An Economic Agenda For the Future

Today on Marginal Revolution, GMU Professor Tyler Cowen writes:

I was asked by US News and World Report to write a short set of policy proposals, and also handicap (ha!) the chances of them passing. Here is a contrasting list from Jacob Hacker. Here is a 2004 post I wrote on the same topic.

Here's what he proposes:

1) Institute means-testing for Medicare. "The graying of America threatens to bankrupt our national finances, mostly through forthcoming Medicare expenditures. Medicare should be a welfare program for the needy, not a source of comprehensive coverage for wealthy old people."

2) Eliminate all farm subsidies, quotas, and price supports. Eliminate all tariffs. Eliminate all budget earmarks. Eliminate all corporate welfare. "No, these are not the 'big fish' in the budget, but we need to take a stand against the totally outrageous."

3) Take in more high-skilled immigrants, and make them legal. "This is a win-win situation, and we are turning our back on it."

4) Phase out all forms of capital income taxation, including the corporate income tax, and replace them with a carbon tax, including a gasoline tax. "Savings and investment boost economic growth, but when it comes to energy, global warming threatens as a major problem and our dependence on Middle Eastern oil damages our foreign policy."

5) Institute full-scale experiments with school vouchers. "Competition is a needed tonic for many of America's worst schools; in any case, many simply cannot get worse. Make sure that the money is attached to the student, not to the school."

Looks like a great list to me! As I recently mentioned in this post, I especially like number five.

Update -- Arnold Kling shares his list:

1. Solve the entitlement problem at the stroke of a pen by raising the age of eligibility.

2. Give school vouchers a real try.

3. Allow some states to experiment with radical deregulation of health care. I would like to see a state try letting anyone supply health care services, but with full disclosure of the supplier's qualifications or lack thereof.

4. Auction spectrum in a way that allows the owners to allocate it to its most valuable use, which I suspect is not any form of over-the-air television.

5. Try a pilot program that substitutes prizes for patents as incentives to develop pharmaceuticals.

Kling's idea for pharmaceuticals sounds very intriguing...