Ah, sorry. They switched notation a couple of times in the paper, which was why I was off by an order of magnitude.
Though, I have a beef with one of their assumptions. (Well, the authors admitted that there were several factors that could cause the threshold to be quite a bit lower)
The idea behind MMS viruses is that they'll spread to everyone on the phone's contact list. But, they couldn't get the contact lists of the phones in the data, so they approximated it by using the calls that a phone made over a 3 month period as a "contact list.
This, on average, approximates things pretty well. Unfortunately, there are a small but significant number of users(Businessman, heavy travelers, social butterflies) who will have large numbers of disparate contacts that they very rarely call.
These "hubs" would likely dramatically decrease the threshold needed.
Luckily, on the other side, multiple and incompatible OS versions serve to further fragment the market, which should buy us a lot of time. For example, the most common Symbian version(7.0), only makes up 25% of Sybian phones. This puts the largest segment of the mobile market at.81%, not 3.2 .
Basically, as networks grow, their fundamental structure changes.
Right now, the Smart Phone is too fragmented, and so there is no "giant component" of cell-phone users with the same OS who are connected to each other. This, and not technical limitations, is the reason why there have not been any cell-phone virus breakouts.
However, we're getting pretty close to that point, and once a certain threshold is met, there will be a sudden "phase transition", and giant components will form.
Good for you. But the US spends FAR more on health-care(Even when you wake away government spending), then literally every other country in the world. Meanwhile, the people in other countries seem to be quite a bit healthier...
"There's this thing called person responsibility I happen to believe in. When I've gone grocery shopping I've compared prices. With a freemarket in health care I'd also compare prices. When I can I shop for what I consider the best deal, which may be different than someone else's best deal."
Due to reasons that are partialy outlined in the previous link, the free market doesn't converge to good outcomes in the insurance market. It's one of the first things they teach you in Game Theory...
Maybe you'll end up with something workable, but it's not too hard to show the outcome will not be pareto-efficient.
3) Doctors in certain specialties have essentially monopolies in their local areas, forcing their salaries to absurd levels. Without monospony power from a single payer, prices will always be above the social optimum.
4) Most importantly, society is not going to let anyone die from lack of healthcare. And so, many people will free-ride off of this and not get health insurance.
5) The demand functions really are pathological here. People are willing to pay anything not to die. I doubt the general welfare theorem holds.
Those are some reasons why I think a France-style healthcare system would be cheaper and provide better heath-outcomes then a perfectly free-market one.
"Instead most of the money was simply given to banks, those banks aren't lending money instead their using the money to buy other banks."
No, it was given in exchange for equity, as I said...
"Oh really? You had enough tyme to read the 647 pages in the House version?"
No, that's why I said " Looking through the big ticket line items". If you've looked at it in greater detail and have any complaints, voice them...
The government has had a mandate to take care of the environment for at least a century(with the national parks act). But as we learned more about pollutants and ecosystems, it became necessary for the government to create a separate agency to fulfill the government's perceived responsibility over the environment.
With the Department of Energy, the government had been explicitly maintaining an oil cartel for a century, and had already launched several coups in oil rich countries. Obviously, the government has believed that energy was it's responsibility for quite a while.
You could make similar arguments for the HUD, CDC, and DHS.
Everyone agrees that we need to transition from consumption to investment.
But right now, the financial sector simply isn't functioning. There are a million reasons why, coordination issues are a big part of it. And so dumping money into the financial sector won't accomplish anything right now.
The stimulus is meant to keep everything humming while we make the necessary transitions, so that dislocations don't end up causing too much collateral damage.
I wasn't talking about nominal prices. I was talking about relative prices(As in, the amount of corn that needs to be sold in order to support the salary of a teacher). These are unaffected by inflation.
The point, is that the cost of labor intensive public goods have risen relative dramatically relative to the rest of the economy, mainly due to Baumol's cost disease. And so, government needed to raise taxes in order to pay for them.
It's not, as libertarians like to believe, that government's scope has increased. It's that the areas under the government scope have become much more expensive.
"Really do you want our corrupt government to decide more loosers and winners? I'd rather decide the loosers and winners with my dollars than having the government take them and decide for me."
Eh, that sound-byte breaks down when under the second scenario, you don't have any dollars to decide with. You need some sort of policy measure that addresses the breakdown in aggregate demand. Otherwise, you've got nothing but old slogans.
"One thing to remember, is that the car manufacturers, as opposed to ALL the other bailouts, asked for short term low interest loans to keep going, because the credit market had frozen, and they couldn't get the loans they needed."
Sorry, that isn't true. Most of the money we've given has been with the Cash-Equity formula, where we give them money in exchange for equity in their company. Either that, or we gave them high, not low, interest loans.
"Every other bailout was a free handout to the company (including AIG TWICE!)"
One, the Feds were given an 80% stake in AIG. In exchange for that 80% stake, we gave them the right to loan 85 billion dollars at a rate of Libor+850(which is higher than most credit cards). The second "bailout", was when we extended their credit line.
"Health - not income tax; it's a separate tax called Medicare"
That's...not true. Medicaire is partially covered by FICA taxes, but government health programs are far more expansive than medicaire. You have Medicaid, the VA, public health programs like the CDC, etc. Just the non-medicaire component of our health-care spending makes up 58% of the money raised by general income taxes, with defense making up nearly all of the remainder.
"instead, I'd concentrate on fixing our tax structure so people aren't spending $50/year to figure out their taxes. "
Definitely, that's an important one. As of now, it costs 1.8 dollars to the economy in order to raise 1 dollar of tax revenue. That's a lot of deadweight loss that just get's thrown away. Simplifying the tax code would be a great way to cut down on that.
"Or go whole hog and get rid of income taxes in favor of sales taxes."
I like the idea of consumption taxes too. Studies have shown though that Sales Taxes break down due to enforcement issues above 10% or so.
My pet idea then, is that any money that is made needs to get deposited into some sort of generalized IRA-like savings account(It could contain stocks, commodities, bonds, whatever). And then, you only get taxed on your withdrawals(You could make taxation regressive if you want).
Administratively, this is a lot easier than an income tax, because you don't need to define income. And it would be a great way to boost our savings rate. (Though, we'd want to wait until he financial system recovers before we implement such a thing).
"So tell me, how did the US do without income tax until 1913?"
90% of the federal budget is spent on Health Care, Pensions, and Defense. Before 1913, the government(state, local, or federal) spent money on all of these things, and there was a national consensus that these things were a public priority.
The thing is, that all of these things have gotten *a lot more expensive* relative to the rest of the economy, since the price of labor has skyrocketed. This is a rather textbook case of http://en.wikipedia.org/wiki/Baumol's_cost_disease/ . It's why the British army was able to fund an army of a couple million a century ago for a fraction of the cost that they now spend to maintain an army of 200,000.
"Was private education non-existent or worse than the complete fail of the 'Hold-all-children-behind' public monopoly? "
Private education was essentially non-existent, and probably less prevalent then it is now. Wide-scale compulsory public education became widespread way before 1914.
The reason costs have exploded, is that the productivity of labor in teaching doesn't increase very much over time, while the productivity of labor in the general economy has skyrocketed. Once again, http://en.wikipedia.org/wiki/Baumol's_cost_disease/.
That really is the opposite of what we'd want. If the financial sector was working, then saving would equal investment, which boosts aggregate demand. The idea being that someone pays his debt down, the bank gives it to a business, and the business buys things, and everything works out well.
But since the financial sector isn't working, so if someone saves, the bank just sits on the money and it disappears. Because of that, a large increase in savings would cause a rather large decrease in aggregate demand, which would causes businesses to close, which causes further decreases in aggregate demand... that process ends at the great depression.
To prevent that, we want the government to spend their money boosting aggregate demand to compensate. Government spending is one way to do it, but there are limits to how many roads you can build within a couple months. So some money will be given to individuals.
But the key point, is that the money given to individuals needs to be *spent*, not saved!
From what I understand, the TARP program mostly involved capital injections in exchange for equity in the companies. Presumably, we could sell the equity at a later date when/if the market recovers.
Other than that, most of the fed's actions have been loans, and at pretty high interest rates! Our deal with AIG involved a loan at Libor+450, which is a higher rate then most credit cards.
You still have to cover health care, social security, and defense. That's 90% of our budget.
Keep in mind, any health care reforms you make to save money must take information asymmetry into account, as well as the public's refusal to see people die from lack of health care. Any social security reform must take into account that the public is not going to let large numbers of old people live in poverty(Forcing a program of either outright government pensions or forced savings programs like social security), and that any politician who cuts defense will be skewered after a terror attack.
Once these constraints are taken into account, any program you make will resemble the status quo. There's a reason that you won't find any first world countries that are libertarian paradises.
"Most government agencies, in my own government experience at the FAA, have 60-65% of workers who sit-around doing nothing all day long, except surfing the net. They could easily layoff those persons (same way a corporation trims the fat), and still get the same amount of work done."
Sorry, this talking point is quite annoying. I could easily say "Based on my experience of corporations, most have them have 60-65% of workers who sit around doing nothing all day long". Running a large organization is very difficult, and the challenges apply equally to the public and private sector. If anything, the public sector might have an easier job, since public sector workers are not allowed to strike.
And in terms of data, the TVA was more efficient than neighboring companies, and Medicaire has *much* lower administrative fee's than insurance companies who cover the same group.
"1. There is nothing evil about having made money. Ask George Soros who has billions."
George Soros made his money by playing game theoretic tricks on the Bank of England. I wouldn't want to prosecute him or anything, but a simple phone call to the central banker saying "Hey, your exchange rate regime is idiotic, and if you don't change it some investor is going to fuck your country over" would have left the world a vastly better place than what actually happened: The British government collecting taxes, with heavy deadweight loss involved, in order to make a billionaire richer, all the while creating heavy exchange rate volatility.
Point being, that sometimes, someone makes money at the expense of the public in a free market. Precisely when and why this happens has been the main subject of study in economics for years.
"3. Sending money to Washington: not a smart way to create jobs. History shows that."
Really? How would you like to show that? If you go ahead and plot "Unemployment" vs "Government spending as percent of GDP", you'll find an inverse relationship. That doesn't prove causation, but the correlations are against your side.
"Wouldn't it be better if the government didn't to take half of people's money in the first place? Your average homeowner gets about a third of his income lopped off in withholding, then another chunk in sales taxes and property taxes take the rest. How great would it be if everyone's earnings were suddenly doubled?"
As it is now, taxes are too low to pay for the government programs that the public seems to really want. Remember: Health Care, Defense, Social Security, and interest on our debt make up literally 90% of the federal budget. Unless someone is to propose deep cuts in these programs, any populist moaning on taxes strikes me as a bit annoying.
"Even when they have the best of intentions you can't rely on government to do the right thing - look at both of the trillion dollar bailout packages: pure pork and waste. The process of government is inevitably biased by the actions of special interests, self interest of the politicians and plain old human stupidity."
That strikes me as a strong statement. From what I can tell, the TARP program was pretty efficient in what it aimed to do: Injecting capital into banks in exchange for equity. Judging by the TED spread, it seemed to do a pretty good job at stabilizing our financial system.
And the stimulus package, while it hasn't gone through congress yet, seems to be pretty clean. Looking through the big ticket line items, everything in it seems to do what it's supposed to: Raise aggregate demand by utilizing under-utilized resources in the economy.
Unless you have a very odd definition of pork, I don't see your justification here.
Slashdot Mirror
It's "n'est-ce pas?".
Word for word, that is "is it not?". Figuratively, it's the equivalent of "No?". The "ce", or "it", is usually silent.
Though, I have a beef with one of their assumptions. (Well, the authors admitted that there were several factors that could cause the threshold to be quite a bit lower)
The idea behind MMS viruses is that they'll spread to everyone on the phone's contact list. But, they couldn't get the contact lists of the phones in the data, so they approximated it by using the calls that a phone made over a 3 month period as a "contact list.
This, on average, approximates things pretty well. Unfortunately, there are a small but significant number of users(Businessman, heavy travelers, social butterflies) who will have large numbers of disparate contacts that they very rarely call.
These "hubs" would likely dramatically decrease the threshold needed.
Luckily, on the other side, multiple and incompatible OS versions serve to further fragment the market, which should buy us a lot of time. For example, the most common Symbian version(7.0), only makes up 25% of Sybian phones. This puts the largest segment of the mobile market at .81%, not 3.2 .
Right now, the Smart Phone is too fragmented, and so there is no "giant component" of cell-phone users with the same OS who are connected to each other. This, and not technical limitations, is the reason why there have not been any cell-phone virus breakouts.
However, we're getting pretty close to that point, and once a certain threshold is met, there will be a sudden "phase transition", and giant components will form.
I can understand why some people would just want a phone, but you think that the group of people who will never
buy a smart phone is so astronomically high?
"Reaches a certain market-share threshold" != "everybody owning an iphone"
Good for you. But the US spends FAR more on health-care(Even when you wake away government spending), then literally every other country in the world. Meanwhile, the people in other countries seem to be quite a bit healthier...
Due to reasons that are partialy outlined in the previous link, the free market doesn't converge to good outcomes in the insurance market. It's one of the first things they teach you in Game Theory...
Maybe you'll end up with something workable, but it's not too hard to show the outcome will not be pareto-efficient.
There are a couple of reasons why I don't think you'll see a functioning free-market health-care system.
1) The cost of catastrophic care is high enough that people will need insurance.
2) Insurance doesn't work very well in the free market due to game theoretic reasons. See http://en.wikipedia.org/wiki/Information_asymmetry .
3) Doctors in certain specialties have essentially monopolies in their local areas, forcing their salaries to absurd levels. Without monospony power from a single payer, prices will always be above the social optimum.
4) Most importantly, society is not going to let anyone die from lack of healthcare. And so, many people will free-ride off of this and not get health insurance.
5) The demand functions really are pathological here. People are willing to pay anything not to die. I doubt the general welfare theorem holds.
Those are some reasons why I think a France-style healthcare system would be cheaper and provide better heath-outcomes then a perfectly free-market one.
"Instead most of the money was simply given to banks, those banks aren't lending money instead their using the money to buy other banks."
No, it was given in exchange for equity, as I said...
"Oh really? You had enough tyme to read the 647 pages in the House version?"
No, that's why I said " Looking through the big ticket line items". If you've looked at it in greater detail and have any complaints, voice them...
You could make consumption taxes progressive, see my post here. http://slashdot.org/comments.pl?sid=1111355&cid=26684787
As I said, the TARP program mostly involved capital injections in exchange for equity in the companies. See http://en.wikipedia.org/wiki/Capital_Purchase_Program
The government has had a mandate to take care of the environment for at least a century(with the national parks act). But as we learned more about pollutants and ecosystems, it became necessary for the government to create a separate agency to fulfill the government's perceived responsibility over the environment.
With the Department of Energy, the government had been explicitly maintaining an oil cartel for a century, and had already launched several coups in oil rich countries. Obviously, the government has believed that energy was it's responsibility for quite a while.
You could make similar arguments for the HUD, CDC, and DHS.
But right now, the financial sector simply isn't functioning. There are a million reasons why, coordination issues are a big part of it. And so dumping money into the financial sector won't accomplish anything right now.
The stimulus is meant to keep everything humming while we make the necessary transitions, so that dislocations don't end up causing too much collateral damage.
The point, is that the cost of labor intensive public goods have risen relative dramatically relative to the rest of the economy, mainly due to Baumol's cost disease. And so, government needed to raise taxes in order to pay for them.
It's not, as libertarians like to believe, that government's scope has increased. It's that the areas under the government scope have become much more expensive.
Eh, that sound-byte breaks down when under the second scenario, you don't have any dollars to decide with. You need some sort of policy measure that addresses the breakdown in aggregate demand. Otherwise, you've got nothing but old slogans.
Sorry, that isn't true. Most of the money we've given has been with the Cash-Equity formula, where we give them money in exchange for equity in their company. Either that, or we gave them high, not low, interest loans.
"Every other bailout was a free handout to the company (including AIG TWICE!)"
One, the Feds were given an 80% stake in AIG. In exchange for that 80% stake, we gave them the right to loan 85 billion dollars at a rate of Libor+850(which is higher than most credit cards). The second "bailout", was when we extended their credit line.
The automakers never approached those terms.
That's...not true. Medicaire is partially covered by FICA taxes, but government health programs are far more expansive than medicaire. You have Medicaid, the VA, public health programs like the CDC, etc. Just the non-medicaire component of our health-care spending makes up 58% of the money raised by general income taxes, with defense making up nearly all of the remainder.
I'm pretty sure that nearly everything we've done involved either loans or cash-equity swaps. I'm not aware of any cash giveaways.
Definitely, that's an important one. As of now, it costs 1.8 dollars to the economy in order to raise 1 dollar of tax revenue. That's a lot of deadweight loss that just get's thrown away. Simplifying the tax code would be a great way to cut down on that.
"Or go whole hog and get rid of income taxes in favor of sales taxes."
I like the idea of consumption taxes too. Studies have shown though that Sales Taxes break down due to enforcement issues above 10% or so.
My pet idea then, is that any money that is made needs to get deposited into some sort of generalized IRA-like savings account(It could contain stocks, commodities, bonds, whatever). And then, you only get taxed on your withdrawals(You could make taxation regressive if you want).
Administratively, this is a lot easier than an income tax, because you don't need to define income. And it would be a great way to boost our savings rate. (Though, we'd want to wait until he financial system recovers before we implement such a thing).
90% of the federal budget is spent on Health Care, Pensions, and Defense. Before 1913, the government(state, local, or federal) spent money on all of these things, and there was a national consensus that these things were a public priority.
The thing is, that all of these things have gotten *a lot more expensive* relative to the rest of the economy, since the price of labor has skyrocketed. This is a rather textbook case of http://en.wikipedia.org/wiki/Baumol's_cost_disease/ . It's why the British army was able to fund an army of a couple million a century ago for a fraction of the cost that they now spend to maintain an army of 200,000.
"Was private education non-existent or worse than the complete fail of the 'Hold-all-children-behind' public monopoly? "
Private education was essentially non-existent, and probably less prevalent then it is now. Wide-scale compulsory public education became widespread way before 1914.
The reason costs have exploded, is that the productivity of labor in teaching doesn't increase very much over time, while the productivity of labor in the general economy has skyrocketed. Once again, http://en.wikipedia.org/wiki/Baumol's_cost_disease/.
But since the financial sector isn't working, so if someone saves, the bank just sits on the money and it disappears. Because of that, a large increase in savings would cause a rather large decrease in aggregate demand, which would causes businesses to close, which causes further decreases in aggregate demand... that process ends at the great depression.
To prevent that, we want the government to spend their money boosting aggregate demand to compensate. Government spending is one way to do it, but there are limits to how many roads you can build within a couple months. So some money will be given to individuals.
But the key point, is that the money given to individuals needs to be *spent*, not saved!
Other than that, most of the fed's actions have been loans, and at pretty high interest rates! Our deal with AIG involved a loan at Libor+450, which is a higher rate then most credit cards.
Keep in mind, any health care reforms you make to save money must take information asymmetry into account, as well as the public's refusal to see people die from lack of health care. Any social security reform must take into account that the public is not going to let large numbers of old people live in poverty(Forcing a program of either outright government pensions or forced savings programs like social security), and that any politician who cuts defense will be skewered after a terror attack.
Once these constraints are taken into account, any program you make will resemble the status quo. There's a reason that you won't find any first world countries that are libertarian paradises.
"Most government agencies, in my own government experience at the FAA, have 60-65% of workers who sit-around doing nothing all day long, except surfing the net. They could easily layoff those persons (same way a corporation trims the fat), and still get the same amount of work done."
Sorry, this talking point is quite annoying. I could easily say "Based on my experience of corporations, most have them have 60-65% of workers who sit around doing nothing all day long". Running a large organization is very difficult, and the challenges apply equally to the public and private sector. If anything, the public sector might have an easier job, since public sector workers are not allowed to strike.
And in terms of data, the TVA was more efficient than neighboring companies, and Medicaire has *much* lower administrative fee's than insurance companies who cover the same group.
The bailout fund was to keep the financial system from destroying the world economy. It wasn't to be "nice".
George Soros made his money by playing game theoretic tricks on the Bank of England. I wouldn't want to prosecute him or anything, but a simple phone call to the central banker saying "Hey, your exchange rate regime is idiotic, and if you don't change it some investor is going to fuck your country over" would have left the world a vastly better place than what actually happened: The British government collecting taxes, with heavy deadweight loss involved, in order to make a billionaire richer, all the while creating heavy exchange rate volatility.
Point being, that sometimes, someone makes money at the expense of the public in a free market. Precisely when and why this happens has been the main subject of study in economics for years.
"3. Sending money to Washington: not a smart way to create jobs. History shows that."
Really? How would you like to show that? If you go ahead and plot "Unemployment" vs "Government spending as percent of GDP", you'll find an inverse relationship. That doesn't prove causation, but the correlations are against your side.
"Wouldn't it be better if the government didn't to take half of people's money in the first place? Your average homeowner gets about a third of his income lopped off in withholding, then another chunk in sales taxes and property taxes take the rest. How great would it be if everyone's earnings were suddenly doubled?"
As it is now, taxes are too low to pay for the government programs that the public seems to really want. Remember: Health Care, Defense, Social Security, and interest on our debt make up literally 90% of the federal budget. Unless someone is to propose deep cuts in these programs, any populist moaning on taxes strikes me as a bit annoying.
"Even when they have the best of intentions you can't rely on government to do the right thing - look at both of the trillion dollar bailout packages: pure pork and waste. The process of government is inevitably biased by the actions of special interests, self interest of the politicians and plain old human stupidity."
That strikes me as a strong statement. From what I can tell, the TARP program was pretty efficient in what it aimed to do: Injecting capital into banks in exchange for equity. Judging by the TED spread, it seemed to do a pretty good job at stabilizing our financial system.
And the stimulus package, while it hasn't gone through congress yet, seems to be pretty clean. Looking through the big ticket line items, everything in it seems to do what it's supposed to: Raise aggregate demand by utilizing under-utilized resources in the economy.
Unless you have a very odd definition of pork, I don't see your justification here.