Tuesday, July 10, 2012

A Post Modern Draft?

A though provoking post from CNAS’s Tom Ricks

Sanka freeze-dried version.

Institute conscription for approximately 4 million annual HS grads with three pipelines.

1. 18 months non-combat state-side only stint in a branch of the armed forces

2. Civilian national service for 24 months

3. Opt out.

If (1 or 2) then, you will receive free or subsidized college and government bennies of other sorts. Which ones? See below.

If (3) then, no free or subsidized college education and no government bennies. Which ones. Well..
“Those who declined to help Uncle Sam would in return pledge to ask nothing from him — no Medicare, no subsidized college loans and no mortgage guarantees. Those who want minimal government can have it."
[Ed. Note: ‘Those who want minimal government’ would, no doubt, nevertheless be required to pay taxes to fund that government, and, in particular, the program they choose to avoid. So they wouldn’t quite “have it” in that regard would they? Or, would Ricks also allow them to opt out of paying the bills for these programs? Seems entirely do-able, especially when allied with consumption taxes that would allow them to pay their share for other government provided benefits they would still use, like highways. But that would imperil the funding for the conscription program, it seems.]

Pay for conscripts would be “low” whatever that might mean. Minimum wage? Less? He doesn’t really say. Considering the benefits package earned upon completion, could a case be made to exempt the conscripted from coverage by the minimum wage law? If not, then assuming 100% participation in the first year and the present federally mandated minimum wage ($7.25) x 4 million x 40 x 52, that would be an outlay of about 15,000 annually per conscript = about 60 billion annually for the program if I’m doing my math correctly. This is not including any benefits that would also be provided during the stint.

Those opting for (1) would do ‘menial’ work at domestic military installations while the volunteer force would do the fighting. Those opting for (2) would provide free day care, or meals on wheels, park clean up, sanitation engineering at public buildings, and other such things, unspecified.

All would be housed at government expense.

So, to continue calculating cost of this program for the first year, you would have to calculate the cost of the housing and benefits. Say ¼ of the 4 million opted for (1), and did the 18 months. They will have earned free college. 4 years at an average state college, tuition and fees amounts to approximately 13,000. Amount: 52 billion.

Assume housing costs of $500 a month for 1 million, you have 500 million.

So far, back of scratch pad estimate has it at 52.5 billion. Add to that the wages, of 15 billion (one quarter of the above calculated 60 bills), and you have 67 billion annually once things have fully swung into operation.

Say 2 million opt for (2), at a cost of a little under twice that amount, 65 billion (subsidized college vice free college). That’s 132 billion added to the budget each year, NOT including the costs of instituting the new bureaucracy to run the conscription program. (And, even here, I suspect the longer stint will actually take us up to the 140 bills range, but I’m ignoring that.)

Ricks thinks money can be saved by using these low wage kids in place of contractors at military bases, doing things like painting fences and ‘driving generals around.’ Similarly, they can supplant civilian sector overpaid public employees. I suppose he thinks money will be saved from the libertarian kids as well. I’ve assumed 1 million libertarian kids here. Cost figures are necessarily higher if that number is less. I suspect it would be, given parents’ encouragement to take the opportunity, given the prohibitive cost of colleges and universities these days. What does he say about these costs? First, on the military side:
“A final objection is the price tag; this program would cost billions of dollars. But it also would save billions, especially if implemented broadly and imaginatively. One reason our relatively small military is hugely expensive is that all of today’s volunteer soldiers are paid well; they often have spouses and children who require housing and medical care.”
This raises the obvious question: How exactly would the program save billions if implemented broadly and imaginatively? The gist of the second sentence seems to be that the low paid kids will supplant the well paid volunteers. (I suspect at least some of the volunteer corps would contest the ‘well paid’ descriptor, but no matter.) Assuming it’s true that you can get those kids on the cheap, and few of them have spouses and kids, it’s still the case that they will need housing and medical care. Oddly, Ricks says this about that:
“Unmarried conscripts don’t need such a safety net.”

At any rate, the costs for constructing/refurbishing/maintaining housing for conscripts would perhaps offset the savings from culling the ‘well paid.’ At least I broadly imagine that could be the case. Similarly, a bit later he says this about the non-military public sector:
“The pool of cheap labor available to the federal government would broadly lower its current personnel costs and its pension obligations — especially if the law told federal managers to use the civilian service as much as possible, and wherever plausible. The government could also make this cheap labor available to states and cities. Imagine how many local parks could be cleaned and how much could be saved if a few hundred New York City school custodians were 19, energetic and making $15,000 plus room and board, instead of 50, tired and making $106,329, the top base salary for the city’s public school custodians, before overtime. The savings actually might be a way of bringing around the unions representing federal, state and municipal workers, because they understand that there is a huge budget crunch that is going to hit the federal government in a few years. Setting up a new non-career tier of cheap, young labor might be a way of preserving existing jobs for older, more skilled, less mobile union workers. “
I actually like this latter thought, but imagine the hue and cry from organized public sector unions. Yikes. Such a bill would probably not survive Congress.

More questions or reactions:

1. Who exactly will oversee these kids? Will the military have to add to the volunteer corps ranks to do so, or will it add these duties to those of the extant (and presumably smaller) volunteer ranks?

2. In the civilian-public sector arena, similar questions arise but with greater urgency. Will the government(s) partner with existent ‘meals on wheels’ and other such programs, or create its/their own programs?

In either case, the influx of new employees will require an expanded management base, and expanded facilities. That will cost. Suppose that adds another $100 billion. Total annual program cost now is around 232 billion by my rough calculations.

3. I have a sneaking suspicion there will not be enough work to go around for the millions of kids being funneled into this program each year. Consider year 1 will have 3 million, year two and subsequent years 6 million minus a few. That’s somewhere around 400 to 500 billion annually.

4. This sounds implausible:

“Similarly, some of the civilian service programs would help save the government money: Taking food to an elderly shut-in might keep that person from having to move into a nursing home.” (Assuming, of course there are not health related reasons for the move. And, when there are health related reasons for the move, the care will be as expensive as it is now.)

5. What would the impact be on the private sector job market? Who is going to man the low wage jobs at restaurants and the like? Are there enough libertarian kids to go around?

6. Is it really conscription if there is an opt out? What would SCOTUS say? Lastly, I am mystified by this claim:
“But most of all, having a draft might, as General McChrystal said, make Americans think more carefully before going to war. Imagine the savings — in blood, tears and national treasure — if we had thought twice about whether we really wanted to invade Iraq.”
Exempting conscripts from combat operations will not have this effect, it seems. A non–mandate-mandate…er..Non-conscription-Conscription (remember the opt out) also will not have this effect. If the Vietnam era draft (which had no such exemptions and no such room for a legal opt-out) didn’t have the effect of making America think twice about entering that war, why would this post-modern draft have any different result today, and how would it have made things different in 2003? One thing is for sure, the mere fact that we have to discuss this…it’s…well:

Using Behavioral Science to Nudge Taxpayers

That's the gist of this blog post from Donald Marron. Across the pond, behavioral scientists, advisors to David Cameron, suggested revisions to a standard letter sent to "certain taxpayers—primarily small businesses and individuals with non-wage income" reminding them to pony up within six weeks. Implied in the post, is dissatisfaction with the letters as they were, and an unacceptable rate of folks that fail to respond. So, the suggested revision, by the advisors, is to include language that points out that a majority of peers do pay on time.
Letters using various messages were sent to 140,000 taxpayers in a randomized trial. As the theory predicted, referring to the social norm of a particular area (perhaps, “9 out of 10 people in Exeter pay their taxes on time”) gave the best results: a 15-percentage-point increase in the number of people who paid before the six-week deadline, compared with results from the old-style letter, which was used as a control condition.
The take-away for Marron is that teams of such behavioural scientists should advise the President, playing a role similar to that of the President's Council of Economic Advisers. As above, they should institute controlled experiments to see what practices work and what practices fail, with regard to getting people to behave in ways desired (in tax compliance and other areas).
Governments on both sides of the Atlantic should look for opportunities to run such controlled experiments so that, to paraphrase Thaler, evidence-based policies can be based on actual evidence.
One might add that we can find empirical evidence of the relative efficacy of policies from less controlled 'laboratories.' We should consider the individual states as such laboratories. Municipalities. Counties, and looking further afield, countries. How do folks (individual and corporate) behave in these labs? Do they stay or do they leave (if possible)? Do the governments 'running the labs' generally have success in providing services on time and on budget? This would be a sort of field work to the controlled experimentation suggested.