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yago
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One of the points I personally find the most interesting, who's working for his money ?
I mean, a lot of those people who have a lot of money, haven't worked for it. The inherited it.
How comes that they should be able to spend there money in a clever way ? They propably buy a bottle of champagne and some caviar and go to St. Tropez for 1 month.
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Lord Merciless
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quote:
Originally posted by Boris Godunov
So Americans who tend to spend their money on foreign imports are helping the U.S. economy more than the government, which spends the money on domestic industry and infrastructure?
I have a hard time believing that. The "Incompetent Bureaucrat" line may play to the anti-government crowd, but it's devoid of substance. |
If you think that government can better spend your money than yourself, I'm a little speechless.
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Lord Merciless
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quote:
Originally posted by yago
One of the points I personally find the most interesting, who's working for his money ?
I mean, a lot of those people, who have a lot of money, haven't worked for it. The inherited it.
How comes that they should be able to spend there money in a clever way ? |
Inheritance are already being taxed like hell in the US. We are talking about income tax here. Please do not go off-topic.
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Agathon
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Leafs 4TW!! - CPA
Dec 2002
time: 00:27
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quote:
Originally posted by Q Cubed
quote:
But how is the spending by consumers better? |
because when they get fvcked over by their bad spending, they can't blame anybody else.  |
When the voters get ****** over by the bad spending policies of their elected representatives, they can't blame anyone else.
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besides, there's a good deal of individualism here. i'd much rather have my money go to waste on things i choose rather than have my money go to waste by some other person, whom i don't like, deciding. |
Well then you are going to end up poorer than you might otherwise have been. The reason we have tax and spend is because left to it's own devices the market underspends on things we need, like health care and education. Economists call these "collective action problems". That's the reason we have to be compelled to pay for the police, because if it was left up to private spending it is rational to try and free-ride on the good will of others. In certain situations, individuals make the worst possible choices (in their effect to everyone, including themselves) over how to spend their money.
Imagine if everyone paid for their education privately. You would get a whole stack of people for whom the cost of their not being able to read would be very little. The problem is the cost to everyone else of these people not being able to read, which the market doesn't take into account.
Similarly, if there were no public water treatment. People would pay for their own, but not everyone would. Then the people who hadn't paid would spread cholera to everyone else.
Of course the right wing solution to this is to punish these people in retrospect, but isn't it always more reasonable (and cheaper) to prevent it ever happening?
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Boris Godunov
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Portland, OR
Aug 2001
time: 00:27
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quote:
Originally posted by Lord Merciless
If you think that government can better spend your money than yourself, I'm a little speechless. |
I was speaking on a general level, not an individual one. Most Americans seem to be incompetent at spending their own money.
At any rate, yes, the government does spend my money better than I do--on certain things. It would be damned incovenient to the point of maddening to write out cheques every week to pay for various services--police, sewage, water, fire protection, road maintenance, mail service, military protection, social security, etc. ad infinitum. The government does me a huge favor by handling these nuisances and just charging me a lump sum for the whole shebang. I'd be willing to give them a bit more, actually, if it meant universal healthcare in this country.
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Agathon
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Leafs 4TW!! - CPA
Dec 2002
time: 00:27
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quote:
Originally posted by Adam Smith
Agathon:
Two reasons.
1. Absent externalities (discussed below) people are better off if they can spend the money on what they choose than what the government chooses. |
Externalities are the problem.
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2. Economists estimate that in the US each dollar of taxation chokes off about 20 cents of econmic activity. |
But does it make us worse off in terms of overall welfare?
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Conservatives often claim that higher income people are likely to invest the money increasing future production. However, if the government has to borrow to cover a deficit, the money comes entirely out of savings, so the economy is worse off. |
True, but a massive disparity in income tends to produce externalities like pollution since the gains to some individuals are worth the price paid in pollution.
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First, why is spending health or education indicative of a market failure? |
Because these embody significant collective action problems (prisoner's dilemmas).
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Many people in the US provide for their own healthcare and education without any government involvement. Aside from public health issues (eg communicable diseases), if I spend on health or education, I reap all of the benefits. No failure here. |
Communicable diseases are a significant problem (SARS!). If you are an employer you also reap the benefits of a public system. There is also the general benefit of things like literacy and a basic awareness of political issues.
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Second, there are vast ranges of government spending which have nothing to do with remedying market failure. Eg, corporate subsidies. |
I have no problem with curbing that.
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Third, there are many areas where both government and the private sector provide the same service. Examples which come quickly to mind in the US include schools, hospitals, trash collection, transportation, and electric power. Economists have found, uniformly, that the private sector provides these services mroe efficiently becauses it uses resources more efficiently. |
Then these economists are full of ****. Canada spends less per capita than the United States on health services and yet manages to provide full health care to all its citizens. The massive overheads generated by the private system account for much of this, and it also produces perverse results. Did you know that the US has about 10 times as many mammogram machines as it needs to give each American woman as many mammograms as they need? This is absurdly inefficient. The reason is that people are prepared to pay for it even if it isn't medically necessary - this money could be better spent elsewhere.
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The evidence from labor economics indicates otherwise. In other words, much more of the variation in income can be explained by level of schooling or hours worked than remains in the random variation. |
And from where you are born and what your parents fed you as a child, and countless other variables, etc. etc.
But that's not my point. Your income largely depends on the number of people competing for your job. This is something you have no control over - it's a matter of luck as far as you are concerned that you get what you get.
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Q Cubed
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t3h y3ll0w p3ril
Apr 1999
time: 23:27
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quote:
Well then you are going to end up poorer than you might otherwise have been. The reason we have tax and spend is because left to it's own devices the market underspends on things we need, like health care and education. Economists call these "collective action problems". That's the reason we have to be compelled to pay for the police, because if it was left up to private spending it is rational to try and free-ride on the good will of others. In certain situations, individuals make the worst possible choices (in their effect to everyone, including themselves) over how to spend their money.
Imagine if everyone paid for their education privately. You would get a whole stack of people for whom the cost of their not being able to read would be very little. The problem is the cost to everyone else of these people not being able to read, which the market doesn't take into account.
Similarly, if there were no public water treatment. People would pay for their own, but not everyone would. Then the people who hadn't paid would spread cholera to everyone else.
Of course the right wing solution to this is to punish these people in retrospect, but isn't it always more reasonable (and cheaper) to prevent it ever happening? |
i love the fact that suddenly i'm grouped with the right wingers on this issue, when indeed i'm closer to the moderate side of things.
i'm not against taxation, ag. i believe some of it is necessary, because we need some basic things paid for by everyone--the necessities, like water, education, healthcare, public defense, the rule of law, or scientific research, for instance. that doesn't mean, however, that because those things are provided for i don't feel bothered by the fact that the government then goes and spends my money on a program to reward criminals...
ag, the government must tax for it to be effective. for the government to be effective, it must spend its money wisely. for money to be spent wisely, it must be spent on necessities, and not on projects which benefits a specific voter bloc.
if the government can pay for the basic necessities with a tax rate of 2%, i want the tax rate at 2%, not at 5. if it can pay for it with a tax rate of 74%, i want the tax rate at 74%, not at 75. it's as simple as that.
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Agathon
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Leafs 4TW!! - CPA
Dec 2002
time: 00:27
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quote:
Originally posted by Q Cubed
quote:
Well then you are going to end up poorer than you might otherwise have been. The reason we have tax and spend is because left to it's own devices the market underspends on things we need, like health care and education. Economists call these "collective action problems". That's the reason we have to be compelled to pay for the police, because if it was left up to private spending it is rational to try and free-ride on the good will of others. In certain situations, individuals make the worst possible choices (in their effect to everyone, including themselves) over how to spend their money.
Imagine if everyone paid for their education privately. You would get a whole stack of people for whom the cost of their not being able to read would be very little. The problem is the cost to everyone else of these people not being able to read, which the market doesn't take into account.
Similarly, if there were no public water treatment. People would pay for their own, but not everyone would. Then the people who hadn't paid would spread cholera to everyone else.
Of course the right wing solution to this is to punish these people in retrospect, but isn't it always more reasonable (and cheaper) to prevent it ever happening? |
i love the fact that suddenly i'm grouped with the right wingers on this issue, when indeed i'm closer to the moderate side of things.
i'm not against taxation, ag. i believe some of it is necessary, because we need some basic things paid for by everyone--the necessities, like water, education, healthcare, public defense, the rule of law, or scientific research, for instance. that doesn't mean, however, that because those things are provided for i don't feel bothered by the fact that the government then goes and spends my money on a program to reward criminals...
ag, the government must tax for it to be effective. for the government to be effective, it must spend its money wisely. for money to be spent wisely, it must be spent on necessities, and not on projects which benefits a specific voter bloc.
if the government can pay for the basic necessities with a tax rate of 2%, i want the tax rate at 2%, not at 5. if it can pay for it with a tax rate of 74%, i want the tax rate at 74%, not at 75. it's as simple as that. |
Fair enough.
I want the tax rate fixed at the point of greatest efficiency compatible with expectations of social justice. Others are not so charitable.
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Adam Smith
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Maryland, USA
Jan 1970
time: 00:27
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quote:
Originally posted by Agathon
True, but a massive disparity in income tends to produce externalities like pollution since the gains to some individuals are worth the price paid in pollution. |
I don't understand what you mean. If you mean that some companies make more profits by polluting the air and water for free, then I agreee they should be charged. This is the standard economic solution for almost 100 years. If you mean that tollerance for pollution varies with income, then I don't understand, because high income people are less tollerant of pollution.
quote:
Originally posted by Agathon
Because these embody significant collective action problems (prisoner's dilemmas). |
I don't understand. If I get an education you are worse off??
quote:
Originally posted by Agathon Communicable diseases are a significant problem (SARS!). If you are an employer you also reap the benefits of a public system. There is also the general benefit of things like literacy and a basic awareness of political issues. |
Basic public health expenses, like vaccinations, is a minimal part of US health care expenses. In the long run the benefit to employers is captured by employees as higher wages. I agree that an informed electorate makes us all better off. I would argue that this benefit is small relative to that of increased wages, which are a private gain.
quote:
Originally posted by Agathon I have no problem with curbing that. |
Neither do I. 
Tquote:
Originally posted by Agathon hen these economists are full of ****. Canada spends less per capita than the United States on health services and yet manages to provide full health care to all its citizens. The massive overheads generated by the private system account for much of this, and it also produces perverse results. Did you know that the US has about 10 times as many mammogram machines as it needs to give each American woman as many mammograms as they need? This is absurdly inefficient. The reason is that people are prepared to pay for it even if it isn't medically necessary - this money could be better spent elsewhere. |
The economists are not comparing US vs. Canada. They are comparing two similar sized US systems for any of these types of expenses. The idea is to hold as many things constant as possible. The US system subsidizes capital spent on health care, which accounts in part for the high cost. The Canadian system rations health care. The economic outcomes are very different. Health care reform, which clearly needs doing, is a topic for another thread (or six).
quote:
Originally posted by Agathon
But that's not my point. Your income largely depends on the number of people competing for your job. This is something you have no control over - it's a matter of luck as far as you are concerned that you get what you get. |
But in the long run people can and do choose what field they go into, and certainly much of that decision for many people is based on likely competition and expected earnings. Moreover, many people retrain mid-career if they get a bad outcome in the job market.
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Agathon
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Leafs 4TW!! - CPA
Dec 2002
time: 00:27
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quote:
Originally posted by Adam Smith
I don't understand what you mean. If you mean that some companies make more profits by polluting the air and water for free, then I agreee they should be charged. This is the standard economic solution for almost 100 years. If you mean that tollerance for pollution varies with income, then I don't understand, because high income people are less tollerant of pollution. |
I'm getting at the "leave everything to the market" bunch (of which there are too many on this forum - obviously not including you). I agree that financial penalties for pollution are right. However, some people think that left to itself the market will fix this. I don't think it will.
As for pollution. I'm not sure this is true. If you are a wealthy person and you stand to make a lot of money from polluting it is rational to pollute (if the utility to you from the extra cash exceeds the disutility from pollution). Wealthy people say they hate pollution, but they are the ones who hold shares in mass polluting industries.
quote:
I don't understand. If I get an education you are worse off?? |
No, I'm not saying that. But if people determined their own educational needs then we would all be worse off, since a significant level of illiteracy is a downer for everyone.
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Basic public health expenses, like vaccinations, is a minimal part of US health care expenses. In the long run the benefit to employers is captured by employees as higher wages. |
But poorer folks just wouldn't be able to afford decent health care. It's simply cheaper to have a public system like Canada's if your aim is to provide the best level of healthcare to the most people. Added to this is the issue of social justice. Efficiency is a worthy aim, but it isn't and shouldn't be our sole aim in public policy.
quote:
I agree that an informed electorate makes us all better off. I would argue that this benefit is small relative to that of increased wages, which are a private gain. |
I don't think so since an informed electorate is necessary for a properly functioning democracy. I'm not one of those who think that increased wages is a good price to pay for a soft tyranny.
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TThe economists are not comparing US vs. Canada. They are comparing two similar sized US systems for any of these types of expenses. The idea is to hold as many things constant as possible. The US system subsidizes capital spent on health care, which accounts in part for the high cost. The Canadian system rations health care. The economic outcomes are very different. Health care reform, which clearly needs doing, is a topic for another thread (or six). |
That's true. Even though the Canadian system rations health care it isn't as if there's a dearth of it up here. You can pretty much get what you need (in fact it seems very generous to me).
quote:
But in the long run people can and do choose what field they go into, and certainly much of that decision for many people is based on likely competition and expected earnings. Moreover, many people retrain mid-career if they get a bad outcome in the job market. |
This comment was aimed at those people who want to equate one's performance in the market with some kind of moral desert. I don't think that the market is a moral phenomenon, so I don't think that it's results can be evaluated as good just because they are the results of a market system. That's all I'm arguing for.
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Guynemer
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This tax cut doesn't bother me too much (though I wonder why a tax cut is necessary when the deficit is ballooning once again).
What bothers me are the American corporations that evade paying taxes by moving their "headquarters" offshore to Bermuda or the Caymans; these island-paradise "headquarters" are often little more than a P.O. box, a ruse that would be funny enough to include in Tropico 3 if it weren't so horribly real. This is costing us billions of dollars a year; these same companies often get rebates on the taxes they never had to pay in the first place... ****ing Washington.
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I Am Jeff
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New Jersey
Feb 2002
time: 00:27
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Bush's tax cuts are simply Trickle Down Economics. For those who do not know what this is, it is giving a bigger tax cut to the rich so they can invest and create jobs etc. Sounds all nice but we all know where this got President Hoover right?
Well for those of you who do not know, he pushed the U.S. deeper into the Depression and it resulted in his loss of the next election to FDR. Bottom line is trickle down economics does not work. And with increasing fiscal problems over the nation, blowing the money is unwise. Instead the money should be spent on the now financialy strapped states/cities
Many states and cities (for example NYC) are having horrible fiscal siutations. Programs will have to be cut to balance budgets since most states and cities must have balanced budget. This will result in a sharp decrease in services and as a result state/city jobs will be cut. So by holding back aid, ironically, Bush will be causing job loss.
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Imran Siddiqui
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The Potterverse
Jan 1970
time: 00:27
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You have a wierd sense of history, Jeff.
Hoover didn't believe in anything as 'trickle down economics'. In fact, I don't believe he gave a single tax cut while President. In fact, spending increased. FDR actually campaigned that spending was TOO HIGH (how ironic). The Reconstruction Finance Corporation was the highest spending public endevor EVER up to that time.
The Depression was caused by a tight money policy by the new Federal Reserve, when a loose money policy could have bailed the US out. The recession, that began the problems, wasn't bad as far as US recessions went, but it was caused by the boom-bust cycle such as in the 1870s and 1890s. That and problems with financing Weimar, and the ending of the Dawes Plan. That, and the whole tariff war crap.
Jeez, you'd expect someone blustering on about history would know something about it  .
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