Quote: Over their lifetimes, those managers have given almost $33 million in campaign contributions to Democrats, according to research by the National Republican Congressional Committee (NRCC) and that is based on data maintained by the nonpartisan CQMoneyline.

So according to Republicans, Democrats are getting all the funding. You'll understand if I'm dubious. (And I have no useful info on which to judge CQMoneyline.)

Interesting discussion. I agree with Carmack.

I for one will do the same as Carmack--that is, vote for candidates that favor smaller government.

Most people understand and agree that they should live within their means (making sacrifices to make do with needs instead of wants, avoiding consumer debt, etc.), yet for some reason it's OK for the government to exceed its means.

News flash: if you get into a mortgage you can't afford or do nothing but spend credit you don't have (just a few examples), you're going to experience some very negative consequences. It's foolish to think that the government can engage in that same behavior without experiencing those same consequences.

"Common sense" has been mentioned quite a few times above, and it's true--if common sense dictates that certain practices lead to weak results in one's individual life, rest assured that those same results will occur when government engages in them. This is just common sense.

Carmack likens taxes to a utility bill. When the burden becomes too great, you cut back, and rightly so--this is only "common sense."

Government needs to do the same thing any reasonable individual does when faced with problems: cut back, make do with less, prioritize, compromise, and focus on the pure necessities.

I'm not opposed to taxes, just as I'm not opposed to paying my electricity bill. However, I am opposed to a monolithic government that continues to consume resources at an alarming rate for diminishing returns, just as I am opposed to buying a $350,000.00 on my income (average cost of a decent home in my area) or spending the rest of my life paying interest on credit card debt. Government needs to work harder for every dollar it receives, by learning to spend it more wisely, just as I work hard for every one I receive.

The disease of entitlement, and its reflection in government, needs to go.

Quote: Original post by Promit

Quote: Over their lifetimes, those managers have given almost $33 million in campaign contributions to Democrats, according to research by the National Republican Congressional Committee (NRCC) and that is based on data maintained by the nonpartisan CQMoneyline.

So according to Republicans, Democrats are getting all the funding. You'll understand if I'm dubious. (And I have no useful info on which to judge CQMoneyline.)

Are Republicans known for smearing their donors?

The Wall St./Democrat connection isn't exactly news, buddy. Talk to some folks who've worked there.

Quote: Original post by strtok
Most people understand and agree that they should live within their means (making sacrifices to make do with needs instead of wants, avoiding consumer debt, etc.), yet for some reason it's OK for the government to exceed its means.

Most of your points, e.g. that government should be efficient, I find quite appealing. But here I have to point out that you do not understand how the US money system works.

The US government budget cannot be understood in terms of a private household. Private households use the currency that is provided by the US government, so logically they have to get money before they can spend it. The US government, on the other hand, is the one who creates the money, so logically, the US government has to spend money before it can get it (via taxes or bond sales). I realize that this seems counter-intuitive at first, but once you really sit back to think about it, it becomes one of those things that are totally obvious in hindsight. An easy to read introduction to how these things work can be found in Warren Mosler's book 7 Deadly Innocent Frauds. There is also a regular blog by an Australian economist who explains these things. If you prefer more academic dead tree books, I can recommend Randall Wray's Understanding Modern Money.

So to make it very plain, the US$-denominated means of the government are infinite. It cannot possibly exceed its means. Don't believe me? Just look at the Fed: it is clearly totally possible for the US government to spend 600 billion US$ just like that.

Does that mean that it is wise for government to spend arbitrarily much, or that government doesn't have to tax? No, far from it! See the references above for detail.

What it does mean is that it is at least misleading - if not nonsensical - to talk about the cost of government in nominal terms. You should always think about the cost of government in real terms: how many goods and services does the government use up that could otherwise be enjoyed by the private sector?

Hint: Right now, there are many possible government programs that have a huge US$-nominal volume at negligible real cost. So long as there is unemployment - i.e. "human resources" that aren't being "used" by the private sector, the government can simply employ those people at zero real cost, e.g. for public works programs. (Of course I am simplifying things a bit; there are secondary costs of public works programs in terms of the tools and machines needed, etc., but the paid wages carry basically zero real cost.)

Also, depending on how you swing politically: it is totally possible for the US government to lower taxes while keeping its spending level the same. After all, the unemployment rate in the US can also be seen as evidence that the high level of taxes takes away so much spending power from the private sector that it has to give up on the enjoyment of real goods and services despite the fact that the US government doesn't then use them instead.

So depending on how you swing politically on the axis of small vs. large government, you might be in favor of cutting taxes or raising spending. But quite objectively, it is clear that the US government deficit is currently too small. Why? Because your resources are laying around idle.

Quote: Original post by Talroth

Quote: Original post by mikeman

Quote: Original post by Talroth

Quote: Original post by Alpha_ProgDes
Well that's great in theory, but the reality is that in today's world, we use money. Money is how we measure value for commodities, goods, and services. Trying to talk around that doesn't help. It's true that humans have used services (cooking, hunting, sex) and items (fur, shoes, wood) to get goods from others and to determine value. But money is the standard for that now.

No, I was pointing out that the idea of coming up with a number X, where X is how much 'money' one needs to live comfortably, is flawed and doesn't really work. Once you start trying to 'fix' prices to a stable level, you're going to start changing them.

Also, money isn't how we measure values, but rather it is something we use to make it easier to compare perceived values of commodities, goods, and services.

Oh come on, you really don't see what I was on about? First of all, money is used in our societies to buy goods and services, so that's what we're going to use. Theorerical ponderings about the 'value of money' is of no issue here, we're going to be pragmatists for once. You need money to buy food or heat or medicine, so that's what we'll deal with. Second, I never said to determine a 'fixed' value. The value will change with time, say every year or every semester, same thing. It's not that damn hard. Don't try to make the calculation of money needed for decent life as this enormously complex socioeconomicomathematical problem; 'oh if we increase the pay this way, the value of XYZ will go this way, and the value of SDFLSDF will go sideways, and the market is going to collapse and a butterfly at pejing will cause a blackhole in NYC". Enough with this bullcrap. This for food, this for heat, this for medicine, this for shelter, this for transport. Leave a small margin to account for 'errors'. Done. Every household does this calculation when it deals with bills and every day needs anyway. Employees are paid in money right now, aren't they? So just make that they paycheck covers these absolutely essential needs. Otherwise, if you can't do it, then what the hell are we even talking about? What exactly can an individual or a family man that works 8-12 hours a day can cut off; food, education for their kids, heat, medicine, a roof under their head at night? Enough with this 'ooohh don't touch the minimal wage, there's a BOMB attached to it!". Gah!

The problem with trying to do something like that in a free market economy is that, to put it bluntly, people will do their best to screw with it for their own gain.

I corner the market in some 'essential resource'. I might not have 100% of it, but I control enough of the supply in a region that at least a sizable part of the population needs to come to up as the others can't supply the entire region. It is 'essential', I'm in a free market,... Cha-ching! Next month I need to raise my prices by 5%. Government adjusts things to ensure everyone can afford everything else plus my stuff. Next month I bump it 10%, and I start the cycle of destroying the system for my own fun and profit. I use 'creative accounting' to bury profits, hide them in expansion and development costs, and keep jacking up my prices.

Now I can keep doing this, because you declared my service 'essential', and as such you made sure every other employer has to pay their employees enough to pay me whatever I ask.

Congratulations, you crashed the markets because you failed to see that I'm human, and therefore have a high probability of being a selfish asshole.

As it is now, I couldn't do something like that as people would just struggle and possibly go without, causing my sales to drop. My sales drop, my profits drop, and then encourages other companies to expand into the void my company is leaving and the market self corrects.

If you want a system like you described to actually work, it means state run monopolies in those sectors. (AKA, communism! That big scary word, which when done right would actually make things better, but we can't do that because people are still scared of the Big Bad Reds!)

You know, let's translate this into programming terms, since that's what we are, basically, right? So you have a huge buggy program that kinda works, but it's full of hairs and warts all over the place. I propose that the way to proceed is to first read the program, understand what it does, how it works, and then perform an iterative improvement on it, by starting now, somewhere, some things small to see what will happen. I am not saying(or maybe I did say it in a way that seemed like that) that we should run an automated script at once and then run it on the original program to make the changes. Yes, we know, KNOW, that when we will try to fix things, we will first do it clumsily and make other bugs appear in other places, but if the errors can "fight" back, so can we. What is the other solution? Delete the program completely, and rewrite it from scratch, having all the knowledge and all the parts that actually work lost? You're proposing to destroy the existing system and replace it with something else; so what about the "human nature" of being an egotistic asshole; is that going to go away because you just substituted "capitalism" with "communism"? Hasn't that been tried already? Hasn't it failed miserably?

Hell yeah, I'm all for socialism and communism, and no I'm not saying that we should "destroy the system from the inside". But you're forgetting that this is not black and white, the pure "free market economy" has remained a fantasy, for the most part, the "corporations" and the "rich" are not all-powerful egostic idiots on a killing spree. You thought that if we start doing something similar to what I'll propose, they'll attack back viciously and start destroying their own markets. Why are you rejecting the notion that they'll reach to the same conclusion and adapt, not of course because they particularly care about those below, but exactly to prevent total collapse? They might do that, or they might not. All I'm saying is let's just try another way. There are some parts of society that are stronger than others, and monopolize all the resources, leaving the others in poverty and subsequently in fear of actually fighting back and risking losing the tiny shares they at least have now. Let's try *something* to see if we can make those weak and poor parts smarter, stronger and more confident, are you sure that's impossible, that it will only lead to destruction?

Quote: Original post by Prefect
So depending on how you swing politically on the axis of small vs. large government, you might be in favor of cutting taxes or raising spending. But quite objectively, it is clear that the US government deficit is currently too small. Why? Because your resources are laying around idle.

Fiat currency is ultimately based on trust. Governments cannot keep increasing debt beyond their means to repay it (creating money out of nothing to meet obligations won't help). Government spending will not necessarily put resources to productive use. If government debt holders lose confidence in the ability of the US to generate returns on their investment, then the US will become fiscally constrained, fiat currency or no fiat currency.

Resources are laying around idle because of a lack of demand and poor allocation. Government money can't really help that.

Quote: Original post by mikeman
There are some parts of society that are stronger than others, and monopolize all the resources, leaving the others in poverty and subsequently in fear of actually fighting back and risking losing the tiny shares they at least have now. Let's try *something* to see if we can make those weak and poor parts smarter, stronger and more confident, are you sure that's impossible, that it will only lead to destruction?

Yes, but why is the solution always some derivative drivel about more government regulation and management of the economy? You're complaining that the system is benefiting a few winners at the expense of a lot of losers, and you're right, but I have a feeling your solution will ultimately involve expanding the system itself.

Here are some things to consider:

1. Government regulation _can_ fail, as it did spectacularly with Freddie Mac and Fannie Mae.

2. Given that private industry must exist and that private industry will naturally seek to maximize its advantage, it is useless to blame private industry for taking advantage of faulty government systems.

3. Strongly centralized, regulated systems (like the banking sector) pick the winners and the losers, and they tend to shut out smaller competitors by making the regulatory burden too large.

4. Globalization is a fantastic thing and a net benefit to humanity -- it has lifted hundreds of millions out of poverty. Naturally, this will come at the expense of first world nations. Impeding globalization is impossible. However, take a good note of one factor that allows the wealthy to get richer at the expense of the poor: companies can move resources abroad, allowing those at the top to tap into ever greater revenue streams, but most people cannot move around as easily.

And, never forget that:

5. Private industrialists and financiers generally have an enormous cognitive advantage over elected officials and regulators. Don't try to outsmart them.


Strengthening the Washington Consensus isn't going to fix our problems. That's small thinking.

Quote: Original post by Prefect
So to make it very plain, the US$-denominated means of the government are infinite. It cannot possibly exceed its means. Don't believe me? Just look at the Fed: it is clearly totally possible for the US government to spend 600 billion US$ just like that.

Not disagreeing, but every time the Fed produces money the value of the dollar goes down. It has the same monetary effect as a universal tax but people don't think of it like that.

Quote: Original post by trzy

Quote: Original post by Prefect
So depending on how you swing politically on the axis of small vs. large government, you might be in favor of cutting taxes or raising spending. But quite objectively, it is clear that the US government deficit is currently too small. Why? Because your resources are laying around idle.

Fiat currency is ultimately based on trust. Governments cannot keep increasing debt beyond their means to repay it (creating money out of nothing to meet obligations won't help). Government spending will not necessarily put resources to productive use. If government debt holders lose confidence in the ability of the US to generate returns on their investment, then the US will become fiscally constrained, fiat currency or no fiat currency.

You're right in that government spending is not necessarily productive - no doubt about that.

However, as far as the fiscal limits are concerned, you've got it wrong, I'm afraid. What is a Treasury Bond? It's ultimately a contract saying that the government will give you an interest payment at regular intervals, and pay out the "principal" of the bond when it reaches maturity. But since the government are the ones who are running the books of the monetary system, they can always give you that money.

Since we're on a game development site, perhaps you'd like to think of it in terms of an MMORPG. The government are the developers (or the admins) of the MMORPG, and we are all players. If they want to give in-game money to some player, they can always do so. They just need to access their database and change a bunch of numbers. The US government is in exactly the same situation from an economics point of view (politically the situation is somewhat different because of checks and balances, but when I say "government can do XYZ", I really mean the branches of government combined).

Does such an act have the potential for player backlash or disruption of the in-game economy? Sure. But you have to accept the fact that from a technical point of view, there is nothing to stop them.

Quote: Resources are laying around idle because of a lack of demand and poor allocation. Government money can't really help that.

I agree about the lack of demand part. As for poor allocation, I wouldn't be so sure, at least as far as the job market is concerned. It's an easy excuse to avoid taking responsibility for the mess, but the reality is that you really have to look with a magnifying glass for evidence that allocation is the problem. By which I mean to say that such factors exist, but they are pretty much negligible compared to the total size of the problem.

And what do mean when you say that government money cannot help there? Are you really saying that if the federal government announces the distribution of additional money to local governments who want to employ people to e.g. work in road repairs, that local governments will be unable to find unemployed people willing to do the job?

Quote: Original post by think_different

Quote: Original post by Prefect
So to make it very plain, the US$-denominated means of the government are infinite. It cannot possibly exceed its means. Don't believe me? Just look at the Fed: it is clearly totally possible for the US government to spend 600 billion US$ just like that.

Not disagreeing, but every time the Fed produces money the value of the dollar goes down.

True - monetary policy is a very blunt instrument, and will give you blunt results. Keep in mind that the US government wants the US$ to have lower value. That's what all the China-bashing is about. (Yes, many of the US economic policies are truly facepalm-worthy.)

Also keep in mind that what really matters to 99% of the population is the CPI, which may move quite independently from exchange rates. Of course, the US is an importing nation, so exchange rates are likely to affect the CPI quite a bit.