Tuesday Highlights

Woo Hoo!

  1. Cool … because they are rare, perhaps in a post-WW-II northern Europe?
  2. Now the left will get to disavow Mr Silver.
  3. Silliness north of the border.
  4. Treaties can do that? And … hierarchy and the Constitution.
  5. Occasionally we need to actually overcome that temptation, that’s the rub.
  6. I wonder if there is a reasoned argument against chivalry and good manners.
  7. Mr Morsi forgets evolution puts him in the same bucket.
  8. How liberal or moderate?
  9. Rhetoric examined. And what the President doesn’t want you to do, he wants it the other way round.
  10. Dan Simmons (in his Illium/Olympus books) argued that androids were in Homer’s Iliad. Hephaestus constructed them to assist him.
  11. Ethics meets economics … or does it?
  12. Perhaps a better start for a discussion about dignity and human life than abortion.
  13. Predictions.
  14. Drugs in the modern world.

17 Responses to Tuesday Highlights

  1. Now the left will get to disavow Mr Silver.

    This is old news on the left. All you have to do is look thru some old Krugman or Slate.com and you’ll find dozens of posts saying the same thing. Whether you measure it by spending per person, by government employees, or whatnot Obama has presided over a decline in gov’t, not a rapid expansion. In fact, take a peek at his first chart and you’ll note even entitlement spending has fallen slightly as a % of GDP in the Obama era.

    Likewise gov’t spending in infrastruture has been modest and flat relative to GDP. Totally at odds with the lines of people like Mark that Obama’s been an era of insanely expensive and wasteful spending repaving perfectly fine roads and building solar farms to nowhere.

    What’s a bit problematic about the analysis is treating gov’t entitlement spending as the same as all other type sof spending. It isn’t. To illustrate this consider two cases, gov’t spends $1M to buy a new jet and gov’t sends 1,000 people a social security check of $1,000.

    In the first case the actual economy must use its resources to produce something that would have otherwise not been produced. If the economy was operating at full employment then that production must be paid for by some other reduction. Maybe the jet factory took people off the private jet assembly line to make a military one, maybe thousands of soda bottles weren’t made to accomodate the jet’s production. This was clear in WWII where despite factories humming 24 hours a day and unemployment near 0% you could not buy a new car until the war was over. If the economy is at less than full employment then the jet’s production can be accomodated by tapping unemployed resources. The real cost goes away (which is why stimulus never has to be ‘paid for’), but the opportunity cost remains. Instead of making a jet maybe the gov’t could have provided housing to 2,000 people displaced by Sandy. Maybe the gov’t could have given everyone a $2 tax cut and we could have had an extra cup of coffee at Starbucks etc. The case for the jet has to establish that among all the other possible use of those unemployed and employed resources, the need for a new gov’t jet trumped all.

    Now consider 1,000 people getting $1000 SSI checks. What’s interesting here is that this represents no actual use of productive resources. This is easy to check by asking what would happen if none of those people bothered to cash their checks? Then ask what would happen if they did cash them but just put the money under their mattress? And so on. The actual production change happens by 1000 people making decisions about what to do with the $1,000 they received. On average this isn’t going to shift production very much since most basic consumption spending is the same. In some micro cases it will change…perhaps there will be more Wal-Mart’s near dense population of older people than there otherwise would have been but overall you’re not going to see a dramatic production shift IMO. Since the production isn’t forced or determined by gov’t, different possible ideas for production can still compete to get those $1,000 of spending. For example, a great business idea can grab that money by having a bank offer great rates on savings accounts to compete some of that money away from the local Wal-Mart. This is a subtle and complicated analysis of gov’t spending and it doesn’t mean entitlement has zero cost but it has too be deflated by some factor (I’m guessing 50%-60%) and if you’re engaging in an honest debate about the size of gov’t you need to break ‘real gov’t spending’ apart from entitlement spending.

  2. Boonton,
    First off, you’ve pointed out that the percent GDP that taxes have accounted for is not changed … apparently you need to check with yourself on how Mr Obama is not reducing spending the way you think he has.

    Second, your analysis in your two examples is just plain wrong. “If the economy was operating at full employement” … as a working hypothesis is just wrong. It has never done so, and certainly now with aggregate unemployment above 10% you’re just funnin’ us here. In your second example you start off even worse, “aNow consider 1,000 people getting $1000 SSI checks. What’s interesting here is that this represents no actual use of productive resources. ” … broken windows. That million dollars is money that the taxpayers contributing that money would have spent. Those checks aren’t creating anything new, just redistributing wealth from those who earned it to those who didn’t. If you’re engaged in honest debate, you have to explain why entitlement spending is right in the first place … except to keep people from starvation and exposure. As noted before, unless safety nets are uncomfortable you have a problem like we have now where a family can be trapped in the “if I get a job that earns less than 50k per year … I’ll make less than I’m getting for free.” problem. That’s not a safety net, that’s a dole.

  3. Boonton,
    If I take 3k from you to pay for other’s entitlments there is no accounting magic you can come up with that can make that 1.5k.

  4. 1. Taxes as a % of GDP is a different topic than gov’t spending and not one addressed in Mr. Silver’s article. But if you want data on that you can look at http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205

    Note that the historical average has been between 16-20% of GDP. Under Mr. Obama it’s been between 15.1%-15.4%, under the average of Mr. Bush’s era and a lower than any year under Reagan.

    2. If we’re talking about theory ‘full employment’ would mean that it would be impossible to increase production of any one good or service without decreasing production of some other good or service. Whether or not any particular economy ever has achieved that or just gotten close is not relevant to the discussion. Some neoclassically inclined economists refuse to believe the economy is ever at anything less than full employment. Unemployment to them is simply the economy ‘producing leisure’ hence an expansion of, say, the auto sector, is imply being paid for by producing less ‘time off of work’.

    2.1 Who said anything about taxes? Remember money is just like poker chips. In itself it’s meaningless, except as it represents a claim of what’s in the pot. On a fundamental level, giving 1,000 people $1K checks expands their ability to buy things. The question is what impact does that have on what is produced to begin with?

    “If you’re engaged in honest debate, you have to explain why entitlement spending is right in the first place … except to keep people from starvation and exposure.”

    How about chemotherapy?

    2.2 ‘Comfortable safety nets’. Not really a significant portion of entitlement spending which is dominated either by Social Security for the old or health care. Are we discussing the macro issue of the level of total gov’t spending or the micro issue of the minority of spending that can be fairly described as ‘the dole’?

    2.3 “If I take 3k from you to pay for other’s entitlments there is no accounting magic you can come up with that can make that 1.5k.”

    But the ‘taking’ part isn’t part of spending. Suppose the gov’t abolished the $3K entitlement but kept the $3K taxes. Your spending power would be decreased by $3K, but $3K would end up going to bond holders as gov’t surpluses (or smaller deficits) goes to the bond market. Now bond holders have $3K additional spending power. What will they do with it? That’s up to them, not the gov’t. Ditto with entitlements where the actual spending is determined by those on the receiving end in contrast to ‘real spending’. When the gov’t buys a plane it’s telling the market to put their other plans on hold and dedicate the factory, materials and manpower to fulfilling that order.

  5. Perhaps a better start for a discussion about dignity and human life than abortion.

    Not addressing the main topic of “rais(ing) Neanderthals in a lab”, this statement seems to stand in contradiction with your previous statement that human identity is created through relationships that humans have. I seem to recall you saying that if you were stranded in some type of ‘null universe’ where nothing else existed you as an individual human would likewise cease to exist….even if your body and mind kept on going.

    Let’s say 100,000,000 years from now some aliens recover one of the Voyeger spacecrafts and find some left over DNA frozen from some lab tech on it. If they use that DNA to ‘grow a human’ devoid of any human culture, society, even incubation in a human womb would they really have a real human?

  6. Boonton,

    Let’s say 100,000,000 years from now some aliens recover one of the Voyeger spacecrafts and find some left over DNA frozen from some lab tech on it. If they use that DNA to ‘grow a human’ devoid of any human culture, society, even incubation in a human womb would they really have a real human?

    So … it would just be fine to create them, modify them, grow them, kill them at will, and perhaps use this to create bio-robot slaves, eh? All just fine. Do whatever. No ethical problem at all.

  7. Boonton,

    But the ‘taking’ part isn’t part of spending (and) Who said anything about taxes?

    Well this explains the stupidity on the left regarding deficits. You haven’t even figured out that “what you take” and “what you can/should spend” are related.

    Note that the historical average has been between 16-20% of GDP. Under Mr. Obama it’s been between 15.1%-15.4%, under the average of Mr. Bush’s era and a lower than any year under Reagan.Yes, this was called “stimulus” and has worked so so very well. So … under Mr Obama there’ve been significant government cut backs in spending. Where exactly are these cuts? Hmmm?

    If we’re talking about theory ‘full employment’ would mean that it would be impossible to increase production of any one good or service without decreasing production of some other good or service

    Are we back in WW-II production environments? No. We are not. We have a lot of excess capacity. Making a plane (or 100) doesn’t mean we have to cut back anything. You know that. I know that. You’re just pretending its not the case.

    Whether or not any particular economy ever has achieved that or just gotten close is not relevant to the discussion.

    If that isn’t relevant … why was it the starting hypothesis. Why use a starting hypothesis that isn’t true.

    Some neoclassically inclined economists refuse to believe the economy is ever at anything less than full employment.

    Well, that’s just stupid. Perhaps they’ve been in ivory towers so long they don’t realize that there are actually real live people out there that want a job but can’t find one.

  8. So … it would just be fine to create them, modify them, grow them, kill them at will, and perhaps use this to create bio-robot slaves, eh? All just fine. Do whatever. No ethical problem at all.,

    If something isn’t a human does that mean any behavior at all towards it is automatically ethical?

    Well this explains the stupidity on the left regarding deficits. You haven’t even figured out that “what you take” and “what you can/should spend” are related.

    A mathmatician should really know better. You can measure the impact of a change in one variable while holding the others constant.

    Also the ‘take’ comes in the analysis of what exactly happens. I use full employment as a starting point because the economy usually is near full employment. One person’s consumption power expands, someone else’s falls in that case. Taxes are simply an accounting mechanism to sort that out. If the gov’t is paying for the entitlement with borrowing it would be interest rates. If it was paying via printing money it would be inflation.

    If the economy is below full employment then by definition there is no clear need to pay for anything with taxes. Grandma’s $1,000 shopping can easily be paid for by the excess capacity laying around.

    Yes, this was called “stimulus” and has worked so so very well. So … under Mr Obama there’ve been significant government cut backs in spending. Where exactly are these cuts?

    There in black and white. You forget half the stimulus was tax cuts to begin with and the spending half was spread over 2-3 years. As a % of GDP, the numbers are there in black and white. There’s no spending surge and no taxing surge. Sorry to ruin your narrative.

    Making a plane (or 100) doesn’t mean we have to cut back anything. You know that. I know that. You’re just pretending its not the case.

    Note quite IMO. Simply noting that there’s excess materials and workers in the economy that could make a plane is not sufficient. You are forgetting the transaction itself carries a cost with it. It’s a bit like saying a junkyard contains all the parts needed to make a brand new car. Possibly but the search costs of finding all the new parts that might be buried there almost certainly exceed the cost of just buying a new car. Full employment almost certainly is at some level of unemployment higher than 0%.

    If that isn’t relevant … why was it the starting hypothesis. Why use a starting hypothesis that isn’t true.

    1. It’s the simplest to model.
    2. It’s the model you’re implicitly using to boot.
    3. It makes sense to start with a simple model and then add complication to it rather than the other way around.
    4. It’s the hardest case to justify entitlement spending. Below full employment it’s a slam dunk. So I’m cutting you slack.

    Well, that’s just stupid. Perhaps they’ve been in ivory towers so long they don’t realize that there are actually real live people out there that want a job but can’t find one

    Don’t bash too much. Explaining why the labor market won’t clear is a very difficult thing to do theoretically when so many other markets clear nicely. They also have a point, some people can get a job but don’t want too because they value the leisure more than the wage. It makes sense to treat leisure as a product the economy is producing and is being consumed just as any other. The question is can you make all recessions and depressions disappear by simply treating them as massive ‘leisure bubbles’. I say no but the theoretical temptation is pretty plain to see.

  9. BTW, some helpful charts. First note public employment for recent presidents measured by months into their admins:

    http://krugman.blogs.nytimes.com/2012/04/25/american-austerity/

    Gov’t employees grew by about a half million under Clinton, grew by a whopping 800K+ under Bush but fell 600K under Obama. If we are going to talk about gov’t spending displacing private spending in the economy, it’s interesting that the gov’t is *releasing* workers into the private economy under Obama while previous Presidents took workers from the private economy. Note also the “methinks the lady doth protest too much” aspect. Despite rhetoric, Republicans actually seem to do more gov’t spending and more taking from the private economy.

    Or use this graph
    http://research.stlouisfed.org/fred2/graph/?chart_type=line&s1id=W068RCQ027SBEA&log_scales=Left

    Taking the log of total spending helps bring out a smooth curve. Note the change in spending has only recently flattened. Also interesting, though, is that just eyeballing it, it seems the Reagan and Bush era increases were steeper than the Clinton era increases. Pretty consistent with a party that talks out of both sides of its mouth.

    If you’re engaged in honest debate, you have to explain why entitlement spending is right in the first place … except to keep people from starvation and exposure

    Was I drunk? I kind of remember sitting and watching a Vice Presidential and Presidential debate not even a quarter of a year ago where Obama was accused of ‘slashing’ Medicare? Please help me, have I accidently opened up a singularity and slipped through the multiverse to an alternative universe without noticing it?

  10. Boonton,

    Gov’t employees grew by about a half million under Clinton, grew by a whopping 800K+ under Bush but fell 600K under Obama

    The only problem with that … is that it isn’t true. Woops. I guess you have to stop believing that Krugman fellow.

    “Was I drunk? I kind of remember sitting and watching” … a Tea Party emerge which was angry with government spending and growth. Or did you sleep though it? Or perhaps you spent too much time in that singularity you speak of, but back here in the real world there is a strong movement objecting to the growth of federal government influence and power.

    A mathmatician should really know better. You can measure the impact of a change in one variable while holding the others constant.

    And this is really hard to do in the social sciences.

    I use full employment as a starting point because the economy usually is near full employment.

    A point on which we disagree. You can’t use as a starting point a item in contention.

    One person’s consumption power expands, someone else’s falls in that case.

    Untrue. In a majority of business deals both parties profit. This was true in an agrarian only economy, in which one persons growth meant he got another guys fields … whose capital subsequently fell.

    Note quite IMO. Simply noting that there’s excess materials and workers in the economy that could make a plane is not sufficient. You are forgetting the transaction itself carries a cost with it.

    Most assembly lines and factories (and for that matter service industries) have a substantial range of production which can vary without affecting employment. You disagreed with that, but my experience watching the industries in which I’ve come in contact with in business lead me to think you (and the economists who think that there little flexibility in production without affecting employment) are just plain wrong.

    Full employment almost certainly is at some level of unemployment higher than 0%.

    On that we agree. But it isn’t 10%+ like it is now.

    It’s the hardest case to justify entitlement spending. Below full employment it’s a slam dunk. So I’m cutting you slack.

    No. You’re arguing with a straw man. I haven’t said 0 entitlements. I’ve said that they should be for emergencies and uncomfortable. This is not “none”.

    Explaining why the labor market won’t clear is a very difficult thing to do theoretically when so many other markets clear nicely.

    Or it’s because the other markets don’t clear as nicely as you pretend either.

  11. The only problem with that … is that it isn’t true. Woops. I guess you have to stop believing that Krugman fellow.

    Krugman’s graph (unsourced unfortunately) measures ‘public employment’. Your chart measures Federal. 2008 Fed. total was 4430K and 2011 (the last year) was 4403K. The uniformed military portion grew by 133K so that means the rest of the Fed. gov’t declined by much greater figures. State and local gov’t is clearly relevant if we are discussing ‘big government’ in general. It’s also relevant since a portion of state and local gov’t payroll is meet indirectly by Federal aid. You’re attempt to refute the point might have had more merit if the Federal gov’t had gone on a hiring spree to offset the state losses but it did nothing of the short and if you back out the very temporary hiring for the census you have an even rougher time defending the right wing narrative.

    a Tea Party emerge which was angry with government spending and growth…

    You mean “Keep the Government out my Medicare” Tea Party?

    See when someone says X is really important to them, I would expect them to be well versed about X. For example, you’re really into high mpg cars. You know quite a bit about them. If you said you were really into, say, chess, but then you demonstrate you don’t know the difference between chess and checkers, I’d say your true interest isn’t chess but something else (maybe you’re trying to impress some girl by sounding sophisticated, for example). If the Tea Party was really about gov’t being too big, I would expect them to be aware of these facts. Their failure to do so indicates that they are really about something else (say electing Republicans)

    Untrue. In a majority of business deals both parties profit. This was true in an agrarian only economy, in which one persons growth meant he got another guys fields … whose capital subsequently fell.

    In a majority of business deals the amount that can be produced expands relative to what could have been produced if the deal had not happened and each business remained isolated. Naturally consuming power becomes greater if production becomes greater.

    Most assembly lines and factories (and for that matter service industries) have a substantial range of production which can vary without affecting employment.

    Then why not produce more? If the product will sell at a price that’s greater than the cost of the added production then it makes sense to do so. But ask yourself could you make a plane by simply tapping your connections to factories and getting them to just lend you their spare downtime?

    Or it’s because the other markets don’t clear as nicely as you pretend either.

    The stock market clears almost instantly, there’s never shortages or gluts of shares. Most commodities do the same, the farmer may not like the market price of corn but he can always sell what he has and the food producer can always buy corn even if they don’t like the price.

    Markets like real estate are much more difficult to clear but that’s clearly a function of their high transaction costs. Labor markets, though, simply do not adjust as easily as they should. I don’t agree with the neoclassical read that ‘true unemployment’ is always at 0% but I can understand clearly *why* they are motivated towards such a counterintuitive thought.

  12. Boonton,

    Your chart measures Federal.

    Which is what we were talking about. Right? You indicated Mr Obama has dramatically decreased the size of the federal government while Bush increased it. The numbers don’t reflect that.

    If the Tea Party was really about gov’t being too big, I would expect them to be aware of these facts.

    Clearly a criteria you did not care to apply to the OWS movement. Or maybe your expectations of what they “really know about” is wrong.

    Statement made before: “One person’s consumption power expands, someone else’s falls in that case.” Now -> “In a majority of business deals the amount that can be produced expands relative to what could have been produced if the deal had not happened and each business remained isolated. Naturally consuming power becomes greater if production becomes greater.” … woops, we both expand and both profit. Both sides consumption power expands, which you obliquely admit.

    Then why not produce more?

    Gosh. You wife could cook more. Why doesn’t she cook all night. She could. Oh, wait, not that many people are coming to the table to eat. She (or you) cooks for the number at the table. Oddly enough manufacturers and distributors make and ship to meet actual orders.

    But ask yourself could you make a plane by simply tapping your connections to factories and getting them to just lend you their spare downtime?

    In recessions big companies that can afford to do exactly this, they sell jobs at a loss … below their costs because making a loss is better than paying leases and people and taking in nothing. Smaller companies sell closer to their break even margin.

    Most commodities do the same, the farmer may not like the market price of corn but he can always sell what he has and the food producer can always buy corn even if they don’t like the price.

    I see. Warehouses of stuff unsold don’t exist. Government bought commodities don’t exist. This alternate reality you speak of … you can come back now. In the 70s lots of steel mills were constructed in a misguided attempt to take advantage of a high profit margin in flat rolled steel. Oddly enough the incredible glut in manufacturing capability led to lower prices and that margin disappeared. That process took 30 years and today there is one, not five or six, big flat steel mills in Northern Indiana. They will be amused, not gratified, at your spurious claim that markets other than employment clear quickly and efficiently.

    We have a shortage of electricity generation in this country. That of course will clear out quickly and efficiently, as it’s not labor.

  13. Which is what we were talking about. Right?

    We were talking government. And as I pointed out there’s not a clear line between the two. One of the reasons state employment didn’t pull back even more was the stimulus package brought the states a year or two before making even deeper cuts.

    Clearly a criteria you did not care to apply to the OWS movement. Or maybe your expectations of what they “really know about” is wrong.

    Why should either of us care about OWS?

    Statement made before: “One person’s consumption power expands, someone else’s falls in that case.” Now -> “In a majority of business deals the amount that can be produced expands relative to what could have been produced if the deal had not happened and each business remained isolated. Naturally consuming power becomes greater if production becomes greater.” … woops, we both expand and both profit. Both sides consumption power expands, which you obliquely admit.

    Keep it simple, imagine a poker game where the pot consists of some cookies. If I win some chips and you loose some my power to consume cookies goes up and yours goes down. But if someone doubles the amount of cookies in the pot then consumption power expands. That doesn’t alter the fact that relative consumption power is in competition. Whoever wins the whole pot eats all the cookies.

    Two businesses that enter a deal that profits both means by definition that the two businesses produced more than before the deal (or took less to produce the same). Production went up. Income (in the form of profits), which is the power to command consumption likewise increases.

    I see. Warehouses of stuff unsold don’t exist. Government bought commodities don’t exist

    It cost money to own a warehouse and store stuff in it. The person who does so does it because it’s cheaper than throwing it away. If the gov’t stopped buying corn tomorrow the price of corn would drop, but the markets would clear.

    We have a shortage of electricity generation in this country. That of course will clear out quickly and efficiently, as it’s not labor

    We do? Are there rolling blackouts because generators on a regular basis cannot keep pace with demand?

    In recessions big companies that can afford to do exactly this, they sell jobs at a loss … below their costs because making a loss is better than paying leases and people and taking in nothing. Smaller companies sell closer to their break even margin.

    In producing goods at least three things have to happen. You have to put labor into it. You have to apply capital to it. And you need the less tangible power to connect the labor, capital and customer to make the transaction. I asked you why you didn’t build a plane using your connections to borrow or buy cheaply all this ‘spare capacity’. YOu didn’t really answer but a big answer is that while you could sell a new plane for good money, you can’t really economically connect those three things. Maybe you could make 100 jets using the economy’s spare capacity, but while a single new jet will sell for good money, we just lack the tech and knowhow to connect the right mix of spare capacity to make just one more jet….even though innovations like JIT and chain manufacturing have done wonders to expand our productive capacity.

    This means as demand increases, the economy starts increasing inflation rather than simply increasing output from the allegedly ‘unemployed’ capacity. We have seen quite a few such periods in recent history indicating that full employment or near full employment has and can be achieved.

    What I don’t get though isn’t why you’re pushing a different type of model, but why you don’t seem to have a coherent model. You’re saying that giving grandma $1,000 must ‘cost’ us something. That would make perfect sense if you were a neoclassical economist who felt we are almost always at full employment with no gov’t intervention. But you’re insisting there’s plenty of spare capacity in the economy that can expand production without even hiring anyone (but since there’s plenty of unemployed people even if a person needed to be hired that can easily be done). OK so print ten $100 bills and give it to grandma. Show me how her going out to Wal-Mart with that is going to really cost me or you or anyone anything?

  14. Boonton,

    Keep it simple, imagine a poker game where the pot consists of some cookies. If I win some chips and you loose some my power to consume cookies goes up and yours goes down. But if someone doubles the amount of cookies in the pot then consumption power expands. That doesn’t alter the fact that relative consumption power is in competition. Whoever wins the whole pot eats all the cookies.

    And this has nothing to do with economic deals. Win-win is the normal circumstance. I win some chips and you win some chips. The Win-Lose is not how economics works in a non-agrarian-only economy.

    Two businesses that enter a deal that profits both means by definition that the two businesses produced more than before the deal (or took less to produce the same). Production went up. Income (in the form of profits), which is the power to command consumption likewise increases.

    Right. And … ?

    The person who does so does it because it’s cheaper than throwing it away.

    No. Because the feds paid him to do so.

    Are there rolling blackouts because generators on a regular basis cannot keep pace with demand?

    It’s called summer.

    What I don’t get though isn’t why you’re pushing a different type of model, but why you don’t seem to have a coherent model.

    I don’t have a coherent model because all the models out there are horrible.

    OK so print ten $100 bills and give it to grandma. Show me how her going out to Wal-Mart with that is going to really cost me or you or anyone anything?

    Well, I’d go to jail. Counterfeiting is a crime. Taxation via inflation is a precisely flat tax. I thought you were in favor of graduated taxation.

  15. And this has nothing to do with economic deals. Win-win is the normal circumstance. I win some chips and you win some chips.

    Win-win applies to cases where the pot of cookies expands. But inside the economy the cash in your pocket represents your ability to buy things. If I take the cash out of your pocket and put it into mine, then I’ve transferred consumption power from you to me. Win-win there would only be applicable if that somehow causes more cash to be put into your pocket than what you lost.

    It’s called summer.

    Perhaps you mean there’s a shortage of quality infrastructure to deliever electricity. I think that’s responsible for more ‘rolling blackouts’ than a true shortage of generation capacity. Anyway I rarely get blackouts in the summer.

    Well, I’d go to jail. Counterfeiting is a crime. Taxation via inflation is a precisely flat tax

    Why would there be inflation? You just told us over and over that businesses have plenty of room to expand production. Why would Wal-Mart simply tap that capacity to supply grandma with her $1,000 of goods? If Wal-Mart tried to raise prices on her why wouldn’t Kmart swipe that $1,000 in sales by not raising prices?

    I don’t have a coherent model because all the models out there are horrible.

    You don’t get to say this till you demonstrate an understanding of the model you’re bashing.

  16. Boonton,

    Win-win applies to cases where the pot of cookies expands. But inside the economy the cash in your pocket represents your ability to buy things. If I take the cash out of your pocket and put it into mine, then I’ve transferred consumption power from you to me. Win-win there would only be applicable if that somehow causes more cash to be put into your pocket than what you lost.

    I see. When non-governmental economic transactions are win-win, government taxation/payoff is win-lose. Is that it?

    You don’t get to say this till you demonstrate an understanding of the model you’re bashing.

    I’m sorry, what don’t you think I understand? That you think production is inelastic? That you think all but employment (and housing) markets clear quickly? No government has created inflation?

    You don’t get to say this till you demonstrate an understanding of the model you’re bashing.

    Let’s see, you have a theory of gravity that says little rabbits pull you down with rubber bands, keeping you from flying off the planet. I don’t have to understand exactly how you figure the rabbits hide the rubber bands from sight to be able to point out that there are serious flaws in your model. You’ve cited predictions (win-lose vs win-win or business are at capacity) which aren’t borne out by observation. I understand your prediction/hypothesis. They are wrong. That is enough to criticize.

  17. I see. When non-governmental economic transactions are win-win, government taxation/payoff is win-lose. Is that it?

    No if I give you $20 you can buy $20 more stuff but I can buy $20 less. If I give you $20 to buy a tool from you that let’s me do a job for $40 you get $20 more to spend and I get $20 more to spend. Where did $20 of extra ‘stuff’ come from to spend this on? Presumably the job I did added to the stuff made by the economy.

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