:shrug: Stalin no, not as such. The repeated failures of economic systems built upon the belief that government can allocate resources more effectively than the market, yes.
How clever was the private sector's deliberate diversion of billions into garbage mortgage paper that it sold off as AAA which in turn ended up creating the worst global economic calamity in 75 years?
Not Very. Neither was the Government's encouragement of that activity.
How efficient was the private sector's cost-cutting on Deepwater Horizon?
Not very, as it turned out. Neither was the Governments' decision to push deep-water drilling out into dangerous depths in order to "avoid pollution". Neither is the government's limiting of domestic drilling, resulting in an increasing in oil
shipping which is the
real issue when it comes to oil-spillage.
Where did the Love Canal come from? Acid rain? How efficient have strip-mining and mountain-top exploding been?
:shrug: Lack of Pollution is a public good - just as defense and rule of law are. Therefore it is a proper role of government to enforce regulation in that area.
You seem to be struggling with the strawman that anyone has argued that the market is
perfect. Far from it - the market is full of dumb, uninformed, panicky, emotional people who make short-sighted decisions based on what feels good at the moment. To borrow from Churchill, a Free Market is the
worst form of economic organization..... except for all the others.
How about if you put all the externalized costs back in? The private sector pursues profit. It cannot be depended upon for devotion to anything else, as it has more than amply demonstrated over and over and over again. If a society values anything at all beyond a naked pursuit of profit, the private sector must be kept on a very short leash. It may be nice to own a horse, but you don't allow one in the living room.
I have no problem with profit. "Profit" is just another way of saying "Provided value to someone". If I run a series of restaurants and feed a million people, because they
value my feeding them, I will
profit by it. You don't "profit" in a free market unless you serve someone else. "Profit" is just a way of measuring the social value of an enterprise - it is a measure of how much we value
their work over the raw cost of performing it. Profit is a grand thing, and the more the better.
These are phony data that expand the notion of income beyond common understandings to include such amounts as an attribution to households of corporate income taxes paid, inclusion of the employer shares of payroll and unemployment taxes, employer contributions to retirement and health care plans, and also untaxed amounts received by beneficiaries from health insurance plans. This expansion of income results in a massive understatement of what would be seen as tax rates under common understandings.
:lol: The rest is pre-tax income, and in-kind benefit income. Which is just fine - my dad is a minister; no one is surprised that he has to count the parsonage as in-kind income.
But perhaps you would wish to challenge the point, and argue that the effective tax rate on new government employees would be above 100%?
Additionally, the progressive nature of income taxes makes the middle quintile unrepresentative of the population as a whole. In the case cited, the rate for the middle quintile is less that one-fifth of the rate for the population as a whole.
No, this is out of households. The only ones excluded are those with negative income.
What sort of private sector spending is being "choked off" today?
That which would result from a predictable tax and regulatory climate, and that which would result from funds being allocated by the private rather than the public sector.
The feds would love to see anybody at all spend more money.
Of course they would. This is because we are an exceedingly short-sighted people. Once you've leveraged yourself to the hilt, the only way out is
deleveraging. We as a nation and as a people have leveraged ourselves pretty damn highly, and now comes the hangover.
The paper cited does not in fact show that.
Allow me to cite from the Executive Summary:
We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As for fiscal adjustments, those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions. We confirm these results with simple regression analysis.
Allow me to cite one of the
Authors:
Politicians argue for increased stimulus spending, as opposed to spending cuts, on the grounds that it would speed up economic recovery. This argument might have it exactly backward. Indeed, history shows that cutting spending in order to reduce deficits may be the key to promoting economic recovery....
But perhaps that one went off the reservation. What does the
other author say on his own?
...The deficit debate is often misleading, however, because it tends to ignore a huge difference between the two kinds of deficit reduction. The evidence speaks loud and clear: when governments reduce deficits by raising taxes, they are indeed likely to witness deep, prolonged recessions. But when governments attack deficits by cutting spending, the results are very different...
The obvious economic challenge to our contention is: What keeps an economy from slumping when government spending, a major component of aggregate demand, goes down? That is, if the economy doesn’t enter recession, some other component of aggregate demand must necessarily be rising to make up for the reduced government spending—and what is it? The answer: private investment. Our research found that private-sector capital accumulation rose after the spending-cut deficit reductions, with firms investing more in productive activities—for example, buying machinery and opening new plants. After the tax-hike deficit reductions, capital accumulation dropped...
Gosh, that's odd. History seems to demonstrate that nations have consistently experienced the results that
cpwill would have predicted, but not the ones that
you would have predicted. Application of the scientific method regarding the testing of multiple competing hypothesis would suggest that
your underlying assumptions, perhaps, are inaccurate.
The authors indeed explicity refused to examine the multipliers you claim to have been shown to produce negative economic effects.
Ah. So darn them they looked at what
actually happened rather than accepting econometric modeling with pre-determined results as a stand-in for reality?
Neither did the authors manage to distinguish between liquidity-trap and non-liquidity-trap environments, though that would seem to have been a necessity with respect to the current US situation. They in fact excluded from their study the largest prior example of an expansionary fiscal effort in a liquidity-trap environment (Japan/1995).
I'd be happy to discuss Japan. They've tried to stimulate themselves into prosperity for years, and indebted their nation into oblivion. How's that worked out for them?
Well, Milton Friedman thought so.
Indeed.
Base money is a measure of the financial system, not the economy. Vault cash is a part of the former, not the latter. It does not chase any goods. If you want to know what GDP has been doing and why, look at GDP data. If you want to know what inflation has been doing, take a look at the CPI-U tables.
Yeah. Because the current international flight-to-safety will last forever, and nobody actually pays for food or energy :roll:.
Yeah, and our common problems far too often arise from an unconstrained private sector that regularly connives and engages in all manner of corruption in service to the lining of its own pockets and in disservice to the broad needs and interests of the population as a whole. Only a fool would trust such people.
By "such people" you realize you are meaning "people". The only people less trustworthy than those who have to
earn your support (say, for example, a corporation who wishes you to purchase a product) are those who can
command it (say, a government official, whose regulatory edicts have the force of law).
