President Bush, Fiscal Policy
GreyFlcn
Join Date: 2006-12-19 Member: 59134Members, Constellation
Join Date: 2006-12-19 Member: 59134Members, Constellation
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For a brief look into the current policy:
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->February 16, 2007
<a href="http://www.cato.org/pub_display.php?pub_id=7774" target="_blank"><i>The "Beltway Cut"</i></a>
by Stephen Slivinski
So you're the president. Your party has just taken a beating in the 2006 mid-term elections. Voters came to realize that your party—over the previous 20 years has been affiliated in the public imagination with fiscal discipline—was no longer interested in making government smaller. So when it comes time to present your first federal budget in the post-rout era, what do you do?
If you're George W. Bush, you start the spending bonanza all over again, with an opening bid of $2.9 trillion. You increase the Pentagon budget by 10 percent, and that's before you add the price of the troop surge for the increasingly unpopular war in Iraq. In short, you do what you've always been doing. You spend like hell and hope nobody—particularly fiscal conservatives—pays attention.
If you've followed media reports about the budget, you might have the impression that the Bush budget actually cuts spending overall. The Boston Globe, for instance, reported "deep cuts" in the Bush plan. But only by the pretzel logic of Washington could an overall spending increase of 4 percent, as Bush has proposed, be considered a cut. It's what you might more accurately call a "Beltway cut."
Here's how it works: Assume government spending will continue to grow annually by seven percent on average, as it has for the past six years. Then imagine you only get a four percent increase this year. Official Washington would see this as a three-percentage point cut. It's the fiscal equivalent of a recovering alcoholic drinking only two and a half beers instead of the whole six-pack before the A.A. meeting.
Another example of the Beltway cut is the president's proposal for Medicare, a program which is already racking up an estimated $32 trillion dollar deficit over the next 75 years. The new budget simply reduces the expected growth of the program from an average of 6.5 percent each year to 5.6 percent. That modest decrease in the rate of expansion was enough to make the New York Times editorial board livid, calling it an attempt to "slash key entitlement programs."
The Bush proposal does include some useful structural changes to Medicare that could reduce the long-term deficit in that program by $8 trillion. But even that is yet another version of the Beltway cut. His Medicare drug benefit has already increased those unfunded liabilities by more than $8.7 trillion. His proposals still leave a $700 billion hike intact.
In order to balance the budget by 2012, as Bush claims he wants to do, spending would have to actually be cut from current levels. But what's so special about 2012? The president could have presented a plan that really cuts overall spending, and balances the budget by the time he leaves office. This might have helped repair some of the damage of the past six years, during which Republicans successfully destroyed their image as the party of small government by hiking non-defense spending over 40 percent since 2001. And balancing the budget in the next two years would completely eliminate the Democrats' ability to use the deficit as a reason to kill the Bush tax cuts. Instead, the president has honed in on 2012, four years after he's left office.
Meanwhile, Democrats will continue to say the president's budget will destroy the social safety net and the press will continue to claim it is austerity incarnate. The bipartisan embrace of the Beltway cut continues and political life goes on. Everyone goes home happy.
Except taxpayers.<!--QuoteEnd--></div><!--QuoteEEnd-->
For an in-depth look at the 2006 US Federal Budget:<a href="http://www.cato.org/pubs/pas/pa543.pdf" target="_blank">The Grand Old Spending Party</a>
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->President Bush has presided over the largest overall increase in inflation-adjusted federal spending since Lyndon B. Johnson. Even after excluding spending on defense and homeland security, Bush is still the biggest-spending president in 30 years. His 2006 budget doesn’t cut enough spending to change his place in history, either.
Total government spending grew by 33 percent during Bush’s first term. The federal budget as a share of the economy grew from 18.5 percent of GDP on Clinton’s last day in office to 20.3 percent by the end of Bush’s first term.
The Republican Congress has enthusiastically assisted the budget bloat. Inflation-adjusted spending on the combined budgets of the 101 largest programs they vowed to eliminate in 1995 has grown by 27 percent.
The GOP was once effective at controlling nondefense spending. The final nondefense budgets under Clinton were a combined $57 billion smaller than what he proposed from 1996 to 2001. Under Bush, Congress passed budgets that spent a total of $91 billion more than the president requested for domestic programs. Bush signed every one of those bills during his first term. Even if Congress passes Bush’s new budget exactly as proposed, not a single cabinetlevel agency will be smaller than when Bush assumed office.
Republicans could reform the budget rules that stack the deck in favor of more spending. Unfortunately, senior House Republicans are fighting the changes. The GOP establishment in Washington today has become a defender of big government.<!--QuoteEnd--></div><!--QuoteEEnd-->
Of course, in the current political, cultural climate, we are expected to assume that if the Bush (read: Republican) fiscal policy is to say you'll stop spending and the spend more (or more-ish) then the only other alternative is the Democrat policy of spending for the Greater Good.
This is what leads people, like me for example, to say that the US is headed for the <a href="http://en.wikipedia.org/wiki/Socialism" target="_blank">Socialist</a> economies of Europe. The US government is taking in too much money and using it to influence too many aspects of society.
The Republicans today are not the Republicans of the 40s, 50s, and all the way through the 70s. House and Senate control were firmly in Democratic hands throughout the 50s, 60s, and all the way until the revolution of 94. And when the Republicans rocked both the House and the Senate, they actually were forced to work with Clinton to control the budget and make sure spending didn't get out of hand. When Bush took over, and the economy tanked, all bets were off.
Spending would have skyrocketed under either party. Both parties now stand for Big Government, because each person on Capitol Hill is fighting for more power, and more power means a seat on some big committee that's meant to oversee some activity which costs money that's a direct drain on the taxpayers.
<b>Spending's out of control now, but that's made paradoxical because the public's been placated by either no tax hikes, or even tax cuts (for the upper income quintile). That means the Feds are spending money they don't have, giving the Federal Reserve the enormous task of raising more and more money (subsequently taking on more and more debt) to fund the Federal government. </b>
Eventually, it'll get to the point where either there will be a massive RIF of the Federal government, or politicians will have NO CHOICE but to raise taxes, and raise them high.
Considering the American public, the former will happen. And all will be well again, until the cycle starts again.
When democrats say they want to Tax oil companies, and fund R&D for renewables.
You get people who blather about
"OMG Socialist Fiscal Policy! Stop the Communists. They deserve the money they rightfully earned."
But hey wait a minute, if they truely deserve every last penny of what they make.
Then how come we're funding them billions of tax payer dollars each year?
Is it so wrong to expect returns on investment of tax payers money?
Ideally, the government should never have to subsidize private industry but I think it's acceptable, on a rare occasion, to inject funds for future scientific or industrial developments. The money should be used as a primer to show whether or not the subject is worth pursuing economically. Academia should be the ones taking on this mantle considering the amount of money that gets crammed into their budgets every year. And, if the research proves out, it should be up to private companies and the market, not Congress, to determine if the ventures are worth their merit.
But don't mind me, I only put the logic book on the shelf because I liked the cover.
Everyone seems concerned about military spending, and while some of it is utterly useless (the old $100 for a toilet seat routine), the military is actually a decent use of the money (at least it does something), unlike some programs which are overstaffed or inproperly managed (or serve unnecessary roles).
...how's it go, "the bureaucracy is expanding to meet the needs of the expanding bureaucracy" ?
Actually, GreyFlcn skipped right over the answer any free-marketeer should give: The government shouldn't be funding them at all.
Ideally, the government should never have to subsidize private industry but I think it's acceptable, on a rare occasion, to inject funds for future scientific or industrial developments. The money should be used as a primer to show whether or not the subject is worth pursuing economically. Academia should be the ones taking on this mantle considering the amount of money that gets crammed into their budgets every year. And, if the research proves out, it should be up to private companies and the market, not Congress, to determine if the ventures are worth their merit.
But don't mind me, I only put the logic book on the shelf because I liked the cover.
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Actually I agree with you fully.
Issue being, what are the chances of that happening ;D
Taxing away money that they shouldn't have given in the first place is about as close as they can get.
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Generally the only time government should be intervening is to ensure that damages and services are properly paid for.
For instance when you have a situation like car exhaust.
Buying a catalytic converter yourself wouldn't give you clean outdoor air.
Market systems don't function very well when the linkage between paying for something and getting it is weak.
The other side would be infrastructure,
Where companies wants to use a resource, but none want to put in the resources to develop and maintain it.
_
But in general, if a government is investing in a company.
About the only good reason I see to do it is for R&D, and seed money.
Paying for the operating expenses of private companies is just silly.
Essentially the electricity provider is gaurunteed a relatively high rate of return.
The catch being, that rate of return goes up or down, not depending on how much electricity they sell, but on how much effeciency they sell that quarter.
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As is California has half the energy use per capita as the rest of the United States.
And we're saving billions each year because of it <img src="style_emoticons/<#EMO_DIR#>/smile-fix.gif" style="vertical-align:middle" emoid=":)" border="0" alt="smile-fix.gif" />
Keynesian economics ftw <img src="style_emoticons/<#EMO_DIR#>/tounge.gif" style="vertical-align:middle" emoid=":p" border="0" alt="tounge.gif" />
First off, Keynesian economics is dead. Get with the new crowd of monetarists. Second, I don't think you know what Keynesian economics are in the first place. Because your last post doesn't show knowledge of it.
And no, you're wrong about infrastructure as well. Look at the oil companies. They have one of the most complex logistical chains out of any corporation in the world, because they are vertically integrated globally. They gotta secure rights for drilling, then drill, then send the oil over from their tankers or use a national pipeline, then bring it to a refinery, which then distributes it via a large chain of truckers or pipelines.
The most our Federal government should do is protect rights of minorities, ensure that people in rural areas (the ones most neglected by corporate enterprise) get a fair deal, national defense, and SLIGHTLY regulate our economy, but only when externalities apply.
You see, the free market is great because it's self regulating in terms of money, supply, and demand. The only problem is externality, because when you buy a car in a completely free market, you're not also buying the added costs that occur when your car makes exhaust. Or electricity, you're paying per kilowatt hour, and not for the pollution made to burn the coal or oil.
In any case, I say that the government should be almost halved. Keep defense spending the same. But slash on all those defunct social programs that were kept on the books.
Why? What are we getting out of it?
<!--quoteo(post=1608739:date=Feb 23 2007, 08:38 AM:name=Rapier7)--><div class='quotetop'>QUOTE(Rapier7 @ Feb 23 2007, 08:38 AM) [snapback]1608739[/snapback]</div><div class='quotemain'><!--quotec-->
In any case, I say that the government should be almost halved. Keep defense spending the same. But slash on all those defunct social programs that were kept on the books.
<!--QuoteEnd--></div><!--QuoteEEnd-->
Like what?
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->and SLIGHTLY regulate our economy, but only when externalities apply.<!--QuoteEnd--></div><!--QuoteEEnd-->
You missed one case: Natural Monopolies. In situations where market conditions will always result in a monopoly, it's usually better for the government to regulate that monopoly, or provide the service itself.
Nice double post, moron.[...]
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Smooooooth. Why should I read the rest of your post again?
Smooooooth. Why should I read the rest of your post again?
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yarly.
I wish I had something to contribute to this thread, but I still don't even understand government-level economics in the least. what does the national debt even mean? who is the government indebted to? the american people or what? and who is suffering? if the government can be that deep in crazy debt and it doesn't really mean anything tangible, why even put a number on it? what's to keep them from saying "Presto! we no longer have a national debt!"?
DiscoZombie: This is how the national debt works.
Suppose that Congress and the President come up with a budget that totals 2.9 trillion dollars (the estimated budget for 07), but the Federal government is only able to come up with 2.4 trillion dollars in revenue (through taxation, duties, etc). There is a 500 billion dollar shortfall between budget and revenue, which is called the budget deficit, not to be confused with the national debt, which is the aggregate of all budget deficits in the history of the US (assuming that the government's surpluses did not outpace the deficits).
This is where the debt comes into play. The 500 billion dollars must be raised by some other means other than taxation. Every other Tuesday, the Federal Reserve auctions off freshly printed bonds on Wall Street for below their face value. Let's say you buy a $10,000 1 year bond for $9500, in one year, you can redeem that bond for its face value of 10,000. Essentially making 500 dollars in one year. This part is crucial, because the bond represents an unbreakable promise. No Federal Reserve bond that has been issued has ever been defaulted on. Which means buying bonds is buying a guarantee of more money.
Obviously that sort of commodity will always be in high demand. So when the bonds are traded, the government gets an infusion of cash that goes towards the national budget. The primary buyers are American individuals and firms, though foreign buyers have been increasing dramatically. The largest foreign held debt block is around 200 billion, held by China. Overall, foreign buyers of US bonds total around 20-25% of the national debt.
The reasons for debt are actually very well founded. The concept (though it wasn't his invention) was brought up by one Alexander Hamilton, the figure who graces the front of the 10 dollar bill. His idea was to tie in national interests with the interests of the wealthy (because the primary buyers of bonds tend to be wealthy individuals or enterprises). Because the wealthy are buying into a promise of money, it was also in their interests to protect the interests of the United States, the issuer of that promise. There are some much more complex reasonings behind the debt which is beyond my understanding, but that's the general purpose.
The consensus on the national debt is that it's perfectly okay, as long as its relative size doesn't increase as much as the economy grows. In recent years, this has not been the case, turning a projected 243 billion dollar surplus into a 400-500 billion annual deficit. Though Bush can hardly be blamed for all of it. Given the economic downturn of the early 2000s, any President would have spent massively, and monetarist policy was to loosen the money supply to encourage investment.
That is a very basic description of what the national debt is, who owns it, and what it's for. It's usually a topic that is completely over the heads of most Americans, and used as a political tool to scare the American people.
"and monetarist policy was to loosen the money supply to encourage investment."
Frankly putting money in the hands of those who are going to use it for operating expenses, or shove it into the stock market doesn't make much sence.
Instead you really should be after putting it into the hands of the middle class, where as they go off and spend it on mundane good and services, which causes a multiplier effect as it finds it's way across the supply chain. Which ultimately raises demand for companies to start producing products and services again, which causes them to be more inclined to make investments.
Keep your sticky fingers out of my ###### pocket.
Here's the basic monetarist philosophy: <b>as long as money is circulating in the economy, all is well.</b> It really doesn't matter who's got it as long as it's moving around. Because the venture capitalist with the money is going to invest in some startup company and the governors of that company need to hire people to work for the company, and the money used to pay those employees are then spent by the employees.
It's a never-ending cycle just as long as money is circulating throughout the system. The Great Depression could have been avoided if the Federal Reserve hadn't contracted the money supply right as the stock market fell through, because that was the very moment that the economy needed liquidity and money. Wealth distribution in the United States might be horrible, but considering that even the poorest economic quintile can afford cars, tvs, microwaves, housing, it's not as bad as say....in Czarist Russia, where the rich were rich as hell and the poor literally ate grass.
No, the majority of the national debt is still held by American institutions and people. If you're talking about public debt, which carries an interest portion, then yeah, it's split about 50/50. But intragovernmental holdings account for a lot of the national debt, and that doesn't carry an obligation.
Numbers incomprehensibly large are required to understand these sort of financial facts and figures. These are the sort of numbers that people use to scare the American people, because people fear what they don't understand.
There's no point in worrying about national solvency just yet. We're far from that stage.
Supplyside is much more open to corruption, and ineffeciency gluts.
Here's the basic monetarist philosophy: <b>as long as money is circulating in the economy, all is well.</b> It really doesn't matter who's got it as long as it's moving around.<!--QuoteEnd--></div><!--QuoteEEnd-->
This is such a terrible philosophy. To me it's simply a question of morals... why should people be buying yachts while others starve to death? I see no justification for it.
Both extremes (Lassez-Faire and communism) are overly idealistic, the best solution to improve conditions for every human on Earth is some sort of a middle ground.
Because stopping people from buying yachts doesnt create more food?
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You don't think that the money used to buy yachts could feed a lot of people in our country (and the world)? Starvation doesn't occur because we don't have enough food, it occurs because of income inequalities.
What's the noblest of human motivations? Some might be tempted to answer: charity, love of one's neighbor or, in modern, politically correct language: giving something back or feeling another's pain. In my book, these are indeed noble motivations, but they pale in comparison to a much more potent motivation for human action that's much more potent. For me the noblest of human motivations is greed. I don't mean theft, fraud, tricks, or misrepresentation. By greed I mean people being only or mostly concerned with getting the most they can for themselves and not necessarily concerned about the welfare of others. Social consternation might cause one to cringe at the suggestion that greed might possibly be seen as a noble motivation. "Enlightened self-interest" might be a preferable term. I prefer greed since it is far more descriptive and less likely to be confused with other human motives.
That human greed is the greatest of human motivations should be obvious to all; however, a few examples will make it more concrete. Texas cattle ranchers make enormous sacrifices to husband and insure the safety and well-being of their herds: running down stray cattle in the snow to care for and feed them, hiring veterinarians to insure their health, taking them to feed yards in time to fatten them up prior to selling them to slaughter houses. The result of these sacrifices is that New Yorkers can enjoy having beef on their supermarket shelves. Idaho potato farmers arise early in the morning. They do backbreaking work in potato fields, with the sun beating down on them and maybe being eaten by bugs. Similarly, the result of their sacrifices is that New Yorkers can also enjoy having potatoes on their supermarket shelves.
Why do Texas cattle ranchers and Idaho potato farmers make these sacrifices? Is it because they love New Yorkers? Only the most naive would chalk their motivation up to one of a concern for one's fellow man in New York. The reason Texas cattle ranchers and Idaho potato farmers make those sacrifice is that they love themselves. They want more for themselves. In a word, they are greedy!
But that is the miracle of the market. Through serving the wants of one's fellow man, one acquires more for himself. That is precisely what Adam Smith meant when he said, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.
We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantage." Adam Smith added, "By pursuing his own interest he frequently promotes that of society more effectively than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good." One might pause here for a moment and ask: How much beef and potatoes would New Yorkers enjoy if it all depended on human love, charity and kindness? I'd be worried about New Yorkers.
Greed or if you like "enlightened self-interest", promotes other wonderful outcomes. It's nice that present generations conserve on scarce resources in order to make those resources available to future generations. Owners of buildings make sacrifices of current consumption, and spend resources on maintenance that extends the useful life of the building - long past their own lives. For example, the original owners of the Empire State Building are now dead; however, the sacrifices they made to maintain the building means that today's generation can enjoy it. When timber companies harvest trees on their land, they spend the resources necessary to plant seedlings and as such insure that the forest will continue to produce trees long after the owners are dead.
Can one realistically produce an argument that present generations make sacrifices of current consumption to insure that goods such as buildings and lumber will be available for future generations because they actually care about future generations? After all there's no quid pro quo i.e., there is no way for future generations to compensate them for the sacrifices made on their behalf. So why? Again, it's greed but with its facilitator, private property rights (rights residing in the owner to acquire, keep, use and dispose of property as deemed fit so long as that use does not violate similar rights held by another).
The present value, or selling price, of say 10,000 acres of forest depends not only on how much lumber the forest will yield in the year 2000, but also in the years 2005, 2010, 2030 and so on. The forest's capacity to produce lumber in these out years is summarized into its present value or selling price. The longer the forest will produce trees, the greater will be its selling price. Therefore, the current owner of the forest has a vested financial interest in doing those things that protect the forest's productivity whether or not he will be alive in 2010 or 2030. In other words, his wealth is held hostage to his doing the socially responsible thing - conserving society's scarce resources. Thus, one easily predicts that goods privately-held will receive better care than goods communally-held no matter what the good: cars, houses, land, etc. Owners tend to take better care of cars, houses and land than renters or other non-owners.
We should hasten to add that for private property to have these beneficial effects it requires more than simply holding its title. The owner must have options. One could hold title to land but the government restricts the uses to which the land can be put. An example is when a person holds title to a 1,000 acre plot of forest land but the U.S. Fish and Wildlife Service (FWS) decrees that some or all of it cannot be used for fear of threatening an endangered species. Such a decree reduces the private use-value of the land and hence weakens incentives to care for the land. Similarly, if there were high transfer taxes for land sales, it too would weaken incentives to care for the land. In fact, anything that weakens the owner's private property rights in the land weakens his incentives to do the socially responsible thing - conserve on society's scarce resources.
While human motivations such as charity, love, or concern for others are important and salutatory, they are nowhere nearly as important as people's desire to have more for themselves. We all know that but we pretend it is not. That unwillingness to acknowledge personal greed as vital to human welfare, and instead view it with disapproval, makes us easy prey to charlatans and quacks who'd take away our liberties in the name of combatting greed.
<a href="http://www.gmu.edu/departments/economics/wew/index.html" target="_blank">Walter E Williams</a>
Ideas on Liberty, October 2000 <!--QuoteEnd--></div><!--QuoteEEnd-->
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->Greed or if you like "enlightened self-interest", promotes other wonderful outcomes.<!--QuoteEnd--></div><!--QuoteEEnd-->
In many cases, it doesn't.
I agree with people that are unable to work, should not starve when we can make enough food already, but I think it has little to do with rich people placing a demand for yatchs.
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But the supply chain used for making luxuries, has very little benefit to the economy as a whole.
Hell often most of it, is imported.
Which is why the purchase of more mundane items is ideal.
Since the supply chain companies are the ones which actually could use the boost.
I agree with people that are unable to work, should not starve when we can make enough food already, but I think it has little to do with rich people placing a demand for yatchs.<!--QuoteEnd--></div><!--QuoteEEnd-->
Yes it does have little to do with the specific example of yachts, but I only use it to illustrate the damage that extreme income inequality can do. I see no harm in a little bit more socialism (much like some European countries) to make conditions better for everyone.
I'm not saying that greed is an unnecessary thing, in fact I can see the point of what you posted, it's nothing new. But that does not address my question. Try again.
In many cases, it doesn't.
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Then it shouldn't be so difficult to clearly identify some of these cases. . .
One of the favorite complaints of those who wield the classism boogeyman is that "so few have so much".
If there are so many more that would benefit from consuming goods that would increase their local economic status, then it is their individual consumer decisions that hold the most influence.
Governments will make decisions based on what will benefit the government best; the individual would only benefit from what was left over.
Then it shouldn't be so difficult to clearly identify some of these cases. . .<!--QuoteEnd--></div><!--QuoteEEnd-->
Constant civil wars in third world countries I would say are (in some cases) motivated by greed. The extremely large salaries paid to some CEOs are motivated by greed. Enron was motivated by greed.
Greed is acceptable to a certain extent...
Do you think the yacht builders are rich? More likely they're coming from the middle class. When money is circulating in the economy, it goes from all levels, top down, bottom up. You do realize that in the old days, when there were such things as gold standards, it was incredibly hard on the working class because old money was practically all the money there was?
The socialism in Europe isn't working out. Too many leechers, not enough workers. There are fewer incentives to work and be productive. The average American is far more productive than the average Western European. It's time for Western Europe to Americanize or they'll get left in the dust in a few decades.
As for your yachts...who's building the yachts? Who's paying for them? The rich are purposely buying something unnecessary, which is built by some company who employs a bunch of people. If a billionaire buys that ridiculously large A380 from Airbus, are they not helping the Airbus corporation, who in turn employs thousands of people? If a rich person buys an Aston Martin, aren't they helping out Ford, who in turn employs a bunch of people?
As long as people are buying, all is well. There's nothing inherently wrong with a concentration of wealth. Oh, and, Nadagast, you do realize that all the strife in Africa was caused by moronic African leaders who squandered their wealth on stupid planned central economies and agrarian reforms that screamed socialism? The average African is worse off today than they were under British colonial rule in terms of relative income.
And all the aid funneled into Africa is funneled right out and into the Swiss bank accounts of a temporary dictator of that country. And the food trucks the UN gives them go straight to the "freedom fighters".
A more or less free market with relatively little regulation from the government is the way to go. You complain about the concentration of wealth and the imperialism of the workshop, but the computers you work on, the cars you drive, the food you eat, and everything you depend on in your daily life was made possible only through private enterprise that was funded by rich venture capitalists. Governments are essential, which is why we have them, but never trust them with too much power. People tend to self regulate, imposing rules never works as effectively.
I don't think I would say that those countries are good examples of more socialized societies. Why do you ignore Norway and Sweden? I do think that people in those countries are living better than in America.
<a href="http://en.wikipedia.org/wiki/Human_Development_Index" target="_blank">http://en.wikipedia.org/wiki/Human_Development_Index</a>
Say what you want about the other countries, the bottom line is that Norway and Sweden lean much more heavily towards socialism than America and they seem to be doing pretty damn well. That seems to go against your assertion.
I'm not saying that every country that is more socialized than America will be better. But the two countries mentioned above (and others) should at least show you that something about your assertions is wrong.
<a href="http://policyalternatives.ca/documents/National_Office_Pubs/2006/Benefits_and_Costs_of_Taxation.pdf" target="_blank">http://policyalternatives.ca/documents/Nat...of_Taxation.pdf</a>
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->We examine 50 indicators that are commonly used to measure a country’s social progress. On over half of these indicators (29), the outcomes in high-tax Nordic countries are significantly better than those in low-tax Anglo-American countries, and on most of the remaining indicators (13), social outcomes are somewhat better in Nordic countries. In short:
• Nordic countries have significantly lower rates of poverty across almost all social groups;
• as an indicator of how well a country protects the vulnerable, the elderly have significantly higher pension income replacement rates in Nordic countries and the income received by those with disabilities relative to the population is much higher;
• income is distributed significantly more equally in Nordic countries;
• on every measure we examine there is significantly more gender equality in Nordic countries;
• Nordic workers have significantly more economic security;
• in terms of health outcomes, infant mortality rates are significantly lower and life expectancy is longer in Nordic countries;
• in terms of educational outcomes, a greater percentage of the population completed secondary school and university in Nordic countries and 15-year old students score higher on math tests;
• as a measure of personal physical security, homicide rates are lower in Nordic countries;
• as indicators of the degree of community and social solidarity in a country and general happiness and life satisfaction, there is significantly more trust among individuals and for public institutions in Nordic countries;
• there is significantly less drug use in Nordic countries; individuals have significantly more leisure time; individuals have more freedom, according to a widely referred to index of economic freedom; individuals report more life satisfaction; and they are more likely to discuss politics with friends;
• Nordic countries rank much higher on an index of environmental performance, and the Nordic countries give significantly more in foreign aid than Anglo-American countries.
Low-tax Anglo-American countries rank higher than Nordic countries on only seven out of the 50 social indicators. In each case, it is a trivial difference that could be easily due to chance: a slightly higher percentage of the 25–64 age group completed either college or university; 15-year-olds did slightly better on reading and science tests; a slightly greater percentage of people report a greater sense of freedom; there are on average a lower number of suicides; and a slightly greater percentage of individuals report they are very happy.<!--QuoteEnd--></div><!--QuoteEEnd-->
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->Do you think the yacht builders are rich? More likely they're coming from the middle class. When money is circulating in the economy, it goes from all levels, top down, bottom up. You do realize that in the old days, when there were such things as gold standards, it was incredibly hard on the working class because old money was practically all the money there was?<!--QuoteEnd--></div><!--QuoteEEnd-->
You're missing the point entirely by focusing on the yacht.
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->The socialism in Europe isn't working out. Too many leechers, not enough workers. There are fewer incentives to work and be productive. The average American is far more productive than the average Western European. It's time for Western Europe to Americanize or they'll get left in the dust in a few decades. <!--QuoteEnd--></div><!--QuoteEEnd-->
It's easy to make assertions, do you want to back that up?
<a href="http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita" target="_blank">http://en.wikipedia.org/wiki/List_of_count...l%29_per_capita</a> + study above.
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->As for your yachts...who's building the yachts? Who's paying for them? The rich are purposely buying something unnecessary, which is built by some company who employs a bunch of people. If a billionaire buys that ridiculously large A380 from Airbus, are they not helping the Airbus corporation, who in turn employs thousands of people? If a rich person buys an Aston Martin, aren't they helping out Ford, who in turn employs a bunch of people?<!--QuoteEnd--></div><!--QuoteEEnd-->
Thanks for telling me how companies work. I didn't know.
You're dodging the issue. You can repeat the fact that the money goes to many working people as many times as you want, it doesn't mean that the homeless people don't exist. This is a reality. Please... address it.
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->As long as people are buying, all is well. There's nothing inherently wrong with a concentration of wealth. Oh, and, Nadagast, you do realize that all the strife in Africa was caused by moronic African leaders who squandered their wealth on stupid planned central economies and agrarian reforms that screamed socialism? The average African is worse off today than they were under British colonial rule in terms of relative income.<!--QuoteEnd--></div><!--QuoteEEnd-->
There's nothing wrong with a concentration of wealth except when people are dying or living miserable lives and the money could be used to help them rather than to make an already very rich individual slightly more money which has no real impact on his living conditions anyway.
And you're right--Africa and South America are not pretty places to live because all the leaders there are idiots. Obviously. We're just so much damn better than them. It had nothing to do with history.
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->And all the aid funneled into Africa is funneled right out and into the Swiss bank accounts of a temporary dictator of that country. And the food trucks the UN gives them go straight to the "freedom fighters".<!--QuoteEnd--></div><!--QuoteEEnd-->
What's the dictator driven by? Greed... (I guess this is more of a reply to Epidemic)
I don't know what your point is. It should be obvious that I don't support taking the money intended to feed and help the poor and give it to the already rich. I assume you agree with me? I don't see where the discussion can go from there.
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->A more or less free market with relatively little regulation from the government is the way to go. You complain about the concentration of wealth and the imperialism of the workshop, but the computers you work on, the cars you drive, the food you eat, and everything you depend on in your daily life was made possible only through private enterprise that was funded by rich venture capitalists. Governments are essential, which is why we have them, but never trust them with too much power. People tend to self regulate, imposing rules never works as effectively.<!--QuoteEnd--></div><!--QuoteEEnd-->
What is this? You're offering nothing except assertion after assertion.
Why should I believe you when you say "People tend to self regulate, imposing rules never works as effectively."
For one you're just asserting this, when there are actual real world countries who are doing, by many measures, better than America, who are doing things that you say should be killing them.
Second, obviously you don't believe this to the extreme. You don't, for example, think that murder should be legal, because I mean... hey, people tend to self regulate. Imposing rules won't work as effectively.
Right? So it's just a question of where you draw the line.
Stop making assertions that I have no reason to believe.
Also just to be clear, I'm not advocating communism or anything like that, just a bit more socialism mixed in with our capitalist society. Seems to be working well for other countries...
Here's the basic monetarist philosophy: <b>as long as money is circulating in the economy, all is well.</b> It really doesn't matter who's got it as long as it's moving around.
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Money circulating is a necessary condition for the health of the economy, but not a sufficient one. Furthermore, it is a symptom and not a cause. I feel like monetary policy has overall reduced the economics understanding of the average person, not due to any fallacy of it's own, but because it is very easy to get lost in all the talk of multipliers and interest rates and forget that money is nothing more than a facilitator. It is a fluid to allow goods to move. People start with an intuitive understanding that is pretty close to the truth: If people are producing, and deriving benefit from that production, then the economy is healthy. Somehow that always seems to get lost.
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->Greed Versus Compassion<!--QuoteEnd--></div><!--QuoteEEnd-->
Greed is one of the most powerful motivators, but any nobility that it has is only due to the system we've tamed it with. Greed can just as easily compel someone to disrespect the property rights of others as to produce goods for them. In any situation with a negative externality, enlightened self interest just doesn't cut it.
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->Do you think the yacht builders are rich? More likely they're coming from the middle class. When money is circulating in the economy, it goes from all levels, top down, bottom up. You do realize that in the old days, when there were such things as gold standards, it was incredibly hard on the working class because old money was practically all the money there was?<!--QuoteEnd--></div><!--QuoteEEnd-->
The place that the money is going is irrelevant. The money will go somewhere regardless of what is produced. The important question is whether or not that yacht itself was a worthy use of it. The yacht builder could have done many other things with his time, but instead, he built a yacht. I'm not going to argue that there shouldn't be yachts, but imagine for a moment if we had some way of making the socially optimal production choice in every situation. Would that yacht get built? Would Somalians get fed?
It's important to remember that all of the proofs about optimality in a perfectly competitive market are only Pareto optimal. (This means, that you cannot make one person better off without making one person worse off if you start with the production choices that will be made in a competitive market.) Another way of saying it is that the optimal set of goods will be produced only if you believe that the current distribution of wealth is also optimal. This is a normative question, and not a positive one, and to address it you have to make some assumptions about what your model for fairness is going to be.
<!--quoteo--><div class='quotetop'>QUOTE</div><div class='quotemain'><!--quotec-->Oh, and, Nadagast, you do realize that all the strife in Africa was caused by moronic African leaders who squandered their wealth on stupid planned central economies and agrarian reforms that screamed socialism? The average African is worse off today than they were under British colonial rule in terms of relative income.<!--QuoteEnd--></div><!--QuoteEEnd-->
Oh I see. Clearly the slaughter or enslavement of tens of millions of people by colonial powers had nothing to do with it. Just one little tidbit. After slaughtering 10 million people in the Congo and enslaving the rest, Belgium left the Congolese to form their own government with only 500 highschool educated people in the entire country. I wonder why it didn't work out.