By James Kwak
Bruce Bartlett (hat tip Catherine Rampell) reproduces a table from a paper by Suzanne Mettler showing that most people don’t realize that they are beneficiaries of government social programs. For example, 60 percent of people who take the mortgage interest deduction say they “have not used a government social program.” Now, while the mortgage interest deduction is a subsidy designed to enable people buy houses, you could get into an argument about whether it’s really a “social program.” But these are the analogous figures for some more classic welfare programs:
- Social Security retirement and survivors’ benefits: 44%
- Unemployment insurance: 43%
- Medicare: 40%
- Social Security Disability Insurance: 29%
- Medicaid: 28%
- Food stamps: 25%
Obvious it’s easy for people to support lower taxes and lower government spending when they don’t realize they are beneficiaries of that spending. (And the numbers on a per-program basis would certainly be higher. For example, it’s likely that of people who take the mortgage interest deduction, many more than 60 percent don’t think that it’s a government social program; the number is only 60 percent because some of those people realize that other things they receive, like Medicare, are government social programs.)
But there’s another number in Bartlett’s post that I think is more interesting. That’s an estimate by the Tax Foundation that, in 2004, the average middle-quintile household received $16,781 in benefits from the federal government. That same study says that, on average, middle-quintile households get back $1.30 in transfer payments and other government spending for every $1 that they pay in taxes. I didn’t review the study in detail, but this is just common sense, anyway. When you have a progressive tax system and an income distribution with a much longer tail at the high end, you would expect people in the middle to be net beneficiaries of government.
I don’t really think that the point of democracy is for people to simply vote their self-interest. That could lead to all sorts of things, like the tyranny of the majority that Tocqueville warned about. But right now, it would be a distinct improvement if people would vote their self-interest.
The Baseline Scenario 
“But right now, it would be a distinct improvement if people would vote their self-interest.”
You mean lower taxes combined with higher government spending?
Then I have good news! That is exactly how people do vote.
Saying that a deduction that lowers my taxes is a “social program” or subsidy can be stretched to absurdity.
Economists have little credibility anyway.
Now, while the mortgage interest deduction is a subsidy designed to enable people buy houses, you could get into an argument about whether it’s really a “social program.”
I don’t see how. It’s aggressive social engineering, along with all things which subsidize automobiles.
We should probably call it anti-social engineering, anti-social programming, though. So much wasted farmland that we’re soon desperately going to need…
But the real question is whether I could get more utility with $1 I spend than the government can achieve on my behalf with $1.30.
And calling the mortgage interest deduction a government benefit (or social program) only works if you buy into the notion that my income is the government’s first and mine second. Instead of a 25% tax rate…it’s a 75% income pass-through rate! Plus all these other things the government gives me! What a bargain!
Two interesting bits from Bartlett’s story …
“For this column, I tried to find some data on who benefits from various government programs. It turns out that the government doesn’t really know.”
On average, maybe no one.
“The bottom line is that cutting spending is neither easy, nor simple, nor fast.”
But we knew that.
Since 40 cents of every dollar the government spends is borrowed, I have to assume you mean that self-interest includes debt slavery.
How is it not a subsidy? It is a direct transfer from the government to you. As a renter, I’m not entitled to such a subsidy.
I’m sure if the MID was removed you would surely miss it. If that’s the case, then it is definitely a subsidy.
“When you have a progressive tax system and an income distribution with a much longer tail at the high end, you would expect people in the middle to be net beneficiaries of government.”
Well, yes. But the US tax system as a whole is far less progressive than that of other developed countries. In fact, it is more due to our taxation system than to our pre-tax income distribution that we have a much more unequal society than other developed countries.
And the mortgage interest deduction is hardly the example to give if you are interested in progressivity. Because it is a deduction, its benefit to you goes up with income. Also the more income you have the more likely you are to own a home, and the larger the price (and, in most cases) the mortgage interest you deduct. In fact, I wouldn’t be at all surprised to learn that the mortage interest deduction is, net, anti-progressive–a transfer of wealth from the working poor to the upper middle class.
Look, the current pattern of spending is unsustainable. And as has been pointed out by you, James, and others any serious change will have to hit defense, Medicare, and perhaps social security. (Perhaps, because I have seen analyses that suggest that if done soon, social security can be shored up with a truly minor, and progressive, tax increase without reducing benefits.) And the longer we postpone this, the more likely it will end up being done chaotically when the sh– starts to hit the fan. And the likely result of that is that the politically connected will protect their rents while the rest of us get shafted.
If you want to be part of the solution, instead of pointing up how many people are government spending beneficiaries and how much pain cutting spending might inflict, you should be focusing on how we can do it with minimal damage.
Health care and defense are enormously bloated with waste and both can be substantially pared back while doing little or no harm (and even doing social good), _if_ we start now to figure out a plan for doing it sensibly.
“But the real question is whether I could get more utility with $1 I spend than the government can achieve on my behalf with $1.30.”
Yes, that is the real question, and we ought to be debating that. What are the activities that government should be involved in and achieve greater overall social utility than staying out? I’m guessing that you and I would disagree sharply about the answer to that. But it is, indeed, the right questions.
“And calling the mortgage interest deduction a government benefit (or social program) only works if you buy into the notion that my income is the government’s first and mine second.”
By contrast, this is just nonsense. If the government spends money it either has to collect it as taxes, borrow it, or create it. That’s just a mathematical identity. So if the government reduces the amount it collects from you by giving you a deduction, it either has to collect more from somebody else, or borrow it (implicitly collecting it from future taxpayers), or print money (which, in the long run will inflate the currency, taking a toll on real wealth from everybody who holds money). So yes, this tax deduction is a subsidy to you, and it comes at the expense of others. You are the beneficiary of an income transfer program.
Just curious: what effect would eliminating the earnings cap on SS taxes (without eliminating the payout cap) have on the solvency of the system? I assume somebody has done the numbers.
So the Government NOT taking my money because I do XYZ is a subsidy now? Now I am really scared.
“Economists have little credibility anyway.”
This economist rejects the very notion of this being a subsidy.
@ CBS from the West
“Health care and defense are enormously bloated” – Yes too both!
Defense spending = Corporate Interest ( America’s National Security for Multinational’s?): Answer…hire their own mercenary armies! Savings =~ 20%
Health Care = “Canadian Health Care System (truly tested and incredibly worthy system)” =~ 25%-35% savings in < 5yrs.
Note: Canada's population is only approximately 33 million, but with the 2nd largest land mass in the world other than Russia. The system is paid through individual (income) taxes only, with copays nonexistent in most provinces. Important…all bad press is solely fabricated by the U.S. Health Industry in a nut shell! If one has a serious health concern/ matter – his/her condition will be treated immediately. There secondary health care, eg. outside therapy & follow up is second to none.
We're failing CBS in many area's, we could learn from our Northern friend's right now – demanding change…that was never fulfilled. But instead, we reluctantly excepted a crumb-stuffing plunger down our throats – we were the Politician's Thanksgiving Turkey gifts…base`d on lies as a present to "K-Street"!
Mortgage deduction is actually a subsidy to the bank (not to the individual) since only the interest is deductible — meaning either you pay the bank or the government — there is no other alternative. From a pure numbers point of view, it is almost always more expensive to own a house than to rent one.
It’s also interesting to see, how social security (which was “sold” as insurance) has turned into a tax thus an individual who has paid into the system all his life has no right to expect any payments when he retires — if he gets any payments, then he is being subsidized.
The point about people wanting lower taxes is not that they don’t realize where the money is going. They realize it fine. Aside from the hypocrites, what do you say to the people who:
1. Don’t own a home
2. Don’t receive unemployment
3. Are not eligible for Medicare, Medicaid, Social Security or Food Stamps.
Speaking for myself (no I am not a tea party member or a Republican), I fall into this category and I have to say I am tired of working for 7-8 months of the year (if you include all the taxes) for the beneficiaries of the programs you mention (and yes to pay for us to go around policing the world and killing people).
So, pray tell me why is this not a rational position to take and how is it in my interest to ask for more taxes?
Why don’t you advocate a program to reduce spending?
This is hysterical! Looking forward to seeing this on SNL tomorrow.
All I can say, James, is that if, as they say, ignorance is bliss, it is nearly mindboggling just how many Americans must be living in a state of eurphoria. It is nearly impossible for me to imagine this level of ignorance, but then, if we just look at what people watch on TV, and what they accept, generally as news coverage, perhaps there’s no real surprise there.
By the way, anyone who hasn’t done this amazing exercise should take advantage of it. It is positively fun and instructional. It will clearly evince the dividing lines between conservatives, liberals and progressives:
http://public-consultation.org/exercise/
It is not about what is spent or taxed, it is purely about the application of revenues to the highest benefit of our society as a whole. None of us, regardless of income or tax burdens wants children underfed or undereducated. None of us wants to see women of 70 eating cat food for supper. Many, if not all of us would like to see our vast military shrunk to the point where we are solely providing for our own national security and not acting as the world’s police force and angering most of the other world’s citizenry. Many of us would like to see NASA go to Mars (and beyond) someday. Very few of us want our tax money used to subsidize banks, pharmaceutical companies and oil companies.
None of us wants to see those on Capitol Hill continuously vote against the common weal and in favor of more riches for the already rich.
Sadly, this is fact. And so it goes in our great plutocracy. We think that our democratically cast ballots give us a bit of control over what is done in government. Sadly, those ballots mean nothing because at heart, both parties are gaming us into oblivion.
” But right now, it would be a distinct improvement if people would vote their self-interest. ”
They’d have to be well enough informed to even know their self interest. Are any of these tea party buffons actually crafty looters benefiting from derivatives games and a heavily over-priced medical system? I don’t think so.
What they do know is that over the last 3 or 4 decades liberals have been pushing feminism and homosexuality, and that created an underlying basis in distrusting and rejecting everything else liberals advocate.
Don’t forget civil rights, RA.
What does “society as a whole” mean? True, no one wants to see children unfed or old people eating cat food but does that mean only some of the people pay for this? Taken to the extreme, this is socialism (democratic or otherwise) where the motto is “from each according to his ability to each according to his needs.” In this scenario, the able are punished for the needy and we all know where this leads.
You, as the OP, posit solutions where the people who produce are taxed and then it is just a question of who gets the proceeds — for you old people and children should get the benefits versus the corporations and banks. What if I say no to both of them? Why is it that people who have millions of dollars in assets still get social security and medicare, when I (who is not a millionaire) have to pay for it? I make the same argument against the banks getting bailouts. In other words, I want to keep some of the proceeds of the work I am doing now. I thought that is what America stood for.
Incidentally, I don’t want to fund a Mars mission either — why should I? Just as I don’t want to fund military, bail out banks, pay for rich old people, etc.
We are living in a world of false alternatives: corporation versus the people, and the middle men (the ones running the government) are laughing all the way to the Swiss bank account. The fools are the ones who still work, pay taxes, don’t collect any benefits. One day they will stop working and then what will the collectors of these benefits do?
I see many liberals (this is not to condone any arguments by the conservatives) make the argument that the government is corrupt but want to give more control to the government. To misquote a cliche, “I have seen the enemy, the enemy is us.”
a subsidy and a negative tax (=tax deduction) are equivalent.
What we should know is what the representative voter pays and receives, and what his preferences are. It is possible that this voter’ net payments to the State taxes, deductions, expected net present value of future or contingent benefits, are negative or surprisingly low (it is suggested above that the average middle quintile household receives rather than pays), and probably relatively lower than those of voters further removed from this representative in the income distribution. Possibly the people in lower income groups pay relatively more (they do not enjoy the same housing benefit, may have a lower life expectancy hence have a much lower expected contingent benefit from Medicare, etc). However I doubt that the people in the higher income groups (except the ones in the highest groups who can afford fully rational expert advice and have much more mobility).
So I do not think that the result says anything about voter rationality. If the median voter gets paid by a democratic government in market economy that is a pretty good result..So good that they probably prefer to behave as if they do not receive a subsidy. Let them come to the UK or Australia! No mortgage subsidy there and, surprise surprise, over half the population does not pay more in taxes (consumption taxes excluded) than they receive in benefits and discounts. Not to mention individualised goods and services such as education and free healthcare.
I suspect that the US system would benefit from a shift of taxation towards consumption (away from income) and a steep increase in pigovian taxes. From what I see here, it would that the median voter rules and it would not be hard to design a shift that would be median voter-neutral…
What politician is brave enough to try this?
Surely the 1.3 > 1 for the Middle Class is explained by the government’s borrowing and not by the progressivity of the income tax.
Re: Mortgage interest deduction.
” … the price of housing in the short run
may rise by the full amount of the present discounted value of the tax subsidy.
Click to access sercdp0055.pdf
http://modeledbehavior.com/2010/12/03/the-mortgage-interest-deduction-winners-and-losers/
It’s more complicated than that but subsidies result in increased demand which drives prices up. Another lunch that isn’t free.
The “60 percent of people who take the mortgage interest deduction [and] say they ‘have not used a government social program.'” may be right — the social program used them.
@Chandrahekar
Your vision is too narrow. There is infrastructure that people living in modern North American and European cities take entirely for granted.
There are reservoirs, water treatment plants, and water mains that deliver safe, clean drinking water to our homes. There is modern plumbing and a vast network of underground sewer mains to deliver “grey water” to sewage treatment plants. There is garbage collection and landfills.
In Elizabethan England, people tossed the contents of their chamber pots, out the window and onto the streets. In Holland, they tossed the contents of their chamber pots into the canals. There are cities today in the third world without modern sanitation systems.
What kind of country are you talking about !!!
Add to the obvious benefits all of the other benefits from government spending for example roads and tax loop holes. The list is enormous. Additionally all of the recipients of the list in the article, spend the money and turn the economy.
Federal spending by state. http://www.fedspending.org/devel/
A quick look at your state budget includes state spending.
There are people who in America who are opposed to centralized government control. But (like everyone else) they would be angry if there was a failure of their government-regulated, centralized sanitation system.
As for clean drinking water: Here is what can happen when there is a failure in a Public Water Utility. In Walkerton, Ontario, seven people died and 2000 people became ill, when ecoli contaminated the town water supply. The tragedy was a national scandal.
The anti-regulation folks (like everyone else) would not be happy if they, or their loved ones, got ecoli from contaminated drinking water. People can die from kidney failure if they get ecoli.
Jesus, get over it. Do you really care if some dude takes it? And it bothers you that a woman tries to get paid the same as a man? And if d.weeds like Rush, O’Reily, et all weren’t shoving it down the lemmings throat(pun take it any way you want), said lems could maybe actually think about ‘everything else liberals advocate’.
Let’s not forget that the greatest recipients of welfare in recent years are those in the financial sector, the beneficiaries of TARP and all the other government programs that sent billions of federal dollars to banks.
[And, IMO, the tax break for home ownership is indeed a social program, in that it exists to promote home ownership.]
Ok I get it. Government programs are good and we should all demand more of them. I think I have a good tradeoff in the interest of reducing my government “footprint.” How about we do away with the homeowner interest deduction…under the condition that the government refund to me ALL of the money taken for social security (with interest). There, that was was easy. Now I realize this may not be a good idea for many as they would probably just take the money and by lotto tickets (another government scam), but it would keep people like you from arguing that we’re all gov’t benefit addicts.
Chandrashekar has got me thinking.
I recall attending an urban planning course, while in university. Not the fashionable New Urbanism espoused by Duany Plater-Zyberk. Nope. Our prof had an agenda. He wanted us to look at the nuts and bolts of urban planning. This being modern sanitation. Waste water and storm sewers are neither common knowledge nor a trendy field in the Liberal Arts. (Not so in engineering.)
What I took away from this course was the appalling knowledge that there are very large cities in the third world — without modern sanitation — and this is one of the challenges in urban planning. We take for granted that what we flush down the toilet goes somewhere and that’s all we need to know. But there are countries where people do not have modern toilets and even if they did there is nowhere for what they flush down the toilet to go. For example, the city of Mumbai — with nearly 14 million people — does not have a modern centralized sanitation system. I am sorry to say this, I feel appalled, even today, wondering what exactly happens to the human effluent from that city. Historically, the so-called untouchables got to clean out the latrines. The upper castes feared contamination and pollution for good reason. Cholera for example.
I am not promoting wasteful big government or centralized planning. But my-oh-my. Every modern city has a government-run centralized sanitation system. I personally would never have it any other way.
What I took away from this urban planning class, is that literally under our feet, in every North American city, is a highly-sophisticated and centralized engineering project. There are water mains that carry clean drinking water to our homes. And there are sewer mains take the effluent from homes to (in a best case scenario) a sewage treatment plant.
Taxation pays for this quality of life. I would argue that it is — essential — to have central government planning, regulation and operation for modern clean drinking water and sanitation systems. We entrust our civic authorities to maintain proper health and safety in this regard.
So I would add a centralized-government-run, modern water and sanitation systems to the list of social benefits in the $1.30 > $1.00 formula discussed in this post.
“The credits are based on the amount of your earnings”
http://www.ssa.gov/pubs/10072.html
“….showing that most people don’t realize that they are beneficiaries of government social programs.”
I use to respect this website. Honestly, you don’t know why people think that???
“But right now, it would be a distinct improvement if people would vote their self-interest.”
What, more benefits and lower taxes???
Tolerance for biologic peversion is one thing, pretending it’s normal is another.
Yes, water treatment systems are nice.
But to a first approximation, they make up 0% of government spending. Government spending consists of (a) entitlements and (b) defense. Everything else combined is a rounding error in comparison. (OK I exaggerate. But seriously, water treatment? Irrelevant to the discussion.)
P.S. Hey James, you forgot one of biggest subsidies of all. Anybody who makes less than $373K per year pays less than the top marginal tax rate of 35%. So they are all getting a MASSIVE subsidy.
Wow, I never realized what a beneficiary I am of government largesse. This will totally change how I vote. Thanks for the enlightenment.
Unless someone gets sick and dies from drinking contaminated water.
Are there not billions worth of munibonds at risk of default?
Really Nemo, would you and your family want to live in a city where the sanitation system (the underground sewer mains) are either non-existent or failed?
The mortgage interest deduction (and property tax and capital gains exclusion) means that homeowners pay $210 billion less in taxes per year than if they were renters. It’s real money.
Somebody is getting subsidized in there somewhere.
To those here who are unable to understand that forgone government revenue in the form of tax preferences is every bit a subsidy as direct payments, I suggest you go take a introductory accounting course. After and if you get your gold star, we can discuss other forms of subsidy, such as loan guarantees and below-market royalty structures.
@Nemo
One sanitation system (the underground sewers) in one town or one city does not add up to much relative to defence and entitlements. But if you added up all the cities and and towns in America it would be in the trillions. I would argue this is a — social benefit — that is essential to quality of life, health and safety.
Equally one food stamp, or one social security payment, is 0% unless compared to entitlements taken as a whole.
tippygolden, you say …
“Taxation pays for this quality of life.”
In the Greater Cleveland (Ohio, USA) area, water and sewer are financed not by taxes but by fees charged to the users based (more or less) on the amount of water used (we all have meters) and the amount of sewage generated (based on water usage).
This means that in our case, water and sewer would not be included in a list of something for nothing or transfer payment social benefits.
Pigovian taxes. Had to Google for a definition. Perhaps a way to justify a hike in corporate taxes. But complicated and there is the problem with regulatory capture.
So, the answer to both is yes?..
Oh! I see. Now we are talking about sanitation systems and roads. Interesting how liberals and conservatives alike, when confronted with the fairness of their favorite spending programs always revert to sanitation and road building. The liberals cannot really justify spending on SS, Medicare, etc. for the rich and the conservatives cannot really justify spending for policing the world.
In other words, did I say I was not willing to pay for sanitation and road building?
Do you know how much money is spent on sanitation, road building, etc.?
I would gladly pay for all these wonderful sanitation system and road building if you abolish social security and medicare for the rich, military spending, missions to Mars, etc.
I will probably have to work for 15 days out of the year to pay for what I consume from government services.
Really, do you know how much of our money goes to pay for this wonderful system that you talk about?
Incidentally, the reason why the city of Mumbai doesn’t have a good sanitation system is because it is run by a corrupt government system. I know — I used to live there. Try getting anything done there (that touches the big arm of the govt. and you will know what I mean). Of course, the liberalization programs instituted in the 90s has created immense growth and prosperity and all the govt. had to do was get out of the way.
Do you know why Mumbai is overcrowded? The World Bank and IMF compel the Govt. of India to build dams and reservoirs (hydro-electricity), which in turn displaces thousands of poor farmers who have no where to go and thus go to Mumbai. A city that was built for about 4 to 5 million has to now support 14 to 18 million people. Of course the infrastructure is overwhelmed.
Anyway, as I have said before, I would gladly pay for sanitation — I venture to guess that the cost would be less than 1% of budgets of various governments that are involved.
Did Greater Cleveland ever get state or federal money to build its reservoirs, water and sanitation system, and sewage treatment plant?
In Greater Vancouver, where I live, we don’t have the kind of metering you describe. But every summer we are reminded to conserve water (even though we are located in a river delta and former rainforest) because too much water is being used to water lawns. So there is talk of water metering, and eventually this will happen.
Vancouver Canada, Sidney Australia, and (Vienna?) generally trade places among the most livable cities in the world, according to a ranking by the Economist magazine.
@ Nemo
As far as subsidies are of concern…President Obama has not raised taxes since he entered office! In fact he has lowered *them*, helping the middle class, and poor as a “greater > than” aggregate of distribution.
I must admit I’m beginning to warm up towards President Obama. Although I’m not fully responsive as yet of his seemingly obfuscated complexities regarding the end game. Why? Because at times his abstract lucidity as a leader seems compromised because of “Poor Communication Skills”?
PS. One thing is for sure…his heart is for the working man. JMHO
Speed, sorry if I sound smug here, but the City of Vancouver has the best tap water in the world. They have done blind taste tests and our tap water ranks better than brand name bottled water imported from Europe. The one problem with our drinking water is there is a faint chlorine smell when it comes out of the tap. Ozone water treatment would solve this problem. IIRC, our city has talked about it, but ozone treatment is more expensive so the decision has been deferred. In any case, the chlorine dissipates after a few seconds or minutes, and our water is delicious, especially with a few slices of citrus.
So what is the tap water quality like in Cleveland.
Actually, it might be more than 1%. I am sure drinking water, waste water treatment, and the maintenance of water mains and sewers, are going to represent a substantial cost in any civic government’s budget. Millions and billions of dollars over time.
@ BW
Nice link…Thankyou :-)
I’ve never owned a home and I’m no accountant so maybe I don’t know what I’m talking about, but it seems to me that if interest received is taxed as income, then interest paid should be deducted from income, whether it goes to a mortgage or otherwise. I see the unfairness not so much in the mortgage interest deduction but rather in the nondeductibility of other forms of interest paid. Either flatten this or don’t count interest as either income or expense.
@ RA
So…Who is it that appointed you “GOD” ?
You earn the money in the first place, not taxing it isn’t a subsidy, its not stealing it. You forgot option 4, the government could simply not spend the money. Instead of saying that not taxing someone means you have to tax someone else, how about saying not taxing someone means you can just spend less so you don’t need those taxes.
Secondly, if I receive $1.30 in “benefits” I don’t need or want, then I haven’t received many benefits at all have I.
“But right now, it would be a distinct improvement if people would vote their self-interest.”
What I’ve really come to dislike about this tired political trope is that, at its core, it’s based on the idea someone can presume to tell another person what their self interest is, knowing nothing about them other than perhaps their socio-economic status. The simple fact that government transfer payments return $1.30 for every $1.00 that someone pays in taxes is NOT, in and of itself, evidence that the current system is in their best interest, and therefore their should do what it takes to continue it. There are other considerations to be taken into account, which are commonly either ignored or glossed over.
If you want to make the argument that the current system objectively operates in someone’s best interest, go ahead and make that argument. But don’t assume it to be true, and then be critical of others because they don’t share that assumption for reasons of their own.
@ tippy golden
The “Great Lakes” in Ohio and surrounding states are so polluted a “Chinese Snake Fish” couldn’t survive. As a matter of fact most of the open water ways in the world are being destroyed by acid rain, and we all know the future for clean fresh water will go the way of the “Dollar Tree Stores” as haplessly as penny candy disappeared overnight?
Your spot on tippy golden :-))
@ Chandrashekar
You have the wealthiest industrial Billionaire in Mumbai that just built a “25 Story High-Rise Mansion” (not quite sure about the height?) dead center amongst the poorest of the poor caste in the world, and you blame the government?
@ fresno dan
People have always voted with their pocketbooks,…
I know I’m probably wasting my time arguing with somebody pushing the “taxation is stealing” line. But let’s give it a try anyway.
Nobody actually earns anything solely based on their own merit and efforts. (Ok, maybe a few hermits in remote areas who live off their own land and don’t interact in commerce at all.) We all make use of publicly created infrastructure and institutions. Everything we “earn” is a joint product of those things and our own activities. That infrastructure requires maintenance and renewal, and that costs money. Taxation is nothing more or less than the way we fund those things. It is nothing more or less than paying your share of the cost of things that we all use and need.
Now, we could and should debate just what infrastructure and institutions government should be providing. In what areas does government involvement work better than the private sectors, and where the opposite? We ought to try to reach a broad political agreement about the proper scope of government. And then we need to create a taxation system that generates the needed funds–no less and no more. Of course we might also debate the utility of taxing income vs. wealth vs. consumption, etc.
Those are all reasonable things to discuss. Indeed, the awful thing is that nobody is in fact having sensible discussions of these issues. Polls show that most people’s ideas about what government actually spends money on are far removed from reality. And most people’s conceptions of where tax money comes from are also not reality based. So we need to lay out the facts, and then have some evidence-based debates about what kind of society we should be.
But let’s stop with the “taxation is stealing” line. It’s just a bumper sticker slogan and it truly has no merit. If you really think otherwise, you might want to check out how things are going in the modern day libertarian paradise of Somalia.
Chandrasekhar, you write that you work perhaps 15 days a year to pay for what you consume in government services. This may be true. But if you immigrated from India, you also immigrated into a country, that has already built up a social and physical infrastructure, that you now enjoy.
Just to clarify, when I said “nobody is in fact having sensible discussions of these issues” I was referring to the broader public discussion. These issues are, in fact, often discussed on this blog. Indeed, there has been a lot of that in the commentson this post. Wish we would have more of it.
Come to think of it. This same drinking water, the best in the world, from our taps is also used to water our gardens, lawns (and farmland?). Wasteful? But that’s how it has always been done. So now we have city planners and the municipal government telling us what to do. For example, you can only water your lawn every second or third day, and other green measures to complicated to explain.
Ok, I will not even go to the question of caste which westerners like to raise whenever there is any discussion of India (it seems that this is all they know about India). As to a billionaire building a travesty in the middle of the city (while despicable) is done with his money (presumably earned by him).
But it is the job (as advocated by liberals throughout and codified in the rules of the govt.) of the govt. to provide sanitation and roads. And they don’t do it because they are corrupt.
This whole discussion has getten tangential where the people responding to my post have not really answered the main points I was making.
So what — I am paying and am willing to pay for new infrastructure that my posterity will enjoy — this is how societies work and anyway that is not the main point. Why don’t you address the main points I was making about SS, Medicare, Military, Mars missions, etc.
Incidentally, if you just look at the federal budget, about 90% is spent on entitlement programs (SS, Medicare), military and interest payments on debt.
As they say in computer science, if you want to optimize performance of software, you attack the components that take up the most resources. Same here with the govt. spending — optimizing on infrastructure (which incidentally is falling apart) is not going to get you very far. Nor it addresses the immorality of taxing workers to support rich old people or killing innocents abroad. And the immorality is compounded if you factor in that we are borrowing more than 1/2 of the money to pay for these extravagances.
Can you read?
A substantial part of the voting public has been alienated from voting for Democrats becasue of liberal acceptance of homosexuality.
These people have wound up supporting a party that eagerly enables Wall St looters and a dysfunctional healthcare system that costs twice what Britain has, and delivers poorer results.
This pattern has happened for a reason, which I pointed out, and you seem threatened by that, for some reason.
However true your argument may be in theory, under this kleptocracy taxation is actually nothing but stealing by now. (Thus the term “kleptocracy”.) The government does nothing but throw what it extracts down corporatist ratholes like the Bailout, the wars, Pentagon budgets, Big Ag subsidies, the drug war, and all other forms of corporate welfare.
As for what’s left of old-style public interest spending programs, they’re being slashed by the day, and I don’t think the presence or absence of tax revenue will make any difference to the “austerity” onslaught. It’ll be politically resisted or it won’t, regardless of the level of taxation.
So it follows that by now we should indeed reject all taxation for the non-rich. It does us no good, represents a cost we can’t afford, and the money is redistributed to our enemies who use it to further assault us.
You say your taxes are going to support “old rich people”. Can you cite the data?
“The unfairness”. Yes, that’s the point, it is a “tax preference” that rewards some form of economic activity, which by definition punishes other economic choices.
When you reward people for taking out a mortgage, you are punishing people for renting (or paying cash). That subsidizes people who buy homes with a mortgage.
It also rewards mortgage debt and therefore punishes other forms of consumer debt. This helped drive the second mortgage and refinancing boom, since people could get cash to spend on other things and pay for it with tax deductible mortgages, as opposed to non-tax deductible installment loans or credit cards. Which, again, subsidizes homeowners at the expense of others.
It should be noted that as another poster pointed out, the other beneficiaries of this are the mortgage bankers (along with home remodeling contractors and sellers of big screen TVs.)
Bravo !! So true. Americans love to throw people overboard they have no empathy for (after all these people deserve what they got in life) and do not mind the “splash” they hear.
Well, technically the kleptocrats do try and argue that bloated corupt defense spending and no-strings-attached bank subsidies do in fact fit under the “everyone benefits” logic. The bankers call it trickle down.
The bankers argue that we will all shrivel up and die if we don’t give them all our tax money, which at its root is essentially the same argument given for repairing our roads and schools.
As the original poster said; the key debate is not “do we benefit?” we do. the debate ought to be, How do we benefit? Who benefits? How much? Is this the best way to get it?
The problem that you are highlighting is that the spending has drifted from activities that had arguable benefit to broad society towards crony wealth transfer to the rich.
But, as the original blog article pointed out, there is a vast gulf of awareness as to the spending that happens that does still in fact affect our citizens broadly.
Actually, deductibility of mortgage interest really means it is taxed only once or twice, not three times. The bank receives interest that is then used to pay employees’ wages, or stockholder dividends paid out of taxed profits, so taxes are paid at one or two levels. I will grant you that tax avoidance is an art, so the corporate taxes are usually not paid at a fair rate.
BTW, renters pay less in rent because mortgage interest is deductible to the landlord as a business expense. Not really so different.
Debt slavery?
Please. Any point you might have been trying to make here got flushed with the over-the-top rhetoric.
http://www.theatlantic.com/national/archive/2011/02/the-past-aint-even-the-past/71143/“>
Words mean stuff. Slavery meant something horrid, and comparing it to wretched objection to paying taxes or Federal debt diminishes its horror; it doesn’t strengthen your argument.
I think Mark Thoma nails this one:
I think his whole essay is worth reading.
O.k. You concede that the mortgage interest deduction is social engineering but you don’t think it’s a social program? Or do you think it’s just one part of a larger social program along with the GSE’s Fannie and Freddie and you’re saying it’s one tool in the toolbox and not a toolbox itself?
When you quibble over someone else’s definition of a term, you need to provide your own for comparison or link to a reference that provides a generally accepted definition that supports your position.
Social security and Medicare are not technically ‘welfare’ programs. Every worker with a social security number getting a pay check (including illegal immigrants) pays FICA tax which is social security and therefore unpaid salary delayed until retirement. Every senior citizen getting Medicare pays a premium based on a sliding income scale, usually out of their earned social security payment so it is not welfare but a paid benefit.
I agree. I think the man is a good guy and a realist about the way things are. And perhaps a realist about his own survival parameters to, as in Bobby Kennedy.
I would love to know what he learned from Kissinger when working for him.
Wage slavery is a very real condition.
Who quibbled? I clarified the real nature of it.
Would it help if I left the dash out of the term: “antisocial”? It’s a social program which is really antisocial in its effect.
Yes, most people still seem brainwashed into the disproven trickle-down ideology in the broadest sense, which is elitism itself: That the people are incapable of ruling themselves and managing their own economic activity, that instead political power and economic productivity have to be collected by elites and then trickled back down in some allegedly wiser way.
But we know by now that this is nothing but a lie. Trickle-down economics and politics (i.e. “representative” government) are proven to fail on a practical level and lead to tyranny and depravity. We know that political and economic elites are nothing but parasites and criminals. We know that morally, rationally, and practically, all forms of government have no credibility left, and therefore no legitimacy. Only direct political and economic democracy has this legitimacy. It’s also undeniably the culmination of all democratic logic. If one doesn’t want to move on to positive democracy, it follows that one considers the entire democratic ideology flawed.
So getting back to the original question, it follows that to still have faith in reforming the tax code or something like that is just investing time and energy we don’t have the luxury of wasting, and continuing to invest ever more scarce financial resources, in a system which we already know is bent on enslaving us.
People are social animals. They cannot survive without a family, social and community network. All in the context of a nation-state.
I believe it was the Treaty of Utrecht that formalized the Euro-centric concept of a nation-state. And with globalization we now have unelected, quasi-governing bodies.
My point is we are “social animals” we cannot survive without others. I find it galling when people adopt the attitude its me-for-myself and each-on-their-own. This is nonsense. They are demonstrating what is politely called cognitive dissonance.
Thomas Hobbes famously said “life is nasty, brutish and short” … when there is no central government, no security and “war of every man against every man”.
Talk about social devolution !!!
tippygolden, you ask …
“Did Greater Cleveland ever get state or federal money to build its reservoirs, water and sanitation system, and sewage treatment plant?”
Nope. Big projects are financed through bonds that are paid off from revenues.
The only restrictions to water use happen in the occasional very hot and very dry summer months when the problem is not that we’re short of water but that the system is not sized to handle the load of too many people watering their lawns at the same time. Normally we go to every other day/even odd house number sprinkling bans. We never see the absolute use bans like Atlanta saw (no washing cars) a few years ago.
But of course, we pay for what we use. And only what we use.
Cleveland tap water is fine. I don’t follow the water awards scene but I drink plenty, don’t taste anything, don’t filter it, don’t buy bottled and my coffee maker doesn’t get clogged.
You may be interested in this …
http://blogs.wsj.com/metropolis/tag/drinking-water/
“But we know by now that this is nothing but a lie. Trickle-down economics and politics (i.e. “representative” government) are proven to fail on a practical level and lead to tyranny and depravity. We know that political and economic elites are nothing but parasites and criminals. We know that morally, rationally, and practically, all forms of government have no credibility left, and therefore no legitimacy. Only direct political and economic democracy has this legitimacy. It’s also undeniably the culmination of all democratic logic. If one doesn’t want to move on to positive democracy, it follows that one considers the entire democratic ideology flawed.”
Yeah, but it’s “god’s will”.
Tippy, if I were still a student in political science, I would do a thesis on Darwinism as a religion.
earle, florida,
Thank you for your erudite, informative, detailed and entertaining comment. It is certainly appropriate to this thread. One correction, however …
You say, “The ‘Great Lakes’ in Ohio and surrounding states are so polluted a ‘Chinese Snake Fish’ couldn’t survive.” It turns out that the Great Lakes may be too good for this species. ” Channa argus prefers stagnant shallow ponds, swamps and slow streams with mud or vegetated substrate … ”
http://nas.er.usgs.gov/queries/factsheet.aspx?SpeciesID=2265
The Great Lakes are none of the above plus it’s too cold for them up here. I understand that they like it just fine in Florida.
Welcome to the “Matrix” – right?
I could never watch that movie from start to finish – it was so puerile. And the tragic part is, just like the official word is that “The Protocols of the Learned Elders of Zion” are a HOAX
isn’t the MATRIX a freekin’ “fantasy”??!!
@Chandrashekar, you do have options, you know, if you don’t like supporting “old rich people” with your taxes you can go back to India where you can…do what with your taxes?
I’m always amazed at people who emigrate here and then bash the way the system works. It boggles the mind. Taxes are a fact of life an even though we don’t like paying them we must to have a functional infrastructure and system. We can argue about the merits of certain programs or payments, but your arguments are just absurditiy. This was a discussion about the mortgage interest deduction. Stick to it.
Let me give you an example of the mortgage interest deduction at work. I currently have one house and one small vacation condo. I get to deduct the interest on both. That knocks me down an ENTIRE tax bracket. And each year that is approximately 11k in tax savings for me.
Now, this is money that would go SOMEWHERE right? Either back to the government if I were taxed to the full amount, or back into the economy. So “subsidy” is a weird word for me here. I am benefiting from this program, but it is also stimulative in that I tend to spend this money over the course of the year, or use part of it to fund a 401k so that it will get spent in the future and I won’t have to avail myself of other government programs when I get older.
So in a sense it is a transfer, but it’s more complicated than that. One the one hand this is, indeed, social engineering as house ownership promotes community and civic obligation, pride, etc. People who own do care more about their localities and you can Google 1000 studies on the subject. So from a government perspective, it’s a desirable outcome. The tax break (subsidy) directly promotes this but also promotes spending or savings so, indirectly, I could argue that this policy also is one that gets government out of the way because it also provides a means to lessen future payments…as in my mother not being on any sort of government aid because she can now live comfortably off her teacher’s pension in a long paid-off house without it.
People’s simplistic way of thinking about this amazes me. The prime objective of owning a house is NOT investment. It is to lower ones housing cost in old age. Full stop. Anything that promotes that lessens government support of retired and elderly people. So looking at it this way, I say, the tax break on mortgages is a really fracking great program.
You give some good arguments about the effects of the mortgage deduction subsidy. The problem is, most subsidies can similarly have good arguments made about their effects.
“Free” publicly funded airline transportation and hotel stays would also give people more money they could save for their retirement.
The problem is, subsidies create distortions in economic behavior, and build constituencies for continuing/amplifying them that don’t get self corrected by normal activity and pressures.
“The problem is, subsidies create distortions in economic behavior, and build constituencies for continuing/amplifying them that don’t get self corrected by normal activity and pressures.”
So the enronistas were being noble by finding a way to “correct” the subsidies “distortion” by diverting the flow of $$$ to their own pockets?
And what is “normal activity” in an economy where the MIC go klepto in operations to accompany thier Nihilism?
I’d like to tax you $1.00, borrow another 31 cents (using your credit) and give you back $1.30.
When the $1.00 turns into trillions, that penny for me and those I like is very rewarding…and leaves others holding responsibility for the 30 cents.
no
Did water meters pay for the reservoirs of Greater Cleveland?
So it’s City versus City eh! :)
Water is a resource as precious as life itself. I would not write it off a list of social benefits. Metro Vancouver opted for ultraviolet treatment of water (not ozone). How’s this for a
taxpayer-funded megaproject. At least we own this thing and not some German bank.
Innovation and entrepreneurship? UF membrane technology, perhaps the most advanced technology for water purification, was developed by a — Canadian scientist — Dr. Andrew Benedek.
So Cleveland uses water meters eh. Hah!
Hey RA,
Kettle black there partner? Frightened? Rather you, my older brother in Chicago, and the rest are the ones afraid, afraid the gay scent might get on you.
Now, you can use it as an excuse not to get on board against bankers, health care criminals, and other monopolists, but don’t blame us ‘liberals’.
Thank you mollyrose.
I wish I knew enough about Darwin to write a thesis. I have a sneaking feeling one needs to look at Darwin in his historical context. Darwin articulated a theory that made sense for his time. When Europeans first came to America they thought the aboriginals were the lost tribe of Israel and the world was 3,000 years old. (Apparently, some Americans still do.) But social Darwinism to justify the supremacy of the free-markets and the dismantling of government!!! As Michael Hudson has suggested, why not then simply revert back to the divine right of kings and the aristocracy.
edit required
Darwin articulated a theory that made sense for the Europeans of his time. And they were colonizing the world. Pax Britannica on which the sun never set (or whatever).
“I believe the people answering this question are actually answering whether they’ve consumed services they didn’t pay for in one way or another.”–Mark Thoma, quoted right before your post
Croak!
OK Speed :) Our infrastructure is funded through some combination of three levels of government. Apparently, our city considered a private option for our Water Utility but the majority did not want this.
So, if the government gives me back some of my own money that’s a subsidy? A social program? Seriously?
@economonium
Your ad-hominum attack on me will not wash! Are you saying as an immigrant I don’t have the right (after paying into the system for over 30 years) to criticize it?
I see your type, you not only want working people to pay taxes for the all kinds of nonsense programs, you want the immigrants to shut up about it too.
I know a few countries that are run the way you would like — China comes to mind — may be you can go there and join the social elite and communist elite.
Question to site/blog admin, “Why do some comments not have the reply button?”
@economonium
One more thing. If you have a problem with immigrants criticizing this system, what are you doing on this site. If I am not mistaken, Simon Johnson is an immigrant (from England) and James Kwak is either an immigrant himself or a first generation immigrant.
Or is it that immigrants who disagree with you should go back?
I have no problem with Darwin’s thought. Neither does Billy Graham for that matter, nor does the Pope. And modern evolutionary thought is including cooperation and solidarity as factors in survival too.
My problem is not science but Scientism. Social Darwinism is a justification for exploitation, and has little to do with genuine evolutionary science..
“Kettle black there partner? Frightened? Rather you, my older brother in Chicago, and the rest are the ones afraid, afraid the gay scent might get on you.”
LOL. I think what’s plain from your incoherent reply is that the “gay scent” is on you.
What you are apparently into, is biologically perverse.
Again: a substantial part of the voting public has been alienated from voting for Democrats becasue of liberal acceptance of homosexuality.
These people have wound up supporting a party that eagerly enables Wall St looters and a dysfunctional healthcare system that costs twice what Britain has, and delivers poorer results.
This pattern has happened for a reason, which I pointed out, and you seem threatened by that, for some reason.
@ mondo
Ah yes…natural selection?
Ever take notice that when man’s best (Doggone?) friend is chosen how closely he/she resembles their master — with a successful life-long (to the death do we part?) marriage, the partners actually look like siblings rather than randomly love struck, bride and groom?
Darwinism is great until we hit the wall at 6k BC, and find that our predecessor actually had a larger brain – that being the “Neanderthal Man”?
PS. Darwin never published nor studied evolution until he was an old man! His findings, as mentioned taught us nothing about evolution we hadn’t already had’t known. It is the mutated gene that splits, dies, or mutates on man, that genetically got us where we are today…but in 50k years?
So, maintaining the mortgage deduction is an act against looters like Enron, etc?
Brilliant analysis….
@Speed
So its city versus city, bagel versus bagel eh :)
Hah! And can Greater Cleveland water meters fund a water utility as good as the Metro Vancouver LEEDS GOLD STANDARD water utility. (Green roofs, restoration of local flora and fauna, frog habitat conservation, solar energy, ultra-violet purification, eco-friendly cement and gravel mining) One day we will use water meters to encourage conservation :)
Sorry to be smug here. Nice video links on the left for more on a state of the art water utility :)
Slippery as an eel, ain’t you?
YOU called the mortgage deduction a “subsidy” that creates “distortions in economic behavior”….
Enronistas looted the “subsidies” that were going to electricity – bye-bye %%% for modernizing the infrastructure…
Keep your “speaker”, Beemer, off the propaganda airwaves for a while, wouldja? To a lot of born and bred USA citizens, it’s like listening to Mubarak to the Egyptians – at some point, the fuse is going to get lit.
The trillions rotating around the planet making war lords and drug lords “rich” is falling apart as a REALITY of “economics” – and Beemer saying “We are broke” is great news! This decade long debacle is going to do something that never happened before, it’s going to make Holy Wars UNPROFITABLE for the mercenaries.
And Beemer being “broke” is the only way him and his “party” are going to get their JUSTICE.
The COUNTRY is not broke – THEY are.
You have any idea how easy it is to turn OFF electricity, Mondo?
that is not how the matrix works, annie.
You are right, Tippygolden, you have to put Darwin in the context of his time :-)
The BIGGEST part of his rather elegant observational science – he REALLY was trying not to make stuff up
that nobody even knows about is he did explain the SPECIALIZATION feature of evolution – how there came to be a honey bee once there were flowers, for instance.
So the “fittest” are those who become specialists in contributing one perfect function to the web of life.
In the human species – the psychotic “specialist” is not the “fittest”, like duh.
The “matrix” has to access “x” channels of energy…
and their “x” is EASY to shut off…stick around, you’ll see I’m correctomundo
Yup, can’t you just FEEL the “love”…?
@save_the_rustbelt: how are you going to do it?
As a rustbelt baby myself, saving it is a subject close to my heart.
earle, I usually like your comments but you are flat wrong about Darwin. He studied and came up with the idea of evolution as a young man, and wrote long before he was old — he just chose to wait a long time before publishing. Get your facts right before you comment.
In fact if you lose your big attitude on the subject and just read the man for yourself, you might learn something beautiful. And while it is true other people had come up with many of the same ideas (indeed thoughtful animal breeders probably saw it first), it was Darwin who first communicated the awesome freefall logic of natural selection –which fired the world’s imagination. For me the Creator is Beloved, and I think Darwin’s is a far, far greater vision than the old way of thinking. But it would not be the same for me if I had not seen the emergent Mandelbrot patterns.
“middle-quintile households get back $1.30 in transfer payments and other government spending for every $1 that they pay in taxes.”
When the government spends $1.40 for every $1 it receives in taxes, middle class is still getting shortchanged and the well-connected elite (both elephants and asses) are milking 10¢ off of everybody else’s tax dollar.
I wouldn’t call complaining about debt the same as complaining about taxes.
I accept (and even don’t mind) the fact that I will pay taxes my whole life in order to have things like roads, utilities, law enforcement, military protection, health regulations and fire fighters. That’s fine to me.
What I *don’t* appreciate is the massive debt for engaging in permanent foreign war to the benefit of the rich (and detriment of the poor), the purchase of money from the Fed at interest (and for profit) transferring wealth to the already wealthy while piling up as yearly debt we must pay, and the constant introduction of further loopholes in to the tax code allowing the wealthy to avoid taxes I will not be able to dodge.
As for the mortgage tax breaks, as I heard it said here once before (by StatsGuy, I think): it’s not a tax break to encourage home ownership. It’s a tax break to encourage having a mortgage. Big difference.
I use the term kleptocracy to describe our system, too. And surely those who rule over us are thieves. Indeed, the thievery of the kleptocrats is their diversion of our taxes into their own pockets and the pockets of their allies.
But that does not alter the principle that taxation is not theft, and will be needed in any society. Call it a theoretical point, if you like.
If it were only about money and there were no humans involved, your theory might have some tread, but money is an arbitrary barter system for allocation of resources and control and when idiotizens vote themselves benefits from the state, they pull money out of the pockets of individuals, rich AND poor, to have a bunch of think-they’re-smarter-than-everyone-else-in-the-room ivory tower elitists decide, sucking all of the inherent efficiencies out of the market, creating imbalances that are quickly abused by people who really are smarter than everyone else in the room.
Here’s two very important things to remember that shatters the basis of this entire article:
1. Governments by their very nature are not creators of wealth. They can only control that which the usurp from others (a nice way of saying they can give to one group only that which they rob from another group).
2. You can have a free market or a centrally controlled market, or anything between, but you still have a market and economic laws are just that, immutable rules by which participants collectively engage in the marketplace. There’s no voodoo juju by which a government can turn $1 into $1.30 except by depreciating the $1 by 30% through monetization and fiat dictates (which probably adds an additional 20-30% in bureaucratic inefficiencies).
3. Money flows through the path of least resistance. Those that make it and control it, as much as you’d like to enjoin their help in the cause of socialism, are the truly mobile that flee with their wealth, and if they don’t make it out alive, you have to ask what good is a dead goose for collecting the golden eggs.
On the ideological side of the issues, self interest isn’t just about an individual netting a maximum of government benefits – once a man’s belly is full, he seeks after self-determination over his own future. Figure giving that up into the price of $1.30 of government “benefits”, and the cost is much more than a buck.
I accept (and even don’t mind) the fact that I will pay taxes my whole life in order to have things like….military protection……What I *don’t* appreciate is the massive debt for engaging in permanent foreign war to the benefit of the rich (and detriment of the poor)…..
That you still differentiate between the two is part of the problem. Why exactly do the non-rich need “military protection” beyond what we could have for a single-digit portion of the Pentagon budget?
The same goes for the police state, er, “law enforcement” as you still choose to call it. That’s overwhelmingly for class war as well, you know. Do you see many laws being enforced against the banksters?
(I personally don’t appreciate the wars and the police state in themselves, not so much the debt in itself.)
That’s why we need to move beyond the obsolete notion that in the real world we have the proper uses of taxation and the abuses of it. This is a terminal kleptocracy, and all taxation is simply our money being stolen to be handed over to the corporations and their thugs to wage war upon us.
Actually, that’s wrong both in practice and principle. If a “government” is an illegitimate gang of thugs, then what it calls “taxation” is indeed theft, in principle. That follows from classical political theory. It’s inherent in the concept of tyranny.
As for practice, please tell me what’s the political utility of this ivory tower theory (which is wrong anyway)? We need brass knuckles, not a knick-knack.
It’s also an elitist myth that taxation is needed in any society, since the State itself isn’t needed, and is in fact always a parasite. Why would a cooperative society where the productive workers directly manage the production and distribute the produce need taxation? By definition if there’s elitist taxation it means there’s a parasite somewhere, usually an extremely bloated one.
I wish I knew enough about Darwin to write a thesis.
You could start with the fact that Darwin had nothing to do with Social Darwinism, which was the invention of Herbert Spencer.
Darwin himself deplored and rejected that and all other non-scientific derivations of his work.
The Cleveland Division of Water is a public utility that supplies water to the city of Cleveland and many of its suburbs. All facilities (certainly for the past several decades and for ever as far as I know) have been paid for by customers through their water bills.
Surrounding areas have their own public water utilities financed the same way. There are cities (suburbs) which can choose to buy water and services from more than one utility and use that to negotiate price and quality of service — which is good for everyone.
The job of the water utility is to supply water not conserve frog habitat or restore local flora and fauna.
Speed, I did a rough estimate. The cost of the Capilano-Seymour water filtration project is about $1 billion or about $500 per capita for the region (population 2.1 million). We don’t pay for metered water. The project will last for at least a generation. $500 for a life time of clean water is a very-very good deal.
So does taxation improve quality of life?
At least that’s the rationale for taxation. Canada is different from the United States. We have universal health care. But we don’t have a huge defence budget. Canada’s corporate tax rate (16%) is also lower than that in the United States.
The Capilano-Seymour water project went through a public consultation. So the conservation of frog habitat was an issue the project addressed. The project also uses geo-thermal energy (not solar as previously indicated).
RA, ‘Gays, Gods, and Guns’ is used for a reason, and idiots like you prove the point.
tippy golden,
All of this is interesting information but it takes nothing from my original point. ” … in our case [Cleveland], water and sewer would not be included in a list of something for nothing or transfer payment social benefits..” We pay for what we get and we don’t pay for what we don’t get.
I guess you pay $1.00 and get $1.30 in return. Not sure where the extra $0.30 comes from.
There’s nothing biologically perverse about being being female or having African racial ancestory, and there’s nothing strange about insisting on equal rights for these groups.
The sort of activities involved in homosexuality are biologically perverse.
“Civil rights” are not advanced to protect pedophilic or bestial activities, and they shouldn’t be for other biologically perverted activties, either.
As I’ve said before, a substantial part of the US voting public has been alienated from voting for Democrats becasue of liberal acceptance of homosexuality.
These people have wound up supporting a party that eagerly enables Wall St looters and a dysfunctional healthcare system that costs twice what Britain has, and delivers poorer results.
This is costing the country a lot.
You’ve been reading too many “free state project” pamphlets.
limited nesting…
This question of subsidies is a real pandoras box. The only subsidies these vote counters in DC are likely to cut are the ones going to people with zilch political power.
The people pulling their strings on FOX know their “self intrests”.
The Demos have failed to get political momentum even with all the incompetence and corruption from the other party. A “culture war” explanation seems right.
That kind of language belongs in the bath house instead of here.
Please find an appropriate where your bigotry would be welcomed.
@ mollyrose
The genomic mapping of “Homo-Sapiens” comparative too its predecessor the “Neanderthal Man”, scientifically show no interbreeding or distinct lineage as of 2010 studies! Thus we are in limbo once again on our roundabout’s?
What has tweaked my curiosity and thought is when will the next “Split Occur” if not 2k years ago or as I write?
PS. “Discovery’s happen simultaneously throughout life – should I write now what a hundred living souls have already put to paper, and thousands have though and put aside as musing…this very second? Once again this of no concern. Their is a greater, more humbling presence,…”
Your on a roll Annie…and I’m lovin it :-)
What you have written assumes that the government has no role in distributing resources. This may have been OK in the old days when you could go west, stake your claim, and hope to grow some food or find some metal in the ground. Those days are gone. It has all been divvied up already, and without government to do some redistribution, fewer and fewer will continue to amass more and more.
P.S. – Are you wealthy if you have money? If so, the government is a creator of wealth. Perhaps you would like the term “redistributor of wealth” better?
It makes no difference if you are more efficient than the government. The thing for which we are discussing efficiency gets done just the same. The difference is simply that the government has given someone more money than you have, which amounts to a GENERAL redistribution of money that is different than the one that would have occurred if you had made the transaction yourself.
Dollars are just points in the scorecard of the economy. The government is the scorekeeper, like it or not.
“Are you wealthy if you have money?”
Depends on how much money, or more importantly if the value of the money is backed by good faith and credit. A country which pursues fiscal policy based upon the kind of slight-of-hand principles espoused in this article doesn’t present a very promising argument that they have much going on in the cranium let alone show worthiness for faith and credit, so the smart money would be to get out of such a fiat currency, or at least budget for its depreciation and ultimate collapse.
I’m still scratching my head wondering how liberals can propose such strange and illogical formulations of numbers to come up with $1 invested in government gives you $1.30 back.
I guess the echo chambers of the liberal mind can distort any argument, even simple math, with no regard for reality. You folks doped up on LSD or something?! Or did you just cheat your way through math and science in school? Surely there aren’t many liberals passing Econ coursework these days unless in the last twenty years it’s been entirely co-opted by liberal elitists of the ilk of Paul Krugman, who give passing grades to idiots seeking the fallacious (as in “never gonna happen”) pursuit of social justice. What a crock!
“without government to do some redistribution, fewer and fewer will continue to amass more and more”
Wrong, get government out of the way, and more and more will continue to amass more and more. Set aside your venial envy, worrying about comparative wealth, and you’ll see that the less fiat forces of government slow down the marketplace, the more actual wealth ALL of the participants generate and enjoy. As freedom, faith, self-interest, and rule of law are to lubrication in the market by generating wealth, tedious regulation and hand outs (a.k.a theft) are the dirt and sand that brings it to a halt, destroying wealth and hampering productivity.
After the last four years, is there any dispute that governments can’t fix what free markets can? The socialists argued without radical government spending, employment in the US would go up from 8%. 2 years later, it hasn’t gotten below 9% and their response is we didn’t spend enough. Truth be told, is you liberal idiots keep listening to the folks that flatter you so that they can control your money and eventually every facet of your lives. May you enjoy the hell you’re creating.
Your brainless drivel is appreciated nowhere.
Sigh…I don’t know where to start.
I would argue that the last four years show that perfect markets don’t exist. And yes, there is the possibility that the government CAN fix what the private sector can’t – it sure hasn’t tried very hard so far.
Anyway, let’s assume for a second that the government has no role in money creation (it does, but not by quantitative easing, but that’s for another day). Then, ALL money creation is done by banks. That means that the ONLY way that more money enters the system is when people take out loans. But most people can’t take out loans because they are already highly leveraged, which is why the economy has stagnated. The Fed has a great chart showing this very clearly – private money creation has simply stopped.
Assuming that new net loans are not created, there is no more money than there was before, so in order for the less-wealthy to become more wealthy, money has to move from those that have to those that do not have — there simply is no other way. It doesn’t matter if markets are efficient or not. If people can’t get money, they can’t participate in the economy.
Also note that since banks are owned money AT INTEREST, the NET money in the private economy is LESS THAN ZERO – there is more owed than exists (taking government money creation out of the picture).
P.S. – It’s not nice to call people idiots.
the matrix is in our minds
“The only subsidies these vote counters in DC are likely to cut are the ones going to people with zilch political power.”
Oh, you mean 95% of the population.
We need to say it over and over again: this system works for the top 5% and nobody else.
Class warfare my A… We know who’s waging economic war on whom.
Check out the lovely chart at http://www.toomuchonline.org
“I would argue that the last four years show that perfect markets don’t exist.”
How can you use a period of gross manipulation of the market to demonstrate that a free unfettered market doesn’t work. The best market conditions we had were under Reagan when government pulled away via reduced taxation and regulation, and it proved itself with drasticly increased output.
To use your exact words, however, what is a “perfect market”? A market isn’t good or bad, perfect or imperfect, it’s simply the net sum of all the participants. An efficient market, that has the optimal output (generation of new wealth) is one with participants actively engaged in productive pursuits which means other participants aren’t running around robbing the output through manipulation, regulation, fiat contrivances, or outright theft. Of course, I’m simultaneously referring to governments and scoundrels (as if they weren’t the same entities).
“yes, there is the possibility that the government CAN fix what the private sector can’t – it sure hasn’t tried very hard so far”
If $1.3T spent isn’t trying “very hard”, I really don’t want to know what “trying hard” is. It sounds like to want engage in full scale, across the board totalitarian communism, but when that doesn’t work (and it won’t), then you’ll say, “but we should have tried EVEN harder.” There’s a point where all credibility is lost and as idiotic as it was to apply socialism to a market problem the last two years, it was already proven a bad idea in the Soviet experiment.
“It’s not nice to call people idiots.”
I call them as I see them. It’s not nice for idiots to actively work to spoil the market and impinge on the liberties of others, but that doesn’t stop the liberal progressive agenda.
Yes, somebody has done the numbers.
Removing the earnings cap on Social Security would fix 75% of the “solvency” problem longterm, according to data available at http://www.public-consultation.org.
Sick talk that says where the fool is coming from.
Another quote from the 1 Kings idiot, despite the incoherence, the peversity shines through: ” Rather you, my older brother in Chicago, and the rest are the ones afraid, afraid the gay scent might get on you.”
Omigosh, RA, I had no idea that you were threatened by homosexuality. I’m so sorry that you are afraid of gay people.
I’m with you, Ann. Made my comment (above) way too soon…without reading all the responses to RA.
“Vancouver Canada, Sidney Australia, and (Vienna?) generally trade places among the most livable cities in the world, according to a ranking by the Economist magazine.”
tippy golden, in Vancouver and Sydney, there are still functioning governments, which might be why you have government services. This has not been true in most rust-belt cities in the U.S. for some time.
Ann – “Please find an appropriate where your bigotry would be welcomed”
RA – “Your brainless drivel is appreciated nowhere”
Wow, all this over a buck thirty! I want to arrange for Ann and RA to be in the same room and get the cameras rolling, what a pair! Between the two of them they filled the thread, miraculously without making a single salient point. Congrats!
“Omigosh, RA, I had no idea that you were threatened by homosexuality. I’m so sorry that you are afraid of gay people.”
I didn’t write anything implying I was “afraid of gays”. What I did write, that you were indeed afraid of, is:
[with reference to civil rights]
” There’s nothing biologically perverse about being being female or having African racial ancestory, and there’s nothing strange about insisting on equal rights for these groups.
The sort of activities involved in homosexuality are biologically perverse.
“Civil rights” are not advanced to protect pedophilic or bestial activities, and they shouldn’t be for other biologically perverted activties, either.
As I’ve said before, a substantial part of the US voting public has been alienated from voting for Democrats becasue of liberal acceptance of homosexuality.
These people have wound up supporting a party that eagerly enables Wall St looters and a dysfunctional healthcare system that costs twice what Britain has, and delivers poorer results.
This is costing the country a lot. ”
Is people like you who are afraid.
OK Speed, Greater Cleveland pays for its water utility through meter rates and munibonds. Metro Vancouver has the Capilano-Seymour water project. (Taxpayer funded, no water meters.)
Canada’s corporate tax rate is 16% (which is lower than the U.S. corporate tax rate) and the plan is to reduce the Canadian corporate tax rate to 15%.
British Columbia had multi-billion dollar surpluses year over year, until the financial crisis in 2008. We could not cut down trees fast enough to supply lumber for the U.S. housing boom. Revenues from our oil, gas and mineral sectors are even better.
China has offered $4.5 billion for 50% of a gas field in northeastern British Columbia. (The spending power of U.S. treasury notes.) The transaction will need federal approval. So there is going to be some “red tape” in the way. We shall see what happens.
All you two could do is engage in brainless name calling, you couldn’t address the issues.
Again:
“Omigosh, RA, I had no idea that you were threatened by homosexuality. I’m so sorry that you are afraid of gay people.”
I didn’t write anything implying I was “afraid of gays”. What I did write, that you were indeed afraid of, is:
[with reference to civil rights]
” There’s nothing biologically perverse about being being female or having African racial ancestory, and there’s nothing strange about insisting on equal rights for these groups.
The sort of activities involved in homosexuality are biologically perverse.
“Civil rights” are not advanced to protect pedophilic or bestial activities, and they shouldn’t be for other biologically perverted activties, either.
As I’ve said before, a substantial part of the US voting public has been alienated from voting for Democrats becasue of liberal acceptance of homosexuality.
These people have wound up supporting a party that eagerly enables Wall St looters and a dysfunctional healthcare system that costs twice what Britain has, and delivers poorer results.
This is costing the country a lot. ”
Again: It’s people like you who are afraid.
” Between the two of them they filled the thread, miraculously without making a single salient point. Congrats! ”
Not too bright.
She raised no slaient points, I raised the following salient points:
Whatshername: “Omigosh, RA, I had no idea that you were threatened by homosexuality. I’m so sorry that you are afraid of gay people.”
RA: I didn’t write anything implying I was “afraid of gays”. What I did write, that you were indeed afraid of, is:
[with reference to civil rights]
” There’s nothing biologically perverse about being being female or having African racial ancestory, and there’s nothing strange about insisting on equal rights for these groups.
The sort of activities involved in homosexuality are biologically perverse.
“Civil rights” are not advanced to protect pedophilic or bestial activities, and they shouldn’t be for other biologically perverted activties, either.
As I’ve said before, a substantial part of the US voting public has been alienated from voting for Democrats becasue of liberal acceptance of homosexuality.
These people have wound up supporting a party that eagerly enables Wall St looters and a dysfunctional healthcare system that costs twice what Britain has, and delivers poorer results.
This is costing the country a lot. ”
Whether you agree or not with what I wrote, it’s not too bright to pretend there are no salient points in it.
“Whether you agree or not with what I wrote, it’s not too bright to pretend there are no salient points in it.”
Once you let Ann start playing inside of your head, dragging you into obscure arguments (wtf, a gay thread in a discussion over economics!?), there were no salient points to be made, nothing that went on between you two that merits further consideration. While only dubiously relevant in some other forum, definitely of no place in this forum. But, it was entertaining and you should invite Ann over for dinner some time.
Since you care so much about freedom and want so much to get rid of the government’s interference with freedom, then I assume you agree:
1. We need to abolish corporations, an artificial creation of big government.
2. We need to abolish “property” enclosures (land, resources, infrastructure, IP), since any such enclosures are an artificial creation of big government.
Both of those government creations are grotesque distortions of any truly free market.
“Since you care so much about freedom and want so much to get rid of the government’s interference with freedom, then I assume you agree:
1. We need to abolish corporations, an artificial creation of big government.
2. We need to abolish “property” enclosures (land, resources, infrastructure, IP), since any such enclosures are an artificial creation of big government.
Both of those government creations are grotesque distortions of any truly free market.”
Thank you for so aptly demonstrating three of the biggest flaws in the progressive socialist mindset…
1. You assume too much.
2. You have no capacity for nuance or anything to the center of the extreme.
3. You fundamentally don’t understand the concepts of law, rights, and overall, the human condition.
Rather than assume, let me explain right thinking on this issue. First, being for limited government (being against BIG government) doesn’t mean being for NO government, it means rule of law and self government where possible, and it’s possible in almost every facet of life. It treats government as a necessary evil inasmuch as human behavior is subject to weakness and inclined to incentives, but it should impinge no more than absolutely necessary on the individual liberties of her constituents.
To respond to your assumptions, I’m not sure what you mean by “abolishing corporations”, or who, if we’ve gotten rid of government, the we is that would do the abolishing. Overall, your supposition is meaningless hyperbole and I certainly do not agree with it, even if it was a comprehensible assertion.
Second assumption, why would we want to do away with property rights? Property rights is embodied in natural law and its the abolishment of those rights that is the greatest reason to fear an encroaching government. It is property ownership that protects us from the arbitrary will of dictators and aggressors, that free us from the arbitrary will of physically stronger parties.
Contrary to your tiny grasp of political structures and doctrines of equity, government does not bestow rights to the people, but the people consent to be governed. Our rights are inalienable, as many believe, given of G_d, or, for those that don’t believe in G_d, simply through nature.
Your statements further imply that you believe that a free market is one that operates in a lawless state. Far from it, a market runs most efficiently when the rule of law prevails and structures that encourage trust and transparency are firmly in place. And by that, I’m not referring to tedious regulations that tell us what light-bulbs we can make or what kind of oil we can cook our fries in, but rather equitable laws as simple as “Thou shalt not lie”.
Go ponder these things and fill that vacuum in your liberal cranium with something of true value.
tippygolden,
Since paying for water with taxpayer dollars is such a good thing, do you favor paying for the natural gas and electricity the same way? If so, why. If not, why not?
@ Ira Dernotsei
Where have you been, Ira? That was profoundly spoken…indeed, with a heartfelt touch of emotional compassion that I haven’t witnessed on this board in a long time!
PS. You should however tone down the condescending rhetoric – in particular your final sentence. Really not appropriate on this magnificently threaded blog.:-)
Yup, you’re a worthless criminal liar, as I suspected. Keep shilling for your big government ideology, parasite. Keep shilling for all the taxes and regulations the government-extension corporations and enclosures impose.
RE. Ira Dernotsei:
” Once you let Ann start playing inside of your head, dragging you into obscure arguments (wtf, a gay thread in a discussion over economics!?), there were no salient points to be made ”
You’re easily confused, and apparently have dificulty discerning what’s going on.
Ann didn’t drag drap me into a discussion on gay issues, I was the one who raised the topic – you missed that.
As for relevance in an *economics* thread, you also missed the relevant point that I raised about the Republicans retaining votes, even in the face of dysfunctional policies that have had seriously bad economic consequences.
Here, read again and try to understand:
[with reference to civil rights]
” There’s nothing biologically perverse about being being female or having African racial ancestory, and there’s nothing strange about insisting on equal rights for these groups.
The sort of activities involved in homosexuality are biologically perverse.
“Civil rights” are not advanced to protect pedophilic or bestial activities, and they shouldn’t be for other biologically perverted activties, either.
As I’ve said before, a substantial part of the US voting public has been alienated from voting for Democrats becasue of liberal acceptance of homosexuality.
These people have wound up supporting a party that eagerly enables Wall St looters and a dysfunctional healthcare system that costs twice what Britain has, and delivers poorer results.
This is costing the country a lot. ”
I can’t say what’s going on inside *your* head – whether you just didn’t get the plain points I was making, or were hiding from them…
They understand what you are saying. The rub is that their liberal religion is being threatened.
Speed, gas and electricity is metered where I live. At one time our gas utility was public (BC Gas) but it got sold off by a “free enterprise” government. Our power utility BC Hydro is a Crown corporation (ie, owned by the taxpayers). British Columbia is a net exporter of gas and electricity.
To answer your questions: At one time our electricity was below market rates (because we are a net exporter) but our government decided to sell our electricity on the open market and we (citizens who owned the power utility) should pay market rates. (Remember Enron?) Metered electricity provided by a public utility worked well for years and is my preference. We had cheaper rates and while the utility was generating profit for our public coffers.
Speed, I did some reading on our hydro-electric and gas utilities.
– BC Hydro is a publicly-owned hydro electric utility and it’s one of the best in the world. BC Hydro is owned by the citizens (the taxpayers) of British Columbia. It’s interesting how deregulation of the energy market works in our favor. Eg, California accused BC Hydro of “market manipulation” and “gouging” during the 2000-2001 (self-inflicted) energy crisis. BC Hydro counter claimed that the state still owed an outstanding $280 million. BC Hydro ended up refunding California $1.3 million. I am sure BC Hydro has made, and continues to make, a great deal of money for our province.
– I know one of our “free-enterprise” governments sold our gas utility. But it’s hard to follow what happened. The current provincial government is privatizing aspects of BC Hydro. Some (including a former right-wing cabinet minister) are sounding the alarm because they do not consider privatization of BC Hydro in the public interest.
– Deregulation of the telecom sector has lead to Canadians paying among highest rates in the world for wireless service.
Privatization of our gas utility has been problematic. Eg, some people (many are elderly) signed fixed-rate contracts for gas and are now paying 50%, or more, than the market rate. Mainly, they were taken advantage of by aggressive marketing, opacity, and the fine print in their contracts.
“1. Governments by their very nature are not creators of wealth. They can only control that which the usurp from others (a nice way of saying they can give to one group only that which they rob from another group).”
Complete and total nonsense. The rule of law is created and enforced by government and it creates enormous value. Why do you think contacts are honored? and the Interstate Highway system was created by government. Rural electrification created huge value by increasing the efficiency of agriculture. The Internet – ever hear of that?
“Complete and total nonsense. The rule of law is created and enforced by government and it creates enormous value.”
Yes, rule of law is of enormous value. Indeed, one might say it’s “invaluable”. In reality, it’s the ONLY valid function of government, to provide and enforce equitable laws within the land, and to protect that land from without. When this is the case, you could easily say that government facilitates the creation of wealth. But read carefully my exact words, because the devil’s in the detail and it’s my words you are disputing:
“Governments by their very nature are not creators of wealth”
And I hold to that statement, speaking of “wealth” and not of “value”. Even if government facilitates wealth, it DOES NOT CREATE “wealth”. It can shuffle money from account to account, it can rob one person to pay another (which draws Rule of Equitable Law into question), but short of nationalizing (Orwellian for “stealing”) factories and production facilities from the private sector how can government create wealth? It simply can’t but relies on private individuals (yes, capitalists, if you like, but also workers, entrepreneurs, inventors, pretty much every private participant in the marketplace) the private sector to do the heavily lifting and actual creating.
If the evidence before the world, like Soviet market failures (and it’s still failing, its GDP is less than Spain, under $1T) and the corresponding destruction of wealth (and people like Holodor), if that isn’t enough to convince you, then there’s nothing I can say that will, you just need to move to a communist country and experience the frustration that permeates daily life for yourself. If you don’t want to move to China, Cuba, Venezuela (I don’t recommend it), then use some common sense and open your eyes to the mischief that occurs when a few powerful elite controlling a government ties the hands of the private sector and dictates what will be produced and consumed.
While under soviet control after WWII, Polish glass factories weren’t producing, apartments (no one but government elite owned a house in Poland) weren’t getting built, so factory managers were given perks if they could increase their tonnage. Soon, window panes 1/2″ in thickness started overwhelming the glaziers and the mines were unable to fill the demand for silicate. Yet, upon review, there was no actual increase in the number of windows being made. So the bureaucratic elite (probably a new crew after the former were either executed or interned in a Siberian gulag) changed the incentive. Obviously they needed a new metric to measure productivity, so they chose the obvious, the area and not the weight of the glass produced. Wouldn’t you know it, window panes went from 1/2″ to 1/16″ in thickness. Glaziers were once again frustrated because the glass rarely even made it to the job sites without breakage (although the miners were happy now because they could reduce output). Of course, what the people really wanted, was something more along the lines of 1/8″ double-pane argon filled windows, but that’s something that only an unfettered free market with innovative entrepreneurs could figure out. But look on the bright side, in Poland, you can tell when a pane of glass was installed just by measuring its thickness!
If I haven’t made my point, unless government seizes the means of production, in which case they decimate the productivity and appropriateness of the product, it’s the people with skin in the game and direct accountability that produce the wealth of a nation.
“the Interstate Highway system was created by government. Rural electrification created huge value by increasing the efficiency of agriculture. The Internet – ever hear of that?”
1. Yes, the HIGHWAYS were commissioned by government, extracting the cost to build them from the people, and then contracted out to private companies (I’m willing to bet that there were huge inefficiencies introduced by cozy relationships between politicians and the companies that won some of the contracts). But the best highway I’ve ever driven is the Jersey Turnpike and the Garden State Freeway, two toll roads financed by individuals.
2. Rural ELECTRIFICATION. While I don’t want to deny electrons to a hard working farming family, how exactly do you directly ascribe agricultural efficiency to electrical power? I’m not denying the overall influence, but most farm equipment is gas powered and most of the efficiency is in cultivation methods involving chemistry (fertilizers and pesticides) and methodology. Since privately held “public” utilities built the rural grid and individuals financed it (urban customer paying the subsidy), all you can attribute to government is compelling the utilities, to which it granted a fiat monopoly to build out into unprofitable areas. Perhaps local electrical generators powered by gas (a common feature on a farm, anyway) would have sufficed or even have proven more efficient.
3. The INTERNET. Sounds like you’ve been dipping into Al Gore’s kool-aid, his tall tale that he invented the internet. In truth, yes, the internet started its build-out on the government owned ARPNET, but it was moved onto private lines owned by the Tel Co’s in 1995, BEFORE the boom, and arguably the CAUSE of the boom. Compare that with the languishing Minitel system built by the French government. The protocols were established by CERN, not even Americans, and the equipment was built by private ventures like Cisco, 3COM, IBM, and Intel. And more than your other examples, the internet is exclusively financed by individuals, whether it’s grandma still paying $24 a month for AOL dialup, the local cable or tel co., or $50 a month for Verizon or AT&T.
* Of course the government, against the will of the people expressed by the House of Representatives, against the laws of the land, are attempting to seize control of this great asset through fiat executive order and a renegade FCC, but it hasn’t been enacted yet so we can’t measure the damage or LOST WEALTH.
So, having set you straight on your complete and total nonsense, do you have any more questions about how wealth is really created?
Finally, to answer your last question (which is quite revealing in the asking),
“Why do you think contacts are honored?”
Because people are inherently fair and when they believe that contracts in their favor will be honored, they are more willing to honor their own obligations, because equity prevails and simultaneously, markets flourish and wealth abounds. Yes, you can go to court and fight for enforcement of a contract because of the Rule of Law, but most contracts in a free market economy, like America, are honored voluntarily without resorting to litigation. Probably a greater deterrent than the courts, however, are the privately owned credit bureaus, because people want to continually garner trust within society, because credit worthiness is a trait for which good people aspire.
As a matter of fact, it’s when the government appears to act with impunity that litigation picks up. It’s when equity is thrown off balance by a government acting outside of the law, or making too many laws that provide too many loop holes, giving too many favors to “friends” that litigation increases. It is no strange coincidence that the longer the tax code, the more modifications become necessary to the Bankruptcy code, the more pages required to close a mortgage, and the more lawyers the universities have to crank out to settle (or stretch out) conflicts.
Assuming that you believe that the answer to the question of why contracts are honored is because “government enforces contracts”, I think your question reveals the real difference between a real American and a squatter, an issue bigger than the noise that obscures daily life. It’s that I believe that people are basically honest and good, but will always pursue their own best interest, so I embrace a strict, but simple set of laws that are embodied in the Constitution and reflected in the simple statutes of conservative states like Texas, Arizona, and Utah. When a minimal government drafts and enforces a simple set of equitable rules guaranteeing honesty and transparency based on fairness, people will govern themselves, knowing their individual liberties and right to own property without wrongful seizure. And thus, their lives will be rich and purposeful, and their wealth will grow correspondingly such that they can enjoy their earnings and have enough to take care of those around them that might be less fortunate.
Liberal progressives on the other hand inherently distrust others (maybe they’re just projecting their own sense of untrustworthiness) and feel there needs to be a far reaching and invasive government to command and compel the people at every turn, that wealth cannot be allowed to rest in the hands of individuals, but must be usurped and controlled by a government. Of course, how can a government comprised of members of the same population of stupid, untrustworthy individuals be any better than the population? Because at the head of government are those that are “smarter”, more “elite”, who know better. So liberals are divided into either the “elite” thinking they’re better than everyone else (e.g. Joe Biden, smartest man in the room) and those really are stupid, untrustworthy, and need to be coercively controlled. Perhaps liberals can also count among their numbers people who would trade hard work, liberty, and self reliance for a handout, too. All that’s left is then, is to decide which one your are.
@ Ira
Man…that was some good stuff! :-))
“ So if the government reduces the amount it collects from you by giving you a deduction, it either has to collect more from somebody else, or borrow it (implicitly collecting it from future taxpayers), or print money (which, in the long run will inflate the currency, taking a toll on real wealth from everybody who holds money). ”
Doh! How about the alternative you conveniently neglected, like “the government spends less money”.
Cut everyone’s taxes in half, spend half as much, and watch this economy take off like a rocket as people spend their money themselves. We’d generate so much wealth as individuals and as a society that within a decade we wouldn’t even remember what deficits and public debts are.
But that kind of disruptive thinking would upset the status quo, so until Americans start thinking critically and independently like Americans should, we’ll have to wait a bit and maybe suffer through the failing socialist policies hoisted upon us. Only then we can overthrow those that would spend away our prosperity and destroy the future for our posterity.
“ Important…all bad press is solely fabricated by the U.S. Health Industry in a nut shell!
I don’t care much for the US Health “Industry”, particularly the tort lawyers and lobbiests that swell their ranks, but the bad press is fully justified. The cost of Canadian Health care is reflected in the high tax rates and the high cost of goods, then capped by severe rationing and long waits. I prepared a family member’s Canadian tax returns for the last 6 years and they pay high taxes, high consumer prices, high pharmaceutical costs (particularly now that the $CAD is higher than the $US) and I’ve been shocked more than once at the annual savings and better care we experience in America versus those North of the Border.