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Split from weekly discussion: election, budgets, & economics

Tue Jan 15, 2013 5:22 am

Split from the discussion thread here. Discussion about the election began here, and other topics popped up at various points. Feel free to let this one wander. Anyway:

Rough Giraffe wrote:
Valhallen wrote:I'm still curious about which budget you're talking about (the one which was unanimously voted down in the Senate, if it's not the one in Sentios's link), since the one described in the New England Council review never made it to a vote.
I was referring to the vote in February of this year, in which the House of Representatives voted down Obama's budget 414-0. But actually, it turns out there's a more recent vote on it. Here: http://townhall.com/tipsheet/guybenson/2012/05/16/breaking_the_senate_rejects_obamas_horrific_budget_990
There have been several different budgets mentioned in this line of discussion. You initially talked here about "the budget proposed by the Obama administration that was unanimously voted down in the Senate." When Sentios asked for clarification, you said, "I was referring to this one, actually: http://www.newenglandcouncil.com/assets ... -Final.pdf" If you instead want to talk about the one voted down in the House, that was actually a Republican proposal intended as a political stunt very much like the one in Sentios's link above. As for your most recent link, that's the same event described in the article Sentios linked earlier, which includes this bit: "Just as they did in March in the House of Representatives, Republicans forced a vote on a bill that was supposed to resemble the president's budget, but wasn't actually the president's budget. A Republican Senator submitted it, and called for the vote." Why did they do that? So that people would talk about "Obama's budget" being rejected unanimously as if that was actually what had happened. So I'm still curious about what budget / vote you're talking about.

Rough Giraffe wrote:I find it rather telling that although the House and Senate Democrats want to try and call out the Repubicans on some kind of imagined obstructionism,
It is not imagined. It is unprecedented.

Rough Giraffe wrote:that they haven't been able to propose or pass an actual budget since 2009. They've all voted no on nearly every budget the GOP presents; how's that for obstructionism?
So since the FY2010 budget, you don't think there have been budgets passed? Yet money continues to be spent, and the government hasn't shut down. Perhaps that's because budgets actually have been passed. Just not the Democratic proposals, because Republicans control the House and enough of the Senate to hold the country hostage. Don't you remember all those fights where Democrats caved almost entirely to Republican budgetary demands to avoid various manufactured catastrophes?

Rough Giraffe wrote:
Valhallen wrote:When I link something to support my points, it's not just to fill space or to look pretty in purple. I'd appreciate it if you would carefully consider what they say.
I most certainly did. You don't have to link it again, I got the idea the first time. Perhaps you're just not grasping my point.

Nothing that they told their employees is illegal or even immoral. They simply issued a warning to their employees regarding what they may do or might have to do if President Obama's policies (tax hikes, expensive regulations, etc.) are put in place. The fact that a few employees felt "threatened" is inconsequential. If Mr. Seigel wants to close his company and move to the Bahamas, that's his right. And it's a direct result of excessive taxation. Now we're getting first-hand evidence why it's such a bad thing.
Rough Giraffe wrote:But anyway, as regards to employers telling their employees that if Obama's policies go through they may lose their jobs, if were related to party affiliation (i.e., "Vote Republican or you're fired"), I would agree that it is fucked up--and possibly illegal.
I wasn't arguing legality. In case you missed it:
The third link wrote:Bosses have little to fear from knowingly misinforming or threatening workers during election season. Calculated and determined efforts at worker intimidation are as brazen as ever this year. Professor Ferguson notes that the waning power of unions, along with non-enforcement of laws, has emboldened employers. CEOs are feeling quite comfortable putting their intimidation efforts into writing and making them public. There is no federal election law that specifically blocks bosses from telling workers they could lose their jobs if they vote for a particular person.
I have been pointing out that something you described as "fucked up" (which I interpreted as a criticism of the morality involved) has actually been going on. If you carefully read the links I gave, or even the excerpts I posted earlier, you would see that threats have actually been made along partisan lines, and some companies have given employees lists of approved candidates (who all happen to belong to a particular party).

As for "getting first-hand evidence why [excessive taxation] is such a bad thing," consider David Siegel and his company, the subjects of the first link I gave about this. Supposedly, if Romney weren't elected, Siegel might have to downsize his company (which had just had its best year ever) or even close it and retire. In the real world, not only has Siegel not downsized his company, he recently gave a blanket 5% raise to his employees. Since events have conformed more to my statements than Siegel's in this matter, will you reconsider your thoughts on the new relationship between corporate personhood and political speech?

Rough Giraffe wrote:If Obama wants to raise taxes, we're going to see a significant drop in revenue in the first year.
As it happens, the recent fiscal cliff deal includes an increase in the top rate. If the next year has more revenue from the personal income tax than this last year, I don't want you to ever again claim that cutting taxes increases revenue or that raising taxes reduces revenue without first presenting evidence to BR or myself and getting approval to do so on a case by case basis. Deal? Or do you not want to stake a claim against reality's well-known liberal bias? Because I'm getting tired of repeating myself.

Rough Giraffe wrote:
Valhallen wrote:Ironically, despite the protests of the people writing these memos, Obama's policies would be better for business, as Romney's proposed cuts in spending and social services would reduce aggregate demand.
As I understand it, aggregate demand is a macro-economic concept, which affects middle and higher-income business owners the most.
Aggregate demand is the total demand for goods and services in an economy. I'm not sure what you're getting at with saying that it "affects" people differently, but if you read that link, you will see the formulation that aggregate demand = consumption (just about everyone, with lower-income people spending more of their incomes here) + investment (where wealthier people and corporations tend to spend more) + government spending (which is actually itself consumption and investment) + net exports (which accounts for consumption of domestic goods elsewhere and foreign goods here). Note that savings are not a part of this. By way of banks, savings can be used for consumption and investment, but that only works when there is sufficient demand to justify either. In recessions, savings rates tend to increase, reducing aggregate demand and amplifying the recession. Also, the propensity to save increases with income, so a given amount of money distributed among low-income people increases aggregate demand more than if that money were distributed among high-income people.

Rough Giraffe wrote:Recessions---such as the one we are in---are caused by a number of micro-economic factors, as they affect middle and lower-income households more greatly.
A recession is itself a macroeconomic concept. Microeconomics deals with individual households and firms (whatever their income level). Macroeconomics is what you get when you consider a lot of households and firms acting together to form an economy. So it's not that microeconomic factors don't have anything to do with recessions, but in discussions of recessions, what causes them, and how to fix them, it is macroeconomic factors that are directly applicable. E.g. if the discussion is about the actions of Lehman Brothers that led to its bankruptcy, it's microeconomics. If the discussion is about the actions of the financial sector that led to the recent recession, it's macroeconomics. Because Lehman Brothers' actions were so big and influential, both micro and macro concepts can be discussed in the same context, but there is still a difference in the level of aggregation involved, which affects what factors are in play for particular entities.

A note on this regarding recessions. Technically, a recession in most contexts these days refers to a contraction in GDP for at least two successive quarters. As such, a recession could in principle mostly involve economic troubles of higher-income households. It's just that recessions in the real world usually affect lower-income people the most, as you said.

Rough Giraffe wrote:Romney's policies appear to be targeting not just the problems at the top end, but also the problems of lower-income households, including---something I note that you advocated in another post---the decoupling of employee health insurance plans from the labor market. Often, these problems are things that go hand-in-hand. Would that not be better for both employers and employees alike due to increased flexibility in the job market?
Decoupling health insurance from employment would be good for the labor market, but some ways of doing it are better than others. A single-payer system would remove the direct costs from businesses, immediately giving a large reduction in operating expenses (thereby increasing their global competitiveness) while having national risk sharing and price bargaining for the best possible economies of scale and systemic efficiency. Romney's proposal would remove the tax deduction for group (i.e. employer) health insurance, with the idea that many individuals would switch to high-deductible personal plans (and receive some kind of tax favor for doing so). This would have several drawbacks. The move from group to individual plans gives purchasers less bargaining power, which is a recipe for higher premiums. The stickiness of wages combined with cutting benefits which must be replaced out of pocket reduces discretionary income, reducing private consumption and the economy's aggregate demand. The emphasis on high-deductible plans, lack of guaranteed issue, and no insurance mandate shift costs to those least able to afford it and discourage preventative care. And Romney didn't give enough details to determine whether or not his proposals would actually be capable of functionally decoupling health insurance from employment. Private insurers don't want a single payer system, but they weren't very enthusiastic about Romney's plan either.

Rough Giraffe wrote:Also there's the fact that if employers are taxed higher, as Obama desires them to be, wouldn't that make it harder for them to hire more employees (thus lessening the overall burden of unemployment on the society) and still maintain their profits? If nothing else, wouldn't that hurt businesses more?
No. As I've mentioned before, business income taxes are applied to profits, and the money that goes to pay employees is not profit but a tax-deductible business expense. Businesses usually try to hire the right number of people to meet the demand they face (in order to be most profitable - see microeconomics), and the tax rate that the profit is subject to does not change that consideration. This is another point we've gone over several times.

Rough Giraffe wrote:When you say it would reduce aggregate demand if he cut spending (reducing government waste and subsidies/tax breaks to businesses, etc.), and social services (reforming Medicare and Social Security, etc.) are you simply calling into question whether these policies would help or hurt businesses, or are you hinting at something else?
Government spending is a basic component of aggregate demand. If the government cuts spending while the private parts of the economy remain the same, the economy's aggregate demand falls, and the economy contracts (perhaps going into a recession, as was the concern with the fiscal cliff). Tying the overall performance of the economy to particular sectors can be complex, but in this case, the demand for real estate and timeshares aligns rather closely with the overall performance of the economy, so a policy that is good for the economy as a whole would very likely be good for David Siegel's company.

Rough Giraffe wrote:
Valhallen wrote:Look at the situation in the first link, for example. David Siegel is the boss of a real estate and time share business, and like the rest of the real estate sector, his company took a large hit in the housing / financial crash before Obama was elected. Now, they're doing better than ever:
David Siegel, last week wrote:Westgate is operating at the highest profit levels in the history of the company,
If this is so, why would he tell his employees to vote for Romney? Perhaps because Ryan's proposed cutting of the capital gains tax rate to zero would eliminate nearly all of Siegel's tax obligations, netting him personally more money even if his company would not do as well as it would under Obama. Does any of this prompt you to reconsider your thoughts on the new relationship between corporate personhood and political speech?
Considering that what you mentioned about cutting the capital gains tax is completely false... then no.

Eliminating the Capital Gains tax is not a stipulation of the Ryan plan. I don't know what prompted you to think that, but perhaps you'd like to take a look at the actual plan proposed by Ryan and point out where it says that the Capital gains tax will be eliminated?

Spoiler:    It doesn't.   
What prompted me to think that was the original budget proposal which put Ryan on the national political map as the Republican budget guy. Look on pages vi and 57. Elimination of taxes on capital gains, interest, dividends, and estates. After people got wind that it would almost completely eliminate the tax burdens of people like Mitt Romney, Ryan proposed the version you linked to, which does not mention capital gains taxes apart from their being a bad thing.
The 'Blueprint' 2012 proposal you linked wrote:Raising taxes on capital is another idea that purports to affect the wealthy but actually hurts all participants in the economy. Mainstream economics, not to mention common sense, teaches that raising taxes on any activity generally results in less of it. Economics and common sense also teach that the size of a nation’s capital stock — the pool of saved money available for investment and job creation — has an effect on employment, productivity, and wages. Tax reform should promote savings and investment because more savings and more investment mean a larger stock of capital available for job creation. That means more jobs, more productivity, and higher wages for all American workers.
This is nearly the same language used to describe it as in the original 2010 proposal. The difference is that the 2012 proposal doesn't describe what policies would follow from that statement, when it's pretty clear what he's getting at (while campaigning, Ryan simply refused to say what he would propose regarding capital gains taxes). So since Ryan actually HAS proposed cutting the capital gains tax rate to zero, have my statements prompted you to reconsider your thoughts on the new relationship between corporate personhood and free speech?

Rough Giraffe wrote:
Valhallen wrote:
Rough Giraffe wrote:What happens when congress starts spending BEYOND the surplus, and we have a deficit again (as happened in 2001)?
That's not what happened in 2001. In 2001, the tech bubble was deflating, resulting in some economic disruption (without 9/11 and its economic fallout, it probably wouldn't have technically qualified as a recession, but it was still a major issue at the time).
Ah, I apologize. I should have been more specific. I was talking about late 2001, when congress actually began spending more than it took in. Post-9/11. Please excuse me.
And the 2001 tax cuts came into effect for Fiscal Year 2002, which began on October 1, 2001. You were saying?

Rough Giraffe wrote:
Valhallen wrote:The government was still running a surplus, and instead of directing it toward paying off the debt as Clinton had proposed, it was decided that a tax cut would be preferable by way of stimulating the economy. However, the supply-side tax cuts in a demand-loss period of economic difficulty not only turned the surplus into a deficit, they failed to stimulate the economy.
Top tax rates were cut from a 39.5% to 35%. What exactly and how much did a 4.5% drop in taxes supposedly harm? Considering that by the end of the fiscal year, before 9/11, as you said, the economy was doing pretty well and basically coming off of a high. A 4.5% drop wouldn't have done what you are suggesting it did.
I'm suggesting that it did something like this. It wasn't the only thing Bush did to expand the deficit, but it was an important thing. Also, the Bush tax cuts on capital gains*, dividends**, and the estate tax*** were rather larger percentage-wise than the cuts on personal income (where that 4.6% reduction to the top bracket represented an 11.6% reduction in taxes owed in that bracket). The most optimistic estimate I've seen for the budgetary effects of the 2001 cut was $1.1T in reduced revenue over the originally-planned run. So will you stop claiming that the Bush tax cuts raised revenue and acknowledge that they significantly lowered it? Do you have any evidence to support your point besides a misguided interpretation of the Laffer Curve?

*20% to 15% (25% reduction)
**39.6% to 15% (62% reduction)
***55% to 45% (18% reduction)

Rough Giraffe wrote:
Valhallen wrote: W. Bush's administration had the worst growth since Hoover's (And also the second lowest top marginal income tax rate since Hoover's. HW Bush had the lowest top rate and the second worst growth.).

Rough Giraffe wrote:Are we going to raise taxes again? Should there be an upper limit for taxation?
Probably, and no, at least not a hard limit. The rates should reflect the circumstances of the situation at hand and the priorities of the government / society. Just to point out how remote concerns involving the downslope of the Laffer curve are, consider this: In 1942, when the top income tax rate was 88% (near its highest ever), the real GDP growth rate was 18.5% (its highest ever). The top rate was over 90% for nearly twenty years following that (initially in order to deal with the deficit and debt from WWII), and those years overall had unusually good growth by the standards of the century. Consider that all years since the Great Depression with 10% or better real annual growth had a top rate above 60%, and all but three of the years with 5% or better had a top rate of 70% or more. In the real world, not only do much higher top marginal rates than at present not impair the economy, they correlate with better growth.
Actually they don't seem to correlate with growth of any kind at all. Regarding the scatter plot, the data points are all over the place without any actual trend. The data does not actually support that claim. Rather, I think a multitude of other economic factors are involved,
See, the thing about a scatter plot is that the data points are scattered to represent raw data, and the presence or absence of any trends may not be immediately apparent (you can see that the ones towards the right tend to be a bit higher than the ones on the left though, right?). One way to extract trends from raw data like that is to use regression analysis to find a curve that fits the data reasonably well. When you do that for GDP growth vs. top tax rate, you get something like this, where an analysis of the data for most of the last century says that a top rate in the sixties correlates with the best growth. Note the descriptions of the strength of this correlation, where the models described predict about a sixth to a third of the variance in GDP. So while there are definitely other factors involved, there is apparently an identifiable relationship (whatever its causes may be) between the top tax rate and GDP growth.

For reference, I first linked to that analysis here over a year and a half ago, and it seems that you have not yet read it seriously. This is what I've been getting at with my statements that I don't really care what of my arguments you respond to if your time is limited, but I ask that whatever arguments you do make are solid. If you don't read what I link or address what I actually say when making statements specifically defeated by what you are replying to, I feel compelled to explode things like this to explain things more clearly.

Rough Giraffe wrote:and I don't see increased government taxation as a definitive positive influence.

The conclusions you draw from these graphs appears to only take partial data and accept it as the whole picture. It's like you're taking examples when we had peace (lower demand for goods and services) and lower taxes, then we have a war and everyone's rushing to produce products to support the country while congress hikes taxes to pay for the war effort, and you say "look, higher taxes means better growth."
Look at what I've actually said*. I didn't say that increased taxation was a definitive positive influence, I said that a much higher top marginal income tax rate than at present (particularly around 60-70%) correlates with better economic growth. There is an important saying about statistics, that correlation does not imply causation. As I've mentioned before, it's not that a higher top tax rate magically triggers better growth, but that things associated with a high top rate (encouraging productive investment, reducing income inequality, lowering the low-income tax burden, and major infrastructure spending) are themselves good for growth. There is another consideration in statistics, that causation usually does imply correlation. So while the information I've presented doesn't conclusively prove that higher top tax rates cause better economic growth, it does disprove the inverse, that higher top tax rates harm economic growth. So please don't make that argument any more.

As for the rest of what you said there, it's nice that you agree that governments can increase spending and raise taxes (to pay for that spending) while stimulating economic growth. The ability of Keynsian economics to explain what happens during wars AND peace, booms AND busts, is why it rose to prominence and why its formulation of aggregate demand and supply underlies modern macroeconomic models. If your model of the effects of a high top tax rate doesn't apply to large swaths of history**, perhaps it's time to get a new model. Also, keep in mind that we do have a war now.

*Seriously, we've been going over the same stuff for quite a while. Please have a look at that post
**I could color points on that scatterplot to identify major wars. There have been plenty of peacetime years with both a higher top rate and better growth than the last decade.

Rough Giraffe wrote:Also, you did not answer my question. Let's say we raise taxes and it abolishes the deficit. Let's say that we are taxing at the rate indicated by the Laffer curve to most positively stimulate growth. What happens if government then continues spending beyond what we take in and we have a deficit again?
Then we'd have a deficit again, only one which would be easy to solve by cutting spending to previous levels (as opposed to the current situation where bringing previous tax levels back would mostly fix things, now that the wars are winding down). From your statements on this topic, you seem to regard it as axiomatic that the government will respond to a surplus by increasing spending, so therefore closing deficits by increasing revenue is pointless. Let's look at the last surplus we had. Clinton's tax increase and good economy shrunk deficits and eventually produced a surplus, which he proposed using to pay down the debt. When W. Bush came into office, he thought it was more important to use the surplus to cut taxes. Then, when major new expenses came along, he opted to let them increase the deficit rather than raise taxes to pay for them. That was neither inevitable nor caused by the same people who established the policies that produced the surplus. In your and my lifetimes, Democrats have been the party of fiscal responsibility, and Republicans have been the party of spending without regard to the state of the budget. Even if Democrats tend to want robust government services paid for by highly progressive taxation.

Also, the Laffer curve isn't directly about growth. It's about tax revenue at different rates, with the idea that too-high rates will bring in less revenue due to inhibiting economic activity. This would have the effect of inhibiting growth, but the Laffer Curve can apply to classical economic scenarios where all taxes inhibit activity and growth period. Since the peak of the rate-growth curve is around 60-70%, the peak of the Laffer curve cannot be below that, but instead lies somewhat above that at a rate with a lower growth but higher short-term tax revenue. Which helps explain how the federal government more than quintupled its revenue in three years during World War II in part by raising the top rate to about 90%.

Rough Giraffe wrote:
Valhallen wrote:
Rough Giraffe wrote:Why is your first concern not instead to reduce spending?
Because in the recovery from a demand-loss recession, reducing government spending would lower aggregate demand and weaken the economy, possibly triggering a second recession, as happened in 1937 when a lot of New Deal spending was cut off. Cuts to government spending (if warranted) should come gradually after the general economy has returned to normal (which it might have already if state and local governments hadn't laid off so many of their workers).
That way of thinking assumes that government spending unquestioningly equals either more economic activity or more jobs, which is an idea that has been proven false time and time again. Just because jobs exist as a result of some forms of government expenditure does not mean that government spending itself is tied to economic prosperity.
Actually, it kind of does as a matter of definition. Suppose the government gives a dude $100. If he spends any of that at all, or if he puts any of it in a bank (which will loan or invest it), that's economic activity. If the government hires the dude to do something, that's a job. Do you disagree? Do you have some kind of rationale for why economic activity and jobs that result from government actions aren't really economic activity or jobs? As a matter of economic stimulus, there's simply no arguing that the government can't do that, since it's blatantly obvious that it can. As a matter of general policy, it is best for the government to focus its efforts on what it does better while letting private markets take care of what they do better. In that sense, a tax-supported government job can result in less economic activity than forgoing the job and the taxes that paid for it. But that's an issue involving nuance and detailed analysis, and it relies on the idea that the budget should be balanced, which in real life is not true. There are times when it is appropriate for the government to hire people to do important stuff even if taxes shouldn't be raised, and there are times when taxes should be raised even if there isn't a need for the government to hire more people or spend more money.

Just what do you think has been "proven false time and time again" and where do you think I said that? I'm not making up the 1937 stuff - that's really what happened. Do you think that unemployment and GDP would be higher or lower than they are now if state and local governments had kept their workforces the same size?

Rough Giraffe wrote:
Valhallen wrote:
Rough Giraffe wrote:Surely there is waste in the government we can cut, or programs that can be lessened, or things that the government owns that can be sold and privatized (Amtrak, public schools, etc.)?
Sure. How about Bush's Medicare Part D, which prevents the government from negotiating prescription drug prices for Medicare patients (as it does with other medical care), resulting in a huge handout to drug companies. That alone is projected to be a major part of future budget problems.
Sure, I agree. Let's cut that.
I wasn't suggesting that Medicare Part D should be simply cut, which would leave lots of people without prescription drug coverage. I was suggesting that the waste should be cut. As in, it should be modified to allow the government to negotiate with drug companies for lower prices. The VA system, for example, pays about half as much as Medicare does for the same prescription drugs. It's a rather big difference.

Rough Giraffe wrote:Then can we agree to cut all funding to the Corporation for Public Broadcasting, seeing as they have their own personal income that eclipses what the government gives them?
You mean Sesame Workshop? That's a separate (private, non-profit) organization. Most of the CPB's money (which comes from the federal government, not "personal income") is used to subsidize broadcast stations and pay for programming (such as that produced by Sesame Workshop). And I happen to like things like Nova, Nature, The New Yankee Workshop, and The Red Green Show. Well worth a few dollars per year IMO, but you're free to disagree.

Rough Giraffe wrote:
Valhallen wrote:Obamacare's "cuts" to Medicare are of this type, which maintain services while reducing the cost to provide them.
Actually, the cost don't really change under his plan. They stay the same---they're just hidden and redistributed, and nothing is done to address the underlying causes of high health care costs to hospitals. He's really just pandering with this bill and putting a nice name on it (the "Patient Protection and Affordable Care Act").
Not really. The cost reductions aren't secret, and they focus on reductions in payments to providers for wasteful service (like Medicare Advantage insurers and hospitals with poor care) while maintaining the level of care for patients. The cost really is reduced - the producer surplus clearly shrinks for the targets of the cuts.

Rough Giraffe wrote:Heck, if we want to have a separate discussion on exactly how we might go about fixing the underlying causes of high health care costs, let's have that discussion. But I don't think we're going to get anywhere by saying "costs sure are high" and then putting forth a plan that says "We're going to cut costs by separating them into several different pieces of legislation and say the problem is fixed."
I've already talked about several parts of Obamacare that address health care costs. Is there some aspect in particular that you want to discuss?

Rough Giraffe wrote:
Valhallen wrote:Similarly, Obama's efforts to reform military spending have focused on eliminating waste, increasing capabilities while keeping the overall budget rather flat (ship numbers are on the upswing, for example, after bottoming out under Bush).
I'm not seeing that one. Setting ship numbers aside, what kind of waste are you suggesting that Obama has cut?
See this speech Secretary of Defense Robert Gates gave two years ago.

Rough Giraffe wrote:
Valhallen wrote:Regarding public schools, please recall the previously-explained economics which says that public funding is necessary, regardless of who actually operates the schools.
I would argue the opposite; that it matters a lot more more who operates the school than how much is actually spent on it, as evidenced by how spending for public schools has increased by a large amount over time with little to no improvement in test scores. Why don't we privatize failing schools and make the education market more competitive? Recall my argument for government assistance on lower-income earners. Children in families below the poverty line could FINALLY get a good education.
See around the middle of my post here where I've already talked about this (it starts at the quote above "Has it occurred to you that there are probably very good reasons for that?"). You're again missing my point. Both government-run and privately-run schools can be run well or poorly, and the difference is not usually about the amount of money spent, so I was not talking about that. I was talking about the importance of government funding of education, regardless of who actually runs the schools. Education is a textbook example of basic externalities used in economics 101 because it is so obvious that education has enormous benefits to the economy that are hard to capture during education. As such, a private market for education would provide much less education than the socially-optimal amount. This is what actually happened before governments provided public education, and poor families couldn't afford formal education for their children until governments subsidized it. Back here, this line of discussion got started when you suggested that "making education more privatized" would shrink the size of the government and put power back into the hands of the people. If the funding of education remains socialized, not much would change in those areas whether or not privately-run schools became more popular. If the funding of education were privatized, the government would shrink, but a lot of people would face drastically reduced options for educating their children because poorer people would have a hard time paying the costs of education from their relatively tight family budgets. As a practical matter, if all children are to have education available to them, there has to be a government-paid option available to cover those children that a private market would not.

Rough Giraffe wrote:
Fine, but since it's owned by the Federal government and runs at a deficit, let's sell the company to a private investor. What would be the problem with that? That's another $2 billion we can save; maybe more if the stock is worth anything at this point.
You're missing the point. Amtrak recovers more of its costs in fees than any private railroad. All private railroads rely on government subsidies to do business. If a private company took over Amtrak and provided the same service at typical private-sector efficiency, it would cost the federal government more, not less, than it does now.

Rough Giraffe wrote:
Valhallen wrote:Cutting waste is not the same thing as cutting service or even spending.
What if the service itself constitutes wasteful spending?
Then cutting the program would cut waste, service, and spending. I hope you realize that this is entirely consistent with my point that waste, service, and spending are different things, and that some programs are capable of providing services efficiently, and some services can reduce systemic waste. Therefore, programs must be evaluated case by case, and the cutting of spending and services does not necessarily result in reduced waste.

Rough Giraffe wrote:
Maybe they didn't feel they wanted those services. What exactly is the problem with that?
That article and its links explained (did you read them?). Things like the Medicaid expansion would improve health care while reducing waste and increasing economic wellbeing (which would more than cover the cost of the expansion). Literally every party involved would benefit, but those Republican governors didn't want those services for ideological rather than practical reasons, to the detriment of every party involved. State governments lose out on federal funding, increased tax revenue from economic gains, and a healthier population requiring less state-funded care; state residents lose out on insurance cost savings, better care, and general economic benefits; the federal government loses out on systemic uniformity and efficiency that would save money and generate more revenue in the long run; and residents of other states face the economic fallout from the states that refused those programs.

Rough Giraffe wrote:
Valhallen wrote:
Rough Giraffe wrote:Why do you see government as the end-all for prosperity?
I don't. I'm not a Communist. Have you been paying attention what I've been saying?
I'm not calling you a Communist. I'm pointing out that nearly every time I suggest that the influence of government is too high, you seem to imply that it's not high enough and seem to be advocating policies which would increase the ability of the government to intervene in our every-day lives. That's certainly not Communism, and I wouldn't try to label you as anything anyway, out of respect.
If you were arguing that free markets were the end-all of prosperity*, and I said, "No, they aren't," it does not imply that I think that government is the end-all of prosperity. In case you haven't been paying attention, I've been saying that mixed capitalism is the most effective economic system found to date. Some things are done better by governments, and some things are done better by markets. If a market is failing to work efficiently, a government can (and often should) intervene to correct it (usually through various kinds of regulation, but occasionally more action is warranted**). This means that neither the government nor private markets are the end-all for prosperity, but that economies are most prosperous with the right combination of the two. By saying that I saw government as the end-all of prosperity, you were implicitly labeling me a Communist because it is Communists*** who believe that prosperity is best achieved through complete governmental control of the economy.

*I'm not saying that you are, but some of what you've said has come rather close.

**This is why, for example, local governments now usually handle fire protection themselves rather than relying on the private sector.

***No modern Communsitic governments, even North Korea, have completely government-run or -planned economies, as they have allocated some functions to private markets despite the objections of traditional Communist ideology.

Rough Giraffe wrote:
Valhallen wrote:
Rough Giraffe wrote:Furthermore, you touched on alleged GOP voter fraud. First, three of the links you posted there relate to the same event---no need to post multiple links of the same story.
I did that to discourage you from dismissing the information out of hand.
I'm not doing that at all. I recognize that voter fraud exists on both sides of the isle. You were expressly focusing on one side of the isle, which is bound to make people think that it's more of an issue with Republicans than it is with Democrats.

And then you proceeded to dismiss my claims that voter fraud was a problem on the Democrat side at all. I wonder if I should bother discussing this particular topic if you're not willing to show my argument the same respect that I show yours.
For several years now, it has been a Republican talking point that "voter fraud" was a widespread and significant problem, that strict voter ID was necessary to fight it, and that Democrats opposed such measures because they relied on "voter fraud" to win elections. In the real world, the alleged "voter fraud" is vanishingly rare, the proposed voter IDs would fail to stop virtually all the fraud that does take place, and the Democratic claims that several voter ID laws would disenfranchise a lot of people are correct. In my election update post here, I pointed out that, in a schadenfreude-laden turn of events, the national and some state Republican parties actually hired people who appear to have systematically carried out voting-related fraud. And the Democrats don't appear to have done that. As you pointed out, some Democrats have acted alone or with immediate family to commit small-scale fraud, but that is so rare that it doesn't appear to actually matter for any election anywhere (other things are more important). Given the information I've presented so far in our discussion about "voter fraud", do you think that it is actually a significant problem anywhere in the US at any level?

Rough Giraffe wrote:In all honesty, and in spite of what you might think, I do respect you and the arguments you make. I'm not very good at conveying my points adequately most of the time (communication is one of my weakest traits, both in text and in real life). You have a very strong hand at debate, but I feel you are very quick to dismiss arguments made by those on the Right. I at least take the argument seriously but I try to provide a counterpoint based in fact. You just called one of my pieces of evidence regarding voter fraud into question because it was a remark by "one man" who used to be a Democrat and is now a Republican. How does that, in and of itself mean that his testimony is false? I see arguments like those as a sign of disrespect; if I used a similar tactic on you, how would you respond?
Back here, you asked "are you just going to ignore the fact that Democrats have publicly admitted that voter fraud is a common political strategy?" The "Democrat" who "admitted" that was actually a Republican repeating Republican talking points. I was pointing out that the source of that statement being a single Republican (not multiple Democrats) makes your statement wrong, not his. His statement is wrong independently of his identity because voter ID laws would not prevent absentee ballot fraud, which is usually done by using the information of real voters to cast improper ballots.

Re: Split from weekly discussion: election, budgets, & economics

Tue Jan 15, 2013 9:41 am

Idk i prefer Q.U.xVal instead of ruff. Q.U.xVal OTP+ most entertaining discussions to read because they usually go somewhere rather quicker. :D

Re: Split from weekly discussion: election, budgets, & economics

Tue Jan 15, 2013 10:35 am

I'm not desperate enough to argue against actual, verified, and established numbers and facts. Which is, as you may assume, what Val pumps out most of the time. I did argue with him on gun laws, because that's more of an ideological issue rather than a purely logical one.

I personally like to defer to the Gaussian function, which so aptly applies to so many fields of nature, and remind myself that most often solutions lie somewhere in between. But it is important to have people other than centrists looking for solutions to problems, because sometimes the best solutions do in fact lie on the extremities.

And while some events are nearly impossible to happen randomly, nor would anybody attempt to bring them about, it is still important to try and learn how the situation would develop, and how the markets would react. Which is why I would still run the kill all the poor simulation, just for the sake of knowing.

Re: Split from weekly discussion: election, budgets, & economics

Sun Jan 20, 2013 7:15 am

Sorry, I've been dealing with a lot of things recently. I'm not going to go into details but I'll seriously try to put together and finish up my responses in a timely manner. I'm still under a bit of stress and dealing with personal issues, so I cannot guarantee I'll finish this up in a very timely manner. I will promise that when I do get down to finishing it, I will try to take my time and come up with worthwhile responses.

Re: Split from weekly discussion: election, budgets, & economics

Sun Jan 20, 2013 9:00 am

So it's personal issues? I thought you went MIA.

Re: Split from weekly discussion: election, budgets, & economics

Sun Jan 20, 2013 12:59 pm

What's the deal with corporate personhood anyway? What does a corporation get now that it's defined as a person, instead of a company, or whatever it is they would be if they weren't "people"?

Re: Split from weekly discussion: election, budgets, & economics

Sun Jan 20, 2013 1:47 pm

A company can make profit, revenue, can be indebted, can be sued, and many other things that people can. So in order to make things easier you treat companies as "people" in some regards. Obviously not in all regards, only in those that make it simpler and easier for the companies to deal with legal issues. And that's been around for a long time now, namely since 1819. For example, if a corporation wrongs you as a customer, and you wish to sue them, who do you sue? You can only sue people, so what, will you sue the majority holder? What if he has nothing to do with what happened? Sue the CEO? The whole board of directors? Who should pay out compensations from their pocket once sued? There's a whole load of issues that corporate personhood solves. Right now, as always, people are arguing over exactly which rights/duties and to what extent corporations should get. That's been a discussion ever since it all started. The most recent ones as far as I've heard involve the freedom to make political expenditures by corporations, or as the civilised countries call it, lobby and bribe political officials and parties to do their bidding.

Re: Split from weekly discussion: election, budgets, & economics

Sun Jan 20, 2013 5:45 pm


It's a thread made by Val. About politics. I cannot imagine any regular being dumb enough not to expect walls of text. So I must take this post as a joke so as not to insult your intelligence. In which case: Val's "Feel free to let this one wander" does not encompass cheap one-liners. Keep them out of here please.
Kind Regards,

Re: Split from weekly discussion: election, budgets, & economics

Sun Jan 20, 2013 9:52 pm

Q.U. wrote:The most recent ones as far as I've heard involve the freedom to make political expenditures by corporations, or as the civilised countries call it, lobby and bribe political officials and parties to do their bidding.
I would just like to point out that this happens on both sides of the political spectrum. For example, this election cycle, Sheldon Adleson apparently donated over $100 million dollars towards the Pro-Romney Super PAC. People were decrying that for a long time, and yet those same people turned a blind eye to the fact that the Pro-Obama Super PAC actually raised MORE money than the Pro-Romney Super PAC.

By the way, I'm not trying to get into a debate about this particular issue. I just want people to realize that lobbying and bribery it is not an exclusively Right or Left issue.

Re: Split from weekly discussion: election, budgets, & economics

Sun Jan 20, 2013 10:10 pm

Using the site you linked (scroll down to where it breaks down the sources), Romney's PAC actually raised about twice as much as Obama's, and Republican PACs overall outspent Democratic ones by about five to one. Obama raised more money for his campaign than Romney because his direct campaign fund (where donations are limited to $2500 per donator) raised a lot more money than Romney's.

Re: Split from weekly discussion: election, budgets, & economics

Sun Jan 20, 2013 10:33 pm


Well if that's the case, if Romney had won, would people have accused him of "buying" the election? I've heard that term being thrown around a lot against the Romney campaign, but I haven't heard anyone using it against the Obama campaign...

Re: Split from weekly discussion: election, budgets, & economics

Sun Jan 20, 2013 11:09 pm

Probably. The difference is the perception of who is buying. If it's a lot of small donors (where Obama got most of his campaign money), it's acceptably close to the spirit of democracy that it's acceptable in the current campaign finance environment. If a smaller number of larger donors (where Romney got most of his campaign money) pay for the winning campaign, it brings up concerns of class warfare, 1% vs. 99% stuff, plutocracy, etc. The wealthy have always had a disproportionate say in elections, and the difference is a matter of degree, but the degree was unusually large this last election.

Re: Split from weekly discussion: election, budgets, & economics

Mon Jan 21, 2013 2:08 am

I don't know, it seems like many of the individuals who donated to the Obama campaign belong to the public-sector unions. Not to say that it really matters whether or not individuals from a union want to donate to a Democratic campaign. What I have an issue with is the fact that public-sector unions have somewhat-recently engaged in the somewhat-shady practice of donating union dues to a Democratic candidate's Super PAC and saying the donations came from a voluntary fundraiser they put together (done in this manner because it receives little to no bad press). This also means that unions can donate a lump sum but say that each of the members donated a specific amount, and therefore say that all of those donations are "individuals" donating rather than saying a single body donated. I don't believe there's anything illegal about what they're really doing, but I'm not sure they should be using union dues (funds intended for protecting and benefiting the workers) for something like that.

Re: Split from weekly discussion: election, budgets, & economics

Tue Jan 22, 2013 12:39 am

Ah, I think I'm getting a bit of perspective here. Republicans think unions are bad, and Democrats think large businesses are bad, for the exact same reason that they're trying to bend congress to their will, right? I'm trying to get a bit into this stuff, because the world's different than I thought it was.

I will note, though, that I think this is because of the way empathy works. People sympathize with events that might actually happen to them, so it must mean that more republicans see the unions as a liability, and the democrats are usually in those unions, and see big businesses as trying to push 'em down. Would this happen to be true?

Re: Split from weekly discussion: election, budgets, & economics

Tue Jan 22, 2013 5:23 am

Well, I'm not a Republican.

I don't think unions, in and of themselves, are bad. I think the people who run many of these unions are bad. I also know, through historical evidence and multiple first and third-person accounts that union leaders and other members have employed thug tactics in the past, such as sabotaging other businesses when they won't join the union--breaking windows, trashing stores, holding elevator shafts hostage via threat of force, etc--and then influencing the government to force extra benefits as well as higher pay, and then getting laws passed that allow them to collect dues from the remaining non-union personnel. This is why we were having such a voracious discussion about "Right To Work" states recently. If you don't know what a Right To Work state is, I would encourage you to research it for yourself.

Re: Split from weekly discussion: election, budgets, & economics

Tue Jan 22, 2013 7:25 am

Do please excuse the sudden shift in subject, but CGP Grey, whom I believe to be Val's internet alter-ego (either that or minutephysics) has put up a video which may help many of you piece the recent debt ceiling crisis together, and realise how it works and what it is.

Re: Split from weekly discussion: election, budgets, & economics

Wed Jan 23, 2013 7:21 am

I'll be responding to the ongoing discussion after I take some time to formulate a response, but for now, a comment on the bit between Blood Lord and Q.U. above: This is a discussion thread in Spam, so some spamminess is fine. For my part, I'd prefer that any spam be funny, but unfunny spam is tolerable if it doesn't disrupt the discussion too much. Short of such derailment, there shouldn't be formal mod actions, but in the same spirit, Q.U.'s edit is OK too, and does not represent an official condemnation of statements of awe at my posts.

On that note:

Re: Split from weekly discussion: election, budgets, & economics

Wed Jan 23, 2013 8:31 am

Indeed it wasn't a condemnation. Just a reminder to ensure people don't just start spamming this thread pointlessly. I like the little bit of depth and discussion we're diving here into.

Now, on the same note as Val. Political rap is fine in cartoons, but then some idiot politicians do it and it becomes dreadful.

Re: Split from weekly discussion: election, budgets, & economics

Thu Jan 24, 2013 5:44 am

Now, that depends. Some can pull off singing.

Re: Split from weekly discussion: election, budgets, & economics

Thu Jan 24, 2013 6:59 am

Whoever did that had a good vision. It reminded me of the debates.

Also, we might be drifting off the subject.

Re: Split from weekly discussion: election, budgets, & economics

Thu Jan 24, 2013 7:07 am

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