Robert Pinsky's 2012 Commencement Speech at Concord Academy →
h/t Larry Kotlikoff
The Age of AI
Image made with the help of ChatGPT
It has been 14 years since my first blog post: What is a Supply-Side Liberal? I have written an anniversary post every year since:
My blogging continues at a slower pace; in addition to my more immediate duties as a professor, husband, father and grandfather, a key part of my research has heated up: my work with Dan Benjamin, Ori Heffetz, Kristen Cooper, Jiannan Zhou, Tushar Kundu and Hannah Solheim toward developing the principles for national well-being indexes that can stand as coequals with GDP and thereby help create a world where what matters most to people matters most to rulers.
More and more, I wonder if the rulers “creating a world where matters most to people matters most to rulers” refers to will be artificial intelligences. In that case, developing comprehensive measures of well-being will be a key part of AI alignment: it is not enough to make AIs care about human welfare. They also need to have a very sophisticated, comprehensive and open-ended concept of human welfare, lest they foster certain human values while crushing others. Jack Williamson’s classic science fiction story “With Folded Hands”—which he later expanded into the novel The Humanoids—is a warning about this. He tells the story of a future where the robots advance human safety at the expense of many other human values.
Like many others, I have been thinking about AI a lot in the past year. I have avidly read news and commentary about AI. I have worried about unaligned AI. I have made sure I was invested heavily in the stock market on the view that AI will lift the economy as a whole, but for large-cap have invested in an equally-weighted fund, which has no theoretical attraction for me, but is simply a way to bet on AI while also betting that the Magnificent Seven (Nvidia, Alphabet, Apple, Microsoft, Amazon, Tesla, Meta) don’t have good enough moats to avoid facing fierce competition in the future, so that their valuations will leak out to other firms, deflating them in relative terms. I have used AI for the first time to help write exams (especially the false answers in multiple choice exams). I have used songs I created with the help of Suno AI to help students remember key ideas in my Intermediate Macroeconomics class. I have used ChatGPT as a tutor to help me learn about three-dimensional and higher-dimensional geometry. And I have experimented with using AI for blog posts. I know I haven’t gotten things down yet. I have tried to represent interesting dialogues I have had with ChatGPT, but ChatGPT is naturally quite long-winded. Nevertheless, here are the posts I have done in the last year using ChatGPT—most of them based on dialogues I had with ChatGPT simply out of curiosity that I then copy-pasted:
The one full post I wrote this past year without involving AI was
I don’t know how many people share this impression, but subjectively speaking, I feel I was in the same technological era from when I was born in 1960 all the way up to 2022. Then, since November 30, 2022, when ChatGPT was released into the wild, it seems everything has been changing with incredible rapidity. We are going into a period in which human-AI teams will beat humans. What is beyond that is hard to foresee with any clarity.
So, to preserve one’s own competitive position, my advice is to experiment with AI and act like a fan, even if you aren’t. And to the extent their are dangers from AI, it will be those who have been doing that experimentation who will be best equipped to cope with those dangers (though those who won’t touch AI will help in warning of the dangers). We are living inside the fabled Chinese curse: “May you live in interesting times.”
The Spirit of Mormonism from a Nonsupernaturalist Perspective—The Chronist →
There is a hyped tone here and some inaccuracies here—for example Mormons avoid the use of the cross as a symbol because Mormonism prefers to emphasize the resurrected Christ rather than the dying Christ—but this video captures much about what is admirable in Mormonism, and much that would ideally be incorporated into a strong nonsurpernaturalist religion. Of course, there is the possibility that much of this works only because of supernatural beliefs. Whether similar things can be done without supernatural beliefs is still to be determined.
On Barry Schwarz's `The Paradox of Choice'
Link to the Amazon page for The Paradox of Choice by Barry Schwarz
As an economist, I have long been annoyed. Contrary to “Having fewer choices is better” message many readers are likely to get from the book, more choices are always better, as long as (a) information is not destroyed and (b) you aren’t stupid about dealing with a larger number of choices.
On destruction of information, consider a website for a type of product you are purchasing for the first time where—instead of the best three options appearing on the landing page—here are now ten options. You now have less guidance than before. By contrast, if what are usually the best three options appear on the main page, and there is a button for “more options” that you ignore unless you really dislike the three main options, you are better off. (Of course, another way destroy information is for the website to steer you to products other that what are usually the best three. Commercial interests don’t always match up with yours. That topic deserves its own post. Some companies do pursue a business model dependent on customers trusting them; this example works best for such a website.)
On not being stupid, it is important to realize that the goal is not “the best product”, but having a good life. In the example agove, ignoring the additional options behind the “more options” button unless you really dislike the three main options is important. Time and attention are some of your scarcest resources. You need to be careful to economize on them. Tim Ferris’s post, “The Choice-Minimal Lifestyle: 6 Formulas for More Output and Less Overwhelm” explains how not to be stupid. He writes:
1) Considering options costs attention that then can’t be spent on action or present-state awareness.
2) Attention is necessary for not only productivity but appreciation.
and gives a lot of good practical advice.
Tim’s advice is based on good economics. It is stupid to ignore information processing costs. The principles of economics require taking information processing costs into account just as much as any other type of costs.
The reason people may think taking information processing costs into account is contrary to economics is because economists aren’t yet very good at modeling how to deal with information processing costs—that is, how to make good decisions about how hard to think about decisions. If I were to propose one problem for microeconomic theory that would be like the Millenium Prize Problems for mathematics, it would be to figure out a way of modeling information processing costs so attractive that it is routinely taught in the core microeconomic theory courses of Economics PhD programs and is routinely used by economists to model whatever applied problem they are studying. This is a hard problem, for reasons I lay out in my post and paper “Cognitive Economics.” 75 years ago, modeling imperfect information and modeling imperfect information processing would have seemed like similar problems. They aren’t. In 2025, modeling imperfect information is essentially a solved problem. But we still have only half-baked models for imperfect information processing. As we stand in 2025, modeling imperfect information processing well is now the holy grail for microeconomic theory.
Miles's Custom AI Summarizes His Proposal for a Public Contribution Program
The more the national debt increases, the more important my proposal for a public contribution program looks. I asked a custom AI I made within ChatGPT to summarize my proposal public contribution program after reading the relevant blog post. A key idea is to have the nonprofit sector take care of a subset of things that government is responsible for—hence the picture of what the government does at the top of this post. Here is my prompt:
Based on everything in Miles Kimball's blog "Confessions of a Supply-Side Liberal," give a 1500-word summary of all the arguments for his proposal for a "public contribution program" to expand the nonprofit sector instead of expanding government. Hit all important points. Make sure to base it on *everything* in the blog on that topic.
Here is its summary:
Here’s a synthesis of Miles Kimball’s case for a “public contribution program” (PCP)—his proposal to expand the nonprofit sector in place of expanding government—drawing on his reader’s guide and every linked, relevant post, plus later cross-references on the blog.
What the public contribution program is
Kimball’s PCP is a donor-directed, mandatory giving scheme that pairs a surtax with a 100% credit for qualifying gifts to nonprofits. In his canonical sketch, marginal tax rates would rise by 10 percentage points on income above about $75,000 per person (or $150,000 per couple), but every dollar of that surcharge could be fully offset by making “public contributions”—donations to high-quality nonprofits that do things government could legitimately do and that can substitute for government spending. This is deliberately narrower than the ordinary charitable deduction; it focuses giving on government-like functions so the program meaningfully relieves budget pressure rather than merely subsidizing any charity. Confessions of a Supply-Side Liberal
Kimball stresses that the PCP doesn’t replace the entire public sector. Defense, minority protections, and other core state functions remain governmental, while the PCP shifts marginal resources—especially in social services, research, foreign aid, and eldercare—toward regulated nonprofits. Eligibility rules (set by normal democratic processes) can exclude, for example, elite cultural institutions that primarily serve the rich (“opera houses”) while allowing faith-affiliated service nonprofits to qualify. Confessions of a Supply-Side Liberal
Why favor nonprofits over more government?
In his reader’s guide, Kimball offers six core reasons to prefer nonprofit provision where feasible:
Decentralization → creativity. A more diverse set of decision-makers, with competition and experimentation among organizations, yields more innovation than centralized bureaucracies.
Easier sunsetting. Funding shifts away from failed or ineffective programs when donors lose confidence—much harder inside government.
Lower cost. Nonprofit wages are typically lower than government pay (outside highly skilled roles), so comparable services are cheaper.
Lower distortions. Even when giving is required, choosing where to give is more pleasant than paying taxes, cutting tax-avoidance behavior and its deadweight loss.
Altruism amplification. Cognitive dissonance works in society’s favor: people required to give come to see themselves as givers; they talk about choices with friends and bring up children in a culture of giving.
Civic education. Thinking about public-goods tradeoffs teaches citizens about policy; people become more informed and engaged. Confessions of a Supply-Side Liberal+1
Kimball anchors this case in John Stuart Mill’s defense of doing “many things outside of government.” Mill warned that enlarging the state needlessly concentrates talent and power in bureaucracy, dampens independent civic capacity, and reduces the competitive scrutiny governments need to perform well. The PCP’s mixed system—some collective rules, lots of individual choice—preserves freedom and pluralism while still getting public goods funded. Confessions of a Supply-Side Liberal+2Confessions of a Supply-Side Liberal+2
The fiscal and political logic (“No tax increase without recompense”)
The PCP is Kimball’s answer to the long-run collision between aging-driven spending and political resistance to higher taxes. He argues we will need more revenue; the question is how to raise it with the least harm. His principle: “No tax increase without recompense”—if we must raise taxes, give taxpayers something they like in return. Here, the “something” is the power to direct the extra money to vetted nonprofits rather than to the general fund. This makes hikes more politically tolerable, reduces tax avoidance, and lets us take care of the poor, sick, and elderly without mechanically expanding the state. Confessions of a Supply-Side Liberal+1
In his Quartz pieces bringing the PCP to a broader audience, he frames it as the alternative to the false choice of austerity vs. spending: shrink government’s footprint while still getting the job done via “a thousand points of light” in the nonprofit world. Confessions of a Supply-Side Liberal
What qualifies as a “public contribution”?
To count toward the 100% credit, a donation must:
Go to a nonprofit meeting high quality standards;
Fund activities that could legitimately be government functions; and
Substitute, to an important extent, for spending governments would otherwise likely do.
He illustrates likely high-priority PCP areas: poverty relief and social services, scientific and medical research, foreign aid that reaches people rather than regimes, and eldercare that helps seniors remain at home. By design, the program crowds out some regular charitable giving (which actually boosts net revenue) while crowding in focused, substitutive giving. Confessions of a Supply-Side Liberal
Although religious congregations as such would not qualify (to preserve the “legitimate government function” standard), many affiliated service nonprofits could. Cultural institutions mainly serving the wealthy could be excluded; legislators would draw and adjust the boundary through ordinary democratic rulemaking. Confessions of a Supply-Side Liberal+1
Distributional and macro effects he anticipates
Kimball thinks a PCP would tilt resources toward areas that current democratic budgeting under-prioritizes—science and foreign aid—while accepting that government likely remains better at national defense and certain minority-protection priorities. He envisions more total resources for the most humane objectives, because the program makes paying for them less painful and more engaging. Confessions of a Supply-Side Liberal
On the macro side, the PCP addresses debt anxieties: it lets us fund what we must without either ballooning deficits or crushing, unpopular tax hikes. And because required giving is less hated than taxes—thanks to choice and social meaning—the program reduces the social waste of tax avoidance, a classic efficiency loss Kimball wants to minimize. Confessions of a Supply-Side Liberal+1
Ethics and behavioral foundations
A recurring thread is that policy should work with human psychology. Kimball leans on two pillars:
Consumption-based fairness (“Scrooge” argument). Ethically, we should tax appropriation for oneself—consumption—rather than savings that might later be donated or invested to benefit others. This perspective makes it feel less punitive to require high earners to direct resources to public purposes rather than simply remit more tax. Confessions of a Supply-Side Liberal
Non-monetary motives. People care about status, gratitude, community, and meaning. Building those into tax design (inspired by Scott Adams’s essay on how to tax the rich) softens resistance to contributing more and channels ambition into public-spirited action. Confessions of a Supply-Side Liberal
He further argues that the PCP cultivates character: via cognitive dissonance, required giving nudges people to see themselves (and their children to see them) as contributors; they’re then more likely to volunteer time as well as money. Confessions of a Supply-Side Liberal
Design details and guardrails
Kimball’s blog proposes and stress-tests the mechanics:
Rates and base. The headline illustration is +10 percentage points on income above $75k per person (or $150k per couple), fully creditable with qualifying gifts. He notes policymakers could cap how much surtax can be offset by contributions, if desired, to reduce perceived advantages for the very rich while still requiring broader participation (so the program actually funds enough). Confessions of a Supply-Side Liberal+1
Eligibility & oversight. A regulator (using familiar nonprofit oversight) would certify organizations and police mission drift, ensuring activities genuinely substitute for government functions. Rules can evolve democratically; mixed systems aren’t inherently less legitimate than fully centralized ones. Confessions of a Supply-Side Liberal
Interaction with current programs. Do not cut direct public programs until decentralized efforts clearly cover specific areas. The PCP is additive at first, creating overlapping coverage and learning; then government can pare back where nonprofits have proven capacity. Confessions of a Supply-Side Liberal
Tax interaction. Because PCP gifts are narrower than general charitable giving and labeled as substitutes for government spending, they crowd out some ordinary donations (which raises revenue relative to a simple deduction expansion). That’s intentional, so the PCP relieves the budget. Confessions of a Supply-Side Liberal
Anticipating the main objections
“Democratic priority-setting is better and more legitimate.” Kimball’s reply: a hybrid of democratic rulemaking (to set eligibility and guardrails) plus individual choice (to allocate within those bounds) is not less legitimate—and often better in creativity and accountability. Mill’s deeper worry is that overgrown states weaken the citizenry’s capacity to act independently; cultivating a vigorous civil society is itself a democratic good. Confessions of a Supply-Side Liberal+1
“This empowers billionaires.” The PCP broadens directed giving beyond the ultra-rich; it requires higher earners—not just plutocrats—to either pay the surtax or direct it to vetted public-purpose nonprofits. Kimball embraces philanthropic pluralism while keeping the state as gap-filler for things that aren’t natural donation magnets. He also points to scholarship rebutting broad-brush critiques of mega-philanthropy. Confessions of a Supply-Side Liberal
“Won’t people game it?” International analogs show design pitfalls and fixes. Japan’s Hometown Tax (a donor-choice system for local governments) spurred big flows, but in-kind gifts created perverse incentives; Japan eventually restricted gift values. The lesson: no rebates-in-disguise, clear caps/criteria, and administrative simplicity matter. Confessions of a Supply-Side Liberal
What would it likely fund better?
Kimball’s lists are suggestive, not exhaustive:
Poverty and social services. More nimble, locally adapted help; easier to scale what works and sunset what doesn’t.
Science & medical research. Systematic under-prioritization in politics could be redressed by donor enthusiasm.
Foreign aid to people (not regimes). Funds can flow directly to effective implementers.
Eldercare innovation. Cheaper, better in-home supports to delay nursing-home entry. Confessions of a Supply-Side Liberal
He repeatedly frames these as areas where nonprofits can beat government on cost and speed while remaining regulable for quality and equity. Confessions of a Supply-Side Liberal
The bigger vision: less hatred of taxes, more love of giving
A subtext through the posts is changing the emotional valence of fiscal policy. Taxes are hated not only because money is taken, but because government monopolizes the choice of how it’s used. The PCP returns choice—within democratic rules—so the same dollars buy more goodwill, less evasion, and richer civic participation. It’s a way to meet Republican goals (smaller government, lighter coercion) and Democratic goals (robust care for the vulnerable) simultaneously. Confessions of a Supply-Side Liberal+1
Bottom line
Miles Kimball’s blog builds a coherent, multi-layered case: fiscally, the PCP is a pragmatic release valve for long-run budget stress; politically, it is easier to swallow than plain tax hikes; institutionally, it cultivates a stronger civil society; behaviorally, it harnesses non-monetary motives; ethically, it aligns with consumption-focused taxation; administratively, it’s feasible with existing nonprofit oversight; and strategically, he urges a gradualist rollout—prove what nonprofits can do before trimming overlapping government programs.
If we must raise more money, raise it in a way people can love, or at least like—by letting them direct it to public purposes. That’s the essence of Kimball’s PCP. Confessions of a Supply-Side Liberal+1
Sources (key posts, in Kimball’s own taxonomy):
“How and Why to Expand the Nonprofit Sector as a Partial Alternative to Government: A Reader’s Guide” (six reasons; scope, legitimacy, J.S. Mill). Confessions of a Supply-Side Liberal
“No Tax Increase Without Recompense” (mechanics; definitions; examples; expected effects). Confessions of a Supply-Side Liberal
“Yes, There is an Alternative to Austerity vs. Spending: Reinvigorate America’s Nonprofits” (Quartz #12; politics and motivation). Confessions of a Supply-Side Liberal
“Off the Rails: How to Get the Recovery Back on Track” (Quartz #14; long-run fiscal framing). Confessions of a Supply-Side Liberal
“Inequality Is About the Poor, Not About the Rich” (cognitive dissonance and altruism under a PCP). Confessions of a Supply-Side Liberal
J.S. Mill series posts (freedom, civic capacity, limits of government). Confessions of a Supply-Side Liberal+2Confessions of a Supply-Side Liberal+2
“Scott Adams’s Finest Hour: How to Tax the Rich” (non-monetary motives). Confessions of a Supply-Side Liberal
“Scrooge and the Ethical Case for Consumption Taxation” (ethical foundation). Confessions of a Supply-Side Liberal
Ryo Ishida on Japan’s Hometown Tax (design lessons). Confessions of a Supply-Side Liberal
Where Kimball revisits and elaborates (e.g., his Feldstein critique and 2021–2024 course pages), the arguments are the same spine: decentralize what we can, regulate it well, and use tax design that people won’t fight—to fund more of the public goods we actually want. Confession