Fluther: Hello Republicans and Baggers. How do you cut spending?

“Your beliefs are irrelevant.”

As are yours. You seem to believe that people that make over $250K stick their money in a mattress. Nobody ever got rich by sticking thier money in a mattress. They invest it. The money provides capital for plant upgrades, venture capital for new businesses, and capital for government bonds. All spur the economy. Government spending is less effective. Building a new road or repairing an old one may seem beneficial but it has no long term economic stimulus. The job gets done and there’s no long term economic growth. Investment on the other hand continues. A plant improvement or a new venture, continues to provide product for many years. Building the roads is useful, just not stimulus.

Unemployment is supposed to be a bridge, not a career. Most states have depleted their unemployment reserves and are now raising the unemployment tax. This pulls money out of the economy and slows growth. I know it sounds easy to say they need it and spend it but you also have to look at where it comes from. We’ve taken a program that was very useful and bastardized it to the point that it’s killing us. Just like government subsidies, which I should have mentioned in my last post.

Jaxk (17626

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@Jaxk, “Government spending is less effective.”

Not according to the CBO.

If you disagree with the nonpartisan organization tasked with calculating such effects, please provide data in support of your own claims.

Qingu (21185

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@Jaxk
“Building a new road or repairing an old one may seem beneficial but it has no long term economic stimulus.”
Oh yes, it does.
A well kept road lowers costs for companies, by providing shorter and faster transport routes, thus lowering transport costs, and by lowering maintanance costs for vehicles which would be higher on a bumpy road. It increases the possible amount of goods per time unit a company can transport somewhere else, it opens up more places a company can sell its products at and it also improves accessibility to the company by customers, which leads to increased revenues.
Money saved which can then be invested again.

ragingloli (51962

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Your post also weirdly ignores infrastructure that enables continued product development (and attendant employment). You seem to believe that after you a build a road, nobody will use it, nobody will ship things on it, no businesses will extract economic value from it, etc. Not to mention publicly available scientific research and expanding broadband.

Qingu (21185

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How about from your own CBO report.

“Despite the potential economic benefits in the short run, such actions would add to the already large projected budget deficits. Unless offsetting actions were taken to reverse the accumulation of additional government debt, future incomes would tend to be lower than they otherwise would have been.”

Sounds like short term to me.

Jaxk (17626

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@Jaxk, please explain what policies you think that quote applies to.

Qingu (21185

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@Qingu where is the actually research from the CBO to support the claim? Economists like George Rejda in the 1960s said unemployment insurance could act as an important, automatic economic stablizer. Research in the 1970s showed that wasn’t the case. Look at the 1976 Cornell University studies of George M. Von Furstenberg, “Stabilization Characteristics of Unemployment Insurance.” THe 2000 papers and research of Alan Auerbach and Daniel Feenberg, “The Significance of Federal Taxes as Automatic Stabilizers in the Journal of Economic Perspectives from the American Economic Association.

The majority of studies since then have concluded that unemployment insurance plays a relatively small role in stabilizing the economy. State studies show that unemployment benefits provide virtually no economic stimulus. “Unemployment Insurance and State Economic Activity” in the International Economic Journal has a 1999 study by Kyung Won Lee, James Schmidt and George Rejda.

Where are the CBO’s studies? Unemployment insurance is not designed to stimulate the economy, despite what the CBO, you or Nancy Pelosi say.

“Researchers at Harvard found that extending unemployment insurance eligibility by 13 weeks increase by two weeks the amount of time that workers remain unemployed. Each additional week week that the government extends UI benefits extends the length of the average worker stays unemployed by 0.16 to 0.20 weeks.” Lawrence F. Katz and Bruce D. Meyer, “The Impact of the Potential Duration of Unemployment Benefits on the Duration of Unemployment,” Journal of Public Economics, Vol. 41(1) (1990), p. 44.

bkcunningham (18496

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@bkcunningham, again, the CBO is the official scorekeeper. They are not infallible, but they are nonpartisan and are basically considered to be the final word on such matters.

You appear to have frantically googled two articles for counterpoints. I haven’t read them, but I would be interested to know if they deal with unemployment insurance during a recession.

Like I said, both spending and tax cut measures only work as stimulus under certain circumstances. Do those circumstances apply?

Qingu (21185

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@Qingu I have the research in front of me and I have discussed it and studied it myself. No need to frantically Google. Where is your research to back up the CBO claims, or even the CBO research. You didn’t answer my question my friend.

bkcunningham (18496

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LOL you have the 1976 paper in front of you? Or are you cribbing from this website? Don’t bear false witness.

The CBO site lists a number of citations. Feel free to look at them.

Qingu (21185

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Also, you say you’ve studied it… what exactly is your background in economics?

Qingu (21185

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@Qingu yeah, as sad as it may seem. I certainly do. It is Keynsian economic theory that you are discussing. Nothing new.

bkcunningham (18496

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You have a background in Keynesian economics? From what school?

Qingu (21185

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http://www.cbo.gov/ftpdocs/119xx/doc11960/11-17-UnemploymentInsurance.pdf

They seem to be referencing the extension of unemployment and the suspension of the payroll tax. Neither of which would be long term. As a result the effects would be short term.

Jaxk (17626

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@Qingu I didn’t say I had a degree in economics.

bkcunningham (18496

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@Jaxk now I have no idea what point you are trying to make.

Qingu (21185

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@Qingu the research stands regardless. What is the point of changing the subject?

bkcunningham (18496

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@bkcunningham, then when did you study this 1976 paper that is not even available for me to read the whole thing on the internet, as far as I can tell?

Qingu (21185

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I can’t believe we’re down to checking credentials. No point in dealing with the details, just attack the person.

Jaxk (17626

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@ragingloli Not to nit pick but “A well kept road lowers costs for companies, by providing shorter and faster transport routes, thus lowering transport costs, and by lowering maintanance costs for vehicles which would be higher on a bumpy road.”

Even if said road was paid for with stimulus funds of which we are currently borrowing to make these projects possible, they most often then become the burden of the local municipality who has to maintain them and over here, our towns and cities are broke! We don’t have money to even salt the roads this winter let alone maintain them.

Our Mega mall in town is now 75% vacant, stores and businesses are still closing down every month here and our town is broke broke. New roads won’t do squat to put money in peoples pockets to go buy goods and services.

Cruiser (40449

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@Qingu I have gobs of research papers on economic theory, journals and other economic literature. It has always interested me.

bkcunningham (18496

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@Jaxk, if you don’t want your credentials attacked, don’t cite your own expertise as evidence in an argument.

@bkcunningham, really? You have hard copies of 1976 research papers sitting on your desk? Or do you have a subscription to jstor?

Qingu (21185

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Also, show me that the research stands. Since I do not have access to the articles. Show me that they are talking about unemployment in a massive recession, with interests rates at effectively zero.

Qingu (21185

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@Qingu I honestly didn’t mean for it to be a contest. Just see what you can find and read it and see if you find any good points in their writing and research.

Not sitting around on my desk. Cataloged actually. Some of the articles are given to me, hard copies, by friends. Not all, but some. Sort of a discussion exchange.

bkcunningham (18496

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@Qingu here’s part of the information I was asking you to provide for from the CBO.

In this, just consider this statement by the CBO and think about the information I provided by researchers.

“In assessing the role of UI benefits in supporting family income in 2009, CBO
accounted only for people who received those benefits, the amount of benefits they
received, and the other income they and their families received. CBO did not consider
any changes in employment or other sources of income that might have occurred if
those benefits were not available. In fact, had UI benefits not been available, some
people would have made different decisions about work and seeking out other sources
of income. For example, some people would have taken a job or increased their
income from other sources, such as the added earnings of a spouse, and some older
people would have retired earlier and received income from sources such as Social
Security or private pensions. Moreover, employers would have made some different
decisions about hiring and discharging workers, and economic conditions would have
differed. A more-complete analysis of the effects of UI benefits on family income
would incorporate such behavioral responses. Separately, although CBO’s calculations
are based on data about individual people, the results are presented in terms of families,
both to focus on the effects on families and for ease of exposition.”

bkcunningham (18496

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I’ll ask a llittle bit of trivia on unemployment figures that I found interesting. Most everyone has heard the monthly unemployment rate figures. “The Jobless Figures.” The numbers are produced monthly by the Bureau of Labor Statistics. How does the BLS come up with these numbers?

bkcunningham (18496

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SIGH! It’s no wonder they refer to economics as “the dismal science.”

CaptainHarley (22447

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@Qingu just in case you are interested, you can find many, not all, but many economic papers online at:

http://www.economistsonline.org/publications?lang=en

bkcunningham (18496

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@bkcunningham, I’m not sure what your point is in citing that paragraph.

I don’t know how the BLS calculates unemployment. Why?

I’ll ask again for elucidation on your source’s research. Were they talking about during a recession, wiht near-zero interest rates?

Qingu (21185

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Wow, a nearly useless thread has become a solid and pretty civil discussion on economic theory. Excellent.

I learned in my economics class some time ago that extension of unemployment benefits does tend to increase the length of time people remain unemployed. I also heard an economist on NPR reiterate last year too.

My brother is an excellent example. He was laid off in late 2009, and he has zero incentive to take any job that pays any less than $20K (which are his benefits). I can almost guarantee he’d find something if that weren’t the case.

I understand his thinking, and that of others in the same boat.

Economics is a dismal science, and a soft one at that. At best one can hope the consensus opinion of “respected” economists is the best one. But even Alan Greenspan was wrong about leaving the derivatives market unregulated, and admitted as much.

cockswain (15276

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I’m a little confused on the actual topic at the moment though. I thought @Jaxk gave a thoughtful opinion here, and I would like to discuss more about what spending cuts should be made. Pretty clear that the bulk of the problem lies with entitlement programs, specifically Social Security and Medicare. The Prescription Drug Benefit was extremely irresponsible, and even the Republicans fought it (I believe Cheney cast the deciding vote, but I may be confusing that event with one of the Bush era tax cuts). Defense cuts are tougher to determine, since we don’t have adequate access to all determining factors.

On the other hand, we appear to be discussing if unemployment benefits are the best way to stimulate the economy. @bkcunningham is providing good data, but as @Qingu has alluded, there isn’t exactly a precedent for the current situation. Namely a major recession with near-zero interest rates.

cockswain (15276

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I have to finish supper and feed my husband. I’ll be back. Hold down fort.

bkcunningham (18496

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@cockswain

Apparently that’s not the popular point. Nor is unemployment the bulk of economics. Nor is Keynesian economics the only theory out there. But hey, maybe if we ask a question about unemployment we could get into budget cuts. It’s sometimes hard to follow these threads.

Jaxk (17626

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Just so I don’t forget my thought, how does the CBO use the near-zero interest rate in comparison with the unemployment benefits as stimulation?

bkcunningham (18496

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I think a planned, well-organized and carefully moderated website built nearly exclusively for political and economic discussions would be of great benefit. Or at least very stimulating.

@bkcunningham I’m going to have to reeducate myself a bit to contemplate that one. I assume we are talking about the interest rate the Fed charges banks to borrow money?

cockswain (15276

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I would look at all social programs and the defense for cuts. Also leaving Iraq and Afganistan will be great.

cletrans2col (2395

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@Qingu the question about how unemployment figures are derived was just a sidebar during a lull in the conversation.

From the BLS: “Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940, when it began as a Work Projects Administration project. It has been expanded and modified several times since then. For instance, beginning in 1994, the CPS estimates reflect the results of a major redesign of the survey…”

To me, the manner of sampling and the way the information if weighted is interesting and I don’t think many people realize this when they use unemployment stats.

http://www.bls.gov/cps/cps_htgm.htm#why

bkcunningham (18496

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@bkcunningham and @cockswain

The low interest rates only pertain to what we’re borrowing to pay the debt and deficit. We are currently borrowing at a fairly low interest so if we barrow to pay unemployment the rate is fairly cheap. But it can and does change. Here is an explanation of how that happens that I thought was fairly good. The bottom line is just because we are borrowing cheap, interest rates can change as any body with a variable rate mortgage can tell you.

“OK, this is a bit complicated.

If you look every month at the interest paid on the debt, you’ll see that it is much higher in some months than in others, even though the size of the debt changed very little. The explanation is in the way the Treasury Department sells and redeems securities. They sell securities several times every month. Some securities mature in as little as four weeks, others in as long as thirty years Every month, some securities mature and are redeemed. Some of those will have been sold in the previous month, but some were sold thirty years ago.

Study Table PDO-1, Maturity Schedules of Interest bearing Securities, which is linked from the Treasury Bulletin website. It lists all the market offerings of securities that are still outstanding, and their issue dates and interest rates —all sorted by the dates they mature. Notice that the interest rates on individual lots of securities can be as low as 1.5%, and as high as 14%. Refer also to the Monthly Interest Rate Certification. It shows the interest rates Treasury has recently paid, and expects to pay in the immediate future, on new security offerings. In September ‘05, these rates ranged from 3.5% to 4.625%.

Each month, some old securities mature, and new securities are sold. If we redeem a lot of old 13% and 14% securities, we replace them with 3.5% and 4.5% securities, and our interest payments go down. On the other hand, if we redeem a bunch of 1.5% and 2% securities, replacing those at the current rates, our interest payments rise.

As obscure as this seems, it is actually extremely important. The chief reason that our deficit fell so dramatically in the late ‘90s is that we replaced a lot of old, very high-interest debt from the ‘70s and early ‘80s, with much lower interest debt. Even though the amount of debt was still increasing, the overall interest payments were reduced. We’re still retiring some of that high-interest debt, but there’s a lot less of it than there once was. When it’s gone, our interest payments will begin to rise, reflecting the rising interest we are paying on new debt. When that happens, the deficit will rise even faster than it has been rising.”

This is from the Muser

Jaxk (17626

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@Jaxk take a look at this:

http://www.federalbudget.com/

bkcunningham (18496

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@Jaxk That looks like the interest rate at which the gov’t can borrow money, and how it affects the gov’t’s interest on the national debt. You believe that is the rate that the CBO is using and not the Fed rate? We should get some clarification on this for certain so we are all on the same page.

cockswain (15276

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I only have a minor in Economics, but I still retain most of what I learned… I think. I favor the Austrian school of economics over the Keynsean, which is why I believe ( and I think the data support this belief, although I’m not going to spend the better part of my entire day looking it up to please those of you who love “show me the data” as a stalling tactic ) that lowering the tax rate has a multiplier effect which returns more to the government in newly generated revenue than was lost by the decrease in taxes.

Somehow, what I said was misinterpreted to mean that all I was suggesting was a decrease in taxes. Not true. I also suggested that deep cuts in spending be mandated, but that it was unnecessary for me to recommend where those cuts should be made FOR the simple reason that we elect representatives and senators to make those sort of decisions for ALL the people.

I realize there is a vast difference in comprehension between flutherites, and if there are those among you who are ( for whatever reason ) unable to understand what I just said, please let me know and I’ll dig up some basic economics texts for you to peruse. : )

CaptainHarley (22447

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@Jaxk I believe the CBO is using the federal funds rate.

The CBO report gives reference to the interest rate in a couple of instances and all are the same, just differnet scenrios in the modeling approach. “Federal Reserve would
not reduce the amount of stimulus it was providing with its own policy levers (such as low interest rates and its efforts to increase liquidity by other means) to offset the output growth caused by ARRA.”

bkcunningham (18496

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I find it odd here that NH doesn’t have the budgetary problems most states do yet they have no state income tax and no state sales tax. That tells me that it is possible to have good schools (their’s are pretty good compared to the rest of the nation), decent roads, adequate emergency services, and all of the other stuff that taxes normally pay for without jacking up taxes on everything the way WA (a state with some hefty financial shortfalls) does.

Maybe it’s because NH spends wisely? I look at the “road tits” and the half-bowling-balls we have in the roads here in the Seattle area and think to myself that “Snowmageddon 2009” would have been a lot less severe if they took that money and spent it on snow plows instead.

But to see where we could cut spending, you have to look at where we are spending it. All of it. Sure this may only be a few million, and that a few hundred thousand, but it adds up! Unfortunately, such a study would cost a few million….

jerv (31076

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@jerv – They have some of the highest property taxes in the country

cletrans2col (2395

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@cletrans2col True, but they are not the highest (last I checked) nor are they combined with other revenue live the 9.5% sales tax I pay here or the state income tax that most states have.

jerv (31076

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@cockswain and @bkcunningham

When they passed the unemployment extensions, they had to borrow the money (we don’t have funds). When they borrow this money they issue bonds. They issue them in varying lengths of time and consequently interest rates. The money borrowed for unemployment extensions is the same as any other money they have to borrow. The interest rates used are a composite of all the bonds they are issuing at any given time. Honestly I’m not sure where the confusion is here but government borrowing is the same regardless of the purpose.

Jaxk (17626

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I am neither. However, the number one way to avoid new taxes is to stop all the government waste.

Example: Paying rent on an empty office building in downtown San Diego for three years before the owner of the building finally blew the whistle. The original official that rented the building retired, and no one knew about the lease.

Buying up an entire company to produce high speed railroad cars, and then not providing any funds to keep company running.

Giving away acres and acres of ex-military land to developers in exchange for unfullfilled promises to build affordable housing.

and I could go on and on.

YARNLADY (46379

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Here is an interesting comparison of states with incomer tax and those without. I understand that is not precisely your point but model of higher taxes and higher debt seems to hold true.

I couldn’t get this to link up so I’m trying it here

Jaxk (17626

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We seem to be mixing things here, in terms of identifying what stimulates the economy. The Fed funds rate affects the interest rate at which banks loan money to the public for investing, etc… A low Fed rate stimulates investment and in theory the economy.

The interest rate at which the gov’t borrows money is something different (I think). If the gov’t borrows to pay unemployment benefits to prop up the economy, how does that interest rate at which it’s borrowing affect the current economy? Or is your point about the longer term effects?

In other words, on one hand we’re talking about the effects of unemployment payments on the economy, and on the other we’re talking about the Fed funds rate. I’m puzzled right now by when @bkcunningham said how does the CBO use the near-zero interest rate in comparison with the unemployment benefits as stimulation?

Do you see what I’m confused about? Is it clear? I’d like us to be talking (however long it takes) about something substantive.

cockswain (15276

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@cockswain

Let me try this from a little different angle. The whole point of this discussion about unemployment started with the concept that unemployment was the best stimulus for the economy (I don’t agree with that but it’s the premise that started this). So if unemployment stimulates the economy the result would be higher GDP and thus higher government revenue from taxes. That higher revenue would then be used to pay back the borrowed money for the unemployment checks. The higher the interest rate for borrowing the harder it is to cover that debt. Right now money is cheap (low interest rates). So they’re saying we can use this cheap money to get substantial benefit to the economy. It all goes back to the cost of money. So even if the unemployment gives marginal benefit, it still may be worth it because our interest rates are so cheap.

The fed uses this same principle for private industry. They set the rate low so that companies will borrow to invest in their business. The lower the interest rate the less ROI they need to make it profitable. The difference is that the Fed has complete control over their interest rates. When the government borrows the fed doesn’t control that rate. It is market that controls and if we want to borrow for 1% we can only do that if someone is willing to lend at 1%. The more debt we have the riskier the loan and eventually the rates go up to reflect that risk.

Jaxk (17626

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We need to back up even further than that, because the original discussion was not even about stimulus.

The person who brought up stimulus did so in defense of tax cuts. They said tax cuts didn’t count against the deficit, even though they decrease revenue, because they can stimulate the economy.

I then brought up unemployment spending, which by the same logic would not count against the deficit since it’s stimulative—even moreso than tax cuts, according to the CBO.

The original point was that this is a dumb argument to make. Stimulus is different than controlling the debt. Both advocates of tax cuts, and advocates of Keynesian spending, are saying that we need to go further into debt, so that we can stabilize the economy.

Stabilizing the economy is a necessary, but not a sufficient, condition for controlling the debt.

Qingu (21185

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Also, you guys appear to have gone off on a tangent about interest rates.

I brought up interest rates only to point out that the macroeconomic situation today is unique. @bkcunningham had cited some ancient economic papers that argued UI is not stimulative (a counterargument to a tangent in the first place). What I wanted to know is if these papers were written to take into account 10% unemployment during a recession—a recession that is also unique because we are at zero bound for interest rates, which limits our other policy options—or if they were only written with data pertaining to a healthy economy (or an even more limited set of conditions). I doubt there is a one-to-one correspondence between 0% interest rate and the effectiveness of UI.

Qingu (21185

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The tax rates are not really outside this discussion since they were brought up in the original question. The unemployment and interest rates however may be getting out in left field. Just for the sake of argument, this chart shows the relationship of spending to stimulus. The recession of 2000 brought revenues down. The Bush tax cuts brought them down further. But from 2003 (the year of the tax cuts) until 2008 government revenue grew faster than spending. Very surprising since the Bush administration escalated the spending quite a bit. Nonetheless, if you’ll notice the spending and the revenue lines were converging until we hit the recession in 2008. It does show that stimulating the economy can overcome some significant spending. Not as much as we’ve done over the past two years but still a significant piece.

I tried to address the spending cuts but no one wants to talk about that. So here we are. If we want to talk cuts, I’m more than happy to do so. If we want to talk about extending unemployment, well it hasn’t worked so far.

Jaxk (17626

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@Qingu the research by Furstenberg was done during a time with the unemployment rate in the US reached 9 percent and interest rates flutuated from as low as 3.71 percent to as high as 13.78.

The economy in the 1970s wasn’t a healthy economy. It was a time with economic issues similar to today, a recession, war, environmental issues, oil embargos, inflation, price controls, labor disputes, new programs to fight against poverty; and as such, it has been a recent topic of discussion for myself and some other people I consider friends.

As @Jaxk points out, one of the unprecedented things in today’s economy is the national debt. But the extension of unemployment compensation has been done many times before, failed each time and only time will tell if the most recent two extensions, coupled with the unknown factor of the national debt, will help the economy.

And yes, all the data, not just Frustenberg’s, models the various interest rate scenerios. The recent lowered interest rates have been used as an economic stimulus (coupled with other things. And the success is dabatable, but let’s not get side-tracked again).

bkcunningham (18496

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When it comes to extending unemployment, that is a tough one in this time of no real job creation and many of the jobs that are being created here are either unavailable due to skill requirements or location, or are not enough to pay the bills. Sure, McDonalds is better that nothing, but I can’t live on more than they pay!

Are you telling me that if we let nearly one-fifth of our labor pool and their families fall into the gutter and starve that the economy will recover? I am using the U6 numbers rather than the cheery U3 numbers. Are we going to let ourselves turn into India?

jerv (31076

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It makes my head spin to try and keep up with the tangents in the discussion. Not that there aren’t valid discussions as a result of these tangents. But it gets confusing to read when there are so many branches on the main topic being discussed. In this thread in particular, the subject started out with such discourse it led to an array of subjects, opinions, comments…To me, at least, the best discussions are a result of an intelligently formed question or statement.

I’m absolutely guilty of picking up one point and beating it like a dead horse. I apologize for the confusion I added to the topic, I’m not really sure what the original topic was to be honest. Cutting taxes? What taxes to cut? The deficit? The national debt? Lower taxes?

bkcunningham (18496

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@Jaxk, you correctly pointed out that Bush both massively cut taxes and massively increased spending.

So I’m curious why you only correlate one of those things to increased revenues during his second term, and not the other.

(Not that I would put much stock in increased rev during a bubble in the first place)

Qingu (21185

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@bkcunningham, the recession of the 70’s was very different from the current recession.

We can both cherry-pick studies to support our ideological position. Certainly there are plenty of ideological economists who have written ideological papers. But citing a study from the 70’s, without explaining the mechanisms in question, or how universal they are, is not an adequate rebuttal to the CBO.

You’re not the first Republican who has casually dismissed the findings of the CBO when it suits their political purpose; the house republicans did the same thing about the CBO’s estimate that repealing HCR would increase the national debt. I refuse to play this shoot the messenger game.

Qingu (21185

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@bkcunningham Economics is full of inter-related factors. You pull one strand of the web and others will move, and you really can’t change just one thing unless you want to run into The Law of Unintended Consequences.

jerv (31076

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I see a better correlation to the tax cuts. The spending curve bent up in 2001 while the economy continued to tank. The tax cuts took affect in 2003 and that is when the revenues bottomed and the economy began to recover. As @jerv points out, there are a lot of moving parts. It would be nice to be able to hold all things constant except the variable you want to test. The economy is simply too large. So I look at significant actions and significant reactions. And similar trends historically.

Sorry for the side track yet again. So if everyone wants to get back to the question, what do you cut?

Jaxk (17626

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After further study….I again put the GSA up on the chopping block for some serious top to bottom house cleaning. The GSA owns large numbers of vacant or underutilized federal buildings and AFAICT does a horrible job of disposing of them in timely and at market prices and often at fire sale prices. Private real estate firms would go out of business if they managed property holdings the way our GSA does.

Next, try selling off or reconfiguring assets controlled by the Transportation Department, Coast Guard, Federal Emergency Management Agency, Amtrak and the Army Corps of Engineers. Again much of what FEMA does is already managed by local government agencies and IMO has bungled each and everyone of our last major disasters. All of them are financial sinkholes for Federal funds.

Except for the Coast Guard, privatize the lot of them.

Of course I don’t think many here will fall all over themselves at the chance to see a legitimate Congressional study done by the Republicans…. but it is a good one and where I gleaned much of my thoughts.

Cruiser (40449

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How about cutting these for starters..

Adult Education_State Grant Program, $574,372,000 total funding
Alcohol Open Container Requirements, $112,000,000 total funding
Alcohol Research Programs, $261,819,000 total funding
Block Grants for Prevention and Treatment of Substance Abuse, $1,690,189,000 total funding
Business and Industry Loans, $857,000,000 total funding
Certified Development Company Loans (504 Loans), $3,000,000,000 total funding
Child and Adult Care Food Program, $1,856,368,000 total funding
Child Care and Development Block Grant, $2,087,910,000 total funding
Child Care Mandatory and Matching Funds of the Child Care and Development Fund, $2,717,000,000 total funding
Commodity Loans and Loan Deficiency Payments, $9,493,384,000 total funding
Community Development Block Grants/Entitlement Grants, $3,031,592,000 total funding
Community Development Block Grants/State’s Program, $1,293,365,000 total funding
Community Services Block Grant, $641,935,000 total funding
Comprehensive School Reform Demonstration, $233,613,000 total funding
Even Start_State Educational Agencies, $222,688,000 total funding
Farm Operating Loans, $1,559,136,000 total funding
Farm Ownership Loans, $1,072,791,000 total funding
Farm Storage Facility Loans, $134,811,000 total funding
Federal Direct Student Loans, $38,992,000,000 total funding
Federal Family Education Loans, $129,166,000,000 total funding
Federal Pell Grant Program, $12,006,738,000 total funding
Federal Supplemental Educational Opportunity Grants, $770,455,000 total funding
Foreign Investment Financing, $800,000,000 total funding
Foreign Investment Insurance, $1,800,000,000 total funding
Gaining Early Awareness and Readiness for Undergraduate Programs, $298,230,000 total funding
HIV Care Formula Grants, $1,030,309,000 total funding
HIV Demonstration, Research, Public and Professional Education Projects, $145,419,000 total funding HIV Emergency Relief Project Grants, $595,342,000 total funding
HIV Prevention Activities_Health Department Based, $320,883,000 total funding
HIV Prevention Activities_Non-Governmental Organization Based, $72,457,000 total funding
HOME Investment Partnerships Program, $1,963,745,000 total funding
Housing Opportunities for Persons with AIDS, $294,751,000 total funding
LOCAL Television Loan Guarantee Program, $1,067,000,000 total funding
Low-Income Home Energy Assistance, $1,888,780,000 total funding
Medicaid Infrastructure Grants To Support the Competitive Employment of People with Disabilities, $25,000,000 total funding
Medical Assistance Program, $177,232,410,000 total funding
Medical Library Assistance, $66,321,000 total funding
Medical Reserve Corps Small Grant Program, $8,350,000 total funding
Medicare Transitional Drug Assistance Program for States, $2,286,000,000 total funding
Medicare Transitional Drug Assistance Program for Territories, $70,000,000 total funding
Medicare_Hospital Insurance, $166,182,000,000 total funding
Medicare_Supplementary Medical Insurance, $127,976,000,000 total funding
Mental Health Research Grants, $946,990,000 total funding
Milk Income Loss Contract Program , $4,000,000,000 total funding
Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, $2,475,000,000 total funding
Mortgage Insurance_Homes, $143,521,171,000 total funding
Mortgage Insurance_Hospitals, $732,000,000 total funding
Mortgage Insurance_Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities, $2,300,000,000 total funding
Mortgage Insurance_Purchase of Units in Condominiums, $12,616,000,000 total funding
Mortgage Insurance_Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate, $5,203,000,000 total funding
National School Lunch Program, $6,884,308,000 total funding
Nutrition Assistance For Puerto Rico, $1,350,518,000 total funding
Pension Plan Termination Insurance, $2,985,000,000 total funding
Rehabilitation Mortgage Insurance, $674,000,000 total funding
School Breakfast Program, $1,574,654,000 total funding
Section 8 Housing Assistance Payments Program_Special Allocations, $5,245,792,000 total funding Section 8 Housing Choice Vouchers, $14,712,341,000 total funding
Single Family Property Disposition, $4,591,684,000 total funding
Small Business Loans, $10,000,000,000 total funding
Social Insurance for Railroad Workers, $9,211,000,000 total funding
Social Security_Disability Insurance, $76,639,000,000 total funding
Social Security_Retirement Insurance, $345,573,400,000 total funding
Social Security_Survivors Insurance, $65,399,700,000 total funding
Social Services Block Grant, $1,700,000,000 total funding
State Administrative Matching Grants for Food Stamp Program, $2,042,000,000 total funding
State Criminal Alien Assistance Program, $285,050,000 total funding
Supportive Housing Program, $837,522,000 total funding
Title I Grants to Local Educational Agencies, $12,342,309,000 total funding
Trade Adjustment Assistance_Workers, $771,200,000 total funding
TRIO_Student Support Services, $263,674,000 total funding
TRIO_Talent Search, $145,685,000 total funding
TRIO_Upward Bound, $563,398,000 total funding
Twenty-First Century Community Learning Centers, $999,070,000 total funding
Unemployment Insurance, $44,086,575,000 total funding
Very Low to Moderate Income Housing Loans, $4,474,392,000 total funding
WIA Adult Program, $898,891,000 total funding
WIA Dislocated Workers, $1,453,168,000 total funding
WIA Incentive Grants_Section 503 Grants to States, $20,000,000 total funding
WIA Youth Activities, $995,059,000 total funding

grasp (121

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You want to cut pell grants and other educational loans?

Okay. So poor people can’t get higher educations anymore. Nice.

Oh. I see you’ve also cut the school breakfast program. I suppose private industry and charity will get that covered. Or maybe those poor kids should just not get to eat breakfast so it teaches them self-determination.

Qingu (21185

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@Qingu,

Good. You’re starting to understand the concept of working for a living. Working for what you desire, rather then sticking your hand out and cry.

grasp (121

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@grasp
You forgot all the military programmes.

ragingloli (51962

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Even though I think @grasp‘s suggestion to end nearly all gov’t programs is unreasonable, at least we have a handy list to discuss. No question funding needs to be reduced for many, if not most of those programs.

Social Security and Medicare are in the greatest need of reform obviously.

cockswain (15276

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@ragingloli,

I didn’t forget the military programs. What happens when foreigners decide to deprive us of our right to work? Do we lay down and die, or do we protect our liberty through defense and/or offense. Safety, peace, and order is a necessity, otherwise you’re at a constant risk of chaos breaking out.

grasp (121

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@grasp, kids aren’t legally allowed to work.

I suppose you want to get rid of that particular government regulation, too.

Qingu (21185

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@Qingu,

You’re catching on quickly.

grasp (121

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@grasp
“Safety, peace, and order is a necessity, otherwise you’re at a constant risk of chaos breaking out.”
Then you have to work for what you desire, rather then sticking your hand out and cry to the government to protect you. Take a pitch fork.

ragingloli (51962

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While we’re at it, let’s bring back slavery. Why should the feds regulate a matter of private property between individuals?

Qingu (21185

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@ragingloli,

I am working. That’s why I don’t mind if my pay check is a little smaller to support safety, peace and order. I can’t serve in the military and work a second career at the same time, now can I?

grasp (121

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@grasp, sure you could. You would just have to work harder, if it means that much to you.

You know, like the poor schoolchildren who you want to force to work in order to pay for breakfasts.

Qingu (21185

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@grasp
of course you can.
millions of people have multiple jobs simultaneously to support themselves.

ragingloli (51962

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@bkcunningham said But it gets confusing to read when there are so many branches on the main topic being discussed. i totally agree

@Jaxk said So if everyone wants to get back to the question, what do you cut?

@Cruiser said .I again put the GSA up on the chopping block for some serious top to bottom house cleaning.

I said at least we have a handy list to discuss.

How about this: when @Qingu and @ragingloli are done wasting their time with @grasp , we discuss the GSA?

@Cruiser, I’ll read your link in the meanwhile.

cockswain (15276

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Okay guys, stop. Look, this is where the discussion takes a turn for the worse.

bkcunningham (18496

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@Qingu, @ragingloli

That’s true, but then military regulations would have to change to allow it and I wouldn’t mind.

By the way, U MAD? I sense the heavy sarcasm, it’s sad. You asked what to cut, I gave my 2 cents.

grasp (121

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Okay, say we cut the GSA.

1. That is only $20 billion. This is a drop in the bucket. Also, only 1% of its operating budget comes from taxpayers.

2. What happens to its 12,000 workers?

3. The GSA’s main services seem to be management and procurement of resources. Are you certain this layer of bureaucracy can be stripped away with no negative effects?

4. If some private function would need to fill the void left, would it even be more cost-effective? I am assuming you believe that the federal government does need to pay money for the upkeep of its buildings, for the purchasing of newer tech for its offices, etc.

Qingu (21185

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@grasp, it just so happens that there is one country on Earth that actually subscribes to your ideals of the role of government.

I suggest you move there.

Qingu (21185

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@Qingu,

Why do I need to move? I was born here, and I watched this country go to hell. I would rather see it all get fixed to the way it was, hence the list of cuts. Plus, I’m a day trader. I make money either way, so I don’t have any issues whether the country is in hell or not. Money is made on the way up and on the way down.

grasp (121

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@grasp

A pretty long list. I might put the loans on the back burner just because the cost is not substantial. Government loans typically get paid back. That doesn’t mean there shouldn’t be a review but I think I’d review the others first.

I wonder what they do with $112 million for alcohol open container requirements. Oh well, I’m sure it’s needed. Afterall they must know what they’re doing.

Jaxk (17626

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@grasp
Are you sure you are not secretly a Ferengi?

ragingloli (51962

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@ragingloli,

I asked you and @Qingu a question. U MAD? :)

grasp (121

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Not mad.
Here is what would happen if what you want were to be implemented:
With no protections or access to basic education, workers would once again become oppressed by the ones with money, just like at the beginning of the industrial revolution.
children would be forced to hard work from a young age, robbing them of their child hood and ruining their health as adults.
Life spans would shorten, work related deaths would increase, the country would experience a massive and permanent increase in poverty. Scientific output in all fields would crumble to almost nothing, technological innovation would cease.
The result would be civil unrest, which the government would attempt to violently crush with the military, the only thing left under their command.
At that point there are two options:
1. Become a 3rd world military dictatorship.
2. A Civil War and a Revolution initiated by the trampled masses, with the goal of toppling the system you regard as paradise.

ragingloli (51962

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Oh wise prophet @ragingloli, please scour the residue out of your bong, and please stop immersing yourself in sites like Encyclopedia dramatica

grasp (121

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Please don’t feed the trolls!

I can’t help but wonder what unintended consequences would occur if we seriously cut all government spending except for our inefficient military. I’ve seen how inefficient they are too; I saw a lot of waste during my time in the Navy.

jerv (31076

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Agreed @ragingloli. What else could happen?

Dutchess_III (46811

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@jerv what were some of the bigger inefficiencies and waste you saw?

bkcunningham (18496

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@jerv,

Yes, let’s not feed the trolls. We need to forget this conversation ever happened. We can’t let the people investigate why there are $9 billion of government funding being spent on breakfast and lunch in schools, when they can eat at home or take food from home. Shhhhh

grasp (121

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@grasp you just overload people who don’t understand with too much information at one time. It turns into an argument and name calling without any grounds.

bkcunningham (18496

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@bkcunningham,

I’m not the least bit surprised it would pan out like this. Give them what they ask for and you get questions about whether or not I’m a “Ferengi”, followed up with prophetic messages if implementing such cuts.

grasp (121

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You can piss and moan all you want about all the cuts that @grasp suggested, but what is your alternative solution? We’re living on borrowed money (and borrowed time) as it is. The current debt projections are unsustainable. If we don’t even cut programs that are ‘optional’ then we won’t even be able later on to sustain the ones that we believe to be ‘mandatory’, and we default.

As a matter of fact, I mostly agree with most of @grasp‘s list… without even reading it all. I don’t think it goes far enough or deep enough. It’s a gross misreading of the US Constitution to believe that “promote the general welfare” means “we’ll have welfare programs for everyone who might need it (or might say that they need it)”.

I also happen to think that we could probably cut about half of our military and still have secure borders and sea lanes – the peace and order that we do want.

CyanoticWasp (20271

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Here’s another gem… Kick out all the 23 million illegal immigrants (that we know of), and hunt down the rest in hiding. That would save us another $20–30 billion, maybe even more.

grasp (121

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@grasp seriously, what do you think is keeping Social Security solvent? Duh, the tax money taken out of the illegals’ paychecks by greedy businesses who know they are illegal and are using fake SS# ...but the greedy owners don’t care and are working them for minimum wage like slaves. The illegals will never collect the SS benefits anyway since they are using fake id. It’s the hidden agenda of the Republicans to keep them in the country working without rights.

bkcunningham (18496

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Response moderated (Personal Attack)

@bkcunningham How much would you pay someone to watch paint dry? Literally sit there for a few hours and watch it. Inefficient use of manpower runs rampant, as does similarly inefficient use of material, and taxpayers fund it all.

Do you know a bit about the battery shortage in Iraq in 2003? Here are a few excerpts from an article I found about it
“Adding to the problem were soldiers in the field disposing of batteries well before they had run down”, LaTulip said.
...
Driscoll said he wasn’t sure how much battery life was discarded inadvertently by changing batteries early. “[I’m] afraid to say that in the first several weeks we threw away a lot…

“So what they are doing, at the squad level, about every eight to 12 hours, with a 24-hour battery, [is soldiers] change batteries,” LaTulip said. “That just doubles what you have to produce to meet our demand. If [soldiers] could get a device put on [the battery] that tells them what is left in the charge, then they could use those batteries to full capability. Right now we can’t do that. That is why our demand from all of your factories is so high.”

That sort of waste also runs rampant.

jerv (31076

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Alcohol Open Container Requirements

I suppose that could cost us some money but the truth is, I’m a lot more tolerate about a life and death situation than I am about studying the alcohol open container requirements.

I know, I know, changing the batteries in a flashlight while barracked in Omaha is not exactly life and death. However the habits you develop in Omaha are the habits you take with you to the battlefield. And the national defense really is a federal responsibility. Food, clothing, and housing is not.

Jaxk (17626

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@Jaxk Given the choice between sending troops to Iraq or being able to eat, I think most Americans would choose not to starve. And people can do some crazy things when they feel their livelihood is threatened.

If the government doesn’t realize that then they will lose support. Now, there are many who show support for the government and their policies by paying taxes; that might stop. There are others who show support by not marching on the Capitol, rioting, and defenestrating government officials; that too might not last long if people get too downtrodden and desperate.

Never underestimate the power of a few million pissed off people with little/nothing to lose ;)

I am also a bit more tolerant in a life-or-death situation, but I never faced one of those in-port in San Diego nor during my schooling. Hell, pretty much the only time I did face life-or-death situations were all engineering casualties or the sort of stuff that could happen to me here in my apartment (fires happen, and we’ve had flooding around here this week) yet there was less waste in the field than there was stateside.

BTW, if the government has no obligation to take care of the people then it stands to reason that the people are responsible for themselves, right? Then why is it that they get so uppity when those who are denied the means to obtain basic necessities decide that they don’t want to die and do stuff like steal? Of course, that wouldn’t be necessary if the rich did their job and created a sustainable economy with ample employment for all who were willing to work…

Okay, I’m blithering here, but my point is that unless you are willing to to provide for those who, through no fault of their own, cannot provide for themselves by legal means then you have to step aside when they take charge of providing for themselves by whatever means necessary. So, do you want government spending, or do you want some mix of the alternatives; starvation. high crime, civil unrest, anarchy, and all that other fun stuff?

jerv (31076

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@jerv I understand your concerns, but I’m a little confused. So just to be clear and to stay on the same page, who are these people who, you say, through no fault of their own cannot provide for themselves? Who, you say will take charge of providing for themselves by whatever means necessary if the government doesn’t take care of them? Are you saying there is a group of people who, if the government doesn’t take card of them, will take care of providing for themselves through civil unrest, anarchy and “all that other fun stuff”? Who are these people?

bkcunningham (18496

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@bkcunningham I am referring to the truly disabled and the unwillingly unemployed. I feel no responsibility for those who can work but just don’t want to, but unlike what some would have you believe, not all unemployed people are lazy bastards and not all disabled people are faking it.

I guess you’ve never heard of “looting”.

They are your neighbors, the people you see walking down the street… basically the average citizen. Push people far enough and they do crazy things that they wouldn’t otherwise do. Yeah, we still have a lot of apathy in this country but it seems that that is changing, and unfortunately the ways in which it is changing are not all good. Not all people who care are sane/rational people.

jerv (31076

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Contining my research here into the GSA issue i posited, I found this GSA Open Government Initiative when the President is challengin the agency to be more transparent in it’s operations. What I read there is that the Gov. has a Facebook portal where you can ask questions of Government employees and offer suggestions and ideas where they “promise” someone will answer you. This at first glance is kinda scary with some of the comments on the page but perhaps Jellies here may want the opportunity to offer up their ideas where it may actually matter.

Cruiser (40449

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@jerv of course I’ve heard of looting. Regardless of what you may think of my beliefs and regarding what some people may have me believe, I certainly don’t think that all unemployed people are lazy bastards and I don’t believe all disabled people are faking it. LOL

I know, and have known, many people who are disabled and they aren’t faking it. And I know, and have known, many unemployed who aren’t lazy bastards.

If we are talking about America, the looting I’m familiar with, I have no way of knowing whether or not these individuals were looting as a means of protesting against the government for not taking care of them. I have no way of knowing why they were looting. I have no way of knowing if they were in the category of the people who you want the government to help as “truly disabled and the unwillingly unemployed” who were looting.

So let’s just leave out the looting and the starvation, high crime, civil unrest and anarchy you mentioned before and agree we are discussing the goverrnment helping truly disabled and the unwillingly unemployed.

So in talking about cutting spending from the government programs in place for these disabled adn unwillingly unemployed, to me at least, we have to identify the programs. What programs are we talking about saving or cutting for these people?

bkcunningham (18496

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@Cruiser what did you find “kinda scary” about the portal and comments? I’m scared to look.

bkcunningham (18496

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@bkcunningham You will just have to suck it up and see for yourself. You get to see why running this country is such a difficult challenge.

Cruiser (40449

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@bkcunningham There are many who believe that the first and/or best place to cut spending is by cutting programs like unemployment and other programs that help those who can’t help themselves. That is why I brought it up.
More later when I have more time and a full keyboard.

jerv (31076

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@jerv I understand. See you later. But one thing to consider…unemployment insurance isn’t setup to really be a government funded program.

bkcunningham (18496

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Funds transferred from NHTSA must be used for alcohol-impaired driving countermeasures or enforcement of driving while intoxicated (DWI), driving under the influence DUI) and other related laws. A State may elect to use all or part of its transferred funds for activities eligible under Section 152 Hazard Elimination program. Funds transferred from NHTSA must be used for alcohol-impaired driving countermeasures or enforcement of driving while intoxicated (DWI), driving under the influence DUI) and other related laws. A State may elect to use all or part of its transferred funds for activities eligible under Section 152 Hazard Elimination program.

Let’s get rid of a significant portion of drunk driving law enforcement.

So Libertarians—what would you do instead? Just let drunks drive as much as they want? Or expect people to shoot drunks, now that they all have guns? Or maybe you could tag them all as undocumented aliens and ship them off and dump them in the ocean out beyond the territorial water boundary? Or maybe turn it over to the army. But would you give them the money to do it, or just expect them to do it with the current budget?

To be serious, I really have no idea how you imagine the world working. Would government do anything besides purchase bombs and train soldiers? How would you respond to the mortgage loan crisis? Enron? The bat plague? Pollution?

wundayatta (58722

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Let me turn the questions back to you for a bit: What good things is government now doing about the mortgage loan crisis (which it helped to precipitate, by the way)? Did government do anything to prevent Enron or WorldCom or Bernie Madoff’s scams and crimes? Do you think that government will solve the problems of the bats and the bees? (I like the turn of phrase that allows, but I know the problems are real.) Is pollution going away because government is ‘in charge’?

I agree that there is a place for government. Most libertarians who aren’t in favor of full anarchy do believe that. But it should be ‘limited’ government. The problems we face are real, and of course you’ve only touched the tip of a continent-sized iceberg. Bernie Madoff is real, and the problems he created are enormous – despite the fact that he did it under the noses of the SEC and a host of regulators – and regulations – that he simply ignored, and which ignored him. So is the answer “we need more regulators and regulations”? That’s the common refrain, and it doesn’t work. So why keep answering our problems with more of the same unworkable, expensive, bureaucratic dinosaurs, when each new expansion of government proves to work even less well than what we had before?

Government didn’t get to the place it is overnight. I don’t propose that we can eliminate 90% of what we have (and what we need to rid ourselves of) overnight, either. We can’t pass a law to return to some mythical government of the past, hand out pink slips to be effective immediately and sell assets in a day on eBay. It’s going to take time. A lot of time. But we should at least start taking a step or two on that road instead of the raggedy-ass and decaying road we’re on… which is just heading to a cliff edge, anyway.

No, libertarians don’t think that drunks should drive all they want. Please don’t be absurd. But here’s a possible alternative: what if your insurance company were in charge of your driver’s licence and auto registration, and allowed to cancel not only your insurance coverage, but your license and registration as well, if you were convicted of drunk driving? Currently, when drivers lose their insurance, they are put into “assigned risk” pools… and insurers are forced to cover them, because we have a soft-hearted thought that “driving is too important to take away from a person completely”. I realize that this is a simple and incomplete approach to the problems of vehicle registration and licensing, but what real good does the DMV do, anyway? In fact, what if insurers were charged with “road safety issues” and ran a sort of pooled Highway Patrol for all but non-criminal offenses within their coverage areas? It’s not perfect, not at all, but it’s a way of thinking about things that doesn’t involve forced mandates and “more government”.

CyanoticWasp (20271

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@CyanoticWasp

Thanks. I realized after reading what you wrote, that I think it is the first time I have heard a Libertarian offer some real proposals about how to handle things in a Libertarian way. I don’t think I want to get into a discussion about the pros and cons of individual policies, although I’m afraid I won’t be able to resist. But I do want to thank you for thinking about this seriously.

People always say limited government, but rarely, if ever, do they say what they mean by that. Thus, those of us who only know that particular way of solving problems are not left with anything to replace it. We see anarchy as the result.

While I think there are better people working in government than you apparently do, and I think that the mortgage loan crisis and possibly Bernie Madoff may not have happened had regulations that had already been there had not been lifted by George Bush, I also think it is extremely difficult for government to regulate organizations that have so much money, they hire all the good people in government away. It would be wonderful to have some other mechanism that wasn’t at such a disadvantage who could watch over and check the power of the banking behemoths.

The devil, according to the cliche, is in the details. We—you and I—can’t talk about every little policy issue, and every goal that the people elected officials to try to achieve. We can’t design—or you can’t, since I’m not even going to try—an alternative mechanism, or even suggest an alternative mechanism to achieve those goals. I guess the Libertarian party line is that if government backs off, people will find ways to deal with all these issues.

My guess is the way they will figure out how to do it is to rebuild government. Mostly because that’s what they know, and they know it works. It may not be as efficient as it could be, but it works.

I’m going to play what-if now, even though I said I didn’t want to. Drunk drivers. Well, all the insurers would try to avoid insuring drunks. Would that stop drunks from driving? Not under that system any more than it does under this one. Still, there would be damage to others, and insurers would still have to pay for the consequences of the drunk drivers’ behavior. Would they join together on their own to create a reinsurance pool? I dunno. I doubt it. That would involve sharing proprietary data. The only way that’s going to happen is if some neutral agency intervenes. Would they trust each other enough to form their own neutral agency? The alternative is just taking the risk that they’ll go under should they get unlucky enough to be insuring a lot of accident-prone people.

Your “pooled highway patrol” is another example of private cooperation that goes against the competitive needs of the private sector. DMV is a neutral agency charged with figuring out who is competent to drive. Could the private sector do this more effectively and at a lower cost? Would that organization be perceived to be fair? Who would watch over it to make sure? Could we have competing DMVs, so to speak?

We think about mandates and government for a reason. We know it works. It may not work as well as some private organization might, but maybe that’s the price we pay for neutrality. Sure, there is corruption in government, but it is equal opportunity corruption. It hurts us all, not just its enemies.

wundayatta (58722

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I give serious thought to these things all the time. Sometimes I even write about them. But they are much better written about at Reason Magazine and Liberty, though I get my ideas from other places (including my own thoughts) such as Milton Friedman, Ludvig von Mises, Murray Rothbard and other great libertarian writers as well.

But I don’t want to leave you with the wrong idea: I think government is staffed top to bottom with all kinds of people having nothing but “the best of intention”. And I do mean “nothing”. That is, they have wonderful intentions for a lot of things that matter to them and that they think should matter equally much to everyone – so they pass a law or regulation to “make it so”, but they forget all about (and seldom have to deal with) unintended consequences. In business and industry we often do the same things, but we do have to face the unintended consequences and clean up after ourselves, or go out of business as someone else does that for us at lower cost to our consumers.

That’s my essential problem with any monopoly: you don’t have a choice in your mail carrier, your Department of Motor Vehicles, your IRS agent, your cop on the corner, etc. And when we didn’t have a choice of phone company, do you remember how awful your service often was? Do you think AT&T would be as relatively good as it is now if there had never been a competitor? At least if I didn’t want to deal with the phone company, I wasn’t forced to take it anyway.

I also don’t think that so much “government regulation” is a good thing. Aside from the fact that it doesn’t seem to work very well, it gives people a false sense of security, that “everything is under control” and “it can’t happen here” (whatever “it” is). I believe in caveat emptor. I believe that if you’re going to put all your eggs in one basket, then you’d better watch that basket like a hawk. A lot of current day government regulations seem to fossilize rules and procedures that end up being gamed and circumvented anyway. And no institution is “too big to fail”. That’s a complete cop-out and excuse to do more of what didn’t work the first time. Don’t you think the Romans, Greeks, Egyptians and others had institutions that were “too big to fail”? Where are they now, I wonder? When government props up institutions that are “too big to fail”, it guarantees (even if it puts off for now) the eventual failure. Better to let things fail piecemeal and be rebuilt.

CyanoticWasp (20271

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The money transferred from the federal government has no impact on the law. DUI are state laws and would be in force and have been in force before the federal government started their give-away programs. There have been several hysterical responses on this thread and I would have to include yours among them.

Jaxk (17626

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Pot calling the kettle black, @Jaxk.

But I gather that you are saying that you are happy with states making laws, but not the federal govt. Correct me if I am wrong (and I’m sure you will). But, on the off chance I have understood you, how do you justify state government regulation when you want to get rid of Federal regulation?

wundayatta (58722

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I am happy with the division of government as described in the constitution. When we begin legislating and regulating at both the state and federal level we create a maze that is unmanageable. Alcohol laws whether they be DUI or open container are state laws. These laws change from state to state. So why is the federal government supplying money. Control. The fed does it on everything. Give money to the state then threaten to withhold it if they don’t do certain things. The states were designed to separate functioning governments. I believe some are out of control on regulation as well but it is difficult to fight (can I still say fight?) on multiple fronts. And it is incredibly expensive to have government agencies at both the federal and state levels doing the same things. This overlapping, redundant organizational structure is killing us and costing more than we can bear.

Jaxk (17626

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Personally, I am interested in why many people share @CyanoticWasp‘s attitude that corporations are better equipped to handle some things and would do so benevolently.

Don’t get me wrong; I would love for business to regulate itself in the idealistically Utopian way that some people seem to think it would, but realistically that won’t happen. Put another way, we have many laws yet people still break many of them (even the ones that we bother to enforce) so handing things over to corporate America more than we already have/do would be like allowing murderers, rapists, and robbers to write and enforce the law.

True, the government does butt in where it shouldn’t, but at least it’s only one entity. Imagine if every corporation did that in order to compete for the registration fees on your car? Or passed laws designed solely to increase their profits? Or they could just collaborate and engage in price-fixing and monopoly building; who would stop them?

So let us pull our heads out of our asses and loo at the Really Real world where ideology leads to corruption instead of perfection. Face it, there are certain things that must be left to government and should… can not be entrusted to any “for profit” entity. (Whether the government should be considered “for profit” is another argument for another time/place.)

@Jaxk Despite our differences elsewhere, I agree with your most recent post 120%. If we got rid of all of the redundant overlapping redundancy, we’d save billions. Hell, we could save enough to stay in Iraq for over a month!
Seriously though, how much spending could we cut that way? And how much more could we save by reducing/eliminating advertising for stuff that we should already know, like the illegality of DUI or failing to wear a seat belt.

jerv (31076

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I think we’ve been down this road before. It is not a choice of regulate everything or regulate nothing. It’s all a matter of degree. For instance, Enron cooked the books. They actually created false assets. That was illegal. People were prosecuted and went to jail. Hell, one guy even committed suicide to keep from going to jail. But we weren’t satisfied so we created Sarbanes-Oxley to make it even more illegal. The problem is that this one piece of legislation costs, on average $2.3 million for each corporation, ANNUALLY. That is the honest corporations. The dishonest ones will still submit ‘cooked books’. Look at Bernie Madoff. He cooked his books for thirty years and the government never did catch him, even with Sarbanes-Oxely. His scheme crumbled under it’s own weight rather than actually being caught. Both were the result of government not doing thier job rather than not having enough regulation.

In general corporations are kept in line by competition. They have to control fraud and efficiency in order to compete. The government doesn’t. That is why fraud and inefficiency run rampant in government programs. No one has any incentive to control costs but rather are incented to not make waves.

As for your point about monopolies and price fixing, they are illegal and I’ve never heard any suggest they shouldn’t be. I think you’re back to the all government or no government argument. It’s the major reason we don’t make much headway on these issues. Even the most ardent liberal has got to admit that at some point there will be too much regulation. And even the most ardent conservative would also admit that at some point there would be too little. I think the liberals arguing too regulation right now have no idea how much there is today.

I’ve said it before but we virtually double the cost of everything you buy just from regulation. I think that’s overkill (can I still say that).

Jaxk (17626

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The ammunition of the troops in Iraq should be paid for by charity not taxes. Then the logic would be in sync with the Republican health care approach. The Iraq war has cost more than funding health insurance for all uninsured for more than two decades.

mattbrowne (31732

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@mattbrowne of course there is wasteful spending, even in the US Dept. of Defense, but making an agrument of national defense and funding health insurance for all uninsured doesn’t make sense to me.

The US Constitution says the federal governement’s responsible to provide for the common defense and national security. This is set out in specific Articles of the Constitution. I’d be interested if you could provide me with the portion of the Constitution dealing with the right to obtain health insurance through funding by the federal government.

I understand that the Constitution obligates the federal government to provide medical care in certain circumstances like to prisoners. And there are many statutes enacted by Congress under “the general welfare” interpretaion with programs like Medicare, Medicaid and CHIPS. But, IMHO, I think the idea of providing funding for health insurance for all uninsured over the funding of the national defense is illogical.

bkcunningham (18496

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@Jaxk Yes, we have, but that is not what I am saying. The government does over-regulate, largely because every time we run into a problem, we pass new laws instead of enforcing the ones that got broken in order to create the problem in the first place.
All I am saying is that given the choice between incompetence and malice, I would rather be lead by incompetence. And I think we both agree that corporations would regulate themselves far more efficiently than the government ever could, but I would rather have inefficient than ruthless.
Maybe there is a way to make it work, but I don’t see it.

jerv (31076

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@Jaxk wrote:

In general corporations are kept in line by competition. They have to control fraud and efficiency in order to compete. The government doesn’t. That is why fraud and inefficiency run rampant in government programs. No one has any incentive to control costs but rather are incented to not make waves.

In theory, there is competition in government: elected officials. We elect them to give us what we want, and to do it efficiently. Candidates know this, and that’s why they are constantly saying they will cut costs, so as to be able to reduce taxes. Except, they say it the other way around: cut taxes and we’ll be forced to cut costs.

Except the people like their programs. They want to keep their programs; they just want them to work better and cheaper. And if some program has to be cut, then it should be someone else’s program, which is why the poor get the short end of the stick. They have fewer votes and even less power per vote than anyone else.

Anyway, we usually elect officials to make government more efficient, and there is always room for more efficiency in government. Government bureaucracy can almost always benefit from significant organizational change, but in order to make that change, you have to make a lot of heads roll, and you have to have the time to do it. Most minor functionaries realize that, with the protection of the union, if something comes along that threatens their job or improve efficiency, all they have to do hunker down, drag their feet, and pretty soon the leader will be gone, and they won’t have to deal with him or her anymore.

This is one of the problems with term limits. It prevents any elected official from taking a long term view. They just need to brighten up their resumes so they can move up the ladder to the next highest position. So much of what they do is cosmetic. And if an economic crisis hits, they can’t do any reform at all; they just make drastic cuts, regardless of the effectiveness or lack thereof of what they are cutting.

Now, if bureaucrats would all lost their jobs when the boss lost his or her job, I think things might be different. In a way, that’s kind of what patronage did. People in patronage jobs should have a strong incentive to please the people, because they’ll lose those jobs if they don’t. Of course, corruption enters and then there are no more fair elections, and the one party stays in no matter what the vote is.

But I am interested in is ways to create competition within government bureaucracies. Maybe let them have overlapping responsibilities, with the consumers or maybe the regulated allowed to choose which one will regulate them. Companies could advertise their wares by saying they are regulated by X agency, which is much more efficient than Y agency, so their products are better and cheaper.

In fact, there could be regulation corporations, kind of like the credit agencies and Moody’s of the world. They would have the power to prosecute and penalize, not just the power to rate a company. These corporations would essentially sell a kind of insurance to people—assuring that the companies who provide goods and services do it in a fair and environmentally friendly way—or whatever other criteria the consumers had a taste for.

I don’t know the particulars, but it does seem that we need ways to keep companies on the straight and narrow, and right now those systems aren’t very efficient. Government already subcontracts out a significant portion of its work, and right now, the government is the major watchdog over these contracts. Maybe the watchdogs could use some competition.

wundayatta (58722

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@wundayatta there are already ways to keep companies on the straight and narrow. It is our judicial system. The other ways, like you described are already in place with the Better Business Bureau, we have certification programs for all sorts of industries from electricians to bankers. We have local building inspectors who make sure these industries are working by certain standards. We have people trained and certified to work at water plants and in the insurance industry and in trading and the list goes on and on.

Maybe I am missing something with the multitude of things you said. I just picked one and commented but what do you think about my comments on the one thing you said?

bkcunningham (18496

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@bkcunningham and @Jaxk, I don’t have time to respond in detail, but I noticed that both of you are strict “constitutionalists.” You seem to base a lot of your arguments on the original intent of the constitution, as for example why the federal government shouldn’t have certain powers.

But I don’t really see how this interacts with the passage of laws, such as universal health care. Where does the constitution say that the federal government can’t pass laws affecting all citizens?

Qingu (21185

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The constitution provides limits on federal authority. In order to enact laws the federal government must have the authority to do so. otherwise that authority is left to the states or the people. If Obama had passed a single payer system, it would not be unconstitutional. It would be paid from taxes and the federal government has the authority to tax. That issue has been resolved. What is in question is whether they have to authority to force the people to purchase products or services that they may or may not want. They are trying to use the ‘Interstate Commerce’ clause to justify it but it’s quite a stretch to argue that not buying something is interstate commerce especially when you consider that what you’re buying can’t be purchased out-of-state. They are also trying to argue that it is a tax but there are many holes in that argument. Not the least of which is thier original argument that it was not a tax.

There are a few other constitutional issues but these are the most widely discussed.

Jaxk (17626

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@Qingu in regards to certain limits of the federal government and the Interstate Commerce Clause dealing with the recent health insurance issues, I have a feeling the US Supreme Court will eventually answer that one for us.

bkcunningham (18496

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@Jaxk please quote where the Constitution limits the authority of the federal legislature to make laws affecting all citizens.

As for the ICC, bear in mind that this is the clause used by SCOTUS precedent to ban racial discrimination. The reason is that blacks often couldn’t practical travel from state to state because they faced discrimination in their lodging options. So there is already ample precedent to using this clause to justify broad-based regulation beyond simply “making purchases.” (Not that conservative judges care about precedent when it conflicts with their ideology, of course).

I also fail to see a practical distinction between taxing people and funding a service for them, and forcing people to purchase a service.

Qingu (21185

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Let me take a stab at it. How about the 10th amendment.

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Jaxk (17626

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@Jaxk Sadly, the Constitution only seems relevant when it supports your position but is easily brushed aside when it stands in the way of your agenda. (Not you personally; I use “your” in a general sense here.) For instance, do you remember this nice little way to side-step the Fourth Amendment?

Part of the reason I joined the military when I was younger is that I am a Constitutionalist myself. Support and defend the Constitution against all enemies, both foreign and domestic? Sign me up! I also had a long debate with my recruiter about how to resolve the potential conflict if I ever felt the US government themselves qualified as a domestic enemy of the Constitution. Unfortunately, I am also a fan of the Universal Declaration of Human Rights, especially Articles 23 and 25, and it seems that the US comes up rather short there, yet not short enough for the likes of many. Combining the Constitution and the UDHR raises quite a few questions about the responsibilities of the government, including which government (state r federal) is responsible for what.

So I think that before we can really answer the question of where to cut spending, we have to ask ourselves what sort of nation we want.

I would like a nation with a fair and just government that operates efficiently and that is capable of providing all of it’s citizens with three hots, a cot, and basic medical care without removing the incentives to excel or punishing the successful. Sadly, we are such a “what’s mine is mine!”, everybody for themselves society that such a thing is not only impossible, but seemingly something to be avoided at all costs :(

Some people want a Corporocracy, some a Theocracy, some want a military state where might makes right… yet all of these require different spending habits than each other and the type of country I want to see. Without knowing and agreeing on which direction we want our country to go in, how can we say where/how to cut spending?

jerv (31076

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@Jaxk It’s ironic that it took your discussion of the potential unconstitutionality of the individual mandate to remind me that I am and always have been against that policy. Like that policy, it seems that I am falling prey to the politics of practicality, not the politics of principle. In a way, I have given up, because in my opinion, the only health reform that will work is single payer. What Obama came up with is a hash of stupid compromises made just to get the thing passed while it was still possible.

Now Republicans are turning up the heat underneath that hash and pointing out that we really don’t want to look closely at it, because it’ll make us nauseous. The individual mandate really is stupid when you think about it. Sure, everyone should have insurance, but letting private insurers provide the insurance is the stupidest and most expensive way of going about it. The idea behind insurance is to spread risk. You spread risk the most widely when everyone is in the risk pool.

But we don’t have single payer. So people who want universal coverage are left defending the undefendable, and the opponents find any excuse they can to attack it. In other words, it’s plain old politics, but everyone is pretending to stand on principle, because that’s the way you keep the troops rallied.

Obama is the Presidential candidate whose ideas were closest to mine. Pretty far a way, but better than McCain. So I have to hold my nose and vote for him, and keep the clothespin on my nose and support his wretched policies because it could be so much worse if I let him fall prey to the misguided policies of the right.

The right rightfully opposes the individual mandate. They happen to use whatever you’ve been discussing above as the excuse to oppose it, but the reality is that it’s just plain stupid, and just about everyone can agree to that if they put down their swords for a second. But it’s what it took to save the private insurance industry and yet get a patchwork universal insurance system created.

Yuck. And yuck again. And we do this because single payer is politically unfeasible. Or so they say.

wundayatta (58722

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@wundayatta @Jaxk While you two are talking about federal versus state and insurance, might I point you to the recent news that Vermont is drafting a single-payer plan and opting out of “Obamacare”?
Hmmm… a state making their own laws that are substantially equal to federal law….

jerv (31076

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This thread caused me to wonder more about libertarian philosophy, so I posted this question, asking if there are any nations governed by a libertarian philosophy and how it works.

By the way, this thread has been terrific. I’m keeping a sharp eye on it, just haven’t had much time to write for a few days.

cockswain (15276

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@jerv Vermont has been through this before. In fact, about fifteen years ago, I did a study about the costs and savings of the introduction of single payer in VT. Obviously, it went nowhere at that time. I believe Howard Dean was governor at the time. Bernie Sanders was the Congressman then, and he was the one who brought us in.

I wonder who’s doing the economic analysis this time around? Perhaps the state version of the CBO?

I wish them the best of luck. I’m sure the insurance industry will come piling in with billions at the last moment and overwhelm any support for the legislation with self-serving half-truths and outright lies.

wundayatta (58722

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@bkcunningham – I think health insurance is an issue of basic human rights. Now when a country is poor there’s a problem. But the US is the richest country in the world and dozens of millions don’t have health insurance. Unborn babies of uninsured pregnant women cannot rely on good prenatal care like every woman in Europe can even though many countries in Europe have a lower GDP per capita. The conservative war in the US against health insurance is a disgrace. I’d say cut spending on issues that are less important like removing dictators in the Middle East. There was no constitutional obligation to go to war with Iraq. And many of America’s best friends warned about the risks in late 2002. But Bush decided to increase spending by going to war.

mattbrowne (31732

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@Jaxk okay. Why on earth do you think the constitution does not delegate law-making powers to the federal government?

Why are you ignoring like 200 years of judicial precedent that upholds this interpretation of “necessary and proper”?

Qingu (21185

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It is the philosophy of our government that the federal power be restricted. There are good reasons for this. Democracy works best when it is local. The larger and more populous the country, the less effective it is. At the founding of this country, the states were autonomous and the uniting of these states was done to to solve very specific problems. National defense would be cheaper and more effective if they banned together. It provides a united front to any other country that make want to mess with us. Interstate commerce was to insure that one state would not gain unfair advantage over other states. It was to insure the free and open trade between the states. And finally, the bill of rights were created to insure neither then federal government nor even the states would be able to limit our individual freedoms. This is the role of federal government. All other functions were left to the states.

The problem with an overreaching federal government is that it is too big. The policies that work in New York, don’t work as well in Nevada. The further down, the more local you make government, the better it works. That was the philosophy and it is one I agree with wholeheartedly.

I hear a lot of debate about other countries and how they work. Sweden is a good example. Sweden has a population of 9.3 million or about the same as N. Carolina. Even at the state level the more populous states seem to have more trouble, more debt than the less populous states. I think the founding fathers were right to try and keep government local. The constitution was designed to do so and it simply works better.

As for your 200 years of precedence argument, it is hard to know what you’re talking about. The courts have always gone back to the constitution to determine if the federal government has the authority. Many of the interpretations have been very liberal (meaning generous to the feds), but still, that’s the basis for their rulings. Even the most liberal of judges will put some restraints on federal power. I’m not sure where you get the idea that congress can do anything they want.

Jaxk (17626

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@Jaxk, “It is the philosophy of our government that the federal power be restricted.”

No, that’s your philosophy.

You then proceed to make arguments for this philosophy, some of which I agree with, some of which I don’t. What annoys me, though, is your almost fundamentalist propensity to appeal to some sort of “true America,” when you are actually talking about what you and your political party wish America to be like.

America has always had an oscillating relationship with federal power, from throwing out the Articles of Confederation as to weak, to the emergence of the federalists, and finally to the preservation of the Union during the Civil War. Not all of the founding fathers wanted to keep government local. And the Constitution is not a static document, and the courts have built layers of meaning onto it with precedents.

“I’m not sure where you get the idea that congress can do anything they want.”

I didn’t say they could do anything they want. I’m just asking you to point out where the Constitution says they can’t do HCR. All you’ve done is repeatedly assert that the Constitution, or the spirit of America, somehow shares your own mentality about federal power.

Qingu (21185

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Also, just to be clear: I would certainly agree that American philosophy has always limited the power of government over citizens… what I am disputing is that these limits only apply to federal government, which is what you are claiming. The Bill of Rights applies equally to federal, state, and local governments (and is, itself, federal regulation).

Qingu (21185

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Milton Friendman = Free To choose

I’m not sure what your reading nor where you get your interpretation. “The powers not delegated to the United States by the Constitution” is pretty clear. It means that authority for any legislation has to be delegated to the federal government. If not, it is reserved to the states or the people. Currently the government is arguing that the constitution provides them the authority under one of two possible scenarios. The interstate commerce clause or that it is a tax which falls under the 16th amendment.

The constitution limits federal authority. That is not an opinion it is a fact. The limitations on states are much less. They are reserved to the individual rights laid out in the constitution or authority that is reserved to the federal government. the federal government must have the authority to mandate heath care and assess penalties for not buying it. I see nowhere in the constitution that gives them that authority. It will soon be argued in the SC court and they will make some arbitrary decision which will set up yet another of the precedents you like so much. Until that is done we will all have to speculate on whether the federal government has that authority.

There are several other problems with health care that are being argued at the same time. Such as whether the federal government has the authority to obligate the states to financing thier part without compensating funds. All these arguments go back to the constitution and whether the federal government has the authority.

You may disagree with the principles of the constitution but that doesn’t change them. The courts help to define the actual wording but the principles remain. Maybe you’d like a little anarchy as is being discussed on another thread but that’s not what we have.

The constitution is not federal regulation but rather a controlling document that is a joint effort with the states. The federal government can not add or eliminate any parts without ratification by the states (or another jackass ruling by the courts).

Jaxk (17626

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Unintended Consequences

Greed is good. Greed works.

Free market, free choice. very small government(no governments intervene into business, religion, money ANYTHING) at most provide few basic services: army, police, judicial, diplomacy, but I’m not even sure about those anymore either.

xseeken (136

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@xseeken
Greed is eternal.

ragingloli (51962

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@ragingloli, Good joke, thanks. Spelled the last name wrong, apologies. It’s Milton Friedman

xseeken (136

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@Jaxk As we both know, jackass rulings are always a strong possibility.

Personally, I like the way MA did it. Well, maybe not the details, but it was a state decision as opposed to a federal one; that I like.

jerv (31076

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@xseeken if you know even a small amount about Milton Friedman you would understand how very wrong you are about your “no governments intervene into…. ” bs. I don’t know where you are from, but in America, we have a judicial system, part of the three (separate) branches of the federal government. Understanding the true meaning of the generic phrase “government” you used is the beginning of understanding true freedom. It blows my mind how caught up so many people in today’s world are in wanting to depend on the “government.”

bkcunningham (18496

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