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.
Tony,
Ogden’s comment is indeed to a polar example. By the content of your last comment though, it seems you do not disagree with Ogden in substance as much as you disagree in degree. I will stipulate that is reasonable. As you say money has some pragmatic value in presenting options and relieving strife. However, that is because you view money much like I do: as a tool. A means to an end and not an end in and of itself. Therein lies a core difference between yours (ours) and Byron’s stances. He confuses his desire for acquisition and the idea he should be free to acquire at any ancillary cost as long as it is the fruit of his labor with the actual utility of the tool. It is a common misconception that the Bible says money is the root of all evil, when it is the love of money – acquisitiveness/greed/your label of choice for the concept – that is the root of all evil. That is my contention as well. Money is a tool like a hammer is a tool. It’s how you apply it that matters. One can build a garden or one can build a prison (for one’s self just as easily for others). But desiring to get all the hammers leaving none for others and/or using your hammer to break others tools? That is a form of pathological behavior. The exact pathological behavior exhibited by Wall St., K St. and Big Oil: maximum profits, damn the consequences and collateral damage. That’s simply sociopathic at best. At its worst, it’s psychotic or malignant narcissism. Therein is Byron’s problem. He doesn’t realize that what he advocates is at its heart the same rationale a sociopath would use to justify his/her actions. “I earned it.” In the old days, they’d have just said, “I have divine sanction.” Just look at BP press releases for modern examples. “I want my life back.” Or the Massey Mining disaster. “I didn’t do anything wrong.” When all the plain evidence points to the fact that both CEO’s acted selfishly and with absolute (I feel criminal) disregard to the risks they were assuming at others expense or the mutual expense of society in toto.
Tony C:
here is a good summation by someone else, but I think it speaks to the issue:
“Man is an integrated being of matter and consciousness who exists by the use of his rational faculty. In order to continue existing, he must implement the products of his reasoning in the material realm, organizing things to achieve a material outcome which contributes to his survival. If force is used against this process at any step, that which is needed for his survival cannot come into being.
A concept is therefore needed to denote man’s morally and legally sanctioned freedom of action with regard to his use of materials-the concept of property rights. Since politics concerns the nature of government, and the essence of government is force, the full politico-economic application of property rights is a system in which government protects an individual’s property rights from violation by others, but does not itself violate them.”
Again back to Locke and the right to the sweat on your brow to transform lumber to a house, etc.
BobEsq:
I meant article V, sorry about that.
But is it void ab initio? There are a good many laws that have been passed that have limited our freedoms. How do you square that? It seems to me that we are less free now than we were 40 or 50 years ago. The intent seems always to save us from ourselves. But the end result is less freedom.
Anyway thanks for the response.
But back to the original question, if someone makes $100,000 and you tax/take all but $50,000 how is that not tyranny? According to John Locke and also the Declaration.
So I think Article V was used to take a portion of what the Declaration granted as our basic right – the right to life. It wasn’t void from the beginning but increased in magnitude over time.
Byron: “Just use the V amendment and vote in Hitler or slavery or whatever the hell you want don’t worry about principles or intent or words or meaning. Whatever the whim of the moment is, shit 3/4′s of the states and it’s the law of the land. Madison, Jefferson, Adams? Who the f . . .k are they to talk to me about what I want.”
It’s ARTICLE V, not Amendment V. Furthermore, if you want to drag the Declaration into it, you may consider it a Declaration of Covenants and Restrictions against TYRANNY running with the land and all other land on EQUAL FOOTING with the 13 original colonies.
Significance?
Per your “Whatever the whim of the moment is, shit 3/4′s of the states and it’s the law of the land” comment;
The existence of the constitution is predicated upon the contradiction of tyranny.
To wit: “AS usurpation is the exercise of power, which another hath a right to; so tyranny is the exercise of power beyond right, which no body can have a right to.”
Accordingly, if your whim be tyrannical, it’s void ab initio.
Your courtesies in connection with this matter are greatly appreciated.
@Byron:
WHY? Don’t tell me what we have, tell me WHY WE HAVE IT. If you think it is a good thing and the proper role of government, WHY do you think that? What is GOOD about it?
@Byron:
Money is NOT freedom, and the luxury of time is not freedom either. If you think that, I suggest you talk to the few millionaires we have in this country serving time in prison.
Freedom is the ability to choose. A lack of money or a lack of time can certainly curtail your choices, but HAVING money or HAVING time does not ensure you will HAVE choices. Your view of money is too simplistic.
Tony C:
I think I understood the sarcasm, why would I have ended with a prostitute stealing a wallet is bad for business?
Those things don’t happen because theoretically we have a constitutional republic to prevent the initiation of force against another individual. Which is the proper role of government.
So what is your point? A businessman competing on a level playing field is not initiating force against his neighbor.
I don’t know too many businesses that have seized mines but there are quite a few governments that have.
@Byron:
Okay, since you didn’t get the sarcasm, let me try a Socratic approach.
WHY do we have those laws against force? What justification do you provide for WHY that is “wrong,” to use force to get one’s way? Attila the Hun, trained by the ancient Romans, would not have comprehended this claim — rule by overwhelming force of arms was used almost everywhere in his world, and he learned to be the best at it.
So the question is, why should we be any different? What is wrong with killing your competitors for your lady’s hand, or seizing a gold mine by force and protecting it by force of arms, or ambushing a ship on the open sea and stealing its cargo?
@Byron:
Surely you understand that in the questions of slavery or robbery or assault, somebody “making a profit” impacts on the rights of others. Just the human rights; it does not have to be encoded in the Constitution.
Additionally, if you construct a solar panel tower on your property that blocks the sun from the solar panel on MY roof, you understand that you have cost me money, in added power costs, for your own profit.
The question isn’t about CONSTITUTIONAL rights. Your Constitutional rights, if you read them while understanding this, are intended to restrain the power of the Government in acting against you. They cannot pass a law restricting your freedom of speech, for example. That is a restriction on the powers of GOVERNMENT. They cannot imprison you without a trial or a chance to defend yourself. They cannot completely disarm you. They cannot prevent you from attending meetings. They cannot prevent you from voting.
Your Constitutional rights are intended to keep the GOVERNMENT from oppressing you; not to keep other CITIZENS or COMPANIES from oppressing you. That is left to normal laws, local and federal, and sometimes to constitutional amendments.
It is seldom the case that another citizen earning a profit violates somebody’s CONSTITUTIONAL rights, it is often the case that another citizen earns profits using measures the vast majority of people would declare an unjust profit, even if technically legal.
Being legal is not enough to make it fair or just.
Tony C:
money is freedom. It allows you the luxary of time.
And good on you for doing that, it is very hard to do what you did.
AY:
Keynes is the problem not the solution. You cannot spend your way to prosperity.
That is the same as saying if I break the glass of all the businesses in town I will stimulate economic growth.
It certainly will for the glazier but the butcher and the baker will come up short.
Money spent by government for roads and bridges is money taken out of the private sector that may have gone for other uses. Where does the money come from? Well I guess this administration and many others think from the printing presses of the Treasury Department.
Tony C:
don’t we have a set of laws to prevent that? An individual has no right to initiate force against another. The proper function of government is to protect the individual from force by others.
It doesn’t really matter we don’t have free markets and probably never will. But personally if a person wants to be a prostitute then go ahead, just don’t steal the clients wallet-it is bad for business. 🙂
@Buddha:
I don’t agree with Ogden. Personally. I was raised poor lower middle class, but I have made six figures for most of my career, and more than I needed. I would say that while I don’t think money buys happiness, it does buy something else: Lack of strife. Fewer fights and disagreements, more even temperaments due to lack of hardship or excessively exhausting work, less UNhappiness due to goods or services or adventures being beyond one’s means.
Psychological stress is a cumulative thing. I couldn’t afford to attend college (in fact I had to work 30 hours a week as a dishwasher to finish high school), but I attended college anyway. When your A/C is broken and you are taking a 90 minute bus ride each way to school and eating plain spaghetti four nights a week, there are many, many straws that can break the camel’s back and make you want to fight.
To me, money is a lubricant that makes life easier, and it can provide entertainment. The things Ogden mentions also make me happy, but in my personal experience I have been much happier after having money than I was before I had it, and I attribute a lot of that happiness to the elimination of money concerns poverty-induced strife. I think it is a big mistake in life to discount the role of money in happiness.
Bryon,
Why We Are Moving Toward a Recessionary Era, and Why Keynes is Being Exhumed
Friday, June 11, 2010
Double-dip watch: Retail sales in May took their biggest nose-dive in eight months, according to today’s report from the Commerce Department. Remember: Consumers account for 70 percent of the nation’s economic activity.
American Corporations are sitting on huge piles of cash but they’re not investing, and they’re creating only a measly number of new jobs. And they won’t invest and create jobs until they know there are customers out there to buy what they sell
http://robertreich.org/post/688197058/why-we-are-moving-toward-a-recessionary-era-and-why
Buddha:
enjoy the laugh then.
but that is what I dont understand, how does making a profit impact someone elses constitutional right?
And your response to Bob? Less than childish and more than partisan. For someone who claims not to be a Libertarian, you sure act like one. Legally? You’re full of crap, Byron. Stick to engineering, because you really don’t understand the Constitution or any economic model that doesn’t justify unlimited greed. That’s a demonstrated fact. But you go ahead and tell one of the smartest lawyers on this site how wrong he is about the Constitution. It’ll be funny watching him eat you alive.
Your right to make a profit and own property ends where others Constitutional rights begins.
@Byron:
Oh, you know, ROME. CHINA.. The Middle East, Greece, Europe and Russia from 2000 BC to at least 1500 AD, in other words, for the majority of recorded history.
Slavery in the South was free market slavery. Of COURSE the slaves were “regulated,” that is the POINT of slavery. Do you not understand that?
The point is that if anything goes, the winners that come out on top are the men (usually) with the least conscience, the most ready to resort to violence, and — to make matters worse — often the smartest of the crowd with the primary qualifications (guilt-free brutality), because intelligence combined with guilt-free brutality is what lets them anticipate and survive attacks by their peers.
The more the law allows oppression of laborers or deception of customers or suppliers or investors, the more it occurs. This has been true in nearly every culture and country for thousands of years.
Regulation is a necessary component to doing business. Which means there is NO SUCH THING as a free market, because the law is always going to be the thing that prohibits slavery, or virtual slavery.
If a man can deliver lawn-mowing services for $2 a pop by owning slaves, which he feed noodles for $0.50 a day — he wins. That is a business he cannot engage in because of your big brother anti-slavery legislation. If a man finds a chance to take over a small town hardware store by murdering the existing proprietor, that is ANOTHER business opportunity your big-brother anti-murdering legislation has prohibited. If a woman discovers she can distract men with a smile as she steals their wallet, there is ANOTHER good and profitable business your anti-theft big brother legislation has discouraged. She might employ maids, clothiers, jewelers, cosmeticians and all sorts of people! Your big-brother attitude is KILLING JOBS, Byron!
Why do you INSIST on attacking entrepreneurs? All these things would be LEGAL if it weren’t for your insistence on preventing slavery, murder and theft! What is WRONG with you? Don’t you understand your regulatory environment is KILLING business?
If you don’t think unregulated free markets lead to slavery, you need to re-read what Tony just clubbed you over the head with, B.
Bottom line? You’ll never admit greed is blinding you to the foibles of what you propose in your dreamland fantasy picture of economics. It’s called self-deception for a reason. There is a difference between rational and rationale just like there is a difference between want and need, Pollyanna. Your rationale for wanting blinds you to the rational needs of society.
Swarthmore Mom:
It was rhetorical flourish to try and make a point.
I hope Palin and her kooks dont win anything more than the firehouse bingo game.
Bob Esq:
I have a really good idea re the V Amendment, if we do have enough people in the congress and the states we can set it up so that democrats are the only ones who pay. I like Tony C’s idea of all income over $50k goes to the government. Talk about the “majority” ruling, but isn’t that what the Constitution is all about? Just get enough people and change it up any ole way you want.
Cept’n your Ox may be the one being gored. Come on November, man I have really learned a lot on this web site. Constitutional lawyers are a great bunch of guys.
The flood gates are open now and the conservatives are at the door and now you don’t have an ethical or moral or legal leg to stand on. Just use the V amendment and vote in Hitler or slavery or whatever the hell you want don’t worry about principles or intent or words or meaning. Whatever the whim of the moment is, shit 3/4’s of the states and it’s the law of the land. Madison, Jefferson, Adams? Who the f . . .k are they to talk to me about what I want.