L there will inevitably be intergenerational costs if

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l There will inevitably be intergenerational costs if we switch systems. A “middle generation” will inevitably be paying for both current retirees and their own future benefits. 3.Ideological battles : l GOP: Allow individuals to control personal retirement accounts (like a 401(k) plan) l Dems: Allow the government to do so (like a pension plan) l Unclear whether reform can happen without settling ideological scores The Result: No progress . Stop-gap measures are adopted as needed, but they fall far short of a permanent solution to the problem.
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APPENDIX – MORE SPATIAL MODEL STUFF
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The Presidency and Congress A simple model captures the dynamics that emerge when the President and Congress negotiate over legislation. This model is very similar to Krehbiel’s Pivotal Politics model, but differs in some important ways—in particular, by incorporating the Hastert Rule. To simplify things, let’s make a few assumptions: There’s a unicameral legislature with a majority party with a median member M with ideal point m. There is a president P with ideal point p . Lawmaking proceeds as follows: If it wants to, M proposes a bill. P decides whether to sign the bill or veto it. This is the simple version of the model, and it’s unrealistic. We’ll cover this version first to help you understand it. Important additions to the model will come in a few minutes.
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The median Republican: John Kline (R-Minn.) President Obama
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m p location of status quo, q b* > q Consider q ’s to the left of p , i.e. q < p. What bill b can M propose that will (1) make M as well off as possible and (2) be signed by P ? It is optimal for M to propose a bill just as far the right of p as q is to the left of p. (Mathematically, this is p +| p - q |.) Denote the optimal bill as b*. In this case, b* moves policy to the right (that is, b* > q ).
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m p location of status quo, q b* > q b* < q Consider q ’s to the right of m , i.e. m < q. What bill b can M propose that will (1) make M as well off as possible and (2) be signed by P ? Simple: the optimal bill b* for M to propose is m. In this case, b* moves policy to the left (that is, b* < q ).
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m p location of status quo, q q b* > q b* < q What about q ’s in the range between p and m ? ( p q m ) Are there any bills b that M wants to propose that will be signed by P ? No. This is the gridlock interval : the range of q ’s in which policy change does not occur. When q falls in the gridlock interval, policy remains at q.
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From Divided to Unified Government Our working example has assumed divided government. How might this change if, say, Marco Rubio gets elected President in 2016 with a Republican Congress?
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The median Republican: John Kline (R-Minn.) Pres. Marco Rubio
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GRIDLOCK b* > q b* < q Under Republican unified government: The gridlock interval shrinks.
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