Opertunity Cost of saftey net programs

[head of joaquin]

No I simply asking isn't there a loss in multiplier from the money in its natural market state to its saftey net state?

1. There is no such thing as a "natural market state". There are simply rules which benefit owners of capital or workers.

2. The multiplier effect works best when there is high velocity. There isn't high velocity in pensions/savings/etc. So the answer is no.

3. Finally, "profit left in the market" as you so inaptly put it, obvious benefits the owners of capital, which is a foolish thing to do for an economic policy, since owners of capital do fine. Benefiting them tends to lead to bubbles and recessions. It's better to have rules that benefit workers, so that economic growth is broad based and invested in the production of real goods and services, not derivatives.

 

[YoungConserv]

1. There is no such thing as a "natural market state". There are simply rules which benefit owners of capital or workers.

2. The multiplier effect works best when there is high velocity. There isn't high velocity in pensions/savings/etc. So the answer is no.

3. Finally, "profit left in the market" as you so inaptly put it, obvious benefits the owners of capital, which is a foolish thing to do for an economic policy, since owners of capital do fine. Benefiting them tends to lead to bubbles and recessions. It's better to have rules that benefit workers, so that economic growth is broad based and invested in the production of real goods and services, not derivatives.

1 yea there is that's what the basic study of economics is all abor, the natural flow of capital.
2 you ignore the bank savings multiplier effect of those savings being loaned out to people to start businesses by homes and buy bigger purchases
3 That's simplistic way to look at it because you ignore that the people use this money not just for their own benefit but they hire people to hire people to do services for them they don't want to do or start businesses that actually benefits the economy orinvest in companiesinsteas of just to siting there like it does in the Social Security accounts

 

[Deuce]

There's nothing more frustrating than hearing the term Opportunity Cost being used with regards to taxpayer funds. The whole concept of opportunity cost relies on the purchaser being able to make his or her own decision. I don't get any opportunity to spend it on anything other than taxation.

In terms of opportunity for society, well yeah, you can sit around all day and debate how you could have spent my money better. I'd still prefer it if you'd just stop taking it from me in the first place. Then we could have a real discussion about opportunity cost.

Um, this is a discussion of that second thing. The opportunity cost to society, and to the government. This is not a discussion about your stupid idea that taxation should be voluntary.

 

[HumanBeing]

Um, this is a discussion of that second thing. The opportunity cost to society, and to the government. This is not a discussion about your stupid idea that taxation should be voluntary.

No need to be rude, I didn't call anyone else stupid. I think my point was valid. As you said, the thread is about opportunity cost of fiscal policies to society and to the government. I'm a member of society, albeit an involuntary one, and the government operates with my money. Opportunity cost is all about individual choices and consequences. In the case of fiscal planning, the choices are made by the government, and the consequences fall onto society as a whole. That means there's a gap where the concept of opportunity cost becomes convoluted, because the opportunity is for one group of people and the cost is for another.

 

[YoungConserv]

I didn't see anyone suggesting that the taxation not be in effect to begin with. You were simply debating how it should be divided and spent after the fact.

To explain this I'm sorry but I'm saying what is the opportunity cost of having the FICA tax that pays for all this.

 

[imagep]

I don't think we are short of land for industry by any stretch of the imagination. Too many people probably put too much money in houses they do not need/cannot afford. I've seen that happen a lot, and I have seen what happens when they do. Americans are addicted to spending and getting their wants. It is really befuddling that people put their wants so far ahead of their needs to their detriment. Even in the welfare debate, people's sense of what people are entitled to is just sad. I was in Walmart the other day and saw that Rachel Ray has a "garbage bowl". It was $19.98. Basically just a hard plastic bowl to put your kitchen waste in. I am sure they will sell a lot of them because people are too dumbass to realize that the plastic bowl they already have or could get at the Dollar store for a couple bucks could serve the same purpose.

What I like about you is that even when you disagree with me, you do so in a manner that doesn't make me feel attacked or insulted. If I grow up, I want to be just like you.

 

[imagep]

2 you ignore the bank savings multiplier effect of those savings being loaned out to people to start businesses by homes and buy bigger purchases

You would have a point if banks could only lend money that they acquired by deposits from the private sector. But money in banks doesn't have to be supplied by savers, it can be supplied by the fed in unlimited quantity. Thats one of the advantages of fiat money, and being monetarily sovereign, over the gold standard, or anything else that limits it's supply.

3 That's simplistic way to look at it because you ignore that the people use this money not just for their own benefit but they hire people to hire people to do services for them they don't want to do or start businesses that actually benefits the economy orinvest in companiesinsteas of just to siting there like it does in the Social Security accounts

You are assuming that only the rich can be employers or produce products. Thats an incorrect assumption, and as I mentioned above, great amounts wealth pooled in the hands of the few is not the only source of business funding available. It's likely not even the best source.

By a small amount, more employees work for small business than large business, and according to Fox News, only about 2% of small business owners are in the top two tax brackets. Essentially, about half of all employees in the US work for a relatively "poor person"

And by the way, the social security doesn't not have a bank vault that they just toss bags of money into, they loan the money to the treasury and receive interest on the money. The treasury then uses the money to fund our government, and the result is that since we have been developing the trust fund (which only started in the early '80's) our gov has used this source of funding as a way to tax our population less.

 

[imagep]

No need to be rude, I didn't call anyone else stupid.

Technically, he didn't call you stupid, he said that your idea was stupid. But yea, he probably shouldn't have gone there.

I think my point was valid. As you said, the thread is about opportunity cost of fiscal policies to society and to the government. I'm a member of society, albeit an involuntary one, and the government operates with my money. Opportunity cost is all about individual choices and consequences. In the case of fiscal planning, the choices are made by the government, and the consequences fall onto society as a whole. That means there's a gap where the concept of opportunity cost becomes convoluted, because the opportunity is for one group of people and the cost is for another.

In the US we elect leaders who we trust, and who we expect to spend time and effort investigating what government spends money on. So, "We The People" are making these decisions. As individuals, we may not all agree with the decision, but in any form of democracy, the majority tends to rule over the minority, and even the minority has it's say, and if they can make a good case that they are correct, then the minority becomes the majority. It's not a perfect system, but tends to function better than any other type of government.

 

[Fisher]

What I like about you is that even when you disagree with me, you do so in a manner that doesn't make me feel attacked or insulted. If I grow up, I want to be just like you.

Well I never plan on growing up so we are both doing okay so far :2razz:

 

[head of joaquin]

1 yea there is that's what the basic study of economics is all abor, the natural flow of capital.

No such thing. Just a market evangelist trope. Capital flow is determined by rules, and rules are made by society. There is no default market, not natural market. No such thing exists and never has.

2 you ignore the bank savings multiplier effect of those savings being loaned out to people to start businesses by homes and buy bigger purchases

Obviously credit is a good thing, but banks have no lack of capital and never have since the Great Depression. I'm sure economists have studied the velocity of money saved versus given directly to working people in various forms. I don't believe money can possibly have a faster velocity than putting it in the pockets of a lower quintile.

3 That's simplistic way to look at it because you ignore that the people use this money not just for their own benefit but they hire people to hire people to do services for them they don't want to do or start businesses that actually benefits the economy orinvest in companiesinsteas of just to siting there like it does in the Social Security accounts

You're assuming working people who get extra money don't start businesses. It's not only a false assumption, it's a looloo. Moreover, by increasing demand for goods and services by putting cash in the pockets of the lower quintile, you produce an incentive for capital to invest in the production of those goods and services. So it's a double win to get money to the lower brackets.