Taxation

[blatantninja]

Do you have numbers backing federal costs from:
- 2 wars?
- yearly loss in revenue due to Bush tax cuts?
- yearly loss in revenue due to the recession/depression?

Add that up and compare that with the yearly delta fed costs of the new health plan, and I am SURE you'll find that the health changes care is peanuts.

So I can claim that you are lying as well. Thanks for being true to your nature.

Have you even read the health bill?

And for reference, the incremented cost of the two wars is estimated at about $1.2T, that's roughly $100B per year. The total cost of the HealthCare bill is expected to come close to $1T a year over the next decade if all of the 'cost savings' aren't realized (and there is little doubt that even half of them will be realized).

as for the bush tax cuts, that number is a lot harder to track down as there are many factors, but consider this: Tax receipts in 2000 were roughly $2.5T (before the cuts were enacted). They dropped to $2.1T during the '01-'02 recession, then rebounded to about $2.6T in 2006, before falling back to about $2.1T in 2009. So in essentially a decade of stagnant to negative growth, at its worst, tax receipts declined by by 20%.

Spending on the other hand has gone from $2.2T in 2000 to $2.8T in the ENTIRE 8 years of Bush's presidency. In THREE years of Obama's presidency, it has gone from $2.8T to $3.77T .

So who's the spendthrift now?

You completely ignore the main point because you are blinded by your hate for Republicans. We all know the economy was in bad shape at the end of Bush's 2nd term, and because of that, federal tax receipts were down. Yet, what did Obama due? He increased spending. Yes he tried to raise taxes and got mixed results, but when he didn't get what he wanted, he should have reduced his spending. He didn't.

 

[blatantninja]

Swedish government spends 52 % of our GDP. Our economy grows by 3 % a year. You go figure.

Übereil

Obviously you have more faith in your government that we do, but even so, your economy does NOT grow at 3% a year. In 2008 you had a growth of -0.4%, in 2009 -5.1%. if you look at the graphs, the yearly GDP change isn't much different than any other western country, including the US.

 

[Ubereil]

Obviously you have more faith in your government that we do, but even so, your economy does NOT grow at 3% a year. In 2008 you had a growth of -0.4%, in 2009 -5.1%. if you look at the graphs, the yearly GDP change isn't much different than any other western country, including the US.

You want a representative view of our economy and you look at how much it grew in the middle of an international financial crisis? That data kind of isn't representative for how our economy grows over time (which is the economic growth that's interesting when checking how it's affected by government spending - economic growth over time).

Though I'm not sure where I got 3 % from (probably last year). I tried to find data for economic growth over time, but I couldn't find any good. The best I could find was gapminder (which works up to 2004 and looks at economic growth for the last ten years. Or rather, it works to 1994 and looks at economic growth for the coming ten years). According to that the economic growth aspect is quite even between the two of us.

Kind of weird, considering that high government spending is supposed to kill economic growth, that Sweden isn't dragging behind at all, isn't it?

Übereil

 

[blatantninja]

You want a representative view of our economy and you look at how much it grew in the middle of an international financial crisis?

The point is that you were no more insulated from that crisis than the rest of us, and you fared no better than the rest of us before it. ( I meant to add that in the previous post but forgot).

Here's a google site that allows you to lay the graphs one over the other:

Sweden vs US vs UK

Kind of weird, considering that high government spending is supposed to kill economic growth, that Sweden isn't dragging behind at all, isn't it?

Government spending doesn't necessarily kill economic growth. The problem arises when the government isn't efficient enough. The Swedish government is significantly smaller than the US and as with any bureaucracy, the larger it gets the more inefficient it becomes. Sweden spending 53% of GDP via the government may not be that much of a drag on the economy because it is able to be more efficient. The US government may be the most inefficient government in the history of western civilization.

 

[rossrjensen]

Swedish government spends 52 % of our GDP. Our economy grows by 3 % a year. You go figure.

Übereil

Did at least…

http://www.google.com/publicdata/ex...WE&dl=en&hl=en&q=sweden+gdp+growth+rate+chart

Edit: Looks like someone beat me to the punch there...

 

[rossrjensen]

Kind of weird, considering that high government spending is supposed to kill economic growth, that Sweden isn't dragging behind at all, isn't it?

For me it's not so much a question of whether spending is going to help or hinder growth (though I firmly believe that encouraging private industry by keeping government spending very limited is the better answer), it's more of a question of freedom. To me, freedom is being able to choose how and where I spend my money. The greater the taxation, the more I am being coerced to spend my money in particular ways. To me, that's just not right.

Others would counter that the government spending takes care of their citizens, allowing them freedom to live without constant worry that they must pay an incredibly high health premium (or any other benefit designed to protect or improve a lifestyle) in case they get sick or hurt. I simply don't see it that way. Like a good role-playing game, we should make choices in our lives and being willing to live with the consequences.

 

[Ubereil]

Did at least…

http://www.google.com/publicdata/ex...WE&dl=en&hl=en&q=sweden+gdp+growth+rate+chart

Edit: Looks like someone beat me to the punch there…

Indeed. I even managed to squeeze in a post pointing out that temporary trends is uninteresting when comparing different systems/strategies. One year isn't a long enough time span to get an accurate picture of how a system effects the economy, because what you will see will mostly be the business cycle.

Like a good role-playing game, we should make choices in our lives and being willing to live with the consequences.

I hear what you're saying, and in the same vein I want to give my own view: cooperation makes us stronger. A group will be able to come up with a single plan that's better for the group than if every single invididual in that group comes up with a plan for himself.

And real life isn't a role-playing game. A failed gamble in a role-playing game is annoying, a failed gamble in real life is heartbreaking. Failure in an RPG isn't nearly as serious as failure in real life. To that happiness isn't a linear thing, it's logarithmic. So ensuring a high minimum quality of life* has a really high payoff compared to giving pepole a chance on unlimited success. Because even if an equal amount of pepole gets unlimited success as fails horribly (which is never the case - the former is always dwarfed by the second) the suffering outweight the good.

* In practise this isn't possible, but we can at least minimize the risk of falling beneath said minimum quality of life.

Übereil

 

[Maylander]

Norway wasn't really affected by the crisis - there was a slight dip around 2009, but that's about it.

However, it's already been pointed out here on the Watch several times that Norway is something of an exception, and not the rule, so we might as well leave it at that.

Edit, here's the main reason why Norway's economy is so stable:
http://en.wikipedia.org/wiki/The_Government_Pension_Fund_of_Norway

 

[blatantninja]

Norway wasn't really affected by the crisis - there was a slight dip around 2009, but that's about it.

However, it's already been pointed out here on the Watch several times that Norway is something of an exception, and not the rule, so we might as well leave it at that.

Edit, here's the main reason why Norway's economy is so stable:
http://en.wikipedia.org/wiki/The_Government_Pension_Fund_of_Norway

Working for a Norwegian firm myself, I would disagree that the Government Pension Fund itself is any part of the reason why Norway's economy is relatively stable. It's stable because the primary economic driver is the underlying oil production from the North Sea and demand and profits have been relatively stable.

Of course, if you want to look at your future, take a look at Texas in the 80's. Texas was at one point the largest producer of oil in the world. Royalties from the state owned reserves were used to fund the two main Universities there (via the Permanent University Fund).

Everything was wonderful. Tuition was next to nothing. Fundraising was ignored as there was no need.

Then the oil bust in the 80's came. It affected the entire state (significant unemployment, housing crashes, etc.), but what really hurt where the Universities. While still a good deal, tuition went from a few hundred dollars at most in the 80's for an entire semester, to now running about $6000 or so a semester.

Very dangerous to tie your economy to a depleting asset.

 

[Maylander]

Working for a Norwegian firm myself, I would disagree that the Government Pension Fund itself is any part of the reason why Norway's economy is relatively stable. It's stable because the primary economic driver is the underlying oil production from the North Sea and demand and profits have been relatively stable.

Of course, if you want to look at your future, take a look at Texas in the 80's. Texas was at one point the largest producer of oil in the world. Royalties from the state owned reserves were used to fund the two main Universities there (via the Permanent University Fund).

Everything was wonderful. Tuition was next to nothing. Fundraising was ignored as there was no need.

Then the oil bust in the 80's came. It affected the entire state (significant unemployment, housing crashes, etc.), but what really hurt where the Universities. While still a good deal, tuition went from a few hundred dollars at most in the 80's for an entire semester, to now running about $6000 or so a semester.

Very dangerous to tie your economy to a depleting asset.

What you say is true, which is why the fund has to be invested into other, sustainable industries.

That being said, the fund does help stability simply by existing. Generally, the fund isn't actually used, and doesn't affect economy directly, but investors, banks, consumers and so on in Norway are all well aware that the government is wealthy enough to bail pretty much anyone out if it's needed to save the economy. It's easier to keep the economy going when consumers do not fear spending.

Simply put: "High risk" in Norway isn't as high risk as it is in most other countries - there's a back up plan that people have enough faith in to keep investing/buying/consuming.

 

[blatantninja]

I would agree with that. The problem, as Texas saw, is that its very difficult to shift into those other sustainable industries.

 

[Maylander]

I would agree with that. The problem, as Texas saw, is that its very difficult to shift into those other sustainable industries.

Indeed, it has to be done while the economy is still stable - before the bang, not after. Basically, Norway has to shift before they are required to do so.

That is a tough call to make though - what politician would take that kind of risk? Invest huge amounts of money into something that might be a better option in the long run, instead of just grabbing the black gold right in front of their noses?

Instead, I suspect they'll do what they always do: Wait untill the last possible moment, and then try to dodge the incoming train. Usually doesn't work out too well.

 

[Thrasher]

Also, the short-term profit driven free markets are terribly bad at these kinds of major economic shifts.

 

[blatantninja]

Also, the short-term profit driven free markets are terribly bad at these kinds of major economic shifts.

That really gets to another fundamental issue in that quarterly profits are basically the entire driver of the market. There are a lot of reasons for that, not the least of which are a broader economic group of the shareholding public and 24/7 media coverage. There was a great Barron's article in '04 about companies that refuse to give earnings estimates and some that only report annually and how they fared better in the long term.

 

[Thrasher]

That sounds like an interesting read. I'll wager they have less executive turnover, and compensation expenses.

 

[rossrjensen]

I hear what you're saying, and in the same vein I want to give my own view: cooperation makes us stronger. A group will be able to come up with a single plan that's better for the group than if every single invididual in that group comes up with a plan for himself.

And real life isn't a role-playing game. A failed gamble in a role-playing game is annoying, a failed gamble in real life is heartbreaking. Failure in an RPG isn't nearly as serious as failure in real life. To that happiness isn't a linear thing, it's logarithmic. So ensuring a high minimum quality of life* has a really high payoff compared to giving pepole a chance on unlimited success. Because even if an equal amount of pepole gets unlimited success as fails horribly (which is never the case - the former is always dwarfed by the second) the suffering outweight the good.

* In practise this isn't possible, but we can at least minimize the risk of falling beneath said minimum quality of life.

Übereil

I can agree with the basic idea behind that, but the problem arises when the group comes up with a better plan for the group, but a worse plan for the individual. It would only work in a completely homogenous-thinking group, with similar thoughts and goals. But in a non homogenous-thinking group, it is going to cause unrest. Someone will say, that's not freedom to me, that's my freedom being squashed by the masses in an effort for them to have a better life at my expense. My ideal would be that no person, regardless of success, wealth, political stance, etc., should be forced to give up what is theirs so that others can have a lifestyle that is as good as that person or closer to being as good as that person. If they choose to give up what is theirs, that's something else entirely. As an alternative, I propose we all to come up with our own individual plans. That way nobody can complain about someone else letting them down, the failure or success of their plans falls squarely on their own shoulders.

The common argument would be that some have unfair advantages over others. We can debate on what does and what does not constitute fair (is it fair if one person is simply smarter than another or another person has a better work ethic than a counterpart...these are apparently debatable), but what we can try to do is allow people a similar level of access to information so they can make their own decisions/plans as best as possible.

 

[Ubereil]

I can agree with the basic idea behind that, but the problem arises when the group comes up with a better plan for the group, but a worse plan for the individual.

Let's say we have group A and group B, both consisting of 20 pepole. Group A follows my principle, and adopts a common plan that's overall best for the group, but at the expense of one individual. Group B adopts your principle, and the rest of the group suffers, but said individual is better off.

If you were to be a random person in either group A or group B, which group would you choose? Picking B is easy when you know you're that one person who is better off in B, but when there's a 1 in 20 chance that you're better off in B and a 19/20 that you're better off in A?

This… trope (or what to call it) is known as the Veil of Ignorance, by the way: "You" (an individual who knows political science, economy and everything else worthwhile to know on the topic) are to create a society, drafting all laws and starting all institutions and so on. There will be pepole living in said society, and you will be one of them (switching knowledge, experiences, parents etc with said person), but you don't know who you'll switch place with (it will be selected at random). What kind of society would you create?

It would only work in a completely homogenous-thinking group, with similar thoughts and goals. But in a non homogenous-thinking group, it is going to cause unrest.

Not more than any other plan. You think the rest of the group will be glad that the individual ruins their plan by not playing along?

Someone will say, that's not freedom to me, that's my freedom being squashed by the masses in an effort for them to have a better life at my expense.

Said person has made the mistake of using some plan where he doesn't have to give anything up as the default. The problem is that there isn't a default plan where nobody loses out. Sure, there are pepole who are better off in a libertarian society than in a social democratic welfare state who might claim that their well being is being sacrifized for the greater good. But if we go the other way, there are other pepole who are better off in a social democratic welfare state than in a libertarian society who can make pretty much same claim (their happiness is being sacrifized for the benefit of those who'd be worse off in the social democratic welfare state). If you compare two different systems there will, regardless of systems being compared, be those who are better off in one system and others who are better off in the other.

If we amplify it to it's most extreme (for clarity) - let's say we're choosing between killing one so 50 can live. The one might claim what you claimed, his/her freedom is being squashed by the masses in an effort for them to have a better life at his/her expense. Well, the option is that 50 dies. Is his/her freedom really worth more than the freedom of 50 others?

Übereil

 

[zahratustra]

That's an excellent rebuttal Ubereil. Well argued and well done!