Challenge to telerion, palynka, kazetnagora, sh76

Originally posted by eljefejesus
I am surprised by the cordial response, I incorrectly thought you'd give a more attacking response, this one is at least fair. Not that I completely agree though...
exceptions do not disprove a general rule. There are costs associated with general intervention, and like you said, there may be a cost-benefit judgement to make. However, in practical ev ...[text shortened]... nd costs in many countries shows, a rapidly increasing number cannot be afforded in perpetuity.

Again, it depends on how what type of retirement benefits and how is the funding collected. One cannot debate if they're good or bad in abstract.

For example, people who have retirement benefits have less need to put a large chunk of their savings in low-risk applications and so can put them in riskier, but more productive investment opportunities. So having a secure income for old age might lead to more productive investment today. So it's not a clear cut that it's bad for growth and it will depend on the details of the benefits themselves. Similar arguments could be made for your other examples.

Wasteful levels of government spending are, by definition, wasteful. But what is wasted or not is what the real question is. Moreover, some countries' government have grown without burdening future generations. A sound fiscal policy can accommodate for higher spending, but I definitely agree that some want to have the cake and eat it too. These basically are shafting the future generations. I think that this is worse than bad economic policy, it is ultimately unethical and undemocratic that many of those bearing future costs are probably too young to vote!

But then we move to the issue. Is Mission Creep a necessary trait of governments? I don't think so, but I would approve of constitutional rules that limit the ability to do this, or at least require more stringent parliamentary majorities to approve large increases in debt.

Originally posted by eljefejesus
As for defensiveness, what can I say, Palynka can be critical! lol, all part of debating, what can i say, the challenge to defend one's point is fun expecially in the midst of disagreements!

What I truly despise is not disagreement, but when people are faced with a criticism and choose to ignore it by moving to other sub-issues without reply or simply by repeating what they stated before. I find it rude, so I reply in kind. I know my credibility probably goes down because of it, but at least I have some fun when no serious discussion is possible. 😵

Originally posted by eljefejesus
Those two things are both important, but I disagree that cutting taxes or shrinking government makes them worse. Usually, if you cut government spending, you reduce government costs and reduce the government deficit.

Usually, if you return most or all of the savings from cuts in government spending by cutting taxes, then the individuals tend to put t popular, but true, government is misallocating resources to discourage productive lives.

when I was talking about "general efforts to make government smaller" - I was in this case referring to the usual politicians that say they're for "less government" in the general sense without ever being specific about what they want there to be less of, or putting together a specific plan of how the cutting process will happen.

the end result is that when the chips are down, no one ever makes any cuts - they just borrow the money. Throw in a bunch of tax cuts that aren't offset by spending cuts, and you end up with a monumental fiscal mess.

my point is that if the only two options are (1) raising taxes so that the budget will be balanced or (2) not raising taxes (or even cutting them) with all of the difference being made up by borrowing -- the first option is the one that's actually better for the taxpayer

It's similar to a consumer with a credit card. If the consumer has the discipline to buy less stuff today, he'll end up being able to buy more stuff over his lifetime because he won't be spending a sizable percentage of his salary in the future on interest payments. Likewise, if the government raises taxes today (to avoid borrowing), the government will be able to buy more stuff (or buy the same stuff with less revenues) over the long term.

obviously there's option (3) not just promising, but actually reducing the amount of money the government spends so that it runs an annual surplus allowing it to pay down most of the debt - and THEN giving out the tax cuts.

If someone actually proposes this option, I will definitely vote for them just for having the guts to make such a proposal.

Originally posted by eljefejesus
I agree that government isn't always and everywhere necessarily evil, but I do believe that power corrupts and that absolute power corrupts absolutely.

Your parallel hits on the eerie truth that governments are like a business but that doesn't have to seek to add value through innovating, doesn't have to stay in business by earning its own income but s much as possible and are not as eager to cut spending.... scary sort of business, I think.

Obviously, a government is not a business -- and most of the problems arise because governments can "afford" to avoid innovating, improving efficiency, or ignore the WFA. Actually, in many ways, it does resemble a business that's been able to monopolize it's market and avoid or eliminate any competitors.

That is why the political culture needs to see the government as if it was a business and do the things businesses are required to do to remain competitive. Ross Perot's 1992 campaign made much use of this imagery - and I've heard it on occasion in certain campaigns since -- but it has not yet taken hold in the political culture.

Originally posted by eljefejesus
Okay, a brief response since this would be the fourth of the original challenges.

I have to continue to raise the point that in the real world government spending in most countries is so high and excessive as to stand to benefit greatly from reductions and movements back towards non-involvement (libertarian). This is especially true of social securi ow I've fulfilled the obligation I created by the original challenge.

More responses later.

Okay. I guess I'm not willing to cede that every call for a reduced size of government is necessarily libertarian. Most political philosophies believe that there is some upper bound lower than 100% for government's share of the economy. You think that government spending is too large in many countries relative to their income. Fine so do I, but that doesn't make me libertarian. If you insist on this definition of libertarianism then there's nothing to be debated since all four of us are almost certainly libertarian according to that. Personally I think the essential libertarian philosophy is far closer to what you are labeling as the extreme.

Originally posted by Melanerpes
Obviously, a government is not a business -- and most of the problems arise because governments can "afford" to avoid innovating, improving efficiency, or ignore the WFA. Actually, in many ways, it does resemble a business that's been able to monopolize it's market and avoid or eliminate any competitors.

That is why the political culture needs to see t sion in certain campaigns since -- but it has not yet taken hold in the political culture.

In a multi-party democracy, government is more like an oligopoly than a monopoly. Governments cannot afford too much wasteful spending because they'll get the other guys voted into office. Once again, this emphasizes the need for a multi-party system with easy access for new parties.

Originally posted by KazetNagorra
In a multi-party democracy, government is more like an oligopoly than a monopoly. Governments cannot afford too much wasteful spending because they'll get the other guys voted into office. Once again, this emphasizes the need for a multi-party system with easy access for new parties.

In my experience, some of the most wasteful spending comes as a result of the multi party system.
1. In many countries, the government ends up funding the ruling parties election campaign.
2. Most planning tends to be very short term and it is quite rare to think beyond the next election.
3. There is too much focus on pleasing the people and not enough on what is good for them.

I fully realize that the multi-party system is probably one of the more democratic systems in use today, but I do not think it is the most financially efficient.

Originally posted by KazetNagorra
In a multi-party democracy, government is more like an oligopoly than a monopoly. Governments cannot afford too much wasteful spending because they'll get the other guys voted into office. Once again, this emphasizes the need for a multi-party system with easy access for new parties.

The problem is that even in a system with many parties, it is usually hard to make more than a small slice of the voters really care about "reducing waste". Lots of voters passionately care if you raise their taxes. And lots of voters care just as strongly if you cut spending on a program they care about.

But while almost everyone is in theory against "waste, fraud, & abuse" and in favor of "fiscal responsibility", it's a real challenge to make this an issue that will attract a lot of votes -- and it's especially hard to make this an issue when it means raising real taxes or cutting real programs.

So you end up with various parties promising different sets of benefits to different groups of people (whether it be in the form of increased spending or reduced taxes) - with everything being paid for by increasing the debt. And there's little incentive on any party's part to improve government efficiency or reduce WFA.

So none of the WFA issues are really addressed until the debt levels reach a "crisis point" -- it helps if the economy is in a recession because then the debt and WFA can be used as a "scapegoat". This is probably a major reason why Ross Perot had success with this issue in 1992 - and why there could be some success with it now (if the GOP ever gets its act together).

Originally posted by twhitehead
In my experience, some of the most wasteful spending comes as a result of the multi party system.
1. In many countries, the government ends up funding the ruling parties election campaign.
2. Most planning tends to be very short term and it is quite rare to think beyond the next election.
3. There is too much focus on pleasing the people and not enough ...[text shortened]... e more democratic systems in use today, but I do not think it is the most financially efficient.

1. Negligible cost, and not really an issue as long as the opposition has access to similar funding. Besides, if you look at costs of election campaigns you will find them to be very high in the two-party system of the US. Do you have data that suggests there is a correlation?

2,3. Equally applicable to two-party systems.

So what exactly is your "experience"? Of course there are examples of very poorly functioning multi-party systems, such as Italy. But fundamentally, the multi-party system is superior.

Originally posted by Melanerpes
The problem is that even in a system with many parties, it is usually hard to make more than a small slice of the voters really care about "reducing waste". Lots of voters passionately care if you raise their taxes. And lots of voters care just as strongly if you cut spending on a program they care about.

But while almost everyone is in theory against ...[text shortened]... y there could be some success with it now (if the GOP ever gets its act together).

People are usually stupid and won't see the importance of cutting waste. They are, however, happy if you give them something paid for by cutting waste, so this is where the incentive to cut waste comes from.

Originally posted by KazetNagorra
People are usually stupid and won't see the importance of cutting waste. They are, however, happy if you give them something paid for by cutting waste, so this is where the incentive to cut waste comes from.

Except that it's hard to get everybody to agree on what that new something should be. So when the government purchases that new something a bunch of people scream "wasteful spending!"

Originally posted by telerion
Except that it's hard to get everybody to agree on what that new something should be. So when the government purchases that new something a bunch of people scream "wasteful spending!"

Well, if there's nothing else, you can always lower taxes.

Originally posted by sh76
I'm not sure if I buy the argument that taxing the rich decreases their incentive to work, but I KNOW that I do buy the argument that paying the poor too much with no strings attached decreases their incentive to work.

I have dozens of clients that have told me that going to work doesn't pay for them. Just yesterday, a client told me that he's on Medicaid (f ...[text shortened]... rd to take a full time job that would pay him market wage based on his (limited) skill set.

Sounds like a good argument for healthcare reform. Richard Nixon's employer-based healthcare system was never a good idea to start with. If healthcare wasn't related to employment then there'd be less perverse incentive to stay poor.

Originally posted by telerion
Except that it's hard to get everybody to agree on what that new something should be.

The whole democracy thing, gives you "professional economists" the jitters, does it not?

Originally posted by FMF
The whole democracy thing, gives you "professional economists" the jitters, does it not?

No, actually there is a lot of research in development economics and macroeconomics which generally shows that democracies have more sustainable growth.