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(Washington Post)   Oh, look, another Rethuglican spouting off at the mouth about Medicare being unsustainable and people getting $3 in services for every dollar they put in and fark it, let's just sick the liberal fact checkers on him. See, I told you...oh, he's right?   (washingtonpost.com ) divider line
    More: Obvious, Medicare, fact checking, John Barrasso, average wage  
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2715 clicks; posted to Politics » on 20 Mar 2013 at 12:24 PM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-20 08:38:10 PM  

I Like Bread: globalwarmingpraiser: I Like Bread: Because profitability is the only metric of success for welfare programs.

the only metric that really matters is can we sustain it or not. Anything else is ego wanking BS.

Yes, every immigrant father who worked himself into an early grave for the sake of his children's future was just wanking his ego. He should've just bought a boat, put his feet up and let his children starve.

"Sustainable" is the wrong word to use. Health care is an expenditure. We don't sit around pondering which cable service is "sustainable".


If the country is unable to pay for the Healthcare anymore then it goes away. I would not oppose a Medicare for all as long as there was plan to pay for it,
 
2013-03-20 08:58:44 PM  

globalwarmingpraiser: there was plan to pay for it,


Umm. Taxes?
 
2013-03-20 09:04:50 PM  

Dr. Whoof: cameroncrazy1984: skullkrusher: isn't the point of Medicare to give people more than they pay for?

I thought that was usually how insurance worked, yeah.

The concept of shared risk pooling is too difficult for Cletus to understand, so let's end Medicare.


That's what they said about derivatives.
 
2013-03-20 09:13:57 PM  

theknuckler_33: MattStafford: theknuckler_33: One is legal tender, the other is not. What the hell is wrong with you?

So are you suggesting that if the government printed up a 100 dollar bill and gave it to me, it would be economically beneficial, but if I printed up a 100% identical replica, and no one could possibly tell the difference, it would be economically harmful?

Wow, you have a lot of faith in the government.  Does it tell you to breathe too?

What would be harmful is making counterfeit money and getting away with buying goods with it only for the merchant to, say, be informed by his/her bank that the money is counterfeit... because basically you robbed them. Inventing a scenario where you create some perfect counterfeit 100 dollar bill that will never be detected by anyone ever, then it is no different than having a real 100 dollar bill.


 Sounds like the Federal Reserve to me.
 
2013-03-20 09:20:14 PM  

skullkrusher: MattStafford: Job Creator: Just wanted to point this out. Buying stuff doesn't help the economy. Got it.

/please be a troll, don't tell me you believe this

Maybe this is difficult for you to understand.  If I printed up several trillion dollars, and bought a whole ton of shiat, it would not help the economy.  If you think otherwise, you're completely brainwashed.

it would, actually. That injection of cash would stimulate demand which in turn stimulates more demand. The inflationary impact, if any, would not be immediately apparent. That's why it works to stimulate the economy out of recession but is not a good idea as a matter of continuing policy


Wow, I agree will skullkrusher.

max_pooper: max_pooper: thismomentinblackhistory: max_pooper: MattStafford: ShawnDoc: The selling and buying of goods does not affect the economy. This is what Matt Stafford actually believes.

If I printed up hundreds of trillions of dollars, and started buying every good I could possibly see, would you think that this is good or bad for the economy?

When are you going to admit you lied when you claimed to have earned a degree in economics?

Can you give the back story to this, max? It sounds entertaining.

In one of the first threads MattStafford popped up in he was going on and on with his stupidity. Somebody told him he should take an economics course. He claimed that he took enough economics class to earn an economics degree. With all his ignorance not many people believe him. He tried to back track on it by saying he did earn a degree but no longer believes any of the stuff he learned.

Let me look through the archives and see if I can find the thread. I think it was about California. I;ll report back when I find it.


Found it. If you don't want to read through the entire thread, just skip to page two and do an ctrl+f "degree". That's where he claims to have an economics degree with some bonus stupidity about how consumption is not good for the economy.

http://www.fark.com/comments/7549150/Remember-last-week-when-Gov-Bro wn -announced-that-for-first-time-in-20-years-California-was-no-longer-go ing-to-be-a-fiscal-laughingstock-Yeahabout-that?startid=82042658


Thank you, was looking for that a couple days ago.
 
2013-03-20 09:25:45 PM  

Muk_Man: Wow, I agree will skullkrusher.


shocking what is possible when you think about stuff, aint it? ;)
 
2013-03-20 09:52:14 PM  
I think if anything out of this thread that perhaps we may have learned today it is this one thing

coconuts
 
2013-03-20 09:52:27 PM  

Dusk-You-n-Me: We should be expanding the medicare age lower. We should also increase SS benefits. Cuts are not, contrary to what the Very Serious People in Washington and in the media say, necessary.


According to the CBO, the number of workers per SS/medicare recipient will soon fall below 2, where it will remain for 20 years. It will bottom out at 1.5 workers per recipient. There's no way that 1.5 workers will be able to afford to pay the costs for each retired person. Lowering the age would just bankrupt the country quicker.
 
2013-03-20 10:14:04 PM  

DrPainMD: Lowering the age would just bankrupt the country quicker.


Yes, adding a large population of the young and healthy will destroy Medicare and America with it.
 
2013-03-20 10:17:40 PM  

DrPainMD: There's no way that 1.5 workers will be able to afford to pay the costs for each retired person. Lowering the age would just bankrupt the country quicker.


Unless you know we by magic adjust the income tax limit above its current limits, but that would just be coconuts
 
2013-03-20 10:23:34 PM  
I can't believe there are still people here who haven't figured out that MattStafford's just conning everyone else into giving him free tutoring for his Introductory Macroeconomics course. Can't say it isn't a clever ruse though - I predict he gets at least a B- when all's said and done.
 
2013-03-20 10:25:27 PM  
MattStafford

Dude. Your analogies are too simple to work. The economy is a complex diverse entity and you keep trying to bring it down to this totally unrealistic closed system of a single town and you as a single employer with a constrained number of goods and services. And for some reason people who can't produce goods, and for some reason can't learn to produce goods except if you offer them a job at your factory. All of this is unreasonable and thus why your analogies don't work. The reason why people can't explain with it's wrong is because it's just all not even close.

The thought process here:

1) Government injects money into economy.
2) People spend money (most of it at least) -> increased demand -> increased supply need -> more workers
3) If economy has grown enough the amount of jobs made in step 2 will support the loss of the government "temp" jobs created in step 1.

Now. Step 3 doesn't allows work out, sometimes the economy hasn't grown enough. So the government tries to improve economic infrastructure with the jobs created in step 1, thus improving the chances that the economy can grow enough for step 3 to happen. So, yes, ditch digging, could stimulate the economy, but in far less likely to help than a real stimulus program.
 
2013-03-20 10:30:25 PM  
As  long as the private sector proves itself to be unwilling to provide the kind of social safety net its workers need,  government is going to continue to step in with "unsustainable*"  programs like Medicare and Social Security.

*but why you mad, Teabaggers?
 
2013-03-20 10:39:51 PM  
Muk_Man:

Dude. Your analogies are too simple to work.

BUT WE SHOULD BE ABLE TO BALANCE THE BUDGET LIKE I BALANCE MY CHECKBOOK!
Welcome to conservative thinking. Everything you need to know about economics can be explained with folky metaphors and some value mapped over time.

The thought process here:

1) Government injects money into economy.
2) People spend money (most of it at least) -> increased demand -> increased supply need -> more workers
3) If economy has grown enough the amount of jobs made in step 2 will support the loss of the government "temp" jobs created in step 1.


The part the Republicans have never been able to figure out is where the money should go. Middle class people live just inside their means; money is spent before it comes in the door; the economy is stimulated. Upper class people squirrel away in investments; money floats around their small circles; the economy is not stimulated.
 
2013-03-20 11:43:45 PM  

DamnYankees: MattStafford: If a bank loaned me two trillion dollars, and I bought and consumed two trillion dollars worth of goods, would that help the economy?

In the current economy? Yes. A lot.

Look, I understand that you fundamentally disagree with Keynesian economics, but is there some reason that you need to re-start every single thread pretending not to know what Keynesian's think, and re-asking the same questions over and over again?


There's nothing Keynesian about the way our economy is currently being run. Keynes would be shiatting all over himself at the stupidity of our government.
 
2013-03-20 11:45:21 PM  

MyKingdomForYourHorse: DrPainMD: There's no way that 1.5 workers will be able to afford to pay the costs for each retired person. Lowering the age would just bankrupt the country quicker.

Unless you know we by magic adjust the income tax limit above its current limits, but that would just be coconuts


In 15 years, when there is one person on SS/medicare for every 1.5 workers, no tax rate will be high enough to pay for it.
 
2013-03-20 11:47:05 PM  

DrPainMD: DamnYankees: MattStafford: If a bank loaned me two trillion dollars, and I bought and consumed two trillion dollars worth of goods, would that help the economy?

In the current economy? Yes. A lot.

Look, I understand that you fundamentally disagree with Keynesian economics, but is there some reason that you need to re-start every single thread pretending not to know what Keynesian's think, and re-asking the same questions over and over again?

There's nothing Keynesian about the way our economy is currently being run. Keynes would be shiatting all over himself at the stupidity of our government.


Imagine what Von Mises would say.
 
2013-03-21 12:14:16 AM  

DrPainMD: In 15 years, when there is one person on SS/medicare for every 1.5 workers, no tax rate will be high enough to pay for it.


Citation needed.

SS can be fixed for the forseeable future merely by adjusting the income cap.
Medicare can be fixed by looking at any other first-world country and copying their system. We already pay on average twice per capita what every other nation pays for their healthcare systems.
And just to further degrade your nonsense, I think you underestimate just how much money the wealthy are stealing away from the rest of the country as they enjoy low capital gains taxes and offshore tax havens.
 
2013-03-21 12:14:35 AM  

DrPainMD: In 15 years, when there is one person on SS/medicare for every 1.5 workers, no tax rate will be high enough to pay for it.


Silly, this is why we enacted Obama Care, we'll be killing those older folks before they have a chance to drain on the system.

Yeesh, and you people proclaim you keep up with the times.

/potato.coconut
 
2013-03-21 12:21:59 AM  
LOL at typical fark libs who feel that THE WASHINGTON POST CITING THE URBAN INSTITUTE is too right wing!!!  I always wondered if you tards were just biased or just stupid.  Now I know that you're both.

Oh, yeah, and shame on you fark libs for your treatment of MattStrafford.  I'm here for throwing around insults.  So are you (but you're never honest about it).  I think Matt might actually want a legitimate debate.  You just confirmed that you will label anyone who disagrees with you a troll, especially when they force you to face the painful reality that facts have a conservative bias.  Every insult that I have given you that I might have felt bad about I now realize was completely justified.
 
2013-03-21 12:31:32 AM  
beta_plus:

Nope, You are not going to get last post in this one. This is our entitlement as our godless leftist Marxist freakish right.
 
2013-03-21 12:46:28 AM  
Heh, I ignore Stafford, and the thread count is literally cut in half.
 
2013-03-21 12:49:57 AM  
GOPers are still bad at math.
 
2013-03-21 12:58:55 AM  
It's nice to see a thread where the usual circle-jerk gets interrupted, if only for a moment.

I really don't see what's so controversial about claiming that it's bad for the government to borrow money to spend on consumption or non-productive labor (e.g. ditch digging). I have to admire your patience, MattStafford; I would have never stuck around for as long as you did, considering most of these hacks would rather respond to your questions with ad hominems and snark than engage in an actual discussion with you.
 
2013-03-21 01:01:14 AM  

Koalacaust: I really don't see what's so controversial about claiming that it's bad for the government to borrow money to spend on consumption or non-productive labor


Because it's, I don't know, actually not bad at all?

Also, there is no such thing as "non-productive" labor.
 
2013-03-21 01:08:59 AM  

Koalacaust: I would have never stuck around for as long as you did, considering most of these hacks would rather respond to your questions with ad hominems and snark than engage in an actual discussion with you.


His questions in this discussion have been nearly 100% asking other people to explain simplifications he himself put forth. I'm not sure why he, or you, expect other people to make his argument for him.
 
2013-03-21 01:10:42 AM  

cameroncrazy1984: globalwarmingpraiser: there was plan to pay for it,

Umm. Taxes?


How did you respond to that without facepalming your nose into the back of your skull, good sir?
 
2013-03-21 01:17:59 AM  

gameshowhost: cameroncrazy1984: globalwarmingpraiser: there was plan to pay for it,

Umm. Taxes?

How did you respond to that without facepalming your nose into the back of your skull, good sir?


Lots of beer.
 
2013-03-21 01:34:10 AM  

cameroncrazy1984: Koalacaust: I really don't see what's so controversial about claiming that it's bad for the government to borrow money to spend on consumption or non-productive labor

Because it's, I don't know, actually not bad at all?


Do you really not see the difference between borrowing money to spend on, say, a highway or developing a new piece of technology, and borrowing to pay for something that is consumed immediately and provides no future economic return?

cameroncrazy1984: Also, there is no such thing as "non-productive" labor.


This is absurd. If the government decided to paid me $X/hr to stack cans in my front yard, have I produced anything of actual value?
 
m00
2013-03-21 02:06:02 AM  

MattStafford: m00: You would go to jail for counterfeiting. Until they caught you, would probably be good for the local economies.

I stumble onto a town that uses their own currency.  I print up a shiat ton of their currency, buy as many goods as possible, and continue on my merry way.  You are suggesting that that local economy is better off, even though I left with a large quantity of real good and it cost me nothing?

The magic of Keynesian economics.


Okay, now we're getting contrived. Because the fact we're at "town that uses their own currency" and "continue on my merry way" doesn't really apply to the situation you are drawing a parallel to.
 
2013-03-21 02:13:01 AM  

Koalacaust: If the government decided to paid me $X/hr to stack cans in my front yard, have I produced anything of actual value?


It's not just about the value you yourself produce. You're going to spend that $X/hr you made stacking cans, consuming goods or services and thereby producing economic activity.
Yeah, we can find a better job for you than stacking cans, but the money isn't completely wasted, as MattStafford and yourself seem to suggest.
 
m00
2013-03-21 02:16:00 AM  
Can I be simultaneously against stimulus packages, and MattStafford?
 
m00
2013-03-21 02:21:53 AM  

MattStafford: Go for it man, but you didn't explain anything. All you've said so far is that government spending on useless programs (such as ditch digging) can magically create growth that won't disappear once the ditch digging program ends and taxes are raised to pay for the program. I have seen no evidence as how this occurs, or seen any reasonable attempt at an explanation.


But wait, what if the stimulus program builds a 220mph high speed rail line that connects major cities, and allows unemployed people who can't find a job in their city to increase their potential commute radius by a factor of 5 -- so someone in Boston can commute to New York, someone in New York can commute to DC, etc? Once the initial cost is sunk into the project for building the network, assume for purposes of this example that it's self-sufficient in terms of ticket prices vs maintenance costs.

How can this NOT create growth after the program ends?
 
2013-03-21 02:28:18 AM  

Koalacaust: borrowing to pay for something that is consumed immediately and provides no future economic return?


You're right, let's just stop buying consumables. We don't need food, or oil, or electricity. It provides no future economic return, right?
 
2013-03-21 03:13:14 AM  

beta_plus: Oh, yeah, and shame on you fark libs for your treatment of MattStrafford. I'm here for throwing around insults. So are you (but you're never honest about it).


Aww, someone is jealous that they're getting more attention than them. How cute.

No, Matt is pretty clueless, but I also think he's trolling.

No one can say something like:

MattStafford: So are you suggesting that if the government printed up a 100 dollar bill and gave it to me, it would be economically beneficial, but if I printed up a 100% identical replica, and no one could possibly tell the difference, it would be economically harmful?

Wow, you have a lot of faith in the government. Does it tell you to breathe too?


And actually be serious.

And if he is serious, yikes....then he's pretty dumb.
 
2013-03-21 03:14:44 AM  

m00: Can I be simultaneously against stimulus packages, and MattStafford?


What? You mean you don't agree with Matt's position that there's nothing wrong with counterfeiting money?
 
2013-03-21 03:53:56 AM  

Mrtraveler01: What? You mean you don't agree with Matt's position that there's nothing wrong with counterfeiting money?


I'd like to know how he convinces the town to give him a trillion dollars with no collateral.
 
2013-03-21 04:00:30 AM  

Mrtraveler01: No one can say something like:

MattStafford: So are you suggesting that if the government printed up a 100 dollar bill and gave it to me, it would be economically beneficial, but if I printed up a 100% identical replica, and no one could possibly tell the difference, it would be economically harmful?

Wow, you have a lot of faith in the government. Does it tell you to breathe too?

And actually be serious.


So, are you suggesting that if a policeman working for the government pulls a guy over and handcuffs him, that's good, but if I bought a really convincing cop uniform and did the same, it would be bad?

Wow, you libtards sure have a lot of faith in the government and furthermore coconuts
 
2013-03-21 04:57:09 AM  
hang on..

how much would that money you paid in over the years have netted you when you retired if you had invested it in stocks of even a decent pension scheme?

Does this claimed ratio completely fail to take into acount even interest potential let alone real earning potential of the money people paid over time?
 
2013-03-21 07:04:01 AM  
I'll respond to those I haven't responded to later on, but let's take it back to the basics:

With regards to these analogies that you are so sure are completely inapplicable to reality-

I'm presenting situations where the interactions are few and easy to follow. I'm explaining the affects of a policy if it were implemented in a small economy.  The results of the policy are obviously negative.  However, if I try to say the exact same policy implemented in a large economy would also be negative, I'm laughed at.

Clearly something happens in between the small economy and large economy that makes the application of that policy fundamentally different.  I need an explanation as to why that is.  I need to know what causes that shift from negative to positive effects and where that shift occurs.  Without knowing that, why should I believe that the shift, in fact, ever takes place?

For example:  Suppose there is a small town that uses a reserve currency, and I decide to retire there.  I borrow money from the local bank, and use it to buy goods and services throughout the town.  I have no intention of paying the bank back.  Clearly, the economy would have been better off without me retiring there (if this is where your sticking point is, please let me know - but I think it is rather straightforward that the town is worse off).

However, if this was a large economy, and I was a retired person, this exact same policy becomes good for the economy.  I'm just failing to see what causes the fundamental shift between the situation in the small town and the situation in the large economy.  No one has explained this shift, or what causes this shift.

Another, real life example:  People on here are saying a debt financed Social Security program is economically beneficial for the United States.  But if that is the case, shouldn't a debt financed Social Security program be economically beneficial for every other country?  If Zimbabwe, or some other sub Sahara African nation started a debt financed Social Security program, it would be a complete failure (unless this is your sticking point, and you think it would be a success - let me know).

So clearly, there is some fundamental difference about the economy of the US and the economy of Zimbabwe, where a debt financed Social Security program is beneficial for us, but harmful for Zimbabwe.  What is that fundamental difference that changes the way a policy affects the economy so dramatically?  Is there an inflection point on some graph somewhere?  Again, without knowing that, why should I believe a debt financed Social Security program is beneficial in the US when it is so clearly detrimental in another economy?

One final example - If the situation involves government spending of money to stimulate the economy, it should not matter if one person spends it, or if many people spend it.  If the theory fails when the policy is give one person a ton of money and have him spend it, but succeeds when the policy is give many people money (the same amount) and have them spend it - you need to explain why.  The same amount of money is entering the economy, creating a similar number of jobs.  Would it change if there are two people who receive the money?  Ten?  If there is an inflection point where the effectiveness of the policy changes, you need to explain where that inflection point is, and what causes it to change.

Instead of getting these questions answered, I'm being met with a wall of "the analogy is too simple" or "the analogy doesn't apply".  That is great, but you need to explain why, specifically, it doesn't apply.  Simply stating it is as so is not an argument.  If anyone is serious about try to explain why my analogies don't extrapolate to a large economy, I'm all ears.
 
2013-03-21 07:10:21 AM  

m00: But wait, what if the stimulus program builds a 220mph high speed rail line that connects major cities, and allows unemployed people who can't find a job in their city to increase their potential commute radius by a factor of 5 -- so someone in Boston can commute to New York, someone in New York can commute to DC, etc? Once the initial cost is sunk into the project for building the network, assume for purposes of this example that it's self-sufficient in terms of ticket prices vs maintenance costs.

How can this NOT create growth after the program ends?


Whew.

Talk about blithely ignoring the reality of what happens to public works projects in the northeast. Do the words Big and Dig not ring a bell?

That's just in Boston. In NYC the World Trade Center replacement project was an epic clusterfark until fairly recently...and it's moving at lightspeed compared to the Tappan Zee replacement bridge (which is in about the most idiotic location you could put a bridge over the Hudson) or the Second Avenue subway, which has been in the works since only 1929.
 
2013-03-21 07:22:34 AM  

MattStafford: For example: Suppose there is a small town that uses a reserve currency, and I decide to retire there. I borrow money from the local bank, and use it to buy goods and services throughout the town. I have no intention of paying the bank back. Clearly, the economy would have been better off without me retiring there (if this is where your sticking point is, please let me know - but I think it is rather straightforward that the town is worse off).


Begging the question, eh?

This is why your analogies suck. In the real world, if an individual defaults on a bank loan, the people you used that loaned money to buy things from STILL HAVE THAT MONEY!!!!! The bank is out the amount you defaulted on and they come after you and you'll have liens put on any future earning and/or file for bankruptcy.  Is the bank 'worse off'?  I suppose, but banks don't lend to one person and can usually absorb a certain amount of defaults on their loans, but you would still be paying for it for years to come. That is what happens in the real world. You can't just 'skip town'... not paying back the loan doesn't make the money you bought stuff with worthless. So, the money you borrowed and bought things with is circulating through that small town economy and benefiting them.

The government of the US is not equivalent to an individual in a small town. You start all your premises the same way as if you can view the friggin US treasury as an individual person. You can't.
 
2013-03-21 08:01:18 AM  

DamnYankees: Dusk-You-n-Me: mrshowrules: You should eliminate the age requirements.

Medicare for all would be fine by me.

We should.


Adding cost shift to things you don't understand. Studies suggest 20% of medicare costs get shifted to private. Also your numbers don't consider the cost of billing services since medicare gets the IRS to do that, hides the true cost.
 
2013-03-21 08:02:38 AM  

MattStafford: One final example - If the situation involves government spending of money to stimulate the economy, it should not matter if one person spends it, or if many people spend it. If the theory fails when the policy is give one person a ton of money and have him spend it, but succeeds when the policy is give many people money (the same amount) and have them spend it - you need to explain why.


Because there is more than just coconuts in a real economy. And yes, that was a serious response. One person may just buy one thing (a large yacht for example, Larry Ellison's Rising Sun was available for a time). You want to stimulate the economy, the money needs to be spread out into all sectors of the economy and the best way to do that is to get money into the hands of lots of people. This is such a simple concept, it is frightening to think that you might be serious in not being able to understand why it 'works' for lots of people but doesn't for one person.
 
2013-03-21 08:03:08 AM  

MattStafford: skullkrusher: it would, actually. That injection of cash would stimulate demand which in turn stimulates more demand. The inflationary impact, if any, would not be immediately apparent. That's why it works to stimulate the economy out of recession but is not a good idea as a matter of continuing policy

It would help it in the short term, I agree.  It would actively hurt it in the long term, however.

I print up currency and hire a bunch of people to dig ditches and fill them back in.  They go out and use that currency to buy goods and services.  Demand picks up, production picks up, the economy is booming.

I stop printing money, and fire all of the ditch diggers.  They stop consuming.  Demand drops.  Production drops.  You return to the status quo, except you suffer the huge opportunity cost of all of those people digging ditches when they could have been doing something else.


Well.. How about:

Before the ditch digging contract is up you hit oil?

One of your employees manages to save enough during the contract to send his son to MIT where he discoverers the secret to perpetual motion?

The local sandwich bar makes enough during the finite period to open another outlet in a more salubrious location and, in the end, becomes bigger than McDonalds... only healthy?

While another of your employees is working during this intermittent window they get their aged mother to look after her children.. Turns out the granny is bi-polar but this added responsibility stops her from killing herself.


/of course the last one is a joke.. who cares what happens to unproductive people, right?
 
2013-03-21 08:04:29 AM  

meat0918: Yeah, that's how insurance works.

When you need it, you pull more out than you ever put in.

You also make it worse when the only people drawing out are the highest risk pool around.

Medicare is a great deal for insurance companies.  They get to pass off the customers that cost them the most money to the feds, while reaping the profits of carrying only low risk customers that (individually) pay them thousands and thousands of dollars every year while only going to the doctor once, if at all during that year.


Do liberals not understand averages? In insurance, some get more than they pay in, some less. Average net is zero. Medicare average is 3x what is paid in. An insurance company would go bankrupt quickly with those numbers.
 
2013-03-21 08:11:25 AM  

theknuckler_33: This is why your analogies suck. In the real world, if an individual defaults on a bank loan, the people you used that loaned money to buy things from STILL HAVE THAT MONEY!!!!! The bank is out the amount you defaulted on and they come after you and you'll have liens put on any future earning and/or file for bankruptcy. Is the bank 'worse off'? I suppose, but banks don't lend to one person and can usually absorb a certain amount of defaults on their loans, but you would still be paying for it for years to come. That is what happens in the real world. You can't just 'skip town'... not paying back the loan doesn't make the money you bought stuff with worthless. So, the money you borrowed and bought things with is circulating through that small town economy and benefiting them.


You are suggesting that, if I showed up to a town, took out a large loan, bought a bunch of real goods and services from the citizens of that town, and then defaulted on that loan, that the town is actually better off because I arrived?  Just read that sentence again, and keep on reading it, until you realize how absurd your position is.

theknuckler_33: The government of the US is not equivalent to an individual in a small town. You start all your premises the same way as if you can view the friggin US treasury as an individual person. You can't.


I just spent like 500 words explaining that if you are going to say that, you need to explain why I can't.  Why does the analogy fail?  What makes these policies successful when the US government uses them, but unsuccessful if they are used in a small town?  Where is the fundamental difference?
 
2013-03-21 08:14:10 AM  

theknuckler_33: Because there is more than just coconuts in a real economy. And yes, that was a serious response. One person may just buy one thing (a large yacht for example, Larry Ellison's Rising Sun was available for a time). You want to stimulate the economy, the money needs to be spread out into all sectors of the economy and the best way to do that is to get money into the hands of lots of people. This is such a simple concept, it is frightening to think that you might be serious in not being able to understand why it 'works' for lots of people but doesn't for one person.


The people who built the yacht don't spend the money?  If the money goes to me, and I employ 100 people to build a yacht, is it any different than the money going to one hundred people and them each employing one person to build a canoe?  100 people still get jobs out of the situation.

And yes, I understand that in the former only I benefit, while in the latter 100 people benefit, but we aren't talking about who benefits - we are talking about whether or not it is a good method to improve an economy.
 
2013-03-21 08:18:26 AM  

m00: MattStafford: Go for it man, but you didn't explain anything. All you've said so far is that government spending on useless programs (such as ditch digging) can magically create growth that won't disappear once the ditch digging program ends and taxes are raised to pay for the program. I have seen no evidence as how this occurs, or seen any reasonable attempt at an explanation.

But wait, what if the stimulus program builds a 220mph high speed rail line that connects major cities, and allows unemployed people who can't find a job in their city to increase their potential commute radius by a factor of 5 -- so someone in Boston can commute to New York, someone in New York can commute to DC, etc? Once the initial cost is sunk into the project for building the network, assume for purposes of this example that it's self-sufficient in terms of ticket prices vs maintenance costs.

How can this NOT create growth after the program ends?


Are you serious?  I've said numerous times that (necessary) infrastructure is a fine reason to go into debt.  I specifically used the word "useless" for a reason, and the example you gave clearly has a use.

And what if the stimulus program built the exact same project, but had it located in the middle of Antarctica?  Would that create growth after the program ends?
 
2013-03-21 08:30:07 AM  
coconuts, just saying
 
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