Some thoughts on the potential of mind uploading. Conservatives (both “left” and “right”) will hate this.
Category Archives: Economics
So Why Is It We Needed A Stimulus Again?
The CBO says that the recession will end this year without one. You can see why the Dems are so panicked to get this bill passed quickly. They’re afraid that they might, in Rahm’s words, “waste the crisis.”
[Evening update]
I have to give kudos to Doug Elmendorf. If he authorized the release of that report, he’s a brave man. He has a blog, though it doesn’t (yet) seem to mention the subject of this particular post.
Let’s just hope that he doesn’t learn the hard way about the “Chicago Way.”
Undoing Welfare Reform?
Mickey Kaus thinks that the Republicans are missing a huge political opportunity in the “Stimulus” debate:
The essence of the 1996 reform was ending the individual legal entitlement to AFDC (cash aid to single mothers, basically) and replacing it with state-run programs that, in theory, require recipients to enter the work force. The stimulus bill doesn’t rip up that basic deal, as I understand it. But it is part of a larger liberal campaign** to use the recession to weaken work requirements and let millions of non-working single mothers back on the welfare rolls. Specifically, it would apparently reward states that expand their welfare caseloads–even if the increase is only the product of loosened work requirements rather than a worsening local economy.
Gee, it’s almost as thought they want people dependent on the state. I’m sure that it’s just an unintended consequence…
Dog Bites Man
You will be as shocked as I was to hear that Bob Zubrin thinks that we should stimulate the economy by sending people to Mars.
“NASA Problems”
Yesterday, over at Space Politics, I saw a very peculiar comment:
…NASA failed to achieve the goal of low cost shuttle operations when they failed to pursue the privatization of the shuttle transportation system. Regrettably this failure may cost the lives of another shuttle crew as one of the cost saving features of the privatized shuttle would have been crew escape pods…a fatal flaw.
To which I responded: “Huh?”
Then, today, over at the Orlando Sentinel space blog, I saw something seemingly similar, from the same person:
Sen. Bill Nelson is backing a dead horse. If his staff had done their homework they know Ares I Orion shuttle replacement is not feasible. Too expensive to develop and to operate. Sen. Nelson is driving nails in NASA’s coffin…and maybe a shuttle crew by not supporting the shuttle crew escape pods…see: wwwnasaproblems.com [sic]
Posted by: Don Nelson | February 06, 2009 at 10:33 AM
So I corrected the URL by putting a dot between the “www” and “nasaproblems,” and wandered over there to see what was going on.
What a mess. Ignoring the site design, very little of this makes any sense, either from a business or technical standpoint.
I don’t have the time or the energy to delve into all the problems, but just to respond to the blog comments, I don’t know what “opportunity” NASA ever had to privatize the Shuttle. I actually supported a privatization study by USA back in the nineties, and it was very difficult to come up with a scenario that would make any kind of business sense for Shuttle privatization, given its intrinsically high costs, with little demand for it outside of government. And that’s ignoring all of the intrinsic institutional resistance that NASA and particularly JSC had to handing over the keys to anyone else.
But even if it could have been privatized, the notion that adding “crew escape pods” (even assuming that it is even really technically feasible) to the existing design would somehow “reduce costs” is absolutely loopy. What is the basis of this claim? Similarly, why would a private entity do this?
Putting a crew escape system into the orbiter as designed makes zero economic sense. As I’ve noted many times, crew are replaceable, while orbiters are not. If the Shuttle isn’t safe enough to fly crew, it’s not reliable enough to fly at all, as we’ve learned with the Challenger and Columbia losses, because we’re now down to a fleet of three vehicles, and it would cost billions to replace them, even if it made economic sense to operate them privately. That, in fact, is why we’re retiring it. The notion of privatizing Shuttle at this late date is utterly ludicrous.
This is obviously the work of an engineer, and not a program analyst.
Get That Man An Irony Meter
It seems a little rich to me for someone like Paul Krugman to accuse other economists of arguing in bad faith.
The Case For No Stimulus
Don’t just do something — stand there:
The grand Keynesian myth is that you can spend money and thereby increase demand. And it’s a myth because Congress does not have a vault of money to distribute in the economy. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. You’re not creating new demand, you’re just transferring it from one group of people to another. If Washington borrows the money from domestic lenders, then investment spending falls, dollar for dollar. If they borrow the money from foreigners, say from China, then net exports drop dollar for dollar, because the balance of payments must adjust. Therefore, again, there is no net increase in aggregate demand. It just means that one group of people has $800 billion less to spend, and the government has $800 billion more to spend.
And for those who say this a prescription for failed Hooverian laissez-faire policies, a) Hoover didn’t keep his hands off the economy — he undertook damaging measures in response to the Wall Street panic (e.g., raising taxes, and implementing protectionist measures) that turned it into a depression that FDR then prolonged and b) a true laissez-faire approach would be to undo the damage that overregulation in the economy has caused.
And here’s a good idea, too:
What about the idea of a moratorium on IRS audits for middle-class taxpayers (using any of Obama’s campaign-trail definitions, from $250K/yr on down) for at least a year? Obviously the IRS is short on auditors, so why not deploy them where they are most needed?”
I’d start with high government officials, since they seem to be poster children for tax evasion, based on Obama’s picks so far. And particularly since those same government officials are so vocal about the need to be (and “patriotism” of) paying your income tax. Maybe if these people had to actually pay the taxes for which they so vociferously shill, they might be a little more sympathetic to calls for rate reduction and simplification.
But probably not. They’re shameless.
[Update a few minutes later]
Victor Davis Hanson rightfully wonders about the implications for the “voluntary” and honor-based nature of the current tax code:
Millions of Americans don’t have either Daschle’s or Geithner’s resources, yet they pay dearly to go to accountants, honestly turn over all their records, and then pay the full amount of taxation in accordance with their understanding of the law, and the advice they receive from professional accountants.
Yet men both much richer and much more informed about the U.S. tax code not only don’t do that, but feel no compunction to rectify mistakes unless they cause embarrassment enough to thwart their careers. Two subtexts as well: there must be many more Daschles and Geithners floating around Washington who don’t show up on the radar unless they want a top political appointment; and, two, the old liberal creed that taxes are good and patriotic and are avoided by greedy, selfish conservative elites seems shattered by these examples.
Any more of these stories and we will be on very dangerous ground, since the message is a terrible one to the American people: You pay your full amount, but our elites not only do not, but won’t unless they get caught.
This is all about as good an argument for a flat tax as one can imagine.
Or getting rid of income tax entirely. Starting with corporate.
[Update a few minutes later]
“The rumors are… drumroll please… true! You are now driving the next United States Secretary of Heath and Human Services!”
“Congratulations, Mr. Daschle. That sure sounds like quite an accomplishment.”
“Yes sirree bob. Quite an irony, isn’t it, Ernest?”
“How’s that, sir?”
“I mean, well, me, having an African-American as a boss. Well, not that it’s like I’m really your boss or anything. Us being good friends and all.”
“I guess not, sir.”
“But there’s this craziest thing, though.”
“What’s that?”
“Some stupid little tax complication.”
“It’s always something, I guess.”
“You said it, Ernest. Seems that there’s this rule that says that I have to claim these fun little drives of ours as income. Isn’t that crazy?”
“Yes sir, I guess so. That’s why I let H&R Block do mine.”
“I mean, we’re just out here havin’ a good time, Edward and Tom, two buddies out seeing the sights of Washington. So I asked my accountant, how in the world can that be taxable income?”
“No idea, Mr. Daschle.”
“Exactly. Now the accountant says I might be stuck with a $100,000 bill for it.”
“whewww! That’s a lot of money, sir.”
“So, I told that accountant that Ernest can’t help it if Mr. Hindery gives him a lot of free time to goof around with his old friend Tom.”
“If you say so, sir.”
“So, Ernest, I don’t want you to worry about getting into trouble. If you get called by the IRS men to testify, just tell them the truth. About how you really work for Mr. Hindrey, and how these all little joy rides of ours are just us playing hookey.”
“Hookey, sir?”
“Exactly! I’ve already talked to Mr. Hindery about it, and he is ready to forgive you. One other thing, Edward…”
“Ernest.”
“Damn! Sorry again. Out of curiosity, does A-1 Limousine keep records? About mileage and all that?”
“Yes sir. Very complete.”
“Passengers, and time and such?”
“Yes sir, it’s all in the computer. It’s how we get paid.”
“Shit.”
I’m sure it was all perfectly innocent. A mistake any tax/big-government hypocrite lobbyist could make.
[One more update]
It’s hard to see these numbers holding up if this continues. Frankly, I’d rather the sheep were less compliant with this extortion plan, so I actually hope to see the hypocrisy continue. I think that we need a little, or a big, tax revolt, and the behavior of the grandees of the Beltway seems almost calculated to bring one on.
Stimulation Through Liberation
Iain Murray has some alternatives to the Democrats spending plans:
Any “stimulus” bill that doesn’t include relief from the provisions of the National Environmental Protection Act…isn’t going to get any infrastructure project going any time soon.
So if you want to stimulate, you’re going to have to liberate. Similar arguments can be made as regards Davis-Bacon and 13C. There are a bunch of other such ideas, which will also get the economy moving by getting government out of the way. For example, finally suspending mark-to-market accounting properly, which will be a huge boon to the banks. Or getting rid of the burdens of SarbOx and other ridiculous and ineffectual regulations on small businesses. Antitrust reform would help, too. And you could even think about finally getting rid of the Corporate Income Tax, a hold-over from the days when income tax itself was unconstitutional, and which, at least before the 2005 reforms, probably cost more to collect than it raised in income.
Somehow, I suspect that this will not be the preferred Democrat approach.
Lies, Damned Lies, And Tax Cuts
I have a piece up at PJM today on the ongoing misleading (if not mendacious) discussion of taxes.
Big Deal
Fabius Maximus notes that we now have more people employed in government than in manufacturing.
While I’m certainly not thrilled with the growth of government employment, which is a problem in and of itself, I can’t get very wound up about a decline in manufacturing employment, per se. All that says to me is that we’re becoming more productive in manufacturing, which I thought was supposed to be a good thing. As someone who has been employed in manufacturing on occasion, I’m glad that I don’t do it any more.
At the turn of the twentieth century, a large percentage of the population was employed in agriculture. I don’t know what the number is now, but I’d guess it’s on the order of a percent (and in fact the Great Plains states have been steadily depopulating). Despite this, we have no impending food shortage. And many who might have wasted their lives as a horny-handed son or daughter of toil and soil now have opportunities for both better paying and personally satisfying employment.
Should we weep for the loss of that bygone day when many more of us were privileged to follow the south end of a mule for a living? I would hope that most would say no, and I don’t see it as a tragedy if fewer people have to be drones on assembly lines, either. The problem isn’t that fewer people are working in factories, per se, but that we don’t have good jobs for those who have been displaced, particularly if they remain uneducated.