harm from vouchers or other school choice programs like charter schools. As someone else has already pointed out, there is a literature out there. Start with Hoxby and Jay Greene.
@Harold: I believe the economists who answered “disagree” should have chosen “uncertain.” It’s fine to have an agnostic opinion, but agnosticism over negative effects isn’t warranted given the theory and evidence. As I said in my last post, the mechanism of less money for bad schools is not necessarily negative–competition for funding can spur improvements in bad schools.
The methods of the studies I mentioned vary. I have explained the Florida program: only students at the lowest-rated schools were offered vouchers, and schools with low ratings saw quicker improvements in student performance. Hoxby’s study compared similar students in districts that gave universal access to vouchers to students in districts that gave no vouchers and found performance improvement in the schools that faced voucher competition. A couple studies I didn’t mention: Forster 2002 examined the same program as Hoxby and found similar results. Hammons 2001 examined “tuitioning” in Maine and Vermont, in which some communities simply offer money for private schools instead of building public schools; public schools that are closer to districts practicing tuitioning have better performance, probably because of competition effects. (Tuitioning is century-old, so I doubt endogeneity effects are large.) There is also a very large literature on competition between public schools without a voucher program. Where there are more school districts within an area, such that parents can easily move if they are dissatisfied with their own district, performance of public schools is greater. (Borland and Howson 1993, Zanzig 1997, Hanushek and Rivkin 2002, Blair and Staley 1995, Greene 2002, Marlow 1997, Hoxby 2000, and Walberg 1993.) A couple other studies along similar lines found no effect on public school performance, but they certainly didn’t find a negative effect. The bulk of the evidence suggests competition for funding improves outcomes for students in bad schools, and to my knowledge not a single study has found a negative effect.
But loss of school income isn’t even a necessary component of a voucher program. The statement in the questionnaire didn’t specify the details of the program. The study I mentioned in my first post that found no effect on public school performance examined the Washington DC voucher program. The author’s explanations for why there was no effect on public school performance were 1) the study only examined outcomes for a single-year period, 2) vouchers were only available to a small number of students, and 3) *the program was specifically designed to not affect the incomes of any DC public school.* The DC voucher program gives extra money to those schools that lose students to vouchers. Likewise, the universal voucher program in Chile grants extra funding to schools that lose students to vouchers. From what I can tell, income loss to bad schools under voucher programs is a benefit of those programs as it induces better performance under competition, but it is not even a necessary component of such programs.
Swimmy – I see your point now. Thanks for the detailed and informative reply.
Skimming the literature, I am surprised by one thing – the lack of correlation between socio-economic status and education outcomes. This is not what I expected at all. Perhaps I have mis-interpreted.
Chile seems to provide the only example of universal vouchers. The problem with it being universal is the lack of a control group for comparison. If only policy makers would implement these things in only half the country it would make research much easier!
The outcome of the Chile vouchers seems generally to be considered not a bad thing, if not necessarily a good one – backing up what Swimmy says.
Mizala and Torche (2012) identified a stratification in the schools they say has not been identified. This seems similar to the African finding I mentioned before.
“the educational achievement of a child attending the private-voucher sector depends considerably more on the aggregate SES of her school than on her own family’s SES.”
This seems to suggest that the school is tapping into a aggregate benefit of having students from high SES families.
On a more general note, I think that it illustrates that where there is very good consensus agreeing or disgreeing, we can have quite a lot of confidence. Where there is less certainty, economists biases may have more influence.
On the fixed cost argument against vouchers – so instead of solving the problem by retaining students through comparable service, a school gets to say “sorry you can’t leave because we have a building to maintain”? (I hope we’re not talking about sunk costs, or arbitrarily deeming unionized labor costs as ‘fixed’.)
This seems like a red herring to me. The govt decides how much “money they take with them”, and setting the voucher amount at the variable cost is arguably fair since the fixed costs of the new school don’t really change either. In fact it seems like this is pretty much how it already works – voucher values are typically less than the new tuition, which in turn is often less than per-pupil total cost at the old school.
So if, say, the total amount spent by the govt (on the kids who stay and the kids who leave) doesn’t change, who’s harmed? And wasn’t the original purpose of the public investment to give the best education to the most kids? ‘Unfair competition’ should have nothing to do with it, that’s just about turf. Is the argument that having redundant capacity (temporarily), even if privately funded, so socially inefficient it outweighs the educational benefits of enhanced competition? Non-fiscal arguments that amount to holding back the educational options of some kids purely for the benefit of others are particularly troubling.
One problem with the voucher questions is that they implied students would take “all funding” away with their voucher. I believe most voucher programs only confer with each voucher a subset of the total cost of the student, say 50%-90%.
80% of them agreed the stimulus reduced unemployment. Does that not make them Keynesian, almost by definition? That could be one dimension in which the panel is narrow. I mean, Keynesians and Monetarists and Austrians could all agree on rent control and free trade, but would find little consensus on financial policy.
Professor,
Maybe I am misunderstanding the question, and if so, please correct me, but it looks like the survey DID ask the question if the fiscal stimulus was worth the cost. Question B on “Economic Stimulus” asks: Taking into account all of the ARRA’s economic consequences — including the economic costs of raising taxes to pay for the spending, its effects on future spending, and any other likely future effects — the benefits of the stimulus will end up exceeding its costs.
Of which the majority agreed. Should I take this to mean that the majority of economists agreed the fiscal stimulus was worth the costs…if not, why not?
Hispanic Pundit:
Question B on “Economic Stimulus” asks: Taking into account all of the ARRA’s economic consequences — including the economic costs of raising taxes to pay for the spending, its effects on future spending, and any other likely future effects — the benefits of the stimulus will end up exceeding its costs.
D’oh! I’d completely overlooked this. Thanks for pointing it out.
Edited to add: Note, though, that this is not one of the questions where the majority is overwhelming — it’s something like 60% agreement instead of the near-unanimity we’re seeing on other questions.