Report: United States Now Borrowing 46 Cents of Every Dollar It Spends

180px-United_States_one_dollar_bill,_obverseThe Congressional Budget Office has released its latest report and it contains this rather distressing fact: the federal government is now borrowing 46 cents of every dollar spent in fiscal year 2013. I have long been a critic of the fiscal policies of both parties, but it is astonishing that the American people have not thrown out the whole lot of these people — Democratic and Republican. We look like an utter ship of fools as politicians allow the country to drift toward an unprecedented financial collapse. In the meantime, the Administration is borrowing this money to simply give Israel a $100 million building complex and pour billions into corrupted governments in Iraq and Afghanistan.  China of course continues to hold much of our debt and is going on a buying spree in the U.S.

The government chalked up a $172 billion deficit in November alone — part of a $300 billion deficit for the first two months of the fiscal year. While both sides talk about the need to reduce spending, they have been spending like drunken sailors for years. For those of us who are skeptical about the use of tax increases in this economy, it is unnerving to think of giving more money to these same players. We need new revenue because of their horrible record over the last eight years. We must need however a third party to break the monopoly of power in this country — a monopoly that has left the entire country captive to these self-perpetuating parties.

It is clear that neither party wants to make hard choices and continue to hand out hundreds of millions of dollars to curry favor with different groups as with the $100 million gift of a building. There is also no serious accountability for the waste of billions under Bush and Obama as “stimulus” funds. I agree with the need to raise taxes but I have little faith in the Obama Administration or Congress in using such money responsibly. You do not get to a point of borrowing virtually half of every dollar spent without a complete lack of leadership and responsibility. Even if this figure falls, the point is that Congress still makes hundred million dollar gifts to wealth countries without a sound of objection or concern. Yes, all countries borrow money but we have a massive debt and continues to grow — an politicians who pledge to be more responsible in the future. The need for revenue is likely to change but not the need for responsibility in Washington.

Source: Washington Times

154 thoughts on “Report: United States Now Borrowing 46 Cents of Every Dollar It Spends

  1. Here is the 2013 budget proposed by the Obama administration; it is set to borrow 23.7% of the entire year budget, not 47%. According to Obama’s proposal; the deficit will be a record, but $900B.

    I read the Washington Times article. They do not give overall numbers; but I think it is probably normal to be borrowing more at the end of the fiscal year.

  2. ” Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

    This is, however, a really bad analogy in at least two ways.

    First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

    Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.” Paul Krugman

  3. 70% of the US GDP is consumer spending. As long as wages are kept low and employment is haphazard the US economy will never be strong. You want to end the debt crisis & get things moving again? Simply put Americans back to work & start sharing the huge gains made via increased productivity with us.

    If our masters stopped shipping jobs overseas and didn’t compensate CEO at 436 times the average worker salary but closer to the 64 times of the EU the increased tax revenue would solve the budget “crisis” by itself.

  4. “But remember: Jobs must come first. Job creation must be our first priority.”


    Cliff Notes on the Three Real Perils Ahead

    Wednesday, December 5, 2012

    The “fiscal cliff” is a a metaphor for a government that no longer responds to the biggest challenges we face because it’s paralyzed by intransigent Republicans, obsessed by the federal budget deficit, and overwhelmed by big money from corporations, Wall Street, and billionaires.

    If we had a functional government America would address three “cliffs” posing far larger dangers to us than the fiscal one:

    The child poverty cliff.

    Between 2007 and 2011, the percentage of American school-age children living in poor households grew from 17 to 21%. Last year, according to the Agriculture Department, nearly 1 in 4 young children lived in a family that had difficulty affording sufficient food at some point in the year.

    Yet federal programs to help children and lower-income families – food stamps, aid for poor school districts, Pell grants, child health care, child nutrition, pre- and post-natal care, and Medicaid – are being targeted by the Republican right. Over 60 percent of the cuts in the GOP’s most recent budget came out of these programs.

    Even if these programs are preserved, they don’t go nearly far enough. But the Obama Administration doesn’t talk about reducing poverty in America. It talks only about preserving the middle class.

    Yet unless we focus on better schools, better health, and improved conditions for these poor kids and their families, in a few years America will have a significant population of under-educated and desperate adults.

    The baby-boomer healthcare cliff.

    Healthcare costs are already 18% of GDP. Between now and 2030, when 76 million boomers join the ranks of the elderly, those costs will soar. This is the principal reason why the federal budget deficit is projected to grow.

    The Affordable Care Act offers a start but it isn’t nearly adequate to limit these rising costs. The President and the Democrats have to lead the way in using Medicare and Medicaid’s bargaining power over providers to get lower costs and to move from a fee-for-service system to a fee-for-healthy outcomes system of healthcare.

    But we can’t avoid the fact we have the most expensive and least effective system of health care in the world that’s spending 30 percent more on paperwork and administration than on keeping people healthy. The real healthcare cliff can only be avoided if we adopt a single-payer healthcare system.

    The environmental cliff.

    Global emissions of carbon dioxide jumped 3 percent in 2011 and are expected to jump another 2.6 percent this year according to scientists, putting the human race perilously close to the tipping point when ice caps irretrievably melt, sea-levels rise, and amount of available cropland in the world becomes dangerously small.

    Yet Republicans (and their patrons, such as Charles and David Koch) continue to deny climate change. And the Administration is no longer pushing for a cap-and-trade system or a carbon tax.

    Yet unless we act to reduce carbon emissions, other major emitters won’t do so. The only binding pact so far is the Kyoto Protocol, which the U.S. never joined. And we’re taking no leadership at the international climate talks now taking place in Qatar.

    Yes, America does face a cliff — not a fiscal cliff but a set of precipices we’ll tumble over because the GOP’s obsession over government’s size and spending has obscured them. And Democrats so far haven’t been able or willing to sound the real alarms.

  5. Our National debt in 2012 is about $14T, the interest on that is $432B, or a 3% overall interest rate.

    But currently, we can borrow at about 2%. Adding $900B to that debt for 2013 will add $18B to the interest bill. In a $3.8T budget, that is an increase of 0.47%. Just to put it in context.

    Of course we cannot keep that up forever, but we can keep it up for a very long time. The pressure is real world economics; the baby boomers are aging, retiring, and slowing down in economic productivity. In order to care for them, we are going to need to borrow money.

    That is fair, through their taxes they cared for the young and old of their generation. We are not “burdening” our children with debt, children don’t pay taxes. They won’t be children in 20 years, they will be adults doing their part: caring for the young and old of their generation; which will include their kids and their parents and grand parents, the baby boomers.

  6. The bad business model has just been enhanced at Doha, Qatar.

    Instead of agreeing to fix what is causing the global warming induced climate catastrophes, they think simply paying for the damage will do.

    That will involve borrowing more money than exists.

    Not such a good plan.

  7. Now we can blame all since Nixon…… For the largest deficits ….. Carter left a little….. But nothing in comparison to any GOP operative …….with the exception of the current one…… Krugman has a great book out regarding this and how to handle it……

  8. United States Now Borrowing 46 Cents of Every Dollar It Spends
    I am so damn glad to hear the economy is on the fast track to recovery…..wake me when it’s over, after the Orcs come brazenly out of the darkened corners to claim thier ‘Victory’…..

  9. If Romney had been elected, the Bush tax cuts for the wealthy would remain in place and the shredding of SSI would have already begun.

  10. One sad truth is that many of the federal politicians know that a sizeable portion of the population does not care or wants to milk the federal cow dry regardless if it kills the cow. Many of the rest would rather punt the issue a few election cycles ahead.

    This idea of deficits and debt do not matter is lunacy, and living in denial. All one has to do is be even the most casual observer of economic history to know when a gov’t approaches a default on its debt it causes severe crisis in that nation. Some gov’ts have resorted to currency devaluation which leads to hyper-inflation that can run beyond the scope of what fundamentals of the currency dictate the value should be.

    If the deficit spending trend continues the US Government WILL face such a crisis. We don’t need to have a currency default like we did in 1779 or even risk the worst case scenario such as hyperinflation like happened in Hungary in 1946 (where in some days the Pengö devaluated by 50% in a matter of hours)

    I fully agree with our Professor in what he has said and in my view the federal elected officials, if they were instead employed as fund managers with fiscal and fiduciary responsibilities would have been jailed if they mismanaged a fund or corporation as reprehensibly as they have in their elected capacity.

    I also share the apprehension of providing these wanton spenders any extra tax money knowing they will blow 140% of everything they are given. I would not mind a reasonable tax increase but history has shown with many of these officials they cannot be trusted to pay down debt or anything that is fiscally responsible.

    I have also observed that it is a disturbing trend in the last 20 years that for the most part a problem that could have been prevented easily through slight course corrections is no allowed to mushroom into a full blown crisis before it is even considered seriously and often it is remedied with only a bandage, creating more and more problems for later. I believe the federal debt has gone so far beyond control, there will have to be a meltdown in society before congress will act and even then the repair will involve some draconian measures that everyone is going to hate and the damage will take 20 years to work its way out.

    But there are going to be endless lines of people here who will react the same way as those who are rising up in Greece to prevent any sort of responsible measures to stave off catastrophie because they want their entitlements and measures they have been placated and socialized into believing for generations is a sacred right they demand regardless of the cost to the stability of the nation.

    I have said for years that the entirety of congress should be voted out of office and new minds be put in that are both capable and willing to address this looming crisis seriously. But with each month I become more and more cynical that it will be repaired. These representatives are too entrenched to do anything reasonable or necessary.

  11. Why is everyone so quick to blame a President for the debt accrued in his office. If my knowledge of the Constitution is correct (which I’m pretty sure is and can be checked quite easily), Congress tells the President how much to spend. The President cannot spend on penny more, nor one penny less. Reagan tried to spend less than Congress told him to and the Supreme Court told him he had to spend every penny. The President is a single person with a loud bullhorn. 435 congressman each have one vote and wen 50%+1 pass a budget, that’s it. So let’s get real, Congress is the one spending all this money. And the blame goes to both sides. Each has their favorite group they want to spend money on but each spends money that makes drunken sailors look like infant babies.

  12. Mayor Karzai needs that money. Emperor Natanyahu needs that money. The Koch Brothers need that money. Our fabled Job Creators will simply sit on their hands ‘ala Ayn Rand if they don’t get the money. Baby Boom Americans will just have to work longer and do without.

  13. “Moreover, despite years of warnings from the usual suspects about the dangers of deficits and debt, our government can borrow at incredibly low interest rates — interest rates on inflation-protected U.S. bonds are actually negative, so investors are paying our government to make use of their money. And don’t tell me that markets may suddenly turn on us. Remember, the U.S. government can’t run out of cash (it prints the stuff), so the worst that could happen would be a fall in the dollar, which wouldn’t be a terrible thing and might actually help the economy.

    Yet there is a whole industry built around the promotion of deficit panic. Lavishly funded corporate groups keep hyping the danger of government debt and the urgency of deficit reduction now now now — except that these same groups are suddenly warning against too much deficit reduction. No wonder the public is confused.

    Meanwhile, there is almost no organized pressure to deal with the terrible thing that is actually happening right now — namely, mass unemployment. Yes, we’ve made progress over the past year. But long-term unemployment remains at levels not seen since the Great Depression: as of October, 4.9 million Americans had been unemployed for more than six months, and 3.6 million had been out of work for more than a year.” Paul Krugman

  14. The USA will never default on its debt, ever. it can print money to pay the interest, and the bonds are organized as contracts that are NOT payable on demand, but upon maturity, so the rate of redemption is controlled, there cannot be a “run on the bank.”

    As I pointed out above, the additional interest is less than 1/2 of 1% of our budget; that will not lead to “hyper inflation.” At our current borrowing rate of 2%, the worst it can do is cause 2% inflation on top of the normal 3%. That will not drastically affect most people, it is (as economists have long known) the equivalent of a tax on the wealthy that have cash or near-cash assets and own debt, either directly or indirectly).

  15. Anything written in the Washington Times is suspect. They are a newspaper version of FOX News, or a Washington version of Murdoch’s Y Post. They were founded and are owed by Sun Young Moon’s Unification Church, which has long played a role in far right wing politics.

  16. If anyone could find humor, albeit dark, in this it’s Albert Brooks. He wrote a funny novel titles, 2030. It also confronts our aging population and the “youngs” having to pay for the “olds”. Albert Brooks is quite liberal but all SANE people see this as insane. And, no we don’t owe the debt to ourselves, we owe it to China.

  17. “Although it may seem as though our debt to these countries renders us a puppet on strings, Bosworth says this fear is overblown. The U.S. market is very important to China’s economy, so China would be loathe to do anything that might exacerbate tensions or disrupt trade between the two countries. And the same can be said for Japan. China owns $1.15 trillion of U.S. government debt — more than any other country — but U.S. taxpayers actually owe less money to China compared to recent years. China holds 10% of U.S. Treasuries, down from 12% two years ago.” CNBC

  18. so the worst that could happen would be a fall in the dollar, which wouldn’t be a terrible thing and might actually help the economy.

    Just as long as the currency fall is not like it happened in the Weimar Republic, France, Austria, Poland, Soviet Union, Hungary, Greece, Taiwan, China, Bolivia, Nicaragua, Peru, Argentina, Poland, Brazil, Yugoslavia, Azerbaijan, Congo, Kyrgyzstan, Serbia, Ukraine, Georgia, Armenia, Turkmenistan, Belarus, Kazakhstan, Tajikistan, Bulgaria and Zimbabwe.

  19. “Over the past few years, our dependence on China as a lender has declined in both absolute terms and in relative terms. For all those who say the U.S. doesn’t make anything the world wants, look no further than the Treasury’s monthly statement of the public debt, which can be seen here (PDF). We manufacture government debt. And the world buys it. In the recently concluded fiscal year, the deficit was about $1.1 trillion. Between September 2011 and September 2012, the grand total of marketable debt held by foreigners rose from $4.9 trillion to $5.455 trillion, or about $555 billion.

    So, yes, the amount of debt owned by foreigners has risen in the past year. But the portion of the debt owned by foreigners has stayed about the same—at about 51 percent—and the portion owned by China has fallen sharply. China’s total holdings of U.S. debt are about where they were in the middle of 2010, when the volume of total U.S. debt was much smaller.

    So, the more accurate anti-spending, anti-borrowing rhetorical trope should be: “We’re borrowing from ourselves to fund the government, plus more than we used to from Japan and somewhat less than we used to from China.” But I doubt that tests well with focus groups.” Daily Beast

  20. @Darren: And of course our fall cannot be that steep. You are screaming about nightmare outcomes that are structurally impossible with USA debt.

  21. This is Neil Degrasse Tyson on congress. There is a longer clip which I will continue searching for. PS. He does note the large # of lawyers in Congress. :), …yes the last sentence does make me smile, (with a slight cynical twist to my lip)

  22. Balanced budgets sound good. But in this era, we have seen the hew and cry being mostly about balancing the budget on the backs of the middle class. As long as the mode of “balancing” is driven by class warfare, in which the super rich make out like bandits while the rest suffer, we do not end up with a fair result.

    It’s all about diverting more money to the ultra wealthy.

  23. And yet, Paul Krugman says, “who cares about the debt, it doesn’t really mean anything anyway! We need to spend more money, more stimulus. Dont worry about it, we owe it ourselves.”

    There is definitely a disconnect here.
    Even if we can print our way out of debt, it is naive to think that will not cause ramifications exactly on par with defaulting.

    I have and do predict, $18T is the physical limit on our national debt, then everything will begin to unravel, fall apart and there will be no more money or credit available.

  24. Paul Krugman does argue well. I have not decided if he is a used-car salesman or a con-man, or just a good talker.

    Remember, one of our elite GB-ers said that economics is not a science, just theses that receive “Tribute to Alfred Nobel” prizes, not a real one.

    Its nature leads tó non-falsifiable theories. And remind of gnosticism, where
    every belief was equally valid and accepted. In a market for potty ideas, which agnosticism catered to, every IPO is fine, for a while.

    The only thing true is that one percent can play the system to their advantage.

  25. 50% goes to the military. Cut the part that goes to the CIA and the drones and the mercenaries and …… Divert more military money to the care of the vets. Better yet, use the military money to improve the VA system and put us all in it.

  26. I wonder why Elaine Magliaro spent all that time and research on the post just below when to some there is only the DEFICIT, and that it’s such a big problem that it must be “fixed” even at the cost of disadvantaging over 90% of the citizenry, as a very conservative guess.

    Further , that we would trust the same mindset, players, and institutional structures to guide us to a sane result when it was those (the acolytes of Peterson, Rubin, etc.) they/it that got us here. Few in power seem capable of learning, and/or are so beholden to this institutional robbery. It would take a fool to swallow Obama’s callow assertion that everyone needs to participate in the shearing when all the evidence points to the extraction of every dollar not nailed down to the benefit of the super wealthy — including insulating them from institutional larceny, gambling, greed and stupidity.

    It’s harder all the time to deny we live in a radically post-democratic society.

  27. There was one important thing previously which caught my eye.

    That the WW2 debt was never repayed. Due to the escape hatch of the later expansion of the economy. So maybe our expansion will get us through this time, but we see none coming now.

    The only problem, is how much freedom will we still have in relation to our loaners. I’m hoping for no defecion by the money people. Pumping money into the economy via the MIC, and the other “biggies” is how we’re keeping up some comsumer demand, it is said. But are they as large employers as they are drainers of the tax budget. Beats me.

    We are here facing problems for which some promise soluions.

    But the other problems: evangelicism, justice, political control, etc are areas that I have not heard any solutions.
    Only revolution or passive resistance are mentioned. Not too sure that even passive resistence would work , because even if It might get rid of our “British”, but it would then leave the problem in our incompetent and corrupt hands, as it did in India.

  28. bettykath, you haven’t heard anyone of note confessing to financing all these wars on credit, have you? Or calling for future military adventures to actually be paid for — even as a way of injecting a degree of pain and reality that might cause more folks to pay attention to our culture of aggression?

  29. DonS,

    Politicians must bow to the wealthy corporate powers that be with whom they rub elbows and who help finance their campaigns. The corporations need more tax breaks while most of society finds itself with less and less. Social programs for the poor, middle class, elderly, and disabled be damned. The rich need to get richer. After all, they’re the makers not the takers and moochers like the rest of us.

  30. David Blauw,

    Love ya’ but the astrophysicist is a con man. Why, Because we are not going anywhare. Moving is not physically possible. The conditions of the journey preclude that. The conditions on the other planets prevent establishment of colonies. And hoping for such solutions provide only false hopes, not the possible ones achieveable here on Earth.

    If we can not solve our problems under these paradisical conditions, then we won’t on Mars or Venus either.

    The home of the future that he claims that NASA projects gave us impetus to, is not what really has happened. It is instead the need for reduction of energy consumption that has produced a skyskraper in Africa which uses 10 percent of a normal resort and conference hotel. How? Using natural models. The home of the future is also a product of microelectronics and computer science, neither of which were employed or stimulated by the NASA projects to any degree. They were essential but not developed through NASA demand or programs. The whole of the on-board computer power on an Apollo flight is less than in your cellphone divided by 100.

    I could go on. I too like dreams, but I also realize that we must solve our problems here and not hope for a second chance elsewhere.

  31. DonS,

    Executive Excess 2012: The CEO Hands in Uncle Sam’s Pocket
    How our tax dollars subsidize exorbitant executive pay
    By Sarah Anderson, Chuck Collins, Scott Klinger, Sam Pizzigati

    Nationwide, budget cuts have axed 627,000 public service jobs just since June 2009. Schools, health clinics, fire stations, parks, and recreation facilities—virtually no public service has gone unsqueezed. Tax dollars haven’t seemed this scarce in generations.

    Yet tens of billions of these scarce tax dollars are getting diverted. These tax dollars are flowing from average Americans who depend on public services to the kingpins of America’s private sector. They’re subsidizing, directly and indirectly, the mega-million paychecks that go to the top executives at our nation’s biggest banks and corporations.

    Exorbitant CEO pay packages have, of course, been outraging Americans for quite some time now. Every new annual CEO pay report seems to bring a rash of predictably angry editorials and calls for reform. But little overall has changed. Wages for average Americans continue to stagnate. Pay for top executives continues to soar.

    One key reason why: Our nation’s tax code has become a powerful enabler of bloated CEO pay. Some tax rules on the books today essentially encourage corporations to compensate their executives at unconscionably higher multiples of what their average workers are paid.

    Other rules let executives who run major corporations routinely reduce their corporate tax bills. The fewer dollars these corporations pay in taxes, the more robust their eventual earnings and the higher the “performance-based” pay for the CEOs who produce them.

    In effect, we’re rewarding corporate executives for gaming the tax system. Our tax code is helping the CEOs of our nation’s most prosperous corporations pick Uncle Sam’s pocket.

    In this latest Institute for Policy Studies Executive Excess annual report, our 19th consecutive, we take a close look at the most lucrative tax incentives and subsidies behind bloated CEO pay and highlight those executives who have reaped the highest rewards from tax code provisions that actively encourage outrageously disproportionate executive pay.

    We also identify the top executives who have benefited the most from what have become known as “the Bush tax cuts”—the reductions in federal income tax rates on top-bracket, capital gains, and dividend income enacted in 2001 and 2003.

    Among our findings:

    – Of last year’s 100 highest-paid U.S. corporate chief executives, 25 took home more in CEO pay than their companies paid in federal income taxes. Seven firms made the list in both 2011 and 2010.

    – The CEOs of these 25 firms received $20.6 million in average total compensation last year. That’s a 24 percent increase over the average for last year’s list of 2010’s tax dodging executives.

    – The four most direct tax subsidies for excessive executive pay cost taxpayers an estimated $14.4 billion per year—$46 for every American man, woman, and child. That amount could also cover the annual cost of hiring 211,732 elementary-school teachers or creating 241,593 clean-energy jobs.

    – CEOs have benefited enormously from the Bush tax cuts for upper-income taxpayers. Last year, 57 CEOs saved more than $1 million on their personal income tax bills, thanks to these Bush-era cuts.

  32. Swarthmore mom – both the left wing and the right wing establishment economists have been saying the same things you quoting for years. Only, instead of discussing the USA, they were discussing western European governments who have been running deficits for years. I was an undergrad economics major – we were taught then, the things you are quoting now. Notably, everyone thought that gov’t debt doesn’t matter for the reasons you are stating. Unfortunately, it does not pass the common sense test. It does not make sense then, and it does not now. Interest compounds – you can not run deficits endlessly – your debt pile gets to infinity.

    Current economic facts demonstrate undisputedly, that these arguments are patently and demonstrably false. Italy, Greece, Ireland, Spain, France – all collapsing under the weight of their debt load that “doesn’t matter”. To continue to make these arguments in the face of all of this evidence is absurd. Keynes is often quoted in “debt is okay” arguments like you are putting forward. However, there is so much misinformation regarding Keynes these days – to an economist – at least by training, its very frustrating.

    Weather you agree with Keynes or not (so leave out the “left and right” arguments for now), no one has ever tried his theories. We allays hear about Keynes when gov’ts want to spend money they don’t have. However, while it is true that Keynes recommended that gov’ts use deficit spending to stimulate the economy in downturns in the economic cycle, HE CLEARLY STATED THAT THEY SHOULD ALSO PAY DOWN THOSE DEFICITS WITH SURPLUS IN THE “BOOM TIMES” OF THE ECONOMIC CYCLE. SOMETHING NO GOV’T HAS EVER DONE. No one, Krugman or any of today’s supposed “Keynsians” ever mentions the pay down part.

    That is why debt matters, even to governments. Just like a family, if you use debt wisely (investment and stimulus when the economy needs a boost) and pay it off as soon as you can (when the economy comes out of its slump) then, and only then, is it an effective tool.

    Finally, people often mention the very small surplus under Clinton. While it is true we had a very small surplus — no one ever even considered using it to pay down the principal amount owed. That is the problem.

    As Jim mentioned in the post, both parties are equally to blame. They spent us into this whole together. The only difference is, they spend it in very slightly different ways. IF YOU HAVE NO MONEY – I.E. YOU CURRENTLY SPEND MORE THAN YOU TAKE IN – IT DOESN’T REALLY MATTER IF YOU GIVE MONEY TO UNITED WAY OR BUY YOURSELF A ROLEX – YOU ARE STILL SPENDING MONEY YOU DON’T HAVE.

  33. I find this topic very depressing. There are solutions but we have and have had Congresses and administrations (regardless of party) that cater to the super wealthy. We have Congress where many/most members engage in insider trading, provide themselves and others outrageous tax breaks and gifts. Corruption is rampant where those who commit war crimes get away with it b/c the new guys commit war crimes, those who play financial games pay for new laws so they can legally commit fraud and then further empty tax payers pockets by being “too big to fail”. It’s really too bad that we haven’t followed the example of Iceland which threw out the government and jailed the banksters. We might have done the same but the choices for the voters is controlled so that won’t happen. We have become an empire that will fall eventually b/c out biggest expenditure is the military and the people get squeezed. And now that big military is being expanded into this country so that those in power can use it to keep those being squeezed in line. All of these threads intersect and intertwine. I’m going back to bed.

  34. The entire deficit is about the size of the GDP, or “annual earnings” of the country. The average annual earnings for individuals in our country is around $50K, so that is approximately each earner’s share of the debt. But all they ever have to pay is the interest of about 3%, which is $1500 per year. That is covered in their taxes, easily.

    Nobody that earns $50,000 a year is going to go bankrupt over 3% of it. Yes, it would be nice if it were $500 or $1000 instead of $1500, but $1500 is not an unmanageable sum, especially if the times demand spending to avoid even worse disasters, and especially since inflation will eventually reduce the capital to insignificance.

    I think national budget and deficits should always be framed in terms of individual shares, because people seem to be inherently alarmed by anything involving billions or trillions, and seem to forget the burden is shared by over 120 million adults working every day. Look at your fair share of the total interest (3% of your annual income), which is all you will ever have to pay, and all alarm fades away.

  35. Elaine M, here’s a cropped repost of my response to Mespo’s question on the ‘rich urinating on the poor thread below


    “Mespo says —-> “Would you agree that however you characterize it, the rich are doing more financially than those who pay less? If so, would you agree they get exactly the same governmental services as the guy paying less or nothing at all? If you agree with those two statements, how you define “fair” except in confiscatory language?”


    Mespo gives an extremely narrow and technical reading to the notion of fairness as relates to the tax code, such that no one could argue the conclusion that the rich are paying more, notwithstanding that the burden on the rich has decreased significantly over the past few decades, without even including the notion of loopholes and tax dodges that the rich benefit from, and the corporate framework that also disproportionatley contributes to their wealth. I say:

    1 ) the “rich are doing more financially”, to me, is a quintessential question of relativism. It is meaningless except in absolutist kind of universe

    2) That the rich “get exactly the same governmental services” can also be seen in an absolutist way; who could argue. But in the real world, the rich DON’T NEED many governmental services because they can pay to circumvent/supplement them. Think gated communities with private police forces; think private jets; etc. Of course at some point when the infrastructure tumbles to the point that the chauffered limo can’t get to the airport even the rich might not be able to buy their way out of a jam. BTW, the rich get to live in a stable society to the extent that all citizens are treated fairly.

    3) I suppose my definition of “fair” might not equate to another’s concept of confiscatory, legal or otherwise. I am not saying, of course, that fair is only that level of participation at which everyone suffers the same deprivation or surplus, not even in a theoretical way.

    4) There are many degrees of well being between poor and filthy rich, and I don’t think we are in danger of the system abetting such confiscation that the rich will howl with pain for a serious reason.
    I am fully confident that the Citizens United Supreme Court will adequately protect their corporatist minded sympaticos, and see no irremediable prior harm that will be done that the Court will not readily address

    5) Of a more touchy freely nature: comparing poor/middle class dollars, and rich dollars, one for one, is barely laughable. In the real world, a ‘rich dollar’ is throwaway money’ that probably goes into investment, expenditure or savings that has little negative impact, probably positive, on the rich’ bottom line, and certainly does not reduce money available for reasonable essentials. As we go down the economic scale, each marginal dollar is more and more critical to the overall health and well being of the taxpayer, with each additional dollar extracted being reflected in some marginal deprivation (whether you consider it frivolous or critical it has an impact)

  36. DonS,

    I guess one could say the rich–the ones who actually pay taxes–are doing more financially…in a literal sense. That said, one has to consider what a person paying 25% of an annual income of $50,000 does to his/her buying power as opposed to a person paying 25% of an annual income of $1,000,000. Is there really any comparison in what the two earners would have left to spend?


    25% of millionaires pay lower tax rates than many middle-class Americans, study says
    By LUCY MADISON / CBS NEWS/ October 13, 2011

    Roughly 25 percent of American millionaires pay a lower tax rate than millions of middle class earners, according to a new study by the nonpartisan Congressional Research Service.

    According to the report, which was based on 2006 data, about a quarter of millionaires (about 94,500) paid less than 26.5 percent of their income in federal taxes, while about 10 percent of moderate-income taxpayers (about 10.4 million taxpayers) paid more than 26.5 percent in taxes. Moderate-income taxpayers were defined as those with an adjusted gross income less than $100,000.

    The study validates claims recently touted by billionaire investor Warren Buffett, that the percentage he paid on his taxable income in a given year was “a lower percentage than was paid by any of the other 20 people” in his office. Buffett argued in an August opinion piece that lawmakers in Washington should raise taxes on the “mega-rich” who have been “coddled long enough by a billionaire-friendly Congress.”

    His comments inspired the so-called Buffett Rule, an Obama administration initiative that endeavors to change the tax code so that “no household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay.”

    According to Thomas Hungerford, who authored the report or the Congressional Research Service, Buffett’s claims of disparity in the tax code are not without basis.

    “The current U.S. tax system violates the Buffett rule in that a large proportion of millionaires pay a smaller percentage of their income in taxes than a significant proportion of moderate-income taxpayers,” he writes.

    The study points out that the while, on average, millionaires do pay more in taxes than middle-class earners (about 30 percent compared to about 19 percent), the use of average tax rates in discussions surrounding the issue “hides a great deal of variation in the tax rates that taxpayers actually face.”

    “The primary reason for this is the higher-income taxpayers with low tax rates receive a very high proportion of the income from long-term capital gains and qualified dividends, which are taxed at low tax rates and not subject to payroll taxes,” Hungerford says.

    Lower-income taxpayers, however, earn most of their income from wages – which are subject to payroll taxes.

  37. While Worker Pensions Fail, CEOs Get Rich
    CBS News

    The traditional pension is quickly becoming an endangered species. But today, a government report found some executives have gotten huge retirement packages, even as their companies were dumping employee pension plans onto taxpayers as CBS News correspondent Sharyl Attkisson reports.

    At the very same time pensions were drying up for 122,000 United Airlines workers, its top executives were cutting deals to make their own golden years comfortable and secure.

    CEO Glenn Tilton, CFO Frederic Brace and COO Peter McDonald together got $7.6 million worth of retirement benefits in four years – from 2002 to 2006 – and earned a combined $55.5 million compensation, with perks like a car and driver and country club memberships.

    That’s one small sample of the outrage packed into a new Government Accountability Office report. It studied 10 of the largest companies to dump their underfunded pension plans into the laps of the federal Pension Benefit Guaranty Corporation, which is $22 million in the red.

    Together, the 10 companies underfunded their pension plans by more than $11 billion affecting 200,000 workers. But their executives drew a total of $350 million in compensation.

    The 10 companies are not named in the report, but CBS News has learned that they are: Polaroid, United, US Airways, Reliance Group, Republic Technologies, National Steel, LTV Steel Corp., Pillowtex Corporation, Westpoint Stevens, and Harvard Industries, Inc.

    Reliance Group Insurance underfunded its plans by $121 million in the five years before it failed. But its top management brought home $70 million in salary, bonuses and benefits. Chief executives Robert Steinberg and George Baker used the corporate plane and helicopter for $200,000 worth of personal travel. That included family trips to China, Greece and Hawaii.

    If the Pension Benefit Guaranty fund can’t get out of the red, it’s taxpayers who will have to pick up the slack. That’s why some members of Congress think they should step in.

  38. @DonS: That the rich “get exactly the same governmental services” can also be seen in an absolutist way; who could argue.

    I can. Nearly without exception, the rich are rich because the lower and middle classes work for them, and those workers collectively generate more income for the rich person’s business than they cost in pay, benefits, business insurance costs or the employer’s share of payroll taxes. That is the whole point of employing somebody.

    However, one of the reasons those employees do not demand a much higher salary is that many of their life expenses are covered by the government. Free roads, a financial retirement plan, a medical plan for retirement, unemployment insurance, police protection, fire protection, food inspection, and so on.

    The rich employers are beneficiaries of all that free and at-cost infrastructure; if employees had to cover all of those expenses themselves with for-profit companies, their living costs would be much higher and they would demand much higher wages in order to have the same buying power they do now after all life expenses.

    The rich do not get “exactly the same services,” their fortune is a result of infrastructure provided at-cost with zero profit margin by modestly paid civil servants.

  39. Always remember money is a facade, it is but a promise we make, only the representation of value. Maybe it is time we consider the renegotiation of world wide debt, and addition of a Constitutional amendment removing money from our politics.

  40. Tony C. It’s not an argument with me ;-) I’m fully aware that cross subsidization exists and that without the bulk of the infrastructure, financed by revenues largely contributed by the non-rich, the rich would lack these basic elements of society as well. Having that infrastructure, as I believe you are saying, redounds to the benefit of the rich since they skim the top off the wealth that is produced by the economy.

  41. Idealist, my purpose of the link was to highlight what I consider to be Tysons very valid statement on Congress. Sound and Fury signifying nothing.

    I got lost in my search for the longer version which included his take on NASA and his support of it. .

    I fully support your comment that we must take care of today …today. Goodness knows we should have started solving these problems yesterday! :) …..

    However with the handle of Idealist, I presume you do have dreams for a better future. One in which our childrens will not have to pay so dearly for the screwups of We adults.

    I am old enough to remember being glued to the TV set, listening to Walter Cronkite. My whole family when available watched. It did create a National feeling of unity ….for a positive reason.
    The moon landing created a worldwide feeling of unity within the ENTIRE population of the world. For one brief moment all humans tingled with an internal pride of the achievement of Humankind, and an optimism for the future. Wow I still tingle remembering.

    I am unaware of any such other thoroughly positive moment in History.
    There were no sides to this, The whole world was victorious.

    It was a Dream made reality. I do support some funding for dreams. Maybe doable fusion is the next one. Perhaps the computer and internet is a slow growing one. We are slowly being accustomed to its’ incredibleness. I got my 1st one 1 1/2 years ago. I am still awed by the access I have to basically everything. I put the computer #2 on my list of achievements of humankind, and it is continuing to improve.

    I don’t think Tyson is a con man,…I think he is a dreamer.

    I thank the stars and the firmament for dreamers.

  42. I wonder of Willard Romney’s bank down in the Cayman Islands will loan me the money that I owe on my 2012 income taxes. That way the Willard could make money off of the lower 47 percenters.

  43. Any time I see someone link to Paul Krugman or Stiglitz I have found my tell…that I am dealing with a group of economic ignoramuses.

    My favorite is “Governments don’t (need to worry about repaying debt)— all they need to do is ensure that debt grows more slowly than their tax base”

    It’s funny…because the second part IS THE HARD PART!!! It’s like saying I don’t have to worry about increasing my own personal debts I just have to make sure I earn more, faster than my debt accumulates….

    We are already in the death spiral. The money spigot will open up to full any time now with full consent of the Krugman’s and Stiglitz’s because when the sh!t does hit the fan the can blame the conservatives and the 1% and wash their hands of bad advice.

  44. “Any time I see someone link to Paul Krugman or Stiglitz I have found my tell…that I am dealing with a group of economic ignoramuses.”

    Any time I see a quote like the one above I laugh because I know I’m dealing with someone who doesn’t know what they’re talking about, but has the Chutzpah to talk anyway. Sort of like a Fox News broadcaster.

  45. ‎”Globalization is the result of powerful governments, especially that of the United States, pushing trade deals and other accords down the throats of the world’s people to make it easier for corporations and the wealthy to dominate the economies of nations around the world without having obligations to the peoples of those nations. Nowhere is the process more apparent than in the creation of the World Trade Organization in the early 1990s and, now, in the secret deliberations on behalf of the Multilateral Agreement on Investment (MAI).”

    Profit Over People – Noam Chomsky

  46. David Blauw,

    I missed all the Congress bit for the empathic plea for space travel.

    Am glad to hear of your thrill watching all that. The last step ushered in with his dedication to mankind was a thrill to me too.

    My idealism is based on my hope/belief that mankind can cooperate and not just compete. The evidence of both are still prominent and my hope remains. Both are necessary, and at least competition seems built in both us and society. Our roads and our mutual defense system speak for the cooperation aspect, plus the numerous other cooperative organizations, etc.

    Right now we are steered in ways which involve paring of 650,000 public sector jobs in 3 years, accdg to a comment/citation above. Good? Bad? I don’t know. But elimination of school quality, letting Medicaid be used by Walmart to avoid paying for health insurance for those (all) working LESS than 30 hours a week, using food stamps to feed the families dependent on their meagre wages from Walmart, etc etc is not a system of cooperation. It is not a fair sharing of our burdens in accordance with the dogma of our three chief religions, nor the morés of the secular minded either.

    I say use the fusion of the sun by converting it to electricity and retire fossil fuels from the energy role—-completely. I say let us use the earth as it is, and not created mono-culture crops dependent on and promoting GMO and GMO farming methods to the profit of Montsanto. Let us find the secrets of the compounds that nature has produced. Let us find the real natural remedies which are neglected now because no one may patent a natural plant compound.
    The NIH which has a patent of cannabis, as some mistakenly claimed, did in fact only patent (I belleve) a process developed to isolate a certain group of compoundsf from cannabis, which may be useful in helping neurodegenerative sicknesses, and which group does NOT have psycho active effects.
    Just exemplifying the conscious use of laws to control or eliminate competition, which would otherwise be existing in the study and use of natural compounds. (and has existed)

    Yes I have dreams, and the internet has fulfilled many of them together with the computer. I expect more from both, while these things also serve as threats in surveillance and control of us.

    Our system is sick if we mean in terms of a functioning democracy influenced by its citizens . Our votes count for less than bribes and insider tips delivered to cooperating congressmen.

    My dream includes righting that by a form of vetting of congressional candidates by public non-partisan organizations. The purpose is to be able to offer support to capable and honest politicians for election. My comment suggesting it got no comments. Peculiar.
    Of course a large measure of FEC and other restricitions are also needed to correct the present mess.

    Excuse for asking, and answer if you will my question, as to your age. Mine is 76.
    Not pulling rank :-) just curious which era you belong to.

  47. “What I don’t understand is how Boehner and his fellows cannot understand that they are burning down their own house. Whether candidates are sincere or lying, the voters want to believe they are choosing a candidate who has principles other than simply staying in office for personal gain. To publicly advertise that anyone who believes in a balance budget and an unencumbered economy is simply going to be excluded from “the club” is to invite being kicked out of office. Boehner has got to realize that he can’t just pretend to care about the looming debt crisis and continue to not do anything about it.

    As it stands now, Boehner has pretty much publicly demonstrated who in Congress belongs to the future of the Republican Party, assuming the GOP has any future at all.

    As far as I can guess, Boehner hopes to see Democrats keep the White House and plans that Republicans will be forced to vote for, and lose with, the kind of candidates we have had to put up with for the last two election cycles. His value to the ruling class will be in diverting Conservative energy into supporting non-Conservative Republican candidates.

    But I don’t think Boehner is going to get his way. The more desperate the American economy gets, the more Boehner will have to openly work to put down Conservatives in Congress. And the more Boehner’s evil work becomes visible to all, the more he is going to enrage conservative voters.

    My hope and prayer is that 2014 give us a new GOP in Congress.” ron-paul-attacking-tea-party-is-not-a-good-plan-for-gop

  48. Me:

    is that you?

    You sound like me, dont take Krugman seriously on issues economic. I am still trying to figure out how he got a Nobel Prize. Although the prez got one so I guess I answered my own question. Although I thought they gave them in economics for serious work.

  49. Kudos Idealist, my vintage is 1954. optimistically doing my best to avoid Vinegarizling. ….. is there two Ls in vinegarizling :) …. my spell check doesn’t seem to accept either spelling. LOL

  50. Since Ray Gun made peace with Russia, and since China is our banker, we would not do anything to disturb them:

    The U.S. aircraft carrier “Dwight D Eisenhower” has arrived off the shores of Syria.

    The multipurpose nuclear attack carrier the U.S.S. Dwight D Eisenhower is leading the naval assault group which has arrived in the eastern Mediterranean.

    It is in close proximity to the coast of Syria. On board the ship are 70 fighter-bombers and a total 8,000 US servicemen.

    The Dwight D Eisenhower joined the amphibious assault helicopter carrier Iwo Jima, which has been in the area for almost two weeks.

    In all there are now 17 American warships off the Syrian coast.

    (Turkish Weekly). I mean seriously, Russia was only kidding when it:

    The escalating conflict around Iran should be contained by common effort, otherwise the promising Arab Spring will grow into a “scorching Arab Summer,” says Dmitry Rogozin, Russia’s former envoy to NATO.

    ­“Iran is our close neighbor, just south of the Caucasus. Should anything happen to Iran, should Iran get drawn into any political or military hardships, this will be a direct threat to our national security,” stressed Rogozin.

    Dmitry Rogozin, who served as Russia’s special envoy to NATO in 2008-2011, was appointed deputy prime minister by Vladimir Putin in December. On Friday he was bidding farewell to his NATO colleagues in the alliance’s headquarters in Brussels.

    As for Syria, if NATO persists in interfering in its affairs, a catastrophe will be hard to avoid, said Rogozin, talking to journalists on the premises of the Russian mission to the alliance.


    Besides, Obama got the Nobel Peace Prize doodes and doodettes.

    Move along, only debts to worry about folks.

  51. Off topic but funny to me.

    I delivered mail for 34 years. Occasionally yet too frequently, someone would stop me on my rounds and say, “do you have any mail for me” Now that sounds fine until it is considered that I would not have a clue who the person was! Nor did the person have a clue that for some reason I couldn’t answer their question. Well in my more youthful years I has snark. My response would be to finger through my mail in search of theirs. Then after a sufficient time I would respond “No, no mail for the name me”. I received varied reactions. ……. Till one day, I did exactly this and the guys last name was ME. I almost fell down, I was guffawing, my face beaming, I think Mr. Me thought I was looney. He wasn’t even curious about my explanation, he just wanted his mail. I gave it to him, and my cheeks hurt the rest of the day.
    Absolutely true story. Who da thunk it.

  52. To further my comment above, Syria and Iran have a mutual defense pact:

    Iran and Syria heightened tension across the Middle East and directly confronted the Bush administration yesterday by declaring they had formed a mutual self-defence pact to confront the “threats” now facing them.

    The move, which took the Foreign Office by surprise, was announced after a meeting in Tehran between the Iranian vice-president, Mohammed Reza Aref, and the Syrian prime minister, Naji al-Otari.

    “At this sensitive point, the two countries require a united front due to numerous challenges,” said Mr Otari.

    (Guardian). China takes a dim view of it, having just vetoed a U.S. move in the U.N. to sanction Syria (their 7th veto since 1971), and have said:

    If a war in Syria occurs, blood, violence, and chaos will again become key buzzwords in the Middle East and North Africa. Under current circumstances, a Syrian war would cost Western powers dearly, and it would be an unwise move and a risky gamble to launch such a war.

    (China Daily). When one invades their bank and guns are pointing at the banker and friends, one’s debt with that bank seems the least of the worries.

  53. Yeh, you know, Krugman and Stiglitz–who would want to listen two top economists with a conscience who care about working people, the middle class, the poor and elderly?

  54. Elaine:

    caring and results are 2 different things.

    Krugman is not right, Keynes is not right. They may be the best 2 guyz that ever wuz but so what?

  55. When I read a comments section like this it boggles the mind to think about how far away the discourse is from economic realities.

    I’m glad to know that the collapse of the dollar “wouldn’t be a terrible thing and might actually help the economy”, or that “The USA will never default on its debt, ever”, or that “at our current borrowing rate of 2%, the worst it can do is cause 2% inflation on top of the normal 3%” . . . and on top of all this debt “more fiscal stimulus is needed.”

    No doubt that folks really believe all of that. After all, we have prize-winning economist not part of the “far right wing” who tell us it’s all fine. Any talk to the contrary is “deficit panic” designed to “destroy SSI”.

    Next stop, $25 trillion, $100 trillion… hyperinflation is for third world countries. These are investments for our grandchildren (which they don’t have to repay, after all), please just keep telling yourselves that.

    The total valuation of all companies on the stock market is $50 trillion. You could seize all of them, and all the stock owned by the 1% and the 99% and the teacher’s pension fund or whatever, and by selling every share to China and Japan you could fund our rate of spending all the way to 2025 and call it even. Nothing to see here – move on – we’ll grow our way out, just like Krugman predicted when he said “By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”

  56. “Some government policies help some people at the expense of other people. But some policies can hurt welfare recipients, the taxpayers and others, all at the same time, even though in different ways.

    With all the talk about taxing the rich, we hear very little talk about taxing the poor. Yet the marginal tax rate on someone living in poverty can sometimes be higher than the marginal tax rate on millionaires.

    While it is true that nearly half the households in the country pay no income tax at all, the apparently simple word “tax” has many complications that can be a challenge for even professional economists to untangle.

    If you define a tax as only those things that the government chooses to call a tax, you get a radically different picture from what you get when you say, “If it looks like a tax, acts like a tax and takes away your resources like a tax, then it’s a tax.”

    One of the biggest, and one of the oldest, taxes in this latter sense is inflation. Governments have stolen their people’s resources this way, not just for centuries, but for thousands of years.

    Hyperinflation can take virtually your entire life’s savings, without the government having to bother raising the official tax rate at all. The Weimar Republic in Germany in the 1920s had thousands of printing presses turning out vast amounts of money, which the government could then spend to pay for whatever it wanted to pay for.

    Of course, prices skyrocketed with vastly more money in circulation. Many people’s life savings would not buy a loaf of bread. For all practical purposes, they had been robbed, big time.

    A rising demagogue coined the phrase “starving billionaires,” because even a billion Deutsche marks was not enough to feed your family. That demagogue was Adolf Hitler, and the public’s loss of faith in their irresponsible government may well have contributed toward his Nazi movement’s growth.

    Most inflation does not reach that level, but the government can quietly steal a lot of your wealth with much lower rates of inflation. For example, a $100 bill at the end of the 20th century would buy less than a $20 bill would buy in 1960.

    If you put $1,000 in your piggy bank in 1960 and took it out to spend in 2000, you would discover that your money had, over time, lost 80% of its value.”

    Read More At IBD:

  57. puzzling:

    Krugman said that? I bet Keynes said something like “the internal combustion engine will have as much impact on the economy as the horse and buggy.”

    One thing I have learned is that most people do not understand money. It is a gaping hole in American public education and what allows for the gross negligence of our elected officials in matters of finance.


    “THIS is what poverty sometimes looks like in America: parents here in Appalachian hill country pulling their children out of literacy classes. Moms and dads fear that if kids learn to read, they are less likely to qualify for a monthly check for having an intellectual disability.”

    Wow, parents purposefully disabling their children for a government check.

    Slaves were forcefully prevented by their masters from learning how to read. Now people do it willingly when they are given other people’s money.

  59. Bron, your very good at wagging your finger and denigrating others. And what have you done with your sorry a– (that’s an Appalachian term) to help?

  60. DonS:

    yes, I will wag my finger at parents who keep their children from learning how to read and I will wag my finger at a government which makes that possible and encourages it.

  61. Most everybody, Nick Kristof included, are willing to wag their fingers. It feels so righteous. But few seem willing to address the larger problems.

    You’ll notice the sentence “Citing anecdotal evidence from a sample of one person living there as well as the testimony of a long-standing critic of Supplemental Security who has proposed block granting it, Kristof sensationally claims that parents are “profiting from children’s illiteracy” and pulling their kids out of literacy classes in order to keep them disabled and eligible for Supplemental Security.”

    h/t Atrios

  62. it is well documented that women have children to get extra income, I would imagine the same is true for disability payments.

    I would like to see them pay parents for every grade over a C+ there children get.

    And increase a womens welfare payments every 6 months if she doesnt get pregnant. If you are going to give people welfare and other tax payer funded subsidies, lets put some incentive to succeed in the payments.

    Why not subsidize positive behavior?

  63. I have always advocated this kind of positive social reward, if we are going to have social programs in the first place.

    I remember many years ago suggesting that we give rewards to children for good grades, and I was shouted down as a mercenary nut.

    You suggestion is good too, but it won’t fly, because of the outrage of the current progressive/liberal mentality – you can’t affirmatively reward people into good behavior.
    It still seems acceptable though to coerce them out of bad behavior.
    Who knows what is acceptable in this strange new land.

  64. “it is well documented that women have children to get extra income, I would imagine the same is true for disability payments.”


    Sorry to say that this is the stupidest most uninformed sentence you have ever written here. Show me your evidence and I’ll match it with my 32 years work experience in Welfare. As for the disability that too is nonsensical. Do you have any idea how hard it is to obtain Disability and then maintain it. When my heart went into failure it took me six months to the point where all my savings were depleted just to live and I received it THAT quickly because my prognosis was that I might not live for another years. After I retired from the City I worked six years for on-profits dealing with people who needed to get disability to live in my programs. Sometime the Agency would have to absorb the rents for a year or more before these people who were certifiably disabled could begin receiving their checks. It makes me furious that the public discussion of so many of these issues is partaken of by people who use unfounded “common wisdom” to discuss serious matters, by blaming victims. It is known as lack of empathy and compassion in the service of ones’ own selfishness.

  65. @puzzling: The total valuation of all companies on the stock market

    What does that have to do with anything at all?

    We have a workforce of 180 million or so. Buying our corporations would not mean anything, if we work for the corporations they still have to pay us, they still have to obey the laws of this country, and we would still have an income. Those corporations still have to pay taxes, and so do the citizens that work for them.

    If they want to shut them down, that is also fine, something else will spring up to serve whatever market void that creates. This has nothing to do with assets already created, our government is funded by the ongoing productivity of 180 million citizen workers.

  66. @Bron: it is well documented that women have children to get extra income,

    No it isn’t, or only in your own twisted mind or from your own biased sources that just make stuff up.

    There are already positive rewards for escaping welfare, we call it “not living in poverty and misery and desperation.”

    If you really think those on welfare are happy to be living where they do and as they are, then you will have to explain why you do not do the same as them. Believing they are fundamentally different than you, without any rationally plausible explanation for why that should be so, is just irrational bigotry.

    The people on welfare are there because there is no acceptable alternative, or because nobody will hire them; due to race, age, and/or lack of education. Especially when there is high unemployment, employers tend to hire younger, healthier, more educated workers from middle class backgrounds. Statistically, they tend to hire whiter workers as well. These are just the unfair facts of life, and welfare is a government program that does what it should; help alleviate some of the more brutal consequences of the unfairness of life; like starvation and homelessness.

  67. Over and over again we get some of the same people, making the same unproven assertions, that mainly devolve on blaming everyone but the small percentage of people who control most of the money and most of everything else.
    Commenters like Elaine, Tony C., SwM, AP, Shano and Bettykath have suppled evidence and argument which persuasively documents the theft of American treasure by this small amount of Plutocrats. Yes the people who have already made up their minds ignore the evidence and seek out guidance on succor from
    fools like Von Mises and Rand. The truth is that given the opportunity all of these commenters would be just like Donald Trump and Mitt Romney. They admire wealth and power and loathe all those without it, sometimes even themselves for not measuring up to their heroes.

  68. Bron & DonS,

    The Voices Missing From The Safety Net Debate
    By Charles P. Pierce

    Something there is about the Supplemental Security Income Program of the Social Security Administration that seems to drive putative liberals to embrace their inner DeMint. Years ago, when Bill Clinton was in the White House and Newt Gingrich was running things in the House, and chucking people off their benefits for phantasmagorical reasons was still all the rage, SSI got devastated by a combination of political opportunism, social Darwinism, and really horrible journalism starring (among other people) Bob Woodward. This was the whole “Crazy Checks” business by which parents were telling their kids to act up in school so that the family could suck up all that sweet government money from the hardworking rest of us. The program got leveled by the 1996 welfare-reform act, and I wrote at length about the effect of the periodic Beltway frenzies on the lives of one little boy, and one very poor family, in New Albany, Mississippi. This is just a little bit of how these things work themselves out on the rest of us.

    If the backlash began anywhere, it was in 1993, in Northeastern Arkansas. A state legislator named Pat Flanagin noticed that one of the poorer clients to whom he sold insurance seemed to have a great deal of money in the bank. “First,” Flanagin later told Forbes MediaCritic, “I thought she was a prostitute or selling drugs.” Later, Flanagin said, he discovered that her money was coming from the SSI program. To Flanagin, anyway, the woman’s children didn’t seem disabled in any way. He suspected that the program had somehow gone haywire, but he couldn’t get any of his colleagues in the state legislature interested. Instead, Flanagin passed along his suspicions to Jerry Dean, a reporter at the Arkansas Democrat-Gazette. Flanagin maintained that a great number of healthy children were receiving SSI benefits and that some mothers were coaching their children to act up in school so that they’d somehow qualify as disturbed. The reporter added a helpful tag to the story. He called the payments “crazy checks.” As the primary documentary source for its claims, the newspaper cited a study of the SSI program done that year at Arkansas State University in which, of 111 educators and guidance counselors in northeast Arkansas, only 9 percent believed the program was being administered correctly. In reality, this “study” was simply a classroom exercise, an extensive homework assignment given by a professor named John Slate, who watched, amazed, as his students’ work took on a life and purpose of its own. Over the next two years, as the SSI program came under assault, Slate’s study would be cited by news organizations from ABC News to The Boston Globe to The Wall Street Journal. “We had no hard data, just perceptions, and those from a small portion of a small state,” says Slate, who works today at the University of Texas at El Paso. “Once the politicians got a hold of it, they used it in ways for which it was never intended, and not one of them called me. It’s made me more distrustful than ever of politicians.”

    Comes now Nick Kristof in The New York Times with the latest true story of waste, fraud, and abuse in the SSI system, this one from West Virginia.

    Many people in hillside mobile homes here are poor and desperate, and a$698 monthly check per child from the Supplemental Security Income program goes a long way – and those checks continue until the child turns 18. “The kids get taken out of the program because the parents are going to lose the check,” said Billie Oaks, who runs a literacy program here in Breathitt County, a poor part of Kentucky. “It’s heartbreaking.”

    This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. Our poverty programs do rescue many people, but other times they backfire. Some young people here don’t join the military (a traditional escape route for poor, rural Americans) because it’s easier to rely on food stamps and disability payments. Antipoverty programs also discourage marriage: In a means-tested program like S.S.I., a woman raising a child may receive a bigger check if she refrains from marrying that hard-working guy she likes. Yet marriage is one of the best forces to blunt poverty. In married couple households only one child in 10 grows up in poverty, while almost half do in single-mother households. Most wrenching of all are the parents who think it’s best if a child stays illiterate, because then the family may be able to claim a disability check each month. “One of the ways you get on this program is having problems in school,” notes Richard V. Burkhauser, a Cornell University economist who co-wrote a book last year about these disability programs. “If you do better in school, you threaten the income of the parents. It’s a terrible incentive.”

    Oh, dear god, have I seen this movie before. You have the heartbroken local bureaucrat without any specific examples, just “many people.” You have the statistics-free analysis of programs, and you have the pet “scholar” from the American Enterprise Institute who, in a stunning coincidence, writes a book concluding pretty much the same thing about social-welfare programs that everyone else at AEI believes. Indeed, his work reinforces the ideas that the AEI was set up in the first place to promote. (Burkhauser, you will note, has made a career out of suggesting an increased work ethic on people who are not him.) And, of course, there is the anguished liberal conscience of the Times columnist. What’s missing, of course, are any of the actual people who allegedly are getting fat on disability payments. This is what I learned in Mississippi.

    The possibility of a transplant brought the Riddles back to Memphis even more often. “They tested Marcus a lot,” says Sammie Riddle. “Once, he had some problems that set him back, and you could see that, maybe, they were thinking, ‘Why waste a heart on this one?’ Then he came back, and they put him right back there at the top of the list.” On May 27, 1997, the Riddles got another letter from the Social Security Administration. “Earlier,” the letter began, “we told you we were reviewing MARCUS T. STEPHENS’s case to see if he is disabled under the new definition of disability for children. After reviewing all the information carefully, we have decided that he no longer qualifies for Supplemental Security Income (SSI).” At the time the letter was mailed, Marcus was almost totally bedridden. In addition, in its files, the Social Security office had Dr. Chase’s notification that Marcus was waiting for a heart transplant. Brenda Smithers had put it there more than a month before. Clearly, the review was no review at all. “Under the new definition of disability for children,” read the first sentence of the fourth paragraph of the letter, “he is no longer disabled as of 05/22/1997.” The Riddles were tired and confused, and there was a sentence in the letter that frightened them. It concerned their right of appeal: “If you lose the appeal,” it said, “you might have to pay back some or all of this money.” “We took the letter at face value,” Sammie explains. “We thought that if we appealed it and we lost, we’d be liable for a whole lot of money. If the letter’d been a little clearer, we’d have known what to do.” The Riddles did not appeal. The checks stopped.

    As long as the liberal conscience is salved, though, all is right with the world.

  69. Thanks Elaine. I worked 35 years in several jobs, in the foothills of Appalachia, all directly or related to the socio-economic group that Clinton and others threw under the bus. It makes me angry whenever I think about it. Certainly stokes the internecine warfare among the 99% which the 1% revel in; get’s a bit of the heat off their backs, docha know.

  70. rafflaw,

    That was an article by Charlie Pierce. I love reading his Esquire blog–and his sense of humor. He’s a frequent guest on Wait Wait…Don’t Tell Me!

  71. DonS,

    Some of the ultra wealthy and some of our politicians consider certain folks in our society throwaway people. Some children is this country never catch a break. It is way more difficult for them to make something out of their lives than it is for kids who have every advantage. I often wonder where someone like Donald Trump would be today if he hadn’t inherited a ton of money from his tycoon father.

  72. More Kristof bashing just because, you know, we’re still free to:

    And by the way, speaking of that Kristof column where, among other things he casts a jaded eye at young women “selling bodies”, as he spits out, to feed an addiction, I wonder if he might actually be capable of carrying on an intelligent conversation on the constellation of factors relating to poverty, addiction, generational incest, lack of economic opportunity and the rest. Or if 30 seconds of degrading female humans is all he’s got on the subject?

  73. @puzzling: The total valuation of all companies on the stock market

    What does that have to do with anything at all?

    I’m hoping that the reader might begin to understand the scale of the debt that we have. Silly me. If the government seized all the stock for all the publicly traded companies on the stock market and magically liquidated it tomorrow, we could barely pay off our debt and deficits for the next few years. Does that not say that government is too large, and just perhaps we are borrowing too much?

    People talk about taxing the rich, taxing corporations, etc etc on and on. Yet you could literally SEIZE ALL of the equity assets of the rich – never mind taxing them – and it still wouldn’t be enough to pay for our government! The problem is truly massive and yet people think that fiddling on the margins with tax rates is going to solve it. It’s not.

  74. “puzzling:
    do you ever get tired of being right?


    Just a spelling correction: “puzzling do you ever get tired of being Right?” :)

  75. @puzzling: Does that not say that government is too large, and just perhaps we are borrowing too much?

    No, it doesn’t say that at all, and no, the problem is not truly massive. Most people with mortgages and car loans and credit cards have more debt than they have actual assets, but they are not about to go under, because they have fifty years to pay off their mortgage, AND they get to live in the house in the meantime. They get to use their car to generate a higher income (by being able to work more than two miles from home). They get to use their credit cards to make life tolerable. They may owe student loans, but get to earn more immediately because of their education.

    Our assets have nothing to do with our debt. Even the level of debt is one step removed from what matters, which is the same thing as what matters for all that debt held by a household: What the payments are relative to their income. For us, here in the USA, our national debt payments are about 3.1% of our national income; a level most middle class Americans would LOVE to have.

  76. “For us, here in the USA, our national debt payments are about 3.1% of our national income; a level most middle class Americans would LOVE to have.”

    Tony C.,

    I must beg you to stop confusing certain people with reality, a state which is so painful to them.

  77. “puzzling isnt Right he/she is Libertarian. Big difference.”


    Much smaller difference then you are capable of understanding given you political pre-judgment. Example number one Ron Paul, libertarian hero. Paul also supports “Right to Life” legislation and other religious based initiatives. He also has a preference for Ayn Rand. For “Libertarian” to have any logical meaning it has to be in favor of people’s right to individually make their most important life decisions, a position with which I strongly agree. Too often though “libertarians”
    define important life decisions solely in terms of money. Since Republicans, which are generally a socially regressive party are on the surface for a “laissez faire” monetary policy they gain many so-called “libertarian” votes, despite the fact that those they vote for are against basic individual freedoms in religion, sexuality and freedom of thought. Therein lies the “libertarian” affinity for the Right.

    To differentiate just from the evidence of this blog, might we infer you voted for Romney and Ryan, whose social policy is to restrict individual liberty? At the same time at least two who prominently write here and can be considered of the Left, Gene and Tony, adamantly refused to vote for Obama strictly on his policies that violate our Constitutional liberties. Therein lies the difference between those pretending to espouse freedom under the guise of being libertarian, but are really voting solely their pocketbook. As juxtaposed with people whose human rights principles, who refuse to compromise themselves.

    On the other hand, there are libertarians I do respect because of their adherence to principles of individual liberty and consistency in their economic approaches. These people came out and voted for the Libertarian Party in the last election and so stood by their principles.

  78. mike spindell:

    puzzling isnt a libertarian? that is news to me. how do you figure that?

    I havent seen anywhere puzzling has been anti-abortion or any other rights limiting ideas.

    romney and ryan would have been less destructive to individual rights than obama has been, is and will be. i thought romney had a chance based on the polls, gary johnson had no chance of winning.

    the choice seemed pretty simple.

  79. “the choice seemed pretty simple.”


    You confirm my point. Left Wingers Gene and Tony wouldn’t vote for either major candidate because they were sticking to their principles and among those are personal liberty. You on the other hand voted for Romney who is openly anti-choice, anti-gay and pro-religious encroachment in government and has a record of all of these positions. A true Libertarian would have voted for either major candidate. You showed that if it’s a choice between civil liberties and your pocketbook, you’ll go with the money any time, ergo you may be conservative, but you ain’t no libertarian. As for puzzling he/she can answer for them-self.

  80. It was an easy choice for me for whom to vote for, Gary Johnson.
    I did not have to hold my nose while doing it, I agree with almost everything he does on the fundamentals.

    I might add that I am the token libertarian here, in fact an official in the NY Libertarian Party, as well as a libertarian political theorist.

    Anyone who votes for the pocketbook over libertarian principles is not a principled libertarian; of course it depends on how he runs his life too, but it is not a good sign if he votes against his principles.

    Neither Romney or Obama are in any sense libertarians, they both disgust me, although I have to say Obama disgusts me less than Romney.

    The GOP deserved to lose when they dumped Ron Paul, a candidate who obviously was far more popular generally than Romney. Paul pulled in thousands at rallies regularly, while Romney was lucky to get a hundred.
    The Republican powers that be, truly would have preferred Obama to win over Paul winning, that should give lefties here pause. Paul would have been more left where it counts, than Obama ever was or would be.

    Paul’s mildest of defects, his pro-life stance, is a small price to pay for almost everything else he was miles higher than any other politician.
    Even his pro-life stance did not supersede his belief in the constitution, and he would have left that up to the states.
    He is truly something you never see, an honest politician who sticks to his principles.

  81. Gary T,

    I didn’t mention you but from your prior comments it goes without saying that you are yruly a libertarian. We do have a few others here that also are, but we also have some pretenders who think the identification gives the cache’.

  82. Well I would be curious, as a self reporting exercise . . .

    Who here believes themselves to be politically libertarian?

    I will start off –

    I gary t, am a libertarian.

  83. @Gary T: I voted for Ron Paul in the primary, and Gary Johnson in the general, because I refused to vote again for Obama.

    However, you will have trouble with unqualified blanket labels. I am a social libertarian, with scientific limits.

    For example, kids are not adults, and adults cannot interact with kids as if they are. They cannot sell them drugs, proposition them for sex, accept them as prostitutes, or speak to them as if they were adults. That is a sliding scale for me; not a cut-off, and I think the law should reflect that (for example that a person on the day before their 18th birthday is highly unlikely to make a radically different consensual choice that day as opposed to the next).

    At some point in a pregnancy I believe the fetus is a human being (also on a sliding scale); and after six of the nine months I think that is pretty certain and the law should recognize that.

    Fiscally, I do not believe that free markets work, for widely accepted scientific reasons based on both psychology and sociology. The mechanisms that many libertarians claim will constrain the money-at-any-cost crowd clearly do not constrain them, their are legions of businessmen rich and free (including Romney) by purposely bankrupting companies, defaulting on pensions, breaking contracts, polluting the planet, poisoning customers and screwing investors. The free-market libertarian idea that these people will somehow be restrained by conscience or their responsibility to their investors or employees or their own long term interest is a joke; none of that matters if you can abuse all of that trust and steal fifty million in a single act.

    I, Tony C, am a social libertarian, I believe in freedom of consenting, informed, mentally competent adults to eat what they want, use any mind-altering drugs they want, say what they want, engage in any sport they want, even if it carries a higher risk of death (like skiing or skydiving or motorcycle riding). I have no problem with consensual prostitution, and no problem with unrestricted abortion in the first 24 weeks of pregnancy (or restricted abortion afterward).

    I think that is some common ground, at least.

  84. Thanks Tony, I of course am also a social libertarian, but certainly more of a fiscal libertarian as well.

    It would appear that we do agree pretty much the same on all the social points you detailed. Although some libertarians can make a principled stance on opposing abortion, I personally believe that it is based upon mysticism – I would respect the mother’s will more than the fetus’.

    As to age of consent for all adult decisions/actions/contracts, I also believe that there isn’t one set age. I would allow younger persons to petition for cognizancy certifications to prove that they are mental adult even if not physical ones.

    I do believe that free markets can work (within the limits of non-fraud or stealing), if there is a strong state enforcement system that makes sure no fraud or robbery occurs, and that includes affirmative requirements for disclosure. If everything is on the up and up, and people know exactly what they are buying/investing/funding, then they should be allowed to take whatever risks and benefit or suffer from those risks.
    I believe that public bounties for whistle-blowers who are aware of market crimes should be in place, and I believe that enforcement agents who miss violations should suffer directly for their failure to catch crimes.

    The free market is a better solution than regulated ones, because the latter leads to a slippery slope – who watches the watchers.

  85. mike spindell:

    romney and ryan would have needed a congress and senate to go along with them to have had any impact on abortion, gay rights or any civil liberty infraction.

    romney was a weak candidate and would have gone along to get along. he wasnt a true believer as obama is.

    my pocketbook had nothing to do with it. i spent many hours thinking about it from all different angles and it played out the same way each time, do you vote for a guy who you almost totally agree with (Johnson) who has no chance of winning or do you vote for a guy who you think is a flawed candidate who has a chance against a candidate who you know is a tyrant based on his actions in office.

    yep, the answer is pretty simple.

  86. @Bron: yep, the answer is pretty simple.

    Not as simple as you think. Romney lost anyway, so why is your vote now any less wasted than if you had spent it on Johnson? In fact, haven’t you done the Libertarian Party some harm, by proving that you will vote Republican no matter how repugnant the Republican nominee may be and no matter how attractive the Libertarian nominee may be?

    You have joined the stats for Republicans that say it doesn’t make a difference how bad their candidate is, they have your vote no matter what. Which means you voted for “more of the same” from them.

    I voted for Johnson instead of Obama, because I figured I had already lost no matter who won, but I wasn’t going to join the stats of Democrat no matter what.

  87. @Gary T: if there is a strong state enforcement system that makes sure no fraud or robbery occurs, and that includes affirmative requirements for disclosure.

    Then you do not believe in a free market, Gary, you believe in a regulated market, including regulations on disclosure, and regulations on, say, farm inspection.

    25% of all food in an American grocery store contains some form of corn. Syrup, oil, flour, etc. A corn farmer, faced with the loss of his crop due to a pest, may believe the only way he can save his financial life is to use a pesticide that is absorbed into the kernel and is a proven carcinogen. Should he be allowed to buy it, and spray it at night, and refuse to disclose he has done so?

    If his harvested corn is mixed with the corn of others, we will lose the ability to track the carcinogen back to any particular farm, we might not be able to track it to any particular region. Should we let farmers, in the name of the free market, form a collective that mixes all their corn together, with the effect of foiling our ability to trace harm back to any individual?

    Further, ingesting the carcinogenic pesticide, if it triggers a cancer, will usually not be detected for months. So if somebody is diagnosed with cancer, it is impossible to trace that cancer back to some particular sandwich, bag of flour, or the farm that used a carcinogenic pesticide and hid it.

    Any solution to that problem (or many others I can think of) is a violation of the purely free market. It demands regulation of the pesticides that can be used and the toxicity of corn that can be sold. It requires inspections, crop seizures, and taxes to pay for the inspections and crop seizures.

  88. Bron:
    The old chestnut “If you vote for the lesser of two evils, you still vote for evil”
    As TonyC points out, your vote for Johnson would not have been a wasted vote. The vote itself was tallied and made very public. That informed the current candidate, future candidates and the public at large. It sends a signal of where people’s sentiment a leanings are politically, and for all to recognize it.


    I do not believe that even mandatory disclosure laws (of the type I mentioned before) equate to regulation of the market.
    There is no affect on the market itself, just the honesty of the transactions.
    In fact such disclosures can easily be justified under libertarian law, as it can be argued that lack of disclosure is a form of fraud, which itself is a fundamental crime under libertarian jurisprudence.
    Although I might add that such disclosure requirements would be voluntarily waivable if affirmatively stated. As such the buyer can accept a lower quality control if he wanted to.

    All the other things you mention however, are regulations I do not agree with.
    You take a fundamental, disclosure of what a person is buying, and use it to try to justify a whole regulatory scheme of intra-component tracking, that undermines a substantial part of the value of the end product – on the anticipation of a quality control failure that hadn’t happened.

  89. @Gary T: and use it to try to justify a whole regulatory scheme of intra-component tracking,

    Does disclosure mean anything if people can simply lie on their disclosure forms? What is your solution to the dilemma I discussed? Namely, what do you do when a bad guy actively conceals his endangerment of his customers, because if he does not do that he faces large losses?

    I am not “trying” to justify anything, you apparently think I want that regulatory scheme, and I do not. I AM justifying something as the only solution I see available to us. I am not doing that “on the anticipation of a quality control failure that hasn’t happened,” I am doing that on the evidence that such “quality control failures” have killed tens of thousands of people before we inspected food, drugs, buildings and vehicles for safety, for precisely the reasons I described. There is money in that deception, and without inspections or any tracking they could get away with it.

    What good is a disclosure law if it is not enforced, and sellers can lie?

    This is one point free marketers fail to address, which I will call the problem of lost provenance when one person can do harm to others for personal gain while successfully masking their own identity, or hiding being a shield of anonymity.

    This is similar to a masked mugger with no police on patrol, but I know this invites personal macho responses of carrying guns or learning self defense, so it is a flawed analogy. A mugger, masked or not, stands before you and can be harmed whether you know his name or not.

    My definition of Lost Provenance means there is simply no way to trace the origin of the harm. For example, in perfectly-known reality the harm was done by a known-to-be carcinogenic chemical pesticide applied to a winter wheat field two years ago, that made its circuitous way into a free donut a man picked up at a business meeting and ate eight months ago, that unfortunately lodged in a crease in his colon and there caused a tumor.

    In actual reality, the provenance of the harm is lost; we cannot trace a tumor to what caused it, a stray gamma ray from outer space could have caused it. We also cannot tell reliably when it started, growth rates can be sporadic, and sometimes the trigger will be dormant for months before it is absorbed into a cell and causes the fatal mutation. If by some statistical fluke we knew it was caused by a particular chemical or compound, and could prove it was a pesticide that worked on winter wheat, how would we trace that to even a bag of flour, much less the farmer that provided 1% of the wheat that was ground into flour to fill that particular bag?

    Disclosure means nothing if it is not verified by inspection. In circumstances where the provenance of harm can be lost (or purposely destroyed), inspection MUST occur at the source.

    I think you mistake my motive, I don’t want a big government inspection apparatus; it is not some work of art I don’t mind paying for, because I love to look at.

    I think it is necessary, like I think police and detectives to investigate murders and thefts and rapes and kidnappings and bank robberies are necessary. I am willing to pay for it because I think the country would be a far more deadly, dangerous and less civilized place without it, because I know there are literally over two million smart, adult psychopaths in this country without any police record, that have no problem with me (or anybody else) being bankrupted, crippled or dying in their pursuit of personal profit, and the only thing that restrains them is the threat of forced incarceration.

    I also do not believe the free market can address these problems, because I have worked as a consultant in many for-profit enterprises, and ultimately they ALWAYS discriminate based on money and wealth. The big customers and big investors are privileged, that is a fact of life in business, and I do not believe our Rights mean anything at all if those rights are only defended for those that can pay. That is equivalent to a simple mercenary system, not of “rights,” but of who can hire the biggest and baddest army. In other words, Might makes Right, not principles or philosophy.

    I know public police forces also suffer corruption. Yet in practice they still primarily serve the people that provide their pay; the citizenry. In practice there is roughly equal access for all of us; if you call 911 they do show up. The same is true for firemen, building inspectors, food inspectors and drug inspectors; I think they prevent more harm than they let through.

  90. Wow, a long retort, but it was so well written it was very easy to read.
    [not being sarcastic!]

    I appreciate the fact that you don’t want it, but feel it is necessary.
    And don’t get the idea I either want to have untraceable violators being able to avoid civil and criminal liability for supplying bad/poisonous products under the guise of a good product.
    The term that applies here is the legal doctrine of Implied Warranty. Basically, for example, when someone advertises and rents a hotel room, by the definition of “hotel room”, there are a slew of implied warranties inherent in that designation, such as – no vermin, clean breathing air, a usable bed, lights, a bathroom even, etc.

    When someone sells you a “bushel of corn”, there are similar implied warranties – that it is not poisonous, that it does not have live bugs in it, even that it has some reasonable range of nutrition expected of corn.

    So, when someone sells you something that clearly violates an implied warranty, that would be a civil liability (or criminal depending on how egregious or intentional that violation was) that is actionable upon the seller.

    You assert that without mandatory regulations tracking the chain of custody of all the production and transport layers, the end buyer (or law enforcement agents) of the product has no way of knowing or finding out who is liable for the breach of implied warranty.

    However under a non-regulatory scheme, it is clear that the end seller of the product is liable, particularly if there is a mandatory (but waivable by the buyer) certification of the products’ fitness. (I might add also that under a libertarian legal view, there would be no corporate shield against individual liability, so who ever did it would be personally responsible).

    If the seller wishes to avoid full liability, he would have to come up with proof that it was not his fault, and show with particularity who was actually responsible, and lacking that would bear the full brunt of the law.
    That of course would not prevent third party investigations (including law enforcement one) of the cause.

    Under such an environment, any seller of a product would be insane not to maintain their own chain of custody documentation, as well as a higher internal quality control certification, or suffer the consequences – again no corporate shield.

    Whereas your scheme mandate pre-crime documentation, whether there was a crime or not, the libertarian one only kicks in when a crime has been committed, and ensures someone, if not all responsible, will go down.
    Both schemes purport to enforce quality control, one in anticipation but at great expense since most transactions are what they are supposed to be, and the other when a proven breach has occurred.

    I believe it is academic arguing to say yours would be more cost effective, and believe it, it all comes down to cost in end, even when public safety is at stake, i.e. there is a limit to how much cost an industry can endure to ensure even public safety.

  91. I might add that, police do not have a legal duty to protect you, and cannot be held liable when they do not – a very BAD regulatory scheme.

  92. tony c:

    “Not as simple as you think. Romney lost anyway, so why is your vote now any less wasted than if you had spent it on Johnson?”

    yep, you are right and I thought about you in the day after the election and your argument that we get flawed candidates because of people who think like me.

  93. PSS:
    Under libertarian law the police (and the state) have an affirmative duty to protect and serve, as well as a whole slew of other government services.

    Under libertarianism, the police in fact WOULD be liable for not protecting you, just as any other service provider who owes you a duty would if they failed to do so, unlike the current laws we live under.

  94. @Gary: Under such an environment, any seller of a product would be insane not to maintain their own chain of custody documentation,

    On the contrary. Under libertarian law, as you note, the solution is damn simple: Since under the hypothetical “libertarian law” there is no restriction on monopoly or on trusts (major sellers making an agreement to not compete on certain grounds, so they cannot be forced by competition to comply with the will of buyers), the sellers simply agree they will not sell to anyone that refuses to sign a waiver of liability.

    Look at the current software industry, where that “libertarian law” holds; nobody sells software without the license stating they are immune from claims of liability, and immune seven ways from Sunday. It is standard boiler plate; either agree to it, or go without. There is your real life example of what happens if that law holds.

    Under the hypothetical libertarian law you propose, in which you are always careful to say that waivers are fine, the same thing would hold for every product sold, including food products like corn. The guy that buys corn from the farmer to make flour, oil and syrup will be required to sign a waiver of liability. He doesn’t mind, because he requires a waiver of liability from every buyer of a tanker full of corn oil. They don’t mind, because they require a waiver of liability, right on the purchase order, from every grocery store or restaurant supply outlet that buys a pallet of packaged corn oil. The grocery stores and supply outlets don’t mind, because they will require a waiver of liability from any customer that buys from them. The restaurants don’t mind, it will become routine to sign a waiver of liability before you are allowed to walk in, or at the point of ordering.

    The end result is just like the software industry: Sign a waiver or starve. Enough people agree that trying to refuse is a losing battle.

    The same thing goes for “competition.” For example, why would anybody agree to provide, say, accounting software like Quick Books without an explicit waiver of non-liability? In order to “compete” by letting themselves be liable, they need to have insurance, because they are certainly going to be sued to kingdom come every time some goofball fails to understand accounting 101 and ends up with a giant tax liability. That insurance (if they can even get it, in a world where there is no demand for it due to routine waivers everywhere) will cost money and it will add cost to their product, so will the lawsuits, and that will demand a much increased price to the end consumer.

    The end consumer, we know, by the application of some very basic marketing psychology, is unlikely to even believe the liability is real, because they would know from experience that everybody signs waivers everywhere. Either that, or the people that will flock to the company offering liability will be the ones that see opportunity in filing lawsuits, making that company a lawsuit magnet for companies with shady accounting!

    The end result is a company cannot stay in business unless they do exactly what everybody else does; have all their customers sign a waiver, or just sign a blanket waiver that is good for life. I would not be surprised to see a new slew of credit/debit card companies founded, where you sign a blanket waiver on all purchases made with that card, and merchants sign up to take that card and enjoy the protection of the blanket waiver, so they do not have to keep track of any paperwork for customers using that card; they are liability free.

    Then of course, if you want to pay in cash, you have to show some ID and sign a contract. That is so much trouble the merchants will charge you $10 on top of the purchase as a paperwork fee; so not only do you lose the anonymity of using cash, you pay an additional “tax” on every cash purchase.

    Shall I go on, or is this enough nightmare? Let me point again at the software industry: When liability can be waived without restriction it is, and no professional businessman, especially those with a lot to lose, would ever sell anything with liability and risk anything more than the sale price of the item.

  95. I like your argument, although it presumes a lot I did not say, and projects a lot of consequence as unavoidable that may be not be.

    I will give it some thought before giving a reflexive answer.

    Essentially, what you are saying is that people cannot have the right to voluntarily waive their otherwise presumed rights.

    That is a fundamental that I have a major issue with.

    It means you will be “protected” from something, even when you affirmatively do not want that protection – the essence of a nanny state (or in other circles a protection racket).

  96. “It means you will be “protected” from something, even when you affirmatively do not want that protection – the essence of a nanny state (or in other circles a protection racket).”

    Gary T & Tony C,

    Forgive me for butting into your excellent discussion, which I am enjoying thoroughly. The problem that you have with the formulation above Gary is that it presupposes that the person is even aware they might need protection. I sign waivers of liability all the time and I’m neither stupid, or negligent. These waivers have reached a point, understandably so from the businessmen’s perspective, that one cannot go through ones day without encountering them and the alternative to signing is procedures that would make life harder and more difficult.
    Also too, the average consumer, like myself, has never sued any firm for anything and reasonably does’t expect to have to in the future. I must sign a waiver at my drugstore on the keypad, just to be allowed to pick up my prescription medications.

    Despite the evidence to the contrary a reasonable person would’t expect the meat from his local butcher to be contaminated, nor would they expect the vegetables from the local market to be tainted. to download software I have to sign waivers of liability and acknowledgements of a firms’ privacy policies, or lack of same. I’m a fast reader but the time it would take to read and parse these things I’m signing are unacceptable.

    Seriously Gary, I now you’re reasonable and so you must be aware that your argument about people not wanting to be protected from something just doesn’t hold water. The truth is that reasonable people, admittedly despite evidence, are not waiving these rights because they don’t want them. The personal freedom aspect of libertarian philosophy has always appealed to me and yes in my teens the worst propagator of it, Ayn Rand, at first appealed to me. However, for that philosophy to be viable you all are really going to have to work out the fact that multi-national corporations are amoral institutions that will take what they can get to increase the bottom line and without someone to watch over their shoulders a hypothetical free market cannot exist. I don’t use “amoral” in a pejorative sense, since the purpose of a business should always be the profit it proposes to make, by definition.

  97. Mike:

    No problem as to your interlude, I welcome your perspective.

    Of course you know that I didn’t say that people don’t want to be legally protected from something, so that is not my argument and I don’t mind if it holds water or not.
    My argument (in the context of the rabbithole that TonyC went down) was that the individual should have the option to waive the ancillary protections that are considered the default expectations in market transactions.

    TonyC asserts with this option, a domino effect occurs that starts with all sellers forming a united front demanding waivers of these rights in every transaction, the practicable coercion of all consumers to waive their rights to implied warranties, and ends with the eradication of safe or viable products to all consumers and the consequent legal immunity of all responsibility for sellers of unsafe or ineffective products.

    My intermediate argument is one of choice; if a buyer wishes to knowingly waive default protections, he should be able to do so. There may be many unforeseen reasons that a buyer may wish to do so, but I assert that option should be available for a knowing, voluntary and intelligent choice of such waiver.

    If it turns out that buyers are waiving their fundamental right to implied warranty, because of coercion, not because of voluntary choice, then that is always a problem, under either libertarian or legacy law. And I believe it is addressable within a libertarian scheme.
    Remember we are talking fundamental axioms and propositional theory here, not practical application yet, which is premature for this conversation.

  98. Gary,

    The problem with talking at the axiomatic level is exactly the lack of specificity that disturbs me. The devil is indeed in the details. I rejected Rand in my youth, though originally thrilled with her, because I ultimately saw her ideas as a blueprint for the most powerful taking over and the Utopian paradise she proposed as being srltructurally flawed. Would that we could live a libertarian life, but the 5% of humans who are sociopathic psychotis wouldn’t let us. If you can’t specifically figure out how to deal with their hunger for power, the end result will always be their tyranny.

  99. TonyC said:

    “You are protected (to some extent) against murder, theft, fraud and physical assault. In the same sense of protection, namely that we punish people for those crimes. Why isn’t THAT a “nanny state?”

    A nanny-state is where your choices for risk are taken away, and someone else arbitrarily determines how much risk they think a particular action or circumstance is acceptable for you.

    Rarely does one choose to be murdered, robbed or assaulted.
    There, the state’s choice for your risk, and your choice for that risk coincide – there is no conflict as to what the state wants to protect you from. It is not a nanny-state because the state is protecting you in the same capacity that you want to be protected.

    That is a far cry from the state telling you that you have no choice in voluntarily making a risky purchase if you wanted to. Or live a risky life, to take whatever drug you want to, have consensual sex with whom you want, or to sky dive or eat fugu.

    Being protected by the state is a good thing presumptively, but it is a bad thing when you can’t say no to that protection, and where other people choose how much and what kind of protection you must have.

  100. @Gary: what you are saying is that people cannot have the right to voluntarily waive their otherwise presumed rights.

    More specifically, what I am saying is that free market mechanics and sellers acting in their own best self interest (not being sued) will conspire to ensure they will never have any other choice but to waive their otherwise presumed rights.

  101. @Gary: And I believe it is addressable within a libertarian scheme. Remember we are talking fundamental axioms and propositional theory here, not practical application yet,

    But the problem IS practical application. If a seller can escape liability, they will. The software market, which I am told (by a lawyer) has a specific permission to disclaim liability in the law (hence that ubiquitous word MERCHANTABILITY that is in all such disclaimers), is the example. That is what happens in practice, and there does not even need to be any collusion, it is in every software vendor’s self interest to disclaim all liability for bugs in their code no matter how careless they were in coding or what the consequences of their bug may have been. And every one of them does it; at least every one I have ever seen sell a shrink-wrapped package.

    The same would be true for every product seller, if product liability could be avoided, they would avoid it.

    I will also point out the same would be true for every employer. What employer wants to be held liable for worker safety, or worker health, or not exposing their workers to toxins? That responsibility costs a lot of money, and it doesn’t sell more product. To maintain their profit margins they have to raise prices, and consumers go with the lowest prices. Just ask Walmart, and the tens of thousands of decades-long established small local competitors they have sunk on price within a year of opening a new superstore. (I am not saying that pejoratively, it is a fact of the market, in America about 60% of consumers name “price” as their #1 most important consideration in buying any product.)

    So to me, the conversation really is about practical application, because it isn’t just theory. You say you want a choice, but there is never going to BE a choice, the real world says that either buyers will be coerced into waiving product liability, or sellers will be forced to accept product liability. Choice is a fantasy, one in which sellers (and employers) will voluntarily act against their own best interest by risking millions of dollars in liability for a few bucks in profit off of a single sale. That isn’t going to happen.

    @Gary: It means you will be “protected” from something, even when you affirmatively do not want that protection – the essence of a nanny state…

    You are protected (to some extent) against murder, theft, fraud and physical assault. In the same sense of protection, namely that we punish people for those crimes. Why isn’t THAT a “nanny state?”

    I am quite serious, I do not think this is any different. Contracting cancer is not much different than being shot, it is life-threatening. It is quite a bit worse than just getting assaulted and beat up, or mugged at gunpoint.

    I do not think every protection is part of the “nanny state,” I think protections that the vast majority of people WANT is just Democracy. Product liability falls into that category. The “nanny state” problem is when lawmakers are passing laws that most people disagree is anybody else’s business. For example, I do not think the majority actually want the government to limit, by law, how much fat, salt, or soda they may ingest.

    Do most people want murderers, thieves and frauds pursued? YES. Do most people want their medicine and food to be safe? Yes. Do most people want their buildings and homes to not collapse, and be reasonably escapable in case of fire? Yes, I think so.

    That is the nature of Democracy, nothing is agreed upon 100%. Serial killers do not want to be punished for murder, thieves do not want to be punished for thievery. Some people really are anarchists, no law will ever be agreed upon by 100% of a population in the millions.

  102. @Gary: It is not a nanny-state because the state is protecting you in the same capacity that you want to be protected.

    So is the same state a nanny-state for you and not for me? Because I do want the state to protect me against building collapse, or kids toys that catch on fire or give my kid cancer or contain poisons or heavy metals that interfere with their neural development. I do want the state to protect me from being sold useless medicines that indirectly kill me or my loved ones. (They do that by supplanting real treatment, and thus letting diseases progress unchecked and untreated.) Or even make matters worse.

    Gary says: That is a far cry from the state telling you that you have no choice in voluntarily making a risky purchase if you wanted to.

    I say the same thing about that as you say about being robbed: Rarely does anybody choose to buy a product that will catch on fire or endanger their life or kill their kid. Who wants to board a plane that has a 1% risk of exploding at altitude? Who wants to buy a house that is going to collapse in the first high wind? This happens so rarely that the state’s choice for your product liability risk coincides with the vast majority of American’s choice for that risk.

    It also happens to be the only way I know of to actually protect you from that risk, since as I said before, individual choice is a fantasy.

    This is a field where reality must intrude on our decision, because in reality our choice is essentially an either-or proposition. If liability can be waived by buyers, then sellers will demand they do that, and it will be impossible for buyers to choose the option of liability. It isn’t the STATE telling you that you have no choice, it is reality. Self interest is going to drive this decision to one of two rails, if product liability is not mandatory then it will be circumvented so routinely that it will vanish; it will be laughable mistake made only by complete amateurs soon to be bankrupted.

    Gary says: Being protected by the state is a good thing presumptively, but it is a bad thing when you can’t say no to that protection, and where other people choose how much and what kind of protection you must have.

    Collectively we can say no to protections we do not want; that is the nature of majority rule. Collectively we DO want product liability protections, so it isn’t “other people” choosing for us, it is us choosing for us.

    It is also true that there will always be a minority that resents any given majority setting rules for them. But note I said always, which means a path without minority resentment is the path of no rules and a return to the societies that currently exist in the lawless badlands of Pakistan and Afghanistan, where the most brutal warlord reign as kings of their little towns. Ironically, that means the path of no minority resentment is the path of majority resentment and subjugation to the whims of a despot.

    The path of preventing the majority from determining how much protection you must pay for is the path of no protection at all.

  103. Well I might say, now we are getting down to the nitty gritty of our fundamental disagreement.

    You believe there is no way to preserve the individual’s right to choose what risks he cares to take for himself without endangering the collective.

    I believe the exact opposite, that an individual can be afforded his personal right and discretion to choose what risks he cares to take, while still protecting the collective from whatever sin his choices may engender.

    It is interesting that you see my perspective in the context of social libertarianism exactly, but eschew the same principle when it comes to trade and business.
    The form of both is the same, only the subject is different – a personal choice is considered unacceptable because of a proclaimed offense on the collective.

    And that we can argue all day long. But it is satisfying enough for me to distill the disagreement down to that simple point.

    You might be interested in seeing how Mike had a very similar argument with Gary at:

  104. “It is interesting that you see my perspective in the context of social libertarianism exactly, but eschew the same principle when it comes to trade and business.”


    This is indeed the nub of the problem. The bottom lines for trade and business has to be profits by definition. From a business perspective ALL profits are good, now matter how they are come by, as long as there is no blow-back. I believe that we must regulate that amoral, yet correct tendency from a business perspective, to protect all of society. As an example HBSC has admitted to illegal activity and will pay $1.5 billion in fines with no criminal liability for those who engaged/approved of the fraud. The $1.5 billion is far less than the profits gained from their illegal dealings, so it’s a win for the company and an incentive to do the same in th3e future. This is the current flaw in libertarian thinking and I would think you in the movement should find some way to deal with this. In the end your dream of a “free market” will be a “pipe dream” if you can not resolve this conundrum.

  105. @Gary: You believe there is no way to preserve the individual’s right to choose what risks he cares to take for himself without endangering the collective.

    I think your belief is without evidence. I have given plenty of logical examples for why I believe what I believe, you have given me no argument for where those examples failed, you have just reasserted your belief that I must be wrong. How, you apparently do not know. How your belief would work in practice, is not something you have worked out. You just seem to have faith that somehow it could work out, because that is how you want the world to be.

    Gary says: but eschew the same principle when it comes to trade and business.

    No, I don’t. What you do with your body is your business as long as you do not harm anybody else. You really DO have a choice when it comes to using psychoactive drugs, and to the extent that you can do that without endangering other people or costing other people money, I am okay with that.

    However, unlike drugs, or prostitution or many other such personal behaviors, I see no logical way your choice can be preserved without doing harm to MY choice and everybody else’s choice.

    That is not a “proclaimed” offense on the collective, it is the conclusion of the logic of reality, it is the result of observing precisely the offensive outcome I detail in history and in the present with the complete lack of liability for software bugs. It is logic which you fail to refute.

    So your characterization is wrong. Preserving your personal choice will inevitably, as history has shown, eliminate my choice, because as an individual I will have no power to compel large companies to offer me safe food or safe products or safe housing or safe employment, and no power to sue them over implied warranties. On the contrary, as I get hungry, or need transportation, or suffer from exposure or poverty, it is ME that will be compelled to waive all liability recourses as I eat their diseased food, buy their deathtrap car, rent their firetrap house and work in their toxic factory.

    This is me being consistent and you being dogmatically stubborn and wrong. I have no problem with personal choice if that choice plausibly exists, but I have a big problem with coercion, which is the inevitable result for me of preserving your choice to take a risk to save a dime.

    That is the real disagreement, you think you should be allowed to take risks for yourself that will ultimately end up endangering me, and I disagree. That is not a “personal” choice that affects only you, it is a global choice that would affect all of us, and I disagree that you or anybody else should have that right.

    This really has nothing to do with “business” per se, I would feel the same about you as an individual making the “personal choice” to infect a river or pollute the air with atomic mercury or dump carcinogenic chemicals on your land that would leach into our common aquifer.

  106. Your reply simply re-affirms what I just said:

    “You believe there is no way to preserve the individual’s right to choose what risks he cares to take for himself without endangering the collective.

    I believe the exact opposite, that an individual can be afforded his personal right and discretion to choose what risks he cares to take, while still protecting the collective from whatever sin his choices may engender.”

    Your assertion that taking drugs, partaking prostitution, gambling, only affect the individual is something I agree with – but it is not what the powers-that-be agree with.
    They argue exactly like you do, that these choices negatively impact the collective, and they have all kinds of statistics to “prove” it. And that therefore these activities must be made illegal or highly regulated.

    That I have not jumped into the pool of arguing the hows, whys and ways of implementing the preservation of individual choice in trade and business, doesn’t mean can’t.
    I just know how long and meandering such a discussion would be. I am trying to distill this discussion down to primary principles, and fundamental expectations of personal freedom.
    (And I do mean personal choices.
    When someone does something that pollutes my drinking water, that is no longer a personal action, but directly and unambiguously harms me.)

    And that you have given examples of a constrained area of trade that has the problems you think would writ large, does not prove the immutable principle you propose, it only proves there are problems in this relatively new area of trade and business.

  107. What Mike said.

    The ultimate flaw of Libertarianism (discounting the flaws of some of their individual candidates in the LP) isn’t the social idea of protecting and maximizing liberty. It’s that their economics don’t jibe with reality and open the door for crime and economic tyranny. A laissez-faire market is every bit as dangerous to society as a locked down total command economy albeit for different reasons.

  108. @Gary: They argue exactly like you do,

    No, they argue exactly like you do; by assertion without logic or proof or example. Ask them how the exchange of money for sex harms two consenting adults any more than if they had free sex, and they will have no logical answer. Or they will, as you do, claim the logic is there but they have no time to get into it. In short they cannot explain themselves, their logic is not provided because it will not hold up to logical scrutiny or critique, or it is based upon beliefs they hold which are not universal at all.

    Enough experience with that is what leads me to expect the same about your missing argument. Ultimately free market solutions to these problems fail for a very simple reason that is fundamental to the free market: It discriminates based on the ability of customers to pay; it is fundamentally and at its heart a bidding war, and that is not how “Rights” should be awarded.

  109. Mike:

    The problem with HSBC’s violations of law, and the penalty they are receiving, is not an indictment of the free market – quite the opposite, it is an indictment of the incumbent regulatory system that is supposed to ensure the honesty and quality control of the market.
    Libertarianism in no way permits this kind of discretion to slap wrists when an admitted proven violation of law has occurred.
    Libertarian law would come down hard on violators, much harder than this, and demand restitution to the victims, and fines to cover investigations, continuing law enforcement and whistleblowers..

    (Of course it wouldn’t actually happen in this instance, since drug dealing, tax evasion and money laundering are not libertarian crimes to begin with.)

  110. “Libertarianism in no way permits this kind of discretion to slap wrists when an admitted proven violation of law has occurred. Libertarian law would come down hard on violators, much harder than this, and demand restitution to the victims, and fines to cover investigations, continuing law enforcement and whistleblowers.


    Surely you know that is easier said then done particularly with some people who call themselves libertarian today and would abjure any governmental interference with business enterprise for any reason. Even by your own statements regarding the freedom to waive liability, the libertarian presumption of the free choice of the consumer is more wishful thinking that reality backed by experience. This is the flaw of modern libertarianism, in that it presupposes a condition that has never been present in human history, except perhaps in hunter/gatherer times. I would really love to see the libertarian movement work this out so that I could join, but so far the movement rates high on idealism. My cynicism is such that I believe idealism is the state that eventually leads to human disaster. We humans are still not at a stage of evolution where we can exist without some trying to screw everybody else.

  111. @Gary: Tax Evasion is a crime, even in a Libertarian system. There is no system of society that affords people rights without that system protecting those rights for all people, even people without a penny. Protecting rights, of life, of property, of contracts, can only be supported by some sort of tax or tax equivalent. Evading them is necessarily also a crime, it is the crime of undermining (and therefore violating) the rights of others to be free.

    Any system without taxes is an anarchic system or despotism without rights, in which one can be killed, robbed, raped, beaten or enslaved without any consequences for the attacker, a system in which the only justice that exists is mercenary justice that must be bought, a system in which you own nothing, not even your own life, because anything can be taken from you by sufficient force and nobody is obligated to defend you or try to get it back.

  112. TonyC:

    Well yes you are right on that one, I only caught that faux pas after I posted it; notwithstanding I do believe HSBC did pay their taxes.

    In a libertarian system they would be considered more like government fees for services rendered, and yes if you used those services you would definitely owe them. Evading them would a legal breach that the evader would be liable for.

  113. Mike:

    Libertarian legal systems do not “abjure any governmental interference with business enterprise for any reason.”

    To the contrary, business contractual and criminal breaches are viewed far more seriously in a libertarian environment than in our own, and any such violations are dealt with swiftly and vigorously.
    It is not anarchism; there is a need for government regulation and enforcement under libertarianism.

    As to waivers, as I said before the availability of these to buyers and sellers are fundamental to a voluntary trade system.
    The acceptable risk in any activity must be gauged by the person taking that risk. To force services (and that includes quality control) upon any person makes his transaction an involuntary one.

    Idealism certainly drives libertarians, as it did just about any prior political or economic system during their inception.
    But idealism does not automatically undermine practical application and adoption.
    Unlike what TonyC avers, I (and many others) do have solutions for the ad hoc criticisms as to how to insulate the collective from any freedoms granted to the individual.

    The distinction being made here, between concern for the collective’s rights being violated if an individual chooses to take his chances in a business transaction, vs the collective’s rights being violated if an individual chooses to take his chances in social choices, I believe to be artificial.

    In both cases, society is saying there are minimum standards of risk that you, as an individual, are allowed to participate in.

    Social conservatives insist that the risks to the collective are just too high when individuals choose to partake in drugs, prostitution, gay sex, gambling, etc.
    Fiscal Liberals insist that the risks to the collective are just too high when individuals choose to partake in unregulated trade and business transactions.

    Both sides make structurally similar and, in my opinion, specious arguments, supported by logic, statistics, anecdotes, and projections.

    And both disrespect and belittle the autonomy of the individual, which is the antithesis of what libertarianism does.

  114. @Gary: This is a minor point, but in most cases I do not believe in fees for government services. I personally see taxes on income as a partner’s share of wealth created using their facilities.

    Many businesses (like Malls) are quite explicit about that income sharing; in addition to rent, common area maintenance, security and marketing, stores owe a percentage of profits over a threshold (i.e. a deductible). In most malls doing that it is a non-negotiable take-it-or-leave-it proposition.

    I see the country in a very similar light; as citizens we provide an infrastructure that helps people create wealth, and we are not content to just charge rent, we want a piece of the profits. Or, those people can go try to find a different mall; but they should not be allowed to sell in ours.

  115. @Gary: To force services (and that includes quality control) upon any person makes his transaction an involuntary one.

    So what? We cannot protect the country from invasion for some people and not for others that do not want to pay for it. Protecting the country from invasion requires a military and that costs money, that money has to come from somewhere, and relying upon some sort of voluntary contributions is not a solution, especially by libertarian or free market principles: For any given individual their maximum self-interest is served by letting somebody else volunteer (either as a soldier or as a source of money).

    There is only ONE way to protect the country from invasion by foreign countries that seek to profit by the forceful looting of it; and that is with involuntary payments.

    There is only ONE way to protect the rights of people, and that is with the involuntary defense of the rights of others. Rights are nothing but empty rhetoric if the violation of rights is not punished, and not every person can defend themselves; some of them because they are mentally or physically unable or disabled. Not everybody can pay, and they are not “Rights” if only those able to pay for them are entitled to them.

    We have a way to defend rights, which we call the police, but they need to be paid for doing a dangerous job, and that payment is accomplished by involuntary transaction.

    Rights, contract enforcement, liberty, sovereignty, protection against thievery, fraud, assault and slavery all cost money. The only plausible way to pay for those protections is by coerced transaction: In our case, the taxation of the money these freedoms allow us to earn.

    There is no free lunch, and there is no way to have a country without the coercion of citizens by law.

  116. TonyC:
    You do know that I am not opposed to paying for government services, including all the ones you mentioned, don’t you?
    Whether you call it taxes, or I call it fees for services, the services do need to be paid for by the recipient of them.

    So you are preaching to someone in agreement on that.

    The context in which I was talking about it, was in areas that I do not believe the govt has to be in, in places where those services are not welcome.

  117. @Gary: the services do need to be paid for by the recipient of them.

    I do not believe that, because I do not believe “recipients” can be narrowed down to individuals.

    In my city, a burglar is sentenced to prison. Who is the “recipient” of that service? That is impossible to tell, if the burglar was not sentenced to prison, then presumably he would still be burgling houses, but we do not know specifically which houses have been saved from his burgling, because that is a future that did not happen.

    In addition, the jailing of the burglar may discourage others from burgling, due to that example of law enforcement raising the risk of burglary. In fact the actual person burgled by this jailed criminal may not be really served in the least; many burglars are caught without any stolen property being recovered or paid for. If anything, the capture of a burglar may just cost the victim additional time, lost work and the hassle of red tape.

    The only way to compute the benefit of jailing a burglar (or murderer, or thief, or fraud) is probabilistically, and inaccurately at that. We presume all citizens benefit from law enforcement by reducing the probability of crime. There is no specific beneficiary; society as a whole is the beneficiary of all law enforcement and military protection, both for the deterrent effect and the removal of what would be an ongoing threat.

  118. @Gary: in places where those services are not welcome.

    You can only mean not welcomed by you.

    But when the choice is an either-or proposition, as the choices you are talking about are, then they have to be decided one way or another, and the fair way to do that is by majority vote. Most of us want those product liability protections, those workplace protections, those drug and food protections, and most of us are willing to give up our right to waive those protections in return for the added safety of them existing.

    Before there was an FDA, or OSHA, or Social Security, the people of those times experienced the world you wanted, and they rejected it. It didn’t work for them. Contrary to free market principles, they had no effective power against the banks and corporations that would compel the powerful to do anything, they were getting phucked over at every turn. Bad food, bad medicine, deadly jobs, monopolistic pricing by trusts and collusions of basic life needs, and screwed out of retirement by one bankruptcy after another.

    There may have been some other way of fixing that, but the easiest way was to collectively use the power of the government to do what the free market had failed to do, force the sellers to spend additional money making food, medicine, jobs and retirement reasonably safe.

    For all the protestations of free market advocates, the free market does not work as advertised. The reason it does not work as advertised is because it is missing a key ingredient and motivator, desperation when asymmetrical power is held. When humans get desperate enough they will waive anything to prevent catastrophe, even their own rights and freedoms. It is why soldiers surrender, after all, they think it is the only chance of continuing their life, no matter how miserable, slavish or deprived it may be.

    Until you detail for us a plausible mechanism that will make sellers voluntarily agree to be sued over what you call implied warranties, we can safely assume this is a binary choice. Either sellers are forced to accept liability for their products, or buyers are forced to waive all liability and take our chances without recourse. The vast majority of us prefer the former, so that is the way it should be.

  119. TonyC said:

    @Gary: the services do need to be paid for by the recipient of them.

    @Tony: I do not believe that, because I do not believe “recipients” can be narrowed down to individuals.
    In my city, a burglar is sentenced to prison. Who is the “recipient” of that service?

    The recipient(s) are the people covered by the government service of being at the ready to respond and process law violators, if and when they happen.
    And then, if and when it occurs, the further services of capturing, convicting and punishing the violators.

    You artificially constrain the definition of a service to mean only an actualized service.
    But a service can cover potential eventualities as well. That happens all the time in insurance offerings.
    You pay for house insurance, even when your house doesn’t burn down.
    That is a service, even when it is not actualized.

    Similarly, all persons within the jurisdiction of the local police/courts/jailers are served by the infrastructure and readiness to respond, even when a response does not happen.

    As a starting point, the proper cost for that service to each individual should be the operating costs of the infrastructure, divided by the number of persons in the jurisdiction. Also, as it is a government service, it is a non-profit entity.

    All income, costs and losses must be factored in to the final per person cost, (i.e., a high crime area would cost more per capita) but that is how it is done with any servicer/servicee relationship.
    There is no magic here, unless you intentionally mystify it.

  120. @Gary: Okay, I agree with virtually all of that. I mistakenly thought you were arguing (as many free-market advocates do) for charging individuals for responses, like fire-fighting, or police intervention.

    If that is not the case, then our difference is in computing the cost to the persons. You mention a starting point for computing the “proper” cost, but no ending point. I do not believe in charging everybody the same amount of money, because I think that unfairly burdens those with very little money. Taking 30% of a minimum wage worker’s income has far more practical impact than taking 30% of my income; in my case it only reduces the amount I save, in their case it reduces the amount they eat or health care they can afford, or whether or not they have a car.

    Also, I think you have accidentally excluded from taxation the biggest beneficiaries of the infrastructure, corporations and businesses.

    So we disagree on your “proper” cost; because you have focused on raw dollars and individuals, and I am focused on hardship, which I do not think can be measured as either a fixed dollar amount or even as a percentage of overall income. Unlike a corporation, individuals do not get to deduct 100% of their living expenses in computing their income.

    However, I have a simple and pragmatic suggestion to fix that. Make the average income the deductible, and then implement a percentage tax on the remainder, for both corporations and individuals, that is sufficient to cover the costs of the infrastructure.

    People earning less than average are already suffering enough, relative to the rest of the population; those earning more that average are not without their financial struggles, but will still be doing better than average after paying their share of the tax. Those a few hundred over the average will pay the least; those earning a million a week will pay the most.

    Here is another, completely different alternative: Let people deduct like corporations do. As a corporation I could deduct the cost of offices (housing), all of my communications, all of my food and entertaining costs, my utility bill, my transportation costs for airfare and car service without ever a question from the IRS, all cleaning fees, trash fees, and the cost of accounting, tax preparation, lawyers, and consultants. I could also deduct all interest and financial fees I paid for any reason. Also all of my business insurance payments. Also the cost of all furniture for my offices. If you can claim money was spent in the pursuit of business, you can deduct 100% of it (some purchases must be deducted over time as a depreciation expense, but 100% ends up untaxed, nevertheless).

    The IRS is neutral on whether expenses make sense, they won’t argue if a corporation wants to spend $10,000 on your office chair, or $100,000 on your desk, or if you want to hang a million dollar work of art on your wall.

    So why not do the same for individuals? The poor have to spend basically all of their paycheck on living expenses. Housing (as rent or mortgage payments), food, utilities, transportation and health care. If we made their living expenses deductible, and applied the same rules and lack of scrutiny and neutrality of judgment as we apply to Bank of America, about half of America would have basically no income; because they spent most of it in the process of living.

    The only people that would be taxed would be those that spent all they cared to spend on living, and after deducting 100% of that still had money left over.

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