Irontruth wrote:

Yakman wrote:

How will inefficient government spending lower unemployment?

The Defense Dept., contrary to popular belief, was not intended to be a jobs program, nor was the Dept. of Homeland Security.

Yet, that's how we are reacting to cuts... that would merely give them the budgets that they had 6 years ago.

When did I claim to be a proponent of inefficient spending?

I want to know exactly how a balanced budget RIGHT NOW makes the economy better. People talk about the deficit like its going to destroy our economy tomorrow if we don't fix it. How?

a) No one, except those on the extreme libertarian side, are agitating for a balanced budget immediately. Even the supposedly draconian Ryan budget doesn't get us there for something like 15 years.

The fact that you think the Ryan budget is somehow good for reducing hte deficit is telling. It needs magic ecconomic growth that is undefined to even approach the timeframe required for the President's budget to become deficit neutral.

Social Security becomes stable for 50+ years if you increase the cap on taxed income from 100K to 250K. Eliminate the cap and it is stable for the forseable future.

Medicare has its own issues, but as others have pointed out.

Welfare I will cover in the next section.

c) Every dollar the gov't spends is one less dollar in the private sector. That's less money for investment and private sector wages.

Not actually true. A dollar spent by the government actually has estimated value of more than a dollar for ecconomic growth, depending on where it is spent. Welfare has one of the highest rates of returns, because every dollar spent by the government gets immediately spent on low end commododies and services. This increases demand for them and causes providers to hire more, reducing the need for welfare.

The defense sector has one of the worste rates of return. Unfortunately its what usually gets pushed because people don't like the idea of giving out handouts.

d) Every programmer hired to make every ridiculous line of code for some federal gov't agency is one less available to do productive work in the private sector - that goes for everything else. Cutting gov't spending, puts those workers and resources on the open market and should increase productivity, thus improving the economy over the middle and long term.

That is why most new programers I know can't find jobs, or the best paying ones they can are in the public sector. The labor market is flooded right now. "Putting those workers on the open market" as you say will bloat the supply even more, making it even harder to find a job that will pay back student loans that can exceed 100K.

Your question was: how will cutting gov't spending get us to below 6% unemployment next summer. The answer is: it won't.

But NOTHING will get us to 6% unemployment next sector save some ridiculously inefficient jobs bill that has people picking up trash by hand or using toothbrushes to clean the streets.

Why do you assume that jobs in construction and education are an inefficient waste? Those are the main areas people are saying we should be spending stimulous money - relief for local school districts and bridge/road repair. These are both desprately needed.

So the question at hand is, what is best overall? Do we continue to spend too much on things that are not needed with a federal sector in dire need of reform? Or do we change how things are done in Washington in a real, substantive way? I prefer the latter.

a2) The Ryan Budget does, as you say, does call for the indefinite continuation of the Bush Tax Cuts, which were set to sunset in 2012. I wouldn't call it a scam, but you can't ask legislators to make immediate cuts to benefits - they'll get voted out of office. Additionally, all these long-term budgets make assumptions about economic growth that, to me at least, are optimistic.

Not merely extending the current tax cuts, but further cuts to the top rates and to capital gains. Which will this time, as they have not done before, stimulate the economy so much they'll pay for themselves.

thejeff wrote:

"Entitlement reform" is a sham. Social Security only needs minor adjustments. Medicare/Medicaid is what will bust the budget in the long term. Even that hides the real problem though. The problem is health care spending, not entitlement spending. Medicare spending is growing much slower than private sector healthcare spending. Under the same projections that spell doom for the Medicare budget, the entire economy is screwed by the amount devoted to health care by the time Medicare is in serious trouble.

Medicaid/Medicare are entitlements. Obamacare did almost nothing to rein in the cost of health care or (more importantly) the growth in the cost of health care. The only method that has worked in the industrialized world to do that is single-payer, which Obama originally campaigned on and later disavowed.

I'm not saying they're not entitlements, just that they aren't the problem. The cost of health care is the problem. Fix that, Medicare/Medicaid takes care of itself. Don't fix it and it won't matter. Obamacare should help, but it won't be anywhere near enough, that I agree with. But that's a more government, not a less government solution.

The gov't taking money to spend on programs removes capital from the private sector.

You say this again as if it's a given and as if it's significant on it's own.

Building tanks doesn't add anything to the GDP, because you can't do anything with a tank except kill foreigners and drive through buildings. While, admittedly, these things are pretty cool, they don't do anything to improve the standard of living of anyone, anywhere. Taking that same money and building, say... a lot of tools or shingles or computer components, creates a product that increases the standard of living for people in the USA. The GDP impact is the same, but no Good comes from financing weapons won't be used to defend the nation's resources.

Does it matter whether the government does this or the private sector does? I think we agree that much military spending is wasteful and there's far too much of it, but what if the government uses that money to build more useful stuff? Or for that matter the private sector uses it to speculate on commodity prices or build McMansions that never get sold? Does that still automatically increase our standard of living, just because it's the private sector?

Not all gov't spending is bad. But coming from DC as I do, you get to see the evidence of waste everywhere. Why are salaries for contractors so high? Why are they contractors at all when they are working on projects that the gov't is required to handle, by law, year after year? How much money gets wasted in the procurement process? Why does the federal gov't do some of the things it does? Why is the Federal gov't employment system based on the Pendleton Act, which was passed under CHESTER A. ARTHUR? Huge amounts of money are spent on silly IT programs that don't work, and contractors who fail over and over again to deliver as promised on time are hired and re-hired.

Not all government spending is bad. We agree there.

Money for some doomed start-up doesn't come from me (unless it is "Green Technology" YAY for Solyndra)- it comes from people who are cognizant of the risks.

Just a Solyndra note: Do you want the government to only guarantee loans for companies that are guaranteed success? They hardly need it. Despite all the talk of Solyndra, the green tech investments have been very successful overall.

Obama has actually done a lot to clean up some of these problems. I'm not sure that Romney would do more - although with his background at Bain, I think he would be ideally suited to the challenge.

We probably have different views of Bain. I'm not sure that being able to profit even off the failure of your investments is a good qualification for dealing with government's problems. The Bain approach, it seems to me, would be to cut back or sell off anything that wasn't profitable in the short term, even if it was a necessary government function.

The Bain approach, it seems to me, would be to cut back or sell off anything that wasn't profitable in the short term, even if it was a necessary government function.

Whether or not this is a problem would depend on one's definition of "necessary government function", I reckon.

You say this again as if it's a given and as if it's significant on it's own.

It is incredibly significant. Money spent by the gov't has to be taken from the people in the form of taxes or borrowed. That's dollars that are removed directly from the private sector. We do this, just for federal spending, to the tune of 1 out of every 5 dollars spent every year. It is an enormous drag on productivity.

Does it matter whether the government does this or the private sector does? I think we agree that much military spending is wasteful and there's far too much of it, but what if the government uses that money to build more useful stuff? Or for that matter the private sector uses it to speculate on commodity prices or build McMansions that never get sold? Does that still automatically increase our standard of living, just because it's the private sector?

Actually, it does. It means wages for people. Just like the Defense Dept. = Jobs program argument that is thrown around so much. The difference is that it's not my money they are wasting. The difference is that they are, you know... BUILDING HOMES. Things that there are markets for. They are trying to meet private demand. They aren't subject to elections and the dubious fund-raising processes that spin campaign money into tax exemptions and contracts like you would not believe.

Not all government spending is bad. We agree there.

Can we also agree that not all private spending is good?...

Of course. But the difference is that if you want to spend thousands of dollars on Magic Cards, then that's YOUR MONEY. It's YOUR PREROGATIVE. When the government does that, it's wasting MY MONEY. Gov't spending should be done with the aim of increasing productivity and providing public goods when experience has shown that markets fail at doing so. Absolute berzerkistan amounts of public money are thrown away every day on out-dated, conflicting, confusing, and counter-intuitive programs that provide limited or no benefit for the country.

Hasbro makes out either way.

c) Every dollar the gov't spends is one less dollar in the private sector. That's less money for investment and private sector wages.

Where do you imagine the money the government spends goes to?

Are you claiming it disappears into some sort of dimensional vortex? Instead of either wages to government employees, who then turn around and buy things like food, cars, homes or rent, or buying products from private companies, who use the money to pay their employees. Or in programs that go to poor people so they can afford things like food and rent.

And are you claiming all private sector spending is spent with perfect efficiency?

I think there is a balance, but in times of economic trouble, government spending becomes kind of a 'rock bottom'. As long as the government is engaging in economic activity and mandating certain things, we can't get any worse. That doesn't mean I think the government should control everything.

Giving people a paycheck is better than charity. Increasing the number of paychecks received will increase demand for goods and services.

Reducing taxes on paychecks that people don't get, isn't going to change much. People don't choose to become homeless just because property taxes are too high.

thejeff wrote:

The Bain approach, it seems to me, would be to cut back or sell off anything that wasn't profitable in the short term, even if it was a necessary government function.

Whether or not this is a problem would depend on one's definition of "necessary government function", I reckon.

Is the state of Mississippi a 'necessary function', we could reduce the federal deficit by kicking them out of the union.

thejeff wrote:

You say this again as if it's a given and as if it's significant on it's own.

It is incredibly significant. Money spent by the gov't has to be taken from the people in the form of taxes or borrowed. That's dollars that are removed directly from the private sector. We do this, just for federal spending, to the tune of 1 out of every 5 dollars spent every year. It is an enormous drag on productivity.

All that money gets put into payroll or purchase products from private companies and goes back into the ecconomy. The money isn't magically disappearing. It is circulating through different hands so that lots of people get what they want. 1 out of every 5 dollars for infrastucture to work in is not a lot. It costs 1 million dollars for a mile of 2 lane road. No one is going to spend the money on their own, and the government is an efficient way to deal with large group projects that need to be done. It looks for group instead of personal good.

thejeff wrote:

Does it matter whether the government does this or the private sector does? I think we agree that much military spending is wasteful and there's far too much of it, but what if the government uses that money to build more useful stuff? Or for that matter the private sector uses it to speculate on commodity prices or build McMansions that never get sold? Does that still automatically increase our standard of living, just because it's the private sector?

Actually, it does. It means wages for people. Just like the Defense Dept. = Jobs program argument that is thrown around so much. The difference is that it's not my money they are wasting. The difference is that they are, you know... BUILDING HOMES. Things that there are markets for. They are trying to meet private demand. They aren't subject to elections and the dubious fund-raising processes that spin campaign money into tax exemptions and contracts like you would not believe.

I think everyone here is in agreement that defense spending should be reduced. As for other spending - they are building things that will benefit the public.

thejeff wrote:

Not all government spending is bad. We agree there.

Can we also agree that not all private spending is good?...

Of course. But the difference is that if you want to spend thousands of dollars on Magic Cards, then that's YOUR MONEY. It's YOUR PREROGATIVE. When the government does that, it's wasting MY MONEY. Gov't spending should be done with the aim of increasing productivity and providing public goods when experience has shown that markets fail at doing so. Absolute berzerkistan amounts of public money are thrown away every day on out-dated, conflicting, confusing, and counter-intuitive programs that provide...

Name a government program that has no purpose. You equate these nebulous programs with Magic cards, but give no equivalent government program. You say they are everywhere, but like Romney can't name one.

Money spent by the gov't has to be taken from the people in the form of taxes or borrowed. That's dollars that are removed directly from the private sector.

Money spent by private businesses has to be taken from the people in the form of high prices that allow for the business to profit well above and beyond the costs of performing the useful tasks you ascribe to them. Every extra I have to spend on a can of peas so that the higher ups at Green Giant can afford that second or third Benz.

You keep using defense spending as an example of wasteful government spending, where the money multiplier is much lower, and I agree. We should cut defense spending considerably. But don't throw the baby out with the bathwater, because there are a lot of necessary services that the federal (and state, and local) government performs that would cost more in private sector's hands, which is just as bad as a tax. Worse even, because we have no control over how a private business spends its spoils, whereas we do have some say in how the gov't does.

Kryzbyn wrote:

thejeff wrote:

The Bain approach, it seems to me, would be to cut back or sell off anything that wasn't profitable in the short term, even if it was a necessary government function.

Whether or not this is a problem would depend on one's definition of "necessary government function", I reckon.

Is the state of Mississippi a 'necessary function', we could reduce the federal deficit by kicking them out of the union.

I'm pretty cool with that, actually.

I'm kind of a northern secessionist though.

Kryzbyn wrote:

thejeff wrote:

The Bain approach, it seems to me, would be to cut back or sell off anything that wasn't profitable in the short term, even if it was a necessary government function.

Whether or not this is a problem would depend on one's definition of "necessary government function", I reckon.

Is the state of Mississippi a 'necessary function', we could reduce the federal deficit by kicking them out of the union.

Bain would, if they were running things.

From a friend:

Dear Mississippi Citizens,
Why are you a red state? Consolidated Federal Funds data (Census Bureau, 2009) reports that you, Mississippi, received more than $53.7 billion in grants, subsidies, direct loans, retirement and disability benefits, other direct payments to individuals, direct payment [not to individuals], guaranteed loans, procurement contracts, and salaries and wages in 2009. $53.7 billion in Federal Funding to the state with the highest poverty rate. Should your electoral votes really go to the rich guy who wants to cut out most of this?

Money spent by private businesses has to be taken from the people in the form of high prices that allow for the business to profit well above and beyond the costs of performing the useful tasks you ascribe to them. Every extra I have to spend on a can of peas so that the higher ups at Green Giant can afford that second or third Benz.

You keep using defense spending as an example of wasteful government spending, where the money multiplier is much lower, and I agree. We should cut defense spending considerably. But don't throw the baby out with the bathwater, because there are a lot of necessary services that the federal (and state, and local) government performs that would cost more in private sector's hands, which is just as bad as a tax. Worse even, because we have no control over how a private business spends its spoils, whereas we do have some say in how the gov't does.

Ah, the money multiplier, wonderful concept. Was going to bring it up myself.

Here's the thing: most federal spending is on transfer payments. Social Security, Medicare, Medicaid, etc.

What's the multiplier there... compared to say... if the money was not taken out in taxes? Since it already would be in the private sector, without wasteful gov't re-allocation and the agency costs... then it must be LOWER for Transfer payments than if it were kept in the private sector.

In other words, that money would be in the economy doing work anyway. Taking it and literally giving it to someone else doesn't multiply it's impact. It subtracts from it.

I dunno the figures, and I know the defense dept. is way down on the chain, but right there with it, as regards to the Money Multiplier, has to be Health Spending. An enormous percentage of it is completely wasted, most of it goes to people who are no longer productive... it's a horrible way to boost an economy. Yet that's what's done.

As far as the "higher ups at Green Giant" go, it's a ridiculous argument. People making money isn't a bad thing, and trust me, the margins on peas are pretty low.

Name a government program that has no purpose. You equate these nebulous programs with Magic cards, but give no equivalent government program. You say they are everywhere, but like Romney can't name one.

I did... the National Flood Insurance Program. But if you want more:

• $75,000 to promote awareness about the role Michigan plays in producing Christmas trees & poinsettias.
• $15.3 million for one of the infamous Bridges to Nowhere in Alaska.
• $113,227 for video game preservation center in New York.
• $550,000 for a documentary about how rock music contributed to the collapse of the Soviet Union.
• $48,700 for 2nd annual Hawaii Chocolate Festival, to promote Hawaii’s chocolate industry.
• $350,000 to support an International Art Exhibition in Venice, Italy.
• $10 million for a remake of “Sesame Street” for Pakistan.
• $35 million allocated for political party conventions in 2012.
• $765,828 to subsidize “pancakes for yuppies” in the nation’s capital.
• $764,825 to study how college students use mobile devices for social networking

Sen. Tom Coburn (R-OK) publishes a book of these every year. These are just a few from last year.

http://www.coburn.senate.gov/public/6946d43b-bccf-4579-990e-15a763532b40.ht ml

http://www.cagw.org/ is another good resource.

Seeing as you just advocated cutting off healthcare for retirees who are "no longer productive" I can't see as we're going to find common ground. You're a monster.

meatrace wrote:

Money spent by private businesses has to be taken from the people in the form of high prices that allow for the business to profit well above and beyond the costs of performing the useful tasks you ascribe to them. Every extra I have to spend on a can of peas so that the higher ups at Green Giant can afford that second or third Benz.

You keep using defense spending as an example of wasteful government spending, where the money multiplier is much lower, and I agree. We should cut defense spending considerably. But don't throw the baby out with the bathwater, because there are a lot of necessary services that the federal (and state, and local) government performs that would cost more in private sector's hands, which is just as bad as a tax. Worse even, because we have no control over how a private business spends its spoils, whereas we do have some say in how the gov't does.

Ah, the money multiplier, wonderful concept. Was going to bring it up myself.

Here's the thing: most federal spending is on transfer payments. Social Security, Medicare, Medicaid, etc.

What's the multiplier there... compared to say... if the money was not taken out in taxes? Since it already would be in the private sector, without wasteful gov't re-allocation and the agency costs... then it must be LOWER for Transfer payments than if it were kept in the private sector.

In other words, that money would be in the economy doing work anyway. Taking it and literally giving it to someone else doesn't multiply it's impact. It subtracts from it.

I dunno the figures, and I know the defense dept. is way down on the chain, but right there with it, as regards to the Money Multiplier, has to be Health Spending. An enormous percentage of it is completely wasted, most of it goes to people who are no longer productive... it's a horrible way to boost an economy. Yet that's what's done.

Again we're back to the idea that government spending is, by it's very nature, regardless of what it's spent on, worse than private sector spending. Which appears to be nothing more than an article of faith.

Every time I see those lists, I see a large number of projects that I support my money going towards. Of that list, I support more than half of them, even though you intentionally made them sound as rediculous as possible. You see, I support public funding for the arts and education, which many of those fall under. And the study on college student use of mobile devices could be a huge boon to lots of organizations, buisnesses, and fields of research. The private sector doesn't like to fund research unless it has clear uses for its bottom line, and then it doesn't like to share it.

Last time I looked at one of these lists, it contained numberous studies that were doing important medical research selected because they had funny names.

Where do you imagine the money the government spends goes to?

Are you claiming it disappears into some sort of dimensional vortex? Instead of either wages to government employees, who then turn around and buy things like food, cars, homes or rent, or buying products from private companies, who use the money to pay their employees. Or in programs that go to poor people so they can afford things like food and rent.

Yes. But what are the gov't employees DOING? Are they doing good things that are productive? Or are they doing stupid things? Just shoveling money at the gov't doesn't make anyone richer.

And are you claiming all private sector spending is spent with perfect efficiency?

no, but I am claiming that this remains a free country, and if stupid rich people want to spend money on being idiots, well then more power to them. I get to laugh.

I think there is a balance, but in times of economic trouble, government spending becomes kind of a 'rock bottom'. As long as the government is engaging in economic activity and mandating certain things, we can't get any worse. That doesn't mean I think the government should control everything.

Keynesian thinking works sometimes. Not all the time.

Giving people a paycheck is better than charity. Increasing the number of paychecks received will increase demand for goods and services.

Yes, but WHO IS FOOTING THE BILL? What is being done to earn this money?

The Federal gov't has a bad record on making its expenditures work to increase productivity. It does, did, will continue to do, some things really, really well (Federal Highway System, FDIC, Nat'l Weather Service).

This doesn't mean that gov't solutions are the best, particularly at a time when the business community has become ever more parasitic on that gov't for contracts.

Bush II enlarged the gov't by a ridiculous amount. Obama has refused to rein in non-defense discretionary spending, and spent a year passing a bill that paves the way to a national healthcare crisis. It's a bad situation all around, and throwing more money at a Congress as inept as this one is (and the next one will be) isn't the answer.

http://moneymorning.com/2012/08/31/one-of-the-decades-biggest-examples-of-w asteful-government-spending/

I do want to say there is nothing inherently "good" or "useful" to our society about private vs. public spending, though you clearly feel differently. The rich getting richer is fine because it's private spending. The safety net for the poor is bad because it's public spending.

I understand the free market only serves to encourage behavior that is profitable That is not a virtue!! because it leaves behinds hundreds of millions of citizens. That thinking is deleterious to a civil society in which we all participate.

As a democracy we have the right to decide where we want money spent. Those wasteful programs going to people who "no longer produce" are things that the majority of people believe are a good thing to have in our society. We have the power to decide that some things need to be paid for, not because they are profitable, but because they are necessary. Public investment in green energy is a necessity if we are ever going to transition to a sustainable economic model which the invisible hand will never move us towards because it is anathema to the infinite growth model on which modern capitalism is predicated.

What matters to people is not how much they're taxed, but how much they have left after all the necessities are paid for. This includes healthcare. If the government can do it more efficiently then it is a superior model and saves people money in the long run. Having a for-profit health care model is an incredibly bad idea if you care about the welfare of your citizenry. Regardless, the money that the federal government pays for healthcare goes to doctors and other healthcare workers, so I'm absolutely puzzled by your assertion that the money multiplier is not in effect for these expenditures.

If you cut defense spending in half, along with allowing the Bush tax cuts to expire on the wealthy, there would be no need to cut anything else. Period. Remove the cap for SS/Medicare/Medicaid tax and we'd run a huge surplus. Defense accounts for >50% of the US's discretionary budget. Again I want to stress I'm not blanket defending Social Security. I think it should be transitioned to be a single-payer, opt-in healthcare system. Medicare and SS rolled into one fund and accessible by all.

What's the multiplier there... compared to say... if the money was not taken out in taxes? Since it already would be in the private sector, without wasteful gov't re-allocation and the agency costs... then it must be LOWER for Transfer payments than if it were kept in the private sector.

In other words, that money would be in the economy doing work anyway. Taking it and literally giving it to someone else doesn't multiply it's impact. It subtracts from it.

Not necessarily. Money inherrently collects at the top and doesn't move from there. The wealthy do not spend it and they put it into whatever investments they think will get them the most returns. At that point, it more or less stops circulating. Trickle down ecconomics does not work. With no incentive to invest back in a company or its employees, employers wont.

• $75,000 to promote awareness about the role Michigan plays in producing Christmas trees & poinsettias.

• $15.3 million for one of the infamous Bridges to Nowhere in Alaska.

This seems pretty solidly pork.

• $113,227 for video game preservation center in New York.

• $550,000 for a documentary about how rock music contributed to the collapse of the Soviet Union.

Down with art! Am I right?

• $48,700 for 2nd annual Hawaii Chocolate Festival, to promote Hawaii’s chocolate industry.

Yep. because it's a waste of money to encourage people to buy domestic chocolate rather then importing it from third world hell holes.

• $350,000 to support an International Art Exhibition in Venice, Italy.

Heavens forbid we support art. Do you have details? Was it just a gift from that state department or was it the cost of transporting part of one of the national collections?

• $10 million for a remake of “Sesame Street” for Pakistan.

Probably the best g*+ d~%n money we could spend there. I mean, seriously, why do so many conservatives want to burn Sesame Street to the ground and piss on the ashes?

• $35 million allocated for political party conventions in 2012.

If that was the only money they received, cool. Its not so it'ss probably not needed.

• $765,828 to subsidize “pancakes for yuppies” in the nation’s capital.

• $764,825 to study how college students use mobile devices for social networking

Pure research is stupid!

Sen. Tom Coburn (R-OK) publishes a book of these every year. These are just a few from last year.

Tom Coburn is stupid. No, seriously. The man is an idiot.

Yakman wrote:

What's the multiplier there... compared to say... if the money was not taken out in taxes? Since it already would be in the private sector, without wasteful gov't re-allocation and the agency costs... then it must be LOWER for Transfer payments than if it were kept in the private sector.

In other words, that money would be in the economy doing work anyway. Taking it and literally giving it to someone else doesn't multiply it's impact. It subtracts from it.

Not necessarily. Money inherrently collects at the top and doesn't move from there. The wealthy do not spend it and they put it into whatever investments they think will get them the most returns. At that point, it more or less stops circulating. Trickle down ecconomics does not work. With no incentive to invest back in a company or its employees, employers wont.

Precisely. At its heart we're talking about government spending being a countercyclical force. If we don't take from the top and inject it in socially necessary programs lower down the food chain, that money just evaporates, or emigrates.

Irontruth wrote:

Where do you imagine the money the government spends goes to?

Are you claiming it disappears into some sort of dimensional vortex? Instead of either wages to government employees, who then turn around and buy things like food, cars, homes or rent, or buying products from private companies, who use the money to pay their employees. Or in programs that go to poor people so they can afford things like food and rent.

Yes. But what are the gov't employees DOING? Are they doing good things that are productive? Or are they doing stupid things? Just shoveling money at the gov't doesn't make anyone richer.

But you're arguing that even if they're doing something productive, it's worse than someone in the private sector doing something stupid. (You may not mean this, but it's how you're coming across: See you're dissing of the multiplier effect)

Irontruth wrote:

And are you claiming all private sector spending is spent with perfect efficiency?

no, but I am claiming that this remains a free country, and if stupid rich people want to spend money on being idiots, well then more power to them. I get to laugh.

Smart rich people often do things with their money that help them, but not the rest of us. Like blowing commodity bubbles and cashing out at the top. Like developing better algorithms to predict market trends milliseconds faster so they can skim money off trades.

Irontruth wrote:

I think there is a balance, but in times of economic trouble, government spending becomes kind of a 'rock bottom'. As long as the government is engaging in economic activity and mandating certain things, we can't get any worse. That doesn't mean I think the government should control everything.

Keynesian thinking works sometimes. Not all the time.

Not all the time, but it works best in a demand crisis, like we're in now. Rich people and big corps have plenty of money. They've done very well since the recession. That money isn't being used to boost the economy. Letting them keep more won't do it either.

Bush II enlarged the gov't by a ridiculous amount. Obama has refused to rein in non-defense discretionary spending, and spent a year passing a bill that paves the way to a national healthcare crisis. It's a bad situation all around, and throwing more money at a Congress as inept as this one is (and the next one will be) isn't the answer.

We're already in a national health care crisis. That's why he had to try to fix it. It's admittedly only a stopgap measure, but it was the best we could get through.

Caineach wrote:

Yakman wrote:

What's the multiplier there... compared to say... if the money was not taken out in taxes? Since it already would be in the private sector, without wasteful gov't re-allocation and the agency costs... then it must be LOWER for Transfer payments than if it were kept in the private sector.

In other words, that money would be in the economy doing work anyway. Taking it and literally giving it to someone else doesn't multiply it's impact. It subtracts from it.

Not necessarily. Money inherrently collects at the top and doesn't move from there. The wealthy do not spend it and they put it into whatever investments they think will get them the most returns. At that point, it more or less stops circulating. Trickle down ecconomics does not work. With no incentive to invest back in a company or its employees, employers wont.

Precisely. At its heart we're talking about government spending being a countercyclical force. If we don't take from the top and inject it in socially necessary programs lower down the food chain, that money just evaporates, or emigrates.

Right. The real problem with government policy over the last few decades isn't the stimulus spending in the hard times, it's that we haven't been counter-cyclical in the good times. See massive tax cuts under Bush and Greenspan's cheap money policies that helped blow the housing bubble up.

Yakman wrote:

What's the multiplier there... compared to say... if the money was not taken out in taxes? Since it already would be in the private sector, without wasteful gov't re-allocation and the agency costs... then it must be LOWER for Transfer payments than if it were kept in the private sector.

In other words, that money would be in the economy doing work anyway. Taking it and literally giving it to someone else doesn't multiply it's impact. It subtracts from it.

Not necessarily. Money inherently collects at the top and doesn't move from there. The wealthy do not spend it and they put it into whatever investments they think will get them the most returns. At that point, it more or less stops circulating. Trickle down economics does not work. With no incentive to invest back in a company or its employees, employers wont.

What do you think those investments are?

Scrooge McDuck swimming in a pile of coins?

It is the money that finances bonds, equities, capital of all sorts, construction, R&D, wages, everything. Business needs financing. Gov't needs financing. The money has to come from somewhere.

What are those returns? The profits! From businesses that WORKED! That made products that people wanted! It's a good thing!

Do Capital Gains Rates need to be as low as they are? Probably not. But to say that money doesn't move from the top is just plain wrong. Yes, it has a tendency to cycle back there, but only AFTER it does productive work.

On a slightly different note to the current tangent

Obama & Romney policies on how to grow the tech industry.

I particularly love Romney's assertion that we need to increase the number of tech-related visas we issue. We really need more people competing with our underpaid college grads who can't find jobs.

Caineach wrote:

Yakman wrote:

What's the multiplier there... compared to say... if the money was not taken out in taxes? Since it already would be in the private sector, without wasteful gov't re-allocation and the agency costs... then it must be LOWER for Transfer payments than if it were kept in the private sector.

In other words, that money would be in the economy doing work anyway. Taking it and literally giving it to someone else doesn't multiply it's impact. It subtracts from it.

Not necessarily. Money inherently collects at the top and doesn't move from there. The wealthy do not spend it and they put it into whatever investments they think will get them the most returns. At that point, it more or less stops circulating. Trickle down economics does not work. With no incentive to invest back in a company or its employees, employers wont.

What do you think those investments are?

Scrooge McDuck swimming in a pile of coins?

It is the money that finances bonds, equities, capital of all sorts, construction, R&D, wages, everything. Business needs financing. Gov't needs financing. The money has to come from somewhere.

What are those returns? The profits! From businesses that WORKED! That made products that people wanted! It's a good thing!

Do Capital Gains Rates need to be as low as they are? Probably not. But to say that money doesn't move from the top is just plain wrong. Yes, it has a tendency to cycle back there, but only AFTER it does productive work.

This would only be true if they were keeping the money in for long term investment. But they aren't. They are buying stocks and then selling them to a someone else sometimes seconds later at a higher price, then liquidating at the top. Anyone who is in for long term investments is getting screwed because of inflated prices.

This would only be true if they were keeping the money in for long term investment. But they aren't. They are buying stocks and then selling them to a someone else sometimes seconds later at a higher price, then liquidating at the top. Anyone who is in for long term investments is getting screwed because of inflated prices.

Precisely. That's how most of the rich in this country invest- the stock market.

Few other points:

There is an institutional obsession about short-term gains. A company "invests" or even outright buys a smaller start up. That start up is bought because it was starting to be profitable, or showing promise, and producing a desired product or service, probably approaching economy of scale. Costs are cut to make it more profitable, which means the workers get paid less or get less benefits, and the new owners blame the union and fire people and bust heads. The bottom line is enhanced, and this company turns around and sells it again after maybe 18 months, after extracting wealth and cooking the books, to a third company looking to do the same. And so the wheel turns, and the fat cats get fat and the workers get worked to the nub. How does this help society?

Also, a greater percentage of money is spent in this country, not on producing goods and services there is demand for, but stimulating the demand for crappy goods and services through marketing campaigns. It's all imaginary.

What I need: food, shelter (w/heat), running water, internet connection, maybe 2 new pairs of underpants and 2 new t-shirts per year to replace old ones worn out. Also, internet connection, because everything else I consume is digital.

Again we're back to the idea that government spending is, by it's very nature, regardless of what it's spent...

No, and that's not what I've said.

I've pointed out that the money multiplier argument is a bad one to make for most of gov't spending... because most of gov't spending is:

a) transfer payments, or shuffling money between private sector actors
b) medical spending, which is mostly used to keep unproductive people healthy
c) military spending, which, if I understand you correctly, we both agree is not a good way to boost the economy (correct me if I'm wrong)
d) servicing the debt

The Money Multiplier is wonderful for items that make the economy more productive. The gov't has lots of programs that do this, like the National Weather Service, the FDIC, the CDC, the the Census Bureau, and lots of other stuff.

For most of gov't spending, the money multiplier isn't really there.

This would only be true if they were keeping the money in for long term investment. But they aren't. They are buying stocks and then selling them to a someone else sometimes seconds later at a higher price, then liquidating at the top. Anyone who is in for long term investments is getting screwed because of inflated prices.

Flash-trading is poorly understood by many.

a) it does not represent the majority of money in the stock market
b) it DOES represent the majority of trades occurring
c) it's primary benefit is to add liquidity - you can always find a buyer or a seller

Flash-trading has problems, but those are mostly related to mistakes in the algorithms. In and of itself, it is an economic benefit.

On a slightly different note to the current tangent

Obama & Romney policies on how to grow the tech industry.

I particularly love Romney's assertion that we need to increase the number of tech-related visas we issue. We really need more people competing with our underpaid college grads who can't find jobs.

There is a huge need to make the high-end visa system more open. We bring in thousands of people to come to the world's best universities, train them, and then send them home. Meanwhile, companies are starved for tech workers.

It's insane. Romney's on the right track.

We should brain drain the s%&* out of the rest of the world, and our visa system should be an engine of growth, not a haphazard jumble of idiocy an mismanagement. Bring me your programmers, your scientists, your engineers!

Caineach wrote:

On a slightly different note to the current tangent

Obama & Romney policies on how to grow the tech industry.

I particularly love Romney's assertion that we need to increase the number of tech-related visas we issue. We really need more people competing with our underpaid college grads who can't find jobs.

There is a huge need to make the high-end visa system more open. We bring in thousands of people to come to the world's best universities, train them, and then send them home. Meanwhile, companies are starved for tech workers.

It's insane. Romney's on the right track.

We should brain drain the s!*@ out of the rest of the world, and our visa system should be an engine of growth, not a haphazard jumble of idiocy an mismanagement. Bring me your programmers, your scientists, your engineers!

While we have high unemployment? Even in the tech sectors? (Not as bad as the rest of the economy, but still not boom time.)

Overall, in the long run? Yes. Now? More tech visas will depress wages and increase unemployment in those sectors. Not a good thing.

Edit: Companies are not starved for tech workers. If they were, I'd be making more money. They're starved for cheap tech workers. Possibly ones with exactly the right mix of skills, but then they won't even consider any on-the-job training.

thejeff wrote:

Again we're back to the idea that government spending is, by it's very nature, regardless of what it's spent...

No, and that's not what I've said.

I've pointed out that the money multiplier argument is a bad one to make for most of gov't spending... because most of gov't spending is:

a) transfer payments, or shuffling money between private sector actors
b) medical spending, which is mostly used to keep unproductive people healthy
c) military spending, which, if I understand you correctly, we both agree is not a good way to boost the economy (correct me if I'm wrong)
d) servicing the debt

The Money Multiplier is wonderful for items that make the economy more productive. The gov't has lots of programs that do this, like the National Weather Service, the FDIC, the CDC, the the Census Bureau, and lots of other stuff.

For most of gov't spending, the money multiplier isn't really there.

a) Some people circulate the money faster. That's where much of the multiplier comes from. Often the benefits of what is produced are too long-term to really be counted. Poor people tend to spend money faster. In a demand crunch that stimulates the economy more than all but the most direct investments made by rich people.

b) Medical spending still goes to doctors and hospitals and drug manufacturers, etc, etc. If you're suggesting we should cut it because keeping unproductive people healthy isn't efficient, then I agree with meatrace. That's monstrous.

While we have high unemployment? Even in the tech sectors? (Not as bad as the rest of the economy, but still not boom time.)

Overall, in the long run? Yes. Now? More tech visas will depress wages and increase unemployment in those sectors. Not a good thing

http://www.theatlantic.com/business/archive/2012/10/revenge-of-the-gee ks-the-tech-guys-are-winning-the-recovery/263443/

Wages are rising in the tech sector. Demand for their services is up. There's a lot of need for these people - I dunno where you live, but in the DC Area, if you can program or manage databases, you have no problem getting a good job.

Microsoft has 3,400 open positions for these people!

http://thehill.com/blogs/hillicon-valley/technology/258985-microsoft-lack-o f-tech-workers-approaching-genuine-crisis

If you have a degree in computer science, there are lots of people desperate to hire you.

Again we're back to the idea that government spending is, by it's very nature, regardless of what it's spent on, worse than private sector spending. Which appears to be nothing more than an article of faith.

This. Which is why I don't bother arguing with people like this.

It is a mathematical fact that everyone acting in their own best interest does not always produce the best outcome, but good luck explain that to a "free market" advocate. Likewise, wealth disparity has reached levels not seen in decades. Further concentrating the wealth in the hands of the few is good for exactly one group -- the wealthy.

Does that mean we should all move to communes? Of course not. The truth, as always, is someplace in between. To me, Obama represents a fairly centrist Keynesian, irrespective of all the silly "socialist" rhetoric.

Edit: Companies are not starved for tech workers. If they were, I'd be making more money. They're starved for cheap tech workers. Possibly ones with exactly the right mix of skills, but then they won't even consider any on-the-job training.

This matches my experience as well.

a) Some people circulate the money faster. That's where much of the multiplier comes from. Often the benefits of what is produced are too long-term to really be counted. Poor people tend to spend money faster. In a demand crunch that stimulates the economy more than all but the most direct investments made by rich people.

Yes, poor people spend money faster - but their demands are inelastic. They haven't seriously cut back on spending... because they can't. They buy beans instead of meat - but they weren't going to buy a new pick up before, and they aren't going to buy one now. Welfare doesn't make an economy boom.

b) Medical spending still goes to doctors and hospitals and drug manufacturers, etc, etc. If you're suggesting we should cut it because keeping unproductive people healthy isn't efficient, then I agree with meatrace. That's monstrous.

Medical spending is unproductive, by and large. Most of it goes to make people healthy who aren't going to work (the elderly and retirees). That isn't a good investment. Money multipliers can come from healthcare (pre-natal care is a wonderful way to spend money) but most of our dollars are not spent getting workers back to work or ensuring that young people grow up healthy.

I'm not suggesting that we abandon these programs. But we can't grow our economy in a meaningful way if almost 20% of our spending is focused on healthcare, and the gov't throwing money at Hospital Cabals isn't going to help the situation either.

I'm not suggesting that we abandon these programs. But we can't grow our economy in a meaningful way if almost 20% of our spending is focused on healthcare, and the gov't throwing money at Hospital Cabals isn't going to help the situation either.

And what I'M saying is that, given that these programs are necessary if perhaps not the best investment monetarily (you monster), let's cut the programs that are BOTH wasteful AND not beneficial to society before you put my grandma in your crosshairs.

Yakman wrote:

I'm not suggesting that we abandon these programs. But we can't grow our economy in a meaningful way if almost 20% of our spending is focused on healthcare, and the gov't throwing money at Hospital Cabals isn't going to help the situation either.

And what I'M saying is that, given that these programs are necessary if perhaps not the best investment monetarily (you monster), let's cut the programs that are BOTH wasteful AND not beneficial to society before you put my grandma in your crosshairs.

something like 1/3 of medical procedures are unnecessary.

but anyhow, i'm primarily arguing that the government money multiplier is not what it is cracked up to be.

something like 1/3 of medical procedures are unnecessary.

Such as?

And what sort of statistical data are you using for that estimate?

but anyhow, i'm primarily arguing that the government money multiplier is not what it is cracked up to be.

Well, you're saying that. But you don't really have much to go on other then the truism that some government spending is wasteful and the assertion that any money taken out of the private sector is preventing productive work. All private sector work (or even savings and speculation) is assumed useful.

meatrace wrote:

Yakman wrote:

I'm not suggesting that we abandon these programs. But we can't grow our economy in a meaningful way if almost 20% of our spending is focused on healthcare, and the gov't throwing money at Hospital Cabals isn't going to help the situation either.

And what I'M saying is that, given that these programs are necessary if perhaps not the best investment monetarily (you monster), let's cut the programs that are BOTH wasteful AND not beneficial to society before you put my grandma in your crosshairs.

something like 1/3 of medical procedures are unnecessary.

Everyone says that untile they are the ones that needs the medical procedure.

something like 1/3 of medical procedures are unnecessary.

I'm precisely 100% sure that you pulled that out of your rectum, but even if true, this is the fault of the government HOW?

100% of fashionable clothes bought are unnecessary.
100% of children are unnecessary.
100% of posts on the Paizo OTD forum are unnecessary.

100% of posts on the Paizo OTD forum are unnecessary.

Well, yours are.

Vive le Galt!

This talk reminds me a bit of Charles Dickens. Karl Marx and he were born in the same year and both had very different views on the industrial revolution. Will history repeat itself? I can imagine most of these republicans asking "Are there no prisons? Are there no workhouses?"

100% of children are unnecessary.

I think I might have to argue with this statement. Survival of the species and all that.

meatrace wrote:

100% of children are unnecessary.

I think I might have to argue with this statement. Survival of the species and all that.

CLONES!

thejeff wrote:

Edit: Companies are not starved for tech workers. If they were, I'd be making more money. They're starved for cheap tech workers. Possibly ones with exactly the right mix of skills, but then they won't even consider any on-the-job training.

This matches my experience as well.

companies try their best not to invest in training. it's really expensive.

100% of posts on the Paizo OTD forum are unnecessary.

All of mine are necessary. After all, someone on the internet is wrong.

But what if it's you?

Vive le Galt!

Yakman wrote:

something like 1/3 of medical procedures are unnecessary.

I'm precisely 100% sure that you pulled that out of your rectum, but even if true, this is the fault of the government HOW?

100% of fashionable clothes bought are unnecessary.
100% of children are unnecessary.
100% of posts on the Paizo OTD forum are unnecessary.

it's not the fault of the gov't. but if the gov't is throwing it's money down a pit, that's not benefitting anyone. Anyhow, here's a link. The 1/3 is an estimate

http://www.nytimes.com/2012/04/04/health/doctor-panels-urge-fewer-routine-t ests.html?_r=4&partner=MYWAY&ei=5065&