Well, that took a while. Sorry for the delay. I did not remove higher quote levels as usual in order to help everyone keep track of the lines of conversation.
Rough Giraffe wrote:Let me make sure I have this crystal clear here. You argue that total government size has decreased under Obama. I prove at the very least that the size of the Federal government (which Obama actually has control over) has increased. Your new argument is that although Obama is not responsible for the size of state government, his goal was to prevent layoffs, and now you're crediting Obama for reducing the size of "total" government because people at the state level lost their jobs? In other words, by your own admission, Obama failed at the job he set out to do during a time when it was critical that he succeed, and you think that this supports your argument? I don't see that as decisive evidence.
Let's go back to the beginning of this line of discussion.
Rough Giraffe wrote:
The picture is arranged from stage left (political Right/fiscal or political conservative) to stage right (political Left/Liberal or Progressive).
Dubious. Do you think that the price-setting, EPA-starting Nixon is to the right of tax-cutting, government
Obama? Or that dictatorial, society-overthrowing Lincoln should be over there? The painter's explanation (mouse over to see explanations of different parts
) emphasizes more how he thinks they helped "the forgotten man" on the bench, which seems to correlate with but not quite follow a left-right spectrum.
Rough Giraffe wrote:
Those graphs are dubious. I know you specifically picked "total government" instead of "Federal government." State government employment has certainly dropped by a pretty steep margin, however Obama has significantly increased
the size of the Federal government. As for spending, that's increased by a lot too and I'm almost certain that you know it.
Valhallen wrote:And yet state and local governments are part of "the government" often criticized for being too big and intrusive (and they're the ones that interfere more with day to day actions). Even though Obama isn't responsible for it (and rather wanted more aid to fill budget shortfalls that resulted in state and local layoffs), the fact of the matter is that "the government" employs fewer people than it did before Obama took office.
My initial point was to call attention to how you seemed to be applying a narrative based on what certain modern pundits say and imply rather than what presidents have actually done. In particular, discussion of Obama often frames it as a
fait accompli that Obama has grown the government by doing something characterized as transforming the country into a socialist / communist welfare state with government health care, when that is not what he actually did.
Rough Giraffe wrote:
Valhallen wrote:And while spending has increased, it has been slower than during other recent administrations, enough so that spending as a percent of GDP has gone down.
Even if that is true, it's completely and utterly irrelevant. All you're doing is taking an extremely bad situation and trying to make it sound not so bad. Why would the rate of spending increase from year to year have anything to do with how much spending there has been overall?
Since the population and economy tend to grow over time, government employment, expenses, and revenue would normally increase year to year if the same policies were always in place
. Therefore, absolute comparisons over time are not very meaningful (For example, about 125 times as much was spent on defense in 2010 as the entire US GDP in 1800 in real terms - can you tell from that which administration was more hawkish?). To make valid comparisons about the societal impact of policies, absolute numbers must be judged against the size of the population, economy, previous policies, etc. For example, between Obama and Reagan, whose economic record is more "conservative", and whose is more "liberal"? Who ran a larger federal government? Who grew the government more? Who raised taxes more? Who grew the deficit more? The actual answers might not fit the popular "conservative" narrative, but it does help explain things like this
Rough Giraffe wrote:
As you can plainly see, spending merely went high and stayed high, and while taking in fewer revenues. The deficit is now a larger percentage of overall spending than "other recent administrations."
And if you look at that chart, you see that the largest deficit in both absolute terms and as a percent of GDP and government spending was in FY2009, which was the last of Bush's budgets. When discussing the performance of presidents and policies, it is important to look at what actually happened and when, and what direction they took things. Note that Obama's successive budget years have had smaller deficits in both absolute and percentage terms, though projections indicate that Obama will not reach his target of halving it in four years. Do you think that Obama would be closer or farther from that goal if Congressional Republicans had allowed the top bracket tax cut expire and passed the jobs bill
Rough Giraffe wrote: Valhallen wrote:
RuffDraft wrote:But to answer your question, Yes, Nixon was, and is, to the Right of Obama. No doubt about it.
But by what yardstick? Policies as implemented? The direction he steered things? How have you reached that conclusion?
Not sure how you want me to explain that. Might as well ask me to explain why a fox and a dog, being different animals, are still related. Someone on the Right can make a decision that a "Leftist" would normally make (like raising taxes) and still be on the Right. Are you suggesting that Nixon was actually a Democrat?
The relationship between foxes and dogs is not exactly mysterious
. There's stuff written about it, even. What I'm getting at is that you have somehow reached the conclusion that "Nixon was, and is, to the Right of Obama." I'm asking how you got there. Do you have a rationale? Do you see "Rightist" and "Leftist" as identities intrinsic to people
, or do they depend on their actions or proposals? Sure, people can do things normally associated with different parts of the political spectrum, but it is still possible to say that one person is more or less in one direction than another. Also keep in mind that "Left" and "Right" do not map perfectly to "Democrat" and "Republican", especially historically (I'll say more about that later). It's pretty easy to build a case that Nixon was (past tense as he has died) farther left than Obama: <NSFW> here, for example
. (The author has a thing for women in overalls, but he makes a good point
And by reasonable standards, Obama is rather to the right
On that note, consider that "Left" and "Right" are not the only distinctions to be made in politics, which has led to a popular model involving a two dimensional arrangement of possibilities
The folks at The Political Compass
rate the current election field like this:
Stewart Alexander, for example, is the Socialist Party USA
candidate. You can see for yourself
where you fit for comparison. In a scheme like that, real-world Communists (as opposed to ideological Marxists) go in the upper left corner, Dictatorships go along the top, with the example of Nazis edging a bit to the right. Theocrats go in the upper right. The left and right middles are kind of generic socialism and free capitalism respectively. Hippy communes and bloody peasants
go in the bottom left corner, anarchists in general go along the bottom, and anarcho-capitalism goes in the bottom right corner. Modern democracies with mixed economies tend to be around the middle, often a bit on the authoritarian side, and the US is currently among the right-most of the major ones. Nixon was rather authoritarian and paranoid, which got him in trouble. Obama may be comparably authoritarian by some measures, but he seems to be less paranoid.
Rough Giraffe wrote:
Valhallen wrote:I'm suggesting that it was a liberal thing for Lincoln to have abolished slavery and freed the slaves, seeing as it overthrew a long-standing cultural institution to correct a perceived wrong. The conservatives of the day wanted to maintain the status quo.
That seems like a very difficult thing for you to prove, considering that the labels of "Liberal" and "Conservative" did not really exist back then, or else people didn't define themselves that way. I don't think you really understand what it means to be a Conservative. It's not about some kind of effort to prevent societal change.
The modern labels of "Liberal" and "Conservative" weren't used as they are now, but the modern all-but-meaningless partisan usage is not what I'm getting at. Check out the first definitions for "liberal
" and "conservative
". Basically, liberals want to fix problems in the status quo (though doing so may risk new problems), and conservatives want to preserve nice things in the status quo or recent past (even if that preserves some problems). They are the basic stances for considering policies, and a society doesn't work very well without both generating a reasoned dialogue. Going more to the "right", there are reactionaries
who often want substantial change to protect or bring back old policies or ideals, such as the Iranian revolutionaries who turned the country into a theocracy. In the other direction are radicals
who want major societal change in new directions, such as revolutionary Communists. So saying that liberals wanted to abolish slavery while conservatives wanted to keep it is a matter of basic definitions. You can use different definitions if you want, but I'm curious as to whether or not you can actually provide cohesive definitions for "what it means to be a Consevative". Seriously, a lot of people these days use Conservative = good, Liberal = bad without having a set of criteria for what fit in each category. When you say that something is Conservative, do you mean that it is good, or do you mean that it fits a particular political ideology with detailed stances on various issues?
Rough Giraffe wrote:Even so, Republicans "of the time" wanted to abolish slavery, not continue it, or "maintain the status quo." It was the Democrat party that desired to prevent Republicans from changing that way of life and destroy the "cultural institution." Are you suggesting that Democrats "of the time" would be recognized as Conservatives by today's standards?
That kind of depends on how you define Conservatism, but as I implied before, political parties are not intrinsically associated with conservatism or liberalism. Using the definitions I've shown previously, the Democratic Party (then known as the Democratic-Republican Party), was established by Thomas Jefferson and his allies as a libertarian opposition to Alexander Hamilton's more authoritarian Federalists. The Federalists won out in terms of steering policy, and the country drifted more towards the strong-central-government system we have today, though Jefferson's ideas have continued to be an influence on many people's political ideology. With some interior disputes and a name change to the Democratic Party, Democrats kind of drifted into a conservative position. As such, they tended to support slavery, though this was not universal, especially in the North. Anti-slavery liberals formed the Republican Party to combat slavery and push for modernization in other parts of the economy in opposition to mostly-Democratic conservative opposition. Republicans came to dominate the north while Democrats held the South, exacerbating tensions between abolitionists and slavery advocates. Many conservatives (including people around the country of all parties) favored maintaining slavery or letting market forces end it naturally over time, but reactionary Democrats in the South eventually came to the position of launching a rebellion to maintain the slave system against perceived liberal Republican threats to it. Lincoln was somewhat liberal in his personal views (thinking that slavery was bad, say), but he had a very conservative view of the president's role with respect to policy. As such, he was in policy against slavery only as he believed doing so served the interests of maintaining the Union (which was how he evaluated policies in general), so while a lot of his actions were liberal (changing things to correct problems), his overall main goal was to preserve the unity and functioning of the country. So while Lincoln achieved his conservative goal, the net result of Lincoln's presidency was a major advancement of liberal policies. Following the Civil War, Republicans dominated nationally, and established ties with big business. Democrats maintained control in the South, where they appealed to racists who didn't like what Republicans had done with the war and Reconstruction. Then came the civil rights movement. The Democratic Party, led more by its Northern members, adopted pro-civil-rights policies, which caused dissent with the southern members of the party. The Republican Party was more focused on economic than social issues, so they appealed passively to opponents of the civil rights movement. Then the Republican Southern Strategy
took advantage of that, winning the South but losing blacks nationwide. Democrats came to power in the North with their new more liberal social policies, and Republicans adopted more conservative social policies popular in the South. And here we are.
To put this in perspective another way, consider the Jim Crow system of segregation in the South in the mid 20th Century*. If someone advocated such a position in 1700, that person would be a revolutionary radical. An advocate of that position in 1850 would be a liberal desiring change within the current political system (and probably a Republican). An advocate in 1950 would be a conservative seeking to maintain the status quo (and probably a southerner, whether Democratic or Republican). And an advocate in 2000 would be a reactionary wanting major change back to an older system.
*Incidentally, this rather aligns with Lincoln's personal views on the appropriate social order for blacks. Moving things in that direction was liberal for his time, but he would have been a conservative had he had the same views a century later.
Also, I see that you used the phrasing "It was the Democrat
party that desired to...". Since the party is actually called
Party, I'm curious about your word choice there. I've seen self-described "Conservatives" use "Democrat" either in apparently disparaging ways or in claims that it is the correct name of the party. What was your intention, if that was intentional?
Rough Giraffe wrote:Also, I like how you call slavery "a perceived wrong." Sort of gives the idea merit, doesn't it?
[Note: You realize that if I said anything like that, I'd surely be labeled a racist? I'm sort of curious why no one else has called you out on that yet...]
Because how people perceive an issue doesn't relate to how right or wrong it is. Abolitionists perceived slavery as wrong, and they wanted to change it through legal reform, which made them liberal with respect to that issue. It doesn't matter that they had good reasons for why slavery was bad. Members of NAMBLA
perceive laws prohibiting sex with minors as wrong, and they want to change them through legal reform, which makes them liberal with respect to that issue. It doesn't matter that their reasons aren't very good. Conversely, people who valued the institution of slavery and wanted to preserve it were conservative with respect to that issue, as are people who want to preserve the prohibition of sex with minors with respect to that issue.
Rough Giraffe wrote:
Valhallen wrote:Lincoln suspended habeas corpus (and did not reinstate it after a court ordered him to do so) and incarcerated thousands of US citizens without trial.
Conspirators who were trying to assassinate the President, secede from the Union and continue the abomination of slavery for years to come. I would do the same thing in his place. If that makes either of us dictatorial, then just call me Hussein.
Conspirators want to assassinate presidents all the time - that's why they have such good security. But anyway, conspirators could have evidence brought against them. I'm talking more about Northerners who spoke out against him
. That's quite a bit more dictatorial than what Obama is accused of. It seems that dictatorial actions tend to get a pass when they are effective, like Obama's drone strikes, but that does not make them less dictatorial.
Rough Giraffe wrote:
Valhallen wrote:He also spent money independently of Congress.
Citation? I don't remember ever hearing about that in school. Of course, I learned about much of Lincoln's history through public education. *rimshot*
. Gradeschool education usually presents a sanitized theme park version of history that glosses over negative aspects of "national heroes" like Lincoln's dictatorial tendencies or Benjamin Franklin's philandering. Have you ever taken a college-level history course? Incidentally, a lot of the push to sanitize gradeschool textbooks these days comes from Texas "Conservatives" who wield a large degree of control over the national textbook market. You might check it out; it's kind of interesting.
Rough Giraffe wrote:But so what if he did? People on both the Right and the Left have done that. I don't think it's right for them to have done so, but why does that mean he's not a Republican or Whig or whatever it was he thought himself to be at the time?
If he did (despite being a Republican), do you think it is inappropriate that he (being dictatorial and society-overthrowing) was placed where he was if the "The Forgotten Man" painting had figures arranged on a left-right political scale?
Rough Giraffe wrote:
Valhallen wrote:Obama has so far displayed fewer dictatorial tendencies.
How about the fact that, in an election year when the problem he is supposed to be solving is unemployment
and problems with the economy
, he finds it more important to make sure that none of our immigration laws are enforced? He came out and suddenly declared that the US would no longer deport any illegal immigrants. Surely you don't think Obama wants us to be the only nation without enforceable immigration laws?
So let me see here. You think that is is dictatorial to NOT hunt down and expel millions of people who are here to work? Also, Obama has set records for deportation numbers while focusing more on deporting criminals
Rough Giraffe wrote:How about the fact that, when evidence exists that Eric Holder, head of the Justice Department, may have bypassed congress in order to promote his anti-gun agenda, Obama agrees to extend Executive Privilege on documents that may have been harmful to his case?
Except that the investigation cleared Holder
, and that use of executive privilege seems to be fairly standard as such things go
. It's not just allegations of conspiracies by partisans that matter, it's actual evidence of wrongdoing. Does this remind you of other manufactured controversies like with ACORN
Rough Giraffe wrote:How about the Cybersecurity Act of 2009 (which thankfully failed) that would have given the President the right to shut down the internet without congressional approval due to any kind of "Cybersecurity Emergency?" That doesn't sound like a power a dictator might use? How many more things do I need to list here?
Sure, it sounds like the kind of power a dictator might use, but that bill never even made it to vote, and Obama has threatened to veto similar subsequent bills. So how does this support your point? As for how many things you have to list, if you're trying to show that Obama is more dictatorial than Lincoln, I don't think the number matters, because I don't think that anything Obama has done is as dictatorial as what Lincoln did (i.e. unlawfully imprisoning his political opponents and shutting down critical newspapers). Or did you have a different point?
Rough Giraffe wrote:
Valhallen wrote:A secondhand statement that Obama's campaign manager proposed a Constitutional amendment to "stifle any and all free speech that challenges Obama" when what he actually proposed was an amendment to overturn the Citizens United verdict (Democrats have their own superPACs which would be outlawed too).
First of all, people are reading the Citizens United ruling and taking it to mean something other than its actual decision. It was not that Corporations Can Spend As Much Money On Political Ads As They Want; it was regarding a stipulation in the 2002 McCain-Feingold Act (A.K.A., the Bipartisan Campaign Reform Act or BCRA) that said releasing a movie about a political candidate within 60 days of a general election or within 30 days of a primary constituted electioneering (paraphrasing) and that spending money on a communications that were considered to be electioneering was outlawed by the FEC. The ruling was that this provision of the McCain-Feingold Act was Unconstitutional. According to Wikipedia, "The case did not involve the federal ban on direct contributions from corporations or unions to candidate campaigns or political parties, which remain illegal in races for federal office."
, that's pretty much exactly what it is, at least in its practical consequences
. The ban on direct contributions wasn't affected because corporations spending money on political ads is not a direct contribution
, it is direct advocacy
. The money never actually goes to a campaign, so corporations can now spend as much as they want on that kind of independent (wink wink, nudge nudge) activity. You might check out some of the fun antics
Stephen Colbert has been getting up to with his superPAC.
Rough Giraffe wrote:The people who are in favor of a constitutional amendment to overturn the Citizens United verdict are often in favor of removing "corporate person-hood" (a term that merely means that a corporation---made up of people---has the same right to free speech, etc, that a person would)
. Corporate personhood is the idea that corporations as legal constructs function in certain ways as individual people in a legal sense, such as the ability to own property, enter contracts, buy and sell stuff, etc. However, this does not mean that corporations start with the full Constitutional protections of citizens and then have certain ones removed; rather, they start as non-entities and are granted a particular subset of Constitutional and legal protections in order to carry out their business as collective entities. In this sense, the Citizens United verdict was rather unusual
in that it said that the rights of a corporation are in some way derived from the people that make it up. Keep in mind that the "speech" of a corporation does not represent its shareholders or general employees, but rather the executives and board of directors (who are the ones with control over what ads are produced). Do you think that corporations should be able to vote in elections as their constituents can? Should their votes count as much as their constituents considered together? People in favor of an amendment to overturn the Citizens United verdict are generally against the interpretation that corporations should enjoy unrestricted "free speech" to spend money on elections, giving them much greater control over laws than the previous lobbying system, and not against the proposition that corporations can do business as legal entities.
Rough Giraffe wrote:
because they're afraid that "Republican" corporations will simply "buy" elections and make sure that only the candidates that they like will be elected. Most of these above people vote Democrat and hate Republicans anyway, and what they fail to realize is that Democrats have historically
been able to raise more money than Republicans by taking advantage of the Unions and holding fundraisers that tend to be targeted towards left-leaning businessmen, Liberal celebrities and anyone else willing to give them money.
And guess what? With campaign contributions limited per contributor, Democrats tended to raise more, given their broader support (the campaign finance system better represented a marketplace
of ideas). With superPACS allowing corporations to directly funnel their enormous disposable incomes into elections, the pattern has reversed
(look at the graphs, especially the bottom one). It certainly looks like someone is trying to buy elections. Look at the charts
of what organizations are spending the most in 2011 and 2012, not just the ones who spent the most in history. As you do so, consider the information about the organizations listed in your link
. The top Democratic-leaning organizations are mostly organizations that aggregate smaller private contributions or represent the interests of groups of working people, while the top Republican-leaning organizations are mostly corporations contributing to advance their own interests (or at least the interests of those in charge of making the donations). Now look at this
, which shows Republican-aligned outside organizations outspending Democratic-aligned outside organizations nearly five to one. Remember this
article? It has some relevant information about who can afford political speech when it is at auction.
Rough Giraffe wrote: Valhallen wrote:
RuffDraft wrote:One thing about Progressives is that they almost always seem to think government can do a better job than the private sector in every way given the chance,
You're describing Communists, not Progressives.
Did you read what I linked earlier
describing Progressives. Communists want public ownership of the means of production, rather than allowing private ownership while letting the government have the ability to control and influence the economy to give the illusion of a free market (which seems to be what is happening nowadays), which is what I'm trying to get at when I describe Progressives.
Except that Progressives don't
want public ownership of the means of production. What you're describing doesn't fit the real world, where the closest thing to that is the proposal for a single-payer health care system (which wasn't even seriously proposed in the health care debate that resulted in the Obamacare expansion of private insurance, and isn't in "The People's Budget"), and even that doesn't actually nationalize private hospitals, it would just set up a national government-run insurance program like what funds the VA hospitals and Medicare, where private insurance would still be allowed to compete
. What world do you live in? Do you understand what Communists actually want
Rough Giraffe wrote:Their solution to everything seems to be to throw money at their favored organizations (Solyndra), rather than letting the people take care of it themselves.
If there is a problem, it usually means that "the people" aren't taking care of it themselves. If a problem is to be fixed, it will probably take time and effort, which cost money. So yes, solutions to most every problem worthy of a government's attention involve money somewhere and one or more organizations tasked with fixing it. Even when the problem is waste of money, it takes some money to fund the effort to make things more efficient. I'll explain what happened with Solyndra later, where I'll contrast it with a case of the government actually
throwing money at favored organizations.
Rough Giraffe wrote:As for "The 'People's' Budget" it's just more of what I described above. It increases the size of government, reduces tax loopholes while jacking up taxes for millionaires and billionaires, addresses capital gains as just another source of income (thereby taxed by the Income Tax rate), assumes the cost of Medicare/Medicaid and Social Security will stay the same, assumes reduced deficits due to increased taxation and assumes that America's GDP will increase substantially---which is how they figure the debt will be 65% of GDP by 2021. It assumes significant economic growth while punishing the successful people who drive the economy in the first place for their success. This plan of theirs is inherently flawed.
Actually, it would shrink
the size of the government (or it would have relative to the baseline size when it was drafted, the current size might be smaller than the budget's target for this time). And it doesn't just assume
those things; there are reasons given in the technical analysis
(did you read it before you made your statements?). The GDP growth used is modest by historical standards, and much less than the assumptions underlying this
critique of Romney's proposals. Whatever the economic growth, "The People's Budget" is the most effective at reducing deficit and debt of any serious proposals during Obama's presidency, and the only one that produces a surplus as early as 2021. Ryan's original "extreme" budget doesn't even come close
, and Romney's is much worse. If you have found an inherent flaw, could you explain it?
Also, in case you are unaware, the economy is driven by supply responding to demand. The current problem is insufficient demand to fully utilize supply, so "job creators" aren't hiring very much. Which do you think would increase demand more: high-income tax cuts and decreasing social spending, or low-income tax cuts and increasing social spending? Keep in mind that taxes don't inhibit "job creators" from hiring, because it is profit
, not gross income
that is taxed. Firms usually try to hire the right number
of people to be most profitable, and that depends on the demand they are supplying, not on the tax rate that profit is subject to. Do you think that demand would go up or down if the major infrastructure projects and other public investments in "The People's Budget" were implemented?
Rough Giraffe wrote: Valhallen wrote:
RuffDraft wrote:Progressives seem to believe staunchly in Keynesian economics and/or tend to advocate spending more than we take in over a longer period of time.
I mentioned this before, but the supply-side policies of Reagan and Bush rely on Keynsian-based models.
In either case, the Keynsian response is for the government to apply targeted stimuli to address the market imbalance. Then (in the part ignored by most real-world policy), once the imbalance is corrected, the government should raise taxes, end the stimuli, and run a surplus to do two things: maintain its fiscal soundness, and prevent the extra money injected by the stimulus from triggering a bubble as people speculate beyond what the fundamentals of the market can bear out.
How exactly does Reagan's economic profile match up with that of a Keynesian? Keynesian economics run on a demand-stimulus method, not a supply-side. According to Wikipedia, "The four pillars of Reagan's economic policy were to reduce the growth of government spending, reduce income tax and capital gains tax, reduce government regulation of economy, and control money supply to reduce inflation." This is nothing close to Keynesian economics, and in fact is in opposition to it. Where in the world did you get that Keynesian economics was supply-side?
, beginning where I said, "That the government can stimulate the economy is based on the (quite obvious) idea that the government can both give money to people (who then spend it) and hire people to do stuff (which produces goods, services, and jobs, and gives those people money to spend). An action that results in people doing stuff and spending money when they otherwise wouldn't is an economic stimulus. This is incorporated into the aggregate demand curve of the Aggregate Demand - Aggregate Supply model
. It's based on Keynes's work, but it's a basic component of various modern economic models, including the supply-side economics of Presidents Reagan and W. Bush. Demand-side (what's usually considered the Keynesian approach) and supply-side plans disagree about where the AD curve crosses the AS curve
(link changed due to linkrot) (thus the relative elasticity of AD and AS), and therefore the optimal strategy for improving things. Note that implementations of supply-side economics have run large Keynesian-style deficits in attempts to stimulate the economy, though the deficits are targeted at incentives for the supply side like reducing corporate and top bracket income tax rates."
Reagan's policies as implemented were rather different from the ideology stated to be behind them. He ran large deficits from a combination of supply-side stimulus and pragmatic expenses like running the Soviet Union into the ground. The post I linked above touches on that too, so you might want to read through the rest of it to avoid treading old ground. Some other parts of the thread are relevant too.
Rough Giraffe wrote:
Valhallen wrote:Can we agree that we are on the low side of the Laffer Curve? Do I have to bring out that regression that shows the best economic growth at a 60%-70% top rate?
Why would economic growth naturally go with a 60-70% tax rate? Because high taxes and strong economic growth always
go hand-in-hand? I would like to see what evidence you have (and if you've showed me this before, I apologize but I can't remember exactly) that leads you to that conclusion.
See these posts
. It's an empirical observation that the best economic growth over the last century has been with a rather high top income tax rate. Linkrot has set in there to some extent, but you can find the statistical analysis mentioned in the second post here
. See these images
for the gist, though I would appreciate it if you did look at the posts. As for why this is so, it's probably a combination of factors. A high top marginal rate acts to reduce wealth disparity, which helps prevent the wealthy from gaining a harmful degree of control
over the economy. It also encourages wealthy people to prioritize economic power (growing their companies with long-term internal investments and such) over using those resources directly for personal enrichment. It also acts to reduce the spare idle money which the wealthy would put towards low-return investments (because they already have plenty of money for high-return investments associated with meeting a market demand), which reduces the risk of economic bubbles and puts more money (by way of reducing low / medium income tax burdens) in the hands of consumers, who drive up demand. Do you think that such considerations have something to do with this
Rough Giraffe wrote: Valhallen wrote:
RuffDraft wrote:I'm talking about excessive regulation. That's why the Constitution is a list of things the government CANNOT restrict, and not what the government can DO. The Founding Fathers wanted to avoid excess regulation.
The Constitution CONTAINS a list of thing the government cannot do, but it also has a bunch of stuff explaining what the government can do and the means it should use to go about doing them. Like, say:
Article I, Section 1 wrote:
All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.
And just before that, the Preamble outlines a bunch of stuff that the new Constitutional government is supposed to achieve. The Founding Fathers wanted the right amount
of laws and regulation.
That's not a directive for something the government can DO, that's a guideline to the formation of the government system. So, sure, the Constitution is really more or less a guide to a better way of governance. But it's core principles are about not restricting the rights of its citizenry and ensuring individual liberties.
It looks like you're trying to move the goalposts
there. Seriously though, have you read the Constitution? I mean, just for an example:
Article I, Section 8 wrote:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
To establish Post Offices and post Roads;
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
To constitute Tribunals inferior to the supreme Court;
To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;
To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;
To provide and maintain a Navy;
To make Rules for the Government and Regulation of the land and naval Forces;
To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;
To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;
To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
That's literally a list of "what the government can DO" to use your original words.
Rough Giraffe wrote: Valhallen wrote:
RuffDraft wrote:The Founding Fathers were all worried about excessive government; things like the Proclamation of 1763, the Currency Act, Quartering Act, Stamp Act, Townshend Act, etc. were viewed as offensive encroachments on their personal liberties. They started to be regulated on far too much, and were really pissed that the government would support a monopoly on tea trade (the Tea Act). All of these things were a large part of why we decolonized from the British in the first place.
The part often omitted in rhetoric is that they were also worried about giving the federal government too little power, which was why they replaced the Articles of Confederation with the Constitution, which gave the federal government a lot more power than it had before.
Do you think that the right size
for the government to be is what the Founding Fathers worked with, or some other size to reflect the different jobs demanded of it today?
The right size, certainly. It was not intended to allow congress to pick winners and losers, which is what congress has been doing when they divvy up money to private companies (Solyndra, banks, etc.), which is something I'm strongly against.
What do you think the right size is, then?
Regarding the government picking winners and losers, let's examine the Solyndra situation and compare it to the whiskey tax of 1791 which led to the Whiskey Rebellion. Solyndra was a technology start-up with some new ideas in solar cell design, with a model projected to be price competitive with conventional solar panels while having certain advantages due to their different geometry. As part of the stimulus program, Solyndra received business loans
from the government to expand its business and enhance economies of scale. So what happened? Development of conventional solar panels (which also received stimulus money) improved so much that their cost fell below where Solyndra's panels could compete. The market
picked the winners and losers there. Now, let's see what the Founding fathers had in mind. Whiskey was a popular beverage at the time, and it was considered (by the wealthy Founding Fathers) to be a luxury and therefore a possible target of taxation without much opposition. However, western farmers often distilled their grain into whiskey to preserve it and to ease transportation over the Appalachian Mountains, and they used it in barter as well. The tax had two options for payment: a small amount per gallon and a larger flat payment. Smaller western distillers opted to pay the per-gallon fee because it was cheaper for their small production amounts, but large eastern industrial distillers opted to pay the flat fee because it was effectively much cheaper per gallon. Thus did the tax directly pick winners and losers, with the difference being a large chunk of the profit to be had in the whiskey market. And, as we discussed, when the western distillers made noise about it, Washington brought an army and stopped them.
So wherefore the accusations of picking winners and losers, particularly as something the Founding Fathers would not approve of?
Rough Giraffe wrote: Valhallen wrote:
RuffDraft wrote:Also, the Founding Fathers were against an income tax ["To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical." -Thomas Jefferson].
Their opinions varied. Thomas Jefferson was against cities, banking, and government intervention to protect rights.
Excuse me, but what Jefferson was against was corruption
And he thought that cities, banks, and the centralized power needed to intervene were inherently
corrupting. Which is why his ideal vision of America was a rural, agrarian society with a very weak central government.
Rough Giraffe wrote:How many large cities do you know in America that have no corruption? And how many see a lot of corruption? That's what he was getting at, and there is some truth there.
They all probably have some degree of corruption. As do nearly all small cities and towns. And rural zoning boards. And corporations, businesses, and enterprises of all sizes. And generally any group undertaking of consequence involving three or more people. It's kind of human nature. The difference with Jefferson was that he thought that any dependence on others (as is needed for cities to function) was inherently corrupting and should therefore be avoided. in the real world, people build cities anyway, and corruption is addressed with rules, oversight, transparency, etc.
Rough Giraffe wrote:As for government intervention to protect rights, I can't find anything that says he was purely against that. The closest I can find is, "I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them." That's more along the lines of an economic intervention, e.g., using the "general welfare" as carte blanch to give near-endless government handouts, even to failing businesses (Solyndra).
didn't like centralized power. He didn't trust the federal government to wield the authority to overrule state and local decisions. If he had weighed in on desegregation, he would have opposed it because he didn't think that the federal government should have the power to tell states not to do things like segregate people, regardless of his personal views on how appropriate segregation itself was. Further, he thought that such dependence on the intervention of others for one's well-being (however it comes about) subverted the functioning of a democracy, and that only voluntary bottom-up societal change was morally acceptable. Keep in mind that his ideal participant in democracy was a yeoman farmer who could satisfy his (women were considered to be inherently dependent on men and therefore unsuited for participation in democracy) daily needs on his own farm. Society just doesn't work that way anymore, and to a large extent, it never did. Society is built on interdependence, and during his presidency, Jefferson recognized the pragmatism of centralized power, even if he didn't like it on ideological grounds.
Rough Giraffe wrote: Valhallen wrote:
Adams was referring to
RuffDraft wrote:They saw it as an invasion of property rights ["The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence." -John Adams].
nationalization and redistribution of all real estate and private property in a Communist-style overthrowing of society.
Your own source has Adams talking about property interchangeably with money as a form of prosperity. He did not literally mean only property like fine silver, jewelery, furniture, horses, land, etc. After all, property can also mean "the money you have earned," as people's wealth is often judged by how much property and investments and/or liquid funds they hold (commonly referred to as net worth). I am not ready to believe I have misinterpreted my original quote.
You are correct in that wealth includes both physical goods and money. Adams was clearly talking about both.
John Adams wrote:Debts would be abolished first; taxes laid heavy on the rich, and not at all on the others; and at last a downright equal division of every thing be demanded, and voted. What would be the consequence of this? The idle, the vicious, the intemperate, would rush into the utmost extravagance of debauchery, sell and spend all their share, and then demand a new division of those who purchased from them.
He's talking about literally dividing up all monetary and physical wealth equally among everyone. Meaning a communist-style overthrowing of society (though without a communistic economic system), not an income tax. States were collecting income taxes, Adams's administration collected taxes, and Adams himself was a Federalist in favor of a strong role for the central government. The whole document is a warning against unlimited, direct, tyranny-of-the-majority-type democracy, because for most people, conditions really sucked:
John Adams wrote:Suppose a nation, rich and poor, high and low, ten millions in number, all assembled together; not more than one or two millions will have lands, houses, or any personal property; if we take into the account the women and children, or even if we leave them out of the question, a great majority of every nation is wholly destitute of property, except a small quantity of clothes, and a few trifles of other movables.
Conditions really sucking for most people was a big reason behind popular uprisings through history, including the Communistic revolutions of the 20th Century. it didn't happen in the US because corporate leaders caved to union demands like a minimum wage, a forty-hour work week, and workplace safety regulations, and because political leaders were able to maintain some appearance of representing the interests of the general population.
Rough Giraffe wrote: Valhallen wrote:
RuffDraft wrote:Until the early 1900s it was unconstitutional to have a federal income tax; that's why they needed an amendment to implement one. Prior to that, the government consisted on tariffs and sales taxes on a lot of popular goods such as alcohol, sugar, tobacco, and so on. But later on they did away with those sales taxes and funded the government almost entirely on tariffs.
Taxation of property and transactions was widespread in the colonial era and continued through the Revolution to the present. The main problem with a national income tax was the requirement to divide revenue from certain kinds of income proportionately among the states (rather than just having a national tax code as today). This requirement was in place due to concerns that certain national taxes could be abused, but it did not cover all types of income (hence the constitutionality of a corporate income tax enacted before the Sixteenth Amendment). But that's rather moot apart from its historical significance, since we have the Sixteenth Amendment today, and there is no (serious) question about the constitutionality of federal income taxes.
Are you saying my questions about the constitutionality of the 16th amendment are irrational? That strikes me as being dismissive of my concerns for no reason other than "It's The Law."
Let me put this another way. Let's say that the Constitution had a stipulation stating that congress could not restrict, for example, the sale of ice cream. Everyone likes ice cream and buys it frequently. Now, let's say that in order to satisfy a long-lasting shortage of dairy used in the production of making butter, ice cream, etc., congress enacts a temporary measure to restrict the sale of ice cream. The crisis passes and congress redacts the measure. Later on, the crisis recurs and congress enacts the measure again. Soon, the courts declare that this measure is unconstitutional and cannot be enacted legally. Shortly thereafter, congress issues an amendment to the constitution saying that congress has the power to restrict the sale of ice cream. If the amendment itself violates the intended spirit of the Constitution, does that make the amendment any more or less valid or constitutional?
Are you still suggesting my concerns are unfounded?
This line of discussion got started when you said that the Founding Fathers were against an income tax in reply to my statement that they had resolved to pay off the Revolutionary War debt with revenue. What exactly are your concerns here? You seem to be trying to imply that if the Founding Fathers and the early tax framework didn't or wouldn't like something like the modern income tax, it somehow means that there is a problem with the income tax today. Legally there isn't, no question about it, because the Constitution now specifically allows it.* Ideologically, by some vague notion of "we shouldn't do something if the Founding Fathers wouldn't approve of it," there might be some case against it, but that's a terrible argument to make. Not only did the Founding Fathers put the Amendment mechanism in so that the Constitution could be updated as desired, and not only did they use that mechanism themselves, that argument would support a whole bunch of things recognized as terrible today. By today's standards, the Founding Fathers were unabashed racists, misogynists, and plutocrats. With that in mind, consider that they also lived in very different economic
conditions than we do, and that as real, imperfect people rather than myths, their statements are not Unquestionable Truth with which we may confidently and uncritically guide society forever.
*"Are you saying my questions about the constitutionality of the 16th amendment are irrational?" Please think carefully about this sentence.
Rough Giraffe wrote: Valhallen wrote:
RuffDraft wrote:I think that proves a national Sales Tax, along with already-existing taxes on imports and exports, could work by them to fund a slightly smaller government as long as we put more power back into the hands of the people. I'm not talking about creating a civilian military; that's dumb. I'm talking about making education more privatized instead of relying almost exclusively on the government to provide a good education; things like that.
Can you describe a single example for each where, in the world, a modern government of the kind you would want for the US covers its expenses without an income tax and where a sufficiently privatized (for whatever standard you are getting at there) education system produces results comparable to modern socialized education? The main reasons for the near-universality of income taxes and public education are their economic incentives. People usually want more money regardless of how much they have, so (well-planned) income taxes introduce very little distortion of economic incentives for different behavior, letting market forces steer things to maximum efficiency despite bites that would wreck markets if implemented with different methods of taxation. They can also be made to target those who can most easily afford it better than other taxes, which helps the economy run better (poorer people spend more of their income, so a tax that hits richer people harder results in less lost economic activity). Education is a textbook case of large positive externalities resulting in private markets supplying less than is optimal for society as a whole. Education has enormous benefits for the entire economy, but few immediate benefits for students and their families. Private education has long been too expensive for the poor even though the expense pays off well over time. Since this payoff can't be captured well enough to be profitable by a single private company unless it sets up company towns or such, it falls to governments to make the socially-optimal level of investment of education.
I can't give you a real world example to my ideas because I don't believe that there's a good example of them anywhere.
Has it occurred to you that there are probably very good reasons for that?
Rough Giraffe wrote:The best I can offer is to point out that our GDP is over $15 trillion and that even 20% of that (if it were a sales tax) is more than we take in in federal income taxes (income taxes account for only $1 trillion, the rest being excise taxes and so on). I realize that that's a very simplified way of explaining it, but if a flat national sales tax were to replace the federal income tax while still allowing a much smaller state income tax (but no state sales tax), and while still allowing a provision to give those below the poverty line (or those whose post-tax situation would place them below the poverty line) a "prebate" on the sales taxes they would spend, the situation moves from placing a burden on the lower-income families to allowing it to remain on the higher-income earners (as it already is and has been).
You're describing the FairTax. I critiqued it here
(it begins at "I've heard of it, and the tl;dr version is that it really isn't."). The FairTax is problematic for a number of reasons outlined there and in the following several paragraphs, including math that doesn't work, huge incentives and opportunities for evasion, and major shifts in tax burden glossed over by most of its proponents. Also, "excise taxes and so on" make up a relative pittance. Nearly all federal revenue is from income taxes, whether individual, corporate, or payroll.
Rough Giraffe wrote:As for education,
What are your thoughts on this?
You're completely missing my point there. The issue isn't whether schools are government-run or privately-run. The issue is who pays for their students' education, because that involves the economic incentives that private for-profit organizations on their own can't steer properly to maximal societal benefit due to the very large externalities for education. If privately-run schools want to take the job of providing government-funded free-to-parents education, that's fine. If they're run well, public and private schools can get similar results for similar costs, but the government must still be prepared to set up government-run schools to cover students that private organizations are not willing or able to.
Rough Giraffe wrote: Valhallen wrote: RuffDraft wrote:
Valhallen wrote:Each dollar on the ground has its own note which says something of the painter's ideas relating to monetary and fiscal policy.
And yet I can't really find any general fault with anything he writes about them.
That was more to point out the difference in interpretation than to disagree. But if you want to look for fault, let's have a look:
1. The US is quite a ways form bankruptcy. The national debt is close to GDP, but that's not what matters for bankruptcy. US net worth and wealth are both quite a bit more. Also, most of the national debt is owed to US citizens. Also, interest on the debt was less than 5% of the budget last year, so the outlined scenario is not going to happen any time soon.
First, the National Debt is above
GDP right now. GDP is approx. $15 trillion right now. US National Debt broke
$16 trillion just last week (which I believe was after you made the above argument, so I'm not going to really fault you for not including that here),
At the time, the debt was under $16T, and the annualized GDP was about $15.6T, so I think that "close to" is an appropriate descriptor.
Rough Giraffe wrote:
and it is still climbing with no end in sight. Pres. Obama's own budget projections
showed us taking on about $9 trillion in extra debt over the next 10 years---about $25 trillion by 2022. Assuming we're not close NOW, that will put us dangerously close to bankruptcy.
For the sake of argument, let's assume that that analysis by one of Obama's opponents
is completely accurate. As I said, GDP is not what matters for bankruptcy, and the total wealth of the US is more like $200 trillion
. Not even Romney's plan calls for a debt that large in the foreseeable future.
Rough Giraffe wrote:As for the interest being only 5% of the budget, is that including all of what we borrow? That's not how those numbers go together. We should be looking at it in terms of interest versus income. In which case, assuming that 2011 saw ~$2.3 trillion in revenue and interest on the debt was ~$454 billion (treasurydirect.gov), that comes to almost 20% of revenues.
The numbers I used were for net
interest on the debt and government expenditure
. Because the government is currently loaning money and collecting interest from it, a good chunk of the interest payments on the national debt are offset by interest gained from debt owed to
the government (this is one of the results of all the "bailout" and "stimulus" loans that were thrown around in the financial collapse). In terms of managing the federal debt, it is the net figure that represents how much input it costs to maintain things, so that's the figure I used. I used expenses rather than revenue because expenses represent how much the government can spend on different things, which was the concern I was addressing. The text for Dollar 1 said that the federal government would soon not be able to afford the interest payments on the debt if the entire budget were directed towards that. This is clearly a question of expenditure.
Rough Giraffe wrote:That's a completely unreasonable number, and we NEED to find a way to seriously cut spending and reduce the national debt before said interest gets much higher. If not, we are headed for a financial meltdown.
As my statements above and elsewhere suggest, the debt is a problem, but it is quite manageable with reasonable policies, and it should be balanced against other interests like paying for government services. For a bit more perspective, interest rates are extremely, remarkably low
. The interest rate that the government pays to borrow money is lower than the rate of inflation. This means that if the government takes out a loan to buy something worth $X, the amount it will eventually have to pay back, after inflation and interest, would be worth less than $X in the year of the loan. This makes deficit spending a lot less problematic than it normally is. For example, look at the gross interest payments listed at the site you linked earlier
. When the debt was half as much as now, interest payments were about nineteen percent lower. For FY1988, the earliest year for which interest information is available there, interest payments were about half as much as FY2012 while the debt was about one sixth as much.
Rough Giraffe wrote:
I disagree. The rate at which we are spending and borrowing, and with no plans to halt either, seems to me that the situation is almost completely out of control, and unless we do something NOW, that is the road we are headed down. To not be worried about it and actively trying to prevent it would be folly.
If the government stops spending, it shuts down. If it stops borrowing, the bond market collapses. No one is seriously advocating for either because it is not very productive to speak as if those are desirable situations. Do you actually have a reason for why you are claiming that the current situation is in some meaningful way like Weimar Germany?
Rough Giraffe wrote:
Valhallen wrote:4. This is accurate, but comparable to the situation after World War Two, which was handled easily by reasonable fiscal and economic policies.
The likes of which I do not see being enacted now, which is why we're having this discussion.
Why do you not see such policies being enacted? Who is preventing them? Who do you think is proposing policies most like those that handled the debt from WWII? In case you need a prompt, the fifties and sixties involved a ~90% top tax rate, major infrastructure and social projects, and approximately Keynesian economic policies
Rough Giraffe wrote:
Valhallen wrote:7. And what happened in the early eighties to cause that? Reagan began the era of "trickle-down" supply-side economics and high-income tax cuts where "deficits don't matter" except as an excuse to push policy. Do you think that reversing this trend could be accomplished by a return to preceding conditions like a high top marginal tax rate and demand-side stimulus?
I do not. Reagan's policies nearly doubled revenues by the end of his term. Congress was largely responsible for the debt that took place during that time. If spending had stayed at the level of his first term, Reagan's policies would have reduced the debt by a considerable amount. And yet, you would not be wrong in suggesting that Reagan allowed it to happen, which makes it partly his fault. However, Reagan's policies of lower taxation were not responsible for ALL of the debt. Maybe in the first few years, but after that, after revenues increased past their starting point, congress increased spending, and didn't stop.
If cutting taxes actually
increased revenue (as opposed to merely collecting a smaller part of a larger economy after normal growth), don't you think that reality would look more like this
? You need to understand that usually, increasing taxes really does increase revenue, and cutting taxes decreases revenue, even over time. This is because growth and economic activity are not only uninhibited by a high top income tax rate, growth is historically better with a high rate. Not even Reagan's budget guy
believes that cutting taxes increases revenues in real life. I said a little more on this at the bottom of this
Rough Giraffe wrote:
Valhallen wrote:8. Except that the Founding Fathers understood that such a debt could be paid down by increasing taxes, which they did. The debt was paid off in ~fifty years despite other wars over that period.
Except that Andrew Jackson paid off the national debt largely by selling land and preventing an increase of spending for federal projects. At the beginning of his term, the national debt was $56 million. He paid it off in six years
. No tax alone could have done that. Either way, they were debt free for a year and then they went into a six-year depression that forced them back into debt.
According to this
, it was $58.4 million in FY1829. If you look at the data for the years around then, you will see that the debt was being paid down before Jackson, that Jackson paid it mostly with taxes (Tax revenue about doubled while gdp increased by about 50%, and that the mostly-tax-based surplus from 1836 alone was more than all proceeds from land sales from Jackson's presidency to that time. As you said, the following recession forced a deficit - do you think that recessions impact tax revenue or land prices more?). Note that 1829 GDP was $921 million, so the debt was about 6.3% of GDP (down from 33% in 1792 and from $127.3 million in 1816). Government revenue was $26.5 million, or about 2.9% of GDP. In 2000, revenue from the federal personal income tax alone was about 12% of GDP, so a simple application of arithmetic suggests that, if Jackson had applied something like Clinton's income tax in lieu of all other revenue, he would have been able to pay off the national debt with his first budget and had a surplus of about 3% GDP to spend on dueling ammo.
Rough Giraffe wrote:We haven't been debt free since, despite congress keeping the top tax rate above 70% for most of the 1900s (it was above 90% between 1950 and 1963 and we still spent more than we took in).
True, but during that time, debt as a percent of GDP shrank, and economic growth was markedly better than the last decade with its lower top rate* and accompanying debt growth as a percent of GDP. A debt that grows in absolute terms becomes a smaller problem so long as it shrinks relative to GDP. For example, in real terms, Enron at its bankruptcy had more debt than the US government had after the Revolutionary War. Enron was a blip in the enormously larger modern economy, while the Revolutionary War debt was a significant influence on the economy over the next several decades.
*Remember how high income inequality is bad for economic growth
Rough Giraffe wrote:
Valhallen wrote:9. A couple of things here. Though China COULD cause trouble by calling its debt and pulling investments, it would cause trouble for them as well, since the Chinese economy relies on exports, about a third of which go to the US. If we assume that China does try to cut off its economic nose to spite the US, China can't foreclose on the US because the US is a sovereign entity. If a sovereign entity doesn't pay its debts, its credit rating falls, and that's about it unless someone wants to start a war. And if we want to propose that China is suicidal too, they could to that now.
Unless they figure out a way to do that and presumably win, in which case we're boned.
War between major nuclear powers isn't a matter of winning; it's a matter of losing less. China has enough nukes to make the US look like post-WWII Europe, but the US has enough nukes to make China look like the Moon. Do you think that this is a realistic course of action to discuss?
Rough Giraffe wrote:Another thing I think you're missing is that if the US decides not to pay its debts, or goes too far into debt that it cannot make enough money to pull itself out, other countries (China, et al) may simply stop lending money.
That's not really how the national debt works. If the debt is growing, it means that people (everyone who buys bonds - mostly US citizens and organizations, but also some foreign governments and investors) are willing to keep buying bonds. The debt can't grow if people won't accept IOUs from the government. Currently, bond interest rates are really low, which means that people are basically throwing money at the federal government as fast as they can. If the government's demand for borrowed money begins to catch up to the supply of people willing to lend it, bond interest rates will rise. If the interest rates rise a lot, inflation will increase. If inflation gets above the annual percentage increase of the debt, the real value of the debt will fall. So long as the economy is in decent shape, things stabilize. The US can do this because it controls its currency. If you're invoking a debt too big for this to work, you're getting rather far from the real world - not even the Romney plan calls for such a growth of debt in the foreseeable future. Historical examples of debt crises like what you're getting at involve countries owing debts demarcated in currencies that they did not control, like Weimar Germany.
Rough Giraffe wrote:This probably wouldn't directly affect trade with the nation inasmuch as the products that are sold in America (unless of course America decided to enact an embargo or boycott or whatever),
Rapid inflation in the US would lower the exchange rate of the Dollar, which would make US-made products more affordable to people in other countries and other countries' products more expensive for people in the US. Imports would fall, and exports would rise. Average purchasing power would probably fall short-term as Chinese imports get more expensive, but domestic manufacturing would increase.
Rough Giraffe wrote:however it might force America into a panic to dramatically cut spending in an attempt to prevent austerity... which is something we should already be doing.
Not quite sure what you're getting at here, since austerity
basically IS drastic spending cuts. And it would be a bad thing now. If anything, social programs, public projects, and state / local aid should be increased somewhat, while deficit reduction should come from tax increases targeted to those currently doing well (read: high-income corporations and individuals). Spending cuts should wait until an economic boom gets going.
Rough Giraffe wrote:
Valhallen wrote:11. In a healthy economy, what the Fed did would be problematic. However, in a financial meltdown and housing market crash, what it did countered deflation and acted to stabilize the economy.
economy, lending money to people who can't afford to pay it back is a problem. Didn't the government bail out the banks that lent that money as a result? In other words, the taxpayer paid for the business decisions of the nation's corrupt banks? How is that good?
It isn't, but it's less bad than letting the banks fail and bring the economy down with them. How it came to that is a separate issue. I would remind you that this line of discussion is about Dollar 11
, which criticizes the Federal Reserve's monetary policies dealing with the crash. Should I take your response to mean that you consider it to have been appropriate?
Rough Giraffe wrote:
Valhallen wrote:13. That depends on how it comes about. Besides, there is currently plenty of domestic capital. The problem is that the holders don't want to spend it because of lack of demand to justify investment. If the time comes that this is a problem, the economy will probably be doing pretty well otherwise. Besides, demand can create its own supply (If the demand exists, people have money to spend. That money can be borrowed to pay for investments to meet the demand.)
I find your optimism in the act of borrowing a little troubling. It seems like you don't care when we stop borrowing to meet our alleged needs. In any case, what you seem to be doing is dismissing the concern because it isn't catastrophic yet. Is that really the right attitude to have?
This is (or was) about the statement associated with Dollar 13
, which expressed a concern that the institution of a different international reserve currency would reduce foreign investment in the US, bringing about a "Depression of dismal proportions." As I said, potential troubles associated with changes in global reserve trends depend on how the changes come about. After World War II, a coordinated international effort replaced the Pound with the Dollar as the standard global reserve currency because it would better serve the world's economic needs, and the UK did fine. If people suddenly go crazy (as has been invoked rather often here in proposals for why we should be worried about various things), things could get bad, but then real-world policies have to deal with real people, not imagined crazy people who will gleefully follow arbitrary scenarios describing economic collapse for no reason. Can you clearly describe what your concern is here?
Rough Giraffe wrote:
Valhallen wrote:14. This seems to confuse the exchange rate of the dollar with its strength as a currency. Look at the higher-valued Pound and the lower-valued Yen. The strength of a currency (especially a fiat currency) is based on the governments and economies backing it, and while the Dollar is declining as a percentage of world currency, it is growing in absolute terms.
I don't think he is confusing the exchange rate with its strength. The dollar is getting weaker because our economy is slumping and because we are printing more money and borrowing. Are you saying that the dollar is getting stronger? And if so, how do you define that?
And now you're doing it. There are two different issues here: the "strength" of a
Dollar relative to other units of currency (its exchange rate) and the "strength" of the
Dollar as a reserve currency. The exchange rate
relates how much of one currency you can buy with a given amount of another. With fiat currencies, this is arbitrary except as the currencies are associated with particular measures of value in the economies in which they are used. And so as economies change over time, exchange rates vary over time
. This can influence the relative prices of goods in foreign vs domestic markets, and thereby affect trade balances, but it does not relate very much to the size or health of the economy backing the currency. A Pound can buy more than a US Dollar, which can buy a lot more than a Yen, but those are just the units of value, and do not reflect the strength of the economies in which they are used (remember how the Dollar experienced deflation - it became "stronger" - during the financial crisis?). As for the "strength" of the dollar as a reserve currency, a reserve currency is used to manage international monetary policy. A good reserve currency would have a relatively predictable value, wide international acceptance, and a very large economy which uses it to do business. The US Dollar is without peer in economic backing and international acceptance, and pretty good on predictable value (the Fed has been rather effective in that regard). As such, it remains the global reserve currency of choice. Dollar-using economies are growing, and absolute use of the Dollar as a reserve currency is rising. It's just that some other economies are growing faster, and the Dollar's relative share of global reserve currencies is declining a little. So whether or not that means that the Dollar is stronger or weaker as a reserve currency depends on whether you mean relative or absolute strength.
At any rate, the economy stopped "slumping" in early 2009 when the recession ended. Or perhaps you are invoking some other measure, like the unemployment rate, which topped out a bit later in 2009, or stock prices, which also began getting better in 2009. Or some other measure yet. And please remember that the government has printed money and borrowed over its entire history, and that its most extreme deficit spending ever (WWII) coincided with its fastest economic growth ever
Rough Giraffe wrote:
So, what, we're not discussing this because the trade deficit is not as vastly huge as it was when the numbers supported his claim, despite the fact that they still do? How in the world do you consider this out of date, when the trade deficit is still $42.9 billion, down from $48 billion? Especially when you consider that much of the reduction of the trade deficit was from the drop in oil prices? Or are you dismissing it simply because the numbers are slightly less bad than he made them sound?
Dollar 15 wrote:American exports are continuing their decline; imports are also plummeting, but not as sharply as exports, contributing to a widening trade gap. In essence, America's economy will continue to decline. So here we have a perfect fiscal storm; quantitative easing by the Federal Reserve, massive overseas borrowing by the Federal government to pay its basic operating expenses, and massive borrowing or printing of dollars to pay for imports not covered by the net value of America's exports.
Exports, imports, and America's economy are now increasing, in direct contradiction to McNaughton's predictions of doom. Would you care to elaborate on how you think the trade deficit is a problem? Do you know what trade-deficit dollars are used for? Currency reserves and investment in the US. It's not a perfect situation, but there are
benefits to it, including ones which you seemed to be worried about losing above.
Rough Giraffe wrote: Valhallen wrote:
RuffDraft wrote:Even if that Cherry Tree story is false, Washington was known to be a man of remarkable wisdom and virtue.
Except for the slaves thing.
Sigh... yes, he owned slaves. Are we going to have to get into a discussion of how humanely his slaves were treated or how his Will demanded that his slaves be freed? Do we have to go into how his perception of slavery changed over the years, or some of the other factors involved during that time period?
No. I just want you to acknowledge that Washington was a real person with good aspects, bad aspects, and nuance, not a myth
Rough Giraffe wrote: Valhallen wrote:
Anyway, what I was getting at is that Washington was a real person who popular culture has mythologized (including the cherry tree bit
). Sure, he did an admirable job setting precedent and running things, but he wasn't perfect, and his actions don't support all the causes that his idea has been invoked to support. For example, in the Whiskey Rebellion, the debt-ridden federal government decided to raise taxes, so it taxed whiskey (an unprecedented move intended to exercise the federal government's new power). Western distillers didn't like it for various socioeconomic reasons and because they didn't like taxes in general. Adding tensions on the border, they didn't think that the federal government was representing their interests. After protests and skirmishes, Washington arrived with an army and put a stop to things. So while Washington's government was very different from today's, Washington respected Congress's authority to decide what the government should be doing. So it's not very appropriate to invoke Washington to protest Congressional laws on ideological grounds like that.
Sure it is. You don't think Washington and the members Congress always got along as well as that, do you? I recall stories from the middle of the Revolutionary War where Congress refused to send Washington the pay for his troops. Washington was forced to let his troops make their own decision on whether to stay and fight or to leave and return to their families. Less than half of his troops stayed behind, and Washington bid the rest farewell.
And Washington's appeals to Congress were generally along the lines of prodding them to exert more power over the States to get them to produce the money and supplies he needed. Recall that this was under the Articles of Confederation, when the central government could not raise revenue on its own and relied on the often-uncooperative States, leading to problems that resulted in the Constitution and its much stronger central government. Further, Washington's point here was not that, as an ideological matter, Congress or the States should or should not have the legal authority to raise money and provide for the Army based on philosophical considerations of the proper role of government. His point was that, as a practical matter, someone
was going to have to pay for stuff if stuff was to get done.
Rough Giraffe wrote:What Washington was trying to do was prevent unnecessary bloodshed (people were attacking the tax collectors---government officials who were just doing the job they had been assigned). As Washington came to town with his army, the riot disbanded before he actually got there. It's not like Washington really did anything but show his ability and willingness to enforce the law. It turned out to be greater than the people's desire to protest it.
Indeed. He showed his ability and willingness to enforce the law.
A law that picked economic winners and losers in an unprecedented tax increase. Because he respected Congress's authority to make such laws. So it is inappropriate to insinuate that Washington would have opposed Obama's Congress-approved policies on an ideological basis.
Rough Giraffe wrote:
Valhallen wrote:The Constitution may be supreme, but there are other written laws in force which constitute the Rule of Law in America, as decided by Congress and the States as outlined in the Constitution. Which actions have blatantly trod upon which parts of the Constitution?
Some of the things I mentioned above, as well as these
. Granted, some of those things are before he became President; perhaps a list like this
one, although a bit Birther-ish, is a better representation. It's still a list of decisions he's made and actions he's taken. If you'd like to discuss the above lists, perhaps we can do it in a separate discussion?
So they point out "decisions he's made and actions he's taken" (at least allegedly). Of course, neither cites sources. And neither makes a compelling case that Obama has trod on the Constitution. Can you identify a single point from either link which you are willing to back in your own words that demonstrates an action of Obama's which has blatantly trod upon some identifiable part of the Constitution? And he has, of course, but neither link mentions it, nor have you thus far. Can you find it? It's not a secret, but it's the sort of thing his political opponents don't usually like to criticize.
Anyway, for the debates. I find it remarkable the degree to which
Romney and Ryan are basing their campaign on outright lies and "Etch A Sketch
of earlier statements. Like the three debates
so far. One cool thing that came from it was the Big Bird ad
. It's like something from the Colbert Report, and it's like a glimpse of the awesome that a Herman Cain candidacy would have been.