Thread: A Solution to the Economic Problem

Originally Posted by Anikdote

Me too for the most part, but there are somethings the private sector does a less than efficient jobs of providing certain goods or services, if in those cases we can utilize the public sector to increase private sector output, it'd be illogical to not.

I'm not terribly fond of stimulus spending, but the argument for it is the one I made above.

Why does your history lesson stop with the US? The size of the US public sector has absolutely increased and certainly more than I'd like, but our private sector has outpaced it at every step. It's frequently an impediment, but to say anymore your going to have to be more specific.

You can't lean towards socialism, you either are or you aren't. Opportunities to succeed here are unfortunately dwindling right now, the chances that you'll start at the bottom and rise to even the middle are getting fewer and farther between. I personally believe our education system plays the largest role in that, but that's another conversation for another thread.

All spending in governments should be more efficient. But it's impossible to study government efficiency when we can't even agree on annual budgets? I just know I want to minimize government and maximize the private sector.

I hate stimulus spending which provides nothing in the end to show for the spending. I know the federal government is funding city and county and state governments, through smoke and mirror accounting, so it's all just a big fricken welfare giveaway using debt money in which there is zero accountability.

I don't care how much the public sector has increased. I just know that the private sector can do quite well without government. Things like roads, or landing strips, or whatever the government intervenes to provide, can all be dealt with by the private sector. Again, place a new business in Timbuktu, let it have 1000 employees, and over time around that business all sorts of crap will pop up and then a government is formed and then life is never the same again. Governments just seem to spend and spend with no accountability.

The USA is 'leaning towards socialism' today so you can lean. We are creating a quasi socialist's society, a bit of a hybrid, because government feels the need to protect everyone.

I don't agree at all with you about dwindling opportunities in the USA. Any kid who focuses on their education, achieves a college degree in a career-oriented curriculum, understands a decent work ethic, and spends more time thinking about work and innovation than they do beer and babes and partying...they can make a very decent life in the USA.

=Reiver;1061598426]Its what that military burden is used for that's important: demand management and reducing market failure associated with technical progress. Comparing sizes of GDP contributions is actually useful in itself. A permanent arms economy approach, for example, will refer to the importanof market concentration and the impact on consumption and investment: i.e. Military 'waste" is a key aspect of re-absorbing surplus into the economy. Enabling stabilisation of the economy and reproduction of capitalist profit.

A dollar of consumption from the private sector is a dollar no matter who does the spending. General military spending is no more efficient than personal consumption or business innovation; all of them effect the private economy but at the end of the day a dollar spent is a dollar spent.

This sentence is actually an open-door for inefficiency. Unimpeded pollutors? Unimpeded property rights abusers? Come on, be serious!

It does not need to be an all-or-nothing approach. There's nothing wrong with pollution controls, except when those controls impede GDP growth, then the decision must be made which is more important. If pollution controls is deemed more important than the economic growth, this is fine, but the public must then understand this decision and not blame capitalism for these types of decisions.

Red herring! Market socialism actually shows 'more respect for the private sector'. Worker owned firms are still privately run. The only difference is that government has enforced property rights (I.e. We received the value of our labour), enabling further productivity gains from more efficient ownership patterns.

No red herring! Leave the private sector alone! It is going to do whatever it does based on it's own merits...period. Now if society wishes to protect and support those who cannot succeed in the private sector with welfare or socialism or government jobs, etc., then let government do this outside of the private sector...do not integrate them based solely on political pandering! Government will only be hamstrung based on how much funding the taxpayer is willing to provide.

You can't maintain your capitalist preference without government, who are required to enforce the resulting inefficient paradigm. Now if I was making some simple pareto efficiency point you could have a point. A pareto efficient outcome, for example, can perceivably include a complete dictatorship with all well-being going to an elite. I'm not. I'm referring to an individualism approach based on exhausting exchange opportunities whilst protecting property rights. You don't like it, but that reflects a tacit support for economic inefficiency (whixh you've just fleshed out in more detail)

Government has a role but it should be a separate entity role! Medicare is a good example in which government is 'forcing' a socialists program into a private sector industry and making very unreasonable demands on services and pricing. If government wishes to have Medicare, then ask the taxpayers to fund the total cost of such program either by contracting to the private health care industry or government creating a separate brick & mortar health care system. Obamacare will be an equal disaster to the private health care industry. Both are destroying the efficiency and integrity of the private health care system...

Originally Posted by OldManOnFire

All spending in governments should be more efficient.

Never is though because of the nature of the beast; it's driven by democracy and we have a nasty habit of demanding bad policies, which is where the Constitution is supposed to come in...

I hate stimulus spending which provides nothing in the end to show for the spending. I know the federal government is funding city and county and state governments, through smoke and mirror accounting, so it's all just a big fricken welfare giveaway using debt money in which there is zero accountability.

I've seen some actual construction done with federal dollars in my district, several road improvements, whether that was an effective use of tax dollars is another issue entirely. But to say "nothing is provided" isn't correct either.

Things like roads, or landing strips, or whatever the government intervenes to provide, can all be dealt with by the private sector.

Maybe, maybe not. There certainly wouldn't be airports in many of the smaller cities in the US. The highway system revolutionized logistics in the US, and made it possible for Walmart to exist. That public works projects have contributed to our success is undeniable.

The USA is 'leaning towards socialism'

Still wrong. It's black and white, oil and water.

I don't agree at all with you about dwindling opportunities in the USA.

Whether you agree or not is irrelevant. It's a statement of fact unfortunately. So the wiki page on the subject is cited and may be easier to follow than the research used to support it: http://en.wikipedia.org/wiki/Socio-e..._United_States, but if you don't like wiki as a source, feel free to scroll to the bottom and check out the sources.

Belief in strong social and economic mobility -- that Americans can and do rise from humble origins to riches -- has been called a "civil religion",^[4] "the bedrock upon which the American story has been anchored",^[5] and part of the American identity (the American Dream^[6]), celebrated in the lives of famous Americans such as Benjamin Franklin and Henry Ford,^[4] and in popular culture (from the books of Horatio Alger and Norman Vincent Peale to the song "Movin' on Up"^[7]). Opinion polls show this belief to be both stronger now in America than in years past, and stronger than in other developed countries.^[8] However, in recent years several large studies have found that vertical inter-generational mobility is lower, not higher, in America than in those countries.^[4]

Several large studies of mobility in developed countries in recent years have found that the US among the lowest in mobility.^[4][8] One study (“Do Poor Children Become Poor Adults?")^[8][9][12] found that of nine developed countries, the United States and United Kingdom had the lowest intergenerational vertical social mobility with about half of the advantages of having a parent with a high income passed on to the next generation. The four countries with the lowest "intergenerational income elasticity", i.e. the highest social mobility, were Denmark, Norway, Finland, and Canada with less than 20% of advantages of having a high income parent passed on to their children. (see graph)^[8]

It's also a fact that the greater factor in determining whether you will be a wealthy adult, is the wealthy of your parents. Obviously there's a great deal of variables involved in that comment, but it remains true nonetheless.

[QUOTE]

Originally Posted by Anikdote

Never is though because of the nature of the beast; it's driven by democracy and we have a nasty habit of demanding bad policies, which is where the Constitution is supposed to come in...

Democracy is just an excuse. There is zero accountability, government can create all the money they wish or use creative accounting procedures. We have $15 trillion in debt and this is only one example of zero accountability. Nothing will change because of the nature of the beast referring to people; people are generally self-serving, greedy, demand more than they are willing to pay, then act like this is acceptable behavior.

I've seen some actual construction done with federal dollars in my district, several road improvements, whether that was an effective use of tax dollars is another issue entirely. But to say "nothing is provided" isn't correct either.

I was 'generalizing' but yes a few road projects have been done. But where was the American challenge and grit in completing a few shovel-ready road projects? We have spent enough stimulus to build how many Yellowstone's?

Maybe, maybe not. There certainly wouldn't be airports in many of the smaller cities in the US. The highway system revolutionized logistics in the US, and made it possible for Walmart to exist. That public works projects have contributed to our success is undeniable.

I think you are underestimating the private sector. The private sector can build roads and airports, etc. This does not require governments.

Whether you agree or not is irrelevant. It's a statement of fact unfortunately. So the wiki page on the subject is cited and may be easier to follow than the research used to support it: http://en.wikipedia.org/wiki/Socio-e..._United_States, but if you don't like wiki as a source, feel free to scroll to the bottom and check out the sources.

It's also a fact that the greater factor in determining whether you will be a wealthy adult, is the wealthy of your parents. Obviously there's a great deal of variables involved in that comment, but it remains true nonetheless.

Your supposed fact is not fact. If it was then you are sending the message to millions of our future kids to just give up now because there are no opportunities for you. Stop thinking about college, stop being creative, ignore innovation, ignore entrepreneurship, etc. etc.

And talking about 'wealth' is nothing but political and meaningless. Wealth is 100% in the eyes of the beholder! One man's wealth is another man's failure. If people are striving to be 'wealthy' then they are idiots because a majority will fail to achieve this. But this does not mean that opportunities do not exist...

Originally Posted by OldManOnFire

I think you are underestimating the private sector. The private sector can build roads and airports, etc. This does not require governments.

Of course it can, it's just not very incentived to do so. It's hard to capture the real value of things like roads and airports so, yes in some cases it may be wroth while, in many that create a great deal of wealth, they would not.

Your supposed fact is not fact. If it was then you are sending the message to millions of our future kids to just give up now because there are no opportunities for you. Stop thinking about college, stop being creative, ignore innovation, ignore entrepreneurship, etc. etc.

Hard fact to swallow. It doesn't mean give up, it means wake up. We either change the way we do things or the problem is only going to get worse.

And talking about 'wealth' is nothing but political and meaningless. Wealth is 100% in the eyes of the beholder!

By wealth I mean material and financial possessions. Whether those are important is subjective, but that they can create opportunities is not.

Originally Posted by OldManOnFire

A dollar of consumption from the private sector is a dollar no matter who does the spending.

That's not true. There is a distinction between counter-cyclical expenditure and general consumption. There is a distinction between technological investment and general consumption.

General military spending is no more efficient than personal consumption or business innovation; all of them effect the private economy but at the end of the day a dollar spent is a dollar spent.

Again not true. We know that the US has used the military sector as a counter-cyclical protection. We know that arms production has led to spin-off technologies such that economic growth has been generated (note much of the distinction between US and EU R&D expenditures has been military oritentated)

It does not need to be an all-or-nothing approach.

You're the only that gave the inappropriate statement, not me (you of course gave it whilst completely misrepresenting what socialism entails)

There's nothing wrong with pollution controls, except when those controls impede GDP growth

This isn't a cunning comment at all. It basically says that you're in favour of short term gains at the expense of long term costs. GDP will rise through polluting production, but that will often be at the expense of future production possibility (e.g. deaths experienced over time)

...and not blame capitalism for these types of decisions.

Capitalism feeds off the profiteering opportunities provided by asymmetric information. The Coase Theorem, for example, is essentially a neat summary for why the market cannot eliminate these problems (with moral hazard significantly increasing transaction costs through non-productive bargaining)

Leave the private sector alone!

That doesn't (and cannot) happen in capitalism. You may have constructed yourself a laissez-faire possibility, but its merely a bubble that ignores economic reality (and the inability to separate the public and private sectors, with the former required for the latter's continued 'success')

and support those who cannot succeed in the private sector with welfare or socialism or government jobs, etc., then let government do this outside of the private sector...

This is ignorant on two fronts. First, you through in socialism willy-nilly. This again shows that you haven't got a clue what socialism entails. Second, the private sector naturally delivers mass unemployment. The reserve army represents a substantial discipline device on the workforce. This ensures compliance and standard profit maximisation criteria to operate. Its the private sector therefore that ensures the need for welfare (as that ensures the physical efficiency of the unemployed can be maintained)

Government has a role but it should be a separate entity role!

It cannot be. Its the key economic agent in capitalism.

Medicare is a good example in which government is 'forcing' a socialists program into a private sector industry and making very unreasonable demands on services and pricing.

Utter garbage again, showing no understanding of socialism. Interventionism into health care has nothing to do with socialism. Instead it reflects two key aspects. First, as shown by empirical evidence into cost efficiency and production output, it tends to lead to efficiency gains. Second, we essentially have provision of a public good. This introduces market failure, by definition.

Originally Posted by stephantsapatoris

A Solution to the Economic Problem

Millions of dollars sit idle across the United States in the form of quarters, nickels, dimes and pennies--in sofas, drawers, and jars. This money is viewed as unimportant at a household level. But if on a single day even a fraction of that capital is knowingly invested in commerce by the purchasing of small items locally, we could jump-start the economy. August...20th, 2012 can be that day. In anticipation of a day of public trade, the stock market should grow increasingly stable, as certainty allows large-scale investors to make more educated decisions. On August 20th, 2012 simply buy something with your change. Together, we, the people, can improve our lives, our nation, and our world this way. It can't hurt; it could only help. Spread this message. August 20th, 2012. We can fix the economy together.

This won't solve our economic problem, but good try, I'll give it a like and a rep for the effort.

We don't need to worry about currency being taken our of the economy due to it being lost in couches because there is a constant inflation rate (at least in the US) that replaces that money in the economy. If you found every lost cent in America, all you would do is increase inflation.

Also the amount of lost money is minute as far as I can see, not enough to pull the US out of its recession.

There is an argument that inflation causes economic growth, but it is a very dangerous thing to do to the economy.

Originally Posted by OldManOnFire

Democracy is just an excuse. There is zero accountability, government can create all the money they wish or use creative accounting procedures. We have $15 trillion in debt and this is only one example of zero accountability. Nothing will change because of the nature of the beast referring to people; people are generally self-serving, greedy, demand more than they are willing to pay, then act like this is acceptable behavior.

So Obama can print 100 trillion dollars and get reelected? I would love to see that.

If things aren't good, politicians get replaced, and thus government is accountable for their actions, including their actions that caused debt.

I think you are underestimating the private sector. The private sector can build roads and airports, etc. This does not require governments.

Name a country that has all its roads created by the private sector. And not some third world country that has dirt roads.

Walmart and other businesses that rely on roads cannot exist with out government made roads. They might be able to take over the roads later, but how could they build their own roads before their business even exists and is profitable?

Originally Posted by Anikdote

Of course it can, it's just not very incentived to do so. It's hard to capture the real value of things like roads and airports so, yes in some cases it may be wroth while, in many that create a great deal of wealth, they would not.

Hard fact to swallow. It doesn't mean give up, it means wake up. We either change the way we do things or the problem is only going to get worse.

By wealth I mean material and financial possessions. Whether those are important is subjective, but that they can create opportunities is not.

In our current society government likes to take care of those services like roads, etc. but we do have private roads and bridges in the USA and it would be no problem to expand this. Instead of toll roads and bridges there would need to be another way for the private sector to obtain their funding.

I still disagree. There is no doubt in my mind that if I was 16 years old again in 2012, that I could finish high school, that I could avoid criminal activities, that I could obtain advanced or college education, and that I could find a reasonable career. Then I just need to be reasonably fiscally responsible and I would have a very enjoyable life. If I can do this with all of my limitations, then others can as well. At the same time, if people today wish to invest little to nothing in themselves, live with their parents, scratch out an existence, and find happiness in this scenario, I think this is just fine.

I think 'wealth' is severely politicized and overrated...

[QUOTE]

Originally Posted by Reiver

You're the only that gave the inappropriate statement, not me (you of course gave it whilst completely misrepresenting what socialism entails)

This isn't a cunning comment at all. It basically says that you're in favour of short term gains at the expense of long term costs. GDP will rise through polluting production, but that will often be at the expense of future production possibility (e.g. deaths experienced over time)

Capitalism feeds off the profiteering opportunities provided by asymmetric information. The Coase Theorem, for example, is essentially a neat summary for why the market cannot eliminate these problems (with moral hazard significantly increasing transaction costs through non-productive bargaining)

I don't appreciate you taking partial words out of context in an effort to make your points.

Originally by Oldmanonfire; It does not need to be an all-or-nothing approach. There's nothing wrong with pollution controls, except when those controls impede GDP growth, then the decision must be made which is more important. If pollution controls is deemed more important than the economic growth, this is fine, but the public must then understand this decision and not blame capitalism for these types of decisions.