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Irony Deficiency

I keep hearing a certain phrase in reports on the economy, and it has been grating on me every single time. And I finally figured out just why it was bugging me.

"...and government services are being cut back for the neediest -- ironically, just as they are needed the most."

It's not always the same words, and it's not always the same government (federal, state, county, local), but the the sentiment is always the same.

But this is not an irony. This is a sign that our system is working as designed.

Oh, it's not a deliberate result, but an unavoidable consequence. And it is a constant reminder that so, so many people don't understand one of the most fundamental truths of our political, social, and economic system.

The government has no money of its own.

The only money the government has is that which it takes from us, by threat of force.

Oh, you can call them taxes, fees, levies, duties, surcharges, licenses, tolls, or any of a zillion other euphemisms we've invented to disguise the reality, but that's what it all boils down to: the government taking our money, almost always by some sort of explicit or implicit form of duress.

Oh, there are exceptions, of course. For example, my own state of New Hampshire gets a healthy dose of its revenues from liquor sales. They maximize this by, naturally, force -- the state has a monopoly on hard liquor. If you want to buy hard liquor, you go to a state-owned and state-operated liquor store and give your money to a state employee. And don't even think of going into competition with the state -- if you try selling hard liquor openly, they will arrest you and shut you down.

Oh, there are some who don't approve of this. But there's not much they can do about it. They can abstain from liquor entirely, or they can travel to a neighboring state where private enterprise can openly sell liquor.

But almost no one does. On the contrary -- people from other states come to New Hampshire to buy their liquor. That's because New Hampshire uses its monopoly to keep its prices significantly lower than those of other states (who tax liquor sales quite exorbitantly.) It also strategically places the liquor stores -- the four busiest ones are located in rest areas along interstate highways.

In fact, this summer, Massachusetts chose to extend its sales tax to liquor sales. This was especially rich -- liquor is already taxed in and of itself, so the sales tax applies both to the liquor and the tax already paid on the liquor. This led to a most entertaining story when one of the Massachusetts lawmakers who championed the tax hike was caught stocking up on booze at a New Hampshire liquor store.

So, it only follows logically that when the people have less money, the government will have less it can take. An economic downturn leads, inevitably, to a government revenue downturn. And an economic downturn leads, inevitably, to a greater demand for government services and assistance. It's an unavoidable paradox.

Is there a solution? Yeah, but it's not an easy one. Fix the economy. There's an old saying that "a rising tide raises all boats."

But even that isn't foolproof. A boat that is too tightly anchored can be swamped and sunk by a rising tide. And in this metaphor, the anchor is government regulation and control.

We're already seeing it. During the recent "cash for clunkers" fiasco, the automakers who surrendered their sovereignty to the government got almost no boost in sales. On the other hand, Ford did rather well. And foreign automakers did even better.

So the next time you hear someone talk about the "irony" of cuts in government services coming as more and more people find they need them, note it carefully -- someone has just shown just how little they understand the fundamentals of our system. And when they have no clue on how it works, they have no clue on how to make it work better.


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Comments (47)

"Its all fun until you run ... (Below threshold)
Gmac:

"Its all fun until you run out of other people's money."

That's why the Democrat, and to a lesser extent the Republican, party loves taxes. It gives them the power of control over the people that are in the programs they created to distribute the taxes, after they take out the money 'required' to operate them.

I'm of a mind to see just what the actual operating cost of some of those programs are as a percentage of funds distributed. But it's government so I already know its going to be obscene, something no free market business could sustain and remain in operation.

Excellent article JT.

People that voted for Obama... (Below threshold)
MPR:

People that voted for Obamalala and are now getting voter remorse now have a clue. At least the people that are honest enough to admit it.

Amen!!!!!!!!!!!!! Excellen... (Below threshold)
mag:

Amen!!!!!!!!!!!!! Excellent article.

Still there are people our there who thinks the gov't does have money of their own.

OR....even worst, they think that money the gov't gets from us tax payors should be given to those who don't pay taxes at all.

This will destroy our country. Thanks to the liberal Dems/Reps. Thanks more to the dummies who vote them in.

the 15,000+ people who line... (Below threshold)

the 15,000+ people who lined up in Detroit for "FREE Money!" the other day were not happy when they found out they couldn't all get it.

Those people, and millions like them who voted (often repeatedly) for Obama are going to eventually decide the process is just too slow...and that their "entitlement" entitles them to go TAKE what they want/need.

Of course, law abiding, tax paying citizens like myself disagree with that notion.

tic...tic...tic...

Great essay. From now on I ... (Below threshold)

Great essay. From now on I think I'll add "money taken by threat of force" after the word "taxes" or "taxpayers."

If we survive Obama, then our focus needs to be holding every single Republican's feet to the fire until their soles are raw and they know that unless they begin undoing past unconstitutional legislation and forego every thought of future unconstitutional legislation, - they will be voted out the next time around.

RE: "The only money the gov... (Below threshold)
kevino:

RE: "The only money the government has is that which it takes from us, by threat of force.The only money the government has is that which it takes from us, by threat of force."

Minor correction: the State gets money by threat of force or through fraud. An example is devaluing the currency through printing money.

Notice that the price of gold has been going way up in recent weeks relative to the US dollar while the price of gold relative to other currencies is relatively unchanging. The value of the dollar is sinking fast, although the Government took some action yesterday. There are two conclusions:
1. The Obama administration is looking to use devalued currency as a way to hold off bankruptcy - effectively paying of debt with cheap dollars. We can print money to pay bills, and if inflation occurs, the State gets built-in tax increases.
2. The flood of people exchanging US dollars for other currencies or commodities is like the sound of people heading for the life boats. The smart money is not in US dollars.

You wanted change? Here is comes.

Most people, especially lib... (Below threshold)
jim m:

Most people, especially libs, do not ever consider where the government gets its money.

I heard an interview on the radio yesterday of a woman who was part of an enormous crowd that had flocked to downtown Detroit on the rumor that the city was giving away $3000 checks.

So the interviewer asks her from where did she think the city was getting the money? She replies "they got it from Obama!" The interviewer then asks "Where do you think Obama gets the money from?" There's a long pause (you can tell she has no idea) then she blurts out, "I don't know. He's Obama!"

Idiot.

I'll note two things:

1) She doesn't say "He's the president!" but sites the individual. For many of these ignorant fools the cult of personality is still mightily in play. His person transcends the office and he can do seemingly anything. She shows a magical belief about Obama that is not that dissimilar from Santa Claus.

2) She evinces no curiosity what-so-ever about where the money comes from or how government works. She is for anybody or anything that will give her something for free. She is a willing slave to any government who will give here the slimmest promise of a handout. There was only a false promise of a handout in this case because there were no checks. She is willing to do whatever the state wants (or what she thinks it wants) in order to get the handout.

jim m....you are so right!!... (Below threshold)
mag:

jim m....you are so right!!!

We know there is nothing free, but people like this woman don't care. Typical slave/welfare mentality....no work but plenty of something for it.
Also, notice how naive she is...a $3,000.00 check for free. I sure she also believes money grows on trees....rich man's tree, so that is why she is entitled to it.

Yeah there sure is a cult of Obama....you and I know it strictly because of his skin tone.

This I am afraid may be hea... (Below threshold)
Ron:

This I am afraid may be heading somewhere that is needed but we should all fear with all our might.

Do any of you remember Pegg... (Below threshold)
Upset Old Guy:

Do any of you remember Peggy Joseph? After an Obama rally in FL during the campaign she said, "I won't have to worry about putting gas in my car. I won't have to worry about paying my mortgage. You know, if I help he is going to help me."

What happened in Detroit is not new, it's just the latest incarnation of the cult of personality that the msm whipped up during the campaign. But then, after an 18 month campaign, standing in line with your hand out for nine months probably doesn't seem so long for some people. Free money,it's right up there with the three small fish and the loaves of bread for his adoring public.

Now JT, I was all set for a... (Below threshold)
epador:

Now JT, I was all set for a consistent metaphor-ridden piece on irony deficiency caused by both chronic microscopic hemorrhage from internal parasites and insufficient irony intake, and instead there are maritime and military ones.

Is it any wonder that lead poisoning can mimic irony deficiency?

Darn.

When people form 'governmen... (Below threshold)
GarandFan:

When people form 'governments', it's first to provide necessary services. The emphasis on NECESSARY. Only then do they start adding the 'nice to have' - which usually (and fairly) should be "nice to have IF we can afford it". People seem to forget that last part; IF WE CAN AFFORD IT.

Local government is mulling over an 18% increase in water and sewer fees. Next year we get to look at another 14-18% increase. That's going to be about a $10 MILLION increase in 2 years.

"...and government servi... (Below threshold)
wolfwalker:

"...and government services are being cut back for the neediest -- ironically, just as they are needed the most."

I have a different reaction to that line and its many variants and equivalents. I wonder why they are cutting services to the "neediest" first, and not looking for other cuts that won't affect "the neediest" as much. Salary and benefits cuts for legislators and their senior staff, for example.

On the other hand, the line that "the only money the government has is that which it takes from us, by threat of force" makes me wince. Come on, people! Taxes are a necessary evil. Without taxes, there can be no government at all -- and while anarchists and extreme libertarians might approve of that, sensible people should know better. Some services can only be provided by a government, and that means taxes. And a way to enforce them. Otherwise you get a lot of freeloaders ... and I thought that having so many freeloaders was one of the many problems with our current system.

I think that when you beef about taxation being theft, you really mean when the taxes are higher than you want to pay, it feels like theft to you.

I wonder why they are cu... (Below threshold)
jim m:

I wonder why they are cutting services to the "neediest" first, and not looking for other cuts that won't affect "the neediest" as much.

That's simple. They want to punish the public for not providing sufficient tax money. If they punish the public harshly enough then the public will acquiesce to raising taxes. The government simply wants a larger share of the pie. There isn't a whole lot of concern as to whether taxes will suppress the economy. That has already been shown. The government simply believes that they deserve the first cut and if the pie is shrinking their piece shouldn't have to shrink.

After all, They think that it's our fault that the economy sucks, not theirs. Pelosi and friends think that they are our betters so they should not have to suffer for our failures.

What else explains why it is that any service that the government provides is cut first rather than government overhead?

what?... (Below threshold)
berowne:

what?

These kind of things get me... (Below threshold)
Berowne:

These kind of things get me no where with those who hate government, but I'll post it anyway. Just so, another perspective is here for any interested.

During the largest period of growth in America's history 1933-1973, when GDP grew on average about 3% a year. the Tax rate on the wealthy in America was between 70%-90% We used that money for schools, roads, and bridges and of course we had a booming economy. the best in the world. The U.S. high school student was rated #1 in math and science, but now we are ranked around 35th. We had more college graduates than any nation in the world. Now we are below average for a first world country. We had a infrastructure that was the envy of the world, now it is decaying and dying.

According to Economist Jeffrey Sachs when comparing developed free-market economies, those that have high rates of taxation and high social welfare spending perform better on most measures of economic performance compared to countries with low rates of taxation and low social outlays. He asserts that poverty rates are lower, median income is higher, the budget has larger surpluses, and the trade balance is stronger (although unemployment tends to be higher.)

I know this has no chance of persuading anyone. The passion in the writings here indicate a strong anti-government feeling. To me the question is not whether people disagree, the real drama is in how harsh the reponses to this will be.

Interesting - The ... (Below threshold)
apb:

Interesting -

The moron 'voters' have no clue where the gummint is funded, and don't care as long as they get 'theirs.'

Exactly the reason why the Founders did not allow women the 'right' to vote - women at the time were uneducated and had no clue of the operation of government, and should not have been trusted to make an educated vote.

Come to think of it, the current class of voters exercising their 'right' to vote have proven themselves nearly criminally stupid.

We're hosed.

"To me the question is n... (Below threshold)
JLawson:

"To me the question is not whether people disagree, the real drama is in how harsh the reponses to this will be."

You know, I wrote a fairly long, reasoned response to you... but then again, why bother? You've got your mind locked down, you're trolling along, looking to stir up something - it's not worth the effort.

You did manage to miss the 3.32% boom years of the '80s and 90s, after taxes were dropped. Why is that? Doesn't fit the narrative?

http://www.measuringworth.com/growth/#

Berowne, interesting "facts... (Below threshold)
Upset Old Guy:

Berowne, interesting "facts". But you demonstrate no causality between high marginal tax rates and a booming economy, highly educated juveniles and a strong infrastructure.

There were two world wars during that period, which had a major impact on tax rates and social motivation to excel. Post-WW II returning GIs came home and went to work on building our country like hyperactive rabbits.

Your statement (#16) lacks the substance necessary for it to be taken seriously, and I doubt you will be able to supply that substance.

Berowne,During ... (Below threshold)
wolfwalker:

Berowne,

During the largest period of growth in America's history 1933-1973, when GDP grew on average about 3% a year. the Tax rate on the wealthy in America was between 70%-90% We used that money for schools, roads, and bridges and of course we had a booming economy. the best in the world.

There's a very big problem with using the period from 1945 to 1973 as an example of US economic power: we had no competition. Europe's economies were ruined by the Second World War. It took them more than 20 years to rebuild to where they were self-sufficient. During that period, the US economy succeeded in spite of the high tax rates, not because of them.

Today, the situation is entirely different. Under these conditions, no economy can sustain marginal tax rates of 80%. I doubt any modern economy could sustain a top marginal rate of 50%.

Berowne - Where do... (Below threshold)
jim m:

Berowne -

Where do I start. It isn't that I hate government. There are a few things it does well. However, when it gets down to Washington dictating how we run the details of our lives, like education, health care etc I draw the line.

Government does a terrible job at running thing outside of the military. Government doesn't build roads, I pays for private companies to build roads. Yes there are parts of our infrastructure that need repair, but have you ever stepped outside the US? On average we are still far better than the rest of the world. Get your head out of your ass and LOOK and see what lousy conditions most of the rest of the world deal with.


While we had a high marginal rate, what that really did was incentivize the rich into behaviors that avoided taxation. They still do it. They always will. The key is to keep tax rates at a level where the benefit from investment outweighs the cost of taxes. When Reagan killed the ultra high levels of taxation we got a major increase in economic activity. Yes, the congress at that time spent money like crazy, but tax receipts increased at the highest rate in history. The government NEVER brought in as much money as it did after the Reagan tax cuts. BTW, Kennedy's tax cuts increased government revenue too.

You complain about schools being crappy, but that is not because we don't spend huge amounts of cash on them. Study after study have shown that educational excellence is not related at all to amount of money spent. Private schools spend less per student but deliver better results than public schools. Care to stretch your brain around that one? It's because public schools waste their money on bureaucracy and union expenses. Public schools have also gotten into ideological education rather than actually educating. Kids get education on diversity, global warming,etc. My sons 2nd grade class spent months learning about Vietnam. His spelling and writing ability went backwards. That is what the government gives us.

If you want to cite an economist about taxation you are going to have to find someone better than far left wacko Jeffery Sachs. His answer for everything is more government and African governments suck because they have no money. No, they suck because they are corrupt. Kind of like our current one.

Sachs says that we have too much poverty? Well LBJ started the "War on Poverty" and if you told him that the average 'poor' family would have a TV, telephone and a car he would say that his efforts had eliminated poverty. Only in the US do the poor live so well. Yes, there are cases where it is really bad. Government does little to help them though. Our poor are the richest poor in the world if you look at standard of living.

There that wasn't too harsh.

Berowne, interesting "facts... (Below threshold)
berowne:

Berowne, interesting "facts". But you demonstrate no causality between high marginal tax rates and a booming economy, highly educated juveniles and a strong infrastructure.

There were two world wars during that period, which had a major impact on tax rates and social motivation to excel. Post-WW II returning GIs came home and went to work on building our country like hyperactive rabbits.

Your statement (#16) lacks the substance necessary for it to be taken seriously, and I doubt you will be able to supply that substance.
============

Well, that is why I supose I think it is futile to post these things, to people that have such deep seated beliefs that government doesn't work.

I really don't think there are any facts, that would convince, you. I think you mind is made up. Which is fine, as we are all entitled to it.

I suppose, I could add to the facts, to add, substanse. Although I think there was plenty there for an overview in what I posted.

I guess my question to you, is what would you accept, if anything? What do you think specfically, counts as "complete substanse?" Wealth rate comparisions, tax-rate comparisons between high-tax free market economis and low-tax free market economies? What sources would you accept. For example, am I limited to Fox news or are there others you would accept? Am I limited to kinds of economist, you would listen to? For instance, would you completly disregard the work of a keynsian, or a monetarist? Would you only accept an austrian explanation (Which rules out any chance of convincing you of anyhting because the austrians hate government and refuse statistics.)

I guess I am wondering what stats do you consider realtive to government involvment and success, or government involvement and failure in a society. basically, where are the goalposts?

Well, that is why I supo... (Below threshold)
jim m:

Well, that is why I supose I think it is futile to post these things, to people that have such deep seated beliefs that government doesn't work.

Utter and complete cop out. You either support your argument with facts or you admit (by not doing so) that you are incompetent to support your feelings. Indeed because they are only feelings if you cannot back them up with rational argument.

If you really believed this crap you would have a defense for it other than the magical government works just because argument that you are presenting.

Present data and sourcing. We can choose to not like your sourcing (like Sachs) and we can dispute or counter your data. What you leave us with is your appeal to "It works because someone told me it does".

Man up or don't post.

Where are the goalposts? W... (Below threshold)
jim m:

Where are the goalposts? Well choose some and articulate why those are the goal posts.

I gave example of the war on poverty. Obviously we would all still say that there are poor people in the US. The truth of the matter is that there will always be poor people. If you live in a market economy there will always be a bell curve of income distribution. Don't like that? Well under communism everyone was poor except for the party elite. I suppose you would prefer that because the government will have equalized everything and no one would be poor compared to the rest.

Come on Berowne. ... (Below threshold)
jim m:

Come on Berowne.

Answer this then: If government is our friend then why DOES it cut services to the neediest rather than tighten its own belt???

Government by doing so shows it to be self serving and arrogant. Government demonstrates that it does not really care about the people it serves but is more interested in extracting the most amount of funding for the least amount of effort in return.

Tell us why government does this. We are all waiting your response...(crickets)

Where do I start. It isn't ... (Below threshold)
Berowne:

Where do I start. It isn't that I hate government. There are a few things it does well. However, when it gets down to Washington dictating how we run the details of our lives, like education, health care etc I draw the line.
================================

You think the government does few things well. Yet you don't back up that assertion with anything, that demonstrates the government fails in any statistical model, it is your opinion that government does nothing well and you assert that without any "substance," if you will, basically what you have accused me of doing, although I did include a few facts to back up my opinions.


Government does a terrible job at running thing outside of the military. Government doesn't build roads, I pays for private companies to build roads. Yes there are parts of our infrastructure that need repair, but have you ever stepped outside the US? On average we are still far better than the rest of the world.
===========================

I wonder, if you have been to the first world outside of the U.S? I have been to Japan, Croatia, Greece, Germany, France, Austria, and Switzerland. Third world countries don't count as in my first post, I was comparing between, first world countries that have high tax-rates and social programs, versus those that go the other direction as a percentage of GDP. in virtually all of the cases I mentioned, I was more impressed with the other Nations infrastructure (with the exception of Croatia.)
Although I freely admit that was just my general impression.

Get your head out of your ass and LOOK and see what lousy conditions most of the rest of the world deal with.

okay, this would be the first insult thrown. I take it by get my head out my ass, you mean, think like you do and believe that government is bad, period." Look, I'm not going to tell you to do anything with your head or your ass. If you actually are interested in a discussion with me on this though, you have to refrain from being intentionally insulting or you will have to debate someone else. I'd love an exchange of ideas, I'm not in the mood for a flame war.


While we had a high marginal rate, what that really did was incentivize the rich into behaviors that avoided taxation. They still do it. They always will. The key is to keep tax rates at a level where the benefit from investment outweighs the cost of taxes. When Reagan killed the ultra high levels of taxation we got a major increase in economic activity. Yes, the congress at that time spent money like crazy, but tax receipts increased at the highest rate in history. The government NEVER brought in as much money as it did after the Reagan tax cuts. BTW, Kennedy's tax cuts increased government revenue too.
==========================================


What you are arguing in essance is called the laffer curve, a key component of supply side economics and there is much debate on it. For example the CBO released a paper that argued that the idea that the idea that tax cuts ultimately improve the government's fiscal situation is flawed. Other economist have argued it is purely deserving of ridicule and still others have agreed with it whole heartidly and still others have agreed it works 'till about a 65% rate of taxation, at which point you start to see diminishing returns. I think there are several flaws with it, as it first and foremost, is based on the unproven assertion that increasing the rate of taxation would mean that somehow the rich would succesfully manage to not pay.


"You complain about schools being crappy, but that is not because we don't spend huge amounts of cash on them. Study after study have shown that educational excellence is not related at all to amount of money spent. Private schools spend less per student but deliver better results than public schools. Care to stretch your brain around that one? It's because public schools waste their money on bureaucracy and union expenses. Public schools have also gotten into ideological education rather than actually educating. Kids get education on diversity, global warming,etc. My sons 2nd grade class spent months learning about Vietnam. His spelling and writing ability went backwards. That is what the government gives us.
=================================

What study after what study? I'd be happy to "wrap my brain" around them, provide the links and I'll look. To give you an idea of the golaposts are (something you refused.) I'd like a study from a non-partisan group or two I'd be willing to read that. Please understand I won't accept Hannity or his like any more than you would accept Keith Olbermann.


If you want to cite an economist about taxation you are going to have to find someone better than far left wacko Jeffery Sachs. His answer for everything is more government and African governments suck because they have no money. No, they suck because they are corrupt. Kind of like our current one.
===================================

okay, so Sachs is out, You flat out will refuse to beleive any statistic that comes from him I take it? So if I get economic data from him, I take it you want another source as well to back it up? I take it Krugman is out for you as well and you will refuse to accept any statstic that is sourced from krugamn. Would a follower of milton Friedman work or is that out to? I'm asking this because i don't want to get into some nonsense where I say unemployemnt was X in 2002 according to krugman and you say krugman is far-left and i have to waste time going to look up unemployment on another site.


Sachs says that we have too much poverty? Well LBJ started the "War on Poverty" and if you told him that the average 'poor' family would have a TV, telephone and a car he would say that his efforts had eliminated poverty. Only in the US do the poor live so well. Yes, there are cases where it is really bad. Government does little to help them though. Our poor are the richest poor in the world if you look at standard of living.
===========================

That is not true actually. The richest "poor" in the world are actually in nordic countries.

There that wasn't too harsh.
====================

It was a little harsh in places. I don't appreciate sarcastic gibes about my head and my ass, nor my brain and it's ability to wrap itself around things. Again, I'm not really in the mood for a flame war. You had alot in there that wasn't a flame which is why I bothered to answer. The board, and anyone whose mind is not made up will benefit if we keep it that way..

Well, that is why I supose ... (Below threshold)
berowne:

Well, that is why I supose I think it is futile to post these things, to people that have such deep seated beliefs that government doesn't work.

Utter and complete cop out. You either support your argument with facts or you admit (by not doing so) that you are incompetent to support your feelings. Indeed because they are only feelings if you cannot back them up with rational argument.
================================

There is no cop out, I'm stating my beleif that you will not buy any of the facts i stated because I think your mind is already made up. also calling somone "incompetent" is hardly supporitng you case. it is just an insult, And it gets us nowhere and certainly doesn't further the debate. I stated facts in my argument, such as the highest rate of economic growth in U.S. history was during a period of high taxation. I can handle you not buying my conclusion that governemnt works on just these two pieces of data, however to say that I posted no facts is just dead wrong. The highest rate of economic growth in U.S. history happened between 1933 and 1973, that is a fact. The rate of taxation during this period was 70-90% that is also a fact. So let's agree that i stated facts and then argue about what those facts mean. For example someone pointed out that much of our competition in the world was bombed away as a result of world war II. This is a possible explantion for why our econmic growth was so high, Although I think there were other factors. Again these are interpretions of the facts. We can argue about these.


If you really believed this crap you would have a defense for it other than the magical government works just because argument that you are presenting.
=======================

I have provideda defense to it. Governemnts that have a free market econmy and large investments in social programs, with high-rates of taxation, perform better on most econmomic indicators. So I'd appreciate if you respond to the argument instead of falsely accusing me of making a "magical government' argument when I certainly did not.


Present data and sourcing. We can choose to not like your sourcing (like Sachs) and we can dispute or counter your data. What you leave us with is your appeal to "It works because someone told me it does".
===============================

I did present data and sourcing.

Data: Countries with high rates of taxes perform better on many economic indicators

Source: Sachs.


You can refuse to accept Sachs, but since Idon't want to waste my time I have asked you what sources you would accept. Otherwise what is to prevent you from saying, "I don't accept that source." on every fact you dislike?

Man up or don't post.
==========================


Okay, let's not turn this into a pissing contest. Please quit trying to bait me into a flame war. If you feel my arguments don't work then argue what you think the flaws are with them, don't get into this "man up" nonsense. We are not on a playground.

Berowne,It's late,... (Below threshold)
jim m:

Berowne,

It's late, but I will answer this: You can do your own study and look up the spending by the department of education for the last 30+ years. The US has dramatically increased spending while results have gone done. The information is publicly available.

If Krugman has something to say on international trade (the actual area of his competency and where he earned his Nobel prize for economics) then yes I will listen. The problem is that he chooses to opine on lots of areas as an expert where he simply is not so.

You can quote Sachs all you want. No I probably won't find him convincing, but at least you are delivering data. Yes of course I will find conflicting data.

With regard to the CBO: It traditionally has used Keynesian theory o model its projections. As such it assumes that increasing taxes won't alter consumer behavior. This is wrong on its face. The fact that the CBO has scored the health care packages so poorly looks even worse when you consider this fact.

You can disagree with Laffer all you like. The fact is that tax cuts have historically spurred on economic growth while tax increases have had the opposite effect. In a consumer driven economy does it make more sense to allow more money to be left in the hands of consumers? Of course it does. Does it matter if the consumers are rich or poor? No it doesn't. It only matters that they are spending their money. Taxation is a disincentive to spend. Tax the people with he most money and they will spend less. Taxing the rich has a disproportionately negative effect on the economy as THEY are the ones with discretionary income. The poor have to spend what little they make. The rich can invest it in tax shelters to avoid taxation. That is what happens. So we increase taxes and spending slows.

And BTW the rich DO find ways not to pay. If you have sufficient income and knowledge it is an easy thing to avoid paying the estate tax. As such the estate tax ends up being a tax on he middle class who have sufficient assets to be confiscated and insufficient access to the legal vehicles to avoid the estate tax. I'll note that the Kennedy's have had no problem getting richer and richer. And Charlie Rangel seems to have certainly found a way to avoid taxation.

The government cannot be the engine that grows the economy. It does not employ capital as efficiently as private enterprise. While it redistributes wealth it takes a cut. The Cars for Clunkers program is a great example. While we don't have final data the early data had the appearance that 80+% was being wasted by government overhead. Not to mention that the money went to foreign auto makers when the intent was to advance the sales of domestic manufacturers.

The government is good at killing things. The military works well. Unfortunately, when it turns its attention to the economy we get inept regulation that destroys the home loan industry. They have destroyed the auto industry (the car manufacturers with the help of unions would have done so eventually, but the government gave them a hand to finish the job early). The health care plan will destroy hospitals across the nation. Amtrak drove private passenger rail out of business. The only reason the post office is still in business is that direct competition for first class mail is illegal.

berowne - "Present data... (Below threshold)
Marc:

berowne - "Present data and sourcing."

Now that there is funny.

In 4 very long posts with facts....er, alleged facts, hot air and much hyperbole you give absolutely ZERO sources other than a name of a single economist.

Get a clue, give a link to support your happy horse shit, or give it up.

Berowne,Here is a ... (Below threshold)
jim m:

Berowne,

Here is a link to the US Dept of Ed showing how much we have increased spending for education.

http://www.ed.gov/about/overview/fed/10facts/index.html

Combine that with our agreement that the current system sucks and I will have made my point.

I will have also made my point that government spending is far less efficient than private spending. Private schools are far better and spend less on average than public schools.

The JFK administration, aga... (Below threshold)
jim m:

The JFK administration, against the advice of many economic advisers, began cutting taxes in 1962, starting with businesses. An investment tax credit encouraged investment and changes in depreciation costs lowered the cost of capital for businesses. The top corporate rate fell from 52 to 48%, and the top individual marginal tax rate fell from 90 to 70%. The empirical evidence shows that these tax cuts stimulated growth:

* Between 1962 and 1969, investment grew at an annual rate of 6.1%, far higher than the 3% annual rate for 1959-1962 and the 2.3% rate for 1969-1972, after the JFK tax reforms had been repealed.
* Real GNP grew 4.5% during the 1960s, higher than the 2.4% growth rate seen from 1952-1960.

The JFK tax cuts also provided proof of a counter-intuitive idea, that cutting taxes will not raise deficits:

* From 1962-1969, government revenue increased 6.4% a year, compared with 1.2% a year between 1952-1959.
* After the '62 and '64 tax cuts, the deficit actually fell from $7.1 billion to $1.4 billion.

The Economic Recovery Tax Act of 1981 featured a 25% across-the-board tax cut. The tax reforms increased incentives to save, work and invest, which increased the productive output of the economy to match the increase in demand:

* Real economic growth averaged 3.2% during the Reagan years, compared with 2.8% during the Ford-Carter years and 2.1% during the Bush41-Clinton years.
* Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years.
* The amount of time the median worker stayed unemployed fell drastically.

Tax cuts fuel economic growth. Period.

If you want proof that people will hide their assets to avoid taxes look no further than the current administration (Geitner, Rangel etc).

Berowne,It's late,... (Below threshold)
berowne:

Berowne,

It's late, but I will answer this: You can do your own study and look up the spending by the department of education for the last 30+ years. The US has dramatically increased spending while results have gone done. The information is publicly available.
==========================

It is late, so I will have to respond tommorow, as I am rather bleary eyed myself. But I appreciate your post, and the fact that it is logical and polite and certainly worthy of a thoughtful reply on my end. obviously we are are starting with a differenst set of assumptions, and worldviews, but, I think healthy debate is always fun, and if nothing else, forces people (myself included of course) to think about why they beleive what they beleive. until, tommorow then When I'll give you a reply.

Now that there is funny.</p... (Below threshold)
berowne:

Now that there is funny.

In 4 very long posts with facts....er, alleged facts, hot air and much hyperbole you give absolutely ZERO sources other than a name of a single economist.

Get a clue, give a link to support your happy horse shit, or give it up.

=====================

You are obviously childish. If that is the best argument you can come up with, You'll forgive me for ignorng you and spending my time with those who demonstrate a shred of critical thinking ability.

Oh - most of that last post... (Below threshold)
jim m:

Oh - most of that last post is owed to the National Center for Policy Analysis.

You can disagree with them all you want but the data is empirical.

obviously we are are sta... (Below threshold)
jim m:

obviously we are are starting with a different set of assumptions, and worldviews,

Obviously. However, I base my assumptions with the understanding of historical data. I haven't blinkered myself with ideology.

Worldview, however has nothing to do with this discussion. If you believe in a redistributionist society then you are simply willing to live with a declining standard of living in order to make yourself feel good by giving the fruits of your labors to others (or conversely by leeching off the lives of others).

If you start with the view that government is the answer it is only because you have not looked at the track record of government and you are willing to suspend disbelief in order to assume that this time everything will turn out differently.

If you look at the information on taxes and economic performance you cannot get away from the fact that decreasing axes spurs economic growth.

At the end of all of this you still have not answered why it is that government will not cut waste but will cut needed services. For instance: Why does the state of Illinois threaten to cut police and fire dept funding when it is giving full funding to the Lt Governor's office? There is no Lt Governor and will not be until after the election Nov 2010. So we are funding a useless dept and cutting needed services. Once more government spits in he eye of the citizen and demands that we pay them more.

"So, it only follows logica... (Below threshold)
914:

"So, it only follows logically that when the people have less money, the government will have less it can take"

This type of logic is way beyond the IQ of a liberal.

Okay, I did want to respond... (Below threshold)
berowne:

Okay, I did want to respond to this one before I went to bed. I will get to the rest tomorrow.

Berowne,

Here is a link to the US Dept of Ed showing how much we have increased spending for education.

http://www.ed.gov/about/overview/fed/10facts/index.html

Combine that with our agreement that the current system sucks and I will have made my point.

I will have also made my point that government spending is far less efficient than private spending. Private schools are far better and spend less on average than public schools.

=====================

I am going to politely disagree that you made your point that government spending is far less efficient than private spending, although we have to go somewhat deeper in to the data for me to show why I believe this.

Your link provides some good information which I don't dispute, however I would like to point out a few things about that information:


First, It shows spending has increased from the period of 1990 to 2005 (roughly about 25% or so when adjusted for inflation.)

Perhaps I missed it but i saw nothing in the link that goes back further than this, and it is key since my point was the U.S.A. went from the leader of education in the world in the 1930s-1970s to a more mediocre level today. Spending increases from 1990-2005 would not be relevant to that argument.

in fact, if you got the percentage of GDP we spent on Education, from 1950-2010 that would still not be relevant. What would be relevant is the percentage of GDP the U.S. spent in 1950-2010 versus the percentage of GDP countries that now outrank us spent on Education from 1950-2010.

e.g. if Japan spent 1% of its GDP on education in 1950, and was ranked below the U.S which spent say, 5% on education in 1950 and Japan now spends 20% on education: and is now ranked above the U.S which spends say, 15% of GDP, then my argument that government spending helps education will have been supported (though certainly not conclusively proven.)

however,

If the opposite is true for example: say that the U.S.A. spent 10% of it's GDP on education in 1950 and Japan spent 20% in 1950; and now today, Japan spends 5% of GDP and U.S.A spends 40% of GDP then your argument that government spending is actually harmful to education will have been supported (although again not proven as there are many other factors to take in account.)
In short, until either one of us does this, neither of us can claim to have demonstrated that government on the issue of education works or doesn't work, at level remotely close to proof. I will look and see if I can find the numbers of relative GDP spending between countries later and will get to the rest of your posts as well as I have many responses.


in 1950 the average U.S.

If the opposite is true for... (Below threshold)
berowne:

If the opposite is true for example: say that the U.S.A. spent 10% of it's GDP on education in 1950 and Japan spent 20% in 1950; and now today, Japan spends 5% of GDP and U.S.A spends 40% of GDP then your argument that government spending is actually harmful to education will have been supported (although again not proven as there are many other factors to take in account.)
In short, until either one of us does this, neither of us can claim to have demonstrated that government on the issue of education works or doesn't work, at level remotely close to proof. I will look and see if I can find the numbers of relative GDP spending between countries later and will get to the rest of your posts as well as I have many responses.

====================

In fact, to conclusively prove the numbers we will have to get even deeper in to the statistics than just a percentage of GDP spent on education between countries, We'd have to factor in the size of GDP historically as well.

For example comparing the % of GDP spent on education in Kenya versus, the % of GDP spent in the U.S. is pretty meaningless as Kenya's GDP is next to nothing compared to the United States.

to put it another way if I have 100 bucks and invest 50% or fifty dollars obviously I'm not going to get the same returns if Warren Buffet invests 10% of his 55 billion.

since the complicates the shit out of things, I think We should limit, comparisions between first world countries only. and just go with a percentage of GDP from the time period of 1950-2010.

Would you agree this makes sense?

Okay this is interesting, a... (Below threshold)
berowne:

Okay this is interesting, although not complete"

http://www.telegraph.co.uk/news/uknews/1571445/World-rankings-for-reading-maths-and-science.html

READING MATHS SCIENCE
1 Korea Taiwan Finland
2 Finland Finland Hong Kong-China
3 Hong Kong-China Hong Kong-China Canada
4 Canada Korea Taiwan
5 New Zealand Netherlands Estonia

this is interesting because I know a bit about Finland, which has completly state run schools. they also spend about 7% of their GDP on education versus about 5% in the U.S.

http://nces.ed.gov/pubs/eiip/eiipid42.asp

Canada also a high scorer spends about 7% of GDp on education. I can't check China and Korea as they are not listed in the link above which includes G-20 nations in 1992.


Will see if I can find historical data to match.

"Will see if I can find hi... (Below threshold)
914:

"Will see if I can find historical data to match"

Yeah, but per capita.. WE have more stinkin freeloaders...er.. I mean dems than your study sample suggests?? So.. Sugestions? Not an accurate sample.

Looks like the younger-set ... (Below threshold)
Upset Old Guy:

Looks like the younger-set stayed up late. Way past my bed time folks.

Barowne - "I really don't think there are any facts, that would convince, you."

You seem to have missed the whole point of my comment. "Facts" are useful to bolster one's argument. However, you weren't making an argument, you came in here and made an assertion of economic causality.

Facts alone will not "prove" your assertion, they will only buttress it. To prove an economic assertion you need to prove it economically. That mean decoupling all other possible explanations from causality, not just listing some "facts" that support your premise.

Otherwise, you're just making an argument (looks like JLawson was right again. Well done Lawson).

UOG

P.S. Uttering the magic word (Sachs) and yelling, "Follow me" isn't even an argument.

Berowne-From CATO ... (Below threshold)
jim m:

Berowne-

From CATO Institute:

From the 1929-30 school year, the first on which comprehensive data are available, to the 1986-87 school year, total real expenditures per pupil in American public schools rose by 500 percent.(2) More recently, total real expenditures shot up from $2,229 per pupil in 1965-66 to $4,206 per pupil 20 years later, an 89 percent hike. Keep in mind that this increase was after inflation, meaning that actual buying power available to schools almost doubled during that period. Real spending in the 1980s, during all the Reagan-era cuts we hear so much about, actually grew at a faster rate--21 percent between 1981-82 and 1986-87--than in the previous decade, when it increased by "only" 16 percent.

...figures published yearly by the United Nations reveal that the United States spends more on education as a percentage of its gross national product, 6.8 percent in 1986, than do most of the countries whose students outperform U.S. students on standardized tests.

West Germany. Total educational expenditures of West German governments come to 4.6 percent of the GNP, or about 9 percent of total government spending...

On the International Assessment of Education Progress test, administered in 1988, Spanish students ranked 8th in a field of 12 in mathematics proficiency. The United States was 12th. Spain also fared slightly better than the United States in science proficiency. But Spanish governments spend only 3.2 percent of the country's GNP on education, less than half the U.S. percentage.

South Korea. Another unlikely rival, Korea, spends 4.5 percent of its GNP on education. On the 1988 IAEP test, Korea ranked first in mathematics proficiency and tied for first in science proficiency.

Japan...government expenditures on education total only 5.1 percent of the GNP. However, as is commonly known, Japanese students excel in international comparisons of mathematical and scientific knowledge.

So our spending is increasing and as a percentage of GDP we are spending more than anyone else.

You want more? I can do the same with raw dollars. Yes the Cato data is from the 80's but you were bitching about the seventies and the Cato analysis looks all the way back to the 20's.

This is tiresome. We spend more dollars than any other nation and we get crap for it. It is a continual failure of the system. The government is not interested in turning out a good product but they are interested in taking more money to produce it.

It doesn't matter how you look at it, our government fails to deliver on education despite massive investment.

You can drink the liberal cool aid that we don't spend enough but that tale is nothing but lies. Liberals feel that if we throw money at a problem we can absolve ourselves of any need to actually do something about it ourselves.

Berowne - You STILL have av... (Below threshold)
jim m:

Berowne - You STILL have avoided the question: why it is that government will not cut waste but will cut needed services?

We spend oodles of money on education and Yet get crappy results. Obama appoints a "Safe Schools Czar" who is more interested in protecting gay child molesters and educating kids about how homosexuality is normative.

It just proves my point again. Government spends money on crap and cuts out necessary services. Government then demands more money for necessary services and spends it instead on more crap.

By this time you should be able to understand why everyone here is calling you an idiot for adhering to the line that you are.

The answer to bad government is not to get more government.

The answer to bad govern... (Below threshold)
JLawson:

The answer to bad government is not to get more government.

Of course it is, Jim M - you need a layer of administration to watch the failing administrators, which in turn will need another layer of administration to watch them, and another layer to watch them, and another layer to watch them...

Makes you wonder for each teacher how many layers of 'help' and how many personnel are needed...

When Berowne gets done just... (Below threshold)
jim m:

When Berowne gets done justifying high taxes for government run education he can then explain why France, The Netherlands, Belgium, Denmark, Ireland and Sweden all allow school choice or have voucher systems and ALL do better than the US.

New Zealand partially funds private schools so I would include them along with the others.

jim m - "When Berowne g... (Below threshold)
Marc:

jim m - "When Berowne gets done justifying high taxes for government run education"

You're not holding your breath are you?

The government has it's han... (Below threshold)
Madalyn:

The government has it's hands all over our personal lives. I should have the right to decide what is right or best for me, not some uppity asshat in Washington who has never met me and knows nothing about me. The government has sat silently by while 3 and 4 generations are welfare supported. They have no desire to work because they don't have to. The government closes their eyes while millions of illegals run across our borders, destroying our property, and stealing from us. They also kill and rape. But, the government says "that's OK". Your life is not as important as an illegal who will vote democratic in the coming elections. If you think this is absurd, think again. The dems will do ANYTHING to remain in control, and that includes not paying their taxes (Geithner, Rangel), standing idly by while their co-horts commit crimes and then have the audacity to slam Joe Wilson for "You Lie". All of you who are on the Obama bandwagon better start jumping before it's too late. You could be dragged to death by the speed Obama will throw you under.
Madalyn




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