Does it anger you that the elite of your country is robbing its citizens blind?

[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 ? They propably buy a bottle of champagne and some caviar and go to St. Tropez for 1 month.

[Lord Merciless]

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.

[Lord Merciless]

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.

[Q Classic]

Like public health care, education, etc.

no, more like handing out "youth awards" to prisoners as part of the recent security bill or draining wetlands in mississippi so they can grow cotton, which hasn't really been profitable in years because of overproduction.

sorry, i don't think public health care, science or education qualifies as pork. don't assume to know what i believe.

[Agathon]

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.

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?

[Boris Godunov]

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.

[Q Classic]

Before I'd assent to this example I'd want to know why they did this.

your guess is as good as mine, but i question it when they actually had a surplus of teachers at one particular school... and then hired another one.

One could say the exactly same about private spending.

but i'd rather feel stupid for my mistake, rather than angry for someone else's.

You still haven't given a general reason as to why government spending is somehow worse. In fact government spending is more accountable than private spending because incompetent governments are accountable to all the voters whereas private spending is (only in some cases) accountable to shareholders.

except, see, many of those sentators who make oodles of goodwill at home through pork projects are never held to task for wasting said money.
on the other hand, a ceo who spends money on buying a private jet while his company isn't doing so hot is, more often than not, fired.

[Boris Godunov]

Originally posted by Agathon


When the voters get ****** over by the bad spending policies of their elected representatives, they can't blame anyone else.

Ah, but you have to stop there...The U.S. isn't Canada, and we don't have such accountability here. Our political system eliminates accountability, so each party can point the finger at the other, and the voters really don't know who is to blame for inefficient policies.

It's a sickness that has infested the withered body of American politics to an almost irreversable degree.

[Gatekeeper]

What I've learned over the years is that pork barrel projects are only "pork barrel" if they're not in or near the complainer's home district.

Gatekeeper

[Agathon]

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.

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?

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.

First, why is spending health or education indicative of a market failure?

Because these embody significant collective action problems (prisoner's dilemmas).

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.

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.

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.

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.

[Q Classic]

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.

[Agathon]

Originally posted by Boris Godunov


Ah, but you have to stop there...The U.S. isn't Canada, and we don't have such accountability here. Our political system eliminates accountability, so each party can point the finger at the other, and the voters really don't know who is to blame for inefficient policies.

It's a sickness that has infested the withered body of American politics to an almost irreversable degree.

What you need is another revolution; not a tax cut.

[Agathon]

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.

[Agathon]

Originally posted by Q Cubed

except, see, many of those sentators who make oodles of goodwill at home through pork projects are never held to task for wasting said money.

But that money isn't wasted. Presumably it benefits the senator's home district. Whether or not this is the best use of the cash is another thing entirely.

From the Americans on this thread I get the feeling that your country could use a dose of democracy. Democracy is quite good at stopping these things (although it isn't perfect).

[Q Classic]

ag, that's a wonderful sentiment.

unfortunately, we'll probably never see it again, seeing as most everything now has been bought and paid for by specific special interests.

as for whether it's wasted or not, it's a fair point. some aren't as wasteful, such as if jobs are brought to the region. on the other hand, there are some which i can't find any justification for:
like the said "youth awards" for prisoners in jail.

[Dauphin]

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.

If they merely inherite all the money they have then they don't have an income tax bill to pay in the first place, and so will not be getting any tax relief on it. Not to mention that when the money was earned by their benefactor (whoever it may be) it was subject to higher rate taxation, and then (depending on the country and amounts involved) subject to a second taxation in the form of inheritance tax.

[rah]

Originally posted by Big Crunch


If they merely inherite all the money they have then they don't have an income tax bill to pay in the first place, and so will not be getting any tax relief on it.

Ah, no, these are likely people making money off dividends from investments. They'll get the biggest break.

[Dauphin]

Originally posted by rah


Ah, no, these are likely people making money off dividends from investments. They'll get the biggest break.

If spending money wisely involves investing in the economy through stocks and shares then more fool the idiots who spend their inheritance on Champagne and caviar in St Tropez.

[Adam Smith]

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.

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??

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.

Originally posted by Agathon I have no problem with curbing that.

Neither do I.

T

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).

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.

[Agathon]

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.

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.

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.

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.

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).

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.

[Imran Siddiqui]

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?

Well, that forces American companies to be more efficient, so yes buying foreign imports are actually better for the economy.

--

And no, the tax cut doesn't bother me. The rich pay more in taxes, they get more in tax relief. Seems ok to me.

[Guynemer]

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.

[GePap]

The rich can afford to pay more in taxes and they also are rich enough to pay people to avoid as many taxes as possible. People making 50,000 a year can;t afford a guy at 500 dollars an hour to tell you how to hide money in the Bahamas so the IRS never gets to it.

Besides, in order to cut these taxes, without any signifcant cut in public programs the government will now begin to use a large fraction of saings to fund its deficit, money that will thus not be able to be invested by the public. Now, much of that money isn;t American anyway (since we keep funding our foreign capital addiction) but this cut still has costs. Besides, most states will have to raise taxes and cut services anyway, so I guess a lot of the "relief" the middle classes get will get eaten up in higher local taxes and having to pay more out of pocket for services cut by the state.

[Alexander's Horse]

I thought the idea of government welfare was to tax the rich and help the poor.

Silly me.

[Ted Striker]

Yes it does bother me and so does those damn CEO compensation packages.

[I Am Jeff]

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.

[Imran Siddiqui]

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 .

[Dis]

The main thing I hate the replicans for is they don't decrease spending.

cutting taxes does nothing but drive up the debt!. Now if they cut spending along with a tax cut...

I want smaller goverment dammit!! The repuclicans are supposed to be for a smaller goverment. But they never cut spending!! They usually increase spending on the military along with a tax cut. Stupid.

I hate both political parties with a passion.

libertarian all the way!

[Space05us]

Im going to be a member of the top 1% when I turn into an old fogey CEO, so love me now while I still work at the video store making $6 an hour