No. No real laissez-faire gotcha. At least, not that I can think of. That seems kind of pointless. I like starting debates from points of agreement and then marching forward until we can spot differences in perspectives, pause, and then talk about those.
Markets can also under-produce goods if they are subject to restrictive regulation that prevents voluntary transactions from occurring between two parties. If you can agree to at least (temporarily) grant me that, I’ll accept your premise and maybe we can talk about it more later when you get back.
I’d like to talk a lot about this. I’ve jumped into about two dozen other threads in the past month trying to talk about this stuff, but give up when the threads quickly degenerate into politically-charged candidate/party bashing.
Yeah, what’s up with that? I tried to buy a Bag O’ Glass from Mainway Toys the other day, you know, for my 3 year old nieces. Dude at the store told me that there’s some law or regulation or something that takes my freedom to buy broken glass for children away from me. And it also takes away Irwin Mainway’s freedom to sell it to me!
Not exactly, but not far off. Defense, foriegn affairs, Veterans administration, justice, and general governement account for 44.39% of the federal budget if you exlcude seperately funded programs such as Medicare an SS* (29.29% if you include those). If you throw in transportation, science funding, natural resource management, education, and paying interest on the dept it goes up to 69.27%. The rest is health (12.93%), Agriculture (1.21%), Commerce and houseing(.53%) and last of all the real bread and circus line item, Income security which is 19.48%.
[http://www.investorguide.com/taxtrackr/](Best cited here)
If you go to the cite above you can actually break down each line item to see what is inside, for example the housing commerce line item includes the Post office.
From what you post and the way everyone responded to you it seems many here suffer fromt the common fallacy that most of you tax money goes to help the poor. But that is simple not true, as I hope you can see.
*The site I pulled this from just breaks down the whole government budget and allows you to plug in your tax amount to see how much went where. It seperates Medicare and SS but has a bug that doubles the amount you put in those lines.
Erislover had a great post in a different thread about how most people misunderstand what a free market is and how regulations relate to it. The only way to have a truly free market without any kind of regulations at all would be if all people were perfectly honest, honorable, and rational.
If you look at them closely, most regulations involve one of two things: Externalities (public safety, environmental concerns) and information. If you look at the current crisis, the regulations that would have protected us were not banning credit fault swaps and CDOs, but rather requiring accurate risk analysis and reporting. There would be no credit crunch if institutions had a way to realisticly and easily put a value on these instruments. Those kinds of regulations actually make the market more free not less, because it gives both sides a common reference so they can determine the value of a good. A market based on ignorance or bad information is not free.
Thanks for taking the time to post. And for the links.
I’m going to let the above line go by for the moment. It is exactly assumptions like that one above that invariably start the quick degeneration of the discussion. Please, please don’t start by assuming that. My request of you is to clear your head of any assumptions like that before we even begin.
The other thing I would note from your post is that you quickly took the numbers at face value, throw them into one bucket or the other, and moved on to a conclusion.
The vast majority of the federal budget is most definitely not used for common defense, protection of basic rights (most of which are handled by local police or fire departments), or the court system. And that’s even before we get into the discussion if the dollars in those buckets are being used efficiently or not.
And I’ll resist the urge to jump out of my seat and react to your claim that most regulations are for safety or externalities. You may want to believe that. But there is no way that is true. There are massive, massive restrictions, subsidies and distortions on foreign and domestic trade that would fill phone books that have absolutely nothing to do with safety or externalities. They have everything to do with some special interest group or the other coming hat-in-hand to Congress for a subsidy or protection from competition.
Sometimes they are cloaked in the guise of safety or the environment, but the reality is they are just sales jobs for some special interest group or the other. Ethanol mandates is just the latest in a long line of restrictions, distortions and subsidies that may actually worsen the environment problem it supposedly is trying to solve. But that’s because it never really was about the environment to begin with, and everything to do with directing subsidies to corn states and a nascent ethanol industry.
I appreciate your multiple posts and interest in the topic. Let me browse through some of the line items in your federal budget links to re-familiarize myself with the numbers.
I agree that there are many things to debate about how national resources are used. What bugs me in general is that many people I have spoken with in the past seem to assume that their tax dollars are going mostly to welfare and HUD and other programs for the poor, when in reality those are probably between 10 and 20%.* If, as it seems now, you are objecting to the general spending priorities of the federal government and how they are determined, I have no problem with that. I also have objections. We may not agree on all of them, but it looks like we agree on at least corn ethanol. I am in favor of bio fuels research in general for environmental, security, and budgetary reasons, but I think too much money has been spent on corn ethanol instead of other forms.
As to the market issues, that is another debate entirely. I think it is important to note that there is a difference between regulations and subsidies, although both effect how a market works.
Agree about the differences between regulation and subsidies. I was indeed starting to conflate the two in my post above. I would like to reserve the right-of-conflation, if it’s OK with you, to keep both of them tightly bundled together since either one can produce significant distorting effects. You can toss Fannie and Freddie into the subsidy column as well.
In my original post above when I was responding to Gorsnak, I had education, health care and infrastructure at top of my mind, where restrictive regulation (especially in the health care field) might be a bigger driver of under-production of supply.
And I’m not even sure spending on the poor cracks your 10-20% threshold above. I’d bet it’s even much less than that, once you dig into the line items and actually count the dollars that make it into the hands of the poor (as opposed to being sucked up by administration and bureaucracy). And the vast majority of entitlements aren’t means tested at all.
Not to jump too quickly to the end of the debate here, but I would argue there is plenty of money available to spend on the poor - if the rest of the budget is managed wisely, which of course it is not - and much better results are possible if the money spent on the poor is handled in a different manner than it is today.
Even if there was a flat tax of, say, 20%, the rich would pay more. To hear some posters argue, you would think that the debate was between a regressive tax system and a flat tax, where the debate is really about a flatter tax vs. the progressive tax system we have.
Under the flat tax, a person making $10 million/yr would pay $2 million in taxes. A person making $50k/yr would pay $10k in taxes. $2million vs. $10k. And the person who is making the big money still drives on the same roads, use the same police, fire, and emergency services, has the same public schools, and the same protection from foreign invaders via national defense as everyone else.
I also disagree with the notion that they have “more to lose”. My modest home and lifestyle is just as important to me as Bill Gates’ extravagent lifestyle is to him. It’s a wash.
And he still is paying FAR, FAR more than I am in taxes. But the idea of the progressive tax system is that he should pay an even higher percentage than I do.
Should we take this to everything in society? For example, if I buy a Big Mac should it be $2, but Warren Buffett should have to pay $2,000 ?
The OP also forgot the part where the tenth man slipped the bartender a ten dollar tip and consequently got told he could drink for half-price while the other nine guys paid more to make up for it. Or maybe pinkyvee isn’t aware that capital gains tax (the kind of taxes rich people actually pay) is capped at 15% (Bush reduced it from 20% in 2003) while income tax rates (the kind of taxes people like you and me pay) range from 15% (starting as low as $8000 a year) to 35%.
Secondly, the rich do benefit more. Lets take two types of spending, transportation and education. Sure the rich drive on the same roads we do, but they also ship products and materials on those roads. Chances are there profits would be lower if they had to deal with maintaining roads, bridges, airports, raillines and other infrastructure. As for the education system, you recieve one education from our system. With a big family you might put ten children through as well. But Bill Gates needs thousand of educated workers to make his money. Do you think it would be more efficient for him to build and run his own K-post graduate education system or kick in a little extra on April 15th so he doesn’t have to?
The thing is, many of the smart rich people understand this or are begining to. For example, one of the reasons both parties are starting to talk about universal health care is that big business are realizing that the current system puts them at a disadvantage. Big stock holders in Ford and GM would love to hand off medical care to the federal government, and they should pay more to be able to do it.
So according to your article, Buffett paid $8.142 million last year while his secretary paid $18,000. But that disparity isn’t enough; Buffett should pay more.
I would ask you again; should his secretary pay $2 for a Big Mac while Buffett pays $2,000? Why or why not?
So, Bill Gates should pay for the education of his employees? He already pays their salaries. They are compensated because of the education and skills they bring to the table. They are able to get good jobs because of that education system, so again, who should pay? Gates or the worker? They both equally benefit.
Sure, the rich ship their products on the roads, but we consume them. Do you not go to the grocery store, local restaurants, and other places? How would you be able to consume and purchase those things if “rich” people couldn’t ship them to you? So who should pay? The rich for shipping or you for buying?
Plus, I don’t trust Warren Buffett. He’s a guilty old white liberal who wants to do nice things because he knows he’s going to die soon and wants to get into heaven.
This class envy gets us nowhere. Sure, I can hate some of the arrogant rich assholes out there, but in a free country, I have no right to demand that they pay more than their share.
I’m not familiar with the particular situation of Mr Buffett and his secretary, but Table 8 in the link below would suggest the opposite is true for America as a whole.
This is one of the major tenets of Obama’s campaign.