Bush vs. Greenspan

“Quoting alumcave:
"If you follow mortgage rates, that market hasn't moved very much considering that the discount rate (the only rate the fed has direct control of) has more than doubled over the last 18 months."

My take on this statement is that demand for homes is waning no matter what the interest rate is. To me this is an indicator that the real estate bubble could pop if and when mortgage defaults begin in earnest. From what I read, Freddy Mac and Fanny Mae are already holding a mountain of bad loans. Smart buyers are waiting on the market (prices) to correct itself. If I were you alumcave I'd wait a year or so, even with a higher interest rate, and buy more house for less money.

By 2007 we should have a good feel for where the economy is going. Call me a pessimist, gold bug, or a bear if you like, but I don't like what I'm reading. I'm hunkering down in my bunker. :)
last edited: 3/05/05 11:46:24 AM”

“�We have the most robust economy in the world by a long shot. The sky is not falling.� bbw

What do you mean by robust? - there are countries with faster growth.
last edited: 3/05/05 4:06:12 PM”

“bbw --- the data you link to shows US GDP growth slower in 2002 and 2003 than for the rest of 1993 to 2003 (i.e. 1993 - 2001). Of course GDP growth has picked up a bit in 2004. Also it shows how our negative account balance has soared as a percent of GDP.

The sky ain't fallin' - but the future looks murkier at the moment. No attempted prophesies from me, though.”

“You never disappoint Ped. Take good news and spin it into bad. I love the fact that Democrats think being critical is a plan.”

“I've got an uncle who's a lifetime bachelor. He's 67 years old, doesn't have an answering machine and it takes years of effort to convince him of anything. In short, he's incorrigible because he's never had anyone there to keep his personality excesses in check.

The Republicans have done a lot of good things over the years. But they are an elderly, bachelor uncle without the Dems. I am quite sure that they would do all manner of crazy things things without good ole' Momma Reid there to beat them over the head with the purse every couple of days.

In short, the Republicans are better because they have the Democrats to tell them no.”

“So bbw, how do you define robust? In what objective way does the US have the most robust economy in the world?

I don't think I'm spinning everything. US economic growth is OK - there are some worrying stats as well. I think its hard to predict whether the debt and trade deficit problems will hurt us. The rapid expansion of debt and deficit under Reagan were ameliorated by faling oil prices - so they did not hurt much. It may be that Bush's rising twin deficits won't hurt us much either.”

“"The Bush problem is excessive spending not tax rebates."

"You cut back on spending.

The (Bush) Government did not do that and we have a cartload of debt."

What is so difficult to understand about this logic ??

Out of control government spending is not the exclusive domain of either party.

Democrats favor spending on social welfare programs and cutting defense programs.
Republicans favor spending on defense and cutting social welfare.

Both have their place and the trick is to balance what goes out with what comes in.

When the economy is good, and everyone is working and making a lot of money and paying taxes you can spend a lot. The reverse is also true, when the economy is down you need to stop some programs.

Because you can't afford it !!

If the economy is good and the government has a lot of money left over they have 2 choices, increase services or collect less tax. Democrats want to increase services, Republicans want to decrease tax.

2 exceptions were FDR and Reagan, for both of these there was an imminent threat to the US and deficit spending is warranted.

Otherwise live within your means.

Bush is not doing that.

As for imminent threat, If Saddam had a nuke he definitly was a threat to the US energy supply with the ability to destroy the Saudi Oil. But from a military spending standpoint he was never in the same league as the Axis or USSR and the current Bush spending is not justified.”

“Manuka!

I would say that I probably agree with you 90%.

But there is something fundamentally different about "cutting taxes" when you have actual money to return to taxpayers vs. a time when you don't have the money and have to incur large debt to give that money to taxpayers.

I would propose that the first is a legitimate tax cut and the second is merely another example of government expansion. In fact, I hold that tax cuts without a spending decrease should be added to the federal budget as a line item. The size of government is determined by how much it spends. These "tax cuts" are increased government spending and should be added to the budget.

I would also take issue with the Republican vs. Democrat difference on social programs. One of the best things that President Clinton ever did was his welfare reform plan. He actually cut social programs.

Bush has increased social spending with the prescription drug benefit and the faith based initiatives.

But I think, Manuka, that we probably have more in common on this issue than any differences.

We should live within our means.”

“By bacpac's logic, China is the most powerful country on Earth.

He also seems to know more about money matters than self-made billionare Warren Buffet.

Buffett deepens dollar worries

Warren Buffett has warned that the US trade deficit risks creating a �sharecropper�s society� as his letter to shareholders sounded an increasingly bearish tone about the value of the dollar.
[...]
Mr Buffett stepped up his warning about the US trade deficit and the need to finance it with foreign investment, devoting more than two full pages of the annual report to the topic.

�This force-feeding of American wealth to the rest of the world is now proceeding at the rate of $1.8bn daily, an increase of 20 per cent since I wrote you last year,� he said. �Consequently, other countries and their citizens now own a net of about $3,000bn of the US�

In particular, he warned that this meant a sizeable portion of what US citizens earned in future would have to be paid to foreign landlords.

�A country that is now aspiring to an �Ownership Society� will not find happiness in � and I�ll use hyperbole here for emphasis � a �Sharecropper�s Society,� added Mr Buffett. �But that�s precisely where our trade policies, supported by Republicans and Democrats alike, are taking us.�
[...]”

“"When a man spends his own money to buy something for himself,
he is very careful about how much he spends and what he spends it on.

When a man spends his own money to buy something for someone else,
he is still very careful about how much he spends, but somewhat less what he spends it on.

When a man spends someone else's money to buy something for himself,
he is very careful about what he buys, but doesn't care at all how much he spends.

When a man spends someone else's money on someone else,
he doesn't care how much he spends or what he spends it on.
And that's government for you."

--Economist and Nobel Laureate Milton Friedman"”

“So the third paragraph is meant to describe Bush's deficit-financed tax rate decrease?”

“How is a tax cut a government expenditure? I am absolutely in support of balancing the budget and wiping out the deficit, and think the Constitution should have an amendment that the government must operate on a balanced budget except in times of national emergency. But I could not disagree more that tax cuts are government expenses.
I think it's time Bush starts vetoing some spending bills.”

“My State has a Constitutional Amendment that requires a balanced budget. The Legislators are slinging pork to gobble up the $250 million dollar surplus this year. Most of the surplus is due to windfall revenues created by economic growth.”

“Let's say you earned $50,000 in a year. You don't save very well and you spent it all. Then, your workplace realizes an error was made and you were paid $3,000 more than you were supposed to. You had to take out a loan to pay that money back.

Was that $3000 an expense for you? Sure. You didn't have it anymore, so it increased your yearly budget by $3000. Instead of spending $50,000, you spent $53,000 that year.

Now, let's say the government has a trillion dollars and spends it all. Now, let's say that the government decides to give $300 billion "back" to taxpayers. Was that $300 billion an expense?

Sure. Instead of spending 1 trillion, the government spent 1.3 trillion.

Since the size of governments, universities and other like entities are determined by their yearly expenditures, these tax "cuts" actually increased the size of the federal government.

Now, let's suppose that the government takes in that same one trillion dollars and only spends $700 billion in the course of a year. At the end of the year, it decides to give everyone a share of that extra $300 billion.

How much has the government spent in that situation? 1 trillion dollars. There is no increase in the size of government. It is the same as if it had spent the money on something else.

So, we can see that a tax cut without an accompanying spending reduction is actually an increase in the size of the federal government.”

“I'm not sure you have a complete grasp of how taxes work. Lets look at your examples.
1. "Now, let's say the government has a trillion dollars and spends it all. Now, let's say that the government decides to give $300 billion "back" to taxpayers. Was that $300 billion an expense?

Sure. Instead of spending 1 trillion, the government spent 1.3 trillion."
The government formulates the budget (supposedly) on expected tax revenues for the following year. When cutting taxes, the government is saying they will not need as much tax to operate the government for that term. Your example doesn't work because the government is not "giving" money, it is taking less. In the case of the $400 check most of us received in 2001, the government was returning money it did not intend to spend, money it had collected in the form of taxes and was holding.
2."Now, let's suppose that the government takes in that same one trillion dollars and only spends $700 billion in the course of a year. At the end of the year, it decides to give everyone a share of that extra $300 billion.

How much has the government spent in that situation? 1 trillion dollars. There is no increase in the size of government. It is the same as if it had spent the money on something else."
No, the government has spent $700 billion and returned what it overcharged.
For the government to "give" money to taxpayers, it would have to be money not first payed by taxpayers, money from another revenue source. If you and I decide to open a business, and I tell you, Your share of the business will cost $100, and you give me $100. I come back to you and give you back $10, telling you that business cost less than expected. Am I "giving" you $10? Or am I returning money to you that is not rightfully mine?
last edited: 3/08/05 8:59:28 PM”

“"How Taxes Work . . .

This is a VERY simple way to understand the tax laws. Read on -- it does make you think!!

Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men � the poorest � would pay nothing; the fifth would pay $1, the sixth would pay $3, the seventh $7, the eighth $12, the ninth $18, and the tenth man � the richest � would pay $59.

That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement � until one day, the owner threw them a curve (in tax language a tax cut).

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So now dinner for the ten only cost $80.00.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six � the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?"

The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, Then the fifth man and the sixth man would end up being PAID to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free.

But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man who pointed to the tenth. "But he got $7!"

"Yeah, that's right," exclaimed the fifth man, "I only saved a dollar, too . . . It's unfair that he got seven times more than me!".

"That's true!" shouted the seventh man, "why should he get $7 back when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up. The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered, a little late what was very important. They were FIFTY-TWO DOLLARS short of paying the bill! Imagine that!

And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.

Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straightforward logic!

T. Davies
Professor of Accounting & Chair,
Division of Accounting and Business Law
The University of South Dakota
School of Business
414 E. Clark Street
Vermillion, SD 57069
Phone: 605-677-5230
Fax: 605-677-5427"”

“Alum's, analogy makes it pretty simple to understand, but it was never a difficult concept.

I don't understand why American's allowed the Democratic leadership to run a campaign on Tax cuts for the rich and suppression of the poor. Now they are doing the same thing with social security. It is pretty simple math with some unknown variables, but only a fool would say that the social security system is fine as is.

How long, before people get their heads out of the sand and toss those bums out?”

“http://biz.yahoo.com/brn/050307/15226_1.html
For decades, we in the media have reported that women earn less than men. As a result, we've created a generation of angry women and self-conscious men.
A new book, "Why Men Earn More," by Dr. Warren Farrell, shows we've been dead wrong: For the same work, women earn more than men. His findings are based on a comprehensive review of government and other statistics.

Farrell is no right-wing misogynist. He ran for the Democratic nomination for California governor. He's the only man ever elected three times to the board of the National Organization for Women in New York City. And he's no intellectual lightweight; the Financial Times named him one of the world's top 100 thought leaders.

The book's main message is good news for women: If women do one or more of the 25 things men more often do, women can earn more than men.

Farrell does not encourage nor discourage women from doing these 25 things: "Each of the 25 usually requires trading quality of life for money. I just want women and men to be aware of their options so they can craft a life rather than just accept what drops in their lap."

The 25 can be reduced to three:

1. Choose careers that pay more. Because of supply and demand, you'll earn more by choosing a job that:

is in an unpleasant environment (prison vs. childcare facility);
requires harder-to-attain skills (hard science vs. liberal arts);
requires longer work hours (executive vs. administrative assistant);
is unrewarding to most people (tax accountant vs. artist);
demands financial risk (commission-based sales vs. government job);
is inconvenient (traveling salesperson vs. teacher);
is hazardous (police officer vs. librarian).
Many more men than women are willing to accept such jobs, even when women are paid more. For example, women sales engineers earn 143 percent of their male counterparts' salaries, yet less than 20 percent of sales engineers are women.

2. Put in more hours. That's obvious, but key. For example, Farrell cites research that "Fortune 1000 CEOs typically paid their dues with 60- to 90-hour workweeks for about 20 years. Yet women are less than half as likely as men to work more than 50 hours a week. And women are less likely to agree, every few years, to uproot themselves and their families to far-flung places to get the necessary promotions."

Why? Because women, on average, are more involved in childrearing and other domestic activities. So, if a woman (or man) expects to rise to high-paying jobs, she may need to push harder to get hubby more involved in those activities, pay for childcare and domestic services, or decide not to have children.

I asked Farrell, "But shouldn't workplaces not expect a woman (or a man) to work so many hours that family life is undercut?" He responded, "Yes, absolutely, but we must be gender-fair. If a male corporate manager chose to take care of his children, we'd applaud him but not expect the workplace to promote him as quickly. Yet when women do the same, women's advocacy organizations often expect just that. Both men and women must accept the consequences of their choices."

3. Be more productive in the hours you do work. If women produce as much as men, the good news is they will likely be rewarded. For example, women's advocacy organizations complain that female professors earn less than male professors, but Farrell cites research that among professors who produce an equal number of journal articles, "men were likely to be paid the same or just slightly less than women."

I asked Farrell, "But apart from the 25 nonsexist reasons men earn more, isn't sexism still a factor?" He responded, "There are instances of discrimination against both women and men, but on average, no. If you knew you could hire a woman for less than an equivalent man, you'd hire women to get a price advantage over your competition. Do you think businesses so hate women that they hire more expensive men even though they'd lose so much money?"

In reflecting on Farrell's book, I wonder if, rather than denigrating men for earning more, we should respect them for their willingness to do unpleasant, but necessary, work that few women will do such as roofing, coal mining or guarding a prison -- often working themselves into an early grave. There are four widows for every widower.

And men, you might learn a lesson from women and consider trading money for quality of life.

-------------------------

Or to use Alumcave's anology, when the taxes get too high I stop working that 60- to 90-hour workweek and go backpacking.

When I go backpacking instead of working, not only do my taxes go down but now I also qualify to get govt assistance for my Kids in college. Win win for me, too bad for the overall economy.

But when I go backpacking we do not have the same amount of money in the household. My wife gets a job as a teacher, doesn't pay much, but it is only to make up a part of my wages.

But it makes a HUGE difference in taxes, as my wife is being paid from public funds.

Example
By working long hours I get paid $90,000, I pay $15,981 in taxes which goes to the public purse.
I get tired of that and work less. But my wife works as a teacher and gets the difference.
I now get $70,000, and my wife gets $20,000.
Our joint income is the same $90,000, our taxes are the same $15,981. BUT my wifes $20,000 come out of taxes so the public purse is now MINUS (20,000-15981=) $4019.

Best of all is the increase in self esteem, I will no longer be despised as a rich person ripping off the downtrodden poor and I have time to go backpacking.

It does not take too many to do this before we are short of $52 when it is time for dinner.”

“Violin, here�sd a good article on your hero, Krugman:

http://www.mises.org/fullstory.aspx?control=1318


Oryx, I believe that Greenspan is, economically, a Monetarist not an Objectivist. Although philosophically, he may be an Objectivist.


Solitary, are you a Keynesian? It will be interesting to see if the Keynesian prediction of inflationary pressure comes to pass. I�ll be paying attention.


Alumcave, did you get a chance to read this on the Tax Cuts for the Rich thread? Government growth currently is inadequately measured by this man�s opinion:

Lies, Damn Lies, and Conventional Measures of the Growth of Government

Robert Higgs
The Independent Review a journal of political economy
Volume IX, Number 1, Summer 2004

Many of us who believe that governments continue to grow relentlessly, at least in the economically advanced countries, have been criticized by analysts who claim that in fact the growth of government has petered out or slowed substantially. ?The latter group perceives us to be needlessly alarmed and faults us for a failure to acknowledge the decisive turn of events associated with the so-called Regan and Thatcher revolutions of the 1980s. Not to worry, they exhort us; the statistics are on the run, and a brave new world of market-oriented liberalism shimmers on the horizon.

My thesis here is that these seemingly level-headed realists are the ones who have failed to perceive correctly the ongoing growth of government. A major reason for their failure is their reliance on certain conventional measures of the size and growth of government. Some of these measures have a built-in tendency to exhibit deceleration even when a more compelling representation displays continuing steady growth. Often the conventional measures miss the growth of government because it has been diverted into channels beyond the scope of their measurement. To some extent, governments have been growing in important but unmeasured or poorly measured ways all along, and they continue to grow in these ways, perhaps more menacingly than ever before. Off-budget spending, for example, is a well-known resort of political scoundrels, but it is only one example among many of how governments employ hard-to-measure means to achieve their usual ends, especially when tax revolts, formal spending limits, or borrowing limitations frustrate their chronic desire to spend at a greater rate.



Government�s Share of Gross Domestic Product

The most common measure of the size of government is the amount of government spending relative to gross domestic product (GDP). In a recent monograph on the growth of government, for example, Vito Tanzi and Ludger Schuknecht present much of their data in the form of government-spending variables relative to GDP. A major theme of the book is: �Government spending [measured in this way] increased most rapidly until about 1980. Since the early 1980s, it has been growing more slowly and in some instances has even declined� (2000, 3).

Now, the first thing to notice is that a sure-fire way to make nearly any economic magnitude appear small is to divide it by GDP, because the latter, which purports to be the total value at market prices of all final goods and services produced within a country in a year, is always an enormous dollar (or euro or peso or other currency unit) amount. Government spending of $2,855,200,000,000, as in the Untied States in fiscal year 2001, seems to be an astronomical amount, but just divide it by the value of GDP and, voila�, it is a mere 28 percent � surely nothing to be alarmed about, especially in comparison with corresponding figures for many European countries that exceed 50 percent.

The next thing to notice is that because government spending for currently produced final goods and services is itself a component of GDP, the ratio of the former to the latter is immediately compromised. Any addition to such government spending increases the denominator as well as the numerator of the ratio. Suppose that in year one the government spends $100 dollars for currently produced final goods and services, and the GDP in that year is $500. Now suppose that in year two the government spends twice as much � that is, it increases its purchase amount by 100 percent � but nothing else changes. In year two, the government�s share of GDP will be 33.33 percent (or $200/$600), as compared to 20 percent in year one. An analyst focusing on the government�s spending share concludes, then, that government has grown not by 100 percent , as plainly has by construction, but only by 66.66 percent (that is, [33.33/20) � 1] X 100). The greater is the bias in moving from its absolute spending to the share concept to measure its growth. If government had begun with spending of $100 out of a GDP of $200, then doubled its purchase amount, other things being unchanged, it would have increased its spending share from 50 percent to 66.66 percent � a mere 33.33 percent growth.

Granted, many economically advanced countries have maintained a fairly steady government �exhaustive� share of GDP during the past couple decades (Tanzi and Schuknecht 2000, 25), but this steadiness merely attests that the government�s purchases of currently produced final goods and services have grown fully as fast as the sum of nongovernmental purchases of such goods and services during that period of substantial economic expansion, not that government has become quiescent or stuck in the mud. In the United States, for example, the total government share of GDP was 22.1 percent in 1975 and 17.6 percent in 1999. Lest one think that government had run out of steam during that quarter-century, however, one ought to notice that government increased its purchases of currently produced final goods and services from $361.1 billion in 1975 to $1,634.4 billion in 1999 � which is to say, it increased the annual rate of such spending by $1,273.3 billion during that period (U.S. Council of Economic Advisors 2001, 274-75). To be sure, inflation accounts for some of that increase, but even in constant (1996) dollars, the increase was from $942.5 billion to $1,536.1 billion (U.S. Council of Economic Advisors 2001, 277), or 63 percent � hardly a retrenchment. Population growth cannot justify the increased spending because the U.S. population grew by just 26 percent during the period (U.S. Council of Economic Advisors 2001, 315).

Of course, the really gigantic increases in government spending have most recently taken the form of transfers (including subsidies), which are not components of GDP and therefore do not give rise to exactly the same numerator-denominator bias that arises when government increases its purchases of currently produced final goods and services (�exhaustive� spending). Transfer spending also, however, is commonly placed for purposes of analysis in relation to GDP, which then serves as a sort of �normalizer� or standard of comparison, and whenever this ratio is used, some of the same problems identified earlier arise again. Why, one might ask, should government�s transfer spending be placed in a ratio to GDP rather than, say, in a ratio to population or some other base? And if the ratio to GDP remains constant, why, one might ask, should such constancy prevail? That is, why should government�s transfer spending increase whenever the economy�s output of final goods and services increases? Indeed such constancy would seem to betoken a kind of relative growth of government in its own right, inasmuch as people in a more productive economy presumably can get by more readily without government assistance; hence, as a rule, the ratio of transfers to GDP might be expected to fall in a growing economy rather than rise or even remain constant.

However this matter might be viewed, in reality the ratio has risen enormously in all the economically advanced countries during the past several decades, and it now stands at more than 20 percent on average for a group of seventeen important industrial countries studied by Tanzi and Schuknecht, up from less than 10 percent as recently as 1960 (2000, 31). Increasingly, transfer spending is becoming recognized as the Godzilla that threatens to consume New York, Tokyo, Berlin, and nearly evey other city on the planet. A few countries, such as Chile, have taken effective measures to deal with this looming threat to government fiscal viability, but so far most politicians in most countries have kept their heads planted firmly in the sand, ignoring everything beyond the next election, while government�s transfer spending has grown ever more bloated, and the severity of the adjustments that will have to be made when the day of reckoning can no longer be postponed has grown ever greater.



Government�s Share of Employment

Government employment as a percentage of total employment has often served as an index of the size of government. This measure, too, has a built-in bias toward suggesting that the rate at which government is growing is decelerating over time even when government increases its share of employment by, say, one percentage point every year. Thus, for example, when government�s employment share increases from 2 percent to 4 percent, the government grows by 100 percent, but when the share increases from 20 percent to 22 percent, gobbling up the same incremental proportion of total employment, the government grows by just 10 percent.

In the group of seventeen advanced countries analyzed recently by Tanzi and Schuknecht, the government�s average employment share increased from 5.2 percent in 1937 to 12.3 percent in 1960 to 18.4 percent in 1994 (2000, 26). The rate of increase of this ratio has declined during the past two decades in most countries, but one ought not to make too much of that deceleration. In the United States, increases in the amount of �contracting out� of government functions have led to a replacement of formal government employees by a growing �shadow� army of many millions of seemingly private employees � grantees, contractors, and consultants � but the latter are doing what they are doing only because the government arranges and pays for it to be done (Blumenthal 1979; Hanrahan 1983; Light 1999a, 1999b). According to Paul Light�s estimates, the U.S. federal workforce is not the fewer than 2 million persons officially reported (as of 1996), but nearly 17 million persons � �and the count does not even include the full-time equivalent employment of the people who work on a part-time or temporary basis for Uncle Sam � for example, the 884,000 members of the military reserves,� although it does include some 4.7 million federally funded workers already counted in the all-governments total as employees of state and local governments (1999a, 1).

Moreover, governments increasingly have established regulations that in effect require bona fide private parties to work for the government. Tanzi and Schuknecht themselves take note of such �quasi-fiscal policies,� which they describe aptly as regulations that �become alternatives to taxing and spending� (2000, 203). In this recognition, they follow in a long line of analysts stretching back at least to Richard A. Posner in his capacity as the author of the 1971 article �Taxation by Regulation.�

The relevant class of regulations, though, is much wider than it is usually recognized to be in the standard literature of economics and public choice. To be sure, all sorts of economic, environmental, health and safety, and social regulations continue to spew out of Washington and Brussels, among many other government centers. In addition, however, the U.S. government especially requires ever more uncompensated information collection and reporting by its subjects in order to slake the Surveillance State�s insatiable craving for the most minute details of everyone�s conduct (Bennett and Johnson 1979; Twight 1999). These Big Brotherish demands are justified by the despicable slogan that only those with something to hide will object, but in truth this vile rain falls on the righteous and the wicked alike � and one would have to be pretty dimwitted to expect the latter to report truthfully even if officially required to do so.

According to a recent summary of U.S. federal regulation by Clyde Wayne Crews Jr.,

The 2001 Federal Register contained 64,431 pages�.

In 2001, 4,132 final rules were issued by agencies�.

Of the 4,509 regulations now in the works, 149 are �economically significant� rules that will have at least $100 million in economic impact. Those rules will impose at least $14.9 billion yearly in future off-budget costs�.

The costs of meeting the demands of off-budget social regulations were as high as $229 billion according to the Office of Management and Budget. A more broadly constructed competing estimate that includes economic regulatory costs and paperwork costs pegs regulatory expenditures at $854 billion in 2001, or 46 percent of all FY01 [fiscal year 2001] outlays. (2002, 1-2)


The foregoing summary, shocking as it is, describes the regulatory burden being imposed at only the federal level of government. The state and local governments, as well as various international bodies, simultaneously continue to pour out endless streams of their own regulations, all of which entail resource costs and sacrifices of citizen�s liberties.

Because the public has less awareness of the burdens imposed by these regulations, many of which remain obscure and indirect in their operation and effects, governments encounter even less resistance to their ongoing imposition of regulatory burdens than they encounter in their quest to collect greater revenue from explicit taxes laid on incomes, sales transactions, and property values. So far it seems that there is no natural limit to the number of regulations governments can and will impose. Hence, we are fast approaching a condition in which everything that is not forbidden is required, even as Americans, acting for all the world like faux-patriotic zombies, continue to reassure themselves incessantly that �it�s a free country.�

For present purposes, the point is that people occupied with regulatory compliance are not truly privately employed. Instead, they are in effect stealth government servants, working not for their own ends but doing the bidding of their political masters. In the present Western world, then, nearly everybody is actually a government employee, but rather than getting a government paycheck for our efforts, we are required to pay the government for the privilege of our own serfdom and to bear the risk of prosecution and imprisonment should our unpaid work on the government�s behalf prove unsatisfactory to our �employer.�



All That and More

Astronomical taxes and expenditures, regulations distended beyond human comprehension; gigantic borrowing and lending; countless prohibitions and subsidies; innumerable loan guarantees; multitudes of fines, fees, and charges; mountains of surplus commodities distributed like manna; precious private property seized at the whim of the forfeiture police; foreign wars without end; internal-security measures that treat all human beings going about their daily lives as criminal suspects � all that and more, much more, ever more constitute the glorious realm of government in today�s economically advanced countries (you know, the ones that are color-coded as �free� on the maps prepared by research institutes better left nameless on this occasion). Each day the galling chains around us are pulled tighter. Yet until the last breath of liberty is squeezed out of us, we can rely on �hardheaded� scholars to trot out the anemic and biased measures of the growth of government and to announce calmly that we have no valid cause for alarm. My advice: if you value your life, liberty, and property, do not employ one of these experts as your night watchman.”

“I'm really impressed arc.

An assistant professor of economics at Frostburg State University (never heard of it before) thinks that Paul Krugman, who is currently a professor at Princeton and has also been one at Yale, Stanford and MIT, is a hack.

I guess that settles that.”

“Frostberg state offers no graduate economics degrees. Imagine that!”

“Typical response from you two.

Don't like the message, smear the messenger.”

“It's called an appeal to dubious authority, Manuka. Look it up.”

“Phaedrus,

Arclite did not post the opinion of William L. Anderson he just pointed it out to VioLin with a link.

What was posted was an article by
Robert Higgs
The Independent Review a journal of political economy
Volume IX, Number 1, Summer 2004

on the increasing share of GDP being swallowed by an ever increasing government. What is this growing government doing with their resources? ever increasing regulation.

That you chose to attack the credibility of the article that WAS NOT posted and have nothing to say about the one that was posted also indicates something.

BTW I believe it was a child who stated that the Emperor had no clothes, so the opinion on Krugman is not invalid just because the holder of the opinion does not have the type of credentials you desire.”

“Frostburg State University is in western Maryland in a town called................Frostburg.


I can't understand why they don't just drop the "State" from the name, my university did.

We were TSU, now TU.”

“Coming up to the Ides of March

ET TU ??”

“FU Brutus?”

“Bad orienteering, wrong empire

FU Manchu
| |
| |
| |
/ \
\_/ \_/

Moustache”

“One interesting note about William Anderson is that he was one of the few economists who predicted the bubble/bust of the late 90's. MIT educated Krugman did not.

Who knows why Anderson didn�t go name brand. His credentials look fine to me: B.S. University of Tennessee, Communications; M.A., Clemson University, Economics; Ph.D., Auburn University, Economics

The Mises Institute thinks enough about Anderson keep him on their adjunct faculty. Of course violin is familiar with Ludwig von Mises. It was the Austrians who had the most success predicting the bubble/bust, the majority of Keynesians, alas, were wrong again.

While he may be a fine economist, I have noticed Krugman to be a political hack. I have a hard time taking his obvious bias seriously. But I don�t discount him entirely. That would be illogical of me. Because there is truth in what he says, just as with Anderson's article.

But you can stick to your Ad Hominem illogic, violin. You must also have had a low opinion of Robin William�s character in Good Will Hunting. You are obviously part of Krugman�s �kiss-ass chorus �The Fields Medal, the Fields Medal��”

“I'm not sure where you get your information arc. I�m not really interested in going into a long and pointless defense of Paul Krugman so I�ll limit myself to a brief post (you should try it sometime).

While Krugman made some predictions that didn't pan out, there was pretty much a consensus opinion that the late 90's stock market was a classic bubble. For Anderson to claim that he was one of the few to predict a burst is revisionism. Krugman wrote a scathing review of that book �Dow 36,000� which was published just before the burst.

One obvious point that Anderson gets wrong is painting Krugman as some sort of Clinton cheerleader (as if that by itself would deflect his criticism of Bush�s policies). Krugman was fairly critical of several Clinton policies, particularly the welfare �reform� legislation.

Believe what you like, but don�t spread falsehoods.”

“Violin, Krugman is a political operative in the minds of many, many, many people. He OBVIOUSLY engages in many anti-Republican rants. That is why you most often manage to post his articles for economic thought isn�t it? I have seen more than one article (by different writers) that mentions Krugman�s bigotry. Anderson just wrote a very good piece about it:

��Lastly, Krugman's columns demonstrate that he is unable to engage in logical arguments. Take his criticism of tax cuts, for example. His main objection is that those who "benefit" the most are "the rich." That is the extent of his argument; wealthy individuals will receive larger reductions in taxes than less-wealthy individuals, so tax cuts that slice off marginal rates are bad. Nowhere does he point out that even a tiny reduction in the top income tax rates will yield fairly large decreases in taxes wealthy individuals pay because those people pay the lion's share of taxes in the first place. In other words, the vaunted economist does not argue in economic terms; he simply appeals to envy and calls it economic thinking�.�
William Anderson

Come on, violin, don�t you just love that part?

Krugman was wrong about the bubble/bust; Anderson got it right. But there you go ASSuming again. Did Anderson make the claim that he predicted the bubble/bust in his article? Did I ever say that Anderson CLAIMED that he made a correct prediction? Tsk, tsk, tsk. You�re just as illogical as your hero, violin.

My information that Anderson got it right came from an article called �

Who Predicted the Bubble? Who Predicted the Crash?, by Mark Thornton, In The Independent Review.

For someone who is as familiar with economics as you, I�m surprised you didn�t know that.”

“OK...

For you to claim that Anderson was one of the few to predict a burst is ignorant.

Happy now?”

“�Ya know what? I think it�s time we all got brutally honest with each other. It�s time we all come right out and say what no one wants to. To say that one single thing that will get us all called closed minded, un-PC, and ignorant. OK, I�ll go first�

�I, Nigal J. McGillicutty, don�t give a shlt what anyone thinks. Don�t agree with me? Tough shlt brother. I don�t give a flying phuck what the left thinks. I don�t give a flying phuck what the right thinks. I don�t give a flying phuck what YOU think. Forget all the �Let�s have an open dialogue and learn from each other.� PC bull chit. You don�t care, I don�t care, WE don�t care. These are my beliefs. This is what I think. Do you really, really think that anyone on here as the credibility to even comment on another�s views? Think again.�

Now, if we get that out of the way we can all agree that all we are engaging in here is shouting. Who can shout the loudest, longest and shrillest. That�s who wins on TT.�”

“In a withering critique of his fellow Republicans, former Federal Reserve Chairman Alan Greenspan says in his memoir that the party to which he has belonged all his life deserved to lose power last year for forsaking its small-government principles.
[...]
Mr. Greenspan, who calls himself a "lifelong libertarian Republican," writes that he advised the White House to veto some bills to curb "out-of-control" spending while the Republicans controlled Congress. He says President Bush's failure to do so "was a major mistake." Republicans in Congress, he writes, "swapped principle for power. They ended up with neither. They deserved to lose."

http://online.wsj.com/article/SB118978549183327730.html?mod=djemalert”

“Anyone else notice how this guy still thinks he's the Federal Reserve Chairman? Kinda sad really.”

“He may be a republican libertarian, but he sure kept interest rates too low -too long. Did Allen also say the dems deserved to be thrown out just because they're A-wholes?”

“Greenspan is right. Republicans were acting like Democrats.”

“WHOA>>>>News Break....sheeeeit most real republicans have been saying that for years.”

“A real republican, would be a Goldwater republican, which is not a republican , but a libertarian.”

“Agreed....”

““Greenspan is right. Republicans were acting like Democrats.”
bacpac


No.

Junior is acting just like Daddy and Ronnie.

Anyone who still holds onto the myth of Republican fiscal conservatism is living in an alternate universe.”

“I don't think Herbert ever said 'no' to anything, did he?  I recall the comments to that effect at the time.

And before that, the Reagan military buildup and the borrowing to cover it.  He was fiscally conservative.... compared to what came later.”

“Not getting killed by commies trumps all else.”

“Fully 70% of the national debt was incurred under Reagan, Bush I and Bush II.”

“But look how much safer you are now after all that spending. If a Mexican truck doesn't hit you, an illigrant will rap or rob you.”

“The best part is this shows how incredibly poor the Civics classes were in certain people's education...


Okay guys...who PASSES the budget..Come on..WHO passes the budget? CONGRESS. Come on...is it that tough. Want to know why the Republicans lost in 06? RUNAWAY SPENDING...the dems are keeping right up...LOL

Now for the 65 Million Dollar question...what is the LARGEST PART of the US Budget?”

“Tell me XL, how many spending bills did Bush veto in his first term? How many total?

And, tell me how many spending increases did he support? How many revenue decreases did he support?”

“Another thing I like about Bush is he didn't overuse the veto. He tried to respect the cabinets whose representatives are elected by their people. He reserved the veto for the most irresponsible legislation. He certainly should have cut the spending on many things in half - but of course, people on here would be complaining about that too. It's a no-win situation for Bush to many on here.”