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| Government Corruption |
| The real reasons money doesn't matter... |
| 2021-04-02 |
| [ZMan] Way back in the early days of the conservative movement, it was assumed that Federal spending was both unsustainable and damaging to the country. Cutting the size and scope of government was their thing. The tool they eventually settled on to reduce Federal spending was taxes. If they made high taxes so unpopular with the public, the Left could not keep raising taxes. If they could not raise taxes to cover their spending, they would eventually have to yield to the mathematics. Obviously, that never happened. The big tax reforms of the 1980’s did simplify taxes and lower rates on rich people, but revenues remained stable. At the same time, spending kept growing. One of the unspoken truths of fiscal policy is the percent of GDP that is consumed by Federal taxes does not change much of time. The range is between 15% to 18%, depending on when tax policy was changed. This is the logic of the flat tax. One rate, no deductions and no more IRS. Spending, of course, keeps going up, no matter who is in office. Despite their rhetoric, the Republicans are the big spenders. In the 1980’s they had to spend on the military to win the Cold War. In the Bush years it was the crusades against Islam. It is only when a Democrat is in the White House that the Republicans get tight-fisted, and even that is mostly ceremonial, as we have seen with the last Covid bill. It turns out that there is no relationship between taxes and spending. Another shibboleth of conservatives is that eventually the bond markets will force a haircut on the government. The so-called bond vigilantes will drive up interest rates, which will make borrowing more expensive. The theory here is that there is a hard limit on debt. Once that limit is reached, spending must go down or taxes must go up in order to reconcile the books. Like the belief that taxes will curtail spending, faith in the mythological bond vigilantes has been misplaced. snip This rather shabby track record should raise a question. That is, is the field of economics just pseudoscientific nonsense? It has lots of complexity and lots of very clever solutions to the complex problems it unearths, but outside of the most basic of concepts like supply and demand, economics is not very useful. In all of the important things, it turns out to be wrong. Astrologers have a better record than economists, because they know they are grifters, not scientists. Putting that aside, the lesson here is that contra the libertarians, economics is downstream from politics. No amount of fiddling with the tax code can fix the defects of the political class. Even further, the right people in a corrupt system cannot correct the defects of the corrupt system. This is why the people come and go in Washington, but the corruption rolls on unimpeded. In the great chain of causality, economics is the last link in that chain. It is the final effect of a chain of many causes. |
| Posted by:M. Murcek |
| #6 Gee, what happened in 1971? Asking for a friend. |
| Posted by: Procopius2k 2021-04-02 19:45 |
| #5 We've been here before -- the 1970s. We'll see a huge shift internally but America itself will remain (relatively) strong for the simple reason that the other possible alternate hegemons are so unattractive. Europe is a joke, the Russians are puny economically and totally dependent on a handful of natural resources - one of which we're now the dominant player in -- and the Chinese are chaotic and growing old fast. America will become more corrupt, more oligarchic, more skewed and divided politically. Eventually we'll have two distinct nations loosely United by a federal structure, sharing a military and a currency and an interstate highway system but little else. If I were advising a hostile power, I'd tell them to do everything in their power to split the two Americas from each other and try to ignite another Civil War. Oh wait… |
| Posted by: Unick Clusolet8326 2021-04-02 14:12 |
| #4 I can remember the old timers in the 1950's lamenting... "where is it all going to end?" |
| Posted by: Besoeker 2021-04-02 13:47 |
| #3 I think the true test will be when the music stops. The easy money will be gone, but the voters will still be voting for "moar." |
| Posted by: M. Murcek 2021-04-02 13:40 |
| #2 No: economics isn't downstream of politics. We've just been a combination of lucky and ruthless. Within three years we are all going to learn a hard, once-in-a-lifetime lesson about what the word "inflation" means. |
| Posted by: Secret Master 2021-04-02 11:35 |
| #1 is the field of economics just pseudoscientific nonsense? 🤣😂😢 |
| Posted by: g(r)omgoru 2021-04-02 10:19 |
