Matt Yglesias on “Rebooting the Care Agenda”
“And formally, at least, progressives are basically committed to just running back the ideas that were cut from the Build Back Better package.
This doesn’t strike me as a great idea.
While the problems that these policies were designed to address are obviously still important, the overall situation in the country and the world has changed over the past four years and the steps we take to address them need to be adjusted for our current circumstances.”
Yes, but that does not mean what some people take it to mean. It did not and does not mean that we need government to supply these services (or to regulate them so tightly that it might as well be supplying them.
It means, rather, that many people at a stage of life/life circumstances when they need (have high marginal utility for) childcare, elder care and disability services, do not at THAT stage of life/life circumstances have the income to procure them. This is fundamentally no different from the problem that Social Security, Medicare/Medicaid/ACA, and unemployment insurance (imperfectly but effectively) solve. It is the problem of social insurance, of moving resources from those in less need of resources at a particular time to those that need them more at a particular time.
One "change" is that many people in 2021 thought that the marginal cost of transferring the resources was zero, that there were enough unemployed people and resources that no taxes would be needed to make this transfer. But that was never the case and so that is really NOT a change. It IS the case that when the Fed has temporarily allowed unemployment to occur, marginal costs are lower than at full employment, but never zero. Expenditures for relief made sense in 2021. It does not make sense, however, to make a structural increase in expenditures on the basis of a temporary low marginal cost environment. [The same applies to expenditures to address infrastructure, supply chain security, “industrial policy” and CO2 emissions. They can be worth making but need to be funded from consumption taxes.]
The issue of “creating jobs” is more fundamental. Fiscal expenditures NEVER create jobs. The Fed creates and destroys jobs in the aggregate. If fiscal expenditures are clever, (NPV>0) they can raise real income and convert lower paying to better paying jobs.
Going back even farther, Democrats “create jobs” meme arose, I think, as a non-silly response to Republican opposition to taxes to do anything, the claim that any taxes would “destroy jobs,” (the counterpart of the claim that their tax cuts for the rich and deficits act, which they had the temerity to call “Tax Cuts and Jobs Act” would create jobs. “Create jobs” in that rhetorical environment could innocently mean the tax and expenditure of a social insurance program is worth doing. But getting misled by one’s own rhetoric is always a mistake.
[Standard bleg: Although my style is know-it-all-ism, I do sometime entertain the thought that, here and there, I might be mistaken on some minor detail. I would welcome comments on these views.]
I honestly don’t know whether the Parental Plan that Quebec created in the early ‘00s created jobs, but it enabled a LOT of women to return to the workplace at a higher level of participation (hours worked) than any other province. And the cost off anyone’s pay stub is negligible. It’s been a while since I took home a paystub or paid the max contribution per year but it was like maybe $9 per pay which is nothing. I wasn’t able to take advantage of the program myself but a lot of people do. Quebec also has public liability for auto insurance that applies to everyone in the province, and that means premiums for insuring one’s own vehicle is sooooo much less than any other jurisdiction. The Republican knee jerk “taxes bad! Government involvement bad!” is just claptrap. There’s a lot of clustersports everywhere you go, including in Quebec, but I have zero negative comments about the SAAQ or the PPIP and I do think pretty much everywhere would be better off with programs like these