> If you reward something, you get more of it. This creates a black market of arranging kidnappings for the tax break.
This is the kind of unhinged batshit economic thinking that leads to people dying because they can’t afford insulin.
This is the kind of unhinged batshit economic thinking that leads to people dying because they can’t afford insulin.
So, first, the "cobra effect," like most economic proverbs, is apocryphal. It didn't happen. It's a story economists tell their kids to keep them from sharing.
Second, there's a big damn difference between "I'm going to grow a snake because I'm getting paid for it" and "I'm going to get my kids kidnapped so I can collect a tax credit without actually having to pay for the kids." It may not appear that way if one's working model of people is "dispassionate rational actor," but it turns out in the real world most people have some kind of irrational emotional attachment to their kids.
Finally, I'd submit that "Cobra Effect"-type problems arise as a factor of two errors - the first is misunderstanding the cultural group for which you're designing practices, and the second is a weirdly inflexible view of society that accepts someone manipulating the system as just a sort of thing that happens and not an egregious breach of the social contract warranting a response.
Don’t assume that everyone else subscribes to your morality, ideology or “ethics”. It’s a brutal world out there and some people value power much more than you do.
Health care for profit rewards companies who limit supply, increase prices, and set the goal of having long-term “customers” because each of those things brings in more cash.
It’s not economic thinking that’s driving the ship though.
People dying because they can't afford insulin are usually not dying because they have insurance where the prescription co-pays for insulin is too high, but because they either are actually uninsured, are effectively uninsured because of a high deductible, or have insurance that works on a coinsurance rather than co-payment model.
And even then that's usually not really the problem, the problem is usually that they can't afford a more basic life necessity (often food or shelter) for themselves or their dependents, and voluntarily forego (or limit use of) insulin to afford the other need. Which is a real problem (and a real public economic policy problem), but usually not fundamentally a healthcare policy problem.
(On the other hand, it's often a problem where moral hazard arguments of the type at issue here contribute to the failure to solve, so the argument about that being the problem may still be correct by a less direct route then seems to have been intended.)
Some tangential articles to show that people exploit children for money. https://www.newyorker.com/magazine/2021/10/25/how-an-adoptio... https://www.npr.org/2019/10/09/768533784/arizona-official-ar...
Since Veblen goods are defined as anything where the demand curve slopes upward, that would only be a result of an empirical study if the study was designed to test, and strong enough to confidently disprove, the existence of goods with a flat demand curve. But it's not meaningful in any case.
> Veblen goods, which kidnapped children most certainly are not.
[citation needed]
Look at the other things that are Veblen goods. They are status symbols. Handbags, rare cars, etc. Kidnapped children are clearly not a member of this category.
> [citation needed]
Please. This is a ludicrous demand for rigor, and not how science actually works.
Captives and slaves, which kidnapped children are the first and often also the second, can be either tools or status symbols (or both simultaneously).
Obviously, flagrantly illegal (and not wink-wink-nudge-nudge tolerated in public) goods tend to only be status symbols in particular criminal subcultures, but those subcultures very much exist.
Yes, that's true. But that's the wrong side of the transaction. This IRS policy is disincentivizing false kidnapping. Not actual kidnapping.
The IRS policy is designed to prevent you from claiming a child as a dependent indefinitely after they have been kidnapped. So, for this to be a Veblen good, it'd have to be a status symbol in your social circle to have had a child kidnapped from you.