World Family Policy Center Newsletter

John D. Mueller

Director of the Economics and Ethics Program at the Ethics and Public Policy Center.

A FAMILY-FRIENDLY FISCAL POLICY TO WEATHER “DEMOGRAPHIC WINTER”

Family members acquire their incomes mostly by exchange with those outside the family, but within the family transactions are mostly gifts. We all need to be fed, clothed, sheltered, and transported, whether or not we earn income. Our income therefore typically exceeds our consumption during parenthood and the ‘empty nest’ (i.e. after children have left home), while consumption exceeds income during childhood and old age. This involves extensive gifts, not only from parents to dependent children but also between husbands and wives and from adult children to aged parents.” “Even with modern private capital markets, an inherent ‘retirement gap’ arises from the fact that for anyone to retire, labor compensation must fall to zero, yet consumption is ordinarily higher than the property income resulting from earlier saving of stocks and bonds.

Without government social benefits, the retirement gap could be bridged only by a gift from someone (most often one’s adult children) whose own consumption is thereby reduced. Pay-as-you-go Social Security went a long way toward solving the retirement problem by providing an asset that private financial markets cannot.

In a recent study … I showed that just four factors explain most variation in birth rates among the 50 countries for which data were available (comprising about two thirds of world population). The birth rate is strongly and about equally inversely proportional to both per capita social benefits and per capita national saving, both adjusted for differences in purchasing power.

Finally, the birth rate is strongly and positively related to the rate of weekly worship.

The main reasons, then, for below-replacement birth rates in most of Europe and Asia compared with the United States are per capita social benefits so high as to displace gifts within the family, including fertility; the legacy of communism in Eastern Europe and Russia; and lower rates of religious observance (with the notable exceptions of Poland, Ireland, and a few others).

The U.S. Congressional Budget Office has projected that the share of American national income absorbed by social benefits will roughly double over the next 75 years. If so, the empirical relationships I mentioned suggest that the U.S. birth rate will decline over the next 75 years from the current 2.1 replacement level to about 1.6, even if America’s religious observance does not decline. (I also concluded that the proposed method of funding benefits will likely raise the relatively low U.S. unemployment rate substantially.) However, the United States could still avoid a declining population by ending legal abortion, which has reduced the American birth rate since the early 1970s by about one-quarter (an average of 0.6-0.7 children per couple).

My conclusion is that two basic principles of family-friendly fiscal policy are necessary for any country, including the United States, to avoid or escape ‘demographic winter.’ First, the cost of general government consumption of goods and services (i.e. excluding social benefits) should be funded with an income tax levied equally on labor and property income at the lowest possible rate.” “Second, each social benefit program should be balanced with payroll taxes on a pay-as-you-go basis, at a level calibrated to prevent the birth rate from falling below the replacement rate. Since the United States is now at the replacement rate of 2.1, this would require that, rather than doubling, U.S. social benefits must not be permitted to increase at all as a share of national income.

The simplest way to balance U.S. Social Security is to cut retirement payroll taxes immediately by about 25 percent (3 percentage points), thus returning the current trust fund surplus to American working families, to invest without restriction either in raising and educating their children or in stocks and bonds, depending on their family situation.

Government health insurance programs must also be reformed by linking each program’s benefits to prior payroll contributions and maintaining overall annual balance in the same way as for Social Security. These two reforms would vastly increase fiscal fairness and simplicity, make it far easier for families to have and raise children, and so help assure (as the theme of the fourth World Congress of Families has put it) that demographic winter is replaced with a springtime for the family.

This article was originally published in a recent World Congress of Families newsletter and is available at http://www.worldcongress.org/WCF/wcf.nl/wcf.nl.0806.0206.pdf

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FEATURED NEWS ARTICLES

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Editor’s Note: The following excerpts are taken from the week’s news around the world all relating to family and family policy. By clicking on the following links, you may read the entire article from its source. Our intent is to help our readers remain current on the state of the family in the world today. The positions taken and choice of wording and advocacy belong to the authors of the articles; inclusion here does not imply endorsement by the World Family Policy Center.

1. U.N. Terminology Legitimizes Prostitution

CitizenLink

June 19, 2008

During a recent meeting on HIV and AIDS, the United Nations adopted interesting new terminology.

For the first time, most members of the U.N. referred to prostitutes as “commercial sex workers.”

“This was the first meeting where homosexuality, prostitution and injection drug use was promoted as acceptable behaviors that should be protected," said Thomas Jacobson, Focus on the Family Action's representative to the U.N.

He said the idea behind the new terminology is to remove the stigma from these behaviors.

Piero Tozzi, executive vice president at the Catholic Family and Human Rights Institute, attended the meeting and said members are throwing gas on the fire.

“Rather than legitimizing the behavior that leads to HIV/AIDS, there should be efforts meant at curtailing it," he said. "The notion that this is going to help the addicts and benefit society is false.”

To view the entire article, visit http://www.citizenlink.org/CLNews/A000007660.cfm

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2. Schools to open sexual health clinics to hand out contraception and abortion advice without parents' knowledge

Daily Mail (United Kingdom)

June 16, 2008

Sexual health clinics are to be opened in secondary schools to hand out contraception and help arrange abortions.

Pupils as young as 11 will be able to drop in for free condoms, contraceptive pills, morning-after pills, pregnancy testing and screening for sexually-transmitted diseases.

Parents will be made aware of the clinics but will not be told if their children have attended.

Hundreds of schools already run sexual health clinics but many more are expected to follow suit after researchers praised a pilot scheme involving 16 schools in deprived parts of Bristol.

A research team from the University of the West of England concluded that pupils are more likely to use sex advice services if they are based at school.

According to their report, the 16 clinics, catering for 11,805 pupils, received around 500 visits a month from pupils, most aged between 14 and 16 but some as young as 11.

To view the entire article, visit http://www.dailymail.co.uk/news/article-1026600/Schools-open-sexual-health-clinics-hand-contraception-abortion-advice.html

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3. Doctors 'Cure' Skin Cancer Patient Using His Own Blood Cells

FoxNews

June 19, 2008

ATLANTA — An Oregon man, given less than a year to live, had a complete remission of advanced deadly skin cancer after an experimental treatment that revved up his immune system to fight the tumors.

The 52-year-old patient's dramatic turnaround was the only success in a small study, leading doctors to be cautious in their enthusiasm. However, the treatment reported in Thursday's issue of the New England Journal of Medicine is being counted as the latest in a small series of successes involving immune-priming treatments against deadly skin cancers.

"Immunotherapy has become the most promising approach" to late-stage, death-sentence skin cancers, said Dr. Darrell Rigel, a dermatology researcher at the New York University Cancer Institute in New York who had no role in the research.

Still, the immune-priming experiments have yet to yield a consistent therapy. Even researchers who worked on the experiment involving nine patients and just one success are quick to couch the result. "This is only one patient," said study co-author Dr. Cassian Yee of the Fred Hutchinson Cancer Research Center in Seattle.

And two years after his remarkable recovery, the patient fell out of contact with researchers and scientists do not know his current condition. The man, who lives in a small town in Oregon, has declined media interviews, Yee said.

To view the entire article, visit http://www.foxnews.com/story/0,2933,368902,00.html

Adult Stem Cell Findings Offer New Hope For Parkinson's Cure

Science Daily

June 6, 2008

The Griffith University study published in the journal Stem Cells found that adult stem cells harvested from the noses of Parkinson's patients gave rise to dopamine-producing brain cells when transplanted into the brain of a rat.

The debilitating symptoms of Parkinson's such as loss of muscle control are caused by degeneration of cells that produce the essential chemical dopamine in the brain.

Current drug therapies replace dopamine in the brain, but these often become less effective after prolonged use.

The discovery is the work of the National Centre for Adult Stem Cell Research, part of Griffith's Eskitis Institute for Cell and Molecular Therapies. Project leader Professor Alan Mackay-Sim said researchers simulated Parkinson's symptoms in rats by creating lesions on one side of the brain similar to the damage Parkinson's causes in the human brain.

"The lesions to one side of the brain made the rats run in circles," he said.

"When stem cells from the nose of Parkinson's patients were cultured and injected into the damaged area the rats re-acquired the ability to run in a straight line.

"All animals transplanted with the human cells had a dramatic reduction in the rate of rotation within just 3 weeks," he said.

To view the entire article, visit http://www.sciencedaily.com/releases/2008/06/080606102603.htm

Disc surgery using stem cells a first, hospital says

Rocky Mountain News

June 3, 2008

An Aurora spinal surgeon Tuesday performed what's being called the first disc surgery in the United States using adult stem cells to help repair a man's injured lower back.

Dr. Jeffrey Kleiner performed the operation at The Medical Center of Aurora.

"It's something we'll start doing more and more of - if it is successful," Kleiner said. "Like all scientific processes, we're hopeful for a home run, but we have to take this one step at a time. We're just looking for relatively small gains."

Dr. Christopher Centeno, medical director of Westminster-based Regenerative Sciences, the company that grew the cells, said the surgery could change the way future back operations are handled.

"I think this is the beginning of a new era of surgery," Centeno said Tuesday. "We usually take out the offending piece but do nothing to repair the small damage we just created. This allows you to do both."

To view the entire article, visit http://www.rockymountainnews.com/news/2008/jun/03/disc-surgery-using-stem-cells-first-hospital-says/

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4. ABC website tells kids when they should die

News (Australia)

May 26, 2008

AN ABC website has been accused of portraying farmers and forestry workers as evil and telling kids how much carbon they can produce before they die.

The Planet Slayer website, which can be accessed via the science section on the ABC home page, also demonises people who eat meat and those involved in the nuclear industry, a Senate estimates committee heard.

The site has several features including a cartoon series, Adventures of Greena, and a tool called Prof Schpinkee's Greenhouse Calculator to help kids work out their carbon footprint.

The calculator lets users compare their own carbon output to the "average Aussie greenhouse pig" and estimates at what age a person should die so they don't use more than their fair share of the Earth's resources.

Too much carbon production causes a cartoon pig to explode, leaving behind a pool of blood.

Victorian Liberal senator Mitch Fifield today questioned the accuracy and appropriateness of some of the imagery and content on the website.

"I know there's a little bit of goth in all of us, but this might be taking it just a little too far," Senator Fifield said of the quasi life-expectancy calculator.

To view the entire article, visit http://www.citizenlink.org/CLtopstories/A000007572.cfm

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5. Ottawa's anti-cloning law threatens to sap provincial powers: Quebec court

MSN News (Canada)

June 19, 2008

In a 53-page judgment, the court said dozens of federal provisions on clinical and research activities are unconstitutional because they encroach on provincial jurisdictions.

Appellate court justices determined that assisted reproduction should be considered a health matter as opposed to a criminal justice issue regulated by Parliament.

They warned that failing to correct to the imbalance could "amount to a Trojan Horse and would reduce substantially the jurisdiction of the provinces."

The federal law on assisted human reproduction was passed in 2004 and bans human cloning and the buying and selling of human embryos.

It also sets out guidelines for in vitro fertilization and research licensing.

The Quebec government had asked the appeals court to review the law, believing parts of it should be under its control.

The court agreed, ruling 22 articles aimed to regulate "an entire area of medical practice," a task usually left to the provinces.

Quebec's Health Department has often complained that Health Canada was on its turf by controlling elements of the assisted human reproduction industry.

Health Minister Philippe Couillard even tabled a bill last year to create provincial norms for clinical and research activities.

To view the entire article, visit http://news.sympatico.msn.ctv.ca/Quebec+court+strikes+down+parts+of+federal+anticloning+law/Canada/ContentPosting?isfa=1&newsitemid=106366042&feedname=CP-NATIONAL&show=False&number=0&showbyline=True&subtitle=&detect=&abc=abc&date=True

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6. B.C. tribunal hears complaint against Maclean's article

CBC (Canada)

June 2, 2008

A hearing into a human rights complaint alleging a Maclean's magazine article spread hatred against Muslims began in Vancouver on Monday.

Mohamed Elmasry and Naiyer Habib of the Canadian Islamic Congress complained to the Canadian, Ontario and B.C. human rights authorities after the Toronto-based magazine published the article, titled The future belongs to Islam, in October of 2006.

The article, an excerpt of a book authored by Mark Steyn, talks about Islam being a threat to North American institutions and values. It used statistics to show higher birth rates plus immigration mean Muslims will outnumber followers of other religions in Western Europe.

Habib claimed the article violated the B.C. Human Rights Code by subjecting him to discrimination based on his religion and exposing him to hatred.

"We know under the Supreme Court of Canada [and] under tribunals of this country that there are reasonable limits [to the freedom of expression]," Faisal Joseph, Habib's lawyer, said on Monday.

To view the entire article, visit http://www.cbc.ca/canada/british-columbia/story/2008/06/02/bc-macleans-human-rights.html

Quote of the Day: "The best thing to give to your enemy is forgiveness; to an opponent, tolerance; to a friend, your heart; to your child, a good example; to a father, deference; to your mother, conduct that will make her proud of you; to yourself, respect; to all men, charity."

~ Benjamin Franklin