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  1. #1
    OAP Theophylact's Avatar
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    An editorial from The Economist

    which is, you know, a conservative magazine:
    Shame on them

    The Republicans are playing a cynical political game with hugely high economic stakes

    IN THREE weeks, if there is no political deal, the American government will go into default. Not, one must pray, on its sovereign debt. But the country will have to stop paying someone: perhaps pensioners, or government suppliers, or soldiers. That would be damaging enough at a time of economic fragility. And the longer such a default went on, the greater the risk of provoking a genuine bond crisis would become.

    There is no good economic reason why this should be happening. America’s net indebtedness is a perfectly affordable 65% of GDP, and throughout the past three years of recession and tepid recovery investors have been more than happy to go on lending to the federal government. The current problems, rather, are political. Under America’s elaborate separation of powers, Congress must authorise any extension of the debt ceiling, which now stands at $14.3 trillion. Back in May the government bumped up against that limit, but various accounting dodges have been used to keep funds flowing. It is now reckoned that these wheezes will be exhausted by August 2nd.

    The House of Representatives, under Republican control as a result of last November’s mid-term elections, has balked at passing the necessary bill. That is perfectly reasonable: until recently the Republicans had been exercising their clear electoral mandate to hold the government of Barack Obama to account, insisting that they will not permit a higher debt ceiling until agreement is reached on wrenching cuts to public spending. Until they started to play hardball in this way, Mr Obama had been deplorably insouciant about the medium-term picture, repeatedly failing in his budgets and his state-of-the-union speeches to offer any path to a sustainable deficit. Under heavy Republican pressure, he has been forced to rethink.

    Now, however, the Republicans are pushing things too far. Talks with the administration ground to a halt last month, despite an offer from the Democrats to cut at least $2 trillion and possibly much more out of the budget over the next ten years. Assuming that the recovery continues, that would be enough to get the deficit back to a prudent level. As The Economist went to press, Mr Obama seemed set to restart the talks.

    The sticking-point is not on the spending side. It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.

    This newspaper has a strong dislike of big government; we have long argued that the main way to right America’s finances is through spending cuts. But you cannot get there without any tax rises. In Britain, for instance, the coalition government aims to tame its deficit with a 3:1 ratio of cuts to hikes. America’s tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so.

    And the closer you look, the more unprincipled the Republicans look. Earlier this year House Republicans produced a report noting that an 85%-15% split between spending cuts and tax rises was the average for successful fiscal consolidations, according to historical evidence. The White House is offering an 83%-17% split (hardly a huge distance) and a promise that none of the revenue increase will come from higher marginal rates, only from eliminating loopholes. If the Republicans were real tax reformers, they would seize this offer.

    Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans. Independent voters should take note.
    (emphasis added)
    Facts do not cease to exist because they are ignored. -- Aldous Huxley

  2. #2
    Rich Obama Donor tony_j15's Avatar
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    *slow clap*
    Get off of my roof!

  3. #3
    Go back to sleep Creatures's Avatar
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    ah, it's always nice to watch from the outside^^ as long as it doesn't snowball to us ;p

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  4. #4
    Light to Counter the Dim MTAtech's Avatar
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    Republicans are counting on O to cave, as he has done before. I guess he never learned how to confront bullies taking his daily lunch money.
    Conservatives: "If the facts disagree with our opinion, ignore the facts -- or at least misrepresent them."

  5. #5
    Ultimate Member Chuckiechan's Avatar
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    America’s net indebtedness is a perfectly affordable 65% of GDP


    In who's opinion?

    The Republicans want real cuts now, not promises that will not be kept. Lets not forget how easy Reagan cut taxes with promises of spending cuts that never came.

    No more promises of "cuts". They either cut now, or they never will.

    My personal opinion is we won't cut enough soon enough, and the dollar will evaporate taking a butt load of national wealth with it. There is no head room for more taxes, even taxing the gazillioniars at 100% won't cut 10% of our debt.

    We are too deep. But the bottom line is I won't suffer, MTA and Theo wont either. They are vested in public plans, I'm invested in private plans of my own making, but they share one thing in common: They both are heavily invested in multi national companies who aren't all that influenced by the health of the USA.

    So whether you know it or not, our future has left the USA.

    How many high school kids graduated this year, vs jobs available? How many college students have graduated and have found few jobs. (or chose to stay in school and incur more debt)

    This is the future of "them", not the people here and elsewhere arguing the loudest.
    “Rancher Bundy should’ve told the feds that those were Mexican cows – who came across the border illegally to seek better grazing opportunities. It was an act of love.”

  6. #6
    Light to Counter the Dim MTAtech's Avatar
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    Your presumption is that cutting spending leads to prosperity. That's nonsense based in ideology not economics.

    This really isn't hard economics, it's freshman ECON 101 stuff. If we cut government spending now, at a time when the nation is in a recession due to lack of demand, it will make the economy worse.

    It goes like this, GDP = Y

    Y = C + I + E + G where:
    C = Consumer Spending
    I = Investment
    E = Exports - Imports
    G = Government Spending

    So, if you cut government spending "G", GDP drops. GDP drops, then demand falls and firms layoff more workers. Those layed-off workers stop paying taxes. Tax revenue drops more than spending drops. Thus, you neither cut the deficit but do worsen unemployment.

    We are really in a tight spot since the only sensible thing to do is increase government spending as economic stimulus but that has no chance of passing the Republican dark-ages House.
    Conservatives: "If the facts disagree with our opinion, ignore the facts -- or at least misrepresent them."

  7. #7
    Ultimate Member Chuckiechan's Avatar
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    What is missing in your analogy is productivity, without that there would be no profits to generate taxes.

    Obamanomics + socialism = BULLCRAP
    “Rancher Bundy should’ve told the feds that those were Mexican cows – who came across the border illegally to seek better grazing opportunities. It was an act of love.”

  8. #8
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    Quote Originally Posted by MTAtech View Post
    So, if you cut government spending GDP drops. GDP drops, then demand falls and firms layoff more workers.
    GDP numbers do not equal prosperity. Look at China, they are goosing their GDP by building hundreds of ghost cities, but the cities are completely empty.

    Quote Originally Posted by MTAtech View Post
    Those layed-off workers stop paying taxes.
    What you really want is to make it easier for people to get into business, and to start their own businesses.

    One of our big problems is the (both state and federal) government is spending it's time trying to shut down everybody who tries to operate a business without some unnecessary license and 600+ hours of schooling that doesn't even teach them anything about what they provide to the market.

    Examples: Unraveling Unconstitutional Government Regulation in Arizona / Untangling African Hairbraiders from Utah's Cosmetology Regime

    It costs a lot of money for the government to go after what are essentially victimless crimes.

    People that end up unemployed as a result of overbearing government can actually become a liability to the government, where as people who are forced to go work for a big-giant corporation for less money and less freedom end up contributing even less to tax revenue.

    If you want to increase tax revenue, you need to make it easier for people to make money, not harder.

    The existing tax rates on a wider tax base would be a pretty good revenue enhancer, I would think.
    Last edited by Reasotarian; July 11th, 2011 at 04:49 AM.

  9. #9
    Tech IMO Bug Finder pickel's Avatar
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    Quote Originally Posted by Reasotarian View Post
    GDP numbers do not equal prosperity. Look at China, they are goosing their GDP by building hundreds of ghost cities, but the cities are completely empty.



    What you really want is to make it easier for people to get into business, and to start their own businesses.

    One of our big problems is the (both state and federal) government is spending it's time trying to shut down everybody who tries to operate a business without some unnecessary license and 600+ hours of schooling that doesn't even teach them anything about what they provide to the market.

    Examples: Unraveling Unconstitutional Government Regulation in Arizona / Untangling African Hairbraiders from Utah's Cosmetology Regime

    It costs a lot of money for the government to go after what are essentially victimless crimes.

    People that end up unemployed as a result of overbearing government can actually become a liability to the government, where as people who are forced to go work for a big-giant corporation for less money and less freedom end up contributing even less to tax revenue.

    If you want to increase tax revenue, you need to make it easier for people to make money, not harder.

    The existing tax rates on a wider tax base would be a pretty good revenue enhancer, I would think.
    Your post makes too much sense and is easy to comprehend. I believe you're talking to those whose opinions outweighs common sense or you be talking to dear ears.

  10. #10
    Go back to sleep Creatures's Avatar
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    then tell me, what market is not yet saturated?

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  11. #11
    Light to Counter the Dim MTAtech's Avatar
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    Quote Originally Posted by Reasotarian View Post
    GDP numbers do not equal prosperity. Look at China, they are goosing their GDP by building hundreds of ghost cities, but the cities are completely empty.
    Certainly, lower GDP numbers do not equal prosperity and that's what the GOP plan's effect will be.
    Quote Originally Posted by Reasotarian View Post
    What you really want is to make it easier for people to get into business, and to start their own businesses.
    Then we should have universal health care. According to some fascinating new economic research, Is Employer-Based Health Insurance A Barrier To Entrepreneurship?, there's an unexpectedly large numbers of Americans becoming entrepreneurs within months of qualifying for Medicare (over and above those you would expect to become entrepreneurs because they were fired, forcibly retired, etc.) The reason: They now have the security of healthcare, so they can take the risk of starting private companies.

    Quote Originally Posted by Reasotarian View Post
    One of our big problems is the (both state and federal) government is spending it's time trying to shut down everybody who tries to operate a business without some unnecessary license and 600+ hours of schooling that doesn't even teach them anything about what they provide to the market.

    Examples: Unraveling Unconstitutional Government Regulation in Arizona / Untangling African Hairbraiders from Utah's Cosmetology Regime

    It costs a lot of money for the government to go after what are essentially victimless crimes.
    Are you trying to make the unbelievable claim that licensing is unnecessary? Maybe you want to visit unlicensed doctors but not me. The same for plumbers and trades. I want to know that when an electrician wires my home or a plumber installs pipe, it meets the established codes. I also want to know that they are insured, which the licensing mandates.

    To use licensing as an example of government overreach is preposterous.


    Quote Originally Posted by Reasotarian View Post
    People that end up unemployed as a result of overbearing government can actually become a liability to the government, where as people who are forced to go work for a big-giant corporation for less money and less freedom end up contributing even less to tax revenue.

    If you want to increase tax revenue, you need to make it easier for people to make money, not harder.

    The existing tax rates on a wider tax base would be a pretty good revenue enhancer, I would think.
    I'm looking forward to reading your research that shows that the "overbearing government" and low taxes on the working poor were suddenly the cause of unemployment going from 5% in 2007 to 9.2% today.
    Conservatives: "If the facts disagree with our opinion, ignore the facts -- or at least misrepresent them."

  12. #12
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    Quote Originally Posted by MTAtech View Post
    Certainly, lower GDP numbers do not equal prosperity and that's what the GOP plan's effect will be.
    If GDP is goosed artificially, like in the case of China by building ghost cities, and then all of a sudden they stop goosing GDP, there isn't really that much of an effect.

    Quote Originally Posted by MTAtech View Post
    Then we should have universal health care. According to some fascinating new economic research, Is Employer-Based Health Insurance A Barrier To Entrepreneurship?, there's an unexpectedly large numbers of Americans becoming entrepreneurs within months of qualifying for Medicare (over and above those you would expect to become entrepreneurs because they were fired, forcibly retired, etc.) The reason: They now have the security of healthcare, so they can take the risk of starting private companies.
    Giving everybody health insurance doesn't increase access to health care because you are still dependent on the supply of health care services (licensed professionals).

    If the supply of health care services is too restricted, you end up needing to restrict demand in order to keep the prices stable.

    Quote Originally Posted by MTAtech View Post
    Are you trying to make the unbelievable claim that licensing is unnecessary? Maybe you want to visit unlicensed doctors but not me.
    Doctor licensing clearly has some justification. But should every single profession require licensing?

    How do I know computer repair advice on this forum is accurate? I could ask a technical question, get an improper solution and that could theoretically harm my computer and result in me losing a significant amount of data.

    Should the government require TechIMO to ensure that everyone who posts here is actually a licensed professional computer repair technician? What would be the result if the government did that?

    In Texas you need a private investigators license in order to repair computers legally. The education required for that has nothing to do with computer repair, is that justified?

    Quote Originally Posted by MTAtech View Post
    The same for plumbers and trades. I want to know that when an electrician wires my home or a plumber installs pipe, it meets the established codes. I also want to know that they are insured, which the licensing mandates.

    To use licensing as an example of government overreach is preposterous.
    An armed security guard requires about 36 hours of training. To braid hair legally in Utah? 2000 hours.

    That's more than it takes to be a lawyer, and take note, it's perfectly legal to braid hair without a license as long as you do it for free.

    Does that make any sense?

    These are just a few examples, there's plenty more where that came from.

    Quote Originally Posted by MTAtech View Post
    I'm looking forward to reading your research that shows that the "overbearing government" and low taxes on the working poor were suddenly the cause of unemployment going from 5% in 2007 to 9.2% today.
    There are multiple causes, it's not caused by a single issue.

    But say an unemployed person in Utah knows how to braid hair, they can't legally provide their services to the market without 2000 hours of schooling and a cosmetology license, as a result, they stay unemployed and remain a liability to the government instead of an asset.

    Unnecessary licensing exacerbates the employment problem.

  13. #13
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    Quote Originally Posted by MTAtech
    There's an unexpectedly large numbers of Americans becoming entrepreneurs within months of qualifying for Medicare (over and above those you would expect to become entrepreneurs because they were fired, forcibly retired, etc.) The reason: They now have the security of healthcare, so they can take the risk of starting private companies.
    Correlation is not causation though. A lot of people will start to do something that they wanted to do their whole lives when they retire, using their saved money and or pensions/social security check (which is money that was taken from them earlier in their lives), in order to fund a new small business.

    People don't just retire and wait to die.

  14. #14
    Light to Counter the Dim MTAtech's Avatar
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    Quote Originally Posted by Reasotarian View Post
    If GDP is goosed artificially, like in the case of China by building ghost cities, and then all of a sudden they stop goosing GDP, there isn't really that much of an effect.
    That's not the case in the U.S. We're suffering from lack of demand
    Quote Originally Posted by Reasotarian View Post
    Giving everybody health insurance doesn't increase access to health care because you are still dependent on the supply of health care services (licensed professionals).

    If the supply of health care services is too restricted, you end up needing to restrict demand in order to keep the prices stable.
    Perhaps that's true in theory. What we find in practice in the rest of the world that has universal H. C. is that it works better and cheaper than what we have.
    Quote Originally Posted by Reasotarian View Post
    Doctor licensing clearly has some justification. But should every single profession require licensing?
    That's why we elect representatives to determine such matters. So far, it's worked reasonably.

    Quote Originally Posted by Reasotarian View Post
    How do I know computer repair advice on this forum is accurate? I could ask a technical question, get an improper solution and that could theoretically harm my computer and result in me losing a significant amount of data.

    Should the government require TechIMO to ensure that everyone who posts here is actually a licensed professional computer repair technician? What would be the result if the government did that?
    One can carry any line of reasoning into the absurd. Just as no license is required to ask you friend's opinion, TechIMO would fall into the same category.

    Quote Originally Posted by Reasotarian View Post
    In Texas you need a private investigators license in order to repair computers legally. The education required for that has nothing to do with computer repair, is that justified?
    I can't answer that without reading the arguments that were debated. But I do know that governments don't just wake up in the morning and decide to regulate something that has no interests wanting regulation.
    Quote Originally Posted by Reasotarian View Post
    An armed security guard requires about 36 hours of training. To braid hair legally in Utah? 2000 hours.

    That's more than it takes to be a lawyer, and take note, it's perfectly legal to braid hair without a license as long as you do it for free.

    Does that make any sense?

    These are just a few examples, there's plenty more where that came from.

    There are multiple causes, it's not caused by a single issue.

    But say an unemployed person in Utah knows how to braid hair, they can't legally provide their services to the market without 2000 hours of schooling and a cosmetology license, as a result, they stay unemployed and remain a liability to the government instead of an asset.

    Unnecessary licensing exacerbates the employment problem.
    Whatever the issue with hair braiders, I am confident that the state legislature can handle this issue. I also think this is a minor example and not a major cause of unemployment.
    Conservatives: "If the facts disagree with our opinion, ignore the facts -- or at least misrepresent them."

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    Quote Originally Posted by MTAtech View Post
    That's not the case in the U.S. We're suffering from lack of demand
    Demand always exists, the real problem is that the people have the lack of money in order to feed their demand, and the lack of money can be exacerbated by well-intentioned but harmful government policy.

    Do you think that in China there isn't any demand for nicer housing? China has over 70 million brand spanking new apartments.

    And they're all empty.

    Is that due to lack of demand for improved housing? Of course not. The Chinese people don't have enough money to afford the housing units.

    Even the people in charge of building the new housing units can't afford to buy one themselves.

    Quote Originally Posted by MTAtech View Post
    Perhaps that's true in theory. What we find in practice in the rest of the world that has universal H. C. is that it works better and cheaper than what we have.
    It's only cheaper because they ensure that the demand does not outstrip the supply, but this requires rationing.

    Quote Originally Posted by MTAtech View Post
    One can carry any line of reasoning into the absurd. Just as no license is required to ask you friend's opinion, TechIMO would fall into the same category.
    That doesn't change the fact that damages could be done. If you took your car to a friend to look at it and he makes a fatal mistake and sets it ablaze, he's liable whether he charged you anything or not, is he not?

    Quote Originally Posted by MTAtech View Post
    I can't answer that without reading the arguments that were debated. But I do know that governments don't just wake up in the morning and decide to regulate something that has no interests wanting regulation.
    Correct, incumbent entities lobby the local government to regulate their markets in order to reduce the amount of competition which also has the effect of bringing prices up due to artificial market suppression.

    Here is yet another example of what I am talking about, from ThinkProgress no less: No To Taxi Medallions | ThinkProgress

    Right now, the supply of taxis is driven by market forces. The fares are regulated at such and such a level, and the city supports approximately as many cabs as it’s profitable to operate at that level.
    So it seems that even ThinkProgress understands that the free market self-regulates. Good for them.

    Quote Originally Posted by MTAtech View Post
    Whatever the issue with hair braiders, I am confident that the state legislature can handle this issue.
    It's not just hair braiders, MTAtech, it's literally thousands of oddball professions that are quite simple and do not require much training, but the government forces people to take on an extraordinary amount of expensive training that can be totally unnecessary.

    One of the primary beneficiaries of these kinds of policies by the way, are private for-profit educational companies, as people are forced to do business with them in order to work.

    Quote Originally Posted by MTAtech
    I also think this is a minor example and not a major cause of unemployment.
    Death by a thousand cuts.

    This is primarily done by the states rather than the federal government, but the federal government ends up being the loser because they end up with less federal tax revenue.

    These kinds of things have been slowly increasing over the past few decades.
    Last edited by Reasotarian; July 11th, 2011 at 02:04 PM.

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    Quote Originally Posted by pickel View Post
    Your post makes too much sense and is easy to comprehend. I believe you're talking to those whose opinions outweighs common sense or you be talking to dear ears.
    Thanks for the compliment, pickel.

  17. #17
    OAP Theophylact's Avatar
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    Facts do not cease to exist because they are ignored. -- Aldous Huxley

  18. #18
    Tech IMO Bug Finder pickel's Avatar
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    Quote Originally Posted by Reasotarian View Post

    How do I know computer repair advice on this forum is accurate? I could ask a technical question, get an improper solution and that could theoretically harm my computer and result in me losing a significant amount of data.


    .
    You DON'T Just like when you bought or build your computer..it's a crap shoot.

    Now , if I gave you advice, that would be a different story.

    Quote Originally Posted by Reasotarian View Post
    Thanks for the compliment, pickel.
    They don't come often. Enjoy your 15 minutes...ROTF

  19. #19
    Tech IMO Bug Finder pickel's Avatar
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    Quote Originally Posted by Theophylact View Post

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