Quotation of the Day…

by Don Boudreaux on July 18, 2011

in Budget Issues, Current Affairs, Debt and Deficits, Other People's Money

… is from Leland Yeager’s 1981 essay “Costs, Sources, and Control of Inflation,” reprinted in Leland B. Yeager, The Fluttering Veil (George Selgin, ed.; Liberty Fund, 1997), pp. 33-84; the following quotation is on p. 46:

… a decent restraint in clamoring for government action to redistribute income from others to oneself is a public, not a private, good.

This quotation beautifully capsulizes one reason for the heat generated by the debate today over raising Uncle Sam’s debt ceiling.  Those many non-creditors of Uncle Sam who, without disruption, would get $$$ from him if the debt ceiling were raised, insist that his ability to transfer $$$ to them from others not be hamstrung by something so bourgeois as a silly ol’ debt ceiling.  (Oh – and I’m sure that the following question must have been asked at least 1,001 times during the past couple of weeks – but what’s the significance or purpose of a statutorily set debt ceiling if the expectation is that it will be raised without question to accommodate the need, or simply the desire, for government to borrow more than is allowed by the existing ceiling?)

By entering the income-’redistribution’ business, government – justified by so many ‘scientifically’ minded folks chiefly for its alleged capacity to ‘solve’ public-goods ‘problems’ – created a huge public-goods problem.

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{ 94 comments }

Greg Webb July 18, 2011 at 3:22 pm

The purpose of government redistribution schemes is for the politician to use the taxpayers’ money — instead of his or her own money — to buy the votes of enough special-interest groups to win the next election.

juan carlos vera July 18, 2011 at 4:38 pm

yes, yes, yes….

juan carlos vera July 18, 2011 at 4:46 pm

That is: politicians are privileged creatures who have the power to make laws that allow them to purchase goods with stolen money. They use the democratic system to clean their dirty business…

Josh July 19, 2011 at 8:07 am

You don’t understand the definition of the word stolen.

Greg Webb July 19, 2011 at 8:32 am

He does understand the definition of the word “stolen”. You are being obtuse.

Josh July 19, 2011 at 9:06 am

Taxation isn’t stealing.

Josh July 19, 2011 at 9:09 am

I would say “redistribution” is spin or rhetoric, but ill not split hairs on that particular choice of words, but “stolen” is just incorrect.

Greg Webb July 19, 2011 at 12:37 pm

Josh, when a government takes more in taxes from its citizens than is legitimately needed to properly administer its legitimate limited powers, it is stealing. It is not a valid argument to say that the government does not steal because it formulates the legal definition for theft, which the government’s representatives carefully craft to exclude the government’s own misconduct.

juan carlos vera July 19, 2011 at 2:02 pm

Josh, this is for you:
“…Whoever claims the ‘right’ to ‘redistribute’ the wealth produced by others is claiming the ‘right’ to treat human beings as chattel…” Ayn Rand…

vikingvista July 19, 2011 at 11:26 pm

“Taxation isn’t stealing.”

“Stealing” and “taxation” are both the forceful taking of the property of an innocent. Someone may stipulate their particular takings to be “legal” (and why not?) according to their rules, and you may choose to use their rules as your standard. But there is also the standard by which laws are made and judged. By that standard–and for the reason we call any stealing wrong–taxation is always stealing.

juan carlos vera July 19, 2011 at 2:06 pm

Josh, this is for you:
“…Whoever claims the ‘right’ to ‘redistribute’ the wealth produced by others is claiming the ‘right’ to treat human beings as chattel…” Ayn Rand…

DG Lesvic July 18, 2011 at 5:34 pm

Greg,

Sorry to disappoint you, but I’m still here, for your feverish attempt at character assassination was proof that you couldn’t meet the challenge of ideas any more than anyone else here. If you’d still like to try, my offer is still open. I will leave if you or anyone else can provide us with an example of mathematical economics, not just the claim of one, but an actual example, validated and verified by means of reason.

But, even barring that, you still have the chance to show that you could contribute something other than character assassination to the discussion, and something beyond the obvious of your statement above.

Tell us something we don’t already know.

Tell us, for example, why redistribution actually makes the poor poorer.

Greg Webb July 18, 2011 at 6:13 pm

DG, it is not character assassination to ask you to keep your promise to leave Cafe Hayek after Don provided you with the example that you requested. But, like all statists, you weasel out of your promise by presenting conditions and standards that you never included in your original demand. Like I said before, one cannot have a meaningful conversation with you because you never mean what you say.

DG Lesvic July 18, 2011 at 7:22 pm

Greg,

The “conditions and standards” of reason are assumed by all reasonable people, without having to be told. It is only unreasonable people who need to be told. And it’s unreasonable to hold me to account for your unreasonableness, and impugn my character because you chose to treat me unfairly.

Fairness is not “the letter of the law.” It’s that part of it that was unspoken or unwritten, and precisely because it was understood by all. It was surely understood by all, but yourself, that I was not agreeing to leave if someone presented me with an invalid example of what I had been asking for, but only with a valid one. I asked for an example of mathematical economics. Don offered “the equation of exchange.” And we had Mises stating that that was not a valid part of economics, that it was non-economics. It may be that Don was right and Mises wrong. And I’m still perfectly willing to examine the question, and, if it turns out that Don was right, leave Cafe Hayek. But why was I obligated to do so before the issue was settled? How does expecting the debt to be verifed before paying it make me a “weasel,: a “statist,” and one with whom you “cannot have a meaningful conversation” because I never mean what I say?

And, how, under the circumstances, are such accusations anything other than character assassination?

And how does this continued effort at it contribute anything to economics, and to anybody but our enemies?

When you’re ready to be reasonable, fair, and contribute to economics, let me know, and I’ll be glad to discuss things with you.

Until then, you can babble on without me.

Greg Webb July 18, 2011 at 7:31 pm

DG, like all statists, you do not believe that the rules — including those that you establish for yourself — apply when you lose. Why, that would be unfair! Like I said, one cannot have a meaningful conversation with you because you do not mean what you say.

vikingvista July 18, 2011 at 8:34 pm

“one cannot have a meaningful conversation with you because you do not mean what you say.”

Not to mention that he is dim to the point of not even understanding what “price” means.

DG Lesvic July 18, 2011 at 9:08 pm

Viking and Gregg, the twins of character assassination.

They should make a happy couple.

Greg Webb July 18, 2011 at 9:39 pm

More “meaningful” conversation from DG Lesvic, a.k.a. “The Weasel”. His modis operandi is to make grand absolute promises like “Give me that example of mathematical economics I’ve been asking for, and I’ll do just that. I’ll leave Cafe Hayek, never to return”. Don Boudreaux did just that, and now The Weasel argues that there were all these implied conditions to his absolute promise. So, instead of either complying with his promise or apologizing by saying that he overstated his pompous claim to leave, The Weasel engages is silly character assassination attempts all the while pretending to be the victim of such attacks. Who else acts that way? Let’s see…Sean Penn, Alex Baldwin, Algore, Bill Maher…and every other insecure statist who is desperate for attention.

Dan J July 19, 2011 at 3:53 am

Dependency!!!! Breeds the dependency….. As inflation rises……. The addictive drug of ‘redistributed’ money does not rise with the inflation….. Leaving them poorer and their offspring, who often follow the behavior, and the neighborhood deteriorates from lack of productivity and income to match the inflationary process…. No growth in neighborhoods.

Dan J July 19, 2011 at 3:59 am

It seemingly impossible to defeat an opponent on issues that are ‘value’ based.
Not to say DG would be unreasonable, but if an argument is lacking his particular value, then no one but DG himself can derive an argument that will suffice.

vikingvista July 19, 2011 at 4:27 am

It’s not so deep. He has severe comprehension problems.

Stone Glasgow July 20, 2011 at 2:02 am

A fisherman has 20% of his catch left over each year, and trades those fish for more nets, increasing the supply of fish to the market each year, making fish cheaper over time.

“Redistribution” takes the leftover fish and gives them to the poor instead of trading them for more nets. When that happens the supply of fish is constant and the poor do not enjoy lower prices over time. In any given year the poor have more fish. Over many years the poor have far less fish, because the price does not fall.

Dan J July 20, 2011 at 2:22 am

Not to mention, more jobs are not created from increase net purchases. Also, since the poor have their fish readily supplied, there is less reason for the poor to change their lifestyle and every incentive to remain in their more comfortable existence.

Ravi July 18, 2011 at 5:38 pm

I have no idea why we are having this debt limit conversation. So one side says, we want no limits on how much we can borrow and spend and another side that says we will let you have an arbitrary limit( it’s not a limit if it can be raised again) — only if you satisfy our politically expedient items on our list? Instead, can’t we have a law that says we cannot borrow more than some percentage of x where x is our revenue?

I guess, people will come up with an explanation such as, how do you factor for special circumstances like a recession when we need to borrow more? But has there been a case when the debt limit has been lowered in good times?

Josh July 19, 2011 at 9:20 am

The debt has never gone down. Its not something that will ever be paid off. It will continue to grow, this debt limit authorization is a silly political football. Just cut spending, don’t argue about paying once you’ve drove the car off the lot.

Countries build up debts, and either carry them or eventually default. Not one national debt has been paid off in the history of man.

Jim July 19, 2011 at 11:28 am

The bill proposed by Republicans does exactly what you suggest Ravi.

Though it restrains spending, I still have philosophical issues it, one of which is that it does not attempt to deconstruct whole portions of federal government.

Randy July 18, 2011 at 5:53 pm

Yes. And why exactly should it be supposed that investment in a political enterprise should be risk free?

My greatest disappointment with this entire charade is that the default will most likely not occur. I see an incredible opportunity that will not be seized.

John Papola July 18, 2011 at 6:56 pm

The artificial creation of commons tragedies seems to by the modern state’s favorite thing. The state’s favorite thing used to be mass murder and brutal conquest. Now, it’s taking ever broader spheres of society and transforming them into contentious, grasping free-riders and/or victims of a needless commons.

Why else would they endeavor to make everything into “insurance” pools, from Social Security, to healthcare to money and banking? Pensions aren’t a commons problem naturally, nor is healthcare outside of infectious disease. Banking? Closer, but not entirely.

The modern state’s favorite mode of operation is the ponzi scheme.

Josh July 19, 2011 at 9:25 am

Insurance is an economic free lunch, and a corner stone of finance. It is also more politically feasable to outright socialization, but if you are forced to buy coverage I fail to see the functional difference. Window dressing for a culture deluded and grasping at its free market roots and ideals, even though in practice it is growing more socialistic.

vikingvista July 20, 2011 at 2:00 pm

True individual insurance is not a free lunch for anyone, unless by unexpected accident.

True pooled insurance may be a free lunch for a small number of pool members, but only because other pool members are paying for that lunch, and the cost of price discrimination is greater than the benefit.

But of course, forced “insurance” isn’t really insurance at all. You can’t strip away the vital role of personal valuation of risk and still call it insurance. Like anything forced, the benefits are not really intended for those being imposed upon.

Yngvar July 18, 2011 at 7:12 pm

“…what’s the significance or purpose of a statutorily set debt ceiling if the expectation is that it will be raised without question…”

The Tea Party changed that dynamic.

Greg Webb July 18, 2011 at 7:33 pm

Let’s hope so!

vikingvista July 18, 2011 at 8:36 pm

I’m skeptical.

Greg Webb July 18, 2011 at 8:56 pm

I am too…but one should hope for the best and prepare for the worst…

Harold Cockerill July 19, 2011 at 7:49 pm

Ammo and freeze dried.

Dan J July 19, 2011 at 4:36 am

It did, temporarily. But, politicizing and organizing the ‘Tea Party’ may very well lead to less fervor and shrink, not grow, the numbers. Going into social issues which are more about ‘values’ than deficits, taxation, and govt intrusions are, will tear the cohesion apart.
Drop any issues of purely social matters and stay focused on govt malfeasance and why govt must be reduced, rather than increased.

Josh July 19, 2011 at 9:28 am

Worked well in mid terms, where seniors and the politicaly active vote. The unwashed masses are going to come out in force (for the President) in the next election tho.

Dan J July 19, 2011 at 3:41 pm

Unwashed masses? You mean ‘dirty’ voters? Yeah, voter fraud heavily favors democrats. Not to mention, voter intimidation that the current administration is intent on not prosecuting.

juan carlos vera July 18, 2011 at 8:41 pm

Today, democracy has become a system that promotes theft and social fraud. I think that this controversy can only be overcome once the people removes from the government its power to make laws. Just as people choose their rulers, just as they must learn to choose their own laws without delegating this power over the rulers…

vikingvista July 18, 2011 at 9:43 pm

Yep. But don’t expect much agreement from libertarians.

Kirby July 18, 2011 at 9:46 pm

The main problem with democracy is that the voters are stupid.

juan carlos vera July 18, 2011 at 11:36 pm

May be, too…

Don Boudreaux July 18, 2011 at 11:38 pm

Not quite. They are, instead, rationally irrational. See Bryan Caplan’s 2007 book The Myth of the Rational Voter.

vikingvista July 19, 2011 at 12:14 am

Any coercion, democratic or not, is a problem. But I think the main problem that some democracy advocates don’t understand, is how easily democratic decision making is manipulated by the oligarchs, with voter intellect being impotent against it. You can’t make a smart choice, when a smart choice isn’t available to you. And a democratic smart choice can’t be made anyway when the smart choice differs from person to person.

juan carlos vera July 19, 2011 at 1:07 am

Interesting point. I think one way to deal with this problem is to minimize the decisions that society delegates over their rulers, and simultaneously develop non-governmental institutions that help preserve the rights of men. This would be a safer way to release more fundamental decision to each of the individuals that make decision in a society…

vikingvista July 19, 2011 at 1:48 am

juan,

I agree entirely.

Jim July 19, 2011 at 11:32 am

The folks who are voting for large governments are not stupid. In fact they are largely driven by highly educated academics.

juan carlos vera July 18, 2011 at 11:36 pm

May be…

Josh July 19, 2011 at 9:32 am

perhaps you mean liberals

Josh July 19, 2011 at 9:30 am

What would be the point of a government without the power to govern? I thought they were overpaid now,

vikingvista July 19, 2011 at 11:27 pm

“What would be the point of a government without the power to govern?”

Exactly.

DG Lesvic July 18, 2011 at 9:10 pm

I repeat my challenge to Greg above.

you still have the chance to show that you could contribute something other than character assassination to the discussion, and something beyond the obvious of your statement above.

Tell us something we don’t already know.

Tell us, for example, why redistribution actually makes the poor poorer.

Greg Webb July 18, 2011 at 9:49 pm

DG, you do not have anything to contribute to economics or anything else for that matter. All you have in life is your credibility. And, you wasted yours by making an absolute promise that, when fulfilled, you weaseled out of complying with. You have proven that you do not believe that the rules — including those that you establish for yourself — apply when you lose. Life is so unfair! As I’ve said before, one cannot have a meaningful conversation with you because you do not mean what you say. Learn to keep your promises and others might truly have a meaningful conversation with you.

DG Lesvic July 18, 2011 at 9:30 pm

I predict that these people will have nothing to contribute to economics other than their hatred of those who do.

Kirby July 18, 2011 at 9:48 pm

Marx contributed, Freidman didn’t?
Well you’re right in the sense that freedom is natural and all proponents are only defending the existing condition. You’re wrong in the sense that Marx didn’t actually figure anything out, he just reworked the existing system out to seem like tyranny.

Greg Webb July 18, 2011 at 9:55 pm

DG, I did not make an absolute promise. You did. Now either keep the promise or confess that you overstated your case.

vikingvista July 18, 2011 at 11:19 pm

“confess that you overstated your case”

In the war between ego and admitting folly, we have, in his case, an unconditional surrender.

DG Lesvic July 18, 2011 at 9:46 pm

Actually Viking has made some oustanding contributions here and I suspect that Greg could do so, too. But I do seem to bring out the worst in people.

It’s my gift.

Greg Webb July 18, 2011 at 9:58 pm

DG, you do not, to my knowledge, bring out the worst in anyone. You do, however, overstate your promises and then weasel out of them. Either keep your promise or confess your silly overstatement.

DG Lesvic July 18, 2011 at 9:49 pm

May I suggest that we call off the war, that must be boring everyone else to tears, and just get back to economics.

So, what about redistribution?

Greg Webb July 18, 2011 at 10:07 pm

LOL, DG! There is no war. I’m just holding you to your overstated promise. I knew that you never intended to keep it that is why my first comment was incredulous that you would make such an absolute promise. Don Bodreaux complied with your request and, ever since, you have been weaseling out or making personal attacks or pretending to be a victim. That is very characteristic of statists in general and leftists in particular. So, take it like an adult and just admit that you were wrong in making such an absolute promise that you did not intend to keep.

DG Lesvic July 18, 2011 at 10:44 pm

OK, I admit that I was wrong, just as you said.

Now, can we get back to economics?

There is still the unfinished business of mathematical economics.

But the issue here is redistribution.

What about that?

Greg Webb July 18, 2011 at 11:01 pm

Sure, DG, let’s get back to Don’s post about government redistribution programs. I agree with Don’s post. But, I disagree with your conclusory statement that mathematical economics is unfinished business; however, we can discuss that when Don posts something in the future about that issue.

DG Lesvic July 19, 2011 at 12:07 am

Greg,

Don quoted Leland Yeager as saying that

“a decent restraint in clamoring for government action to redistribute income from others to oneself is a public, not a private, good.”

And Don wrote,

“This quotation beautifully capsulizes one reason for the heat generated by the debate today…”

At one time Don expressed the view that redistribution was not just one reason for the heat but “the bottom line.”

Be that as it may, the bottom line or just one reason, it is at least that, and certainly an important and worthwile topic of discussion, and one of which we ought not leave any promising stone unturned.

I propose what I think is an even more beautiful statement than Yeager’s:

Taking from the rich to give to the poor cannot reduce but only increase income inequality and social injustice.

You may not agree that it is more beautiful than Yeager’s.

You may not even agree that it is correct.

But wouldn’t you agree that it ought to be expored, and if it passed muster, be included in the arsenal of free market thought, along with Yeager’s beautiful statement, and so many others?

Of all the statements for freedom, should this be the only one relegated to oblivion, the dead letter files, and an unmarked grave?

DG Lesvic July 19, 2011 at 12:42 am

Brother Greg, now that we’re pals,

I prepared a posting in this space but don’t believe I actually posted it. So, at some risk of duplication, I’ll try this.

Yeager’s statement, however “beautiful,” was not exactly a rallying cry against redistribution.

If you’re going to talk against it at all, you ought to say as much as you can against it.

While the political arguments against it still leave the economic and moral arguments for it, and, the moral, the economic, and even all the other economic arguments, about it making society as a whole poorer, still leave the economic argument that it makes the poor richer, and even the argument that it makes them poorer in absolute terms still leaves the argument that it makes them richer in proportional terms, the argument that it doesn’t reduce but increases inequality wipes out all other arguments, political, moral, and economic, for it.

That is still not to say that it should be deployed to the exclusion of all others, just that it not be excluded, that the best argument against redistribution not be relegated to oblivion, the dead-letter file, and an unmarked grave, just because it didn’t come from an academic high priest.

Greg Webb July 19, 2011 at 1:14 am

DG, we are not “pals”. There are many valid arguments against wealth redistribution, and no valid arguments in favor of it. Wealth redistribution creates economic uncertainty, among other things, which causes economic activity to decline. Wealth redistribution is immoral because coercion, either actual or implied, is necessary to get people to give up assets they earned or inherited to others. Wealth redistribution encourages unethical behavior because people learn that it is easier to obtain what they need through the political process rather than through serving the consumer by creating something of value. Wealth redistribution is illegal because it violates the policy reasons supporting the Constitution, which are the inalienable rights to life, liberty, and property. (Yes, I know that it occurs today and the Supreme Court says it is legal. It isn’t. And, the Supreme Court has been egregiously wrong before as when they held that people could be property despite those same policy reasons. The Court was wrong then as it is now.). Now, do you have any valid arguments in favor of wealth redistribution?

productive work.

DG Lesvic July 19, 2011 at 4:25 am

Greg,

Here are your arguments against redistribution:

#1 “Wealth redistribution creates economic uncertainty, among other things, which causes economic activity to decline.”

Let’s just say that it makes society as a whole poorer. But, if the poors’ proportion of the cake goes up while its overall size goes down, the question then: would they be better off in absolute terms with the larger share of the smaller cake or the smaller share of the larger cake?

But if their proportion actually went down along with the overall size, wouldn’t it be better then to point out that the process left them not with a larger but smaller share of the smaller cake?
#2 “Wealth redistribution is immoral because coercion, either actual or implied, is necessary to get people to give up assets they earned or inherited to others.”

But that is to say that it is immoral by your standard of morality. Wouldn’t it be better to be able to say that it was immoral by his own as well?

#3 “Wealth redistribution encourages unethical behavior because people learn that it is easier to obtain what they need through the political process rather than through serving the consumer by creating something of value.”

Is that any reason for not telling them that it also makes them poorer?

#4 “Wealth redistribution is illegal…”

Again, is that any reason for not telling people that it doesn’t work?

You asked if I had any valid arguments in favor of wealth redistribution?

Of course I don’t believe there are any, but that’s beside the point, for our opponents certainly do. But I would ask you if you have any argument against it that would wipe out every conceivable argument for it.

I believe I have such an argument, that, after establishing that the policy didn’t reduce but increased inequality, there was nothing moral, political, or economic that could be said in favor of it.

And while I don’t ask for the deployment of that argument to the exclusion of all others, I do ask that it not be excluded, that there be a place for it too, along with all the others, if not at the head of the list.

Now are we pals?

DG Lesvic July 19, 2011 at 4:30 am

Sorry, but I didn’t proof read that, and it really needs to be restated, and is important enough to warrant that..

So here goes again.

Greg,

Here are your arguments against redistribution:

#1 “Wealth redistribution creates economic uncertainty, among other things, which causes economic activity to decline.”

Let’s just say that it makes society as a whole poorer. But, if the poors’ proportion of the cake goes up while its overall size goes down, the question then: would they be better off in absolute terms with the larger share of the smaller cake or the smaller share of the larger cake?

But if their proportion actually went down along with the overall size, wouldn’t it be better then to point out that the process left them not with a larger but smaller share of the smaller cake?

#2 “Wealth redistribution is immoral because coercion, either actual or implied, is necessary to get people to give up assets they earned or inherited to others.”

But that is to say that it is immoral by your standard of morality. Wouldn’t it be better to be able to say that it was immoral by the other fellow’s as well?

#3 “Wealth redistribution encourages unethical behavior because people learn that it is easier to obtain what they need through the political process rather than through serving the consumer by creating something of value.”

Is that any reason for not telling them that it also makes them poorer?

#4 “Wealth redistribution is illegal…”

Again, is that any reason for not telling people that it doesn’t work?

You asked if I had any valid arguments in favor of wealth redistribution?

Of course I don’t believe there are any, but that’s beside the point, for our opponents certainly do. But I would ask if you have any argument against it that would wipe out every conceivable argument for it.

I believe that I do, that, after establishing that the policy didn’t reduce but increased inequality, there would be nothing moral, political, or economic that could be said in favor of it.

And while I don’t ask for the deployment of that argument to the exclusion of all others, I do ask that it not be excluded, that there be a place for it too, along with all the others, if not at the head of the list.

Now are we pals?

Josh July 19, 2011 at 8:23 am

Taxes pay for alot of public goods that make capitalism work better. Take basic education. Surely giving the poor literacy and numeracy is a good investment in future prosperity. Of course, each of us with decent income feel like we would be better off if government didn’t tax us, but lets talk about reality. Death and taxes are a given, lets move on to some real debates like the debt limit.

Greg Webb July 19, 2011 at 1:33 pm

DG, you said, “But, if the poors’ proportion of the cake goes up while its overall size goes down, the question then: would they be better off in absolute terms with the larger share of the smaller cake or the smaller share of the larger cake?” It depends on the proportions and the sizes of the cakes involved. But, the whole wealth redistribution issue is the diversion necessary to cover the real goal of politicians and their cronies, which is to take from the productive to give to themselves.

You said, “But if their proportion actually went down along with the overall size, wouldn’t it be better then to point out that the process left them not with a larger but smaller share of the smaller cake?” Yes, but the issue really isn’t helping the poor. Please see the paragraph above.

You said, “But that is to say that it is immoral by your standard of morality. Wouldn’t it be better to be able to say that it was immoral by his own as well?” Hmmm. There is no morality if everyone sets his or her own standard. There are universal truths, which are the basis for morality. And, one of those universal truths is that using coercion, actual or implied, to get money and property from others is simply wrong. All major religions recognize this. And, the Church of Me, to which so many statists belong, is not a valid religion.

You said, “Is that any reason for not telling them that it also makes them poorer?” The issue is unethical behavior. An unethical person will never admit the truth because unethical people are reverting to animal behavior, which is about short-term survival without thinking about a better long term solution.

You said, “Again, is that any reason for not telling people that it doesn’t work?” Again, the issue with this point that I was making is that wealth redistribution is illegal. An unethical person will never obey the law because he is reverting to animal behavior, which is about short-term survival without thinking about a better long-term solution or, for that matter, about anyone but himself.

You said, “But I would ask you if you have any argument against it that would wipe out every conceivable argument for it.” No because statists are reverting to animal behavior, which is about short-term survival. Consequently, reason and logic does not matter. All that matters is having a thin veneer of an excuse to rationalize their immoral, unethical, and illegal behavior.

You said, “And while I don’t ask for the deployment of that argument to the exclusion of all others, I do ask that it not be excluded, that there be a place for it too, along with all the others, if not at the head of the list.” That’s your opinion and that is fine with me. My concern is that such a response gives legitimacy to a smoke screen issue, which, if the politicians can get a plurality to see it their way, then politicians and their cronies will achieve their goal of redistributing wealth (or stealing) from others to give to themselves.

You said, “Now are we pals?” No.

Greg Webb July 19, 2011 at 1:44 pm

Josh, great example! That’s why poor people in Washington DC, when given a chance, opted for vouchers and put their kids in private schools. Yes, a perfect example — of why government should not be involved in education. Thank you.

Many public services are poorly run by government and do not achieve the “high sounding” goals expressed by politicians. The better option is to limit government to its specifically enumerated powers and require Congress to actually oversee those functions to ensure that they are efficiently and effectively run.

The reality is that taxes are too high. I’m disappointed that you cannot see that. My guess is that you don’t pay any. But, I can understand your desire to discuss the debt limit. So why don’t you move on to another blog discussing that issue? Or, better, be patient and wait until Don posts something about that issue. I’m sure it won’t be long.

vikingvista July 19, 2011 at 11:29 pm

“Surely giving the poor literacy and numeracy is a good investment in future prosperity”

It’s done wonders for economic miracle we call “Cuba”.

Nemoknada July 19, 2011 at 12:20 am

“but what’s the significance or purpose of a statutorily set debt ceiling if the expectation is that it will be raised without question to accommodate the need, or simply the desire, for government to borrow more than is allowed by the existing ceiling?”

It could – and should be – cosmetic, a reminder to Congress and their consituents that it is possible to spend too much. But it should not be taken seriously as an actual limit. If it is, our paper becomes suspect. What good is a promise from a government that may be unable to pay it under its own laws despite being a money-issuing sovereign? How can such promises be the paper of choice for world reserves? Who finances a defense contractor whose contracts may be dishonored under cover of the debt ceiling? Once Congress says it is going to pay someone something, it damn well better pay them. Or the whole house of cards collapses.

Ken July 19, 2011 at 12:43 am

“It could – and should be – cosmetic, a reminder to Congress and their consituents that it is possible to spend too much.”

With an actual limiting debt limit in place, there seems to be very few congressmen who take it serious that it is possible for the federal government to spend too much.

“But it should not be taken seriously as an actual limit. If it is, our paper becomes suspect.”

Really? So if creditors see that my debt doesn’t increase year to year, my earnings are suspect? You can’t really mean what you wrote can you, Nemoknada?

“What good is a promise from a government”

You should have stopped right there. Really what good is any promise from the government? We’ve heard in the past decades that social security cannot possibly privatized, even partially, because only the government can guarantee a retirement payment. Well, the democrats who insisted that they can actually guarantee this are now threatening to NOT pay. So much for a gov guarantee.

But to answer your actual question “What good is a promise from a government that may be unable to pay it under its own laws despite being a money-issuing sovereign?” If the gov is a money-issuing sovereign, why borrow money at all? Why not simply print money to buy whatever you want? Ask Zimbabwe and Germany about that.

“Who finances a defense contractor whose contracts may be dishonored under cover of the debt ceiling?”

Who finances lenders when debtors dishonor their debts by declaring bankruptcy?

“Once Congress says it is going to pay someone something, it damn well better pay them.”

Seriously? Are you five? I once said I was going to be an astronaut. Should I have damn well done that?

“Or the whole house of cards collapses.”

Basically you’re living in some la la land where the gov can simply ignore any sort of money supply and do what it likes without regards to the laws of economics, i.e., ignoring the incentives put in place due to stupid gov policy.

Regards,
Ken

Josh July 19, 2011 at 8:13 am

The fed and treasury set the money supply. Congress has to make do with revenues plus borrowing, it dosen’t have a printing press. “The government” isn’t monolitic, it is many parts and individuals working together to reach compromise decisions.

Ken July 19, 2011 at 10:26 am

Josh,

That’s the point. Nemoknada thinks the gov is monolithic or wants it to be. And yes the gov does control the printing press. The Treasury is under the control of the president and congress. The Fed could be taken under their control; it was created out of legislation and legislation can be changed. The formal separation doesn’t matter that much anyway. Obama, congressional democrats, Geithner, and Bernanke are all in cahoots to print the money and do what Nemoknada suggested. After the failing of QE1 and QE2, the idea of QE3 is being floated.

Regards,
Ken

Dan J July 19, 2011 at 3:44 pm

For democrats, QE4-QE22 are in the pipeline….. And none of them will work.

Josh July 19, 2011 at 8:29 am

On Bloomberg today Ramesh Ponnuru talks about a 6 million dollar spending bill reinstated by the votes of 90 Republicans and 131 Democrats to provide high speed internet to rural areas. Yes this is a relatively tiny amount, but if restraint can’t be had on things like this, I don’t know that we have any hope on reforming social security or medicare. I think this is very instructive and illustrative of the process that is causing this debt limit morass.

Greg Webb July 19, 2011 at 1:35 pm

It does. But, that is what happens when government exceeds it specifically enumerated powers and begins pretending it is Robin Hood. The reality is that they are just thugs stealing from the productive to give to themselves.

DG Lesvic July 19, 2011 at 2:43 pm

Greg,

You wrote that the question, would the poor better off with the larger share of the smaller cake or smaller share of the larger cake, was a question of the proportions and the sizes of the cakes involved.

That is exactly right, and, as Mises pointed out, a quantitative issue beyond the scope of economics. But, if the process actually left the poor not with a larger but a smaller share of the smaller cake, the issue was no longer quantitative but logical. So why wouldn’t you put it on the logical basis more favorable to your cause, if you could do so?

Because, you say, “the whole wealth redistribution issue is the diversion necessary to cover the real goal of politicians and their cronies, which is to take from the productive to give to themselves.”

Again, that is absolutely true, and, in fact, was Rothbard’s main argument against redistribution. But it missed the point that, even if somehow the process did manage to proceed from rich to poor, which was not impossible, it would still make the poor poorer? So, again, why wouldn’t you make that point along with the other, why just the one and not the other as well?

You said that “the issue really isn’t helping the poor.”

You don’t have to convince me. You have to convince the poor themselves and their friends who vote for redistributive measures on the assumption that they do help the poor. I have nothing against pointing out that the politicians proposing these measures for the benefit of the poor are not sincere about it, and that the redistribution is more from all of us to the political class than from the rich to the poor. But why are you against pointing out that the process would make the poor poorer even if it did proceed from rich to poor? Again, why every other argument under the Sun but the one that, at best, it simply wouldn’t work? Why would you exclude that one argument?

You’re not so sure that it would be better to say that the policy was immoral by the redistributionist’s own standard of morality, rather than just yours. For, as you say, in effect, there is one universally valid standard of morality, and it’s not the other fellow’s but yours. The problem with that is that, while he would agree that there is but one universally valid standard of morality, he would not agree that it was yours rather than his, but would surely insist that it was his rather than yours. So can you not see any advantage in circumventing that endless argument by pointing out that his policy was immoral by his own as well as your standard.

If you could do so, why wouldn’t you?

You said, in effect, that the economic argument against redistribution would be ineffective, for the redistributionist cares only for short term gain without any regard for long term consequences.

But, if you could show that redistribution would make them poorer in the short as well as the long run, wouldn’t you do so?

You said that you would exclude my argument against redistribution because it somehow gives validity to redistribution.

I fail to see how challenging its fundamental assumption validates it and failing to challenge it does not validate it.

And you summed up your whole position with the statement that “reason and logic does not matter.”

That appeared to me to be your attitude right from the start, and I certainly appreciate your leaving no more question about it.

But I still don’t see why we can’t be pals. I’m pals with lots of unreasonable and illogical creatures, my wife, my dog, Viking, Methinks, and see no reason why I can’t be pals with you, too. So how about it.

Here, Greg, come on boy, come on. Good boy.

Greg Webb July 19, 2011 at 4:50 pm

DG, you said, “That is exactly right, and, as Mises pointed out, a quantitative issue beyond the scope of economics.” No, the issue is not a quantitative issue beyond the scope of economics. Rather, my argument is that you should never even get there because when you argue that issue you give inappropriate legitimacy to the whole wealth redistribution issue. The better argument, as I pointed out previously, is to point out that wealth redistribution is wrong morally, ethically, and legally. Why would you want to give any legitimacy to something that you say that you oppose?

You said, “But it missed the point that, even if somehow the process did manage to proceed from rich to poor, which was not impossible, it would still make the poor poorer?” Uh, we are dealing with politicians and their cronies so, no, in the real world, you are wrong. It is impossible. And, as I’ve said before, there is no reason to give legitimacy to the argument for wealth redistribution. You never have to even take the issue up because wealth redistribution is morally, ethically, and legally wrong.

You said, “So, again, why wouldn’t you make that point along with the other, why just the one and not the other as well?” See previous posts. Never give your opponent’s argument legitimacy if you can avoid it. It gives them a chance. Also see Debate 101 textbook.

You said, “Why would you exclude that one argument?” See previous posts. Why would you want to give your opponent a chance in the debate by arguing his point?

You said, “it would be better to say that the policy was immoral by the redistributionist’s (sic) own standard of morality, rather than just yours.” When did theft become moral to anybody but the thief…unless, of course, you try to take the thief’s stuff and then he indignantly calls you thief.

You said, “But, if you could show that redistribution would make them poorer in the short as well as the long run, wouldn’t you do so?” The case is arguable in the short run. It could go either way. By bringing it up at all, you give credibility to your opponent’s argument. How silly of you! Then, he has a chance of winning. But, everyone that I know, including the immoral, the unethical, and the criminal, understand that theft is immoral, unethical, and criminal. Why don’t you?

You said, “And you summed up your whole position with the statement that ‘reason and logic does not matter.’” Nice sound bite clipping of my argument to misrepresent what I said. Here is my full statement, “No because statists are reverting to animal behavior, which is about short-term survival. Consequently, reason and logic does not matter. All that matters is having a thin veneer of an excuse to rationalize their immoral, unethical, and illegal behavior.” You carefully clipped out my previous sentence referencing statists so that it appears that I am saying that logic and reason do not matter. But, that is a misrepresentation. My argument was that statists do not care about reason and logic. And, from your careful editing, it appears that you do not care about the truth.

You said, “That appeared to me to be your attitude right from the start, and I certainly appreciate your leaving no more question about it.” Ah, I see! I hurt your feelings by pointing out that you made an absolute promise, weaseled out in complying with that promise when it was fulfilled, maliciously and falsely accused others of character assassination, pretended to be a victim of the character assassinations that you were committing, and now, to top it off, you sleasily edit my comments to misrepresent my views. But, thank you for showing who and what you really are.

You said, “Here, Greg, come on boy, come on. Good boy.” And, this says a lot about the “logic and reason” of statists like DG Lesvic a.k.a. “The Weasel”. For only a typical statist would treat another person as a subhuman and not worthy of respect.

You said, “But I still don’t see why we can’t be pals. I’m pals with lots of unreasonable and illogical creatures, my wife, my dog, Viking, Methinks, and see no reason why I can’t be pals with you, too. So how about it.” No. A man who would demean his wife as an “unreasonable and illogical creature” is no man at all.

DG Lesvic July 19, 2011 at 5:54 pm

Greg,

I have been seeing your kind in libertarianism for a very long time.

As I wrote, long before I knew you,

“You can lead a libertarian to victory, but you can’t make the jackass drink. The neophobic, evenly rotating libertarians and Austrians who will not challenge the fundamental assumption of the Left concede it, and are not leaders in the fight for freedom but irrelevant to it, and, not just defaulting but actively impeding the effort, not true enemies of the Left but its loyal opposition and first line of defense.”

Greg Webb July 19, 2011 at 6:46 pm

LOL, DG! Because only someone who:

* Makes absolute promises,
* Weasels out of keeping said absolute promise when the demanded example is provided,
* Maliciously and falsely accuses others of character assassination,
* Pretends to be a victim of the character assassinations that you were committing,
* Sleasily edits comments to mischaracterize what someone else said,
* Makes silly personal attacks implying someone is subhuman, and
* Demeans his wife by saying that she is an “unreasonable and illogical creature”

will lead anyone in “the fight for freedom”. By your sleazy behavior and belittling attitude toward other human beings, you prove that you are just another statist who, though you may not like them, has adopted the tactics and traits of the left, which makes you no better.

And, your demeaning comments that your precious wife is an “unreasonable and illogical creature” proves, for all to see, that you are no man at all.

DG Lesvic July 19, 2011 at 7:14 pm

Greg,

There’s nothing unusual about you. Small minds like yours rule every “school” and corner of philosophy, with one exception. Over a period of 40 years or so of trying to get a hearing for new ideas in economics, and being met with little but hatred for it and literally thrown out of one “school” and blog after another, I have been met with courtesy and kindness and fair treatment at only one place, right here at good old Cafe Hayek.

Grateful for my place here, I certainly don’t begrudge yours.

But let’s understand each other. You’re not fooling anyone.

Greg Webb July 19, 2011 at 8:23 pm

LOL, DG! That’s hilarious! You really love pretending to be the victim…all the while saying demeaning things about others, including your wife. Your recent comments and actions tell everyone exactly who and what you are. And, your comments and actions tell us that you are certainly no libertarian.

DG Lesvic July 19, 2011 at 8:17 pm

Greg,

Since I’m such a bad person, the Cafe would certainly be better off without me. And I’m going to give you another and even greater chance to get rid of me.

Give me an example of mathematical economics and I will leave
the Cafe forever.

And, or, refute my theory of redistribution, and I will leave forever.

We know that you can hurl insults, but can you meet the challenge of ideas?

Greg Webb July 19, 2011 at 8:29 pm

LOL, DG! You’ve played the absolute promise game before, and you weaseled out when Don provided you with the example that you requested. The old rule is “Fool me once, shame on you. But, fool me twice, shame on me”. You have destroyed your credibility.

DG Lesvic July 19, 2011 at 10:08 pm

But, Greg,surely by now you know that I’m asking for a genuine, not a false, example. And, besides, wouldn’t exposing my errors and advancing economics be satisfaction enough for you?

Or is character assassination all you’re good for?

And, by the way, how do you know how precious my wife is?

Has something been going on that I don’t know about?

Now I’m beginning to understand why all my kids have hooves and a tail.

Greg Webb July 19, 2011 at 10:53 pm

DG, if you read my original post to you, you would know that I don’t care whether you leave Cafe Hayek. In that post, I gave you an opportunity to gracefully back out of your absolute promise, but Don met your standard and you started trying to weasel your way out of it, which is cowardly to say the least.

Since then, you have given the typical statist-hater routine by maliciously and falsely accusing others of assassinating your character, pretending to be the victim of character assassinations that you were committing, sleasily editing comments to misrepresent what others said, making silly personal attacks claiming that others are less than human, and demeaning your wife by saying that she is an “unreasonable and illogical creature”. I have not gained any satisfaction from giving you the opportunity to expose yourself as a sleazy fraud.

All wives are precious, stupid! You compound your error by continuing to impugn your wife”s character…just so you can protect your prideful ego. And, that is how I know that you are simply a self-serving, arrogant statist. It is also how I know that you never keep your promises.

DG Lesvic July 19, 2011 at 11:26 pm

In other words, you can’t meet the challenge of ideas.

Greg Webb July 20, 2011 at 1:19 am

No, DG. It means never trust someone who demeans his wife. After all, who can trust someone who does not keep the covenants that he made with God regarding his wife. One who cannot be trusted with important matters certainly cannot be trusted with small ones.

Greg Webb July 20, 2011 at 1:45 am

“D.G. Lesvic: the bad boy of economics and the terror of the Austrian School”. LOL, DG! You really think a lot of yourself.

DG Lesvic July 20, 2011 at 3:56 am

Not nearly as much as those who attack me personally because they can’t attack my ideas.

Greg Webb July 20, 2011 at 10:18 am

LOL, DG! George says the same thing!

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