You're probably too smart for me, but what the hell--beats doing work.

Werthless wrote:1) I'm not sure what is being advocated here, beyond spending a lot of money to pay people to build things. I question whether a blanket "money for infrastructure, used to create non-outsourceable jobs" is fiscally prudent, or simply a populist plea for votes.

My understanding of this proposal is that it would set aside something like $50 billion a year of federal money to make grants to rebuild bridges, roads, schools, etc, and that these grants probably would be awarded on some kind of competitive basis (which is not to say that they'd be inoculated from the usual inside elbowing).

I believe that infrastructure investments are "fiscally prudent" (the Eisenhower highway system certainly comes to mind), but that's certainly a debatable premise. Is it a "populist plea for votes"? Well, perhaps. But if it's a good idea on its own merits, as the relevant professional associations seem to believe, so be it.

Werthless wrote:2) Envirnonmental innovation? Nobody's against that. :? Would you like the US government to decide the best technologies of the next 50 years (by throwing money at them, and making it a lobbying competition), or would you like the best technologies to succeed? Uniform tax cuts for all research technologies is something that I support, but giving research grants to labs/environmental technologies who can't necessarily get private funding by VC's doesnt seem like a worthwhile use of government funds.

This suggests to me that you believe there's an either/or between government support and VC support; can't one abet the other? (Honest question--I know very little in this area.) Also that VCs are as willing to embrace risk now as they might have been five or ten years ago, which I find dubious (but again, I don't know).

Otherwise, I think government can help "make markets" by creating tax incentives for things like solar panels on homes and office buildings--in other words, helping to propagate the proven technologies in addition to supporting the development of new ones. It's not as soundbite-sexy as taking about fusion or whatever, but probably more useful short-term.

Werthless wrote:3) Tax burden has been shifting... I don't suppose you care to reverse the trend!

I should have said "rates," not "burden."

Werthless wrote:4) Healthcare... there's no easy answer here. I don't think either candidate wants to get into specifics, since any proposed policy which goes into more depth than a soundbite will have a few holes.

Right--because as we know it'll all be battled out in Congress anyway. But the philosophical difference, the basic principles, are very clear-cut between the two candidates. McCain wants to throw tens of millions of workers into the private insurance market, undoing the employer-provided model. Obama, as I understand it, wants to expand coverage through price controls and a pay-or-play regime.

The politics are more important than the policy details: at a time when people are feeling very insecure, McCain is essentially proposing a new burden of insecurity. This might or might not be justifiable on economic grounds (Holtz-Eakin is a smart guy), but it's hard to imagine it playing well among those "hard-working whites."

dajafi wrote:You're probably too smart for me, but what the hell--beats doing work.

Werthless wrote:1) I'm not sure what is being advocated here, beyond spending a lot of money to pay people to build things. I question whether a blanket "money for infrastructure, used to create non-outsourceable jobs" is fiscally prudent, or simply a populist plea for votes.

My understanding of this proposal is that it would set aside something like $50 billion a year of federal money to make grants to rebuild bridges, roads, schools, etc, and that these grants probably would be awarded on some kind of competitive basis (which is not to say that they'd be inoculated from the usual inside elbowing).

I believe that infrastructure investments are "fiscally prudent" (the Eisenhower highway system certainly comes to mind), but that's certainly a debatable premise. Is it a "populist plea for votes"? Well, perhaps. But if it's a good idea on its own merits, as the relevant professional associations seem to believe, so be it.

Werthless wrote:2) Envirnonmental innovation? Nobody's against that. :? Would you like the US government to decide the best technologies of the next 50 years (by throwing money at them, and making it a lobbying competition), or would you like the best technologies to succeed? Uniform tax cuts for all research technologies is something that I support, but giving research grants to labs/environmental technologies who can't necessarily get private funding by VC's doesnt seem like a worthwhile use of government funds.

This suggests to me that you believe there's an either/or between government support and VC support; can't one abet the other? (Honest question--I know very little in this area.) Also that VCs are as willing to embrace risk now as they might have been five or ten years ago, which I find dubious (but again, I don't know).

Otherwise, I think government can help "make markets" by creating tax incentives for things like solar panels on homes and office buildings--in other words, helping to propagate the proven technologies in addition to supporting the development of new ones. It's not as soundbite-sexy as taking about fusion or whatever, but probably more useful short-term.

Werthless wrote:3) Tax burden has been shifting... I don't suppose you care to reverse the trend!

I should have said "rates," not "burden."

Werthless wrote:4) Healthcare... there's no easy answer here. I don't think either candidate wants to get into specifics, since any proposed policy which goes into more depth than a soundbite will have a few holes.

Right--because as we know it'll all be battled out in Congress anyway. But the philosophical difference, the basic principles, are very clear-cut between the two candidates. McCain wants to throw tens of millions of workers into the private insurance market, undoing the employer-provided model. Obama, as I understand it, wants to expand coverage through price controls and a pay-or-play regime.

The politics are more important than the policy details: at a time when people are feeling very insecure, McCain is essentially proposing a new burden of insecurity. This might or might not be justifiable on economic grounds (Holtz-Eakin is a smart guy), but it's hard to imagine it playing well among those "hard-working whites."

Thanks for the response. I'm working too.

I come from a perspective that government can do very little to create worthwhile jobs. The jobs that can be created by government policy are broken up into a few groups. There are literal government jobs, jobs where a salary is paid for through taxes. And there are private industry jobs, where government tries to raise demand in a sector to a point where companies within that sector need to hire people to carry out the needs of the business. It sounds like the infrastructure jobs that are created are of the latter type; government will raise spending to rebuild some bridges, roads, etc. That's sounds fine to me, as long as there is a demand for that type of service. It's better than paying people to move dirt from one field to another and back, which is what I envision when I hear someone say they will "create jobs." Additionally, if you subscribe to a Keynesian view of markets and deficit spending in a recession, it makes a ton of sense to make these infrastructure investments now, as opposed to during a booming economic period. That also assumes that the US is in a recession, which is certainly debatable.

Concerning the government support of environmental innovation, I worry that the US government will spend a shitload of money on worthless (not werthless) technologies, money that was acquired through lobbying for grants. It's anti-meritocratic, and can lead to some crappy technologies being forced to the forefront. I guess I trust VCs who are investing their own money more than I trust government officials, who are assigned to give away other people's money irrespective of ROI. I would rather government just offer blanket incentives to all environmental research if they are looking to encourage innovation.

Regarding tax burden vs. tax rates, I think the distinction is not that useful. Aren't tax rates used to shape the tax burden? I think it's very relevant that the top 10% are paying a MUCH higher percent of the income tax, and suggests that distributional efforts seem to be working. No overhaul seems necessary.

I really really like your point about McCain's general proposal for the healthcare system, which I happen to loosely support. It doesnt matter if it makes sense economically by shifting incentive structures. It's removing people's comfort level, which makes it a potential vulnerability in the campaign.

As an aside, the whole build infrastructure thing reminds that those of us who had the privilege of attending a school built as part of the WPA might note that those buildings were built solid, often with pleasing aesthetic touches. (My high school had a big tower, my elementary school had fine stonework.) That has value. Those buildings have functioned as schools for 80 years now, and will continue to function. Schools built more recently are dumps, and maybe have a 20 year life expectancy. Furthermore, they tend to use the latest dumb idea colleges of education have cooked up. (Anyone ever take classes in an "open classroom"--the rage of the 70s? Forget it.)

TenuredVulture wrote:

Houshphandzadeh wrote:I would think the GILF would have to be significantly hotter than the MILF to earn that status.

Anyway, the point is that in my dream, there was no sexual frisson whatsoever. She was scary and old.

Are you sure it was a dream? Sounds like real life to me.



Also, I think people are forgetting Gramm's part in the whole mortgage mess. He helped make the greed (both consumers and banks) possible.

Thanks Werthless. Always a pleasure to discuss policy with someone who's well informed.

The political philosophy of the health care debate is fascinating to me. During the primary campaign, in response to people who were criticizing him from the left, Obama said that if he were starting from scratch, he'd probably favor a single-payer system--but since he's not, he wanted to accomplish the transformation and get toward the goal of universal coverage with as little blood spilled (figuratively! figuratively! and my phrase, not his) as possible. That meant modifying the employer-provided system, using it as a basis for expansion, maybe phasing it out over time.

I'm sympathetic to the (traditional) conservative concern about not wanting to do more damage getting from A to B than you do good by arriving at B. So Obama's thinking here appeals to me. What McCain is proposing, if I understand it (which is questionable), probably would create a lot of chaos and uncertainty, and would require a strong governmental presence to help guide people through the new choices available to them with the least harm done. Even if the numbers work in the abstract, I'm skeptical that the Republicans would provide that presence, particularly when there's profit to be had.

Of course, he wouldn't get it through a Democratic Congress anyway, and I'm frankly doubtful that even a Republican Congress would go along. Just too much political risk, as with Bush's privatization scheme three years ago. (To think where we'd be now if that had gone through... yowza.)

Werthless wrote:
Regarding tax burden vs. tax rates, I think the distinction is not that useful. Aren't tax rates used to shape the tax burden? I think it's very relevant that the top 10% are paying a MUCH higher percent of the income tax, and suggests that distributional efforts seem to be working. No overhaul seems necessary.

Not to beat a dead horse, but federal income taxes are not the entire tax burden. It's something of a pet peeve of mine, but to properly discuss tax policy, you need to include all taxes. Eliminating the tax on stupid rich people (otherwise known as the estate tax) for instance, has nothing to do with the income tax burden, but it does result in increasing the overall tax burden on everyone but stupid rich people.

You also have to consider the far more regressive state and local taxes, which cannot be cut as easily as federal taxes, since states do have to balance their budgets.

I was watching a special on alternative energy the other day and they showed what the Germans have done with solar power. They gave incentives for purchasing panels and then also gave a price guarantee on any extra energy the cells produce which can be put back into the electric grid. The result was a huge number of people buying and installing solar cells, so much so that the price of the cells came down dramatically and they are now producing a good portion of their power through solar energy.

Do you business/policy-types think that could work here in some capacity?

The notion that government investment in research is the same as the government picking and choosing winners rather than the market is simply silly. The government has a long track of great success in supporting basic research with great benefits for everyone.

If you count Bell Labs (which while a private entity, existed only because the government gave ATT a monopoly on long distance phone service) there's hardly any major technological innovation that isn't traceable to work done either by the government itself (integrated circuits) or research sponsored by government.

TenuredVulture wrote:

Werthless wrote:
Regarding tax burden vs. tax rates, I think the distinction is not that useful. Aren't tax rates used to shape the tax burden? I think it's very relevant that the top 10% are paying a MUCH higher percent of the income tax, and suggests that distributional efforts seem to be working. No overhaul seems necessary.

Not to beat a dead horse, but federal income taxes are not the entire tax burden. It's something of a pet peeve of mine, but to properly discuss tax policy, you need to include all taxes. Eliminating the tax on stupid rich people (otherwise known as the estate tax) for instance, has nothing to do with the income tax burden, but it does result in increasing the overall tax burden on everyone but stupid rich people.

You also have to consider the far more regressive state and local taxes, which cannot be cut as easily as federal taxes, since states do have to balance their budgets.

Have the other forms of taxes become increasingly regressive?

There are a good deal of incentives available in the states. New Jersey's just expired- probably one of the best in the country. I think it was like greater than 50% of the cost of the system.

Rendell has proposed a similiar bill for PA next year, along with incentives for PV manufacturing. So much so that Home Power mag has PA listed in the top 10 alternative-friendly states.

But I believe (and it's a widely held position) that the government has to really crank up the subsidies about a million notches for solar R&D. There's billions (that's "billions" with a "b") in subsidies every year given to oil and coal companies- people recording record profits. Does that make sense?? Those goverment handouts are needed to bolster the development of more efficient solar panels. Right now, the biggest problem with solar is the amount of footprint it takes to get enough power. I would need like 2000SF of panels to provide for my home. And that's not cheap- not the acquisition, not the installation, not the space needed. The break-even for a solar system in PA is 60-80 years (not considering any kind of incentives). That's way too long for the mainstream to adopt.

So I guess it could go either way- direct subsidies for R&D, or buyer assistance. But I think you get way more long-term bang for the buck going direct to R&D to develop more efficient gear.

Werthless wrote:

TenuredVulture wrote:

Werthless wrote:
Regarding tax burden vs. tax rates, I think the distinction is not that useful. Aren't tax rates used to shape the tax burden? I think it's very relevant that the top 10% are paying a MUCH higher percent of the income tax, and suggests that distributional efforts seem to be working. No overhaul seems necessary.

Not to beat a dead horse, but federal income taxes are not the entire tax burden. It's something of a pet peeve of mine, but to properly discuss tax policy, you need to include all taxes. Eliminating the tax on stupid rich people (otherwise known as the estate tax) for instance, has nothing to do with the income tax burden, but it does result in increasing the overall tax burden on everyone but stupid rich people.

You also have to consider the far more regressive state and local taxes, which cannot be cut as easily as federal taxes, since states do have to balance their budgets.

Have the other forms of taxes become increasingly regressive?

States and localities use sales taxes (which are regressive) and property taxes (which tend to be regressive). Also, state income tax codes often are much less progressive than the federal tax code. Obviously, making generalizations about 50 states and thousands of local jurisdictions with tax authority is hazardous. The point being you cannot simply point to income tax and say ah ah! the rich pay all the taxes. It doesn't work that way.

The federal income tax is only about half of the total tax take in the US.

TenuredVulture wrote:The notion that government investment in research is the same as the government picking and choosing winners rather than the market is simply silly. The government has a long track of great success in supporting basic research with great benefits for everyone.

If you count Bell Labs (which while a private entity, existed only because the government gave ATT a monopoly on long distance phone service) there's hardly any major technological innovation that isn't traceable to work done either by the government itself (integrated circuits) or research sponsored by government.

What would you consider to be basic research? The problem with disproving your assertion is that either:

A) I name some innovations that came about without government innovation, and you simply call it a rare occasion.
B) I cannot name a truly free-market industry. The US is constantly giving grants and tax incentives to different industries all the time, and it would be hard to find an industry without government intervention, making it hard to find innovation from such a free-market industry.
C) I can't name what you define as "major technological innovations" because government steps into every major market and gets involved (ie. granting a monopoly, or subsidizing development in the nascent industry). By subsidizing the work of the "leading" technology in a given sector, the government ensures its success and continued use. (Path dependence

Philly the Kid wrote:

mpmcgraw wrote:I read enough to know that our current constitution was not our first constitution.

What analysis do you provide? You spew utter nonsense, challenge us to prove you wrong, and then provide a link to a random blog that more likely than not does not even address your point when you are called on it.

The biggest lol in all of this is you always talking about respecting the constitution and then calling for a new $#@! constitutional convention.

You answer a question with a question and just attack. You say nothing. You are young and arrogant and contribute no value. I have articulated many interesting points of view, referenced a variety of sources. The discussion was 'systemic change', and alterations to our governance strucutre -- I suggested a more parliamentary situation with prime minister and proportional represenation. You made some wise-crack.

I'm getting bored with you. Do you have any opinions that are not being a punk to others?

What is your analysis son? Tell us how things can improve?

What would you do to fix the economy?
Who are you supporting in the election and why?
What is your take on foreign policy?
What issue do you think are important -- what are you 21-22-20? Tell us your view of reality?

You can't even encapsule the debate. I "challenge you to prove me wrong", what? Makes no sense.

You don't have to agree with anything I say, and you can keep cracking-wise, easy to do when we aren't standing face to face. But since your such a smart guy -- tell us something, anything on a political topic? let's here what Quickdraw McGraw has to tell us about how the country should be run and what policies to implement??

We're all waiting to hear your take on it all?

????

Most of that babble is irrelevent. It doesn't matter what I think, where my opinion falls has nothing to do with your idiotic theories.

Your 9/11 and cops are evil idiocy is based on nothing. It took Woody literally months to get even a link out of you for the 9/11 conspiracy and your evidence for cops are evil was a cop pushing a biker over.

All I am asking is that the next time you blibber blabber about 9/11 conspiracy theories is that you provide something credible other than "I have heard and read quite a few experts who *insert ridiculous opinion*. Some people just don't want to know the truth."

What you don't seem to understand is that when you post these ridiculous conspiracy theories is that you are basically insulting us because you have absolutely nothing credible or fact based backing you.

This then makes people extremely annoyed with you and things they would have normally let go you get harped on for. For example me pointing out your lack of historical accuracy on pretty much anything.

so yea.

Werthless wrote:

TenuredVulture wrote:The notion that government investment in research is the same as the government picking and choosing winners rather than the market is simply silly. The government has a long track of great success in supporting basic research with great benefits for everyone.

If you count Bell Labs (which while a private entity, existed only because the government gave ATT a monopoly on long distance phone service) there's hardly any major technological innovation that isn't traceable to work done either by the government itself (integrated circuits) or research sponsored by government.

What would you consider to be basic research? The problem with disproving your assertion is that either:

A) I name some innovations that came about without government innovation, and you simply call it a rare occasion.
B) I cannot name a truly free-market industry. The US is constantly giving grants and tax incentives to different industries all the time, and it would be hard to find an industry without government intervention, making it hard to find innovation from such a free-market industry.
C) I can't name what you define as "major technological innovations" because government steps into every major market and gets involved (ie. granting a monopoly, or subsidizing development in the nascent industry). By subsidizing the work of the "leading" technology in a given sector, the government ensures its success and continued use.

By basic research, I mean research that is sufficiently speculative that no private company has any reason to fund it, since the likelihood of its being profitable is too low.

Companies should only invest in research where it is likely that the returns will outweigh the investment. (Again, the old Bell Labs/ATT model is an exception here, but economically, it functioned as a quasi governmental company anyway.)

Corporate research therefore focuses on bringing the discoveries and inventions of basic research to market. Basic research can then be understood as the raw material for further corporate development.

Government funds lots of research--much of it through the Department of Defense, notably DARPA. But DARPA does lots of basic research. VCRs for instance depend on high density ferrites. Integrated circuits were based on an invention that game out of a government lab.

NSF funds research through grants, as does NIH. This research, much of it conducted in university settings form the basic building blocks of corporate research.

The US is the world's leader in research and innovation precisely because this model works so well, and there's no reason why it wouldn't work with energy.

TenuredVulture wrote:

Werthless wrote:Have the other forms of taxes become increasingly regressive?

States and localities use sales taxes (which are regressive) and property taxes (which tend to be regressive). Also, state income tax codes often are much less progressive than the federal tax code. Obviously, making generalizations about 50 states and thousands of local jurisdictions with tax authority is hazardous. The point being you cannot simply point to income tax and say ah ah! the rich pay all the taxes. It doesn't work that way.

The federal income tax is only about half of the total tax take in the US.

Sales taxes are flat, right, and are proportional to one's consumption? And sales taxes are exempted on some items:

wiki wrote:Food, most clothing, and footwear are among the items most frequently exempted....Additional exemptions include internet service,[51] newspapers, textbooks, disposable diapers, feminine hygiene products, toilet paper, wet wipes, prescription drugs, many over-the-counter drugs and supplies, oral hygiene items (including toothbrushes and toothpaste), contact lenses and eyeglasses, health club and tanning booth fees, burial items (like coffins, urns, and headstones), personal protective equipment for production personnel, work uniforms, veterinary services, pet medications, fuel for residential use (including coal, firewood, fuel oil, natural gas, steam, and electricity), many farming supplies and equipment, and ice.

So, assuming that the poor spend a disproportionate amount of their income on exempted items, it seems that sales tax could be either regressive or progressive, depending on other factors.

Concerning property tax, which is a tax on wealth held in the form of real estate, I dont understand how it is regressive in nature. I thought it was a flat rate that is a set proportion of your assessed value. Care to elaborate?

Payroll taxes and social security are regressive because they stop being assessed above a certain income. I think that Congress resists raising the income limit because they want the ROI for higher income wage earners to remain positive. As it stands now, the return on investment of the wealthy (those making at or above the limit) are around 0%, depending on who you ask. It's probably still positive, however, if you believe the socsec.orgwebsite and assume you live into old age..

For example, a couple with one worker who earned an average income and retires in 2029 would receive an average real rate of return of 3.97 percent. Those with high earnings would receive a lower, but still positive rate of return.

Check out here for a cool tool where you can calculate your ROI:
http://politicalcalculations.blogspot.c ... te-of.html

TenuredVulture wrote:By basic research, I mean research that is sufficiently speculative that no private company has any reason to fund it, since the likelihood of its being profitable is too low.

Companies should only invest in research where it is likely that the returns will outweigh the investment. (Again, the old Bell Labs/ATT model is an exception here, but economically, it functioned as a quasi governmental company anyway.)

Corporate research therefore focuses on bringing the discoveries and inventions of basic research to market. Basic research can then be understood as the raw material for further corporate development.

Government funds lots of research--much of it through the Department of Defense, notably DARPA. But DARPA does lots of basic research. VCRs for instance depend on high density ferrites. Integrated circuits were based on an invention that game out of a government lab.

NSF funds research through grants, as does NIH. This research, much of it conducted in university settings form the basic building blocks of corporate research.

The US is the world's leader in research and innovation precisely because this model works so well, and there's no reason why it wouldn't work with energy.

Fair enough. I don't believe in the US government spending my money on "speculative research" with a low probability of profitability. It is exactly your low hurdle of "success" that you hold for government accountability that guarantees its success. Of course if we spend billions of dollars, stuff will be invented. But that doesn't justify its expense, IMO. However, if it brings you national pride, then I guess you can't put a price on warm fuzzy feelings. To take it a step further, we should spend trillions of dollars on this basic research to really make sure we succeed!! Why wouldn't this work?

TenuredVulture wrote: (Anyone ever take classes in an "open classroom"--the rage of the 70s? Forget it.)

I went to Rolling Hills and CRIS Holland, known as the failed experiment of Council Rock

dajafi wrote:McCain wants to throw tens of millions of workers into the private insurance market, undoing the employer-provided model. Obama, as I understand it, wants to expand coverage through price controls and a pay-or-play regime.

The employer provided model has already unraveled. McCain is promoting a way out of that model if the person chooses to do so. Healthcare costs are killing some companies. Due to their healthcare burden Ford and GM can't make cars less expensively than Toyota, even though both cars are made in the US. McCain's plan allows a person to make a healthcare choice and opt out of employer based programs that are increasingly shifting the burden to the employees and may fall apart at many companies. Additionally there may be a plan that works better for an individual or family that the employer doesn't offer. It may be less expensive than the one the employer is providing. Employers bring a one plan, sometimes two, plan fits all. And then there's the situation when you leave a job. Cobra is often more expensive than an individual plan. McCain's plan calls for uninsured high risk people to be grouped together and be able to get insurance.

Correct me if I'm wrong, Obama wants to create a government insurance plan similar to the Congressional plan for anyone falling through the cracks and he wants to increase employer participation in the form of companies paying into this fund.

Obama's latest ad. Shades of the 2004 convention speech in regards to the economy. No mention of McCain.

Sorry, there's no way for me to inbed the video.


http://link.brightcove.com/services/lin ... 1799203760

Monkeyboy wrote:Obama's latest ad. Shades of the 2004 convention speech in regards to the economy. No mention of McCain.

Sorry, there's no way for me to inbed the video.


http://link.brightcove.com/services/lin ... 1799203760

I cried