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.
Many point to unromantic 20-somethings and women’s entry into the workforce, but an overlooked factor is the trouble young men have in finding steady, well-paid jobs.
TOKYO—Japan’s population is shrinking. For the first time since the government started keeping track more than a century ago, there were fewer than 1 million births last year, as the country’s population fell by more than 300,000 people. The blame has long been put on Japan’s young people, who are accused of not having enough sex, and on women, who, the narrative goes, put their careers before thoughts of getting married and having a family.
But there’s another, simpler explanation for the country’s low birth rate, one that has implications for the U.S.: Japan’s birth rate may be falling because there are fewer good opportunities for young people, and especially men, in the country’s economy. In a country where men are still widely expected to be breadwinners and support families, a lack of good jobs may be creating a class of men who don’t marry and have children because they—and their potential partners—know they can’t afford to.
The president also angrily lashed out at the media and his critics.
President Trump lashed out at the media in a Saturday morning tweetstorm, insisting his authority to issue pardons is “complete” and expressing frustration over stories that revealed Attorney General Jeff Sessions may have lied about his contacts with Russian officials during the 2016 campaign.
“A new INTELLIGENCE LEAK from the Amazon Washington Post, this time against A.G. Jeff Sessions. These illegal leaks, like Comey’s, must stop!” the president tweeted, following up by stating that “While all agree the U. S. President has the complete power to pardon, why think of that when only crime so far is LEAKS against us. FAKE NEWS.”
The tacit acknowledgement the president has been thinking about his pardon power in relation to the Russia investigation, and the qualification that no crimes but leaks had been revealed “so far” raised eyebrows among media observers.
On Flower Boy the rapper suggests he’s not straight—and struggles with a stigma he helped propagate.
Tyler, the Creator became famous, in part, for being hateful. When his rap collective Odd Future Wolf Gang Kill Them All (“Odd Future” is fine) caught buzz around 2010, it was because of their delirious energy and Eminem-like love of mayhem. But it was their threats against women and “faggots,” delivered in song and on social media, that elevated them from subculture phenomenon to become essay prompt and political flashpoint. The likes of GLAAD and the band Tegan and Sara declared Tyler poisonous and asked the music industry to stop supporting him. Theresa May, back when she was home secretary of the U.K., took the extraordinary step of banning him from her country because his lyrics “encourage violence and intolerance of homosexuality.”
Biology textbooks tell us that lichens are alliances between two organisms—a fungus and an alga. They are wrong.
In 1995, if you had told Toby Spribille that he’d eventually overthrow a scientific idea that’s been the stuff of textbooks for 150 years, he would have laughed at you. Back then, his life seemed constrained to a very different path. He was raised in a Montana trailer park, and home-schooled by what he now describes as a “fundamentalist cult.” At a young age, he fell in love with science, but had no way of feeding that love. He longed to break away from his roots and get a proper education.
At 19, he got a job at a local forestry service. Within a few years, he had earned enough to leave home. His meager savings and non-existent grades meant that no American university would take him, so Spribille looked to Europe.
The Senate parliamentarian’s rejection of important provisions of the GOP’s Obamacare repeal bill puts its status in further jeopardy.
On Friday, Senate Democrats released a list of provisions in the Republican health-care bill that the Senate parliamentarian holds can pass via a simple, filibuster-proof majority vote. Among those provisions that didn’t meet her scrutiny are the bill’s plans to defund Planned Parenthood, restrict tax-credit funding for insurance plans that provide abortions, and a six-month “lockout” period from purchasing insurance for people who don’t maintain continuous coverage.
If this preliminary guidance holds, the Better Care Reconciliation Act—which is already in dire straits—seems likely to fail.
The final assessment of the parliamentarian, Elizabeth MacDonough, is a critical step in the GOP’s strategy for passing their bill to repeal and replace Obamacare. Republicans have opted to pass their health-care legislation via the special reconciliation process, under which they can cut debate short in the Senate and thus eliminate indefinite filibusters, which Democrats would certainly use in order to block any attempt to repeal Obamacare. But bills have to follow a certain procedure—called the Byrd Rule—in order to pass by reconciliation.
Epic yet intimate, the director's new war film is boldly experimental and visually stunning.
What is Dunkirk?
The answer is more complicated than one might imagine. Director Christopher Nolan’s latest is a war film, of course, yet one in which the enemy scarcely makes an appearance. It is a $150 million epic, yet also as lean and spare as a haiku, three brief, almost wordless strands of narrative woven together in a mere 106 minutes of running time. It is classic in its themes—honor, duty, the horror of war—yet simultaneously Nolan’s most radical experiment since Memento. And for all these reasons, it is a masterpiece.
The historical moment captured by the film ascended long ago to the level of martial lore: In May 1940, in the early days of World War II, some 400,000 British and Allied troops were flanked and entrapped by Germany on the beaches of Dunkirk in northern France. Although the Channel was narrow enough that the men could almost see across to England, the waters were too shallow for warships to approach the beaches. So a flotilla of some 700 civilian craft—the “Little Ships of Dunkirk”—made their way from Ramsgate in England to assist in the rescue.
One story that should not slip underneath the radar, however, is a report that the Trump administration has apparently entrusted a small group at the White House to undermine the Iran nuclear accords over the objections of the Departments of State and Defense.
The news says a lot about two very narrow ways in which the administration sees not only Iran but the greater world. First, some members of the administration have failed to see the admittedly very real challenges presented by Iran outside the binary U.S.-Iranian contest for influence in the Middle East. Second, and most importantly, some members of the administration still do not understand that much of what the United States has been able to accomplish over the past two decades has been achieved through coalitions that could actively resist U.S. efforts to roll back those accomplishments.
The White House is threatening the special counsel and trying to dig up dirt on him, and the prospect that the president will try to fire him now seems very real.
The idea that Donald Trump might fire—or try to fire—Special Counsel Robert Mueller has bubbled up enough times to seem possible, but still improbable. For one thing (as Reince Priebus and Sean Spicer, among others, can attest) press reports that this president might fire someone are frequently wrong. For another, it seemed that even Trump was prudent enough to avoid making the mistake that ended Richard Nixon’s presidency.
Yet Trump has a knack for making the wildly implausible suddenly imminent. In the last 36 hours, the idea of Mueller being fired—and the political crisis it would likely set off—has become distinctly real. In an interview with The New York Times, Trump all but said he would fire Mueller if his investigation went into places Trump didn’t like. Since then, several reports have suggested that Trump’s defense strategy, as investigations probe deeper into his life and administration, is to attack Mueller and attempt to discredit him. Increasingly, the operative question seems not to be whether Trump will try to fire Mueller, but when he will do so and what will push him over the edge.
The transcript of the president’s conversation with The New York Times throws his shortcomings into greater relief than ever before.
“Now Donald Trump has finally done it” is a sentence many people have said or written, but which has never yet proven true. As Trump gained momentum during the campaign season, errors that on their own would have stopped or badly damaged previous candidates bounced right off.
These ranged from mocking John McCain as a loser (because “I like people who weren’t captured”), to being stumped by the term “nuclear triad” (the weapons of mass destruction that he as U.S. president now controls), to “when you’re a star ... you can grab ‘em by the pussy” (my onetime employer Jimmy Carter had to spend days in the 1976 campaign explaining away his admission to Playboy that he had sometimes felt “lust in the heart”), to being labelled by an in-party opponent a “pathological liar,” “utterly amoral,” and “a narcissist at a level I don't think this country's ever seen” (the words of his now-supporter Ted Cruz). I kept my list of 152 such moments in the Time Capsule series as the campaign went on.
The choice of the former hedge funder and ardent Trump loyalist reflected longstanding dissatisfaction with Press Secretary Sean Spicer.
The Scaramucci revolution was televised.
After months of chatter that his job was on the chopping block, White House Press Secretary Sean Spicer finally exited stage right on Friday after financier, donor and TV talking head Anthony Scaramucci was given the job of White House communications director, which had been vacant since the departure of Mike Dubke in May. Spicer resigned in opposition to the move.
The incident brought simmering conflicts inside the White House to a boil and pitted top advisers against each other in a last-minute effort on the part of some of them to stymie the appointment of Scaramucci, known as “The Mooch,” who had refashioned himself as an ardent Trump supporter during the campaign and had been left in limbo during the early days of the administration after not getting a promised job.