Thursday, January 28, 2010

The economy is not a zero-sum game

Reminder to morons: There are two ways to handle not making enough money to meet all your basic needs. The first one is to starve shivering in the cold. The second one is to increase your income.

For some reason, the second one absolutely gets ignored by the right wing deficit cutter talking points spewers. It's as if they believe if you're not making enough money to get by, well, you should just cut out food for two days a week, or something like that. They say, “government should be like a household — should cut its expenses to match its income.” But when my dad was only making enough money to feed his children for five days a week, he didn’t starve his children for two days a week — he went out and found a second job to increase his income. But the deficit cutters want to starve the children for two days a week rather than do what’s necessary to increase income.

So could we increase the national income? Sure. The first thing would be to increase the GDP as a whole via policies aimed at increasing employment and economic growth. The second would be *targetted* tax increases where it won’t hurt consumption (basically the government equivalent of asking your boss for overtime when your kids are hungry), policies to increase percentage of our national income that is taxed (right now we’re the least-taxed major economy on the planet, and it shows in the poor state of our infrastructure and social services). You combine these two things, and the deficit goes away by increasing our income rather than starving our children.

Of course, since the majority of these fat cats who are whining about taxes and whining for less government have never had to make that choice — let your children go hungry, or find more income — they simply dismiss it as a possibility. It’s as if they operate in a zero sum world, where if your children are hungry, the only thing permissible to do is allow them to slowly starve to death, because it’s impossible to grow your income. That’s both ridiculous, and sad, that these people are so out of touch with reality that they seriously advocate letting children go hungry — which is what their policies boil down to, in the end. They'd rather see children starve due to our collapsing social services network than pay even the amount of taxes that the Japanese and Koreans pay -- yeppers, the Japs and Koreans pay more taxes than Americans do. So much for that bullshit of "Americans are too heavily taxed", just another right-wing lie like every other right-wing lie. Evil motherfuckers couldn't tell the truth if you wired'em to one of those Abu Ghraib electrocution machines and shocked their nuts every time they lied, it seems built in to them like gills on a catfish, sigh...

-- Badtux the Economics Penguin


  1. It's an inability to reconcile reality with ideology. I really believe the biggest difference between a progressive and a regressive (i.e. "conservative") is that a progressive accommodates reality into his ideology, while the regressive denies reality for the sake of ideological purity. You said something similar recently.

    Thus, the regressives haul out the invalidated Laffer curve to deny that they are starving the children. Lowering taxes is the way to raise revenues, increase business activity along with the general welfare, and float everyone's boat.

    Neocons, Libertarians, The Muslim Brotherhood, Maoists and Marxists all share this negation of reality complex. For them, ideology trumps reality, every time.

    This week, we got new phones and a new garage door opener, which I am paying somebody to install.
    I would go out and spend more money today, but it's too damned cold.

    JzB the reality trombonist

  2. The right has managed to make ignoring reality a part of their DNA. A normal cycle for realists is execute, examine your feedback, adjust, and repeat. The right's cycle is execute, ignore reality, and blame others for failures that can't be ignored. Look at Iraq. Look at Afghanistan. Look at the economy. In every case, it was GOP policies that failed miserably, and still they ignore the facts and blame others for things that can't be ignored.

    JzB, I wouldn't call the Laffer Curve invalidated. It makes some sense. The problem is that the right only ever sees one half of the curve. It never sees what happens past the inflection point. As far as they are concerned, we're still only 10% of the way onto the curve, when we're actually past the 50% point and thus dealing with reduced revenue.

  3. LFC -

    You make a good point, re: Laffer. And it sent me on a very useful quest.

    This work done by Angry Bear
    goes a long way towards invalidating conservative claims about taxation and growth. The hot topic a few days ago.

    Which is a bit askew from today's topic, but information I'm keenly interested in. Laffer plots Govt revenue, not GDP growth, vs. tax rates, of course.

    JzB the pro-tax trombonist

  4. In fact, I mis-spoke. It's supply side economics - based on a distortion of Lafferism - that has been invalidated.


  5. BT -

    I posted my first article at HubPages. It's not about economics or Penguins or music, but I thought you might read it and give me feedback since you put words together better than average.


  6. You'd really starve your kids for two days out of the week before you'd cut household spending by getting rid of the super-deluxe cable-TV package with all the movie channels and NFL access?

    You're acting as if all gov't spending is going towards only the bare basics (putting food on the table) and that simply isn't true.

  7. So, Purple, what would you count as waste? National defense? Social Security? Medicaid? Medicare? Payment on the national debt? Because you add those four things up, and you're at 85% of the federal budget, leaving very little for the "big screen TV" that you claim is going on. In fact, the U.S. government uses a smaller percentage of the national GDP than any other major economy's government. We're long past the time when the U.S. government was spending on the equivalent of big screen TV's... yeah, there's occasional spending on junk food and the occasional restaurant meal, but the data simply doesn't support your assertion that a significant portion of government spending is waste.

    So, tell me where the waste is. I bet you can come up with a bit of waste here and there, but if it accounts for more than 1% of federal spending, I would be *seriously* surprised. Our crumbling infrastructure and collapsed regulatory agencies that can no longer insure that our food and water is safe tend to indicate that we've cut spending to the point where the children are starving, with a big-screen TV nowhere in sight.

    - Badtux the "Data, not talking points, please" Penguin

  8. Data?! You started it with an analogy, so why can't I go on with that as well?

    *clears throat*

    Have you seen the size of Dad's gun collection? He could sell off almost 3/4 of what he owns and still have more than enough to protect us. And if most of our income is going towards interest payments on old debt then that tells me he needs to get another job as well as cut back on spending. Otherwise Dad is gonna always be working his ass off and that's never good for the family, is it? And it seems that Mom & Dad are hiring far-far more babysitters for us then ever before. All that extra hired help sure can't be cheap...

    All that aside, if you really wanna run on a platform of "Raise taxes and raise 'em high!" then please let me know exactly which office you're running for...I'd love to follow that race. ;)


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