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AEI's weekly digest of top commentary and scholarship on the issues that matter most

Maximum Distortion in Future Investment

Prescription Drug Pricing Proposal Disrupts Investment for Minimum Benefit in Cost

July 23, 2022

Kirsten Axelsen criticizes a proposal now under consideration by the Senate Finance Committee that would require the US government to set certain prescription drugs' prices. "This type of policy," she writes, "achieves maximum distortion in future investment for minimal healthcare savings."

 

 

Encouraging lawmakers to pass the Bipartisan Innovation Act, John P. Bailey explains why American leadership in science and technology depends on investments and reforms in three crucial areas: (1) domestic semiconductor manufacturing; (2) federal support for research and development; and (3) our immigration system, to admit greater numbers of skilled immigrants.   

 

In his newest report, Derek Scissors discusses how America can begin improving our supply chains' resilience. Scissors identifies constitutive materials as the "single weakest link in many supply chains" and urges US policymakers to take stock of our demand and reliable supply of those.

 

Mackenzie Eaglen considers why America's massive (and increasing) defense spending is still unable to meet our strategic needs. To start, Eaglen finds severe financial constraints on the Pentagon's flexibility: "Between two-thirds and three-quarters of the entire defense budget is preordained and essentially spent before policymakers can begin choosing how to advance their strategy."

 

As the Dobbs v. Jackson Women's Health Organization decision prompts some Republican lawmakers to propose legislation expanding federal benefits to families, Angela Rachidi asks: "Can limited-government conservatives support pro-family policies?" An affirmative answer, she contends, requires greater targeting at middle- and low-income families.

 

Past instances of racial bias have made the use of algorithms in hiring and policing anathema to social justice activists. Robert Cherry contends that algorithms' transparency and adaptability, in contrast to humans', make them exceptionally effective at making large-scale decisions while mitigating biases.

 

Does Our Solution Lie in Tokyo?

In a presentation from the AEI Housing Center, Tobias Peter contrasts Hawaii's restrictive housing policies and exorbitant costs with those in Tokyo, where housing prices remain stable and affordable, especially among megacities. Peter finds that Tokyo's developers enjoy a far freer, market-based policy environment than those in Hawaii, which has the highest home prices and second-highest rents among the 50 states. Peter reports that Tokyo's policies, from inclusionary zoning laws to restrictions on local interference, have protected property rights, lowered prices, and created a dense but livable environment where the housing stock has grown steadily. He proposes several ways that Hawaii (and other states) could embrace similar policies to improve the affordability and quality of its housing.

 

 

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