Thursday, May 12, 2011

Questioning Some Economic Assumptions

Let me see if I have this right. I could be wrong, so feel free to correct me.

For thirty years you believed Republicans when they said deficits don't matter. While they were promoting this idea, you were happy with the tax cuts they made, believing that "starving the beast" was a good thing because Republicans told you it was.

Now you've changed your tune and you believe that deficits do matter but hasn't occurred to you that they lied to you for thirty years about deficits. Deficits do matter and they told you they didn't.

In the meantime, they've cut taxes - i.e. revenue - and made up the difference by borrowing so that the government could maintain it's obligations to it's people. Even though they've cut revenue income and replaced it with borrowed funds that must be repaid, you now believe them when they tell you that we have a spending crisis and not a revenue crisis?

Beyond that, when it comes to creating jobs you believe Republicans when they tell you that further tax cuts (additional reductions in revenue forcing more borrowing) will somehow create jobs. Yet the numbers are pretty clear. During the Clinton administration (eight years), more jobs were created than during the Reagan administration (eight years), the Bush I administration (four years) and the Bush II administration (eight years) ... combined! But, in spite of the numbers, you believe them.

When Republicans tell you that "tax credits" are a good thing you believe them because you believe anything that reduces taxes for anyone must be a good thing ... and because that's what Republicans have been telling you for years. They don't bother to mention that even though "tax credits" may reduce taxes for some, they leave a gap in tax revenue that must be made up for either by additional borrowing or higher taxes for others.

For years Republicans have told you that government is inefficient and you believe them ... in spite of the fact that Medicare (a government administered program) delivers excellent health care for 41.61 million people with only a 3% overhead while private insurance companies require more the 15% to provide service that's not as good. Paying 5x for the same or inferior service doesn't seem like the epitome of efficiency. (Ask anyone who's paid for their own insurance for any period of time before qualifying for Medicare which of the two they prefer.) Keep in mind that for the most part Medicare delivers services to people who are 65+; people who tend to need more health care services, while private insurance companies a.) serve a younger demographic who tend to need less health care overall, b.) have eliminated people with preexisting conditions (i.e., people who actually need health care) and retain people who don't need health care and c.) limit coverage with it gets too expensive - making the disparity even more striking.

Every system has waste but when Republicans talk about waste, they only talk about it in terms of government waste, without comparison to anything else ... but you believe them when they say government is wasteful. It is. But compared to what?

Wednesday, May 11, 2011

10 Republican Lies About the Bush Tax Cuts

So it's come down to this. On Saturday, David Stockman, the legendary Reagan budget chief who presided over the Gipper's supply-side tax cuts, announced that the "debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts." The next day, the former Fed chairman Alan Greenspan, who famously helped sell the 2001 Bush tax cuts to Congress, declared them simply "disastrous."

Sadly, Stockman and Greenspan are just about the only voices in the Republican Party speaking the truth about the fiscal devastation wrought by the expiring Bush tax cuts. After all, the national debt tripled under Ronald Reagan, only to double again during the tenure of George W. Bush. And as it turns out, the Bush tax cut windfall for the wealthy accounted for almost half the budget deficits during his presidency and, if made permanent, would contribute more to the U.S. budget deficit than the Obama stimulus, the TARP program, the wars in Afghanistan and Iraq, and revenue lost to the recession - combined. Of course, you'd never know it listening to the leaders of GOP.

Read up on the 10 Lies here ...

Sunday, May 08, 2011

An Open Apology to an Ayn Rand Fan

I'm sorry you've taken what I've said as an attack on your intellect. I admit that my interpersonal skills are flawed but I honestly though I was giving your opinions all the respect they are due. After all, you offered a tightly reasoned argument (in the form of an urban legend written by someone else that you didn't credit) and concluded "Socialism doesn't work."

I attempted to question your logic by offering a counter example of a situation in which capitalism didn't work (18th and early 19th century fire companies*) followed by a text book recitation of why it's a logical error to extract a general principle from a single, specific instance: effectively, if a saw fails at pounding nails does that mean it fails as a tool?

You quickly, succinctly and eloquently refuted my argument - well, not really refuted it. To refute it would involve pointing out where my error was. What you did say was, "I don't buy it."

Now, given that the example of fire companies that I gave is historically accurate and the recitation I provided demonstrating that it's a logical error to draw a general conclusion from a single instance parallels every textbook on the subject of logic, I can only conclude that what you're not buying is logic itself and that you have developed a means of analysis superior to logic. I'll take your word for it. Unfortunately, my intellect is saddled with the constraints of logic which render me incapable of "free thinking". I now recognize that logic is a handicap like the blinders worn by slavish draft horses that prevent them from looking at anything that isn't directly in front of them.

I admit that I made a grave error in neglecting to point out that the socialism practiced by the successful constitutional democracies of Europe (and Japan) is not quite the same socialism that was practiced by the totalitarian Soviet Union - which history indeed tells us failed - so you were right about history! Well, you were sorta right... if you assume the the socialism of the successful countries of Europe was the same as the Soviet socialism... but, heck, the Soviet Union did actually have "Socialist" in their name and that should be enough to settle the matter! (Of course, the National Socialist German Workers Party [NAZI] had socialist in their name, too, yet they were rabidly anti-Communist. History tells us that socialists were among the first people they sent to the camps .... but that's another story altogether.)

In the meantime, we'll just have to wait a bit for history to prove that the now successful countries of Europe will fail as a result of their misguided implementations of what I believe you would define as socialist ideas throughout their economies. But from my read of what you'd written, it's obvious that history will vindicate your position and that the now successful countries of Europe (and Japan) will eventually fail.

Far from questioning your intellect, I admire it! History shows us that single minded, blind dedication to an idea often triumphs over mere logic. That's why I recommended that you establish an economics consultancy in order to save the countries of Europe (and Japan) from their inevitable failure. I would not presume to do so myself because my knowledge of economics (hampered as it is by the restrictions of logic) is incomplete and obviously inadequate. But you, on the other hand - unhampered by logic and in possession of the truth that history shows us - that socialism doesn't work - have far more to offer than I would.

So, bottom line, I most sincerely apologize if you took what I have written as questioning your intellect. I hope that you will accept my apology in the spirit in which it's offered.

*Late 18th and early 19th century for-profit fire companies did, in the spirit of totally unrestricted , unregulated free enterprise, evolved a business model that would be admired by Mafia dons running down and dirty protection rackets in the early and mid-20th century - as in "pay up or we'll burn yer f&%king house down."