This breakdown is an indisputable fact, not a theory. The path from the simple to the complex always involves two things: Energy and thought. Neither one alone will suffice to reverse the natural tendency of the complex toward the simple.
Really? No localized increases in complexity can happen without thought? How did you come to that conclusion?
Just because some minor changes are made in some organism, doesn't prove that birds can evolve from reptiles or that apes are human ancestors.
Just because we measure minor movements in mountains now doesn't mean that mountains can be thrust up naturally without help from aliens.
Experiments with fruit flies have shown that no matter what mutations are made to happen, the offspring, if any, are still only and forever fruit flies. This true for EVERY life form. If they are still able to reproduce, they only reproduce their own kind.
How do you define kind? Not by example, please. A real definition. Preferably one that doesn't make the statement "they only reproduce their own kind" tautological.
Ideally, this definition should apply to all kingdoms, not just animals.
I'm amazed that you can't read my whole post correctly. I'm not debating that fish exist that can breath in water and air, but that there is no proof that lungs and other organs can change so drastically without causing death, as the organ needs other changes too for it to be successful.
Change from what into what? The reason people are pointing to lungfish is to disabuse you of the notion that gills need to turn into lungs, leaving the organism with a half gill / half lung / death type of solution. The most obvious intermediate is an organism with both. Most likely, such a thing would initially look more like a labyrinth fish with a simple gas exchange membrane in addition to gills instead of the full blown lungs + gills solution.
The various types of dogs that we have today are the result of thousands of years of un-natural selection caused by humans limiting and controlling the breeding habits of dogs. If you remove this intelegent designing dogs would do what was natural for them and we would be dealing with a bunch of wolfs today.
The point is that given the genetic information available in a species, when combined with recombination, mutation, and selection (artificial or natural), huge changes can be affected. The fact that the wolf is well suited to its selection landscape is beside the point. The fact is that the potential for such changes is there, and all that is required is a selection landscape that selects for them.
See, the funny thing is that for every response that told me how the FairTax was worst for the poor, the tune changed to middle class.
I don't recall saying anything about the FairTax being worst for the poor. Perhaps you have me confused with one of the other dozens of people you've discussed this with? I can see how if you do that, my position might be considered inconsistent.
Yes, it would seem that way, especially if prices don't drop... but they would. Not nearly as much as FairTax supporters would suggest, though.
Yes, prices would certainly drop. I'm not sure how that factors in to the distribution of tax burden, though.
On the other hand, the middle class are also alleviated from having to pay medicare and social security (so many people forget that these federal taxes on income are also eliminated by the FairTax).
Are you suggesting that Medicare and Social Security would be unfunded? Somebody is going to have to pay for them, and given that the FairTax shifts the burden toward the middle class, I have a feeling I know who will. Unless your point is that those taxes already hit the middle class disproportionately. That's certainly true. So we have a tax system that shifts the burden of those two things from the middle class to the middle class and then takes the rest of the things that were distributed elsewhere and shifts that to the middle class as well. I don't see that as a particularly good solution.
A consumption tax also encourages saving, which benefits the economy on a longer term because savings get invested. Our economy is artificially propped up right now, it's falling because of all the deficit spending PEOPLE do (not just the government).
That's certainly true.
I also never claimed the FairTax was perfect... it's just a lot better than the current system.
My point is that there are probably simple taxation systems that maintain a more progressive distribution--like a progressive income tax without the complex system of deductions, credits, and tens of thousands of pages of exceptions. It would allow for a healthy progressive system, not burden the poor, and remain simple. We could even go forward with FairTax ideas like doing away with corporate income tax in the process.
That argument is wrong. Your credit has exchange value up to the limit that others are willing to trade other real goods and services for that credit. By definition of voluntary trade, all that is received from trade is "afforded".
And here's the fundamental problem: There is a perfectly valid definition for the word "afford" that you're simply ignoring because you're fixated on the operational one. When people say, "You're buying more than you can afford" they do not mean that you're buying things that you're incapable of buying. They're suggesting that there will be negative long run consequences to your behavior and that the utility gained from the transaction is likely to be less than the disutility of those actions. Feel free to define yourself into correctness, but you're not using the definition originally intended in the conversation.
Your point is essentially that people value things at what people value them, which is true, but not particularly illuminating. You might decide to light yourself on fire to purge the demons, and that decision would be motivated by something that made you believe you'd get utility out of doing it. There are those of us, however, who would point out that you may not be accurately evaluating the risks involved. Perhaps neither one of us is objectively correct, but I think that there may be some merit to the warning. That's what I'm suggesting about the policy of assuming that a nation should import more than it exports by growing debt at a greater rate than GDP growth. I know that they can do it now, but is it a good long run policy?
Your examples are examples of fraud, not typical trade transactions.
The distinction between "knowingly borrowing more than you could ever possibly pay back" and "fraud" is lost on me.
Nothing whatsoever has intrinsic objective constant economic value.
That's not what I claimed. I'm pointing out that there are things that have little or no intrinsic value. Debt is one of them. Debt derives its value from the goods and services one can trade it for.
It's sustainable precisely to the point that others will voluntarily trade other goods and services for those credit promises. No, you cannot do so forever, unless others are willing to exchange for that without limit forever. Your credit is limited by continuing trade of goods and services for that credit. Once further credit is not forthcoming, your credit is "maxed". There's long-run consequences for everything, regardless of trade.
I think that you've just hit on what people often refer to as "using credit to borrow more than one can afford."
Where to begin? I should have known that taking up a discussion with somebody who is clearly arguing semantics and philosophy over objective reality and mainstream definitions on slashdot was a bad idea, but I've made my bed now.
You are confusing changing subjective value through time with the subjective value of goods at the moment of trade transaction.
In the most general sense, yes, every transaction is completely legitimate and adds "value" for both sides based on what they percieved at the time or the transaction wouldn't have happened. As one of my economics professors used to say, "Every behavior including lighting yourself on fire to kill the demons in your head is rational. The interesting question is how you measured the costs and the benefits." What I'm arguing is that when we normalize for objectively measurable costs and benefits, there is definitely such a thing as more credit than one can afford.
What you're glossing over is a matter of imperfect and or asymmetric information. If I sell you a box full of gold for $100 and after the transaction, you find that there's no gold in it, the transaction wasn't mutually beneficial in any objective sense. It was me giving you the shaft. Let's say I offer to mow your lawn in exchange for your beer and then I drink your beer and walk away. Or I promise to give you my car in exchange for your services while promising the same thing to 10 other people. I suggest that in all of these cases, there's a matter of subjective valuation based on imperfect information (i.e. being unaware that I fully intend to screw you) and a more objective valuation based on the reality that what I'm giving you is completely worthless. In the most techincal sense, you're correct. Based on subjective valuation, you got what you agreed to get: a promise. In a more realistic sense, this isn't a long-term sustainable behavior. Try borrowing more than you can pay back and see what happens.
Just like above, in the case of a trade deficit, the imprudence comes from long-term effects, not from the immdediate lack of being able to get somebody to accept your credit. In the long run, you're either going to have to pay your creditors back or default on the credit. Sure, you can default on the credit and using your philosophical definitions of "afford" you were able to afford everything you bought with it. It comes at a cost, though. You don't get more credit and the market value of your currency adjusts to reflect the new realities of trade. For people who see this and the consequences that follow as a normatively bad thing, then yes, you've borrowed more than was prudent at that point. The point is that trade is a repeated game and how you play one round has serious effects on how future rounds work out.
Credit *is* something of actual value. If credit was not something of actual value, nobody would ever voluntarily trade something away in exchange for credit promises in return. This is why credit is no different than a bar of gold, a food good, a house good, or a fiat currency unit good, on pure strictly economically evaluated terms of possessing positive subjective value.
Credit has market value, not intrinsic value. The two are decidedly different. This is the same reason why you giving me a dollar in exchange for no goods or services does not contribute anything to the economy.
The entire existence of society and civilization is predicated on the division of labor in which absolutely every single person "imports" and "exports".
Simple question: Is it sustainable for me to "import" goods while "exporting" credit forever without being able to make good on the promises of that credit? To make my point clear, I'm sitting on my couch and doing no work and earning no money while buying things on credit. Is it likely that I will be able to continue to do so forever? The answer to that question has similar ramifications on a national level. Every individual transaction may work, but there will be long run consequences.
I can appreciate your opinion about income redistribution and that taxes never pay for anything good. You're wrong but that's okay.:)
I think that perhaps I didn't make myself clear. Taxes themselves contribute to a lot of good things. The actual industry of tax preparation, aside from enabling taxes, doesn't do anything at all to contribute to society. If we could do away with them and still collect the taxes we need, we should do it because it's otherwise a dead weight loss to the economy. As I see it, our tax preparation system is about as good for the economy as having all of us pay our taxes by sending cash in hand-carved wooden cases that are destroyed by the IRS. Sure, it puts some people to work, but why would we do it if we could avoid it?
I think you should have put the word YEARS, in BOLD. Other than the fact that it would cost BILLIONS of dollars, most likely, the transition would take YEARS.
I agree with you on the first part. You can't put that many people out of work and expect them to find jobs immediately. As for the cost part, I do have some idea of where the money could come from. I suggest a few years of higher taxes to the tune of roughly the amount we paid the tax preparers. There isn't much of a reason for it to cost more than it did when we were paying their salaries + paying for their office space + paying for the profits of the companies that employed them. Any money we save could go toward buying out and dissolving the income tax preparation portions of tax preparation companies so as not to screw their shareholders. Anyway, even if the transition took forever, we'd still be better off because even though we'd still be in the same financial predicament, we'd still have simpler taxes. Worst case, we could pay welfare to tax preparers for the rest of their lives and still be better off.
Which requires PLANNING. None of these things are ever discussed by proponents of the FairTax. They just like the sex and selfishness of NO INCOME TAXES. And really, who wouldn't? But they just can't keep their hands off their dicks long enough, to really make it a reality.
Agreed once again. The FairTax proponents seem to strongly underestimate the potential shock effects of implementing such a system. It redistributes the tax burden rather harshly onto an unfortunate subset of the middle class, has the potential to create an interesting "black market" in secondhand cash sales to compete with retailers who collect the tax, and probably has a lot of other side effects that I haven't thought about. While I appreciate the idea of a vastly simplified tax system without all of the compliance costs we're currently saddled with, I don't think they go about it the right way, and I think that a lot of the people behind it are largely as you described: short sighted ideologues who don't care about the real consequences of a jarring financial transition.
Brilliant! I'm sure you understand the impact of completely destroying the need for a particular industry in one fell swoop is exactly like the millions of past workers whose prior jobs were rendered obsolete.
I'm not a fan of the Fair Tax, but the grandparent is right. Right now, we're paying for a deadweight loss on the economy. A simple transfer of wealth with no real benefit (which is what tax preparation is--it's a necessary evil rather than something that produces real goods) isn't really stimulating the economy. We could, quite literally, take the money we were spending on tax preparation and give it to former tax preparers as a form of welfare and gradually taper that amount off until we're no longer wasting money on them. The accounting industry will still be alive and well.
Simple thought experiment: We have a world in which a huge portion of the economy goes to fixing broken windows. Your windows just shatter randomly over the course of an average week and you have to pay somebody to fix it. There's no wealth being created there. You're just spending thousands of dollars per year to keep your house the way it was. If we found a way to keep the windows from breaking, we could use that money for more useful purposes and grow the economy. Yes, everybody who replaced windows for a living would be out of a job, but for the first few years, we could use the money we saved to transition them to other things. It's the way the world works. You're better off spending your money on something that improves your quality of life than on something that simply maintains it at equilibrium.
Which shows you don't really know the FairTax, or you'd know that the rebates go to EVERYONE regardless of income, they're not just subsidies to the poor, and there are no exemptions... which gets back to what I said earlier about having a simpler, untweakable tax system that the politicians can't abuse and can't demagogue their way into buying votes by promising anything to some smaller group.
Let's try a model in which there are three types of goods: necessities, normal goods, and savings. We define the poor as the people who spend most or all of their income on necessities. The rebates take care of the poor completely, resulting in a very low tax rate. The rich are those who put the majority of their incomes into savings. For them, both the rebates and the tax itself are small potatoes, also resulting in a very low tax rate. The middle class are defined as those who spend the largest portion of their incomes on normal goods. The effective tax rate *will* be the highest on them no matter how you slice it. You can tweak what the rebates cover and how they cover it, but the end result is high and low incomes with a low tax rate and the middle incomes with a high one.
That said, I don't think that the Fair Tax people are entirely off their rockers with the desire to simplify the system. As I see it, the easier to deal with version would be a simple progressive income tax. You could probably get away with skipping corporate income taxes and just about everything else. Most of the exceptions, incentives, deductions, and ways of defining different types of income could likewise be eliminated. Similar general simplifying effect while maintaining a progressive structure that reflects the diminishing marginal utility of income.
No, credit is just another good with potential positive subjective value, exactly the same as absolutely all goods and services whatsoever.
Credit has value that's assessed at transaction time (e.g. you accept my promise to pay you $100 as being worth $100), and then there's the actual value of it when it's paid back (e.g. it turns out that I paid for $100,000,000 worth of stuff with credit and I only make $15K per year: at least some of my lenders are definitely not going to see the benefit they had hoped to reap from our transaction). Consistently purchasing goods with ever increasing amounts of credit is frequently not sustainable for this very reason--credit eventually has to be backed with something of actual value or it becomes worthless, so if the goods you're purchasing aren't providing a yield greater than the interest rate you paid, you're going to run out of real value to back your credit eventually.
Perhaps the "importing more than we can afford" claim would be better phrased as "importing at an unsustainable rate" as it's clear that a massively negative trade balance funded by credit cannot go on forever unless the economy is growing faster than the debt is. Another way of phrasing it is "importing more than is prudent." Credit can be used as a way of smoothing consumption over time or as a form of leverage to generate bigger returns on a good investment. I think it's reasonable to say that if you're using credit for other reasons, you're probably not using it wisely, whether you're a national government or an individual.
This is a great explanation but it fails account for collateral. What happens to the real property that the bank owns when the default occurs? Not paying the money back has real negative consequences for the borrower's property and wages.
Accounting for collateral, the bank is likely to get back some portion of the bad debt, but things get nasty when the market value of the collateral for many loans is correlated as in the case of the mortgage crisis. Banks can foreclose and sell houses, but in the process, they're increasing the market supply and driving down the price. In a case like that, a lot of defaults at once results in the collateral turning out to be worth a lot less than the bank originally thought it was.
The situation gets even more interesting as in certain states, if you owe more than your house is worth, the bank can't go after you for the difference. That makes defaulting on your loan a very rational decision in many cases, even if you can afford to pay it. That's a recipe for some really ugly results.
Anyway, to account for collateral just add some houses to the assets part of the equation, but value them at less than the overall value of the loans. You still end up with low (or negative) owner's equity and an undercapitalized lender.
And for the rest of us, the act of multiplication is simply the repeated act of addition... Credit is as much money as dollar bills are. Banks "create" and destroy money on massive scales.
The point is that the multiplication effect is bounded and well understood. You won't find Ben Bernanke saying, "Hey! Wait a minute! I only wanted to add a dollar to the economy and the banks went and made it ten!" It's part of the known mechanism for controlling the amount of credit available in the economy. My complaint is with people who phrase the explanation in such a way as to imply that the whole system is run by a cabal of lenders who reap huge profits by printing worthless money without limit. The reality is that the supply is controlled by a central authority with no profit incentive to create too much money, and that central authority knows beforehand what the multiplication effect is likely to be.
I'm going to be classy and reply to myself here... I was fixated enough on the grandparent's common misunderstanding of how money multiplication works that I forgot to address a more fundamental point: My example above doesn't really illustrated what happened with the mortgage crisis accurately. It's an illustration of what happens to banks when people don't pay back the "fake" money that they loaned out.
In the case above, the bank got shut down and the FDIC member banks lost out because they had to cover the demand deposits for a failed bank. In the case of the mortgage crisis, the loans weren't paying back into savings accounts. The debt was owned by investors all over the place (check your 401k). Anybody who bought a mortgage backed security lost some value on this one, and there's no FDIC to step in to pay you back. The issue here is the same, though: Somebody paid some money to buy some debt and then the debt became worthless. In the first example, the bank and the bank's insurer got screwed. In the second case, some insurers got screwed along with anybody holding the debt. No matter how you slice it, this mortgage crisis thing is going to hurt a lot of people. It does, however, have the nice side effect of me being able to afford a house and say "I told you so" to people who advised me to buy one when the market was clearly dangerously screwed up. I just feel like a bad guy for enjoying it so much.
Then why does the government bother to tax us at all when it can just print money as it is required? If they are going to deflate the value of our money, why not make us happy by letting us keep all of our soon to be worthless money?
Because the system isn't as simple as "Congress runs a deficit and the Fed prints money, buys the securities, and inflates the debt away." Treasury securities are auctioned on the open market. Sometimes the Fed buys them with its magic infinite money account in order to tweak economic parameters. Most of the time private banks and investors buy them with their not-so-magic finite money accounts. Congress can't order the Fed to monetize the debt.
You'll see stock prices are random. Study after study proves it. It's not a mystery but there isn't a formula either.
On the whole, there are a lot of meaningful patterns that we would do well to note. Shiller's graph of P/E ratios vs long term yield in Irrational Exuberance is pretty illustrative that there are fundamental rules governing trends and that the efficient market hypothesis is wishful thinking. Short term prices may be a random walk, but that's about as far as I'd go.
You'll see that cutting tax rates leads to increased Gov't revenues by growing the economy. (Don't give me the crap about Reagan, he spent it and then some but it busted the Soviet Union..not a bad use of the money).
Let's see the data. Seriously. I've seen a lot of people attempt to see the Laffer curve in the data (my favorite being this train wreck of reasoning, but as far as I can tell, they're not doing much better than the people who are attempting to see Jesus in their toast.
You can't blame long term problems on groups who haven't been in control of the process.
I don't remember seeing a lot of vetoes of profligate spending under Republican presidencies when Democrats ran congress, and for the brief period when they ran both, I can't say that they were an example of fiscal restraint. Face it: Politicians have strong incentives to borrow and spend.
You'll see a failure to increase a program budget by the proposed X% is called a "cut". If your boss didn't give you that 10% raise did your salary go down?
So, if i understand correctly, they haven't LOST a trillion dollars, so much as they won't be PAID a trillion dollars-- but the reciprocal part of the loan (the "money" they loan) was invented. Someone with an econ degree plz explain to me haha..
Not exactly. Let's take a look at this and pretend that there's only one big bank to keep things simple: you. You get $10. Some nice guy comes out and borrows $10 from you. He spends it at 10 different retailers, each of whom deposits a dollar with one of your branches. You've traded $10 in money for $10 in assets (the debt the first guy owes you), and now you have an "additional" $10 that has been put back in your bank. Absent any regulation, you can loan that $10 out again. The problem, of course, is that you won't have that money to give to your depositors if they come and ask for it, and additionally, it also has the minor side effect of allowing you to create an infinite amount of money. Not good.
In come the regulators. They say, "You can loan the money back out, but you have to keep 10% of it on hand." So you get your $10 in deposits and loan out $9 to another person. He spends the $9 and it trickles back to you. Of that $9, you can loan out another $8.10. Eventually, you asymptotically approach zero dollars loaned out (and you've loaned out $100 for your original 10). At the end of it all, you have a balance sheet that looks like this:
Assets: $100 (Loans: People owe you $100, so that's an asset.)
Liabilities: $90 (Savings accounts: *You* owe your depositors $100, which they could choose to withdraw at any time.)
Equity: $10 (You're holding $10 in a drawer somewhere.)
Here's where your thought experiment goes wrong: Let's say people decide not to pay $50 worth of loans back to you. Where are you now?
Assets: $50 (Loans: People owe you $100, but you'll only ever see $50 of it.)
Liabilities: $90 (Savings accounts: *You* owe your depositors $100, which they could choose to withdraw at any time.)
Equity: $-40 (You're in some serious shit if people decide to pull their money out. Your business is worthless now.)
In the real world, odds are good that your depositors aren't going to eat it because the government will bail them out, but you can bet that you're going to get shut down. You see, the banks didn't "create" the money so much as they borrowed it. Even if borrowers don't pay back their debt to the banks, you can bet that demand deposit account holders are going to want the banks to pay them back. This is why the banking industry is regulated. It's a huge leverage machine. There's nothing wrong with that in general, but it's inherently risky. That's why there's all manner of risk pooling and rules about what banks can and can't do with the money they control.
The real world, obviously, is more complicated, but this is a rough illustration of the money multiplier effect. In the US, normal banks don't "create" money as much as they multiply it. For every $1 that the Fed creates, banks multiply the effect in the real economy. It's not any sort of a trick. It's just how the system works.
I'm not so sure about that. Not all laws that have retroactive effects on perpetrators have been ruled unconstitutional. I believe that the point of that clause in the Constitution is to prevent the government from making something you did illegal retroactively and throwing you in prison--a nasty trick that works really well when you want to silence a law-abiding citizen who is a thorn in your side for whatever reason.
I don't see this as a violation any more than a law reducing sentences for people currently in prison, which I believe has been done without any trouble from the courts. This seems to be very much in the same vein, even though I regard it as an idiotic, irresponsible way of covering the asses of people who betrayed our trust.
I'm guessing they're smart enough to hash the ident data - it can be verified but not reversed.
The problem with that type of work in biometrics is that the things you're comparing are not exact matches of one another. In the crypto world, a properly secure algorithm will give you no hint about whether you're close to matching or not. If it did, it would be relatively easy to break. A crypotgraphically secure hash, for example, should have about a 0.5 probability of flipping each bit in the output hash if you change even a single bit in the input. That doesn't lend itself well to biometrics, in which you're typically measuring the degree of closeness of two feature vectors and then applying a cutoff.
That's not to say that it couldn't work, but the algorithm in question has to have certain properties. The few cases where I've seen it done, the actual transform is cryptographically weak because it necessarily leaks information. If it didn't, it would be useless as a biometric unless you were lucky enough to get an exact bit-for-bit identical capture when you go back to compare images.
That matters to some extent, but not as much as you'd think. The cameras that do this type of thing work in near infrared, and the textures of even dark irises become very detectable under those conditions.
Why should the writers get any of the profits? They get paid for a job...done.
That would be fine if that's how their compensation was structured. That's how most of us work, but it's not how the agreement is set up between writers and studios. I'd be a pretty greedy bastard if I decided after the fact that my paycheck wasn't enough and that I wanted a cut of every gizmo that my company sold, but that's because how our arrangement is supposed to work. If the agreement was "We'll pay you a little bit up front and then give you a percentage of every gizmo we sell" and then found a loophole where they could make money bartering gizmos and tried to cut me out of my pay because it wasn't technically "selling" them, you can bet that I'd be fighting pretty damned hard for a contract that clarified the issue.
Exactly. Obviously the mere point that's holding the democrats together is anti-science. Economics say that both hillary and obama's plans for social services are dumb ideas. They won't work, and they might even bankrupt the state.
Of course, some random guy on Slashdot say so, so it must be true by fiat. Never mind the fact that there are plenty of economists who don't agree with you. For example, both Clinton and Obama have actual economists advising them, for example. Google Austan Goolsbee and Paul Krugman, or better yet, do a literature search.
Typically, when I hear a slashdotter making hard and firm economic pronouncements, it usually follows that he hasn't really spent a lot of time studying economics. I could be wrong this time around, but I seriously doubt it.
It is up to you to offer an equally plausible alternative for why prices are going up and why the dollar is at a historical weak point in international trading.
One possibility might be the fact that the dollar was well over-valued for a very long time. We've been living better than we could justify for years due to an unsustainably large trade deficit and poor savings (both public and private), all propped up by the fact that we happen to be the world's reserve currency. It was basically guaranteed that at some point, people would find better investments elsewhere and demand for the dollar would flag. There's certainly a cause and effect relationship between the money supply and exchange rates, but it's not nearly the one-variable equation you seem to be making it out to be.
Well, I have to differ there. At the point of determining the perpetrator in a murder case, the act has already been committed. The mechanism (whatever it were) existed and acted in the past. Both Darwinism and ID make historical inferences and they both either live or die by the same requirements you place on what is valid historical science.
My point is that in a murder case, we realize that it's murder because it looks like murders we've seen before. On top of that, we have so much information about murders that have been committed before (mechanisms, motivations, etc.), that a good investigator has a lot of knowledge about what to look for. We don't know what "designed" life or "undesigned" life looks like. That's pure speculation. Evolutionary theory makes historical inferences, but those inferences are testable in a meaningful way. The same does not yet hold true for anything in the world of ID because ID's inferences are nonspecific enough as to be useless.
For the proponents of ID, this is more of a philosophical or theoretical debate at this point than anything. I agree that it would be nice for them to do such things and I totally expect that those will come forth (even if I am the one to do so). But, this is all very much in the 'theoretical' realm at this point.
That's fine as long as they leave it there. When we see "The END of DARWINISM!" in print and people knocking at the doors of school board meetings trying to sell it as established science, you're going to get some push-back, though. A lot of it.
And, that isn't entirely fruitless either because theories can be supported or disproved in the abstract sense.
Well, to a certain extent, but I don't think that ID has stepped far enough out onto any limb to be disproved or supported in any concrete way.
I think though, if you study information science in more detail, you'd see that these sorts of things already exist (in for instance cryptography). How does the NSA know when it has intercepted a communication and not just random garbage?
Well, I'm in the signal processing / statistical pattern recognition business. I'm a bit of a crypto geek on the side as well--at least enough of one to understand how one usually figures out the difference between encrypted and unencrypted files, etc. That's actually why I'm so thoroughly annoyed at the ID people. They're trying to wrap themselves up in the legitimacy of the mathematics used by those fields, and they clearly don't know the first thing about them. They're claiming to be hot on the trail of a classification algorithm, but they haven't described the classes.
The theories they're invoking lend themselves extremely well to experimentation, proofs, and testing of all sorts. The fact that they don't appear to have done any of the work and then say things like, "If you study information science in more detail..." does not ingratiate them in my book.
Also, the ID group has done some work with the anthropic design principle that shows the probability of the universe coming into existence by random chance to be so low that it is for all intents an purposes--impossible.
I'd love to see the work, because every time I have looked at one of those "proofs" it has suffered from three major flaws:
1) GIGO. Without fail.
2) Calculating big numbers after the fact without considering the difference between that and an a priori probability (e.g. the probability of a given order of a shuffled deck is less than 1 in 10^67, but some order has to come out every time).
3) Assuming the "creation of the universe" has anything to do with evolutionary theory.
You are asking for the same proof that Creationists have often demanded of Darwinists (e.g., missing link anyone??).
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How do you define kind? Not by example, please. A real definition. Preferably one that doesn't make the statement "they only reproduce their own kind" tautological.
Ideally, this definition should apply to all kingdoms, not just animals.
Yes, prices would certainly drop. I'm not sure how that factors in to the distribution of tax burden, though.
Are you suggesting that Medicare and Social Security would be unfunded? Somebody is going to have to pay for them, and given that the FairTax shifts the burden toward the middle class, I have a feeling I know who will. Unless your point is that those taxes already hit the middle class disproportionately. That's certainly true. So we have a tax system that shifts the burden of those two things from the middle class to the middle class and then takes the rest of the things that were distributed elsewhere and shifts that to the middle class as well. I don't see that as a particularly good solution.
That's certainly true.
My point is that there are probably simple taxation systems that maintain a more progressive distribution--like a progressive income tax without the complex system of deductions, credits, and tens of thousands of pages of exceptions. It would allow for a healthy progressive system, not burden the poor, and remain simple. We could even go forward with FairTax ideas like doing away with corporate income tax in the process.
Your point is essentially that people value things at what people value them, which is true, but not particularly illuminating. You might decide to light yourself on fire to purge the demons, and that decision would be motivated by something that made you believe you'd get utility out of doing it. There are those of us, however, who would point out that you may not be accurately evaluating the risks involved. Perhaps neither one of us is objectively correct, but I think that there may be some merit to the warning. That's what I'm suggesting about the policy of assuming that a nation should import more than it exports by growing debt at a greater rate than GDP growth. I know that they can do it now, but is it a good long run policy?
The distinction between "knowingly borrowing more than you could ever possibly pay back" and "fraud" is lost on me.
That's not what I claimed. I'm pointing out that there are things that have little or no intrinsic value. Debt is one of them. Debt derives its value from the goods and services one can trade it for.
I think that you've just hit on what people often refer to as "using credit to borrow more than one can afford."
In the most general sense, yes, every transaction is completely legitimate and adds "value" for both sides based on what they percieved at the time or the transaction wouldn't have happened. As one of my economics professors used to say, "Every behavior including lighting yourself on fire to kill the demons in your head is rational. The interesting question is how you measured the costs and the benefits." What I'm arguing is that when we normalize for objectively measurable costs and benefits, there is definitely such a thing as more credit than one can afford.
What you're glossing over is a matter of imperfect and or asymmetric information. If I sell you a box full of gold for $100 and after the transaction, you find that there's no gold in it, the transaction wasn't mutually beneficial in any objective sense. It was me giving you the shaft. Let's say I offer to mow your lawn in exchange for your beer and then I drink your beer and walk away. Or I promise to give you my car in exchange for your services while promising the same thing to 10 other people. I suggest that in all of these cases, there's a matter of subjective valuation based on imperfect information (i.e. being unaware that I fully intend to screw you) and a more objective valuation based on the reality that what I'm giving you is completely worthless. In the most techincal sense, you're correct. Based on subjective valuation, you got what you agreed to get: a promise. In a more realistic sense, this isn't a long-term sustainable behavior. Try borrowing more than you can pay back and see what happens.
Just like above, in the case of a trade deficit, the imprudence comes from long-term effects, not from the immdediate lack of being able to get somebody to accept your credit. In the long run, you're either going to have to pay your creditors back or default on the credit. Sure, you can default on the credit and using your philosophical definitions of "afford" you were able to afford everything you bought with it. It comes at a cost, though. You don't get more credit and the market value of your currency adjusts to reflect the new realities of trade. For people who see this and the consequences that follow as a normatively bad thing, then yes, you've borrowed more than was prudent at that point. The point is that trade is a repeated game and how you play one round has serious effects on how future rounds work out.
Credit has market value, not intrinsic value. The two are decidedly different. This is the same reason why you giving me a dollar in exchange for no goods or services does not contribute anything to the economy.
Simple question: Is it sustainable for me to "import" goods while "exporting" credit forever without being able to make good on the promises of that credit? To make my point clear, I'm sitting on my couch and doing no work and earning no money while buying things on credit. Is it likely that I will be able to continue to do so forever? The answer to that question has similar ramifications on a national level. Every individual transaction may work, but there will be long run consequences.
I agree with you on the first part. You can't put that many people out of work and expect them to find jobs immediately. As for the cost part, I do have some idea of where the money could come from. I suggest a few years of higher taxes to the tune of roughly the amount we paid the tax preparers. There isn't much of a reason for it to cost more than it did when we were paying their salaries + paying for their office space + paying for the profits of the companies that employed them. Any money we save could go toward buying out and dissolving the income tax preparation portions of tax preparation companies so as not to screw their shareholders. Anyway, even if the transition took forever, we'd still be better off because even though we'd still be in the same financial predicament, we'd still have simpler taxes. Worst case, we could pay welfare to tax preparers for the rest of their lives and still be better off.
Agreed once again. The FairTax proponents seem to strongly underestimate the potential shock effects of implementing such a system. It redistributes the tax burden rather harshly onto an unfortunate subset of the middle class, has the potential to create an interesting "black market" in secondhand cash sales to compete with retailers who collect the tax, and probably has a lot of other side effects that I haven't thought about. While I appreciate the idea of a vastly simplified tax system without all of the compliance costs we're currently saddled with, I don't think they go about it the right way, and I think that a lot of the people behind it are largely as you described: short sighted ideologues who don't care about the real consequences of a jarring financial transition.
Simple thought experiment: We have a world in which a huge portion of the economy goes to fixing broken windows. Your windows just shatter randomly over the course of an average week and you have to pay somebody to fix it. There's no wealth being created there. You're just spending thousands of dollars per year to keep your house the way it was. If we found a way to keep the windows from breaking, we could use that money for more useful purposes and grow the economy. Yes, everybody who replaced windows for a living would be out of a job, but for the first few years, we could use the money we saved to transition them to other things. It's the way the world works. You're better off spending your money on something that improves your quality of life than on something that simply maintains it at equilibrium.
That said, I don't think that the Fair Tax people are entirely off their rockers with the desire to simplify the system. As I see it, the easier to deal with version would be a simple progressive income tax. You could probably get away with skipping corporate income taxes and just about everything else. Most of the exceptions, incentives, deductions, and ways of defining different types of income could likewise be eliminated. Similar general simplifying effect while maintaining a progressive structure that reflects the diminishing marginal utility of income.
Perhaps the "importing more than we can afford" claim would be better phrased as "importing at an unsustainable rate" as it's clear that a massively negative trade balance funded by credit cannot go on forever unless the economy is growing faster than the debt is. Another way of phrasing it is "importing more than is prudent." Credit can be used as a way of smoothing consumption over time or as a form of leverage to generate bigger returns on a good investment. I think it's reasonable to say that if you're using credit for other reasons, you're probably not using it wisely, whether you're a national government or an individual.
The situation gets even more interesting as in certain states, if you owe more than your house is worth, the bank can't go after you for the difference. That makes defaulting on your loan a very rational decision in many cases, even if you can afford to pay it. That's a recipe for some really ugly results.
Anyway, to account for collateral just add some houses to the assets part of the equation, but value them at less than the overall value of the loans. You still end up with low (or negative) owner's equity and an undercapitalized lender.
I'm going to be classy and reply to myself here... I was fixated enough on the grandparent's common misunderstanding of how money multiplication works that I forgot to address a more fundamental point: My example above doesn't really illustrated what happened with the mortgage crisis accurately. It's an illustration of what happens to banks when people don't pay back the "fake" money that they loaned out.
In the case above, the bank got shut down and the FDIC member banks lost out because they had to cover the demand deposits for a failed bank. In the case of the mortgage crisis, the loans weren't paying back into savings accounts. The debt was owned by investors all over the place (check your 401k). Anybody who bought a mortgage backed security lost some value on this one, and there's no FDIC to step in to pay you back. The issue here is the same, though: Somebody paid some money to buy some debt and then the debt became worthless. In the first example, the bank and the bank's insurer got screwed. In the second case, some insurers got screwed along with anybody holding the debt. No matter how you slice it, this mortgage crisis thing is going to hurt a lot of people. It does, however, have the nice side effect of me being able to afford a house and say "I told you so" to people who advised me to buy one when the market was clearly dangerously screwed up. I just feel like a bad guy for enjoying it so much.
Let's see the data. Seriously. I've seen a lot of people attempt to see the Laffer curve in the data (my favorite being this train wreck of reasoning, but as far as I can tell, they're not doing much better than the people who are attempting to see Jesus in their toast.
I don't remember seeing a lot of vetoes of profligate spending under Republican presidencies when Democrats ran congress, and for the brief period when they ran both, I can't say that they were an example of fiscal restraint. Face it: Politicians have strong incentives to borrow and spend.
If inflation is greater than 10%, yes it did.
In come the regulators. They say, "You can loan the money back out, but you have to keep 10% of it on hand." So you get your $10 in deposits and loan out $9 to another person. He spends the $9 and it trickles back to you. Of that $9, you can loan out another $8.10. Eventually, you asymptotically approach zero dollars loaned out (and you've loaned out $100 for your original 10). At the end of it all, you have a balance sheet that looks like this:
Assets: $100 (Loans: People owe you $100, so that's an asset.)
Liabilities: $90 (Savings accounts: *You* owe your depositors $100, which they could choose to withdraw at any time.)
Equity: $10 (You're holding $10 in a drawer somewhere.)
Here's where your thought experiment goes wrong: Let's say people decide not to pay $50 worth of loans back to you. Where are you now?
Assets: $50 (Loans: People owe you $100, but you'll only ever see $50 of it.)
Liabilities: $90 (Savings accounts: *You* owe your depositors $100, which they could choose to withdraw at any time.)
Equity: $-40 (You're in some serious shit if people decide to pull their money out. Your business is worthless now.)
In the real world, odds are good that your depositors aren't going to eat it because the government will bail them out, but you can bet that you're going to get shut down. You see, the banks didn't "create" the money so much as they borrowed it. Even if borrowers don't pay back their debt to the banks, you can bet that demand deposit account holders are going to want the banks to pay them back. This is why the banking industry is regulated. It's a huge leverage machine. There's nothing wrong with that in general, but it's inherently risky. That's why there's all manner of risk pooling and rules about what banks can and can't do with the money they control.
The real world, obviously, is more complicated, but this is a rough illustration of the money multiplier effect. In the US, normal banks don't "create" money as much as they multiply it. For every $1 that the Fed creates, banks multiply the effect in the real economy. It's not any sort of a trick. It's just how the system works.
I'm not so sure about that. Not all laws that have retroactive effects on perpetrators have been ruled unconstitutional. I believe that the point of that clause in the Constitution is to prevent the government from making something you did illegal retroactively and throwing you in prison--a nasty trick that works really well when you want to silence a law-abiding citizen who is a thorn in your side for whatever reason.
I don't see this as a violation any more than a law reducing sentences for people currently in prison, which I believe has been done without any trouble from the courts. This seems to be very much in the same vein, even though I regard it as an idiotic, irresponsible way of covering the asses of people who betrayed our trust.
That's not to say that it couldn't work, but the algorithm in question has to have certain properties. The few cases where I've seen it done, the actual transform is cryptographically weak because it necessarily leaks information. If it didn't, it would be useless as a biometric unless you were lucky enough to get an exact bit-for-bit identical capture when you go back to compare images.
Typically, when I hear a slashdotter making hard and firm economic pronouncements, it usually follows that he hasn't really spent a lot of time studying economics. I could be wrong this time around, but I seriously doubt it.
My point is that in a murder case, we realize that it's murder because it looks like murders we've seen before. On top of that, we have so much information about murders that have been committed before (mechanisms, motivations, etc.), that a good investigator has a lot of knowledge about what to look for. We don't know what "designed" life or "undesigned" life looks like. That's pure speculation. Evolutionary theory makes historical inferences, but those inferences are testable in a meaningful way. The same does not yet hold true for anything in the world of ID because ID's inferences are nonspecific enough as to be useless.
That's fine as long as they leave it there. When we see "The END of DARWINISM!" in print and people knocking at the doors of school board meetings trying to sell it as established science, you're going to get some push-back, though. A lot of it.
Well, to a certain extent, but I don't think that ID has stepped far enough out onto any limb to be disproved or supported in any concrete way.
Well, I'm in the signal processing / statistical pattern recognition business. I'm a bit of a crypto geek on the side as well--at least enough of one to understand how one usually figures out the difference between encrypted and unencrypted files, etc. That's actually why I'm so thoroughly annoyed at the ID people. They're trying to wrap themselves up in the legitimacy of the mathematics used by those fields, and they clearly don't know the first thing about them. They're claiming to be hot on the trail of a classification algorithm, but they haven't described the classes.
The theories they're invoking lend themselves extremely well to experimentation, proofs, and testing of all sorts. The fact that they don't appear to have done any of the work and then say things like, "If you study information science in more detail..." does not ingratiate them in my book.
I'd love to see the work, because every time I have looked at one of those "proofs" it has suffered from three major flaws:
1) GIGO. Without fail.
2) Calculating big numbers after the fact without considering the difference between that and an a priori probability (e.g. the probability of a given order of a shuffled deck is less than 1 in 10^67, but some order has to come out every time).
3) Assuming the "creation of the universe" has anything to do with evolutionary theory.
Time out