The Cupidity of Big Government

Discussion in 'Economy' started by PoliticalChic, Sep 14, 2012.

  1. PoliticalChic
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    PoliticalChic Diamond Member

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    Perhaps the most effective ‘stake through the heart’ of the ‘Big Government’ juggernaut is a comparison of the economic record, the handling of the economy, by bureaucrats and politicians, versus that of businessmen.

    The following was written by JOHN STEELE GORDON, who writes “The Long View” column for Barron’s.

    1. “When the Solyndra Corporation filed for bankruptcy last summer, it left the taxpayers on the hook for a loan of $535 million that the government had guaranteed. In a half-billion-dollar example of how governments often throw good money after bad, the government had even agreed to subordinate the loan as the company’s troubles worsened, putting taxpayers at the back of the line. In retrospect, it is clear that the motive behind the loan guarantee was political: to foster green energy, an obsession of the left. And that’s the problem with government investment: Politicians make political decisions, not economic ones.




    2. [There’s no end] of government investment disasters. The Clinch River Breeder Reactor, for instance, authorized in 1971, was estimated to cost $400 million to build. The project ran through $8 billion before it was canceled, unbuilt, in 1983. A half century earlier, the Woodrow Wilson administration thought it could produce armor plate for battleships cheaper than the steel companies. The plant the government built, millions over budget when completed, could not produce armor plate for less than twice what the steel companies charged. In the end it produced one batch—later sold for scrap—and shut down.

    a. The Erie Railway was initially estimated to cost $4,726,260 and to take five years to build. In fact, it would take $23.5 million and 17 years….[in many ways] —not unlike the current proposed California high-speed rail project, the first segment of which would run between Fresno and Bakersfield and cost $9 billion.

    b. Why was the Erie Canal a huge success—it even came in under budget and ahead of schedule—that made huge profits from the very beginning, while the Erie Railway was a monumental failure? One reason was that canal technology was well-established and well-understood by the early 19th century. More important, the route of the Erie Canal was the only place a canal could be built through the Appalachian Mountains. Thus it would have no competition.





    3. In 1992, New York State found itself $200 million short of having a balanced budget, which the state constitution requires. The total state budget was about $40 billion, so it could have been balanced by cutting one half of one percent—the equivalent of a family with an after-tax income of $100,000 finding ways to save less than 50 dollars a month.

    So did New York cut its budget? Don’t be silly. Instead, it had a state agency issue $200 million in bonds and use the money to buy Attica State Prison from the state. The state took the $200 million its own agency had borrowed, called it income, and declared the budget balanced. New York now rents the prison from its own agency at a price sufficient to service the bonds.

    Had any private company sold, say, its corporate headquarters to a wholly-owned subsidiary and called the money received income, its management would be in Club Fed.

    a. …government, unlike corporations, can keep their books as they please. And why must corporations obey accounting rules? In a beautiful example of Adam Smith’s invisible hand at work, it was the self-interest of Wall Street bankers and brokers that produced one of the great ideas in American economic history.





    3. In the 1880s the great Wall Street banks that were emerging at that time, such as J. P. Morgan & Co. and Kuhn Loeb, as well as the New York Stock Exchange, began demanding two new ways of doing business: First, listed firms, and those hoping to raise capital through the banks, were required to keep their books according to what became known as Generally Accepted Accounting Principles. …firms were required to have their books certified as honest and complete by independent accountants. It was at this time that accountancy became an independent, self-governing profession, like law and medicine.

    a. But while J. P. Morgan was probably the most powerful banker who has ever lived, not even he had the power to force governments to adhere to Generally Accepted Accounting Principles and submit their books to independent certification. And because it is in the self-interest of politicians to cook the books—just as corporate managers did until Wall Street forced them to change their ways—they continue to commit accounting fraud on a massive scale. This is no small part of the reason that the federal government and many state governments are in financial crisis today.” Hillsdale College - Imprimis Issue
     
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  2. PoliticalChic
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    PoliticalChic Diamond Member

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    "But while J. P. Morgan was probably the most powerful banker who has ever lived, not even he had the power to force governments to adhere to Generally Accepted Accounting Principles and submit their books to independent certification."


    And the result is the laughable claim that President Clinton has a "surplus' and a balanced budget.


    A joke....on the American people....as the national debt rose 41% during the Clinton term.
     
  3. Rshermr
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    Rshermr VIP Member

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    Yes, indeed, politicalchic. And we are left to either believe you, or the cbo. tough choice. Because we all know that you would never lie about a dem, right politicalchic. the only laughable claim is that you ever in your life used impartial sources to prove the claims that fit your agenda.
    And, of course, you are aware that the national debt and the deficit are totally different numbers. I am sure you did not mean to confuse the issue when you stated that
    Must have been an Innocent mistake, eh, politicalchic.
    And, of course, your numbers are completely incorrect.

    Here are actual figures for the national debt.
    http://www.skymachines.com/US-National-Debt-Per-Capita-Percent-of-GDP-and-by-Presidental-Term.htm

    And again, your numbers are completely incorrect for the deficit under Clinton. Another honest mistake, I am sure. Not quite aware of how you could have missed this one, but those bat shit crazy con web sites you live on can be a tad misleading. Lets look at gov numbers, eh:
    http://www.davemanuel.com/history-of-deficits-and-surpluses-in-the-united-states.php
    Damned gov numbers. Show clinton came in with a $475B Deficit and left GWB a $315B Deficit.

    Are you lying again, politicalchic. I am so disappointed in you.
     
    Last edited: Sep 15, 2012
  4. Rshermr
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    Rshermr VIP Member

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    And the beat goes on. Politicalchic uses a source. Can you believe it? The author is John Steel Gordon, best known for his articles in such right wing bat shit crazy publications as American Spectator, So, nothing new here. Next.
     
  5. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    of course her general principle is 100% correct which is why you are so afraid to address it but favor as always yet another personal attack to change the subject as if everyone doesn't notice.
     
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  6. Rshermr
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    Rshermr VIP Member

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    Do, you wonder why no one cares what you say, ed.
     
  7. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    I do wonder why there is never a tiny bit of substance out of you except the BS about how Reagan was a perfect scientific experiment proving that conservatism does not work, all the while ignoring Fed policy.

    Its all too stupid for words. i.e., perfectly liberal.
     
  8. Rshermr
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    Rshermr VIP Member

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    p://www.guardian.co.uk/commentisfree/2012/feb/06/right-stupidity-spreads-enabled-polite-left
    Cmon, ed. Read the study. It explains why you are stupid, and why you call everyone else stupid. And why no one pays any attention to you.
     
  9. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    If you feel conservatism is stupid please say exactly why or admit as a liberal you lack the IQ to do so. We all enjoy watching you try to dodge the issue yet cling to your Nazi like faith that you are right merely because you have strong liberal feelings!!
     
    Last edited: Sep 17, 2012

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