There is an interesting economics column in the Wall Street Journal on the similarities between the Greek meltdown and our own fiscal policies. I have long been a critic of the wild spending of both Congress and President Obama, including the recent proposal to simply pay for an over $200 million short-range missile program for Israel (here). This article discusses the possible disaster awaiting the United States as our leaders blissfully assume that a recovering economy will pay for their various programs and pet projects.
The column questions the logic of being able to tax their way out of this deficit. While I am socially liberal, I tend to be fiscally conservative and I find the current situation extremely alarming.
This article is interesting for its proposition that higher taxes are not able to close such a gap:
The feds assume a relationship between the economy and tax revenue that is divorced from reality. Six decades of history have established one far-reaching fact that needs to be built into fiscal calculations: Increases in federal tax rates, particularly if targeted at the higher brackets, produce no additional revenue. For politicians this is truly an inconvenient truth.
This is a different take on the problem. I have always been skeptical of the “spend out way out of the crisis” approach — which is an awfully convenient theory for members who are always inclined to spend more and put off payments to the future. Once back in power, the Democrats seemed to immediately fulfill a stereotype of higher spending and immediately turning to higher taxes as the solution. This is precisely the course that led to the last Republican takeover of Congress. In their defense, Democrats faced a crisis left to them by the Republicans and particularly George Bush who was one of the greatest spendthrifts in our history. However, they have shown no serious commitment to tackle these dire economic forecasts — gushing money in Iraq and Afghanistan while watching cities and states shutting down basic programs. Our debt is now growing at a record pace — roughly $5 billion a day (here).
This is not to excuse the Republicans who, under Bush, showed no restraint and left Obama with a massive debt. I simply have little faith in our current economic policies or a sense that leaders are seriously addressing the growing threat to the nation from our growing debt. Various countries have raised alarm over our debt and the similarities to the Greek meltdown, here.
For the column, click here.
http://www.washingtonpost.com/wp-dyn/content/article/2010/06/11/AR2010061105726.html?hpid=topnews Maybe you won’t win in the fall Byron.
Buddha:
how so? And when have unregulated markets lead to slavery? I wouldnt exactly call the south an unregulated market, it was a feudal system of, by and for old world style aristocrats.
As long as you have your cake and eat it too.
“Keeping up with the Joneses is a substitute for true self esteem.”
You said it, not me.
But what’s interesting is that you cannot see that facsimile is the exact hole in your reasoning that money and the spending thereof equates to happiness. Want is an expression of desire. Need is an expression of necessity. It is your very inability to distinguish want from need that blinds you to the fallacy that unregulated markets lead to anything but slavery.
Fake happiness is still fake, but economic slavery is a very real evil. It causes social discord and eventually it’s the fabric of which revolutions are made. But by all means, let those without bread eat cake.
Bob:
Goody when we win in November we can repeal the 16th amendment and a few others that suck the life out of us.
That will be great fun. Hopefully we can achieve the majorities necessary to right the wrongs of the past.
Buddha:
I know what greed and materialism are, living in the DC area I come across it all the time. Most people around here work for the government and are always trying to keep up with the Joneses in one form or another. Maybe it is the political class of all stripes. A possible reason for the graft and corruption?
But I see nothing wrong with enjoying the money you make honestly. Keeping up with the Joneses is a substitute for true self esteem. 2nd handers are always worried about who is having dinner with whom and what dress is in fashion or what architect has designed their new vacation home in Aspen.
Anyway no nanny nanny boo boo, just an invitation to expand your horizons. Trying to return the favor, I may not always agree but at least I have been willing to check out what you and others say and recommend.
Thanks, Bob. I was trying to recall Kelo earlier but was drawing a total blank.
Byron: “Does the Constitution protect private property? Excluding of course the taking of land for public uses such as roads or parks.”
See Kelo v. City of New London
Byron: “I guess the entire Constitution and the Declaration are just words that don’t mean shit according to your statement. So how are we personally free if we don’t have economic freedom? If I make $1,000,000 per year (which I don’t) and I get taxed all but 50K how am I not a slave?”
Article V permitted the 16th Amendment.
Period.
Now if you’d post “Saturday Night Special”, you’d have hit the Lynyrd Skynyrd tri-fecta.
Ever come the day when you have to say
“no hole in your soul”
“when in fact”
Sleep deprivation and typing do not mix.
Happiness comes from within
Dats were mines comes from, dens it jus comes rushin out.
Mama said been like dat in our family four a long times.
Mama use to say, take your time young man, don’t you rush ta get old. Be a simple kind of man, one that you can love an understand.
She say do this for me son if you can.
Byron,
Please. Now you’re just playing nanny nanny boo boo.
You’re simply wrong about the root of corruption. It flowers in the form of representatives who obey their money masters instead of their Constitutional duty to citizens, but the root is corporate cash. And as The Shadow noted, the weed of crime bears bitter fruit.
graft \ˈgraft\, n.,
: the acquisition of gain (as money) in dishonest or questionable ways; also : illegal or unfair gain
Corruption and bad laws (as in improper to the health of society as a whole) are the core dysfunction of government, i.e. the effect. The cause of corruption is graft. Graft paid to government officials to allow corporate officers and their lobbyists to draft bad laws in their favor. One cannot have graft without money to fuel it just as one cannot have a fire without fuel. Where does the money come from that fuels political graft? Industry and corporate coffers. The circle is closed. Eliminate the money and the ability for corporations to participate in the political and legislative processes and you eliminate the problem. The circle is broken.
Cause and effect.
You have a real problem with the concept.
As to what Oscar meant? You really need to meditate on the nature of materialism as it relates to greed and desire. Greed for the material is a reflection of desire for externally derived happiness.
materialism \mə-ˈtir-ē-ə-ˌli-zəm\, n.,
2 : a preoccupation with or stress upon material rather than intellectual or spiritual things
Materialism is the philosophy of greed made manifest. The idea that happiness comes from what one has, not what one is.
While you may disagree, Buddha teaches us that the root of all suffering is desire. Your current unhappiness with your inability to win this argument comes from your desire that materialism somehow is a logically good thing when it cannot be as it is rooted in the same desire as greed: a trait reviled by almost every religious and philosophical tradition. There is no hole in you soul that a material possession can ever fill whether or not that possession is a result of your labor or simply an accident. Look at lottery winners and see how “happy” they often are: http://abcnews.go.com/GMA/story?id=2941589. The illusion is that you possess your possession when if fact they possess you. Material wealth is not the equivalent of happiness. “The ingredients of happiness are so simple that they can be counted on one hand. Happiness comes from within, and rests most securely on simple goodness and clear conscience. Religion may not be essential to it, but no one is known to have gained it without a philosophy resting on ethical principles. Selfishness is its enemy; to make another happy is to be happy one’s self. It is quiet, seldom found for long in crowds, most easily won in moments of solitude and reflection. It cannot be bought; indeed money has very little to do with it.” – Wm. Ogden.
@Byron:
I agree with Buddha’s last.
Instead of wondering what you mean by the “case” for privatization, let me make the case for governmental takeover.
Private industry is motivated by profits, and once a business model is found that achieves profits, the maintenance and growth of that business model, with the aim of increasing profits. This is a fine thing.
Darwin’s theory of evolution was probably influenced by Adam Smith’s treaty on free markets. Some biographers claim, on thin evidence, that Smith “inspired” Darwin’s theory, but Darwin’s auto-biography specifically refers to Malthus as providing the key inspiration. In any case, the ideas of Smith and Darwin’s survival of the fittest start out quite similarly.
But Darwin, as a naturalist, understood that the natural “free market” was cruel and brutal, with an unbounded inventiveness for deception, cheating and stealing. To deceive predators or ambush prey, to cheat on mates, to steal food or territory, to hijack the bodies and brains of others for one’s own purposes (as done by many insects to other insects).
Left to its own devices a free market in human society will, like the natural world, produce the correlate of predators and prey, namely dictators and slaves (or kings and serfs if you prefer prettier language). The “natural” human state is not freedom, but to be miserably oppressed, enslaved, and exploited for the gain (in luxury, services, produced goods, money and domination of women) of a far more powerful gang of thugs. The knights are armored and armed and trained from childhood to fight and kill, and they make damn certain the serfs are not, by ruthlessly cutting them down (often literally) at the first sign of opposition or resentment or a refusal to follow orders.
That is preamble to the case for government takeover. There are some operations we want for the good of society that we, as a society, do not WANT done for a profit, because the risk of thuggery is far greater than the risk of corruption. Doing something for profit is a fine motivator to compete, but it is also a fine motivator to cheat, deceive, or cut corners to maximize profits. Especially when fair play fails, because “desperate times (for a businessman getting his ass kicked by the competition) call for desperate measures.”
As examples, we do not want our court or police systems to be a for-profit enterprise. We don’t want our health inspectors to be a for-profit enterprise. The efficiencies encouraged by competition are not worth the corruption encouraged by competition when the stakes are literally the lives of citizens.
This is our problem with health insurance. Forty years ago, health insurance was like banks, clipping along with 5-10% margins and delivering on their promises. As baby boomers aged, their old prices that used to produce those 5-10% profits stopped working. The market wouldn’t let them raise prices much, so they competed by other means; ultimately (in the 2000’s) by gaining monopolies and deceiving their customers into paying for insurance that they only *thought* would pay for their cancer treatments or catastrophic health care.
In such circumstances, it is the role of government FOR THE PEOPLE to step in and perform the service as a break-even enterprise. That is how courts operate, that is how the police operate, that is how Medicare operates, that is how the military *used* to operate. No profit motive at all, no salaries more than about three times the national average (for top level managers), no bonuses or perks or stock options.
Competition is a force for good AND for evil. We want it when the good is pretty likely to outweigh the evil. We don’t want it when the level of evil that can be done far outweighs the net good that can be done. Competition produces innovation, and efficiency, and these can transform lives. What we don’t want is producing poisoning, death, financial ruin, enslavement, exploitation, deception, misery and disease. There are two options to address these evils, and they are enforced regulation and government takeover. But regulation is never perfect, and open to its own corruption. Even with regulation the evils are bound to occur. So Government takeover is appropriate when our tolerance for the evils is near zero, and that is usually when the stakes are very high.
In such cases, the efficiencies and innovations lost are simply not worth the destruction of our fellow citizens, or our fellow humans, or our environment, or our government.
Buddha:
government started it, go take a look at the history of the Vanderbilt steam ship line and then come talk to me about how government was corrupted by business.
Mespo:
what the hell does that mean? So one should give up the quest to produce because one ceases to be an individual?
So the function of life is not to extend and better it but to “be”.
Please tell me how one is to “be” if one does not have food clothing and shelter?
Did you ever stop to think that maybe people who work are “being”, that is how they create and express themselves, their individuality? The builders, the engineers, the small and large business owners. They acquire yes, but the act of creation is far more important to most. Artists aren’t the only ones that have passion for their work.
mespo,
That Wilde was not just a witty fellow, but an astute observer of human nature.
Byron,
Privatization?
And exactly how screwed would the elderly of this country be if we’d privatized Social Security like the Republicans have wanted to do since Reagan when then CDS debacle hit?
Reasonable does not equate to correct.
Government has overstepped its bounds in bailing out private risks with public funds and in trampling the right of habeas corpus and to be free from cruel and unusual punishments, but it has underperformed in regulating industry. Why? Because of K St. graft. Proof? “Self-regulating” industries. Allowing industry insiders and their lobbyists to write legislation and ergo law so that companies like BP can flaunt safety for their personal profit and expect the taxpayers to foot the bill for their colossal fuck ups. The bailout of private Wall St. risks on CDS (made up nonsense) with public monies. Going to war against a country that didn’t attack us for personal and corporate profits instead of attacking those who did attack us. All the while protecting industrial criminals who, but for their “campaign contributions”, would be under a prison if the rule of law was even remotely being equally applied.
Government has been compromised by industry, Byron, not the other way around.
Wake up and smell the fascism.