Balanced Budget Amendment

[AndyZ]

I've heard this term get thrown around a lot but haven't seen any discussions of it on here or in most of the news.  It seems like a good idea to me, and would certainly fix the problem of the perpetually escalating debt (though I think the ceiling would still have to be raised after it was passed in order to give it time to work) but I'd love for the more educated on the matter to enlighten me a little more on the perspectives of both sides and any possible drawbacks.

[Oniya]

If I remember correctly, the term refers to the idea that no budget can be passed unless we have the funding (GNP) to pay for it.  If we had/have to go to war, we'd have to pay off everything (material, personnel, etc.) within the year.  If there's a disaster (Katrina), we have to pay off everything within the year.  If we want to offer aid to one of our allies, we have to be able to pay it off within the year.

[Jude]

If it were passed, it would completely eliminate the possibility of any party using Keynesian Economic policy ever again.

I'm sure some people would consider that to be a good thing, mainly those who worship Milton Friedman as if his birth was the second coming of Jesus, but empirically they're simply incorrect.  Economic theorists haven't settled on any particular model, there seem to be advantages to all of them.

In short, I consider removing a valid governmental economic management strategy from the table to be an extremely poor decision.

And why is it necessary anyway?  Why tie our leader's hands?  It makes no sense.  If you don't want your leaders to deficit spend, don't vote for people who do deficit spending.

And if even those who decry it do it, that should tell you something about its vital importance as a tactic of a functioning government.

[Oniya]

Jude - you seem to have a bit more info on it than I do.  Was my interpretation correct?  I was working off of old news stories and not anything with textbook references.

[Callie Del Noire]

I find it interesting that when we are REASONABLE sound fically or the Budget isn't the issue of the moment, anyone who brings this 'Balanced Budget Amendment' is regarded as a crazy idiot but when it's budget issues on the news.. someone trots this out, knowing full well it won't work but that when the other side shoots it down it comes off as the bad guys.

It's almost as unworkable as the idea to eliminate ALL income tax and work off of a national sales tax only.

[Synecdoche17]

I've heard this term get thrown around a lot but haven't seen any discussions of it on here or in most of the news.  It seems like a good idea to me, and would certainly fix the problem of the perpetually escalating debt (though I think the ceiling would still have to be raised after it was passed in order to give it time to work) but I'd love for the more educated on the matter to enlighten me a little more on the perspectives of both sides and any possible drawbacks.

Imagine a person with $80,000 annual income and $150,000 debt. Is this person a) a financially unstable free-spender, b) a newly-minted lawyer with a great starting position at a mid-sized firm? Advocates of balanced budget amendments would have you believe it's always a), but even at the personal level it makes sense for some years' spending to radically exceed income, just as a law student might rack up many tens of thousands of dollars in debt annually but then pay it all back easily once s/he graduates. Government needs to be free to invest as necessary in the nation's future and safety.
Further, government's special role as a non-profit-seeking player in the economy means that the government can intervene to break depression cycles or other nasty economic phenomena in ways that the private sector is incapable of doing.
The only reason to back a balanced budget amendment is fear of higher taxes, but even that is a short-sighted fear, since history proves again and again that heavy government investing makes for a strong economy and, paradoxically, greater wealth for everyone.

[Caela]

Imagine a person with $80,000 annual income and $150,000 debt. Is this person a) a financially unstable free-spender, b) a newly-minted lawyer with a great starting position at a mid-sized firm? Advocates of balanced budget amendments would have you believe it's always a), but even at the personal level it makes sense for some years' spending to radically exceed income, just as a law student might rack up many tens of thousands of dollars in debt annually but then pay it all back easily once s/he graduates. Government needs to be free to invest as necessary in the nation's future and safety.
Further, government's special role as a non-profit-seeking player in the economy means that the government can intervene to break depression cycles or other nasty economic phenomena in ways that the private sector is incapable of doing.
The only reason to back a balanced budget amendment is fear of higher taxes, but even that is a short-sighted fear, since history proves again and again that heavy government investing makes for a strong economy and, paradoxically, greater wealth for everyone.

The problem with your comparison at the beginning is that the gov't isn't a person who wracked up 150,000$ in debt and is working to pay it off. It is more like a person who wracks up that much debt EVERY YEAR and then tells the bank it needs to give them more money so they don't default on the last 5 years worth of loans. Us being the bank.

You're right that we do need our gov't to invest in the future but we also need it not to be spending our children into the poor house. At some point the reins need to be pulled and we have got to say STOP. I think a balanced budget amendment would be too limiting, as stated some years you do have to spend more than comes in, but I also think some serious cuts need to be made before the gov't asks us to pony up more money as well. Politicians (of every stripe, no finger pointing at any one party here) seem to have a way of saying they'll cut spending  but when taxes go up those promises seem to go POOF and the spending just increases.

I'm willing to pay my share, even if it means my taxes go up a bit, but I want to see the cuts done FIRST, before they get more money to play with in Washington.

[Asuras]

but when taxes go up those promises seem to go POOF and the spending just increases.

Really?

[AndyZ]

Really?

What's the CBO's definition of revenues?  Can you provide the link where you got this?

[Oniya]

Found it:  http://www.economist.com/node/18928901

[AndyZ]

Nothing really on that link on any sort of correlation between the two.  However, I'm pretty sure that the listed numbers on there are about the money that the government is actually bringing in, not the numbers of how much they're taxing us.  (Taxable income elasticity and all that)

Since we got people on here who are good with finding these things, can someone search for a correlation between the tax rates and the amount of money the government is actually bringing in?  I've heard that they invert to some degree, which is proof of the Laffer curve, but I haven't really looked into it yet.

[Oniya]

I looked up info on the Laffer curve (which makes a certain amount of mathematical sense, but has only two calculable data points - namely 0% and 100% taxation), and then info on the federal budget until my head swam.  I'm sure there's something useful here: http://www.gpoaccess.gov/usbudget/index.html , but I think I'd need additional data to make a full-fledged correlation.

[Asuras]

The article in question (and Oniya found it rightly, and I apologize for not citing it immediately) is freaked out about something other than correlations. Namely that America is taxed less now and spends more now than it has in the last twenty years.

Nothing really on that link on any sort of correlation between the two.

Well, there is that chart. You're right, the article wasn't about the correlation of spending vs taxes. Nor need it to do so because:

It doesn't take a statistician to look at that chart and say "Hey, if taxes go up...spending doesn't really correlate." I'll put the data in Excel if you really want me to.

However, I'm pretty sure that the listed numbers on there are about the money that the government is actually bringing in, not the numbers of how much they're taxing us.  (Taxable income elasticity and all that)

I don't understand the distinction between "the money the government is actually bringing in" versus "the numbers of how much they're taxing us".

The chart I posted is "the cash dollars that the government takes in taxes" divided by "the cash dollars produced by the entire United States economy" (aka GDP).

[GloomCookie]

There is smoke coming out of my ears from all these talks of theories so I'm just going to throw my ideas out the door and hope I don't regret doing so.

When the government taxes people, they're doing so for the good of the (city/state/country).  Local taxes pay for police, firemen, utilities, etc.  When the government taxes people, they take the money and put it in their budget, allocating spending to cover the three basic needs every country's leaders need to focus on: Territorial Defense and Internal Stability.

Territorial Defense
Almost no one here would say we're on the defense here in the United States or Great Britain.  We're engaged in wars overseas and haven't had a foreign army on our soil in hundreds of years.  Yet we are on the defense.  Every single nation is on the defense when it comes to protecting their interests on the national stage.  For the US and UK, the primary focus is to protect their interests against foreign powers such as the People's Republic of China and global terrorism.

The military gets a huge budget as a result.  While sometimes it seems that we're just using the military to fund a war over oil or invading countries like Afghanistan, there are definite reasons for doing so.  The entire US and UK economies are dependent upon oil, because we need oil for vehicles to transport goods.  Not only that, but the military buys directly from many industries and provides funding for research into new weapons and armor, which can produce results that independent entrepreneurs can then adapt for their own needs to build a business.

In 2010, the US Government spent 685.1 Billion dollars on the combined forces of the military[1], of which, 140.1 billion was spent on procurement (such as obtaining weapons and ammunition) and 79.1 billion on research and development, as well as 23.9 billion on construction (such as bases).  That's a total of 243.1 billion dollars (35.5% of the total budget) going immediately out to civilian corporations.  Given that the US Government's total budget for 2010 (3,456 billion) [2], the military draws almost 20% of the total budget.  That's 7% of the budget immediately going back into the hands of civilians.  And that's just the military.

Internal Stability
As far as Internal Stability goes, the US is fairly stable for the most part.  Most cities contain crime fairly well, riots don't just spark for no reason, and for the most part civilians obey the majority of the laws and pay their taxes.  A nation must be secure militarily, economically, and socially in order to remain a viable power, and that's where the budget can come into play.  We've already discussed how the military, which can help establish order when it begins to break down, gets a plentiful share of the federal government, but like it's been mentioned already, the government functions as a non-competing member of the financial world.

when the banks began to go under, the majority of people correctly assumed it was because of bad business practices.  Many laws had been allowed to be ignored, and so banks began to operate by lumping loans with less than ideal credit ratings with others and dumping them into insured bundles within other banks.  The same situation happened in the 1920s when people borrowed money with no collateral, and then when the money came due, they couldn't pay, and it happened on a grand scale.  The same thing happened, and it just so happened that a rushed deal between Bank of America and Merrill Lynch helped make the situation decidedly worse.

For the most part, banks are in the business of lending to turn a profit.  More loans means more interest, which means greater profits.  The US Government insures deposits up to a certain amount, but for the most part, the banks are responsible for maintaining their books.  However, it's one thing to play dirty with money, and another to have the government pushing for the banks to begin making less than ideal loans to people in order to get them into houses, as the government did during the 90s.  It was believed that if the majority of Americans could own their own homes, it would boost the economy and lead to greater economic success in the future.

The point here is that while the government does have the power to manipulate the economy to help it expand, it must also be in a position to regulate the economy such that the disasters of the past don't become the problems of today.  That's why major banks now have US Treasury representatives on their boards, to oversee their operations to ensure they don't begin a downward spiral that will once again force the Government to step in.  The entire issue of bailing the banks out was because so much money was tied up within the banking system that a complete collapse would have plunged the US economy into the very depths of hell.

Expanding without Expanding
For the longest time, the US didn't operate according to how we view it today.  The government was responsible for printing money, but handled the economy by letting it roam free.  Businesses were allowed to grow unchecked, but the US was in a period of expansion until the 1900s.  As the country expanded, new opportunities arose, allowing new businesses to pop up and grow.  Because gold and silver were being discovered in the west, the Government was able to back dollars directly with their equivalency in gold and silver, which was standard practice at the time.

As the US took on its current continental shape, businesses which had begun to accumulate great wealth suddenly found themselves with a country that, rather than pushing frontiers, now had two major coastlines and was growing rapidly through the center.  This let business tycoons such as Rockefeller, Vanderbilt and others build up monopolies that threatened to crush the US economy in its vicelike grip.  Breaking up these monopolies became important to insure that men such as Rockefeller couldn't simply take control of the country by threatening to cut off the oil supply.

It was after the Great Depression that the idea of economic inflation became a reality.  Unlike before, when the US was growing, the US was now locked and no longer able to expand and grow the economy through traditional means.  This meant that in order to keep money from being locked away, the government would need to artificially expand the markets to allow wiggle room for new business to grow.  As a result, the US government allows a certain amount of inflation to creep in every year.  It was only during the 90s that inflation took off, and lead us to where we are now.



I'm going for a smoke, that post wound me up.

[AndyZ]

Well, there is that chart. You're right, the article wasn't about the correlation of spending vs taxes. Nor need it to do so because:

It doesn't take a statistician to look at that chart and say "Hey, if taxes go up...spending doesn't really correlate." I'll put the data in Excel if you really want me to.

Correlation is not causation.  Here's now Vekseid puts it:

Correlation does not imply causation 'Cum Hoc Ergo Propter Hoc', 'False Cause' - believing that because a occurs regularly with b, therefore a causes b. Includes Confusing Cause and Effect and Ignoring a Common Cause, but also pure coincidence - given enough sets of numbers, you will find one that matches what you are looking for.

I don't understand the distinction between "the money the government is actually bringing in" versus "the numbers of how much they're taxing us".

There's diminishing returns.  Just because you raise the tax rate doesn't mean that you'll bring in a proportionate amount of money.

An oversimplified example is that if you make a DVD and you'd ordinarily sell a million copies at $1 per DVD, if you raise the price to $100, it doesn't mean you would've actually made a hundred million dollars.  It's not exactly the same thing, but it's essential to understand this point: http://www.investopedia.com/university/economics/economics3.asp

In the same way, simply raising taxes doesn't cause the intake to go up at a linear rate, especially when the system is as riddled with loopholes as the American tax system is.  Even not taking into account the loopholes, the more money you remove from the system via taxes, the less money there is to go around, get invested, plug back into the system and so on, and next year there's less to be taxed.

I hope this explains a little better ^_^  I know I'm not very good at teaching.



Linna, there's an awful lot here and my ADD is being too naughty today to read the entire thing in detail.  Most of what I read, I've had no issue with, but I'm not entirely sure about this part:

The point here is that while the government does have the power to manipulate the economy to help it expand, it must also be in a position to regulate the economy such that the disasters of the past don't become the problems of today.  That's why major banks now have US Treasury representatives on their boards, to oversee their operations to ensure they don't begin a downward spiral that will once again force the Government to step in.  The entire issue of bailing the banks out was because so much money was tied up within the banking system that a complete collapse would have plunged the US economy into the very depths of hell.

I'm not really convinced that they have fixed this problem.

Back during the financial crisis of 2008, the American people were told that the largest banks in the United States were "too big to fail" and that was why it was necessary for the federal government to step in and bail them out.  The idea was that if several of our biggest banks collapsed at the same time the financial system would not be strong enough to keep things going and economic activity all across America would simply come to a standstill.  Congress was told that if the "too big to fail" banks did not receive bailouts that there would be chaos in the streets and this country would plunge into another Great Depression.  Since that time, however, essentially no efforts have been made to decentralize the U.S. banking system.  Instead, the "too big to fail" banks just keep getting larger and larger and larger.  Back in 2002, the top 10 banks controlled 55 percent of all U.S. banking assets.  Today, the top 10 banks control 77 percent of all U.S. banking assets.

Source: http://www.benzinga.com/11/07/1771942/too-big-to-fail-10-banks-own-77-percent-of-all-u-s-banking-assets

I'll admit that I don't fully understand much of what they're doing with the banks, but if it was too big to fail before, are we going in the right direction?  Aren't we just setting up for another inevitable necessary bailout?

[Asuras]

Correlation is not causation.

A while ago I posted a chart (nerd that I am) correlating the length of my hair with the US unemployment rate and found a very high correlation (0.80 or something). Obviously the length of my hair does not cause millions of Americans to go unemployed. So you're right: correlation is not causation.

But Caela said (paraphrased) that "taxes and spending go up together." That is a claim of a correlation. But my chart shows that that correlation does not actually exist.

So I'm saying that since they aren't correlated, "taxes and spending move randomly irrespective of each other." I'm arguing against any significant correlation or causation between the two.

There's diminishing returns.  Just because you raise the tax rate doesn't mean that you'll bring in a proportionate amount of money.

An oversimplified example is that if you make a DVD and you'd ordinarily sell a million copies at $1 per DVD, if you raise the price to $100, it doesn't mean you would've actually made a hundred million dollars.  It's not exactly the same thing, but it's essential to understand this point: http://www.investopedia.com/university/economics/economics3.asp

In the same way, simply raising taxes doesn't cause the intake to go up at a linear rate, especially when the system is as riddled with loopholes as the American tax system is.

The numbers in the charts I posted are federal revenues, after people paid to the federal government after deductions, loopholes, subsidies, whatever.

I think what you're talking about is the Laffer curve which says (correctly) that people will avoid taxes more when taxes are raised. They will, either by working less or by deductions.

In practice, every tax cut in the last thirty years has led to a reduction in revenue because cutting taxes doesn't lead to people working more or deducting less nearly as much. That means that we're on the short end of the Laffer curve and the government will get more money by raising taxes.

Even not taking into account the loopholes, the more money you remove from the system via taxes, the less money there is to go around, get invested, plug back into the system and so on, and next year there's less to be taxed.

The same is true if you cut spending - the less money the government injects into the economy, "the less money there is to go around, get invested, plug back into the system and so on, and next year there's less to be taxed."

[Oniya]

In practice, every tax cut in the last thirty years has led to a reduction in revenue because cutting taxes doesn't lead to people working more or deducting less nearly as much. That means that we're on the short end of the Laffer curve and the government will get more money by raising taxes.

The problem with this statement is that the only points where the Laffer curve is defined are 0% (when the government gets nothing, because there are no taxes) and 100% (when the government gets nothing because everyone is avoiding earning anything taxable).  The tax rate that gives a maximum return is not defined at all, and is very likely not at 50%, the way the curve's general depiction might lead people to believe.  We could just as easily be at the apex of the Laffer curve, in which case both cuts and increases would result in a decrease in revenue.

[Asuras]

The problem with this statement is that the only points where the Laffer curve is defined are 0% (when the government gets nothing, because there are no taxes) and 100% (when the government gets nothing because everyone is avoiding earning anything taxable).  The tax rate that gives a maximum return is not defined at all, and is very likely not at 50%, the way the curve's general depiction might lead people to believe.

You are the first person I have ever read or heard that the Laffer curve would suggest a 50% tax rate. All that the Laffer curve says is that "somewhere between 0 and 100% there is a maximum revenue" definitely not that it's 50%.

[Oniya]

Every depiction of the curve that I have seen shows this nicely symmetrical, roughly parabolic curve.  To someone who looks at the graph and doesn't read further into the theory, it's very suggestive of a maximum at or near 50%.  I make a point of reading what goes into a graph (masochistic that way ;) ) but the average person in the street probably doesn't.

I'm betting that most people you have discussed the Laffer curve with are more versed in economic theory than the general public.

It still doesn't follow that we are necessarily on the lower part of the curve and not at the apex.  In fact, since the apex is reflective of what the 'taxed' will put up with, the apex itself has a certain mobility, yes?

[Jude]

And in a global economy where it's easier to migrate to warmer 'tax climates' it's kind of difficult to rely on isolated economic models like that anyway.  You need a multidimensional approach if you want to consider the economic conditions we actually live in.

[Vekseid]

And in a global economy where it's easier to migrate to warmer 'tax climates' it's kind of difficult to rely on isolated economic models like that anyway.  You need a multidimensional approach if you want to consider the economic conditions we actually live in.

In order for this argument to hold, their income has to either be derived from outside of the United States, or from their own talents as individuals. Bill Gates, Warren Buffet, Larry Ellison, the Koch Brothers, etc. can all flee the country, but their money is still made in the United States for the most part.

If their money is made outside of the US, that country has a right to it before the US does.

If that money comes from their own personal talent, then the tax revenue is only lost if no one else is capable of producing the lost economic output. It is very likely, in many cases, that their 'going Galt' will actually increase economic activity and revenue, for all of the glass ceilings they personally impose while they remain here.  It is not at all likely that anyone, anywhere, is actually worth a nine figure income.

I call it 'flight of the douchebags' for a reason. Look at the richest 100 people in America. Nine times out of ten, the ones with leanings who would 'flee to a tax haven' are not the sorts of people who do this country credit.

[Revolverman]

going what?

[Jude]

That may be true for individuals to some extent (though it discounts the loss of their money being spent in our economy), but what about corporations?  If Apple leaves for Canada because corporate taxes are too high here, you don't think that would hurt America?

[Vekseid]

That may be true for individuals to some extent (though it discounts the loss of their money being spent in our economy), but what about corporations?  If Apple leaves for Canada because corporate taxes are too high here, you don't think that would hurt America?

It doesn't discount it. It aggressively states that they cannot efficiently spend the money they earn. This is an empirical fact - banks and corporations are sitting on a combined three trillion dollar - and growing - cash stockpile. That money could be used to put thirty million Americans to work, indefinitely. It isn't.

These actions are not going to be taken in a void. It is rather patently obvious to anyone familiar with the situation that this is going to have to include corporate tax reform. The exact same principle holds - the money they make in the United States is still potentially subject to taxation no matter where they base themselves.

And, seriously, the loophole that existed during the last 90% tax bracket will still exist. It's there for a reason, and was a major part of the postwar boom. You can let the government take your money, or you can reinvest it, if you think you can do a better job than the government can.

[Oniya]

going what?

http://en.wikipedia.org/wiki/John_Galt#Cultural_significance

(I had to look it up, too.)

[Revolverman]

http://en.wikipedia.org/wiki/John_Galt#Cultural_significance

(I had to look it up, too.)

Ohhhh Atlas Shrugged. Bleh.

[Asuras]

Every depiction of the curve that I have seen shows this nicely symmetrical, roughly parabolic curve.  To someone who looks at the graph and doesn't read further into the theory, it's very suggestive of a maximum at or near 50%.

The first statement is true - the Laffer curve is definitely parabolic. That would be the point of the thing.

I can see how someone could look at the Laffer curve and conclude that the 50% tax rate maximizes revenue, but they would (as you say correctly) be wrong. But I have never seen anyone say that.

Typically the Laffer curve is invoked in saying that by reducing taxes we can increase revenue (typically the Republicans invoke the Laffer curve when they want to cut taxes).

I'm betting that most people you have discussed the Laffer curve with are more versed in economic theory than the general public.

That's generous, but thank you.

It still doesn't follow that we are necessarily on the lower part of the curve and not at the apex.  In fact, since the apex is reflective of what the 'taxed' will put up with, the apex itself has a certain mobility, yes?

The point I'm trying to make is that we have consistently reduced taxes over the last thirty years, and yet revenues have also fallen over the last thirty years. Longer than I've been alive.

We are therefore at the lower part of the curve. We reduce taxes, and we get less in revenue. That is the lower part of the Laffer curve.

This is an empirical fact - banks and corporations are sitting on a combined three trillion dollar - and growing - cash stockpile. That money could be used to put thirty million Americans to work, indefinitely. It isn't.

And...what? They're just sitting on that cash, letting it rot in a bank? Presumably companies that have money would like to invest it in something. Where do those numbers come from anyway?

[Oniya]

The first statement is true - the Laffer curve is definitely parabolic. That would be the point of the thing.

If it were symmetrical (which is a requirement for being parabolic), then the maximum would have to occur at 50%.  A more realistic depiction would have the curve distinctly skewed, with the maximum tax rate somewhere definitively below 50%, like this:

[Vekseid]

And...what? They're just sitting on that cash, letting it rot in a bank? Presumably companies that have money would like to invest it in something. Where do those numbers come from anyway?

Presumably. They aren't.

Corporate cash reserves at 1.6 trillion in April.
If Bloomberg is anything to go by, it's rising by ~40 billion per month.

Aggregate reserves of depository institutions.

[Asuras]

If it were symmetrical (which is a requirement for being parabolic), then the maximum would have to occur at 50%.  A more realistic depiction would have the curve distinctly skewed, with the maximum tax rate somewhere definitively below 50%, like this

True, parabolic is the wrong word.

Presumably. They aren't.

Okay, they're putting a lot more money than they used to in treasuries (or deposits, which eventually becomes treasuries). Not that investing in the government is a waste of money, either - after all that becomes social security and you know, highways and stuff. Although it is a fair point that investing in treasuries isn't going to contribute much to economic growth if you cram into them.

On the other hand you have to understand why they would do that. After a catastrophic financial catastrophe they're "deleveraging" and shoring up capital. Because A) they should B) they want to and C) we made new rules that forced them to do that.

I mean, I can assure you that nobody, least of all bankers and CEOs, enjoys sitting on a pile of assets that returns less than the rate of inflation. The question is why would they do that, and there's your answer.

[Vekseid]

Social security is a separate fund /nit

And, as long as Austrian and Chicago economists are directing things, it's not becoming much of anything.

[MasterMischief]

I think the proposal that everyone, including government, must 'live within their means' is flawed.  And that is essentially what the balanced budget amendment is, right?

Sure, it seems to make sense on the surface.  You should only spend what you have.  But let's face it, our country simply does not work that way.  How many people pay cash for their house?  Also, there is the old adage that you need money to make money.  College loans, small business loans...hell, isn't investment a form of debt?

[Asuras]

Sometimes I think it might be better if we made business/economics/finance a core subject for American students...the value for the country of knowing about the battle of Saratoga is a bit vague to me (even as a history major) versus knowing what the consequences of tax cuts and spending cuts are. If people don't understand what happens when you cut spending you'll get stupid shit from voters.

Let alone things that hit people's pocketbooks like the difference between an adjustable rate mortgage versus fixed rate or the time value of money. Or what stocks, corporate bonds, treasuries, mortgages, money markets, and munis are. Maybe even mention derivatives to the seniors. Maybe we wouldn't have had a subprime mortgage crisis if we'd told them about that stuff.

[OldSchoolGamer]

I think the proposal that everyone, including government, must 'live within their means' is flawed.  And that is essentially what the balanced budget amendment is, right?

Sure, it seems to make sense on the surface.  You should only spend what you have.  But let's face it, our country simply does not work that way.  How many people pay cash for their house?  Also, there is the old adage that you need money to make money.  College loans, small business loans...hell, isn't investment a form of debt?

Um...yes and no.

What bothers me more than the level of debt per se is that we have this sizable (not catastrophic, but substantial) pile of debt and nothing to show for it.

It would be one thing if we had racked up that debt putting men on Mars and finding cures for cancer and AIDS and developing cheap water desalination and thermonuclear fusion for power.   Those would be investments, as you describe, with payouts for decades to come.  But what have we gotten for our $14T of debt?  Nothing that I can see.  If anything, we've incurred long-term liabilities (like Iraq's wounded veterans, a bloated health care system, and a burgeoning financial sector that really produces little of actual value.)  I remember reading that the primary employment in the United States now for mathematicians is not in research, science, or teaching, but rather in the service of Big Finance creating ever more complex swindles and three-card montes financial instruments.

[Oniya]

Another thing that really gets overlooked is the 'debt to GDP ratio'.  Right now, everyone is tossing around this godawful number of how much the US owes (and that's actually the pre-existing debts, not any new spending), when a more common indicator of economic health is the amount of debt as a percentage of the Gross Domestic Product. 

Now, yes, that's been increasing over the last several years (since 2000, and more rapidly over the last 4 years, to be fair), but there are two ways of making it slow and/or turn around.  One is cutting the amount of debt, but the other is - wait for it - increasing the GDP.  How do we do that?  Get America producing.

[OldSchoolGamer]

Another thing that really gets overlooked is the 'debt to GDP ratio'.  Right now, everyone is tossing around this godawful number of how much the US owes (and that's actually the pre-existing debts, not any new spending), when a more common indicator of economic health is the amount of debt as a percentage of the Gross Domestic Product. 

Now, yes, that's been increasing over the last several years (since 2000, and more rapidly over the last 4 years, to be fair), but there are two ways of making it slow and/or turn around.  One is cutting the amount of debt, but the other is - wait for it - increasing the GDP.  How do we do that?  Get America producing.

+1

That's what irritates me the most about the GOP.  They're absolutely anally fixated on the spending side of the federal ledger, but utterly ignoring (even openly scorning) anything on the income side.

It would be like me having my hours cut to 25 a week...then someone approaches me with a $1000 gig and I tell them, "Don't bother me, I'm too busy figuring out which meals I'm going to skip over the next week because I'm BROKE!!!1!"

[AndyZ]

+1

That's what irritates me the most about the GOP.  They're absolutely anally fixated on the spending side of the federal ledger, but utterly ignoring (even openly scorning) anything on the income side.

It would be like me having my hours cut to 25 a week...then someone approaches me with a $1000 gig and I tell them, "Don't bother me, I'm too busy figuring out which meals I'm going to skip over the next week because I'm BROKE!!!1!"

Are you familiar with the Laffer curve?  From my understanding, the idea is that when you cut taxes, you actually increase the revenue because it spurs the economy by allowing more money to circulate, although this may be an oversimplification.

I do agree with Obama that we don't want to raise taxes.  I expect that a lot of the businesses that are hoarding money right now are doing so because they expect taxes to suddenly jump.

Obama: "The LAST THING We Want to Do Is Raise Taxes During a Recession"

Full clip at Obama Says Don't raise Taxes In A Recession 2009

[OldSchoolGamer]

Are you familiar with the Laffer curve?  From my understanding, the idea is that when you cut taxes, you actually increase the revenue because it spurs the economy by allowing more money to circulate, although this may be an oversimplification.

It is a vast oversimplification.  The Laffer curve had some validity in 1980 when marginal rates were as high as 70% and demand was good.  Here in 2011, with demand rather slack and businesses flush with cash?  Giving more cash to people who already have it and aren't creating jobs with it now isn't going to fix anything.

I do agree with Obama that we don't want to raise taxes.  I expect that a lot of the businesses that are hoarding money right now are doing so because they expect taxes to suddenly jump.

Then they need to get over themselves.  Either that, or they should  move to Somalia and stop worrying about paying taxes altogether.

Seriously.  I'm tired of hearing businesspeople whine about uncertainty.  Life is uncertain.  When I was growing up we had to worry about global thermonuclear war with an actual superpower.  Now rich people are in mortal fear they may end up sitting next to a mere pleb at their doctor's office.  Buck up, little campers.

(Disclaimer: I'm not saying there's no opportunity for improvement in the way government taxes and regulates.  I'm just tired of all the whining, fear and loathing from the Right and the Randroids.)

[Oniya]

Seriously.  I'm tired of hearing businesspeople whine about uncertainty.  Life is uncertain.  When I was growing up we had to worry about global thermonuclear war with an actual superpower.  Now rich people are in mortal fear they may end up sitting next to a mere pleb at their doctor's office.  Buck up, little campers.

(Disclaimer: I'm not saying there's no opportunity for improvement in the way government taxes and regulates.  I'm just tired of all the whining, fear and loathing from the Right and the Randroids.)

Right with you, OSG.

Four minutes to midnight on a sunny day
Maybe if we smile the clock will fade away
Maybe we can force the hands to just reverse
"Maybe" is a word, maybe "Maybe"'s a curse.
[noembed]http://www.youtube.com/watch?v=2jFCUp-d9Xk[/noembed]

[Vekseid]

Are you familiar with the Laffer curve?  From my understanding, the idea is that when you cut taxes, you actually increase the revenue because it spurs the economy by allowing more money to circulate, although this may be an oversimplification.

Revenue only increases if that money continues to cycle through the economy. That is, if someone who earns a dollar spends it on a good instead, and this chain continues, about thirty times for the poorest sectors of the economy. That is to say, tax cuts for the poor can be immensely beneficial.

Tax cuts for the rich, on the other hand, are not the same. The rich spend less of their money, investing it instead. The richest 5% earn ~25% of the income and spend ~15% of the money. Which means 10% of this nation's income or roughly 1% of our wealth gets siphoned into their pockets each year. In the current case, roughly 3.4 trillion dollars in cash is being left to rot between banks and corporations alone. Typically, this money would either be taxed, loaned to the government, or loaned to individuals.

Obviously, taxation and loans to the government are out of the question in the current political environment. And loans to individuals are going to be sluggish with such an uncertain economy. And the economy will be uncertain until one of those three events take place. Something needs to spur an immense amount of investment.

That $3.4 trillion could be tapped - through taxes and loans - to instantly solve our job crisis through a new WPA. But that is not currently politically feasible, so the nation will suffer until a good chunk of people like you get educated as to the real reasons our economy is in shambles rather than believing the lies spewed by the right wing.

I expect that a lot of the businesses that are hoarding money right now are doing so because they expect taxes to suddenly jump.

Then you do not understand how businesses operate. If they invest the money, they are not taxed on it - it's an expense. Right now, they are earning less on the cash they are hoarding than the inflation rate. If you think the millionaires and billionaires want that, I have no idea what to say to you. What sort of lies have you been told to make you believe that businesses want to be losing money?

It's rather simple.

To avoid the taxes, they can simply re-invest the money. The money they re-invest even returns at a higher rate. This has the added benefit of spurring growth in the country, meaning that the real value of their income rises still more. This is true whether the tax rate is 5% or 50%.

Pretty much, the only people as a block who are against tax increases are the 30k-70k block - people who are relatively poor. This makes sense - especially with what they pay in regressive taxes like Payroll and Sales taxes, their taxes are too high. Those taxes have been on the rise since the Reagan era, even though it gets presented as a tax cut because the rich got the break.

[MasterMischief]

Is it me or is a large portion of this country still buying into 'Trickle Down Economics'?

[Oniya]

I suspect those that are buying into it are the ones at the top end of the 'trickle'.

[MasterMischief]

I wish it were that simple.  I can honestly see how big business and the wealthy are Republicans.  I have a harder time understanding how lower income Americans can be against eliminating tax loopholes and oil subsidies.

[AndyZ]

Then you do not understand how businesses operate.

I really don't.  Thanks for explaining ^_^

I wish it were that simple.  I can honestly see how big business and the wealthy are Republicans.  I have a harder time understanding how lower income Americans can be against eliminating tax loopholes and oil subsidies.

We absolutely have to eliminate the tax loopholes.  However, I'm curious about the oil subsidies.  I also don't agree with treating oil businesses any different than other companies.  If oil gets special subsidies that other companies don't, they should be dropped.

Please don't insult me.  I know I don't know a lot about this stuff.  That's why I keep asking questions.  If that's not welcome, then just say that.

[RubySlippers]

Pretty much, the only people as a block who are against tax increases are the 30k-70k block - people who are relatively poor. This makes sense - especially with what they pay in regressive taxes like Payroll and Sales taxes, their taxes are too high. Those taxes have been on the rise since the Reagan era, even though it gets presented as a tax cut because the rich got the break.

You mean the Middle Class they of course are getting hit hard, but they are not poor. I'm working poor, others are poorer than me these folks are pretty well off by my standards they can afford a decent basic home or better, have a car, luxuries, money to invest and can meet lots of other needs and wants.

As for taxes I think we could tax more I would have a new 5% tax bracket and add tax brackets up to 50% for the very rich then shut down all possible loopholes and deductions have them have that tax, minus a few basic deductions say medical, charity and dependent child deductions (three examples) keeping this all one basic form. And I mean simple this is your income from all sources, you knock off say 2% for deductions if very wealthy and if your income in 2012 is $10 million you owe the government 48% of that. If your going to give investment deductions make it only on US based investments say if you made so many investments in US company stock you get some thing extra in a simple deduction and make it appealing to do that with maybe 10% of your money a year. This way any rich person who contributes meaningfully in the nations wealth and therebye promoting companies interests gets rewarded right now there is no such incentives in the system. I don't mind the rich having money but unless they help the US as a citizen should in their capacity as an investment source what is the point save to hoard more money or invest it or hide it overseas?

[MasterMischief]

However, I'm curious about the oil subsidies.

It really depends on which side you ask.
American Thinker
New York Times

Republicans say that government is inefficient, corrupt and intrusive.  I agree, but if I distrust the government, I distrust big business even more.  At least in theory, the government is supposed to be looking out for the people.  Big Business 's primary objective is profit.  It may be more efficient, but is that a good thing when it is crushing you under its heel?

Republicans keep saying that taxing businesses will damage the recovery.  I do not think businesses are going to hire more people until it is profitable for them to do so which has absolutely nothing to do with how much taxes they pay.  Now if those taxes were crushing, sure, maybe they would fold up and move overseas, but I do not think we are talking extremes here unless everyone is just flinging hyperbole around (which is likely actually).

[Vekseid]

You mean the Middle Class they of course are getting hit hard, but they are not poor. I'm working poor, others are poorer than me these folks are pretty well off by my standards they can afford a decent basic home or better, have a car, luxuries, money to invest and can meet lots of other needs and wants.

As for taxes I think we could tax more I would have a new 5% tax bracket and add tax brackets up to 50% for the very rich then shut down all possible loopholes and deductions have them have that tax, minus a few basic deductions say medical, charity and dependent child deductions (three examples) keeping this all one basic form. And I mean simple this is your income from all sources, you knock off say 2% for deductions if very wealthy and if your income in 2012 is $10 million you owe the government 48% of that. If your going to give investment deductions make it only on US based investments say if you made so many investments in US company stock you get some thing extra in a simple deduction and make it appealing to do that with maybe 10% of your money a year. This way any rich person who contributes meaningfully in the nations wealth and therebye promoting companies interests gets rewarded right now there is no such incentives in the system. I don't mind the rich having money but unless they help the US as a citizen should in their capacity as an investment source what is the point save to hoard more money or invest it or hide it overseas?

Most laborers making under 70k per year in this country experience some financial stress. Compared to the mean (over 100k per year), they are slightly poor. Compared to the people making over five million per year (who is worth that?) they are impoverished.

[Zakharra]

I don't mind the rich having money but unless they help the US as a citizen should in their capacity as an investment source what is the point save to hoard more money or invest it or hide it overseas?

To make more money. The US market is large, but it isn't the only one anymore and companies can make more money of spread out over several nations/regional areas. There are major companies that have holdings outside the US and people who own companies outside the US as well, sop for them, the money those companies make can hardly be spent in the US on US businesses and infrastructure.


  I tentatively agree with most of what you say. Some of what Veskied says makes sense too. Investing in the US, and making it so it is good sense to do so is good. I think I could tolerate up to a 50% total income tax (state, local and federal), minus deductions for  investing in US companies and such. More than 50% and I think the taxes are just being vindictive and very unfair.

Most laborers making under 70k per year in this country experience some financial stress. Compared to the mean (over 100k per year), they are slightly poor. Compared to the people making over five million per year (who is worth that?) they are impoverished.

And someone making 30K and under, 70k is fairly wealthy. 100k is rich. It's a matter of perspective.

[AndyZ]

It really depends on which side you ask.
American Thinker
New York Times

Ok, that talks about tax breaks.  Subsidies, from my understanding, are quite different.

A subsidized product comes from a company, or industry that has received a subsidy--a type of economic assistance. Governments use subsidies to decrease the prices of goods lower than the price determined by the free market. Subsidies can benefit industries and consumers, but they can also be controversial.

Read more: What Is the Meaning of Subsidized? | eHow.com http://www.ehow.com/facts_6737849_meaning-subsidized_.html#ixzz1TyY9QxAQ

My understanding is that they do this with food, giving subsidies to farmers in order to keep the price of food low and affordable.  If oil companies are getting this, then there's obviously a problem because the price of gasoline keeps rising.

Republicans say that government is inefficient, corrupt and intrusive.  I agree, but if I distrust the government, I distrust big business even more.  At least in theory, the government is supposed to be looking out for the people.  Big Business 's primary objective is profit.  It may be more efficient, but is that a good thing when it is crushing you under its heel?

This is something that confuses me a lot as well.  I agree that government is inefficient, corrupt and intrusive.  However, if we keep government small enough that it can't corroborate with big business, how can it damage us?  Without a huge government, business doesn't have any power beyond selling a product.

Let's throw out the example that a particular food company puts broken glass in its food that it sells to people.  When even McDonalds gets sued because their coffee is too hot, and the press makes sure that everyone hears about it, would this really be in the best interest of profit?  I would expect the police to come in with criminal negligence charges at the very least.

I know I tend to be pretty Socratic.  Thanks for indulging me.

Compared to the mean (over 100k per year),

What are the median and mode?  $100, a year seems seriously high to be the average salary in the USA.

[MasterMischief]

Tobacco companies have no problem killing their customers.  Sure, in a perfect world, we would like to think that Big Business would seek to be sustainable, benefit the world and make a profit.  I do not think that actually plays out in the real world.

Without a huge government, business doesn't have any power beyond selling a product.

I think that is rather naïve thinking.  First of all, I would agree that big government, corporations can wield a great deal of power.  Where does that power come from?  Money.  Without big government, corporations can still acquire (and possibly more easily) money.  Small government does not impede their power.  With a small government, there is just one less person to buy off.

[AndyZ]

You didn't answer my subsidy question.  I guess you don't know the answer either.  If anyone does, please enlighten me, because it's confused me for some time.

Tobacco companies have no problem killing their customers.  Sure, in a perfect world, we would like to think that Big Business would seek to be sustainable, benefit the world and make a profit.  I do not think that actually plays out in the real world.

In this day and age, it's very difficult to argue that people are unaware of the health risks associated with smoking.  Many, many people have brought forth lawsuits against the tobacco companies because of it.  From my understanding, and this may be wrong, the only reason that tobacco companies aren't currently run into the ground from the lawsuits is because they made a deal with the government to stay in business.  If the government had not been corrupt enough to do so, they would have gone under.

I posit that it is indeed profitable to be ethical, if only because of the press and lawsuits.  The lack of people buying Toyota is a prime example.

This can be countered by the debate of that car which found out that it had a problem, did the math and found out that A+B+C<X.  If you saw Fight Club, you know the one that I mean, but I can explain further if not.  However, even that is not safe from publicity and lawsuits, because once people found out about this, not only did they stop buying from them, but the lawsuit payoffs jumped tremendously.

I think that is rather naïve thinking.  First of all, I would agree that big government, corporations can wield a great deal of power.  Where does that power come from?  Money.  Without big government, corporations can still acquire (and possibly more easily) money.  Small government does not impede their power.  With a small government, there is just one less person to buy off.

The problem with that is that, as I see it, the power which money buys is pretty much all political.  What else are you spending money on besides bribes in order to get power?


P.S.  Thanks for giving me a fun discussion!  Most people have given up on me by this point.

[MasterMischief]

You do not think that large corporations would buy out the press, bribe judges and hire the best (and most expensive) attorneys?

When was the last time Microsoft produced a truly innovative operating system?  Yet, how many times have we had to upgrade in the last 10 years?  It has been far more profitable for them to make minor tweaks and use their influence to push people into upgrading every few years than to actually make advances.

Several of the major car companies recently agreed to President Obama's request to produce more fuel efficient vehicles.  Why didn't they do that years ago?  I seem to recall stories many years back of breakthroughs that would allow 50 MPG and then nothing.

I agree that a company can be profitable and ethical but I do not trust them not to reach for greater profit by cutting out the ethics.

[AndyZ]

You do not think that large corporations would buy out the press, bribe judges and hire the best (and most expensive) attorneys?

If they could buy out the press, I would imagine that they would have already done so.  It simply makes more money to have stories about people than it would be to be bought off.  I'm sure Taco Bell would have loved to have had that story quieted up about the amount of beef, for example.

As for bribing judges, that's already part of the government.  You're suggesting that we need someone to watch the watchers.  The problem with that is that we already have people who should watch the waters and are corrupt.  Would you suggest having people who watch the people who watch the watchers?  Where does that end?

Lawyers I'll definitely grant you.  Our law system is completely messed up.  However, the law system is only being made worse by the government in my opinion.

When was the last time Microsoft produced a truly innovative operating system?  Yet, how many times have we had to upgrade in the last 10 years?  It has been far more profitable for them to make minor tweaks and use their influence to push people into upgrading every few years than to actually make advances.

I think this gets into the crux of what I'm trying to say.  I don't own Windows 7.  My desktop still runs XP, which works just fine.  I have an iPhone 3 which I picked up for cheap when the 4 came out.  They can plug stuff all they want, but nobody has to actually buy anything that they don't want to.

Compare that to the most recent health care bill where I get fined if I don't buy something.  I think it's $2500 a month if I don't want health insurance.

This goes hand in hand with the concept of a monopoly.  Monopolies are bad; I doubt I have to explain this.  Yet everything the government makes ends up being a monopoly one way or another in that area.  If you don't like the public school system, you can't just find another one in the area like how you can move to Apple Computers or switch to another private school.

Several of the major car companies recently agreed to President Obama's request to produce more fuel efficient vehicles.  Why didn't they do that years ago?  I seem to recall stories many years back of breakthroughs that would allow 50 MPG and then nothing.

I lack information on this one and sadly don't have time to research it before I'm out the door today.  However, I'm curious if it was truly a "request" or if it was forced through some sort of regulation.

Heading out for now.  Talk to you later.

[Will]

This goes hand in hand with the concept of a monopoly.  Monopolies are bad; I doubt I have to explain this.  Yet everything the government makes ends up being a monopoly one way or another in that area.  If you don't like the public school system, you can't just find another one in the area like how you can move to Apple Computers or switch to another private school.

If there are private schools, then education isn't really a monopoly, is it?  In practice, most people don't really have the choice to go to a (typically expensive) private school, but it's still a poor example of your point.

[Oniya]

Re: education, there's also a growing homeschool movement, and things like k12.com - which is tuition-free online schooling.  (It's available in Ohio, and probably other states as well.)

[MasterMischief]

If they could buy out the press, I would imagine that they would have already done so.

Oh there is one outlet they did not buy, they simply manufactured.

[Vekseid]

If they could buy out the press, I would imagine that they would have already done so.  It simply makes more money to have stories about people than it would be to be bought off.  I'm sure Taco Bell would have loved to have had that story quieted up about the amount of beef, for example.

Taco Bell is a piss-poor company with no resources.

Why do you think DuPont, BASF, Boeing, McDonnell-Douglass and General Electric purchase general brand advertising, when what they sell to consumers is a pathetically small fraction of their business? Some companies do it through their subsidiaries - all those Bounty ads aren't just about paper. It's Koch Industries' way of keeping the media quiet about its main line of income.

You aren't their customer, rather, they are the media's customer. The same is true of any major ad-driven apparatus. You aren't a customer, to them, to most large website owners, etc. You are a product, openly bought and sold on the market.

[AndyZ]

If there are private schools, then education isn't really a monopoly, is it?  In practice, most people don't really have the choice to go to a (typically expensive) private school, but it's still a poor example of your point.

Fair enough.  It's not the strict definition of a monopoly.  However, I feel that many of the problems still apply.  With multiple companies, you can pick and choose, but unless you can afford either to move or buy private schools, you're rather stuck.

When there's only one choice for something, it's much easier for the people running it to slack off.  If we compare this to competing businesses, like Pepsi and Coke, both have to keep doing a good job or else people will just quit buying from the crappy one.

Re: education, there's also a growing homeschool movement, and things like k12.com - which is tuition-free online schooling.  (It's available in Ohio, and probably other states as well.)

I'm at least glad that they're doing something in that regard.

Oh there is one outlet they did not buy, they simply manufactured.

Fox does have a Republican bias, but MSNBC and others have a Democrat bias.  Personally, I feel that you have to watch both in order to get the full picture, in the same way that you want to get more than one side to any story.

You haven't given any comment on my other hypotheses, though.  Am I correct?

Taco Bell is a piss-poor company with no resources.

Why do you think DuPont, BASF, Boeing, McDonnell-Douglass and General Electric purchase general brand advertising, when what they sell to consumers is a pathetically small fraction of their business? Some companies do it through their subsidiaries - all those Bounty ads aren't just about paper. It's Koch Industries' way of keeping the media quiet about its main line of income.

You aren't their customer, rather, they are the media's customer. The same is true of any major ad-driven apparatus. You aren't a customer, to them, to most large website owners, etc. You are a product, openly bought and sold on the market.

Taco Bell is a piss-poor company with no resources.

Why do you think DuPont, BASF, Boeing, McDonnell-Douglass and General Electric purchase general brand advertising, when what they sell to consumers is a pathetically small fraction of their business? Some companies do it through their subsidiaries - all those Bounty ads aren't just about paper. It's Koch Industries' way of keeping the media quiet about its main line of income.

You aren't their customer, rather, they are the media's customer. The same is true of any major ad-driven apparatus. You aren't a customer, to them, to most large website owners, etc. You are a product, openly bought and sold on the market.

Can I get some more information on general brand advertising, please?  I'm not familiar with all this.

I'm certainly not going to argue about problems with General Electric, which from what I've heard, pays no taxes and is arm in arm with the government.  If what I've heard is true, then it's more proof that big government only aids big business because both are corrupt.  This said, the options are either to try to make government bigger by setting up someone to watch the person who watches the watcher, or to shrink government power back down so that big business isn't abusing it.  Since setting up someone to watch the watcher (the law enforcement) hasn't worked, setting up someone to watch the watchers of the watchers isn't going to work either.

Is all this correct?

[Oniya]

If I'm not mistaken, general brand advertising is where you advertise a company, rather than the products that the company sells.  One that I've seen recently is the 'LG - Life's Good' campaign.  Another (that Veks alluded to) was BASF's campaign of 'We don't make the things you buy - we make the things you buy better.'  Some folks might remember 'GE, we bring good things to light.'

[Will]

Fair enough.  It's not the strict definition of a monopoly.  However, I feel that many of the problems still apply.  With multiple companies, you can pick and choose, but unless you can afford either to move or buy private schools, you're rather stuck.

When there's only one choice for something, it's much easier for the people running it to slack off.  If we compare this to competing businesses, like Pepsi and Coke, both have to keep doing a good job or else people will just quit buying from the crappy one.

Okay, we'll say it's a monopoly.  So what?  There are times when a monopoly is a positive thing.  It's just such a loaded word that people tend to break it out when they want to demonize some specific target.  If you really think that education is a monopoly, and that all monopolies are bad, shouldn't we abolish free national K-12 education?  We already make people choose between eating regularly and going to the doctor.  Should we really add getting a basic education into that mix?

I'm just trying to demonstrate that getting the government completely out of our lives is no more sensible than having the government dictate every aspect of our lives.  Sweeping statements like "governments can't do anything right" are just an attempt to swing from one extreme to another.

[AndyZ]

If I'm not mistaken, general brand advertising is where you advertise a company, rather than the products that the company sells.  One that I've seen recently is the 'LG - Life's Good' campaign.  Another (that Veks alluded to) was BASF's campaign of 'We don't make the things you buy - we make the things you buy better.'  Some folks might remember 'GE, we bring good things to light.'

Thanks.  I never did get this concept of advertising.  Maybe it works on some people, but to me it always felt like trying to pay people to be your friend.  Like, I know various game companies rock, but if they don't mention a game is coming out, and I'm not keeping up, I'm not going to know to buy it.

Okay, we'll say it's a monopoly.  So what?  There are times when a monopoly is a positive thing.  It's just such a loaded word that people tend to break it out when they want to demonize some specific target.  If you really think that education is a monopoly, and that all monopolies are bad, shouldn't we abolish free national K-12 education?  We already make people choose between eating regularly and going to the doctor.  Should we really add getting a basic education into that mix?

I'm just trying to demonstrate that getting the government completely out of our lives is no more sensible than having the government dictate every aspect of our lives.  Sweeping statements like "governments can't do anything right" are just an attempt to swing from one extreme to another.

Are these really our only two options, though?  I would hope there's more options out there than to do nothing and to fall to anarchy.  There has to be something in between.

[Oniya]

Thanks.  I never did get this concept of advertising.  Maybe it works on some people, but to me it always felt like trying to pay people to be your friend.  Like, I know various game companies rock, but if they don't mention a game is coming out, and I'm not keeping up, I'm not going to know to buy it.

The idea is that if you're off shopping for, say, a washing machine, most people look for a brand they recognize.  It's not a conscious thing, but if you've seen the brand-ads, you might see the LG logo and get that subconscious tweak of 'Life's Good'.  It's sort of like that whole Ford/Chevy dichotomy.  *doesn't really get that either*

[AndyZ]

The idea is that if you're off shopping for, say, a washing machine, most people look for a brand they recognize.  It's not a conscious thing, but if you've seen the brand-ads, you might see the LG logo and get that subconscious tweak of 'Life's Good'.  It's sort of like that whole Ford/Chevy dichotomy.  *doesn't really get that either*

Sounds like a waste of money to me, but I guess it's their money to waste.

Personally, I still remember driving to a girl's house for a date as a teenager and having my Ford car emitting white smoke from under the hood.  I have no opinion on the Chevy, but my mind is quite made up on the Ford.

[Will]

Are these really our only two options, though?  I would hope there's more options out there than to do nothing and to fall to anarchy.  There has to be something in between.

Well, yeah.  That's what I'm getting at.  I think situations should be judged one by one, to decide how/if the government should get involved.  Indiscriminately throwing blanket statements and rhetoric at every issue doesn't really solve anything.

[AndyZ]

Well, yeah.  That's what I'm getting at.  I think situations should be judged one by one, to decide how/if the government should get involved.  Indiscriminately throwing blanket statements and rhetoric at every issue doesn't really solve anything.

Well, it's off topic, but we can discuss it.  What can we do to fix the modern school system?

I think that there needs to be a way to reward good teachers and reprimand/fire bad ones without the use of "rubber rooms" or similar methods.  I don't believe that simply throwing more money at the problem, as many politicians are wont to do, will really solve anything.