Yet, despite the well known debunking, ever since I began studying for my BA in economics in 1973, through to my daughter earning the same degree last year there is only one macro economics book and theory offered at almost every university in the country - Keynesiam.
The economic illiteracy of Americans is what results in many, especially the young, adopting socialism as their worldview.
Given that both Keynes and Marx advocated government control of the economy, they are philosophical sisters.
If the Department of Education cannot be abolished, it's only mission should be to undertake the teaching of every high school student the falsity and failure of socialism and the beauty and success of capitalism.
Have you looked at how much money the government pays businesses each year to create value?
$3.9 trillion according to BEA's NIPA tables -- and that's just "consumption".
There's also $1.1 in "gross investment." There may be overlap depending on accounting treatment.
That's potentially $5 trillion paid to businesses to create value, or at least almost $4 trillion.
Those aren't transfer payments either
It's all on the BEA websit: Table 3.1. Government Current Receipts and Expenditures
It takes paying customers for a business to create value. The government is a paying customer to the level of at least almost $4 trillion dollars. Ignoring all that doesn't lead to any kind of a serious argument about political economy. Saying "the private sector would do that if the government was out of the way" isn't serious either: roads, bridges, defense, police, libraries, space ships, etc. etc.
Yes, roads have value. And it is generally businesses that build them. Government only pays for them. Same for most of the other items you list.
Sure, you can knock some holes through my comment, but by and large it is business that creates value, not government. Just look around yourself, wherever you are right now. You see things with monetary value, including your clothes, your computer, food, etc. Of all that, try to find anything that DIDN'T come out of a factory. Now, try to find anything that was physically produced by government.
I didn't mean to be too critical, sorry if it came across that way. I don't think we can separate "government" from "business" all that cleanly. Many businesses depend on government revenue, and you're right -- government services or works often can't exist without private business. If we trace the causation of "creating value" it gets complicated.
Yes, as well as supply. An obvious example is gold. If it were more plentiful, it's price would drop. If for any reason demand goes up, so does the price. There is the classic demand/supply curve that theoretically determines the price of any particular thing.
I'm not even sure what that means. I'm engaging in broad-brush rhetoric here. I'm imagining an Austrian-zealot individual who has deified "the market" and expects that wherever it clears, that is socially optimal. Most of us bitch & moan here in comments (I know I do!) about how irrational "the market" can get when it comes to valuing financial assets, like bubble stocks. Well? Is it any different when market failures drag an entire society down? I know, I know, the zealot will say "If it hadn't been for central banks, we wouldn't have had a bubble." I'm not so sure. Bubbles have been around for centuries, well before modern central banking or even classical central banking (i.e. per Walter Bagehot).
First, apologies to my misspelling of your name above. But to your point: markets, like people, are not perfect. Precisely because people often act irrationally, against their self-interest, especially so in group settings, markets can reflect this. But markets have a self-governing mechanism: resources are reallocated to the rational actors and removed from the irrational. Hence the harm caused by the irrational, at least to society is curtailed. Alternatively, government action, where the resources are seized by taxation, and the implementation is enforced by law, and ultimately police, doesn't have this built-in failsafe. Hence the harm governments can do has almost no limit.
Hi, no worries about misspelling. I'm not that sensitive! I happened to be online when your comment notification came in.
In reality, markets are structured, administered, policed and enforced by flawed humans. As a result, markets in practice never achieve the perfect action that theory posits. It seems to me this flaw is just as bad as the tax-related governmental flaws you observe.
Let's think about this: Who structures, administers, polices and enforces markets? The Government! How can the same "Government" that does harm via wealth seizure and taxation somehow become a philosopher-king and act nobly in the structuring, policing, administration and enforcement of markets? Why do we see the same failures there too: coopted regulators, ritual bailouts of banks and financial institutions who poorly allocated risk, "too big to fail/too big to jail", easy money forever, etc.
I don't see the difference -- it's Government failure in both directions.
Yet, despite the well known debunking, ever since I began studying for my BA in economics in 1973, through to my daughter earning the same degree last year there is only one macro economics book and theory offered at almost every university in the country - Keynesiam.
The economic illiteracy of Americans is what results in many, especially the young, adopting socialism as their worldview.
Given that both Keynes and Marx advocated government control of the economy, they are philosophical sisters.
If the Department of Education cannot be abolished, it's only mission should be to undertake the teaching of every high school student the falsity and failure of socialism and the beauty and success of capitalism.
Governments create money. Businesses create value. Never confuse the two.
Have you looked at how much money the government pays businesses each year to create value?
$3.9 trillion according to BEA's NIPA tables -- and that's just "consumption".
There's also $1.1 in "gross investment." There may be overlap depending on accounting treatment.
That's potentially $5 trillion paid to businesses to create value, or at least almost $4 trillion.
Those aren't transfer payments either
It's all on the BEA websit: Table 3.1. Government Current Receipts and Expenditures
It takes paying customers for a business to create value. The government is a paying customer to the level of at least almost $4 trillion dollars. Ignoring all that doesn't lead to any kind of a serious argument about political economy. Saying "the private sector would do that if the government was out of the way" isn't serious either: roads, bridges, defense, police, libraries, space ships, etc. etc.
Yes, roads have value. And it is generally businesses that build them. Government only pays for them. Same for most of the other items you list.
Sure, you can knock some holes through my comment, but by and large it is business that creates value, not government. Just look around yourself, wherever you are right now. You see things with monetary value, including your clothes, your computer, food, etc. Of all that, try to find anything that DIDN'T come out of a factory. Now, try to find anything that was physically produced by government.
I didn't mean to be too critical, sorry if it came across that way. I don't think we can separate "government" from "business" all that cleanly. Many businesses depend on government revenue, and you're right -- government services or works often can't exist without private business. If we trace the causation of "creating value" it gets complicated.
Demand= value.
Yes, as well as supply. An obvious example is gold. If it were more plentiful, it's price would drop. If for any reason demand goes up, so does the price. There is the classic demand/supply curve that theoretically determines the price of any particular thing.
The Austrians would destroy an economy completely in order to save it. So would the Keynsians. They'd each just do it differently. LOL.
The rest of us have to live in a messy world where Political Economy means something and economic theory does not mean anything.
Can you elaborate on how Austrian trade cycle theory destroys an economy?
I like the way you have posed your response...and I will attempt to answer the self-named "crazyman" below.
I'm not even sure what that means. I'm engaging in broad-brush rhetoric here. I'm imagining an Austrian-zealot individual who has deified "the market" and expects that wherever it clears, that is socially optimal. Most of us bitch & moan here in comments (I know I do!) about how irrational "the market" can get when it comes to valuing financial assets, like bubble stocks. Well? Is it any different when market failures drag an entire society down? I know, I know, the zealot will say "If it hadn't been for central banks, we wouldn't have had a bubble." I'm not so sure. Bubbles have been around for centuries, well before modern central banking or even classical central banking (i.e. per Walter Bagehot).
First, apologies to my misspelling of your name above. But to your point: markets, like people, are not perfect. Precisely because people often act irrationally, against their self-interest, especially so in group settings, markets can reflect this. But markets have a self-governing mechanism: resources are reallocated to the rational actors and removed from the irrational. Hence the harm caused by the irrational, at least to society is curtailed. Alternatively, government action, where the resources are seized by taxation, and the implementation is enforced by law, and ultimately police, doesn't have this built-in failsafe. Hence the harm governments can do has almost no limit.
Hi, no worries about misspelling. I'm not that sensitive! I happened to be online when your comment notification came in.
In reality, markets are structured, administered, policed and enforced by flawed humans. As a result, markets in practice never achieve the perfect action that theory posits. It seems to me this flaw is just as bad as the tax-related governmental flaws you observe.
Let's think about this: Who structures, administers, polices and enforces markets? The Government! How can the same "Government" that does harm via wealth seizure and taxation somehow become a philosopher-king and act nobly in the structuring, policing, administration and enforcement of markets? Why do we see the same failures there too: coopted regulators, ritual bailouts of banks and financial institutions who poorly allocated risk, "too big to fail/too big to jail", easy money forever, etc.
I don't see the difference -- it's Government failure in both directions.
AND...........???? JUST MAKE THE MOST OF IT AND TEACH YOUR CHILDREN
Very interesting, makes sense.