A Passover Seder Insight On Simultaneously Having Space for Joy and Sadness in Life

As part of my Passover preparation this year, I participated in a Passover-themed yoga session with a local synagogue. Part of the intentionality going into the session was about acknowledging the craziness in the world along with the reasons to celebrate. The rabbi first brought up Jewish weddings. Although it is one of the happiest celebrations in one's life, a Jewish wedding has a sad ritual at the beginning (the recitation of El Malei Rachamim) and ends with a brief, sad ritual: the breaking of the glass to mourn the loss of the Second Temple. Even on such a joyous occasion, there is space for sadness. 

As the rabbi brought up, the Passover seder is no different. Take a look at the blessing over the wine, the Kiddush. The Passover seder begins with a blessing over wine, a happy occasion. As a matter of fact, the Passover Seder is at least happy enough of an occasion to have four cups of wine. Yet there is a moment in which we are to spill some of our wine at Seder to, at least in part, represent a diminishment of joy. This is not the only time this theme comes up in the Passover ritual. 

• Look at the relationship with matzah throughout the Seder. Towards the beginning of the Seder, we break the middle matzah in a ritual known as yachatz. This ritual can have multiple spiritual meanings, whether it is grappling with poverty or dealing with one's brokenness. By the time we reach the Afikomen ritual towards the end, we find those pieces and bring them together, thereby representing a sense of redemption. 
• There is another matzah-related tension in the Seder. On the one hand, we are to hide matzah, which mimics the ancient practice of stashing food out of a scarcity mentality. In spite of that perceived (or actual) scarcity, we are still meant to share with others on Passover. 
• Another example is with the bitter herbs (Maror). Jewish tradition teaches us that consuming bitter herbs on Passover is one of the three mandatory aspects of the Seder so that we can taste the bitterness that the Israelites experienced in Egypt. What is optional is having the charoset, which is a sweet mix. What I brought up a while back regarding the maror and charoset is the bittersweet nature of life. Bitterness is an inevitability in life. Whether or not we bring sweetness into lives in spite of that inevitable bitterness is our freedom and our choice. 
• The Korech (the Hillel sandwich) reminds us that life is neither all good nor all bad. Much like the Hillel sandwich, life is generally a mixture of the bitter, the sweet, and the "tasteless," neutral, "meh" moments.
• The ritual of dipping vegetables in saltwater, known as karpas, also can have mixed meaning. Does it represent the tears of the Israelites? Does it represent the fact that personal growth happens through dark times? Is that rewards come through hard work? How mixed this ritual is depends on how the ritual is interpreted and how we respond to adversity.
• Singing the song Dayenu during the Seder brings up another paradox. This song acts as a springboard to ask us what is enough. Let's say that G-d freed the Israelites had them cross the Sea of Reeds, and then left them in the middle of the desert without manna, is that really enough? We were not in that moment. Part of it is that we sing the song looking back in history. "Hindsight is 20-20," as the saying goes. We need to realize the same in our own lives, as nerve-racking as uncertainty can be. Events often make more sense looking back. In the moment, anxiety about the future can take over, especially wondering if we can make it out of a rut or if we ask ourselves if our best days are behind us. What Dayenu does is encourages us to find the good in life, even during our tribulations or uncertainty about the future.

Life is never a walk in the park the entire time. Life often gives us lessons from the School of Hard Knocks. There are moments in which we have to learn how to carry both joy and sorrow at the same time. There are other times where a paradigm shift in perspective can minimize or even eliminate sadness. To be able to do this, we need to find ways to take the edge off the bitterness in life. We need to find ways to be more open to hold space for both sadness and joy. By learning how to embrace life in its totality is how we can truly be free. 

Biden Is At It Again With Some Costly Student Loan "Forgiveness"

"If you at first don't succeed, try, try again." That is the approach of President Biden and his attempts with student loan "relief." It does not matter that the U.S. Supreme Court struck down his student loan forgiveness program last year in Biden v. Nebraska, which the bipartisan Committee for a Responsible Federal Budget (CRFB) estimated would cost $400 billion. That does not stop Biden from giving up on the idea. Last week, the White House announced a new plan to "provide relief to borrowers disproportionately burdened by student debt." This plan entails multiple provisions, including:

• Waiving up to $20,000 of accrued and capitalized student loan interest
• Eliminating student loan debt for those who have had debt for more than 20 years
• Assisting borrowers who experience hardship in paying back loans
• Applying the most favorable repayment options, whether under this latest version or from the previous version (known as SAVE)
• Helping borrowers enrolled who enrolled in low-financial-value programs or institutions

The Penn State Wharton School of Business, which is the premier business school in the country, modeled the cost of Biden's student loan plan. When combining the overlap between the new plan and previous SAVE plan, Biden's student loan plan is going to cost $559 billion!

When Biden first tried student loan "cancellation" with the SAVE Plan, I was critical enough to provide a list of 13 reasons why such a policy does such a disservice. These reasons ranged from the unfairness, cost, and lack of economic stimulus to its regressive nature, the moral hazard, and doing nothing to prevent that the problem from resurfacing. As the CRFB brought up in its response to Biden's latest plan:

You can't solve a very real debt problem by issuing more debt. The President's previous student loan cancellation plan was expensive, inflationary, poorly targeted, and would have boosted rather than reduced tuitions. This plan similarly misses the mark.

Knowing that it is an election, I know this is more than wanting to help out the little guy. It is about fulfilling a 2020 campaign promise, as well placating a certain demographic amongst the Left that is more likely to be critical of Biden's stance on the conflict in the Middle East. Biden's student loan plan is not going to do anything to lower tuition costs. If anything, Biden's plan will create inflationary pressures, both in the higher education market specifically and the macroeconomy generally. If the Biden Administration were to do the responsible thing, it would abandon this plan and work on reforms that would actually reduce college tuition costs. Sadly, it looks likely that good politics will defeat good policy once again.

4-16-2024 Addendum: Apparently, the Wharton School is not the only one to come up with an estimate. The CFRB released its analysis today (4-16-24) and found that it could cost anywhere between $250 billion and $750 billion. 

Trump's 60 Percent Tariff on China Would Not Only Hurt the Economy, But Could Hurt Government Revenue

For my regular readers, it does not come as a surprise that I despise former President Trump's obsession with tariffs. This is not simply a matter of mainstream microeconomic theory. The negative impacts of tariffs were clear before Trump began his tariff tirade. Trump's tariffs during his first term lowered the GDP by 0.21 percent, lowered wages by 0.14 percent, and reduced employment by 166,000 full-time equivalent (FTE). Making the economy worse off with his tariffs was not enough for him. He would like to take tariffs to a new level. 

In February, Trump proposed a 60 percent tariff on Chinese good. Shortly thereafter, I showed how such a tariff would cost the economy anywhere between $200 billion and $495 billion per annum. Remember that the economy is not some amorphous blob. It consists of business and producers, as well as consumers like you and me. On average, it will cost the typical U.S. household upwards of $3,492 if this tariffs gets implemented. If that is not bad enough, it looks like this tariff could adversely affect something else: government revenue. 

An analysis from the bipartisan Committee for a Responsible Federal Budget (CRFB) examines the effects that a 60 percent tariff on China would have on government revenue. This seems counterintuitive at first. After all, if we look at a standard supply-demand graph of the effects of tariffs (see below), increased government revenue is one of the main economic benefits of a tariff. 

This CRFB analysis questions that premise in the case of Trump's 60 percent tariff. Why? In short, because it is such a large tariff. Remember that a tariff is a fancy way of saying "import tax." The larger the tax, the more likely it is to distort the economy in what is known in economics as deadweight loss. In the CRFB's static analysis, it assumes $2.4 trillion of government revenue in a decade. The problem with a static analysis is that is premised on unrealistic assumptions. Once accounting for macroeconomic effects and trade flows, we get a more accurate picture. 

In part, higher tariffs with China means less trade with China, which means less tax revenue. This, of course, depends on if certain goods are replaced with domestic or other foreign substitutes. Even assuming some offset from income and corporate tax revenue, CRFB estimates in its more conventional modeling that the tariff has the potential to lose somewhere around $200 billion to $500 billion of revenue over the next decade. 

While there is a possibility that it could bring the government a net positive in tax revenue, the fact that it could plausibly create a net negative in tax revenue should make even tariff sympathizers pause. For those who care about the impacts of tax policy, this finding is another example out a long list of examples of why we should be more than wary of tariffs. 

Measure 110 Had Its Limits, But Oregon Re-Criminalizing Drug Possession Is a Step Backwards

In 2020, the state of Oregon passed Measure 110. The point of this Measure was to decriminalize all drugs. Instead of jail time, the punishment was a $100 fine or a completed health assessment by a qualified center. It took less than four years for this experiment to end. Late last month, Oregon re-criminalized low-level drug possession due to an increase in opioid deaths and nuisances related to public drug use. My reaction is similar to my reaction last week when Idaho got rid of its syringe services programs: re-criminalizing is not going to do any favors. Below are some preliminary findings about the Oregon experiment to make me wonder about Oregon's recent decision.  

Measure 110 did not increase drug deaths. Brown University Professor Brandon del Pozo found that once adjusted for the rapid increase in fentanyl that came to Oregon later than it did the other states, there was no association between Measure 110 and an increase in fentanyl. These findings are consistent with a study from JAMA Psychiatry (Joshi et al., 2023).

Measure 110 did not encourage drug use. There are some preliminary survey data to suggest that this is the case. An RTI International survey of 467 Oregonian drug users found that only 1.5 percent of respondents started using drugs after Measure 110 began. 

There have been fewer arrests since Measure 110. Since Measure 110, there have been 83 percent fewer possession of controlled substances (PCS) arrests (Russoniello et al., 2023). Fewer arrests mean fewer interactions with the criminal justice system, particularly in terms of prosecution and incarceration. This translates into fewer law enforcement costs. 

Postscript. There are limitations to the findings here, at least in part because it has been less than four years. I made that caveat last year when analyzing the public health impacts of marijuana legalization. Between a fentanyl wave that swept the United States, the COVID pandemic, and a delay in funding for harm reduction programs, I am not surprised. It is also an issue that Oregon did not take it far enough. Similar to what I brought up with last year on Maine's partial prostitution legalization, doing it partway can either cause more problems or keep many problems intact. As Cato Institute scholar Jeffrey Miron brings up, "Legalizing [or, to a lesser extent, decriminalizing] possession, but not production, does not eliminate the underground market, so violence and quality control issues remain." Until these drugs are brought to the legal market, consumers are unsure as to the dose or purity of what they are purchasing. 

There is potential for success of decriminalization. As I pointed out last year, Portugal's twenty-plus years of drug decriminalization has been a success. However, without addressing the decriminalization or even legalization of the production, the success for decriminalization is going to be limited, especially in comparison to legalization. 

In spite of Oregon only partially decriminalizing, it beats the alternative of taking the step backwards that Oregon did. Oregon gave up on serious drug policy reform too soon. All re-criminalization is going to do is divert drug users to jails while doing very little to deter illicit drug usage. Prohibition and criminalization compound the effects of what is a public health issue, not a criminal issue. Why Oregon is going to revert back to prohibition, the very policy that got the Beaver State into this mess in the first place, is indeed a puzzlement. 

Idaho Banning Syringe Services Program Is a Stab in the Back of Idahoans

Last week, the state of Idaho took a step backwards in public health. Idaho's Governor Brad Little signed HB617 into law, which repeals the ability for harm reduction organizations to operate syringe service programs (SSP). Also known as "needle exchange programs," an SSP provides a wide range of services, including "access to and disposal of sterile syringes and injection equipment, vaccination, testing, and linkage to infectious disease care and substance use treatment."

Why did Idahoan lawmakers get ride of their SSPs? They were concerned that SSPs increase drug use and opined that there was not enough evidence to show that SSPs incentivize substance abusers to seek treatment. Here is the problem with that line of thinking. According to the National Association of Counties, SSP participants are twice as likely to reduce the frequency of substance use and three times more likely to stop using substances all together. Even so, advocates never promoted SSPs for that purpose. 

The main purpose of SSPs was to provide drug abusers with a cleaner, safer alternative. This "meet them where they are at" approach is meant to reduce the spread of disease. SSPs have been shown to reduce HIV and Hepatitis C by 50 percent. SSPs have reduced syringe litter (Levine et al., 2019), which means less likelihood of being pricked or injured by a needle. In Idaho, the program collected nearly 600,000 needles, which kept them out of public places. Furthermore, SSPs are not shown to increase crime or illicit drug use. As a matter of fact, SSPs save upwards of $7.58 [in 2014 dollars] for every dollar spent (Nguyen et al., 2014). The cost savings for SSPs is quite high (Ruiz et al., 2019). If you want more information on how beneficial SSPs are, you can read this 2023 meta-analysis from the U.S. Department of Veteran Affairs here.

Much like we could not mask our way out of the pandemic, we cannot criminalize our way out of the opioid crisis. As a 2022 research paper from Cato Institute shows, such drug paraphernalia laws obstruct harm reduction. Criminalizing these programs will make users more likely to use dirty needles (Marotta et al., 2021) and cause a rebound in HIV cases (Zang et al., 2022). Instead of keeping those who use drugs safer, re-criminalization will decrease their likelihood to survive. Idaho's abandonment of a program clearly shown to protect those who use drugs, as well as the community as a whole, is putting its citizens at risk. 

How Free Trade and Trade Liberalization Help Out the Poor Domestically and Globally

Last month, the White House released its annual Economic Report of the President. In the report, there was a chapter on International Trade (Ch. 5, p. 173). One of the interesting admissions in the report is how trade with China has improved the purchasing power, especially of lower-income Americans (p. 203). As a matter of fact, the report calculated that 68 percent of those benefits went to low-income Americans. This finding is echoed in a report from the Federal Reserve Bank of Minneapolis that was released just last week (Horwich, 2024).

The author of the Minneapolis Fed report, Jeff Horwich, says that much of the research of international trade on consumer welfare looks at the effects on a national level. Rarely is it done to see the effects of a certain demographic, such as the poor. Even so, the fact that international trade helps out low-income households both in the United States and globally does not surprise me in the least. Why is this the case? How does international trade help out the poor specifically? 

Improved quality of life with greater imports. As this article from the Houston Chrolinc brings up, it can be cheaper for a country to import goods or services than it can be to produce them. To quote the Australian Department of Foreign Affairs and Trade (DFAT), "trade expands the markets local producers can access, allowing them to produce at a more efficient scale to keep down costs." This ensures a constant flow of more goods, which can improve the quality of life and give options they otherwise would not have. 

Lower prices lead to greater purchasing power. To quote the International Monetary Fund (IMF) from 2001: "Trade liberalization helps the poor in the same way it helps most others, by lowering prices of imports and keeping prices of substitutes for imported goods low, thus increasing people's real incomes...An open trade regime also permits imports of technologies and processes that can help the poor." 

I was first criticizing Trump's obsession with tariffs in March 2016, which was before he was president. I pointed out that tariffs decreased economic welfare. Conversely, countries with fewer trade barriers had less poverty. To quote DFAT, "Removing tariffs on imports gives consumers access to cheaper products, increasing their purchasing power and living standards, and gives producers access to cheaper inputs, boosting their competitiveness by reducing their production costs."

Free trade improves innovation and efficiency. The Mercatus Center mentions a good point in its brief on the benefits of free trade: "Over time, free trade works with other market processes to shift workers and resources to more productive uses, allowing more efficient industries to thrive. The results are higher wages, investment in such things as infrastructure, and a more dynamic economy that continues to create new jobs and opportunities." Those wage increases help out the poor, as well. 

Postscript. As a 2015 report from the World Trade Organization illustrates, free trade creates new job opportunities for the poor, raises the real wages of unskilled labor, lowers prices of goods consumed by the poor (which means greater purchasing power), and improves access to external markets for the goods that the poor consume. All of these phenomenon aggregately improve the quality of life for the poor. 

Freer trade is vital for the poor because, as the World Economic Forum states, "Open trade is particularly beneficial to the poor, because it reduces the cost of what they buy and raises the price of what they sell." Farmers and manufacturers especially can reach a wider market when there is open trade (ibid.). As the World Bank has brought up, free trade has lifted over a billion people of poverty. The Heritage Foundation, amongst many others, has shown how greater economic freedom creates greater economic growth while lowering poverty (see below). This is a truth I detailed when showing how trade liberalization does a much better job than foreign aid at alleviating poverty. 

With the overwhelming evidence in favor of greater international trade, it does beg a question for the upcoming presidential elections. If the relatively lower tariffs from Trump's previous administration made items more expensive and made Americans poorer, what will Trump's proposed universal 10 percent tariff or 60 percent tariff on China will do to the poor both in the United States and abroad? This November's election is between a Republican whose tariffs will make Americans poorer and Bidenomics that has increased inflation in a way that has made life more expensive for the poor. And let's not forget that Biden has maintained many of Trump's tariffs. While it is clear that free trade helps out those in low-income households, it is also clear that we are in an age of protectionism, regardless of who gets elected this November. It is the everyday citizen, especially the poorer ones, that suffer because politicians on both sides of the political aisle ignore the fundamentals about the benefits of free trade.

CBO 2024 Fiscal Outlook Is Grim: Will the U.S. Government Finally Address Rising Federal Debt?

Last week, the Congressional Budget Office (CBO), which is the gold standard of U.S. federal legislative analysis, released its Long-Term Budget Outlook. This outlook projects the nations' fiscal and economic outcome for the next three decades. What fun and joy does the CBO predict for the upcoming thirty years? 

Debt will reach 166 percent of GDP in 2054. As the CBO's graph shows below (p. 10), this amount will be significantly higher than World War II. It will be in 2029 that debt will reach its highest levels and go up from there. 

Entitlement spending is why expenditures continue to outpace revenue. Until the government gets its spending habits under control, there will continue to be a growing deficit. Social Security and Medicare are the two largest culprits of this spending binge. By 2054, these two programs will account for 41.4 percent of federal spending (p. 4).

Interest outlays will more than double. The U.S. government already spends more on interest outlays than it does national defense. By 2054, we will be paying 6.4 percent of GDP (or 23.1 percent of government spending) towards interest payments (p. 10). As I have mentioned before, not only do higher interest payments hamper economic growth, but it means that we could spend that money on something other than interest outlays. 

Two silver linings. One is that the Old Age and Survivors Insurance (OASI) Fund with Social Security with Social Security will expire in 2034, which is one year later than previously projected. But still, it is not good (see below). Two, debt-to-GDP ratio projections are at 165 by 2054, which is 17 percentage points lower over a comparable period than when the CBO released last year's report. Nevertheless, as previously alluded to, it is still a perturbingly high amount of debt.

Postscript. All in all, this unsustainable fiscal path is a quagmire waiting to happen and it shows no signs of slowing down. It reminds me why credit rating agency Fitch's downgraded the U.S. credit rating last year. As the bipartisan Committee for a Responsible Federal Budget (CRFB) enumerates, high debt results in threatened economic vitality, increased budget strains, geopolitical challenges, punishing younger generations, and making it more difficult to respond to emergencies and recessions. Addressing the national debt needs to be a priority if the United States wants to continue being a beacon of economic prosperity. If policymakers continue to kick the can down the road, future policymakers will have to make difficult decisions similar to those that Argentinean President Javier Milei is having to make. I think Argentinean culture is by and large great, but fiscal irresponsibility is one feature of Argentina the United States should not emulate.