“At the end of 2021, not quite a year into Joe Biden’s presidency, something unusual happened: Congress actually allowed a massive government program to expire. That program was the expanded child tax credit, which had been enacted as a temporary program under the American Rescue Plan (ARP), a roughly $2 trillion spending package passed exclusively with Democratic votes in March 2021.
A year after the expansion expired, however, Democrats began looking for ways to bring it back. The cost of doing that would be very high.
The ARP raised the maximum child tax credit from $2,000 to $3,600 per child for families making up to $150,000 a year. The one-year program made the credit fully refundable, meaning that people would qualify for it even if they owed no income taxes. That change expanded the benefit to millions of households that previously had earned too little to qualify.
The ARP also turned what had been an annual lump sum around tax season into a monthly payment that in many cases was directly deposited into parents’ bank accounts. In effect, the law set up a program of monthly checks, sent directly to the bank accounts of most families.
Although the program was initially designed as a one-year expansion, supporters hoped it would become permanent. As The New York Times reported in January 2022, the benefit “was never intended to be temporary,” and “many progressives hoped that the payments, once started, would prove too popular to stop.”
Yet at the end of the program’s first year, after paying out about $80 billion, Congress declined to extend the program. Even with Democrats in control of both the House and the Senate, there simply weren’t enough votes to keep it going. Sen. Joe Manchin, the moderate Democratic senator from West Virginia, was vocally opposed, citing cost concerns and warning that the expanded eligibility would subsidize unemployment. Progressive ambitions were foiled”
“”We find that excess inflation is significantly correlated to each country’s own domestic stimulus and to various exposures of foreign stimulus,” concluded a trio of economists at the St. Louis Federal Reserve in a report published last month. In the U.S., they found that “fiscal stimulus during the pandemic contributed to an increase in inflation of about 2.6 percentage points.”
That’s a significant increase, even if it doesn’t account for the full run-up of inflation that took place during the past 18 months. Price increases accelerated in late 2021 and throughout 2022, ultimately peaking at an annualized rate of 9.1 percent in June.
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“Other recent reviews of COVID-era stimulus bills have come to a similar conclusion. In a paper published in September, economists at Johns Hopkins University and the Chicago Federal Reserve said “fiscal inflation” accounted for “approximately half” of the recent price increases.
That’s troubling, they added, because “fiscal inflation tends to be highly
persistent…When inflation has a fiscal nature, monetary policy alone may not provide an effective response.”
So far, the chief response to inflation has been a monetary one.””
“Total births and the general fertility rate in the US have fallen significantly over the past 15 years. While 2021 saw a 1 percent increase in births from the year before — the likely result of planned pregnancies postponed during the first difficult year of the pandemic, plus the reproductive benefits of remote work — that number was still more than half a million fewer than the US peak in 2007. The total fertility rate — the number of children women are projected to give birth to over the course of their lifetimes — stood at 1.67, well below the point needed to replace the population through reproduction alone. Nearly one in six Americans 55 and over is childless, a percentage that is only expected to grow. Without the boost of immigration, the US population growth rate would have essentially flatlined in recent years, and even with it, it grew by just 0.4 percent in 2022, among the lowest rates in the nation’s history.”
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“America has room for more children; it needs them to thrive; and most of all, people do want the freedom to choose the family sizes they desire, including larger ones. It’s a future that progressives can — and should — help create.”
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” while it’s true that a child born today will be responsible for adding more carbon into the atmosphere, that 60-metric-ton figure was derived from work by researchers in 2009 who added up not just the lifetime emissions of the child, but dwindling portions of the lifetime emissions of that child’s descendants, all the way until 2400 — and making all of that the responsibility of the parents. And that number assumes that the world will make no additional progress in decarbonizing the global economy, which already isn’t true. In a rich country like the US, a baby born today will emit less CO2 on average over the course of their lifetime than their parents did; according to the International Energy Agency, if the world achieves carbon neutrality by 2050, the carbon footprint of those New Year’s babies could be 10 times smaller than that of their grandparents.”
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“As for those fears that having a child would doom them to life in a hot hellscape, the world now appears to be on a path to dodge the worst-case climate scenarios. This isn’t to minimize the very real suffering that will be unavoidable thanks to warming, especially in poorer countries, but a child born today almost anywhere around the world has a better chance of living a good, long life than at almost any other time in the whole of human history.”
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“an aging country is one that will have a dwindling number of young workers to support a growing number of elderly. Today there are around three and a half working-age adults to support every American eligible for Social Security. By 2060, that is projected to fall to two and a half workers for every retiree. Social Security isn’t a Ponzi scheme, but without enough young workers putting in payroll taxes, it can’t continue in its current form.”
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“A study of 33 OECD nations between 1960 and 2012 found that while countries can remain inventive even as they age, rates of innovation eventually begin to stagnate and decline. As a 44-year-old it pains me to say this, but creativity is a quality most concentrated in the young.”
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“The average cost of child care in the US now exceeds $10,000 a year. That’s an enormous burden for working- and middle-class families, but it also discourages people who would have more children from doing so. Reducing the cost of care is one of the few proven ways of boosting fertility over the long term”
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“while the most effective way to grow population over the long term is the old-fashioned one — have more children — liberalizing immigration to add more Americans would pay off immediately.”
“Since 2010, a U.S. taxpayer purchasing an electric car could claim a nonrefundable tax credit of up to $7,500. However, only 200,000 credits could be claimed per automaker. Tesla, General Motors, and Toyota have all reached the limit.
The IRA removes the manufacturer cap and introduces a new credit of up to $4,000 toward a used EV, which could help anybody who can’t or doesn’t want to buy brand new. But the law also established several prerequisites that a vehicle must meet to qualify.
Since August, vehicles have been subject to a “final assembly” requirement, which says the car’s final assembly must have occurred in North America. That single restriction is complicated, as you can see from the Department of Energy’s list of eligible vehicles. The agency recommends that shoppers research cars by Vehicle Identification Number (VIN) to determine eligibility. Those requirements carry over into 2023.
Starting January 1, individuals earning over $150,000 per year or households earning over $300,000 will no longer qualify for the EV tax credit. Electric cars that retail for more than $55,000, and electric trucks and SUVs over $80,000, are also not eligible. According to Kelley Blue Book, the average price for an EV is over $65,000.
Under the IRA, the credit also depends on the materials used to assemble a vehicle’s batteries. Certain minerals—chiefly lithium, cobalt, manganese, nickel, and graphite—are essential to constructing the lithium-ion batteries used in electric vehicles. Starting in 2023, qualifying for half of the $7,500 credit requires that 40 percent of the minerals used to assemble an E.V.’s battery be sourced from the U.S. or a country with which it has a free-trade agreement. To qualify for the other half, 50 percent of the battery’s parts must be sourced domestically or from a free-trade partner. Each of these percentages will increase over subsequent years.
In December, the Treasury Department suspended the mineral requirement until March, when it can issue final rules. But notably, the law requires that starting in 2024, no battery parts can be sourced from a “foreign entity of concern,” such as Russia or China. The same requirement applies to minerals the following year.”
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“The E.V. tax credit is a convoluted mess. Because of the Treasury delay, most automakers will likely be able to offer half of the credit for two months. Then for the rest of the year, only certain models will qualify, forcing customers to check each individual car or truck to see. Finally, next year, fewer and fewer vehicles will qualify at all, as the U.S. is unable to source necessary materials from politically-favored places. Perplexingly, Treasury announced in late December that leases would be exempt from all sourcing and assembly requirements and eligible for the full $7,500 credit.”
“the government currently has no idea where broadband actually is and is not available.
The government defines broadband as any high-speed internet connection that is always on without needing to dial up.”
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“To determine what areas need investment, the government relies on maps from the Federal Communications Commission (FCC). But despite costing $350 million, the FCC’s maps are notoriously unreliable and have been for many years. In 2021, The Washington Post noted the maps are based on census data, so “if even one household in a census block—a statistical area that conveys population data—has broadband available, then the agency considers the entire group served. In rural areas, one block could cover dozens of square miles.” The FCC’s maps also don’t take into account physical impediments, like trees and mountains, which can disrupt wireless signals.
As Karl Bode noted this week at Techdirt, the FCC’s maps were so unreliable that multiple states took it upon themselves to draw up their own. Vermont determined that more than 18 percent of its residents lack broadband access, while the FCC’s newly redrawn maps put Vermont’s shortfall at only 3 percent.
Now, with more than $40 billion in state grants on the line, states are scrambling to challenge the new maps, which cost the FCC nearly $45 million in addition to the $350 million previously spent.”
“The Biden administration’s rush to engage in more centrally planned industrial policy, particularly when it comes to the production of semiconductor chips and other high-tech manufacturing, has always been framed as an attempt to counter China.”
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“To defeat China, the argument goes, the U.S. must adopt the tactics of the Chinese Communist Party, at least when it comes to high-end manufacturing.
How’s that going on the far side of the Pacific? Not so great, actually.
“China is pausing massive investments aimed at building a chip industry to compete with the U.S.,” Bloomberg reported last week. “Top officials are discussing ways to move away from costly subsidies that have so far borne little fruit and encouraged both graft and American sanctions, people familiar with the matter said.””
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“China might be relatively new to this game, but industrial policy has a long, mostly ugly history in other parts of the world—including right here in the U.S.—and there’s little reason to think that this time will be different.
China’s shift away from industrial policy seems to be driven, according to Bloomberg, by the strain that COVID-19 has put on the country’s economy and fiscal policies rather than by any sudden rediscovery of the benefits of free markets. Even so, there’s a certain irony to the Chinese government changing course just months after U.S. policy makers decided that we had to copy China in order to compete with it.”
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“The Bloomberg report says Xi is becoming frustrated about how tens of billions of dollars dumped into the semiconductor industry in recent years haven’t produced major breakthroughs that allow the country’s domestic chipmakers, like the Semiconductor Manufacturing International Corporation, to compete with the world’s top producers.
America’s foray into high-tech industrial policy seems to be on the same trajectory. The New York Times, for example, reported last week that “new chip factories would take years to build and might not be able to offer the industry’s most advanced manufacturing technology when they begin operations.” Meanwhile, everything from federal permitting requirements to America’s broken immigration system is creating huge hurdles for the semiconductor manufacturers that are planning to expand their capacity in the United States.”
“massive flight cancelations from are a good reminder of what a raw deal those bailouts were for taxpayers and consumers. Rather than allow the shock of the pandemic to create some needed disruption in the passenger airline industry, Congress chose to prop up a messy status quo.
The $7 billion Southwest received from three COVID relief bills allowed ineffective practices at the airline to persist. Allowing the competitive pressures to more freely do their work might have spurred some productive change within Southwest.”
“If wealthy homeowners want to live in places likely to experience severe weather events, they’re free to do so, but it shouldn’t be the federal government’s responsibility to help protect them against the consequences.”
“Danny had chronic, searing pain from an electrocution accident years earlier. For treatment, he and Gretchen, his caretaker, traveled regularly from their home in Georgia to a pain management physician in Beverly Hills, California, to receive pharmaceutical fentanyl. But on November 1, DEA agents suspended the Beverly Hills physician’s narcotics prescribing license, having decided that he was inappropriately prescribing painkillers. A week later, Danny and Gretchen killed themselves.”
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“It was the most recent of the many dreadful outcomes that follow when cops practice medicine.”
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“The DEA has not formally charged the physician, David Bockoff, who has been practicing medicine with a spotless record in California for 53 years. He was treating many “pain refugees” like Danny: patients with chronic pain, well-managed with opioids, whose previous physicians had either closed after a DEA visit or abruptly cut off their pain medication fearing the wrath of law enforcement.”
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“Today, 38 states have laws on the books that limit the dosage and amount of pain relievers doctors can prescribe to their patients. Many of these laws have cast in stone the Centers for Disease Control and Prevention’s now-discredited 2016 Guideline for Prescribing Opioids for Chronic Pain. The guideline came under so much criticism from pharmacologists, clinicians, and academic physicians that the agency revised it this past November. No matter. The flawed 2016 guideline remains the basis of the prescribing laws in most states. Doctors face losing their licenses or, worse, jail time if they violate these laws.”
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“All 50 states maintain Prescription Drug Monitoring Programs to surveil all prescriptions issued and filled within the state. These primarily serve as law enforcement tools. In most states, police drug task forces use them to go on warrantless fishing expeditions, hoping to find a doctor to bust for “inappropriate prescribing” or a patient they can arrest for “doctor shopping.” These programs have not reduced the overdose rate. If anything, they have driven non-medical users who cannot obtain diverted prescription pain pills to more dangerous drugs in the black market, causing the overdose rate to increase.”
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“opioid-related overdose deaths reached a record high in 2021, exceeding 71,000, 89 percent of which involved illicit fentanyl. Despite a dramatic drop in opioid prescribing, deaths have soared.
According to government data, addiction to prescription pain relievers has been relatively stable at under one percent in this century. Chronic pain patients rarely become addicted to opioids. The overdose crisis is a prohibition-induced crisis. Neither the practice of medicine nor the act of self-medication belongs in the realm of the criminal legal system.”