The United States has a higher proportion of children living in poverty than Russia–that’s just one interesting statistic from a recent New York Times article on child poverty. The US has this dismal distinction despite giving tax credits and personal tax exemptions for children as ways to combat poverty.
There’s a fundamental flaw with tax credits. Credits benefit people who earn relatively more money and therefore pay relatively more in taxes. Credits don’t do much for children in the poorest of families. The poorest 20 percent of families receive just $120 per year in benefit from the potential $1,000 child tax credit.
Continue reading Basic Income for Children
The United States recently elected billionaire businessman Donald Trump as its 45th president. Trump has no prior experience in government, and campaigned in part on his business track record. Voters seemed to like that, apparently thinking that government needs to run more like a business.
While government can certainly learn from business, it’s important to note that government is different than business. President Obama contrasted the two well, as described in a recent Los Angeles Times article. The difference between the two relates to the difference between social goods and private goods.
Continue reading How Government is Different Than Business
Nonprofits often receive funding for providing a specific service, but not for the organizational infrastructure that supports the service. Running a food bank or crisis hotline is crucial work. Who is going to pay the rent, phone bill, and liability insurance needed to provide such services?
Donors have historically avoided funding “overhead.” Understandably, they want as much of their money as possible going to services. The problem comes in not fully funding your nonprofit for all the costs that contribute to providing services.
Continue reading Fully Funding Your Nonprofit
Back in 2002 Peter Fisher, undersecretary of the U.S. Treasury, described the U.S. federal government as “an insurance company with an army.” After all, if you look at the federal budget, benefits and military spending take the vast majority of funds. Since much of the military focuses on supply chain and distribution, you can modified Fisher’s quote to describe the federal government as an insurance company and a logistics company.
Continue reading Government Can Be A Leader In Digital Goods And Services
Students go into debt to pay for college. In the United States, the amount of student debt has surpassed $1.3 trillion, which puts it on par with auto loans. Americans like to think the student debt is an American phenomenon, but this article from the New York Times shows that students in other countries also borrow, and borrow almost as much. Borrowing may not be American, but struggling to repay is. How can we improve student loans?
Continue reading Designing better student loans using system thinking
This blog needs a definition of social goods. That’s a bit difficult, though. Even economists don’t have a clear and agreed-upon definition. So by way of definition, let’s discuss the characteristics and problems of social goods. We’ll see how those characteristics pose problems for traditional marketing activities such as design, distribution, pricing and promotion.
Continue reading Social goods, defined
Fresh water may be the ultimate community shared resource or commons. It’s a finite and renewing resource. It’s essential for life as we know it. We spend billions of dollars on space exploration searching for it on other planets. How we make use of this scarce shared resource now and in the coming decades will say a lot about our social nature. Marketing principles about pricing and distribution can help us make better use of water during times of drought.
Continue reading Governing the commons: Making markets for water
If you file federal taxes in the United States, do you check the box on the return form to donate $3 to the Presidential Election fund?
Continue reading Pricing presidential elections
In Washington state, where I grew up and where my sister and brother-in-law are teachers, lottery winnings have been dedicated to education since 2000. In 2012, the state Supreme Court found the state in violation of its own constitutional mandate to fully fund public education. And in 2014, the same court found the state in contempt of court for not yet allocating funding. Clearly, lottery funding doesn’t make a difference in Washington state.
Is there a better way to design lotteries for the benefit of society? The Dutch Postcode lottery could provide lottery program directors with a blueprint.
Continue reading Innovative government program design: the Dutch Postcode Lottery
Once when I was a teenager, I was pulled over by a police officer while I was riding my bike. It was very early on a June morning, before 5 a.m., and I was biking to my summer job on a landscaping crew. I didn’t get a ticket, but needed to convince the officer that I wasn’t an early morning bike thief.
Recently, officials in Lillestrom, Norway, were pulling over bike riders for another reason–to pay them a “reverse toll.”
Continue reading Pricing as promotion: reverse tolls