Inequality was the single most popular topic when economists gathered at their annual convention in San Francisco last month. But here is what everyone should know. Most of the studies you read about in newspapers are flawed. A new study exposes those flaws and presents a much rosier picture of the American economy. (Full disclosure: I provided early funding for this study in a previous job.)
A typical study of the distribution of income compares people on the top and bottom rungs of the income ladder. The problem: the entire population is on the ladder. That means these studies are comparing retirees with people who are working. They are comparing people who are at the peak of their career earnings with people who are just starting out.
Studies of the distribution of wealth typically have an even bigger problem. They count private savings (such as an IRA or 401(k) account) and private pensions as part of an individual’s wealth. But they ignore Social Security and other entitlement benefits, even though people pay taxes to these programs at the same time they are contributing to their private retirement accounts.
|John C. Goodman is a Senior Fellow at the Independent Institute, President of the Goodman Institute for Public Policy Research, and author of the widely acclaimed Independent books, A Better Choice: Healthcare Solutions for America, and the award-winning, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and the National Journal, among other media, have called him the Father of Health Savings Accounts.|
Obamacare remains highly controversial and faces ongoing legal and political challenges. Polls show that by a large margin Americans remain opposed to the healthcare law and seek to repeal and replace it. However, the question is: Replace it with what?