Wrongly conflating socialism with generosity
Bookworm on Apr 18 2011 at 1:17 pm | Filed under: Capitalism, Religion, Socialism
I read someone today who said that Jesus must have been a socialist, because he didn’t seek profit, which is the hallmark of capitalism. Instead, gave away his time, energy and skills to those who could not pay. Since he didn’t have a profit motive, he must have been a capitalist. QED. It was a classic case of conflating socialism with generosity.
Socialism is, in fact, the opposite of generosity because it removes human morality and decency from the equation. There’s a reason study after study shows that liberals donate less to charity than conservatives do. The liberals have placed themselves entirely in government’s hands: the problem of the poor has become someone else’s problem. The fact that we all pay taxes, which the government uses to fund the poor, isn’t charity, it’s central planning predicated on wealth redistribution.
The Victorians, who were wellsprings of one sentence wisdom, used to say “charity begins at home.” The giving impulse of charity must start within us, as it did within Jesus. In a totalitarian, or even semi-totalitarian (i.e., socialist) state, nothing is allowed to come from within. All goes to and flows from the government.
In a capitalist society, people have the wherewithal to give. And in a healthy capitalist society, they have the moral impulse to give. Jesus wasn’t a socialist. When he said “render unto Caesar that which is Caesar’s and unto God that which is God’s,” he fully understood the separation between our spiritual and moral impulses on the one hand, and the dictates of a state on the other hand. Ideally, the people’s adherence to both Caesar and God is a mutually beneficially system, with a humane state allowing humans to go about their business, and a social and moral structure that encourages those with the most to reach out, without state coercion, to help those with the least.
The Bookworm Turns : A Secret Conservative in Liberal Land,
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Related posts:
- Don Quixote’s Thought for the Day: Jesus is a liberal?
- Why Obama’s socialism matters *UPDATED*
- Socialism’s Waterloo? *UPDATED*
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174 Responses to “Wrongly conflating socialism with generosity”
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They are always seeking some divine mandate for their unethical slaughter of humanity. And if they can’t find a god to back their revolutionary war, they’ll make one instead (obama).
Jesus was a carpenter, a small businessman. I can guarantee you He did not provide his services for free.
Wishful thinking. When he became active in his ministry, he had other priorities than business. But the parables plainly show he was used to handling money in a business like fashion.
Peter and his brothers were obviously fishing to make a living.
Finally, Paul repeatedly makes it plain that he did not rely on others for his personal support. He paid his own way.
Paul wrote in 2 Thes Chap 3,
8nor did we (O)eat anyone’s bread without paying for it, but with (P)labor and hardship we kept (Q)working night and day so that we would not be a burden to any of you;
9not because we do not have (R)the right to this, but in order to offer ourselves (S)as a model for you, so that you would follow our example.
10For even (T)when we were with you, we used to give you this order: (U)if anyone is not willing to work, then he is not to eat, either.
11For we hear that some among you are (V)leading an undisciplined life, doing no work at all, but acting like (W)busybodies.
If profit is the hallmark of capitalism, then what the hell are unions doing getting money?
Ymar, the distinction is this: Profit is supposed to be earned by honest labor and effort. What you’re talking about with unions is more properly called loot or protection money. Not really profit; more like spoils.
Regarding Jesus as a socialist, when he admonished the tax collectors to be fair in their takings, he didn’t then tell them that he was reassigning them redistribute the wealth.
There are places where the Christian “socialist” model works. They are called monasteries where small groups of people gather together to do God’s work and hold all their property in common. The only reason this works is because the groups are small and they are all and entirely 100% voluntary associations. Any other connection between Christianity and socialism is a fool’s errand. As others have pointed out, before they were apostles, the 12 worked for their living, doubtless as did Jesus before he started his ministry.
Bookworm: Socialism is, in fact, the opposite of generosity because it removes human morality and decency from the equation.
Though socialism isn’t the same as generosity, to say that socialism removes human morality and decency is not always correct. Democratic socialism can be an expression of human morality and decency when people unite to help those less fortunate than themselves.
Bookworm: Jesus wasn’t a socialist.
That is quite true. Jesus wasn’t proposing a governmental system. (He wasn’t much of a capitalist either. Though he did work for the family business, he abandoned that for his ministry.)
Charle Martel: Regarding Jesus as a socialist, when he admonished the tax collectors to be fair in their takings, he didn’t then tell them that he was reassigning them redistribute the wealth.
He didn’t have to. It was taken for granted they were redistributing wealth from the provinces to Rome.
Tonestaple: As others have pointed out, before they were apostles, the 12 worked for their living, doubtless as did Jesus before he started his ministry.
Fishermen, certainly. But tax collecting was considered tantamount to treason, and certainly not honest work.
Zachriel
Democratic socialism can be an expression of human morality and decency when people unite to help those less fortunate than themselves.
Which would be a good thing for you if it were possible for the collective to get into heaven after having taken other people’s money to help the poor. Unfortunately though, there is no such thing as collective salvation mentioned in the Bible. We are only told, each as individuals, to not covet thy neighbors property and to not steel. Both things are regularly practiced by socialism’s advocates.
Cheesestick: Which would be a good thing for you if it were possible for the collective to get into heaven after having taken other people’s money to help the poor.
No, it won’t get you into Heaven. According to some religions, neither will charity. In any case, our comment didn’t concern Salvation, but the overgeneralization about socialism.
Cheesestick: We are only told, each as individuals, to not covet thy neighbors property and to not steel. Both things are regularly practiced by socialism’s advocates.
Non-socialists covet too. It’s part of the human condition. In any case, if a democratic society decides to use the town coffers to pay for a road, and then allow everyone, rich and poor alike, to use the road, is that stealing?
A question for the seekers of truth:
Jesus was God incarnate. According to the scriptures.
God is the creator of all that is and posessor of no less. According to the scriptures.
Where does one find profit apart from all creation that is God’s?
Man profits from God not the other way around.
Only the Godless would suggest that Christ Jesus was of any political stripe.
The Godless have no interest in truthful assessment of the character of Christ Jesus.
There can be no interest in what is believed not to exist.
The Godless should refrain from commenting on the Character or motivation of Christ Jesus.
Z seems to think socialism is the control upon which democracy must be haltered.
Remember Z talking about all the bad things in democracy?
In any case, if a democratic society decides to use the town coffers to pay for a road, and then allow everyone, rich and poor alike, to use the road, is that stealing?
Your little clique would say that, but in reality the poor will be prevented from using the road.
Z, I love your reference to “town coffers” as if the money magically appeared there. What you really mean is the government decided to raise money (99% of the time by taxation) and then decided to spend it on a road for everyone’s use.
It’s part of the human condition.
Next you’ll say is AGW is part of the human condition. We’re waiting.
Z proposes: “Democratic socialism can be an expression of human morality and decency when people unite to help those less fortunate than themselves.”
Z unsurprising conflates “individual” humans with government, probably in the mistaken belief, common among collectivists, that socialist government reflects the will of the “people” and serves the interest of individuals. This is a common dividing line between Z and others on this blog.
Z, speaking of Jesus admonishing tax collectors to be fair but not encouraging them to redistribute wealth from individuals to others, comments that:
“He didn’t have to. It was taken for granted they were redistributing wealth from the provinces to Rome. ”
Jesus also preached “render unto Caesar the things which are Caesar’s” as a way of demarcating the individual from the government. He was quite clear that it was not Caesar that was to provide charity unto others but individuals.
And, following a flash of insight sparked by jejune idealism, Z expounds that, “In any case, if a democratic society decides to use the town coffers to pay for a road, and then allow everyone, rich and poor alike, to use the road, is that stealing?”
The problem is that in societies, the larger they get, the more that competing interests introduce corruption into the system. Thus, in Illinois, for example…we have perfectly good roads that are rebuilt to profit road repair companies that donate to the government but horribly damaged roads that never get repaired in neighborhoods that don’t provide the necessary “clout”. However, no matter the roads being rebuilt, the monies spent thereon is all taken from others that did not necessarily give their consent to the takings.
Here’s an example: I live close to a high-end neighborhood in the Chicago North Shore (median household income: $150,000). Imagine my surprise last year to learn that the village roadway passing through town, which is close to through traffic (except for residents) during rush hour, sported a large sign indicating that it was being repaved as an “Obama Stimulus Project”. The town is very liberal and the home to many Illinois and Chicago political insiders. Oh that Suzy and Todd in Smallville, Iowa (median family income $35,000)….who paid for this project…could so benefit from their own monies in their small, rural, one-traffic light village.
Ymar, in response to Z’s concluding remark: “It’s part of the human condition.”, posits that” Next you’ll say is AGW is part of the human condition. We’re waiting.”
Well….Al Gore, Ted Kaczynski, Barbara Boxer, Charley Manson….Z certainly would be in good company!
It’s just a hand wave of an excuse for tyranny, totalitarianism, and corruption. Z wants to justify the evil the Left does by a bunch of idealistic clap trap. Forever and ever humans have had brown nosers seeking the favor of the megalomaniac, writing glowing biographies and ballads of their “righteous war of conquest” without mentioning the hideous cost in human lives.
The Left is totalitarianism because people like Z are fine with it. They provide endless reasons to justify it. They refuse to see the truth, for the truth is more dangerous than going bankrupt.
Ymarsakar: Z seems to think socialism is the control upon which democracy must be haltered.
Quite the contrary. Democracy is the harness the people use to control their institutions, socialist or otherwise.
Ymarsakar: Your little clique would say that, but in reality the poor will be prevented from using the road.
We used that example because most roads are public roads.
Don Quixote: Z, I love your reference to “town coffers” as if the money magically appeared there. What you really mean is the government decided to raise money (99% of the time by taxation) and then decided to spend it on a road for everyone’s use.
That’s precisely what we mean: Money raised by taxes.
You used that example because you knew you didn’t have a case for healthcare, even though you want ObamaCare to go through and crush people’s lives. You need that for your state power gig.
If democracy is the harness upon which control and authority is set, then why were you misleading people by pretending to agree with the various Founding Fathers and their ideas of government.
Danny Lemieux: Z unsurprising conflates “individual” humans with government, probably in the mistaken belief, common among collectivists, that socialist government reflects the will of the “people” and serves the interest of individuals.
A town gathers for a meeting because some disaster has befallen a family. They vote to use tax funds to help the family. This is clearly a group expression of compassion.
Danny Lemieux: Jesus also preached “render unto Caesar the things which are Caesar’s” as a way of demarcating the individual from the government. He was quite clear that it was not Caesar that was to provide charity unto others but individuals.
Quite so. Jesus always put the onus on the individual.
Danny Lemieux: The problem is that in societies, the larger they get, the more that competing interests introduce corruption into the system.
That’s why it is called an overgeneralization. It applies in some cases, but not all cases. There is plenty of money wasted in government, and there is plenty of money wasted in industry. Yet, with all the waste, people still expect the government to initiate the building of public roads.
Ymarsakar: You used that example because you knew you didn’t have a case for healthcare, even though you want ObamaCare to go through and crush people’s lives.
We used the example because it is a simple case where the majority take money from everyone to fund a project.
Ymarsakar: If democracy is the harness upon which control and authority is set, then why were you misleading people by pretending to agree with the various Founding Fathers and their ideas of government.
We’re not pretending. The Constitution allows for the levying of taxes to promote the general welfare.
Z attempts to contradict Jesus, in his AGW rants. There the focus is definitely not on individuals, but on authorities of the Left. People are being punished and driven out from their economic self-sustainment by laws and cons created by the Left’s Green movement for the simple reason that individuals are only cogs to the Left. To be used up as they see fit.
When Z thinks ObamaCare, Obama, and the Left in America are striving for “progress” and the “good”, then how can you trust him when he says it is an overgeneralization? He’s just using it as an excuse to push through his agenda, which has the positive side effect, from the Left’s view, of crushing people underfoot.
The Constitution is not democracy. Either democracy is its own authority, thus without the need of electoral colleges and a constitution, or democracy is not its own authority. Z can’t have it both ways. Democracy is corrupt, just in a different fashion than aristocracy, monarchy, merchant capitalism, or colonialism. The majority voting on anything is inherently corrupt because there’s always con artists like Obama out there to dictate what the majority will vote. Democracy is not elections but if it was, elections would not be the source of any right or authority. The numerous number of democracies Z mentions, do not have US Constitutional protections. If democracy was truly the source of the state’s power and right to kill, loot, and burn people’s lives down, why does Z consider them all legitimate democracies yet all of them have different limitations on their power. Sometimes it isn’t based upon justice, but simple expediency. In the democratic socialist countries you call democratic as well as the “republican” countries you call a republic.The Communists truly believed their cause was the People’s, thus all their country’s were named People’s Republics or People’s Democratic Republic’s. Yet it is precisely because people listened to the concept that democracy is the ultimate source of authority, that they plowed through those that didn’t agree. Do you actually think you will help totalitarianism win this time, Z?
The Left prefer to use examples where everybody donates but only the Left decides what to do with the funds. They try to portray this as acting in the common good, but it never works out well once you flip the curtains.
They confiscate funds from union members involuntary, who don’t even want to be in the union, and call it their “right” as a democracy. They confiscate people’s money and use it to conduct war, sabotage, and cruelty upon the taxpayers and they call it right because that is DEMOCRACY to them.
But they forgot one thing. They forgot to consider what to do when it’s time to brand the cattle and all they have are physical weaklings that quail at doing what’s necessary.
Once again, Zach, in his imitiable Forrest Gump way, has hijacked the thread. The thread concerns to silliness of conflating Jesus’ message compassion and agape with socialism, which is neither compassionate nor loving. It’s not a very hard thesis to prove, but once again we have to suffer through Zack’s little bull careening its way through our china shop.
Excuse me while I hide my favorite set of tea cups.
People may have noticed, but when political arguments become unsolvable due to Leftist intransigence or societal class warfare, what you get is what you see in the Middle East.
The decision will be settled by force of arms and whose side God or Jesus are on, will be determined by whose mountain of enemy corpses are higher.
Leftist revolutionary groups have won many victories in many countries simply because their opponents lacked the spine or the resources to fight them. In countries they cannot conquer by force of arms, they insinuate their insidious whispers into the highest offices and take over from within. A growing cancer and parasite.
Whether the Left thinks they will prevail as they did in Cuba or whether they think they can keep looting and raping Americans while calling it righteous democracy, remains to be seen.
Regardless, words are words. In the end, violence is effective and final.
That is quite true. Jesus wasn’t proposing a governmental system. Though he did work for the family business, he abandoned that for his ministry.) - Zachriel Actually Jesus traded one family business for another. He came to be about his Father’s business and to offer the permanent sacrifice, once for all, for the redemption of those who accept it. He wasn’t much of a capitalist either.- Zachriel And you know that how? The right to private ownership of property is the core of capitalism. The purpose of government is to protect that right. Take away that right, you no longer have capitalism. If I choose to give away my property, or never make a profit from its use is my business, but doesn’t make me any less of a capitalist. Jesus was very much a capitalist. Read his parables. Zach the Contrarian reminds me of myself when I was young. I loved to argue. It didn’t matter much which side of the debate I was on– I enjoyed the role of contrarian. I’d love to see Zachriel expound on his sometimes obtuse comments and tell us what he(they) really thinks. It’s hard sometimes to conclude what he(they) is(are) advocating based on one-liners.
Actual work is forbidden the Leftist aristocracy, Brian. You know how they look down upon trade and the other dirty work of commoners.
Ymarsakar: The Constitution is not democracy. Either democracy is its own authority, thus without the need of electoral colleges and a constitution, or democracy is not its own authority.
You’re probably trying to say that sovereignty resides in the People.
Ymarsakar: The majority voting on anything is inherently corrupt because there’s always con artists like Obama out there to dictate what the majority will vote.
As Adams pointed out, simple democracy is tyranny over the minority.
Ymarsakar: They confiscate funds from union members involuntary, who don’t even want to be in the union, and call it their “right” as a democracy.
Yes, by majority vote.
Charles Martel: The thread concerns to silliness of conflating Jesus’ message compassion and agape with socialism, which is neither compassionate nor loving.
And we agreed with that point. However, we did not agree with Bookworm’s position that “Socialism is, in fact, the opposite of generosity because it removes human morality and decency from the equation.”
BrianE: Zachriel Actually Jesus traded one family business for another. He came to be about his Father’s business
Quite so. Point taken.
Zachriel: He wasn’t much of a capitalist either.-
BrianE: And you know that how? The right to private ownership of property is the core of capitalism.
Only in the sense that he abandoned his own economic capital. That doesn’t mean he rejected capitalism, per se. So point taken there, too.
BrianE: Zachriel Actually Jesus traded one family business for another. He came to be about his Father’s business
Quite so. Point taken.
Zachriel: He wasn’t much of a capitalist either.-
BrianE: And you know that how? The right to private ownership of property is the core of capitalism.
Only in the sense that he abandoned his own economic capital. That doesn’t mean he rejected capitalism, per se. So point taken there, too.
Socialism is an immoral system when viewed from the context that it is based on a faulty understanding of human nature.
It’s immorality stems from offering people something that it can’t provide– heaven on earth. And because of its faulty logic, Socialism (either Big S or little s) inevitabley leads to authoritarianism, which is why, I suppose, socialists coexist so well with statists.
I suppose one should stipulate that capitalism has its own set of problems, but given that capitalists, for the most part, recognize the selfishness of human nature they are more likely to provide some balance.
For a socialist to recognize the inherent selfishness of human nature would bypass the nonsense of the altruism of socialism and proceed directly to its authoritarianism. In the end, socialism, as it’s practiced, is merely a system for gaining power and distributing goodies to your benefactors at the expense of your rivals.
I don’t know what Jesus did, I didn’t know him. Neither, for that matter, did Paul – just as much if not more the father of Christianity. I do know he routinely traveled with one very wealthy woman in his train, and there is reasonable speculation she picked up most of the bills. Whether she did or not, dunno, I wasn’t there. (Again: nor was Paul.) He also had a tax-collector/accountant (Matthew) in his train who was group treasurer, and one fairly dangerous outlaw and tough guy (Judas) who handled most of the negotiating for whatever they needed, and made sure they got a fair price.
I occasionally wonder what happened to all the wives and children who were just summarily abandoned when their husbands dropped their nets, downed tools, etc. to go and follow him – we just never find out. Though we are told that Peter’s wife’s mother was sick of a fever, and he did go visit Mrs. Peter and cure her Ma. Maybe Peter got in a day at the playground with the kids, or a brief conjugal visit – who knows? But the ministry seems kind of hard on the un-forewarned wives and kids. (To me, anyway – maybe just to me.) And we know that one of the disciples’ father just died and he wanted leave to go and bury the old man – Jesus did not grant him leave.
I would suspect he was not a socialist – and obviously Paul wasn’t – and there’s no question everybody worked for a living before downing tools to wander the countryside with him. What he was doing we don’t know, but he apparently spent time in school, because he learned to read and write – and would have been one of the very few people in his little backwater who knew how to be his own scribe. And of course he learned a sufficiency of history and the Talmud to be able to discourse in learned manner with the chief priests and elders went he spent three days at the temple in Jerusalem at age twelve. (Naturally, he may not have had to spend time in Hebrew School for this, he could well have had an inside track to such knowledge.) But was he an assistant or apprentice carpenter? Seems doubtful, and the bible certainly doesn’t say so, plus he had four brothers – more than enough manpower available to do all the assisting or apprenticing Joseph needed while he got an education.
He had no problem rendering unto Caesar, and never told anybody else not to pay their taxes, either – but he was a long way from being a socialist, or even, necessarily, being in favor of Rome’s oppression. He seems never to have expressed much of a political view about Rome and the occupation of the middle east, but if he absorbed any of the local flavor he probably, on some level, resented it and disliked Rome. Or he may have recognized that Rome at least kept the warring factions more or less quiet, most of the time – and valued that. I don’t know – he never told me.
Jesus also gave us the parable of the talents – Matthew 23:24. Certainly on one level, it is the penultimate embrace of capitalism. It celebrates the profit motive and industriousness.
While the Catholic Church itself has embraced the renunciation of wealth for its clergy as a means of concentrating on the spiritual, it has embraced the profit motive since near its inception to grow the Church and help the flock. And indeed, during the first millenium after the death of Christ, many of the European monasteries were the central force in clearing European land and establishing agriculture – which was the basis for wealth during the medieval period. As to the monasteries themselves, I know that many of them (and I would not be surprised to find that virtually all of them) run businesses to support themselves, some of which are or were quite famous – i.e., Chartreuse, Frangellico and Benedictine come to mind. For example, see http://www.trappist.com/indexjs.cfm?v=05&taal=en.
“As to the monasteries themselves, I know that many of them (and I would not be surprised to find that virtually all of them) run businesses to support themselves, some of which are or were quite famous”
They certainly made great brandy and great beer!
Coffee, too. There’s a bunch of monks in Wyoming that grind some great stuff.
Jelly and preserves – the Trappists at St. Joseph’s Abbey in Spencer MA make the best jellies and preserves int he world. It’s in supermarkets all over the northeast, out here on the Idiot Coast you have to order it by phone or online – which we do – and it’s well worth it.
Z says: “A town gathers for a meeting because some disaster has befallen a family. They vote to use tax funds to help the family. This is clearly a group expression of compassion.”
Let’s assume the tax funds were raised solely by a sales tax on business owners who all voted “no” to the proposal. The town has voted, by a majority vote of people who did not contribute to the taxes, to spend tax dollars solely paid by somebody else. This is clearly not a group expression of compassion.
This is what is wrong with America and the rest of the Western world. We all want what we think we have coming to us, and we want to help others as well, but we want somebody else to pay for it. “Compassion” on somebody else’s dime is cheap compassion indeed.
Z, if the townspeople want to raise funds to help the family, let them raise them privately, not at the point of a government’s gun.
Don Quixote: Let’s assume the tax funds were raised solely by a sales tax on business owners who all voted “no” to the proposal. The town has voted, by a majority vote of people who did not contribute to the taxes, to spend tax dollars solely paid by somebody else. This is clearly not a group expression of compassion.
Perhaps not. Now consider the situation where everyone pays into a fund, then votes how to spend the funds. A family loses their home to a fire, and voters decide to spend the money to help the family. Is it reasonable to say the village is acting out of compassion? Most people would say so.
Don Quixote: Z, if the townspeople want to raise funds to help the family, let them raise them privately, not at the point of a government’s gun.
All taxes are at the point of a gun.
http://en.wikipedia.org/wiki/Whiskey_rebellion
Is it tyranny to use tax funds to help people stranded by Hurricane Katrina? That seems to be the implication of your position.
“A family loses their home to a fire, and voters decide to spend the money to help the family. Is it reasonable to say the village is acting out of compassion? Most people would say so.”
You no proof whatsoever that that is what most people would say. (You might also try telling us what compassion is and how a collective can show it, especially when some voting members of said collective do not pay taxes.)
“Is it tyranny to use tax funds to help people stranded by Hurricane Katrina? That seems to be the implication of your position.”
Note the strawman fallacy: Zach shifts the focus from the discussion of whether taxes are extracted at the point of a gun to whether taxes, having been collected, may be characterized as helping tyranny when they are expended for a putatively good cause. Having done so, the Wiki Kid then sniffs the air and judges DQ’s non-existent assertion to carry certain penumbras and emanations.
Charles the Hammer, Zach’s kickass teacher, awards the Hive an F.
Zachriel: Most people would say so.
Charles Martel: You no proof whatsoever that that is what most people would say.
Some people are curmudgeons and don’t like anything, but we’ll let our readers decide.
Charles Martel: Zach{riel} shifts the focus from the discussion of whether taxes are extracted at the point of a gun to whether taxes, having been collected, may be characterized as helping tyranny when they are expended for a putatively good cause.
It’s directed to the point.
Danny Lemieux: if the townspeople want to raise funds to help the family, let them raise them privately, not at the point of a government’s gun.
Katrina rescue operations were taking taxes — at the point of a gun no less — and giving them to someone else “putatively” in need.
“A family loses their home to a fire, and voters decide to spend the money to help the family. Is it reasonable to say the village is acting out of compassion? - Zach the Contrarian
It’s always easy to spend someone elses money. But is that compassion? I would suggest it may be faux compassion. It’s easy to feign compassion when you’re own well-being isn’t at stake. Real compassion should include an element of sacrifice. Without that, the decision to help the family could be self-interest– the desire that the town help them if they were in a similar circumstance.
In fact the example Zach offers concerning Katrina, has more to do with the unstated element of reciprocity mixed with the self-serving interest of politicians. No one balks at the idea of helping Katrina victims rebuild their lives, since we assume tax dollars will be used for us or our area should a natural disaster occur. It’s more like insurance than generosity.
The excess number of dollars that poured into Katrina, with little effect demonstrates the inefficiency of the “compassion” of our government. My desire not to see my tax money wasted says nothing about my view of compassion. One shouldn’t draw conclusions one way or the other.
Instead measure compassion by churches and other organizations still sending teams to New Orleans to help homeowners rebuild their houses and lives. As I understand it, the government bureaucracy was an impediment to action. We may actually be better off by not relying on the “compassion” of the bureaucracy.
Again, you deliberately attempt to derail the discussion by insisting it’s going down the track you’ve selected for it. The discussion here is not whether the feds took tax money and used it to help Katrina victims. Those funds were long gone and out of citizens’ control.
The discussion is whether a local group of citizens in the aftermath of a tragedy that affects one family has the right to vote to force unwilling fellow citizens to show “compassion” by expending money that is still under local control. When you decide to address that—including defining how a collective can show compassion—let us know.
Folks, I think the back and forth here with the Zach Hive is an example of how the left uses words that sound good but never bothers to define them.
Zach has no idea what compassion is—how it works, what motivates it, what makes it authentic. It’s just that in his circles he’s heard the word used so many times he thinks it has magical properties. All he has to do is conjure it. It’s like when Dukakis kept intoning that the country needed “good jobs at good wages” to the point that simply saying it was enough in his mind to define what he meant. The same with Zach’s “compassion.”
That’s why you’ll never see Zach engage any of us here in a real discussion that goes beyond his tedious citations and one liners. He has not really thought through his reflexive snark and contrariness. It is not so much a philosophical position as it is a reactionary stance.
BrianE: No one balks at the idea of helping Katrina victims rebuild their lives, since we assume tax dollars will be used for us or our area should a natural disaster occur.
Not everyone, but most people certainly. And reciprocity is clearly part of the social contract. In any case, it’s taking taxes — at the point of a gun no less — and giving them to someone else “putatively” in need.
Charles Martel: The discussion is whether a local group of citizens in the aftermath of a tragedy that affects one family has the right to vote to force unwilling fellow citizens to show “compassion” by expending money that is still under local control.
Yes. People continue to pay taxes to support government agencies, such as FEMA, the Federal Emergency Management Agency. Are you saying no more FEMA?
People have no choice as to what their taxes go to paying for. Z needs a basic education on how our system works.
It would be nice if people could reserve their funding for A, B, C but not Y, X, and abortion, but that’s not how it works.
Unions and democratic socialism is tyranny over the minority.
In terms of devoting funding to any particular initiative, there’s no particular reason to have a vote on it. The vote isn’t the source of authority on where funding should go. The original authority comes from the people who produce the cash. If they wish to spend their cash, they can do so. Putting a layer of bureaucracy on it and saying now people can vote to spend their cash and other people’s, is ridiculously complicated and prone to corruption and inefficiency.
Why would someone vote to spend their cash when they can just spend it? It’s only because it’s a way to fool people into thinking that their vote is for their own cash, when in fact the vote is for them to get other people’s cash involved. In the guise of being equitable, what you have is pure unjust inequality.
In the frontier days, money wasn’t worth much. Since you could have tons of gold, but the INdians and the white raiders out there can take all of it when they want to. So what you needed was strength, skills, leadership, and protection. Those were far more important than money and nobody could “vote” such services to themselvesbecause it had to come voluntarily from the people who had them. What were the villagers going to do, capture a tough gunfighter and make him defend them against raiders? Not going to work. The entire town can take a vote and say that X should fight for them, but all X has to do is to get the hell out of town and go to another one.
When people got rich and corrupt enough, then the vote became a method of reallocating resources, often times unwisely. That is where leadership comes in to help mitigate the excesses of the mob. Before, on the frontier, it was a case of those with the resources directly commanding where it should be spent, thus you had human wisdom and experience at work. As people got more prosperous and civilized, the vote became an indirect way of voting away other people’s resources. Thus human foolishness became more and more prevalent.
It is also why women were more valued and equal on the frontier and when they joined the union, rules and laws from civilization started to crush the liberties women had had on the frontier. It’s because women, being the owner of resources for the frontier household and family, had influence. But once something indirect like a town or village idiot voting board came up, they lost that influence because people could vote to keep them in their place.
Zach,
You’re last post left me scratching my head, trying to figure out how to respond. But first I had to figure out which side you’re arguing.
The original post by BW asserted that people wrongly conflate generosity with Socialism, which is true.
But are you trying to make BW’s point for her? You’re not suggesting that collecting taxes “at the point of a gun no less” to distribute to others is an act of generosity are you? Are you suggesting that holding a gun to people’s head is an example of “democratic socialism” are you?
I must have missed something along the way.
My point is that Socialism isn’t altruistic except in the minds of those proposing it. Eventually it does require a gun to the head to keep people participating in it, since people soon learn that everyone isn’t equal and not everyone is sharing in the burden of producing the fruits that all equally share.
The Katrina demonstrated the limits of centralized bureaucracies and that by their nature are inefficient when couple with the distorted layers of regulations that they meander through in their futile attempt at fairness.
You’re not suggesting that collecting taxes by force counts as generosity by the folks holding the gun are you? You might make a case those folks might feel “righteous” by forcing others to accept the obligations they “feel” but I’m waiting for you to make the case that qualifies as generosity.
I give up. The kid can’t even follow a simple argument. I’m going to go walk my cat.
If Jesus was a socialist, then you would have seen class warfare erupt between the Jews and the Romans several times during his historical life time. But what you saw was actual peace and cooperation. The wars and revolts happened after his death, coincidentally.
If Jesus was a socialist, you know what you would have seen was terror, misery, conflict, strife, warfare, and revolutionary zeal. Yet, curiously, the Middle East was rather relatively peaceful during his lifetime. And that’s surprising considering that Arabs and people back then were even more crazy and violent then they are today.
For what it’s worth, Z, I for one would rather see FEMA disbanded and emergency relief handled privately and through insurance. People who gave money privately to help those in Haiti or Japan or New Orleans showed real compassion. People who took money at the point of a gun and gave it to the people of New Orleans showed no such thing.
Using the power of government to steal money from people to give it to any charity is morally wrong, no matter how worthy the charity. Except in rare cases (where the continued existence of the freedom of the nation is at stake; where, as we’ve discussed, many lifes can be saved with a single “immoral” act, etc.) moral ends do not justify immoral means. They certainly do not do so when the ends are better achieved through moral, private means.
It is interesting that Z took me to terrible task for advocating one act of torture to save millions of lives, but himself supports millions of acts of theft for no better purpose than to redistribute income.
Z does not even have a partial understanding of how torture or interrogation works. This causes him to doubt the efficacy of torture. Z has no doubts that redistribution of income works and that it can be used to pay for some things. He has doubts that people would be willing to pay voluntarily, so it is a guarantee to make them pay. When people are given a choice of a slight possibility of getting their goals achieved and a certain chance, they choose the latter as being the easiest route.
Of course Z could seek out information on torture and train in interrogation protocols, but as his arguments with SSG Dave and others have demonstrated, Z is not capable of learning what he refuses to see.
Many people doubt the efficacy of torture because they have been fed media propaganda on the subject. It’s not like they have experience or insights on the matter. They believe whatever they are told to believe, and then tell us torture subjects will be able to resist and lie for a year under the knife and torch. Well maybe a retarded torturer would achieve that result or if they didn’t care about getting a true confession out of them, but that has nothing to do with torture as a methodology.
Ymarsakar: People have no choice as to what their taxes go to paying for. Z needs a basic education on how our system works.
In democratic countries, they have taxation with representation.
Ymarsakar: Unions and democratic socialism is tyranny over the minority.
Minorities don’t always get their way in a democratic society. That’s rather the point.
Ymarsakar: In terms of devoting funding to any particular initiative, there’s no particular reason to have a vote on it. The vote isn’t the source of authority on where funding should go.
It is in democratic societies, such as under the U.S. Constitution.
Ymarsakar: Why would someone vote to spend their cash when they can just spend it?
For instance, a democratic government might impose a tax to build a public road.
BrianE: The original post by BW asserted that people wrongly conflate generosity with Socialism, which is true.
That’s correct. Socialism is an economic system, and because so many modern systems are mixed, we often consider it in terms of a continuum. Britain may have single-payer healthcare, for instance, but they also have a thriving private sector. However, we wouldn’t call Britain’s Conservative Prime Minister a socialist, even though he supports the National Health Service.
There are two contentions at issue. One is simply whether we can ascribe personalities to nationalities and their actions. America bravely liberated Europe and then generously helped them rebuild. These are reasonable statements, and most people know that there were naysayers in the United States, but that the democratic society decided to spend their blood and treasure to accomplish these goals. The other is this statement:
Bookworm: Socialism is, in fact, the opposite of generosity because it removes human morality and decency from the equation.
That is an overstatement. If a democratic society votes to spend money on, let’s say, emergency relief in Indonesia, then we can say it was an act of generosity. We say this even though we know there were naysayers, and even though the money is taken “at the point of a gun”. It’s called taxation with representation.
BrianE: Are you suggesting that holding a gun to people’s head is an example of “democratic socialism” are you?
Gee whiz, BrianE. All taxation is at the point of a gun.
http://en.wikipedia.org/wiki/Whiskey_rebellion
BrianE: Eventually it does require a gun to the head to keep people participating in it, since people soon learn that everyone isn’t equal and not everyone is sharing in the burden of producing the fruits that all equally share.
This is the conflation at the root of the misunderstanding. Sharing the fruits equally is communism. Socialism means the government control of the means of production. Modern states are mixed, and so-called democratic socialist governments have very strong private sectors. And even minimalist governments spend money on public projects, such as roads.
BrianE: You’re not suggesting that collecting taxes by force counts as generosity by the folks holding the gun are you?
The Marshall Plan was an act of American generosity.
http://en.wikipedia.org/wiki/Marshall_plan
BrianE: The Katrina demonstrated the limits of centralized bureaucracies and that by their nature are inefficient when couple with the distorted layers of regulations that they meander through in their futile attempt at fairness.
As Katrina demonstrated, when the people in government don’t believe in government, and put cronies in charge of important agencies, they atrophy. Most Americans want a federal emergency response system. That’s because disasters are often too big and too widespread for local governments to cope. Then there’s this:
Don Quixote: For what it’s worth, Z, I for one would rather see FEMA disbanded and emergency relief handled privately and through insurance.
You can make that argument, but the American people seemingly would rather have a well-run federal emergency system. And when you lose that vote, it means they will take your money “at the point of a gun”, just like they take your money to build roads and schools and funding cancer research.
Don Quixote: People who gave money privately to help those in Haiti or Japan or New Orleans showed real compassion.
Most of the people in Japan and Louisiana and Haiti consider that their government should have a system in place to help in case of national emergencies. And when the system is inadequate, then they usually insist that the government improve its services, not disown them.
Don Quixote: It is interesting that Z took me to terrible task for advocating one act of torture to save millions of lives, but himself supports millions of acts of theft for no better purpose than to redistribute income.
No. You were taken to task for making torture mundane because of your imaginary threats.
Ymarsakar: Z does not even have a partial understanding of how torture or interrogation works.
It’s not a new science.
Z nods their heads thoughtfully and conclude: “In democratic countries, they have taxation with representation”, followed by “Minorities don’t always get their way in a democratic society. That’s rather the point.”
In a perfect world, one that is easy to imagine from the comfortable confines of an armchair. This is first-level thinking, bereft of perspective. Many of the battles swirling in our western societies today revolve around the growing gaps between the citizenry and the nation state (the “Borg”). In Europe, it was estimated (prior to Lisbon) that 85% of all laws and regulations were imposed upon nations by the EU without representative debate and acquiescence. Similarly, in the U.S., a growing amount of regulation and spending is imposed upon the citizenry without its acquiescence and the votes of politicians are too easily corrupted by the process. Evidence for the prosecution – the pending EPA imposition of regulations on carbon dioxide. Nobody voted for these regulations, nor did they vote for the taxes (direct or indirect) that such regulations will impose.
In an excellent post today (or obit, we can only hope) regarding the long-overdue discrediting of Keynesian economic thinking (another armchair philosophy), Peter Foster of the Financial Post says it most succinctly, “People come into government to do good and stay on to do well.” http://opinion.financialpost.com/2011/04/19/peter-foster-keynesianism%E2%80%99s-systemic-failure/.
Yes. Exactly!
[...] a reason study after study shows that liberals donate less to charity than conservatives do. The liberals have placed themselves entirely in government’s hands: the problem of the poor has become someone else’s problem. The fact that we all pay taxes, [...]
Danny Lemieux: Similarly, in the U.S., a growing amount of regulation and spending is imposed upon the citizenry without its acquiescence and the votes of politicians are too easily corrupted by the process. Evidence for the prosecution – the pending EPA imposition of regulations on carbon dioxide. Nobody voted for these regulations, nor did they vote for the taxes (direct or indirect) that such regulations will impose.
There is an inevitable distance between government and the people even in a representative government. An argument can be made that therefore government should be kept as small and local as practical. But that wasn’t the argument being made. It is notable that the most advanced economies are mixed economies.
Danny Lemieux: In an excellent post today (or obit, we can only hope) regarding the long-overdue discrediting of Keynesian economic thinking (another armchair philosophy), Peter Foster of the Financial Post says it most succinctly, “People come into government to do good and stay on to do well.” http://opinion.financialpost.com/2011/04/19/peter-foster-keynesianism%E2%80%99s-systemic-failure/.
Except he doesn’t make such an argument. Rather, Keynesianism was ignored in the largest U.S. economy leading up to the debacle, along with even basic financial prudence. Of course, there are going to be on-going deleterious effects. Foster demonstrates his ignorance of Keynesianism here:
Peter Foster: The astonishing aspect of all this — as pointed out numerous times in this space — is that spend-yourself-rich Keynesianism had already been comprehensively refuted in theory and had spectacularly failed in practice by the late 1970s.
“Spend-yourself-rich” is directly contrary to Keynesianism, which is based on countercyclical policy.
Sure, Z, and planes flying into buildings, especially the Pentagon, were imaginary — until they happened. I hypothesized a real threat, not an imaginary one, and asked whether, if (and only if) there were a real threat, would you support torture. You argued with the premise to avoid answering the question. I’m not going to go through that whole debate with you again, but obviously if the threat is imaginary then the torture is unjustified. You have to accept the premise before you can answer the question.
And in no way did I ever make torture “mundane.” Your charge is simply false. If you are going to be taken seriously, you have to take the others’ arguments seriously and not distort them.
Z misapplies Peter Foster’s quote as follows: “Spend-yourself-rich” is directly contrary to Keynesianism, which is based on countercyclical policy.
Keynesian economics proposed that the government increase its debt to pump-prime the economy during economic downturns. This is to what Foster (David’s brother, cousin?) was referring. To that end, Keynesians do advocate government spending toward restoring economic growth.
What the Great Depression and the current Obama regime (although Obama’s spending was more geared to pump-priming slush funds than the economy) demonstrated again and again is that the government cannot pump-prime the economy with spending.
Witness the government’s plans to sell off its Government Motors state at a significant loss (although we can be sure that favored Obama constituencies will get favored access here as well). This is the source of the Morgenthau’s famous reflection on FDR’s spending binges: ‘We’re Spending More Than Ever and It Doesn’t Work’. Similarly with the Obama administration – record levels of government spending have done nothing for the economy.
The flip side of Keynesian economics is that, during up-cycles of the economy, government uses the increase in revenues to pay down the national debt. Again, this is armchair philosophizing as this is where human nature kicks in – government has shown itself over and over again unwilling to pay down debt during good economic times when such debt can instead be used to buy votes to keep politicians in power.
Not to veer too far off-topic, but a parallel can be found in university tuition: the more that government supports to student loans were increased, the more that universities raised their tuitions to absorb the increased supports. The net effects to taxpayers were negative, for the students these programs were designed to help were neutral and, to the universities….well, they made out like the bandits they are.
Ditto for government “stimulus” funding of the economy: taxpayers end up in the negative, the effect on the economy is neutral, but favored government constituencies (e.g., public sector unions) make out like the bandits they are. Politicians, meanwhile, get reelected from the financial and other support extended to them from selfsame favored constituencies.
Like Marxist economic theory, Keynesian economic theory is not reality based.
Danny Lemieux: Sure, Z, and planes flying into buildings, especially the Pentagon, were imaginary — until they happened.
And there was a real threat of total thermonuclear annihilation when the U.S. pressed the world to outlaw torture.
Danny Lemieux: I hypothesized a real threat, not an imaginary one, and asked whether, if (and only if) there were a real threat, would you support torture.
What you imagined was that Danny Lemieux had the answer to stopping the threat, and that the answer was to torture prisoners. If you were to find yourself in such a position, and you knew the only way to save innocent lives was to torture someone, you could simply break the law, and allow the law to take its course. It’s not that difficult a concept.
Danny Lemieux: And in no way did I ever make torture “mundane.”
Of course you make it mundane because you make it routine. There’s always a threat. There’s always a justification. There’s always someone who claims necessity. Under the color of law, who would you torture, how much, when do you stop? Fortunately, in the U.S. at least, there is a Constitutional prohibition against cruel and unusual punishment.
That’s funny, Z: this is not the first time that you have confused Don Quixote with Danny Lemieux.
To begin, Don Quixote is a Spaniard, Danny Lemieux is a Kermit. Spain and France are two very different countries:
Lest there by any misunderstanding…I, Danny Lemieux, would like to state categorically that I do not torture people, other than with conversation, good wine and fine food.
Don Quixote, I suspect, prefers torturing people with castanetes, Flamenco and beautiful brunettes.
So, now that everybody’s blood pressure is at rest…why are you so angry? You live in dreamland, it isn’t real.
Danny Lemieux: Keynesian economics proposed that the government increase its debt to pump-prime the economy during economic downturns.
Yes, if there is a collapse in aggregate demand, then the government can temporarily replace that demand to reduce the downturn.
Danny Lemieux: What the Great Depression and the current Obama regime (although Obama’s spending was more geared to pump-priming slush funds than the economy) demonstrated again and again is that the government cannot pump-prime the economy with spending.
Let’s review:
Danny Lemieux: Following the crash of ’29 and the Great Depression (no, not the Obama Depression…the current one!), there were many partial recoveries. The problem is that the systemic damage to the economy was so great that the “recoveries” were short-lived.
Zachriel: Um, no. GDP grew from the time of the New Deal, exceeding it’s previous size by 1936. There was a temporary recession in 1937 when deficit hawks convinced Roosevelt to slash spending, a course he then reversed. Growth resumed well before WWII.
http://norcalcyclingnews.com/words/wp-content/uploads/2009/02/depression-gdp-output-1.gif
And with the Great Stimulus of WWII, the U.S. reach full employment as millions of people got jobs with the government. As for the current situation, the CBO has determined that the stimulus contributed significantly to the economic recovery (between 1.1% and 3.5% of GDP in 2010).
Danny Lemieux: The flip side of Keynesian economics is that, during up-cycles of the economy, government uses the increase in revenues to pay down the national debt. Again, this is armchair philosophizing as this is where human nature kicks in – government has shown itself over and over again unwilling to pay down debt during good economic times when such debt can instead be used to buy votes to keep politicians in power.
Sigh. Just a decade ago, the U.S. government was running a surplus, exactly as it should have. Having a lower debt would have given the U.S. much greater flexibility in the current crisis, and may have limited some of the damage by cooling the economy during the bubble.
Danny Lemieux: That’s funny, Z: this is not the first time that you have confused Don Quixote with Danny Lemieux.
Apologizes for the misattribution.
This mixture assumption being trolled out here is like the claim a mixture of oxygen in carbon chain fuels means that the impurity added in should be be increased until all you have is oxygen. Yet it no longer burns like the original compound.
It is never notable what mixture advanced and bankrupt economies are composed of. It says nothing about what the Good is nor the Bad. As a claim for increasing the impurity of one element over the other, the assumption is foolish. They have no idea what element in the mixture is good or bad. They have no idea what element in the compound is doing X and Y. In fact, if this was simply left at the level of ignorance, it would be a neutral statement. But people like Z claim they know. They claim they know which impurity is good and which impurity is bad, which one needs an increase and boost and which one needs to be marginalized. As a justification for increasing the tyrannical power of the government to tax and steal from Americans, it’s not as good as people assume it is.
There’s always someone who claims necessity.
What’s the point of you talking about yourself claiming the necessity for taxation? Are you trying to contradict yourself on top of the clown act.
Fortunately, in the U.S. at least, there is a Constitutional prohibition against cruel and unusual punishment.
The terrorist is not at trial. Then again, Constitutional prohibitions never stopped the Left from nationalizing businesses, starting wars to distract the political opposition before an election, and conduct vote fraud on a national level. Not even the First Amendment and the Second Amendment has stopped the Left from trying to silence and enslave Americans. So where do you come off talking about Constitutional prohibitions that you find convenient to obey when it suits you?
And when you lose that vote, it means they will take your money “at the point of a gun”, just like they take your money to build roads and schools and funding cancer research.
This shows the Leftist insanity and psychological sociopathy at work quite well. The idea that politics is warfare, that anything goes, and that the winner determines the fate of the loser. It’s actually very consistent and compatible with socialist and marxist class warfare theory. And totally incompatible with Founding Father ideological views of the proper balance in government powers.
The idea of hobbled government that cannot do things because branches of government opposes itself, is simply because without the power to forcibly take money and spend it on people’s personal prostitution accounts, there’s no need for the loser to be rode over by the winners. Since there won’t be the power to do it, so it doesn’t matter who wins and who loses, people keep their own money and lives. The Left and Z believe that politics should be warfare, that the winner should go out and loot the vanquished and stomp them into the mud.
Why they think the losers would be satisfied with this arrangement and not take up arms eventually, I have no idea. Maybe they think their Revolutionary Wing composed of Ayers, Obama, and Khomeini will be able to force people to do their bidding. At the point of a gun.
It is very simple. Government has no authority to spend taxes on anything other than what the Constitution specifically allows. For it is the Constitution that was ratified by the US states, not government laws to increase the salaries of Congress. The sovereignty of the US lies not in democracy or elections or laws, but in the US Constitution. That is the source of the authority the government exercises under. Any law that violates the US Constitution is null and void and is being enforced, if it is, illegally and without any support of the people.
It does not matter what people say they want. That is not sovereignty or the will of the people. That is only a desire, a momentary lapse. The Constitution lays out what people need and that is what they should get for their taxes. Healthcare wasn’t there. Charity wasn’t there. Helping the poor by paying them six figure yearly incomes wasn’t there. The Left and Z keep putting things in the Constitution and claiming they have the authority to ride over the rest of you, yet when you look around, there is nothing in the Constitution that provides the Left and Z with the authority to commit so many injustices against other Americans.
Ymarsakar: This mixture assumption being trolled out here is like the claim a mixture of oxygen in carbon chain fuels means that the impurity added in should be be increased until all you have is oxygen. Yet it no longer burns like the original compound.
Your analogy almost works. It’s more like blowing on a spark to encourage the flame. Once the fire starts in earnest, then it will provide its own draft.
Ymarsakar: What’s the point of you talking about yourself claiming the necessity for taxation?
Taxes are necessary for government.
Zachriel: Fortunately, in the U.S. at least, there is a Constitutional prohibition against cruel and unusual punishment.
Ymarsakar: The terrorist is not at trial.
Punishment first, then trial? Or don’t bother with the trial?
Ymarsakar: So where do you come off talking about Constitutional prohibitions that you find convenient to obey when it suits you?
Nope. Same law for everybody.
Zachriel: And when you lose that vote, it means they will take your money “at the point of a gun”, just like they take your money to build roads and schools and funding cancer research.
Ymarsakar: This shows the Leftist insanity and psychological sociopathy at work quite well. The idea that politics is warfare, that anything goes, and that the winner determines the fate of the loser.
In, as Adams termed it, “a simple democracy”, the majority can tyrannize the minority. However, modern democracies have a balance of various institutions that provide protections for the minority. Nevertheless, if the voters decide to, say, spend tax money on Katrina relief or the Iraq War, then you may end up paying taxes for purposes you may not agree with. It’s the price and privilege of living in a democracy: Sometimes you may be in the minority.
Ymarsakar: Government has no authority to spend taxes on anything other than what the Constitution specifically allows.
It allows spending for the “general welfare”.
A fire provides its oxygen you say… interesting.
Elections and voting aren’t necessary for government.
The Constitution names punishment as part of a trial by the government.
How can the Left claim they obey the same law when they have special favors and healthcare for the elites and something else for the peasants living in most of America.
The voters don’t decide any policy issues in a republic.
A government that has gotten to the point where they are distributing cash from one group to the other, at the expense of those without political connections, is no longer a just government worth obeying.
Zachriel: Once the fire starts in earnest, then it will provide its own draft.
Ymarsakar: A fire provides its oxygen you say… interesting.
As we said, a fire can provide its own draft.
Zachriel: Taxes are necessary for government.
Ymarsakar: Elections and voting aren’t necessary for government.
As we said, taxes are necessary for government.
Ymarsakar: The Constitution names punishment as part of a trial by the government.
Amendment V: No person shall … be deprived of life, liberty, or property, without due process of law
Ymarsakar: The voters don’t decide any policy issues in a republic.
They vote for representatives.
Ymarsakar: A government that has gotten to the point where they are distributing cash from one group to the other, at the expense of those without political connections, is no longer a just government worth obeying.
Prudence.
Ymar, Zack’s counter-analogy wasn’t thought through. It’s true that once a fire catches, it draws oxygen into it—witness what happens in a firestorm. The problem with Z’s contention is that he compares massive deficit spending to oxygen and the U.S. economy to, let’s say a pile of straw, that needs to be lit. So what happens when the government blows oxygen that doesn’t yet exist (debt) into the straw in unheard of quantities? Even assuming the straw catches fire and now creates its own draft, where does that oxygen come from? Remember, the straw has to “pay back” the oxygen it received.
In Zack’s universe, the straw magically draws in and sends out oxygen. Neat trick, that.
Charles Martel: Remember, the straw has to “pay back” the oxygen it received.
Yes, the money has to be paid back.
Classically, the policy is to maintain the government in balance. So if the economy is growing, leading to increased tax receipts, cut taxes. If the economy is shrinking, causing reduced tax receipts, raise taxes to cover the budget. The problem is that this exasperates the market cycle, leading to booms and busts. Cutting taxes while the economy grows causes it to grow faster, leading to a bubble. When the bubble bursts, raising taxes accelerates the decline, leading to a dangerous, downward spiral.
Countercyclical (Keynesian) policy means to run a surplus during times of plenty (seven fat cows), and run a deficit during times of famine (seven skinny cows). In a modern economy that may mean progressive taxes, which dampen growth as incomes rise, but reverses when the economy declines. Unemployment insurance and other safety net programs act as automatic stimuli.
Imagine if the U.S. had put some of the projected Clinton surplus into a “lock box” instead of using it for tax cuts. Wouldn’t a little cash on hand come in handy about now? The size of the U.S. stimulus was small in relation to the depth of the problem, especially as state spending is contracting at almost the same rate as the federal government is expanding.
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Genesis 41: “Then Pharaoh said to Joseph: ‘Behold, in my dream I stood on the bank of the river. Suddenly seven cows came up out of the river, fine looking and fat; and they fed in the meadow. Then behold, seven other cows came up after them, poor and very ugly and gaunt, such ugliness as I have never seen in all the land of Egypt. And the gaunt and ugly cows ate up the first seven, the fat cows.’ “
Zack, thank you for once again totally missing the point. I knew I could rely on you.
Charles Martel: thank you for once again totally missing the point.
You seem to be quibbling about the imperfect nature of Ymarsakar’s analogy, rather than the point under discussion. The usual analogy is to priming a water pump. Did you mean something else?
It is not my analogy that fire creates its own fuel, like government creating wealth out of vacuum.
Zack, as I said, you have a hard time following arguments, especially when they show the flaws in yours:
1. You offered the oxygen/combustible material analogy, I commented on its structural problems. It’s a little too late to offer pump priming instead (as though that feint will distract us).
2. What Ymarsakar said. For a supposedly scientific hive, you seem to lack knowledge of how gases behave.
Charles Martel: You offered the oxygen/combustible material analogy, I commented on its structural problems.
The idea is you put a little in (draft), and get even more out (draft). In any case, we answered the actual point about countercyclical policy in detail, just so that you wouldn’t be confused.
Nice try, Zack. Always run back and try to fix what you said by claiming that you put it the second way, not the first. Are you beginning to see why you have absolutely no cred here?
Z apparently gets very excited about (projected) economic recovery rates of 1% to 3.5%. I don’t. Remember, this is recovery from a very low base. Economies eventually recover on their own, as business and consumers need to restock their inventories. The issue is whether government policies help or stymie recoveries.
Here is a very nifty tool from the Minneapolis Federal Reserve, where you can compare the current recession and recovery against the others. Click the tabs on the top to choose the metrics, click the little boxes on the bottom to include the different recessions since 1953.
http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/index.cfm
And, Z…since I know that I can predict the conclusion to which you will jumb…recognize that the data for the 2001 “Bush” recession reflects a recovery from a much lower level of decline. Notice how quickly we recovered from other recessions where “Keynesian stimuli” were not employed.
A few factoids:
Clinton never had a government “surplus”: thanks to a Republican congress (Congress sets the budget, not the President). Clinton’s budget deficit almost went down to zero in 2000 ($17.9b) but it increased back to $133b in 2001 (the last “Clinton” budget). However, the government deficit increased in all years of the Clinton Administration.
The FDR “Depression” did not end with WWII…economic growth during that period was anaemic and did not begin to recover until FDR’s second term. Unemployment was abysmal until WWII, unless you want to call WWII a government “economic stimulus” project. Thank you, but I would prefer not to rely upon a world war for economic recovery.
I suspect that you are reading far too much into GDP. GDP equates to [ private consumption + gross investment + government spending + net exports]. The GDP values for the Roosevelt era (and today) were skewed by government spending, which is not wealth-generating activity but, rather, recycling of existing wealth. This is not “growth”. The DJIA, which is a measure of growth and wealth creation, did not recover to pre-Depression Era levels until 1954.
The idea is you put a little in (draft), and get even more out (draft).
I have no idea what Z is talking about here. But to take the topic of air currents moving due to a fire, a fire creates what is called negative pressure. The opposite of positive overpressure from an explosion. Similar to an implosion where the external pressure is higher than the inside, thus crushing the inside if the pressure from the inside outwards doesn’t equal or exceed the pressure from the outside towards the inside.
Fire does not create much and there’s no way it can create a vacuum. Only nuclear weapons can do that, albeit momentarily. Huge firestorms and very hot fires can cause a negative pressure locally which tends to suck in air from other parts of the land, but that’s about it. The air moves not because of the fire but because there’s an inequality in the system. Closed system redistribute itself to manage uneven order.
The negative pressure of a single candle flame is unmeasurable. It is effectively random in a closed system to the naked eye. It cannot be isolated in a container given the minute quantities of air pockets that is being exchanged and affected. For a hotter fire, the effect can be observed in the air currents.
Fire is what chemists call combustion. It is the physical observation to the naked eye of combustion, which is Carbon chains plus oxygen equals heat and x byproducts utilizing catalysts or initial energy startup. Oxygen, a percentage of the air around us, is the fuel. Combustion stops when air is absent or when oxygen has been exhausted to a point where the combustion can no longer proceed. There are certain metals, I forgot whether it was potassium, pure phosphorous, or magnesium, that will combust the moment you expose them to oxygen in the air at certain room temperatures. Oxygen is considered a corrosive gas, and it is not a noble gas like xeon. It likes to react to things, sorta like Bill Mayers and crazy MSNBC casters.
The chemist in the house, Danny, can provide more details. But I’ll say this. Government spending will not make a fire create its own oxygen supply. What a fire creates is waste byproducts, not oxygen and not air. Feeding a fire more oxygen simply means it will burn itself out faster and create more waste.
Danny Lemieux: Z apparently gets very excited about (projected) economic recovery rates of 1% to 3.5%.
That’s CBO’s estimate of the *difference* in economic growth due to the stimulus in 2010.
Danny Lemieux: Clinton never had a government “surplus”:
That is incorrect.
http://www.cbo.gov/budget/data/historical.pdf
Danny Lemieux: economic growth during that period was anaemic and did not begin to recover until FDR’s second term.
Huh? GDP set a new record in 1936. Here’s the growth rates from FDR’s first term:
1933 -1.3
1934 10.9
1935 8.9
1936 13.0
Danny Lemieux: Unemployment was abysmal until WWII, unless you want to call WWII a government “economic stimulus” project.
Of course it was an economic stimulus.
Danny Lemieux: Thank you, but I would prefer not to rely upon a world war for economic recovery.
Of course not, but it demonstrates the effects of a powerful stimulus far beyond anything the Roosevelt Administration had attempted. And much of the economic output was meant to be shipped overseas to be blown up.
Danny Lemieux: The GDP values for the Roosevelt era (and today) were skewed by government spending, which is not wealth-generating activity but, rather, recycling of existing wealth.
GDP is the *market value* of all goods produced.
Danny Lemieux: The DJIA, which is a measure of growth and wealth creation, did not recover to pre-Depression Era levels until 1954.
The stockmarket was clearly overpriced in the late 1920′s.
Ymarsakar: But I’ll say this. Government spending will not make a fire create its own oxygen supply.
We would prefer not trying to salvage your analogy. However, a stimulus is not meant to create wealth, but to spark economic activity in the private sector during a downturn.
We would prefer not trying to salvage our analogy.
There, Perfesser, fixed it for you.
I’m real sure Government Motors has gotten a whole lot of stimulation after Obama nationalized them.
Jesus said we should take the shirt off OUR backs and give it to our brother
He never said we should take the shirt off our Cousin’s back and give it to our brother
It seems to me that conservatives are realists; liberals are theorists.
As Zachriel pointed out socialism is an economic system based on the concept of public ownership of property and it in itself is amoral. The fact that socialism has never been successfully sustained outside of small homogenous groups already alluded to doesn’t seem to deter its adherents to extol its virtues.
But proponents of socialism cannot be credited with generosity, as has been discussed here. This cover of altruism masks the greed and envy at the core, IMHO. I can feel good that I’m being fair to others (with the fruits of others labor of course), but somewhere deep in the heart of man greed and envy are at work and what better way to rationalize my selfishness than with a veneer of compassion.
Since Zachriel has reminded us continually that taxes have the threat of force, he successfully debunks the idea that we can characterize the use of such receipts as altruistic. Practical possibly, defensible doubtfully, and assuredly self-serving, since it’s our politicians that most often bask in the glow of its beneficence. They’re also always the first to remind us of our virtue.
Zachriel hails the Marshal Plan as proof of our altruism. But in fact, the world’s economy was in shambles. We were at the top of a world laying in so much rubble– our economy by the end of the war was capable of producing incredible amounts of goods– with no one to buy them. What were all those returning GIs going to do? We were merely creating markets.
It has been suggested by others that the Marshal Plan was a shrewd business decision. I’d like to think it was just because Americans are so good-hearted. The truth probably lies somewhere between the two.
Since it was the American military executing the plan, we had actual good people in charge. Not the greedy and corrupt officials that would be placed above us all in the Obamanation. Execution counts for much, theory only a little. Sound execution of a bad theory is infinitely better than poor execution of a good idea.
Nobody else can give you virtues or dignity. That is something integral to oneself and not something you trade with others for. When I say nobody else, that certainly includes governments and nations. Which puts me in full agreement with Book on the question of “socialist generosity”. There is no such thing. Those that wish it was otherwise, are seeking to detach personal virtues from the person.
Is honor and self respect so common that you would trade with it as if they were cash and stocks?
“It has been suggested by others that the Marshal Plan was a shrewd business decision. I’d like to think it was just because Americans are so good-hearted. The truth probably lies somewhere between the two.”
I think you make a good call, Brian. You’re pointing out two important things about Americans: They are generous and they are realistic.
Their generosity was the decision to help lift post-war Europe out of poverty, with a step between generosity and realism, which was the desire to keep Communism from taking over all of the continent.
Their pure realism was the realization that no other nations up to that time, except for maybe Great Britain, had ever understood: The zero-sum, peasant view of the world, as exemplified by the Germans, Japanese and Russians, that there is limited wealth and you can only steal it, is pathetically limited. The Americans knew how to create wealth and were willing to share the “secret,” knowing, as John Kennedy once said, “a rising tide lifts all boats.”
Unfortunately, socialists are incapable of creating wealth. The best they can do is get in the way of the people who do know how to create wealth, people whose creative and entrepreneurial efforts they have expropriated for decades in the name of some greater good. Imagine how much richer Swedes and Danes would be if they had not spent so many years parasitizing their best people.
Re. Z’s economic assessments, did some numbers crunching and came up with the following that I believe explains the disconnects between respective perceptions…
Re. the Clinton Surplus – I concede Z’s point -there was a slight decrease in U.S. debt levels of $5.75t to $5.73t (0.3%) which I have to attribute to the “Clinton” (aka Republican Congress) budget.
Re. Z’s definition of GDP – leaves out “goods and services”, including government services. The flaw in “GDP” as a measure of government health is that it does not measure the economic productivity of those government services, as in (for example), the ability of those services to create new jobs and self-sustaining growth. Increasing employment at the Dept. of Motor Vehicles or planting trees under FDR’s Works Project Administration does not contribute to economic growth. It bleeds monies from the productive sector to the non-productive sector and thus does not contribute to the overarching wealth of the economy.
The private sector under FDR did not recover to 1930 levels until 1940, 11 years after the crash of ’29, while government expenditures soared during this time. Much of government expenditures during this period, it should be mentioned, were wasted on non-productive projects, such as wiping out the private electrical power industry, collectivizing farmers and destroying pig farms…to name just a few examples. Yet, those expenditures would have been logged as net contributors to GDP. The core question to be addressed is why it took so long for the private sector to recover and what would have happened under these Keynesian policies had WWII not intervened.
Re. the current Obama administration’s record, Z confused GDP growth rates with actual GDP. Between 2006 and 2008, GDP grew from $13.4t to $14.4t (7.5%). From 2008 to 2010, GDP grew from $14.4t to $14.7t (2.1%). This This growth, as anemic as it was, was attributable to growth in government expenditures (again, non-productive investments), as, despite such government expenditures (which I maintain went primarily to politically favorable slush funds and radical, non-productive agendas), private sector investments decreased from $2.1t to $1.8t, a 16.7% drop.
The core question should be: are the Obama administration’s policies helping or hindering private sector economic recovery and the improvement of our lives (through wealth generation)?
Upon this issue, I am sure we can have a great debate.
A great source for tracking year-to-year GDP values of the economy can be found at this Dept. of Commerce website:
http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=5&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=2006&LastYear=2010&3Place=N&Update=Update&JavaBox=no#Mid
Danny Lemieux: Re. the current Obama administration’s record, Z confused GDP growth rates with actual GDP. Between 2006 and 2008, GDP grew from $13.4t to $14.4t (7.5%). From 2008 to 2010, GDP grew from $14.4t to $14.7t (2.1%).
CBO 2/2011: *Change* attributable to ARRA in 2010 (low and high estimates),
Q1 1.8 4.3
Q2 1.6 4.6
Q3 1.4 4.2
Q4 1.1 3.5
2010 1.5 4.1
http://www.cbo.gov/ftpdocs/120xx/doc12074/02-23-ARRA.pdf
Now adjust your growth figures by taking out the estimated change attributable to the ARRA and see what you have left.
Danny Lemieux: private sector investments decreased from $2.1t to $1.8t, a 16.7% drop.
Duh. Of course it dropped. That’s the whole point of a stimulus—to offset the drop in private investments due to the financial shock in 2008 and ensuing recession.
You seem to think that government activity is crowding out private investment. That would be the case in a strong economy. Government borrowing would compete against private borrowing leading to rising interest rates. Government investment would compete against private investment leading to inflation. The U.S. has neither rising interest rates nor inflation. These may yet occur, but not until the economy starts to work at or near capacity (or unless there is some other shock to the financial markets).
It isn’t a matter of “crowding out” private investment.
First, by increasing taxes and decreasing sales (by taxing the populace), the government leaves business with fewer retained earnings that can be reinvested into the business.
The value of private industry investment is that it comes with economic multipliers – i.e., the ripple effects of a private industry investment…if you buy a truck to haul goods, you also benefit all the people that manufacture parts for, service and fuel that truck. The truck, in turn, hauls more goods for the company, which in turn fuels the growth of the receiving company.
Government, by contrast, is a very inefficient investor. It uses the money taken from the individual, private sector business and treasury bond buyer toward very inefficient ends. By some estimates, only $0.25 of every dollar spent by the government ever reaches its intended target, after being cycled through layers of internal bureaucracies.
The examples I gave you of FDR’s “investments” into building stone paths in national parks, planting trees and the destruction of hogs (to increase the price of pork, of all things – a ham-handed approach if there ever was one!) are cases in point: they did not contribute ripple effects to the economy.
In some cases, government programs actively undermined successful private investments, such as FDR’s assault on private electrical producers to the benefit of government monopolies. In addition, whereas the objective of private investment is to create profit (a measure of wealth creation), the objective of government investment is not to create wealth and grow the economy but to generate votes. This is a fundamental reason many economists have problems with FDR’s handling and extension of the Great Depression, or with Keynesian economics, for that matter. The FDR administration demonstrated that Keynesian economics does not work in a “real world”. Even Keynes was said to be very disillusioned with how FDR applied his theories: but then, Keynes did not factor in “real world” variables, such as the need for politicians to buy votes and grow their satrapies through patronage politics.
Ergo, the actual cost of government “investment” is much higher than for private sector investment, over and above the nominal costs of the government programs themselves. That is not to say that it is an all or nothing equation: there are areas where government investment is the best alternative available (e.g., defense).
However, I suspect that running car companies is not one of them, as the current General Motors debacle illustrates. Take a close look at where government stimulus spending went and you will find many, many cases where money went to areas that do not and never will help generate economic growth. But they did help to buy votes.
As Katrina demonstrated, when the people in government don’t believe in government, and put cronies in charge of important agencies, they atrophy. – Zachriel
Katrina didn’t demonstrate that at all. You’ve been watching to too much CNN.
Given the response by the mayor of New Orleans and Govenor of LA prior to the storm, it’s understandable that it took some time to recognize the magnitude of the storm. After all, it turns out Katrina was the largest natural disaster in the history of the US.
“It has been stated in the evacuation order that, beginning at noon on August 28 and running for several hours, all city buses were redeployed to shuttle local residents to, “refuges of last resort,” designated in advance, including the Louisiana Superdome.[4] They also said that the state had prepositioned enough food and water to supply 15,000 citizens with supplies for three days, the anticipated waiting period before FEMA would arrive in force and provide supplies for those still in the city.[4] Later, it was found that FEMA had provided these supplies, but that FEMA Director Michael D. Brown was greatly surprised by the much larger numbers of people who turned up seeking refuge and that the first wave of supplies were quickly depleted.[4] The large numbers were a direct result of the insufficient mobilization and evacuation before Katrina’s arrival, primarily due to city and state resistance to issuing an evacuation order and risk “crying wolf” and losing face should the hurricane had left the path of model prediction. Had contra-flow on highways been initiated sooner and more buses begun evacuating families (including the idle school buses that were not used at all) the numbers of stranded New Orleans occupants would have been significantly less making the initial wave of FEMA supplies adequate and even excessive.”….
“In the early morning of September 2 mayor Ray Nagin expressed his frustration at what he claimed were insufficient reinforcements provided by the President and federal authorities.[10][11] However, many police, fire and EMS organizations from outside the affected areas were reportedly hindered or otherwise slowed in their efforts to send help and assistance to the area. FEMA sent hundreds of firefighters who had volunteered to help rescue victims to Atlanta for 2 days of training classes on topics including sexual harassment and the history of FEMA.[12] Official requests for help through the proper chains of command were not forthcoming due to local and state delays in engaging FEMA for federal assistance, even after approached by such authorities. Local police and other EMS workers found the situation traumatic; at least two officers committed suicide, and over 300 deserted the city after gang violence and “turf wars” erupted around the city.[13] A report by the Appleseed Foundation, a public policy network, found that local entities (nonprofit and local government agencies) were far more flexible and responsive than the federal government or national organizations. The federal response was often constrained by lack of legal authority or by ill-suited eligibility and application requirements. In many instances, federal staff and national organizations did not seem to have the flexibility, training, and resources to meet demands on the ground.”n the early morning of September 2 mayor Ray Nagin expressed his frustration at what he claimed were insufficient reinforcements provided by the President and federal authorities.[10][11]
http://en.wikipedia.org/wiki/Criticism_of_government_response_to_Hurricane_Katrina
Danny Lemieux: First, by increasing taxes and decreasing sales (by taxing the populace), the government leaves business with fewer retained earnings that can be reinvested into the business.
Taxes are at their lowest rates since 1950.
http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm
Danny Lemieux: The value of private industry investment is that it comes with economic multipliers –
Yes, private investment tends to be the most productive, but private investment dried up in the aftermath of the financial meltdown.
Danny Lemieux: Government, by contrast, is a very inefficient investor.
Often. Some investments only the government can make due to the scale and timelines involved, but that’s not an issue here. Of course, it’s recommended that the stimulus be spent on infrastructure or other essential investment, but it works even if the money is spent on tanks that are then shipped overseas that produce no economic benefit whatsoever.
Danny Lemieux: It uses the money taken from the individual, private sector business and treasury bond buyer toward very inefficient ends.
If you tax and spend, then it’s not a stimulus. Are we having the same conversation?
Danny Lemieux: they did not contribute ripple effects to the economy.
Of course they did. They had immediate effects by putting people to work. And their effects are still felt today.
Danny Lemieux: The FDR administration demonstrated that Keynesian economics does not work in a “real world”.
The economy immediately began to grow when the Roosevelt Administration began the New Deal, went into recession when they pulled back, started growing again when they resumed the New Deal, and continued to grow as America hired his excess workers and sent them overseas to fight in WWII. The result was a huge increase in economic activity, along with a huge increase in debt.
GDP
http://norcalcyclingnews.com/words/wp-content/uploads/2009/02/depression-gdp-output-1.gif
Debt%
http://zfacts.com/metaPage/lib/US-National-Debt-GDP.gif
Notice how U.S. reduced their debt burden based on the much larger post-WWII economy. Also note the decrease during the Clinton Administration.
Danny Lemieux: First, by increasing taxes and decreasing sales (by taxing the populace), the government leaves business with fewer retained earnings that can be reinvested into the business.
Taxes are at their lowest rates since 1950.
http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm
Danny Lemieux: The value of private industry investment is that it comes with economic multipliers –
Yes, private investment tends to be the most productive, but private investment dried up in the aftermath of the financial meltdown.
Danny Lemieux: Government, by contrast, is a very inefficient investor.
Often. Some investments only the government can make due to the scale and timelines involved, but that’s not an issue here. Of course, it’s recommended that the stimulus be spent on infrastructure or other essential investment, but it works even if the money is spent on tanks that are then shipped overseas that produce no economic benefit whatsoever.
Danny Lemieux: It uses the money taken from the individual, private sector business and treasury bond buyer toward very inefficient ends.
If you tax and spend, then it’s not a stimulus. Are we having the same conversation?
Danny Lemieux: they did not contribute ripple effects to the economy.
Of course they did. They had immediate effects by putting people to work. And their effects are still felt today.
Danny Lemieux: The FDR administration demonstrated that Keynesian economics does not work in a “real world”.
The economy immediately began to grow when the Roosevelt Administration began the New Deal, went into recession when they pulled back, started growing again when they resumed the New Deal, and continued to grow as America hired his excess workers and sent them overseas to fight in WWII. The result was a huge increase in economic activity, along with a huge increase in debt.
GDP
http://norcalcyclingnews.com/words/wp-content/uploads/2009/02/depression-gdp-output-1.gif
Debt%
http://zfacts.com/metaPage/lib/US-National-Debt-GDP.gif
Notice how U.S. reduced their debt burden based on the much larger post-WWII economy. Also note the decrease during the Clinton Administration.
Will respond later to Z group. Really need to get work so that I can stimulate my own economy.
“A report by the Appleseed Foundation, a public policy network, found that local entities (nonprofit and local government agencies) were far more flexible and responsive than the federal government or national organizations. The federal response was often constrained by lack of legal authority or by ill-suited eligibility and application requirements. In many instances, federal staff and national organizations did not seem to have the flexibility, training, and resources to meet demands on the ground.”- From post #91
This is the lesson that should be taken from Katrina. There are limits to what a centralized government can do. The more centralized, the more buearucratic. Notice that prior to sending in firefighters, they had to go through sexual harassment training! That’s as bureaucratic as it gets!
Unforetunately, the more inefficient government proves to be the more layers of red tape are added to the system. How perverse. We do need to decentralize and streamline.
What should be one more nail in the coffin of socialist thought instead is a rallying cry for statists.
“The broadest measure of the economy is gross domestic product. OMB’s Table 10.1 shows that GDP grew more slowly during the aughts than in any other decade over the last seventy years. In each successive year from 1940 through 2008, GDP grew. Even during recessions, even during stagflation, even in the wake of the 9-11 terrorist attacks on the very heart of America’s financial district, GDP always grew. Such was the underlying strength and resilience of the American economy.
But in 2009, GDP contracted, and by some $201 billion — the only contraction of GDP in the last seventy years.
The shortfall in federal revenue isn’t that the feds can’t suck enough money out of the economy due to low tax rates; the problem is the economy itself. The economy is ailing. And it’s not a cyclical disease; it’s chronic, structural. The current problems with the economy have been festering for decades and have finally come to a head.
Evidence that the economy has taken a turn for the worse can be seen in the response to the ever-increasing doses of stimulus. The patient lies comatose on its gurney, we apply the electrodes, turn on the juice, and still it just lies there unresponsive. By contrast, after the 9-11 attacks (which occurred during a recession), GDP started expanding again the very next quarter. But now we seem headed for a double-dip in the recession, and experts say it will take years for employment to return to pre-recession levels. There’s even talk of a lost decade ahead, such as Japan suffered in the nineties.
We mustn’t delude ourselves that we can go back to the halcyon days of healthy federal revenue by merely hiking tax rates. We must be correct in our diagnosis before we can write a prescription. The cause of our economy’s sickness is government.”…
http://www.americanthinker.com/2010/06/federal_revenue_and_the_econom.html
Here is the crux– We must be correct in our diagnosis before we can write a prescription!
BrianE (quoting): “A report by the Appleseed Foundation, a public policy network, found that local entities (nonprofit and local government agencies) were far more flexible and responsive than the federal government or national organizations.”
They concluded that the federal governments needs to make improvements in coordination with local authorities and adopt more flexible approaches during disasters. They did not conclude the federal government didn’t have an important role to play.
BrianE: This is the lesson that should be taken from Katrina. There are limits to what a centralized government can do.
Yes, there are limits. That’s why there should be greater coordination between local and national entities.
Hall: The economy is ailing.
A lot of the article just details how the recession is the worst since the Great Depression.
Hall: Evidence that the economy has taken a turn for the worse can be seen in the response to the ever-increasing doses of stimulus. The patient lies comatose on its gurney, we apply the electrodes, turn on the juice, and still it just lies there unresponsive.
Turns out that the economy is no longer in recession, and the job market is slowly recovering. The CBO has estimated a significant effect on GDP and jobs from the stimulus. In any case, the stimulus is a one-time expenditure. That appears to be the only evidentiary link to the conclusion.
Hall: In 2010, outlays are estimated to hit 25.4 percent of GDP, higher than in any other year since 1945.
That’s what happens during a recession. The denominator (GDP) shrinks while the numerator grows (expenditures).
Hall: Such spending is a drag on the private sector. As government grows, the real economy atrophies.
This is confusing cause and effect. There is no drag from government spending on the private sector during a market collapse — the private sector has already withdrawn from the market. On the other hand, if the government spends during an economic expansion, then it may compete against private investment.
100!
Damn you, BrianE! That 100 spot was mine!
Go and take a number. Maybe Obama will give it back to you.
You realize, of course, that the next target is 200! Go for it, guys and gals!
As Margaret Mitchell might have said, “With Zach as my witness, we’ll never run out of URLs again!” Meaning we can keep any thread alive as long as there’s a dedicated contrarian like him to work it over, and over, and over, and over, and over again.
(96 to go!)
The Z group’s economic vision is pretty well defined: conventional Keynesian theory impervious to facts on the ground. I know that they and I read the same data but interpret it differently and through (I maintain) rose-colored glasses bracketed by ideological blinders. I have known many that think like this.
My father, bless his soul, was an engineer who to his dying day saw the world in terms of neat CAD-CAM diagrams, if only people would stop being so illogical and report to their appointed spots. In his logical, utilitarian world model, it made no sense (for example) that people could buy more-than one model of a kitchen faucet when one model was all that you really needed. And, yes…he was a very die-hard Leftist. He had to accept that the world was the way it was (and that all his children became Christians and conservatives…the height of illogic, in his view), but he didn’t like it and found it exceedingly frustrating that the world would not conform to his ideas of how it should be. Once is world template gelled, it became impermeable. That didn’t stop us from loving each other, of course.
Someone at another blog made the comment that a few years ago, Liberal-Lefties were all aflutter about chaos theory and fluttering butterflies, but never grasped its implications for human existence, economics or planetary climate. They want order in an exceedingly complex world, while books on Chaos theory gather dust on chi-chi coffee tables.
This is where the priesthood of Z resides within its Temple of Orthodoxy. I don’t believe that our competing perspectives will never connect. In the meantime, facts on the ground will be facts on the ground. It is as it is.
Leftists aren’t allowed to grasp things. Otherwise they might need to be excommunicated if they find out the dark, deep, and dirty secrets of the clique they belong to. This limits their vision when it comes to all other avenues of human endeavours.
Chi Chia coffee tables?
Danny Lemieux: The Z group’s economic vision is pretty well defined: conventional Keynesian theory impervious to facts on the ground.
Well, no. Keynesian theory has changed a great deal over the years in response to data, and a better understanding of the economy, but most people on this forum don’t seem informed enough about even the basic principles; for instance, by saying that a stimulus during a recession doesn’t affect GDP, that is, ”the effect on the economy is neutral.”
Danny Lemieux: I know that they and I read the same data but interpret it differently and through (I maintain) rose-colored glasses bracketed by ideological blinders.
You “interpret it differently.” We cited the CBO which stated that the stimulus increased GDP. There are a lot of arguments against a stimulus, or how much stimulus is appropriate, but saying the stimulus didn’t increase GDP is not one of them.
Danny Lemieux: They want order in an exceedingly complex world, while books on Chaos theory gather dust on chi-chi coffee tables.
That’s funny. Or perhaps irony is a better word.
“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.” — Alan Greenspan, noted monetarist.
OK, Zach. Obama’s historic and probably historically destructive “economic stimuli” worked. Got it!
As you said, Danny, impervious. The guy is our house Joe Biden.
(91 to go!)
Zachriel: Well, no. Keynesian theory has changed a great deal over the years in response to data, and a better understanding of the economy, but most people on this forum don’t seem informed enough about even the basic principles; for instance, by saying that a stimulus during a recession doesn’t affect GDP, that is, ”the effect on the economy is neutral.”
I think Danny knows what GDP consists of. You were either missing or ignoring his point.
***********
Danny Lemieux: The core question should be: are the Obama administration’s policies helping or hindering private sector economic recovery and the improvement of our lives (through wealth generation)?
Upon this issue, I am sure we can have a great debate.
Zachriel:
Let the debate begin.
Mart, invincible under the sun he is.
Zach would never say something as dangerous as ”Let the debate begin.” I have challenged him several times to a real-time debate online, a challenge he, understandably, has refused to take on.
Can you imagine the drubbing he’d take if he were to debate Danny in real time? It would be like watching NBOTUS without TOTUS.
I think much of my objection to President Obama is his misusing of the recession to expand government—you know– ”never letting a crisis go to waste”
TARP didn’t go to buy troubled assets and the Stimulus didn’t go to infrastructure spending. And yes, I’m aware that TARP was passed under Bush, though Obama voted yes.
Here’s some interesting figures to chew on.
The Great Depression began in August 1929 and lasted through 1933 (yes I know another recession began not long after that). Assuming that it takes government a while to respond, lets use 5 years of government deficit spending after the downturn begins and see what the spending looked like.
1932- 4.0% of GDP
1933- 4.5% of GDP
1934- 5.9% of GDP
1935- 4.0% of GDP
1936- 5.5% of GDP
For a total of 23.9% deficit spending of GDP.
Let’s look at some modern recessions:
July 1981-Nov 1982– This was a bad one, as unemployment hit 10.8%. The 5 year spending beginning in 1983-1987 was 24.1%. During that time defense spending was increasing, which partially led to the collapse of the Soviet Union. Still, pretty healthy deficits for which liberals today still criticize Reagan for.
July 1990-March 1991– The recession that probably cost GW his presidency. 5 year deficit spending was 15.1% of GDP.
March 2001- Nov 2001—Made worse in my opinion by 9/11. 5 year deficit spending was 11.9% of GDP.
The Great Recession (Dec 2007- June 2009) Some of this money hasn’t been spent yet, but is in Obama’s projected budgets.
2010- 10% of GDP
2011- 8.9% of GDP
2012- 10.9% of GDP
2013- 7% of GDP
2014- 4.6% of GDP
Total deficit spending- 41.4%
You might be able to see why conservatives are concerned about the direction of federal spending. You might even understand why conservatives believe this isn’t about stimulus, but about expansion of social spending, beyond what is necessary to maintain a “safety net”.
Sorry, “Let the debate begin” was my challenge re-issued to Zachriel.
The white space has been Zachriel’s reply since Danny’s initial post.
Also, the figures in post #113 come from OMB document “Fiscal Year 2012 Historical Tables Budget of the U.S. Government”
Danny Lemieux: The Z group’s economic vision is pretty well defined: conventional Keynesian theory impervious to facts on the ground.
Zachriel: Well, no. Keynesian theory has changed a great deal over the years in response to data, and a better understanding of the economy, but most people on this forum don’t seem informed enough about even the basic principles; for instance, by saying that a stimulus during a recession doesn’t affect GDP, that is, ”the effect on the economy is neutral.”
BrianE: I think Danny knows what GDP consists of. You were either missing or ignoring his point.
Hmm. Nowhere was it stated that Danny Lemieux didn’t know what GDP was.
Danny Lemieux suggested that Keynesian economic theory is “impervious to facts.” Instead, Keynesian theory is a empirical theory that has changed over time. The second point quoting his contention that the economic effect of the stimulus was neutral was to emphasize that it was his position that was “impervious to facts”.
BrianE: You might be able to see why conservatives are concerned about the direction of federal spending. You might even understand why conservatives believe this isn’t about stimulus, but about expansion of social spending, beyond what is necessary to maintain a “safety net”.
It’s quite reasonable to be concerned about deficit spending, however, ongoing deficits aren’t due to an expansion of social programs.
Danny Lemieux: The core question should be: are the Obama administration’s policies helping or hindering private sector economic recovery and the improvement of our lives (through wealth generation)? Upon this issue, I am sure we can have a great debate.
Zachriel: {Discussion of the effect of stimulus on GDP with citations to CBO.}
BrianE: Let the debate begin.
There’s a lot more to consider than just the stimulus and GDP. In the short-run, unemployment remains a significant problem. Over the next few years, it will be necessary for the U.S. to make real efforts to reduce the debt. In the long-run, medical expenses threaten to undermine the economy. But it’s hard to make progress when we’re stuck on neutral.
TARP was actually Obama’s idea. Bush, in order to smooth the transition, was already consulting Obama on where to go, since it wouldn’t be fair to unload something on the next President by a division of two months. Well, at least that’s how Bush saw it. Obama would have seen it differently. A way to get his clutches into the economy first and foremost.
Zachriel: ongoing deficits aren’t due to an expansion of social programs.
Than what is causing the increase in spending? OMB figures show total outlays going from $2.98 trillion in 2008 to Obama’s proposed spending of $4.47 trillion in 2016.
Danny Lemieux: The core question should be: are the Obama administration’s policies helping or hindering private sector economic recovery and the improvement of our lives (through wealth generation)? Upon this issue, I am sure we can have a great debate.
Zachriel, please elaborate on your answer. How was the stimulus money spent? What sort of multiplier did it have? Do you agree that the recovery has been rather tepid given the sheer magnitude of the deficit spending (stimulus) given the perspective of deficit spending in other downturns?
BrianE: You might be able to see why conservatives are concerned about the direction of federal spending. You might even understand why conservatives believe this isn’t about stimulus, but about expansion of social spending, beyond what is necessary to maintain a “safety net”.
Zachriel: ongoing deficits aren’t due to an expansion of social programs.
BrianE: Than what is causing the increase in spending? OMB figures show total outlays going from $2.98 trillion in 2008 to Obama’s proposed spending of $4.47 trillion in 2016.
We may be talking past one another. You seemed to be talking about new social spending “beyond what is necessary to maintain a ‘safety net’ “. Social spending on *existing* programs will increase as the population increases, especially as the aging demographic bubble works its way through the system. That accounts for most of the increase. There is also the problem of medical inflation, economic growth (impacting the revenue side), and servicing the interest on the debt. The interest on the debt could become a very important factor, if debt continues to accumulate unchecked. In other words, it has little to do with stimulus spending, which was the center of the discussion above, or any new expansion of federal responsibilities (excepting the unfunded Part D).
The shortfall is about $700 billion per year over the next decade. Clinton-era levels of tax rates could account for about half this. (The U.S. could alaso use a more progressive tax code with fewer loopholes.) Restraining growth in medical costs could help with some of the balance. Winding down the wars in Afghanistan and Iraq could also have a significant impact.
As for your other questions, keep in mind that the stimulus is only a one-time expenditure.
BrianE: How was the stimulus money spent?
The largest single amount was for tax relief. Unfortunately, that has the smallest direct effect on economic activity.
http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009
BrianE: What sort of multiplier did it have?
Using the mid-point of CBO’s estimate, direct spending by the Federal government or money provided to the states for infrastructure had a multiplier of 1.75. Transfers to individuals, about 1.5. Taxcuts to middle and lower-income groups about 1.0, while taxcuts to the rich 0.4. (The rich often just pocketed the money.)
http://www.cbo.gov/ftpdocs/117xx/doc11706/08-24-ARRA.pdf
BrianE: Do you agree that the recovery has been rather tepid given the sheer magnitude of the deficit spending (stimulus) given the perspective of deficit spending in other downturns?
The depth of the recession was far worse than any previous downturn since the Great Depression. Also, state and local governments contracted significantly, absorbing much of the stimulus. As noted above, some of the stimulus had little effect on economic activity. That the U.S. is still struggling is not unexpected considering that the economy nearly collapsed. (The financial system had completely stopped functioning.) As noted above, recovery from the Great Depression was slow, and only the huge spending of a world war finally brought the U.S. back to full employment.
A larger stimulus, or one more directed towards spending, might have been more effective, but this had to be balanced against the threat to confidence with regards to repayment of the debt. The U.S. has had an ongoing problem in this regard, with only a short interpose of surpluses in Clinton Administration. Some major American leaders have actually said that “deficits don’t matter”. Once the economy is back on a sound footing, the U.S. needs to bring its books back into line. This will mean cuts and taxes. There also has to be more accountability in the financial markets.
Any dialogue will be fraught with difficulty, but that’s normal in a democracy. There’s no inherent reason the U.S. can’t resolve this issue.
I have this vision of Z, deep in a cellar, surrounded by CBO reports and frantically pounding their keyboards, yelling “It can’t be, it can’t be!” as the government-stimulated Western economies slide deep into Argentinian territory.
However, I am sure the Obama administration is just about to release one more economic recovery plan, based on Z’s thoughtful conclusions…we need more stimuli! Perhaps, we should draw the proper lessons from Z’s interpretation of the Great Depression, which, we have learned from Z, was really FDR’s “Great Recovery” (who knew?), which of course, we know, climaxed in a triumphalist display of fireworks (is it time to invest in “fireworks”?).
It’s quite clear, from Z, that the problem with the stimuli foisted on the American people was that they just weren’t big enough. A bit like the Lefty arguments about communism…”This time, we’ll get it right!”.
What is it about these Lefties and their nostalgic mystical view of the 1930 and Keynes? Over at Pajamas Media, Author Sarah Hoyt provides further insights into this peculiar phenomenon…
http://pajamasmedia.com/blog/jurassic-president/
“120″, eighty to go!
Danny Lemieux: I have this vision of Z, deep in a cellar, surrounded by CBO reports and frantically pounding their keyboards …
In other words, you gave up on substantive argument.
Danny, I know you know that Zach is probably the most humorless person ever to visit this board, but it’s always a hoot when he reminds us.
77 to go: Zach, can we count on you for 58?
Cellars are valuable in the summer for storing wine and munitions. We can’t be wasting it on people, Danny.
Hardly, Z…but you apparently don’t read any of the substantive data that we provide, so what’s the point.
Like I said in a previous post, you are and I have reached an impasse at the junction between two alternate universes. You all are Keynesians. I understand and interpret economics through the perspectives of the Austrian school and the U. of Chicago, which I maintain were forged from experience and proven track records rather than theory. For me, the theoretical Keynesian economics were rendered obsolete during the Great Depression (the one in the ’30s, not this one) and, in my opinion, exist only as an ideological tool to justify expansion of the leviathan State.
I believe that your world view is based on abstract theories discredited by history. I also believe that your world views have also put us on the path to destruction. But, we obviously disagree, which is OK. We simply post from very different perspectives of history.
All that being said, I am quite willing to let the facts on the ground speak for themselves. I can wait. So, in line with Charles Martel’s observation, some humor is warranted.
Danny Lemieux: but you apparently don’t read any of the substantive data that we provide, so what’s the point.
We’ve tried to respond to every claim and associated data. Perhaps we missed something, but most of what we have seen is either unsupported claims, data that doesn’t support the claims, or handwaving.
Danny Lemieux: You all are Keynesians.
Not specifically. Economics is much more complicated than orthodox Keynsian theory would allow (not that Keynes wasn’t aware of this). But when you say that the stimulus was neutral with respect to economic activity, that’s just not a supportable statement.
Danny Lemieux: I understand and interpret economics through the perspectives of the Austrian school and the U. of Chicago, which I maintain were forged from experience and proven track records rather than theory.
We responded to that claim, in particular, to the idea that markets really work based on rational agency. You the point. You then brought up chaos theory in relationship to climate change, which revealed your ignorance of the historical roots of chaos theory.
Danny Lemieux: For me, the theoretical Keynesian economics were rendered obsolete during the Great Depression (the one in the ’30s, not this one) …
Keynesian didn’t have much currency in economics until well into the Great Depression. It was the Great Depression and WWII that convinced most economists that Keynes was right, at least in some respects. This held sway until the stagflation of the 1970′s when it was found that Keynesianism wasn’t sufficient to account for the economic conditions.
Danny Lemieux: and, in my opinion, exist only as an ideological tool to justify expansion of the leviathan State.
Well, that just shows you don’t understand Keynesianism. It’s not a socialist theory, but one based on markets.
Danny Lemieux: I believe that your world view is based on abstract theories discredited by history.
You believe it, but you don’t show it.
Danny Lemieux: I also believe that your world views have also put us on the path to destruction.
Ha, ha. That’s funny. The anti-Keynesian tax cutters ran the U.S. economy into the ground, and dragged much of the world after them.
I want to know who was the first person that ever waved a hand at Zach. I’d love to take him out for a drink and let him live in my basement for a few weeks.
Stop poaching Feinstein and Nancy PillowC’s hand waving school for kids.
Using the mid-point of CBO’s estimate, direct spending by the Federal government or money provided to the states for infrastructure had a multiplier of 1.75. Transfers to individuals, about 1.5. Taxcuts to middle and lower-income groups about 1.0, while taxcuts to the rich 0.4. (The rich often just pocketed the money.)- Zachriel
The rich don’t “pocket” their money– they invest it. What would you consider the multiplier effect in the economy if I take my wages and invest them?
If transfers to individuals have a multiplier of 1.5, what’s the multiplier for my wages when I’m engaged in production of a good or a service?
The stimulus bill had very little infrastructure spending.
The stimulus bill didn’t provide tax cuts to the rich, so I’m not sure what that has to do with anything.
Looking historically, it seems the economy can tolerate taxes when they’re less than 18% of GDP and government spending less than 19%.
Reagan and Bush were attempting to get the government back to those historical norms. We’ve been push 20-22% for too long. But for prosperity, we need to keep taxes around the 18% level.
BrianE: The rich don’t “pocket” their money– they invest it. What would you consider the multiplier effect in the economy if I take my wages and invest them?
They do when markets are rising, but when markets are falling, most investors sit on the sidelines. In a normal market, prices drop and investors move back in at some point when they think the market has bottomed out. But when there is a collapse with no foreseeable bottom, there may be plenty of capital, but no investment.
Think about this a bit. When the financial markets collapsed, many investors pulled back to avoid risk. This caused the market to fall even more, so more investors pull out. As the markets deflated, cash became king. People lost confidence and, without intervention, this can lead to a dangerous downward spiral.
Now, when the markets are growing, government stimulus competes for capital leading to rising interest rates, and competes for production leading to inflation. But if the market is shrinking, especially when there is virtually no private investment during a collapse, then interest rates will tend to be low due to lack of borrowers, and inflation will tend to be low or deflationary due to lack of buyers.
BrianE: The stimulus bill had very little infrastructure spending.
The largest sums were for tax relief, nearly $300 billion, which tend to have smaller multipliers because people often use the money to pay down debt, or horde the cash for increased security, esp. those with higher income. Infrastructure was about $100 billion, another $100 billion for education and energy development, and $150 billion for state and local governments.
BrianE: We’ve been push 20-22% for too long. But for prosperity, we need to keep taxes around the 18% level.
Yes, low taxes are good, as long as you can maintain your infrastructure, and pay your bills. The problem is that the U.S. has a demographic bulge and a broken medical insurance system. As most Americans support Social Security and Medicare, it will probably require additional revenues, as well as more efforts to rein in medical inflation.
BrianE: Reagan and Bush were attempting to get the government back to those historical norms. We’ve been push 20-22% for too long. But for prosperity, we need to keep taxes around the 18% level. ‘
That does no good if you don’t reduce spending to comparable levels.
BrianE: If transfers to individuals have a multiplier of 1.5, what’s the multiplier for my wages when I’m engaged in production of a good or a service?
It depends on the industry and the overall economy. In a labor intensive industry, it can be as high as 5. Problem is that investors don’t directly profit on multipliers. Nor do individual investors have the clout to stop a collapsing market by themselves. Their money just gets sucked into the maelstrom. Again, in a collapse, the rational decision for each investor is to pull out of the market, even if that means they are contributing to the collapse.
“Yes, low taxes are good, as long as you can maintain your infrastructure, and pay your bills. The problem is that the U.S. has a demographic bulge and a broken medical insurance system. As most Americans support Social Security and Medicare, it will probably require additional revenues, as well as more efforts to rein in medical inflation.”
1.. What is “most Americans?” When “most Americans” were asked whether they support Social Security and Medicare, were they also told what it would cost them, their children, and their grandchildren to support those programs without incurring trillions of dollars of debt? Since you seem to know a lot about these matters, perhaps you could estimate how much more tax current and future generations will have to pay to support Social Security and Medicare on a pay-as-you-go basis?
2. What would replace the “broken medical insurance system?” What constitutes “broken?” What would constitute repair? What efforts would you suggest to “rein in medical inflation?” What causes medical “inflation?”
Pinochet definitely got rid of the unsightly Keynesians in Chile. That’s why the economy there went up and not down.
In a labor intensive industry, it can be as high as 5. Problem is that investors don’t directly profit on multipliers.- Zachriel
Zachriel, I assume you’re acknowledging the benefit of my wages not only as it relates to investment, but conversely the benefit to society based on the productivity that produced the wages.
Transfer payments can never have a comparable multiplier since no economic benefit was realized in its production. So if we were to compare the two– direct transfers are a drag on the economy, if the alternative were to be productive activity. So how do we encourage that productivity? Is the system we currently use for welfare payments as efficient as possible? I doubt it.
As a policy, we should work to decentralize authority. It produces more efficiency, since at some point the law of diminishing returns sets in. I’d say we’ve reached and gone way past that point.
In fact, decisions made at the local level will be even more efficient– what riles liberals is the notion that someone might not be treated ‘fairly’. And to some extent that’s true. Arkansas isn’t going to provide the same level of social services as California and it shouldn’t.
This idea of centralized bureaucratic contorl is a drag on our economy– especially when the overwhelming level of regulation is layered on top of it. It’s a wonder that anything gets done. Case in point. China is making inroads in Africa– providing infrastructure and making their investment go farther than ours IMHO.
You seem to assume that raise tax rates on the rich a few points, add some more cost controls to to health care and everything’s going to be OK. My point is that the problems are structural, we’ve ignored the symptoms for some time and the cure is going to be painful.
I haven’t paid that much attention to Ryan’s plan, but it sounds like a good start.
Liberals like to beat up on the rich– constantly complaining they aren’t paying their fair share and they don’t use their excess wealth productively. Given that, Democrats controlled congress and the presidency and yet they passed a new tax policy that included rates for the rich below what they believe are necessary for the health of the country. In fact, rather than do nothing and allow the tax rates to raise, they had to actively vote to lower tax rates to the level of 2009. So in addition to demagogue Medicaie they didn’t have the courage to act on their convictions and allow tax rates on the rich to rise.
“More thant half the country supports tax increases for the richest Americans, according to a new poll, backing President Barack Obama’s plan to boost levies on individuals making more than $200,000 a year.”- Associated Press
Whey didn’t they allow the tax cuts to expire and make it a campaign issue– you know, “nasty Rethuglicans wouldn’t let us soak the rich.?
They know that if they demonize the rich, they can get the rich to donate to Democrats. Then they won’t have to raise taxes and create loopholes just for themselves. It saves them from having to do any work.
BrianE: I assume you’re acknowledging the benefit of my wages not only as it relates to investment, but conversely the benefit to society based on the productivity that produced the wages.
We were discussing capital, but certainly the fruit of your labor can have a multiplier effect.
BrianE: Case in point. China is making inroads in Africa– providing infrastructure and making their investment go farther than ours IMHO.
China is a Communist country with centralized planning. They are making inroads into many areas, from Africa to solar energy, because they have made a national commitment to doing so.
BrianE: Transfer payments can never have a comparable multiplier since no economic benefit was realized in its production.
Sigh. Are you still that confused on how a stimulus works? It’s not a transfer from one class to another. Not sure how else to explain it.
Ymarsakar: Pinochet definitely got rid of the unsightly Keynesians in Chile.
Allende was not a Keynesian, but a socialist. Pinochet’s 1973 coup resulted in the murder of thousands of political prisoners. Unemployment increased and there was a significant decline in real wages. But rich got richer. The economy collapsed in 1982 leading to massive protests over several years and the eventual end of the Pinochet regime.
Zachriel: As most Americans support Social Security and Medicare, …
Charles Martel: What is “most Americans?”
“Hands Off Medicare, Social Security.”
http://blogs.wsj.com/washwire/2011/03/02/wsjnbc-poll-hands-off-medicare-social-security/
“young people line up solidly behind Social Security, too…
‘Among all non-retired adults in the survey, about half say they’re willing to pay higher payroll taxes now”
http://newoldage.blogs.nytimes.com/2010/08/25/social-security-and-younger-americans/
Charles Martel: When “most Americans” were asked whether they support Social Security and Medicare, were they also told what it would cost them, their children, and their grandchildren to support those programs without incurring trillions of dollars of debt?
Social Security is not that far out of line. Simply removing the cap on income subject to payroll taxes would be sufficient to fix the problem. There are a number of other proposed solutions.
Medicare is much more difficult. The U.S. spends nearly twice what many other advanced economies spend for comparable benefits. A look at those systems may give clues to fixing the problem with the U.S. system.
Zach is correct, a stimulus is not a transfer from one class to another. Instead, it is a generational transfer, where older people “borrow” money from their children—in other words, wealth that has yet to be created. If the government continues functioning at the same size it does now, then taxes will have to rise spectacularly, and their children will live a form of indentured servitude where a large percentage of all the money they ever earn will be expropriated by the government.
Now Paul Ryan’s plan would sidestep that dreary outcome by radically curtailing the size of the federal government. Zach, what’s your take on his plan?
Charles Martel: Instead, it is a generational transfer, where older people “borrow” money from their children—in other words, wealth that has yet to be created.
Or it can be from savings, though often it is borrowed funds. However, even if borrowed it doesn’t mean leaving debt. Countercyclical policy is balanced over time. Seven fat cows. Seven skinny cows.
Charles Martel: what’s your take on his plan?
Not familiar with Ryan’s plan in detail. Doesn’t it replace Medicare with vouchers, leaving any shortfall up to the elderly? And doesn’t it lower taxes as well?
It’s (stimulus tax rebates) not a transfer from one class to another.- Zachriel
Sigh, When the majority of the population, most of who pay no income tax is given a tax rebate (cash payment whether one pays income tax or not) from ARRA, and the top 1% pays the majority of taxes and received no tax relief, I’d consider that a transfer.
But Charles Martel is correct, since 41 cents of every dollar spent by the federal government was borrowed, it is a generational transfer, wealth redistribution, and stimulus. But you are right it’s a poor stimulus, since prudent citizens realize in a downturn that reducing debt is a good thing.
It irritated me when Bush suggested our war effort should be consumer spending– since no, it should have been saving– but that’s all we’ve got in this country, spending. We’re the world’s largest mall.
Not familiar with Ryan’s plan in detail. Doesn’t it replace Medicare with vouchers, leaving any shortfall up to the elderly? And doesn’t it lower taxes as well?- Zachriel
Time to think outside the box. Not every senior is destitute. Many can pay increased premiums and co-pays. It’s time to think of Medicare part B as welfare and means test, since that’s what it is.
Countercyclical policy is balanced over time. Seven fat cows. Seven skinny cows. – Zachriel
How about you Keynesians remind our politicians of the second part of Keynes theory– the part where the debt is paid down in the good years.
But I’m with you– it’s time to start paying it down. We just have to decide who’s going to pay the bill.
China is a Communist country with centralized planning. They are making inroads into many areas, from Africa to solar energy, because they have made a national commitment to doing so.- Zachriel
China is a country that hasn’t paralyzed itself with regulations. I don’t think we have to become a China environmentally to get our economy jump-started, but until we get sensible with environmental policy, we’ve put ourselves in a strait-jacket, especially when compared to the Chinese.
“Public health is reeling. Pollution has made cancer China’s leading cause of death, the Ministry of Health says. Ambient air pollution alone is blamed for hundreds of thousands of deaths each year. Nearly 500 million people lack access to safe drinking water.
Chinese cities often seem wrapped in a toxic gray shroud. Only 1 percent of the country’s 560 million city dwellers breathe air considered safe by the European Union….”
http://www.nytimes.com/2007/08/26/world/asia/26china.html
And here I thought socialists considered central planning a good thing. I know Thomas Friedman is in love with the place.
I think that China’s wheels, just as we are seeing with the Obama regime’s, are starting to wobble. The revelations about the inefficiencies and corruption attached to its vaunted high-speed rail system, its collapsing real estate market (shades of 2007 in the U.S.!), the terrible imbalance between young males and females, its absurd attachment to censorship and thought control, bespeak a country that is inching ever closer—as is the United States—to major, perhaps calamitous, disruption.
Given the brittleness of totalitarian regimes, and the Chinese culture’s inability to think outside the box, I think a lot of China’s “advances,” whether political or economic, are way too dependent on a transient set of circumstances. (Speaking personally, I have been waiting for years for the Chinese to advance from manufacturing cheap crap, the way the Japanese did in the 1950s, to making stuff that actually lasts and shows some technological savvy—the way the Japanese began doing in the 1960s. Alas.)
The Japanese began to adopt Western ideas as early as the Meiji Restoration, which was in the 1800s.
China’s Mao obsessed revolution turned the clock and setback Chinese adoption of foreign ideas by a century or 3.
BrianE: When the majority of the population, most of who pay no income tax is given a tax rebate (cash payment whether one pays income tax or not) from ARRA, and the top 1% pays the majority of taxes and received no tax relief, I’d consider that a transfer.
Just because some people don’t pay income taxes, doesn’t mean they don’t pay taxes. The overall tax system is not particularly progressive.
http://www.ctj.org/pdf/taxday2011.pdf
In any case, there were substantial tax benefits for businesses.
BrianE: But Charles Martel is correct, since 41 cents of every dollar spent by the federal government was borrowed, it is a generational transfer, wealth redistribution, and stimulus.
Not quite. It should be repaid as soon as the economy recovers. (And importantly, you’re not supposed to let the economy run amok then crash.) But that might mean taxes. For many in America, cutting taxes is always good, even if spending isn’t cut along with it, that “deficits don’t matter”.
(A progressive tax system is automatically countercyclical. When the economy expands, tax rates rise, the government runs a surplus and it cools the economy. When the economy contracts, tax rates drop, the government runs a deficit and it stimulates the economy. Unemployment and retraining benefits also act as automatic stimuli.)
BrianE: But you are right it’s a poor stimulus, since prudent citizens realize in a downturn that reducing debt is a good thing.
That’s the paradox. In a crash, everyone individually tries to reduce debt and build cash, and no one takes risk on investment. It takes coordinated action to counter this natural tendency.
BrianE: Many can pay increased premiums and co-pays. It’s time to think of Medicare part B as welfare and means test, since that’s what it is.
That’s an option, but it will tend to undermine the program, and seems like a wedge for many conservatives who have tried to kill the program many times in the past.
Ronald Reagan – Medicare Will Bring A Socialist Dictatorship
http://www.youtube.com/watch?v=Bejdhs3jGyw
BrianE: How about you Keynesians remind our politicians of the second part of Keynes theory– the part where the debt is paid down in the good years.
Clinton did exactly that, and left structural surpluses. But due to peculiarities in the American electoral process, the person with the most votes didn’t win the election to succeed him.
BrianE: China is a country that hasn’t paralyzed itself with regulations.
Nothing like lead paint on children’s toys. In any case, they have plenty of regulations, but powerful people can often ignore them, to the detriment of worker safety, environmental quality, and often their own long-term interests. But they’re changing, slowly.
BrianE: And here I thought socialists considered central planning a good thing.
The problem with central planning is that the planners become detached from the everyday concerns of the people. Advanced societies have many levels of organization, including non-governmental. The Chinese people are slowly developing these structures, but the government is afraid of any power or change that might threaten the country’s stability.
I hope that everyone enjoyed a wonderful Passover and Easter last week.
Just a quick jump into the fray before I go back to trying to stimulate my own economy…
Z says, “The problem with central planning is that the planners become detached from the everyday concerns of the people.”
No. While true, the main problem with Central Planning is that economies and the human nature that drives them are far too complex to be managed through any central authority(ies). This was the lesson the Soviets learned the hard way through their 5-year and 10-year planning. Here’s a more recent example from China’s centrally managed high-speed rail plan, a plan that Obama wants to emulated (published in that rabidly right-wing rag, the Washington Post)
http://www.washingtonpost.com/opinions/chinas-train-wreck/2011/04/21/AFqjRWRE_story.html
BrianE: How about you Keynesians remind our politicians of the second part of Keynes theory– the part where the debt is paid down in the good years.
Z, hearkening back to dream-time recollections of Camelot when Democrats ruled the round table, opines that “Clinton did exactly that, and left structural surpluses.”
There was nothing “structural” in the budgets put together during the latter years of the Clinton Administration. Three major factors contributing to budget “surplus” were a) a booming tech economy generating record tax revenues, b) Republican congressional intransigence in confronting Clinton’s budget proposals and c) big slashes to military spending.
By the last year of the Clinton Administration, the tech boom was collapsing and military cuts has to be reversed in the wake of 9/11. Unfortunately, under Bush, the Republican Congress also reversed its commitment to fiscal discipline and showed themselves equally adept at gorging themselves at the public trough. But, that’s another story.
Z explains how Keynesian economics should work in a perfect world, as defined by mathematical equations. Speaking of Federal “stimulus” spending, they say:
“Not quite. It should be repaid as soon as the economy recovers. (And importantly, you’re not supposed to let the economy run amok then crash.) But that might mean taxes.”
When economies recover, which is what tax reductions are supposed to encourage, Federal tax revenues do go up (as JFK and Reagan demonstrated). However, other than in a perfect world, that doesn’t mean that Federal spending goes down. Quite the opposite…it just encourages the hogs of all stripes to feed even more ardently at the trough (Hey, I’m from Illinois -we knew all about this type of politics before it went national).
Booms and bubble busts are part of the normal “creative destruction” of capitalist economies (as Austrian school economist Joseph Schumpeter, who noted that: “Economic progress, in capitalist society, means turmoil”). Bubbles are self-correcting and, left alone, economies recover quickly.
This, of course, is highly objectionable to those with central-planning totalitarian mindsets that loathe the very idea that some things (human nature, climate, economies, good and evil, etc.) cannot be controlled…by them.
Z, you have a lovely grasp of how things are supposed to work in a perfect world with honest politicians. In the real world, the last President to balance the budget before Clinton was Nixon and the last time we did not have a national debt was the Jefferson administration. The theory is wonderful but we have 200+ years of proving it doesn’t work in practice.
The only way to stop spending is to amend the Constitution and force the government to never spend more the total tax income for that fiscal year.
But those who don’t like the authority of the COnstitution are forever stealing power from it and redistributing it to their own cronies, so that plan is very unpopular with them.
Zachriel: The problem with central planning is that the planners become detached from the everyday concerns of the people.
Danny Lemieux: No. While true, the main problem with Central Planning is that economies and the human nature that drives them are far too complex to be managed through any central authority(ies).
What you probably mean is “Yes. While true, the main problem …” They are actually related problems in complex systems. The information is diffused at lower levels and has to filter up to the higher levels. If decision-making is concentrated at the top, there are logjams to the information flow, and as you point out, the system is too complex to be understood by any single entity in any case.
Danny Lemieux: Here’s a more recent example from China’s centrally managed high-speed rail plan, a plan that Obama wants to emulated (published in that rabidly right-wing rag, the Washington Post)
Of course, half the money is wasted. That’s typical. You act as if there’s no corruption in business, just after the U.S. experienced a huge financial catastrophe fueled by the sale of toxic assets. In any case, the project is somewhat overblown, but has allowed China to import important technologies, while also helping knit the country more closely together. Interestingly, the opinion-writer compared it to the largely successful “moon shot” program in the U.S.
Your larger point is correct, though. Without robust public debate, there is a greater likelihood of waste, both on the local and on the global scale.
Danny Lemieux: There was nothing “structural” in the budgets put together during the latter years of the Clinton Administration. Three major factors contributing to budget “surplus” were a) a booming tech economy generating record tax revenues, b) Republican congressional intransigence in confronting Clinton’s budget proposals and c) big slashes to military spending.
Of course it was structural passed with the Omnibus Budget Reconciliation Act of 1993 without a single Republican vote, but it was specifically undone by the Bush “deficits don’t matter” Administration.
By the way, the booming tech economy can be traced to deregulation of the Internet by Gore and his Congressional allies.
“As far back as the 1970s Congressman Gore promoted the idea of high-speed telecommunications as an engine for both economic growth and the improvement of our educational system. He was the first elected official to grasp the potential of computer communications to have a broader impact than just improving the conduct of science and scholarship … the Internet, as we know it today, was not deployed until 1983. When the Internet was still in the early stages of its deployment, Congressman Gore provided intellectual leadership by helping create the vision of the potential benefits of high speed computing and communication.” — Robert Kahn and Vinton Cerf
http://amsterdam.nettime.org/Lists-Archives/nettime-l-0009/msg00311.html
Danny Lemieux: By the last year of the Clinton Administration, the tech boom was collapsing and military cuts has to be reversed in the wake of 9/11.
No, they didn’t. Much of the U.S. spending on the military has provided very little in terms of security. They still can’t even control entire regions of Afghanistan and Pakistan, which are still havens for terrorist conspirators. The Iraq War, by any reasonable estimation, was a huge strategic disaster. As you can’t destroy all places terrorism can fester, you have to interdict them. That means international cooperation and old-fashioned law enforcement shoe leather.
Danny Lemieux: Unfortunately, under Bush, the Republican Congress also reversed its commitment to fiscal discipline and showed themselves equally adept at gorging themselves at the public trough. But, that’s another story.
No. It’s *the* story. They cut taxes and increased spending, even while the economy was growing, leading to structural deficits, and adding fuel to the bubble.
Danny Lemieux: Booms and bubble busts are part of the normal “creative destruction” of capitalist economies (as Austrian school economist Joseph Schumpeter, who noted that: “Economic progress, in capitalist society, means turmoil”). Bubbles are self-correcting and, left alone, economies recover quickly.
Markets rise and fall, businesses are born and die, but you find very few people who think that a complete collapse of the financial markets is healthy for the economy. (It’s like comparing stressing the heart through exercise with a heart attack.) The financial meltdown and ensuing recession punished people who worked hard and played by the rules, while rewarding those who drove the system to collapse.
Danny Lemieux: This, of course, is highly objectionable to those with central-planning totalitarian mindsets that loathe the very idea that some things (human nature, climate, economies, good and evil, etc.) cannot be controlled…by them.
As we reject central-planning and totalitarian mindsets, you seem to be talking to someone else.
Don Quixote: Z, you have a lovely grasp of how things are supposed to work in a perfect world with honest politicians.
Constitutional democracy doesn’t depend on honest politicians, but on a balance of power.
Don Quixote: In the real world, the last President to balance the budget before Clinton was Nixon and the last time we did not have a national debt was the Jefferson administration.
Debt itself is not necessarily bad, such as money invested on infrastructure. But it’s deleterioius if debt is merely used to cover ongoing expense (other than short-term stimulus).
Ymarsakar: The only way to stop spending is to amend the Constitution and force the government to never spend more the total tax income for that fiscal year.
That would be disastrous. Every time the economy turned down, government receipts would fall , the government would have to cut back, which would cause the economy to drop even further, which would cause government receipts to fall some more, leading to more cut backs, and so on. The classic downward spiral.
Ymarsakar: But those who don’t like the authority of the COnstitution are forever stealing power from it and redistributing it to their own cronies, so that plan is very unpopular with them.
The authority of the Constitution allows the government to borrow money.
And now for a little reality check.
“…And 1993 — the year of the giant Clinton tax hike — was not the turning point in the deficit wars, either. In fact, in 1995, two years after that tax hike, the budget baseline submitted by the president’s own Office of Management and Budget and the nonpartisan Congressional Budget Office predicted $200 billion deficits for as far as the eye could see. The figure shows the Clinton deficit baseline. What changed this bleak outlook?
Newt Gingrich and company — for all their faults — have received virtually no credit for balancing the budget. Yet today’s surplus is, in part, a byproduct of the GOP’s single-minded crusade to end 30 years of red ink. Arguably, Gingrich’s finest hour as Speaker came in March 1995 when he rallied the entire Republican House caucus behind the idea of eliminating the deficit within seven years. Skeptics said it could not be done in seven years. The GOP did it in four.
Now let us contrast this with the Clinton fiscal record. Recall that it was the Clinton White House that fought Republicans every inch of the way in balancing the budget in 1995. When Republicans proposed their own balanced-budget plan, the White House waged a shameless Mediscare campaign to torpedo the plan — a campaign that the Washington Post slammed as “pure demagoguery.” It was Bill Clinton who, during the big budget fight in 1995, had to submit not one, not two, but five budgets until he begrudgingly matched the GOP’s balanced-budget plan. In fact, during the height of the budget wars in the summer of 1995, the Clinton administration admitted that “balancing the budget is not one of our top priorities.”"
http://www.cato.org/pub_display.php?pub_id=5656
Having posted this, our problems are way past blaming the other guy, and defending our guy. Liberals and conservatives need to recognize that neither side will be serious about applying the brakes as we get ever closer to the looming cliff ahead, until we demand it.
There is no austerity program that will get us out of this mess– we’re way beyond that. There are two solutions— real honest growth of the economy by moving the eco-facists to the sidelines, or inflation (OK, that’s really not a solution, but a by-product of reckless Fed ‘central planning’.
Developing REAL energy– natural gas, oil, nuclear. It’s not going to come from those phantom energy sources. Folks in California have reason to be afraid, very afraid with their new energy program.
I was reading about thorium nuclear reactors as the new-way for nuclear. Let us hope we can get environmentalists on board.
I see that Zachriel the Contrarian is apparently working this shift.
Brian, I think that just as we are way past blaming the other guy and crediting our guy (though I think you have the better of the argument with Z; facts are powerful things), we are also past limiting ourselves to REAL energy solutions. We should be exploring EVERY possible solution with equal vigor.
Z, balance of power only works when the power is actually balanced (see Brian’s discussion of the balance between Republicans and Clinton) and still doesn’t work at all if all of the politicans in the balance are dishonest.
BrianE offers two solutions: “There are two solutions— real honest growth of the economy by moving the eco-facists to the sidelines, or inflation (OK, that’s really not a solution, but a by-product of reckless Fed ‘central planning’.”
And, on cue, comes this New York Sun editorial highlighting another great moment in state-based economic planning. The sentiments of this piece express what many of us already knew: that Ben Bernanke’s QE-2 was destined to fail because it did not address the critical underpinnings of this crisis, which is massive, uncontrollable government debt brought about by economic stimuli that served only to put money into the pockets of favored constituencies with no economic returns.
What makes this particularly delicious is that this was called out long ago by none other than Sarah Palin, upon which mention Lefty/Liberal heads go into total radioactive meltdown. We’ll be cleaning up their pollution for a long time to come.
http://hotair.com/archives/2011/04/25/ny-sun-how-about-sending-palin-to-the-fed/
Gaia weeps as another great dreamland vision of centralized government planning runs smack into that 2×4 called “reality”.
http://fullcomment.nationalpost.com/2011/04/25/alternative-energy-investors-run-for-the-exits/
Maybe it’s time to start worrying how we plan to stay warm next winter.
Don Quixote– I’m a fan of solar and wind as much as the next guy (I use passive solar in my house).
But we need an energy solution that recognizes we can’t survive without oil and works to promote fossil fuel energy production for the next 50 years or until we discover a solution to the intractable problem of the alternative sources (which is the storage of energy). Until we get over that hump, the other solutions aren’t really solutions.
We can super-insulate our homes, turn down our thermostats, use solar and wind where possible, encourage co-generation and the like, but we are just nibbling around the edges.
BrianE: Newt Gingrich and company — for all their faults — have received virtually no credit for balancing the budget.
They do deserve credit for helping balance the budget, in particular, with regards to welfare reform. Clinton had campaigned on welfare reform, but had attempted health care reform first. The Republicans helped keep the pressure on. But also keep in mind that Clinton signed the bill after having vetoed two previous, more conservative versions. The key for Clinton was that people weren’t just thrown out in the streets, but were provided the help they need in terms of training and jobs, to make the transition to the workforce.
BrianE: I was reading about thorium nuclear reactors as the new-way for nuclear.
Thorium seems to have a number of advantages. Ironically, China’s centrally managed high-speed trainwreck brittle totalitarian regime that isn’t paralyzed with regulations is investing in thorium research.
Danny Lemieux: And, on cue, comes this New York Sun editorial highlighting another great moment in state-based economic planning.
Let’s return to the original source.
“The Federal Reserve’s experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates.”
http://www.nytimes.com/2011/04/24/business/economy/24fed.html
The QE2 accomplished what could reasonable be expected. Effective interest rates are near zero, so lowering rates is not an option. It probably averted a double-dip recession, but isn’t capable of inducing growth in the economy.
Danny Lemieux: Gaia weeps as another great dreamland vision of centralized government planning runs smack into that 2×4 called “reality”.
Yes, and investments in thorium reactors still require government subsidies. And the money may be wasted in the end, depending on what they discover, and other technological developments. You do understand that governments often fund basic research?
BrianE…if I can offer the following perspective, we have only been on a gas and oil economy for a little over 100 years. We have more than enough gas and oil resources in North America to last us another 100 years while simultaneously crashing the world price of oil and gas (which would probably do more to promote world peace than any other economic act that I can think of).
I am really confident that we should be able to identify new and better sources of energy within the next 100 years…as long as we maintain a dynamic economy able to afford in R&D. Any new source of energy, however, has to make economic sense.
Brian E and Z….What are the advantages of thorium-based nuclear energy? Just asking.
Z offers…”The QE2 accomplished what could reasonable be expected. Effective interest rates are near zero, so lowering rates is not an option. It probably averted a double-dip recession, but isn’t capable of inducing growth in the economy.”
You may be right, Z, but lets wait and see how this plays out. My sources in the finance industry tell me that should know the full effects of QE-2 around June-Aug, good or bad. It is very worrisome that the Chinese are signaling that they may unload $2t of our dollars on world currency markets, both in term of what this does to our dollar value and to the international market’s willingness to buy U.S. bonds.
Brian, my point is that it’s not either/or. We can do both the solutions the left proposes and those the right proposes. For the life of me, I can’t figure out why the two sides are arguing with each other as if the solutions are mutually exclusive. They aren’t. Why can’t we work together for a change?
Danny Lemieux: We have more than enough gas and oil resources in North America to last us another 100 years while simultaneously crashing the world price of oil and gas (which would probably do more to promote world peace than any other economic act that I can think of).
Do you have a source for that?
Danny Lemieux: It is very worrisome that the Chinese are signaling that they may unload $2t of our dollars on world currency markets, both in term of what this does to our dollar value and to the international market’s willingness to buy U.S. bonds.
They’ve spent $0.5 trillion to finance their own stimulus program. They will presumably avoid any sudden change in their holdings as it would devalue those holdings, and ruin the trade relationships they have carefully built up over time. They will probably start to import more consumer goods, and that will help rectify the imbalance.
“…Thirdly, the green-utopian goal of using the very non-dense forms of energy derived from solar and wind cannot, and have not, replaced baseload fossil fuels anywhere in the world. It is way to expensive, requiring massive full price subsidies to exist presently to stay “in business”. The Green capitalist solution of wind and solar is an economic failure and a waste of research and development monies better spent on advanced nuclear energy. Wind energy, for example, takes up to 8 times the amount of concrete and steel for unit of energy produced than nuclear! Which is really the ‘cleaner’ energy generator with this in mind?…”
“…The basis of understanding the development of the productive forces of the political-economy of society, most notably capitalism, but is true for socialism as well, is that these forces were developed in large part because of the advance of scientific technique, organized for capitalism, for the purpose of better appropriating surplus value from the working class and the peasantry. We all know this as students of Marx, but something is often missed in the minutiae of examining Political Economy, and that is how the physical economy of capitalism, of humanity in fact, has applied science to achieve the aims of development of the productive forces. It is my belief that the material physical basis of the socialist mode of production will require yet another quantum leap in the physical economy of a collectivized society.
Nothing shows this more than in energy. Historically, it is the ever more abundance, availability and usage of energy that has allowed the productive forces under any mode of production to advance. Indeed…if one can sum this up, it is the human ability to tap the density of energy forms that has allowed humanity to advance from human and animal power to wind power, to water power, to steam, to electric energy generated by yet more increasing dense forms of energy: from wood, to coal and then diesel & gasoline, to atomic power. At each step of the way we find the density of energy to be a determining importance as to the efficiency, cheapness, and accessibility of utilizing that energy. Every historical leap in the development of the productive forces has utilized this technique to propel the forces of production ever faster, and ever wider. Denser, more efficient, more abundant….”
http://left-atomics.blogspot.com/
Don Quixote, this comes from a marxist pro-nuclear website (maybe this is the beginning of us all getting along). Pretty good stuff, other than the “war-mongering capitalist pig” rhetoric.
BrianE, you are a better man than I to subject yourself to plowing through Marxist swill. Nevertheless, just as Zach and broken clocks are occasionally correct, even Marxists can get it right at times.
Danny,
Don’t know much about thorium reactors, but it’s my understanding they produce less waste and thorium is fairly abundant.
http://energyfromthorium.com/essay3rs/
Danny Lemieux: What are the advantages of thorium-based nuclear energy?
As BrianE points out, thorium is more abundant, doesn’t require complex refinement, produces less waste, even burns up old waste. In addition, it is not readily made into weapons, so it is safer in terms of controlling nuclear proliferation.
z – for natural gas:
EIA current estimates of “proven reserves” for natural gas increased from 255 trillion cubic feet(tcf) to 285 tcf from 2008 to 2009 and to , against consumption levels of roughly 25 tcf per annum. As you can see from the 2nd link provided, the amount of proven reserves is currently on an exponential growth curve, as new technologies and gas fields are identified.
http://www.eia.doe.gov/dnav/ng/ng_cons_sum_dcu_nus_a.htm
http://www.eia.doe.gov/oil_gas/natural_gas/data_publications/crude_oil_natural_gas_reserves/cr.html
“Proven reserves” are defined by the U.S. EIA as “those volumes of oil and natural gas that geologic and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating condition”. However, “existing economic and operating conditions” have been changing very quickly.
However, the EIA also recognizes that many gas fields exist that have yet to be developed. Thus, it projects total reserves (currently developed plus yet to be discovered and developed) at 2,586 tcf (or about 100 years-worth of natural gas at current consumption levels) – see link below. Other estimates put together by energy industry organizations come in a bit lower, at 1,400 to 1,800 tcf. It should be re-emphasized that the word “unproven” in this context does not mean “speculative”.
Moreover, since this last report was published in 2008, there have huge increases in natural gas reserve estimates worldwide, including in tiny Israel [ http://oilprice.com/Energy/Natural-Gas/Massive-Natural-Gas-Field-Found-of-Israels-Coast.html ]
http://www.naturalgas.org/overview/resources.asp
I need to get back to work, so I can only deal with crude oil reserves in a peremptory level. See Figures 7-8 in this link:
http://www.eia.doe.gov/oil_gas/natural_gas/data_publications/crude_oil_natural_gas_reserves/cr.html
It references total petroleum reserves at only 22.4 billion barrels, against consumption of about 6.8 bbl per year.
However, if you look at Figure 8, you notice that very little is contributed by new drilling (which would establish the value of these reserves).
According to this 2007 publication, total proven North American petroleum reserves are 211 bbl., or about 35 years worth of current U.S. annual consumption.
http://www.energy.alberta.ca/Oil/pdfs/AB_OilReserves.pdf
This 2006 EIA publication regarding the Bakken Fields development demonstrates how quickly “proven oil reserves” can increase with new discoveries (which are currently prevented by the Obama administration. “Proven Reserves”. To quote from the report: “Comparing 2005 to 1999 crude oil proved reserves volumes, the proved reserves of Montana have increased 106 percent, and the proved reserves of North Dakota have increased 59 percent (Figure 8).”
There are many other Bakken-like reserves in our country waiting to be developed and “proven”. For example, preliminary USGS estimates of the Arctic estimate potential oil and gas reserves at 77 to 154 billion bbls and natural gas reserves at 300 to 770 tcf, most of it off of Alaska.
http://www.energyandcapital.com/articles/arctic-oil-gas/890
To these numbers, add “unconventional” oil sources, such as “heavy oil in place” (w/ very preliminary
est. at 100 billion bbls, in the 2006 link to a U.S. DOE report ) and liquified coal, of which the U.S. has huge resources (but which the Obama administration promised to “bankrupt”).
http://fossil.energy.gov/programs/reserves/npr/Heavy_Oil_Fact_Sheet.pdf
The bottom line with “proven” petroleum reserves is that the potential for the discovery and potential reserves of new petroleum resources have barely been tapped. Funny thing is that every time people start predicting the end of our oil reserves being in sight (i.e., “peak oil), new reserves and new extraction technologies are found.
There is much exploration and development work that could be done to make us energy independent…if the U.S. had the will to do it.
For the life of me, I can’t figure out why the two sides are arguing with each other as if the solutions are mutually exclusive. They aren’t. Why can’t we work together for a change?
Since when did you expect Oakland criminals to work with the police?
There’s theory and then there’s actual delineations of turf and human factions.
There were plenty of the Keys walking amongst the socialists.
Pinochet’s coup resulted in an economic recovery and restructuring, resulting in the peaceful transfer of power and even the election of former Allende cronies and socialists. Funny how Pinochet missed them while they were in prison.
The rich socialists got dumber and the poor socialists got richer.
Pinochet will forever be known as someone that did what socialists, Key boyos, and Totalitarian Leftists could not. GIve up power for the greater good.
It’s something the Left cannot even comprehend as being possible.
By the Left, I am including Z here.
BrianE: Many can pay increased premiums and co-pays. It’s time to think of Medicare part B as welfare and means test, since that’s what it is.
Zachriel: That’s an option, but it will tend to undermine the program, and seems like a wedge for many conservatives who have tried to kill the program many times in the past.
How will making the Medicaire sustainable undermine the program? You’re not going to stabilize Medicare by cost-containment. It promotes cost-shifting. As as for price controls, how did price controls work out for Nixon?
BrianE: How will making the Medicaire sustainable undermine the program?
Making it sustainable doesn’t in itself undermine the program, unless it results in undercutting public support by turning it into a means-tested program. This isn’t an inevitable result, but the Right has been attempting to kill Medicare since its inception.
BrianE: You’re not going to stabilize Medicare by cost-containment. It promotes cost-shifting.
Other developed nations are not immune to the problem of medical inflation and an aging population, but they manage to provide health care for much less money, and provide it universally. Each country has a different system, some through insurance, some by single-source pay, some with government run medicine, so there are a variety of models to choose from, and to adapt as required to the U.S. system and culture.
Megan McCardle dissects the statists never ending desire for more control and taking Krugman to task for being– well, Krugman.
Check out the stat on which countries have highest out of pocket expenses for healthcare. Intersting that many EU countries, even Canada, have higher out of pocket expenses.
“Nor do I think the possibility of reducing costs through individual discretion is quite as impossible as Krugman makes things sound. Sure, a lot of decisions are life-or-death last minute things. But a lot of them aren’t. They’re questions like, “Do we send grandma to a nursing home, or try to keep her in the spare bedroom with the help of a home health-care aide?” Or “I’ve got stage four breast cancer with bone metastes; should I really mortgage the house to try another round of chemo?”
It’s all very well to say that people shouldn’t have to make those decisions on the basis of money. But that’s all the government is going to do. Sure, there are some procedures that people just shouldn’t have (like a lot of back surgery). But a lot of this is value judgements: hip replacements for elderly patients, expensive chemotherapy that may extend life by a few months, more convenient dosing schedules or better side-effect profiles for brand name drugs. Unless we simply rely on across-the-board reimbursement cuts–which would be moronic on every level–the government is mostly not going to be deciding which treatments are effective; it’s going to be deciding which treatments are cost-effective. We haven’t taken doctors out of the business of selling health care to patients; we’ve just added a middleman.
Now, maybe you think that the government is smarter than the consumers it’s speaking for. But how does the government know what you value most: an extra three months of life when you have cancer, or an extra five years of walking after age 89, or an extra $4,000 right now?
I think that people who favor a central board probably put more faith in technocrats than I do, but also, that they are horrified by the specificity of the choices. They’re comfortable making decisions about who lives or who dies when the people in those decisions are just decimal points in an aggregate statistic. But they find it horrifying that anyone–particularly the patient–should have to make that decision about a specific person.”
http://www.theatlantic.com/business/archive/2011/04/people-or-rules/237832/