California's Economy

[TraneWreck]

Split from here (http://forums.randi.org/showthread.php?t=211433).

You can't really blame the poor congressman. He's from California, which is desperate to find alternative revenue streams to fund its alternative lifestyle.

Yes, California proves quite clearly that anti-tax hysteria is a terrible way to run a government.

[theprestige]

Yes, California proves quite clearly that anti-tax hysteria is a terrible way to run a government.

California proves quite clearly that failing to anticipate bust phases, overspending during boom phases, and not maintaining a substantial contingency fund, is a terrible way to run a government.

What you call anti-tax hysteria is simply some Californians noticing that the same people who irresponsibly overspent us into this mess are now irresponsibly hoping to tax us out of it.

TraneWreck, if you'd shown any responsibility in spending and saving in the California during the 90s and 00s, I'd consider giving you the benefit of the doubt about spending and saving now, and I'd consider approving your proposed tax increases. But you haven't, so I don't.

[TraneWreck]

California proves quite clearly that failing to anticipate bust phases, overspending during boom phases, and not maintaining a substantial contingency fund, is a terrible way to run a government.

What you call anti-tax hysteria is simply some Californians noticing that the same people who irresponsibly overspent us into this mess are now irresponsibly hoping to tax us out of it.

TraneWreck, if you'd shown any responsibility in spending and saving in the California during the 90s and 00s, I'd consider giving you the benefit of the doubt about spending and saving now, and I'd consider approving your proposed tax increases. But you haven't, so I don't.

California shows a number of things:

1) If you adopt a referendum system for everything, people will always vote to cut taxes and never vote to cut programs.
2) When the state government provides the best universities in the world free to its citizens, then the federal government hires every engineer that graduates for two decades and puts them to work in Silicon valley, the state is going to boom.
3) When people buy into anti-tax, anti-government backlash in a place that's built on tax dollars creating a great social structure and federal spending driving a huge portion of the economy, a place can go into the tank pretty damn quickly.

The recall election that led to the Governator was one of the most shameful episodes in recent American politics, but your rarely hear anyone discuss it. They deregulated the energy industry and allowed Enron to basically run the place, extorting whatever payments they wanted.

The best social structure in the country was brought down by the same deregulation, anti-government, anti-tax nonsense that we see at the federal level now. California is a tragic story, and the Republicans seem intent on bringing that to the rest of the country.

[eeyore1954]

California shows a number of things:

1) If you adopt a referendum system for everything, people will always vote to cut taxes and never vote to cut programs.2) When the state government provides the best universities in the world free to its citizens, then the federal government hires every engineer that graduates for two decades and puts them to work in Silicon valley, the state is going to boom.
3) When people buy into anti-tax, anti-government backlash in a place that's built on tax dollars creating a great social structure and federal spending driving a huge portion of the economy, a place can go into the tank pretty damn quickly.

The recall election that led to the Governator was one of the most shameful episodes in recent American politics, but your rarely hear anyone discuss it. They deregulated the energy industry and allowed Enron to basically run the place, extorting whatever payments they wanted.

The best social structure in the country was brought down by the same deregulation, anti-government, anti-tax nonsense that we see at the federal level now. California is a tragic story, and the Republicans seem intent on bringing that to the rest of the country.

Is that why California has one of the highest income tax rates in the country now.

$0+ 1%
$7,168+ 2%
$16,994+ 4%
$26,821+ 6%
$37,233+ 8%
$47,055+ 10%
$1,000,000+ 11%

Checked the rates in 1999 and the top two brackets now have a higher rates .

So I don't see how this goes along with what you said.

To me California shows along with Nevada that has no income tax that those that are booming the most have farther to fall when the cycle turns against regardless of the tax structure.

[Ziggurat]

1) If you adopt a referendum system for everything, people will always vote to cut taxes and never vote to cut programs.

As already mentioned, California is a high-tax state. So the tax side of your claim seems rather... counter-factual. There is, however, a serious problem in regards to spending mandates from the referendum system (like that ridiculous stem cell (http://en.wikipedia.org/wiki/California_Proposition_71_%282004%29) thing)

2) When the state government provides the best universities in the world free to its citizens, then the federal government hires every engineer that graduates for two decades and puts them to work in Silicon valley, the state is going to boom.

Is this supposed to be a description of what happened to create California's previously thriving economy? Because if so, it's also... counterfactual.

The recall election that led to the Governator was one of the most shameful episodes in recent American politics, but your rarely hear anyone discuss it. They deregulated the energy industry and allowed Enron to basically run the place, extorting whatever payments they wanted.

Ummm... what?

The recall election was driven in no small part because of the view that Davis handled the electricity crisis poorly (ie, he didn't come down on Enron hard enough). But the recall election didn't cause the electricity crisis in any way. I see no evidence that it even prolonged it. In fact, I can't even tell what the hell your point is here.

The best social structure in the country was brought down by the same deregulation, anti-government, anti-tax nonsense that we see at the federal level now.

California is so bloody far from a low-regulation, low-tax, anti-government state that it's hard to envision how you even thought this argument would ever fly. Your description isn't even recognizable as being of the golden state.

[WildCat]

California is so bloody far from a low-regulation, low-tax, anti-government state that it's hard to envision how you even thought this argument would ever fly. Your description isn't even recognizable as being of the golden state.
And I'll point out that TraneWreck's state, Illinois, is also high-tax, high-spend and high-reg and along with California make the 2 states in the worst financial state in the whole USA.

It seems, shockingly enough, that you can't tax and spend and regulate your way to prosperity.

[TraneWreck]

As already mentioned, California is a high-tax state. So the tax side of your claim seems rather... counter-factual. There is, however, a serious problem in regards to spending mandates from the referendum system (like that ridiculous stem cell (http://en.wikipedia.org/wiki/California_Proposition_71_%282004%29) thing)

The tax is high in relation to the other states, but that's relatively meaningless when determining how a budget is balanced. California has suffered recently from the demand to cut programs in order to lower taxes. It has led to a terrible downward spiral, and the characteristics that made California such an amazing place are now completely gone.

The problem is that no one in a referendum system votes for tax increases, and they also never vote to cut spending. This results in budgetary woes, and conservatives love to use such situations as an excuse to cut programs in order to lower taxes on the wealthy. It's been going on in California for a while, and the teabaggers have tried to federalize this approach (it's always the goal of the right, but that's the latest incarnation).



Is this supposed to be a description of what happened to create California's previously thriving economy? Because if so, it's also... counterfactual.

Yes, that's very much what drove California's boom after WWII. Free college and the government hiring every engineer graduate they could produce.

I'm not entirely sure what you think "counterfactual" means. That actually happened.



Ummm... what?

The recall election was driven in no small part because of the view that Davis handled the electricity crisis poorly (ie, he didn't come down on Enron hard enough). But the recall election didn't cause the electricity crisis in any way. I see no evidence that it even prolonged it. In fact, I can't even tell what the hell your point is here.

First, the revelations about Enron ("screwing over grandma" and all that) came out after the recall election durning the various court cases. And at no point did I say the recall caused the energy crisis, quite the opposite.

Deregulation led to massive fraud. The massive fraud was used as a reason to recall Grey Davis, who was then replaced by a guy running on a less tax, less regulation platform.

Ironically, one of the big issues in the recall was an increase in the vehicle tax:

With the recall election days away, car-obsessed Californians will be required to pay three times more to license their vehicles, starting today.
The increase will ensure that Californians pay among the highest car taxes in the United States. And that has Pasadena resident Percy Kosoi fuming.

"It's ridiculous," Kosoi said. "If you're going to raise it, raise it a little, but don't triple it."
http://newsmine.org/content.php?ol=cabal-elite/w-administration/schwarzenegger/recall-election/car-tax-signed-by-pete-wilson.txt

Of course, the car tax cut was passed by Davis' predecessor, Pete Wilson. The bill contained an automatic trigger to have it jump 2% under certain budgetary conditions. After the tech bubble burst, California was in that situation.

So the electorate blamed Davis for the jump in taxes that he wasn't responsible for (but had to happen to balance the budget), and Arnold made hay from this. In fact, that was one his his first acts:

Arnold Schwarzenegger wasted little time Monday getting down to his first order of business: Repealing the immensely unpopular tripling of the car tax.
News of his first action as California governor was greeted by cheers from car dealers, who have seen business dip sharply under higher rates, but by jeers from city officials who viewed the loss of tax revenue with trepidation.
"During the campaign, I promised on Day One to repeal the car tax increase," Schwarzenegger said in a prepared statement. "Today, I am making good on that promise."
http://www.nctimes.com/news/local/article_bd2752a1-52fc-5b7d-8aa1-381be17c7afe.html

Of course, Arnold ended up signing a budget that contained the very same vehicle licensing tax a couple of years ago.



California is so bloody far from a low-regulation, low-tax, anti-government state that it's hard to envision how you even thought this argument would ever fly. Your description isn't even recognizable as being of the golden state.

For some strange reason you're evaluating the claim relative to other states. That makes little sense. I never argued that California was a low tax, low regulation state compared to other states, I argued that their budgetary woes have been exacerbated by right wing myths of lower taxation and deregulation.

Deregulation under Wilson led to Enron's fraud. The fraud, in conjunction with the budgetary fallout from the tech bubble bursting, led to the recall.

And I'll point out that TraneWreck's state, Illinois, is also high-tax, high-spend and high-reg and along with California make the 2 states in the worst financial state in the whole USA.

It seems, shockingly enough, that you can't tax and spend and regulate your way to prosperity.

California's debt really is that exceptional as a % of GDP. It ranks right in the middle, 25th:

http://www.thedailybeast.com/galleries/1740/1/?redirectURL=http://www.thedailybeast.com/blogs-and-stories/2010-08-16/ranking-states-with-most-debt/

The states' debt is a result of the recent fiscal crisis. That crisis was caused by deregulation that allowed insane risk to occur on the housing market. Now people are trying to pretend like the deficits are what caused the crisis, when they're the result of the crisis.

[TraneWreck]

Is that why California has one of the highest income tax rates in the country now.

$0+ 1%
$7,168+ 2%
$16,994+ 4%
$26,821+ 6%
$37,233+ 8%
$47,055+ 10%
$1,000,000+ 11%

Checked the rates in 1999 and the top two brackets now have a higher rates .

So I don't see how this goes along with what you said.

To me California shows along with Nevada that has no income tax that those that are booming the most have farther to fall when the cycle turns against regardless of the tax structure.

Again, that's just an irrelevant comparison. I never argued about California's tax rate compared to other states. What has happened in California, as in the rest of the country, is that deficits caused by the financial crisis are being used as an excuse to cut taxes on the wealthy.

Arnold tried it, it made the budgetary picture worse, so he ended up signing into law the very tax increases that he ran against in the recall.

The larger story, however, is a failure on the federal level. The austerity measures that the states have been forced into have negated stimulus on the federal level. This has led to massive cuts in state jobs, which is keeping unemployment high.

The states should have been bailed out, but we need to do it now, anyway. The collective state budget shortfalls are a fraction of the cost of bailing out the failed financial institutions.

[Ziggurat]

The tax is high in relation to the other states, but that's relatively meaningless when determining how a budget is balanced.

No, actually, it isn't. Businesses are leaving California for other states, because of the tax and regulatory environment. I really hope I don't need to tell you why businesses leaving California might impact the state budget.

California has suffered recently from the demand to cut programs in order to lower taxes.

They need to be lower in order to remain competitive with other states, which will draw away both businesses and workers. Revenue drops when workers and businesses leave the state. But state costs don't drop much. For example, pensions need to be paid no matter where a retiree is, or how many people are left in the state.

The problem is that no one in a referendum system votes for tax increases, and they also never vote to cut spending.

They do worse: they vote to increase spending.

That's the heart of the problem, TW. The state's spending is simply far too high. They CANNOT raise taxes to close the gap, because they'll just loose to many taxpayers. They have to cut spending if they want to balance their budget.

Yes, that's very much what drove California's boom after WWII. Free college and the government hiring every engineer graduate they could produce.

Yeah, um... neither of those things happened. The UC system was cheap, but it was never free. And the government hired a lot of people, but it sure as hell didn't hire everyone. Not to mention the economy really went boom because of private companies. You can try to claim that those companies took off because of government investment, but they also did so in an environment where California was not at a severe competitive disadvantage compared to other parts of the country, like it is now.

I'm not entirely sure what you think "counterfactual" means. That actually happened.

No, actually, it didn't.

[TraneWreck]

No, actually, it isn't. Businesses are leaving California for other states, because of the tax and regulatory environment. I really hope I don't need to tell you why businesses leaving California might impact the state budget.

They need to be lower in order to remain competitive with other states, which will draw away both businesses and workers. Revenue drops when workers and businesses leave the state. But state costs don't drop much. For example, pensions need to be paid no matter where a retiree is, or how many people are left in the state.

And yet when they tried to lower taxes and pass deregulatory measures, the budget just went farther into the tank.

I'd be curious to hear when you think these nasty taxes and regulations were passed. The tech bubble burst in California right after an administration that cut taxes and deregulated. Arnold cut and deregulated until it wasn't possible to do anymore.

Show me when the taxes were increased and how it affected the economy. I don't buy your causal story without substantiation.



They do worse: they vote to increase spending.

That's the heart of the problem, TW. The state's spending is simply far too high. They CANNOT raise taxes to close the gap, because they'll just loose to many taxpayers. They have to cut spending if they want to balance their budget.

I don't disagree with that. The current budget gap is the result of a fiscal crisis that will not be closed until the economy recovers.



Yeah, um... neither of those things happened. The UC system was cheap, but it was never free. And the government hired a lot of people, but it sure as hell didn't hire everyone. Not to mention the economy really went boom because of private companies. You can try to claim that those companies took off because of government investment, but they also did so in an environment where California was not at a severe competitive disadvantage compared to other parts of the country, like it is now.

The California Master Plan for Higher Education of 1960 kept the University of California tuition free. There were some incidental charges, but tuition was not part of it.

The California Master Plan for Higher
Education affirmed that UC should remain tuition-
free (a widely held view at the time) but allowed that
fees could be charged for costs not related to
instruction. It also stipulated that fee charges should
be as low as possible, and that program quality
should be maintained.

http://www.universityofcalifornia.edu/news/documents/facts_fee_history_110810.pdf

Around that period, the government was basically hiring any engineer that graduated from that system to work on military technology. Additionally, when the private firms started exploding, they benefited from both the technology developed through government funding as well as the populace that was educated tuition-free.

This is, by the way, the model that China and India are following to basically eliminate the higher ed tech gap between our countries.



No, actually, it didn't.

Yeah, it really did.

California's post war explosion occurred because of very conscious social engineering. They created the strongest middle class in the world, and became the most impressive economy in the world. Destroying those advantages won't magically lead to improvement just because the tax rate is low.

[Ziggurat]

And yet when they tried to lower taxes and pass deregulatory measures, the budget just went farther into the tank.

The majority of their economic problems are not from tax rates being too low.

I'd be curious to hear when you think these nasty taxes and regulations were passed. The tech bubble burst in California right after an administration that cut taxes and deregulated. Arnold cut and deregulated until it wasn't possible to do anymore.

Um... no.

I'm not sure what you think "regulations" means, but California still has very burdensome (http://www.catc.ca.gov/programs/rtp/materials/SBA_study_on_regulatory_costs.pdf) regulatory environment. They've got VERY strict environmental regulations, lots and lots of land-use regulations, health insurance regulations (which increase prices), etc.

In fact, the only specific deregulatory effort you pointed to was electricity. And even that was only about the sale of electricity. One of the reasons Enron was able to play so many games with the electricity crisis was that California was short on generating capacity, because new power plants hadn't been built anywhere in the state in a hell of a long time. And burdensome environmental regulations were a very big part of that.

Show me when the taxes were increased

I didn't say they were increased. I said they were high. And yes, in comparison to other states IS the relevant metric, because businesses can and do leave states because of tax rates and regulatory burden.

And if you want an illustration of the impact of these sort of differentials, try pricing a one-way U-Haul trailer rental from Los Angeles to Houston, versus Houston to LA. Currently it's $1021 for the former versus $657 for the latter. Can you figure out why there's such a big discrepancy?

I don't disagree with that. The current budget gap is the result of a fiscal crisis that will not be closed until the economy recovers.

And it won't be closed even then unless they cut spending.

The California Master Plan for Higher Education of 1960 kept the University of California tuition free. There were some incidental charges, but tuition was not part of it.

You're right, the cost wasn't tuition.

But I'm not sure why you think that's even relevant. California doesn't have the money to run the UC system that way even if it wanted to. And it would also require a radical overhaul of the entire university, including a major downsizing, which simply isn't going to happen. Higher education is currently in the middle of a bubble that's going to burst at some point. It's not a very good investment for a hell of a lot of people. Making it "free" (which really just means making California taxpayers foot the bill) will only further inflate that bubble unless you seriously cut the number of students attending.

And what would that even accomplish? The good students, the ones you need graduating with science and engineering degrees, are mostly from the middle and upper classes, and can get through the system as it is. Making it free won't expand the pool of good students very much. And it's not like California isn't graduating enough people in total. It's rather the reverse, and not just in California: we're pushing too many people through college, and a lot of them simply will never benefit from that education enough to justify the costs. Higher education right now is a demonstration of the failure of social engineering.

And the failure begins much earlier than college, in fact. The primary schools (which are free) are graduating lots of people without the prerequisite skills to take advantage of college. Making college free to them won't help. Nor will increasing the amount of money spent on primary education, because a shortage of funding isn't the problem. Funding has been steadily climbing for decades, with nothing to show for it.

Around that period, the government was basically hiring any engineer that graduated from that system to work on military technology.

Yeah, THAT will solve our economic problems: ramp up military spending!

Why the hell do you think the rest of the country should pay for a massive increase in military spending to bail out California? Seriously, what's the logic here?

[KoihimeNakamura]

And what would that even accomplish? The good students, the ones you need graduating with science and engineering degrees, are mostly from the middle and upper classes, and can get through the system as it is. Making it free won't expand the pool of good students very much. And it's not like California isn't graduating enough people in total. It's rather the reverse, and not just in California: we're pushing too many people through college, and a lot of them simply will never benefit from that education enough to justify the costs. Higher education right now is a demonstration of the failure of social engineering.

And the failure begins much earlier than college, in fact. The primary schools (which are free) are graduating lots of people without the prerequisite skills to take advantage of college. Making college free to them won't help. Nor will increasing the amount of money spent on primary education, because a shortage of funding isn't the problem. Funding has been steadily climbing for decades, with nothing to show for it.


Citation needed. Several citations.

[TraneWreck]

The majority of their economic problems are not from tax rates being too low.

Did I ever make that claim? The majority of their economic problems, like the rest of the country, are a result of the fiscal crisis.

Once again, California's budget problems aren't that dire relative to other states. They rank 25th in terms of deficit as a % of GDP. You want to argue that 24 states are crappy because of their tax rate?

Let's check out that sky high tax rate, as well:

The average American pays 11.23% of their income in state and local taxes; the average Californian pays 11.73%.
http://www.orangejuiceblog.com/2010/12/the-myth-of-a-business-exodus-from-california/



Um... no.

I'm not sure what you think "regulations" means, but California still has very burdensome (http://www.catc.ca.gov/programs/rtp/materials/SBA_study_on_regulatory_costs.pdf) regulatory environment. They've got VERY strict environmental regulations, lots and lots of land-use regulations, health insurance regulations (which increase prices), etc.

In fact, the only specific deregulatory effort you pointed to was electricity. And even that was only about the sale of electricity. One of the reasons Enron was able to play so many games with the electricity crisis was that California was short on generating capacity, because new power plants hadn't been built anywhere in the state in a hell of a long time. And burdensome environmental regulations were a very big part of that.

I'd like some evidence for that claim. What are those regulations restricting energy production? Tell me what regulation you'd like to eliminate.

Texas is a low regulation low tax state and California has about 7.5 times the number of biotech companies, why? If this is the key issue, why is California still a preferred destination for businesses?


I didn't say they were increased. I said they were high. And yes, in comparison to other states IS the relevant metric, because businesses can and do leave states because of tax rates and regulatory burden.

And if you want an illustration of the impact of these sort of differentials, try pricing a one-way U-Haul trailer rental from Los Angeles to Houston, versus Houston to LA. Currently it's $1021 for the former versus $657 for the latter. Can you figure out why there's such a big discrepancy?

Yet this isn't happening. This is one of the great Republican myths.

The source of this misunderstanding is how corporate taxes work. What do corporations pay taxes on? Their profits. What company flees a state leaving profits behind? If they don't make money, they don't pay taxes.

I would be curious if you can provide any evidence of that claim. Show some businesses that have left California because of high taxes.

This research updates with two additional years of data (2005 and 2006) PPIC’s 2007 report Business Location Decisions and Employment Dynamics in California. Relying on the most recent data, this analysis reconfirms that business relocation—the movement of business establishments from one state to another—accounts for a very small share of California’s employment fluctuations. In fact, relocation accounts for a smaller share of job gains and losses in California than in most other states, in part because most California businesses lie far from the border of neighboring states.

[...]

Few businesses move into or out of California. From 1992 through 2006, about 16,000 jobs annually moved into California and about 25,000 jobs annually moved out of California. The annual net employment change in California due to relocation—a loss of about 9,000 jobs—represents only 0.05 percent of California’s 18 million jobs
http://www.ppic.org/content/pubs/report/R_910JKR.pdf

If a business is paying taxes, that means they're making money. If they vacate their money-making operation for a lower tax haven, some other business will gladly step in to take it's place.

This myth is like the "rich people will stop working if the tax rate is too high" canard. It just ain't so.



And it won't be closed even then unless they cut spending.

Prove it. Again, California's budget situation isn't that dire as a % of GDP compared to the nation as a whole. Provide that analysis. Show the expected GDP of California after the recovery and then show the receipt/outlay comparison. I don't believe you.

In California, spending as a % of GDP is at it's lowest level since the early 1970's. The economic problems are a result of the economic crisis. The rest is just right wing fear-mongering.



And what would that even accomplish? The good students, the ones you need graduating with science and engineering degrees, are mostly from the middle and upper classes, and can get through the system as it is. Making it free won't expand the pool of good students very much. And it's not like California isn't graduating enough people in total. It's rather the reverse, and not just in California: we're pushing too many people through college, and a lot of them simply will never benefit from that education enough to justify the costs. Higher education right now is a demonstration of the failure of social engineering.

I love the causal confusion implicit in that bolded statement. Are students better because upper-middle class vaginas spit out better babies, or is it the case that the upper-middle class way of life affords those children educational opportunities? A country that allows quality minds to flounder for lack of rich parents is one that will not do well moving forward.

California made a conscious decision to give educational opportunity to all of its citizens, regardless of class upbringing. This was an incredible success. Now that system is being dismantled.

Again, there's a reason India and China are basically developing the California model for higher education in order to catch us. We built dominance by generating a strong middle class open to all. Now we're destroying it because of a fiscal crisis caused by Wall Street.

We're in one of those moments that we'll look back on in a half century and wonder what the **** we were thinking. At least it will be easy to explain why China is the dominant nation in the world and all important future technological innovations happen in South Korea, Germany, and Australia.


And the failure begins much earlier than college, in fact. The primary schools (which are free) are graduating lots of people without the prerequisite skills to take advantage of college. Making college free to them won't help. Nor will increasing the amount of money spent on primary education, because a shortage of funding isn't the problem. Funding has been steadily climbing for decades, with nothing to show for it.

Necessary vs. Sufficient. Funding doesn't promise better results, but cuts ensure worse.



Yeah, THAT will solve our economic problems: ramp up military spending!

Why the hell do you think the rest of the country should pay for a massive increase in military spending to bail out California? Seriously, what's the logic here?

First, military spending was the means of government spending in California during the Cold War. There's no particular reason more stimulus has to take that form now.

Massive public works programs, increased educational spending, and stimulus generally aimed at eliminating the drop in aggregate demand would all benefit California. And because the United States is an integrated economy, what benefits California benefits the United States.

I don't remember a lot of folks complaining that the tech boom happened in California. HOW UNFAIR!! to poor people in Minnesota. Oh wait, that boom drove the entire American economy for a decade.

[Ziggurat]

Citation needed. Several citations.

On what? The fact that academic achievement correlates strongly with socioeconomic background? That should be such common knowledge that you should be familiar with it already, and if not, you can surely find sources yourself.

Or do you need a citation on the education bubble (http://mjperry.blogspot.com/2011/05/higher-education-bubble-updates.html)?

Or perhaps you need a citation about how increasing primary school spending hasn't improved outcomes (http://www.heritage.org/research/reports/2008/09/does-spending-more-on-education-improve-academic-achievement)?

Pleas, let me know what it is you're ignorant about in more detail.

[KoihimeNakamura]

Please don't use libertarian sources. I may actually read them next time.

As for the outcome-matching income thing- I'm pretty sure that's a coorelation, not causation.

ETA: Also, following the links from the wikipedia entry seems to argue differently than the wikipedia page: not too surprising.

[Ziggurat]

Once again, California's budget problems aren't that dire relative to other states. They rank 25th in terms of deficit as a % of GDP. You want to argue that 24 states are crappy because of their tax rate?

<pedant mode>It's Gross State Product, not Gross Domestic Product.</pedant mode>
Current debt alone tells only part of the picture. As a percentage of their current budget, it's ranked significantly higher.

I'd like some evidence for that claim. What are those regulations restricting energy production? Tell me what regulation you'd like to eliminate.

Funny that NOW you're going to play "name that regulation" game. This is only a standard of evidence you're insisting upon after having been challenged, and it's one that I know you have no interest in holding your own argument to.

I do not know what regulations should be eliminated. But I know that the California Clean Air act, for example, had a major impact on electricity generation. And not just on generation, but also on electricity price (http://hc.wharton.upenn.edu/jkolstad/kolstad_wolak_aug08.pdf).

Texas is a low regulation low tax state and California has about 7.5 times the number of biotech companies, why? If this is the key issue, why is California still a preferred destination for businesses?

I never said it was the key issue. I said it matters. And it does. It matters comparatively less (which really only means something else matters more) for businesses like biotech than for something like manufacturing, but it always matters.

I love the causal confusion implicit in that bolded statement. Are students better because upper-middle class vaginas spit out better babies, or is it the case that the upper-middle class way of life affords those children educational opportunities?

It doesn't matter. Whatever the cause, those middle and upper class kids are overwhelmingly the ones who are ready to succeed in college, and the poor kids, for the most part, simply aren't. Unless you want to overhaul primary education in some way which can close the gap (and good luck, nobody's managed it so far), then that question is simply irrelevant to whether or not making higher education free will achieve what you want it to achieve.

A country that allows quality minds to flounder for lack of rich parents is one that will not do well moving forward.

Again: that's not an issue of higher education. That's an issue of primary education. I would absolutely LOVE it if you could solve that problem. But I don't think you can, and I'm absolutely certain that California won't.

First, military spending was the means of government spending in California during the Cold War. There's no particular reason more stimulus has to take that form now.

It's either military or space. Those are the only government spending which is targeted at engineers and scientists. But military spending only transfers wealth, it doesn't create it. That's a losing proposition for the country as a whole. And while I've seen claims of positive returns for spending on space research, there's no reason to think those positive returns will remain if spending is expanded significantly. Even private spending has the same problem of diminishing returns on investments, but I simply don't see how you can possibly expect the returns to remain positive at the sort of spending levels needed to transform California. So again, what's in it for the rest of the country, if they're footing the bill? Nothing, really.

And if you're NOT talking about hiring engineers or scientists, and just want any old stimulus spending, then I don't even see why education is critical to your proposal.

I don't remember a lot of folks complaining that the tech boom happened in California.

I don't remember a lot of folks being taxed to foot the bill.

In fact, I don't remember government spending driving that boom either. Perhaps because it didn't.

[Ziggurat]

As for the outcome-matching income thing- I'm pretty sure that's a coorelation, not causation.

If you had paid attention, you'd know that it doesn't matter whether it's causation or correlation. For my argument, it doesn't matter at all what the cause is. Hell, it could even just be a coincidence. What matters is that few poor students graduate from primary education with the tools to succeed in higher education. Making higher education free will not change that.

[TraneWreck]

<pedant mode>It's Gross State Product, not Gross Domestic Product.</pedant mode>
Current debt alone tells only part of the picture. As a percentage of their current budget, it's ranked significantly higher.

GDP is appropriate. Note the Bureau of Economic Affairs uses it:

Retail trade and finance and insurance were also leading contributors to real GDP growth. Retail trade contributed to growth in all eight BEA regions and in every state, and was the leading contributor in Oklahoma and Florida. Finance and insurance was the leading contributor to real GDP growth in five states, contributing more than one percentage point to growth in New York and Connecticut.
http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htm



Funny that NOW you're going to play "name that regulation" game. This is only a standard of evidence you're insisting upon after having been challenged, and it's one that I know you have no interest in holding your own argument to.

That makes little sense. I was speaking specifically about a deregulation effort undertaken by Pete Wilson. If you want the bill, you just needed to ask:

Back in 1996, lobbied by Enron and other energy interests, the state (under then Governor Pete Wilson, a Republican) decided to loosen its hold on electricity production. Responsibility for matching supply and demand was handed over in 1998 to an Independent System Operator (ISO), which would buy from providers (like Enron, Calpine and Dynegy) and sell to middlemen (companies like Pacific Gas & Electric) as necessary, even paying providers to take excess electricity out of the state at times when supplies were flush. And if the markets got too rough? Never fear; price caps were in place

Read more: http://www.time.com/time/business/article/0,8599,237028,00.html#ixzz1PBNHv9Zo

I did not realize you were challenging the idea that Wilson deregulated the energy industry.


I do not know what regulations should be eliminated. But I know that the California Clean Air act, for example, had a major impact on electricity generation. And not just on generation, but also on electricity price (http://hc.wharton.upenn.edu/jkolstad/kolstad_wolak_aug08.pdf).

Always a classy move to link a 62 page report without so much as a comment. What part of that did you find worthy of note?

They appear to make the argument that the way NOx emissions permits were implimented allowed energy generators to engage in price gouging; it allowed them to bid for prices above the soft caps that were implimented in 2000-2001.

I'm not sure what you think that proves. It looks like energy producers took advantage of a loophole to drive up prices. That looks like an argument for more regulation, not less, and, of course, California was still operating in the deregulated energy economy created by Wilson.


I never said it was the key issue. I said it matters. And it does. It matters comparatively less (which really only means something else matters more) for businesses like biotech than for something like manufacturing, but it always matters.



It doesn't matter. Whatever the cause, those middle and upper class kids are overwhelmingly the ones who are ready to succeed in college, and the poor kids, for the most part, simply aren't. Unless you want to overhaul primary education in some way which can close the gap (and good luck, nobody's managed it so far), then that question is simply irrelevant to whether or not making higher education free will achieve what you want it to achieve.

It's pretty clear that the way to narrow the achievement gap on economic lines is to eliminate the economic conditions that cause that gap in the first place. Obviously this a problem that needs to be dealt with from the bottom up, starting with basic necessities (nutrition, shelter, healthcare) and moving on to pre-K and early education through primary schooling.

An essential element of that plan, however, must be higher schooling available to all who qualify. The California schools used to be tuition free based on performance. The top 15% were assured a spot, Community Colleges took the rest, and if people worked through those, they were assured a spot at the quality universities.

You can complain about how difficult or expensive that is, but government programs aimed at education pay back more than they invest. A student who achieves a college education where they couldn't afford it will pay back far more in taxes over their lifetime than they were given for the education, itself.

We are already falling behind in the sciences and engineering. This is not an area a nation should be cutting corners if it seeks long-term success.


Again: that's not an issue of higher education. That's an issue of primary education. I would absolutely LOVE it if you could solve that problem. But I don't think you can, and I'm absolutely certain that California won't.

I don't disagree with the last sentence, though I doubt we agree on the reason.



It's either military or space. Those are the only government spending which is targeted at engineers and scientists.

Seriously? Surely you can do a better job of brainstorming than that.


But military spending only transfers wealth, it doesn't create it. That's a losing proposition for the country as a whole.

Substantiate that claim. I grew up in a city near a military base. Sure looks like there are a lot of thriving businesses in the area. There's also a university in the city, meaning that a huge percentage of the population receives their income from the government. You may be shocked to learn it was one of the top ten least affected areas in the recent fiscal crisis.

This is another goofy right wing myth. Military spending absolutely creates wealth, both directly and indirectly. Troops with salaries buy things like people who receive their salary from a private business. That money then generates economic activity.

Obviously our military spending enables international trade, and I would love to hear you explain how WWII didn't creat wealth.

It's an absurd claim no matter which direction you approach it from. Hell, military spending created the internet. That, you may have noticed, has generated some wealth.


And while I've seen claims of positive returns for spending on space research, there's no reason to think those positive returns will remain if spending is expanded significantly. Even private spending has the same problem of diminishing returns on investments, but I simply don't see how you can possibly expect the returns to remain positive at the sort of spending levels needed to transform California. So again, what's in it for the rest of the country, if they're footing the bill? Nothing, really.

IN our current economic condition, private investment has crashed, aggregate demand has bottomed out, and interest rates are at the zero bound. Government spending of any kind that goes to demand will have massive returns.

This isn't always true, which is why government spending should recede as the economy recovers, but right now the returns will be enormous.

And again, California contributes more to the US economy than any other state. It alone generates about 1/6th of our GDP. What's good for the California economy is good for the United States.


And if you're NOT talking about hiring engineers or scientists, and just want any old stimulus spending, then I don't even see why education is critical to your proposal.

You're conflating a number of arguments. Education and stimulus are not dependent on one another. There could be stimulus with no education and vice versa.

Stimulus is the short-term measure needed to generate economic recovery (even Larry Summers is saying this now), and education is the means by which we will stay competitive.



I don't remember a lot of folks being taxed to foot the bill.

In fact, I don't remember government spending driving that boom either. Perhaps because it didn't.

Good thing we don't generate history books by having you dictate from memory.

Government spending most certainly drove that boom. All of the base technologies were developed by the government. No internet, no boom. It took government investment to get it up and running before it was a profit generating entity.

[Ziggurat]

That makes little sense. I was speaking specifically about a deregulation effort undertaken by Pete Wilson.

Arnold cut and deregulated until it wasn't possible to do anymore.

:confused:

I did not realize you were challenging the idea that Wilson deregulated the energy industry.

I didn't realize that Wilson went by the nickname "Arnold".

They appear to make the argument that the way NOx emissions permits were implimented allowed energy generators to engage in price gouging; it allowed them to bid for prices above the soft caps that were implimented in 2000-2001.

I'm not sure what you think that proves. It looks like energy producers took advantage of a loophole to drive up prices. That looks like an argument for more regulation, not less, and, of course, California was still operating in the deregulated energy economy created by Wilson.

The loophole exists in the first place because of NOx emission permit requirements. If it had been handled through something other than permit requirements, then there wouldn't have been a loophole.

I don't accept the notion that the only solution to bad regulations is more regulations.

It's pretty clear that the way to narrow the achievement gap on economic lines is to eliminate the economic conditions that cause that gap in the first place.

"The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them." - Glenn Reynolds (http://pajamasmedia.com/instapundit/106691/)

Obviously this a problem that needs to be dealt with from the bottom up, starting with basic necessities (nutrition, shelter, healthcare) and moving on to pre-K and early education through primary schooling.

In other words, even if you're right, your solution requires vast social engineering which California cannot afford.

You can complain about how difficult or expensive that is, but government programs aimed at education pay back more than they invest. A student who achieves a college education where they couldn't afford it will pay back far more in taxes over their lifetime than they were given for the education, itself.

And yet, somehow, student loan default rates are increasing significantly. I wonder why you think the tax revenue increases will justify the costs when their direct income increases can't even cover it.

We are already falling behind in the sciences and engineering.

Because we're failing at the primary school level. Our higher education science and engineering programs are just fine. Just compare how many Chinese graduate students study in the US compared to how many US graduate students study in China.

Seriously? Surely you can do a better job of brainstorming than that.

You don't seem to be exactly forthcoming with suggestions.

Substantiate that claim. I grew up in a city near a military base. Sure looks like there are a lot of thriving businesses in the area.

It's called wealth transfer.

This is another goofy right wing myth. Military spending absolutely creates wealth, both directly and indirectly. Troops with salaries buy things like people who receive their salary from a private business. That money then generates economic activity.

Again: wealth transfer. That money didn't come from nowhere. It came from taxpayers elsewhere. Taxpayers who cannot spend that money themselves anymore.

Military spending serves a very necessary function. It protects us and our wealth. But it does not create wealth. Your incredibly shallow analysis doesn't refute that statement.

I would love to hear you explain how WWII didn't creat wealth.

I would love to hear you explain how spending money and resources on stuff used to destroy other stuff constitutes the creation of wealth.

The ONLY example you've come up with is the internet. That was a research project which worked (many don't), but its economic payoff took decades to materialize. Research, military or otherwise, can (sometimes) produce big payoffs. But DARPA wasn't run as a jobs project. It was run to achieve actual goals. And most important, it's not scalable. You can't crank up its funding by an order of magnitude and expect that its effectiveness will increase by that much as well. Hell, you can't even be sure that it will produce anything like the internet's success. Russian military research spending never did. So the idea that you can use such spending to rescue California from its economic woes is wishful thinking.

IN our current economic condition, private investment has crashed

Given that capital is not, in fact, in short supply, this should give you pause to consider why.

But of course, it hasn't.

[TraneWreck]

:confused:


I didn't realize that Wilson went by the nickname "Arnold".

That exchange seemed to be about energy regulation, thus, I refered specifically to the energy deregulations I had been discussing.

If you want evidence of Arnold's deregulation efforts, those are easy to come by, as well:

The law – passed last April by the legislature as Schwarzenegger threatened to bring even more stringent reforms to the ballot – cut costs in several other ways as well. It limited compensation for lost wages, gutted the state's job-retraining program, gave insurance companies the right to strictly manage medical treatment, and – perhaps most significantly – slashed the amount of money an injured worker can get to pay for the medical costs that will come with a lifetime of disability. Rules being promoted by workers' comp chief Andrea Hoch have made these changes even more severe.

The state hasn't done a study to show how payments for permanent disability will change, but according to UC Davis researcher Paul Leigh, those benefits will be cut by as much as 70 percent. A carpal tunnel syndrome patient he cites would see her payment – meant to cover medical care for the rest of her life – drop from $116,000 to just $17,000. Why? Much of this disability is measured in pain, and after the initial treatment, pain no longer counts.
http://www.sfbg.com/39/27/cover_workers_comp.html

Mostly Arnold has just stalled any attempt to remedy the deregulations under Wilson, but he has tried multiple times to pass new deregulation measures.


The loophole exists in the first place because of NOx emission permit requirements. If it had been handled through something other than permit requirements, then there wouldn't have been a loophole.

That's not really what the study said. Maybe you can quote the part you're talking about, because I didn't read the whole thing, but the abstract and beginning explain how the NOx market allowed energy producers to circumvent the mild cost controls put in place to deal with the energy crisis. Without the cost cap, there would have been no need for the loophole, and the cost cap was only put in place to deal with the fall out from the failed deregulation efforts.


I don't accept the notion that the only solution to bad regulations is more regulations.

This is a bizarre story you're trying to tell. Wilson passes deregulations that cause the energy market in California to go haywire:

The deeply flawed deregulation law in California required utilities to sell their generation plants, then buy electricity back from merchant generators at astoundingly high prices. Californias market manipulations by the likes of Enron and others are a well-documented failure that cost residents $70 billion.
http://www.ibew.org/articles/05journal/0503/p18_deregulation.htm

Mild attempts are made to deal with this problem, the energy industry immediately begins exploiting a loophole to further gouge prices, and you view this as an argument for less regulation?

The inciting event was the deregulation efforts, not the NOx permits.



"The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them." - Glenn Reynolds (http://pajamasmedia.com/instapundit/106691/)

That's a dumb statement by one of the nation's dumbest pundits.

Middle classes do not occur naturally. They have to be carefully planned. As we saw after WWII, paying for college and passing strong social programs DOES, in fact, create more middle class people. The problem, it turns out, is that when the middle class is strong, they're less likely to take ******** from the top. The single decade with the strongest middle class in American history was the 1960's.

There you go, stop oppressing women and blacks and what do you get? They start demanding "rights" and "equality."

Strong social programs do create a strong middle class. Reynolds is a dolt.


In other words, even if you're right, your solution requires vast social engineering which California cannot afford.

No, it doesn't require all that much. Compared to launching a war in Afghanistan then another one in Iraq, it's really easy. Expand Medicare, fund the rest of the necessities. Not complicated, it just takes will.


And yet, somehow, student loan default rates are increasing significantly. I wonder why you think the tax revenue increases will justify the costs when their direct income increases can't even cover it.

You want to get into banks taking advantage of the country's horrible loan system? Like the health insurance industry, student loans have been taken over by middle men skimming their profit off the top. Eliminate that profit and the loans are much more manageable.

Additionally, funding higher education directly to reduce their costs and thereby reduce the amount students have to pay would correct a great deal of that problem. Talk to someone from Europe and ask them how much they paid for a university education.

But the loan default rates, like all economic problems, are a result of the fiscal crisis and resulting fallout, most notably unemployment. That will largely correct itself over the next decade.



Because we're failing at the primary school level. Our higher education science and engineering programs are just fine. Just compare how many Chinese graduate students study in the US compared to how many US graduate students study in China.

I agree with that. The larger issue is primary education, but solving one problem doesn't need to include ignoring another.



You don't seem to be exactly forthcoming with suggestions.

You really need me to provide them? Space and the military, that was your claim.

How about renewable energy, bio-tech, medicine, nuclear...etc. Basically anything an engineer or scientists can do, the government needs.

They also don't have to employ them directly to gain the stimulitive benefit. NIH grants, for example, are responsible for the development of most new pharmaceuticals. The grant process is an excellent way of funding science and technology, and the industries that can benefit from such investment are, let me count them up, 1, 2...all of them.



It's called wealth transfer.

Again: wealth transfer. That money didn't come from nowhere. It came from taxpayers elsewhere. Taxpayers who cannot spend that money themselves anymore.

The hell does that mean? No money comes from "nowhere." New businesses need investors, weather from tax payer dollars or from some investor's bank account, money is transferred. It all comes from someone, someplace and goes to someone else, somewhere else.


Military spending serves a very necessary function. It protects us and our wealth. But it does not create wealth. Your incredibly shallow analysis doesn't refute that statement.

Look, this is just pathetic. I'm not sure what you think "creates wealth" means, but there is no coherent story of generating economic activity that excludes government spending.

Do military contractors "create wealth" by performing the same jobs we used to have the military do but charge 3x as much?

Again, the military developed the internet.



I would love to hear you explain how spending money and resources on stuff used to destroy other stuff constitutes the creation of wealth.

Ask the Native AMericans. We certainly have generated some wealth from the land our military budget removed them from.


The ONLY example you've come up with is the internet. That was a research project which worked (many don't), but its economic payoff took decades to materialize. Research, military or otherwise, can (sometimes) produce big payoffs. But DARPA wasn't run as a jobs project. It was run to achieve actual goals. And most important, it's not scalable. You can't crank up its funding by an order of magnitude and expect that its effectiveness will increase by that much as well. Hell, you can't even be sure that it will produce anything like the internet's success. Russian military research spending never did. So the idea that you can use such spending to rescue California from its economic woes is wishful thinking.

I'm not sure what that has to do with anything. The development of jet engines for military purposes has had a rather large wealth creating effect on the commercial airline market. In fact, almost all military technologies eventually find their way into the stream of commerce. How about satellites? Seems those resulted in some private business uses.

But once again, the military provides people with good jobs and pays for their education. These people then spend that money on goods and services. The fact that people who otherwise wouldn't be employed or have a college education do, generates wealth.



Given that capital is not, in fact, in short supply, this should give you pause to consider why.

But of course, it hasn't.

This is absolutely false. Capital is in great supply, businesses aren't spending it:

Rather than pouring their money into building plants or hiring workers, nonfinancial companies in the U.S. were sitting on $1.93 trillion in cash and other liquid assets at the end of September, up from $1.8 trillion at the end of June, the Federal Reserve said Thursday. Cash accounted for 7.4% of the companies' total assets—the largest share since 1959.
http://online.wsj.com/article/SB10001424052748703766704576009501161973480-search.html

Given that just about every factual assertion you've made has turned out to be incorrect, this should give you pause to consider why.

But of course it hasn't.

[Ziggurat]

This is a bizarre story you're trying to tell. Wilson passes deregulations that cause the energy market in California to go haywire:

That's what precipitated the electricity crisis, yes. But you seem to be ignoring the fact that environmental regulations which stifled generation capacity were a major contributing factor to why the crisis was so bad. Even with the "deregulation", California's electricity market did not actually resemble a free market. Only some very specific parts of it did. Those parts didn't play well with the parts that were still regulated. That's not exactly a free market failure, because, again, it wasn't a free market. It was a poorly regulated (not under-regulated) market.

Mild attempts are made to deal with this problem, the energy industry immediately begins exploiting a loophole to further gouge prices, and you view this as an argument for less regulation?

No regulations are very frequently superior to bad regulations, yes.

The inciting event was the deregulation efforts, not the NOx permits.

I know that. But the NOx permit requirements are a big part of why capacity was so limited. Without those restrictions, there almost certainly would have been more capacity, and Enron wouldn't have been able to game the system so much. Better regulations OR more free markets could have worked, but what California had was bad regulations.

That's a dumb statement by one of the nation's dumbest pundits.

He's a hell of a lot smarter than you, TW.

Middle classes do not occur naturally. They have to be carefully planned. As we saw after WWII

... because middle classes didn't exist prior to WWII. Obviously.

paying for college and passing strong social programs DOES, in fact, create more middle class people.

Paying for strong social programs is easy when your workforce is young and you're by far the most productive country in the world. It gets a little harder when your workforce gets old and you face significant international competition.

The problem, it turns out, is that when the middle class is strong, they're less likely to take ******** from the top.

Yes, yes. The proles will rise up and crush their bourgeoisie masters.

The single decade with the strongest middle class in American history was the 1960's.

And during the 1960's, those social programs you're advocating were greatly expanded, and the middle class (according to you) went into decline. Maybe those social programs weren't quite as effective as you thought.

There you go, stop oppressing women and blacks and what do you get? They start demanding "rights" and "equality."

Since when do rights and equality before the law equate to social programs? And you have it backwards. The demand for rights for blacks preceded the expansion of social programs, and those demands are what stopped the oppression, not the other way around.

And those social programs also destroyed the family institution among blacks. The link between broken families and pretty much every other social pathology (poverty, crime, educational underachievement) is impossible to deny.

No, it doesn't require all that much. Compared to launching a war in Afghanistan then another one in Iraq, it's really easy. Expand Medicare, fund the rest of the necessities. Not complicated, it just takes will.

Medicare won't help a poor kid achieve in school. You seem to have... drifted off.

You want to get into banks taking advantage of the country's horrible loan system? Like the health insurance industry, student loans have been taken over by middle men skimming their profit off the top. Eliminate that profit and the loans are much more manageable.

The federal government has pretty much done that (http://www.nytimes.com/2010/03/31/us/politics/31obama.html). And yet, the problem persists. Why?

Because it isn't due to creditors demanding a profit, it's due to higher education costing too much money. Making the feds pay for that won't actually fix that problem.

Additionally, funding higher education directly to reduce their costs and thereby reduce the amount students have to pay would correct a great deal of that problem.

It would shift the burden of dealing with that problem. Not the same thing.

But the loan default rates, like all economic problems, are a result of the fiscal crisis and resulting fallout, most notably unemployment. That will largely correct itself over the next decade.

No, it won't, because the economic downturn is only part of the problem. The cost of higher education has spiraled out of control. For many people, the economic benefits simply do not outweigh those costs, and will not even when the economy recovers. Subsidizing their education won't change that either.

How about renewable energy, bio-tech, medicine, nuclear...etc. Basically anything an engineer or scientists can do, the government needs.

Yeah, all of that iss already being funded quite a bit, by both government AND private enterprise. You can't simply expand funding and expect results to scale. They won't.

The hell does that mean? No money comes from "nowhere." New businesses need investors, weather from tax payer dollars or from some investor's bank account, money is transferred. It all comes from someone, someplace and goes to someone else, somewhere else.

I see you have confused money with wealth. That is foolish.

Shuffling money doesn't create wealth, it only moves it. To create wealth, you need to actually produce something

With damned few exceptions, the military doesn't produce wealth. It consumes wealth. Even the examples you've given didn't really produce significant wealth until AFTER they left the hands of the military.

Look, this is just pathetic. I'm not sure what you think "creates wealth" means

And I don't know what you think "wealth" means.

but there is no coherent story of generating economic activity that excludes government spending.

Government is necessary to secure and protect markets. I never suggested otherwise. But very little of the government produces wealth.

Do military contractors "create wealth" by performing the same jobs we used to have the military do but charge 3x as much?

Of course not. Since I never suggested any such thing, you're either being dishonest or you're simply clueless about what I'm saying.

Again, the military developed the internet.

And it wasn't worth **** until after private enterprise got hold of it.

This is absolutely false. Capital is in great supply, businesses aren't spending it

What do you mean, "This is absolutely false"? What you just said is what I just said! You can't refute me by taking the exact same position. Did you think you could pull a rabbit season/duck season (http://www.youtube.com/watch?v=9-k5J4RxQdE)?

[TraneWreck]

That's what precipitated the electricity crisis, yes. But you seem to be ignoring the fact that environmental regulations which stifled generation capacity were a major contributing factor to why the crisis was so bad.

[...]

Better regulations OR more free markets could have worked, but what California had was bad regulations.

Again, that's because Wilson eliminated those regulations. You're telling a bizarre story. The market was working fine for decades, within 4 years of an intense deregulation effort, it's thrown into total flux. Systems that previously worked well no longer functioned correctly, and greedy price gougers took advantage of them.

The 1992 and 1996 deregulations were the causes of all of this. You're essentially arguing that the existing regulations should have automatically compensated for the chaos. It's bizarre. The NOx emissions were exploited because of the state of the industry after the deregulation.


He's a hell of a lot smarter than you, TW.

Haha, not even close. I will GLADLY go up against that dimwit on any measure you can come up with. He is a really, really silly person.

I should point out that you are a hell of a lot smarter than that hack, also. Most people conversing on this forum have better ideas and express themselves more intelligently than Instaputz.


... because middle classes didn't exist prior to WWII. Obviously.

I know you're trying to be sarcastic, but you do realize that the Great Depression immediately predated WWII, right? And before that we had the gilded age and the robber barons...

The middle class was at its strongest immediately following WWII until the slow erosion that began with Reagan.


Paying for strong social programs is easy when your workforce is young and you're by far the most productive country in the world. It gets a little harder when your workforce gets old and you face significant international competition.

And you decide to give away unfunded tax cuts and start unfunded wars and make absurd unfunded prescription drug plans and refuse to move to universal health care so we pay twice as much per capita, have 46 million without insurance, and are devastated by health-related bankruptcies.

That's the dirty little secret the right tries hard to hide: quality social programs are actually better for the economy than the neo-libertarian nonsense.


And during the 1960's, those social programs you're advocating were greatly expanded, and the middle class (according to you) went into decline. Maybe those social programs weren't quite as effective as you thought.

No, the 60's is when it was at its peak. It maintained strength through the 70's and began a serious decline in the 80's that has continued to today.


Since when do rights and equality before the law equate to social programs? And you have it backwards. The demand for rights for blacks preceded the expansion of social programs, and those demands are what stopped the oppression, not the other way around.

SInce always. When people have a voice, they tend to demand better treatment.


And those social programs also destroyed the family institution among blacks. The link between broken families and pretty much every other social pathology (poverty, crime, educational underachievement) is impossible to deny.

That's nonsense and you know it. The deterioration of the African American family is directly related to the "War on Drugs." Provide one iota of evidence to suggest that social programs "destroyed" family institutions.


Medicare won't help a poor kid achieve in school. You seem to have... drifted off.

It absolutely will. Fewer people declaring bankruptcy because of health care costs equal more people with the means to provide their children with quality education.

These issues are all related, no matter how hard you try to isolate them.



The federal government has pretty much done that (http://www.nytimes.com/2010/03/31/us/politics/31obama.html). And yet, the problem persists. Why?

Because it isn't due to creditors demanding a profit, it's due to higher education costing too much money. Making the feds pay for that won't actually fix that problem.

The problem persists because we're in the midst of a recession.


It would shift the burden of dealing with that problem. Not the same thing.

If the problem is defaulting on loans, it absolutely will deal with that problem.



No, it won't, because the economic downturn is only part of the problem. The cost of higher education has spiraled out of control. For many people, the economic benefits simply do not outweigh those costs, and will not even when the economy recovers. Subsidizing their education won't change that either.

That's because the costs are so high and the job market is so bad...because of the recession.



Yeah, all of that iss already being funded quite a bit, by both government AND private enterprise. You can't simply expand funding and expect results to scale. They won't.

Goal post shifting. You argued that "military and space" were the only ways the government could put engineers to use. I pointed out how dumb that was, you challenged me to provide examples, now you're babbling about something else.

Just because it doesn't "scale" doesn't mean it's not worthwhile. And given our economic plight, stimulative measures that yield benefit will "scale" amazingly well.



I see you have confused money with wealth. That is foolish.

Shuffling money doesn't create wealth, it only moves it. To create wealth, you need to actually produce something

With damned few exceptions, the military doesn't produce wealth. It consumes wealth. Even the examples you've given didn't really produce significant wealth until AFTER they left the hands of the military.

This is gibberish. The reason they produced wealth after they left the hands of the military is that the military absorbed all of the initial costs, then didn't market it.

If the military demanded royalties for the technologies they developed, they would generate an AWESOME amount of wealth. Instead, those technologies were (rightly) turned over to the free market to allow creative uses to develop, but that military spending was the source.

This is so silly. I notice you've completely ignored the part about the military paying quality salaries and providing people with health care and educational opportunities. Go to any area with a military base and you will see plenty of wealth being generated by the economic activity from the base.



Government is necessary to secure and protect markets. I never suggested otherwise. But very little of the government produces wealth.

Nonsense. I see you're trying to be vague by qualifying your language. You'll just alter the meaning of "very little" so suit whatever nonsense you come up with, but the government generates wealth in so many ways only the blind would over-look them.

As I mentioned before, almost all new drugs in the US are initially developed from NIH grants. Once developed, companies can purchase the patent rights and sell them on the open market. Explain how the government developing a new drug that then makes incredible profit for a company doesn't generate wealth.

Government grants generate important innovations and new technologies in every sector of our economy. In fact, every major portion of the economy began with significant government investment. Of all the right wing myths you spit out, this is the worst.



Of course not. Since I never suggested any such thing, you're either being dishonest or you're simply clueless about what I'm saying.

No, I'm trying to figure out what you mean since you're being intentionally coy. So if Blackwater turns a $10 million profit, they haven't generated wealth?


And it wasn't worth **** until after private enterprise got hold of it.

That's ********. It was worth an incredible amount, which is why private enterprise wanted to get a hold of it.



What do you mean, "This is absolutely false"? What you just said is what I just said! You can't refute me by taking the exact same position. Did you think you could pull a rabbit season/duck season (http://www.youtube.com/watch?v=9-k5J4RxQdE)?

Read your initial post incorrectly. Now I'm just amused at why you thought that was significant and/or difficult to explain.

There is no demand. Surpluses on the supply side are meaningless if there is no aggregate demand. By and large, attempts to repair the economy have come in the form of tax cuts, this only increases the supply-demand disparity.

Investment in demand, IE-stimulus, is needed. Businesses spend and expand when there is demand to provide for. People don't start hiring just because they have cash sitting around.