McCain's Tax Cuts Would Cause the Deficit to Explode

[Dogger]

yada, yada, yada. **** bogus rightwing talking points and McCarthyism smears omitted ****

Why do you think the government would be better at spending our money than we are? Why not stimulate the economy with what we spend rather than the government?

I said no such thing. But there are services only government can provide, and they are not free. There are other services that people want, and those cost money.

I like roads, parks, schools, FDIC, mail, non-collapsing bridges, internet, safer food and drugs, building codes, lead-free toys, cops, fire protection, disaster assistance and relief, clean water and air, safe air travel, and even our military. Where will they come from if we don't pay for them?

"Taxation is the price we pay for living in a civilized society." - Holmes (O.W., not Sherlock)

 

[RetiredGySgt]

I said no such thing. But there are services only government can provide, and they are not free. There are other services that people want, and those cost money.

I like roads, parks, schools, FDIC, mail, non-collapsing bridges, internet, safer food and drugs, building codes, lead-free toys, cops, fire protection, disaster assistance and relief, clean water and air, safe air travel, and even our military. Where will they come from if we don't pay for them?

"Taxation is the price we pay for living in a civilized society." - Holmes (O.W., not Sherlock)

What? No demand for free health care and cradle to grave welfare for those not inclined to be productive? And last I checked bridges do collapse even when the Government pays for them.

 

[Dogger]

What? No demand for free health care and cradle to grave welfare for those not inclined to be productive? And last I checked bridges do collapse even when the Government pays for them.

Health care is nice, but that cradle to grave nonsense does not reflect anything I've said or belive.

Bridges collapse much more frequently when they are not inspected and maintained. Are you saying we can't pay for services unless they are 100% effective?

Were you 100% effective when you drew government pay? Why aren't you like that now?

 

[BaronVonBigmeat]

Tax cuts do not stimulate the economy, especially if they are coupled with spending cuts. There is a stimulus, but it is offset by the greater loss of stimulus from spending cuts.

If that were true, socialism and central planning would have worked. Instead, nearly every country that tried it has abandoned it.

Spoken like a devout member of the Collective. Why do you think the government would be better at spending our money than we are? Why not stimulate the economy with what we spend rather than the government?

I agree with this, however I just want to point out that if taxes go down, but spending remains high...has anything really been cut?

To put it another way: The government doesn't use green slips of numbered paper. Neither do the taxpayers. We use scarce resources, and the dollars are just a placeholder. If the government cuts Tax A, but continues using the same amounts of manpower, gasoline, concrete, steel, etc...then nothing has been cut. You've just shifted to Tax B, or Tax C.

I said no such thing. But there are services only government can provide, and they are not free. There are other services that people want, and those cost money.

I like roads, parks, schools, FDIC, mail, non-collapsing bridges, internet, safer food and drugs, building codes, lead-free toys, cops, fire protection, disaster assistance and relief, clean water and air, safe air travel, and even our military. Where will they come from if we don't pay for them?

Virtually everything you listed can be provided (or, has been provided in some areas) by free markets and/or volunteerism.

 

[onedomino]

I said no such thing. But there are services only government can provide, and they are not free. There are other services that people want, and those cost money.

I like roads, parks, schools, FDIC, mail, non-collapsing bridges, internet, safer food and drugs, building codes, lead-free toys, cops, fire protection, disaster assistance and relief, clean water and air, safe air travel, and even our military. Where will they come from if we don't pay for them?

"Taxation is the price we pay for living in a civilized society." - Holmes (O.W., not Sherlock)

You said this: "Tax cuts do not stimulate the economy, especially if they are coupled with spending cuts. There is a stimulus, but it is offset by the greater loss of stimulus from spending cuts." Where did you learn economics? A Friedrich Engels Cooperative? Individuals and businesses spend tax cuts. For example, when depreciation schedules are accelerated, businesses spend more money on machinery and services. Most would describe that as economic stimulus. I said nothing about essential services. You pulled that straw man out. Only someone who is Left of Left would not agree that the $3 trillion to be spent in 2009 by the Federal government includes many programs that can be reduced or eliminated. To suggest that the stimulus of a tax reduction is offset by "a greater loss of stimulus from [government] spending cuts" is flat-out absurd on the face of it. Reduced government spending as a function of tax cuts leads to more jobs to support the demands that individuals and businesses make for more goods and services. But Leftists like you think that government spending provides more stimulus than spending by individuals and businesses. And that is Socialist bildge that has repeatedly failed whenever it has been inflicted on a population.

 

[ReillyT]

To suggest that the stimulus of a tax reduction is offset by "a greater loss of stimulus from [government] spending cuts" is flat-out absurd on the face of it.

Why? It may be correct or incorrect, but there is nothing about that statement that is patently absurd.

Reduced government spending as a function of tax cuts leads to more jobs to support the demands that individuals and businesses make for more goods and services.

True, but there is no predetermined number of jobs it must lead to. Assume that all $3 billion dollars of that money is spent buying plastic lawn ornaments made in China. Yes, there will be a higher demand for goods at Wal-Mart, but much of the trickle down job-creating effects of this spending wil go to China.

But Leftists like you think that government spending provides more stimulus than spending by individuals and businesses.

Not necessarily more... but it could be more. Suppose instead of plastic lawn ornaments that $3 billion was spent on the provision of health care. This will create jobs in the domestic health care sector and increase the level of human capital in the United States. Take national defense spending, that $3 billion could be spent on jobs in the military and the purchase of armaments made in the US. That would also be quite a boon to the US economy.

Depending on the circumstances, there is no reason that government spending can't create as many jobs as private spending.

 

[RetiredGySgt]

Why? It may be correct or incorrect, but there is nothing about that statement that is patently absurd.



True, but there is no predetermined number of jobs it must lead to. Assume that all $3 billion dollars of that money is spent buying plastic lawn ornaments made in China. Yes, there will be a higher demand for goods at Wal-Mart, but much of the trickle down job-creating effects of this spending wil go to China.



Not necessarily more... but it could be more. Suppose instead of plastic lawn ornaments that $3 billion was spent on the provision of health care. This will create jobs in the domestic health care sector and increase the level of human capital in the United States. Take national defense spending, that $3 billion could be spent on jobs in the military and the purchase of armaments made in the US. That would also be quite a boon to the US economy.

Depending on the circumstances, there is no reason that government spending can't create as many jobs as private spending.

The reality is that Governments of ALL types waste money, they are by nature inefficient. You have been provided examples by people that know how the system works.

Let me give you another.

I ran accounts in the US Marine Corps, I spent a year running all billeting aboard Camp Courtney in Okinawa. I had 2 accounts to spend from. I got my first taste of Government think on those accounts when I took over the job just before the end of the Fiscal year.

The account had 6000 dollars in it. I had no idea what I might need as I just took over ( and in reality it turns out generally speaking the position usually needs little money at all) I was told my second day, as I was given the info on the account " to spend the 6000 dollars before a set date about 2 weeks away" The money was to be spent on anything and everything, not cause I might need anything, but because if the account had money in it at the end of the fiscal year , someone higher up might decide it did not NEED that money and the next year take it for some other account.

There is absolutely NO reason or desire to save with in the Government. If you do not spend every penny given to you, you lose it the next year no matter the reality of what you may or may not need. No Incentive what so ever.

By the way, I got in trouble with the Account people cause I just couldn't waste 6000 dollars in 2 weeks. I did manage to spend 2000 dollars on items and material I had absolutely no use for, before I quit buying in disgust. And most of what I bought I gave to other entities aboard the camp. The camp services had a pitiful account and the Admin center never had enough copier paper, so I usually ask them what they needed and spent money FOR them. I do not enjoy wasting money just cause. All justified because , well I used the copier and Camp Services was my work crew.

Now multiply that by every office and department in the entire Government.

 

[ReillyT]

The reality is that Governments of ALL types waste money, they are by nature inefficient. You have been provided examples by people that know how the system works.

Let me give you another.

I ran accounts in the US Marine Corps, I spent a year running all billeting aboard Camp Courtney in Okinawa. I had 2 accounts to spend from. I got my first taste of Government think on those accounts when I took over the job just before the end of the Fiscal year.

The account had 6000 dollars in it. I had no idea what I might need as I just took over ( and in reality it turns out generally speaking the position usually needs little money at all) I was told my second day, as I was given the info on the account " to spend the 6000 dollars before a set date about 2 weeks away" The money was to be spent on anything and everything, not cause I might need anything, but because if the account had money in it at the end of the fiscal year , someone higher up might decide it did not NEED that money and the next year take it for some other account.

There is absolutely NO reason or desire to save with in the Government. If you do not spend every penny given to you, you lose it the next year no matter the reality of what you may or may not need. No Incentive what so ever.

By the way, I got in trouble with the Account people cause I just couldn't waste 6000 dollars in 2 weeks. I did manage to spend 2000 dollars on items and material I had absolutely no use for, before I quit buying in disgust. And most of what I bought I gave to other entities aboard the camp. The camp services had a pitiful account and the Admin center never had enough copier paper, so I usually ask them what they needed and spent money FOR them. I do not enjoy wasting money just cause. All justified because , well I used the copier and Camp Services was my work crew.

Now multiply that by every office and department in the entire Government.

No one is arguing that there isn't inefficiency in government. There is also inefficiency in the private sector.

Regardless, that isn't the topic I was addressing.

 

[onedomino]

Why? It may be correct or incorrect, but there is nothing about that statement that is patently absurd.

Because it is socialist to suggest that government spending is more efficient and produces more economic activity than does spending by individuals and businesses. It is absurd because it is an idea whose enactment has repeatedly failed ever since Engels brought it up. Do you need a list of failed socialist experiments? What is the motivation for efficiency when you are spending someone else's resources? Capacity you did not earn? Ear mark that.

 

[ReillyT]

Because it is socialist to suggest that government spending is more efficient and produces more economic activity than does spending by individuals and businesses. It is absurd because it is an idea whose enactment has repeatedly failed ever since Engels brought it up. Do you need a list of failed socialist experiments? What is the motivation for efficiency when you are spending someone else's resources? Capacity you did not earn? Ear mark that.

Now you are talking about efficiency, but that wasn't the point of your previous post. It was job promotion. There is no logical reason that government spending cannot promote job creation in a domestic economy as much as private spending (even if, in the aggregate, private spending generally does a better job).

Even in the individual case, suppose that private consumption does create greater economic activity than government expenditure (and I have no reason to believe that is necessarily always the case) but that the economic activity is disproportionately concentrated in the exporting country (e.g., Chinese goods). Then, even more inefficient government spending in the domestic economy or domestic goods and services could create more jobs than private consumption.

Additionally, the efficiency or inefficiency of government spending is secondary (or perhaps not even a factor). Even government spending on shit that isn't needed but is produced in the US leads to greater economic activity. As Keynes noted, even if the government spent money to have people dig holes and then fill them back in, this could create wealth (and jobs).

 

[ReillyT]

Because it is socialist to suggest that government spending is more efficient and produces more economic activity than does spending by individuals and businesses.

Take another case for example. Suppose that instead of giving money to consumers that will be spent on plastic lawn ornaments made in China (just a hypothethical), the government uses that money to improve the domestic infrastructure (i.e., roads, bridges, airport expansion, rail links, etc.). The improvement of the domestic infrastructure will a) create jobs and b) provide a platform for even greater domestic growth. Spending on public goods does allow for economic expansion in ways that private consumption may not.

 

[RetiredGySgt]

Now you are talking about efficiency, but that wasn't the point of your previous post. It was job promotion. There is no logical reason that government spending cannot promote job creation in a domestic economy as much as private spending (even if, in the aggregate, private spending generally does a better job).

Even in the individual case, suppose that private consumption does create greater economic activity than government expenditure (and I have no reason to believe that is necessarily always the case) but that the economic activity is disproportionately concentrated in the exporting country (e.g., Chinese goods). Then, even more inefficient government spending in the domestic economy or domestic goods and services could create more jobs than private consumption.

Additionally, the efficiency or inefficiency of government spending is secondary (or perhaps not even a factor). Even government spending on shit that isn't needed but is produced in the US leads to greater economic activity. As Keynes noted, even if the government spent money to have people dig holes and then fill them back in, this could create wealth (and jobs).

Your hole digging example is stupid. It does not "create" wealth, it redistributes it from those that already have money to those that do not. And in the process the Government takes a HUGE chunk to pay for the people to run the programs, the offices and the budgets to ensure the entities always exist from hence forth.

 

[Ravi]

Link?

Check with the CBO. They recently came to the same conclusion.

 

[ReillyT]

Your hole digging example is stupid. It does not "create" wealth, it redistributes it from those that already have money to those that do not. And in the process the Government takes a HUGE chunk to pay for the people to run the programs, the offices and the budgets to ensure the entities always exist from hence forth.

It isn't my example. It is John Maynard Keyne's example. The point is not that digging holes is the optimal use of government spending. The point was that even inefficient government spending (in this case, digging holes) can put money into people's pockets, which will then be spent on goods and services, which will increase demand, which will stimulate production and job growth, which will increase wealth.

It is the idea that got us out of the Great Depression.

 

[onedomino]

Now you are talking about efficiency, but that wasn't the point of your previous post. It was job promotion. There is no logical reason that government spending cannot promote job creation in a domestic economy as much as private spending (even if, in the aggregate, private spending generally does a better job).

So I cannot refer to job creation and efficient consumption of resources? Why? You specifically say that private spending does a better job? So what's your argument?

Even in the individual case, suppose that private consumption does create greater economic activity than government expenditure (and I have no reason to believe that is necessarily always the case) but that the economic activity is disproportionately concentrated in the exporting country (e.g., Chinese goods). Then, even more inefficient government spending in the domestic economy or domestic goods and services could create more jobs than private consumption.

You mean like the recent $40 billion contract to manufacture EADS re-fuelers for the USAF in France and assemble in Georgia? Thus we have the government expenditure of $40 billion producing maybe 25,000 jobs, rather than the 44,000 jobs specified by Boeing. You can argue the virtue of socialist hypotheticals all day. The reality is that when people in government are consuming resources that they did not create, there is less motivation and less accountability for efficiency than in the private sector. The Airbus deal is just one of virtually countless examples of inefficient, job hostile, government expenditures of private resources. Name one industry where government consumption of resources is more efficient than private industry.

What about public endeavors that require more investment than the private sector will supply, e.g., NASA and Defense. Surely these will be examples of efficient government consumption of resources. Let's see: the government spends more than $200 billion on NASA over the past 15 years and the result is that after the next seven Shuttle flights are over, Americans will have zero access to space for five years. Are the NASA managers canned? Of course not. It's not their money. Easy come, easy go. With development included, B2 bombers cost $2.6 billion each. What a bargain. Thus the recent crash of a B2 in Guam becomes financially catastrophic. But it's not the government's money and there's more where that came from. The government expenditure of public resources on the program was so inefficient that we could only afford 21 aircraft. $2.6 billion each. And that is just to purchase, much less operate. How about energy and transportation? In how many states have fuel taxes been collected only to have the money tossed into the general fund rather than spent on roads? How about government spending $300 billion over the past 15 years on the Department of Energy with the net result that oil is $117 dollars per barrel? Ludicrous. We might as well have raked our money into a giant pile and burned it. The government is grossly inefficient and abusive when consuming the resources of the private sector.

Additionally, the efficiency or inefficiency of government spending is secondary (or perhaps not even a factor). Even government spending on shit that isn't needed but is produced in the US leads to greater economic activity. As Keynes noted, even if the government spent money to have people dig holes and then fill them back in, this could create wealth (and jobs).

I do not know how to respond to spending money on shit except to observe that it seems to be the principle product of the government.

 

[Paulie]

The reality is that Governments of ALL types waste money, they are by nature inefficient. You have been provided examples by people that know how the system works.

Let me give you another.

I ran accounts in the US Marine Corps, I spent a year running all billeting aboard Camp Courtney in Okinawa. I had 2 accounts to spend from. I got my first taste of Government think on those accounts when I took over the job just before the end of the Fiscal year.

The account had 6000 dollars in it. I had no idea what I might need as I just took over ( and in reality it turns out generally speaking the position usually needs little money at all) I was told my second day, as I was given the info on the account " to spend the 6000 dollars before a set date about 2 weeks away" The money was to be spent on anything and everything, not cause I might need anything, but because if the account had money in it at the end of the fiscal year , someone higher up might decide it did not NEED that money and the next year take it for some other account.

There is absolutely NO reason or desire to save with in the Government. If you do not spend every penny given to you, you lose it the next year no matter the reality of what you may or may not need. No Incentive what so ever.

By the way, I got in trouble with the Account people cause I just couldn't waste 6000 dollars in 2 weeks. I did manage to spend 2000 dollars on items and material I had absolutely no use for, before I quit buying in disgust. And most of what I bought I gave to other entities aboard the camp. The camp services had a pitiful account and the Admin center never had enough copier paper, so I usually ask them what they needed and spent money FOR them. I do not enjoy wasting money just cause. All justified because , well I used the copier and Camp Services was my work crew.

Now multiply that by every office and department in the entire Government.

This is actually a very good example laid out here by RGS, and I give him props for that. Government incentive to save is nil.

 

[ReillyT]

So I cannot refer to job creation and efficient consumption of resources? Why? You specifically say that private spending does a better job? So what's your argument?

You can choose to discuss anything you want. I was merely pointing out that when you initially said that private spending through tax cuts necessarily leads to more jobs than public spending. While this may be true in an individual case, it is not necessarily always true. That was my argument. Your efficiency angle came in later.

You mean like the recent $40 billion contract to manufacture EADS re-fuelers for the USAF in France and assemble in Georgia? Thus we have the government expenditure of $40 billion producing maybe 25,000 jobs, rather than the 44,000 jobs specified by Boeing. You can argue the virtue of socialist hypotheticals all day. The reality is that when people in government are consuming resources that they did not create, there is less motivation and less accountability for efficiency than in the private sector. The Airbus deal is just one of virtually countless examples of inefficient, job hostile, government expenditures of private resources. Name one industry where government consumption of resources is more efficient than private industry.

This is one example where government expenditure will likely not lead to a great deal of domestic expansion. So what? I didn't say public spending always produced better outcomes.

What about public endeavors that require more investment than the private sector will supply, e.g., NASA and Defense. Surely these will be examples of efficient government consumption of resources. Let's see: the government spends more than $200 billion on NASA over the past 15 years and the result is that after the next seven Shuttle flights are over, Americans will have zero access to space for five years. Are the NASA managers canned? Of course not. It's not their money. Easy come, easy go. With development included, B2 bombers cost $2.6 billion each. What a bargain. Thus the recent crash of a B2 in Guam becomes financially catastrophic. But it's not the government's money and there's more where that came from. The government expenditure of public resources on the program was so inefficient that we could only afford 21 aircraft. $2.6 billion each. And that is just to purchase, much less operate. How about energy and transportation? In how many states have fuel taxes been collected only to have the money tossed into the general fund rather than spent on roads? How about government spending $300 billion over the past 15 years on the Department of Energy with the net result that oil is $117 dollars per barrel? Ludicrous. We might as well have raked our money into a giant pile and burned it. The government is grossly inefficient and abusive when consuming the resources of the private sector.

Actually, all of those things you named are handled better by government than the private sector. Governments are better at delivering on these things because they are public goods, and the coordination problems of private action to accomplish these goals are extreme. This is all basic economics stuff. I am sorry you don't like some of the individual expenditures.

In addition to national defense, space exploration, and infrastructure development, don't forget to add a system of justice complete with rule of law that allows private interactions to occur with a degree of certainty. That sure does seem handy.

Of course, none of what you have said in these posts addresses your initial incorrect assumption that private spending will necessarily produce domestic employment in excess of that created by government expenditure.

I do not know how to respond to spending money on shit except to observe that it seems to be the principle product of the government.

The good news is that it is a free country. If you think governments are wasteful and inefficient, please feel free to move to Somalia where you won't have to be burdened by government at all.

 

[onedomino]

The good news is that it is a free country. If you think governments are wasteful and inefficient, please feel free to move to Somalia where you won't have to be burdened by government at all.

Congratulations. Almost as pointless as your "shit" exqample. But exactly the kind of inane, insipid remark I would expect from someone defending the efficiency of government spending.

 

[Dogger]

If that were true, socialism and central planning would have worked. Instead, nearly every country that tried it has abandoned it.

I never advocated socialism and central planning; that kills incentive. Incentive remains in a fair market economy that balances power among the participants.

Incentive does not conflict with paying for what you want instead of dumping your bills on future generations, and making them have less while paying for your selfishness.

 

[ReillyT]

Congratulations. Almost as pointless as your "shit" exqample. But exactly the kind of inane, insipid remark I would expect from someone defending the efficiency of government spending.

I appreciate your thoughful rejoinder.