Policy proposals must match economic reality
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Russell Roberts, Ph.D. Campaign Finance Reform |
Russell Roberts, an expert in political economy, has been evaluating the policy proposals of the candidates this year. Unlike many observers, he has his eye on the bottom line: He wants to know how much these proposals are actually going to cost, and whether they're going to work.
Roberts recently discussed the candidates' respective plans for Social Security. "The current Social Security system is not demographically sound," he said. "I don't think it's going to go bankrupt -- we can always lower benefits or raise taxes to keep it going."
Roberts acknowledged, however, that such changes will be politically difficult, pitting young against old, but suggested that privatization would help defuse the generational conflict. "Privatizing some or all of Social Security takes intergenerational relations out of the political arena and allows people to act like adults and plan for their own retirement," he said.
Roberts also is worried about the consequences of government-provided prescription drug benefits. "People like to complain about the high price of pharmaceuticals," he observed. "I think what most people have in mind is that they would like 21st century medicine at 19th century prices. There is a name for this, and it's called a 'free lunch.' If the government pays for seniors' drugs, there will be inexorable pressure on pharmaceutical companies to lower prices, which will result in less innovation. That's a bad deal for future generations."
Roberts has also studied the nation's campaign finance system with an economist's tool kit. Although John McCain did not win the Republican nomination, Roberts believes that the effects of his dramatic primary campaign will be felt next year when Congress convenes. "Campaign finance reform will be a key issue next year because of the McCain factor," he predicted. "McCain has vowed that the Senate floor will 'run with blood' if that's what it takes to get campaign finance reform."
Although many pundits believe that elected officials are generally reluctant to change the rules that they have learned to exploit, Roberts offered a counterintuitive analysis. "Campaign finance reform makes it harder for challengers to overcome the enormous name-recognition of incumbents and thereby reduces competition," he said. "So incumbents love campaign finance reform. Democrat incumbents seem to like it more than Republican incumbents, so if the Republicans retain the House and Senate -- even if Mr. Gore wins and despite the bravado of Mr. McCain -- I don't see it happening."
