Federal Budget: Simplified

Discussion in 'Political Opinions & Beliefs' started by Anikdote, Dec 14, 2011.

  1. Anikdote

    Anikdote Well-Known Member

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    [​IMG]

    Found this out there on the web and thought I'd share it with this group, I don't really agree with "vote them all out" -- because truth be told there are probably 1-2 that are worth keeping, but in general the budget process is a complete joke and we NEED a balanced budget amendment.
     
  2. Black Monarch

    Black Monarch New Member

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    I agree. Let's start with everything that's not authorized by the Constitution and see what's left.

    Oh wow, we just chopped off 2/3 of the budget! Wasn't that easy?
     
  3. Ethereal

    Ethereal Well-Known Member

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    The typical statist response is that governments do not have to abide by the same economic fundamentals of a household or an individual or even a corporation.

    Apparently, governments operate under a different set of economic laws and principles as every other entity on the planet.
     
  4. thediplomat2.0

    thediplomat2.0 Banned

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    Well, a household is a better example than an individual. After all, the complex circular flow diagram utilized by economists includes households, firms, the rest of the world, financial markets, and the government. It does not include individuals.
     
  5. DA60

    DA60 Banned

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    Great thread.
     
  6. Anikdote

    Anikdote Well-Known Member

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    I'm not a "statist" but governmental budgets do work different than household budgets, well unless your household is concerned with currency issues. That's one example, but there are others. Regardless of this, I'm a huge fan of a balanced budget amendment, I just don't think we'll ever see it.

    Thank you sir.
     
  7. Ethereal

    Ethereal Well-Known Member

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    Individuals are the fundamental unit of social organization. You cannot disentangle the individual from any socioeconomic analysis.
     
  8. Anikdote

    Anikdote Well-Known Member

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    But you have to step back from the issues of a household/individual when analyzing federal budgets. I'm not justifying their actions, but simply pointing out the fact that budget analysis for an individual is infinitely less complex than government budgets.

    Again, spending more than you take in, is almost always wrong.
     
  9. Ethereal

    Ethereal Well-Known Member

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    I agree that they work differently, but I've always maintained that they're beholden to the same fundamental economic limitations and principles that apply to individuals, households, and businesses. The only difference is the scale.

    And I know you're not a statist. I've read your posts before.

    I'm also a fan, and I agree that we're unlikely to ever see one.
     
  10. Ethereal

    Ethereal Well-Known Member

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    I agree that it is more complex, but I do not believe the complexity of government finances excludes it from the same fundamental limitations and principles that apply to all other economic entities.
     
  11. thediplomat2.0

    thediplomat2.0 Banned

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    Socioeconomic analysis is completely different from pure macroeconomic analysis. The circular flow diagram, which deals strictly with markets and the flow of money, and goods and services from one to another is devoid of social aspects. However, if one were to look at a circular flow diagram, one would see that households and the government are included. Therefore, from a macroeconomic perspective involving only empirical analysis, comparison of a household budget to the federal budget is more legitimate than the comparison of an individual's budget to the federal budget.
     
  12. Anikdote

    Anikdote Well-Known Member

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    Well... I don't want to disagree, but the fact that they :

    a) create and print currency
    b) have control over exchange rates
    c) can, with the power of the vote increase revenue

    Make them quite distinct from virtually every other economic entity. I keep wanting to say they're also get to run budget deficits... but people do that all the time now with credit cards.
     
  13. Ethereal

    Ethereal Well-Known Member

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    Economics is a social "science".

    That's because it's an idealized simplification of a series of interconnected and complex processes. But implied within the circular flow diagram are assumptions about social dynamics.

    The only difference is the scale. The individual is the fundamental unit of social and economics organization, and households and governments are merely an aggregation of individual actors and actions.
     
  14. thediplomat2.0

    thediplomat2.0 Banned

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    And the relationship between households and governments is that they are aggregations of individual actors and actions. Both are macroeconomic entities instead of microeconomic entities. It's a lot harder to compare a microeconomic entity (individual) to a macroeconomic entity (government).
     
  15. Ethereal

    Ethereal Well-Known Member

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    I think there is a misunderstanding here. I understand and agree that governments abide by different operational parameters than an individual or household. My contention is that they are still beholden to the same economic limitations and principles as individuals, households, and corporations regardless - the only difference is the scale and operational parameters of the respective entities. I believe your OP demonstrates this fact quite aptly.

    Ultimately, governments can only defy the laws of economics for so long. Eventually, they will succumb to the "economy's" tendency to maintain equilibrium.
     
  16. Ethereal

    Ethereal Well-Known Member

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    I understand the distinction, but I believe they are inextricably related to one another, and that this relationship informs the characteristics and qualities of the aggregations.
     
  17. Anikdote

    Anikdote Well-Known Member

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    I could probably quibble over details, but I get the feeling we see eye to eye on this for the most part and appreciate your contribution.
     
  18. Ethereal

    Ethereal Well-Known Member

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    Yes, I think we are on the same page, but feel free to quibble. This is an internet forum, after all...:-D
     

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