Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

[5mn_Major]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I would argue that the government has consumed so much of the lend-able capital out there that it's created a substitution effect in the economy against the private sector lending and borrowing (government crowding out private borrowing).

That is a valid theory out there. And it could be a small or major factor today.

But do keep in mind that money that is borrowed by the govt is spent...and there is a major multiplier for money spent on the economy in this way which helps fuel the economy. Unless its spent overseas, that is to say by the military...which is a big part of why I feel that this spending is a big waste.

So again, the theory is fine as long as money that is not borrowed by the govt is borrowed by the private sector and spent at the same high rate. Today's problem is the debt.

 

[Rover]

Did you ever possibly think that those whom Fishy is trying to protect live in New Hampshire? To avoid the Massachusetts tax, all you have to do is cross the state line. Also, you seem to be under an exacerbated presumption that everyone is going to dump coverage. There are some that will be able to take the higher costs, sure, but there are others that won't, and they have already adjusted for their predicament, such as pushing full-time jobs down to part-time as a loophole. As Roberts did mention in his ruling, though, given the tax being so low compared to health costs, and well as the insurance provider mandate to accept customers regardless of previous health situations (although there's nothing stopping them from pricing them out similar to how auto insurance works), the option could very well prove to be more beneficial. Not to mention, what are the levies or subsidies on the $200k/$250k obsession? Are those people even going to be paying it?

One thing I've learned about libtards: Their ideas and concepts may be utopian, but their execution sucks.

Flag, in all my dealings with conservatives I tend to find a couple of themes that keep coming up. One is an obsession with costs, the other is that every scenario operated in a fishbowl with all other inputs held constant.

So, did it ever occur to you that perhaps employers, in their quest for quality employees, or out of fear of bad PR, or for a lot of other reasons, will just comply with the law? The problem with all anti-PPACA arguments it that their doomsday scenarios fall apart when you consider a state of almost 7M people has already implemented the same law for almost a decade now and none of these problems have come to pass.

So, if employers purely made every decision strictly by cost, no matter how small those cost increases may be, then you should not only have a population of part time workers in the state, you should also have above average unemployment and a mass exodus of people to places like Mississippi or Alabama which are a lot cheaper. Wait, you say: Mass has lower unemployment than the nation and has gained back all the jobs it lost during the last recession?!?! How can that be?

 

[Rover]

As someone who has started investing in personal loans, I will echo this sentiment. However, from my experience, there's more I look at than credit score. How much are you bringing in a month, and what are your expenditures like? How many times in the past couple of years have you been delinquent with payments? What is your revolving debt like? Some people try to base it upon credit inquiries, but that doesn't always tell you much.

Heard a story from a mortgage agent who said he tried to get a loan for someone who had way more money in savings then they were trying to borrow, but didn't have a full time job. Loan was rejected despite savings level because of no steady income.

Credit scores, current underwater houses, unemployment, bankruptcy, etc. That's what's holding back lending IMHO. I don't know if there's anything to be done for the people with bad credit scores (and maybe there shouldn't be) but on underwater houses and unemployment only time and a rising economy can cure that.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Flag, in all my dealings with conservatives I tend to find a couple of themes that keep coming up. One is an obsession with costs, the other is that every scenario operated in a fishbowl with all other inputs held constant.

So, did it ever occur to you that perhaps employers, in their quest for quality employees, or out of fear of bad PR, or for a lot of other reasons, will just comply with the law? The problem with all anti-PPACA arguments it that their doomsday scenarios fall apart when you consider a state of almost 7M people has already implemented the same law for almost a decade now and none of these problems have come to pass.

So, if employers purely made every decision strictly by cost, no matter how small those cost increases may be, then you should not only have a population of part time workers in the state, you should also have above average unemployment and a mass exodus of people to places like Mississippi or Alabama which are a lot cheaper. Wait, you say: Mass has lower unemployment than the nation and has gained back all the jobs it lost during the last recession?!?! How can that be?

Now it's your turn to get the reading talking to. You obviously missed where I said "There are some that will be able to take the higher costs". Overlook it, or was all you saw "republican drivel"? Also, I love how you are assuming that Massachusetts has a certain level of unemployment because of their version of PPACA. Someone forgot that people are deciding to remove themselves from the work force, so of course the numbers will seem better. Not to mention, wasn't Mittens the governor of Taxachusetts before the housing bubble burst?

Why do people focus on costs? The bottom line is that that's the only reason they're in business. In the long run, philanthropists are not successful. They get eaten up. In addition, there are some assumptions that are being made in the "doomsday scenario". The assumption is that the expenditure cost of doing business (ALL expenses, including overhead) is higher than the tax. If that is the case, the "doomsday scenario" happens. However, what could still be possible in your example is that the tax is higher than the expenditure cost for some of the insurance companies. In that case, it could very well work, as the insurance provider would target the cost of the product to be just below the tax level. You have the better price, but are still able to make money. Here's the challenge with that, though: How do you price the tax? Is it a flat level or based upon percentage of income? If the latter is the case, you have a problem, because the "doomsday scenario" is more likely to happen. If the former's the case, the pricing paradigm would work, but I don't think I need to tell you what then happens to the poverty class.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Heard a story from a mortgage agent who said he tried to get a loan for someone who had way more money in savings then they were trying to borrow, but didn't have a full time job. Loan was rejected despite savings level because of no steady income.

Credit scores, current underwater houses, unemployment, bankruptcy, etc. That's what's holding back lending IMHO. I don't know if there's anything to be done for the people with bad credit scores (and maybe there shouldn't be) but on underwater houses and unemployment only time and a rising economy can cure that.

The first paragraph does beg the question, though: Why wouldn't the person just use the savings to finance what needed to be financed? In the long run, it's cheaper, because you have to assume that the interest you are collecting is lower than the interest you're paying to your creditor.

If you go bankrupt, you've proved that you can't handle money. I don't make loans to those people. I know it's like branding a scarlet letter, but unless you have, in some way, repaid the debt to your creditors, you don't get that chance. If you're square with the house after a bankruptcy, though, we'll talk. Unemployment I can understand, but there are other ways to make money, such as royalty payments. The same holds true with credit score, as just like with any sporting event, there's much more that happened than the box score. As a creditor, I need to make sure that there is a way for me to get back what is owed to me.

 

[unofan]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Unemployment I can understand, but there are other ways to make money, such as royalty payments.

Ok, Mitt. Let me guess, everyone should also borrow from their parents.

 

[unofan]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I guess I should have quoted much less of Roberts' ruling, and stuck only to the most salient parts....

You do realize that him saying that has no real world effect, right? It's purely a question of semantics. The practical effect is that the law stands as written, except for the Medicaid provisions.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Ok, Mitt. Let me guess, everyone should also borrow from their parents.

You've never created anything to sell for a royalty return, have you? That's how book authors and music composers are able to make money: They sell the product to a distributor for a cash amount along with a royalty term in perpetuity. I'm not talking about oil royalties from trading stocks here.

 

[Rover]

Now it's your turn to get the reading talking to. You obviously missed where I said "There are some that will be able to take the higher costs". Overlook it, or was all you saw "republican drivel"? Also, I love how you are assuming that Massachusetts has a certain level of unemployment because of their version of PPACA. Someone forgot that people are deciding to remove themselves from the work force, so of course the numbers will seem better. Not to mention, wasn't Mittens the governor of Taxachusetts before the housing bubble burst?

Why do people focus on costs? The bottom line is that that's the only reason they're in business. In the long run, philanthropists are not successful. They get eaten up. In addition, there are some assumptions that are being made in the "doomsday scenario". The assumption is that the expenditure cost of doing business (ALL expenses, including overhead) is higher than the tax. If that is the case, the "doomsday scenario" happens. However, what could still be possible in your example is that the tax is higher than the expenditure cost for some of the insurance companies. In that case, it could very well work, as the insurance provider would target the cost of the product to be just below the tax level. You have the better price, but are still able to make money. Here's the challenge with that, though: How do you price the tax? Is it a flat level or based upon percentage of income? If the latter is the case, you have a problem, because the "doomsday scenario" is more likely to happen. If the former's the case, the pricing paradigm would work, but I don't think I need to tell you what then happens to the poverty class.

I thought you were an "independent"?

I saw your words but saying "some may choose to pay the cost" doesn't get at the real story. The VAST MAJORITY have chosen to pay the cost clearly or the state would be either 1) hemmoraging jobs, or 2) dumping employees onto the state system. There's a reason for this, and its because profit, not cost, is the only reason why they're in business. You can cut costs all day but if you have no customers you're screwed.

Moving on, I said nothing about Romneycare being the cause of MA's lower than avg unemployment. Feel free to point out where I did. Also yes this was Mittens law. Perhaps if he'd embraced it more he'd be the President right now.

But, at the end of the day the point about PPACA is the same as the minimum wage, which also is supposed to lead to financial collapse and cannibalism. Some employers will agree with the law and comply. Others will comply because its the law. Still more will make the judgement that they like their workforce and its integral to the company success so they won't risk losing them by dumping their health insurance. Even more will calculate that its not worth the bad press (See Papa John's). By the time you're done, the impact on employment ends up being very little, as a real life test case has already shown. All I'm asking of you is show me where mass layoffs or whatever has already happened, not what might happen in theory, because I'm showing you actual evidence (the Mass experience).

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

But do keep in mind that money that is borrowed by the govt is spent...

however there is always extra "drag" because of government payroll and benefit costs. only part of any money borrowed is spent on the purported purpose, the rest must be spend on administrators' payroll costs. If you look closely at Keynes' model, he ignored this cost; however, when you update his model to factor it in given today's levels of over-staffing, it is no longer trivial and it greatly changes the results once it is accounted for.

and there is a major multiplier for money spent on the economy in this way which helps fuel the economy

that assertion is under considerable challenge today from some excellent studies, there generally is only a short-term multiplier, which turns into a drag in the longer run because of interest costs. It is unusual for government spending to create enough gains on a net present value basis to outweigh the cost to repay at interest over time (if there were, the government wouldn't need to spend in the first place, an entrepreneur would step in first!)

The only argument for a multiplier is in unusual times, it is definitely NOT normal. Keynes himself knew this; when asked about the long-run effects, he famously replied "in the long run we are all dead." In other words, he didn't answer at all!

Today's problem is the debt.

no kidding, we are going to be strangled by debt service as soon as interest rates revert to the mean. it will be really ugly. that makes it essential for us to restrain spending now. I have to find the name of the economist who has produced top-quality work that demonstrates how a reduction in government spending is almost always better than an increase in tax rates to reduce the deficit, any deficit reduction now has a virtuous-circle effect of reducing future debt service costs as well.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

I thought you were an "independent"?

I saw your words but saying "some may choose to pay the cost" doesn't get at the real story. The VAST MAJORITY have chosen to pay the cost clearly or the state would be either 1) hemmoraging jobs, or 2) dumping employees onto the state system. There's a reason for this, and its because profit, not cost, is the only reason why they're in business. You can cut costs all day but if you have no customers you're screwed.

Moving on, I said nothing about Romneycare being the cause of MA's lower than avg unemployment. Feel free to point out where I did. Also yes this was Mittens law. Perhaps if he'd embraced it more he'd be the President right now.

But, at the end of the day the point about PPACA is the same as the minimum wage, which also is supposed to lead to financial collapse and cannibalism. Some employers will agree with the law and comply. Others will comply because its the law. Still more will make the judgement that they like their workforce and its integral to the company success so they won't risk losing them by dumping their health insurance. Even more will calculate that its not worth the bad press (See Papa John's). By the time you're done, the impact on employment ends up being very little, as a real life test case has already shown. All I'm asking of you is show me where mass layoffs or whatever has already happened, not what might happen in theory, because I'm showing you actual evidence (the Mass experience).

Until you actually read the entire last paragraph, I'm not even going to bother responding, because I already gave you the answer.

 

[unofan]

however there is always extra "drag" because of government payroll and benefit costs. only part of any money borrowed is spent on the purported purpose, the rest must be spend on administrators' payroll costs. If you look closely at Keynes' model, he ignored this cost; however, when you update his model to factor it in given today's levels of over-staffing, it is no longer trivial and it greatly changes the results once it is accounted for.

It's accounted for. Spending is spending at the macro level. If you pay people to dig holes and others to fill them back up, it all counts.

I also love how you state government is over-staffed as if its an obvious fact, ignoring that public sector employment has fallen significantly.

 

[joecct]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

It's accounted for. Spending is spending at the macro level. If you pay people to dig holes and others to fill them back up, it all counts.

I also love how you state government is over-staffed as if its an obvious fact, ignoring that public sector employment has fallen significantly.

If you look @ a DMV office, you could probably make a claim. However, IIRC overall state employment is down due to decreased revenues due to the economy. Federal employment has increased.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

If you look @ a DMV office, you could probably make a claim. However, IIRC overall state employment is down due to decreased revenues due to the economy. Federal employment has increased.

In late 2010 to 2011, federal employment went down. Of course, that's because the census was complete.

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

You do realize that him saying that has no real world effect, right?

Wrong. It is huge, a major restriction on federal power. If the mandate had been allowed to stand, the government could have compelled people to engage in all sorts of other activities too. Many people who follow the Court have speculated that Roberts wanted to make sure that the limits on government power implicit in his ruling would be widely accepted and that's why he allowed it to stand under the taxing power instead. How can the left both praise his ruling on PPACA and also complain that he tossed out the Commerce Clause justification at the same time?

The precedent set in the ruling is extremely important. It is a very clearly drawn "bright line" that says the Commerce Clause has very distinct and firm limits. In the long run, that is going to be very important.

I thought you were an attorney? Isn't precedent one of your most precious principles? How can you say such an important precedent has no real world effect?

 

[FreshFish]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

It's accounted for.

not in the Keynesian model that purports to show a "multiplier" for government spending. that was the context.

you state government is over-staffed as if its an obvious fact, ignoring that public sector employment has fallen significantly.

is this non-sequiter day and I missed the notice? what does one have to do with the other? government is obviously overstaffed because there are so many layers of administrators between primary service providers and top-level managers. Given today's technology and management techniques, you definitely do not need 16 levels!

Another way to look at it is to use Department of Labor statistics on the overall composition of the workforce. I don't have the link handy beyond DOL.gov but I found it by browsing there in the first place so I'm sure someone with your research skills can find it even more easily than I did.

Government employment is about 25% of the labor force, employment in non-profits / not-for-profits is about 15% of the labor force, and private sector is about 60% of the labor force. 1 out of every 4 people working in government? that is ridiculous for a supposedly free market capitalist economy. the drain on productivity represented by all those salaries and outsized benefit packages is enormous.

In Rhode Island today, pensions for retired people already consume so much of the state and local budgets that essential services are hurting and hard to find. The problem is only worsening.

Anyway, sorry to interrupt. You can stick your fingers back into your ears and resume whistling again as you walk past the graveyard.

 

[unofan]

Wrong. It is huge, a major restriction on federal power. If the mandate had been allowed to stand, the government could have compelled people to engage in all sorts of other activities too. Many people who follow the Court have speculated that Roberts wanted to make sure that the limits on government power implicit in his ruling would be widely accepted and that's why he allowed it to stand under the taxing power instead. How can the left both praise his ruling on PPACA and also complain that he tossed out the Commerce Clause justification at the same time?

The precedent set in the ruling is extremely important. It is a very clearly drawn "bright line" that says the Commerce Clause has very distinct and firm limits. In the long run, that is going to be very important.

I thought you were an attorney? Isn't precedent one of your most precious principles? How can you say such an important precedent has no real world effect?

Because it doesn't. He didn't overrule Wickard v. Filburn, and the mandate was still upheld as a tax. Unless and until courts actually strike down a federal law by the same rationale, we're still talking semantics.

 

[FlagDUDE08]

Re: Strands in the Tapestry: the Business, Economics, and Tax Policy Thread

Because it doesn't. He didn't overrule Wickard v. Filburn, and the mandate was still upheld as a tax. Unless and until courts actually strike down a federal law by the same rationale, we're still talking semantics.

That's like saying, since there was a credit for "green" cars, that there was a mandate to purchase a "green" car.

 

[unofan]

not in the Keynesian model that purports to show a "multiplier" for government spending. that was the context.

is this non-sequiter day and I missed the notice? what does one have to do with the other? government is obviously overstaffed because there are so many layers of administrators between primary service providers and top-level managers. Given today's technology and management techniques, you definitely do not need 16 levels!

Another way to look at it is to use Department of Labor statistics on the overall composition of the workforce. I don't have the link handy beyond DOL.gov but I found it by browsing there in the first place so I'm sure someone with your research skills can find it even more easily than I did.

Government employment is about 25% of the labor force, employment in non-profits / not-for-profits is about 15% of the labor force, and private sector is about 60% of the labor force. 1 out of every 4 people working in government? that is ridiculous for a supposedly free market capitalist economy. the drain on productivity represented by all those salaries and outsized benefit packages is enormous.

In Rhode Island today, pensions for retired people already consume so much of the state and local budgets that essential services are hurting and hard to find. The problem is only worsening.

Anyway, sorry to interrupt. You can stick your fingers back into your ears and resume whistling again as you walk past the graveyard.

Just go move to Somalia already. You want a lack of government, you can have it there. You want fingers-in-your-ears ignorance, look in the mirror. Otherwise, let me know when you realize that there's a reason for almost every law and regulation, and until you can show the private sector won't fark it up the same way again, I'm fine with the govt preventing those particular forms of free enterprise.

 

[unofan]

That's like saying, since there was a credit for "green" cars, that there was a mandate to purchase a "green" car.

A subsidy for doing something and a tax for not doing something are the exact same things.

The child tax credit could easily be relabelled the childless penalty or the child mandate.