Open Thread: Impala/Warthog
by Bradford
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July 3rd, 2009 at 5:08 pm
More research to state the obvious, boy science sure wastes a lot of money.
Comment by Todd Berkebile — July 3, 2009 @ 5:08 pm
July 3rd, 2009 at 5:21 pm
Cap and Trade: The Big Con By John Griffing
Comment by Bradford — July 3, 2009 @ 5:21 pm
July 3rd, 2009 at 5:34 pm
Bradford, do you actually believe that GW is a scientific hoax intended to destroy the American economy?
Comment by Raevmo — July 3, 2009 @ 5:34 pm
July 3rd, 2009 at 5:42 pm
Do you actually believe Cap and Trade is a scientifically based piece of legislation? That's the critical point. Do unilateral regulations implemented by the USA, which cost jobs in a depression and tax the poor along with the rich, reverse climate trends. The only scientific point worth debating is whether the estimates on which the legislation is predicated are accurate and how that would affect climate. We should have assessed the bill's impact on the finances of the American people and weighed options. None of that was done. Ideology is driving this, not science.
Comment by Bradford — July 3, 2009 @ 5:42 pm
July 3rd, 2009 at 5:49 pm
You didn't answer the question
Comment by Raevmo — July 3, 2009 @ 5:49 pm
July 3rd, 2009 at 5:54 pm
My answer is you're done here.
Comment by Bradford — July 3, 2009 @ 5:54 pm
July 3rd, 2009 at 7:58 pm
Hey all,
Here is the kind of thing that could move the ID discussion forward. Perhaps we might even be able to come up some actual math to compare the probability of various models.
peace
Comment by fifth monarchy man — July 3, 2009 @ 7:58 pm
July 3rd, 2009 at 10:12 pm
fmm,
Interesting article. How do you envision this driving ID forward? If this simulation based on natural conditions does lead to the formation of complex forms that would seem to support a naturalistic OOL?
Comment by Todd Berkebile — July 3, 2009 @ 10:12 pm
July 3rd, 2009 at 11:51 pm
It might allow our discussions to be based more on actual data and less on speculation and Metaphysics.
It would and by the same token if it does not lead to such forms that would seem to support ID.
In the same way if the "ID edition" of Evogrid reveals a plausible pathway for a designer to “seed” life in an environment analogous to the primordial soup it would support ID and if no such pathway is forthcoming it would be evidence against ID.
Keep in mind I said this might move the discussions forward not settle the argument.
This kind of simulation won’t tell us what happened but might give us a better Idea what might have happened
peace
Comment by fifth monarchy man — July 3, 2009 @ 11:51 pm
July 4th, 2009 at 10:09 am
I am Spartacus.
Comment by Zachriel — July 4, 2009 @ 10:09 am
July 4th, 2009 at 10:29 am
Here's part of a comment from another thread which would have been better placed in this one:
Did you notice how uninterested your side of the aisle is in substantive discussions? Good at personal attacks, setting up straw men, presuming superior knowledge and at juvenile antics. The reference to the Cap and Trade legislation is a case in point. The issue isn't even over global warming and the evidence for it. To accurately evaluate the bill's value one needs to assess the strength of scientific evidence for a regulatory impact on climate and balance that with some inevitable harmful economic effects.
For those of you who are analytically challenged, global warming is not the central issue when remedial legislation is proposed. It's not even whether or not the "remedies" will impact climate change, although that clearly is more relevant. The issue not considered by congress is the merit of a trade off. Are economic setbacks offset by the climate change anticipated by the bill? Ideologues do not like subtleties. It's much easier to stereotype opponents and pretend a superior knowledge they do not evidence.
Comment by Bradford — July 4, 2009 @ 10:29 am
July 4th, 2009 at 10:55 am
Of course it is. Many in the business and right-wing political classes continue to deny climate change, hence, argue there is no need for action.
That is correct. But you can't do that when powerful political forces continue to wave away the evidence and accuse scientists of trying to destroy the U.S. economy.
Yes, of course they are, including plans on cost containment and ways to offset the economic impact. I can't imagine why you would think otherwise.
Or may I can.
Comment by Zachriel — July 4, 2009 @ 10:55 am
July 4th, 2009 at 11:02 am
Not a very scientific analysis on your part. Climate changes are cyclical throughout geologic time. Most have taken place before mankind existed let alone the industrial age. Leftist ideologues do not have a scientific clue as to what part of observable trends are attributable to man and what part could be due to natural factors. The reason for that is that natural contributory factors are largely a mattter of speculation at the current time. Environmental extemists have made global climate a political rather than a scientific matter.
Comment by Bradford — July 4, 2009 @ 11:02 am
July 4th, 2009 at 11:58 am
Geez. It's not a scientific analysis at all.
You had said "The issue isn't even over global warming and the evidence for it." The scientific argument concerning anthropogenic climate change is now only about the extent of the damage. The political issue is those who pretend it isn't so.
What "leftist ideologues" think is only a concern within a political context. Scientific questions are settled through the scientific method.
Geez. "Environmental extremists" are political by definition.
The strong consensus of the scientific community is that anthropogenic climate change is real and will have vast effects on life.
Comment by Zachriel — July 4, 2009 @ 11:58 am
July 4th, 2009 at 1:09 pm
I miss hanging out with you guys, but I've been really busy lately……
An important qausi creationist organization is called "Galilean Electrodynamics". Here is a little bit about this idea:
In classical mechanics, we expect to perceive distance as invariant to our velocity. Whether you are travelling 60 miles per hour or are stationary, if you are at an intesection in the road, the building that is 100 yards away is 100 yards away independent of your velocity. This is not the case in special relativity where one is dealing with high speeds close to the speed of light.
My understanding is that in Special Relativity, velocity affects the perceived distance between two objects. This was originally postulated as the Lorentz-Fitzgerald Contraction.
http://en.wikipedia.org/wiki/Length_contraction
For example if you are at point in space and have a relative velocity of 0 with respect to a distant star you will perceive the distance to be far away, but if you were at that same point in space with a very high relative velocity close to the speed of light, you will perceive the distance as quite near!
But this grates against the sensibilities of classical physics.
Hints of the wierdness of relativity originated with the consequences of the creationist Maxwell's equations. Many have tried and failed to re-write maxwell's equations so that some semblance of classical physics can be maintained where distance and length are invariant.
A major problem in re-writing Maxwell's equations has been the Michelson-Morely experiment, which seemed to seal the immutability of Lortetz-Fitzgerald-Einstein length contractions, not to mention the spectacular success of Maxwell's equations in ushering in the modern world of TV's Radios and cell phones.
Walter Ritz and others have tried to re-write Maxwell's eqautions, but as Tipler noted:
Tipler's wonderful paper is here:
http://math.tulane.edu/~tipler/theoryofeverything.pdf
As of this time, it remains to be seen if a successful revision of the theories of maxwell and the consequential theories of Lorentz and Einstein can be reframed in terms of "galilean electrodymics". A small segment of creationists have staked out interest in this topic as well as a variation of stochastic electrodynamics.
Creationists can make a real contribution to science and technology if they succeed in these ventures.
When I was learning about atomic structure, we studied the work of Bohr. Why does classical Electrodynamcis break down when dealing with the centripetal acceleration of the electron? Is there a way to alleviate some of the quantum wierdness with conceptions a bit more in line with classical physics? But quantum wierdness offers lots of wondeful black magic, like quantum computers and quantum cryptography, barrier tunelling, etc.
So much to learn!!!!!
Comment by Salvador T. Cordova — July 4, 2009 @ 1:09 pm
July 4th, 2009 at 7:05 pm
Zachriel:
That type of reasoning process drives states like California to bankruptcy. The only issue is whether or not the effects of the law's provisions remedy the damage to any significant degree and if it is worth the resulting economic hardships. China and other emerging economic giants are not aboard either. A little bit of added pollution there in an attempt to advance economically would wipe out the impact of US environmental laws. But environmental provisions makes environmentalists feel better. Why let reality get in the way of that?
Comment by Bradford — July 4, 2009 @ 7:05 pm
July 4th, 2009 at 7:46 pm
Economic effects of going "green" are recognized to be an economic drag:
here
Economic hardships are a legitimate issue whether in India, Indonesia or the USA. It is clearly more poignant to those who are out of work though.
Comment by Bradford — July 4, 2009 @ 7:46 pm
July 6th, 2009 at 10:12 am
Banned from the RNA Polymerase II for pointing out the obvious and asking the hard questions I see. Bradford claims us critics never engage in serious discussion but then he bans us from any thread where we engage in serious discussion. Interesting.
Comment by Todd Berkebile — July 6, 2009 @ 10:12 am
July 6th, 2009 at 10:40 am
Interesting indeed. You proclaim your liking for mockery, liberally sprinkle your comments with insults, falsely assume to know the thinking of others, infer mental illness and then act as if you did not suspect these things might get you banned. Serious discusser you are not.
Comment by Bradford — July 6, 2009 @ 10:40 am
July 6th, 2009 at 10:40 am
Same attitude as many on the right during the previous environmental movement. Air and water pollution is real and impacts the lives of real people. China is trading for short term growth at the expense of polluting their rivers and air. Even in a society where dissent is severely curtailed, China is reaching the limits of what their people can tolerate for their children's future and constitutes an upper limit on growth. The West has to a large extent controlled pollution so that their industries are more efficient, capable of continuing growth, and produce a better quality of life for their people. The environmental movement was a successful intervention in the economy.
The argument is merely repeated in each generation with each new challenge.
Of course they are. Keep in mind that climate change will disproportionately affect many developing nations.
That's correct. (Though per capita greenhouse gas emissions are significantly less in China than the U.S.) Any long term solution has to balance the real needs of emerging economies and the ensuing damage due to climate change. It's going to require new technologies, many probably originating in the developed world.
Comment by Zachriel — July 6, 2009 @ 10:40 am
July 6th, 2009 at 10:43 am
Zach, the point about China and other nations is the futility of unilateralism. Why take Bush to task for that and then proceed to pretend the USA can clean up the planet when clearly it cannot. Those rivers in China lead to the same ocean system we use.
That's true because of China's huge population but their technology is dirtier and their concern for the environment less.
Comment by Bradford — July 6, 2009 @ 10:43 am
July 6th, 2009 at 11:36 am
That's why it takes international agreement. But it will also take leadership. Those nations that develop green technologies will lead the export markets.
Comment by Zachriel — July 6, 2009 @ 11:36 am
July 7th, 2009 at 5:08 pm
NewsFlash: Michael Jackson still dead!
It’s been more than three days!
Michael Jackson was murdered by his adoring fans. Regardless of the autopsy results. (I'm pretty sure he pulled an “Elvis.”)
I used to like MJ, before he morphed into a surgically altered ghoul who preyed on children.
Obviously, the guy had some mental health issues.
But the adoration, the fanatical devotion, he received…
His fans made him what he is today: A stinking corpse.
Popculture is an interesting thing.
It's very important in these discussions. Ever think of it that way?
Comment by Rock — July 7, 2009 @ 5:08 pm
July 7th, 2009 at 9:37 pm
He was an incredible artistic talent but the news coverage and the exhalting funeral speeches are too much. He was not a heroic person or one who merits the post-mortem adulation. Yet you would not know it by listening to the mainstream media. Fox News provides a sorely needed oasis where non-PC views can be heard. It contrasts with the predictable conformity that substitutes for journalism among the mainstream media.
Comment by Bradford — July 7, 2009 @ 9:37 pm
July 9th, 2009 at 8:23 am
I'm in Minnesota right now, hoping to meet with elements of the NPA (Natural Philosophy Alliance). The NPA is a dissident physics movement with some creationist as well as anti-creationists elements. I have many questions to pose to them.
As time has gone on, I began to appreciate the significance of the Rutherford scattering experiment which led to the development of quantum mechanics:
http://en.wikipedia.org/wiki/Rutherford_scattering
If the electron has some sort of "orbit" (and I use the term loosely) around the nucleus, then it must be constantly, on average, be accelerating toward the nucleus. We call such accelerations, centripetal.
But an accelerating electron should be creating a radiation, according to Maxwell's equations, yet why does it not constantly do this? Radiations by the electron happen only in discrete situations (thus the spectrum of emissions which we study in spectroscopy).
I recall that my Electromagnetics professor saying that what we were studying in class was "classical" electromagnetics when we worked with Maxwell's equations.
The more advanced views were "quantum electrodynamics" and "relativistic quantum electrodynamics". Such things supposedly could reconcile the apparent discrepancy between atomic behavior and the traditional ideas in maxwell's equations.
But there have been elements in the physics community to come up with a different formulation of electrodynamics, called "stochastic electrodynamics". Supposedly the equations of general and special relativity naturally flow out of stochastic electrodynamics, and even the notions of gravity.
An alternative electrodynamics formulation was provided by Lucas:
Lucas Force Law.
If one take as taylor series of the Force Law, the terms of the Taylor correspond to well known forces including gravity! On of the terms results in a very strange looking force which correspond to the tilt of the orbits of planets around the sun. This un-named force looks intriguing as it may confirm the Lucas force law or other formulations of stochastic electrodynamics.
It appears there are some reasonable names behind the notion of stochastic electrodynamics like Putoff and Haisch.
Resolving the enigma of classical electrodynamics and the centripetal acceleration of the electron seems to be an important question in physics. Quantum Electro Dynamics (QED) supposedly answers the enigma, but I'm open to the idea of Stochastic Electrodynamics (SED), especially if SED makes better predictions to the exclusion of QED.
Comment by Salvador T. Cordova — July 9, 2009 @ 8:23 am
July 12th, 2009 at 3:59 pm
And the guy with one hand tied behind his back will always win the fight.
Wishful thinking I'm afraid. More liberal Utopianism with no basis in reality.
Comment by Daniel Smith — July 12, 2009 @ 3:59 pm
July 12th, 2009 at 7:53 pm
Yahoo news features the article:
11 Places With a Worse Economy Than Ours. Those 11 countries have already headed down the road we are traveling. A more centralized economy, an increase in the public sector and a corresponding decline in the private sector which must fund itself and the public sector- these trends are familiar to Europeans and the Japanese. This statement is a daunting prospect:
Indeed. Consumers are not likely to spend money when economic times appear perilous.
Comment by Bradford — July 12, 2009 @ 7:53 pm
July 12th, 2009 at 8:05 pm
Georges St. Pierre is a uniquely gifted fighter but whether or not he fights at middleweight (a heavier weight class) should be his decision alone. It's easy enough for a writer or fan to demand this. But they are not the ones who would have to step into the octagon.
Comment by Bradford — July 12, 2009 @ 8:05 pm
July 12th, 2009 at 9:36 pm
I only count 10. Instead, let's take a look at who's leading the list.
China
India
Middle East
Africa
Brazil
World total
Canada
Accordingly, the U.S. should adopt the economic policies of China, Canada and Africa.
That's right. Hence, basic economic theory indicates a stimulus to kick-start the economy.
Comment by Zachriel — July 12, 2009 @ 9:36 pm
July 12th, 2009 at 9:44 pm
The directional arrow is significant. Africa is too diverse a category and includes countries whose economies are doing worse than ours as well as countries whose economies are growng. Canada's sytem is similar to ours. Not much to go on there. China's emphasis on free enterprise is working. Although their social value system leaves much to be desired.
Comment by Bradford — July 12, 2009 @ 9:44 pm
July 12th, 2009 at 9:55 pm
This type of thinking illustrates the concept of invincible ignorance. The recent stimulus experiments have failed. Government stimulus policies have been falsified.
There is a tried and true form of stimulus that would work though but it is not ideologically compatible with the views of those running the USA. Lessen the involvement of the government in business activity and afford small businesses in particular more freedom and fewer tax burdens and you will see the economy grow. Jobs are created by the private sector. Small businesses account for the bulk of new jobs. Removing foolish regulatory requirements would stimulate the growth of small business in America.
Comment by Bradford — July 12, 2009 @ 9:55 pm
July 12th, 2009 at 10:14 pm
You recently stated that government spending, short of preexisting full employment, does not provide a short-term stimulus. Do you still stand by that position?
Comment by Zachriel — July 12, 2009 @ 10:14 pm
July 12th, 2009 at 10:36 pm
Bradford have you ever thought about writing a piece on the third Humanist manifesto and its signers?
Comment by themayan — July 12, 2009 @ 10:36 pm
July 13th, 2009 at 12:27 am
I'm not sure what you mean by preexisting full employment. I gather this is a reference to WWII when American men were employed by the military and American women went into the labor force in droves to take their place? The point to note is that nations do not live short term lives. Long term effects must be evaluated to assess overall value. When the government spends money it does so very inefficiently. Consumers spend it in ways that benefit them directly. That's why tax breaks when combined with cuts in government expenditures is the best strategy for boosting economies. When you spend trillions you do not have you must make an accounting. Those trillion dollar IOUs are coming up soon. If the government borrows the money it will have to compete with private borrowers for the money. That means higher interest rates which you do not want to see particularly in a recession. We could monetize the debt but that would provoke a severe round of inflation. It's not like we have not seen this before. African nations have undergone it. Argentina and Germany are textbook examples. Why do Obamaites think they can have their cake and eat it too? Spend like drunken sailors and not experience the consequences. Whew. Wish I could do it in my personal life.
Comment by Bradford — July 13, 2009 @ 12:27 am
July 13th, 2009 at 12:40 am
the mayan:
No, I'm not really familiar with it. Do you have references?
Comment by Bradford — July 13, 2009 @ 12:40 am
July 13th, 2009 at 2:03 am
Dembski has talked about it. It seems to be the latest of three within the last century. Its a secular religious document that advocates naturalism and atheism which in itself is their own business, and I have know problem with it, however one of its tenets is that, the duality of mind and body must be rejected. It is a philosophical and religious ideology signed and endorsed by Richard Dawkins, Eugenie Scott, Oliver Stone and many other less known names. Creation Wik has an article, and there are many others. There are some in the scientific community who feel its there moral obligation to rid mankind of unreasonable foolish and superstitious beliefs and bring us into a knew enlightened age of reasoning, again I guess.
Comment by themayan — July 13, 2009 @ 2:03 am
July 13th, 2009 at 2:14 am
An article entitled, Motives dont matter and sauce for the goose is sauce for the gander. The discovery institute discusses, humanist manifesto.
Comment by themayan — July 13, 2009 @ 2:14 am
July 13th, 2009 at 7:25 am
Not full employment means there are idle in the workforce. Pre-WWII is not the only time the U.S. has had less than full employment. It's also called unemployment.
That wasn't the question.
You already indicated the consumers won't spend during an economic crisis.
You recently stated that government spending, short of preexisting full employment, does not provide a short-term stimulus. Do you still stand by that position?
Comment by Zachriel — July 13, 2009 @ 7:25 am
July 13th, 2009 at 8:52 am
Yes, that is their initial reaction for obvious reasons. I've also said that we get out of recessions without government intervention. What brings that about is in evidence today. While government debt is piling up consumer debt is actually decreasing. If the latter trend continues consumers will gain in confidence insofar as their personal finances are concerned. Of course economics is complex and personal finances can be adversely impacted by increased tax burdens and higher interest rates to say nothing about loss of jobs.
If you spend a trillion dollars it is difficult not to realize some short term economic activity but how short is short term and what else is going on in the economy? I've already mentioned the need of the government to borrow great amounts of money. Money is finite and when the government competes with business for capital the economy loses- short and long term. So let's see how this plays out. Reality after all is the best check on theory. Incidentally one third of the federal government budget is allocated to paying interest. Imagine what good that hundreds of billions in dollars could do if freed up for alternative spending.
Comment by Bradford — July 13, 2009 @ 8:52 am
July 13th, 2009 at 8:58 am
Hi themayan, I'll look into the tip you supplied. Mind duality is an area of special interest to me.
Comment by Bradford — July 13, 2009 @ 8:58 am
July 13th, 2009 at 10:50 am
Thank you. That only took a week or ten days.
Those are important questions, but the progress on this discussion has been glacial.
Um, no.
Comment by Zachriel — July 13, 2009 @ 10:50 am
July 13th, 2009 at 11:51 am
Now you can answer a question I've posed before. How much "stimulus" money do we have to spend to get out of the recession and how much debt are you willing to accumulate?
Comment by Bradford — July 13, 2009 @ 11:51 am
July 13th, 2009 at 12:04 pm
As we both agree that government spending acts as a stimulus when there is underutilized capacity, and as the economy is still sputtering after a very significant stimulus, this indicates the depth of the economic crisis.
The current U.S. stimulus is within the margin of reasonableness, though it is being undercut by shrinking state spending. Regardless, it will take several months to impact the economy. It is also reasonable to make adjustments as circumstances require. As for debt, as soon as the economy returns to health, then measures should be taken to lower the debt. (By the way, I have expressed this position before.)
Comment by Zachriel — July 13, 2009 @ 12:04 pm
July 13th, 2009 at 1:23 pm
Stimulating the economy is more nuanced than this. I agree that when you spend 790 billion economic transactions will occur. That's obvious but the issue is how to best allocate money and who should make those decisions. Borrowing money to spend it comes at a cost. The downside must be weighed if we are acting responsibly. I hear no discussion of negative side effects from Congress or the White House. They come from independent economic analysts.
We will see. Are you supporting another stimulus package?
Comment by Bradford — July 13, 2009 @ 1:23 pm
July 13th, 2009 at 1:45 pm
The National Debt
Comment by Bradford — July 13, 2009 @ 1:45 pm
July 13th, 2009 at 2:45 pm
CBO has done extensive analysis of the effects of the stimulus, including the possible effect of crowding out private investment which may result in somewhat lower long-term growth, but perhaps offset by productive government investment in infrastructure.
Now that we are beyond the basics of what a stimulus is meant to accomplish, then you are right to be concerned about the rising debt. The Bush Adminstration added $5 trillion to the debt while leaving an equity debacle with immediate losses of more than $10 trillion. The collapse of the banking system was threatening to bring down the economy and restricted the available options for responding to the catastrophe. Consumers were afraid to spend, or unable to, accelerating the downward spiral.
It's sad. It's unfortunate. But that's what happens when you break your economy. You can rail about taxes when the bill comes due.
Comment by Zachriel — July 13, 2009 @ 2:45 pm
July 13th, 2009 at 5:35 pm
The proof is in the pudding Zach. Stimulus bills need to stimulate the economy. A 790 billion dollar tool is an expensive tool. If it does not turn the economy around the truth of that must be acknowledged.
I'm loyal to principles as opposed to politicians. One of the things I criticized both Bush and Congress for was excessive spending. There were many liberal Democrats who were likewise critical. I'm still critical. Congress has not changed its reckless spending ways and insofar as spending goes Obama is Bush on steroids. Where have the liberals who criticized Bush gone?
Thomas Sowell (a brilliant African-American) has written an excellent book on the economic calamities of the past few years. Among the things he pointed out was that lowering lending standards has correlated to significant increases in foreclosures according to historic data. Like many flawed strategies this one has been tried in the past. But unlike the past lending institutions faced little adverse consequences due to an ability to transfer bad loans to Fannie and Freddie. And it was the government which strong armed lending institutions to revise their lending practices in the first place.
Comment by Bradford — July 13, 2009 @ 5:35 pm
July 13th, 2009 at 5:55 pm
I know what you mean. In my lifetime, I've never seen a clearer or more literal example of "throw money at the problem."
Comment by don provan — July 13, 2009 @ 5:55 pm
July 13th, 2009 at 6:17 pm
BTW here is a link to the Thomas Sowell book I alluded to:
The Housing Boom and Bust
Comment by Bradford — July 13, 2009 @ 6:17 pm
July 13th, 2009 at 6:39 pm
Gee whiz, Bradford. I thought we resolved this, but we're back to square one.
Comment by Zachriel — July 13, 2009 @ 6:39 pm
July 13th, 2009 at 6:49 pm
I stated my belief that spending (nearly a trillion dollars for two bills within the last year) could have some stimulative effects. It also can have draw backs. Particular bills (as opposed to theory) need to be assessed based on results. The bill passed in Feb appears to have had little if any stimulative effects on this economy.
Comment by Bradford — July 13, 2009 @ 6:49 pm
July 13th, 2009 at 7:15 pm
And why do you think the stimulus bill has had little if any stimulative effects? How much money has actually been spent?
Comment by Zachriel — July 13, 2009 @ 7:15 pm
July 13th, 2009 at 8:08 pm
Hrun wanted me to announce that he has been banned from TT. His words:
Though I'm a member here, I never figured out how to communicate with the other members, so I'm not sure why he was banned. But he's made comments over at Mike Gene's blog.
Comment by Bilbo — July 13, 2009 @ 8:08 pm
July 13th, 2009 at 9:24 pm
Because it takes the wrong approach. Over 50 billion of that money was earmarked for state treasuries. Not exactly a job creator. There was pork galore. The best way to stimulate growth is to encourage it where most new jobs are created- by small businesses. There are many suggestions as to reforms that could be made in this area.
This is a real problem for the bill's sponsors. I recall the "urgency" that was said to have existed. Did Obama and Biden not fly out on separate jets for the signing ceremony? This was lets get it done quick stuff because the ailing economy needs the stimulus spending. If supporters are now going to contend that effects are not realized because some money is not due to be spent until next year (my understanding) then why the urgency and why backload the spending on a "stimulus" bill. It makes little sense unless the bill's authors have next year's elections in mind. My focus is on the economy. But then again I'm not running for office.
Comment by Bradford — July 13, 2009 @ 9:24 pm
July 13th, 2009 at 9:40 pm
States budgets are contracting. That means laying off workers.
You're still not responding to the point. Spending is stimulative when there is excess economic capacity. As you know, most of the stimulus has not been spent, so why are current deficits so large? Why are states budgets contracting?
Comment by Zachriel — July 13, 2009 @ 9:40 pm
July 13th, 2009 at 9:51 pm
Government workers. There are too many of them.
It's about the hows of spending Zach. Some spending is much more stimulative than others. Some spending is very inefficient. Policy effectiveness is in the details.
The last few decades have shown a correlation between economic prosperity and an inflow of money into the federal treasury. Money deducted from pay checks does not exist for the 10 percent of the work force that is unemployed. Is that your view of this- a shortfall?
Comment by Bradford — July 13, 2009 @ 9:51 pm
July 13th, 2009 at 10:11 pm
There was a budget surplus at the end of Clinton's term.
That's right. That and corporate taxes. The increased deficit is the symptom of the underlying problem. There is a very real crisis that hit the banking sector then spread to the general economy. Your heart needed a shot of adrenaline. You'll recover with time.
And yes, most of the money will be wasted. That's normal even in business. It's still stimulative. And not all of the money will be wasted. Consider the great projects completed during the Great Depression, and the vast improvements in banking and business regulation, the very safeguards (e.g. FDIC) that helped avert a worse crisis. Where the system failed was where those safeguards were ignored.
Transparency. Accountability.
The real question is whether the U.S. will have the political will to rein back on the deficits once the economy is on the move again. The Bush Administration cut taxes when they had the opportunity to tackle the debt. But sniping because the U.S. hasn't recovered in a few months from the worst economic catastrophe since the Great Depression is not particularly reasonable.
Comment by Zachriel — July 13, 2009 @ 10:11 pm
July 13th, 2009 at 10:35 pm
Realistic expectations of recovery would extend into next year but we'll have to wait and see. With Biden floating trial balloons about the possibility of another stimulus package there's a need to honestly evaluate the effects of prior ones. Small business owners I know well are also concerned that their needs are being ignored. A friend of mine, who owns a prosperous construction company, told me he employs one full-time office assistant to deal with the different state and federal agencies regulating his business. That's her job and he has fewer than 15 employees. My sister, also a small business owner, is similarly exasperated by government demands for statistical data. These two could be multiplied by tens of thousands of people holding similar views. It's not simply about money spent.
Comment by Bradford — July 13, 2009 @ 10:35 pm
July 14th, 2009 at 8:04 am
Agreed. An additional stimulus probably isn't necessary. Nervous Nellies.
Agreed. This emphasizes the problem of the government being in charge of the distribution of resources. It becomes a clamor for attention. The sooner America returns to business as usual, the better. But it will require fundamental structural changes to avoid a repeat. More transparency and accountability in the markets. No more too big to fail. And a system in place to dismantle large failing firms so they can't hold the economy hostage.
At least half the money is wasted. Nothing new about that, even in business. Those who worked hard and played by the rules have lost. Those who manipulated the system have often benefited. There is great injustice in these sorts of calamities. But the damage has been done.
Comment by Zachriel — July 14, 2009 @ 8:04 am
July 15th, 2009 at 7:02 am
This amuses me. George Bush (while still in office):
Congress did act on Bush's requests and Obama has taken similar measures. As a senator he voted for Bush "crisis measures." Since then millions of jobs were lost, people have lost their homes and unemployment rates are nearly double digit. I know. I know. It would be even worse if Bush policies were not put into effect. The real lesson though is how political viewpoints are insulated from the reality of actual events. No matter which way the trends go partisans can argue that either it would have been worse without our policies or that it got better because of our policies. Win, win for spinmeisters. A loss for those genuinely interested in truth.
Comment by Bradford — July 15, 2009 @ 7:02 am
July 15th, 2009 at 7:42 am
You've admitted that spending has a short term stimulatory effect (when the economy is running at less than full capacity), even if at the sacrifice of long term growth. Therefore, you yourself should be able to reason that the recession would be worse without the stimulus. You could argue that the short term benefit is not worth the long term cost. Instead, you hand wave, again.
Bradford, it took two weeks to get you to retract your previous claim about stimulus spending. And here we are, again, back at square one.
Comment by Zachriel — July 15, 2009 @ 7:42 am
July 15th, 2009 at 7:58 am
No hand waving Zach. More like an attempt to view problems from their proper perspective. I have no doubt that if Americans went on a patriotic spending spree to the point of exhausting their resources and borrowing on their credit cards we could stimulate economic growth. But would that be desireable? That's the operative question I seek to bring to the forefront while you want the issue settled with a spending can stimulate growth thought. Stimulating the economy is not our primary objective. Providing a basis for continued growth that extends beyond temporary measures should be our goal. This is a question of a balanced approach rather than considering matters in isolation from one another.
My claims about stimulus spending are that the long term and the global picture are relevant to the desireability of stimulus spending. There is also the matter of distinguishing between the theoretical can be and the actual what is taking place in the here and now.
Comment by Bradford — July 15, 2009 @ 7:58 am
July 15th, 2009 at 8:12 am
In fact, it would stimulate growth in the short term. However, many Americans have already tapped out their resources due to the collapse in equity and many others are hoarding their resources. They won't spend or can't. That leads to loss of business, cutbacks, more unemployment. That deepens the crisis, leading to even more conservative behavior. A stimulus can stop this downward spiral.
With unemployment rising, short term stimulus is certainly a primary objective.
Let's return to the year 2000. Can you point to your comments advising against tax cuts advocated by candidate Bush which were in the trillions of dollars?
Yes, of course. That means strong regulation of the financial sector, and improvements in infrastructure, including support for the emerging green economy. This requires money, of course.
Yes, of course. The economy was in free fall. Unfortunately, the $5 trillion in debt piled up during the previous administration (and all the other debacles) has made it more difficult. But not only is the labor market underutilized, so are the credit markets, which were in near collapse. That's why inflation has not been a problem short term. Long term, the U.S. needs to reign in the deficits, but short term a stimulus and spending to restructure the economy are reasonable.
Comment by Zachriel — July 15, 2009 @ 8:12 am
July 15th, 2009 at 8:34 am
That's an empirical claim. The lab is the entire economy and the data is only partially in. The spiral has been in the wrong direction in spite of stimulus spending.
Bradford: Stimulating the economy is not our primary objective.
It's a political objective. Whether the short term is worth the sacrifices of the long term is an economic matter.
No. In fact I can point to comments by liberals and conservatives during the previous election campaign endorsing the Bush stimulus tax cuts.
Bradford: Providing a basis for continued growth that extends beyond temporary measures should be our goal.
It can also mean deregulation where appropriate. Regulation is not a sacrosanct word implying the wisdom of regulators. There are some very specific regulatory policies which have backfired.
It's more a matter of money flow. Do we have businesses spending capital or taxing the capital to spend it as politicians see fit?
Comment by Bradford — July 15, 2009 @ 8:34 am
July 15th, 2009 at 9:29 am
Didn't think so.
Yes, it based in economics. There are a variety of historical cases, and mechanisms to explain why government spending can stimulate government activity.
You really need to try and be consistent. First you say government spending is not stimulative, then it is, then it's not. It's impossible to have a reasonable discussion when your position is so changeable.
Comment by Zachriel — July 15, 2009 @ 9:29 am
July 15th, 2009 at 9:46 am
Couple of typos.
Yes, it's based in economics. There are a variety of historical cases, and mechanisms to explain why government spending can stimulate economic activity.
And under what circumstances.
Comment by Zachriel — July 15, 2009 @ 9:46 am
July 15th, 2009 at 10:57 am
And your point is…
It's based on economic theory as is the belief that lowering tax rates stimulates spending, investment and growth.
What I've consistently pointed out is that whether spending stimulates the economy is not to be judged by a predisposed theoretical bent but rather by the performance of the economy. You can have a stimulus bill and still realize negative growth. There are factors other than government spending which determine economic fortunes.
Comment by Bradford — July 15, 2009 @ 10:57 am
July 15th, 2009 at 11:17 am
I'm sure it's obvious to everyone but yourself.
Tax cuts can sometimes also be stimulative, especially when directed at the middle class. But as with spending, the long term effect is debt. So a stimulus should be used only when required due to economic downturns. That's the conservative view (rather than the right-wing ideological view that "deficits don't matter", Cheney to O'Neill in 2002 just before O'Neill was fired for opposing more tax cuts).
Comment by Zachriel — July 15, 2009 @ 11:17 am
July 15th, 2009 at 11:53 am
Maybe but why not spell out what you think your point is?
Bradford: It's based on economic theory as is the belief that lowering tax rates stimulates spending, investment and growth.
That's only true if tax revenue declines. But if growth occurs revenue increases also. There is a fundamental difference between government spending stimulus and tax rate stimulus. The former places spending decisions in the hands of legislators. The latter in the hands of consumers and businesses. The latter group is better acquainted with their needs.
The second difference is that debt is front loaded into government spending. Money is spent first, stimulative effects hoped for and if realized so is a tax flow return. But once the money is spent the economy is on its own. Lower taxes have more permanent impact if left in effect. People and busineses can factor them into decisions unlike stimulus proposals which entail the uncertainty of legislative wrangling and ultimate passage. It comes down to what strategy yields more tax revenue.
Comment by Bradford — July 15, 2009 @ 11:53 am
July 15th, 2009 at 12:39 pm
Yes, Bush tax cuts led to trillions in increased debt for the United States leaving it more vulnerable to the current financial calamity. The point is that a stimulus is necessarily a short term remedy. There are significant problems with the Obama program, but that discussion remains elusive.
Comment by Zachriel — July 15, 2009 @ 12:39 pm
July 15th, 2009 at 12:54 pm
Do you agree or disagree with these statements:
* The recent economic crisis is among the worst since the Great Depression.
* Government spending can be stimulative when the economy is working at less than full capacity.
* Deficits do matter.
Comment by Zachriel — July 15, 2009 @ 12:54 pm
July 15th, 2009 at 2:27 pm
A big increase in government expenditures led to more debt. This trend continues with Obama.
Comment by Bradford — July 15, 2009 @ 2:27 pm
July 15th, 2009 at 2:42 pm
Watch the debt climb.
Comment by Bradford — July 15, 2009 @ 2:42 pm
July 15th, 2009 at 2:46 pm
The National Debt as a Percentage of GDP
Comment by Bradford — July 15, 2009 @ 2:46 pm
July 15th, 2009 at 4:07 pm
A truly insightful point. While the goal of "stimulus" spending is to stimulate economic activity, as you corrected your statement to say, there's some question about whether any given spending will actually stimulate economic activity, as you and Bradford are debating. On the other hand, it is absolutely unavoidable for government spending to stimulate government activity. That unquestionable negative effect must not be ignored.
I must object: spending alone causes debt. This is perhaps a fine point, but important to keep in mind. That doesn't mean you can't make a case to increase taxes in order to reduce the deficit, but pretending cutting taxes increases debt presupposes that the natural thing is for the government to take all our money, and we only have to decide how much the government can afford to give back to us. Although typical, that's still a dangerous attitude.
Comment by don provan — July 15, 2009 @ 4:07 pm
July 15th, 2009 at 4:33 pm
There are, indeed, a number of factors involved.
Government spending will tend to stimulate the economy when it's working at less than full capacity. If the economy is already at full capacity, then government spending will compete with the private economy and that will tend to push up inflation. Cutting taxes can also stimulate the economy. If people spend the additional cash flow, then it will have direct stimulatory effect. If they save it, then it may reduce the cost of borrowing. Similarly, if the credit markets have excess capacity, then in the short run government borrowing will not crowd out private investment. Finally, if there is no confidence in a nation's ability or willingness to repay, then rates will climb and make borrowing prohibitive.
Not necessarily. If the government has money saved, then increased spending doesn't cause debt, but can still stimulate the economy. When people are out of work might be a good time to build that new road which will lead to long term economic growth.
It merely reflects the fact that the majority of people want a certain level of government services. A mixed system is prevalent in modern, industrial nations.
Comment by Zachriel — July 15, 2009 @ 4:33 pm
July 15th, 2009 at 4:39 pm
By the way, governments—just like individuals—should live within their means and only borrow during times of crisis (or for well-considered, long term investments). Better yet, they should save for a rainy day.
Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery. — Charles Dickens
Comment by Zachriel — July 15, 2009 @ 4:39 pm
July 15th, 2009 at 6:00 pm
My point is that this is only true of specific spending. If, for example, that Government spending merely transfers money from tax payers who will spend it to someone else who will spend it, the net effect on the economy is zero. The burden would be on stimulus advocates to show that that's not what's happening.
Not that that's what happening here. What's happening here is spending money that isn't available yet. While that opens up many, many additional issues, that shouldn't distract us from asking who's deciding what the money is spent on, and why. If most of the money just goes into, say, rich people's pockets, then there won't be much stimulus.
I said that spending is the only thing that causes debt. I did not say that spending always causes debt.
Yes, this was pretty much my point: a majority of people have bought off on the idea that a certain amount of everyone's incomes belongs to the government, and that the requirement is to show the current amount being taken via taxes is too much. That's why we're ruled by Democrats and Republicans that thrive on spending money, and not by Libertarians that focus on reducing the government's impact.
Personally, I don't object to taxes, I only object to the presumption that taxation is the government's right and doesn't need to be justified.
What you are saying is very wise, and one would hope it was normal practice. It's also very, very important to recognize why it isn't and never will be normal practice, though, at least not unless there's a huge change in how the majority views government.
Comment by don provan — July 15, 2009 @ 6:00 pm
July 15th, 2009 at 7:04 pm
That is correct. It has to represent an increase in total spending.
Taxation only with effective representation, a reasonable positoin.
Not typically, but the U.S. did pay down the huge WWII debt, as did other democratic countries, so it is not unheard of.
Comment by Zachriel — July 15, 2009 @ 7:04 pm
July 15th, 2009 at 7:45 pm
Yes, we are blessed with such a system. But the majority can still abuse taxation through their representatives.
Yes, Americans used to have a much healthier view of government. The current situation developed over the last 50 years or so.
Comment by don provan — July 15, 2009 @ 7:45 pm
July 15th, 2009 at 8:34 pm
Especially when those on the government teat are in the majority and elect representatives who soak the minority.
Comment by kornbelt888 — July 15, 2009 @ 8:34 pm
July 16th, 2009 at 3:37 am
You are on track, but the way you express it makes me fear you think you've identified a particular group "behind" the problem. But the problem is that in this day and age, we're essentially all on the teat in one way or another. Simply targetting one group and turning public opinion against them won't solve the problem, it will just move it to the next group. For example, I'm guessing you were imagining the poor in your comment, but I'd say it's the middle class that's currently in control and driving government in a direction favorable to them at the expense of the other classes.
(Mind you, we're discussing the power wielded by representation. There are, of course, other abuses involving other lines of force.)
Comment by don provan — July 16, 2009 @ 3:37 am
July 16th, 2009 at 4:02 am
He has identified a particular group. It is the majority of people who believe the government is an institution to be used to advance their personal agendas.
This is true only in a trivial way. There are many whose payment and service balances during their lifetime are heavility weighted in favor of more resources surrendered to the government than resources received.
The middle class is being murdered in America. It is the middle class which shoulders increasingly heavier tax and regulatory burdens without the resources of the rich to buffer them.
Comment by Bradford — July 16, 2009 @ 4:02 am
July 16th, 2009 at 7:29 am
The majority typically have some political control, and people being people will tend to advocate policies that represent their own interests, even if they equate those interests with the greater good.
I don't think the "majority" see that as their goal.
Ah, the Blue States, which pay more in taxes than they receive in benefits from the central government. But they are generally richer, so shouldn't they pay a bit more?
I thought we just went through an era of tax cuts.
Anyway, the Bush tax cuts favored the wealthiest Americans. Ironically, a minority benefited, not the majority. The majority got left holding the bag. You're right to be angry.
Comment by Zachriel — July 16, 2009 @ 7:29 am
July 16th, 2009 at 9:27 am
Here is another view of the National Debt. Note the rise and fall over the past three decades. Which administrations were spendthrifts, and which were fiscally prudent? Which ones cut income tax rates, and which ones raised them?
Before pursuing that line any further, I must point out that marginal income tax rates were drastically reduced in the Reagan era, especially for high earners, but the payroll tax (which is regressive) was increased. You can see the effects of this in Wikipedia's charts on the Debt, or Bradford's chart above. That "intragovernmental debt obligation"? It consists primarily of transfers into the Social Security lock box. They increased dramatically due to FICA tax increases in the mid-1980s, which helped to mask the credit market impacts effects of the budget deficits. But the point is, taxes were cut in the 80s for some but not all.
During the Bush II administration, income tax rates fell further, and the top tax rate on dividend income and long term capital gains was slashed to 15%. Warren Buffet has famously claimed that he pays a lower marginal tax rate than his receptionist. In fact, if his receptionist was in a two-earner family, he or she could well fall into the income bracket for the Alternative Minimum Tax, which does not extend to Warren Buffett's (or anyone elses) dividend income or long term capital gains. Thus much of the income of the wealthy can now escape a tax originally designed for the wealthy. And so it goes.
I couldn't disagree more. Bradford has it correct: the middle class is being wiped out. But it is not through heavy taxes or regulatory burden. It is through dis-enfranchisement, de-regulation that favors those who know how to game the system, and a crushing private debt burden that dwarfs the National Debt. They have seen their home equity disappear (though many of them were willing partners to the destruction of that equity), their pensions slashed, their medical benefits eliminated or priced beyond reach, their retirement savings reduced, and their jobs sent abroad. Mourning in America.
Comment by Tom MH — July 16, 2009 @ 9:27 am
July 16th, 2009 at 10:34 am
Yikes, that post went longer than I thought. Erm- troll much?
Since this is an open thread: 30 years ago today…
Comment by Tom MH — July 16, 2009 @ 10:34 am
July 16th, 2009 at 4:51 pm
I don't think he identified this group, nor do I think this group could be said to be abusing representational power since it doesn't act as a unit for the same ends. But I do agree this is an important group, and suggest that today this group includes virtually everyone, even those that protest against it. That's the point: almost everyone is in this group, and until that changes, pointing out specific abuses is just a game of whack-a-mole.
I'm not quite sure what you mean. It's true in a fundamental way. Is that the same thing?
Can you supply numbers to back this up? I'd be interested to see how such statistics take into account factors such as infrastructure, defense, and benevolence. (One votes for welfare mainly so that someone else gets the service.)
Anyway, this is somewhat tangential: abusing representational powers to advance their personal agendas does not imply that their personal agendas will actually result in them coming out ahead by any specific measure.
As I said, there are other forces at work, but it appears to me that the middle class is currently wielding the representational power, in that they are a large group which is relatively cohesive in that they tend to want upper classes to bear more burden and they tend to want lower classes to have more services provided by the government.
Comment by don provan — July 16, 2009 @ 4:51 pm
July 16th, 2009 at 5:38 pm
Comment by chunkdz — July 16, 2009 @ 5:38 pm
July 16th, 2009 at 11:33 pm
This typifies your one dimensional analyses of late. Federal income taxes are but one part of a metric which also includes state income taxes, property taxes, sales taxes and payroll taxes in addition to the hidden fees that politicians in NJ have become adept at imposing. The hidden taxes include items like steep hikes in licensing and filing fees. On a federal level the filing fees that are now in effect for immigration petitions are noticably impacting the willingness of some poorer people to file for benefits.
The cruelest tax of all may be a coming round of inflation which severely impacts the very groups of people liberals claim to care about.
Comment by Bradford — July 16, 2009 @ 11:33 pm
July 16th, 2009 at 11:42 pm
Tom MH:
Glad to see you drop by Tom. You are a tad plus more sophisticated on financial matters than the average bear roaming the TT forest. My reference to regulatory burdens is focused on a subset of the middle class- small business owners. I'm personally familiar with their complaints and the businesses span quite a variety of enterprises. In a prior comment I pointed out that a small business owner I know has had to hire one assistant whose sole responsibility is to deal with various government agencies. Thanks for the comment.
Comment by Bradford — July 16, 2009 @ 11:42 pm
July 17th, 2009 at 7:30 am
Of course.
So you agree that running up trillions in debt with tax cuts to the wealthiest Americans during times of economic expansion was a bad idea. The majority got left holding the bag. You're right to be angry.
Comment by Zachriel — July 17, 2009 @ 7:30 am
July 17th, 2009 at 9:06 am
My position is that lowering taxes is good for the middle class but that lowered taxes should come with lowered government spending. Less spending. Less taxes. That's the formula for prosperity.
Comment by Bradford — July 17, 2009 @ 9:06 am
July 17th, 2009 at 9:26 am
Well, that right there is job creation!
Comment by Tom MH — July 17, 2009 @ 9:26 am
July 17th, 2009 at 9:32 am
As a general rule, that makes some sense. Of course, a modern economy requires certain expenditures, banking regulation and insurance, food and drug testing, law enforcement, defense, etc. Other expenditures, such as for the social safety net, are supported by wide sectors of the population. All modern industrial societies have some sort of social safety net, including social security and unemployment. These sorts of programs provide a more stable society, which has allowed business to prosper over the last century.
Speaking of one dimensional analyses, merely saying less spending, less taxes does not really resolve the issue. The largest government expenditures were instituted to solve important social issues. For example, before social security programs, many old people literally starved or froze to death, especially during economic crises when families were forced to scatter. When there was less social mobility, people took care of their parents and grandparents. But with the movement to cities for work, this no longer was a sustainable system. Social security not only helps the elderly, but permits greater economic mobility for their children, and a more stable social and political environment for business.
Comment by Zachriel — July 17, 2009 @ 9:32 am
July 17th, 2009 at 9:43 am
Without more details, your statement is hard to evaluate. Most small businesses, such as Mom and Pop stores, have a bookkeeper (Mom or Pop) and hire a tax accountant during tax season. But bookkeeping is essential for any business venture, even in a laissez faire business environment. Larger businesses may have more overhead and have entire departments involved with accounts receivable, payable, payroll, perhaps legal and contracting. Businesses that work with government contracting, of course, will have people who specialize in dealing with government agencies. Compliance issues can often be farmed out to professionals.
If you advocating for a simplified and modernized tax and regulatory environment, then you have our support.
Heh.
Comment by Zachriel — July 17, 2009 @ 9:43 am
July 17th, 2009 at 11:49 am
Yeah, small business owners have humorously noted their "job creation" contributions. Much of the daily chores entail compilation of statistical data to be furnished on government forms for government purposes. It includes statistical information on job applicants (for businesses having government contracts) which specifies the racial and ethnic backgrounds of applicants along with other personal information. Other data is more business oriented but it would be a mistake to assume the motivational purpose of inquiries is the betterment of society as opposed to ideologically guided social engineering.
Comment by Bradford — July 17, 2009 @ 11:49 am
July 17th, 2009 at 2:22 pm
Of course not. There's the matter of deciding what to cut.
Yeah, yeah. Noone wants to cut the little old lady out of her SS checks. What we should do though is take measures to prune government agencies and make them operate more efficiently. When private businesses operate inefficently the marketplace has a way of pruning the operations out of existence in favor of better run businesses. That of course does not hold true in today's economy where lobbyists can keep their clients in business with favors from the government. It helps when lobbyists are sons, daughters and wives of Congressmen. But the competive model, while corrupted by realpolitik, nevertheless suggests how to prune. If a parrallel operation in the private sector requires 10 workers to accomplish task x and an agency needs 15 to do it, that's a likely candidate for pruning. I worked for a federal agency long enough to learn about the use or lose strategy federal agencies employ in Sept- the end of the fiscal year. Use up money or you may get less to spend next year. That's a target month for pruning. There's lots of fat mixed into programs having lofty and sometimes worthy goals.
Comment by Bradford — July 17, 2009 @ 2:22 pm
July 17th, 2009 at 5:41 pm
Please, I've asked you for such a small thing. You can only run up trilliions in debt by spending. Tax cuts decrease the reduction in debt, they do not cause the debt to begin with.
When you ask the question in that "tax cuts or not" form, you're ignoring the broader questions, such as whether it wouldn't have been just as good or better to decrease spending to reflect the reduced revenue of the tax cuts. (I'm taking your word that there was reduced revenue: in an expansion, tax cuts can lead to increased revenue, but I've lost track of exactly what period you're talking about.)
Of course not, but it's better than imagining that raising was the only way to resolve the issue.
Comment by don provan — July 17, 2009 @ 5:41 pm
July 17th, 2009 at 9:44 pm
So you agree that running up trillions in debt with tax cuts* to the wealthiest Americans during times of economic expansion was a bad idea (*while maintaining or increasing levels of spending).
There is a long term political movement in the U.S. that deficits don't matter, meaning you can maintain spending while simultaneously cutting taxes. Hence, the question is often addressed in terms of tax cuts.
The Clinton Administration made substantial cuts in welfare spending as part of the effort to bring the budget back into line, so there is no question that it can be addressed on the spending side.
There was an increase in revenues during the Bush Administration, but not nearly sufficient to close the fiscal gap.
Comment by Zachriel — July 17, 2009 @ 9:44 pm
July 17th, 2009 at 10:15 pm
That comment was originally directed towards Bradford.
Comment by Zachriel — July 17, 2009 @ 10:15 pm
July 18th, 2009 at 5:04 am
…overflowing a bucket by plugging holes* (*while maintaining or increasing the amount of water you pour into it). Plugging holes doesn't overflow the bucket. Can't you get it? For your sentence to make sense, tax cuts should be the asterisk, not spending.
Yes, I understand spending can be reduced, but when you blame the increased debt on cutting taxes, you are speaking as if spending isn't the fundamental problem. All I'm saying.
Were revenues higher or lower than they would have been without the tax cuts?
Comment by don provan — July 18, 2009 @ 5:04 am
July 18th, 2009 at 7:49 am
Without a parallel universe for comparison, how will we ever know? This is the joy of economics and politics. There is never a double blind experiment to check out the untried theories, only history to pick over the bones of the failed policies!
(Bit like ID really!)
Comment by Alan Fox — July 18, 2009 @ 7:49 am
July 18th, 2009 at 9:01 am
The sentence makes sense. You generally run up debt by cutting revenue* (*while maintaining the same level of spending). So when business drops off, the balance sheet moves negatively**. This can then lead to cuts in expenditures as a consequence of the decrease in receipts. It depends on the variable we wish to treat as the independent variable.
(**Nor does deficit spending necessarily lead to debts—if the entity is spending from savings. But most people know that, and it probably isn't necessary to repeatedly mention it parenthetically.)
That indicates it is not a mere semantic distinction you are drawing. You consider spending a "fundamental problem", even when spending may be an important solution by generating a stable business environment that enables everything else to happen. Cut the wrong spending and it may very well cut revenues, e.g. no police, no commerce.
Comment by Zachriel — July 18, 2009 @ 9:01 am
July 18th, 2009 at 9:16 am
I think I've seen you indicate you are a libertarian. Nice in the abstract. But frankly, if you don't have police, everyone needs their own security forces. Something like the Middle Ages. What is inevitable is that power consolidates. Even in the U.S., closely held trusts were at one time economically more powerful than the federal government.
Modern governance requires police, military, laws concerning property, safety, banking insurance and regulation, food and drug inspection. All advanced societies have such institutions. And you also need some sort of social safety net or you don't have a stable political environment. Otherwise, every time there was an economic calamity (which were more frequent and more dangerous before institutions such as FDIC, the Fed and other regulatory bodies), there would be millons of unemployed on the street. Millions of U.S. veterans were educated and housed after WWII leading to the greatest period of prosperity in history. Compare to the neglect unemployed veterans experienced after WWI.
Power will consolidate. It's necessary that this be balanced by strong, democratic institutions that can address critical issues before anarchy ensues.
Comment by Zachriel — July 18, 2009 @ 9:16 am
July 18th, 2009 at 10:06 am
Indeed. So let's review the bidding, and do the best we can:
Reagan era: cuts taxes, national debt increased.
Bush I/Clinton era: raised taxes, national debt decreased.
Bush II era: cuts taxes, national debt increased.
To be fair, that is debt as a percentage of GDP. In absolute dollars, the debt has been increasing monotonically (although Clinton was able to achieve an on-the-books surplus — that is, excluding intragovernmental transfers — in his final budget)
And to answer dan provan's anticipated objection: yes, this ignores what was going on on the spending side. Bush II was notoriously unconcerned about controlling spending; the PAYGO discipline of his predecessors (beginning with Dad!) was abandoned. The advice of Nobel-laureate economists, and his Treasury Secretary, to curtail deficits was ignored. As measured by his unwillingness to use the veto pen, he was one of the most liberal presidents in modern times. He started a couple of wars and chose not to raise the taxes necessary to pay for them, unwilling as he was to follow the prudent example of his fiscally-conservative father, whose conscience obliged him to raise taxes to help offset the cost of the S&L Crisis (more lovely fruits of deregulated commerce btw). Or perhaps he was unwilling to pay the consequences his father paid for that reluctant betrayal of an ill-advised promise to the party's base. "No new taxes." Read between his lips.
Vice President Cheney to Treasury Secretary Oneill, December 2002: ""You know, Paul, Reagan proved deficits don't matter."
Comment by Tom MH — July 18, 2009 @ 10:06 am
July 18th, 2009 at 6:50 pm
I mentioned the growing dissdent physics movement that is represented in part by the Natural Philosophy Alliance (NPA).
I will be the first to say, that some of the individuals I've met through the NPA I would consider cranks of the first order!
But there are some bright minds and interesting questions that have been put forward through the NPA. Some are long time university professors, most notably Domina Spencer who got a PhD in math and physics from MIT at age 21 and has been a professor ever since at University of Connecticut! I believe she is setting world records. Also there have been creationists who have been an integral part of the NPA like professor Thomas Barnes.
I don't know how these guy pulled it off, but some elements of the NPA are helping organize something at the John's Hopkins University Applied Physics Lab (JHU APL). Recall that it was Lee Spetner of JHU APL that was among the first academics from a university to openly declare he was a creationist (see his book Not by Chance endorsed by JHU Nobel Laureate Chrisitan Anfinsen).
The announcement of the 4 day conference is here:
http://ias-spes.org/SPESIF.html
It was through this element of the NPA I learned about the Laithwaite experiment:
http://en.wikipedia.org/wiki/Eric_Laithwaite
Laithwaite was a respected professor of electrical engineering:
See this article:
http://www.rexresearch.com/laithwat/laithw1.htm
Recall, that there are dissident elements that believe gravity is a form of elctromagnetism. The fact that we can't apply maxwell's equations directly to account for the lack radiation when dealing with the electron's centripetal acceleration resulted in attempts at reconcilation with such things as Feynman's Quantum Electro Dynamics (QED). Another attempt at reconciliation is Stochastic Electro Dynamics. See:
http://en.wikipedia.org/wiki/Stochastic_electrodynamics
Controlling Ineria? Hmmmmmmmmmm…..
Comment by Salvador T. Cordova — July 18, 2009 @ 6:50 pm
July 20th, 2009 at 12:20 pm
Today celebrates the 40th anniversary of the moon landing.
A little known fact for a long time, but now on Wiki:
Comment by Salvador T. Cordova — July 20, 2009 @ 12:20 pm
July 26th, 2009 at 4:16 am
This analysis is of a business. Governments are not the same. Revenues are different from taxes in a very significant way.
The point isn't that all spending it bad. The point is that all spending needs to be justified sufficiently to warrant the corresponding taxation.
Anarchy is your only concern? I think any modern government can avoid anarchy. I'm more worried that they'll do it by reducing our individual freedoms. And when you say, "The problem here is that we're not taxing enough, so we're going deeper and deeper in debt," you are marching in that direction, the one that presupposes that we have to justify the money we keep rather than the government having to justify the money it takes.
By the way, you are confusing libertarianism with anarchy. They are very different. You are correct that modern societies are well beyond any possibility of adopting libertarian principles. But that doesn't mean we should all throw up our hands and give in to the trend no matter where it might lead.
Comment by don provan — July 26, 2009 @ 4:16 am
July 26th, 2009 at 9:32 am
We have no disagreement on that point. What started this was:
You generally run up debt by cutting revenue* (*while maintaining the same level of spending).
We can, in fact, analyze the effects of revenue on a fixed level of spending, and we can, in fact, reasonably say that a proposed tax cut may lead to deficits if that proposal doesn't also include spending cuts. Some, on the American Right, have claimed otherwise.
Perhaps it might be worth pointing out that the spending side of the equation is sometimes neglected. But I'm not sure it constitutes an actual argument.
Comment by Zachriel — July 26, 2009 @ 9:32 am
July 26th, 2009 at 1:38 pm
I was pointing out that you expressed yourself in a way that encourages the kind of thinking that leads to spending being fundamentally neglected. And it wasn't an argument, it was just an observation.
I admit that very few people would agree with me. That's because the idea that taxation doesn't need to be justified is pervasive. More's the pity. It's led to our current state, where governments at all levels are seen as functioning as a two step process: first, get money, then spend it. This decoupling leaves the amount of taxation an arbitrary decision. We see in your statement: debt is the problem, taxes solve it, so keep taxes high. Taxation stops being the measure of government control it really is and becomes a practical matter: how much taxation will the populace stand?
Comment by don provan — July 26, 2009 @ 1:38 pm