Archive for the ‘law enforcement’ Category

Putting government pension costs into perspective

Wirepoints recently issued a helpful report showing state and local government pension debt per Chicago household.  They estimate the burden at $144,000 per household.  This is a big number, but one could suppose that a prosperous household, over decades, could bear such a burden.  Some could, but probably not those below poverty level.  Take them out of the picture and the per household amount rises to $172,000.  Excluding households with incomes below $75,000, or below $200,000, and the per-household amount rises further, to $393,000 and $2,022,000 respectively.

Here’s their chart: pension debt chart

Of course this doesn’t consider land values, nor businesses.  If prime Chicago land is worth $1,000/sq ft, that’s 5.38 sq miles.  But more typical land value is much less, probably no more than $25/sq ft. (it seems that nobody has tried to estimate citywide values). That would be 112 square miles.  Once we subtract land owned by governments, churches and other exempt nonprofits, we might be approaching the total value of all land in Chicago. And that’s just for pensions, not bonded debt, nor needed capital improvements.  Real estate buyers know, or certainly should know, about these encumbrances.

Of course money can be raised from business taxes, but that’s hardly a way to grow economic opportunity for Chicagoans. I would consider any tax revenue from “gaming” as a kind of business tax.

The lesson Wirepoints draws from this is that pensions have to be downsized somehow, which required amending the state constitution.  And they go further, comparing government salaries to those of the private sector:

some local gov't salaries compared to average workers

So it looks like we’re going to have to confront a large number of people with guns and firehoses and control over our children, who have been getting a lot of money from us for years and may prefer not to moderate their demands.

Tho I don’t know how, this problem will be solved. Maybe MMT will yield a continuing stream of funds to bail us out.  Maybe inflation will accelerate such that the fixed 3% compounded pension increase isn’t a burden.  Maybe Chicagoans will decide that they just don’t want so many government “services.”  Maybe politicians will decide to remove all taxes from productive economic activity, taxing only the value of land and other privileges (such as the private monopoly over street parking fees), which will grow the economy (while reducing the need for emergency services) sufficient to make pensions a non-issue.

And when it is solved, those who own land and other privileges will benefit most.

More jobs –> less recidivism

Click this image of Abashiri Station, Hokkaido to learn how it relates to recidivism. Image credit: David McKelvey .license: Attribution-NonCommercial-NoDerivs 2.0 Generic

Many of us have long assumed that a strong demand for labor results in less crime.  At least, less of the kind of crime people get imprisoned for.  And of course we assume this works most strongly for people at the bottom of the economic ladder, a category which includes most of those released after serving time in prison.

Now we have a study (or more precisely, a report on a study because the original source is behind a paywall) which confirms this assumption. Basically, those released into a strong economy are less likely to return to prison than those released in slack times.  Because the study was apparently done at the county level, there would be enough cases that it’s not a statistical artifact. From the abstract:

[B]eing released to a county with higher low-skilled wages significantly decreases the risk of recidivism. The impact of higher wages on recidivism is larger for both black offenders and first-time offenders, and in sectors that report being more willing to hire ex-offenders. These results are robust to individual- and county-level controls…

So, since taxing privilege rather than production is an economic development tool, we can also assert that it is an anti-crime measure.

Can a citizens dividend reduce violence?

Wikimedia Commons

Wikimedia Commons

The Washington Post says that Richmond, CA has reduced shootings by paying violent offenders up to $1,000 per month to be less violent. The murder rate declined by 50%.  Even tho the cost of this program is less than the cost of adding one cop to the force, isn’t it wrong to bribe criminals to not commit crimes?

Of course it’s wrong, but it seems to work.  So what if, instead of giving money to violent criminals, we gave money to everybody, thru a citizens dividend?

The Richmond program also hires mentors to help the beneficiaries stay out of trouble, which is an additional necessary component of a program like this.