Bob Higgs here (yet again, but always worthily) explains why WWII did not boost the economy. (Is there a more frequently committed instance of the looking-only-at-what-is-seen error than the frequently committed insistence that war is good for the economy?)
And here Bob ponders bank reserves.
Cato’s Sallie James has the dirt on the agreement to extend Trade Adjustment Assistance through 2013.
Richard Rahn discusses tax cuts.
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Always good to read Dr. Higgs, thanks!
The Carden article would benefit from discussion of Munger’s concept of “Euvoluntary Transactions” (see his recent EconTalk). People react to rising prices after natural disasters because many find revolting the idea of making money off of people who have no better alternative. Bob (not me) might need milk (or water, or other supplies) from the grocery store in order to feed himself or his family. However, in the wake of the disaster, he has no better alternative to what’s on offer. Consequently, grocers could charge whatever they wanted and it is this perception of the exploitation of desperation that people react to. Munger’s EconTalk was quite interesting on this point.
Regarding Richard Rahn and tax cuts here is a question of the type I like to ask my libertarian brethren to see just how much they’ve actually thought of things and to see what solutions their philosophy might provide or more likely will fail to provide.
So we now owe as a nation some $14 trillion in debt. If we are intent on NOT passing debt to our children, part of the libertarian platform…. how should we pay this off now so we do not burden them with our problems of overspending and under-taxing.
The easy answer will be to avoid all responsibility because “i did not vote for this spending”. We can ALL say that. The fact is it is their… someone… ALL of us are taking and receiving from that excess spending.
If you choose to be a citizen of this land then you are responsible for this debt… we all are… and we have no right to pass it on, based on the libertarian principles, to the next generation. So how do we ethically pay it off NOW. Or do you suggest we riot like they are doing in Greece which has accumulated exactly as much debt per person as us.
Ignoring your inexcusable and perpetual misunderstanding of libertarian principles, retiring the US government debt is very simple (not to be confused with easy). And since you asked how “we” could ethically pay off the debt rather than a politically feasible solution:
The US gov’t should shut down foreign military bases, eliminate most departments and agencies, and get rid of 90+% of government employees, thus reducing expenses dramatically. They should write off all intra-government debt and repeal the legislation causing huge unfunded liabilities. Then they should auction most government owned assets (cars, trucks, airplanes, buildings, land, etc.) and use the proceeds to pay the remaining debt and buy annuities for current and imminent SS recipients.
Then, with such a reduced government structure, taxes and other intrusions into people’s lives can be vastly reduced / eliminated, thus stopping the huge economic distortions caused by oscillatory political interventions, and eliminating the appeal to those who now co-opt government for their own ends.
Of course, you’d violently oppose such reforms since you’d no longer benefit from the subsidies and preferential treatment granted to doctors under current law.
You suggested a way to fix the deficit. I don’t think you covered the $14 trillion in debt… maybe some of it but not likely more than a small fraction.
So after we totally collapse the economy doing the things you suggest and are left with say $7 trillion still in debt… how do we pay it off?
George, I covered the deficit, the $14 trillion debt AND the much larger unfunded liabilities of entitlements. Your mental shortcomings do not compel me to repeat myself.
Also, the only economy I “collapsed” was parasitic – real wealth would increase after killing the parasite that reduces it.
YADave,
muirgeo is stuck on stupid. He doesn’t understand that reducing spending, while keeping revenues the same frees up much of the budget to actually pay off the debt. He doesn’t understand that if
Revenues = $2,381,000,000,000
Expenditures = $355,000,000,000 (a 90% reduction as you suggested)
Then the deficit is ENTIRELY eliminated (all $1,171,000,000,000 in 2010) and $2,026,000,000,000 can be used to pay down the debt. While muirgeo claims to be a doctor, he isn’t smart enough to perform 3rd grade arithmetic.
Regards,
Ken
Well Muirgeo, if U.S. government truly wanted to get rid of the debt now, a lump sum tax would be instituted. It’s the most efficient tax and it does not create deadweight loss.
Thanks…. thats my point. Ken and Dave don’t understand that if we cut all spending tomorrow and somehow revenues stayed the same that would only pay off $2 to 3 trillion of the $14 trillion owed. Even in their ridiculous scenario the debt would not be paid off for 8 to 10 years… again passing it off to the next generation.
Muirgeo, thanks for (inadvertently I’m sure) making the point that government spending should be cut dramatically and immediately, but I have one question. Can you read???????
You seem to have missed this part:
I never implied this would be immediate, but your comment illustrates just how devastating the irresponsible spending flagrancy you so enthusiastically support has been to the US.
Muirgeo,
In such a tax scheme as you describe, In your estimate how much tax would be collected immediately to pay towards the debt? Why? What would be the consequences for next year and the years to follow from this scheme? Why?
Thanks,
” Ken and Dave don’t understand that if we cut all spending tomorrow and somehow revenues stayed the same that would only pay off $2 to 3 trillion of the $14 trillion owed.”
Are you seriously suggesting that the gov just take $14,000,000,000,000 from American citizens today to pay off a debt created by other people, i.e., politicians? Is this your plan to eliminate the debt? To kill the US economy to eliminate a debt that the policies you flack for are directly responsible for?
You’re a dumbass, muirgeo.
Regards,
Ken
muirgeo-
According to nationalatlas.gov, the federal government alone owns 650 million acres of land- nearly 30% of the entire US. The above commenters recommended selling this land, along with other assets, plus eliminating inter-governmental debt. Your comment accusing them of not understanding their own position assumed that the total payment received by the government for all of these assets would be 0.00- that selling enough land for every single American to have an extra 2.15 acres would be worth exactly nothing. That the government’s jets, planes, trucks, buses, limos, ships, roads, buildings, computers, fuel, and other things would be worth a whopping total of exactly NOTHING.
How the hell can you claim money is better spent in the hands of government than in the hands of private citizens when you simultaneously claim that the government has spent all of its money on worthless garbage? Or perhaps were you ignoring the substance of their point and attacking a straw man?
muirgeo’s penchant for attacking straw men has resulted in a rash of dead scarecrows all across the country.
How did I choose to be a citizen of this land?
BTW — why isn’t the accumulated debt just a grand example of the wonderousness that is your “boosting demand”? Just think of all the jobs that were created by that debt. How about we just have those people pay it off?
Just this week, I heard several pundits all emphatically agree that WWII did not fix the depression (Fox Business). It can take time for a sound idea to displace entrenched unsound ones, but it does happen. Once you open the eyes of a few people with a large audience, your discovery will reach critical mass. Don’t be discouraged, be proud.
Re: The Sacketts Vs The EPA. From the activity I have seen quoted by another source in this (property rights) arena, I would say the Sacketts have an excellent case to prevail at the SCOTUS.
““The Ninth Circuit’s ruling against the Sacketts amounted to putting a $200,000 price tag on their right to pursue justice,” said Schiff. “If they can’t get judicial review of the EPA’s land grab without going through a long, costly, and probably futile permitting process, then for all intents and purposes, they have been denied their day in court.”
The tactics of tyranny, from home invasions, property forfeitures, to backdoor seizures of property such as this, it goes on and on.
Speaking of the arrogance of government bureaucrats:
http://www.ktrh.com/cc-common/news/sections/newsarticle.html?feed=121300&article=8770750
This is arrogance on display that has no place in any government position, elected, appointed, or hired. I would urge everyone to call their congressman and senator and support the move to get that woman fired and out of government. This is one push back against government stupidity you can do
Some imbecile claims that the Reagan tax cuts didn’t pay for themselves. Here’s some data:
US Population in 1980: 227,224,681
US Government Income Tax Revenues in 1980: $308.7 billion
US Government Income Tax Revenues Per Capita in 1980: $1,358.57
US Population in 1990: 249,438,712
US Government Income Tax Revenues in 1990: $560.4 billion
US Government Income Tax Revenues Per Capita in 1990: $2,246.64
Total Inflation 1980-1990: 63.75%
US Per Capita Income Tax Revenues in 1980, inflation-adjusted: $2,224.66
Ergo, the Reagan Tax Cuts Paid for themselves.