Source: Bet On It
by Bryan Caplan
“When they hear about awesome yet unlikely policy reforms, one of economists’ favorite reactions is to shrug and sigh, ‘But there’s a huge credibility problem.’ Why not promise foreign investors that they’ll never be expropriated? ‘Credibility. Investors know that after they invest, you’ll reverse the policy.’ Why not deny immigrants welfare benefits for life? ‘Credibility. Natives know that once the immigrants are here, they’ll soon pressure us for equal treatment.’ Why not allow people to give up Social Security benefits in exchange for lower taxes? ‘Credibility. Americans won’t tolerate senior citizens living on the streets.’ Citing ‘credibility’ makes economists sound wise, and laymen sound like wise economists. Yet on reflection, most credibility arguments are foolishly obtuse.” (01/29/26)