Why subsidize retirement saving if the subsidies don't work?
Imagine there were no 401(k)s. You wouldn't stop saving for retirement, right? Right? Don't worry, I won't tell Suze Orman. Not that CNBC's personal finance guru would get mad at you -- according to a new paper, most households wouldn't sock away any less for their golden years if we eliminated 401(k)s. Which raises a $100 billion question...
Why subsidize retirement saving if the subsidies don't work?
As far as tax expenditures go, the one for retirement savings is a biggie. Remember, "tax expenditure" is just econospeak for the various deductions, exclusions, and preferential rates -- in other words, subsidies -- that litter the tax code. According to the Congressional Budget Office (CBO), excluding pension contributions and earnings from taxes will cost us about 1.2 percent of GDP over the next decade, or an average of $240 billion a year. That's a lot of spending -- that's what tax expenditures are, just disguised spending -- without much bang for the buck. Maybe just a penny's worth.
In fact, one penny's worth is exactly how much extra saving a dollar's worth of retirement subsidies produced in Denmark, according to the recent paper by Raj Chetty and John N. Friedman of Harvard, Soren Leth-Petersen and Tore Olsen of the University of Copenhagen, and Torben Heien Nielsen of the Danish National Centre for Social Research. In other words, we might be spending $240 billion to get people to save $2.4 billion more.
But don't the trillions of dollars in 401(k) accounts tell a different story? Not necessarily. There isn't enough data for the U.S., but Chetty et. al. looked at the numbers for Denmark, which has accounts similar to our 401(k)s, to examine how much more incentives to save get us to save. The first chart shows how much households contributed to tax-preferred accounts after subsidies increased and the second chart shows how much they contributed to non-tax-preferred accounts, again after subsidies increased. It's a bit hard to see, but the decrease in the latter almost completely offsets the increase in the former -- households saved an average of 1 cent more.
Households save where the subsidy is, but don't save more because of the subsidy. It turns out the best way to get households to save more is ... to make them save more. In other words, automatically take a percentage of each person's paycheck and put it in a retirement account, as a default. If this sounds familiar, it's because that's how the payroll tax works -- except it's how you think the payroll tax works now. There's a misconception that the money the government withholds from you every month ends up in an account with your name on it that eventually becomes your Social Security benefits. It doesn't. The money the government withholds every month pays for current retirees, which is why the system needs some kind of tweak over the next few decades as the Boomers retire.
A system of forced, or nudged, saving wouldn't replace this social insurance, but rather the wasteful dinosaur that is the 401(k). It's mostly the well-off, who have retirement savings to move around, who move their savings to where the subsidies are. The 401(k) doesn't do much if your goal is to get people who don't save much to save more, and it doesn't do this at quite the cost.
We need Suze to tell Congress that we can't afford it.
For decades the Man of Steel has failed to find his groove, thanks to a continual misunderstanding of his strengths.
Superman should be invincible. Since his car-smashing debut in 1938, he’s starred in at least one regular monthly comic, three blockbuster films, and four television shows. His crest is recognized across the globe, his supporting cast is legendary, and anybody even vaguely familiar with comics can recount the broad strokes of his origin. (The writer Grant Morrison accomplished it in eight words: “Doomed Planet. Desperate Scientists. Last Hope. Kindly Couple.”) He’s the first of the superheroes, a genre that’s grown into a modern mass-media juggernaut.
And yet, for a character who gains his power from the light of the sun, Superman is curiously eclipsed by other heroes. According to numbers provided by Diamond Distributors, the long-running Superman comic sold only 55,000 copies a month in 2015, down from around 70,000 in 2010—a mediocre showing even for the famously anemic comic-book market. That’s significantly less than his colleague Batman, who last year moved issues at a comparatively brisk 150,000 a month. Mass media hasn’t been much kinder: The longest-running Superman television show, 2001’s Smallville, kept him out of his iconic suit for a decade. Superman Returns recouped its budget at the box office, but proved mostly forgettable.2013’s Man of Steel drew sharp criticism from critics and audiences alike for its bleak tone and rampaging finale. Trailers for the sequel, Batman v Superman: Dawn of Justice, have shifted the focus (and top billing) to the Dark Knight. Worst of all, conventional wisdom puts the blame on Superman himself. He’s boring, people say; he’s unrelatable, nothing like the Marvel characters dominating the sales charts and the box office. More than anything, he seems embarrassing. Look at him. Truth? Justice? He wears his underwear on the outside.
The Denver Broncos beat the Carolina Panthers, but neither Peyton Manning nor Cam Newton seemed able to prove their worth.
Now more than ever, the NFL is all about the quarterbacks. The buildup to Super Bowl 50 proved no exception: In the two weeks prior to Sunday night’s game in Santa Clara, the national conversation largely centered on the signal-callers, whose styles of play and off-field personas were pored over in every manner imaginable by an army of reporters and analysts. The game’s two possible outcomes were pre-cast as career-defining triumphs for the passers. If the Denver Broncos won, it would be a rousing sendoff for the potentially retiring all-time great Peyton Manning. If the Carolina Panthers won, it would be a coronation for Cam Newton, this season’s Most Valuable Player.
The Broncos beat the Panthers, 24-10, but the game featured none of the displays of virtuosity fans of Manning or Newton might have hoped for. It was a plodding, mistake-riddled affair, all stuffed runs and stalled drives. Maybe the most miraculous thing about the game was that it ended at all; it seemed for a time that it might simply give out somewhere along the way, leaving the Denver and Carolina players to wander around Levi’s Stadium until the resumption of football next fall.
Black poverty is fundamentally distinct from white poverty—and so cannot be addressed without grappling with racism.
There have been number of useful entries in the weeks since Senator Bernie Sanders declared himself against reparations. Perhaps the most clarifying comes from Cedric Johnson in a piece entitled, “An Open Letter To Ta-Nehisi Coates And The Liberals Who Love Him.” Johnson’s essay offers those of us interested in the problem of white supremacy and the question of economic class the chance to tease out how, and where, these two problems intersect. In Johnson’s rendition, racism, in of itself, holds limited explanatory power when looking at the socio-economic problems which beset African Americans. “We continue to reach for old modes of analysis in the face of a changed world,” writes Johnson. “One where blackness is still derogated but anti-black racism is not the principal determinant of material conditions and economic mobility for many African Americans.”
Immediately, the pings from fellow journalists (and media-adjacent folk) came pouring in, all saying something along the lines of, “Can you actually let me know what you find out? I’m addicted to that stuff.”
They mean “addicted” in the jokey, dark-chocolate-and-Netflix-streaming way, but the habit can border on pathological. For me, rock bottom was a recent, obscenely long workday during which an entire 12-pack of coconut La Croix somehow made it down my throat, can by shining can.
The charismatic senator’s candidacy was flying high—until he hit turbulence at Saturday’s debate. Will it stall his surge?
MANCHESTER, New Hampshire—Until Saturday’s debate, it was clear that this was Marco Rubio’s moment.
The moment he had waited for, planned for, anticipated for months, for years: It was happening. He had surged into a strong third-place finish in Iowa, outpacing the polls and nearly passing second-place Donald Trump. He’d ridden into New Hampshire on a full head of steam, drawing bigger and bigger crowds at every stop, ticking steadily up into second in most polls, behind the still-dominant Trump. The other candidates were training their fire on him, hoping to stop the golden boy in his tracks.
And then, in the debate, he faced the test he knew was imminent. They came right at him. First it was the moderator, David Muir of ABC News, leveling the accusation put forth by his rivals: that Rubio was merely a good talker with nothing to show for it, just like another eloquent, inexperienced young senator, Barack Obama.
Will the Democratic Party nominate a candidate who hasn’t been a member of their party, and who has long denounced it?
When a party chooses its presidential candidate, it also chooses its party leader in the election. This year the Democrats face an unusual situation. Bernie Sanders isn’t just an outsider to the party establishment; he’s not even been a member of the party, and has long excoriated it in unsparing language. Although the media haven’t much focused on this history, the early signs suggest it could become a problem for Sanders in getting the nomination—and a problem for the party if he does get it.
According to the entrance polls at the Iowa caucuses, there was a 30-percentage-point split between self-identified Democrats and independents in their support for Sanders. Hillary Clinton won 56 percent of self-identified Democrats but only 26 percent of independents, while Sanders won only 39 percent of Democrats but 69 percent of independents.
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
Thenew Daily Show host, Trevor Noah, is smooth and charming, but he hasn’t found his edge.
It’s a psychic law of the American workplace: By the time you give your notice, you’ve already left. You’ve checked out, and for the days or weeks that remain, a kind of placeholder-you, a you-cipher, will be doing your job. It’s a law that applies equally to dog walkers, accountants, and spoof TV anchormen. Jon Stewart announced that he was quitting The Daily Show in February 2015, but he stuck around until early August, and those last months had a restless, frazzled, long-lingering feel. A smell of ashes was in the air. The host himself suddenly looked quite old: beaky, pique-y, hollow-cheeky. For 16 years he had shaken his bells, jumped and jangled in his little host’s chair, the only man on TV who could caper while sitting behind a desk. Flash back to his first episode as the Daily Show host, succeeding Craig Kilborn: January 11, 1999, Stewart with floppy, luscious black hair, twitching in a new suit (“I feel like this is my bar mitzvah … I have a rash like you wouldn’t believe.”) while he interviews Michael J. Fox.
Hillary Clinton’s realistic attitude is the only thing that can effect change in today’s political climate.
Bernie Sanders and Ted Cruz have something in common. Both have an electoral strategy predicated on the ability of a purist candidate to revolutionize the electorate—bringing droves of chronic non-voters to the polls because at last they have a choice, not an echo—and along the way transforming the political system. Sanders can point to his large crowds and impressive, even astonishing, success at tapping into a small-donor base that exceeds, in breadth and depth, the remarkable one built in 2008 by Barack Obama. Cruz points to his extraordinarily sophisticated voter-identification operation, one that certainly seemed to do the trick in Iowa.
But is there any real evidence that there is a hidden “sleeper cell” of potential voters who are waiting for the signal to emerge and transform the electorate? No. Small-donor contributions are meaningful and a sign of underlying enthusiasm among a slice of the electorate, but they represent a tiny sliver even of that slice; Ron Paul’s success at fundraising (and his big crowds at rallies) misled many analysts into believing that he would make a strong showing in Republican primaries when he ran for president. He flopped.
What happened when 11 exiles armed themselves for a violent night in the Gambia
In the dark hours of the morning on December 30, 2014, eight men gathered in a graveyard a mile down the road from the official residence of Yahya Jammeh, the president of the Gambia. The State House overlooks the Atlantic Ocean from the capital city of Banjul, on an island at the mouth of the Gambia River. It was built in the 1820s and served as the governor’s mansion through the end of British colonialism, in 1965. Trees and high walls separate the house from the road, obscuring any light inside.
The men were dressed in boots and dark pants, and as two of them stood guard, the rest donned Kevlar helmets and leather gloves, strapped on body armor and CamelBaks, and loaded their guns. Their plan was to storm the presidential compound, win over the military, and install their own civilian leader. They hoped to gain control of the country by New Year’s Day.