Wednesday, September 13, 2017

Are DREAMers Net Contributors?

People often claim that "DREAMers," aka DACA recipients, are a boost to the economy. The Center for American Progress (CAP) says that deporting DACA recipients will cost $433.4 billion over ten years, and CATO says $283 billion.

The problem, however, is the lack of context. What does this actually mean per capita? Well, let's do some back-of-the-envelope calculations.

According to Trading Economics, U.S. GDP in 2016 was $18,569.1 billion dollars. We will assume a modest 3% growth rate in the future.
I say this is modest because the average annual growth from 2009 to 2016 was 3.68%. I calculated this by taking the overall growth over 7 years (18569.10 divided by 14418.74 equals 1.2878 or 28.78% growth over 7 years) and taking the 7th root (1.2878^(1/7) = 1.0368 or 3.68% growth per year).

Under this assumption, the GDPs for 2017 will be $19126.17 billion and the GDPs for the next ten years will be:
2018 19699.96
2019 20290.96
2020 20899.69
2021 21526.68
2022 22172.48
2023 22837.65
2024 23522.78
2025 24228.46
2026 24955.32
2027 25703.98
The total GDP for the decade 2018 to 2027 will be $225,837.94 billion, or approximately $226 trillion.

According to Wikipedia, the U.S. Population in 2017 is estimated at 325,365,189. Assuming a growth rate similar to that of 2000-2010, let's say the the population will be 10% bigger in 2027. That would bring it to about 358 million. This includes everyone, children, the elderly, the unemployed.

The number of DACA recipients is estimated at 800,000. The CAP study is based on 741,546 people leaving (645,145 of whom are workers). The Cato study is based on an estimate of 750,000 people. That comes out to between .207 and .2095 percent of the U.S. population. Using the lower number, .207 per cent of the GDP for 2018-2027 is $467.8 billion.

In other words, unless the contributions of DACA recipients are more than $467.8 billion over ten years, they are actually reducing per capita GDP. And remember, this is using the population figure for the end of the period and assuming modest economic growth, both of which would tend to make the per capita GDP smaller and therefore make the DACA recipients' contributions look bigger in comparison. And of course, this is not counting how much collateral population growth letting DACA recipients stay versus deporting them will create - if half of DACA recipients have one kid (who won't be contributing economically at all for at least about fifteen years), that would mean that DREAMers would have to make $701.7 billion to keep per capita GDP flat.

The point is, getting rid of the DACA recipients would reduce the size of the overall U.S. economic pie, but it would reduce the number of people eating the pie by a greater percentage. Most of the discussions of the "economic benefits" or immigration tend to act as if the immigrants simply produce value for the native population without consuming anything.

Now this analysis does not conclusively show that there is no economic benefit to Americans from DACA recipients - that would depend on how much of the recipients' productivity is consumed by the recipients themselves. However, they would have to consume less than the average American for there to be any surplus at all, and perhaps significantly less if the CATO rather than the CAP study is correct. Then there is the issue of how the surplus is distributed, and whether there are winners and losers in the system. And all of this is assuming that economics is the only measure here.

In short, the benefits of allowing DACA recipients to stay are greatly exaggerated and may not exist at all. Don't let economists use half-calculated figures and incomplete statistics to trick you.

That is all.

Sunday, September 03, 2017

Friday, July 28, 2017

A Thought on How to Deal with Pre-Existing Conditions in the Individual Markets

It occurred to me, if the big issue with health care is how to deal with people with pre-existing conditions, would it not make more sense to develop a subsidy system for insurance and to let insurers do more actuarial pricing?

Note: This is about how to deal with the biggest Obamacare problem, the individual markets that are encountering a huge rise in prices, and is not an attempt to solve other issues that have arisen.
Essentially, what we have now is partial community rating. In real terms, that's like putting a head tax on insurance for healthy people. If we are going to subsidize health insurance for people who are too expensive to insure on the market, would it not make more sense to do it out of income tax revenue?

Put another way, why not subsidize insurance prices at varying rates as percentage of income? For example, you have to pay your premiums up to the first 12% of your income (I choose that figure because it amounts to 1% of annual income a month, the actual numbers could be different), then get, say, a 50% subsidy for the next 12%, an 80% subsidy for the next 12%, 90% for the next 12%, 99% for the next 12%, and 99.9% beyond that?

For someone making an adjusted gross income of $50,000 a year, this is what they would pay out for various monthly premiums:

$ 500.00.......$500.00

For someone making an adjusted gross income of $100,000 a year, this is what they would pay out for various monthly premiums:

$ 500.00........$500.00

We could avoid the issue of mandated coverage raising prices by allowing insurance companies to set rates actuarially, because then if you truly did not need coverage you would pay very little for it; i.e. a 55-year-old childless woman would still have to get pediatric dental, but due to the fact that very few 55-year-old women would need it, it would only add 25 cents a month to her bill. Without community rating, much of the "coverage I don't need" issue would become moot.

We could also avoid the issue of companies trying to make money off of the subsidies by overcharging (hey, the customer will pay $1000 more a month if he gets $999 back) by giving the full subsidy only to the cheapest plan (if you get a more expensive plan you have to pay, e.g., the greater of your basic subsidy, or your basic subsidy for the cheapest plan plus 20% of the difference between plans. This would encourage price competition.

This could be paid for in a variety or ways, either using existing tax revenue, raising income taxes, or putting on a special income tax (like we have for Medicare).

The advantages are that we would not be taxing health, and the subsidies would be less for those who could most afford not to have them, as opposed to the current system where a person making, say, 5 times the poverty level (i.e. not eligible for official subsidies) could easily be subsidizing a sicker person who is making 10 or 20 times the poverty level. We would get better risk pools if we were able to charge healthy people less.

That is all.

Thursday, June 29, 2017

Why Feminists Insist Rape is not About Sex

From a comment at the Anonymous Conservative Blog:

Have you ever wondered why feminists insist that “rape is an act of violence, not sex”, when it most definitely and obviously is an act of sex?

Because feminism is sexual Marxism, the belief that women need, and are therefore entitled to, surplus resources produced by men. The inverse implication, that men need, and are therefore entitled to, sex with women, is avoided by insisting that sex is actually not sex, but violence.

That is all.

Friday, June 09, 2017

Do You Think Jews are White? I Will Guess Your Answer After You Answer These Questions.

(1) Do you generally sympathize with Jews as a group or not?

(2) Do you generally sympathize with whites as a group or not?

If you answered the same to both (1) and (2) then you think Jews are white.

If you answered differently, then you don't.

If your answers are nuanced, the more different your answers to (1) and (2) are, the less you think of Jews as white.

Note: Obviously I am talking about Jews in an ethnic sense here. No one thinks Sammy Davis Jr. is white.

That is all.

Wednesday, June 07, 2017

The Problem with Rod Dreher

I think Rod Dreher's biggest flaw as a commentator is his earnest desire to be the sort of conservative whom the New York Times ought to find respectable. Not that he is deluded that the left MSM would ever consider him such, but he wants to be able to say "if they were intellectually honest, they would consider me to be a fellow journalist in good standing."

That is all.
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