"Going Dutch"

This article by Russell Shorto (author of The Island at the Center of the World and Descartes' Bones) is a relaxed examination of the similarities and differences between the American and the Dutch social welfare systems. This is not a number-filled article, but rather a straightforward discussion of some of the pros and cons of both the Dutch and American systems. Shorto also discusses the cultural roots of the two systems and the historical forces that shaped the trends of each system.

One of the interesting points raised in the article:

This points up something that seems to be overlooked when Americans dismiss European-style social-welfare systems: they are not necessarily state-run or state-financed. Rather, these societies have chosen to combine the various entities that play a role in social well-being — individuals, corporations, government, nongovernmental entities like unions and churches — in different ways, in an effort to balance individual freedom and overall social security.

And, a hilarious summary of the Dutch personality:

'If you tell a Dutch person you’re going to raise his taxes by 500 euros and that it will go to help the poor, he’ll say O.K.,' [an American expatriate] said. 'But if you say he’s going to get a 500-euro tax cut, with the idea that he will give it to the poor, he won’t do it. The Dutch don’t do such things on their own. They believe they should be handled by the system. To an American, that’s a lack of individual initiative.'

That's a lot of money

Christopher Buckley, or C-Buckz, as I'm tempted to call him (just kidding, although that really makes me wish he'd marry Star Jones so she could be Star-Buckz - sorry, it's been a long week) has an article at the Beast trying to put a handle on how much the $1.2 trillion dollar deficit really is. And while I like what he does, he's taking a macro approach, and before I had read it I was already planning on taking more of a micro approach.

Let's start with Bernie Madoff. One fraud case, 50 billion dollars. That's a lot of money. A whole lot. It averages out to about $170 for every man, woman, and child in America.

Now, you didn't lose $170 in the Madoff fraud case, which you're probably pretty happy about. And that makes you like most Americans - almost all of them in fact. But for every American who didn't get ripped off by Madoff, that means that one of them who did lost an extra 170 bucks. Put another way, if you put all Americans on one side of a giant room with a big line down the middle, then for every single person that got to cross the line to the "didn't invest" side, some investor would have to pay $170. Just think about how long that would take ...

Now think about the stimulus. The tax rebate stimulus in early 2008 was $150 billion. Then TARP was $700 billion. Now Obama proposes another $825 billion. That adds up to $1.675 trillion (Just for fun: $1,675,000,000,000) There are 138 million taxpayers in the United States, so this amounts to $12,140 per taxpayer. That's incredible! Essentially, the federal government is forcing taxpayers to band together and go into (an additional!) $12,140 worth of collective debt each (albeit at a low interest rate, and of course the burden is not evenly distributed).

The entirety of the debt when Clinton left office was under $6 trillion. It's now over $10 trillion with $1 trillion deficits projected indefinitely. And we haven't even gotten to Social Security et al yet.

My Plea to President Obama

Mr. President-Elect,

We are clearly in difficult times. This is no secret. What is of note is the number of problems we face whose solutions are clear but unpopular. Now may not be the time to make tax cuts more progressive. Defense spending must be slashed (or shifted to defense). Medicare, Medicaid, and Social Security all pose huge problems into the future.

I don't feel like there would be major disagreement on how to handle these problems if you got a bunch of big-name economists together and had them craft the ideal solutions. What such solutions would be, however, is wildly unpopular.

But you have a unique opportunity. You have a decisive majority in Congress and could still reach 60 seats in the Senate. And you're young. Like, super young.

So do what we need done. Do what's not popular. Solve our crises. The worst case scenario is that you lose the election in 2012. But that's cool. Like I've said before, you could go chill in the Senate for 20 more years, and run in 2032 still younger than John McCain is now. Even if it costs you the next election, do what we need done.

Unless Sarah Palin wins the nomination.