Rich people and taxes

[gojujay]

Originally Posted by Dr. Pfleschbach

That's a good question. Regulatory bodies and concerned citizens already monitor private industry, but who is in a position to monitor government agencies? There shouldn't have to be a congressional hearing every time you want an accounting of what's going on.

Agreed, but that is what it takes. I work for the State and am frequently in an adversarial position because of my Union status. Management, in an effort to CYA, or CTA as the case may be, won't willingly give out any information without the threat of litigation.

[Dr. Pfleschbach]

Originally Posted by gojujay

Such sentiments, like diplomacy, work better at the point of a gun. If you want to give your money away, that's your business. If you want to give MY money away, we have a problem. Or rather, you have a problem.

gojujay, we'll probably have to just agree to disagree. Maybe I'm reading your tone wrong, but it doesn't seem like your response to my post leaves room for discussion. Just one thing, though - between your POV and the one you THINK I'm coming from there is a vast spectrum of nuanced positions, one of which I inhabit. The point of your gun is aimed at thin air.

[jeff]

Originally Posted by gojujay

"Spending down" is a cancer that can even affect private contractors.

Spending down your budget to make sure your following year budget is at least as big is NOT something special to government agencies. I've always worked in private sector - either banking/brokerage or technology, and it's common practice. Managers spend every dime they're allocated, and fight for headcount, whether public or private worlds!

[Inquartata]

Originally Posted by Dr. Pfleschbach

While private industry will seek to produce goods at minimum cost, the other side of the equation requires them to sell the goods at maximum profit. Market forces are not necessarily positive, but rather neutral in terms of advantage to the consumer because they can push prices in either direction. Savings to the consumer are only realized if there is sufficient competition and abundant supply.

Yes, but it's overly superficial to equate "consumer advantage" always and only with "lower prices". There are more qualities in a consumer's bundle of preferences than just low price ( quality, choice, etc ).

The market is an agent of efficiency: of the allocation of a society's scarce resources to those uses the society values most. It's not necessarily to bring about consumer happiness, much less the happiness of any given consumer...

While it may be immaterial to a government agency whether it saves or wastes money, it is axiomatic that private industry will seek to control and manipulate market forces in it's favor whenever possible in order to raise prices to the maximum, thereby increasing profit.

And that's why we have regulation, a certain amount of which is justified by the duty of government to minimize negative externalities and provide the framework of laws and rules without which there can be no certainty and no predictability. The market cannot function at its best without these things. One gets monopolies and oligopolies, which by their nature produce less at a higher price that the most efficient solution would do.

But this is an entirely separate question from that of whether government can produce goods and services more efficiently than private industry would do. Even in the case of monopoly, it is more efficient to regulate private producers and make them produce the market-solution quantity at a near-competitive price than it is for government to take over and produce the good or service itself ( so long as it's not a public good ).

[Inquartata]

Originally Posted by jBirch

Right. And when profit motives conflict, deficiency results. This is the essense of the monopsony/monopoly problem.

Most markets are not inherently monopolistic. They are a very small part of any modern economy.

See, this only works if you assume infinite resources, zero cost and zero public bad.

What?

If medicare (for example) is too expensive, there is incentive for the government to cut its budget.

Dreamer!

The incentive, if any, is to raise taxes or borrowing in order to increase budgets. $600 hammers did not lead the US to cut the Defense Department's budget...

This is quite apart from the enormous portions of the federal budget which is on autopilot, as it were. Whose agencies receive automatic increases regardless of what lawmakers want to do.

In otherwords, if the goal is lowest cost health care for everyone, government offered service is the most efficient way to go.

Dubious at best, I think.

In any event, "lowest cost" and "universal access" are contradictory values, economically speaking. It's asking for an increase in demand and no concommitant increase in price. That way lies something, but it isn't efficiency!

[Inquartata]

Originally Posted by jeff

Wasn't it argued at length that health care was a nonpublic good, and therefore private industry _should_ be more efficient?

Yes. And absent (a) excessive, market-distorting regulation and (b) "cherry-picking" by government monopolies like Medicare, it would be, IMO.

[Inquartata]

Originally Posted by Dr. Pfleschbach

That's a good question. Regulatory bodies and concerned citizens already monitor private industry, but who is in a position to monitor government agencies? .

Lobbyists.

[Dr. Pfleschbach]

Originally Posted by Inquartata

Yes, but it's overly superficial to equate "consumer advantage" always and only with "lower prices". There are more qualities in a consumer's bundle of preferences than just low price ( quality, choice, etc ).

I agree one hundred percent with you about this.

And that's why we have regulation, a certain amount of which is justified by the duty of government to minimize negative externalities and provide the framework of laws and rules without which there can be no certainty and no predictability. The market cannot function at its best without these things. One gets monopolies and oligopolies, which by their nature produce less at a higher price that the most efficient solution would do

And I'm with you on this, too.

But this is an entirely separate question from that of whether government can produce goods and services more efficiently than private industry would do. Even in the case of monopoly, it is more efficient to regulate private producers and make them produce the market-solution quantity at a near-competitive price than it is for government to take over and produce the good or service itself ( so long as it's not a public good ).

This is where we differ. When you focus on efficiency, I assume you mean productivity with minimum waste. Efficiency is all very well and good for private industry, but it does not necessarily equate with improving the general conditions within our society. For example, it is efficient for industry to dump toxic waste products in the nearest body of water and leave the cleanup costs to the taxpayer, but it is very destructive to our society in general. It may be more efficient to outsource jobs, but if it leads to there being an entire underclass of people in our society who are either unemployed or working at MacDonalds, the demand for the products generated by the outsourced jobs will decrease (here, at least) because they will be unaffordable to large numbers of people.

I want to be clear that I am not a Luddite, nor am I opposed to private industry. I agree with you that there are many goods and services that it produces in a more beneficial way than government can. I just don't believe that efficiency should be the ultimate goal. Efficiency is about method, not outcome. I think it makes more sense to make judgements based on effective benefit than efficiency of process.

[jeff]

Originally Posted by Inquartata

Yes. And absent (a) excessive, market-distorting regulation and (b) "cherry-picking" by government monopolies like Medicare, it would be, IMO.

Do you mean to say that by selecting the aged, the government cherry picked the best consumers? That's simply wrong - the exact opposite occured: Medicare covers the segment that disproportionately consumes expensive medical services, while private insurers notably and in well-documented ways, cherry picked the young and healthy.
As fas as "excessive regulation" - that's in the eye of the beholder, and regulation in healthcare almost uniformly occured because of private, market-based abuse. Such a vague and sweeping assertion can be used for any excuse, and proves nothing

[jBirch]

What?

Dreamer!

The incentive, if any, is to raise taxes or borrowing in order to increase budgets. $600 hammers did not lead the US to cut the Defense Department's budget...

Your assmumption here is that budgets are infinite, private sector produces no public bad and that there are no negative ramifications (costs) to raising them. This raises the ineficiencies you've noted. This assumption is false.

There are real limitations on budgets, revenue and performance.

While the government has waste, so too does comparitively sized private sector. Does the company really need a private jet? Or corporate retreats to expensive resorts? Yes, these can be justified economically (as, in some cases, can $600 hammers), but most often are pure economic waste. Shall we go over to the logical fallacies thread for your Defense Department argument or is the counter-example enough? *grin*

In any event, "lowest cost" and "universal access" are contradictory values, economically speaking. It's asking for an increase in demand and no concommitant increase in price. That way lies something, but it isn't efficiency!

Now you kinda get the problem.

This, I think, is what you miss when evaluating public sector motives. Both private sector and industry operate according to the profit motive. It's just that in one, the motive is financial profit and in the other the motive is electoral profit.

This is why simply raising taxes is not in governmental nature. If a program is overspending its budget, there is electoral profit to be made in cutting it. Therefor, there is public sector incentive to operate in a financially prudent manner or else your program gets cut.

Because of the electoral profit motive, public sector institutions minimise the production of public bads for any given good. In cases where the financially efficient production of a good/service generates significant public bad, opportunity exists for public sector institutions to more efficiently produce that good (higher cost, but lower public bad production).

James.

[Dr. Pfleschbach]

Originally Posted by Inquartata

Lobbyists.

And now the government is monitoring the lobbyists. Sounds like what we used to call a circle jer_ (fill in the missing letter with whatever comes to mind). Oops, did I just push the limits of propriety?

[gojujay]

Originally Posted by Dr. Pfleschbach

gojujay, we'll probably have to just agree to disagree. Maybe I'm reading your tone wrong, but it doesn't seem like your response to my post leaves room for discussion. Just one thing, though - between your POV and the one you THINK I'm coming from there is a vast spectrum of nuanced positions, one of which I inhabit. The point of your gun is aimed at thin air.

I have a problem with government artificed wealth redistribution schemes. They are usually well meaning but fail to account for the incentives they actually create. The problem is that ANY change, no matter how needed, produces howls from the beneficiaries of the government programs. This even if the beneficiaries are not the original intended targets of such programs, but grifters who managed to find a nice or overlooked teat on the government sow. The helping hand that you are offering is fine and has tremendous morality if it is offered knowingly and willingly. Government programs don't fit that description. The government doesn't have the knowledge needed to distribute, or redistribute, wealth; no individual or individual organization does.

[gojujay]

Originally Posted by jeff

Spending down your budget to make sure your following year budget is at least as big is NOT something special to government agencies. I've always worked in private sector - either banking/brokerage or technology, and it's common practice. Managers spend every dime they're allocated, and fight for headcount, whether public or private worlds!

Makes one wonder if there exists a way to allow a department/agency to keep those excess budgeted funds through a fiscal cycle and add them to the next years budget with no negative impact on that FY's budget. It seems like they're winning a battle against inefficiency while making it that much more difficult to win the "war".

[gojujay]

Originally Posted by Dr. Pfleschbach

...snip...I just don't believe that efficiency should be the ultimate goal. Efficiency is about method, not outcome. I think it makes more sense to make judgements based on effective benefit than efficiency of process.

Careful, that way thar' be dragons. That can lead too easily to equality of outcome not equality of opportunity. Quotas.

[Feltan]

Originally Posted by gojujay

...The government doesn't have the knowledge needed to distribute, or redistribute, wealth; no individual or individual organization does.

I concur. They lack the knowledge to do so effectively, but they do have the power to attempt the feat. Much like a teenage boy driving wrecklessly to impress the girl.

Regards,
Feltan

[PeterGustafsson]

Hi!

Originally Posted by gojujay

I have a problem with government artificed wealth redistribution schemes.

Since you dislike these redristibution schemes, and they will be part of the legal/political landscape for the foreseeable future, I recommend that you relocate to another country where there are no such policies in effect.

You seem to have no problems with illegal immigrants voting with their feet, so why not vote with your own?


Have a nice time!

Peter Gustafsson

[PeterGustafsson]

Hi!

Originally Posted by gojujay

Such sentiments, like diplomacy, work better at the point of a gun. If you want to give your money away, that's your business. If you want to give MY money away, we have a problem. Or rather, you have a problem.

He will not have a problem. However, the IRS has power to access YOUR money, and can call upon guns (i.e. law enforcement) to back up their point.


Have a nice time!

Peter Gustafsson

[PeterGustafsson]

Hi!

Originally Posted by gojujay

Seems to me to be a plan for autocratic socialism except for possibly #5

What kind of definition of socialism do you operate with? Furthermore, can you back up that definition with any kind of reference to a widely respected source? Or do you just use the word as a grab-bag term for political opinions not to your liking?
Have you ever lived in a place where the govt. at the time defined itself as socialistic? Or even lived in a place where self-described socialists have had political representation? Or even visited such a place?

While I do not vote socialist, I dare say that I would know more about socialism than you, since I can say "yes" to all 3 last questions, and you seem to have a very shaky grasp of the topic.

Originally Posted by gojujay

The incentives that minmum wage laws create are what has led to the current illegal immigration imbroglio.
-SNIP-
Business will always look for ways to cut expenses and labor is the biggest expense.

So we pay protection money to the poor to keep them from burning the town down?

So we are to accept the fact that employers want to circumvent minimum wage laws by hiring illegal immigrants, rather than demanding that they follow such laws? Since they think it is bad for them, then we should let them disregard the laws?

In contrast, you take issue with any carrot approach to poor people, and demand that they follow laws as they stand.

Me - I demand that both should follow laws.


Have a nice time!

Peter Gustafsson

[jeff]

Originally Posted by gojujay

Makes one wonder if there exists a way to allow a department/agency to keep those excess budgeted funds through a fiscal cycle and add them to the next years budget with no negative impact on that FY's budget. It seems like they're winning a battle against inefficiency while making it that much more difficult to win the "war".

It's called "corporate governance", aka fiscal discipline, and it's hard to pull off whether in a real corporation or in public sector. I think the keys are accountability ("why did you spend that") and alignment of goals: In cultures that measure power by money you can spend and number of staff reporting to you, it's like holding back the tide. If managers are rewarded for not spending money they've budgeted (in some companies it's almost considered a crime of poor planning to not spend your budget) through bonus or other incentive, maybe there can be progress. But, this is a very common, very tough problem.