Bear Pit: now the sole domicile of politics at LuLa

[Alan Klein]

It seems to be a common misconception amongst our right-wing friends that life is a zero-sum game, and a very short-term one at that.

You're mistaken. Economic success and wealth is not a zero sum game.  There are no limits other than the productivity of the people.  The more productive, the more success and wealth they create.

[kers]

The concern was testing ICBM's that could reach America. Those were stopped as were nuclear tests, both because of Trump making a deal with them.

False claims and ...
I did not stop Trump from making a fool of himself  en made Kim bigger than before. But who cares?
Fortunately a majority of the American people.

"Biden vows enough vaccine for all US adults by end of May"
Let us see if he can live up to this promise unlike his predecessor...

https://apnews.com/article/joe-biden-coronavirus-pandemic-25738fbba2ff638be1a1253d96199578
After

[Alan Klein]

False claims and ...
I did not stop Trump from making a fool of himself  en made Kim bigger than before. But who cares?
Fortunately a majority of the American people.

"Biden vows enough vaccine for all US adults by end of May"
Let us see if he can live up to this promise unlike his predecessor...

https://apnews.com/article/joe-biden-coronavirus-pandemic-25738fbba2ff638be1a1253d96199578
After

What did the Dutch PM do to stop North Korean testing of nuclear weapons and ICBM's? How did your PM calm down the threat of war on the NK Penisula and with other nations?

I also hope that Biden gets everyone vaccinated by the end of May.  If he does, that would be great. It would also be because his predecessor set up the groundwork with Operation Warp Speed and ordered huge numbers of vaccines beforehand.  Biden is carrying the torch to the end.  Trying to give Biden credit for another man's work is unseemly and political. 

[Robert Roaldi]

I explained what states do in my post.

But it made no sense to me. I'm trying to understand the basic thinking.

You (and others) seem to accept the notion that government jurisdictions (states, cities, etc.) should compete with each other to attract businesses. The way they do that is to use some portion of the tax money they collect from citizens to convince businesses to come to their area.

This is not what Nikon and Canon do to convince me to buy their cameras. They add features, set price points, advertize, all to convince me to buy what they're selling.

Shouldn't companies be bending over backwards with jurisdictions, giving deals, etc., to convince those jurisdictions to give them permission to install their businesses in their locations. Why is the client (the citizen) having to pay for the privilege of having some company in town? Instead, should't the companies be killing each other with competition for the privilege?

I think we have it backwards. We seem to have forgotten who the boss is.

[LesPalenik]

I also hope that Biden gets everyone vaccinated by the end of May.  If he does, that would be great. It would also be because his predecessor set up the groundwork with Operation Warp Speed and ordered huge numbers of vaccines beforehand.  Biden is carrying the torch to the end.  Trying to give Biden credit for another man's work is unseemly and political.

A more accurate description would be - fortunately Trump was taken out before he could inflict more damage.

[kers]

What did the Dutch PM do to stop North Korean testing of nuclear weapons and ICBM's? How did your PM calm down the threat of war on the NK Penisula and with other nations?

and you forgot, what did the president of Malta do to stop the nuclear threat? Make Rutte president of the US and you will know.

but then only President trump gets warm letters from Kim... nobody else...
I wish they would be published...

[Alan Klein]

But it made no sense to me. I'm trying to understand the basic thinking.

You (and others) seem to accept the notion that government jurisdictions (states, cities, etc.) should compete with each other to attract businesses. The way they do that is to use some portion of the tax money they collect from citizens to convince businesses to come to their area.

This is not what Nikon and Canon do to convince me to buy their cameras. They add features, set price points, advertize, all to convince me to buy what they're selling.

Shouldn't companies be bending over backwards with jurisdictions, giving deals, etc., to convince those jurisdictions to give them permission to install their businesses in their locations. Why is the client (the citizen) having to pay for the privilege of having some company in town? Instead, should't the companies be killing each other with competition for the privilege?

I think we have it backwards. We seem to have forgotten who the boss is.

What you argue works in states that have no income taxes like Texas and Florida.  It's easier for them to attract businesses. For my ex-state of New York and many others, with their high taxes (income, sales, property, etc.) and high cost of labor and other services, there's little incentive for companies to go there.  So these states have to offer something, hence some giveaways in taxes.

Now you may ask, why should states even care to attract new businesses?  That's a good question.  Well, many states have huge budgets for Medicaid, education, pensions, etc.  With many companies and rich people moving out of these states for cheaper-to-live destinations, that leaves shortfalls in state budgets because the tax collection is less. So they try to attract businesses to make up for these losses.  Hence, giveaways. Sure there are initial losses from certain costs that states pay directly to these businesses.  But the states make that up long-term with taxes on employees' salaries, income from spending for things purchased, sales taxes, real estate taxes, and business taxes that are eventually paid etc.  They provide jobs for construction, services, and manufacturing which provide more taxes to the state. 

States are trying to sell something as well. Amazon had dozens of localities in states around the country competing for their 25000 job headquarters.  Even Canada I believe made an offer.   

In any case, I agree it's unfortunate that some states have gotten themselves into such a bind with spending, they have to prostrate themselves to attract new suckers to pay taxes.  Personally, I have an ax to grind since my wife and I get NYS pensions.  So their ability to continue to pay them is important to us. If overall tax revenue goes down and they run out of money for pensions, that could jeopardize our income and retirement. 

[Alan Klein]

A more accurate description would be - fortunately Trump was taken out before he could inflict more damage.

The reason Biden can promise May, is because of Trump.  It's the reason over 70 million Americans have already been vaccinated which is 4-5 times more than Canada in rates per thousand.  While your PM was sitting on his duff, Trump bought huge amounts of vaccines through Operation Warp Speed and made deals with companies to secure our supply and get them distributed.  Biden is benefitting from Trump's setup and taking credit for it for political reasons, of course.  Here's a guy who hid in his basement for the entire election.

[Alan Klein]

and you forgot, what did the president of Malta do to stop the nuclear threat? Make Rutte president of the US and you will know.

but then only President trump gets warm letters from Kim... nobody else...
I wish they would be published...

That's right. Trump was doing the work of the world keeping peace on the Korean peninsula.

[Peter McLennan]

You're mistaken. Economic success and wealth is not a zero sum game.  There are no limits other than the productivity of the people.  The more productive, the more success and wealth they create.

Is this the same Alan who recently posted that “there’s only so much money to go around”?

Nah.  Must be someone else...

[Alan Klein]

Is this the same Alan who recently posted that “there’s only so much money to go around”?

Nah.  Must be someone else...

One thing has nothing to do with the other.  My point is that taxes collected are finitely based on the productivity of the country.  That's what "there's only so much money to go around"  means. That is  we should live within our means just like with personal expenses.  How much more beyond your salary and other income can you spend?  If the government tries to spend more than it collects in taxes, then it has to borrow or print or both. Or cut spending.  Of course, if the country produces more, then it can collect more taxes.  But that's not what's happening.  Currently, half our budget or so is being printed and borrowed.  Where's all the $1.9 trillion and other spending coming from?  Do you want your taxes to go up?  How much more are you willing to contribute?  Do you want to pay a wealth tax every year on everything you own including your house, your cars, and all your assets as Senator Warren wants to do?  There's only so much money to go around.

[digitaldog]

Is this the same Alan who recently posted that “there’s only so much money to go around”?

Nah.  Must be someone else...

And this is the same guyS that accuses Biden is having dementia.

[jeremyrh]

One thing has nothing to do with the other.  My point is that taxes collected are finitely based on the productivity of the country.  That's what "there's only so much money to go around"  means. That is  we should live within our means just like with personal expenses.  How much more beyond your salary and other income can you spend?  If the government tries to spend more than it collects in taxes, then it has to borrow or print or both. Or cut spending.  Of course, if the country produces more, then it can collect more taxes.  But that's not what's happening.  Currently, half our budget or so is being printed and borrowed.  Where's all the $1.9 trillion and other spending coming from?  Do you want your taxes to go up?  How much more are you willing to contribute?  Do you want to pay a wealth tax every year on everything you own including your house, your cars, and all your assets as Senator Warren wants to do?  There's only so much money to go around.

This article is relevant to your naive analysis of national debt.  I'm sure you won't read it, but others may do so and see the wider relevance.

https://www.ippr.org/blog/economists-urge-bbc-rethink-inappropriate-reporting-uk-economy

[John Camp]

This article is relevant to your naive analysis of national debt.  I'm sure you won't read it, but others may do so and see the wider relevance.

https://www.ippr.org/blog/economists-urge-bbc-rethink-inappropriate-reporting-uk-economy

What impressed me more than the analysis (which was conventional and not much a surprise to anyone who pays any attention to economics at all) was the fact that this is a long list of people who take the BBC seriously. (I'm not arguing that they shouldn't, only that it's interesting that they do.) Can you imagine a long list of serious economists writing a similar letter to Fox or MSNBC? I can't, simply because nobody really takes most American television outlets seriously, other than as propaganda platforms. There'd be no point in writing such a letter, because if it didn't conform to the existing ideologies, it'd simply be ignored. These economists writing the BBC seem to expect that someone will actually pay attention.

[John Camp]

In some ways that I suspect Alan doesn't understand, he may be somewhat correct in some of his arguments. The borrowing (printing) of trillions of dollars with no intention of covering the debt through taxes does have some problematic effects, as we saw after fighting the Vietnam war without raising taxes to cover the cost of it. For example, at that time we spoke of spendings billions of dollars to fight the war (est. $168 billion.) Now we talk in trillions to fight covid. That, itself, is one effect -- the $168 billion to fight Vietnam would now be ~$1 trillion. The dollar has become worth that much less in the span of fifty years or so. When we borrow, we do pay it back one way or another. The phrase OK Boomer has become current because boomers tend to bloviate about their "experiences" (and they do) but sometimes, old people should be listened to. Alan (and I) remember when you could get something like 14% interest on a thirty-year government bond, and when, at one point, mortgage rates approached 20%.

[Alan Klein]

This article is relevant to your naive analysis of national debt.  I'm sure you won't read it, but others may do so and see the wider relevance.

https://www.ippr.org/blog/economists-urge-bbc-rethink-inappropriate-reporting-uk-economy

I read the article.  Very similar to many here who believe government spending is fine. The more the merrier.  America's debt is approaching $30 trillion.  Trump's $6.7 billion deficit almost matched Obama's debt of $8.6 billion.  Of course, it only took Trump 4 years to do what Obama did in 8 years.  Biden may outdo both of them.  It will never get paid back as was suggested in your article.  Maybe Brits watch their money better than Americans.  But I doubt it. 

Additionally, money spent by the government is taken out of the private economy, often misallocated by the government.  Printing devalues the currency and makes it harder for fixed-income people and the poor to make ends meet.  It makes the rich richer as the money goes into assets, owned more by the rich than anyone else.  It accounts for the large income disparity.  The more government goes into debt, the richer the rich get.  I'd think you're against that.  I don't see anyone on Wall Street complaining about rising stock prices.  How many minorities are getting rich from the stock market?  Higher taxes take income away from fixed income people as well, as does low-interest rates caused by all the government borrowing.  The Fed artificially pushed rates down.  That helps the rich and hurts everyone else. It impoverishes the economy eventually hurting everyone, even the rich.

Countries have to live within their means just like people.  Sure, you can spend more at times, hopefully, only during emergencies like war and Covid.  But there has to be a limit.  We've gone way beyond ours.

[jeremyrh]

What impressed me more than the analysis (which was conventional and not much a surprise to anyone who pays any attention to economics at all) was the fact that this is a long list of people who take the BBC seriously. (I'm not arguing that they shouldn't, only that it's interesting that they do.) Can you imagine a long list of serious economists writing a similar letter to Fox or MSNBC? I can't, simply because nobody really takes most American television outlets seriously, other than as propaganda platforms. There'd be no point in writing such a letter, because if it didn't conform to the existing ideologies, it'd simply be ignored. These economists writing the BBC seem to expect that someone will actually pay attention.

Good point and an interesting perspective at this point because there is considerable debate about the future of the BBC as a broadcaster funded by a compulsory licence fee. From my point of view the BBC is a little too friendly to the Tories, with a lot of the news programming in the hands of card-carrying Conservatives, and also a tendancy to give a platform to Brexiteers (with the outcome we see) and climate-change deniers.

[Alan Klein]

What impressed me more than the analysis (which was conventional and not much a surprise to anyone who pays any attention to economics at all) was the fact that this is a long list of people who take the BBC seriously. (I'm not arguing that they shouldn't, only that it's interesting that they do.) Can you imagine a long list of serious economists writing a similar letter to Fox or MSNBC? I can't, simply because nobody really takes most American television outlets seriously, other than as propaganda platforms. There'd be no point in writing such a letter, because if it didn't conform to the existing ideologies, it'd simply be ignored. These economists writing the BBC seem to expect that someone will actually pay attention.

I would compare the BBC to PBS a quasi-government operation that gets US taxpayer money, not the private MSNBC or Fox.  BBC gets public funding. Can you imagine a public entity like PBS politicking the US government? That would be unheard of. It may be illegal.  Of course, PBS does do that by the type of shows it produces, mostly liberal.  But then, it just claims it's presenting different ideas.  But they could not take a public position like the BBC can get away with. 

On the other hand, there are loads of private and non-profit entities that politic all the time and have "experts' signing off.  I'm sure you could find loads of conservative outlets like the Hoover Insitute who would take an opposite position. 

[Alan Klein]

In some ways that I suspect Alan doesn't understand, he may be somewhat correct in some of his arguments. The borrowing (printing) of trillions of dollars with no intention of covering the debt through taxes does have some problematic effects, as we saw after fighting the Vietnam war without raising taxes to cover the cost of it. For example, at that time we spoke of spendings billions of dollars to fight the war (est. $168 billion.) Now we talk in trillions to fight covid. That, itself, is one effect -- the $168 billion to fight Vietnam would now be ~$1 trillion. The dollar has become worth that much less in the span of fifty years or so. When we borrow, we do pay it back one way or another. The phrase OK Boomer has become current because boomers tend to bloviate about their "experiences" (and they do) but sometimes, old people should be listened to. Alan (and I) remember when you could get something like 14% interest on a thirty-year government bond, and when, at one point, mortgage rates approached 20%.

I remember the 1970's like you and early 1980's when interest rates were like that and inflation was even higher.  The younger people here today just don't understand what it's like to have stagflation - bad economic conditions and higher prices for things due to inflation.  I believe they're going to see it soon. So they'll learn.

For example, if you had $100 in 1970, it would only have the purchasing power of $45 by 1982.  So if you had $100,000 in the bank as a retirement nest egg, it would only be worth $45,000 for a loss of $55,000.  Like a hidden tax stolen in the night.  Of course, back then, you could get high-interest rates to make up for some of those losses.  However, today with interest rates under 1 or 2%, if you're lucky, there just won't be any growth to make up for those inflation losses like back then. 

[Alan Klein]

Good point and an interesting perspective at this point because there is considerable debate about the future of the BBC as a broadcaster funded by a compulsory license fee. From my point of view, the BBC is a little too friendly to the Tories, with a lot of the news programming in the hands of card-carrying Conservatives, and also a tendency to give a platform to Brexiteers (with the outcome we see) and climate-change deniers.

In the US,  PBS is more liberal, supporting climate change and other left-wing theories. The BBC has always been biased, I thought it more liberal than conservative.  But either way, I never feel you're getting the news in an unbiased way.  Same with PBS.  I don't think government agencies should be in this business.  There are enough private enterprises and news outlets and you can watch whatever flavor you prefer.  Government news propaganda machines just remind me of Izvestia government newspaper during the Soviet Union days spouting off how great the Communist system is.  I didn't believe them and I don't believe PBS. (or BBC)