OT: 2008 Elections

[Feanor]

$200 billion of our tax money is spent just servicing that debt, but you can blithely dismiss it if that makes you feel better.

[Leebo33]

Taxing and spending is a great little phrase idiotic right-wingers came up with because they hate government and don't want to pay their share.

I wish I made enough money to not worry about the government(s) taking 30-40% of my paycheck. Maybe someday I can afford to be a Democrat.

Thanks for proving my point. You want highways in good shape. You want a VA to take care of veterans. You want the fire department to show up if your house is burning.

Or do you just want your money.

I'm all for taking care of veterans. In fact, I've given after-tax money to veterans. I've also given after-tax money to local fire and ambulance causes. I know quite a few *volunteer* firemen and I wish I had the time/courage to do this as it seems to me to be much more noble than giving money to someone else (like the government) to take care of problems.

Why don't we just give all of our money to the government? Or maybe that is too extreme. How about half? Would that solve all our problems? Do you really believe our highways would be in better shape or there would be better care for veterans? I'm still waiting for the real estate tax relief Rendell promised me and the improved schools with his "slots for tots" program here in PA. Our goverment can't spend the money we send them now efficiently and you think we should send more?

If I had a family member that was poor at budgeting, was corrupt, and couldn't support his family the last thing I would do would be to write more checks to give to them.

And I do believe the problem is caused by politicians on both sides. I just added the Democrat comment mainly as a joke because this seems to be the thread for making sweeping generalizations and perpetuating stereotypes on both sides.

[wco81]

The basic question comes down to what the govt. should do.

Some believe it should provide for the common or national defense and little else. So speaking of inefficiency and waste, they will overlook the excesses of the Pentagon and war budgets and focus on social programs.

We talk about giving our money to the govt. but has it occurred to anyone that our individual earning power is at least partly due to the infrastructure which has been built up over decades or centuries through govt. spending?

Not just civilian infrastructure like roads but things we long ago took for granted like power, water, telecom.

What would our earning power be in Mexico or another Latin American country? Very early on, this country aimed for universal literacy so it invested in education, while all the other countries in this hemisphere, except one other, did not.

Beyond primary education, what would the state of higher education be if not for govt. investment in universities over the past 100-150 years? Without our universities, which educate leaders from all over the world, where would the economy be, and specifically, would we be making as much?

If as some claim, cutting taxes by a few percentage points leads to greater economic growth and a better budgetary situation, why not cut ALL taxes?

That should yield hyper growth and a big budget surplus, right?

[pk500]

WCO:

You're living in a fantasyland in which government spends every tax dollar wisely and efficiently. The reality is the exact opposite, which causes many Americans -- including me -- to not want to give another cent to an entity that essentially throws away my money.

There is absolutely no doubt in my mind that nearly everything controlled by the government could be done more cheaply and efficiently by the private sector in a competitive environment. Schools, roads, infrastructure, etc.

In my perfect world, income taxes would be abolished immediately. They penalize me for being productive. The more I succeed and the more I earn, the more I pay an inefficient bureaucracy. That's not rewarding hard-working Americans; it's penalizing them.

Property taxes, excise taxes and sales taxes would be the source of revenue for the government in my world. And if the government had to drastically reduce its spending across the board to do it, so be it. It's not that hard to find fat to trim in the Federal budget right now.

Granted, my perfect world is just as much of a fantasyland as yours, only on diametrically opposite ends of the spectrum.

Bottom line: I'm not a big believer in socialism or in the power of the Federal government to achieve anything with any efficiency or thrift. To me, giving more tax money to Washington is like giving clean needles to a heroin addict.

Take care,
PK

[brendanrfoley]

I'm new to this thread, so forgive me if I missed some finer points of previous posts.

For me, the issue is not that we're taxed. I honestly don't mind giving up somewhere between a quarter and a third if my income. My issue is that I have a hard time seeing that money go knowing how it's spent in Washington.

Too many bills have items tacked on (pork barrel spending) that don't really serve the interest of the American people. And, some of the spending at the Pentagon is ridiculous (such as continual funding of a plane that could not fly). I could also talk about massive corporate tax breaks and billions in airline bailouts for hours.

It's all very frustrating.

[RobVarak]

To me, giving more tax money to Washington is like giving clean needles to a heroin addict.

Take care,
PK

As P.J. O'Rourke once wrote, "Giving money and power to government is like giving liquor and car keys to a teenage boy."

[wco81]

Never claimed the govt. was efficient or always wise.

But I dispute that the private sector would provide essential services like infrastructure at the most efficient cost. For instance, look at health care. We spend at least double per capita what any other nation spends.

Yet the results are inferior. WHO stats show the US at the bottom among industrialized nations in measures like life expectancy and infant mortality. But there are now more concrete metrics where we fall short:

Other industrialized nations have also seen the benefits of public insurance. Around the same time that Medicare cracked down on payments, most rich nations began more actively negotiating with doctors and hospitals to keep prices from rising through the roof. Lo and behold, medical inflation in most of the industrialized world has slowed dramatically, as the health policy specialist Chapin White has shown. But without such coordinated restraint, U.S. spending on health care has continued to rise rapidly -- a far cry from the 1970s, when our health-care spending per person was comparable to that of other rich nations and growing at about the same rate.
You'd think that those lower costs abroad would mean worse care. (You'd certainly think that if you listened to GOP candidates sneering at the British, French or Canadian systems.) But the closer one looks, the more unexceptional -- and often downright mediocre -- U.S. care looks.

Consider some basic measures of health-care infrastructure, such as those surveyed in a series of analyses by a team led by Gerard Anderson of Johns Hopkins University. The United States has fewer doctors, hospital beds and nurses per person than the norm among rich nations: 2.4 doctors per 1,000 people in 2004, for example, compared with 3.4 in France, which spends just over half what we do per person. Moreover, Americans visit doctors and hospitals less frequently and have shorter hospital stays than citizens in other affluent countries: The oft-maligned French see their doctors enough to rack up an average of 6.4 visits per person in 2004, but the American number was just under four visits. And we lag far behind other rich nations in the use of information technology, such as electronic prescription systems, to improve quality and lower costs.

Indeed, by some measures, U.S. health care looks downright lousy. A six-country study by researchers at the Commonwealth Fund, a health-care think tank with a generally liberal bent, concludes that the United States "scores particularly poorly on its ability to promote healthy lives, and on the provision of care that is safe and coordinated." Meanwhile, a recent analysis of 19 rich nations by Ellen Nolte and C. Martin McKee of the London School of Hygiene and Tropical Medicine found that the United States has the highest rate of "amenable mortality" before age 75 (the odd term of art for deaths that could have been prevented with timely care) -- and that we're falling farther behind.

http://www.washingtonpost.com/wp-dyn/co ... 02743.html

Why do we spend more but get less in health care services? Could it have something to do with the fact that health insurers and pharmaceuticals are among the most profitable businesses out there? Google William McGuire and stock options.

But it's not just a question of direct govt. spending but also the regulatory environment. Cases for better efficiency can be made under a more active regulatory regime. For instance, look at telecom. Early on, Europe mandated GSM while we went through several different competing standards. We still have CDMA in addition to GSM but now, even Verizon has indicated they will use LTE, which is the 4G technology derived from GSM.

Meanwhile, they have better overall mobile service (better coverage) and far more competition. They have enough capacity that they have an active MVNO market, bringing more competitive rates.

It's also not an accident that in just about every industrialized country, the broadband infrastructure is more advanced and provided at lower prices. That's partly because telecom services are unbundled, meaning the equivalent of our ILECs had to sell bandwidth to competitors which wanted to offer services.

Which brings us back to your premise that private sector can provide services more efficiently. In a lot of markets, we don't have a truly "competitive environment." Look at the electricity market in the CA energy crisis. Why was that market susceptible to gaming by energy traders and power generators? Do we have a competitive market for cable TV, or phone or Internet services?

Many of the most profitable businesses are in govt-granted, govt-protected or govt-subsidized markets. For instance, we had oil industry executives in front of a Senate panel this week, arguing why they should continue to receive $10-20 billion in subsidies when they made $120 billion in profits in the last year alone.

It's easy to say private sector could do it more efficiently but do the facts bear that out? Why for instance are most stadia publicly-financed or publicly-subsidized? Do we want to pay a half dozen tolls to drive from San Francisco to LA or a similar distance (400 miles) anywhere else in the country? Or a toll for even the shortest bridge?

[Jared]

You're living in a fantasyland in which government spends every tax dollar wisely and efficiently. The reality is the exact opposite, which causes many Americans -- including me -- to not want to give another cent to an entity that essentially throws away my money.

Neither is the case...the government isn't perfect at spending tax money...but neither does it throw away every cent. The question is figuring out what the free market does best and what government does best, and finding the right equilibrium. Complete unrestricted free market capitalism doesn't work...but neither does 100% socialism either.

As for things like schools, regulations, etc., the history of the United States is one where the government was more "libertarian" to start, but then changed because the free market wasn't doing things important things well Things like providing education, regulating food and commerce, building roads, etc. These libertarian myths ignore our nation's history and make assumptions that the free market will do better in just about everything because...the free market is teh awsome!

PK, if the government was the way you wanted, why on earth would the free market want to build roads and infrastructure in upstate New York where businesses and people are leaving? Furthermore, why would a company build a toll road that 1000 people use when they could build one that 50,000 people use? If they did build one for 1000 people, my guess is that those people would pay a lot more in tolls. Would that be a good thing?

[Leebo33]

For me, the issue is not that we're taxed. I honestly don't mind giving up somewhere between a quarter and a third if my income.

Yeah, I totally agree. I can live with that as long as the money is spent wisely. However, when the money is being wasted I fail to see any reason to give them more. I'm already giving them 7.65% for FICA (which I expect to see very little return by the time I retire), 3% for state, 2% for local, 15-20% for federal depending on the tax code and my deductions/credits in any given year, say 5% for real estate, 6% sales tax, gasoline taxes, taxes on utility/phone bills, capital gains taxes, rental car taxes, inheritance taxes, hotel taxes, occupational taxes...isn't that enough? That doesn't even count the tolls, registration fees, etc.

[Leebo33]

Furthermore, why would a company build a toll road that 1000 people use when they could build one that 50,000 people use? If they did build one for 1000 people, my guess is that those people would pay a lot more in tolls. Would that be a good thing?

I was actually going to use a highway example as an instance of government gone wild. Why in the hell does Altoona, PA have a beautiful 3 lane highway when many of the most traveled and run-down sections in PA (I-81 in Harrisburg, The Schuylkill Expressway in SE PA, etc.) have 2 lanes of gridlock? I know the answer. And yes, it was a Republican's fault:

http://en.wikipedia.org/wiki/Bud_Shuster

[pk500]

PK, if the government was the way you wanted, why on earth would the free market want to build roads and infrastructure in upstate New York where businesses and people are leaving?

Because despite urban legend, there still are people who own vehicles here. Plus the highways and byways of this area are important thoroughfares to the rest of the nation.

Furthermore, why would a company build a toll road that 1000 people use when they could build one that 50,000 people use? If they did build one for 1000 people, my guess is that those people would pay a lot more in tolls. Would that be a good thing?

If I had thousands of dollars more in my pocket every year due to the abolishment of income taxes, those extra tolls wouldn't hurt quite as much.

Take the New York State Thruway, for example. When N.Y. Governor Thomas Dewey commissioned the construction of it in the 50s, he said tolls would be charged to subsidize the construction. Once that bill was paid, the toll booths would come down.

Fat chance, as in any government promise to cut spending or eliminate a program. The New York State Thruway was paid off years ago, yet toll increases are announced nearly annually. It's a giant state government boondoggle and money sinkhole, and that can't be eliminated, can it? Might lose the votes of those employed by the Thruway Authority.

Bottom line: Interstate highways run just fine without tolls west of the Mississippi. But toll roads still exist in the East. Are the roads in any better shape here? Hardly. So I'm paying $5 to drive 150 miles just so I can have a rest area with overpriced food and gas every 25 miles on the New York State Thruway, something I can get on a non-toll road at lower prices by simply pulling off at an exit and driving a half-mile?

Man, you've got to love that government efficiency. Big Brother is really looking out for us.

Take care,
PK

[wco81]

For me, the issue is not that we're taxed. I honestly don't mind giving up somewhere between a quarter and a third if my income.

Yeah, I totally agree. I can live with that as long as the money is spent wisely. However, when the money is being wasted I fail to see any reason to give them more. I'm already giving them 7.65% for FICA (which I expect to see very little return by the time I retire), 3% for state, 2% for local, 15-20% for federal depending on the tax code and my deductions/credits in any given year, say 5% for real estate, 6% sales tax, gasoline taxes, taxes on utility/phone bills, capital gains taxes, rental car taxes, inheritance taxes, hotel taxes, occupational taxes...isn't that enough? That doesn't even count the tolls, registration fees, etc.

I just look at it as the cost of doing business. In CA, I pay an income tax of 9.3%. In neighboring AZ, it would be less than half that and in NV, there would be no income taxes.

AZ sales tax is lower and given lower property values, the property taxes should be a lot lower in neighboring states. I've heard that for about $300-400k, which is about half the value of my home, I could get a much bigger, nicer place in these other states.

But I wouldn't have had the career opportunities in those other states that I've had here.

When I exercise stock options, they withhold 40-50% and I have to pay more taxes when I file my tax return. While I'm not happy about that, it's a better problem to have than not having stock options, which would be the case in another state or another country.

Nor do I think that our tax dollars should be poured into Iraq or some big weapons programs.

BTW, our tax levels are low relative to other wealthy nations. Probably why for all the complaints about taxes, few successful American businessmen choose to move to other countries, even tax havens like Monaco. Few countries provide the same economic opportunities and fewer still have regulatory regime as friendly to business.

[pk500]

I was actually going to use a highway example as an instance of government gone wild. Why in the hell does Altoona, PA have a beautiful 3 lane highway when many of the most traveled and run-down sections in PA (I-81 in Harrisburg, The Schuylkill Expressway in SE PA, etc.) have 2 lanes of gridlock? I know the answer. And yes, it was a Republican's fault:

http://en.wikipedia.org/wiki/Bud_Shuster

Not to mention "The Big Dig" in Boston, a $14.6-billion project to reroute 3.5 miles of highway in a tunnel and build two bridges. The project has been marred by shoddy construction, with tunnel leaks and a fatal ceiling collapse.

http://www.washingtonpost.com/wp-dyn/ar ... Nov18.html

The original price tag was estimated at $2.8 billion. Of course, the efficient government just kept throwing money at it, and the end result was $14.6 billion to reroute 3.5 miles of road and build two bridges. That's about $4 billion per mile. Well done.

Take care,
PK

[Leebo33]

But I wouldn't have had the career opportunities in those other states that I've had here.

So PA should increase it's taxes to 9.3% to create better opportunities for citizens? If that in turn quadruples the value of my house and doubles or triples my salary then I'm all for it!

[Jared]

I'm sure people own vehicles up there. And let's say that, for argument, highways and interstates would be perfectly covered and efficient in a free market system. What about the thousands of other roads? Unless you live off a highway off-ramp, do you really think that the free market will more efficiently pay for all of that?

(And those thousands of dollars saved will pay for your tolls...but I doubt they'd pay for all the other services you get from the gov't.)

Leebo,

I walk across the most gridlocked part of the Schuykill Expwy every day for work. They planned it in the 50s and there is nowhere they can expand it, as it's bounded by 30th Street Station and UPenn on the west side and the Schuykill River on the east side. It also originally wasn't designed to be an interstate, but later was turned into an interstate-grade highway everywhere except that two lane chokepoint in Philly.

And let me be clear...I'm not saying that there isn't government waste, and that there aren't bad gov't projects, etc. But the idea that the free market will automatically be better and more efficient for everyone in every domain is not backed up by history or by evidence.

[Jared]

And one more thing. Arguments that say "this government project cost too much/was shoddy/etc., therefore the government shouldn't get my tax money" is weak. It's as if I said "Enron was a failure, therefore we should become a socialist nation." Businesses waste money and fail, governments do the same. The question is what does the free market do better, and what does government do better. And for things like roads (for all Americans), education (for all Americans), regulation, defense, etc. the government likely does better than the unfettered free market. This doesn't mean that the government doesn't have room to improve...it clearly does. But libertarian solutions don't work.

[wco81]

But I wouldn't have had the career opportunities in those other states that I've had here.

So PA should increase it's taxes to 9.3% to create better opportunities for citizens? If that in turn quadruples the value of my house and doubles or triples my salary then I'm all for it!

Didn't make any claims about higher taxes causing higher property values or income.

Just that despite higher taxes, people can do well.

I would imagine Manhattan has high local taxes on top of high state taxes. Yet people keep flocking to it, despite the high cost of housing and taxes.

Cost of doing business.

[pk500]

Government handles education better than the private sector? Then why are eight of the top 10 research institutions in the United States (2007) private schools?

http://mup.asu.edu/research.html

You're a graduate of one of those fine private institutions, Jared, right? Hopkins?

Why are each of the top 10 of America's best colleges in the 2008 U.S. News & World Report rankings private schools?

http://colleges.usnews.rankingsandrevie ... _brief.php

Take care,
PK

[wco81]

I'm sure people own vehicles up there. And let's say that, for argument, highways and interstates would be perfectly covered and efficient in a free market system. What about the thousands of other roads? Unless you live off a highway off-ramp, do you really think that the free market will more efficiently pay for all of that?

(And those thousands of dollars saved will pay for your tolls...but I doubt they'd pay for all the other services you get from the gov't.)

Look at rural broadband.

Look at utilities and even telecom access in certain unincorporated areas of metropolitan areas.

Utilities aren't always in a hurry to get service out to certain areas.

Look at how Verizon rolls out FIOS service. They cherry-pick zip codes.

If you rely on private sector, you better have money or else you're invisible to them.

[wco81]

Government handles education better than the private sector? Then why are eight of the top 10 research institutions in the United States (2007) private schools?

http://mup.asu.edu/research.html

You're a graduate of one of those fine private institutions, Jared, right? Hopkins?

Why are each of the top 10 of America's best colleges in the 2008 U.S. News & World Report rankings private schools?

http://colleges.usnews.rankingsandrevie ... _brief.php

Take care,
PK

Do you know where even those private institutions get funding?

Do you know how many institutions were funded with land grants?

Also, aren't universities non-profit? They can raise billions in endowments and millions in fundraising but do they pay taxes?


EDIT: Lot of people can't afford to attend these fine private institutions without financial aid, often in the form of govt.-backed loans and grants.

Mexico has some fine private schools (and low taxes) for wealthy families. Or they send their children abroad to private schools in the US or Europe.

If all the universities were private and we got rid of all the govt. grants and subsidies, then going to university would be even further beyond the reach of many Americans.

[pk500]

EDIT: Lot of people can't afford to attend these fine private institutions without financial aid, often in the form of govt.-backed loans and grants.

You're absolutely right, because they're paying income taxes out of their asses every year to fund programs that wouldn't be necessary if the income tax was abolished and government spending was drastically slashed across the board to only provide basic services, including moderate funding of education. Instead, the Federal government has created a society of entitlement.

If all the universities were private and we got rid of all the govt. grants and subsidies, then going to university would be even further beyond the reach of many Americans.

No, they wouldn't, because the lower taxes created by the halt of endless government handouts to a zillion different entities across the spectrum would put more money into working Americans' pockets.

How Americans choose to spend that money is up to them. I would save even more for my kids' college fund than I do now every month.

Plus, an efficient and thrifty government could be funded by sales taxes, property taxes, excise taxes and the like, still providing basic services while infusing thousands into the pockets of working Americans. Sure, it's a fantasyland because it's impossible to control the welfare state that the U.S. has become since the New Deal, and it's impossible to reign in the annual spending orgy in Washington for sensible fiscal policies. There are votes to be bought, you know.

I don't favor the elimination of all taxes. I do favor the abolishment of the income tax, which is nothing but a penalty for productivity.

But if you'd rather let Uncle Sam keep an extra five figures of your annual income per year or more instead of deciding where you choose to spend it, that's your prerogative. I trust myself with my money a hell of a lot more than the U.S. government.

Take care,
PK

[Jared]

Government handles education better than the private sector? Then why are eight of the top 10 research institutions in the United States (2007) private schools?

1) Notice that I said that the government does "education (for all Americans)" better. In a free market system, you will have great schools that will be attended to by the rich and top students. But in a free market system, things would be in really bad shape for schools in poor areas. (And I think that public education is poor in rural and inner city areas...but would be worse in a free market system.)

If you're poor, the elimination of the income tax doesn't do much since the tax rate for the poor is low. You'll get some money back, but not enough to afford a private education. So basically, the poor will be without an education. And if you can't afford education, that seriously impairs your ability to move up in the world.

Of course, this did happen in the United States in the 19th century, and the effects of this is what drove the movement to start public schools. Look at the history of America...in many ways it was more libertarian in its early days. But in many cases, relying on the free market simply did not work, and so things like public education were started.

2) Do you know how much government money is in private schools? Tons...the top researchers are the ones that are the best at bringing government money to the university (private or public). And people that bring the most money tend to be recruited by the best schools. If you took government money away from private schools, you'd kill most research. A truly private school (i.e. one that didn't take any gov't funds) wouldn't be able to compete with one that did.

3) As for why the top research universities are private, it tends to be because they have more money (since they charge more for tuition, state subsidies don't make up for it) and are much older. Both give them more time to develop endowments, infrastructure, and a reputation. Though state schools are improving in that respect...9 of the top 20 research institutions (from the research link you sent) are public institutions.

[wco81]

Private school tuition is over $30k a year.

How many households do you think pay $30k a year just in income taxes?

Without federal grants and aid, that tuition would grow much higher.

Lot of the fine research at those private universities come from govt. funding.

This very medium which we're using to have this exchange came out of govt. funded research and spending on buildout, not to mention tax-subsidies for continued buildout of the Internet.

As for sales and those other forms of taxes (do you mean something like a VAT?), the only problem is that that tax system would be regressive.

Look at the tax system of any industrialized country. You will find none of them have regressive tax system.

Income tax a tax on productivity? Well the income tax was enacted in the early 20th century? And we've become the wealthiest nation since?

Apparently it's not enough of a drain on productivity. I'd be curious to know the GDP before and after the income tax was instituted.

My argument has been that income taxes funded investments in infrastructure and research which boosted productivity. For instance, computers have increased productivity (or so Greenspan claimed). Computers were developed at private companies. But these companies benefitted from subsidies and infrastructure and research paid for by the govt.

[Leebo33]

And one more thing. Arguments that say "this government project cost too much/was shoddy/etc., therefore the government shouldn't get my tax money" is weak. It's as if I said "Enron was a failure, therefore we should become a socialist nation."

Very true and I would never say that. I say that I don't want to send them even *more* money, but rather be more efficient with the money they already receive with the ultimate long term goal being tax decreases. So in this case it would be as if I said "Enron was a failure, therefore I am not investing in poorly run companies without accountability." Just like I don't think we should throw money into ineffective government programs. If the education system is working, by all means fund it.

Enron and like companies failed and the reaction was to increase controls and accountability of executives and corporations. I wish the government would apply those same principles to itself and really mean it.

[Jared]

Very true and I would never say that. I say that I don't want to send them even *more* money, but rather be more efficient with the money they already receive with the ultimate long term goal being tax decreases. So in this case it would be as if I said "Enron was a failure, therefore I am not investing in poorly run companies without accountability." Just like I don't think we should throw money into ineffective government programs. If the education system is working, by all means fund it.

I agree with you...if government programs are ineffective or inefficient, throwing more money at it is NOT the solution unless that money is absolutely necessary to fix it. But completely discarding these programs (aka the PK solution ) doesn't work either.