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To: TimF who wrote (6061)2/25/2012 8:24:46 PM
From: Jorj X Mckie
3 Recommendations   of 7536
I think that simulator is biased toward a progressive economic philosophy.

they assume that tax cuts add to the debt, but if you think back to the 90s, the reason that the government was awash in revenues was that we were in a boom.

If tax cuts have an economic stimulative effect, that will actually increase revenues rather than decrease.

there are a bunch of other examples like this too. The CRFB claims to be non-partisan, but I don't believe it.

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To: TimF who wrote (6061)2/25/2012 8:24:51 PM
From: Jorj X Mckie
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To: Jorj X Mckie who wrote (6062)2/26/2012 11:34:58 AM
From: TimF
1 Recommendation   of 7536
Its not partisan, in the way that term normally gets used. Its not formally or strongly informally linked to either party. That doesn't mean its not ideologically biased, or dependent on questionable ideas.

Examples of the questionable ideas are things like static analysis of tax changes, which always make tax cuts seem more revenue negative, and tax increases more revenue positive, than the reality. Some go too far in the other directions, "tax cuts always pay for themselves" and such, often tax cuts are revenue negative, and tax increases revenue positive, but not as much as any static analysis would suggest, because people respond to changes in incentives.

Increases in investment taxes, and corporate taxes (which many on the left want) are particularly ineffective in raising revenue, and often cut revenue instead. Capital is more responsive to changes in rates, it can somewhere else with less difficulty than people can, and even when it can't or won't move, its less likely to get used to build new businesses, or expand old ones, when the after tax rate of return is low.

As far as non-investment income goes, the favorite of the left, higher taxes on the rich, is also likely to be disappointing in revenue terms. The rich already pay the highest marginal and average rates, they are further along on the Laffer curve, than the non-rich. Also if you depend heavily on the rich paying (as the US does more than most other countries), you get more wild swings in revenue. In boom times you have people flush with income, paying out large amounts of tax revenue. Governments raking in all the money, start new programs to spend it. In recessions far fewer people are income rich, and tax revenue collapses, and you get big deficits. Taxes on the non-rich are also cyclical, but not to the same degree. Making our tax system even more "progressive", would make the swings even worse.

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From: TimF2/27/2012 8:57:27 PM
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Criminal Child Neglect and the "Free Range Kid": Is Overprotecting Parenting the New Standard of Care?

When Ordinary Parenting Practices Can Land You in Court
Ilya Somin • February 18, 2012 5:39 pm

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From: TimF2/27/2012 9:17:50 PM
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Climategate Turnabout Continued
Jonathan H. Adler • February 27, 2012 12:27 am

The revelation that Peter Gleick of the Pacific Institute posed as a Heartland Institute board member to obtain confidential board documents and then distributed these documents, along with an almost-certainly-fake “Climate Strategy” memo continues to reverberate through climate science and policy circles. Folks that might otherwise be discussing the new study claiming climate change could lead to shorter people are instead preoccupied with the ethics of Gleick’s actins. There’s also reason to believe legal action could be coming. Gleick may have violated relevant state laws, and Heartland has apparently referred the matter to the FBI and is considering civil actions. Gleick has canceled recent speaking engagements, resigned posts with some organizations involved in climate science and policy, and is taking a leave from the Pacific Institute, where he is also under investigation.

The Heartland Institute, for its part, has released two sets of e-mail correspondence (on its new “Fakegate” website) that shed further light on Gleick’s actions. Early this year, heartland’s James Taylor had an exchange with Gleick on the Forbes website. More specifically, Taylor lambasted a Gleick essay, and Gleick responded. Shortly thereafter, Heartland invited Gleick to participate in a debate over climate change at the Institute’s annual dinner. There was a brief back and forth, but on January 27, Gleick declined the offer, even though Heartland had offered to pay $5,000 to a charity of Gleick’s choice. Interestingly enough, on the very same day he turned down Heartland’s invitation to debate — citing, among other things, concerns about the organizations lack of transparency and refusal to list all of its donors — Gleick began posing as one of Heartland’s board members in an e-mail exchange that led to his receipt of confidential Heartland documents. This is quite a coincidence — a coincidence that makes Gleick’s explanation of his actions all the more curious (as if they were not curious enough). As Steven Hayward quipped, “The only thing missing right now to make Gleick’s story weaker is an old Woodstock typewriter.”

Meanwhile, Heartland has been quite heavy-handed with bloggers and websites who posted the documents distributed by Gleick, suggesting that posting the documents on line could be illegal and demanding that all of the relevant documents, and not just the “Climate Strategy” memo, be taken down. Debbie Fine, general counsel for the Center for American Progress Action Fund, has responded to Heartland’s threats with a letter noting CAPAF (like many other organizations) has taken down the almost-certainly-faked memo, but explaining why it is under no legal obligation to remove the other documents. As I understand the law, CAPAF is correct. Those who obtained the documents lawfully may disclose their contents.

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To: Jorj X Mckie who wrote (6062)2/28/2012 10:32:31 AM
From: Peter Dierks
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The CRFB claims to be non-partisan, but I don't believe it.

Nobody believes it.

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To: Neeka who wrote (6060)2/28/2012 10:35:48 AM
From: Peter Dierks
4 Recommendations   of 7536
Chart: 'America’s Per Capita Government Debt Worse Than Greece'
11:21 AM, Feb 23, 2012 • By DANIEL HALPER

The office of Senator Jeff Sessions, ranking member on the Senate Budget Committee, sends along this chart, showing that 'America’s Per Capita Government Debt Worse Than Greece,' as well as Ireland, Italy, France, Portugal, and Spain:

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From: TimF3/1/2012 10:17:33 PM
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A Call for Beijing to Loosen Its Grip on the Economic Reins

Published: February 27, 2012

SHANGHAI — A new study by the World Bank and a Chinese government research organization warns that the country’s economic growth is likely to diminish over the next few decades unless China alters its development model and rethinks the role of government in managing the economy.

The report, called “China 2030,” and produced by the bank and the Development Research Center, the government research organization, calls on Beijing to complete the transition to a market economy, scale back the power of state-owned companies, encourage private enterprise and confront rising inequality and environmental degradation.

As remarkable as China’s growth has been over the past three decades, the study suggests that the country’s development pattern has been uneven and is unsustainable. The government should make significant changes, it says.

“The case for reform is compelling because China has now reached a turning point in its development path,” Robert B. Zoellick, president of the World Bank, said in a speech in Beijing on Monday, when the report was released. “Managing the transition from a middle-income to a high-income country will prove challenging; add to this a global environment that will likely remain uncertain and volatile for the foreseeable future, and the need for change assumes even greater importance.”

The release of the report comes at a critical juncture. China is now in the midst of a once-in-a-decade leadership transition, and the report’s proposals could help influence the way the next generation of leaders governs.

Analysts also have growing concerns that China’s economy is facing strong headwinds this year.

Economic weakness in Europe, Japan and the United States is threatening to dampen China’s export boom. After years of heavy investment in public works, there are worries here, too, about inflation, the mounting debt of local governments and the possibility that big state-owned banks could be at risk...

...One of the study’s main recommendations involves efforts to make China’s economy more market-oriented, including scaling back the power of state-owned companies and altering the way the government allocates resources.

“The role of the government and its relationship to markets and the private sector need to change fundamentally,” the report warned...

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To: Jorj X Mckie who wrote (6062)3/2/2012 12:29:20 PM
From: TimF
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He Had Moves Like Jagger
By Steve Horwitz On February 23, 2012
13 Comments · In Current Events, Liberalism

While flying yesterday, I began a set of readings for a Liberty Fund conference on Bastiat (thanks Matt!). I haven’t read Bastiat in a serious way since grad school. My reaction to the first set of readings recalls the (perhaps apocryphal) story of when Eric Clapton first heard Jimi Hendrix play. Supposedly Clapton said “that’s it, I have to go home and burn all my guitars.” Or in a more recent cultural reference: “I am not worthy!” I mean that literally, in that I was recently mentioned in a conversation about modern-day Bastiats. I thought that was excessive flattery at the time, but after this morning, I really am not worthy. Even after more than 150 years, I’m not sure any economist has ever combined really good economic content with the style, panache, and passion of Bastiat. There are so many examples even in the limited reading I did, but one stood out from the first chapter of Economic Harmonies from 1850. The long extracts below could have been written today about Occupy Wall Street and related issues, but no one has done it with quite the style and clarity of analysis that Bastiat brings. I’ll insert some commentary along the way.

But now the great masses of the people, downtrodden, oppressed, exhausted, stage their revolution too…They become a pressure group; they [like those they oppose] insist on becoming privileged. They, the masses of the people, imitating the upper classes, cry in their turn for privileges. They demand their right to employment, their right to credit, their right to education, their right to pensions. But at whose expense? That is a question they never stop to ask. They know only that being assured of employment, credit, education, security for their old age, would be very pleasant indeed, and no one would deny it. But is it possible? Alas, no, and at this point, I say, it is no longer detestable, but illogical to the highest degree.

All fair enough, then Bastiat appeals directly to them.

Privileges for the masses! People of the lower classes, think of the vicious circle you are placing yourself in. Privilege implies someone to profit from it and someone to pay for it. We can conceive of a privileged man or privileged class; but we can we conceive of a whole nation of privileged people? Is there another social stratum under you that you can make carry the load?

Note the argument that it’s the richer classes who use privileges from the state to exploit those below them, rather than the other way around. There’s something of a libertarian class theory there.

Will you never understand the weird hocus pocus of which you are the dupes? Will you never understand that the state cannot give you something with one hand without taking that something, and a little more, away from you with the other? Do you not see that, far from there being any possible increase of well-being in this process for you, its end result is bound to be an arbitrary government, more galling, more meddling, more extravagant, more precarious, with heavier taxes, more frequent injustices, more shocking cases of favoritism, less liberty, more lost effort, with interests, labor, and capital all misdirected, greed stimulated, discontent fomented, and individual interest stifled?

This is a classic imminent sort of criticism, suggesting that the means of the poor’s desire for privilege (the state) will frustrate their ends and give them more of exactly what they oppose. Bastiat’s argument is a fine one against OWS today. As good as this is, Bastiat recognizes that he might be letting other parties off the hook.

The upper classes become alarmed, and not without reason, at this disturbing attitude on the part of the masses. They sense in it the germ of constant revolution, for what government can endure when it has had the misfortune to say: “I have the force, and I shall use it to make everybody live at the expense of everybody else. I take upon myself the responsibility for the happiness of all?”

Now he goes in for the kill:

But is not the consternation these classes feel a just punishment? Have they themselves not set the baneful example of the attitude of mind of which they now complain? Have they not always had their eyes fixed on favors from the state? Have they ever failed to bestow any privilege, great or small, on industry, banking, mining, landed property, the arts, and even their means of relaxation and amusement, like dancing and music – everything, indeed, except on the toil of the people and the work of their hands? Have they not endlessly multiplied public services in order to increase, at the people’s expense, their means of livelihood: and is there today the father of a family among them who is not taking steps to assure his son a government job? Have they ever voluntarily taken a single step to correct the admitted inequities of taxation? Have they not for a long time exploited their electoral privileges? And now they are amazed and distressed that the people follow in the same direction! But when the spirit of mendicancy has prevailed for so long among the rich, how can we expect it not to have penetrated to the less privileged classes?

KA-BLAM! Bastiat was a rhetorical ninja right there.

It’s is a terrific substantive and rhetorical point that I think has largely been overlooked in the contemporary libertarian commentary on Occupy Wall Street, yet Bastiat had it 160 years ago, and with style and panache. Bastiat may not have made any real contributions to economic theory, but no one in the history of economics has been a better economic rhetorician than he was. He knew how to take ideas and put them in a form that was persuasive and memorable. It is a skill more economists could use as we continue to try to push back during a time when bad ideas we thought were dead are reappearing, zombie-like, across the landscape.

Oh for some contemporary Bastiats, for I am not worthy.

Well, he did run some "theories" down the garbage grinder of reality.

It is equally important, if not more important, to determine what is false, than to determine what is "true."

Posted by RRS at February 28, 2012 04:31 PM

A little to collective about the rich/"upper classes". The fact that many push for and receive government favors, doesn't mean all of them are statists. But still some good quotes there.

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From: TimF3/2/2012 1:13:04 PM
2 Recommendations   of 7536
Helping the Poor Is Not Intuitive

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