Great Ghu, you’re actually doubling down on this nonsense.
If reality worked that way, the robber barons would never have bothered to create company towns, because limiting the mobility of their workforces wouldn’t have enabled them to pay any less.
Could you at least attempt to hide the fact that you’re attempting to craft a definition that automatically excludes all the evidence against your position?
Of course it’s “change at the margins” – that’s how macroeconomics works. What point are you trying to make?
Only if there are now more bidders than sellers. Mass transit increases the number of sellers of labor and the number of buyers.
The same one you just did. Since macroeconomics can only make changes at the margins, it cannot do much more than make a dent in inequality. Which is fine, but activists don’t want things to be done merely at the margins, or to make a dent. They want to bring about a revolutionary change, and governments are incapable of revolutionary change.
But, we know from experience that there are some government actions that can.
Make more than a dent? Like what? I suppose Social Security counts since it nearly eliminated elderly poverty, but a) SS is not sustainable on its current path and may not be so successful in the future, and b) The elderly are a minority that can be targeted. How do you end poverty and dependence in an entire population? Even more, how do you reduce inequality by raising up the bottom rather than just lopping off the top?
I went to the best explanation of theprinciples of economicsthat I could find on the internet. And I still have a shaky idea of what “at the margin” is and no idea why it should be sneered at.
It’s obviously a point of contention whether or not people make decisions “at the margin” or not. It seems to be a technical term for making a rational decision after analyzing the economics of the decision mathematically.
So is the sneering just a way of saying “it only helps individuals”? 'Cause if it helps enough individuals, it has more general, global effects. I don’t think you can just declare that “it only helps individuals - therefore it can be dismissed.” You actually have to be able to say that it has no significant general effect.
:rolleyes: Covered upthread.
Nonsense. There’s nothing wrong with it that can’t be fixed by progressivizing the payroll tax.
YOu mean make it a welfare program. And the Nordic countries have only reduced poverty at the margins, and at the cost of making more people dependent on government. Plus the middle class takes a huge hit. The mean income of the bottom 10% is only $14,000 or so. That’s not tackling poverty, that’s eliminating pockets of extreme misery and replacing it with larger groups of people who are poor but not drastically poor.
The governments there have kneecapped the citizenry, given them a government-paid for crutch, and then told them that they couldn’t walk without the government’s help.
I fail to see the relevance of the whole ‘at the margins’ comment. Is improvement at the margins worse than the alternative, whatever it may be?
Again, what do you mean by being “dependent on the government”. The Swedish government is paying for my education and health care even though I could probably afford them myself. Am I dependent on the government? Have I been made dependent on the government?
Genuine questions :dubious:
If it comes without huge cost, it’s worth doing. My point is that this is the best a government can do. Even a government as competent as Sweden’s can’t eliminate poverty, much less reduce inequality by a hugely significant amount. And what they have accomplished has been mainly to reduce the ranks of the rich, not lift the poor up. THe poor are still poor, they are just less awfully poor.
Dependency is not working and relying on the government for support.
Nothing wrong with that.
Instead of making the tax progressive, you can get to the same place simply by means testing.
I’m going to have to ask if everyone in America is really after the opulence and desperatly chasing riches. Cause going for opulence is a great way to end up with no retirement savings. Most of the people I know who have gathered a decent nest egg did it by prioritizing saving over spending. In the family, the relative who’s gathered the most lives in a little house, drives an old truck, and dresses like an old construction worker.
And most of the people who have gathered a nest egg want to be able to cover sudden maintenance to house or car, medical expenses, education expenses, and retirement. Plus some stuff, of course.
We assume that an average lifestyle includes indoor plumbing, refrigeration, air conditioning, washer/dryer (don’t have - old house - requires remodeling to include), computer and internet, etc. (I may be about to get forced air heating/AC. It will make next winter nicer.) I’d feel below average if I didn’t have a car. (And I know exactly what that feels like.) But is that all it takes to be opulent?
There’s no reason we can’t do both and no reason we shouldn’t.
No, but the air here appears saturated with the notion that we all should be.
It is already means tested by making it taxable once your non-SS income hits a certain level. (Likewise, Medicare part B costs more as your retirement income rises.)
I’m not talking about taxing, i"m talking about not giving SS to people who don’t need it.
Ok, do you have a cite that shows the savings to be realized, the income levels affected and the benefits to the program?
Is there a demand gap? What evidence do you have for that? There are many potential reasons for a moribund economy.
Not only do I think that fiscal stimulus won’t help, I don’t think there is much evidence that it helped before to the extent promised - especially in countries with open export markets and floating exchange rates. And I note that even Christina Romer’s plan for a stimulus admitted that it would be a net cost to the economy in the long term - once the direct effects of the stimulus are over, there’s the long-term drag on the economy of the debt servicing costs. If interest rates return to a normal range of 3-4% for federal funds, the last ‘stimulus’ is going to cost Americans $20-$30 billion dollars PER YEAR in debt servicing until it is paid back. That’s money that could have been spent on social programs, college tuition, or left in the hands of taxpayers.
If you think fiscal stimulus is a grand cure-all, please explain to me how Japan can still be an economic basket case when their ‘stimulus’ as a percentage of GDP was something like 10 times the size of the one in the U.S. While you’re at it, please explain how Canada’s economy is doing so well as our government plans for a balanced budget next year and a surplus the year after.
Some of you guys on the left need to re-learn economic fundamentals. You’re all fixated on running an economy on gimmicks - stimulus plans, loose money, wacky government ‘job creation’ programs, etc. You think you can play accounting tricks and money games and make a healthy economy out of it.
But here’s the core thing to remember: In the end, what makes a healthy economy is the free flow of information between producers and consumers, an alignment of the productive capacity of the country with demands of consumers, and reality-informed balances between spending and saving, long and short-term investment, infrastructure and the needs of the people, etc.
A fiscal stimulus might be useful when some artificial factor suppresses demand and leads to idle productive capacity (that wouldn’t be idle other than the temporary distortions). If it is, it’s only because it prevented the destruction of that productive capacity that you’d really want to have when the recession is over.
But if your productive capacity is already aligned with what the people want, need, and can afford, adding fiscal ‘stimulus’ is worse than useless because it causes dislocations based on an artificial input. i.e. production increases because the producers get a signal that there is more demand. Then when the stimulus goes away, you have overproduction.
In the meantime, the people and resources needed to build that new productive capacity are pulled from other areas of the economy that were already productive, causing dislocations of labor and capital. And of course, if capital is already being used, the stimulus money must crowd out other uses for that capital, or if it’s printed money or borrowed money it will drive down the value of the currency or drive up interest rates.
Or if you think you can have a ‘permanent’ fiscal stimulus, you’ll be in for a rude shock. If you pay for it with taxation, you’re simply shifting the economic balance from one form of consumption to another, or you’re pulling money from future investment to pay for current consumption. You may temporarily goose the economy, but only at the expense of its long-term health and growth. If you borrow the money, you’ll eventually run out of money to borrow, and in the meantime you’ll drive up your debt servicing costs and make that capital unavailable for private investment. If you print the money, you’ll eventually devalue your currency.
Any one of these paths also has a common destructive characteristic - it injects noise into the flow of information critical to a complex economy. As a producer, if I see demand go up for my product I no longer know if it’s demand driven by a real need, or demand driven by a temporary injection of money. It becomes hard to plan. If the stimulus causes a diversion of resources into a useless project, it harms the useful projects that would have used those resources.
Japan spent trillions on stimulus, much of which went into infrastructure. That generated a huge amount of consumption of steel and concrete and other materials. And now they have lots of under-utiliized bridges and roads which require regular maintenance. And they have a massive debt, and their economy is still in the doldrums. Japan has fiscally-stimulated itself into a box it can’t get out of.