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nitty gritty
6 years ago  ::  Nov 11, 2012 - 7:06PM #21
Posts: 1,457

Nov 11, 2012 -- 9:30AM, louisiana_lightning wrote:

Nov 9, 2012 -- 10:06PM, Demonseed wrote:

I still don't know what the free stuff is, people want free stuff, people want things.

What 'things' do the people want?  Republicans don't want 'things'?  Doesn't the Republican psuedo demographic define themselves by their 'things'?

The statements being made after the fact, about free stuff and things, seem to be pretty general, but it also seems like the people making those statements have something pretty specific in mind.  

You seem pretty up to date on things, could Romney eliminate Welfare?  Was Romney going to take this 'free' stuff away from those receiving it? Do you believe getting rid of these 'socialistic' entitlement programs would benefit the economy or our society?  

As to the mortgage interest deduction, isn't that just as much an incentive to keep people from paying off their homes?  

You may find this mean spirited but i believe a society is the sum of it's parts and the government has nothing to give without taking it or obligating the liability of it to someone.  Take this as an example from the Pennsylvania's secretary of Public Welfare:



Julia’s mother: Why a single mom is better off with a $29,000 job and welfare than taking a $69,000 job



The U.S. welfare system sure creates some crazy disincentives to working your way up the ladder. Benefits stacked upon benefits can mean it is financially better, at least in the short term, to stay at a lower-paying jobs rather than taking a higher paying job and losing those benefits. This is called the “welfare cliff.”

Let’s take the example of a single mom with two kids, 1 and 4. She has a $29,000 a year job, putting the kids in daycare during the day while she works.

As the above chart  – via Gary Alexander, Pennsylvania’s secretary of Public Welfare — shows, the single mom is better off earning gross income of $29,000 with $57,327 in net income and benefits than to earn gross income of $69,000 with net income & benefits of $57,045.

It would sure be tempting for that mom to keep the status quo rather than take the new job, even though the new position might lead to further career advancement and a higher standard of living. I guess this is something the Obama White House forgot to mention in its“Life of Julia” cartoons extolling government assistance.

As you saw from my post of the IMF economists debunking the multiplier effect of stimulus spending that you commented in I believe that the whole concept of priming the pump from the supply or demand side makes us poorer as a society and that an objective examine of past attempts around the world supports that assertion.  You can counter that although there were losses gains were made but let's be realistic, the gains tend to be from personal ambition and innovation.  If anything the government spending hindered those by crowding out individual innitiative.

I understand the concept of the safety net is important to the left but I don't believe there is ever a real safety net, even nations fail.  Remember in the 90s when Nobel ecconomists created a Hedge Fund to prove their theory and reap the rewards called Long-Term Capital Management.  They believed if their investments were diverse enough they would be immune to corrections.  What they failed to consider was that no matter how diverse their selections were they all had one thing in common, their investment.  They ended up being the cancer that dragged down their investments.  Right now I see the United States on an unsustainable path based upon debunked failed economic theory and the only solace we are offered is that we were not adequately invested in the theories that failed us or that the rest of the world is just as wreckless and we can't all fail.  That is nonsensical, of course we can.  That is a major contributing factor to Dictatorships and World Wars.  Prior to WWI economists predicted there could never be another major war because the economy became so global that all active participants would lose economically, they were absolutely right but it happened anyway and another followed a couple decades later fueled by the consequences of settlement of the first.

The argument is often made to allow the funding of the government to fall upon those with the means to fund it.  The problem with that is two fold.  We need to assume that if someone has more than another it is because they aquired their advatage through legitimate means.  If their gains are ill gotten that is what should be addressed, not disparity in general.  The second is if we take disproportionately from those with disposable income that they will no longer have the means to convert their excess to capital which provides employment, products, services, and multiplies wealth.  There are no guarantees that the investments made will succeed, most will fail but the losses are privately held and the investments are being managed by people with a direct vested interest in their success as opposed to government investment.

I don't think Romney could or would elliminate welfare but I don't think he would be looking to make it more comfortable and would want to preserve and improve the temporary nature of it.  Teach a man to fish, rather than give a man a fish.  I send my child to a Pre-Kindergarten and recently I had to fill out a form for Federal Lunch Assistance.  Although we are lower middle class (I hate the term middle class) I made clear that I know we don't qualify for it and was told it is mandatory for all parents to complete the form in full to be put into the aggregate of the population of the school.  So let's say I qualified and did not wish the assistance, a requesite of enrollment was allowing the school to request upon the child's behalf.

Why shouldn't people pay off their homes?  Remember how I feel about stimulus spending.  The manipulating inflates bubbles, crowds out private investment, and makes us all poorer.

While the scenario in the article may be one that can be engineered on 'paper', I think it would be exceedingly difficult for someone to knowingly create that situation.  In fact, I would be suprised if you could find more than a handful of people that are actually in that scenario by their own doing.

In general, I agree with a lot of what your saying, but I don't have as much faith in economic theory as you do.  I think as much as people can find metrics to validate their positions, I think much of the information is basically ancedotal at best.  I believe the USA has become almost an anomaly.  If any other Nation was in our situation, their currency would have already collapsed, and major changes would have to have been made to their status quo.  This doesn't mean I don't believe the USA can't fail, it just means I think there is a lot more leeway being given to us to prevent that from happening.  

I have posted this several times:  The only way to fix our current system will require drastic changes, I don't see a transitional type of approach as being effective or having any lasting results.  The problem is, I also do not think with the way things are now, that will ever happen.  People like to use catch phrases and slogans, like think of our childrens future and the like, but when it comes down to it, they would rather pass that particular hardship onto another generation.  

Not to go on a tangent, but in several recent threads on abortion, I could not get anyone  into a serious (rational) discussion about the economic impact that outlawing abortion would have, why? because it is easy to say Abortion is wrong, it is murder, but it requires an effort to think through the implications of that policy.  

Overall, I think too many things (pun intended) are intertwined in our particular scenario, the Global Military Presence we maintain, the amount of foreign aid we provide, The benchmark like status of our currency, the amount of commodities we consume, etc, etc, etc.  Any massive internal change to our economy and how we approach long term economic growth, will also affect much of the Globe as well.  Perhaps a period of isolationism would serve us well.

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