Thursday, September 03, 2009

Fixing the US, Sans Morality (Part I)

We recently ended the great experiment popularly called Cash for Clunkers. For those of you unfamiliar with the process, below are the basic provisions.
1. You own an old piece of crap car that gets bad gas mileage.
2. You want a new car that gets good gas mileage.
3. A couple thousand dollar subsidy by Uncle Sam will prompt you to make that new car purchase.
Evidently the program has had some success – automobile salvage workers and Asian car manufacturers have especially benefited. I briefly considered the program, but decided against it for the basic reasons below.
1. My old piece of crap car that gets bad gas mileage runs just fine.
2. I don’t want a new car.
3. Even with a government subsidy, you still are taking on many thousands of dollars in consumer debt. (Many > couple).
Anyway, I’ve been thinking of other ways to use the tremendous power of the federal government to tax and spend on behalf of THE PUBLIC GOOD. In the first installment of a two-part post, I’ll spin out some ways that the federal government can stimulate the economy, mostly in the same vein as Cash for Clunkers. In other words, prompt people to buy stuff or do things that have a positive impact on the national gross national product. In the second installment of this post, I’ll give some ways that the federal government can make itself money to close our national deficit. (I know, crazy thought that Chinese banks will one day refuse to keep buying our debt, but consider this a thought experiment).

1. Forgive Student Debt

I’ll let others make a more elegant case for forgiving student debt than me. Nutshell case – less loan payments, more consumer spending, better economy, WIN.

Here’s where I’m on board: this is an issue that young people, by and large, can get on board with and care about. Politicians have governed for too long ignoring 20-somethings, and with good reason. We don’t vote. Wide-scale student debt forgiveness may have only a marginal effect in stimulating the economy, but agitation for this policy could have larger implications. More civic participation from America’s future working class will lead to better government. For instance, picture a world where more kids have master’s degrees and we build less F-22s Raptors (no matter how badass they are). Wouldn't you rather live in that world? I would.

Ok, enough faux-seriousness – this is a blog, not reality.

2. Health Care Makeover

Yeah, I’m not touching this. Some right-wing nut job will break into my apartment and shoot me in the leg with a MAC-10.

3. Bills for B*****s and Money for Marriage

Divorce is expensive. Those going through divorce have to pay for lawyers to haggle over who gets the junk the couple has accumulated before and during marriage. Probably one or both folks hire some private investigators to get dirt on their former better-half. Costly counseling ensues after the divorce. And if kids are involved, the arms race of present giving at Christmas and birthdays kicks. Sounds like just the right environment for a couple on the cliff of marriage to get a little push into the abyss of divorce – for the sake of the economy of course.

Here’s the other half – marriage is also expensive. The cost of a wedding is huge (flowers, photographers, cakes, dresses), not just to the parties and their immediate families who pay the bill. Out of town guests have to purchase plane tickets and rent cars for the weekend. Toss in hotel bills and a gift or two and everyone’s wallets feel a little lighter by Sunday morning. Even lawyers get a piece (!) – houses get sold and the smart ones get prenuptial agreements.

So here’s the plan: give a tax break for every year a person’s marital status changes from the year before.

4. Gay Marriage Galore

Along the same vein as above, gay people have bank accounts and income too. Why should Breeders be the only ones spending money on marriage and divorce? Frankly, its pretty unfair that if (when?) I develop a crippling gambling addiction that forces my spouse to divorce me, I have to pay out of the nose in spousal support and alimony while a gay man in the same situation walks away with his Gucci man purse, his Vespa, AND the decorative sconces from Saks. UVA Law Blog readers, your new Republican party slogan – “You can listen to Fred Phelps (“Gods Hates Fags” guy) or you can have a robust economy.”

Check back tomorrow for ways the government can make money (or at least close the national deficit).

17 comments:

Rule 12 (f) said...

"give a tax break for every year a person’s marital status changes from the year before."

In most cases, the government already does this. http://en.wikipedia.org/wiki/Filing_Status_%28federal_income_tax%29#Married_Filing_Jointly

"Married filing jointly is advantageous to most couples . . ."

J. Crew Model said...

Giving one tax break for joint filing doesn't mean we can't also give a tax break for having your marital status change.

Anonymous said...

Maybe after we stop building jet fighters and everyone puts their new masters' degrees on the walls of their bedroom in their parents' house (since lord knows they won't have jobs), we can all watch Obama give yet another nationally televised address on the need for something for all these people to do. Maybe we can have a national jobs program where all these wonderfully educated do-nothings can write poetry or blogs to help enrich our economy and society.

Anonymous said...

11:20: Hey how's OCI going?

Anonymous said...

Rule12f: I very much doubt that married filing jointly is advantageous to most couples. Any truth to the statement is based on a comparison to married filing separately, not a single individual filing singly. Hence, it does not apply to the idea presented.

Anonymous said...

Hey 2:12, how's your first week of fed income tax going? Looks like the answer is not so great...

Anonymous said...

2:12 here,

It does seem to be beneficial to more couples than not; I just tend to read "most" as meaning more of a super-majority than a simple majority.

From the Congressional Budget Office (written in 1997, but probably not too far off from current numbers):

"[H]usbands and wives with similar incomes usually incur a larger combined tax liability than they would if they could file individually. At the same time, spouses who have markedly different incomes but file as a couple generally face smaller tax bills than they would if they were single."

"Although there are various ways of defining marriage penalties and bonuses, one broad measure indicates that more than 21 million married couples paid an average of nearly $1,400 in additional taxes in 1996 because they must file jointly, whereas another 25 million found that the benefits of filing jointly decrease their tax bills by an average of about $1,300."

[both from http://www.cbo.gov/doc.cfm?index=7&type=0&sequence=2]

In sum, two married individuals with similar incomes do face a penalty for being married, while couples with disparity in incomes tend to benefit. My mistake was just in not expecting as high a number of provider/dependent marriages as there seems to be.

2:37: How cute of you.

Rule12f: I guess your citation link got cut off, but I cannot find the line that you quoted in the Wikipedia link as it appears...

Rule 12 (f) said...

Key: "with similar incomes". For most couples this is not the case. (In fact, there still exists today - sadly - a wide disparity in the incomes of men and women across the board). This is further augmented by the fact that after marriage one spouse often stops working or stops working as much (it doesn't matter which).

Anonymous said...

In UVA Law Blog land most = majority.

Anonymous said...

12(f), please keep the callbacks posting at the top. Nobody cares about this other crap. If you don't believe me, how has your hit-count been the last 3 weeks compared to the previous 9 months?

Anonymous said...

Hey, 4:24

Quit complaining and start your own blog with the callbacks posting at the top.

Or, ask nicely.

Either way, grow up.

Anonymous said...

Kudos Rule 12(f). As much as quoting CBO might get 2:12 off (in a decidedly lame, gunner fashion), the reality is, the marriage penalty realistically affects a relatively small portion of the American public - namely, "strong" middle class (MTR 25-28%) where both partners make near identical wages.

2:12, you're cute, too. In a kind of dumb way. Call me.

Anonymous said...

ITT: UVa students show why they're in the Final Four for douchiest law school.

Anonymous said...

11:08 is correct.

Anonymous said...

titcr brah

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