Curiouser and Curiouser! on economics

Spend it like Bush

Wed, 14 Jan 2004 10:00:27 +0000

National Debt. More on the U.S. national debt, from Al Martin Raw, the article "Scoreboard 2003". Seems to be in the member area, but somebody sent me an e-mail copy.
The total national debt of the United States on a fully realized basis, inclusive of federal, state, county and local debt stood at a record $20.613 trillion (83.73% of said debt having been created from 1981-92 and from 2001 to present.) The total public and private indebtedness of the United States ended the year 2003 at $39.384 trillion. The total public and private assets of the United States ended the year 2003 at $26.134 trillion. Thus, the United States by the end of 2003 has a negative net worth of approximately $13 trillion. The total debt service of the United States ended the year 2003 at 309.4% of GDP (Gross Domestic Product). These are numbers never before seen. This is a higher debt to gross domestic product ratio than any other country on earth, which still services its debt.
Doesn't sound good. I'd like to see some other sources on that, of course. The periods he's mentioning, 81-92 and 2001 to the present, where 83.73% of the debt were generated is when Reagan and the two Bushes have been presidents. [Ming the Mechanic]

Caveat Lector: Uninformed commentary follows...

If these figures are anywhere near true then we should all be worried. Worse still American spending is going to be painfully hard to decrease with President Bush continuing to borrowing to fund his pet projects like The Global War on Terror.

What's $6.9 trillion between friends?

Fri, 16 Jan 2004 20:14:59 +0000

Interesting article about the US national debt. Interesting because it explains some of the economics of, and differences between, private and public debt which I did not previously understand.

Away with your railways

Mon, 19 Jan 2004 13:50:02 +0000

It's funny, for years I have been a strong supporter of renationalizing the railways in the UK. As I listen to the government talking about bringing management of the railways back in house and talk of the public subsidy required to to do the job I realse I don't believe it any more.

A subsidized railway is not free. It is paid for by our tax money. The goverment takes it from us, by force if necessary, and hands it over to companies over whom we have no control. More and more of it disappears into the sinkhole that is the British rail system every year. Yet have you heard even a single passenger trumpeting the improvements they have made?

The government and the industry say it will cost billions of pounds and take many years just to get back to the levels of service everyone was complaining about before the Hatfield rail crash. I don't believe they will do it. I believe it is good money poured after bad.

I think a significant aspect of the problem is that the Railway companies aren't as interested in the passengers as they are in pleading to government for more subsidy. In effect pleading for the government to rob us of more money, to hand over to them. Well I don't want to give it to them.

Let me repeat that: I do not want to give the government any more money for the railways!

I think that the state cash supply for the railways should be turned off and as soon as is practical. Let them turn instead to their customers for their revenues. Let them persuade customers to pay for their services on a fair basis. All that tax money should be immediately returned to the tax-payer in the form of a cut in the basic rate of income tax, VAT, or National Insurance. Whichever will benefit the most number of people.

To those who argue that prices would go up I say "I agree." If you want to use the railway then pay them. And you should have a little more money in your pocket to do so.

To those who argue that the poor may not be able to afford it I say "I agree." This could be a problem. But I think that there are solutions to be found. Maybe people could come together to create purchasing blocks to force a better price from rail companies? They're surely going to need their business.

And if, after all this, the railways can't survive. Then let them die and be replaced by something more fit to serve us.

But don't keep lining their pockets with my taxes. It's not fair.

Learning the fundamentals

Sun, 15 Feb 2004 00:11:12 +0000

Does anyone have a recommendation for where I can get a copy of Murray Rothbards: Man, Economy, and State in London? Ordering it from Amazon.com at $35.00+shipping isn't attractive.

Tax and waste

Tue, 30 Mar 2004 13:05:41 +0100

Florida is a battleground state in the US presidential election this fall. Lots of Bush-Cheney ads on the radio on the drive here from Orlando. They paint Kerry as a taxer. They have an ad with a supposed Bostoner (he makes fun of his own accent) talking about how Kerry likes to tax, tax, tax. Made me think I should move to Florida until November, so I can vote for Kerry in the fall in a place where my vote means something. Bush makes me totally sick. Bush decided to create a huge deficit. Kind of like a tax. [Scripting News]

As I understand it, a very actual tax. Just not till after the election.

As far as I known there are 3 kinds of government borrowing:

Borrowing to cover capital investment
Borrowing to cover day-to-day spending
Borrowing to waste on overseas adventurism

The first kind can be good because the investments hopefully lead to a growth in the economy which leads to higher tax revenues. The other kinds are bad because they do not increase the capacity of the economy. In all cases you have to pay back the principal but also fund the interest charges on what you've borrowed.

So, if you're pissing that borrowed cash away on bombing foreign countries and filling the pockets of your friends in the oil & arms industries... well likely you'll be the kind of person that will find a way to avoid the taxes anyway.

Have a nice day!

What kind of crummy Marxism is this?

Sat, 01 May 2004 10:08:04 +0100

Can you imagine this? Here are a bunch of commies who are offering sweetheart tax breaks to Western companies. Low taxes benefit business. Arent commies supposed to be anti-business? I mean, what kind of crummy Marxism is this?

Other executives complained bitterly that the Department of Homeland Security is making it so hard for legitimate foreigners to get visas to study or work in America that many have given up the age-old dream of coming here. Instead, they are studying in England and other Western European nations, and even China. This is leading to a twofold disaster.

First, one of Americas greatest assets its ability to skim the cream off the first-round intellectual draft choices from around the world and bring them to our shores to innovate will be diminished, and that in turn will shrink our talent pool. And second, we could lose a whole generation of foreigners who would normally come here to study, and then would take American ideas and American relationships back home. In a decade we will feel that loss in Americas standing around the world.

Still others pointed out that the percentage of Americans graduating with bachelors degrees in science and engineering is less than half of the comparable percentage in China and Japan, and that U.S. government investments are flagging in basic research in physics, chemistry and engineering. Anyone who thinks that all the Indian and Chinese techies are doing is answering call-center phones or solving tech problems for Dell customers is sadly mistaken. U.S. firms are moving serious research and development to India and China.

Friedman concludes: "We have got to get our focus back in balance, not to mention our budget. We cant wage war on income taxes and terrorism and a war for innovation at the same time." Call this "the education of Thomas Friedman." Who knows? Maybe this perspective will actually have some influence on the editorial page of the New York Times. But dont bet your pension money on this possibility. [Gary North via LewRockwell.com]

A snippet from Gary North's latest piece on the developing relationship between Eastern and Western economies. I usually enjoy his perspectives as well as his prose.

More and more my view is that our conservative governments are a millstone around our necks. They don't understand the flow of events around them and yet they seek to control them, grabbing whatever powers they need to do it. In the process they are damaging us all and we are letting them.

You don't have to look to hard to see the consequences.

Economics

Thu, 22 Jun 2006 09:55:58 +0100

Hands on teaching of economics by Arthur E. Foulkes:

Lesson 3: "Savings"

On the third week of my class the economic concept of the day was savings. In this day's activity we divided the class into two "villages" one made up of people who "live for the day" (believing with Keynes that, in the long run, we're all dead) and the other village made up of savers.

Every day the kids in both villages went fishing with their bare hands and caught two fish each. In the first village each person would eat both fish at a big party and feast. In the second village, each student just ate one fish and put the second in a small pond located in their village.

Soon an intelligent villager came up with the idea for a net to help catch fish. The trouble was the net would take a lot of time and effort to make. Since several days were required, only the kids in the savers' village had the resources available to abandon daily fishing to devote time to making a net.

Once they had a net, fewer "savers" were required to catch fish, freeing up other villagers to make bows and arrows, huts, and so on. The "quality of life" in the savers' village seemed to take off geometrically while life in the other village remained the same.

Interestingly, while at first many students had said they would prefer living in the "party" village, by the end of the class, most said they would prefer living in the savers village. We ended the class period talking about the role of savings in allowing people to do things aimed at improving their lives: pursuits that also require time, such as attending school or changing jobs.

There are 5 lessons in all: Trade, Money, Savings, Competition, and Price. I found them well worth reading.