“52 percent of voters approved Question 1, an ordinance that puts a hard annual 3 percent cap on rent increases. It makes no allowances for inflation or exemptions for vacant apartments and new construction that are typical in other rent control policies.
The new ordinance doesn’t go into effect until May 2022. Nevertheless, several real estate companies with large projects in the works have already announced that they’re pulling their permit applications.”
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“In response to the developer freakout, freshly reelected Mayor Melvin Carter’s administration sent an email to the St. Paul City Council on Monday saying that while he supported “rent stabilization” as one necessary tool to make housing affordable, the new ordinance passed by voters could use some work.
“Allowing a reasonable return on investment is why virtually every other rent control ordinance in effect today exempts new construction,” reads the email. “The Mayor requests you consider an amendment to exempt new housing construction, which he will sign once it reaches his desk.”
That would make St. Paul’s new rent control policy more similar to those that exist in other states around the country.
Both California and Oregon, which passed statewide rent control ordinances in 2019, exempt buildings that are less than 15 years old from their price caps. New York’s long-standing rent stabilization law mostly applies to apartments built before 1974 or to newer units that received certain tax benefits.”
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“Some economists have argued that even with exemptions for new construction, rent control policies still suppress the value of new buildings and thus deter some amount of new construction.”
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“The 3 percent cap on annual rent increases is itself pretty strict. California and Oregon permit annual rent increases of 5 and 7 percent respectively. Allowable increases at rent-stabilized apartments in New York are typically much lower, and are often in the 1 to 2 percent range.
Both California and Oregon also allow landlords to factor inflation into rent increases. St. Paul’s ordinance makes no allowance for inflation, meaning that if prices rise more than 3 percent, landlords will effectively be required to lower the real rents that they charge. St. Paul’s ordinance also does not allow landlords to raise rents beyond that 3 percent cap for vacant units.
All of this could well encourage landlords to just get out of the rental market altogether and sell their properties to owner-occupiers. Rising home values in St. Paul, where prices have increased 12 percent in the last year, only make this option more attractive for landlords.
This is what happened in San Francisco where an expansion of preexisting rent controls led to a 15 percent reduction in the supply of rental housing, according to one 2018 study. That study found that incumbent tenants benefited handsomely from the limits on rent increases but that their windfall came “at the great expense of welfare losses from future inhabitants.”
Even if the city’s new ordinance is amended to exempt new construction, St. Paul renters, current and future, can expect a similar result.”
“inflation is real. The all-item consumer price index (CPI) was up more than 5 percent on a year-over-year basis for July, August, and September, and now shows a 6.2 percent increase for October—the largest jump since 1990. The Fed considers 2 percent inflation to be its bright-line monetary policy goal. Obviously, there is a large gap between that and what we are seeing on the ground.”
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“Individuals whose salaries, wages, Social Security payments, and even mortgage interest or rental rates are automatically adjusted for inflation have much less to worry about than their neighbors on fixed salaries, who must cope with ballooning grocery bills or pay twice as much at the pump. On these grounds, inflation may be devastating for some and almost meaningless for others. These gaps widen as inflation gets worse.”
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“The rate of inflation gets captured in interest rates that borrowers must pay, especially for longer-term debt. Lenders hope to be paid back with at least as much purchasing power. If they believe inflation will tick away at 4 percent, interest rates tend to rise with this baked-in expectation.
In any case, higher interest rates mean higher interest costs on all forms of public and private debt. As a result, mortgage rates will rise, all forms of construction will suffer, and businesses will postpone making large investments in plants and equipment.
Now consider the public debt—especially the federal debt that ballooned from large deficits in recent years. (In 2020, federal revenues were $3.4 trillion and spending was $6.6 trillion.) The interest cost of the national debt in 2008 was $253 billion and remained at about that level through 2015. Even though the debt doubled in those years, sharply falling interest rates and low inflation worked to contain costs.
But that was yesterday. With today’s higher inflation and rising interest rates (perhaps with more to come), the Congressional Budget Office (CBO) estimates the interest cost of public debt to be $413 billion in 2021. Obviously, any dollar spent on interest cannot be spent on government benefits and services to taxpayers.”
“If Congress fails to enshrine key climate policies as federal laws, Biden’s Plan B includes executive orders and major regulations from the Environmental Protection Agency, the New York Times reported.
The problem is that executive actions aren’t an ideal substitute for federal laws, and may last only as long as Biden’s presidency. EPA regulation also “tends to lag [behind] the technological realities,” meaning it may only modestly nudge the economy in a new direction, Jesse Jenkins, an environmental engineering professor at Princeton University, told Vox. It’s also vulnerable to intervention by the Supreme Court.”
“More than 580,000 Americans are homeless. The median sale price for a home has just surpassed $400,000. Homeownership is on the decline.
This, by all accounts, is a national emergency — and one House Democrats had proposed $330 billion to tackle as part of their Build Back Better plan. This package was both a once-in-a-generation investment and also barely enough to scratch the surface. Now, even those proposed investments are being cut down as part of negotiations over the final package.”
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“some in Congress were willing to make substantial investments, very few were willing to tackle the fundamental problem that was making homes so expensive in the first place: lack of supply.
Yes, it’s easier to try to help people afford something expensive than to try and make it less expensive to begin with. But many of the policies that try to subsidize housing can actually make it more expensive. “What you really need if you want to lower those new home prices, is you need to build more homes — and there’s not that much of that in this bill,” says Paul Williams, a fellow at the Jain Family Institute.”
“Outside experts have estimated that as much as $75 billion should be spent over 10 years on public health infrastructure, preparedness, and prevention.
The revised Build Back Better legislation totals roughly $10 billion in public health infrastructure and pandemic preparedness funding over the next few years — a down payment on better readiness, in Democrats’ view, but one without assurance of future installations.
“All too often, when there’s a crisis, the reaction is to put money into public health. Once the crisis subsides, the funding tends to dry up,” Ron Bialek, president of the Public Health Foundation, told me. “This is not a recipe for success.””
“Rising costs of entitlement programs and the interest on the debt itself are the primary reasons why the debt will keep growing. In other words, even cutting a lot of discretionary spending would have little effect on the debt at this point.
The guilty parties are, well, both parties. It was fitting that the debt hit the symbolic $1 trillion figure during Reagan’s presidency, as the Gipper ignored his own warning. Republicans have spent much of the past 40 years venerating Reagan as an icon of conservative values, including supposedly limited government. And while his successors ran up far larger amounts on the nation’s credit card, Reagan saw the government surpass not only the $1 trillion debt threshold but also the $2 trillion threshold.”
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“The guiding principle for today’s Democratic Party is the idea that debt doesn’t really matter if interest rates remain low. So long as the cost of servicing the federal debt stays below 2 percent, policymakers should not be restrained by the “traditional idea of a cyclically balanced budget,” Larry Summers, Clinton’s treasury secretary, and former Obama economic adviser Jason Furman argued in an influential paper published last year.
But the past 40 years would suggest that lawmakers have almost never been restrained by the idea of balanced budgets—a few brief interludes of fiscal sanity notwithstanding.
It took nearly two centuries for America to accumulate $1 trillion in public debt. It took 40 years to increase that amount 28 times over. If we refuse to address the breakneck speed at which America spends money it doesn’t have, how long until Clinton’s warning is realized, and that debt deals with us?
“If legislators were determined to “save lives, period, whatever it costs,” they would set the speed limit at 5 miles per hour, or perhaps ban automobiles altogether, which would prevent nearly 40,000 traffic-related deaths every year. Those policies seem reasonable only if you ignore the countervailing costs. In public policy, economist Thomas Sowell famously observed, there are no solutions; there are only tradeoffs.
“Logically,” Bourne writes, “there must be some negative consequences of government lockdowns, and some point at which they might become self-defeating.” To figure out when that might be, policy makers needed to estimate the public health payoff from lockdowns and compare it to the harm they caused.
Contrary to Cuomo’s framing of the issue, this is not a matter of weighing “the economic cost” of maintaining lockdowns against “the human cost” of lifting them, as if those categories were mutually exclusive. Even in life-and-death terms, lockdowns had a downside, since they plausibly contributed to a spike in drug-related deaths, discouraged potentially lifesaving medical care, and inflicted financial and psychological distress, neither of which is good for your health. And as Bourne emphasizes, “economic welfare” goes beyond household finances or GDP, encompassing everything people value.”
“During his early days in office, Biden seemed on track to dismantle the Trump administration’s most restrictive immigration policies. He ended the travel ban on people from mostly Muslim-majority countries, halted most new border wall construction, and reversed the “zero-tolerance policy” that enabled family separations and the “Remain in Mexico” program that kept asylum seekers waiting in Mexico for court hearings in the US. He also released an expansive reform proposal with a path to citizenship for the more than 10 million undocumented immigrants living in the US as its centerpiece.
Then, within weeks of his inauguration, record numbers of unaccompanied migrant children began arriving from Central America, and Biden’s border policies came under scrutiny from both the left and the right.
Suddenly on the defensive, the administration’s posture shifted. It reopened temporary, jail-like facilities — the same “cages” that drew condemnation in 2019 under Trump — to house migrant children. On a June trip to Guatemala, in what would become a common refrain for US officials, Vice President Kamala Harris told migrants, “Don’t come.””
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“Biden’s primary tool to manage the border has been a controversial policy that one ex-Trump official, referring to the architect of the former president’s restrictive immigration policy, called a “Stephen Miller special.”
In March 2020, at the outset of the pandemic, Trump used a special legal authority called Title 42, a section of the Public Health Service Act that allows the US government to temporarily block noncitizens from entering the US in the interest of public health. Though Centers for Disease Control and Prevention (CDC) scientists initially opposed the policy, arguing that there was no legitimate public health rationale behind it, then-Vice President Mike Pence ordered them to implement it anyway.
Under both Trump and Biden, the policy has allowed US immigration officials at the southern border to rapidly expel migrants more than 1.1 million times, without a hearing before an immigration judge. (The exact number of people expelled is unknown because many have been caught trying to cross the border multiple times.)
Even when a federal judge recently blocked the policy from being used to expel families, the Biden administration chose to appeal the ruling, and has continued (with court permission) to enforce the policy while litigation continues.
Biden has carved out some exemptions. Unaccompanied children and people subject to the “Remain in Mexico” policy under Trump are allowed to enter the US while their cases are adjudicated. The Mexican government has also refused to take back some Haitian and Central American families, who have been allowed to enter. But everyone else, including people facing real persecution and danger in their home countries or in Mexico, can be expelled.”
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“Haiti has been in a state of upheaval since at least July, when Haitian President Jovenel Moïse was assassinated and, amid the power vacuum, gang violence sharply escalated. When a magnitude 7.2 earthquake and tropical depression devastated Haiti in August, the country’s political crisis was compounded by a humanitarian one.
About 30,000 Haitian migrants arrived in Del Rio, Texas, last month, setting up a temporary encampment under the international bridge that connects the US and Mexico. There has also been a dramatic increase in Haitians attempting to cross the Caribbean by boat to reach the US. More than 1,500 such migrants were intercepted by the US Coast Guard over the last year, up from about 400 in the previous year.
Many of the Haitians seeking refuge in the US lived in Latin America for years after fleeing earlier crises in Haiti, including an even bigger 2010 earthquake. But the Covid-19 recession, racial discrimination in Latin America, the realization that going home was no longer an option, and the perception that the US would offer them humanitarian protection all played a role in their decision to move north.
At first, the Biden administration did offer protection. Mayorkas decided to extend Temporary Protected Status — typically used to enable citizens of countries that have experienced violent conflict or natural disasters to live and work in the US — for Haitians who arrived in the US prior to July 29. This offer was designed to cover those who fled the country in the aftermath of the political crisis stemming from Moïse’s killing.
At the time, Mayorkas said “serious security concerns, social unrest, an increase in human rights abuses, crippling poverty, and lack of basic resources, which are exacerbated by the COVID-19 pandemic” had made it dangerous for Haitians to return home.
But the administration maintained a strict stance toward those arriving by boat. Mayorkas said in July that any migrants intercepted off US shores will be turned back or, if they express fear of returning home, repatriated to a third country.”
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“Most of the Haitians who were staying in the camp have since been expelled. The US has sent 7,000 back to Haiti since September 19 through the Title 42 policy, despite continued turmoil on the ground. Others voluntarily returned to Mexico to avoid being sent back to Haiti or were allowed to enter the US, at least temporarily.
It’s not clear how US authorities determined which Haitians were to be expelled and which permitted to stay. Some 12,000 Haitians are currently facing deportation proceedings in which they will be able to make their case before an immigration judge for why they should be allowed to remain in the US, via asylum or other humanitarian avenues.”
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“Biden has sought to provide legal status to at least some portion of America’s more than 10 million undocumented immigrants.
He backed Democrats’ latest but so far unsuccessful attempt to include a pathway to citizenship for certain categories of immigrants — including DREAMers who came to the US as children, TPS recipients, farmworkers, and essential workers — in a budget reconciliation bill. His administration also recently published a proposed regulation seeking to codify protections for DREAMers who have been allowed to live and work in the US under the Deferred Action for Childhood Arrivals program, which is meant to guard against ongoing legal challenges.
Biden has also attempted to expand legal aid resources for immigrants and limit the reach of immigration enforcement inside the US. The administration recently launched an initiative to provide unaccompanied children facing deportation with a government-funded lawyer in eight cities across the US, and has sought to narrow the categories of undocumented immigrants who should be prioritized for arrest, issuing new US ICE guidance meant to focus resources on those who pose public safety threats. And on Tuesday, the administration ended mass worksite raids, which the Trump administration used to arrest hundreds of undocumented immigrants at once.
Such policies, Psaki said during a September 20 briefing, show that Biden remains “absolutely committed” to “putting in place long-overdue measures to fix our immigration system — to make it more moral, humane, and workable.”
But his actions on the border have told a different story: a push to improve the lives of only certain immigrants who are already integrated into American society, while keeping others out of sight and out of mind — even if that means embracing policies designed by the Trump administration.”
“There are some serious costs associated with means testing. Though they’re usually framed as ways of curbing government spending, means-tested benefits are often more expensive to provide, on average, than universal benefits, simply because of the administrative support needed to vet and process applicants.
And then there’s the burden means testing puts on those in need. Take the applications for SNAP, or food aid, for example. The most complicated state programs require individuals to meet a specific income threshold and complete certain asset tests. Individuals need to show that they don’t currently make more than 130 percent of the poverty line, or $16,744 for an individual, and have assets worth more than $2,500 (a requirement that varies based on age). According to mRelief, a nonprofit that assists SNAP recipients, the average applicant needs to either fill out a 17-page form or participate in a 90-minute interview, in addition to providing as many as 10 documents about their assets. Even the prospect of this can push people away.”
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“According to Georgetown University political scientists Pamela Herd and Don Moynihan, the administrative costs for programs like SNAP, the family assistance program known as TANF, and the Supplemental Nutritional Program for Women, Infants, and Children can range from 15 to 40 cents of each dollar of benefits distributed in the programs. That includes money used to interview people, check the documentation they provide, and ensure that their claims of need are valid.
In other words, even though the intention of means testing is to help people most in need, imposing strict qualification requirements can actually make it tougher for individuals who are eligible to get past the application process.
As Matt Bruenig writes for the People’s Policy Project, a progressive think tank, these administrative barriers have hurt uptake rates of programs like SNAP and Medicaid, none of which fully serve all the people who qualify for them”
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“Additionally, researchers have found that means testing stigmatizes people who are eligible for these programs, further reducing participation in them and fomenting biases toward low-income people.”
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“A pitfall that universal programs are able to avoid, too, is choosing a cutoff that fails to adequately estimate need. For instance, the income threshold for SNAP is $28,550 for a family of three. Because of this cap, people who make slightly more money than the cutoff are left out of the program — even if they could also use this support.”
“I document a large and mounting body of empirical research that shows that key market-based policies in health care have failed. Even if well intended, these policies have often not helped people make meaningful choices of medical care or insurance plans. And neither have they controlled spending, as experts promised.
In fact, they are doing exactly the opposite. They are setting people up to make poor choices and are scaffolding a massive, ineffective market bureaucracy.
One-third of people said they would rather file their taxes than read the terms of a health plan. And reams of studies summarized in my article affirm that people do not choose well among health insurance plan options, and these errors are hard to remedy with anything short of a strong default plan—in which case, one must ask whether “choice” even matters.
Likewise, even when people have to pay a large share of their own medical care and have easy access to price information, they still do not compare prices or choose the lowest-price options, even for services with little variation in quality. One partial explanation is that health care patients look to doctors—not price lists—to steer their care. Patients lack the desire, time, knowledge, and skills to navigate medical decisions as “consumers.”
The focus of the last several decades of health regulation has been to try to fix broken markets and flawed consumers through constant regulatory, technocratic tinkering—either to spur competition or to nudge consumers toward better choices. This tinkering has fallen short, and it has produced a massive market-based bureaucracy.
Thick layers of government regulations and regulators attempt to scaffold failing market-based policies. Plus, this scaffolding has deeply embedded private health care enterprises—with high profits and salaries—into the bureaucracy. As one example, the 2018 salary for the CEO of Blue Cross and Blue Shield of Michigan was recently reported to be $19 million, which is not an unusual sum among health care executives.
Because markets do not meaningfully enhance choice, do not avoid bureaucracy, and have certainly not solved cost problems, it is time to stop tinkering and to seek a better foundation for the next era of health policy and regulation.”
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“It is time to give up the false hope that health care markets and individual purchase decisions will produce a health care system that Americans want and, in the process, drive down spending. Policymakers have spent a half-century avoiding the hard questions about what values, objectives, and tradeoffs should guide health policy, by hoping that markets would magically answer these questions.
The reality is that the only way to build effective health policy—and, in turn, health regulation—is by engaging deeply in these hard questions and the challenging political battles they necessarily provoke.”