Issue Brief

The entire edifice of insurance regulation by state governments is a leftover from the New Deal. Since World War II, in virtually every industry other than insurance, this type of regulatory control has been replaced by more realistic, market-based mechanisms. The recent attempts by the State of Florida to regulate insurance prices demonstrate the compelling need to modernize today’s dysfunctional state insurance regulatory system.

The problems of insurance industry regulation merit the review currently underway at the Treasury Department. The review should concentrate on identifying the most critical problems these industries face as a consequence of government action (or inaction), and target a few discrete initiatives, such as regulatory competition, that should set the political process on a straight road to reducing those problems.

Designed to recover welfare costs from parents who abandon their children, child support has expanded to include middle-class divorced families for which it was never intended. Through this abuse of power, taxpayers subsidize both fatherlessness and state government operations.

Technologists, and particularly computer programmers, seem to fixate on unlikely scenarios while giving only lip service to the massive copyright infringement now happening. When they do look at problems, they dismiss technical solutions because they are not perfect. And they ignore how laws can support or work alongside technology, because law is unfamiliar to them. By putting problems in perspective, technologists can be particularly effective in finding approaches to the real problems in today’s digital world.

While many people in the copyright debate talk about "fair use," they seldom say which uses are of concern. But without specifics, it is hard to provide balanced exceptions to copyright protection. Congress should codify "fair use of necessity" and many instances of "economic fair use" so that people will know what is allowed, while reserving fair use primarily for the "transformative" or "productive" uses that reflect the
goal of copyright.

Fear of projected fiscal problems is driving many policy thinkers, including some prominent conservatives, to accept the inevitability of large tax increases as a partial solution. This course is a mistake, as it will lead to economic stagnation. Instead, conservatives should confidently advocate the package of reforms presented in this study that will deliver superior benefits to U.S. taxpayers and citizens.

Many are attempting to rewrite intellectual property protections by altering the Digital Millennium Copyright Act, whether by broadening definitions of permissible conduct such as “fair use”, or by wholesale changes to current law. However, many have failed to consider the ramifications of these changes to our international agreements. Some legislative proposals would require renegotiation or complete dissolution of these trade agreements.

Indexing Social Security benefits to the growth of prices is politically indefensible. Even with small personal accounts, price indexing would result in even lower returns for workers, and likely to lead to tax increases. A far better alternative are large personal accounts, which would make price indexing completely unnecessary. Such accounts would provide workers with much higher returns than under the current system, and restore Social Security to permanent solvency.

The total Social Security trust fund surplus would immediately fund 3.2 percent personal retirement accounts, stopping the spending raid on the trust fund and starting the personal accounts so broadly supported by the public. This would begin to solve Social Security’s unfunded liability problem while leaving the door open to a future extension of the accounts or other steps necessary for a comprehensive solution.

Consumer groups and the media are putting pressure on public officials to allow U.S. citizens to reimport drugs from foreign countries like Canada. Using an economic simulation model, this report concludes reimportation or price controls would have a significant negative impact on the Washington economy, and its large biotech sector.