Even if those attribution studies are 100% correct that doesn’t mean this system optimally allocates resources.
The ultimate issue with our social programs is due to demographics. An aging population whose replacement rate is projected to go negative (more deaths than births) within the next few years is catastrophic for the way we fund those programs. We absolutely should try and reduce their operating costs though; I agree with that.
Have you ever actually worked with a Fortune 500 company? I’m assuming not or you’d know “inefficient allocation of resources” isn’t a government issue, it’s a large organization issue that’s as bad if not worse in the private sector.
There is a natural garbage collection mechanism for corporations that become too inefficient. Inefficient government agencies can last much longer.
There was; now we have bailouts. "Too big to fail".
While true, you overstate the problem. Look up the companies in the S&P 500 today, 10 years ago, 20, 30, 50. There are dramatic changes with only a handful of long term survivors.
That overstates the difference as mergers hardly destroy the old companies in their entirety.
Instead it’s the same kind of shakeups you regularly see in government agencies. Picking one small example, HERSA is a merger of the Health Services Administration (1973–1982) and Health Resources Administration (1973–1982). However currently one of its major functions is managing the Ryan White HIV/AIDS Program that showed up in 1990.
There is a LOT more personnel churn in private sector than federal government.
That really depends on what you mean by churn. Lower levels of government are less stable than major corporations. Walmart stores don’t regularly all randomly shut down for a few weeks due to someone being unable to decide on a budget etc.
I’ll grant you it’s really different kinds of instability though.
A merger frequently involves major shakeups in both the acquirer and the acquired. You don’t have to, and shouldn’t destroy the old companies. You just want their resources redirected to more efficient uses every so often.
Yea, the "too big to fail" principle needs to just go. Corporations should be prevented from becoming so big in the first place. There must be a limit on the revenue generation - once you cross a number, you should be broken up.
Humongous companies just become national-level power brokers adversely affecting both the government and the free market.
Monopolies have a bone to pick with you. They aren’t generally garbage collected as their wealth becomes self-perpetuating even in the face of inefficiencies as they can continue to raise prices and push others out.
This was true during the gilded age and it’s become true again. It took systematic regulations, unions, welfare, and the Sherman antitrust act.
If it wasn’t for a democratic government the oligarchs would still have been in control. They are corrupting the current institutions thought the DOGE coup. You see this in the self dealing of the billionaires such as Musks contracts as well as the tariff exemption grift.
So please don’t flaunt a free market as a natural solution to inefficient systems, not even Adam Smith believed that.
As a purely practical matter, trying to fix federal budget outlays by cutting indirect funds attached to NSF/NIH/DOE etc. grants is like telling a guy who is morbidly obese by 350lbs that you can lose weight quickly by shaving your head and trimming your fingernails really, really close.
And yet that morbidly obese guy probably got that way by a thousand unhealthy snacks between meals. While just a few extra calories generally doesn't do much; a steady stream of them over time can do the trick.
As DOGE is finding, that $36 trillion of government debt didn't come in one blow. When every agency has a bunch of bloated programs; it really adds up.
Doge is lying through its teeth. They are costing the government more than they are saving and the biggest savings have been contracts that never existed in the first place. They also keep revising down their saving projections. Now it’s down to 150 billion from 4 trillion.
They are operating a coup and if you don’t see it you are lying to yourself.
> They are operating a coup
Did they fire Congress? Did they fire Trump or Vance? Which elected officials have they fired?
If they haven't fired elected officials, this is the very first coup of its kind in recorded history, so the burden on you is to explain exactly how this situation is a coup.
The point of the analogy is that cutting your hair does nothing to solve the actual issue of obesity. Some of the people in the comments are arguing that the money spent on research is very little and that it ends up bringing in more money for the government than the initial investment. It would be like looking at an investment someone made that had a great return and arguing that they could save money by not investing the money in the first place. They could be wasting money on other things but cutting a profitable investment is not going to save them money.
Optimal relative to what? And more seriously, name any large program, government or corporate, that is "optimal".
Google, Duolingo, and DataBricks are three multibillion dollar tech companies based in part on NSF research. The return on investment from NSF-funded research spinning out into companies is enormous.
While the system could use some tuning, it also works pretty well as is. Don't let the perfect be the enemy of the good.
Noting people do is 100% optimal, but productivity gains mean resource constraint problems are more solvable than they first appear.
People are worried about automation driving people out of the workplace while others are worried about a lack of workers due to changing demographics. What’s going to happen is the result of a bunch of different forces, simplified projections are easy to make and unlikely to prove accurate.
It is insane that people think we need a growing population to make this perfect population pyramid, to make things work easily in monetary terms with taxes. It really does ignore so many of the other forces as you mention.
The picture looks radically different if you focus on real resources and allocation. In fact a growing population could make things very economically tenuous in real terms, depending on how a few key environmental factors play out over the coming centuries.
No system will optimally allocate resources. However projects are typically funded under competitive grants and that process is fairly good at moving slowly but methodically in the right direction.
Even when it doesn’t, it is training researchers who can enter systems which have different incentives like private research and development. That is a massive positive externality.
The solution is a straightforward but painful increasing of the retirement age to like at least 70.
I mean, a relatively easy fix to a negative replacement rate (at least when you have a well-run, wealthy, attractive country) is immigration. Replacement rate isn't a problem when you let more folks in
I agree, but this only works if one is willing to accept a changing racial profile/culture. It appears that many people do not accept this idea. Not just in the USA, but look at Japan or South Korea, for example.
To me, the really interesting question is how to stop what appears to have been inevitable for the last 40+ years: when an economy becomes "advanced," the birth rates drop to tragic levels. I believe what could help here involves all kinds of non-market solutions which are hard to solve, and very not cool at the moment.
The reason that I find this important is that even though I personally have no problem with race/culture mixing, in-fact I love Korean BBQ tacos... eventually with the immigration solution, there is an end state where all societies and countries are economically advanced, and have negative birth rates. What then? As a Star Trek fan, I have ideas about post-scarcity.
> when an economy becomes "advanced," the birth rates drop to tragic levels. I believe what could help here involves all kinds of non-market solutions which are hard to solve, and very not cool at the moment.
There is a huge factor in this which is well-documented to reduce the fertility rate: The first generation to become affluent enough to own property does so and then lobbies for policies that increase home prices. These policies create housing scarcity both for homes and rental units.
That saddles later generations with unreasonably high housing costs and makes them unable to afford to start a family, so the fertility rate drops. If you want more kids, build more housing.
As mentioned in this other comment [0], I find this to be one of the most interesting problems of our time.
> There is a huge factor in this which is well-documented to reduce the fertility rate:
If you have a moment, would you mind pointing me to this documentation? It sounds very correct to me, but I would love to have the receipts when I quote you in the future.
There are numerous studies showing that higher housing costs reduce the fertility rate, e.g.: https://doi.org/10.1016/j.labeco.2024.102572
Thank you. This is excellent. I am really curious how we fix this in the future.
My crank idea to fix both of the issues you mention is mandatory national service.
This would provide everyone a common ground, similar to how widespread military service in wwii did. It would promote civic virtue by exposing everyone to how they personally can make the government useful. And it could be made such that we have our national service corp just build useful things, like houses. Additionally we could provide similar benefits to folks that go through national service as the military - healthcare, payment for college, etc.
one possible answer is removing property taxes and replacing them with land value taxes. property taxes dicensentivize development while land value taxes incentive it.
The US was very good for a very long time at integrating immigrants. It should continue that tradition and work even harder at it.
I believe it was some Republican president who said something to the effect of “if you move to Germany you may be a citizen but you are not a German… But if you move to America and become a citizen you are an American”.
It’s worth noting that not all advanced societies have fared as badly as Korea and Japan. Scandinavia for instance is below replacement but not nearly as catastrophically as Korea. It’s possible that a bit more policy tweaking and more productivity=>leisure time could get them back to a replacement rate.
The US was historically rather hostile towards new waves of immigrants in practice, treating them very much like second class citizens (Irish, Italians, Latinos etc), effectively pressuring them to assimilate by becoming "more American than Americans" to avoid such attitudes. One can argue that the system kinda sorta worked in the long run, but I don't think it makes it worthy of emulation.
> when an economy becomes "advanced," the birth rates drop to tragic levels.
heck maybe that's what trump's doing - tank the American economy and hope it brings the birth rate back up...
I think you need to consider history if you think this is a new thing. People literally paid for indentured servants, even outside of the slave trade.
Importing cheap labor has been a constant throughout the countries history, look at camps of people building the railroads you’ll see lots of Chinese people etc.
But if we zoom out, there is an end to this. We run out of poor people to be migrants eventually, right? I don't just mean as the USA, or any country, but as the Earth.
How do we solve the issue of the end state, where all economies have reached our current level of advancement?
I assume we solve it, or we go extinct, and that would be an odd reason to do so after millions of years, wouldn't it?
Countries are just arbitrary here. What happens long term is there’s massive selective pressure because children of people that reproduce in wealthy economies are the only people to be around in 200+ years.
The USA as a whole has 1.7 births per woman which is really close to the ~2.1 needed. However that isn’t evenly distributed ethic Native Hawaiian and Pacific Islander’s living in the US actually sit just above replacement rate. Give it 200 years and that may very well increase.
Really 3 kids needs to be seen as normal long term because some people just aren’t going to have any.
Why does less then replacement rate equal extinction? It just requires a reimagination of the economy it's not an extinction level threat. That's just scare mongering.
You know NYC is already minority white right?
My most controversial take, even though it is 100% true:
The entire planet is minority "white." I put that in scare quotes because even as the lightest skinned person in the land, I know that "white" is a made up in/out group term. As a Slav, I was not "white" according to US immigration law as recently as the 1950s. There is technically no such thing as being white, there is only passing for white. The definition of white entirety depends on the day, and who you ask. Slavs, Irish, Italians, Greeks, were not "white" until very recently. It's a silly word that really means nothing.
If one wants to slow down "white" people becoming the minority more and more due to their economic advancement, clearly the solution is carpet bombing poor countries with e-readers preloaded with Wikipedia. That is the only moral way to even things out!
> The definition of white entirety depends on the day, and who you ask. Slavs, Irish, Italians, Greeks, were not "white" until very recently.
Indeed, in some parts of Russia, white supremacists do not consider Caucasians to be white. It really does depend on who and when you ask.
I assume if it reaches dire levels the government will just mandate that you raise children. I dont see anything wrong with that, personally. Raising kids is a duty like paying taxes or registering for the draft. Previously, it was just assumed that people would do it on their own, but it seems like the government needs to add "sticks" to get people to do it.
This is such a cool topic. Homo sapiens are exactly evolved to reproduce. This is instruction #1, or else we wouldn't be here to discuss it. We might call this the super-not-weak anthropic principle?
We produce multiple hormones which control our behavior to reproduce, and then different ones to raise those kids. It's been nice for millions of years. Parents think that creating their children is the best thing they ever did, generally speaking.
Yet... we have recently created what is otherwise a really cool economic system, which somehow overrides all of that!
Aside from "are we alone in the universe," this is one of the most interesting problems in my mind.
This doesn’t fix your problem if the people you let in cost more than they contribute in taxes. See for example the Netherlands where non-Western immigrants are large net negative contributors and their children are no better. https://docs.iza.org/dp17569.pdf
Similar results apply in Denmark. https://docs.iza.org/dp8844.pdf
EU style negatively selected immigration where easily a billion people are eligible for asylum and refugee status with easy family reunification means immigration is a large net negative fiscal contributor.
They might still create more value than they cost. For example, a bus driver enables many people to work, but has a low wage and hence pays little in taxes.
On average you are paid according to your value so this doesn't track.
Where are you getting this from? The value you provide sets a kind of ceiling on what you can be paid. But you are paid based on how easy it is to replace you.
So a top TikTok influencer is more valuable than a surgeon?
Yes. They provide a scaled entertainment. You are forgetting the reach that this person has.
Compared to a surgeon who's impact is more local, they might help a few patients in a week.
Do you think a combat soldier is more important than a VP of Google?
Here's how you determine who brings more value to society: If they were to just stop coming to work tomorrow, would society keep going?
If every ticktocker quit tomorrow, would society still function? Yes. Things would go on like nothing ever happened.
If every surgeon quit tomorrow, would society still function? No, people would die, they would become timid and afraid of being hurt, because minor injuries would be fatal and life changing. Not only that, we would lose centuries worth of knowledge and be forced to learn it all from scratch again from books instead of trained surgeons.
The danger in your logic is it leads to thinking like this: "ticktockers provide more value than surgeons because they can scale their reach, therefore in order to maximize total value to society, we can maximize the number of ticktickers and we don't have to worry about surgeons. We can just offset the lost value by the value brought by all the ticktockers."
That's an obvious bad idea and straw man, but people really try to go down that slippery slope in non-obvious cases. The realm of education comes to mind. "MOOCs are more valuable than universities because they have more reach, therefore in the future we will close down universities and only have MOOCs" is something I've heard seriously proposed before.
You have the delusion that true value is the same as a fungible one dimensional number, that externalities (negative or positive) don't exist, we have perfect information and local minima aren't real.
The original example is that certain economic activities are force multipliers, the guy who actually does a good job in servicing the metro in my city (we avoid 10 minutes of delay) has more impact than most local CEO day to day. A good supply of bus drivers make certain services possible, which in turn boost productivity.
The social influencer entertains like shitty cocaine, we don't have a lack of inane shit, their absurd payout exists because ZIRP happened. Bad entertainment has costs beyond the directly measured by dollars.
Getting everybody addicted to nicotine is profitable but bad, correct?
A hypothetical world were we "stagnated" on MySpace equivalents could've existed and surely the generated value would be higher.
if you think the metro guy/girl provides more value then he/she should be paid more. tough luck because its not the market that decides his wage unfortunately.
Fertility rates are below replacement on every continent except Africa, and they're dropping quickly there. Immigration isn't going to save us, at least not long-term.
I think what'll happen is that areas that still have a vibrant age pyramid will put up borders (either geographic or economic or both) with ones that don't, and say "Sorry, you're on your own" to the latter. They protect their children at the expense of their elders, basically. It won't be national borders either: the fertility issue cuts across most major nations, but there are certain regions where people still raise children.
Stop trying to solve problems 100 years from now in other countries though.
The US is an enormously attractive immigration target and can easily bring in enormous numbers of new workers if it wants to. It's so good at this that it actually has and those people pay taxes but don't get government benefits.
There is no "other countries", it's a global economy. Mexico exports $450B worth of stuff to the US every year. When their fertility rate was 6 and then one or two of those kids immigrate to the US, that's fine for them. Now that their fertility rate is below the population replacement rate too, if their kids emigrate their country is screwed. Then there's nobody to make that $450B worth of stuff, because the kids who migrated are busy filling the existing jobs in the US.
Meanwhile what do you expect to happen in countries with fertility rates below population replacement and net out-migration of the youth? Is it morally reasonable to willingly cause that to happen, even without considering the consequences to the US of that level of desperation spreading through the rest of the world?
The alternative would be to get the fertility rate back to the population replacement rate.
Assuming current trends are unchanged we’re still talking about having billions of humans for hundreds of years. On that kind of timescale we might see significant life extension, artificial wombs, and hard core genetic engineering.
Some countries like South Korea are going to face major challenges far sooner, but frankly having the most extreme examples collapse means the average stays higher.
> Assuming current trends are unchanged we’re still talking about having billions of humans for hundreds of years. On that kind of timescale we might see significant life extension, artificial wombs, and hard core genetic engineering.
The absolute number of humans isn't the issue. It's that people expect to retire at 65, but are now living into their 80s and 90s. Retirees have to be supported by working people, i.e. younger people. If the ratio of younger people to older people gets out of kilter, there's huge problems. Life extension makes this worse rather than better.
The ratio of younger vs older people is also a function of biological aging which might look very different in 500 years. I don’t think we can reasonably expect to retire at 65 if healthy lifespan hits 200+.
If 150 year olds are as healthy as current 50 year olds they may very well be expected to work. And personally I’d happily extend how long people are expected to work in exchange for significantly longer lifespans.
You make it sound like the US is a parasite that takes the young of other countries to endow itself, never mind what happens about other countries. Maybe it is?
People decide where they want to go, and people overwhelmingly despite significant risks choose immigrate to the United States in one form or another.
It’s not just regions you find differences based on culture, and guess what natural selection is going to do with less fertile cultures.
that doesn’t mean this system optimally allocates resources.
When's the last time someone in the Trump administration "optimally allocated resources" in a way that didn't "allocate" them to his or her own bank account?