Friday, November 25, 2011

Why Spending, Not Revenue, is the Cause of our Deficit and Debt


Since 1950, tax revenues have averaged about 18% of GDP IRRESPECTIVE of marginal tax rates. They've been as low as 14.4%, and as high as 20.9% (for one year, 2000, the only year they've topped 20%), but always for very brief periods, and they almost always correct very quickly and return to about 18%. Remember, this is true REGARDLESS of what the tax rates are, even including the 92% top rate under Eisenhower in 1953. The government's collection of revenue under Eisenhower's high upper tax rates from 1950-1959 was only 17.2% of GDP.

It is therefore statistically true that there is very little association between tax rates and tax revenues. This is largely due to the Laffer curve; when tax rates become too high, the incentive to work decreases, and certain economy-growing investments no longer become profitable or worth the effort. In such circumstances a tax cut can actually increase tax revenue. This happened in the 1980's when Reagan's tax cuts increased tax revenues much faster than inflation (contrary to common perception, it was Reagan's increase in military spending that caused his deficits, not any decrease in tax revenue). For sure, tax cuts don't always, or even usually, pay for themselves: there is an optimal rate to maximize revenue, and what that rate is depends upon economic conditions. But it is simply false to claim that tax revenues are malleable or easily increased by simply jacking up tax rates.

Meanwhile, federal government expenditures over this same period (1950-2010) have averaged 20% of GDP, 2% higher than federal revenue. In the years revenues have gone up, spending has gone up with it, rather than those revenues being used to decrease the ever-running deficits. This tells us that no matter how much money we give politicians to spend, they will always spend more than that amount. This, also, makes intuitive sense. Politicians are people, and people generally act in their self interests. If a politician has 100 dollars of tax revenues, which will help his chances of reelection more: using it to pay off a debt that most Americans don't see or understand, or using it to pay for a service or road or park or handout or favor that will make some people happy now? Voters generally view politicians with a "what have you done to help me?" attitude, and vote based on who promises to help them the most. Therefore, even if using revenue to pay off debt may be in the best interests of the country, it won't help the politicians win reelection; kicking debt down the road a bit may cause a problem for the people after him, but it won't hurt his chances in November.

It is unequivocally false, therefore, to claim that we have a debt problem because of of low taxes, for two reasons. 1. There is very little association between tax rates and tax revenues, and 2. Regardless of tax revenues, politicians will spend more than those revenues if they can get away with it. The 1990's example is one of the few times in history in which the people woke up and stopped letting them get away with it. It'd be great if we could do the same today.

Italian student says it like it is



Great video. In fact, it's just a great channel. You should all subscribe to it!

Calculate how much big government costs you

Wednesday, November 16, 2011

OWS Mic Checks come to Hopkins




An increasing tactic of the Occupy Wall Street movement has been to launch "mic checks" at the public speaking arrangements of the movement's enemies. In a "mic check", somebody yells mic check and then the OWS supporters stand up and begin call-and-answer protest chants in the middle of the speech, making it impossible for the speaker to continue. OWS supporters call it bravely standing up to the establishment by demonstrating that you will be silent no longer. I call it terribly obnoxious, arrogant, and detrimental to the movement because every reasonable person in the country recognizes it as obnoxious and arrogant. I have no problem with you exercising your right to free speech, but I do have a problem with you preventing others from exercising theirs. This is not the "non-violent resistance" you claim to advocate, and it is not something MLK would smile to see. It is disruptive, obnoxious, rude, and not conducive to the civil discussion that is necessary to bring about the productive change your movement claims to seek.

Anyways, last night I got to experience a "mic check" first hand when Karl Rove came to Hopkins to speak. Occupy Baltimore protesters infiltrated Shriver Hall and began chanting about 15 minutes into the speech. After about 10 minutes of disorder, Rove was allowed to continue before the shouting began anew several more times. I captured both instances (minus the first 2 minutes or so, when I was so entertained by what was happening that I forgot to whip out my phone) on video, and you can see them above.

Sunday, November 13, 2011

QOTW: 11/13 - 11/19


“It's kind of fun to do the impossible." - Walt Disney

“Don't say you don't have enough time. You have exactly the same number of hours per day that were given to Helen Keller, Pasteur, Michaelangelo, Mother Teresa, Leonardo da Vinci, Thomas Jefferson, and Albert Einstein.” - H. Jackson Brown

"Do what you want and say how you feel because those who care don't matter and those who matter don't care." — anonymous

Friday, November 11, 2011

Friday Funny, Monty Python and the Holy Grail Edition

Some of the funniest men of all time. It's impossible to encapsulate all their comedic accomplishments in one blog post, so I'm breaking it up by movie/TV series. Enjoy the highlights from their most famous film, and stay tuned for Life of Brian in an upcoming Friday Funny!









Sunday, November 6, 2011

Sunday Funny


Cuz I forgot on Friday

  • WHATEVER HITS THE FAN WILL
    NOT BE DISTRIBUTED EVENLY.
I have kleptomania,
but when it gets bad,
I take something for it.

FOLLOW YOUR DREAMS!
Except that one where you're naked in church.

Sometimes too much to drink isn't enough.

Kinky is using a feather.
Perverted is using the whole chicken.


Heaven is Where:
The Police are British,
The Chefs are Italian,
The Mechanics are German,
The Lovers are French
and 
It's all organized by the Swiss. 

Hell is Where:

The Police are German,
The Chefs are British,
The Mechanics are French,
The Lovers are Swiss
and
It's all organized by the Italians.

Suicidal twin kills sister by mistake!

My short-term memory is not as sharp as it used to be. 
Also, my short-term memory's not as sharp as it used to be.

Welcome to Utah
Set your watch back 20 years.


A bartender is just a pharmacist
with a limited inventory.

I may be schizophrenic,
but at least I have each other.

I am a Nobody.
Nobody is Perfect.
Therefore I am Perfect.

KENTUCKY:
Five million people,
Fifteen last names.

I'm not your type.
I'm not inflatable.

Dyslexics Have More Nuf.

In Memorium
With all the sadness and trauma going on in the world at the moment, it is worth reflecting on the death of a very important person,
which almost went unnoticed last week. Larry LaPrise, the man who wrote "The Hokey Pokey", died peacefully at age 93.
The most traumatic part for his family was getting him into the coffin.
They put his left leg in. And then the trouble started.

I LOVE COOKING WITH WINE
Sometimes I even put it in the food.

money isn't everything,
but it sure keeps the kids in touch.

Reality is only an illusion
that occurs due to a lack of alcohol.

Red meat is not bad for you 
Fuzzy green meat is bad for you.

I am having an out-of-money experience.

Don't sweat the petty things.
Don't pet the sweaty things.

Corduroy pillows are making headlines!

I want to die while asleep like my grandfather,
not screaming in terror like the passengers in his car.

QOTW: 11/6 - 11/12 (Abraham Lincoln Edition)


America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.”--Abraham Lincoln

“Most folks are about as happy as they make up their minds to be.” - Abraham Lincoln

“Ballots are the rightful and peaceful successors to bullets.” - Abraham Lincoln

“Don't interfere with anything in the Constitution. That must be maintained, for it is the only safeguard of our liberties.” - Abraham Lincoln

“Don't worry when you are not recognized, but strive to be worthy of recognition.” - Abraham Lincoln

"You cannot help the poor by destroying the rich.  You cannot strengthen the weak by weakening the strong.  You cannot bring about prosperity by discouraging thrift.  You cannot lift the wage earner up by pulling the wage payer down.  You cannot further the brotherhood of man by inciting class hatred.  You cannot build character and courage by taking away people's initiative and independence.  You cannot help people permanently by doing for them, what they could and should do for themselves." - (This is not a direct quote, but a paraphrase of Lincoln's fiscal policy views from one of his biographers)

“I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts, and beer.” - Abraham Lincoln

"We the people are the rightful masters of both Congress & the courts, not to overthrow the Constitution, but overthrow the men who pervert the Constitution." - Abraham Lincoln

Wednesday, November 2, 2011

Jesse Jackson does not understand the constitution

In a recent article, Jesse Jackson blames all the nations problems on Republican congressmen who are blocking the President's attempts to fix all our problems. He, like the President himself, is presuming that because Republicans are voting down all the Presidents initiatives, they must just place a higher priority on getting Obama out of office than they do on fixing the country (rather than, you know, actually having rational disagreements with those policies...they can't fathom that). So since Congress is an impasse, Jackson praises Obama's recent use of executive order's as a means of circumventing Congress. He then poo-poo's Republican's objections to these mandates with the following sentences:


"Governance by executive order goes back to George Washington, who issued the first order in 1789...[T]he Constitution allows a president to protect the nation’s interest from a Congress in rebellion."


No Jesse, it absolutely doesn't. In fact, executive orders are nowhere to be found in the constitution. All the President can do, according to the constitution, is ENFORCE the laws made by Congress. "Executive orders" are only constitutional if they do that: it's the supreme court's job to interpret when those orders are within the framework of powers granted to the president BY CONGRESS. George Washington did issue the first executive order, and it was regarding the questioning of a military officer whose men had been killed in battle. The handling of that officer was directly pursuant to the president's constitutional authority as Commander in Chief; that officer was commissioned by the President's signature, and worked under the President's orders.


Using executive orders to "protect the nation's interest" is code for using them to "do what he wants", because obviously what's in the nations best interest is up for debate! There's also another term for the "rebellious congress" Jackson laments: checks and balances. Since different factions want different things, each can place a check on what the other can or cannot do. When Republicans put a whooping on Mr. Obama and Mr. Jackson's party in 2010, it meant the President could no longer just push through his will. That is a beautiful thing. Obama's frustration with his inability to get his way constitutionally does not mean he can simply issue a decree that things shall be done his way: that would make him a King. Jessie Jackson should know the framers weren't too hot about that idea. President Obama should not be able to "protect the nations interest from a rebellious Congress" any more than King George should have been able to protect the nations interest from rebellious colonies. Because as it turned out, the colonies were right.

Tremendous article by one of the best


November 2, 2011
You Want More Equality? Support More Capitalism
A person can't go but a few clicks on the Internet these days without tripping over some shocking item about the "explosion" of income inequality that has, like the dark smog of capitalistic excess, been choking the life out of this unjust nation. And when it comes to inequality, there is certainly only one vital question we must ask ourselves: Who cares?
If the wealthy get wealthier, no one has to become one penny poorer. This childish idea that the economy is a zero-sum game might appeal to the populist sentiments of the so-called 99 percent -- or to the envious nature of some others or to the emotions of many struggling through this terrible economy -- but in the end, it doesn't stand up to the most rudimentary inspection.
Not to mention, tales of runaway income disparity destroying the American middle class have been repeatedly debunked. James Pethokoukis at the American Enterprise Institute recently pointed out that new Congressional Budget Office "data show real median after-tax household income (half of all households have income below the median, and half have income above it) grew by 35 percent over the past three decades."
Over the past half-century, in fact, the wages of the middle class have captured a remarkably consistent share of gross domestic product. And the most important fact that eludes protesters and progressives is that the poorest 5 percent of Americans are still richer than nearly 70 percent of the world -- with a lot more opportunity to change that situation.
But let's concede that, thank goodness, some inequity will exist and will as long as we remain a largely meritocratic society. But even if corrosive disparity is tormenting us, as so many journalists would have you believe, how are we to fix it? Are Americans prepared to take on a massive social engineering project that entails politicians, commissars and czars making biased and arbitrary assessments about who deserves what and who doesn't? That sort of endeavor has been attempted to varying degrees of real economic tragedy. It's the sort of behavior that got us here.
What we should be worrying about is economic mobility. And we do well there, too. A 2007 Treasury Department study showed that 58 percent of households that were in the bottom quintile in 1996 moved to a higher level by 2005, and of households in the top 1 percent during the same time, more than 57 percent dropped to a lower income group. And economist Shikha Dalmia recently pointed to a study by the University of Chicago's Steven Kaplan that "shows that, despite government bailouts, in 2008 and 2009 the adjusted gross income of the top 1 percent -- a disproportionate number of whom work in the financial industry -- fell to 1997 levels."
These numbers show great mobility, upward and downward, and it's why "class" as a political wedge issue hasn't typically held traction -- though the Obama administration is doing its best to change that dynamic.
No doubt, the recent recession -- and "stimulus"-induced extension of that recession -- and structural and technological changes that often occur in the job market mean that every so often, we will have some painful times. Taking a snapshot of "inequality" when emotions are exacerbated by a recession is only meant to distort reality for political gain. And every time capitalism is hijacked by technocrats and bureaucrats, it seems there is a cry from other technocrats and bureaucrats (and their fellow travelers) to institute more of the top-down control that stifles mobility.
You will notice that the Occupy Wall Street crowds -- and the progressives who support them -- focus on bringing the wealthy down to earth rather than lifting the 99 percent. They have a nearly religious belief that too much wealth is fundamentally immoral and unhealthy for society. The economic systems they cheer on would coerce downward mobility for the sake of equality but ignore prosperity for the people they claim to represent.
If progressive were interested in mitigating inequality, they would support the dynamism of free markets to allow the merit of ideas, products and services to win the day rather than stifle companies and pick winners in the name of imagined "progress." Yes, "too big to fail" means banks, but it also means union-backed bureaucracies, political parties, car companies and green energy -- and more.
If they were interested in spreading wealth, they would support lifting barriers that inhibit markets and make life difficult for entrepreneurs and businesses rather than spreading the destructive notion that life can only be "fair" if we rely on dependency and entitlement and tear down those who have more.
Copyright 2011, Creators Syndicate Inc.

Tuesday, November 1, 2011

The Hunt for a Red November begins now

It is the first Tuesday in November. That means that in one year from now (technically a year and six days, since  next year it will fall on the 6th and it's a leap year which adds a day) it will be election day. In light of this day, I would like to announce that I am launching a new blog. The blog will be titled "The Hunt for Red November", and the URL is http://thehuntforrednovember.blogspot.com/  It will run for exactly one year, culminating on the day after election day. My objective is to track campaign happenings, from a mostly analytic perspective,  analyzing why who is saying what, what effects what strategies are taking, tracing poll numbers and associating certain trends with certain events, and just give a general summary of what is happening. I'll give my reactions to what the candidates say and I'm sure there will be plenty of opinion on there, but it will always be in response to what's happening and being said right now, rather than just because I have been thinking about it and feel like expressing my opinion. That stuff will stay on this blog. I don't know how much time I'll have to post, or how frequent the posts will be. I imagine that the traffic will come down on this blog a bit as I try to juggle another one (and they've already slowed), but I'll still update this one as well, still do the QOTW and Friday Funny and stuff like that. We'll see where it leads. Anyways, make sure to follow me!