Re: NASA moon trip video


"Josh Hill" <usereplyto@xxxxxxxxx> wrote in message
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"Josh Hill" <usereplyto@xxxxxxxxx> wrote in message
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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

There's a lot of class-warfare noise. Would you care to point out the
signal?


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.

Well, we don't want it bad enough to throw the rascals out. Finding a set
of non-rascals to install has proven difficult when both parties are
spendthrifts.

On the spending front, the Republicans were supposed to be the non-rascals,
but that hasn't held up under the temptations that come with control of the
pursestrings.


If it were up to me, we'd retain and expand categories A and B, while
eliminating category C.

First we need a common or at least workably common definition of each
category.

If I work with you to streamline the military and cut back on corporate
welfare, will you work with me and do the same with social programs?


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.

We've gone round concerning social security before. Suffice it to say I
don't always agree with your definitions.


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.

Push up demand how?

And "shifting income" defines out as taking money the rich earn and giving
it to the poor who don't (earn it). This discourages innovation by both
groups. When your needs are taken care of and you aren't doing something to
earn it, it's easy to get comfortable. At the same time, why burn the
midnight oil when the government's going to take an disproportioonate chunk
out of your success?


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.

My tax money doesn't belong to me, it belongs to everyone. Therefore it
also belongs to noone, including me.


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.

Just because the government *can* tax us more doesn't mean it is entitled
to.


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."

I'm sure.


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 . .

Both are correct. It's been interesting to see "tax and spend" democrats
playing at being budget hawks.


--
John Trauger,
Vorlonagent


"Methane martini.
Shaken, not stirred."


"Spirituality without science has no mind.

Science without spirituality has no heart."

-Methuselah Jones



.

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