Q. For Small Government Adherents

[Steinlight]

I don't think you understand what progressive means. The capital gains tax is progressive because it increases based on income level. Just because you don't like the top tax rate doesn't mean it isn't progressive.

But now, you are getting off track. We aren't talking about FICA. No one contended that it wasn't a regressive form of taxation.

I have not advocated adding a single tax on those with less income, or anyone for that matter. I have advocated removing the income tax, which reduces the burden of low income and high income individuals alike.

As I said before, learn to read what I actually write and stop engaging in shrill liberal hyperbole.

- Now if you want to backtrack and claim you would get rid of FICA as well, then you have to abandon your claim of sufficiency in revenues, and we have a very different problem evident in your proposal.

I never talked about FICA, stop changing the issue.

The issues here are your claim that the income tax is the only progressive tax and that I want to impose more regressive taxes on the poor. You are wrong on both counts.

Look, if you disagree with getting rid of the income tax, that's fine, we can have an argument on the merits of the position. But to keep lying and saying I want to add more taxes on the poor when I clearly state I want to remove the income tax and replace it with nothing is dishonest and I won't have it. That is not a debate.

To debate, you have to counter the argument of your opponent, not ignore his argument and create your own strawman.

There's another aspect that you haven't considered (I find it amazingly rare that anyone does).

Think about the effects of systems of taxation not in relation to each other, but in relation to the null hypothesis - no tax at all.

In such a scenario there is some basic income required for bare survival. Assuming similarity in location, age, and medical condition, that income required is the same or every one.

Let's call that mandatory income, all of which must be spent for the person's survival.

Let's call the remainder of one's income discretionary income (because there is no tax, disposable income is meaningless). This income can be spent, saved, or invested in any way one likes.

It represents your economic freedom.

It also represents the o my income which can be taxed, because taxation of mandatory income result, in extremis, in your death.

So what constitutes "fair"? If we tax 10% of everyone's income, what is the impact?

If your income is the mandatory income, we are literally taxing you to death.

If your income is 10% above the mandatory income, we are taxing 100% of your economic freedom.

If your income is 11 times the mandatory income, we are taxing 19% of your economic freedom.

A flat tax, then, has a disparate income on the liberty of the people it taxes, leaving more liberty to those who earn more, taxing all liberty from those of modest means, and barely impacting tehe liberty of the wealthy.

If you disagree that taxes impact liberty, then the argument of taxation becomes purely utilitarian, and the rhetoric of libertarians and the Tea Party become meaningless sophistry.

The only way to create a system which impacts the liberty which all have earned in equal measure is to Prevatte the bottom so that mandatory income is not taxed at all, and to impose highly progressive income taxes on everyone else.

I don't advocate a flat tax to replace the income tax, I advocate not a Fair Tax or a Flat Tax, but no tax.

- If there's no tax, then how do you claim $1.6 trillion in tax revenue?

Not no tax, no income tax. So the revenue comes from everything other than the Income Tax.

 

[TemplarKormac]

Start with a balanced budget amendment.

- The OP asked for a cost benefit analysis. That seems to be missing.

If asked, I can articulate very clearly the costs of a balanced budget amendment, and explain logically how destructive it would be.

Is there any argument FOR a balanced budget amendment that is based on anything other than emotion?

Balancing the budget is simple, as any common man has learned to live within his means. That, or spend recklessly and end up broken and on the streets. It's not emotional, it's realistic. How else do you address the spending?

So, perhaps you are familiar with this paper

"Analyzing the Case for a Balanced Budget Amendment"

In it, the economists argue the benefits and drawbacks of a balanced budget amendment. Two of the main benefits of such an amendment are these:

1) A balanced budget amendment likely would inspire the government to increase savings to hedge against future problems in the broader economy.

2) An elimination of the deficit also would reduce the millions of dollars in interest that the government pays on its debt when it runs a deficit.

http://static1.squarespace.com/stat...4aeb9e4e4b088b975e88a0a/1420736996813/bbr.pdf

There are always drawbacks, (tax volatility, crisis management, social services, etc) as you are so easily given to, but you ignore the benefits. The price of success is failure. But you can't keep failing on purpose and hope to succeed.

- I explained in detail in an early post how a balance budget could be achieved, and the damage that would do.

Did you read that post? I have already answered the argument.

You may not be aware of some of the arguments going on among economists now in terms of government budgets (I don't mean that as an insult, it's just that the press and most public representations of ongoing economic arguments are very narrow, and [insultingly, I think], tailored to what writers think the public can understand).

The government is not a household. Period. Arguing that a business can balance its budget, or a household, holds no water - it depends on them being the same sorts of entities to have any logical validity, and they are not.

Let's begin with the basic proposition that a monetarily sovereign government issues its own currency, which the private sector uses.

It issues that currency as a flow of money from itself to the private sector, which is defined as a deficit. That deficit is defined as a private sector surplus. All deficits must be matched by surpluses somewhere.

To argue for a balanced budget is, ultimately, to argue that the private sector should never have a financial surplus - that is, that it should never be able to save without reducing income, that it should never be able to grow, and that it should become a zero-sum game in which the profit of one agent is the loss of another.

So if no balanced budget, then what? How is money managed?

 

[Pksimon2007]

I don't believe that this question can be answered without knowing all of the functions of the federal government and being aware of the implications of losing functions. I seriously doubt anyone on here (including myself) can make an informed opinion on such a huge budgetary issue.

- I think it can be evaluated from a macro perspective. There are costs and benefits to individual programs, but there are also costs and benefits to federal spending, taxing, surpluses, and deficits.

From the longest view, federal deficits are private sector surpluses. Deficits and surpluses are flows of money, so the sum of all flows of money must equal zero.

Conservatives forget this, and don't comprehend what their calls for a balanced budget amendment mean, from a macro perspective.

One macro perspective I find particularly useful is called the sectoral balances approach, which looks at the economy being divided, monetarily, into three sectors: the federal government, which is the monopoly issuer of the currency, the private sector, which produces real wealth and private credit/debt and uses the government currency, and the foreign sector with which the private sector trades.

The conservative approach is to argue that responsibility demands that the private sector and government sector must both either balance their budgets or run surpluses.

What they forget is that surpluses and deficits (like profits and losses) are flows, and cannot simultaneously exist among all sectors. For one sector to have a surplus (and a profit would be a surplus), then another sector must run a deficit.

For both the government and private sector to be net positive, the only way that can happen is for the US to be a net exporting country, with net flows of money incoming from other countries in exchange for real wealth which we produce. The only way that can happen is for US workers to allow wages to fall, and to forego the enjoyment of real wealth so that it can be shipped to other countries in order to produce a financial profit for the private sector (which would have to be realized, necessarily, outside of wages) and for the government.

This is why they have to advocate a race to the bottom for US workers. They don't understand their own logic, but at some intuitive level they know that people must be forced to suffer to produce the financial surpluses they feel government must run.

They simultaneously forget that government is the monopoly issuer of its own currency, so there is no reason it should run a financial surplus. To government, which creates money at will ("printing" it), money is free. Governments which produce their own currency are not constrained from producing more - their constraint is on their ability to buy real resources with that money, which means inflation, in a practical sense is their limiting constraint on spending.

So yes, even though we cannot evaluate individual programs this way, it is very clear that we can evaluate a macroeconomic effect which tells us whether government should have a deficit, surplus, or balanced budget. The answer will be different, depending on the behavior of the private and foreign sectors. Government exists to serve the private sector (us), and its budgetary position should be tailored to support our objectives.

If our objectives are to employ our labor and other real resources in order to create wealth and to provide savings for ourselves, that is only possible if we have government run deficits or if we run trade surpluses.

This is also my answer to the OP, and includes my cost-benefit analysis at a macroeconomic level.

I also gather that you are prone to overanalysis. Government can't serve anyone or anything when it can't pay for any of the services it provides. If it can't pay for these essential services, people suffer. So, taxes are increased to continue paying for these programs while borrowing more money. Running surpluses means you don't have to levy so many taxes to pay for borrowing, it would thusly be able to pay for the services government provides to the public without again raising taxes. The individual, microeconomic impact is obvious. As is the macroeconomic impact.

//Government can't serve anyone or anything when it can't pay for any of the services it provides.// Yet we know that a government which issues its own money can always do that, providing the country has the real resources to enable it. The government is not fiscally constrained, but constrained by the labor and industry available to the country.

Do you really believe that we are using our labor and industry as intensively as we possibly can?

//Running surpluses means you don't have to levy so many taxes to pay for borrowing//

- From a funding perspective, you don't have to levy any taxes at all. Taxes don't fund anything. Taxes are, quite literally, money destroyed.

There is an accounting illusion that taxes provide money to the government, and enable it to spend. That illusion is easy to dispel. It was true when government defined a commodity as money, and restrained itself to issuing currency based on its possession of that base commodity. That is now completely untrue, and has been for 44 years.

The government, btw, doesn't actually borrow money. It issues securities, for which it receives no money. People pay for them, but the assets with which they part do not make it into the government's hands.

This is not "over-analysis", but a basic understanding of monetary economics and federal finance. If you believe what you are posting, you don't understand the system (again, no insult intended, most people don't. One of my missions in posting is to widen appreciation for how the system works. It's not a partisan thing. Knowing how the system works ought to help anyone, no matter what their perspective). Lack of understanding often leads to wild conspiracy theories about banks and the Fed - but those are pretty much primitive myths similar to the pantheistic myths created by the ancient to fill in things they knew they didn't understand.

//Running surpluses means you don't have to levy so many taxes to pay for borrowing//

- This actually turns out to be untrue. If you've heard of the paradox of thrift, it sort of fits into that category.

 

[TemplarKormac]

Its a simple matter of income and expenses. That's what it all boils down to. Even a monetarily sovereign government has them. Perhaps the reason we have so many spending problems is because of an over complicated tax system. All you need is a simple way of managing money.

 

[Pksimon2007]

Start with a balanced budget amendment.

So if no balanced budget, then what? How is money managed?

- Basically using a sectoral balances analysis, which establishes the fiscal space in which government can operate. Currently, under neoclassical economics, governments use a calculation which produces what they call the intertemporal budget constraint, which enables them to determine the range of options open for spending and taxation.

This model is hopelessly flawed, and has predicted disaster every year since it has been employed. The disaster it predicted has never happened, of course, so economists are forever trying to explain away their predictive failure.

The sectoral balances model was developed around 1983, and has been used successfully among academics to predict exactly the things it's supposed to (even including the 2008 market crash, which was missed by most economists).

The sectoral balances model works because it's an accounting model and money is, at its core, an accounting construct. Money is best understood in accounting terms: it is a liability of its issuer, and an asset of anyone who uses it. Understanding that simple concept allows one to explain not only federal finance and its effects, but to understand a great deal about credit markets which mainstream economists just miss (like the 2008 crash).

 

[Pksimon2007]

Its a simple matter of income and expenses. That's what it all boils down to. Even a monetarily sovereign government has them. Perhaps the reason we have so many spending problems is because of an over complicated tax system. All you need is a simple way of managing money.

- Again, it is not a matter of income and expenses. You're trying to graft a household model onto a government, and it doesn't work.

To say that government is successful if it taxes as much as it spends is like saying an oil company is successful if it collects as much oil from its customers as it sells to them.

An oil company is successful if oil flows out to its customers, and does not come back.

 

[Pksimon2007]

- Now if you want to backtrack and claim you would get rid of FICA as well, then you have to abandon your claim of sufficiency in revenues, and we have a very different problem evident in your proposal.

I never talked about FICA, stop changing the issue.

The issues here are your claim that the income tax is the only progressive tax and that I want to impose more regressive taxes on the poor. You are wrong on both counts.

Look, if you disagree with getting rid of the income tax, that's fine, we can have an argument on the merits of the position. But to keep lying and saying I want to add more taxes on the poor when I clearly state I want to remove the income tax and replace it with nothing is dishonest and I won't have it. That is not a debate.

To debate, you have to counter the argument of your opponent, not ignore his argument and create your own strawman.

There's another aspect that you haven't considered (I find it amazingly rare that anyone does).

Think about the effects of systems of taxation not in relation to each other, but in relation to the null hypothesis - no tax at all.

In such a scenario there is some basic income required for bare survival. Assuming similarity in location, age, and medical condition, that income required is the same or every one.

Let's call that mandatory income, all of which must be spent for the person's survival.

Let's call the remainder of one's income discretionary income (because there is no tax, disposable income is meaningless). This income can be spent, saved, or invested in any way one likes.

It represents your economic freedom.

It also represents the o my income which can be taxed, because taxation of mandatory income result, in extremis, in your death.

So what constitutes "fair"? If we tax 10% of everyone's income, what is the impact?

If your income is the mandatory income, we are literally taxing you to death.

If your income is 10% above the mandatory income, we are taxing 100% of your economic freedom.

If your income is 11 times the mandatory income, we are taxing 19% of your economic freedom.

A flat tax, then, has a disparate income on the liberty of the people it taxes, leaving more liberty to those who earn more, taxing all liberty from those of modest means, and barely impacting tehe liberty of the wealthy.

If you disagree that taxes impact liberty, then the argument of taxation becomes purely utilitarian, and the rhetoric of libertarians and the Tea Party become meaningless sophistry.

The only way to create a system which impacts the liberty which all have earned in equal measure is to Prevatte the bottom so that mandatory income is not taxed at all, and to impose highly progressive income taxes on everyone else.

I don't advocate a flat tax to replace the income tax, I advocate not a Fair Tax or a Flat Tax, but no tax.

- If there's no tax, then how do you claim $1.6 trillion in tax revenue?

Not no tax, no income tax. So the revenue comes from everything other than the Income Tax.

- Right. Most of which is FICA, which we both agree is regressive.

 

[ScienceRocks]

Start with a balanced budget amendment.

- The OP asked for a cost benefit analysis. That seems to be missing.

If asked, I can articulate very clearly the costs of a balanced budget amendment, and explain logically how destructive it would be.

Is there any argument FOR a balanced budget amendment that is based on anything other than emotion?

Balancing the budget is simple, as any common man has learned to live within his means. That, or spend recklessly and end up broken and on the streets. It's not emotional, it's realistic. How else do you address the spending? Clinton DID IT!

So, perhaps you are familiar with this paper

"Analyzing the Case for a Balanced Budget Amendment"

In it, the economists argue the benefits and drawbacks of a balanced budget amendment. Two of the main benefits of such an amendment are these:

1) A balanced budget amendment likely would inspire the government to increase savings to hedge against future problems in the broader economy.

2) An elimination of the deficit also would reduce the millions of dollars in interest that the government pays on its debt when it runs a deficit.

http://static1.squarespace.com/stat...4aeb9e4e4b088b975e88a0a/1420736996813/bbr.pdf

There are always drawbacks, (tax volatility, crisis management, social services, etc) as you are so easily given to, but you ignore the benefits. The price of success is failure. But you can't keep failing on purpose and hope to succeed.

- I explained in detail in an early post how a balance budget could be achieved, and the damage that would do.

Did you read that post? I have already answered the argument.

You may not be aware of some of the arguments going on among economists now in terms of government budgets (I don't mean that as an insult, it's just that the press and most public representations of ongoing economic arguments are very narrow, and [insultingly, I think], tailored to what writers think the public can understand).

The government is not a household. Period. Arguing that a business can balance its budget, or a household, holds no water - it depends on them being the same sorts of entities to have any logical validity, and they are not.

Let's begin with the basic proposition that a monetarily sovereign government issues its own currency, which the private sector uses.

It issues that currency as a flow of money from itself to the private sector, which is defined as a deficit. That deficit is defined as a private sector surplus. All deficits must be matched by surpluses somewhere.

To argue for a balanced budget is, ultimately, to argue that the private sector should never have a financial surplus - that is, that it should never be able to save without reducing income, that it should never be able to grow, and that it should become a zero-sum game in which the profit of one agent is the loss of another.

So if no balanced budget, then what? How is money managed?

We can balance the budget without cutting a fucking cent out of infrastructure, science, r&d and education. These areas have never caused a cent of DEBT. Clinton didn't cut shit from these areas and balanced the budget in the 1990's!

The military, your fucking wars, welfare and the healthcare system has drained this nation....Learn something or stop whining.

 

[ScienceRocks]

- Now if you want to backtrack and claim you would get rid of FICA as well, then you have to abandon your claim of sufficiency in revenues, and we have a very different problem evident in your proposal.

I never talked about FICA, stop changing the issue.

The issues here are your claim that the income tax is the only progressive tax and that I want to impose more regressive taxes on the poor. You are wrong on both counts.

Look, if you disagree with getting rid of the income tax, that's fine, we can have an argument on the merits of the position. But to keep lying and saying I want to add more taxes on the poor when I clearly state I want to remove the income tax and replace it with nothing is dishonest and I won't have it. That is not a debate.

To debate, you have to counter the argument of your opponent, not ignore his argument and create your own strawman.

There's another aspect that you haven't considered (I find it amazingly rare that anyone does).

Think about the effects of systems of taxation not in relation to each other, but in relation to the null hypothesis - no tax at all.

In such a scenario there is some basic income required for bare survival. Assuming similarity in location, age, and medical condition, that income required is the same or every one.

Let's call that mandatory income, all of which must be spent for the person's survival.

Let's call the remainder of one's income discretionary income (because there is no tax, disposable income is meaningless). This income can be spent, saved, or invested in any way one likes.

It represents your economic freedom.

It also represents the o my income which can be taxed, because taxation of mandatory income result, in extremis, in your death.

So what constitutes "fair"? If we tax 10% of everyone's income, what is the impact?

If your income is the mandatory income, we are literally taxing you to death.

If your income is 10% above the mandatory income, we are taxing 100% of your economic freedom.

If your income is 11 times the mandatory income, we are taxing 19% of your economic freedom.

A flat tax, then, has a disparate income on the liberty of the people it taxes, leaving more liberty to those who earn more, taxing all liberty from those of modest means, and barely impacting tehe liberty of the wealthy.

If you disagree that taxes impact liberty, then the argument of taxation becomes purely utilitarian, and the rhetoric of libertarians and the Tea Party become meaningless sophistry.

The only way to create a system which impacts the liberty which all have earned in equal measure is to Prevatte the bottom so that mandatory income is not taxed at all, and to impose highly progressive income taxes on everyone else.

I don't advocate a flat tax to replace the income tax, I advocate not a Fair Tax or a Flat Tax, but no tax.

- If there's no tax, then how do you claim $1.6 trillion in tax revenue?

Not no tax, no income tax. So the revenue comes from everything other than the Income Tax.

How about close the loop holes and make the top 10% pay their taxes??? Maybe close some bases and end some welfare. Jezzz.

 

[TemplarKormac]

Do you really believe that we are using our labor and industry as intensively as we possibly can?

No. It is being underutilized, for the simple matter of government funded entitlement programs, Government doesn't provide enough incentive for people to engage in labor, thus hampering our industry, therefore government cannot "use" it at all.

The government, btw, doesn't actually borrow money. It issues securities, for which it receives no money. People pay for them, but the assets with which they part do not make it into the government's hands.

I gather you are an economist simply by your language, and I would surmise I am at a disadvantage here, but I shall press on.

So, to answer this assertion, I must ask were all of this talk of borrowing money from China comes from. I can guess that China buys our securities, which I see literally as borrowing. Securities in this essence is us assigning our debt to someone else without gaining anything in return. Someone else holds our debt while we continue spending. What I see is our government essentially kicking a few dozen cans down the road.

This is what I think of when someone talks about government issued securities:

Government Security Definition Investopedia

 

[kaz]

Giving money to poor people in and of itself alleviates immediate needs but does little to assist with the underlying causes of poverty, chief among them, the lack of opportunities.

Providing low/no cost quality child care, classes to upgrade skills, and other "hand up" supports work but as long as the only jobs available are low wage service sector jobs, it won't do much good.

As for Republican policies which cost the U.S. jobs, let's start with giving tax breaks to corporations who shipped jobs offshore.

The U.S. is now outsourcing some aspects of defence contracts to China. There's a brain dead strategy if ever there was one.

What about min wage laws that price new workers out of the market? Any responsibility there or is that different somehow?

Yea...if I pay someone $7.50 an hour to sweep my floors, I would hire two guys at $3.75

You'd only get away with that because you flood the market with illegals willing to work for that fucking the low end American workers in the process. Though you've never hired anyone in your life.

Cut the low end of the wage scale and employers will keep the extra profit

That is what they have been doing for decades

We do that anyway. We just don't hire the losers not worth $7.25. You're self deluding

 

[TemplarKormac]

To say that government is successful if it taxes as much as it spends is like saying an oil company is successful if it collects as much oil from its customers as it sells to them.

An oil company is successful if oil flows out to its customers, and does not come back.

How does the government fund itself? I see the taxes as a means of income for our government. What else would there be for our government to draw an income from?

 

[Steinlight]

I never talked about FICA, stop changing the issue.

The issues here are your claim that the income tax is the only progressive tax and that I want to impose more regressive taxes on the poor. You are wrong on both counts.

Look, if you disagree with getting rid of the income tax, that's fine, we can have an argument on the merits of the position. But to keep lying and saying I want to add more taxes on the poor when I clearly state I want to remove the income tax and replace it with nothing is dishonest and I won't have it. That is not a debate.

To debate, you have to counter the argument of your opponent, not ignore his argument and create your own strawman.

There's another aspect that you haven't considered (I find it amazingly rare that anyone does).

Think about the effects of systems of taxation not in relation to each other, but in relation to the null hypothesis - no tax at all.

In such a scenario there is some basic income required for bare survival. Assuming similarity in location, age, and medical condition, that income required is the same or every one.

Let's call that mandatory income, all of which must be spent for the person's survival.

Let's call the remainder of one's income discretionary income (because there is no tax, disposable income is meaningless). This income can be spent, saved, or invested in any way one likes.

It represents your economic freedom.

It also represents the o my income which can be taxed, because taxation of mandatory income result, in extremis, in your death.

So what constitutes "fair"? If we tax 10% of everyone's income, what is the impact?

If your income is the mandatory income, we are literally taxing you to death.

If your income is 10% above the mandatory income, we are taxing 100% of your economic freedom.

If your income is 11 times the mandatory income, we are taxing 19% of your economic freedom.

A flat tax, then, has a disparate income on the liberty of the people it taxes, leaving more liberty to those who earn more, taxing all liberty from those of modest means, and barely impacting tehe liberty of the wealthy.

If you disagree that taxes impact liberty, then the argument of taxation becomes purely utilitarian, and the rhetoric of libertarians and the Tea Party become meaningless sophistry.

The only way to create a system which impacts the liberty which all have earned in equal measure is to Prevatte the bottom so that mandatory income is not taxed at all, and to impose highly progressive income taxes on everyone else.

I don't advocate a flat tax to replace the income tax, I advocate not a Fair Tax or a Flat Tax, but no tax.

- If there's no tax, then how do you claim $1.6 trillion in tax revenue?

Not no tax, no income tax. So the revenue comes from everything other than the Income Tax.

How about close the loop holes and make the top 10% pay their taxes??? Maybe close some bases and end some welfare. Jezzz.

The top 10% pay most of the tax burden with the income tax. They paid about 70% of the Income taxes last I checked. So your characterization that the Top 10% don't pay their taxes is incorrect.

 

[Pksimon2007]

Its a simple matter of income and expenses. That's what it all boils down to. Even a monetarily sovereign government has them. Perhaps the reason we have so many spending problems is because of an over complicated tax system. All you need is a simple way of managing money.

- If you're not intimately familiar with the schools of economics, let me clarify this for you, as labeling becomes an issue.

Classical economics is Adam Smith et seq, leading up to the middle to late 19th century, around the time of Marx, who was probably the last of the classical greats, and was the root of Marxian economics today.

In the late 18th century, the concept of marginal utility was introduced by Jeremy Bentham (at least it's credited to him). It was really formalized in the late 1800s by three economists simultaneously, Jevons, Menger, and Walras. Their thinking inspired the "marginalist revolution", which led to two significant schools of economic thought, one of which still dominates today: the Austrian school (Menger and Jevons), and the neoclassical school (Walras and Jevons).

The next great revolution actually occurred in two schools, and occurred simultaneously. One was the publication of Keynes' general theory, the other was Hayek's development of his theory of prices as information messages, which fundamentally changed Austrian theory (and divided it, I think, as well), but had a wider impact even among those who disagreed with his conclusions.

The Austrians developed a small but devoted following, which continues today. They are better respected by the public than they are among academics, but they have made some important contributions, even though I don't think their current, mostly Rothbardian approach is going anywhere.

Keynes' name was immediately coopted by neoclassicals, who grafted it on to their theory, calling it the neoclassical synthesis. This school is called "old Keynesianism" or neoKeynesianism, and was most popularized by Paul Samuelson, and is where his nephew, Larry Summers, comes from today.

Out of this rose monetarism, which was a brilliant neoclassical critique of the Synthesis, which proved profoundly valid as a critique during the 1970s. This moved many Old Keynesians to adopt a good deal of monetarist thinking, creating what they called the "New Synthesis", or "New Keynesian", or "saltwater" [MIT, near the Atlantic, was the center of this] school (as opposed to Friedman's "freshwater [Great Lakes] school), which includes, today, people like Krugman, Bernanke, and Stiglitz. While the Old Keynesians weren't really Keynesian at all, the New Keynesians are even less.

Amongst this were a number of economists who actually read Keynes and thought he was at least mostly right. They just called themselves Keynesians, but had basically zero impact on policy, although they did offer some well-respected critiques of the neoclassical approach. Eventually they came to call themselves post Keynesians. I work from their tradition. They are a heterodox school, far from the mainstream. We were fortunate to have Bernie Sanders hire one of our own, Stephanie Kelton, as his chief economist. If you follow him, many of his recent proposals show her influence.

 

[TemplarKormac]

Start with a balanced budget amendment.

- The OP asked for a cost benefit analysis. That seems to be missing.

If asked, I can articulate very clearly the costs of a balanced budget amendment, and explain logically how destructive it would be.

Is there any argument FOR a balanced budget amendment that is based on anything other than emotion?

Balancing the budget is simple, as any common man has learned to live within his means. That, or spend recklessly and end up broken and on the streets. It's not emotional, it's realistic. How else do you address the spending? Clinton DID IT!

So, perhaps you are familiar with this paper

"Analyzing the Case for a Balanced Budget Amendment"

In it, the economists argue the benefits and drawbacks of a balanced budget amendment. Two of the main benefits of such an amendment are these:

1) A balanced budget amendment likely would inspire the government to increase savings to hedge against future problems in the broader economy.

2) An elimination of the deficit also would reduce the millions of dollars in interest that the government pays on its debt when it runs a deficit.

http://static1.squarespace.com/stat...4aeb9e4e4b088b975e88a0a/1420736996813/bbr.pdf

There are always drawbacks, (tax volatility, crisis management, social services, etc) as you are so easily given to, but you ignore the benefits. The price of success is failure. But you can't keep failing on purpose and hope to succeed.

- I explained in detail in an early post how a balance budget could be achieved, and the damage that would do.

Did you read that post? I have already answered the argument.

You may not be aware of some of the arguments going on among economists now in terms of government budgets (I don't mean that as an insult, it's just that the press and most public representations of ongoing economic arguments are very narrow, and [insultingly, I think], tailored to what writers think the public can understand).

The government is not a household. Period. Arguing that a business can balance its budget, or a household, holds no water - it depends on them being the same sorts of entities to have any logical validity, and they are not.

Let's begin with the basic proposition that a monetarily sovereign government issues its own currency, which the private sector uses.

It issues that currency as a flow of money from itself to the private sector, which is defined as a deficit. That deficit is defined as a private sector surplus. All deficits must be matched by surpluses somewhere.

To argue for a balanced budget is, ultimately, to argue that the private sector should never have a financial surplus - that is, that it should never be able to save without reducing income, that it should never be able to grow, and that it should become a zero-sum game in which the profit of one agent is the loss of another.

So if no balanced budget, then what? How is money managed?

We can balance the budget without cutting a fucking cent out of infrastructure, science, r&d and education. These areas have never caused a cent of DEBT. Clinton didn't cut shit from these areas and balanced the budget in the 1990's!

The military, your fucking wars, welfare and the healthcare system has drained this nation....Learn something or stop whining.

Geez man, how many times have you glued that broken record back together?

 

[Wry Catcher]

The point being you spend money on poverty because it is needed. While you may not end all poverty, you provide a safety net, and programs to help people escape poverty

You "spend your money" on poverty!?!?! Jesus - the amount of money that this country has spent on poverty should make us all millionaires!!! How damned much "money" do we have to shell out!?!?!?

Geezzz. even the staunchest left wing communist liberal has the ability to understand that throwing good money after bad only gets you ZERO. This might be hard for you to understand, but I'll give it a shot. Read the following carefully....





IT DOESN'T WORK!!!!!

I'd rather spend my money helping Americans than nation building around the world.

You'll get no argument from me there. But what the hell, why not demand that people like George Soros and Al Sharpton pay what they owe in taxes? Soros? an estimated 12 BILLION - that's right BILLION. and Al Sharpton nearly 10 MILLION.

Here's a clue. If you or I owed that kind of money - we would be holding down a cell in Leavenworth.

If true, they should. But ... BUT your have no evidence to prove you're not lying. Provide it, or STFU!

Watch, like most of the New Right Wing, this clown will cut and run.

Hey guess what, Randall is right.

George Soros reportedly could face up to 7B tax bill after delaying payment for years Fox News

http://www.nytimes.com/2014/11/19/n...column-region&region=top-news&WT.nav=top-news

And while Randall is off $5 billion and $5.6 million respectively, they both owe tons of back taxes.

And you can shut your mouth.

No. I won't, and you can't make me (even if we stood toe to toe)

 

[Steinlight]

I never talked about FICA, stop changing the issue.

The issues here are your claim that the income tax is the only progressive tax and that I want to impose more regressive taxes on the poor. You are wrong on both counts.

Look, if you disagree with getting rid of the income tax, that's fine, we can have an argument on the merits of the position. But to keep lying and saying I want to add more taxes on the poor when I clearly state I want to remove the income tax and replace it with nothing is dishonest and I won't have it. That is not a debate.

To debate, you have to counter the argument of your opponent, not ignore his argument and create your own strawman.

There's another aspect that you haven't considered (I find it amazingly rare that anyone does).

Think about the effects of systems of taxation not in relation to each other, but in relation to the null hypothesis - no tax at all.

In such a scenario there is some basic income required for bare survival. Assuming similarity in location, age, and medical condition, that income required is the same or every one.

Let's call that mandatory income, all of which must be spent for the person's survival.

Let's call the remainder of one's income discretionary income (because there is no tax, disposable income is meaningless). This income can be spent, saved, or invested in any way one likes.

It represents your economic freedom.

It also represents the o my income which can be taxed, because taxation of mandatory income result, in extremis, in your death.

So what constitutes "fair"? If we tax 10% of everyone's income, what is the impact?

If your income is the mandatory income, we are literally taxing you to death.

If your income is 10% above the mandatory income, we are taxing 100% of your economic freedom.

If your income is 11 times the mandatory income, we are taxing 19% of your economic freedom.

A flat tax, then, has a disparate income on the liberty of the people it taxes, leaving more liberty to those who earn more, taxing all liberty from those of modest means, and barely impacting tehe liberty of the wealthy.

If you disagree that taxes impact liberty, then the argument of taxation becomes purely utilitarian, and the rhetoric of libertarians and the Tea Party become meaningless sophistry.

The only way to create a system which impacts the liberty which all have earned in equal measure is to Prevatte the bottom so that mandatory income is not taxed at all, and to impose highly progressive income taxes on everyone else.

I don't advocate a flat tax to replace the income tax, I advocate not a Fair Tax or a Flat Tax, but no tax.

- If there's no tax, then how do you claim $1.6 trillion in tax revenue?

Not no tax, no income tax. So the revenue comes from everything other than the Income Tax.

- Right. Most of which is FICA, which we both agree is regressive.

Most of which is FICA because Medicare makes up the largest portion of the budget after Defense. FICA goes exclusively to Medicare and Social Security, FICA doesn't fund the rest of the federal budget by law. FICA and the Income Tax fund separate things.

What's your point? FICA already exists, I never advocated implementing FICA to begin with or at this point increasing it. So your initial claims that the Income Tax is the only progressive tax and that I want to impose more taxes are false.

 

[TemplarKormac]

Its a simple matter of income and expenses. That's what it all boils down to. Even a monetarily sovereign government has them. Perhaps the reason we have so many spending problems is because of an over complicated tax system. All you need is a simple way of managing money.

- If you're not intimately familiar with the schools of economics, let me clarify this for you, as labeling becomes an issue.

Classical economics is Adam Smith et seq, leading up to the middle to late 19th century, around the time of Marx, who was probably the last of the classical greats, and was the root of Marxian economics today.

In the late 18th century, the concept of marginal utility was introduced by Jeremy Bentham (at least it's credited to him). It was really formalized in the late 1800s by three economists simultaneously, Jevons, Menger, and Walras. Their thinking inspired the "marginalist revolution", which led to two significant schools of economic thought, one of which still dominates today: the Austrian school (Menger and Jevons), and the neoclassical school (Walras and Jevons).

The next great revolution actually occurred in two schools, and occurred simultaneously. One was the publication of Keynes' general theory, the other was Hayek's development of his theory of prices as information messages, which fundamentally changed Austrian theory (and divided it, I think, as well), but had a wider impact even among those who disagreed with his conclusions.

The Austrians developed a small but devoted following, which continues today. They are better respected by the public than they are among academics, but they have made some important contributions, even though I don't think their current, mostly Rothbardian approach is going anywhere.

Keynes' name was immediately coopted by neoclassicals, who grafted it on to their theory, calling it the neoclassical synthesis. This school is called "old Keynesianism" or neoKeynesianism, and was most popularized by Paul Samuelson, and is where his nephew, Larry Summers, comes from today.

Out of this rose monetarism, which was a brilliant neoclassical critique of the Synthesis, which proved profoundly valid as a critique during the 1970s. This moved many Old Keynesians to adopt a good deal of monetarist thinking, creating what they called the "New Synthesis", or "New Keynesian", or "saltwater" [MIT, near the Atlantic, was the center of this] school (as opposed to Friedman's "freshwater [Great Lakes] school), which includes, today, people like Krugman, Bernanke, and Stiglitz. While the Old Keynesians weren't really Keynesian at all, the New Keynesians are even less.

Amongst this were a number of economists who actually read Keynes and thought he was at least mostly right. They just called themselves Keynesians, but had basically zero impact on policy, although they did offer some well-respected critiques of the neoclassical approach. Eventually they came to call themselves post Keynesians. I work from their tradition. They are a heterodox school, far from the mainstream. We were fortunate to have Bernie Sanders hire one of our own, Stephanie Kelton, as his chief economist. If you follow him, many of his recent proposals show her influence.

No, I'm not familiar with all the schools of economics. I'm not an economist. I don't study economics, primarily for the reason that it is overly complicated and hard to understand.

Perhaps you could simplify your responses for me. I am interested in carrying on this debate with you, but I must admit I am overwhelmed.

 

[ScienceRocks]

You "spend your money" on poverty!?!?! Jesus - the amount of money that this country has spent on poverty should make us all millionaires!!! How damned much "money" do we have to shell out!?!?!?

Geezzz. even the staunchest left wing communist liberal has the ability to understand that throwing good money after bad only gets you ZERO. This might be hard for you to understand, but I'll give it a shot. Read the following carefully....





IT DOESN'T WORK!!!!!

I'd rather spend my money helping Americans than nation building around the world.

You'll get no argument from me there. But what the hell, why not demand that people like George Soros and Al Sharpton pay what they owe in taxes? Soros? an estimated 12 BILLION - that's right BILLION. and Al Sharpton nearly 10 MILLION.

Here's a clue. If you or I owed that kind of money - we would be holding down a cell in Leavenworth.

If true, they should. But ... BUT your have no evidence to prove you're not lying. Provide it, or STFU!

Watch, like most of the New Right Wing, this clown will cut and run.

Hey guess what, Randall is right.

George Soros reportedly could face up to 7B tax bill after delaying payment for years Fox News

http://www.nytimes.com/2014/11/19/n...column-region&region=top-news&WT.nav=top-news

And while Randall is off $5 billion and $5.6 million respectively, they both owe tons of back taxes.

And you can shut your mouth.

No. I won't, and you can't make me (even if we stood toe to toe)

I am glad that billionaire will be paying his taxes. Tired of them cheating the system, but still driving on our roads, using our schools and police.

 

[TemplarKormac]

You "spend your money" on poverty!?!?! Jesus - the amount of money that this country has spent on poverty should make us all millionaires!!! How damned much "money" do we have to shell out!?!?!?

Geezzz. even the staunchest left wing communist liberal has the ability to understand that throwing good money after bad only gets you ZERO. This might be hard for you to understand, but I'll give it a shot. Read the following carefully....





IT DOESN'T WORK!!!!!

I'd rather spend my money helping Americans than nation building around the world.

You'll get no argument from me there. But what the hell, why not demand that people like George Soros and Al Sharpton pay what they owe in taxes? Soros? an estimated 12 BILLION - that's right BILLION. and Al Sharpton nearly 10 MILLION.

Here's a clue. If you or I owed that kind of money - we would be holding down a cell in Leavenworth.

If true, they should. But ... BUT your have no evidence to prove you're not lying. Provide it, or STFU!

Watch, like most of the New Right Wing, this clown will cut and run.

Hey guess what, Randall is right.

George Soros reportedly could face up to 7B tax bill after delaying payment for years Fox News

http://www.nytimes.com/2014/11/19/n...column-region&region=top-news&WT.nav=top-news

And while Randall is off $5 billion and $5.6 million respectively, they both owe tons of back taxes.

And you can shut your mouth.

No. I won't, and you can't make me (even if we stood toe to toe)

Really? Are you threatening me? Notice how you were quiet all that time, then came back like a small child and said

"nuh-uh, you can't make me! Nananana boo boo!"

Quite pathetic. For the sake of your credibility (or what's left of it) you should really heed my advice.