mgeoffriau

iTrader: (7)

So, let me try a story.

I steal $10 from Brain.

I steal another $10 from Blaen.

Then I feel guilty. But I feel more guilty about stealing from Brain.

So I give Brain back $8, and I give $4 back to Blaen.

Thus, I have "contributed" more to Brain's wealth than to Blaen's wealth. Yay!

Or, as I stated originally to you:

Scrappy Jack

iTrader: (2)

Can you clarify what you mean by "tax dollars" above? Taxes paid are about the only way to reduce net financial assets in the broad economy. Basically, the money gets sent to the IRS/Treasury and then "shredded" (I use the quotation marks because there is virtually no physical money actually transacted).

Government spending is a better phrase than "tax expenditures" as the US does not wait until they collect taxes to spend, nor is its spending restrained by the tax revenues taken in (apart from political limitations like the debt ceiling agreement).

I disagree with this, operationally.

I'll try to cite some if I can make the time. The "multiplier" only works if you assume those receiving food stamps or other welfare programs would not be able to replace that income via private sector work. It is the same thought process with unemployment insurance benefits.

If the choices are (A) person receives food stamps or (B) person does not receive food stamps and has no way to replace that income, then the multiplier may be relevant. Some would argue that is a false dichotomy.

Scrappy Jack

iTrader: (2)

Vilsak is a lawyer-politician, not an economist.
Zandi as a centrist may be a stretch.
I'll give you Elmendorf.

blaen99

iTrader: (6)

Mg: May want to quote the whole statement. You've successfully done something that would be equivalent to me saying "Brainy's the greatest guy alive, except for that time where he raped and killed a young girl in 1990", then trying to claim I only said Brainy's a great guy.

My position is absolutely correct that food stamps contribute more to the local economy (Or even national economy) then foreign aid. As Scrappy points out, it's to some extent a false dichotomy (We HAVE to spend tax dollars!!!!111oneone), but my intent was to point out that people here should be going after things much more important then food stamps or even welfare. Half of our food stamp budget (Based on Brainy's numbers) went to Pakistan in foreign aid. The place that harbored Bin Laden. One of the two bothers me a lot more, I'll leave it to you to figure out which one and why that is.

Secondly, this has also given rise to an interesting topic for me. Specifically, that the Bush tax cuts and tax cuts given in a similar vein actually contributed less than $1 per federal dollar cut to the economy. I'm all for the tax cuts, but (And I'll have to research this), if it is true, it means the Republicans trickle down drek is truly full of BS - and they knew better when they were advocating it. Mind you, I'm not saying that I have a problem with the tax cuts. I'm saying I have a problem with politicians lying and knowing better about it.

Read it in context with Mg's statements, Scrappy.

Although my argument boils down to "A tax dollar spent is not a net negative if more than $1 in private investment/economic growth results." at the simplest.

Aww, Scrappy, <3. I never knew you'd agree with me on an economic statement!

mgeoffriau

iTrader: (7)

Except that my second statement doesn't contradict my first. Unless of course, you want to argue that stealing less and contributing more mean the same thing.

But sure, here's the whole thing:

blaen99

iTrader: (6)

Considering the entire argument spawned based on your second sentence, I'd say it's pretty damned important.

On a hilarious note, I've posted a Scrappy-verified Centrist economist agreeing with your twisting of my position. I'm actually finding trouble refuting his data and arguments, so feel free to take a whack at that if you want Mg. The closest I've found is a bunch of far right people saying "BUT WHAT HE SAYS IS UNPOSSIBLE! GOVERNMENT SPENDING CAN NEVER RESULT IN PRIVATE INVESTMENT!!!oneoneone"

Sidenote: I utterly reject the premise that no government investment can result in economic growth. I also equally reject the premise that all government investment results in economic growth. I derailed the topic earlier on highways to demonstrate this appropriately. Interestingly, highways are a great demonstration of government investment resulting in economic growth, while the Bushian tax cuts resulted in economic decay. I'm really disliking the results on the food stamps, it's distasteful for me to admit that there is potential for a net positive there. I really, really dislike that. I can get on board with them being better than foreign aid all day, but I intensely dislike the net positive argument.

mgeoffriau

iTrader: (7)

Oh for Pete's sake...

Let's simplify things a bit here. I'm positing that food stamps are essentially just a transfer of money to certain individuals. Basically, food stamp allotments are low enough in value that the recipient would normally be spending at least that much in equivalent cash on their food; therefore, the food stamp doesn't typically buy them food they wouldn't already be purchasing, it simply frees up their own cash to be spent for other purposes.

Even if we allow for the possibility that some recipients do in fact purchase more food with food stamps than would with their own cash (sans food stamps), the increase is only the marginal difference between their own normal spending and the amount of the food stamp allowance, not the full value of the food stamp allowance.

Agree or disagree?

fooger03

iTrader: (2)

Food stamps.

They do not increase or improve the economy.

People do not buy *more* food because they have food stamps.

Example: Sally is scraping by, and can manage to do so on $140 worth of food per month. As a government, we determine that Sally needs $200 worth of food per month in order to survive, so we give sally $60 worth of food stamps. How much food is Sally going to buy next month?

Is sally going to buy $200 of food next month? If you aren't willing to accept that this is not the truth, you need to run headfirst into a pike.

When next month rolls around, Sally is going to spend approximately... $140 on food. $80 of it will be Sally's money, $60 of it will be your money. She will then take the $60 that she's saving herself by using food stamps and spend it on relative luxuries...or worse yet, she'll work one day less that month at her job.

So, if we take this into consideration, then the solution is obvious. If we give sally $200 worth of food stamps, she'll buy $200 worth of food. That's GENIOUS!!

Except sally isn't going to buy $200 worth of food. Well, not in the normal sense, anyways. Sally is only going to buy approximately $140 worth of food. She is then going to do what she pleases with the $140 we've saved her in food. Sally is also not going to let her $60 worth of credit go to waste. She'll sell her $60 worth of credit for $40 - to someone she might not know, and who might not even "need" government assistance, and make out with a total of $180 on the deal. Now Sally will either buy a relative "luxury" with her $180, or else she'll work 3 fewer days this month.

Since we all know that economic growth only comes with production (and not consumption), and since sally is working 3 fewer days and therefore producing less, it is an economic travesty to give sally food stamps.

In maslow's hierarchy, a sensible human will do everything in his power to fulfill first tier needs. Any needs above "first tier" will only be achieved by a human based on self-motivation. Giving a person money is not the same as giving the person motivation, it only allows the person to achieve first-tier needs with less work.

With regard to whoever asked me if I would exchange what I have now for the average man's 1913 dollars and wages, my answer is this: Absolutely I would, but it must occur under condition. You can't affect only me, you have to affect the entire population of the country. If you affect only me, there will be no real effect other than to drive me to poverty and eventual death. If you affect the entire country, prices on *everything* produced domestically will immediately drop dramatically. Within days, the value of the dollar will skyrocket, and as such, prices on all imports will drop - again dramatically. (Remember, "dollar" doesn't mean jack ----, it's "value" that's important. If a dollar is worth 10 hours of hard work tomorrow, then it would buy the same thing as 10 hours of hard work will buy me today).

What would make more sense, is if you just throw out a "minimum wage" completely, and allow employers to hire competitively, we'll immediately start producing more as people have to work harder in order to maintain their current standard of living. Low cost goods produced in the united states would then take place of imports, and we would actually have an export market (which is the only true way of reducing a national deficit - we have to sustain ourselves, and then we have to sustain others too - which is what china has been doing for ever now).

The thing that you have to get through your head is this: In a global market, your work is not worth what you think it's worth. You, me, your coworkers, democrats, republicans...We're all self-entitled fucktards that consume far more than we produce. Some people claim we're moving to a "service oriented economy" - guess what, service doesn't produce jack ----. Service is only redistribution of wealth from person A who makes something of value to person B who provides a service of value. In order to positively affect our national economy, we must provide "service" to foreign countries in exchange for value. We don't do that - India does that. So not only are we not a production based economy, we're also not a service based economy. What are we then? We're a government based economy? We're a socialist state exactly 30 years behind the U.S.S.R. without actually having learned their lesson? We're a dozen bad political decisions behind Greece?

All of the above?

There are only a couple permanent ways to get our economy out of the gutter - they all involve selling things to other countries. Why not sell oil? We buy all of our oil because selfish bastards all across the nation say "you're not drilling in my backyard". Why not sell electricity? We can't build powerplants to supply energy to ourselves or our neightbors because selfish bastards say "You're not putting a nuclear powerplant in my backyard". Why not sell products? We can't hire workers for globally competitive wages because selfish bastards say "but then he won't be able to buy his own backyard"....

Scrappy Jack

iTrader: (2)

I think you are muddling multiple topics there and need to define "the Bush tax cuts" as there were several of them, including those that reduced the lowest marginal bracket.

Gotcha. For clarity's sake, it would probably be better to say "one US dollar spent by the government is not a net negative if more than one US dollar in economic growth results." The phrase "tax dollar spent" is less useful/operationally incorrect.


I gave you 1.5/3. Don't get too excited about 50% success rate.

We all hate when you type like this.

A) Agree it is a direct transfer from government to private sector. I disagree that it is a transfer from Brain to foodstamp recipient.

B) Assuming the food stamp recipient now has $200 more a month to spend on anything could increase total demand for all products in aggregate. All else being equal (and it almost never is), I would consider a $200/month tax cut equivalent to a $200/month direct transfer.

Scrappy Jack

iTrader: (2)

The offer was to trade you 1913 dollars and a 1913 standard of living for 2012 dollars and a 2012 standard of living. My premise being that devaluation of the dollar/long-term inflation has not led to a destruction of living standards.

blaen99

iTrader: (6)

I'm going to throw out "in aggregate", since it is what the linked article claims based on how I read it.

I'd say it's 3/3 considering my argument was leftist and centrists Scrappy!

I hate when I type like that too :(. But it's the most effective way to illustrate how retarded some arguments are. You should know better than I do that just because someone says something is, does not mean that thing is!

mgeoffriau

iTrader: (7)

I know you do. That's part of why I wanted to simplify our model, and just speak of it in terms of a transfer to that recipient without specifying the source.

I cautiously agree with you here, but I've got to add my standard caveat, which is that simply saying that it could increase aggregate demand ignores way too many secondary considerations.

For example, if tomorrow the government wrote checks to every single American citizen for $1 million each, would we be correct to say that aggregate demand has actually increased? Or will it only "increase" temporarily until that money is either destroyed in taxation or price inflation catches up?

fooger03

iTrader: (2)

The increase in consumption plus the decrease in production will, in the majority of cases, equal approximately $200. Three extreme cases:

1. Someone who is already a hard worker: Consumption increases $200, production decreases $0.

2. A lazy person: Consumption increases $0, production decreases $200.

3. Someone who already has some amount of expendable income: Consumption increases $100, production decreases $100.

In all cases, consumption either increases or stays the same while production either decreases or stays the same. Since increased consumption and decreased production are both causes of economic regression, the end result is that the economy can only weaken with food stamps, and cannot strengthen with them.

Also consider that the knowledge that government would take $200 from a businessman in order to give to someone else effectively *reduced* the businessman's desire/motivation to earn the money that contributed to the fund. If we looked at people paying 50% marginal tax rates, dropping their marginal tax rates to 0% (which isn't realistic, but stay with me here) effectively doubles their motivation to make more money. (before I made 50cents off of every dollar of profit, now I make 100cents off every dollar) And since "profits" are a real, exact, and easily measured indicator of economic production, we're literally doubling a businessman's financial incentive to stimulate the economy. So when we take that $200 from the businessman to give to the poor man, not only are we hurting the economy from the perspective of the poor man, we're also hurting the economy from the perspective of the businessman.

fooger03

iTrader: (2)

I also accept this offer.

Under the premise that we keep today's technology.

1913 standard of living is ---- compared to today's standard of living - since our standard of living has improved vastly by our improvements in technology vs. 1913, simply having today's technology will improve the 1913 standard of living to 1970s standard of living in a couple of months. It would further improve the standard of living to late 90's early 00's standard of living in a couple of years.

I don't have evidence to prove my point, but they didn't have combines, nail guns, CAD, turbine engines...and the billions of other workforce multipliers....in 1913. In 1913, if you wanted to earn a living, they had this term called "labor", and it wasn't related to babies...

The only way we'll be able to maintain our current standard of living without working harder is if we can train self-sufficient robots to be our slaves. Slaves are the ultimate economic "F U", because they're not workforce multipliers, they're the workforce. In order to have the "haves", you have to have the "have nots", and slaves are effectively the "have-nots". If the slaves are robots, you get past the moral dillema of using humans for forced labor. Every rapid-growing, nationalistic, pre-modern civilization grew rapidly because of forced labor. Their humane neighbors were overrun, defeated, made to submit, and themselves made to do forced labor.

Scrappy Jack

iTrader: (2)

I think we are on the same page there.

I am not sure that is the sum of the possible outcomes. Maybe we are using different definitions of the terms, but what if consumption increases and, due to massive slack in production due to lack of demand, production also increases?


This assumes there is a 1:1 offsetting tax increase per transfer dollar spent. I do not believe there is empirical evidence to support this.

Nope; the technology is part of the standard of living and is a large part of my point. The increases in productivity and wage increases over the long haul have more than offset the increases in long-term dollar devaluation. Thus, my comments on clothes washing and life expectancy.

My sole points there being that the long-term dollar devaluation has not caused a currency rejection or a destruction in the standard of living over that time frame.

In 1900, about 80% of the average American's income would have gone to food, clothing and shelter. In 2003 (latest I have seen data for), that would have dropped to closer to or less than 50%.

Or, consider the time needed to work to buy similar items from 1973 to 2009:



How about real disposable income?

fooger03

iTrader: (2)

you are correct to assume that production would increase, but at a rate which can be no greater than the increased consumption. (No need to produce 100 more cheeseburgers if only another 95 are demanded). You should also consider the two different likely effects of increased demand on a product. The first likely effect is obvious, consumer wants more cheeseburgers, so we're going to produce more cheeseburgers. The second, and less obvious effect is this: Since the consumer has more money to spend, he puts a higher value on the cheeseburger. That cheeseburger that used to be $1.89 might go up to $1.99 or $2.09 after you consider the foodstamp conundrum, simply because of laws of supply and demand. That extra ten or twenty cents is being paid by everyone, regardless of whether you get the $200/month of foodstamps or if you're the businessman. Without the government assistance, products are cheaper. Another point to consider: when a persons expendable income is increased, which countries will produce the products that they are likely to buy with additional expendable income?Not sure I'm following you here. Real income and real disposable income has increased dramatically in the last century, I have no arguments against it. We have used various technologies to multiply our work efforts, and as such, we are rewarded with a standard of living that is far superior to what it was just a mere 100 years ago. We're failing to differentiate between what is "nice to have" and what we "need to have" though. We "need to have" food, water, shelter, and safety. It's "nice to have" a car, single family housing, a cellular telephone, a TV, a computer, an mp3 player, lobster and steak dinners...

We've lived for tens of thousands of years on hunting and gathering - while I aknowledge that such an idea is impossible today, it strikes me as staggering that some people today cannot refuse to do 1/10th of what our anscestors HAD to do to survive, and then we give them even more. If everyone today put in only the bare minimum amount of effort required to survive in 1913, you and I can't even begin to imagine how well our national economy would be chugging along right now.

I wouldn't really have any quarrel with the food stamp or other government assisted programs, if they met the requirements: Anyone on government assistance must be living in a dwelling with a minimum of 6 adults. For the total group of 6 adults, they will be allowed to register only 1 automobile for every two adults. They may not have any entertainment subscriptions (to include cable/satellite TV), and they may have only a basic internet connection. Each adult will be allowed up to three dine-out meals per week, but otherwise, food will be provided (by pre-packaged deliver) for cooking in the home.

This isn't close to everything, but it's a good start as far as I'm concerned. If you have ANY luxuries, then government assistance is not available. If you want luxuries, then go earn the necessities first, then you can earn the luxuries. If you can't work because you have to take care of your 8 kids, then you should have thought about that beforehand.

My personal opinions are actually far more radical --> if you aren't willing or are unable to work for a living...mother nature is more than willing to drown you in the gene-pool...we've got all these tree hugging hippies, so why can't we let mother nature take it's course. I have to consider how I would function as a slave - I either work forced labor or they kill me. As much as I wouldn't want to work forced labor, I much prefer it over death. Take government assistance away from people, and they'll make the world work for them. Just make sure you drop the "minimum wage" (a price fix on the labor market) before you do that, so that they'll be able to find jobs.

Scrappy Jack

iTrader: (2)

The above scenario assumes there is no significant slack in capacity. Price increases (via demand pull inflation) are not automatic.

blaen99

iTrader: (6)

http://www.msnbc.msn.com/id/46487781...ws-phoenix_az/

Untill very recently, I've never believed that a political party could be anti-education. But the more I see, the more I'm starting to think it's plausible.

Braineack

iTrader: (62)

I don't understand? You're upset that people can't go to a college for free?


the article is poorly written:

It opens that that students at AZ's three state colleges will now have to pay $2000 out of $9000 tution. This assumes students didn't pay any prior?

Then in it comments it only equal $1,500 more a year. (4x1500=$6000)

then is says that it's an extra $14,000 over 4 years?


I honestly don't understand what the article is saying.

blaen99

iTrader: (6)

Brainy,

The outrage comes from "student athletes and similar students" are being exempted from the additional $2k.

That's whole new levels of ridiculousness. They severely restrict universities abilities to give scholarships for academic achievement to cover this, but exempt all student athletes and similar? Come on dude.