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On the permanent war... If we are purposefully starting wars (or keeping them going), just to keep the military business booming, to create jobs, to create a multiplier affect, blah blah blah isn't that the same as moving rocks around? (except you are killing people in other countries, further infuriating them and giving them further reason to hate us)
It's kinda like the old story about creative destruction. If a kid hits a baseball and breaks a window is that good for the economy? Small scale says yes, because someone spends money, and buys a new window. large scale though that money could have been used for a productive item, like a new window that goes in a new house, or what ever as an investment.
Also, if you listen to the founders, there is NOT supposed to be a standing federal army, except in times of war and what is necessary to maintain federal equipment/infrastructure. When an active, standing army is maintained it gives want to use it. Why build a big gun if you never have occasion to shoot it? The standing army is to be the people themselves, hence the 2nd amendment. If less was spent on the military, and policing the world, I could be charged less taxes and have a larger, better trained personal "arsenal" with wich to help stop military take overs of my state.
I will not buy your military "stimulus", multiplier, argument. States vie for the deals to bring the manufacturing to their state because they hope that if the capitol is spent in their state initially, that it will cost too much to move it out and that they will have the means of production, and it can then be used for similar civilian uses. Oh, government doesn't need any more tanks, maybe that company can do some real work and produce.... I dunno cars, bulldozers or whatever,... But once that government contract runs out, the government "created" work is also complete. Therefore those jobs were not permanent. As soon as the switch occurs and something other than government goods are built the work is complete, and government created jobs are terminated.
Some might argue that that state is better off because now it has the capital to build something, cars or bulldozers... But I would argue that the government wasted money because they went away from the free market to build a building (or what ever capital was invested), in an inconvenient spot that otherwise would be utilized for something else, simply to fulfill political goals. So the people's money was taken by force (taxed), then used for politcal gain, often times as a side show to the real bill, just to get another vote for the total bill that the voting person otherwise would not have voted for.
Back to econ 101, ANYTIME price controls are instituted by a government, whether price ceilings or floors, supply quotas or limits, forced purchasing or what ever other techniques, There is a NET LOSS to society. That is tried and true, proven over and over again. I can still draw the supply and demand graphs that i learned almost 10 years ago now... It was a rather enlightening course, and opened my eyes dramatically..
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Group: Forum Members
Last Login: Thursday, March 18, 2010 11:27 AM
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You ignore the multiplier effect - which, by the way, is taught in ECON 101. This is why states fight to get military projects into their states. I believe the ratio is 1:20. For every 1 dollar put into a given project, 20 dollars are created in a community. Don't look now, but that creates JOBS. Granted when that project is over something else has to take up the slack.
Can you explain to me how the multiplier effect works when the gov takes money and spends it, but doesn't work if the person who produced something to obtain the money spends it. It appears to me it would work the same except the gov wouldn't get their cut... and wouldn't get to take the credit for "creating jobs"
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Jon Spurgeon (11/20/2009)
You ignore the multiplier effect - which, by the way, is taught in ECON 101. This is why states fight to get military projects into their states. I believe the ratio is 1:20. For every 1 dollar put into a given project, 20 dollars are created in a community. Don't look now, but that creates JOBS. Granted when that project is over something else has to take up the slack.
Can you explain to me how the multiplier effect works when the gov takes money and spends it, but doesn't work if the person who produced something to obtain the money spends it. It appears to me it would work the same except the gov wouldn't get their cut... and wouldn't get to take the credit for "creating jobs"
The multiplier effect works with any type of manufacturing. That's why the states also fight for whatever the latest Japanese or Korean or German (etc.) plant is getting ready to migrate here.
What is this "cut" that you're mentioning? Are you implying that Government Contracting Officers are corrupt? Or am I misunderstanding?
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Jerry Bezanson (11/20/2009)The multiplier effect works with any type of manufacturing. That's why the states also fight for whatever the latest Japanese or Korean or German (etc.) plant is getting ready to migrate here.
What is this "cut" that you're mentioning? Are you implying that Government Contracting Officers are corrupt? Or am I misunderstanding?
what I am challenging you to do is prove that the multiplier effect works when the gov takes money and spends it, but doesn't work when the person who produced the money that the gov took spends it.
I was referring to the whole beurocracy that needs funding, but I wouldn't be suprised at all of corruption among Gov Contracting Officers. I am not aware of any cases, so I won't speculate.
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basically what it comes down to, regardless of contractor corruption or what ever, is that government is inefficient. If there were a need for the tank plant, in that location, and it was an optimum place to put it, the free market would have done so. all of the overhead costs, paying the government contractors, the work force development people, buildings, utilities in those buildings, everything that the government does is inefficient. Government is not necessarily driven by costs. If not necessarily driven by cost then they are driven by something else, politics. That's the whole point of private property and the constitution, to limit and control the "politics". I'll bend what ever rule I can to get elected. Since there will ALWAYS be more poor than rich, they hold more "voting power". So as soon as you allow laws to be broken or the true meaning to change over time from the original intent, you give more power to the poor voting block. They deserve to be checked just as much as does the corporate powers donating to politicians, and congress, supreme court, and the president. Congressmen have realized that if they bring any kind of government work into their states, the serfs will be happy because they now have a job. They will continue to vote this way until someone puts them in check.
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Aaron Dowdell (11/23/2009)
basically what it comes down to, regardless of contractor corruption or what ever, is that government is inefficient. If there were a need for the tank plant, in that location, and it was an optimum place to put it, the free market would have done so. all of the overhead costs, paying the government contractors, the work force development people, buildings, utilities in those buildings, everything that the government does is inefficient. Government is not necessarily driven by costs. If not necessarily driven by cost then they are driven by something else, politics. That's the whole point of private property and the constitution, to limit and control the "politics". I'll bend what ever rule I can to get elected. Since there will ALWAYS be more poor than rich, they hold more "voting power". So as soon as you allow laws to be broken or the true meaning to change over time from the original intent, you give more power to the poor voting block. They deserve to be checked just as much as does the corporate powers donating to politicians, and congress, supreme court, and the president. Congressmen have realized that if they bring any kind of government work into their states, the serfs will be happy because they now have a job. They will continue to vote this way until someone puts them in check.
"Government is inefficient" this is your mantra. Government is not monolithic. Government consists of many parts. Just as society consists of many people. Some parts of Government are efficient - some are not. Just as other big bureaucracies - Say GM for example. The main Regulation by which Government procurement functions is the FAR - Federal Acquisition Regulation. If one knows how to use it properly it can work very efficiently. I speak as one who has saved the taxpayers MILLIONS.
Does government waste? Hell yes! But does all Government waste and are government employees uncaring slugs who suck the nation dry as you seem to be implying - Hell no!
We are supposed to function within our budgets - it is a system called DBOF. When we reach that ceiling we STOP. The agency I was working in was the central Acquisition Authority for DOD - DLA. We only got our funds be selling to other agencies. With the creation of the government credit cards, agencies could go to commercial sources for anything except classified items. They still came to us, we had better prices, deliveries, access systems to name just a few. In other words we were more efficient than our commercial competitors.
Of course you wouldn't believe me no matter what I say. You have an image in your mind that no argument or proof will ever change.
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Group: Forum Members
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Hold for a second, I am not saying anything about the government employees being "slugs"... What I'm talking about is on a more fundamental level. I'm saying that when government forces price ceilings or floors, supply caps or minimums, or taxes then spends that money in ways that the free market would not have, that inherently creates inefficiencies. Any "slugs" that are exist, or truly inefficient programs merely add more inefficiency to the already poor allocation of capitol. I almost need to upload some supply and demand curves, and make drawings to explain what I'm talking about... Basic of the most basic Econ 101 stuff... When you tax something, you increase the cost, therefore creating less demand for it and an excess of supply. That "triangle" (not necessarily a technical triangle because supply, demand, or both can be inelastic and non-linear) between supply, and demand and the now higher price, and the free market determined price, is the net loss to society.
In the free market, those business that in-efficient go out of business. government programs that are inefficient above and beyond the inherent net loss to society, do not simply go out of business, they government props them up, maybe hires fires a couple people, then carries on.
For example medicare, the guessed the price would be 1X, after implementing the cost came out to be 9X. If that happened in the real world, the business would go out immediately. Instead politicians afraid of getting voted out, voted in more money to prop up the program. Now it's completely out of control, yet still going. Now TOO many people would be upset if you canceled the program. Where as if itwould have been cancelled right away, it would have been labeled a poor program, yup it sucked, then reworked, and if it could be made more feasible then would be re-implemented.
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