18 Oct 09
2 edits
Originally posted by KazetNagorraTrue. And I suppose one could lower tax brackets across the board, but usually people will fight over how much each bracket should be reduced.
Well, if there's nothing else, you can always lower taxes.
Look. Given that taxes and transfer programs fall asymmetrically across the distribution of households. Cutting targeted government programs and replacing them with generally tax cuts or general spending is going to leave some of the people net losers. You basically took their concentrated benefit, reduced (or eliminated) it, and then spread the proceeds more equitably among the populace. At this level of abstraction, that policy probably seems more fair (I see it that way too), but that doesn't mean there wouldn't be a sizable fraction of voters that opposes it.
18 Oct 09
Originally posted by twhiteheadExamples, from back to the days in ancient rome, you had entire government positions and farmlands left empty and abandoned as taxes got too high. Rome was paying its civil servants and other employees quite well to keep them happy and supporting the emperor, but they would need to raise taxes. The taxes and their punishments made it worse to run their business than to abandon them and take what they could. You would see whole areas of the former states abandoned.
I have no doubt that the level of taxation has an effect on a countries competitiveness internationally, it may have an effect on a businesses profitability or overall success, but those were not the claim at all.
You said:
[b]Reduced government red tape and political spending would go a good way towards freeing up resources for the taxpayers and main ...[text shortened]... career for a lower income. I find it hard to believe that that is a particularly strong effect.
Another example, the US state of California has been paying through the nose from ballot initiatives that cost millions to billions, to government employee benefits that let them have full medical benefits by age 50 for just having worked 5 years! Not to mention generous pensions for public employees. California also had some of the most liberal work comp laws in the nation (left of the left, it was said) and medical costs were out of control there too. Employers and small businesses were leaving the state (which is the option other than switching to another business). Even the movie industry was starting to leave to places like Canada, Australia, and occasionally considered Mexico recently. What did California do?
It LOWERED TAXES for the movie industry and it reformed work comp benefits to use a generally conservative medical treatment guidelines.
Let's not forget that we are more mobile now days than they used to be in ancient rome, so people move to lower tax areas rather than give up their business, despite all the moving costs that still exists and the need to re-establish any local customer base.
Seriously, if you can make 10% average in well-diversified growth stocks a year and save some emergency reserves in bonds, there's less incentive to keep running a business that after interests and taxes pays about a 5% return.
California still borrows and spends too much and you can hear the small business owners complaining and there is talk of many leaving again. High spending and taxing simply prices out many businesses, do you dispute that?
In Mexico as well, Mexico went from a Golden Age of movies in the 50's or so timeframe to a blight in all but its novelas. The Mexican government has been making different forms of government costs not by high taxes directly, not by tough work comp requirements, but by requiring businesses to give workers generous pensions, etc on top of the generally reasonable taxes. How did Mexico begin to recover some of its movie industry strength? Presidents like Vicente Fox agreed on tax credits to the movie industry. People are more familiar now with bigger Mexican movies and directors with the likes of Guillermo Del Torro and others, with movies like pan's labyrinth, hellboy, others directed movies like children of men, etc.
How? Through reduction in taxes. It really deters businesses because they're not profitable enough when government imposes too many costs, through direct taxes or indirect taxes.
18 Oct 09
Originally posted by KazetNagorraExample,
You should take Palynka's criticism to heart and think more thoroughly about where government intervention is necessary and where it is not. You say that "markets are usually best", admit that "sometimes government intervention is necessary" but do not elaborate on what makes government intervention necessary in those cases. If you have some kind of gen ...[text shortened]... , and when markets fail, then you can get some consistent idea about socio-economic policy.
if you want to stabilize business cycles, government should collect savings in a sovereign wealth fund during periods of growth to be tapped during periods of decline, as with the current credit crisis.
Impartial courts ought to guarantee a certain high level of pay for judges to hand out justice. The government can subsidize such unprofitable costs and usually pays all costs itself directly.
Police and drug officers also need a certain level of pay and benefits to help their interests remain in favor of helping the public rather than in favor of helping the criminals. The government needs to be involved to pay such costs.
Public goods like you mentioned as parks are government items, though some apartments and condos take that upon themselves, but every certain number of miles parks seem reasonable.
The government also helps invest in roads and educations which are also public goods.
As the supreme court said, there is no public benefit in creating an underclass.
What I think is worth investigating is the idea of subsidizing vouchers and creating more competition in school district, as currently kids much go to certain schools in their geographic locations. There's monopolization. Recent testing standards are good. Vouchers would also be good.
Also, subcontracting to private companies is a source of potential gain.
I realize that there are occasional problems, but those are just failed experiments that should be refined, not given up on. Britain gave up to soon on rail privatization. For-profit colleges seem to be the worst colleges so far, but that should mean better regulations and letting the worst of those fail and creating more subsidies of tax breaks to help the best for-profit ones would be the way to go. We don't need just UC universities in California. We need variety and competition. That's why there are private non-profit universities that are the best of the best and don't experience the decline of the UC and Cal State systems during touch economic times.
18 Oct 09
Originally posted by PalynkaI think you and SH76 have hit on a very important political reform issue that is being ignored in the current debate, which is putting a break on all this political spending of the wealth of future generations.
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 hav ...[text shortened]... t least require more stringent parliamentary majorities to approve large increases in debt.
I continue to maintain that less spending is less government, and that this is needed IN GENERAL because it's true, you cannot go across the board and justify government spending at current levels, you can say you favor starting with the least productive, but that is not the same as saying you oppose libertarian's push for a change in policy to reduce governments.
I understand you all dislike that libertarians tend to blame government spending as harmful generally, when there are exceptions. It may well be, but the converse, that defending government spending is generally good is more harmful and more incorrect when you look at the current real situation.
Let's say that all these retiree on social security improve their investment allocation, is it likely that they are investing very much during retirement age at all rather than spending, and most importantly when looking at the relative effect on productivity, are then being even more productive than all the working people who are being taxed social security taxes in order to fund the retirement of 65 year olds?
Here is a look from google images at just how much social security makes up from the US budget:
2008
like to piechart
http://images.google.com/imgres?imgurl=http://upload.wikimedia.org/wikipedia/en/thumb/e/ef/Fy2008spendingbycategory.png/450px-Fy2008spendingbycategory.png&imgrefurl=http://farbar.blogspot.com/2008/09/2008-federal-budget.[WORD TOO LONG]/[WORD TOO LONG]
the numbers
The President's budget for 2008 totals $2.9 trillion. Percentages in parentheses indicate percentage change compared to 2007. This budget request is broken down by the following expenditures:
Mandatory spending: $1.788 trillion (+4.2😵
$608 billion (+4.5😵 - Social Security
$386 billion (+5.2😵 - Medicare
$209 billion (+5.6😵 - Medicaid and the State Children's Health Insurance Program (SCHIP)
$324 billion (+1.8😵 - Unemployment/Welfare/Other mandatory spending
$261 billion (+9.2😵 - Interest on National Debt
Discretionary spending: $1.114 trillion (+3.1😵
$481.4 billion (+12.1😵 - United States Department of Defense
$145.2 billion (+45.8😵 - Global War on Terror
$69.3 billion (+0.3😵 - Health and Human Services
$56.0 billion (+0.0😵 - United States Department of Education
$39.4 billion (+18.7😵 - United States Department of Veterans Affairs
$35.2 billion (+1.4😵 - US Department of Housing and Urban Development
$35.0 billion (+22.0😵 - State and Other International Programs
$34.3 billion (+7.2😵 - Department of Homeland Security
$24.3 billion (+6.6😵 - Energy
$20.2 billion (+4.1😵 - Department of Justice
$20.2 billion (+3.1😵 - Department of Agriculture
$17.3 billion (+6.8😵 - National Aeronautics and Space Administration
$12.1 billion (+13.1😵 - Department of Transportation
$12.1 billion (+6.1😵 - Department of Treasury
$10.6 billion (+2.9😵 - United States Department of the Interior
$10.6 billion (-9.4😵 - United States Department of Labor
$51.8 billion (+9.7😵 - Other On-budget Discretionary Spending
$39.0 billion - Other Off-budget Discretionary Spending
Here is one with many good figure about the $40,000 in debt each american would owe to repay the national debt, the interest, the trillions in debt, etc.:
http://images.google.com/imgres?imgurl=http://chartingtheeconomy.com/wp-content/uploads/2009/03/book9_10067_image0011.gif&imgrefurl=http://chartingtheeconomy.com/[WORD TOO LONG]/[WORD TOO LONG]
Now just as you would jump on anyone arguing for 100% government involvement, and anyone arguing 0% involvement, let's ignore those two extremes and say that in the realistic course of policy discussions, in which practical directions do most governments that are borrowing at the extremes ought to look?
I repeat only such points as have been themselves overlooked in the counter-arguments.
Government spending has been excessive, we need a more libertarian view at eliminating all the government Waste, Fraud, Abuse, and cut more from massive deficits. Once we approach not only sustainability, but responsibility and fairness, then you may have a more valid argument against the libertarian push in their direction. You have all made valid points against a long run, sudden, and dramatic push towards an extreme that ignores all exceptions, however.
18 Oct 09
Originally posted by PalynkaThat's not unreasonable, and if I have done that myself, feel free to point it out.
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. 😵
By the way, here is a link on the Swedes' move towards private pension, even in the much defended socialist dream, they move from pure government involvement to allowing more private involvement, which makes sense with retiree pensions towards some additional privatization:
CONCLUSION
http://images.google.com/imgres?imgurl=http://www.heritage.org/Research/SocialSecurity/images/bg1381cht2.gif&imgrefurl=http://www.heritage.org/Research/SocialSecurity/bg1381.[WORD TOO LONG]/images%3Fq%3Dsweden%2Bgovernment%2Bspending%26hl%3Den%26client%3Dsafari%26rls%3Den%26um%3D1&ei=YGHbSpL0KqfIswOH3MiZBg
"Sweden?s reputation as a cradle-to-grave welfare state would lead many Americans to assume that it would be one of the last nations to privatize its pension system. To the contrary, however, Sweden has made significant and profound progress toward ensuring the future of its retirement program.
In most nations, pension reform is not an ideological issue. The Labor Party, for instance, privatized the pension system in Australia. British privatization is most often associated with Margaret Thatcher, but she merely built upon the reforms that a Labour government had put in place.
Likewise, Swedish policymakers looked at their pension program?s long-term numbers and realized that a partially funded system, augmented by notional accounts for the government-run portion, was necessary. Sweden?s reform will be good for workers, good for taxpayers, and good for the Swedish economy."
18 Oct 09
Originally posted by eljefejesusYou're not addressing the post you've quoted. On a fundamental level, you need to figure out what it is that will make markets fail or succeed. I'll give you a short summary with my limited knowledge of economics.
Example,
if you want to stabilize business cycles, government should collect savings in a sovereign wealth fund during periods of growth to be tapped during periods of decline, as with the current credit crisis.
Impartial courts ought to guarantee a certain high level of pay for judges to hand out justice. The government can subsidize such unprofita ...[text shortened]... nd don't experience the decline of the UC and Cal State systems during touch economic times.
Here are some things which will make a market more successful: transparancy, many producers, easy access to the market for new producers, homogeneous goods, consumer goods. Sometimes it may not be possible to guarantee all or even just some of these conditions (farming is one of the few industries where everything is fulfilled, but ironically governments tend to intervene in this market with subsidies, with huge waste as a result). In these cases a government monopoly or single payer system may be more efficient. In the cases where there is a collective interest in the goods the free market generally works quite poorly because it results in Prisoner's Dilemmas. For example, it's in the interests of the entire population that everyone has good health care and access to education, but the only way to fund it is using a collective scheme.
18 Oct 09
Originally posted by MelanerpesI'll answer your scenario and give you an alternative scenario as well.
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 ...[text shortened]... on, I will definitely vote for them just for having the guts to make such a proposal.
First, let's say you create two options, one is bad, the other is worse. In your scenario, one option is to raise taxes to pay for current levels of overspending that creates deficits. These taxes mean less profits are left for those who saved and invested, and more subsidies for those who are consuming. That is bad, but it's not as bad as continuing to borrow and spend without funding. Now in the real world, there's option 3, which is make government smaller by making them spend less. Take them partly out of the social security system (if not fully) by some form of privatization like even the Swedes admitted that they had to do.
That would have lowered spending.
I agree with what Greenspan said to Bush, you have to fund the tax cuts, not just cut first, you have to actually cut government spending. That is one thing libertarians want and one thing they get attacked for, because government spending has so many defenders when it's said generally, and so many other defenders when its specific.
How many people attacked bush's attempt to privatize social security? The congress couldn't pass it and Bush had nothing to sign.
Let's take the credit card scenario. Let's say you raise your income. If you can do so, that's already a good thing in the first place. If you can avoid INCREASING SPENDING, then that is a very good thing. As you said, government tends to increase spending rather than balance cuts in taxes with cuts in spending. Now let's take an example of where the money comes from, does the government invest in something and make more money to pay down debt? No, it taxes others. So let's say you're a child with parents giving you money, and you run a high credit card debt. Is the responsible thing to control your spending, or to tax your parents more because you ran a big credit card bill? The government gets its money from other productive sources, by far. Its principal revenue is taxes. The kid should cut its spending, the libertarian philosophy is for the government to turn back the clock and roll back the spending, at its practical, moderate, feasible end.
If there is a proposal 3, it is that government should cut spending, like bush wanted to do to cut social security spending. Obama promised to save spending money on the war effort.
I agree with your scenario thing, and I must say, that's what a libertarian would like to see as a start, we need to move in that direction.
18 Oct 09
Originally posted by MelanerpesAs far as the need to have more responsible financial/fiscal policies, I completely agree, and also in the need to encourage innovation, productivity, efficiency, etc. Unfortunately, as you said, government tends to be a monopoly, whether it's a public utility, the post office, etc. I think more sub-contracting would help reduce this problem and encourage competition, and reduce the government size which makes it a huge fiscal burden in its natural monopolistic form. I'd rather have a smaller burden than a larger burden if possible, more competition rather than less, and more efficiency and productivity rather than less.
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 ...[text shortened]... sion in certain campaigns since -- but it has not yet taken hold in the political culture.
I like the Perot example because it exemplifies the need for political competition and fiscal responsibility, plus he pushed the Republicans to learn the appeal of fiscal responsibility to some of their base. The 90's republicans learned to push back at the growth in government spending. I'm sure many libertarians were more please with this alternative than the other greater evils that were possible were it not for perot, which would be more spending and more deficits in the 90's than what ended up happening instead.
18 Oct 09
Originally posted by telerionAnd if you want to increase spending in ways that were good and helpful, and I were to call you a Communist, would that not be unfair? Or if a libertarian saw an evil in government's growth from fiscal to political, would that make him an extremist?
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 doe ...[text shortened]... the essential libertarian philosophy is far closer to what you are labeling as the extreme.
I think it would be unfair to label all libertarians as their most extremes examples.
Libertarians are not by definition anarchists, just because they both tend to see many problems within government.
I think that the libertarian philosophy has many merits, and chief amongst them are controlling the encrouchment on liberties of men and on the distortion of the markets that make allow men to enrich themselves and society freely.
If you want government reduction in size and share of the economy, you are more libertarian than someone who wants more, although you may not quite be a libertarian per se. I would consider most Republicans to be more libertarian than most Democrats, except in matters of national defense. Republicans tend to favor less spending and less encourchment of liberties (except for some issues of national defense like the patriot act).
On the other hand, most libertarians would not support an oppressive level of government intrusion into private life such as the Patriot act. Rather, it would be disfavored.
That is not an extreme position either, nor unreasonable, nor widely shared.
Libertarians will also tend to favor freedom from such major government spending policies as nationalized healthcare, and can join Republicans on that end of things. One major issue is that the government would have to force more people to do more things against their will, thereby encrouching on individual freedoms and liberties.
Milton Friedman and Julian Simon have done some great work on the economics (and political economy) of the value of freedom.
Unfortunately, it seems as though most governments continue to ignore their wisdom and pursue their political interests.
I would favor some of those proposals made here in these threads to limit the extent of government overspending during the election cycle.
I think most of all these proposals would disfavor the current medical reforms being debated, of which most of you have been defending all along. I hope you can all be a bit more consistent.
18 Oct 09
Originally posted by telerionAnd, believe it or not, some people will just point it out and debate it rather than scream it... and if it is wasteful spending, then they'll be right! If it's not, then they'll be wrong. Waste through dead weight loss or market-distorting sallaries benefits are hard to dispute. Do most of you think that public servants are generally paid market rates for the number of hours and skill levels they put in?
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!"
what ever happened to the days when there were more volunteers in government accepting lower pay? that's not even the main problem with public employees, its the combination of low hours, high pay above market rates, and ridiculously generous benefits.
18 Oct 09
Originally posted by KazetNagorraI'll agree on the benefits of transparency, competition (may producers), reduced red tape and artificial/unnecessary barriers to entry (easy access to the market for new producers)... but not sure where your going with the goods you named as consumer goods will exist in a market economy and will avoid the shortages created in socialist-leaning economies.
You're not addressing the post you've quoted. On a fundamental level, you need to figure out what it is that will make markets fail or succeed. I'll give you a short summary with my limited knowledge of economics.
Here are some things which will make a market more successful: transparancy, many producers, easy access to the market for new producers, ...[text shortened]... lth care and access to education, but the only way to fund it is using a collective scheme.
Your prisoner' dilemma scenario does not justify the extremes. Example, just because the government could benefits its people by improving access to education and investing in education does not mean that it ought to directly provide more education itself rather than subsidize the private sector participants that provide it well and not subsidize those that don't provide it well.
Similarly, governments need not tax everyone to force coverage by all, but rather simply subsidize some preventative care for the poor with some level of co-pays to contain costs and provide preventative care. It can also continue to subsidize life-serving emergency care on top of offering some forms of preventative care subsidies.
Governments can help people be healthier, but that should not mean ensuring all people are forced into extreme levels of coverage. Let people at least have their freedom of choice of the level of participation. I could see value in a minimum of preventative and emergency care, but not in pushing all-encompassing and extreme levels of coverage on all.
18 Oct 09
Originally posted by eljefejesusbut not sure where your going with the goods you named as consumer goods will exist in a market economy and will avoid the shortages created in socialist-leaning economies.
I'll agree on the benefits of transparency, competition (may producers), reduced red tape and artificial/unnecessary barriers to entry (easy access to the market for new producers)... but not sure where your going with the goods you named as consumer goods will exist in a market economy and will avoid the shortages created in socialist-leaning economies. ...[text shortened]... nd emergency care, but not in pushing all-encompassing and extreme levels of coverage on all.
I don't understand what you mean with this.
Example, just because the government could benefits its people by improving access to education and investing in education does not mean that it ought to directly provide more education itself rather than subsidize the private sector participants that provide it well and not subsidize those that don't provide it well.
Similarly, governments need not tax everyone to force coverage by all, but rather simply subsidize some preventative care for the poor with some level of co-pays to contain costs and provide preventative care. It can also continue to subsidize life-serving emergency care on top of offering some forms of preventative care subsidies.
That is true. I would not object to such a voucher system per se, although I have no reason to assume it is significantly more or less efficient than a government run scheme. I can at least tell from experiences with privitazation in my home country that the privatization of the railway services, health care and energy hasn't brought any cost reduction.
I could see value in a minimum of preventative and emergency care, but not in pushing all-encompassing and extreme levels of coverage on all.
Why not? And why the adjective "extreme"? Is there any "extreme" health care today?
19 Oct 09
Originally posted by eljefejesusThe effort to cut Social Security was a great example of just how hard it is to actually make an effort to reduce the size of government.
I'll answer your scenario and give you an alternative scenario as well.
First, let's say you create two options, one is bad, the other is worse. In your scenario, one option is to raise taxes to pay for current levels of overspending that creates deficits. These taxes mean less profits are left for those who saved and invested, and more subsidies fo ...[text shortened]... hat a libertarian would like to see as a start, we need to move in that direction.
The big problem is that seniors vote at very high levels, and there's a lot of them, and they have political clout. As an ever greater percentage of the population are seniors, this problem will only become more challenging.
Another problem is that if you cut benefits, those people who've been paying taxes all these years to fund previous generations' benefits will now feel like the rug's been pulled out just when it's their time to collect. Many people will see a fundamental unfairness here.
How would you propose we go about fundamentally reducing the size of Social Security and Medicare in a way that would be politically doable?