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Dan8267
2013 Jul 24, 5:52am
Liberalism is a social philosophy, not an economic one.
It's actually both. … Liberalism should mean individual liberty in action and choice (so long as it does not constitute aggression to others enjoying equal individual liberty). Political economy is very much part of the philosophical underpinning of this school of thought.
Libertarianism is often described as the philosophy of maximum social and economic freedom. However, it is not. Social freedoms apply to individuals and individuals have very little power unless they can order others to commit acts of violence on them. Liberal philosophy does not allow for that. Economic "freedom" is used to mean that corporations are not subject to the same kind of laws that individuals are, e.g. not polluting, placing others in harm's way, etc. Furthermore, corporations, being aggregates, have the potential to become very large and powerful, far more so than any individual. The exercising of unrestricted choice by these powerful entities does limit the freedom of all others. Hence, liberal philosophy cannot be applied accurately to corporations. Libertarianism isn't liberal economic policy.
Furthermore, a liberal can be fiscally conservative, socialist, or ascribe to any other economic policy. Engineers including myself are very fiscally conservative yet highly liberal. And socialists can be far from liberals as well. So liberalism is independent from economic philosophy and deserves to be a word just used for the social philosophy. A different and distinct word should be used for each of the various kinds of "economic free-for-alls" philosophies. The more you overload a word, the less useful it is for clear and accurate communication.
Dan8267
2013 Jul 24, 5:59am
All that coke you did in the 80s is distorting your memory.
Your graph makes Reagan look bad; therefore, it is incorrect.
Fair enough...
Social freedoms apply to individuals and individuals have very little power unless they can order others to commit acts of violence on them.
Acts of Violence on whom? Does "liberalism" nowadays mean wanton initiation of violence?
Economic "freedom" is used to mean that corporations are not subject to the same kind of laws that individuals are, e.g. not polluting, placing others in harm's way, etc.
Utter nonsense. Economic freedom means the individual's right to choose counter parties in exchanges. Corporations are entirely artificial construct enabled by government laws that granting individual owners limited liability to the stock shareholding. It is your much worshiped government that grants corporations this peculiar privilege.
Furthermore, corporations, being aggregates, have the potential to become very large and powerful, far more so than any individual.
Utter ignorance, both economic and political. People can form organizations based on 1st Amendment free association right. Whether the entity they form is organized under corporate charter or a party platform is entirely up to them. Often times both.
The exercising of unrestricted choice by these powerful entities does limit the freedom of all others.
How is that any different from people forming Democratic Party or Republican Party? Many of their branches are also incorporated entities. Even the labor unions are incorporated entites. What exactly is your point? That if I rent a hotel room, it limits your freedom to use the same room? Isn't that simple economic illiteracy talking?
Hence, liberal philosophy cannot be applied accurately to corporations. Libertarianism isn't liberal economic policy.
Neither liberal philosophy nor libertarianism address corporation directly at all. Most thinking philosophers or economists realize that it is the individual who are capable of making decisions. Corporations only provide a legal veil.
Furthermore, a liberal can be fiscally conservative, socialist, or ascribe to any other economic policy. Engineers including myself are very fiscally conservative yet highly liberal. And socialists can be far from liberals as well. So liberalism is independent from economic philosophy and deserves to be a word just used for the social philosophy. A different and distinct word should be used for each of the various kinds of "economic free-for-alls" philosophies. The more you overload a word, the less useful it is for clear and accurate communication.
This is regurgitation of propaganda designed to obfuscate and confuse you. People can call themselves whatever they want, but any policy advocacy for the divine right of the King/Government/wise-men to make decisions for all is by definition against the liberty of the individual.
The economy creates tons of wealth....
The real economy is actually shrinking, after factoring out government spending and borrowing.
just for the elite, the (crap) job creators whose legs get humped by libertarians and conservatives, not because of government intrusion (you do recognize which country you're talking about here, don't you?) but because that's all it wants to create,
Every one wants to get something cheaper. I don't see you tipping the checkout lady 20% extra either. The real issue is why there hasn't been more rapid growing companies bidding up wages.
which (jobs) it creates kicking and screaming as a last resort after outsourcing and puffery and endless golden parachutes get its important budgetary largesse.
Government subsidy to corporations and therefore indirectly to executives with political connections is a big part of the problem. That's how cronyism works in a typical bureaucratic society.
Even if your boogeyman were, as you say, making such a mockery of free markets by preventing business from eating its own limbs, then why are markets making new highs?
The stock market is making new highs because FED QE. It is the explicit policy hope of the FED to use the stock market wealth effect to pull up the real economy. Needless to say, that's a policy that disproportionally benefit the Wall Street, rather than the Main Street. In fact, it can be said that the inflationary effect from such a policy benefit the rich at the expense of the poor, as the rich get the newly minted money and get to spend it before the poor, who then would have to face inflated price levels.
Don't spew about the middle class, now. That's not where the wealth is, not the wealth you're speciously talking about.
Increasing disparity in wealth distribution is very much the result of the central banking process giving newly printed money to the wealthy, at the expense of the middle class getting hit by the inflationary effect.
The real issue is why there hasn't been more rapid growing companies bidding up wages.
Because of wealth disparity. There are so few quality customers, such minimal quality demand. In a crap economy only crap jobs are created in order to supply goods and services that require virtually all the earnings of the working class.
Central banking is very much the reason behind the dramatically increasing wealth disparity since the 1970's. The working class has too heavy of a debt and tax load: mortgage, student loans, and tax to service national debt.
Government subsidy to corporations and therefore indirectly to executives with political connections is a big part of the problem.
The source of business revenue doesn't dictate executive compensation.
The corporation would of course pay the executive more if the executive is the reason why the corporation gets government contracts, bailouts and/or waiver from regulatory penalties.
Correct, but there's more. The Fed's post crash fiscal policy served to keep the real economy from absolute destruction (which would have occurred if any Libertarian administration had sat on its hands in 2008-9 and simply read from the handbook), and then QE puffed up the financial markets. The jury is still out on whether price inflation will occur before the next crash, but we'll save that for a rainy day.
Liquidation is what helps market clear, removing old debt. A house in Phoenix is far better off to have been foreclosed, sold off to someone like Roberto, who then renovates it and rents out to people at lower rent than the old mortgage payment or even flip sale for a lower price than the old debt from 2007.
What the Keynesian fear mongers call "absolute destruction" is little more than normal market process for removing debt burden. As we mentioned above, debt burden is the reason why consumers are tapped out.
but in the absence of QE a deflationary depression would have had a much greater impact.
Short term deflation would have benefited the middle class far more than inflation, as their cost of living would have gone down while bargain hunting by new businesses on the carcasses of over-leveraged businesses would have generated new jobs that carry less debt burden at the corporate level.
No one forced business into the credit default swap lunacy of pre-crash times. All the players....ALL OF THEM....choose precisely the counter parties they wanted. There's your freedom. And no one....NO ONE....made such decisions other than those free players.
Many of the gamblers should have gone bankrupt. I'm not sure how "free market" those players were though; many of them were counting on FED bailouts to flood the financial industry with new money. It's like if you and I each having only $1Mil, but we decide to bet $5mil on the next coin flip, counting on the FED to pay whoever wins the extra $4mil! Then the "loser" can go work for the "winner." Voila, the two of us have just made an extra $4mil by spewing some scary nonsense.
Government saved the world as we know it. Don't even argue about that. Inflation is the price we pay for not better regulating business.
That's what the propaganda wants you to believe. In reality, the government has nearly destroyed the world as we know it by ripping off the taxpayers to pay the reckless gamblers.
Central banking is very much the reason behind the dramatically increasing wealth disparity since the 1970's. The working class has too heavy of a debt and tax load: mortgage, student loans, and tax to service national debt.
Yep.
The corporation would of course pay the executive more if the executive is the reason why the corporation gets government contracts, bailouts and/or waiver from regulatory penalties.
Yep. this is likely the case for seemingly "failed" executives being recycled with great pay/bonuses, being connected to the government is more important than ever these days.
Liquidation is what helps market clear, removing old debt. A house in Phoenix is far better off to have been foreclosed, sold off to someone like Roberto, who then renovates it and rents out to people at lower rent than the old mortgage payment or even flip sale for a lower price than the old debt from 2007.
What the Keynesian fear mongers call "absolute destruction" is little more than normal market process for removing debt burden. As we mentioned above, debt burden is the reason why consumers are tapped out.
Yep.
Short term deflation would have benefited the middle class far more than inflation, as their cost of living would have gone down while bargain hunting by new businesses on the carcasses of over-leveraged businesses would have generated new jobs that carry less debt burden at the corporate level.
Absolutely.
Many of the gamblers should have gone bankrupt. I'm not sure how "free market" those players were though; many of them were counting on FED bailouts to flood the financial industry with new money. It's like if you and I each having only $1Mil, but we decide to bet $5mil on the next coin flip, counting on the FED to pay whoever wins the extra $4mil! Then the "loser" can go work for the "winner." Voila, the two of us have just made an extra $4mil by spewing some scary nonsense.
Yes.
That's what the propaganda wants you to believe. In reality, the government has nearly destroyed the world as we know it by ripping off the taxpayers to pay the reckless gamblers.
Yep -govt. picking winners and losers is absolutely destructive for the economy.
There hasn't been any complete deregulated and completely free market economy.
If that is true, isnt your premise is based upon theory?
The rest of your points about my examples of state operated capitalistic economies showing the greatest growth in the past 100 years, now collapsing because of central planning - cannot be substantiated. It is your thesis. Economies in North Korea, East Germany, or the Soviet Union are not examples of state operated capitalism, so any allusion to them does not fit.
You cannot simply point to the cause of economic malaise to be government intervention without proof. Those economies are the 4 largest in the world. Their growths all began during times of state operated capitalism. All 4 have systematically reduced regulation - and all 4 experienced downturns after. Have any of the 4 INCREASED regulation - become less free - since their emergence as a world economic power?
My counterpoint is simple. Economic growth in the US for the past 100 years has been higher, on the average, in times of more regulation and higher taxes than in times of lesser regulation and taxes. This is the practical example of an economy operating more closely to Nash Equilibrium with a combination of Smith and Marx.
You didn't answer the question about government protected IP rights.
It has been postulated in previous theads that if deflation were to hit then the rich would flex their economic muscle even more by buying up everything at "firesale" prices. I am not so sure about that. Since most of their money is in the form of stocks and bonds and stocks are particularly sensitive to deflation, wouldn't the weath gap between rich and middle class/lower class actually decrease since the latter 2 don't nearly hold the same percentage of assets in stocks?
Dan8267
2013 Jul 24, 9:45am
Since most of their money is in the form of stocks and bonds and stocks are particularly sensitive to deflation, wouldn't the weath gap between rich and middle class/lower class actually decrease since the latter 2 don't nearly hold the same percentage of assets in stocks?
I concur. Deflation, i.e. money contraction, would devastate the rich and greatly help the middle class. The poor, I'm not sure which way would go. Necessities would be much cheaper, but debt would be harder to pay off.
Deflation, i.e. money contraction, would devastate the rich and greatly help the middle class
Deflation is nirvana for owners of gilt edged bonds. Every cent of interest is worth more each spending cycle, and the potential capital gain on government debt would be impressive. One must be debt free to enjoy this advantage otherwise the liquidation blackhole takes over. For those elite debt free creditors it doesn't get any better. As long as the general economy doesn't suffer so much as to cause commercial bankruptcy the middle class wage earner will be OK.
That's not correct. Creditors cannot overburden the debtors who will simply default eventually, then it is the creditors scrambling to make a deal to see some of the cash as not every asset backing debt is particularly useful and those assets deflate as well. We have seen this during the financial crisis, where distressed people or gutsy pretenders were able to resolve their car or other loans for sizable discounts (50% and more) when banks were scrambling for cash. Being debt free has nothing to do with being an elite creditor, there is still middle class who is debt free because they know that you cannot spend more than you take in, but they are given the shaft with 0% savings and are constantly baited into becoming a debt serf, peddling this nonsense as the "new normal". It isn't and pushing a whole economy/country into debt dependency will eventually lead to its demise. Capital formation is the pillar of a sound economy, because it obeys simple math which just is and doesn't lie.
It doesn't advance the discussion to merely repeat this. I doubt you are that simple minded, or I wouldn't be talking with you.
I have gone into detailed analysis several times already in the past. Pure fiat currency regime since the 1970's exacerbate wealth disparity both on deductive logic and on emperical evidence: Whom do you think the central bank bails out at critical times? Not you and me the average guy on Main Street, but the bosses of the TBTF; that's precisely when money is worth the most. Without central bank bailouts, crunch times are the times when wealth disparity is reduced as the over leverage wealthy pay the price for their extraordinary wealth growth in boom time. Central bank bailouts eliminate/curtail that downside for leveraging by the wealthy. Statstics also show that the wealth disparity has increased dramatically since the US$ became pure fiat in the 1970's. The disparity among industries caused by the central bank is the fundamental reason why US manufacturing jobs have been displaced by FIRE jobs in the past few decades. Central banking has made the "manufacturing" money the most profitable industry in the US.
Debt load is a function of personal responsibility. No one is forced to be stupid with their money. Taxes are not high, but they're always too high for Libertarians. Foolhardiness and some of the lowest tax rates in years are distinct from central banking.
Taking on excessive debt is not necessary stupid in the fiat money system. The wealthy bankers take on excessive debt through leverage, with expectations of central bank bailout. The poor also take on excessive debt, with expectations of debt write-down and bailout. It is the middle class who are screwed by having to take on debt in the face of rising cost of living due to money printing and having to pay the taxes that service the debt for both the ultra rich and the poor. That's why the middle class is being destroyed.
Government contract procurement falls to mid-level personnel. No business model presumes failure such that bailouts are the projected source of revenue. Waivers of regulatory penalties is what you're arguing should obtain in freebooting unfettered risk taking. Besides, that's the job of lobbyists, not executives.
Revolving door between government office positions and corporate executive/consultant positions have been rampant.
Bailout is a fundamental part of the business model that leverage 50x or 500x with no accounting for tail risk; bailout has to be part of the business calculation for such a business model to survive. In fact, many of the bets between GS and AIG were nominal/artificial bets/swaps for book keeping reasons that nobody expected to collect on except for when "bailout" was in the air and AIG was used as a conduit to funnel money into GS.
There is a fundamental difference between reducing excessive regulation for all business vs. waivers for specific cronies. That needs no elaboration, unless you are just a paid shill pretending to be stupid.
Besides, that's the job of lobbyists, not executives.
Whatever you call them, ex-regulators are leaving government offices to become either executives or multi-million consultants for the very industry that they previously regulated.
Again, you know better than this. Yeah, there would have been one hell of a buying opportunity if BO had just let the deflationary depression take place. Perhaps you don't really grasp the difference between simple sector debt liquidation and Armageddon, but you should. If you recall, THERE WAS NO MARKET for trillions of dollars of securities. I can't help you if you can't connect the dots of cascading disaster. It's too easy to refer to it as liquidation now, you're smarter than this.
"No market" is simply an expression for market not clearing. The holders of the asset was expecting government bailout as routine, and the would-be buyers wanted to wait till bailout is in place instead of taking the risk of no bailout.
"Amageddon" is pure BS. The liquidation of Lehman derivative portfolio turned out to be a non-event in the end, because the huge nominal amount involved many many mutually offsetting positions. It was the fear mongering itself that was dragging down the market and designed to induce/justify government bailout at the expense of taxpayers.
Oh, they should have been skull fucked and turned into fertilizer, and I blame BO on letting them live with their testicles intact. But none of them had the bailout as part of a business model. Don't imply that, it's foolish. And that market they played in that brought us all to the brink of ruin was too fucking free. You get that, don't you?
Stop the pointless act. You shills know very well skull fucking is not realistic in any civilized society. Every single one of the big Wall Street banks have bailout as part of their business model. Otherwise, they wouldn't be be leveraging the way they do and have no reserve for statistical tail events that are inevitable in the long run.
Now you're back to the Faux News logic reversal. It's propaganda to claim anything but government saved the world economy from reckless risk taking within as free a market as we have in the modern world.
That's utter nonsense. Banks come and go. Some other banks would have taken the place of the alleged TBTF when TBTF's fail. The reckless risk taking was calculated based on expected central bank bailout.
Yes the gov has tapped the taxpayer (in the form of the US Treasury) and thus saved a system that should have been better regulated in the first place. You've got it backwards, again.
No, you have it backwards. The very existence of central bank "regulation" on what is money is the fundamental reason why reckless gamblers could count on bailouts. BTW, the biggest bailout was not that which was debated in Congress, but at the keyboard strokes at the central bank making new money available to the TBTF. It's the fiat monopoly regulations that make the result of those keystrokes worth anything at the expense of the rest of the population forced to use the money as currency. The government itself has no money. It just creates book entries during bailout setting them up as devices for funneling future tax payment to the TBTF banks as debt service. The long term result is of course further wealth disparity, as the middle class pay the taxes to enrich TBTF executives and bond/shareholders.
My question is when has a market free to act exactly as Smith would want ever outperformed one constrained by circumstances that ensures no one participant can choose individual benefit over group benefit, given perfect knowledge?
The US economy pre-1980 or so was certainly a time of much higher regulation and central planning within a free market framework. China and Germany operate under State operated capitalism (or social market, whichever term you prefer). Their economies seem to be doing pretty well...post-war Japan - lotta central planning and government sponsored over-lending there...
There 4 examples of central planning with a capitalist framework spurring the highest sustained economic growth in the past 100 years or so.
Already addressed in the previous post:
There hasn't been any complete deregulated and completely free market economy.
If that is true, isnt your premise is based upon theory?
Based on deductive logic. Also, you asked for example of completely deregulated and completely free market, so I gave you the specific answer. Libertarianism is not communist aspiring to end-state nirvana. Complete deregulated and completely free market is irrelevant as they do not exist and can not be achieved any time soon. The goal is a less regulated and more free market.
Economies in North Korea, East Germany, or the Soviet Union are not examples of state operated capitalism, so any allusion to them does not fit.
You cannot simply point to the cause of economic malaise to be government intervention without proof. Those economies are the 4 largest in the world. Their growths all began during times of state operated capitalism. All 4 have systematically reduced regulation - and all 4 experienced downturns after. Have any of the 4 INCREASED regulation - become less free - since their emergence as a world economic power?
The common thread is more government intervention vs. less intervention. Nominal "-ism" is quite irrelevant. You are dreaming if you think Japan after 1990, China recently and US after the 1970's have less government than the period preceding it. Japanese government embarked on massive monetary and fiscal intervention after their 1989 stock market crash. Chinese government likewise embarked on massive government intervention since 2008 (the ghost cities have been showing up since then). The US went on a pure fiat currency regime since the 1970's, enabling much higher government spending as percentage of the economy, causing resource misallocation.
My counterpoint is simple. Economic growth in the US for the past 100 years has been higher, on the average, in times of more regulation and higher taxes than in times of lesser regulation and taxes. This is the practical example of an economy operating more closely to Nash Equilibrium with a combination of Smith and Marx.
You are confusing rhetorics vs. reality. The higher tax bracket in the 50's and 60's did not translate into more taxes collected. The talks of deregulation and lower taxes did not translate into lower government spending as percentage of the real economy (or even lower total tax revenue). The reality was that the foot print of government spending and the length of regulatory books have mushroomed despite the rhetorics to reduce both.
You didn't answer the question about government protected IP rights.
That's a whole different issue, not worth sidetracking into at this point.
On what deductive logic? I have pointed out that economic activity has been higher on the average in times of higher taxes and regualtion than it has in times of lower taxes/regulation.
Do you have data that shows otherwise?
How can you deduce that lesser taxes/regulation will spur economic activity when the opposite has been realized in practice?
You obviously don't know what a gilt edge bond is. Sovereign US debt, or corporate debt of unassailably high quality (hence, the term gilt edged) would soar in a deflationary depression. We saw this flight to quality during the Bush administration financial panic.
For a short duration perhaps. Sovereign debt is fundamentally a loan without collatural, and the debtor has sovereign immunity. The term "gilt edge" is invented to describe the thin washing on the paper, similar to a pig with pretty lipsticks.
On what deductive logic? I have pointed out that economic activity has been higher on the average in times of higher taxes and regualtion than it has in times of lower taxes/regulation.
Do you not understand the difference between deductive logic vs. inductive logic? In any case, the data you use to carry your inductive proof is wrong: the existence of higher tax brackets did not mean higher tax revenue collected. More important, even tax revenue itself alone does not give the full picture of the size of government intervention in the economy: total government spending is what creates distortion.
Do you have data that shows otherwise?
You are asking for inductive proof. There are inherent problems with inductive proof in complex systems with many input factors. I will try to accommodate you nevertheless but don't hold me to it:
1. The total government spending as percentage of the real economy is much higher since the 1970's than before (WWII excluded, obviously)
2. The government regulation books are much thicker, and the army of regulators are much more numerous.
How can you deduce that lesser taxes/regulation will spur economic activity when the opposite has been realized in practice?
Your inductive logic process is really broken. Significant reduction in taxes and regulations have almost always led to significant increase in economic activity.
Back to deductive logic: less taxes/regulation enable you the individual to have more resources in your hand to improve your own life and make peaceful mutually willing exchanges with others with less regulations/bans getting in the way. Therefore, more economic activity is possible. Pretty damn simple logical deduction, really. Economic activity is not some magic on a 2D chart, but mutually willing exchanges taking place one at a time.
The US went on a pure fiat currency regime since the 1970's, enabling much higher government spending as percentage of the economy, causing resource misallocation.
Yeah, on-budget federal spending since 1971 (the year we went off the gold standard) has averaged 17.2% of GDP. The average of 1946 (after WW2) through 1970 was 16.4%. If you include the War years and FDR spending through the GD, spending on the Gold standard averaged 17.4%.
http://www.whitehouse.gov/omb/budget/historicals
The higher tax bracket in the 50's and 60's did not translate into more taxes collected.
Same link, federal receipts since the Bush tax cuts have averaged 16.6% of GDP. Federal receipts under Reagan tax cuts averaged 18%. Federal receipts averaged 16.2% in the post war 1940s, 17.2% in the 1950s, and 17.9% in the 1960s. Average over the entire time period was 17.3%.
Federal receipts under Clinton tax increases was 19.1%.
I guess the point of all of that is - what the hell are you talking about? Government spending as a % of the economy has gone basically nowhere before or after Nixon took us off the Gold standard. It was actually higher if you include GD and WW2 spending. If you remove spending since 2008 - and compare that with post-war spending until 1971 - spending was flat (within .1%). Taxes collected as a percentage of GDP were higher in the 1990s than the 1980s, after the Clinton tax increases. Taxes collected in the 1950s and 1960s were higher than they have been since the Bush tax cuts, and on par with every year since 1980.
Do you not understand the difference between deductive logic vs. inductive logic?
You really are an asshole. You must have facts to use top down logic. By induction, your argument is not valid since your conclusion is not true (known), but we assume your premises to be true.
Your premise, if taxes are lower, then you have more money to spend, which implies more economic activity, is false for the entire economy because of the prisoner's dilemma. Just because one market participant has more to spend does not imply increased market activity - the effects of lower taxes (giving one participant more to spend) must be investigated downstream.
Yeah, on-budget federal spending since 1971 (the year we went off the gold standard) has averaged 17.2% of GDP. The average of 1946 (after WW2) through 1970 was 16.4%. If you include the War years and FDR spending through the GD, spending on the Gold standard averaged 17.4%.
Utter nonsense. Take a look at your numbers again, and stop using "average" to cover up the underlying trend. The government outlay as percentage of GDP in the 50's and 60's were in the mid-teens. After 1971, it's been rising to 20% and beyond, rising to as high as 25% in 2009. That's even with the new GDP calculation method inflating the denominator since the Clinton Administration.
The higher tax bracket in the 50's and 60's did not translate into more taxes collected.
Same link, federal receipts since the Bush tax cuts have averaged 16.6% of GDP. Federal receipts under Reagan tax cuts averaged 18%. Federal receipts averaged 16.2% in the post war 1940s, 17.2% in the 1950s, and 17.9% in the 1960s. Average over the entire time period was 17.3%.
Thanks for proving my point: the existence of higher tax brackets did not translate into high tax revenue collected; the tax cut talks did not translate into much reduction in tax revenue collected.
I guess the point of all of that is - what the hell are you talking about? Government spending as a % of the economy has gone basically nowhere before or after Nixon took us off the Gold standard.
Don't blame me if you can't read spreadsheets. Look at Table 1.3 in your own link. Here's the sequence of numbers for outlay as percentage of GDP from 1947 to 2012:
1947- 14.8 11.6 14.3 15.6
1951- 14.2 19.4 20.4 18.8 17.3 16.5 17.0 17.9 18.8 17.8
1961- 18.4 18.8 18.6 18.5 17.2 17.8 19.4 20.5 19.4 19.3
1971- 19.5 19.6 18.7 18.7 21.3 21.4 20.7 20.7 20.1 21.7
1981- 22.2 23.1 23.5 22.2 22.8 22.5 21.6 21.3 21.2 21.9
1991- 22.3 22.1 21.4 21.0 20.6 20.2 19.5 19.1 18.5 18.2
2001- 18.2 19.1 19.7 19.6 19.9 20.1 19.7 20.8 25.2 24.1
2011- 24.1 22.8
See a general rising trend there? Don't forget the GDP denominator has been rigged (so the number here look smaller than otherwise would be) since the Clinton administration
On budget vs. off budget. Combined numbers are skewed by an aging population.
Do you not understand the difference between deductive logic vs. inductive logic?
You really are an asshole.
Is that deductive or inductive logic? or just something up your butt today causing you pain?
You must have facts to use top down logic. By induction, your argument is not valid since your conclusion is not true (known), but we assume your premises to be true.
You are using the wrong statistics. Either that, or you can't read the spreadsheets. My conclusion is correct, as is my premise. You just don't understand the difference between deductive logic vs. inductive logic, and suck at both.
Your premise, if taxes are lower, then you have more money to spend, which implies more economic activity, is false for the entire economy because of the prisoner's dilemma.
Okay, I should have refined "more economic activity" to "more gainful economic activity" as I normally do not count wanton capital destruction as economic activity.
Just because one market participant has more to spend does not imply increased market activity - the effects of lower taxes (giving one participant more to spend) must be investigated downstream.
The effect of lower taxes is not just one person, but on the entire population facing taxes. The whole idea is the numerous individuals are more capable of discovering new forms gainful economic activities than some bureaucrats spending their money in their stead. Bureaucrats are most likely to repeat and amplify the old mode misallocation of resources.
On budget vs. off budget. Combined numbers are skewed by an aging population.
That's an entirely artificial distinction. Government spending is government spending. We are talking about the effect of government spending on the economy.
Is that deductive or inductive logic? or just something up your butt today causing you pain?
Abductive.
That's an entirely artificial distinction. Government spending is government spending. We are talking about the effect of government spending on the economy.
We are talking about higher spending after coming off the gold standard. Your argument is higher government spending "crowds out" private investment and prevents market clearing.
What "crowding out" caused by government spending on Social security can you imply? What has higher spending on old folks done to prevent the market from clearing? How has it encouraged malinvestment?
We are talking about higher spending after coming off the gold standard. Your argument is higher government spending "crowds out" private investment and prevents market clearing.
Not preventing market clearing, but causing misallocation of resources into less productive, non-productive or counter-productive use.
What "crowding out" caused by government spending on Social security can you imply? What has higher spending on old folks done to prevent the market from clearing? How has it encouraged malinvestment?
Another clever strawman tactic. Medicare/Medicaid spending exceed social security. The high price of medicine under MM is certainly resource misallocation, and the primary beneficiaries are not the elderly but the banks lending to hospitals and medical students. It's rent seeking on the taxpayers using the elderly as hostage.
The problem with social security itself is the theft of funds over the decades. So now the youths are prevented from working by the payroll tax.
Medicare/Medicaid exceed social security.
These are on-budget, and included in my analysis that compared on-budget pre-1971 and on-budget post 1971, that was flat.
Not preventing market clearing, but causing misallocation of resources into less productive, non-productive or counter-productive use.
So how has spending on social security done this?
Medicare/Medicaid exceed social security.
These are on-budget, and included in my analysis that compared on-budget pre-1971 and on-budget post 1971, that was flat.
That's exactly what's wrong with analysis from book cookers like yourself. The massive increase in Medicare/Medicaid over the decades (now 23% of total federal government outlay, more than defense budget and more than social security outlay, more than the entire "discretionary" that the sitting administration has directly control over) is cooked down to "flat." Somehow chalked up to aging population instead of recognizing that the cost of medicine has gone haywire under the government 3rd party pay system.
Not preventing market clearing, but causing misallocation of resources into less productive, non-productive or counter-productive use.
So how has spending on social security done this?
The "trust fund" fraud enabled the massive military spending during Reagan years after "reforming SS." Now the stolen funds have to be paid back by current payroll tax, which is preventing the job market from clearing (i.e. preventing the youths from working).
That's exactly what's wrong with the analysis from book cookers like yourself. The massive increase in Medicare/Medicaid over the decades (now 23% of total budget outlay) is cooked down to "flat." Somehow chalked up to aging population instead of recognizing that the cost medicine has gone haywire under the government 3rd party pay system.
You are changing your argument - if you want to argue WHAT government is spending on (more specfically, what it is NOT spending on) now compared to the 1950s/60s, I am in agreement. We spend more of the on-budget outlays on medicine for old folks now than we did in the past - this has caused massvie rent-seeking in the medical profession. This does contribute to economic growth but not in a efficient way because of the private/public nature of the relationship.
Spending has shifted from from productive areas (like on infrastructure) to rent seeking. But it has not increased. trhis is why economic activity has fallen. Cutting spending further on prudcutive areas is not the answer.
ou are changing your argument - if you want to argue WHAT government is spending on (more specfically, what it is NOT spending on) now compared to the 1950s/60s, I am in agreement. We spend more of the on-budget outlays on medicine for old folks now than we did in the past - this has caused massvie rent-seeking in the medical profession. This does contribute to economic growth but not in a efficient way because of the private/public nature of the relationship.
I have not changed argument. Government spending tends to attract rent seekers. After all what else do you call people with connections for getting government contracts? This does not contribute to economic growth at all . . . as resources and human labor are wasted instead of being put to more productive use.
Spending has shifted from from productive areas (like on infrastructure) to rent seeking. But it has not increased. trhis is why economic activity has fallen. Cutting spending further on prudcutive areas is not the answer.
It's a mistake to think even infrastructure building by the government is productive: it's just another form of rent-seeking, by the unions and big construction monopolies with their own lobbies and tap into the government funding process. In fact, they may well be the same crew building the hospital buildings and get the taxpayers to pay several times the cost over many years.
Sovereign US debt, or corporate debt of unassailably high quality (hence, the term gilt edged) would soar in a deflationary depression. We saw this flight to quality during the Bush administration financial panic.
Not sure if you understood, I was talking about regular, individual debtors. Sure they will default much faster as they don't have a printing press, followed by corporate debt. But if you think that US cannot default or inflate its way out (de facto default) I have that bridge that I'd like to sell you. The "fight to quality" won't be last long enough and is heavily depending on the dollar's status as wold reserve currency.
Well, Watson, you read but you do not comprehend. The elite status belongs to those who are both debt free and creditors.
It's you who doesn't comprehend. You don't have to have "elite status" to be debt free. Just a regular middle-class citizen who opted out of being a debt-serf. Which used to be the norm - being debt free or keeping debt at a minimum, shorter mortgages, etc. Correcting inflated prices can only aid.
All of you are making this out to be way more complicated than it need be. We all know that all government spending is eeee-vil. At least any government spending that possibly benefits the working and middle classes. Thus what is there to debate here? Its clear that we should only spend what the lobbys and outside interests want us to spend or not spend money on. As a staunch conservative, I strongly feel that its a big waste to spend money on roads, schools, airports, buses, and libraries. Americans want freedom! And that of course means they should be totally happy to do without and be stoically happy to provide the the aforementioned lobbys because we've all been promised that if we suffer, then perhaps someday we too will be rich rich rich!
freak80
2013 Jul 25, 1:52am
And that of course means they should be totally happy to do without and be
stoically happy to provide the the aforementioned lobbys because we've all been
promised that if we suffer, then perhaps someday we too will be rich rich rich!
Absolutely. Extreme wealth concentration is good for us. Just like chromium.
;-)
As a staunch conservative, I strongly feel that its a big waste to spend money on roads, schools, airports, buses, and libraries.
Roads (turnpikes), schools and libraries all existed long before the government got in on the act. Many airports today are still privately owned, as are most bus lines running between cities.
When the government gets into building these things, that's when things get expensive, and lobbyists get involved to ensure that the big corporate monopolies get the government contracts, and send the bills to the hapless taxpayers.
freak80
2013 Jul 25, 1:56am
Roads (turnpikes), schools and libraries all existed long before the government
got in on the act.
Correct. And only the rich could afford to use them.
Don't blame me if you can't read spreadsheets. Look at Table 1.3 in your own link. Here's the sequence of numbers for outlay as percentage of GDP from 1947 to 2012:
1947- 14.8 11.6 14.3 15.6
1951- 14.2 19.4 20.4 18.8 17.3 16.5 17.0 17.9 18.8 17.8
1961- 18.4 18.8 18.6 18.5 17.2 17.8 19.4 20.5 19.4 19.3
1971- 19.5 19.6 18.7 18.7 21.3 21.4 20.7 20.7 20.1 21.7
1981- 22.2 23.1 23.5 22.2 22.8 22.5 21.6 21.3 21.2 21.9
1991- 22.3 22.1 21.4 21.0 20.6 20.2 19.5 19.1 18.5 18.2
2001- 18.2 19.1 19.7 19.6 19.9 20.1 19.7 20.8 25.2 24.1
2011- 24.1 22.8
See a general rising trend there? Don't forget the GDP denominator has been rigged (so the number here look smaller than otherwise would be) since the Clinton administration
Your spreadsheet doesn't say much. Eliminating pre 1952 numbers since that was part of the general drawdown of the government from WWII there hasn't been all that much creep even allowing for your "rigged" numbers. From about 19% to 22% (pre 2007 crash and allowing for "rigged" numbers) is a 3% change over 50 years. Hardly earth shattering onerous burden on the economy, especially since some of that extra spending actually benefits business. The only thing that pops out of your numbers is that the economy has dropped off the face of the earth in 2007 and hasn't even begun to recover yet.
The fact is the federal government hasn't grown all that much relative to the economy. What the federal government is spending on has changed a lot. State and local governments have exploded however which is a much bigger issue, but you don't go into that at all.
Thanks for proving my point: the existence of higher tax brackets did not translate into high tax revenue collected; the tax cut talks did not translate into much reduction in tax revenue collected.
They were never supposed to. The Reagan tax reform was to simplify the tax system, not change the tax collections. The higher brackets were never collected, there were far too many deductions in the tax code for anyone to actually pay 93% at high income levels or anywhere near that. The point of the Reagan tax reform was to radically cut the tax code and lower the rates to make up for it. The key word is "supposed". That was how it was sold, in actual fact taxes got pushed more into the middle class.
The Bush tax cuts are a different story. They were a pure giveaway to the 1%. The housing bubble and off the books spending on the Iraq war covered up the loss of revenue until the housing bubble collapsed, then the deficit went through the roof which is where it has been ever since.
Roads (turnpikes), schools and libraries all existed long before the government got in on the act. Many airports today are still privately owned, as are most bus lines running between cities.
Yup. You are soooo right! Remember back in the Neolythic times? why- those cavemen paid for their own freeways and airports. In fact, they didn't even have government and as some other people indicated before, people lived a lot longer back then than now. They lived to be an average of 130 years old. When government started happening is when things went all to hell.
I strongly feel that its a big waste to spend money on roads, schools, airports, buses, and libraries.
Not everybody who is arguing against deficit spending and bailouts necessarily holds this perspective. The main issue is that if you are going to spend money on things you have to budget for them now, not in the future. And don't funnel it to private corporations to bail them out.
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According to a conservative publication I unquestionably agree with, science has had it all wrong for untold 1000's of years: The wheel is clearly some sort of eeee-vil liberal hoax. The reality is that squares make way better wheels by far. The reason is that a bunch of liberals way back in the day complained that the ride they got from their square-wheeled ox carts was way too bumpy. Since we all know that liberals are all a bunch of whiners, of course they came up with a lame contraption shaped like a circle that gave a much smoother ride.
But of course we- the silent majority- know the truth! We all know the founding fathers rode around with horse and buggies that had square wheels because they were true patriots!
So- if any of you want to challenge me and say I'm wrong well Ha! No amount of common sense will ever convince me otherwise! So please- keep those replies comin', you liberals!