The question changes
❝❝If government is not a net benefit, then the question “What can government do?” changes to “How do we limit costs?”❞❞
NeoNote — Flow of value
❝❝Remember when I said that economics was about the flow of value? It's like piping water in a swamp. Yes, you can clean it up the water and direct it where you want, but there is still a lot of water flowing around. The more water, the more it seeps and looks for lower ground. You can only" fix" that by draining all the water and taking away what used to be widely available.NeoNotes are the selected comments that I made on other boards, in email, or in response to articles where I could not respond directly.
Now let's change that phrasing that a bit.
Yes, you can clean it up the value and direct it where you want, but there is still a lot of value flowing around. The more value, the more it seeps and looks for lower ground. You can only" fix" that by draining all the value and taking away what used to be widely available.
That's a whole new different perspective. Economic activity and free markets create more value. The flow of value and value in the wrong hands threatens the central systems and the elites. As the elites see it, their best interests are served by controlling value and directing it where they see problems. They want their choice to supersede the choices of others, particularly the unwashed masses who don't know when something is being done for the Greater Good.❞❞
"Controlling" an economy
Saturday - 27Jul2019 Filed in: Quotes & Thinkums&Free Markets
❝❝"Controlling" an economy is like putting plumbing in a swamp. You have to take the existing water away before you can bring water back. The plumbing always leaks and bursts because there is nothing stable to work with.❞❞
NeoNote — Practical economics
❝❝Beer, cheese, and bread.NeoNotes are the selected comments that I made on other boards, in email, or in response to articles where I could not respond directly.
These things were discovered hundreds, perhaps thousands of years ago. We don't know exactly when. What we do know is that chemistry and science in general originated because someone wanted to make beer, cheese, and bread better.
Money, measurement and accounting in general started because someone tried to figure out how many goats their grain harvest was worth.
That doesn't even count fundamentals like fire or the wheel which are still basics of our science and technology today.
Science and technology use what works. When we find something that works better, we modify our science and technology.
And yes, economics in it's pure form is a science. The problem comes when we try to use economics to do things that it can't do well. Most of this is directly traceable to government interference in the exchange.
Economics describes the flow of value. We know how value moves as long as it isn't diverted. Rather than top-down "managing the system" and diverting (and diminishing value), I'd rather see new ideas in products and services. I'd rather see incremental improvements in technology than a clumsy effort to shift money by government edict. I'd rather see lower prices than tariffs protecting the "balance of payments."
No, the correct phrase is that when we find something that works better, we modify our science and technology. Sometimes it's an improvement, sometimes it is a dead end. Modify is appropriate, not improvement.
Your point is wrong. The poor are getting richer, in cash, opportunities, and in available goods (at a lower cost). Cell phones are dirt cheap. Grocery stores have a better selection and sell for lower relative prices.
There is a disparity between the rate of wealth growth of the rich and poor, but the majority of people are better off. But since that doesn't cost the poor, that's hardly a problem.
Are there problems with unemployment and low paying jobs? Yes, but it's not government's job to fix that. We know that when government tries to set prices or wages, things get worse.
You want specifics, then I will give you specifics. Cut taxes so that the combined (Federal, state, local) tax on anything is no more than ten percent. Do away with the income tax and it's reporting requirements. Prevent government from spending more than it takes in, possibly by punishing the legislators. I can give you hundreds more, but all of it is unimportant until taxes get cut way back AND government spends within it's means and no more.
If I say things that are correct and they don't fit your "mental image of the world," maybe that image isn't all that clear.
For American history, I usually work from about 1750 CE on. For Western civilization in general, I usually work from the age of Charlemagne or the Roman republic
Now, what you are talking about is the 20th Century. That just happens to be the century of American central banking, command economy, war as an industry, active intervention in the internal affairs of other nations, massive corporations mostly unbound by local laws, and the birth of "globalism." I put "globalism" in quotes because our "elites" don't mean opening up the world to trade and cultural exchange, they mean control. Specifically deciding what is and is not allowed under what circumstances.
I group these things together because they are closely and intimately related. These are also things that you are not supposed to pay attention to, indeed most of the media constantly tries to distract people from these things. It's just taken for granted that government is supposed to handle those things and we mere citizens aren't supposed to worry.
We're conditioned from birth to accept that government is the first, last, and best solution.
Plot the events and trend lines for yourself. Increase any of these six items and the impact falls mostly on the middle class and then the poor. These changes don't affect the rich as much as those trying to become rich. Changing your financial circumstances becomes harder. Indeed, a society that puts those six factors first "locks out changes," it resists any disruption from within the system. Usually the only change that can happen starts externally. For the elites, this is not a flaw, this is deliberate design.
So when I say that government is not your friend and when the solution to almost all widespread economic problems is to get government out of the picture, it's because I know what it has done.
The truly scary part is "helping the little guy" relies on more government intervention and control. Even though that is what hurt the them to begin with. Let's fix government… with more government!
The problem for the elites is that the economy can't be controlled, not even mostly. Remember when I said that economics was about the flow of value? It's like piping water in a swamp. Yes, you can clean it up the water and direct it where you want, but there is still a lot of water flowing around. The more water, the more it seeps and looks for lower ground. You can only" fix" that by draining all the water and taking away what used to be widely available.
Now let's change that phrasing that a bit.
Yes, you can clean it up the value and direct it where you want, but there is still a lot of value flowing around. The more value, the more it seeps and looks for lower ground. You can only" fix" that by draining all the value and taking away what used to be widely available.
That's a whole new different perspective. Economic activity and free markets create more value. The flow of value and value in the wrong hands threatens the central systems and the elites. As the elites see it, their best interests are served by controlling value and directing it where they see problems. They want their choice to supersede the choices of others, particularly the unwashed masses who don't know when something is being done for the Greater Good.
Build a system insulated from the free market that "controls" value and it will always serve the elites at the expense of everyone else. Manipulate the system, tinker with it, and the elites always come out ahead.
“When has an economist ever been right about anything?!”
Hernando de Soto. The Other Path: The Economic Answer to Terrorism. Almost any of the Chicago school of economics. But the politicos don't like a free market approach because it reduces their power and their ability to pick "winners" and "losers" in a national economy. Of course when things go wrong, that doesn't stop the politicos and pundits from blaming economics in general and the Chicago school specifically. Even if the politicos and technocrats did the exact opposite of what Chicago school of economics experts told them they needed to do.
Meteorology measures and predicts the weather within limits. No one expects meteorology to control the weather. Even in a massive internal environment like a skyscraper, no one uses the tools and techniques to of meteorology to control the "weather" except in the most basic ways. Meteorology is about understanding the weather, not controlling it.
Any meteorologist who told you that he could control the weather is either a fool or a con man.
Likewise, any meteorologist who claimed he could predict the wind by measuring the humidity isn't using the right tools.
The Other Path tells that story. de Soto was part of the international economics team brought in to advise to Chilean government how to grow their economy and how to deal with The Shining Path's promises. It's one of the best examples of practical economics and the Chicago school specifically.
A word of advice. Never argue practical economics with a small "L" libertarian.
A good economist isn't going to promise he can control the flow of value. What he can do is tell you that diverting value reduces value.
Value isn't something that can be generated by political dictate. You have to provide something that people want. Free market competition means that over time, goods and services become better, cheaper, and more widely distributed, even as the overall value flow increases. It's all based on choice without coercion. Voluntary exchanges between consenting adults.
When you get people who don't like the choices others make and see the coercive power of government as a way to change or stop those choices, that's when things get complicated. We effectively outlaw cannabis and cocaine, but nicotine and alcohol are only regulated. Sex is okay in marriage, but not as a commercial transaction. You can make a statue of a bare breasted Liberty leading the charge, but most American beaches require covered breasts.
The economic choices allowed by government to most American citizens are meant to control them, not to free them.❞❞
Friday roundup
Changing the Rules
Controlling the internetWhy Is Social Media So Toxic?
Have we really wiped out half of all animals?
If Dems win the House, ‘climate committee’ will return – seeking energy taxes
Napolitano Teaches Basic Civics to Desperate ‘Fox & Friends’ Hosts
It wouldn't be the first time Trump said something outrageous to set the discussionWe Need a #MeToo Movement for Political Consent
How Trump Is Winning The Midterm Elections
Pakistan acquits Christian woman on death row
Surveillance Cameras Can Identify Anyone by “Talking to Their Cellphones”
Everything you need to know about economics you can learn in the pet food aisle
'Stalked within your own home': Woman says abusive ex used smart home technology against her
If You Liked 'Axis of Evil,' You're Gonna Love 'Troika of Tyranny'
Foxconn: Failure & Fraud
Wednesday roundup
Headlines that don't merit their own entry
Study: Economic Boom Largely Ignored as TV's Trump Coverage Hits 92% Negative
The First Amendment protects your right to not be a rat.
Two Students Hooked Up. It Was Clearly Consensual. He Still Spent $12,000 Defending Himself.
With corruption like this, it’s no wonder so many pension funds are insolvent
Antifa Arsonists Vandalize Pro-Trump Truck — THEN TORCH IT (Video)
Antifa Shut Down Major Intersection, Threaten Citizens with Violence If They Don’t Obey
Pennsylvania's Libertarian Senate Candidate Gets Invited, Then Snubbed From Televised Debate
Fearmongering Article Falsely Claims 'Halloween Is Christmas for Sex Offenders'
Data Showing Navy's Poor Aviation Safety Record Disappears From Website
Sex Workers Pioneered the Early Internet—and It Screwed Them Over
That sign telling you how fast you’re driving may be spying on you
A Florida Man Faces Prison for Making Grills Without a License
What Seems To Be Going on At @Tesla, and The Risks Of Buying (and Shorting) $TSLA Stock
NeoNote — Taxes, spying, deductions, and economies
❝❝Did I ever mention how the income tax isn't designed to produce revenue, but to spy as needed on American citizens?NeoNotes are the selected comments that I made on other boards, in email, or in response to articles where I could not respond directly.
Yep.
You can start with how the IRS is the "go to" agency whenever someone does something the Federal government doesn't like.
You can continue with the fact that your employer and any financial institution you do business with are required "under penalty of law" to report any transactions on demand. There's a reporting threshold for "as they happen," but the IRS still has the (questionable) power to demand any and all going back for years.
Speaking of penalty of law, have you read that bit on the 1040? In fact, take a close look at the entire form. It doesn't say you are required to report your income, it just says that it must be accurate reported on the form before you sign.
No one, including the IRS understands the tax code. It can be manipulated and interpreted as needed. And remember, the first few levels of the tax courts are administrative courts run by the IRS with their own rules of evidence. The presumption of innocence doesn't apply. You have to prove the IRS wrong, and then you might get your seized money back.
By definition, a "standard" deduction means taxes are too high.
What, you wanted it stated in the authorizing law?
Everything I said was drawn from truth.
From Al Capone on, the IRS has been used against those the Federal government doesn't approve of. Or occasionally found politically inconvenient. Any other uncovered crimes are just a bonus.
Reporting financial transactions have proven so useful in so many cases that it has become literally the reason the IRS exists.
The 1040 form is unusually and carefully worded.
Since at least the 1970s, IRS agents and supervisors have been shown to have a very focused knowledge of the tax code and an appalling ignorance about the rest.
The IRS does have it's own court system with it's own rules of evidence. And you are not presumed innocent until proven guilty.
More importantly, look at how Presidents have used the tax code against their enemies.
Al Capone went to jail for tax evasion because they couldn't get anything else to stick.
You tell me, if you were a prosecutor and you knew you had a guilty man and you had the evidence, would you want to charge them with murder or tax evasion?
Prove me wrong instead of labeling it conjecture and innuendo. It's right there, I showed you were to look.
Remember, it took amending the Constitution to make a Federal income tax legal.
Going after him for tax evasion wasn't even part of the plan.
Pay attention, because that is a critical point.
Did you know that the IRS was used to enforce Prohibition?
That was a critical point too.
I understand your confusion. Many assume that Government is a Good Thing. It's not commonly acknowledged that taxes can be some of the worst abuses of government authority. Might I suggest Adams' For Good and Evil: The Impact of Taxes on the Course of Civilization as a starting point?
No I am not.
I'm stating that law is not good in and of itself, and that law is more likely to be abused than not.
For example, people are usually taught that the progressive income tax in particular is a way to get the rich to pay "their fair share." That's not true and it never has been. We know that wholehistoriesindustries have grown up to help people use tax loopholes. What's more, we know that politicos and technocrats benefit from selectively applying the law.
Which returns to my comment, that the income tax as designed is intended to spy on American citizens. It's not uniformly applied. It's subject to change and political influence. And the majority of the public is locked out of changes. And for what? A mala prohibita law. Not paying taxes is does not harm someone, it's just bad because government has declared it to be bad.
The graduated income tax has done more harm and destroyed more freedom than any other law in American history. "Innocent under proven guilty" stopped because of the income tax and no longer applies in American law.
I should have warned you. Never argue taxes with a libertarian.
Yeppers.
That standard deductions line makes people think. And it should.
That's usually when I point out that if they are getting a refund, they just gave the government an interest free loan.
Oh my, that's just so adorable!
Look at it this way.
Taxable income = 100 dollars
Standard deduction = 17 dollars
"Taxed" income = 83 dollars
You are still paying taxes. It's only on paper that there is a difference. They messed with the rate, not with the tax.
They lie.
Don't even get me started on itemized deductions.
ETA: I'm the one with the line of "by definition, a standard deduction means taxes are too high." I'm proud of it, so I want credit.
Yep, and the claim stands.
The politicos and technocrats are playing word games to convince people that the IRS is looking out for the little guy.
They don't reduce the tax, they tell you that there is a standard deduction.
Speaking of which, let's look at that word standard. As in, everyone gets it. If it were really about "giving something" to someone with lower income, you'd think the deduction would be less for higher incomes. But then it wouldn't be a standard deduction.
Nope, we give everyone a standard deduction.
And that certainly looks like taxes are too high.
The fact is that the government hides to actual tax rate to make people think they are getting something for nothing.
The tax rate is too high, so they play word games.
The graduated tax is another issue.
The point is, the mere existence of a standard deduction means that the standard is to deduct. Hence, by definition and the admission of the government, taxes are too high.
That's the same form that is worded to hide the fact that they don't care about you paying your taxes as much as they don't want you to lie about it and make sure that it is correct, right?
The whole thing is deceptive from the payroll deduction to the falsity that a progressive tax that impacts higher tax brackets more to which deductions may be allowed this year if you are lucky enough to know about them.
Not to mention the undeclared interest free loan that many make to the government every year without realizing it.
If it were really just about the income, the whole thing could be done on half a postcard.
Including the instructions.
But this US doesn't do it simply. The code is created to distract, to obfuscate, to hide what government wants.
It's not about the revenue.
It's about tracking the flow of money. Something which isn't authorized by the Constitution.
The whole business of a "standard deduction" is just another way to confuse citizens and convince them that they are getting something for nothing.
It's three card monte by government regulation. You aren't supposed to look close.
Meanwhile there is a surveillance system that is the envy of tyrants all over the world. And Americans accept it even as they complain about it.
Tax income, but not track money.
The 16th was a product of the time, and NO ONE at the time expected it to be used against the poor and the (emerging) middle class. It was sold as a way to make the rich pay "their fair share." I'm pretty sure that if people knew then what the income tax would become, there would have been another revolution.
The graduated income tax was intended to foster class envy. At that point, the upper class did not have the political clout to protect themselves.
Don't you find it interesting that a sales tax doesn't require nearly the administration that an income tax does?
Don't you find it even more interesting that no one understands the tax code and just accepts that is how it is supposed to be?
And then there is the fact that in the name of "protecting" the poor, they still have to declare their income under penalty of law.
As I said and have shown, the American income tax system is more about spying on the American people than producing income.
All you are doing is saying that the system is necessary.
One of the things I quickly learned as a Corporate Clone is that the budget expands to consume the sales income. It's always easier to spend someone else's money.
Remember I said that taxes are too high.
Still, I stand by my point. The spying on the American public is more important than the revenues.
If you state a tax rate and then give everyone a "standard deduction," then taxes are too high.
Taxes are too high for many other reasons, but I agree that distracts from this argument.
A standard deduction goes to everyone, not someone on a graduated scale.
Deductions have nothing to do with a graduated tax, especially since most deductions go to the middle and high end income groups.
It's not a reduction of tax on graduated income, it's deliberately confusing what the rate is.
Which isn't necessary for the higher ends of the income scale who can afford to have someone do their taxes. On the very high end, that means hiring a professional accountant to minimize tax liability.
Deductions are not intended to help the poor. Even if they are standard.
Of course the easiest thing of all would be actually lowering the tax without deductions.
Not true.
The modern version of the income tax started as a class tax. It was not expanded to a mass tax until WWII. Even then (in 1944), the "standard deduction" started as ten percent of taxable income. When the standard deduction was changed to a flat fee, that fee deliberately wasn't linked to the rate of inflation. Which means that over time, people on the lower end of the income scale paid more. But that wasn't the justification in 1964 when the deduction was changed from a percentage to a fee.
Because the fee amount wasn't linked to inflation, inevitably people started falling through the cracks. Meanwhile the income tax provided an unprecedented (and expanding) monitoring of cash flow (not the economy). That monitoring power could not be sacrificed.
And that is where the Earned Income Tax Credit came from. A direct payment from government that did not interfere in the existing tax structure or the government's ability to monitor cash flow. If anything, it expanded the latter.
And if you lower taxes, you don't have to lie about deductions to convince people that they are getting something that they are not. The actuality is that it's easier to manipulate a fee than a percentage all while hiding that people are paying more and getting less while being told what a Good Thing it is.
Reagan signed the expansion of the EIC, but it was originally created in 1975. It's also constitutionally questionable.
And if you eliminate the standard deduction and lower the tax rate to 8%, they pay less.
Manipulating the process is not the answer.
Um,yes.
Because now we are going to talk about the unintentional side effects of a graduated tax system.
Higher taxes aren't just absorbed by businesses and those with more income. The higher costs are passed on. In the case of a business, that means higher prices. In the case of an individual, that means they will buy less, which means few jobs creating or selling.
All this results in lower economic opportunity overall, but especially on the margins. That in turn means that those trying to increase their income will be most affected, especially if they are on the lower end of the income scale.
These are well known second order effects. Look them up.
Simply put, modifications and exceptions to the rules usually benefit those most able to influence the system. Or, as I like to put it, government authority tends to be used against those least likely to resist.
The more complex and convoluted a law is (any law), the bigger negative impact it has on the lower levels of income.
Extra rent and utilities due to displaced costs $50 per month or $600 per year.
Extra costs of food $15 per month or $180 per year.
Extra costs of clothing and miscellaneous $60 per year.
Company downsizing and freezing salary, adjusted for inflation $200 per year.
Just for the stuff I've listed, $1040 additional costs per year due progressive and distributed taxes.
Taxes are costs. They certainly aren't revenues to the people who are paying them.
The costs I provided were approximately middling. See, it's not just the amount of the tax that is shifted. It's also the cost of collecting and administering the taxes. Not to mention all the other costs of government, from the salary of Congressional pages to the paperclip allowance in the Department of the Interior.
Economies are based on the movement of value, we usually talk cash flow as a shorthand. The movement of value acts a lot like water. You can block it off, you can divert it, you can tap it, and you can channel it. Every change influences the whole system, you can't isolate one bit from the other without removing the cash flow. Think water pressure and you're close to the mark. The more you mess with the pluming, the more unstable the system becomes.
Governments tend to use the myth that the economy can be managed and controlled. But it is a myth. The only reason some governments can get away with it is because the cash flow is usually high enough to compensate for the really stupid things.
But if the goal is more money and not lower taxes, then the people with the lowest cash flow (i.e. water pressure) will be most impacted by any changes.
That's why lower taxes alone is a false and misleading measurement.
If you reduce taxes and costs go up, then there is no benefit to a "standard deduction"
Manipulating the system at a higher cost is going to hurt the people the deduction is supposed to help. The government sells a line, "We're going to reduce your taxes." But the politicos never admit the obvious, it's going to cost more.
Revenues are not neutral, that is another lie. There is an increased cost to administer the system. Any changes in process will increase this cost. And government has no incentive to reduce this extra cost.
So in the name of compassion, the system screws the people least likely to resist.❞❞
NeoNote — Economics and Trump
❝❝One flawed legacy of Keynesian economics is that government can control individual action by government. Taxes and budgeting are not the same thing and shouldn't be treated as such. Taxes on the revenue side of the ledger are calculated in terms of their cost (expense side of the ledger) to government. This is probably the most fucked up part of modern government accounting. It's not about how much money government has, it's about how much money government takes from people. Money is power and choice, the more government takes the less people have. Government can't create value, it can only divert it.NeoNotes are the selected comments that I made on other boards, in email, or in response to articles where I could not respond directly.
There hasn't been a real government budget in years. What there has been is a series of continuing resolutions, essentially a short term agreement to spend at least the same amount as before unless specifically changed by Congress. There hasn't been a balanced budget in even longer. There's no cost to Congresscritters for not passing a balanced budget. If it were up to me, I'd say that Congress and it's staff only gets paid in years that a budget is passed and the budget is balanced. In years that the budget isn’t balanced, a Congresscritter should pay it’s salary to the government with interest.
In the case of the tax cut, the original CBO scoring said that the cost to government would not be offset by the revenue it generated. The new CBO report says that the cost to government was offset. Since people like having more money, Trump's popularity went up. People don’t care about the deficit. People do care about money in their pocket.
I’m not “you guys.” I’m not cheering for massive deficits (which happen with Democrat presidents too). I specifically said that he gave the economy a (mythical) boot into growth and that the tax cuts have paid for themselves and boosted his popularity. This is not the action of a drooling idiot. It’s not smart enough and it’s only short term, but it makes Trump look good and gives people more power today.
What I am doing is pointing out that Trump plays the populist better than any recent president, possibly any President since Jackson. The reason he can do this is because government has become more and more oppressive, no matter what party is “in control.”❞❞
from crux № 13 — Competiton
Monday - 07Aug2017 Filed in: Free Markets&Morality & Modern Life
Competition drives the free market, to keep customers companies have to make things better than their rivals and better than what they themselves did yesterday.
Competition is what the "single payer" eliminates in the name of efficiency, yet over time competition means that products and services will be better, faster, and cheaper.
There is no incentive to improve under a government controlled system. There is overwhelming incentive to pay off legislators and technocrats for favorable treatment.
I'm usually correct.
Except when I'm wrong… *grins*
Jokes aside, you probably agree with me on economics, smaller government and (most) individual rights. We won't agree on religion, personal morality, and sexuality. I hope we can agree on honor.
I hang out here to keep me honest and so I can see how conservatives think. And occasionally to keep you honest *wink* and keep you from taking yourself too seriously.
I just get very tired of watching people who should know better lump all members of a group into a monolithic block who is out to destroy their way of life and must be Stopped for the Good of Humanity™
The ironic thing is many of the people who complain loudest about it being done to them are only too willing to turn around and do it to someone else.
I've seen pagans do it to Christians, "blacks" do it to "Hispanics," Republicans do it to Democrats, and women doing it to men.
And vice versa.
You know what? It's not the label shouting and doing things, it's the individual person. Until you deal them as individuals rather than as a subset of a label, you have walled yourself off.
Not them. You.
Thinking about it just now, that raises a fascinating question.
Which is worth more, a moral code handed to you or one earned through personal experience?
I'm not asking you to follow my code.
I'm not even asking you to allow me to follow my code.
I'm telling you that I won't follow your code just as you would tell me that you won't follow mine.
Now we could find what we agree on and work from there, or you could spend effort telling me why your enlightenment requires my sacrifice.
I think the former would be more productive, but I would enjoy your frustration at the latter too.
I started keeping my crux files because I noticed I kept getting into the same discussions in comment threads on other people’s web sites. After a while it just made sense for me to organize my thoughts by topic. These are snippets. It’s not in any particular order, it’s just discussions I have again and again.
Shrinkflation
Friday - 30Jun2017 Filed in: Headlines