Well, in the US in 2008 there were 16,272 murders (or 5.91 9/11s) - is that a compelling reason for police to set up roadblocks, randomly stop people and arrest/incarcerate them because they may be statistically more likely to be about to commit a murder (ie: they own a gun; they are black and/or poor; they refuse to provide evidence they are not about to go kill someone, etc.)? Hell, there were nearly triple the number of suicides (34,598, or 12.43 9/11s) in 2007 - does running that through your "9/11 significance filter" make you in favor of "suicide roadblocks", set up to incarcerate people who seem a little down?
I certainly agree that just about anything is a better use of effort and money than the military mis-adventures in the Middle East (which have equalled at least 38.11 9/11s in Iraq and at least another 3.74 9/11s in Afghanistan civilians).
"Drunk driving is bad. Since we haven't precisely quantized how exactly every single persons ability decay with blood alcohol limit do we just let people drive drunk, or just go with a best guess of 0.05 or 0.08 and iterate?"
Well, we set up illegal police search and seizures via drunk driving road blocks, charge and imprison people for refusing to incriminate themselves (by refusing to provide a breath or blood sample) and generally punish people based upon a (unknown and certainly small) potential they may cause harm, while diverting resources from more pressing issues. All to try to reduce the 13,000 or so people who are presumed to die as a result of "drunk driving" in the US (2008 stat, and about 4/1000ths of a percent of the population).
So no: let's not do the drunk driving approach here (and you're quite right to use that excellent analogy to illustrate what's being suggested)...
"The market watcher defines 'success rate' as the percentage of search queries that result in a visit to a website" - that seems odd to me: 32.44% google searches aren't followed up by going to a resulting web site? I guess sometimes I have to rephrase my query, which I guess would contribute to that 32.44%, and I suppose once in a while I get to the second page of search results (but still ultimately visit a resulting page), or get interrupted, but I can't think of any instances whereby I concluded the information doesn't exist and gave up...
+1. My computer at the place I worked until very recently took at least 20 mins to boot up. That's not an exaggeration - the routine was: get to work, switch on computer, go for a coffee, come back, check on computer, realize it's still booting, wander office to find other people waiting for their machines to boot and make small talk for several more minutes. This happened to over 500 people each day, all whom made at least a six figure salary, so we're talking about $2M+ in lost productivity annually. And each "upgrade" made it worse. Plus, you'd go through the whole 20 minute boot process only to find your computer had been "upgraded" overnight and needed to be rebooted again, or your passwords needed resetting, which also required another reboot!
A lot of people simply stopped shutting down their computers at the end of the day. That caused problems with upgrades that ran at night and which presumed the desktops were off. It got so I asked to be exempted from "upgrades". Then I asked if I could switch to Linux (they offered me a dual boot option but never delivered), then I started doing more and more work from home (on my ubuntu machine, which boots in 17 secs, according to boot chart). It got to the point I very, very rarely even bothered with my office desktop. The company, meanwhile, kept upgrading the network and wondered why people continued to complain about their computers despite the "increased bandwidth".
Of course, this was the same company which spent over a quarter of a million dollars, and $2,300/month for each of their five offices, in the midst of expense pressures, to have video conferencing, which I never once saw used...
You're quite right about why politicians favor big business: they're just being efficient, but what they're being efficient about isn't jobs as much as it is fund-raising.
Intersting comments about your concern about an actor running a country. I have a different view: in a democracy, the only qualification to participate in government is to be a citizen - career politician are a huge part of the problem (which is why term limits exist). If you want an example of how a "commoner" can run things well, take a look at Brazil: their last president has, if I recall, a grade four education. He did wonders for the economy (and you'd probably like what he did with handouts to the poor, while really it was his liberalization of the economy that led to Brazil's dramatic gains). In a democracy, there should be no pre-qualification to govern - it's government "of the people, by the people" (or should be). And comparitively speaking, Reagan was pretty good. It's just a very low bar.
If you honestly think a massive military expense increase is a good thing because we got some science out of it which we would have anyway arrived at (altho it might have taken more time), then we're really not seeing eye-to-eye: if your end goal is science, why take the massively inefficient military budget to get there? I don't think science should be a goal of government. Then again, I don't think "job creation" should be either - let business take care of business and stick to policing and the judiciary and defense and not too much else.
I don't like any kind of bailout, and when you propose the government should bail out some companies, what you are suggesting, of course, is that the government should pick and choose which businesses survive and which fail. And thus we're back at the command-style economy which you seem to favor strongly and which I despise, for mostly pragmatic reasons (it doesn't work, and hurts a lot of people). I've said it before: by your line of reasoning, we'd still have a horse and buggy industry funded by government, all to protect the workers from the pain of change. Of course those same few favored workers would have their adaptation delayed and made more painful. What makes you think the government has the abilities (let alone the right) to decide which businesses fail and which don't? The only fair solution is to not play favorites and let the people decide, via their spending decisions - after all, each time you buy something you are telling the market, in your own small way, to invest in that area: when you buy that side of fries, you are telling the farmer to grow another potato.
Honestly, how can you say you don't agree with the things Thatcher or Reagan did, but you fully agree with the results and agree they were necessary? That's a contradiction. You may not like the suffering some (previously subsidized) people endured (I don't either), but that's a function of their prior subsidization!
Are you sure you were a libertarian? A libertarian is decidedly different from a conservative. A libertarian believes, first and foremost, that individuals should be free to act however they choose, provided, always, that freedom does not impede others from freely acting however they choose. That includes the freedom to trade with anyone I choose to trade with, at whatever price we choose, without government interference (ie minimum wages, price controls, bailouts, etc.). There are an awful lot of people passionately opposed to freedom (you, included, by virtue of the fact you argue in favor of bailouts (but only if they meet your criteria), minimum wages, "social safety nets", etc). Likewise, when you argue in favor of patents, but only if they meet your selected criteria, you do realize you are arguing a question of degrees, don't you? It's binary: either you are in favor of freedom or you aren't. When you say that you favor bailouts, sometimes, and favor patents, for some periods, and favor price fixing, occassionally, when i
+1. I never understand why people get so emotionally (or otherwise) wrapped up in the whole "linux on the desktop" notion. I've used linux for about 5.5 years exclusively at home, and as long as it does what I need it to do, I couldn't care less that my neighbors use windows or iWhatever. And your point about Google Docs (or any web-based tool) being a plus for linux is spot on: if you're the sort of person who cares about these things, you should welcome the idea that things people want can be accessed via the web using linux just as well as any other operating system. I was up in Lake Tahoe a couple of weeks ago and my uncle complained that his computer had broken. Turned out it was a bad hard drive. I asked him what exactly he used the machine for. "Browsing, email, stock trading". That made it easy - no need to even bother with the hard drive: I made him a bootable Ubuntu USB stick and now he uses linux on his desktop (altho he doesn't really know what that means - to him, a browser may as well be the operating system, and if someone asked him what OS he uses, he'd likely say "Firefox"). But I don't have any vested interest in him using linux: it just happened to be the right (and easiest and cheapest) tool at the time to serve his needs.
Well, we can agree on the small business vs big business point: I never understand why politicians are so enamored of big business, because small businesses create 90% of the jobs.
Also, the '80s featured some good policies, but also some terrible ones: everyone reveres Reagan these days, forgetting that he increased taxes 12 times, took military spending off the deep end and nearly doubled the size of government debt. Luckily he was saved by GDP growing even faster than he could grow the debt, due to all the innovation and efficiencies unleashed as regulation was signfiicantly reduced (not too long before that, the government had gone right off the deep end, with price controls, policies which caused inflation to sky rocket (are you old enough to remember 18% being a good mortgage rate???) etc.). Reagan was a partial step in the right direction. Likewise Thatcher.
I'll consolidate posts here and respond to your other one too: in your example, neither one of us would have started producing anything unless we had pretty good reason to believe we had customers for our goods - we wouldn't otherwise risk the capital...and besides, it's not like your example at all: just because a company buys some input from another company does not mean the other company doesn't pay its employees with those proceeds, who the go out and buy things (like, perhaps, the things the first company produces) - just because money is spent on non-consumer goods doesn't mean it doesn't eventually get spent on consumer goods. Every company which produces items for other companies has employees who are at the same time consumers.
The article is right (and so are you) in that both "sides" have been co-opted, just by different interests. Find me a true fiscal conservative who is also a true social liberal (in the classical liberal sense) and I'll be a happy libertarian (of course, Ron Paul is pretty damn close to a libertarian's wet dream, but he somehow doesn't get any press despite breaking records for grass-roots fundraising).
As for the solution: stop bailing things out; stop calling things "too big to fail"; stop fucking borrowing (!) - every man, woman and child is already in the hole to the tune of about $130,000 in federal government debt (!); make unions illegal as a restraint of the free trade of labor; eliminate minimum wage (that will cure your illegal immigration problem too); reform, severely, patent and copyright laws; stop invading other countries (!) and reduce the military to the bare minimum needed for defense; cut spending by at least 2/3rds (most of which is unconstitutional anyway - see the Department of Education, the US Department of Agriculture, etc etc etc); drop taxes by half that amount of spending cuts, and make it a flat tax rate: no deductions, no credits, just a percentage applied to income. Better yet, eliminate income tax entirely and institute a VAT instead (in fact, ultimately all involuntarily taxes should be eliminated); eliminate the criminal enterprise that is the Federal Reserve and allow interest rates to be determined by the market alone. All of that will cause an awful lot of short term pain and an awful lot of long term gain. If you really want to go big, eliminate all barriers to immigration. Of course, you'd have a generation of poorer Americans but a thousand years of richer humans throughout the world...
Unlike you, I don't like paying taxes, because they are taken by force and the only "civilization" you ostensibly buy is provided by a monopoly, which not incidentally holds a monopoly on the use of violence. You can't shop around. You can't say "no". You can't say, "but I don't agree that part of my workday each day should go towards paying for the killing of people in far away places who have yet to even come close to invading us". You can't say, "I don't like your services, so I'm not going to shop here anymore". All you can do is touch your toes, hope is doesn't hurt too much and realize you live in the Land of the Unfree and the Home of the Afraid...
I don't think you understand: when you say, "loans for consumption are pretty much out of the question these days", you seem to be saying that only "consumer spending" counts - you are confusing "consumer spending" with "consumption", because the only thing a loan can be used for is consumption, whether that's buying new equipment or paying workers or building a new location: it all ends up being spent in the economy. When a company pays another company for supplies, that is "demand" being exercised; when a company borrows money to pay their suppliers, that is also "demand" being satisfied by supply: they are buying things (be they services or goods or labor or anything else). Anything money gets spent on is "demand" meeting "supply". I don't know why you seem to think it doesn't count unless it is consumer spending. And your argument that the majority of loans are only used to cover other loans, and that borrowers don't "invest" the proceeds is ludicrous on multiple fronts: on the one hand you are arguing that loans are hard to come by ue to Basel II while on the other hand saying banks are giving loans willy-nilly to companies without the means to repay them and for the purposes of paying other loans, like a ponzi scheme, and then you say that the loans will go to "keeping the business solvent", seemingly without realizing that any and all money a company spends ultimately ends up as someone else's consumer purchasing money. When you say, "If I invest, or 'save', money, it will NEVER end up on the demand side", you are 100% entirely incorrect: it cannot do anything but ultimately end up as demand.
I'll tell you exactly why the crisis came about, and how government interference directly caused it: imagine you set up an insurance company to sell insurance against fire destroying houses. You collect premiums and set aside money to cover the eventual fires. You underwrite your customers diligently, because if they are more likely to have a fire, you are more likely to lose money. You are rewarded based upon how well your insurance contracts, in the aggregate, perform: if your customers have few fires, you make some money. If you misjudge the risk, you lose some money. You do your best to price your insurance such that, in the aggregate, you will have enough money to pay losses, plus some profit. Now, imagine what would happen if, suddenly, you no longer had to pay losses. No matter whether a customer of yours has a fire or not, you don't have to pay out, and you make money on the policy. And the more policies you sell (regardless of losses), the more money you make. How would you behave? If you are a rational person, you will start selling policies like crazy without any regard to the risk of a fire to a policy holder. Some customers will come in and tell you their house is already on fire. You couldn't care less, and sell them a policy, and for cheap, too. Other customers come in and tell you their house has burned down to the ground several times before. You don't care about that, either - you sell them a policy.
How does all that relate to the mortgage crisis? It is identical: the government set up Fannie Mae and Freddie Mac to backstop mortgages. Banks no longer carried mortgage risk themselves: they instead simply sold mortgages, funnelled them through Fannie and Freddie for insurance against default, and then sold the fully insured loans to investors. Because of the government (and only because of the government), the banks had no concern whether a lender would ever pay back a cent, because their accountability was entirely removed by the government: they now made money solely based on the number and volume of money lent, not on how those loans performed. Did they care if you didn't have a job, no assets and couldn't afford the house? Hell no! It didn't matter! The government took on the risk. And then, the government went all-in: it declared that more "disadvantaged" people and poor people needed to own houses, and insisted
Well, the social conservative would say, "that's fine, provided only my religion gets that freedom!" The social liberal would say, "it isn't fine, because I hate religion!". The libertarian would say, "who gives a fuck, so long as it doesn't interfere with my ability to exercise whatever religion I choose (or anyone else chooses)."
PS: thanks for the link - interesting article. The author is correct about bailouts: if investors take the risk of investing in a country (or a bank, or GM, or AIG), and those investments go south, the investor should suffer the consequences, not the taxpayer (which the author subsitutes "workers" for). However the author mistakenly equates corruption with "conservative". I'm not a "conservative" or a "republican" or "right-wing" (I'm a libertarian), but the issues he raises are not a function of economic or political point of view; rather they are a function of criminal activity (a newspaper using wiretapping in order to exert political control) or what should be criminal activity (the government bailing out private companies and investors). The "right" works for a small group of people called "bankers" and the left works for a small group of people called "unions". Neither is correct.
It seems to me you have too rigid a defnition of "supply" and "demand", as tho they are somehow mutually exclusive. For example, when you posit that savings go to the "supply side of the economy", I don't understand: savings go to loans (at a considerable leverage, it's better than 10 to 1) or other investment. And what do these loans do? They result in purchases, ie the demand you're looking for! Unless someone borrows money simply to put the money under his or her mattress (which would only make sense with negative real interest rates), borrowing is going to lead to spending, and it's going leverage savings. It is all intertwined, my friend. And even if you hand people money and they in turn pay their debts with it, that's going to lead to demand too, because the lender will now have money to re-lend, and will leverage that money too. The way you explain it doesn't make sense to me: you argue that there is too much supply and not enough demand, but by your same logic, increasing supply means hiring more workers which means more money in the pockets of those workers which they in turn can spend and create your demand!
I agree that paying bureaucrats is not the same as burning money. It's worse. What I mean by that is that you are taking money from a free (and rather efficient) market and giving it to a monopoly (the government) which faces no real competitive pressures to spend that money in an efficient manner. On top of that, the money to pay these people is taken, no less, from those people in the free market whom you wish could purchase more in order to stimulate demand! The case you are inadvertently making for tax cuts is getting stronger:) Of course, you could always borrow that money to pay the bureaucrats - that's exactly what the US government has been doing in earnest since about 1970 (but particularly so since 2008). In fact, government employees now make up about 1 in 7 workers in the US and growing.
We haven't really tried the "opposite of communism" in the past 200 years at least. The extremes you use, ie that communism is on the one hand and the heavily regulated market we've had for the past 50 years is on the other and therefore the answer lies in the middle are false choices: it's more a case, in my opinion, that we've seen that complete command economies fail completely, while partial command economies (like the US and most other western countries) fail more slowly, because those free parts of the economy manage to sustain it. To be clear about one thing: a lot of the popular criticisms of capitalism that seem de rigeur these days seem to have their roots in criminal activity and/or lack of transparency: Madoff, Enron, Worldcom, Tyco, Hollinger, et al are not examples of a market operating freely. Fannie Mae and Freddie Mac are flat out examples of profound interference in the market by government (why the government should have any interest in whether people buy homes, or encourage them to do so, or set up government-backstopped entities to backstop mortgage, or explicitly encourage the backstopping of loans, under the guise of "helping the poor and historically disadvantaged realize the dream of home ownership", to the people least able to make good on those loans, is all beyond my comprehension). None of the meltdown of 2008 could have occured without the government backstopping mortgages via Fannie and Freddie. That's an example of government intervention directly causing economic harm to a great many people. If you're interested, I can elaborate on exactly the mechanisms which made that possible - essentially, the government actively and explicitly took accountability of mortgage performance out of the hands of the people writing those same mortgages. The prospect you don't seem to be considering is that, if total government intervention is extremely bad, and a lot of government intervention is bad (but not quite as bad), then quite possibly far less intervention may lead to bett
You do realize that when someone else is disparaging the "average person" or the "average voter" they are including you in that group?
Good points about the DNA data - thanks for that - I somehow managed to misplace my thinking cap, yet again...I think it's over here under my tin foil lid...
Agreed: nothing wrong with settlements. Rather, the fundamental problem is that it costs a bloody fortune to defend yourself from a frivolous (or any kind of) suit. That's a function of regulation which says that you must go to (typically very expensive) law school, pass the bar and then article to become part of the club and practice law. The practical effect is that it restrains the supply of lawyers and inflates the cost of legal advice. It's also a rather new concept: it wasn't that long ago that lawyers were simply people who chose to practice law, typically after apprenticing under a practicing lawyer for some time (but not necessarily so).
+1, and thank you. I use a 37" 16 X 9 monitor at a distance of about 2m, so I have set my minimum font sizes fairly large. About 3 in 10 sites have problems with this, ie: overlap of page elements. Very irritating having to regularly disable minimum font size in order to see the entire page or particular elements, and I suspect it's going to be an issue for more and more people as televisions attempt to integrate web pages, include browsers, etc.
Notably, Chrome seems to do a much better job rendering these same sites, so maybe it's the browser after all, and not the web designers I've been cursing...
Aren't you a "Mr or Mrs John Q Voter"?!? If so, how come you have the powers to figure it out but assume the rest of the population doesn't? I see an awful lot of comments along these lines, ie, "I can figure these things out but the rest of the people can't, therefore we must apply laws such that the dumb population can be made to see things with my scintillating clarity." It's nonsense, all of it, and the height of arrogant presumption: you, in all likelihood, aren't any more "perceptive" or "insightful" than those who disagree with your viewpoints (and are therefore presumed to be idiots).
To the article: I'm not in favor of the government retaining this data or any other data from unconvicted people, but does this differ significantly from fingerprints (ie insisting that you surrender personally identifying biological traits)? Note I'm not arguing either should be stored indefinitely, or that taking fingerprints is acceptable (nor am I arguing it isn't). I'm just honestly not seeing the significant difference between the two (but am open to being informed).
I'm afraid I don't understand the logic of your first paragraph: you seem to be saying that putting money in people's pockets via a tax break only serves to stimulate demand if those people already have some arbitrary amount of money. Why would that be? In fact, the less money that people have, the more likely they are to immediately spend a tax rebate, rather than save it (of course, whether they save it or spend it, it still goes into the economy, unless they save it under their mattress). It also tends to be more efficient to give money directly to people, rather than spend money on so-called "stimulus" projects, because those projects come with bureaucracies and other inefficiencies. Obama would have made more efficient use of the "stimulus" money simply by throwing it out of a helicopter.
There's nothing fundamentally "socialist" about people saving more then they spend. In 2007 (ie pre-recession), the top net savers were France, Ireland, Germany, Austria and Switzerland (in order - you can find details here: http://econ365.files.wordpress.com/2008/10/gross-savings-rate.pdf). Nor does that seem to insulate a country from economic problems: on a gross basis, Spain and Belgium have had almost identical rates of savings, and yet face very different economic situations today. In fact, you seem to be arguing that people need to save more but also spend more, in order to stimulate demand! You do realize that you cannot simultaneously save and spend the same dollar?
When it comes to supply and demand, the thing I think you are perhaps overlooking is that these apply to everything, not just products (which is what you seem to be arguing). What I mean by that is that investment, labor, savings rates, interest rates (to some extent - they are heavily manipulated by (what should be illegal) central banks), prices, availability of products, etc. are all a function of supply and demand. And besides, shifting a bunch of money from one group of unfavored people to another group of favored people doesn't accomplish anything economically anyway: that's a zero sum game, and as others have pointed out, other than putting money under your mattress, it is impossible to take money "out" of the economy. When people complain about billionaires "hoarding" money, this is a virtually impossible thing for them to do: they invest it and/or spend it, just maybe not in a way some people (or governments - see Obama and his comments about private jets etc) particularly care for. In my world view, you can do whatever the hell you like with your money.
You cannot "dump" products in an economy and somehow "force" people to buy them (altho in other parts of your post you seem to suggest doing just that). It is a confusing post to me: you think people should save more such that they can spend more but then argue that "As soon as the savings dry up, we end up in the mess we're in now."
The fundamental mistake you're making, in my opinion, is thinking that supply and demand need to somehow be "controlled' or "dictated" by a government. That is the surest way to cause a mismatch between the two: it's been tried many, many times to varying degrees - the governments which have tried it the most have had the poorest of results (I should say their people have had the worst outcomes: see Cuba, USSR, China (pre market reforms) and virtually any desperately poor country. Then take a look at countries which have liberalized their economies. Hell, even Cuba is now permitting some small taste of free market business (ie hair dressers and restaurants) because their attempts to interfere in free markets have had such desperately and heartbreakingly poor results on generations of people). Think a guaranteed "minimum wage" or "social safety nets" are the key to a successful economy, and therefore a prosperous and well-fed people? I'm happy to provide you a one-way ticket to Cuba anytime!
This reminds me of an assignment I was given in high school English class: the book we were to study that year was Hemingway's "A Farewell to Arms". Prior to starting the book, the teacher asked that we write an essay outlining our expectations of the book, based solely on the title. Well, I had no idea what the hell the book would be about - all I could come up with was a future in which superior, articficial limbs became widely available, and once a person's growth stopped, they'd have their natural limbs hacked off and replaced with the better artificial limbs in a ceremony called, "A Farewell to Arms!" The teacher gave me an "A+", but looked at me funny the rest of the year...
Some very interesting comments (and I thank you for your civility - the name calling I've received from those who disagree with my viewpoint, while amusing, was getting rather boring) - wish I had time to respond more fully, because I don't disagree with a lot you've said.
Canada is a pretty good example of how regulations and taxation and the size of government and government debt can go too far, and also shows the path for the US to pull back from the brink:
Canada has been systematically reducing its various tax rates and cutting government services since the mid-90s. The consequences? GDP grew. Tax revenues
increased. Unemployment went from 12% to 6%. The dollar went from being worth $0.67 USD to about $1.06 USD (before lowering to about $1.01 USD in the turmoil of the past few days). Government deficits were eliminated (until recent economic downturn) and the country ran surpluses. Government debt as a percentage of GDP went from 70% at its peak in 1995 (about where the US is today) to about 22% (pre-downturn - it's now around 31%).
I'd say there are some lessons there for the US...
I'm not in favor of no regulation: there is a need to regulate where the market won't find equilibrium in a reasonable time frame (ie in a lifetime, or a generation) or where irreversible harm can be done to humans (think pharmaceutical products and the like). Note however that all regulation comes at an expense, and virtually all regulation is a restraint of trade (by definition, I guess) with often negative consequences. For example, there are a lot of industries which systematically restrain the free trade of labor via regulation, such as lawyers. In order to become a lawyer, one must attend (rather expensive) law school and then article and then write the bar exam and be accepted to the bar. It is not permitted to simply challenge the bar exam and then practice. Or, simply practice, and let your customers decide if you're worth supporting. That's nothing but an attempt to restrict the supply of lawyers in order to inflate the price of legal advice. Same things applies in almost any "professional" organization. Do I think engineers who build bridges should face additonal scrutiny? Well, their design should. Should it matter if they've spent money on the approved education and been accepted into the club? Not so much. Same applies to almost all government regulation, with some notable exceptions. Keep in mind that all this hyper-regulation is a relatively new concept, and that those industries and people regulated still make plenty of mistakes (have a chat with any malpractice lawyer to see how regulation of doctors has not put an end to malpractice).
As for social safety nets, I'm all in favor of them, provided they are privately and voluntarily delivered (ie charitable). I'm happy to (and I do) do my bit for my fellow humans without needing a government to put a gun to my head.
Of course, the "fairest" system would be a single flat income tax or a single consumption tax (where here I'm defining "fairest" as "each person pays an equal share of what they earn/spend"). Then, using your figures above, the 56% of earners making less than $100K would contribute 56% of the revenue. The benefits of such a system would include eliminating the enormous tax-preparation industry that exists simply because the tax code has become so confusing and complicated.
What's interesting is that if you plot this data out, comparing share of income with share of households, some things jump out:
- from about $52K to $100K, share of income almost exactly matches share of households;
- from $100K to $150K, the share of income jumps dramatically compared to the share of households: the percentage of all households in this division is 11.54% however this group earns 20.70% of all income, the second largest discrepancy;
- for the groups in the $150K to $200K and $200K to $250K, the discrepancy drops (to 4.10% households/10.42% income and 1.53%/5.04% respectively);
- at $250K+ the discrepancy rises again dramatically, to 1.93%/13.01% (the biggest point spread of all);
- the halfway point for households is about $50K: 51.36% of households make less than that while 48.64% make more. The share of income is 19.47% ($50K);
- there are almost certainly some extreme outliers at the top end.
Unless you have a system whereby the government entirely dictates who gets what, there will always be natural discrepancies between share of households and share of income, just as two people who sit in adjacent cubicles may make different salaries based on their perceived worth to their employer. And there will always be those who decry any result as "unfair". I guess the better question is: is it possible for a household to make the jump from one income tier to the next?
I arbitrarily picked 2002 data (which you can find here: http://pubdb3.census.gov/macro/032003/hhinc/new06_000.htm) and compared it to the 2007 data. This shows that the number of households in virtually every category below $85K decreased (notable exception: the number of households earning between $70K and $72.5K increased 11.84%) while the number of households above $85K increased, in many cases dramatically (for example: number of households earning $85K to $87.5K increased 5.39%; $87.5K - $90K: +6.94%; $90K - $92.5K: +8.19%; $92.5K - $95K: +11.52%; etc.).
What can one conclude from this? Well, everyone seems to be making more money (note: the data does not seem to correct for inflation, but inflation has been historically low during the sample period). The rich are getting richer, if you define rich as those making more than $85K. The richest households saw the greatest number of new entrants: there was a dramatic increase in the number of households earning $100K - $150K (+27.46%), $150K - $200K (+53.08%), $200K - $250K (+47.62%) and 250K+ (+45.97%). My quick analysis of that leads me to believe people are capable of bettering their place on the income ladder in the US. YMMV.
Wish I had three-quarters of a mod point, because I agree with almost everything you say, but for your final two paragraphs.
The US wasn't intended to have a standing army, and the battles it is currently engaged in are pretty far removed from "defense", unless you think the folks in the middle east can fire camels, Angry Birds-like, to the US shores. In fact, there's a strong correlation between a US presence in a country and an increase in anti-US sentiment (and terrorism) from that same country (sorry, I don't have time to find the link to the article, but if I recall, Ron Paul included reference to it at one point).
Your point about gun ownership is spot-on: the Second Amendment doesn't have anything whatsoever to do with hunting and everything to do with weapons not being the exclusive domain of the government and keeping the government in check.
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Well, in the US in 2008 there were 16,272 murders (or 5.91 9/11s) - is that a compelling reason for police to set up roadblocks, randomly stop people and arrest/incarcerate them because they may be statistically more likely to be about to commit a murder (ie: they own a gun; they are black and/or poor; they refuse to provide evidence they are not about to go kill someone, etc.)? Hell, there were nearly triple the number of suicides (34,598, or 12.43 9/11s) in 2007 - does running that through your "9/11 significance filter" make you in favor of "suicide roadblocks", set up to incarcerate people who seem a little down?
I certainly agree that just about anything is a better use of effort and money than the military mis-adventures in the Middle East (which have equalled at least 38.11 9/11s in Iraq and at least another 3.74 9/11s in Afghanistan civilians).
In fact, that's precisely what most people do in the industry I was in, once their computer boots up.
"Drunk driving is bad. Since we haven't precisely quantized how exactly every single persons ability decay with blood alcohol limit do we just let people drive drunk, or just go with a best guess of 0.05 or 0.08 and iterate?"
Well, we set up illegal police search and seizures via drunk driving road blocks, charge and imprison people for refusing to incriminate themselves (by refusing to provide a breath or blood sample) and generally punish people based upon a (unknown and certainly small) potential they may cause harm, while diverting resources from more pressing issues. All to try to reduce the 13,000 or so people who are presumed to die as a result of "drunk driving" in the US (2008 stat, and about 4/1000ths of a percent of the population).
So no: let's not do the drunk driving approach here (and you're quite right to use that excellent analogy to illustrate what's being suggested)...
Karl...is that you?!?
"The market watcher defines 'success rate' as the percentage of search queries that result in a visit to a website" - that seems odd to me: 32.44% google searches aren't followed up by going to a resulting web site? I guess sometimes I have to rephrase my query, which I guess would contribute to that 32.44%, and I suppose once in a while I get to the second page of search results (but still ultimately visit a resulting page), or get interrupted, but I can't think of any instances whereby I concluded the information doesn't exist and gave up...
+1. My computer at the place I worked until very recently took at least 20 mins to boot up. That's not an exaggeration - the routine was: get to work, switch on computer, go for a coffee, come back, check on computer, realize it's still booting, wander office to find other people waiting for their machines to boot and make small talk for several more minutes. This happened to over 500 people each day, all whom made at least a six figure salary, so we're talking about $2M+ in lost productivity annually. And each "upgrade" made it worse. Plus, you'd go through the whole 20 minute boot process only to find your computer had been "upgraded" overnight and needed to be rebooted again, or your passwords needed resetting, which also required another reboot!
A lot of people simply stopped shutting down their computers at the end of the day. That caused problems with upgrades that ran at night and which presumed the desktops were off. It got so I asked to be exempted from "upgrades". Then I asked if I could switch to Linux (they offered me a dual boot option but never delivered), then I started doing more and more work from home (on my ubuntu machine, which boots in 17 secs, according to boot chart). It got to the point I very, very rarely even bothered with my office desktop. The company, meanwhile, kept upgrading the network and wondered why people continued to complain about their computers despite the "increased bandwidth".
Of course, this was the same company which spent over a quarter of a million dollars, and $2,300/month for each of their five offices, in the midst of expense pressures, to have video conferencing, which I never once saw used...
Yup: if I recall correctly, it can make it from LA to NY in 12 minutes and anywhere on earth inside an hour. I think it was Mach 22, actually.
You're quite right about why politicians favor big business: they're just being efficient, but what they're being efficient about isn't jobs as much as it is fund-raising.
Intersting comments about your concern about an actor running a country. I have a different view: in a democracy, the only qualification to participate in government is to be a citizen - career politician are a huge part of the problem (which is why term limits exist). If you want an example of how a "commoner" can run things well, take a look at Brazil: their last president has, if I recall, a grade four education. He did wonders for the economy (and you'd probably like what he did with handouts to the poor, while really it was his liberalization of the economy that led to Brazil's dramatic gains). In a democracy, there should be no pre-qualification to govern - it's government "of the people, by the people" (or should be). And comparitively speaking, Reagan was pretty good. It's just a very low bar.
If you honestly think a massive military expense increase is a good thing because we got some science out of it which we would have anyway arrived at (altho it might have taken more time), then we're really not seeing eye-to-eye: if your end goal is science, why take the massively inefficient military budget to get there? I don't think science should be a goal of government. Then again, I don't think "job creation" should be either - let business take care of business and stick to policing and the judiciary and defense and not too much else.
I don't like any kind of bailout, and when you propose the government should bail out some companies, what you are suggesting, of course, is that the government should pick and choose which businesses survive and which fail. And thus we're back at the command-style economy which you seem to favor strongly and which I despise, for mostly pragmatic reasons (it doesn't work, and hurts a lot of people). I've said it before: by your line of reasoning, we'd still have a horse and buggy industry funded by government, all to protect the workers from the pain of change. Of course those same few favored workers would have their adaptation delayed and made more painful. What makes you think the government has the abilities (let alone the right) to decide which businesses fail and which don't? The only fair solution is to not play favorites and let the people decide, via their spending decisions - after all, each time you buy something you are telling the market, in your own small way, to invest in that area: when you buy that side of fries, you are telling the farmer to grow another potato.
Honestly, how can you say you don't agree with the things Thatcher or Reagan did, but you fully agree with the results and agree they were necessary? That's a contradiction. You may not like the suffering some (previously subsidized) people endured (I don't either), but that's a function of their prior subsidization!
Are you sure you were a libertarian? A libertarian is decidedly different from a conservative. A libertarian believes, first and foremost, that individuals should be free to act however they choose, provided, always, that freedom does not impede others from freely acting however they choose. That includes the freedom to trade with anyone I choose to trade with, at whatever price we choose, without government interference (ie minimum wages, price controls, bailouts, etc.). There are an awful lot of people passionately opposed to freedom (you, included, by virtue of the fact you argue in favor of bailouts (but only if they meet your criteria), minimum wages, "social safety nets", etc). Likewise, when you argue in favor of patents, but only if they meet your selected criteria, you do realize you are arguing a question of degrees, don't you? It's binary: either you are in favor of freedom or you aren't. When you say that you favor bailouts, sometimes, and favor patents, for some periods, and favor price fixing, occassionally, when i
+1. I never understand why people get so emotionally (or otherwise) wrapped up in the whole "linux on the desktop" notion. I've used linux for about 5.5 years exclusively at home, and as long as it does what I need it to do, I couldn't care less that my neighbors use windows or iWhatever. And your point about Google Docs (or any web-based tool) being a plus for linux is spot on: if you're the sort of person who cares about these things, you should welcome the idea that things people want can be accessed via the web using linux just as well as any other operating system. I was up in Lake Tahoe a couple of weeks ago and my uncle complained that his computer had broken. Turned out it was a bad hard drive. I asked him what exactly he used the machine for. "Browsing, email, stock trading". That made it easy - no need to even bother with the hard drive: I made him a bootable Ubuntu USB stick and now he uses linux on his desktop (altho he doesn't really know what that means - to him, a browser may as well be the operating system, and if someone asked him what OS he uses, he'd likely say "Firefox"). But I don't have any vested interest in him using linux: it just happened to be the right (and easiest and cheapest) tool at the time to serve his needs.
Well, we can agree on the small business vs big business point: I never understand why politicians are so enamored of big business, because small businesses create 90% of the jobs.
Also, the '80s featured some good policies, but also some terrible ones: everyone reveres Reagan these days, forgetting that he increased taxes 12 times, took military spending off the deep end and nearly doubled the size of government debt. Luckily he was saved by GDP growing even faster than he could grow the debt, due to all the innovation and efficiencies unleashed as regulation was signfiicantly reduced (not too long before that, the government had gone right off the deep end, with price controls, policies which caused inflation to sky rocket (are you old enough to remember 18% being a good mortgage rate???) etc.). Reagan was a partial step in the right direction. Likewise Thatcher.
I'll consolidate posts here and respond to your other one too: in your example, neither one of us would have started producing anything unless we had pretty good reason to believe we had customers for our goods - we wouldn't otherwise risk the capital...and besides, it's not like your example at all: just because a company buys some input from another company does not mean the other company doesn't pay its employees with those proceeds, who the go out and buy things (like, perhaps, the things the first company produces) - just because money is spent on non-consumer goods doesn't mean it doesn't eventually get spent on consumer goods. Every company which produces items for other companies has employees who are at the same time consumers.
The article is right (and so are you) in that both "sides" have been co-opted, just by different interests. Find me a true fiscal conservative who is also a true social liberal (in the classical liberal sense) and I'll be a happy libertarian (of course, Ron Paul is pretty damn close to a libertarian's wet dream, but he somehow doesn't get any press despite breaking records for grass-roots fundraising).
As for the solution: stop bailing things out; stop calling things "too big to fail"; stop fucking borrowing (!) - every man, woman and child is already in the hole to the tune of about $130,000 in federal government debt (!); make unions illegal as a restraint of the free trade of labor; eliminate minimum wage (that will cure your illegal immigration problem too); reform, severely, patent and copyright laws; stop invading other countries (!) and reduce the military to the bare minimum needed for defense; cut spending by at least 2/3rds (most of which is unconstitutional anyway - see the Department of Education, the US Department of Agriculture, etc etc etc); drop taxes by half that amount of spending cuts, and make it a flat tax rate: no deductions, no credits, just a percentage applied to income. Better yet, eliminate income tax entirely and institute a VAT instead (in fact, ultimately all involuntarily taxes should be eliminated); eliminate the criminal enterprise that is the Federal Reserve and allow interest rates to be determined by the market alone. All of that will cause an awful lot of short term pain and an awful lot of long term gain. If you really want to go big, eliminate all barriers to immigration. Of course, you'd have a generation of poorer Americans but a thousand years of richer humans throughout the world...
Unlike you, I don't like paying taxes, because they are taken by force and the only "civilization" you ostensibly buy is provided by a monopoly, which not incidentally holds a monopoly on the use of violence. You can't shop around. You can't say "no". You can't say, "but I don't agree that part of my workday each day should go towards paying for the killing of people in far away places who have yet to even come close to invading us". You can't say, "I don't like your services, so I'm not going to shop here anymore". All you can do is touch your toes, hope is doesn't hurt too much and realize you live in the Land of the Unfree and the Home of the Afraid...
I don't think you understand: when you say, "loans for consumption are pretty much out of the question these days", you seem to be saying that only "consumer spending" counts - you are confusing "consumer spending" with "consumption", because the only thing a loan can be used for is consumption, whether that's buying new equipment or paying workers or building a new location: it all ends up being spent in the economy. When a company pays another company for supplies, that is "demand" being exercised; when a company borrows money to pay their suppliers, that is also "demand" being satisfied by supply: they are buying things (be they services or goods or labor or anything else). Anything money gets spent on is "demand" meeting "supply". I don't know why you seem to think it doesn't count unless it is consumer spending. And your argument that the majority of loans are only used to cover other loans, and that borrowers don't "invest" the proceeds is ludicrous on multiple fronts: on the one hand you are arguing that loans are hard to come by ue to Basel II while on the other hand saying banks are giving loans willy-nilly to companies without the means to repay them and for the purposes of paying other loans, like a ponzi scheme, and then you say that the loans will go to "keeping the business solvent", seemingly without realizing that any and all money a company spends ultimately ends up as someone else's consumer purchasing money. When you say, "If I invest, or 'save', money, it will NEVER end up on the demand side", you are 100% entirely incorrect: it cannot do anything but ultimately end up as demand.
I'll tell you exactly why the crisis came about, and how government interference directly caused it: imagine you set up an insurance company to sell insurance against fire destroying houses. You collect premiums and set aside money to cover the eventual fires. You underwrite your customers diligently, because if they are more likely to have a fire, you are more likely to lose money. You are rewarded based upon how well your insurance contracts, in the aggregate, perform: if your customers have few fires, you make some money. If you misjudge the risk, you lose some money. You do your best to price your insurance such that, in the aggregate, you will have enough money to pay losses, plus some profit. Now, imagine what would happen if, suddenly, you no longer had to pay losses. No matter whether a customer of yours has a fire or not, you don't have to pay out, and you make money on the policy. And the more policies you sell (regardless of losses), the more money you make. How would you behave? If you are a rational person, you will start selling policies like crazy without any regard to the risk of a fire to a policy holder. Some customers will come in and tell you their house is already on fire. You couldn't care less, and sell them a policy, and for cheap, too. Other customers come in and tell you their house has burned down to the ground several times before. You don't care about that, either - you sell them a policy.
How does all that relate to the mortgage crisis? It is identical: the government set up Fannie Mae and Freddie Mac to backstop mortgages. Banks no longer carried mortgage risk themselves: they instead simply sold mortgages, funnelled them through Fannie and Freddie for insurance against default, and then sold the fully insured loans to investors. Because of the government (and only because of the government), the banks had no concern whether a lender would ever pay back a cent, because their accountability was entirely removed by the government: they now made money solely based on the number and volume of money lent, not on how those loans performed. Did they care if you didn't have a job, no assets and couldn't afford the house? Hell no! It didn't matter! The government took on the risk. And then, the government went all-in: it declared that more "disadvantaged" people and poor people needed to own houses, and insisted
That typically happens in countries outside the US.
Well, the social conservative would say, "that's fine, provided only my religion gets that freedom!" The social liberal would say, "it isn't fine, because I hate religion!". The libertarian would say, "who gives a fuck, so long as it doesn't interfere with my ability to exercise whatever religion I choose (or anyone else chooses)."
PS: thanks for the link - interesting article. The author is correct about bailouts: if investors take the risk of investing in a country (or a bank, or GM, or AIG), and those investments go south, the investor should suffer the consequences, not the taxpayer (which the author subsitutes "workers" for). However the author mistakenly equates corruption with "conservative". I'm not a "conservative" or a "republican" or "right-wing" (I'm a libertarian), but the issues he raises are not a function of economic or political point of view; rather they are a function of criminal activity (a newspaper using wiretapping in order to exert political control) or what should be criminal activity (the government bailing out private companies and investors). The "right" works for a small group of people called "bankers" and the left works for a small group of people called "unions". Neither is correct.
Thanks for the detailed reply.
:) Of course, you could always borrow that money to pay the bureaucrats - that's exactly what the US government has been doing in earnest since about 1970 (but particularly so since 2008). In fact, government employees now make up about 1 in 7 workers in the US and growing.
It seems to me you have too rigid a defnition of "supply" and "demand", as tho they are somehow mutually exclusive. For example, when you posit that savings go to the "supply side of the economy", I don't understand: savings go to loans (at a considerable leverage, it's better than 10 to 1) or other investment. And what do these loans do? They result in purchases, ie the demand you're looking for! Unless someone borrows money simply to put the money under his or her mattress (which would only make sense with negative real interest rates), borrowing is going to lead to spending, and it's going leverage savings. It is all intertwined, my friend. And even if you hand people money and they in turn pay their debts with it, that's going to lead to demand too, because the lender will now have money to re-lend, and will leverage that money too. The way you explain it doesn't make sense to me: you argue that there is too much supply and not enough demand, but by your same logic, increasing supply means hiring more workers which means more money in the pockets of those workers which they in turn can spend and create your demand!
I agree that paying bureaucrats is not the same as burning money. It's worse. What I mean by that is that you are taking money from a free (and rather efficient) market and giving it to a monopoly (the government) which faces no real competitive pressures to spend that money in an efficient manner. On top of that, the money to pay these people is taken, no less, from those people in the free market whom you wish could purchase more in order to stimulate demand! The case you are inadvertently making for tax cuts is getting stronger
We haven't really tried the "opposite of communism" in the past 200 years at least. The extremes you use, ie that communism is on the one hand and the heavily regulated market we've had for the past 50 years is on the other and therefore the answer lies in the middle are false choices: it's more a case, in my opinion, that we've seen that complete command economies fail completely, while partial command economies (like the US and most other western countries) fail more slowly, because those free parts of the economy manage to sustain it. To be clear about one thing: a lot of the popular criticisms of capitalism that seem de rigeur these days seem to have their roots in criminal activity and/or lack of transparency: Madoff, Enron, Worldcom, Tyco, Hollinger, et al are not examples of a market operating freely. Fannie Mae and Freddie Mac are flat out examples of profound interference in the market by government (why the government should have any interest in whether people buy homes, or encourage them to do so, or set up government-backstopped entities to backstop mortgage, or explicitly encourage the backstopping of loans, under the guise of "helping the poor and historically disadvantaged realize the dream of home ownership", to the people least able to make good on those loans, is all beyond my comprehension). None of the meltdown of 2008 could have occured without the government backstopping mortgages via Fannie and Freddie. That's an example of government intervention directly causing economic harm to a great many people. If you're interested, I can elaborate on exactly the mechanisms which made that possible - essentially, the government actively and explicitly took accountability of mortgage performance out of the hands of the people writing those same mortgages. The prospect you don't seem to be considering is that, if total government intervention is extremely bad, and a lot of government intervention is bad (but not quite as bad), then quite possibly far less intervention may lead to bett
You do realize that when someone else is disparaging the "average person" or the "average voter" they are including you in that group?
Good points about the DNA data - thanks for that - I somehow managed to misplace my thinking cap, yet again...I think it's over here under my tin foil lid...
Agreed: nothing wrong with settlements. Rather, the fundamental problem is that it costs a bloody fortune to defend yourself from a frivolous (or any kind of) suit. That's a function of regulation which says that you must go to (typically very expensive) law school, pass the bar and then article to become part of the club and practice law. The practical effect is that it restrains the supply of lawyers and inflates the cost of legal advice. It's also a rather new concept: it wasn't that long ago that lawyers were simply people who chose to practice law, typically after apprenticing under a practicing lawyer for some time (but not necessarily so).
+1, and thank you. I use a 37" 16 X 9 monitor at a distance of about 2m, so I have set my minimum font sizes fairly large. About 3 in 10 sites have problems with this, ie: overlap of page elements. Very irritating having to regularly disable minimum font size in order to see the entire page or particular elements, and I suspect it's going to be an issue for more and more people as televisions attempt to integrate web pages, include browsers, etc.
Notably, Chrome seems to do a much better job rendering these same sites, so maybe it's the browser after all, and not the web designers I've been cursing...
Aren't you a "Mr or Mrs John Q Voter"?!? If so, how come you have the powers to figure it out but assume the rest of the population doesn't? I see an awful lot of comments along these lines, ie, "I can figure these things out but the rest of the people can't, therefore we must apply laws such that the dumb population can be made to see things with my scintillating clarity." It's nonsense, all of it, and the height of arrogant presumption: you, in all likelihood, aren't any more "perceptive" or "insightful" than those who disagree with your viewpoints (and are therefore presumed to be idiots).
To the article: I'm not in favor of the government retaining this data or any other data from unconvicted people, but does this differ significantly from fingerprints (ie insisting that you surrender personally identifying biological traits)? Note I'm not arguing either should be stored indefinitely, or that taking fingerprints is acceptable (nor am I arguing it isn't). I'm just honestly not seeing the significant difference between the two (but am open to being informed).
I'm afraid I don't understand the logic of your first paragraph: you seem to be saying that putting money in people's pockets via a tax break only serves to stimulate demand if those people already have some arbitrary amount of money. Why would that be? In fact, the less money that people have, the more likely they are to immediately spend a tax rebate, rather than save it (of course, whether they save it or spend it, it still goes into the economy, unless they save it under their mattress). It also tends to be more efficient to give money directly to people, rather than spend money on so-called "stimulus" projects, because those projects come with bureaucracies and other inefficiencies. Obama would have made more efficient use of the "stimulus" money simply by throwing it out of a helicopter.
There's nothing fundamentally "socialist" about people saving more then they spend. In 2007 (ie pre-recession), the top net savers were France, Ireland, Germany, Austria and Switzerland (in order - you can find details here: http://econ365.files.wordpress.com/2008/10/gross-savings-rate.pdf). Nor does that seem to insulate a country from economic problems: on a gross basis, Spain and Belgium have had almost identical rates of savings, and yet face very different economic situations today. In fact, you seem to be arguing that people need to save more but also spend more, in order to stimulate demand! You do realize that you cannot simultaneously save and spend the same dollar?
When it comes to supply and demand, the thing I think you are perhaps overlooking is that these apply to everything, not just products (which is what you seem to be arguing). What I mean by that is that investment, labor, savings rates, interest rates (to some extent - they are heavily manipulated by (what should be illegal) central banks), prices, availability of products, etc. are all a function of supply and demand. And besides, shifting a bunch of money from one group of unfavored people to another group of favored people doesn't accomplish anything economically anyway: that's a zero sum game, and as others have pointed out, other than putting money under your mattress, it is impossible to take money "out" of the economy. When people complain about billionaires "hoarding" money, this is a virtually impossible thing for them to do: they invest it and/or spend it, just maybe not in a way some people (or governments - see Obama and his comments about private jets etc) particularly care for. In my world view, you can do whatever the hell you like with your money.
You cannot "dump" products in an economy and somehow "force" people to buy them (altho in other parts of your post you seem to suggest doing just that). It is a confusing post to me: you think people should save more such that they can spend more but then argue that "As soon as the savings dry up, we end up in the mess we're in now."
The fundamental mistake you're making, in my opinion, is thinking that supply and demand need to somehow be "controlled' or "dictated" by a government. That is the surest way to cause a mismatch between the two: it's been tried many, many times to varying degrees - the governments which have tried it the most have had the poorest of results (I should say their people have had the worst outcomes: see Cuba, USSR, China (pre market reforms) and virtually any desperately poor country. Then take a look at countries which have liberalized their economies. Hell, even Cuba is now permitting some small taste of free market business (ie hair dressers and restaurants) because their attempts to interfere in free markets have had such desperately and heartbreakingly poor results on generations of people). Think a guaranteed "minimum wage" or "social safety nets" are the key to a successful economy, and therefore a prosperous and well-fed people? I'm happy to provide you a one-way ticket to Cuba anytime!
To be clear: it is not
This reminds me of an assignment I was given in high school English class: the book we were to study that year was Hemingway's "A Farewell to Arms". Prior to starting the book, the teacher asked that we write an essay outlining our expectations of the book, based solely on the title. Well, I had no idea what the hell the book would be about - all I could come up with was a future in which superior, articficial limbs became widely available, and once a person's growth stopped, they'd have their natural limbs hacked off and replaced with the better artificial limbs in a ceremony called, "A Farewell to Arms!" The teacher gave me an "A+", but looked at me funny the rest of the year...
Some very interesting comments (and I thank you for your civility - the name calling I've received from those who disagree with my viewpoint, while amusing, was getting rather boring) - wish I had time to respond more fully, because I don't disagree with a lot you've said.
Canada is a pretty good example of how regulations and taxation and the size of government and government debt can go too far, and also shows the path for the US to pull back from the brink:
Canada has been systematically reducing its various tax rates and cutting government services since the mid-90s. The consequences? GDP grew. Tax revenues increased. Unemployment went from 12% to 6%. The dollar went from being worth $0.67 USD to about $1.06 USD (before lowering to about $1.01 USD in the turmoil of the past few days). Government deficits were eliminated (until recent economic downturn) and the country ran surpluses. Government debt as a percentage of GDP went from 70% at its peak in 1995 (about where the US is today) to about 22% (pre-downturn - it's now around 31%).
I'd say there are some lessons there for the US...
I'm not in favor of no regulation: there is a need to regulate where the market won't find equilibrium in a reasonable time frame (ie in a lifetime, or a generation) or where irreversible harm can be done to humans (think pharmaceutical products and the like). Note however that all regulation comes at an expense, and virtually all regulation is a restraint of trade (by definition, I guess) with often negative consequences. For example, there are a lot of industries which systematically restrain the free trade of labor via regulation, such as lawyers. In order to become a lawyer, one must attend (rather expensive) law school and then article and then write the bar exam and be accepted to the bar. It is not permitted to simply challenge the bar exam and then practice. Or, simply practice, and let your customers decide if you're worth supporting. That's nothing but an attempt to restrict the supply of lawyers in order to inflate the price of legal advice. Same things applies in almost any "professional" organization. Do I think engineers who build bridges should face additonal scrutiny? Well, their design should. Should it matter if they've spent money on the approved education and been accepted into the club? Not so much. Same applies to almost all government regulation, with some notable exceptions. Keep in mind that all this hyper-regulation is a relatively new concept, and that those industries and people regulated still make plenty of mistakes (have a chat with any malpractice lawyer to see how regulation of doctors has not put an end to malpractice).
As for social safety nets, I'm all in favor of them, provided they are privately and voluntarily delivered (ie charitable). I'm happy to (and I do) do my bit for my fellow humans without needing a government to put a gun to my head.
Interesting - thanks for the additional info.
Of course, the "fairest" system would be a single flat income tax or a single consumption tax (where here I'm defining "fairest" as "each person pays an equal share of what they earn/spend"). Then, using your figures above, the 56% of earners making less than $100K would contribute 56% of the revenue. The benefits of such a system would include eliminating the enormous tax-preparation industry that exists simply because the tax code has become so confusing and complicated.
Are you using the stats here http://pubdb3.census.gov/macro/032007/hhinc/new06_000.htm ?
What's interesting is that if you plot this data out, comparing share of income with share of households, some things jump out:
- from about $52K to $100K, share of income almost exactly matches share of households;
- from $100K to $150K, the share of income jumps dramatically compared to the share of households: the percentage of all households in this division is 11.54% however this group earns 20.70% of all income, the second largest discrepancy;
- for the groups in the $150K to $200K and $200K to $250K, the discrepancy drops (to 4.10% households/10.42% income and 1.53%/5.04% respectively);
- at $250K+ the discrepancy rises again dramatically, to 1.93%/13.01% (the biggest point spread of all);
- the halfway point for households is about $50K: 51.36% of households make less than that while 48.64% make more. The share of income is 19.47% ($50K);
- there are almost certainly some extreme outliers at the top end.
Unless you have a system whereby the government entirely dictates who gets what, there will always be natural discrepancies between share of households and share of income, just as two people who sit in adjacent cubicles may make different salaries based on their perceived worth to their employer. And there will always be those who decry any result as "unfair". I guess the better question is: is it possible for a household to make the jump from one income tier to the next?
I arbitrarily picked 2002 data (which you can find here: http://pubdb3.census.gov/macro/032003/hhinc/new06_000.htm) and compared it to the 2007 data. This shows that the number of households in virtually every category below $85K decreased (notable exception: the number of households earning between $70K and $72.5K increased 11.84%) while the number of households above $85K increased, in many cases dramatically (for example: number of households earning $85K to $87.5K increased 5.39%; $87.5K - $90K: +6.94%; $90K - $92.5K: +8.19%; $92.5K - $95K: +11.52%; etc.).
What can one conclude from this? Well, everyone seems to be making more money (note: the data does not seem to correct for inflation, but inflation has been historically low during the sample period). The rich are getting richer, if you define rich as those making more than $85K. The richest households saw the greatest number of new entrants: there was a dramatic increase in the number of households earning $100K - $150K (+27.46%), $150K - $200K (+53.08%), $200K - $250K (+47.62%) and 250K+ (+45.97%). My quick analysis of that leads me to believe people are capable of bettering their place on the income ladder in the US. YMMV.
Here are some numbers relating to the US federal income tax:
- the top 2% of earners in the US pay 43.6% of all federal income tax (while earning 24.1% of all income)
- the bottom 50% pay 3.3% (while earning 13.4% of all income).
- the top 5% of earners (which equates to an average income of $137,056) pay a whopping 57.1% of all federal income taxes.
Wish I had three-quarters of a mod point, because I agree with almost everything you say, but for your final two paragraphs.
The US wasn't intended to have a standing army, and the battles it is currently engaged in are pretty far removed from "defense", unless you think the folks in the middle east can fire camels, Angry Birds-like, to the US shores. In fact, there's a strong correlation between a US presence in a country and an increase in anti-US sentiment (and terrorism) from that same country (sorry, I don't have time to find the link to the article, but if I recall, Ron Paul included reference to it at one point).
Your point about gun ownership is spot-on: the Second Amendment doesn't have anything whatsoever to do with hunting and everything to do with weapons not being the exclusive domain of the government and keeping the government in check.