Vindicated:Conservative economic policies

[Rockingham, AH Deist]

From American Thinker:http://www.americanthinker.com/2010/10/vindicated_the_truth_about_con.html

Over the years, conservative economic policies have been the subject of heated attack by liberals seeking to justify punitive taxes and a bloated regulatory state. But far from failing, conservative economic values have delivered on every point.

Edited for Rule 4. Please don't copy large sections of text from a copyrighted source. As a guideline, quote a paragraph or two and provide a link to the original.

[Spindrift]

How's that deficit going?

[Rockingham, AH Deist]

The deficit increased not because of reduced tax revenue(tax revenue actually increased) but because the degree to which tax revenue increase was insufficient to fund increased military spending.

[Trakar]

from american thinker:http://www.americanthinker.com/2010/10/vindicated_the_truth_about_con.html


stop the presses!!!!

Leading partisan philosophy advocacy organization asserts they have been correct in their perspective, advocacy and rhetoric since the beginning!!!

[Fnord]

The deficit increased not because of reduced tax revenue(tax revenue actually increased) but because the degree to which tax revenue increase was insufficient to fund increased military spending.
So ... how's that "War on Terror" going?

Find the "Weapons of Mass Destruction" yet?

"Mission Accomplished", perhaps?

[Chaos]

So ... how's that "War on Terror" going?

Find the "Weapons of Mass Destruction" yet?

"Mission Accomplished", perhaps?

Haven´t you gotten the memo yet? These are all Obama´s wars - the conservatives never had anything to do with that.

[kasar]

Haha your first fail was using American Thinker as a source of anything. Go back and read some of the rubbish they spout, they are on the same level as Faux News.

[ponderingturtle]

Oh come on next you will question the Catholic Churches findings that they in no way aided and abetted child rape by merely getting the victims to keep quite and move the perpetrator to a new hunting ground.

And remember Reagan proved deficits don't matter so why would deficits be a fault for conservatives anyway?

[Rockingham, AH Deist]

Oh come on next you will question the Catholic Churches findings that they in no way aided and abetted child rape by merely getting the victims to keep quite and move the perpetrator to a new hunting ground.

And remember Reagan proved deficits don't matter so why would deficits be a fault for conservatives anyway?
As the below graph proves, the Reagan deficit resulted from increased spending not decreased tax revenue:

[pgwenthold]

As the below graph proves, the Reagan deficit resulted from increased spending not decreased tax revenue:

Well, yeah. If you massively increase government spending on defense contracts, then defense contractors hire more workers and pay them salaries out of those government contracts, and then those workers pay income tax on their salaries, then yes, you would expect, all else being equal, the government revenue to increase.

The problem was that for every additional billion the government spend, it might come back with $50 mil in additional revenue.

If I take out a $10000 loan at 5% interest, and then dump that money into a savings account at 2% interest, I can make an extra $200 this year in income. Good deal, right?

[Sceptic-PK]

I think it's thoroughly absurd when people claim that cutting taxes actually raises revenue. I can't get my head around the assertion.


Myth 1: Tax cuts “pay for themselves.”

“You cut taxes and the tax revenues increase.” — President Bush, February 8, 2006

“You have to pay for these tax cuts twice under these pay-go rules if you apply them, because these tax cuts pay for themselves.” — Senator Judd Gregg, then Chair of the Senate Budget Committee, March 9, 2006

Reality: A study by the President’s own Treasury Department confirmed the common-sense view shared by economists across the political spectrum: cutting taxes decreases revenues.

Proponents of tax cuts often claim that “dynamic scoring” — that is, considering tax cuts’ economic effects when calculating their costs — would substantially lower the estimated cost of tax reductions, or even shrink it to zero. The argument is that tax cuts dramatically boost economic growth, which in turn boosts revenues by enough to offset the revenue loss from the tax cuts.

But when Treasury Department staff simulated the economic effects of extending the President’s tax cuts, they found that, at best, the tax cuts would have modest positive effects on the economy; these economic gains would pay for at most 10 percent of the tax cuts’ total cost. Under other assumptions, Treasury found that the tax cuts could slightly decrease long-run economic growth, in which case they would cost modestly more than otherwise expected. (http://www.cbpp.org/7-27-06tax.htm)

The claim that tax cuts pay for themselves also is contradicted by the historical record. In 1981, Congress substantially lowered marginal income-tax rates on the well off, while in 1990 and 1993, Congress raised marginal rates on the well off. The economy grew at virtually the same rate in the 1990s as in the 1980s (adjusted for inflation and population growth), but revenues grew about twice as fast in the 1990s, when tax rates were increased, as in the 1980s, when tax rates were cut. Similarly, since the 2001 tax cuts, the economy has grown at about the same pace as during the equivalent period of the 1990s business cycle, but revenues have grown far more slowly. (http://www.cbpp.org/3-8-06tax.htm)

Some argue that, even if most tax cuts do not pay for themselves, capital gains tax cuts do. But, in reality, capital gains tax cuts cost money as well. After reviewing numerous studies of how investors respond to capital gains tax cuts, the Congressional Budget Office concluded that “the best estimates of taxpayers’ response to changes in the capital gains rate do not suggest a large revenue increase from additional realizations of capital gains — and certainly not an increase large enough to offset the losses from a lower rate.” That’s why CBO, the Joint Committee on Taxation, and the White House Office of Management and Budget all project that making the 2003 capital gains tax cut permanent would cost about $100 billion over the next ten years.

(http://www.cbpp.org/policy-points4-18-08.htm)

[Bob Blaylock]

I think it's thoroughly absurd when people claim that cutting taxes actually raises revenue. I can't get my head around the assertion.


I guess that's because you don't grasp the impact that taxation has on the economic activity being taxed.

What would happen if there was a 100% income tax—you go to work, do your job, earn your pay, and the government takes it all, leaving you with nothing? The answer should be obvious. Nobody would bother to work, since doing so didn't gain them anything. How much revenue would the government be able to collect with a 100% income tax? None at all. 100% of nothing is nothing.

So, what if the government cuts this tax rate to 95%? Most people probably still wouldn't bother. Being allowed to keep 5% of one's income probably wouldn't be enough for most people to make it worth getting and having a job. But compared to the 100% tax, at 95%, there would probably be a few people who would think it worth working for that meager 5%.

95% of a small amount is more than 100% of nothing. So, in this case, a reduction in the tax rate certainly would result in an increase in tax revenue.

The point is that economic activity of any sort,—the economy as a whole—is not some stiff, solid source that government can tax at any rate it wishes, without affecting the activity being taxed. Taxation has a stifling effect on economic activity; and beyond a certain point, heavily taxing the economy shrinks the economy such that the amount of tax revenue collected at a particularly high rate will be less than what would be collected at a lower rate, from an economy that is less-stifled by that lower rate.

[Sceptic-PK]

I remain unconvinced that the relationship between cutting taxes and increasing taxation revenue is anything but a bell-curve, and using extreme examples like you have here is using one end of that curve. Since nobody is paying ~95% tax rates I think we should limit ourselves to discussing figures more in line with reality. And in the reality I pasted above, taxation revenues climbed much faster when tax rates were raised than when they were lowered. Simulations of Bush's tax cuts' impact found that such cuts would "pay back" only 10% of the cost in lost revenue. Now, it's fair to say that such simulations are approximate only, but I do not think they'd be off by a factor of ten or more.

I would appreciate you showing me how the stuff I quoted was in error.

[Mark6]

I remain unconvinced that the relationship between cutting taxes and increasing taxation revenue is anything but a bell-curve, and using extreme examples like you have here is using one end of that curve. Since nobody is paying ~95% tax rates I think we should limit ourselves to discussing figures more in line with reality. And in the reality I pasted above, taxation revenues climbed much faster when tax rates were raised than when they were lowered. Simulations of Bush's tax cuts' impact found that such cuts would "pay back" only 10% of the cost in lost revenue. Now, it's fair to say that such simulations are approximate only, but I do not think they'd be off by a factor of ten or more.

I would appreciate you showing me how the stuff I quoted was in error.
Of course it is a curve. Well, not bell curve, as it is not symmetrical, but it is pretty obvious that with 0% taxation government revenue will be $0, and with 100% taxation it will also be $0. Somewhere between these two extremes is the taxation rate which brings maximum revenue -- and the term for this is Laffer curve (http://en.wikipedia.org/wiki/Laffer_curve).

Problem is, figuring out where exactly is the top of Laffer curve is really, really hard -- running experiments can be very expensive for the country, and most people in position to influence tax rates are guided more by ideology than by empirical science. In 1950's top tax rate in US was 93%, which was almost certainly on the right side of Laffer curve -- and Kennedy's tax cuts did increase the revenue. It's actually hard to tell whether Reagan's tax cuts increased the tax revenue, as they were not done in vacuum -- as pgwenthold pointed out, they were accompanied by massive increase in government contracts which skewed employment. It was not a scientific experiment.

[daenku32]

Of course it is a curve. Well, not bell curve, as it is not symmetrical, but it is pretty obvious that with 0% taxation government revenue will be $0, and with 100% taxation it will also be $0. Somewhere between these two extremes is the taxation rate which brings maximum revenue -- and the term for this is Laffer curve (http://en.wikipedia.org/wiki/Laffer_curve).

Problem is, figuring out where exactly is the top of Laffer curve is really, really hard -- running experiments can be very expensive for the country, and most people in position to influence tax rates are guided more by ideology than by empirical science. In 1950's top tax rate in US was 93%, which was almost certainly on the right side of Laffer curve -- and Kennedy's tax cuts did increase the revenue. It's actually hard to tell whether Reagan's tax cuts increased the tax revenue, as they were not done in vacuum -- as pgwenthold pointed out, they were accompanied by massive increase in government contracts which skewed employment. It was not a scientific experiment.

We do have data from the 90s when economy was growing rapidly even with the greater tax rates. Had they imposed even greater tax rates on investment income they might have been able to avoid the stock bubble and that recession, while bringing in even more revenues.

Then you have the data from 00s where you had mostly continuous growth by GDP, but that it never made up for the revenue losses caused by the tax cuts.

[nota]

How do the teabaggers hope to cut government jobs

without causing a depression

[Sceptic-PK]

Of course it is a curve. Well, not bell curve, as it is not symmetrical, but it is pretty obvious that with 0% taxation government revenue will be $0, and with 100% taxation it will also be $0. Somewhere between these two extremes is the taxation rate which brings maximum revenue -- and the term for this is Laffer curve (http://en.wikipedia.org/wiki/Laffer_curve).

Problem is, figuring out where exactly is the top of Laffer curve is really, really hard -- running experiments can be very expensive for the country, and most people in position to influence tax rates are guided more by ideology than by empirical science. In 1950's top tax rate in US was 93%, which was almost certainly on the right side of Laffer curve -- and Kennedy's tax cuts did increase the revenue. It's actually hard to tell whether Reagan's tax cuts increased the tax revenue, as they were not done in vacuum -- as pgwenthold pointed out, they were accompanied by massive increase in government contracts which skewed employment. It was not a scientific experiment.

Thanks for the correction. I wasn’t sure of the exact terminology, been many a year since I was plotting curves!

[Corsair 115]

For what it's worth, here are the figures in dollar values rather that percentage of GDP. The figures come from the CBO (http://www.cbo.gov/ftpdocs/108xx/doc10871/historicaltables.pdf). (Note: link is to a PDF file.)

Revenues, Outlays, Deficits, Surpluses
1980-2009, in Billions of Dollars

Year Revenues Outlays Deficit/Surplus
-----------------------------------------
1980 517.1 590.9 - 73.8
1981 599.3 678.2 - 78.9
1982 617.8 745.7 -127.9
1983 600.6 808.4 -207.8
1984 666.4 851.8 -185.4
1985 734.0 946.3 -212.3
1986 769.2 990.4 -221.2
1987 854.3 1,004.0 -149.7
1988 909.2 1,064.4 -155.2
1989 991.1 1,143.7 -152.6
1990 1,032.0 1,253.0 -221.0
1991 1,055.0 1,324.2 -269.2
1992 1,091.2 1,381.5 -290.3
1993 1,154.3 1,409.4 -255.1
1994 1,258.6 1,461.8 -203.2
1995 1,351.8 1,515.8 -164.0
1996 1,453.1 1,560.5 -107.4
1997 1,579.2 1,601.1 - 21.9
1998 1,721.7 1,652.5 69.2
1999 1,827.5 1,701.8 125.7
2000 2,025.2 1,789.0 236.2
2001 1,991.1 1,862.9 128.2
2002 1,853.1 2,010.9 -157.8
2003 1,782.3 2,159.9 -377.6
2004 1,880.1 2,292.9 -412.8
2005 2,153.6 2,472.0 -318.4
2006 2,406.9 2,655.1 -248.2
2007 2,568.0 2,728.7 -160.7
2008 2,524.0 2,982.6 -458.6
2009 2,104.6 3,518.2 -1,413.6


I notice that revenues in actual dollars fell in 1983 compared to 1982, dropping by some $17.2 billion (2.8%). Revenues went up in 1984, and continued to go up every year through 2000. For each of the next three years after that, however, revenues fell. Total revenue fell $34.1 billion in 2001 compared to 2000, $138.0 billion in 2002 compared to 2001, and $70.8 billion in 2003 compared to the prior year. Those are percentage declines of 1.7%, 6.9%, and 3.8%, respectively.

Revenues went up again starting in 2004, and continued upwards through 2008. In 2009, revenues once again declined, falling by $419.4 billion compared to the prior year, a drop of 16.6%.

[Trakar]

For what it's worth, here are the figures in dollar values rather that percentage of GDP. The figures come from the CBO (http://www.cbo.gov/ftpdocs/108xx/doc10871/historicaltables.pdf). (Note: link is to a PDF file.)

Revenues, Outlays, Deficits, Surpluses
1980-2009, in Billions of Dollars

Year Revenues Outlays Deficit/Surplus
-----------------------------------------
1980 517.1 590.9 - 73.8
1981 599.3 678.2 - 78.9
1982 617.8 745.7 -127.9
1983 600.6 808.4 -207.8
1984 666.4 851.8 -185.4
1985 734.0 946.3 -212.3
1986 769.2 990.4 -221.2
1987 854.3 1,004.0 -149.7
1988 909.2 1,064.4 -155.2
1989 991.1 1,143.7 -152.6
1990 1,032.0 1,253.0 -221.0
1991 1,055.0 1,324.2 -269.2
1992 1,091.2 1,381.5 -290.3
1993 1,154.3 1,409.4 -255.1
1994 1,258.6 1,461.8 -203.2
1995 1,351.8 1,515.8 -164.0
1996 1,453.1 1,560.5 -107.4
1997 1,579.2 1,601.1 - 21.9
1998 1,721.7 1,652.5 69.2
1999 1,827.5 1,701.8 125.7
2000 2,025.2 1,789.0 236.2
2001 1,991.1 1,862.9 128.2
2002 1,853.1 2,010.9 -157.8
2003 1,782.3 2,159.9 -377.6
2004 1,880.1 2,292.9 -412.8
2005 2,153.6 2,472.0 -318.4
2006 2,406.9 2,655.1 -248.2
2007 2,568.0 2,728.7 -160.7
2008 2,524.0 2,982.6 -458.6
2009 2,104.6 3,518.2 -1,413.6


I notice that revenues in actual dollars fell in 1983 compared to 1982, dropping by some $17.2 billion (2.8%). Revenues went up in 1984, and continued to go up every year through 2000. For each of the next three years after that, however, revenues fell. Total revenue fell $34.1 billion in 2001 compared to 2000, $138.0 billion in 2002 compared to 2001, and $70.8 billion in 2003 compared to the prior year. Those are percentage declines of 1.7%, 6.9%, and 3.8%, respectively.

Revenues went up again starting in 2004, and continued upwards through 2008. In 2009, revenues once again declined, falling by $419.4 billion compared to the prior year, a drop of 16.6%.

Are these adjusted real GDP numbers (if so, using what base year)?

[Corsair 115]

Are these adjusted real GDP numbers (if so, using what base year)?


You'd have to consult the source document for that. I don't know offhand what the CBO uses, but I think those are nominal (unadjusted) actual dollar amounts. That is, the number of dollars taken in that year versus the number of dollars spent that year.

Inflation in that case wouldn't make much difference when comparing years close together.

[Tippit]

As the below graph proves, the Reagan deficit resulted from increased spending not decreased tax revenue:

Given the Federal Reserve system and it's unlimited money, increased spending is akin to increased taxes - the taxes merely come from inflation as opposed to direct taxation. I don't think "conservative" fiscal policy has been vindicated at all, considering that George Bush Jr. ran up the largest deficits in US history. Reagan and Ford were no slouches either. Republicans simply spend our money on aircraft carriers and nukes, and they use the printing press and debt to do it.

[Trakar]

You'd have to consult the source document for that. I don't know offhand what the CBO uses, but I think those are nominal (unadjusted) actual dollar amounts. That is, the number of dollars taken in that year versus the number of dollars spent that year.

Inflation in that case wouldn't make much difference when comparing years close together.

That depends upon what the inflation rate was, which in the 80s was not insignificant, to my recollection.

[drkitten]

That depends upon what the inflation rate was, which in the 80s was not insignificant, to my recollection.

About 3-4% annually.

[Trakar]

About 3-4% annually.


Hmmm, looking at http://inflationdata.com/inflation/inflation_rate/HistoricalInflation.aspx?dsInflation_currentPage=2

1980-Annual Ave- 13.58%
1981 10.35%
1982 6.16%
1983 3.22%
1984 4.30%
1985 3.55%
1986 1.91%
1987 3.66%
1988 4.08%
1989 4.83%
1990 5.39%
1991 4.25%
1992 3.03%

looks a bit higher than 3-4% annually, I get a decade average of around 5 1/2% with the early half decade running significantly higher at an average 7 1/2% per year.

[Toke]

And just to add to the complications.
A higher tax rate can often improve economic activity, providing the money is spent correctly.
Some examples would be roads, schools, BBB/courts, healthcare.

[ServiceSoon]

How do the teabaggers hope to cut government jobs

without causing a depression
How do the libtards expect to continue paying the lucrative salaries/benefits for gov jobs that aren't necessary without creating inflation and turning the USA into Greece or Ireland. If that happens the interest rate to sell our debt will increase, which would raise consumer interest rates. Hello downward debt death spiral.

And just to add to the complications.
A higher tax rate can often improve economic activity, providing the money is spent correctly.
Some examples would be roads, schools, BBB/courts, healthcare.
In so much as those improvements were needed. No matter how many times Drkitten says otherwise.

[ServiceSoon]

Don't argue with me, argue with the IMF.

The IMF said the recovery from the recession remains vulnerable to threats, including soaring budget deficits in many nations. It says credible plans to cut deficits are urgently needed.

For the global economy to continue growing, the IMF said advanced economies such as the United States will need to see stronger spending by consumers and growth in exports.

[Toke]

How do the libtards expect to continue paying the lucrative salaries/benefits for gov jobs that aren't necessary without creating inflation and turning the USA into Greece or Ireland. If that happens the interest rate to sell our debt will increase, which would raise consumer interest rates. Hello downward debt death spiral.

The mantra of overpaid and unnecessary government employees does not become true by repetition.
Do you realise that a bit of inflation would help on consumer spending?
In so much as those improvements were needed. No matter how many times Drkitten says otherwise.

What are you trying to say?
That business can survive without a government to provide them with infrastructure and healthy educated workers?

[Bob Blaylock]

And just to add to the complications.
A higher tax rate can often improve economic activity, providing the money is spent correctly.
Some examples would be roads, schools, BBB/courts, healthcare.


This assumes that the government will spend the money better than the person to whom, it rightfully belongs would spend it; and that the government is more entitled to it than is the person who rightfully earned it.

[Toke]

This assumes that the government will spend the money better than the person to whom, it rightfully belongs would spend it;
Absolutely correct. :)
The track record for government vs. private spending is really good in most areas. One glaring obvious area is healthcare, but infrastructure and education is up there too.
and that the government is more entitled to it than is the person who rightfully earned it.

The part about rightfully and entitled is decided by law in democracies.
We vote for politicians advocating a larger/smaller public sector and get either less taxes or bigger tax paid benefits/services from public coffers.

[Chaos]

Absolutely correct. :)
The track record for government vs. private spending is really good in most areas. One glaring obvious area is healthcare, but infrastructure and education is up there too.


The part about rightfully and entitled is decided by law in democracies.
We vote for politicians advocating a larger/smaller public sector and get either less taxes or bigger tax paid benefits/services from public coffers.

Oh, come on, Toke - you know that only the policies we agree with are actually democratically legitimized. The ones we disagree with are the first step towards a fascist/socialist/whatever dictatorship.

[Toke]

Oh, come on, Toke - you know that only the policies we agree with are actually democratically legitimized. The ones we disagree with are the first step towards a fascist/socialist/whatever dictatorship.

You are right :) , and if I had the writing skills I would give you a lengthy rant about how our current (semifacist) right wing government have destroyed the public sector and the Danish economy through it's sucking up to Bush's economic ideas.:mad:

[Sceptic-PK]

So, have the conservatives in this thread accepted that cutting (reasonable) taxes decreases government revenue?

[ServiceSoon]

The mantra of overpaid and unnecessary government employees does not become true by repetition.
Do you realise that a bit of inflation would help on consumer spending?
The mantra of overpaid and unnecessary government employees is true by fact. I've hear anecdotal stories from co-workers whose family members received a government job from/due to other family members whose salary was larger than the job they replaced.

I realize that inflation continues to cause thousands of hours wasted on labor to update the computer and continues to pick winners and looser in the economy. By the latter part I mean that those industries that can justify the largest price increase in the least amount of time wins.

How does inflation help on consumer spending? In one scenario the same amount of money I made last year buys less, which equals more profit for that company, which is less economic activity.

In the second scenario I receive a raise and I'm in the same situation I was before inflation occurred; what purpose does inflation serve in this scenario; it's a zero sum game?

What are you trying to say?
That business can survive without a government to provide them with infrastructure and healthy educated workers?My point is that if the infrastructure doesn't need improving than repairing it doesn't make sense. I'll have to think about educated and healthy workers from various scenarios.

[Toke]

The mantra of overpaid and unnecessary government employees is true by fact. I've hear anecdotal stories from co-workers whose family members received a government job from/due to other family members whose salary was larger than the job they replaced.

Anecdote does not equal facts.
Particularly not if recycled in a political enviroment.

I realize that inflation continues to cause thousands of hours wasted on labor to update the computer and continues to pick winners and looser in the economy. By the latter part I mean that those industries that can justify the largest price increase in the least amount of time wins.
Cost of relabeling goods in the supermarked???

How does inflation help on consumer spending? In one scenario the same amount of money I made last year buys less, which equals more profit for that company, which is less economic activity.
In the second scenario I receive a raise and I'm in the same situation I was before inflation occurred; what purpose does inflation serve in this scenario; it's a zero sum game?
The general idea is that with inflation people tend to spend their money before they drop in value.

My point is that if the infrastructure doesn't need improving than repairing it doesn't make sense. I'll have to think about educated and healthy workers from various scenarios.
Infrastructure require constant maintenance.

[ServiceSoon]

Anecdote does not equal facts.
Particularly not if recycled in a political enviroment.
Federal Pay 55% higher than Private Sector in equivalent jobs! (http://www.sodahead.com/united-states/federal-pay-55-higher-than-private-sector-in-equivalent-jobs/blog-399629/)

Cost of relabeling goods in the supermarked???The headache of updating the prices in the computer system.

The general idea is that with inflation people tend to spend their money before they drop in value. And people did spend that money, money they did not have, but it was at such a great rate. They spent so much money in the past that nobody has any to spend now. How is that working for us? And the solution to this problem is to lower interest rates so spending money becomes even more appealing. It seems like a vicious circle of crazy to me.

Infrastructure require constant maintenance. The monies allocated for infrastructure was done because we had to stimulate the economy. Whether that infrastructure actually needed repairs or improvements was an after thought. The bill will be due soon.

[Trakar]

Federal Pay 55% higher than Private Sector in equivalent jobs! (http://www.sodahead.com/united-states/federal-pay-55-higher-than-private-sector-in-equivalent-jobs/blog-399629/)

The headache of updating the prices in the computer system.

And people did spend that money, money they did not have, but it was at such a great rate. They spent so much money in the past that nobody has any to spend now. How is that working for us? And the solution to this problem is to lower interest rates so spending money becomes even more appealing. It seems like a vicious circle of crazy to me.

The monies allocated for infrastructure was done because we had to stimulate the economy. Whether that infrastructure actually needed repairs or improvements was an after thought. The bill will be due soon.

Only a smal portion of the stimulus bill was dedicated to infrastructure and most of that was painting over rust rather than rooting out the decay and updating long antiquated and dilapidated foundations of our national economy. and even these half-steps are largely uncompleted, much of that infrastructure money still sits undispersed and unused.

[ideogram]

And people did spend that money, money they did not have, but it was at such a great rate. They spent so much money in the past that nobody has any to spend now.

It seems to me you are operating on the assumption that the amount of money in the economy is fixed. Clearly it is not; in fact my understanding of the "stimulus" is that we are creating new money precisely so that people can spend it.

The monies allocated for infrastructure was done because we had to stimulate the economy. Whether that infrastructure actually needed repairs or improvements was an after thought. The bill will be due soon.

Why do people keep saying repairs are wasted? It's not like infrastructure works perfectly well for thirty years and then disappears in an instant. It has a service life during which it steadily decays. Also, new infrastructure can use the latest technology to provide benefits the old infrastructure did not.

[Bob Blaylock]

It seems to me you are operating on the assumption that the amount of money in the economy is fixed. Clearly it is not; in fact my understanding of the "stimulus" is that we are creating new money precisely so that people can spend it.


How could you possibly come to such an outrageously wrong understanding?

No, government is not creating more money. Government is taking money from some people, and giving it to others. Those to whom it is given have more money to spend, yes, but those from whom it is taken have less to spend. If this were being done with perfect efficiency (that ism, each dollar taken from one person resulted in a dollar being given to someone else) then the net effect on the economy would be neutral, at best. But nothing is that efficient—government least of all.

Now if what government was doing was creating (printing) more money, then the effect would be different. If government creates more money, this doesn't create any new wealth; it only devalues the money. If there were a trillion dollars in circulation, and government were to print another trillion dollars, the only thing this would do is to make each dollar worth half what it was before. See the situation in Zimbabwe (http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe) for an example of the sort of “stimulus” program you seem to think you are describing.

[3point14]

How could you possibly come to such an outrageously wrong understanding?

No, government is not creating more money. Government is taking money from some people, and giving it to others. Those to whom it is given have more money to spend, yes, but those from whom it is taken have less to spend. If this were being done with perfect efficiency (that ism, each dollar taken from one person resulted in a dollar being given to someone else) then the net effect on the economy would be neutral, at best. But nothing is that efficient—government least of all.

Now if what government was doing was creating (printing) more money, then the effect would be different. If government creates more money, this doesn't create any new wealth; it only devalues the money. If there were a trillion dollars in circulation, and government were to print another trillion dollars, the only thing this would do is to make each dollar worth half what it was before. See the situation in Zimbabwe (http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe) for an example of the sort of “stimulus” program you seem to think you are describing.


With regard to the bold point.

Every dollar taken in taxes is given to someone else. Not all of it to the same person, but a bit goes to the administrators (who spend it), if a private outsourced company is used by the government then some of it ends up as profit with the shareholders (who spend it) and some of it ends up with whoever the government was planning on giving it to in the end (who spend it). The system might not be efficient, but a dollar goes in one end and a dollar comes out of various other ends. That dollar does not diminish in value, it just ends up split up.

In short, while neither agreeing nor disagreeing with the rest of your stance, the bolded statement is plain wrong, none of the taxed dollar disolves into nothing, it's just that some (most? I have no idea) doesn't end up where it was intended to end up.

[ideogram]

How could you possibly come to such an outrageously wrong understanding?

I am sure there are many things I do not understand.

Is this more correct: the stimulus is trying to increase the "money supply"?

[Sceptic-PK]

Now if what government was doing was creating (printing) more money, then the effect would be different. If government creates more money, this doesn't create any new wealth; it only devalues the money. If there were a trillion dollars in circulation, and government were to print another trillion dollars, the only thing this would do is to make each dollar worth half what it was before.

Sorry, but this isn't accurate. The number of dollars printed is only one factor that influences the value of the dollar.

Additionally, you never did get back to me re post #13. Do I take that to be your acceptance that cutting taxes reduces government revenue, assuming tax rates aren't at fictitiously high levels?

[Bob Blaylock]

Sorry, but this isn't accurate. The number of dollars printed is only one factor that influences the value of the dollar.

It's certainly a very big factor. Money and wealth are not the same thing. Money is only a unit by which wealth can be measured and exchanged. Changing the amount of money in circulation doesn't directly affect the wealth that it represents—it only changes how much of that actual wealth is represented by each unit of money.

Again, see Zimbabwe (http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe) for an example of what happens when you increase the money supply, without a corresponding increase in actual wealth.


Additionally, you never did get back to me re post #13. Do I take that to be your acceptance that cutting taxes reduces government revenue, assuming tax rates aren't at fictitiously high levels?

It would help if you asked a question that made some kind of rational sense. What is “fictitiously high” supposed to mean?

[ideogram]

It's certainly a very big factor. Money and wealth are not the same thing. Money is only a unit by which wealth can be measured and exchanged. Changing the amount of money in circulation doesn't directly affect the wealth that it represents—it only changes how much of that actual wealth is represented by each unit of money.


Sure, and if people start stuffing cash into their mattresses, that also would change the amount of money in circulation.

[lomiller]

Changing the amount of money in circulation doesn't directly affect the wealth that it represents


Correct, it doesn't directly affect wealth. It can have a massive indirect effect, however, as insufficient money supply chokes economic activity and discourages investment.




Again, see Zimbabwe (http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe) for an example of what happens when you increase the money supply


See the great depression for what happened when the money supply is to small.

Now the real question, which of these two is happening now, is inflation running amok or is deflation setting in?

[Sceptic-PK]

It's certainly a very big factor. Money and wealth are not the same thing. Money is only a unit by which wealth can be measured and exchanged. Changing the amount of money in circulation doesn't directly affect the wealth that it represents—it only changes how much of that actual wealth is represented by each unit of money.

The relationship is more like this:


M*V = P*Q

Where:

* M is the total dollars in the nation’s money supply
* V is the number of times per year each dollar is spent
* P is the average price of all the goods and services sold during the year
* Q is the quantity of assets, goods and services sold during the year


It is not a single variable equation, so your example above of doubling the money supply = halving of the value of each dollar in that supply, is incomplete and inaccurate.


Again, see Zimbabwe (http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe) for an example of what happens when you increase the money supply, without a corresponding increase in actual wealth.

The US isn't Zimbabwe.


It would help if you asked a question that made some kind of rational sense. What is “fictitiously high” supposed to mean?

"Ficticiously high" refers to your ficticious example of tax rates of 95% or 100% mentioned in post #12. Since those rates do not represent tax rates in the US or other comparable nations, they do not serve as a useful example of the effect of taxation on government revenue in 2010.

[Bob Blaylock]

Again, see Zimbabwe (http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe) for an example of what happens when you increase the money supply, without a corresponding increase in actual wealth.The US isn't Zimbabwe.

Not yet.



[QUOTE=Sceptic-PK;6421736][QUOTE=Bob Blaylock;6420677] It would help if you asked a question that made some kind of rational sense. What is “fictitiously high” supposed to mean?"Ficticiously [sic] high" refers to your ficticious [sic] example of tax rates of 95% or 100% mentioned in post #12. Since those rates do not represent tax rates in the US or other comparable nations, they do not serve as a useful example of the effect of taxation on government revenue in 2010.


To address your question “Do I take that to be your acceptance that cutting taxes reduces government revenue, assuming tax rates aren't at fictitiously high levels?” then, no, I don't accept that. It is absolutely clear that taxation burdens the economy, dragging it down. The larger a portion of the economy the government consumes, the more the economy is damaged. Somewhere, between 0% and 100%, there is a point where, taking more than that portion of the economy will result in lower revenues, that would a lower tax rate, because although the government is taking a bigger share of the economy, the economy is smaller by a greater amount, because of the degree to which the government-imposed burden is damaging the economy.

Just what this point is, of course, is a matter of much debate and speculation, but I do not believe that this point is nearly as high as that range which you describe as “fictitiously high”.

[Sceptic-PK]

Well, I'm sorry but I can only repeat myself at this juncture.


Myth 1: Tax cuts “pay for themselves.”

“You cut taxes and the tax revenues increase.” — President Bush, February 8, 2006

“You have to pay for these tax cuts twice under these pay-go rules if you apply them, because these tax cuts pay for themselves.” — Senator Judd Gregg, then Chair of the Senate Budget Committee, March 9, 2006

Reality: A study by the President’s own Treasury Department confirmed the common-sense view shared by economists across the political spectrum: cutting taxes decreases revenues.

Proponents of tax cuts often claim that “dynamic scoring” — that is, considering tax cuts’ economic effects when calculating their costs — would substantially lower the estimated cost of tax reductions, or even shrink it to zero. The argument is that tax cuts dramatically boost economic growth, which in turn boosts revenues by enough to offset the revenue loss from the tax cuts.

But when Treasury Department staff simulated the economic effects of extending the President’s tax cuts, they found that, at best, the tax cuts would have modest positive effects on the economy; these economic gains would pay for at most 10 percent of the tax cuts’ total cost. Under other assumptions, Treasury found that the tax cuts could slightly decrease long-run economic growth, in which case they would cost modestly more than otherwise expected. (http://www.cbpp.org/7-27-06tax.htm)

The claim that tax cuts pay for themselves also is contradicted by the historical record. In 1981, Congress substantially lowered marginal income-tax rates on the well off, while in 1990 and 1993, Congress raised marginal rates on the well off. The economy grew at virtually the same rate in the 1990s as in the 1980s (adjusted for inflation and population growth), but revenues grew about twice as fast in the 1990s, when tax rates were increased, as in the 1980s, when tax rates were cut. Similarly, since the 2001 tax cuts, the economy has grown at about the same pace as during the equivalent period of the 1990s business cycle, but revenues have grown far more slowly. (http://www.cbpp.org/3-8-06tax.htm)

Some argue that, even if most tax cuts do not pay for themselves, capital gains tax cuts do. But, in reality, capital gains tax cuts cost money as well. After reviewing numerous studies of how investors respond to capital gains tax cuts, the Congressional Budget Office concluded that “the best estimates of taxpayers’ response to changes in the capital gains rate do not suggest a large revenue increase from additional realizations of capital gains — and certainly not an increase large enough to offset the losses from a lower rate.” That’s why CBO, the Joint Committee on Taxation, and the White House Office of Management and Budget all project that making the 2003 capital gains tax cut permanent would cost about $100 billion over the next ten years.

(http://www.cbpp.org/policy-points4-18-08.htm)

[drkitten]

To address your question “Do I take that to be your acceptance that cutting taxes reduces government revenue, assuming tax rates aren't at fictitiously high levels?” then, no, I don't accept that.

Of course you don't. It's absolutely mandatory, in order to be a modern conservative, to completely deny reality.

Since there's no reality-based, or even reality-influenced, evidence supporting conservatism, reality must be denied for conservatism to have any chance.

[Bob Blaylock]

Of course you don't. It's absolutely mandatory, in order to be a modern conservative, to completely deny reality.

Since there's no reality-based, or even reality-influenced, evidence supporting conservatism, reality must be denied for conservatism to have any chance.


“Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever!” — from The Adventures of Baron Munchausen (http://en.wikipedia.org/wiki/The_Adventures_of_Baron_Munchausen)


Your “reality” puts government in the role of master, and the people in the role of its servants; and gives to government ownership and rights to the fruits of the people's labor, and the right and authority squander it on fraudulent, wasteful “stimulus” programs”. This is what modern liberalism is all about.

Conservatism is the opposite; government exists to serve the people, not to enslave us, not to steal and frivolously squander the fruits of our labor.

Is there evidence of which system is better? probably not, but I know which one I would rather live under.

[drkitten]

“Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever!” — from The Adventures of Baron Munchausen (http://en.wikipedia.org/wiki/The_Adventures_of_Baron_Munchausen)

As if I needed further proof that conservative economic theories come straight out of fairy tales.


Is there evidence of which system is better?

There is indeed. The fact that, as pointed out by professional economists such as Krugman, both conservative and liberal ("Keynesian") economic theories make predictions.

The difference is that the Keynesian predictions match future events.

I know which one I would rather live under.

I'm sure you do. But you do live in a world where Keynesian economic policies are demonstrably correct. Your desire to live in Narnia or Cloud-Kookoo-Land isn't really relevant.

[Sceptic-PK]

“Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever!” — from The Adventures of Baron Munchausen (http://en.wikipedia.org/wiki/The_Adventures_of_Baron_Munchausen)


Your “reality” puts government in the role of master, and the people in the role of its servants; and gives to government ownership and rights to the fruits of the people's labor. This is what modern liberalism is all about.

Conservatism is the opposite; government exists to serve the people, not to enslave us, not to steal and frivolously squander the fruits of our labor.

Is there evidence of which system is better? probably not, but I know which one I would rather live under.

I’d prefer to live under whichever system based its economic principles on actual evidence rather than emotionally-appealing but ultimately empty ideology. For instance, I would wish my leaders, “liberal” and “conservative” alike, to understand when they cut taxes, there will be a decrease in government revenue, and to moderate their spending accordingly. Certainly this seems much more sensible than the recent 8 years of Bush’s tenure, which was to cut taxes and ramp up spending.

[Roboramma]

And just to add to the complications.
A higher tax rate can often improve economic activity, providing the money is spent correctly.
Some examples would be roads, schools, BBB/courts, healthcare.This assumes that the government will spend the money better than the person to whom, it rightfully belongs would spend it;
Sure, which certainly makes sense: while sometimes individuals spend their money in ways that are best for society as a whole, they fail to provide public goods.
Do you really believe that roads would be built, and built more efficiently, without public funds?
and that the government is more entitled to it than is the person who rightfully earned it.
No, it doesn't depend on that at all.
That the government is entitled to it or not has nothing to do with whether or not they can spend the money in a way that improves economic activity.

That might be an argument for why, even if the government is more efficient at spending money in some cases, you'd still oppose taxation, but it not an argument for why the government is less efficient at providing services that improve the economy.

[Toke]

Bob,
Have you read the bible story about 7 fat cows eating 7 skinny cows?

I read it as the first written example of how you should not run up deficits in good times, but rather save up money for the bad.
Conservative economics did exactly the opposite.

[MontagK505]

Absolutely correct. :)
The track record for government vs. private spending is really good in most areas. One glaring obvious area is healthcare, but infrastructure and education is up there too.


The part about rightfully and entitled is decided by law in democracies.We vote for politicians advocating a larger/smaller public sector and get either less taxes or bigger tax paid benefits/services from public coffers.

So in principle 50.1% is entitled to gang-rape the 49.9%? Sounds democratic to me.

[Toke]

So in principle 50.1% is entitled to gang-rape the 49.9%? Sounds democratic to me.

In theory yes, depends on country, mine would require 66% to make such drastic changes in constitution.

It kind of refers back to the lack of absolute moral values here in the real world. If you have a better idea than democracy, feel free to share.

BTW: regarding rape, isn't it a rather new idea that a woman get to pick her own husband, and can say no if she is not in the mood?

[Bob Blaylock]

Sure, which certainly makes sense: while sometimes individuals spend their money in ways that are best for society as a whole, they fail to provide public goods.
Do you really believe that roads would be built, and built more efficiently, without public funds?

I do not dispute the need for some government spending, and some taxation to support it. Basic infrastructure, law enforcement, emergency service,s administration, and such.

The problem, in the U.S., is that we have government, at every level, going very far beyond its rightful place, consuming much more of the wealth produced by its citizens than it has any right to consume, trying to do too much for us that we ought to be doing for ourselves.



No, it doesn't depend on that at all.
That the government is entitled to it or not has nothing to do with whether or not they can spend the money in a way that improves economic activity.

That might be an argument for why, even if the government is more efficient at spending money in some cases, you'd still oppose taxation, but it not an argument for why the government is less efficient at providing services that improve the economy.


Of course, I dispute the claim that government can spend its people's money more efficiently and effectively than we can spend out own money. But this is rather beside the point.

The last phrase of the Fifth Amendment to our Constitution reads……nor shall private property be taken for public use, without just compensation.

Even if government could improve the economy, by taking money from its citizens and spending it as it sees best, rather than letting these citizens keep their own money to spend themselves as they see best; government has no right or authority do do so, and attempting to do so is a blatant violation of our Constitution. It constitutes the taking of private property for a fraudulently-claimed public good, without compensating those from whom it is taken, in violation of the Fifth Amendment which explicitly prohibits such a taking and misuse of private property.

[Bob Blaylock]

It kind of refers back to the lack of absolute moral values here in the real world. If you have a better idea than democracy, feel free to share.


Here in the U.S., we do have a better idea, at least in theory. We are not a democracy, but a “representative republic”. We have a Constitution, and various other documents that lay out specific rules under which the country is to be run, and the people elect representatives to carry out the actual business of running the country.

In theory, at least, this approach is supposed to produce a government that is accountable to the people, and subject to the will of the people, while avoiding the tyranny of the majority to which pure democracy is subject.

This system has worked well for about two centuries, but lately seems to be breaking down. The people are becoming complacent, apathetic, and downright ignorant about the principles on which this country is to be governed, while those we are putting into office are becoming increasingly arrogant, and increasingly unaccountable to those they are supposed to represent.

[MontagK505]

In theory yes, depends on country, mine would require 66% to make such drastic changes in constitution.

It kind of refers back to the lack of absolute moral values here in the real world. If you have a better idea than democracy, feel free to share.

BTW: regarding rape, isn't it a rather new idea that a woman get to pick her own husband, and can say no if she is not in the mood?

If you have a democracy without constitutional limitations you could have:
50.1% get to cannibalize 49.9% I meant gang-rape in a metaphorical way. As in, you can have your wallet “raped” by the majority.

[Toke]

Here in the U.S., we do have a better idea, at least in theory. We are not a democracy, but a “representative republic”. We have a Constitution, and various other documents that lay out specific rules under which the country is to be run, and the people elect representatives to carry out the actual business of running the country.

It sounds a bit like you see the constitution as something god given and eternal. It is not, it changes with the changes in moral values in society. At some point people decided that slavery were wrong and changed it.
(those democracies you refer to not being, do not exist. My country would be a representative monarchy.)

In theory, at least, this approach is supposed to produce a government that is accountable to the people, and subject to the will of the people, while avoiding the tyranny of the majority to which pure democracy is subject.
You got this the wrong way around.
If you want a government that can act as a buffer against sudden shifts in public opinion it must be less accountable to the people. The direct/pure democracy is the most accountable to the people.

And yes, having the people vote directly for laws does give a serious risk of tyranny of the majority. The proposition something, against gays in California is a prime example.

This system has worked well for about two centuries, but lately seems to be breaking down. The people are becoming complacent, apathetic, and downright ignorant about the principles on which this country is to be governed, while those we are putting into office are becoming increasingly arrogant, and increasingly unaccountable to those they are supposed to represent.
I am not sure if there is a specific "In the good old days" fallacy, but I suspect that you are commiting it.

[Tippit]

Again, see Zimbabwe (http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe) for an example of what happens when you increase the money supply, without a corresponding increase in actual wealth.



It's worth pointing out here that even if productivity offsets monetary inflation, it still represents a tax. This tax is no less for the fact that an increased amount of goods and services to be chased by ever more dollars obscures it. A stable price level isn't ideal, stability of nominal spending is (http://www.terry.uga.edu/~selgin/deflation.html). If we accept that stable prices are somehow requisite, then we must accept the role of the central bank and it's arbitrary and non-transparent method of taxation (or something similar).

[Tippit]

Correct, it doesn't directly affect wealth. It can have a massive indirect effect, however, as insufficient money supply chokes economic activity and discourages investment.



Monetary inflation has a direct effect on wealth to the extent that its issuance represents an arbitrary transfer of wealth.



See the great depression for what happened when the money supply is to small.



See the monetary inflation generated by the Fed which led to the rampant stock speculation in the roaring twenties, leading to the crash of 1929, and the subsequent Great Depression when the Fed contracted the money supply by a third.



Now the real question, which of these two is happening now, is inflation running amok or is deflation setting in?

Both. Inflation is running amok in stock and bond markets, which are in bubble-like territory, particularly the US government bond market, as well as food and energy prices. Deflation is running amok in real estate asset prices, as well as other industries affected by the destruction of massive amounts of credit. There is no question if it weren't for the Fed bailouts, many asset prices would have collapsed to their true value, but instead the taxpayer paid (and is paying) to keep them propped up.

[Roboramma]

Of course, I dispute the claim that government can spend its people's money more efficiently and effectively than we can spend out own money. But you yourself just agreed that it can:
I do not dispute the need for some government spending, and some taxation to support it. Basic infrastructure, law enforcement, emergency service,s administration, and such.

But this is rather beside the point. I agree, my only point was that whether or not government is entitled to take that money has nothing to do with whether or not, when it does so, it spends it more effectively than the people that it took it from.
It was your connection between the right of the government to take the money and the effectiveness of it's spending that I took issue with. Do you still claim that if government isn't entitled to do so, that shows that it is less efficient at spending that money for the good of the economy?

[drkitten]

Monetary inflation has a direct effect on wealth to the extent that its issuance represents an arbitrary transfer of wealth.


Yes. Since it in no way represents an arbitrary transfer of wealth, it has no direct effect on wealth whatsoever.



Both. Inflation is running amok in stock and bond markets, which are in bubble-like territory,

Oh, yes, that's right. Stock prices are terribly, terribly inflated, which is why the DJIA has risen a whopping 400 points between this January 2010 and today. Bond prices have actually fallen over that same period.

as well as food and energy prices.

Food price inflation is running a big, big 1.0% over the past twelve months.

This is more examples of how Tippit can find "inflation" where no rational person sees it.

Prices go up, Tippit screams "inflation!" Prices go down, Tippit screams "inflation!" Prices stay the same, Tippit screams "inflation!" The Buffalo Bills lose their first five games, Tippit screams "inflation!"

When you don't know what the word means -- as Tippit demonstrably doesn't -- I guess it's a fun magic word to scare yourself with. Personally, I prefer "hocus pocus," but to each their own.

[daenku32]

Speaking of energy inflation. Remember when oil was $130/barrel in summer of 2008? You know, before all this "massive printing"? Now I think it's going to get back there again. But not because of inflation. Just global demand for the stuff.

[daenku32]

Monetary inflation has a direct effect on wealth to the extent that its issuance represents an arbitrary transfer of wealth.

The money hoarders are really in a pickle when their tactical hoarding doesn't have the intended consequence. It'd be so much easier to corner the market with gold.

[BeAChooser]

The track record for government vs. private spending is really good in most areas.

LOL! And what specifically would those areas be?

The part about rightfully and entitled is decided by law in democracies.

That's right. It's Beggars and Choosers. And now that the beggars almost outnumber the choosers ...

[Toke]

LOL! And what specifically would those areas be?

Is there some disorder or other that prevent people from reading two sentences in a row?The track record for government vs. private spending is really good in most areas.



One glaring obvious area is healthcare, but infrastructure and education is up there too.
Here they are with extra line breaks to make it easier on you.

That's right. It's Beggars and Choosers. And now that the beggars almost outnumber the choosers ...
???
I assume it have some deep meaning to you.

[BeAChooser]

Is there some disorder or other that prevent people from reading two sentences in a row?

I just wanted to be sure those were all your examples of the government doing a good job compared to the private sector. So I thought I'd give you the opportunity to add some. Since you didn't ...

You claim they've done a good job in health care. Then why did Obama state that Medicare was threatening to bankrupt the nation? Why are health costs going up now that Obamacare in in place?

You claim they've done a good job with infrastructure? Then why are roads falling apart all over the country?

You claim they've done a good job with education? Then why do only 50% of the students in the 50 largest public school districts graduate highschool on time?

[Toke]

I just wanted to be sure those were all your examples of the government doing a good job compared to the private sector. So I thought I'd give you the opportunity to add some. Since you didn't ...

I see no reason to use more than a few examples. If you insist, I am sure Drkitten have some to tell you on fire fighting. :D

You claim they've done a good job in health care. Then why did Obama state that Medicare was threatening to bankrupt the nation? Why are health costs going up now that Obamacare in in place?
Try compare to Europe. :D
App. ½ cost.
You claim they've done a good job with infrastructure? Then why are roads falling apart all over the country?
That is clearly because your country is run by conservatives who hate government and will do anything to ruin its smooth opperation. :D
BTW: In my country Obama would belong to a right-wing fringe group.

You claim they've done a good job with education? Then why do only 50% of the students in the 50 largest public school districts graduate highschool on time?
Ditto.

[jimbob]

I just wanted to be sure those were all your examples of the government doing a good job compared to the private sector. So I thought I'd give you the opportunity to add some. Since you didn't ...

I see no reason to use more than a few examples. If you insist, I am sure Drkitten have some to tell you on fire fighting. :D

You claim they've done a good job in health care. Then why did Obama state that Medicare was threatening to bankrupt the nation? Why are health costs going up now that Obamacare in in place?
Try compare to Europe. :D
App. ½ cost.
You claim they've done a good job with infrastructure? Then why are roads falling apart all over the country?
That is clearly because your country is run by conservatives who hate government and will do anything to ruin its smooth opperation. :D
BTW: In my country Obama would belong to a right-wing fringe group.

You claim they've done a good job with education? Then why do only 50% of the students in the 50 largest public school districts graduate highschool on time?
Ditto.

I think it is time to remind BeAChooser of my signature again

OECD healthcare statistics

http://www.oecd.org/document/16/0,3343,en_2649_34631_2085200_1_1_1_1,00.html
2007 Data (latest available)
UK 8.4% of GDP of which 81.7% is state expenditure = 6.86% of GDP from taxes
US 16% of GDP of which 45.4% is state expenditure = 7.264% of GDP from taxes

Medicare is expensive compared to efficiently implemented healthcare.

[BeAChooser]

That is clearly because your country is run by conservatives who hate government and will do anything to ruin its smooth opperation. :D
BTW: In my country Obama would belong to a right-wing fringe group.

Toke, you can't take Denmark's experience and think it would necessarily work in the US just by waving a wand. You're trying to compare apples and oranges systems, or more accurately, apples and bananas. I'm not saying Denmark's system doesn't work (it clearly does), but consider some of the differences between your society and ours which are not differences that could be implimented overnight here in America or changes that democrats would even tolerate for one moment.

For example, do you know that about half as many Danes get a college education as Americans? And in Denmark, central planners decide how many doctors, engineers, lawyers, etc the society needs. More people go into trades. Now if we were honest with ourselves, perhaps a lot of Americans would be happier and more productive after learning a trade than being a community organizer or a lawyer or ethnic studies major. But I honestly don't think most Americans would stand for government forcing individuals into certain occupations rather than others. It goes against everything America is supposed to represent.

And Denmark has a number of other things going for it that we may not be able to duplicate here? Your country is tiny. It's population has been stable at about 5 million people since the 1970s. Ours is anything but stable. Part of your stability comes from the fact that there is little illegal immigration in your country. In fact, Denmark has some of the strictest immigration policies in Europe (which are almost draconian compared to ours). Maybe Danish society works because you don't have illegals abusing your system like we now do and because Danes feel their government is doing the one job it is really supposed to do … protect them from foreign invasion.

Another major difference is that your populace is also ethnically homogenous. In fact, almost 91% of your populace are native born Danes. You speak a common language. You share a common heritage and culture. And there is basically one religion … Protestant. Racism is a word you rarely hear. None of those things applies to the US situation. Democrats seem intent on destroying whatever common cultural bonds and language we still have. To achieve your success, perhaps we'd have to become more like you in terms of homogenuity, but how would that be possible? Democrats (and, to be honest, many/most(?) republicans) would fight such changes.

Here's another major difference. The Danish government is a constitutional monarchy. And the King is not just a figurehead. To be like you, would we literally have to annoint Obama as our King? And overall there is actually much less bureaucracy than in the US. Your's is a society based on consensus, not lawyers. Do you know that the total number of lawyers in Denmark was 4900 in 2006. That's, per capita, 1 per 1000. That's per capita about one-fourth the number of lawyers in the US. What are we supposed to do to become like you overnight? Impliment Shakespeare's solution? And the fact is even that wouldn't bring consensus. The fact is that you have traditions and cultural aspects that allow you to reach consensus on decisions in a far less divisive manner. Danish unions and businesses actually work together instead of constantly being adversarial. That stems from LONG cultural traditions. We have nothing equivalent in the US.

Danish society has no social status. Lawyers are … well … no better than garbagemen. They live right next to one another. You Danes really mean it when you say "Jantelov": you're no better than anyone else. Like it or not, we do have social status in the US. It's part of what *we* are. And you aren't going to change that overnight. And the change the democrats are pushing isn't aimed at eliminating social status. They are caught up in it just as much, if not more than republicans.

Danes also aren't particularly materialistic. Your expectations are more modest. They best be modest given the lower disposable income (courtesy of the lower per capita GDP and the much higher tax rates). You have learned to live with smaller houses and a higher cost for everyday items (e.g., gas is over $8 a gallon). In contrast, America was founded on materialism. We aren't going to change that overnight. Nor perhaps should we. Afterall, that materialism has led the US to a much higher per capita GDP than most countries. For example, the US has a per capita (PPP) GDP of $46,000. Denmarks per capita GDP (PPP) is only about $37,000. That's enough to pay whatever delta there was/is between your health care costs and ours, and still have some money left over to do something else with. You Danes, for all the wonders of your system, have far less purchasing power than we do. If we had some of your advantages and policies, ours might be even higher than that. But there would be tradeoffs in that.

Here's a thought. If you go to the Danish government's website, it proclaims “the present configuration of the country is the result of 400 years of forced relinquishments of land, surrenders and lost battles." Maybe being weaker is the key to your success? Or is that the expectation thing again? Americans expect more of their country achievement-wise. Ironic that we don't expect more of our government, however. Or at least democrats don't. But does that mean we should stop trying to achieve great things? The world would be a lot different now had American's not *achieved*.

And there one more very important difference. You, Toke, may be a hardcore socialist, but most Danes are VERY capitalistic and business oriented. In that sense, they are not at all like most democrats in America. Denmark has relatively few rules on businesses in contrast to what the democrats are establishing here in the US. Danes embrace free trade, competition and there is little government ownership or involvement in business. Just the opposite of what Obama's administration is pushing. In fact, if we could learn one lesson from the Denmark, it would be "leave the economy alone". According to the OECD, Denmark has the least amount of government red tape and the shortest start-up time for new businesses in the EU. There is no minimum wage (which democrats are pushing all the time here in the US). And you Danes don't have our Social Security nightmare (lucky you). You actually contribute to individual accounts that move with you from job to job ... that you own. And as a result, you tend to retire making about 87% of your income. Where as we are just stealing from Paul to pay Peter and getting further and further in debt.

Do you know (of course you do ;)) that 30% of Danes change jobs EVERY YEAR? Most of those are voluntary changes for better jobs. The Danes, as a people, are culturally far more upwardly mobile than we are (or for that matter, other European countries). I actually admire Danes because they emphasize individualism. We just seem to give it lip service nowadays. Especially democrats.

Yes, Denmark has a very large welfare support system but you know that Danish welfare benefits are limited. My understanding is that a Dane can exhaust his lifetime allowance in less than four years so most of you are strongly motivated to find a job and work. That's a far cry from what democrats want to do here in the United States ... make people life long dependents of the government ... and therefore democrats.

[Toke]

I am down with the cold but will try to respond to what you get right and wrong in this post. (It is not quite as fairy tale as you may think)
Toke, you can't take Denmark's experience and think it would necessarily work in the US just by waving a wand. You're trying to compare apples and oranges systems, or more accurately, apples and bananas. I'm not saying Denmark's system doesn't work (it clearly does), but consider some of the differences between your society and ours which are not differences that could be implimented overnight here in America or changes that democrats would even tolerate for one moment.

For example, do you know that about half as many Danes get a college education as Americans? And in Denmark, central planners decide how many doctors, engineers, lawyers, etc the society needs. More people go into trades. Now if we were honest with ourselves, perhaps a lot of Americans would be happier and more productive after learning a trade than being a community organizer or a lawyer or ethnic studies major. But I honestly don't think most Americans would stand for government forcing individuals into certain occupations rather than others. It goes against everything America is supposed to represent.

I am not sure how the allocation of college funds are made, I assume someone make a guess of how many of each are needed, then modify looking at number of applications last year.
There might not be that much difference in flexibility from you, American universities cannot double capacity from one year to another either.

And Denmark has a number of other things going for it that we may not be able to duplicate here? Your country is tiny. It's population has been stable at about 5 million people since the 1970s. Ours is anything but stable. Part of your stability comes from the fact that there is little illegal immigration in your country. In fact, Denmark has some of the strictest immigration policies in Europe (which are almost draconian compared to ours). Maybe Danish society works because you don't have illegals abusing your system like we now do and because Danes feel their government is doing the one job it is really supposed to do … protect them from foreign invasion.
We have quite a lot of arab/african immigrants, with a very low employment rate. I believe your latin americans are doing better.

Another major difference is that your populace is also ethnically homogenous. In fact, almost 91% of your populace are native born Danes. You speak a common language. You share a common heritage and culture. And there is basically one religion … Protestant.
More like none.
Racism is a word you rarely hear.
You have obviously never heard of the "Danish peoples party", a major support for the current government.
None of those things applies to the US situation. Democrats seem intent on destroying whatever common cultural bonds and language we still have. To achieve your success, perhaps we'd have to become more like you in terms of homogenuity, but how would that be possible? Democrats (and, to be honest, many/most(?) republicans) would fight such changes.
You may well be less homogeneous, and that is likely to be a disadvantage in getting a population to feel as one. As for the democrats being evil, I suspect you of having some bias.
Here's another major difference. The Danish government is a constitutional monarchy. And the King is not just a figurehead. To be like you, would we literally have to annoint Obama as our King?
Our queen is just a figurehead, unlike your president she have no real power.
And overall there is actually much less bureaucracy than in the US. Your's is a society based on consensus, not lawyers. Do you know that the total number of lawyers in Denmark was 4900 in 2006. That's, per capita, 1 per 1000. That's per capita about one-fourth the number of lawyers in the US. What are we supposed to do to become like you overnight? Impliment Shakespeare's solution? And the fact is even that wouldn't bring consensus. The fact is that you have traditions and cultural aspects that allow you to reach consensus on decisions in a far less divisive manner.
American litigativeness is a standing joke here, I have no idea what to do about it.
Danish unions and businesses actually work together instead of constantly being adversarial. That stems from LONG cultural traditions. We have nothing equivalent in the US.
If ours co-operate i would hate to see the adversarial ones. :)
Yes, there might be a higher level of mutual trust.
Some economist have written a thick book on how trust can make a country run a lot smoother. I recall the name as Francis Fucuyama or such.
Danish society has no social status. Lawyers are … well … no better than garbagemen. They live right next to one another. You Danes really mean it when you say "Jantelov": you're no better than anyone else. Like it or not, we do have social status in the US. It's part of what *we* are. And you aren't going to change that overnight. And the change the democrats are pushing isn't aimed at eliminating social status. They are caught up in it just as much, if not more than republicans.
We do have the most equal society in the world, "Ivor the engineer" had some links to how that benefits a society.
Danes also aren't particularly materialistic. Your expectations are more modest. They best be modest given the lower disposable income (courtesy of the lower per capita GDP and the much higher tax rates). You have learned to live with smaller houses and a higher cost for everyday items (e.g., gas is over $8 a gallon).
I guess most people have more realistic expectations of their life, and will not be too depressed if they end up as ordinary people.
In contrast, America was founded on materialism. We aren't going to change that overnight. Nor perhaps should we. Afterall, that materialism has led the US to a much higher per capita GDP than most countries.
I see no direct link between the materialism and the GDP.
For example, the US has a per capita (PPP) GDP of $46,000. Denmarks per capita GDP (PPP) is only about $37,000. That's enough to pay whatever delta there was/is between your health care costs and ours, and still have some money left over to do something else with.
You Danes, for all the wonders of your system, have far less purchasing power than we do. If we had some of your advantages and policies, ours might be even higher than that. But there would be tradeoffs in that.
Yes, a well run healthcare system would give you much more disposable income.
Here's a thought. If you go to the Danish government's website, it proclaims “the present configuration of the country is the result of 400 years of forced relinquishments of land, surrenders and lost battles." Maybe being weaker is the key to your success? Or is that the expectation thing again? Americans expect more of their country achievement-wise. Ironic that we don't expect more of our government, however. Or at least democrats don't. But does that mean we should stop trying to achieve great things? The world would be a lot different now had American's not *achieved*.
I had the distinct impression that it was the republicans that hated government the most and wanted to get itś hands off as much as possible?

And there one more very important difference. You, Toke, may be a hardcore socialist, but most Danes are VERY capitalistic and business oriented. In that sense, they are not at all like most democrats in America. Denmark has relatively few rules on businesses in contrast to what the democrats are establishing here in the US. Danes embrace free trade, competition and there is little government ownership or involvement in business. Just the opposite of what Obama's administration is pushing. In fact, if we could learn one lesson from the Denmark, it would be "leave the economy alone". According to the OECD, Denmark has the least amount of government red tape and the shortest start-up time for new businesses in the EU.
You read me wrong here, I am very much in favour of letting people start their own business. My problem comes if a business gets big enough to start influencing the government. As in buying their own laws and getting their own tax cuts.
There is no minimum wage (which democrats are pushing all the time here in the US). And you Danes don't have our Social Security nightmare (lucky you). You actually contribute to individual accounts that move with you from job to job ... that you own. And as a result, you tend to retire making about 87% of your income. Where as we are just stealing from Paul to pay Peter and getting further and further in debt.
I do not know how you retirement system works, ours is pretty complicated, but does work fairly well.
Our minimum wage is app. 100Kr ($15-20)

Do you know (of course you do :wink:) that 30% of Danes change jobs EVERY YEAR? Most of those are voluntary changes for better jobs. The Danes, as a people, are culturally far more upwardly mobile than we are (or for that matter, other European countries). I actually admire Danes because they emphasize individualism. We just seem to give it lip service nowadays. Especially democrats.

One of the reasons for the comparative ease of job change is that we do not have to worry about retaining our health care insurance.
I think you got the individualism part wrong, we are more into getting group co-orporation to work.
Yes, Denmark has a very large welfare support system but you know that Danish welfare benefits are limited. My understanding is that a Dane can exhaust his lifetime allowance in less than four years so most of you are strongly motivated to find a job and work. That's a far cry from what democrats want to do here in the United States ... make people life long dependents of the government ... and therefore democrats.
I am just starting to learn about our unemployment benefits, the hard way, the one I have been paying to since I started working.

Yes, there are large difference in our societies, and solutions from one will not necessarily work well in another. That does not mean that others experiences can be completely disregarded, just that they may need some adaption.

[BeAChooser]

We have quite a lot of arab/african immigrants, with a very low employment rate.

But, still, you don't have anywhere the number of illegal immigrants that we do. In the US, they constitute 3-6% of the population. Denmark in 2009 had 298,000 foreign born in the population, including legal immigrants. That's about 0.5% in total and the illegal component is only believed to be 1-5 thousand (http://files.nowhereland.info/654.pdf ).


And there is basically one religion … Protestant.

More like none.

Maybe you are only seeing Denmark as you'd like to see it.

http://en.wikipedia.org/wiki/Denmark#Religion


According to official statistics from January 2010, 80.9% of the population of Denmark are members of the Danish National Church (Den Danske Folkekirke), a Lutheran church that was made the official state religion by the Constitution of Denmark. … snip … According to the most recent Eurobarometer Poll 2005, 31% of Danish citizens responded that "they believe there is a God"


:D


American litigativeness is a standing joke here, I have no idea what to do about it.

Neither do we …

If ours co-operate i would hate to see the adversarial ones.

Just look at the US …

I see no direct link between the materialism and the GDP.

Being a socialist, you wouldn't. :D

Yes, a well run healthcare system would give you much more disposable income.

No doubt, but I'm not sure we should do what the Danes have done since that will take us down a socialist path that might affect our GDP per capita, and thus our disposable income.

And getting to your health care savings (which is presumably how you define "well run") would require many changes that just may not be possible in the US. For example, the average income of doctors in the US is about $130,000. In Denmark it is about $50,000. Without reducing doctor salariers and the quality of doctors, how are we to realize the cost savings that Denmark boasts?

And right now we provide free health care to illegal aliens. So upwards of 6 percent of our populace is getting free healthcare. That's a cost you don't have to deal with. Should we do what you do? Institute harsh illegal immigration laws and enforce them? How are we to get where you are without that?

Now our life expectancy is actually higher than yours. Should we save some money and allow ours to drop to yours? And do away with 3/4ths of lawyers … who drive up the cost of our system? And for all the problems these changes would entail for our system, would there really be much gain in health or disposable income down the road?

My problem comes if a business gets big enough to start influencing the government. As in buying their own laws and getting their own tax cuts.

But two of Denmark's companies (shipper A.P. Moller-Maersk and the Danske Bank) are on the Fortune Global 500 (http://money.cnn.com/magazines/fortune/global500/2010/countries/Denmark.html ). Combined they employ about 150,000 people and have revenue of about $80 billion in an economy with a GDP of $310 billion. That's almost 1/4th the size of the overall economy. In the US, there are 139 Fortune Global 500 companies (http://money.cnn.com/magazines/fortune/global500/2010/countries/US.html ) with a total revenue of a little over a 1/3rd the overall economy. According to Wikipedia, large corporations employ about 38% of the entire US workforce. The 30 million small businesses in the US account for 64% of net new jobs and 70% of jobs created in the last decade were by small businesses. I'd hazard that large companies employ about the same portion of the Danish workforce and probably have just as much influence on your government. You just have a long tradition instead of lots of lawyers.

Our minimum wage is app. 100Kr ($15-20)

Actually, according to http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country you have no government edicted minimum wage, as we do in the US. You have a wage negotiated by unions and employers.

One of the reasons for the comparative ease of job change is that we do not have to worry about retaining our health care insurance.

But there have been solutions offered to that in the US that wouldn't involve Obamacare. Here's the way democrats in the US see this issue:

http://www.cnsnews.com/news/article/65950


House Speaker Nancy Pelosi said this week that thanks to the new health-care reform law, musicians and other creative types could quit their jobs and focus on developing their talents because taxpayers would fund their health care coverage.


Obamacare will do wonders for aspiring rappers. ;)

I think you got the individualism part wrong, we are more into getting group co-orporation to work.

Ok. But again, that's a cultural shift that will take more than passing some legislation to make work here in America.

Yes, there are large difference in our societies, and solutions from one will not necessarily work well in another. That does not mean that others experiences can be completely disregarded, just that they may need some adaption.

And no one on the anti-Obamacare side has suggested completely disregarding good ideas in other countries. What has been suggested is that we let our system EVOLVE into a better one, rather than have a small group of socialist lawyers, many of whom have never worked an honest day in their life, force a revolution overnight that we collectively didn't want, that didn't look very workable from the very beginning, and that democrats had to hide the details of in order to get it passed. :D