Re: NASA moon trip video

On Wed, 1 Feb 2006 18:33:01 +0000 (UTC), "Vorlonagent"
<jt@xxxxxxxxxxxx> wrote:


"Josh Hill" <usereplyto@xxxxxxxxx> wrote in message
news:u4d1u1tk4dq5mfvfde89gi22uecbhjo559@xxxxxxxxxx

Nipping Bush's tax cut will raise revenue in the short trem (over next 18
mos or so), but it also slams the brakes on an economy already beginning
to
falter under high oil prices.

The real answer is to get serious about cutting spending.

It seems to me that there were, from a macroeconomic perspective,
several serious problems with Bush's tax cuts, chief among them the
fact that they were targeted largely at the wealthy, who unlike the
poor and middle class tend to invest rather than spend. Since
investment isn't what we need in an economic downturn when cheap
capital is plentiful, for a given reduction in revenue, Bush's tax
cuts provided significantly less of an economic stimulus than they
would have had they been targeted towards consumption.

The counter point is, "if the rich aren't making money, nobody's making
money."

Otherwise, I refer you to the US GDP growth figures.

But that isn't the dichotomy! Check out this site --

http://www.faireconomy.org/press/archive/1999/Divided_Decade/divided_decade.html

During the progressive era, income increased dramatically across the
board, for people at all income eras. By way of contrast, during the
conservative era, income has increased for the wealthiest Americans
and stayed static or decreased for the poor and middle class -- with
slower overall growth.

Henry Ford said when he doubled the wages of his workers that he
wanted them to be able to afford the cars that they made. Increasing
the income of the poor and middle class tends to improve overall
economic performance by increasing demand, and to do so much more
effectively than the "trickle down" effect of Reaganomics.

I'm not sure why you distinguish between reigning in spending and
increasing taxes, since it seems to me that from a macroeconomic
perspective, they have a similar effect, the main difference being
that spending provides a more effective fiscal stimulus than tax
decreases that aren't specifically directed towards the poor.

It's de-centralized vs. centralized spending. The government has a
different spending pattern. You want to transfer money uselessly to
corporations and organizations, let the government spend it. If you want
the whole economy to do better, let people spend it. Cutting taxes puts
money in the hands of people who would spend it simulating the economy
buying durable goods, what-have-you.

It seems to me that one has first of all to distinguish between
government spending that is actually spent by individuals and money
spent directly by the government. Social Security is a good example of
the former -- just about every penny we send to Social Security is
disbursed to Social Security recipients, or put in a trust fund where
it earns interest and will be disbursed when we retire; the overhead
of the program is virtually nil.

Much of government spending -- the entitlement programs -- is of this
sort. Not only is it more efficient than other government spending, it
is unique in that it's frequently more efficient than comparable
efforts managed by private enterprise, which is one of the reason's
Bush's Social Security privatization scheme failed.

Then there's a second class of government expenditure, what one might
call necessary but inefficient. Such expenditures are necessary -- we
can't do without highways or the military -- but they're wasteful,
because the funds are disbursed in a corrupt or political manner.

Finally, there's a third class, what one might call the pork category
-- the infamous $100 million bridge to an uninhabited island in
Alaska, midnight basketball programs we could do without, and various
endeavors that might be accomplished more efficiently by individuals,
non-profit organizations, or private enterprise. Such spending is IMO
wasteful, but I see no evidence that the government is going to reduce
it, since We The People don't seem to want to eliminate our cut of it
(as Reagan found out when he tried to eliminate the
reviled-by-economists home mortgage exemption), or to take the time to
determine which of our representatives are dispersing pork to special
interests.

If it were up to me, we'd retain and expand categories A and B, while
eliminating category C. We'd all be richer if we did. But that's not
what conservative politicians (as opposed perhaps to the conservative
rank and file) have been pushing for. They want to dismantle
effective, efficient programs like Social Security that benefit the
poor and middle class while creating programs or making tax cuts that
favor big business and the wealthy. They want to spend less on social
programs and more on the military -- a valid tradeoff, perhaps, but
one that increases rather than diminishes pork -- and to provide
"corporate welfare" and tax cuts to those who are least likely to
spend it.

Which is a long way of saying that it seems to me that your dichotomy,
while valid in principle, isn't applicable in practice, because the
cleavage doesn't really occur along that face. Rather, in practice,
Dems tend to push up demand and shift income from rich to poor, both
of which are good for the economy except when we're in an inflationary
period, which, historically, has been the exception rather than the
rule.

Moreover the money is the people's to begin with. Government must leny a
share of it to provide for the common good. I think there is an attitude of
entitlement, as if its Government's decision to make how much money it
*allows* its people to spend.

I don't think this last is applicable in a democracy. It's our money
whether we have the government spend it or spend it ourselves, and
there are times when it makes sense for the government to spend it on
our behalf, since some activities -- building highways or outfitting
the military, say -- are by their nature group endeavors.

The
balance between government and private spending should, I think, be
based upon an analysis of our needs and the most efficient way of
meeting them, rather than an ideological obsession with small (or
large) government. Except in unusual circumstances such as a world
war, when our needs increase as they have because of the Iraqi war,
the flood in New Orleans, and the Medicare drug benefit, taxes should
be increased to cover them, with the decision to run a deficit or
surplus based on purely economic considerations.

A logical exreme of this point of view is the government sticking its nose
into every buying decision I make (with lobbyists lining up behind to try to
prejudice the government's decisions for someone's profit).

An alternative method from raising taxes to cover spending is to reduce
spending in some areas to free up money for new needs. Ideally, Congress
uses both, raising taxes if there isn't resources to transfer. The problem
with just about any tax is that the government can never get around to
ending the tax once it has been put into effect.

Well, I'm not sure that that's true -- IIRC the Federal tax bite has
gotten smaller as a percentage of income -- but even if it is, there's
probably a good reason for it, in that we're getting richer and can
afford to spend a higher percentage of our income on government
endeavors while still being ahead at the end of the day. Real per
capita income, forex, has increased IIRC five times since the 30's. We
spend more on taxes, but we still take home more, and in return for
our expenditures, we receive benefits the people of that era didn't
get or expect -- everything from medical care when we grow old (do we
really want to do without that quadruple bypass?) to superhighways to
a vast military establishment.

Also, I think it's dangerous to speak without qualification about
reigning in government spending. That isn't going to happen because we
don't want to eliminate the valid things that government spending
provides -- things like education, R&D, a strong military, Social
Security, and Medicare. The problem as I see it is that legislators
are reluctant to cut the spending that /should/ be cut -- pork like
farm subsidies, bridges to uninhabited islands in Alaskaand,
anti-terrorism money for cornfields, the huge and largely unnecessary
cold war nuclear arsenal, and the like. Since the President and
Congress haven't been willing to cut out pork, the conservative
"starve the beast" reductions in government financing have had the
unfortunate effect of depriving government of the funds it needs for
productive and necessary investments such as energy independence,
reconstruction in Louisiana and Iraq, and comprehensive health care
reform, as well as shifting a burden to states and local communities,
which has the effect of magnifying economic inequality, since poorer
localities and large states (which are underrepresented in Congress)
end up with higher taxes and inferior services, driving business
elsewhere.

The tax cut was not intended to "starve the beast". It was intended as
economic stimulus, right in line with your thinking of how tax decisions
ought to be made.

Are you sure about that? Reagan spoke of trickle-down economics, but
IIRC conservative journals were at the time discussing using tax cuts
as a weapon to force the dismantling of social programs. It seems to
me possible that Reagan fell for his own group's guff, as I think Bush
does sometimes as well. That's the disadvantage of having a president
who is (in Bush's words) a "retail politician."

My complaint from the start of this thread was about the disconnect between
receipts and spending and the fact that Congressional Republicans have shown
no appetite for restraint.

My definition of fiscal restraint is something Republicans and
Democrats use to condemn the other party when they're out of power . .
...

--
Josh

"Reade him, therefore; and againe, and againe: And if then you doe not like him,
surely you are in some manifest danger, not to understand him." - Heminge and Condell

.

Relevant Pages

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    ... The real answer is to get serious about cutting spending. ... several serious problems with Bush's tax cuts, ... let the government spend it. ... the whole economy to do better, ...
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